00:00:00
it was the government that was the big buyer then you get everybody leveraging up then you've got the problem do you
00:00:06
own Bitcoin right yeah I have some not nearly as much as as gold the AI War it's a war that no country can lose if
00:00:15
China or the US really lose this war it's more important than profits we're at a civil war internally and we're at
00:00:24
an international War simultaneously just have people behave logically H maybe that's too much to ask we hope
00:00:33
going all right besties I think that was another epic discussion people love the
00:00:38
interviews I could hear him talk for hours absolutely we crush your questions ad minute we are giving people ground
00:00:44
truth data to underwrite your own opinion what' you guys think that was [Music] fun Ray good morning good morning I'm
00:00:52
going to start off by sharing a couple Stats today the US has $36.4 trillion of federal government debt and GDP of 29.1
00:01:02
trillion giving a debt to GDP ratio of 125% and this ratio has climbed steadily since the pandemic began in 2020 when
00:01:11
the federal government debt was 20 trillion and GDP was just 21 trillion so since the pandemic federal government
00:01:17
debt has risen by 80% while GDP is climbed 38% and steady inflation from the large
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stimulus of money from both central banks and the US governments caused the Federal Reserve which is the US Central
00:01:32
Bank to raise interest rates driving up the cost of borrowing and despite recent
00:01:38
efforts to cut interest rates again markets have traded treasuries down causing the long-term interest rates of
00:01:44
US debt to spike up to levels that we have not felt since just before the 2008 Global financial crisis to keep the
00:01:52
economy growing the US government's now running a nearly $2 trillion annual deficit nearly 7% of GDP while paying
00:02:00
over a trillion dollars per year in interest alone on just the existing outstanding debt the Congressional
00:02:06
budget office the CBO projected last week annual budget deficits are expected to be equal to 6.1% of GDP through
00:02:15
2035 which the CBO noted is significantly more than the 3.8% that deficits have averaged over the past 50
00:02:22
years the national debt slated to rise by nearly $24 trillion over the next decade a sum that does not even include
00:02:29
the millions of dollars in additional tax cuts that the current Administration may put into place is the US headed for
00:02:37
bankruptcy what are the mechanics of the looming crisis ahead and can we avoid it
00:02:43
to talk about this what I consider to be the most important topic in the world at
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the moment is Ray Doo who I consider to be the preeminent thought leader on this
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matter in 20121 as everyone knows Ray published The Changing World Order why Nations
00:02:58
succeed and fail I declared it the book of the year and I thought it was the most precient and important thing that
00:03:03
everyone should read and unfortunately I feel like many in politics many in government have largely ignored some of
00:03:09
the preent warnings shared in that book this week Ry is releasing a new book called how countries go broke in which
00:03:17
he analyzes and shares his studies on this particular topic and I'm really excited for Ry to join me here uh today
00:03:25
Ray thanks for being here thanks for having me here to talk about this important
00:03:31
issue well so so let me just start by asking why you wrote the book why you putting it out now and maybe we can just
00:03:37
talk about the timeliness of all this from your point of view through my roughly 50 years of being a global macro
00:03:43
investor I would U keep to myself and then now I'm 75 and I want to pass along the things that have helped me and um
00:03:53
the bond markets Global Mar markets I've been involved with all over the world for a long time and there's a mechanical
00:04:01
process which is not understood about the question when is enough debt when does it matter how does
00:04:08
it work mechanistically and I feel compelled to get that understanding out now how do
00:04:17
the mechanics work for countries for the United States for other reserved countries I want to make sure that's
00:04:24
understood thanks for doing it and the basis of the analyses is your work at Bridgewater and outside of Bridgewater
00:04:32
is that right you you've kind of gathered quite a bit of material together for this book and you've shown
00:04:36
a lot of historical context maybe just share a little bit about where the data came from and and how you've kind of
00:04:41
conducted these studies over what period of time you know bridgew and I up until
00:04:47
my passing along Bridgewater uh maybe a little over a year ago has been indistinguishable you
00:04:55
know one the same and uh so and over through that period of time we've been involved in the markets I've been
00:05:02
involved in the markets and thinking about such things so the data is largely public
00:05:11
data that's available for anybody we just you know collect it from all different spots and go back through
00:05:19
history like I did in changing world order we we were in some cases in the changing World Order because we were
00:05:25
dealing with data that was hundreds of years ago we would go through archives pull data out the data is all available
00:05:32
to everyone and so I think that's really important because this isn't just an opinion piece you're writing as an
00:05:38
analyst you're sharing quite a lot of empirical data that's publicly available that anyone can go access and you're
00:05:45
taking a look at that data and saying this is the pattern this is the trend that we've seen historically it has
00:05:50
repeated over and over again I think you make a really important point at the front of the book only about 20% of the
00:05:58
750 currency debt markets that have existed since 1700 still remain and all of them that still remain have devalued
00:06:06
through the mechanistic process you describe in the book that's really important to note you know we all think
00:06:11
that we have this kind of privileged position in the United States and the US is different and this time around is
00:06:16
different but you highlight how so often everyone thinks they're in a good place
00:06:21
and then the cycle repeats you speak about and and the primary premise of this is what you call the big debt cycle
00:06:28
and you highlight that the big debt Cycles typically last about 80 years they're more easily forgotten than the
00:06:34
short-term debt Cycles which last about six years on average plus or minus three
00:06:38
years you say and we're now 12 and a half cycles of the short-term Deb cycle since 1945 so we've kind of been in this
00:06:46
big debt cycle in the US for about 80 years at this point but maybe we could start by talking about what the
00:06:53
short-term debt Cycles are that that you highlight make up the long-term debt cycle yeah and I I want to emphasize
00:07:00
just based on um what you said that they're mechanical they can watch you can watch it you can do the calculations
00:07:07
so if you read the book you can see these it it'll either make common sense to you you see the con calculations uh
00:07:17
to me it's it's almost like the circulatory system you know I think that credit is like blood that brings
00:07:30
nutrients to all of the parts of the body and it passes through a system that is like
00:07:38
arteries and then credit creates debt and the key question if it's healthy is does the debt create an
00:07:50
income that is more than enough to service the debt and that's like I don't know eating vegetables or something it's
00:07:59
a health process and if not credit begins to build up this debt it begin begins to become like plaque in
00:08:11
the arteries and you can measure it just just like you could measure it in the arteries and you can see how it
00:08:21
constricts that circulatory system because as credit and Debt Service rise you see that it eats up more and more
00:08:31
consumption because you have to spend that so you could watch the government do that you can see that how
00:08:38
interest is eating up and Debt Service is eating up and that means there's less money and then you also can see how
00:08:46
heart attacks take place and they're very you know economic debt heart attacks and the way they take place is
00:08:54
by looking at the supply and the demand you if the if you have a lot of debt and
00:09:00
then you have a large supply of debt that has to be bought somebody's got to buy it and so that when you get to the
00:09:11
point where there's debt risks there's not only the new Supply that has to be offered but there is the possibility of
00:09:22
holders of those debt assets selling those debt assets and so the supply becomes
00:09:30
overwhelming relative to the demand and then what that means is it's it's the same a dynamic as it for the government
00:09:41
as it is for an individual or a company except the government can print money so
00:09:47
when that Debt Service burden rise or there's a big Supply demand imbalance if the government most
00:09:56
importantly the central bank doesn't print money buy it then there has to be a rise in the price of the debt to
00:10:06
constrict borrowing and that borrowing constricted that credit that is not going to come will weaken the economy
00:10:15
and and cause bad economic conditions and so they can let that happen or they can print money and buy the debt and
00:10:24
monetize it when they do that that's inflationary and it lowers the value of the debt in either case you don't want
00:10:33
to hold that debt because either there's a a Debt Service problem or there's a depreciation you get paid back with a
00:10:43
greater Supply and cheaper money and that is the Dynamics and that's the mech mechanism and
00:10:51
because it can be measured it can be seen in all countries you can watch it happen
00:10:59
and so like you're going to your doctor you can measure these things you can see
00:11:04
them and you can know what needs to be done so yeah I I want to just talk about two things real quick
00:11:13
one is just to provide an analogy for folks watching or listening on what it means to have interest levels be so high
00:11:22
relative to one's income so if you know the United States this year is expected to service debt with over a billion
00:11:29
dollar of interest payments on the outstanding US Treasury bonds and the government's only going to bring in just
00:11:36
under 5 trillion of Revenue so nearly a quarter of every dollar that's being collected by the federal government is
00:11:43
going out the door just to pay interest on the existing debt so in order to fund
00:11:47
new programs the government needs to take on new debt and the folks that are having to issue that cash to the
00:11:54
government end up saying wait that's pretty risky now I need a higher interest rate and over time that
00:12:00
interest rate climbs and then there's this separate entity called the central bank that comes in and says well I'll
00:12:06
buy the the debt ultimately to give the government the ability to continue to operate or give the economy the ability
00:12:13
to continue to move and the Central Bank when you say the word monetize you mean
00:12:17
the Central Bank ends up when you say monetize the debt that means they're buying the bonds they're buying the debt
00:12:23
that's being issued in the market is is that the right way to kind that's right they're they're essentially making the
00:12:29
money up right and buying it so there's Central in in the US it's our federal reserve and the US government are the
00:12:35
two players here and the Federal Reserve ultimately would in this model and historically obviously during the
00:12:41
pandemic and during 2008 they would go into the market they would buy bonds by issuing cash that they're making up
00:12:49
effectively very well described and you know a good example was in covid money there were two waves the first wave was
00:12:57
the covid wave in which they put out um the government wanted to and actually did deliver a lot more money to people
00:13:09
companies then there was a loss of income so they first wave a lot of that money where did they get the money from
00:13:19
they had to borrow it the central bank then came in and lent them that was the primary then the
00:13:28
second when when President Biden was elected there was a second wave of that after covid it was most mostly like a
00:13:38
universal basic income thing in other words hand people money and we're going to be better off and so they handed
00:13:45
people money doing that same exercise again and so naturally all these people got a lot of money and so they put them
00:13:54
they deposited them in Banks they went out and spent and so on and it therefore shouldn't be surprising that we had a
00:14:03
big wave of inflation and we also had a lot of banks buy uh government bonds which they lost
00:14:12
a lot of money on and that was that crisis so that's how the mechanics work right and when that money gets printed
00:14:21
it finds its way into the economy and the money supply goes up and the way I kind of think about it and you've got a
00:14:26
nice image in your book that I really appreciate here's a kind of overview of the big debt cycle that you talk about
00:14:31
which is there's small expansion and contraction waves as as debt comes into the market debt should drive
00:14:37
productivity but at some point you accumulate so much debt that you can't drive productivity anymore and then you
00:14:44
effectively have to monetize the debt and everything gets devalued but as I kind of think about the introduction of
00:14:51
money uh into the economy the increase in the money supply I always tell people and everyone screams oh the markets are
00:14:57
going up the markets are going up but I say the markets are going up in dollar denominated value and there's more
00:15:05
dollars so you know the nominal meaning that the actual you know index might go up the the NASDAQ might go up the the
00:15:14
Dow might go up but if you've got a lot more dollars a dollar is worth less the real question is has your purchasing
00:15:20
power gone up have you actually increased your net worth as the markets go up and when you do the studies it
00:15:27
turns out that inflation goes up meaning the cost of everything goes up when you
00:15:31
pump money into the system so of course it looks like the markets go up of course it looks like asset values go up
00:15:38
but ultimately if everything's going up your purchasing power goes down it's almost like I tell people you have a 100
00:15:45
clams and you use seashells and you're using seashell to buy stuff and then you know there's only five things to buy now
00:15:53
if you have 500 seashells to buy stuff the price of the things you're trying to buy goes up because everyone's got more
00:15:58
seashells doesn't that ultimately kind of describe what happens as the money supply goes up the inflation drives the
00:16:05
the purchasing power down of everything and everyone kind of gets inflated away very well said
00:16:11
Dave you can't get richer by making money you know and the Val the purpose of money
00:16:21
purchasing power is what matters at the end of the day what your money's worth what you can actually buy with it that's
00:16:27
right and there are two purposes of money which is as a medium of exchange and a stor hold of
00:16:34
wealth saving is very important and if you don't have savers who have it as an effective storeold of wealth then you
00:16:46
don't have a viable long-term credit Market yeah people don't understand that the bonds become a bad deal you need
00:16:56
that like any Market place you need purchasers and sellers to be able to have an efficient
00:17:07
NE negotiation to achieve a balance without the government coming in and printing a lot of money and messing up
00:17:15
make a me big mess it's like they made very severe negative real rates right and we know what happened with the
00:17:23
negative severe negative real rates and the government while they were making the significant real rates it was the
00:17:30
government that was the big buyer okay so the government takes it on and they make negative rates so what happens is
00:17:38
then you get everybody leveraging up yes then you've got a problem and so that's
00:17:44
how that's how it works and it's a global issue it's not just an American issue well that's what I want to get to
00:17:50
that in a minute because I want to talk about the relative strength of the United States and how this plays out
00:17:55
globally firstly in your book you describe the big debt cycle following five stages you call it the sound money
00:18:01
stage when net debt levels are low and money is sound and the country is competitive and then you talk about the
00:18:07
debt bubble stage where debt and investment growth are greater than can be serviced from the incomes being
00:18:11
produced and then you call it the top stage the bubble pops and the credit and debt and markets contract and then this
00:18:19
d leveraging stage where the Central Bank comes in and they start buying all the debt and issuing more cash and the
00:18:24
inflation goes up and the value goes down and then finally the de the the big debt crisis recedes and we start over
00:18:30
again but you speak about in the top stage a debt crisis can you describe the debt crisis you know like how do we talk
00:18:37
think about the mechanics of what is a debt crisis where are we in the United States today with respect to facing a
00:18:44
debt crisis and what are the the red flags that you look for first when there's a lot of borrowing to service
00:18:51
debt there's what's called you know the um death spiral is what we typically refer to that when a
00:19:01
company has it the government can have it too and that is that Dynamic where there's uh too much debt and you have to
00:19:09
borrow to service the debt and then people investors know that that's a problem to service the debt so the
00:19:18
credit is worse and that means that interest rates go up which is the worst thing that can happen to a heavily
00:19:26
indebted entity and then as they rise you get that spiral you need to borrow more and so on
00:19:35
so that is also noticed when then there is uh the the key spot is when The Debt Service becomes large and then like the
00:19:46
real red flag the biggest red flag is when there's then the selling of the debt beyond the new Supply but the
00:19:55
holders of it sell it and then you could see it in the market action because you
00:20:00
can see that long-term interest rates rise while short-term interest rates aren't rising or go down so it's the
00:20:10
free market losing its desire that you have a balance problem in the free market out there um and then you start
00:20:20
to see that when the currency then depreciates particularly relative to gold or Bitcoin
00:20:33
or um other assets a and sometimes other currencies but typically these things happen broadly
00:20:43
speaking together in which all currencies go down relative to other things like gold Bitcoin or or
00:20:55
tangible values and so that's what it looks like that's that edge then you start to
00:21:02
see uh you know the dynamic so you either see the Central Bank comes in very quickly and does the buying and um and
00:21:12
when that happens you see then the currency um to take a uh Japan for example if you were a holder of Japanese
00:21:20
bonds you lost about 80% of your money relative to gold and about 60% relative to us bonds because you received an
00:21:30
interest rate that was 3% less than the corresponding interest rate in the United States so you lost the interest
00:21:38
rate and interest rates in the United States as you know were very low relative to inflation for most of that
00:21:44
time plus you had a depreciation in the currency so you lose you know you lost a
00:21:50
ton of money in the debt that way because the Central Bank came in and printed the money it's very bad for
00:21:57
holders of the debt and it's a basic thing you don't have to even get too technical it's just a supply demand
00:22:03
thing you know well so are we seeing that in the US today so the Federal Reserve cut interest rates as of a few
00:22:10
months ago as they've cut interest rates the market has sold off us bonds rather
00:22:17
than buying them and which is normal when you know rates go down the price of bonds is supposed to go up and uh we are
00:22:26
now seeing r rates actually climb in the market relative to where they were while
00:22:33
the FED has been cutting rates is is that a dynamic that's a red flag for you well gold has gone up and um the Bitcoin
00:22:41
has gone up and it's so that is that kind of Market action I'm talking about and
00:22:48
you've seen it in other countries too you uh the UK very classic the dollar has been a relatively strong currency
00:22:56
but not measured in gold or Bitcoin right so all currencies have gone down and then you've had that Dynamic
00:23:08
you're talking about and you see it also in like Sterling is a good example Sterling is gone down while UK Bond
00:23:17
rates have gone up and central banks have held it steady and so you see it in the market action you also see it in
00:23:25
terms of who the buyers are and who you've seen central banks for example and Sovereign wealth funds shift to have
00:23:36
lesser amounts of um debt bonds and so on at the same time as they've accumulated gold or hard
00:23:46
values now gold is the third largest reserve currency by the way dollars um Euros gold and then Yen
00:23:57
so yeah you're seeing that Supply demand shift and it's it's um partially for all
00:24:03
the reasons we're talking about and also partially because of issues like geopolitical issues countries sometimes
00:24:10
worry about sanctions countries uh China is worried about holding bonds you would us bonds
00:24:21
um Japanese bought a lot of bonds yeah even as a percentage of portfolios the bonds themselves have become such a
00:24:32
large US Treasury bonds and US debt has become such a large part of the portfolio that it's even from a
00:24:39
portfolio rebalancing point of view you don't want so much concentration all of those factors are in play for the supply
00:24:47
demand and bonds that's why I emphasize this you have to look at the supply and demand of bonds you've got a table in
00:24:56
the book where you look at central government debt level to uh deficit level across these uh these major
00:25:05
markets so you've got the US Japan China France Germany and the UK and the US is running a deficit 7% of
00:25:17
GDP so the federal government is spending more than it makes at a level that's about 7% of the total size of the
00:25:23
economy in the United States which is the highest of all of these these industrialized markets second is France
00:25:30
at 6% third is the UK at 6% as well and then China at 5% and then these these these countries
00:25:38
are all approaching 100% debt to GDP Japan obviously is at 215% so from a from a relative
00:25:49
perspective one of the points that I've heard a lot of people make is everyone's
00:25:55
got this problem everyone's got rampant spend everyone's got Rising debt levels they're increasing their debt levels to
00:26:02
pay the interest on their existing debt and to stimulate their economy the US is
00:26:08
the best strongest currency amongst the group that we just showed why would anyone trade out of our currency I guess
00:26:16
from a market perspective rate where else do people go with their worth their net worth where do they transfer their
00:26:22
value into if it's not dollars and doesn't it have to be some denom ated currency and isn't the US
00:26:29
ultimately the best maybe you can talk about what these alternatives are gold Bitcoin elsewhere but is that realistic
00:26:36
at scale like is there enough of gold enough Bitcoin for everyone to transfer all their net worth into those assets
00:26:43
versus hold some currency denominated asset maybe we can just talk about that Dynamic of how do I make the decision
00:26:50
about where to store my value where do I store my network first of all um the United
00:26:56
States and countries like China you you see that U particular Dynamic China um Japan they're all educational and that
00:27:06
means that the bonds the debt are Bad Assets so then what where you store it is in those assets
00:27:15
that benefit rather than suffer from the reduced value of money and the U the buying of it
00:27:26
so and obviously you look at money and what is an international money that is why gold is
00:27:33
in and then there's a question of you know Bitcoin or others are a conversation we can digress into that
00:27:41
but it can be ideally it's International it's mobile ideally it's relatively private
00:27:51
so it's relatively secure because in history there's the value part of it and then there
00:27:59
the confiscation part of it too in some fashion or another that confiscation can easily take the form of
00:28:07
taxing on holding it right for example one of the problems with real estate B besides the fact that it doesn't move so
00:28:16
it's not internationally nego you know you can't use it uh internationally is it is a readily
00:28:23
taxable asset it's there it's there and therefore they're going to get you they won't take it and you can you can get it
00:28:31
so we have to understand that taxes and confiscations are one and the same because during a time of of of a debt
00:28:39
crisis and and I want to get to this in a minute you talk about the four actions
00:28:43
that can be taken tax or taxation austerity where governments cut spending restructuring where the debt gets
00:28:49
restructured and then the Central Bank buying the debt obviously this notion of Taxation it's always played a critical
00:28:54
role during these moments and assets are sees or tax in different ways and transferred away what about Commodities
00:29:03
and how do commodity markets do non-old is there a difference in commodity markets hard soft Etc it's so it's so
00:29:10
interesting I've you know studied history and I've of course I've been through a bunch of these like the 70s
00:29:17
Commodities ideally also those that might do well if the economy doesn't do well
00:29:23
because you're dealing also with the inflation environment uh is um is are always gone to you don't
00:29:33
want economically sensitive Commodities as much but and if unless the sometimes maybe the economy will do pretty well
00:29:41
but there's usually that it doesn't but in like in the Weimar Republic Give an example rocks were used as store holder
00:29:51
wealth now that sounds really funny but um they were considered building ingredient you know in other words the
00:29:59
Rocks were used to build things with and so they would store the money in rocks they but they but any asset I should go
00:30:08
store a bunch of GPU chips in my garage h100s from Nidia technology devalues them the new
00:30:16
technology devalues them right so that's the question what is it it is those things that can't be devalued
00:30:23
Commodities by the way in real terms all Commodities every single commodity in real terms over long decline long
00:30:32
periods of time have declined because of productivity yeah well every commodity and has declined in real terms
00:30:40
because of productivity so you would like a productivity producing assets that cannot be taxed can move around
00:30:49
from place to place so equities of a certain type tend to do that that's why currency
00:30:56
depreciations are associ iated with that combination of things currency depreciation lowering interest rates and
00:31:05
producing money causes Equity assets to go up not necessarily in real terms like
00:31:14
in the 70s they didn't go up in real terms they went down in real terms but it is those kinds of stor holds of
00:31:21
wealth that can't be taxed as easily that benefit from inflation rather than not right okay the purest play is gold
00:31:33
because gold can be transferred between countries it's used by central banks as a reserve so central banks will go to it
00:31:42
they are going to it they'll hold it it can be private right more so than crypto cryp
00:31:50
is very easily taxed you know in other words the government knows where it is and who's doing what and and so on and
00:31:58
it's also an effective asset to tax but it has you know benefits too it was very
00:32:05
interesting when we had negative rates I was with a group of the central Bankers
00:32:10
in a discussion of how Negative they can have rates and they described that they
00:32:16
can have negative rates only to the extent that there's not enough capacity for paper money to be
00:32:25
stored so they estimate it was funny actually for that they could have over a short period of time up to 400 basis
00:32:34
points negative rates that's crazy because there wasn't enough they calculated how much Vault Storage Bas
00:32:43
there was and then they calculated that they would produce more Vault Storage Space because it would be profitable to
00:32:51
do that and then they that and they said and the good thing is we can tax it okay
00:32:58
yeah because if you have a digital currency you can tax it yeah do you own Bitcoin right yeah I have some not not
00:33:08
nearly as much as as gold I'm you know that's kind of my diversifier I try to find what are the I have to have some
00:33:16
I'm I'm a but I'm a gold guy much more than I am a yeah I'm like I'm a productive asset guy I like owning
00:33:22
businesses that make stuff so in this in this environment Where do I own that's a
00:33:28
productive asset that's a business that can still see its revenue and its incomes grow as this inflationary effect
00:33:36
and this devaluation occurs as we get through a debt crisis like this what would be the best kind of productive is
00:33:42
it a mining business is it a commodity trading business what's the right I'm with you so you know let that chart that
00:33:49
we showed in the beginning has this line productivity going up you know and I think that we're in a um
00:33:58
yeah that's it and it and it and it tends to Compound on on itself and I think that that's where Ai and that is
00:34:06
fantastic but it it depends where you're referring to AI I think the super scalers in this
00:34:15
world have risk issues be you know you think by you know the um the super scales of
00:34:25
or uh Nvidia or or you know those I think that the tech War certainly productivity I'm with you man but you
00:34:35
want to invest in productivity but there's disruption great disruption yeah that's going to take place and there are
00:34:41
going to be the disruptors and the disrup and it's not necessarily those who are producing the vehicles but it's
00:34:50
those who are implementing and changing as a result of having their big impact I
00:34:56
think that like the the tech War for the AI War it easily is I think it is actually more important it's a war that
00:35:12
no country can lose okay because it's more important than profits if you lose if China or the US
00:35:23
really lose this war it's more important than profits and so you have to play that
00:35:31
war that way and it could be like electric vehicles or or more in terms of Chinese electric vehicles and the like
00:35:39
you can produce them so I don't think and I think there's s such expectations I think we are going to see
00:35:50
applications like I think the Chinese are a bit behind in the chips but they're ahead in the applications in
00:36:00
terms yeah did you see the Deep seek announcement this weekend and obviously that was known for a little
00:36:08
while now yeah and so I think you're going to even see well the Chinese play is going to
00:36:16
be chips very inexpensive chips embedded into manufactured goods you'll see robotics so you're you're going to see
00:36:28
Chinese are unbelievably in making things inexpensively terrifically they own 33%
00:36:36
of all World manufactured goods which is more than the combined us um German and Japanese manufactured
00:36:45
goods Chinese produce more so you know you're going to see that type of competition and it may be it's
00:36:54
like solar panels or something you know right it's profit doesn't matter so you have to go where there's I I think that
00:37:03
where there's productivity and Innovation and disruptors to be essentially long those who are
00:37:10
benefiting themselves through usage or creating the applications that are having the big effect is certainly one
00:37:18
thing but you also have to look at different countries and places and things um most importantly is price I
00:37:26
think a lot of invest make the mistake of thinking I want to buy good things you know that's a
00:37:34
great company but a great company that gets expensive is much worse than a bad company that's really
00:37:44
cheap totally so you have to look at pricing this is all part of the cycle you know everybody says that's great and
00:37:51
it's going to be great for the future and and like you know like the internet and come it was it's great okay but the
00:38:01
price has to be paid attention to and I'm particularly concerned of those companies at a time when we are in a
00:38:10
situation with the interest rates operating as we are in other words this looks qu a quite a lot alike like 1998
00:38:19
or 99 where the assets of the the you know the new hot thing the productivity grow driers yeah yeah so yeah are hot
00:38:30
the prices are high yeah and you have a rising interest rate environment that is
00:38:37
a classic issue so we have to pay attention to the interest rates and the pricing of those assets and you have to
00:38:46
think where is next the other thing is I think diversification is very very important because everybody's leverage
00:38:54
long everybody thinks you know I'm going to buy assets that are going to go up and I'm and if they're good I'm going
00:39:03
to do that in a leverage way so the world is so leverage long you have to pay at least as much attention to
00:39:11
correlation so that's why when I look at you know something like gold or these uncorrelated assets it's interesting as
00:39:19
you add it into the portfolio it reduces the risk of the portfolio so you have to
00:39:25
pay attention to the uncorrelated Assets in that kind of an environment and those could be
00:39:33
geographically looked at or but so that's part of portfolio construction well so there's no simple
00:39:40
answer for the audience on what to buy but I do think this portfolio point of view in the book you actually talk about
00:39:45
having 10 to 15 uncorrelated bets at any given time and I I would imagine in your
00:39:50
context truly uncorrelated whereas most folks buy us equities and think that they're in different sectors but
00:39:56
obviously there's a great degree of correlation when you're buying a bunch of us equities Equity prices just to
00:40:02
keep in in mind there many times Equity prices in inflation adjusted B therefore purchasing power
00:40:12
terms have declined 60 or 70% yeah that's incredible that's an incredible fact for folks to take in so
00:40:20
when you adjust for the the value of your dollar Equity prices have really taken a hit um even though the Market's
00:40:26
gone up and I hear and from from 1966 y until 1984 you had a negative real return I
00:40:38
think this is super important rate I just want to double click on this and and then we'll talk about the us but a
00:40:43
lot of folks talk about markets going up without taking into account what is the
00:40:49
denomination that those markets are measured in in this case US Dollars and when you look at the value of your US
00:40:56
dollar and you look at the market going up even if you bought equities what you can now turn that dollar into has
00:41:04
actually not gotten much stronger folks have really taken a hit and I think this
00:41:08
is super important yeah so I just I'm glad you're uh bringing up I think it's super important too and I just want to
00:41:14
emphasize you have to look at your returns in real dollars what can you buy okay or any and
00:41:23
purch what can you buy yeah it's funny because I watch the value go up and down even the currency go up and down and
00:41:34
it's a distorted perspective it's like being on a boat that's going up and down and judging the land to be volatile yeah
00:41:44
absolutely okay I want to come back to the United States and I want to talk about your point of view on measures
00:41:50
that the United States is going to have to take or should take going forward in order to avoid
00:41:57
a more cataclysmic debt crisis in fact you use this term often the beautiful deleveraging that's possible when
00:42:04
there's a great deal of debt and a country faces a debt crisis that there are several actions that can be taken
00:42:14
together to try and resolve the debt crisis in a way that is least harmful but I first want to talk about the
00:42:20
measure that you share of risks so first is you you show what you call your risk
00:42:25
gauge for us long-term government debt and so you've got this risk gauge on the long-term and the risk gauge on the
00:42:32
shortterm for US Government debt on the short term you say US Government debt is
00:42:38
a 0% risk age there's no risk in the near term the economy seems fairly balanced but over the long term your
00:42:44
risk age is 100% And then you follow that up with an analysis of the Central Bank and you say the Central Bank
00:42:52
short-term 0% risk age long-term 46% risk age and nearly the highest you've seen ever but maybe you can just say
00:43:02
what's the the composition of these risk ages and what does this tell us and then
00:43:06
we'll come back to the actions just to be clear 100% does not mean 100% probability of
00:43:13
of it happening it means 100% that's the highest that it's ever been you know it's it's at the ma kind of Maximum but
00:43:21
just yeah just to describe it the longer term risk age is taking existing amounts
00:43:27
projecting those two things that I've described before the supply demand and the um uh The Debt Service creating the
00:43:37
squeeze so think of it as going into you you know your doctor and having him uh give you your test results
00:43:51
and how much plaque is in there and what the what it's looking like and how you did on your stress test and and what
00:43:58
your arteries are looking like and what your condition is that's what the first measure is the second is you're in a
00:44:09
seizure in other words now so that second measure of the Deb is exhibiting okay it's now happening yeah
00:44:19
and happening means things like you're seeing the selling you're seeing the um the the spreads widen in other words the
00:44:32
interest rates Rising on the long end without the short end you're seeing that the central bank is put into that
00:44:39
position of being a you know having to make the difficult choice of coming in there and monetizing everything very M
00:44:47
and then credit problems and debt monetization because you're in the middle of it that's what the that's what
00:44:54
the one on the right means so what we have is if I'm speaking to you as the government policy makers your condition
00:45:04
is is very bad right okay you're not in the middle of it now you in other words we're not seeing that particular Dynamic
00:45:15
transpire but uh you have to change your diet you have to change your behavior you have to maybe have a stent put into
00:45:24
an equivalent so you asked about what that is okay okay here's what it is let me let
00:45:31
me pull up this chart for you real quick Ray so I I just want to highlight the uh
00:45:38
CBO projection right so this is the US government's debt as a percent of the US government's Revenue which you you
00:45:46
indicate in your book is more important than debt to GDP you've got to look at the actual Revenue being generated by
00:45:50
the government and how much debt they have and the CBO highlights this expansion to 00% meaning the government
00:45:59
is going to have a debt level that's seven times the income it's making every year over the next uh I believe this is
00:46:06
a 10-year um chart and you propose a bunch of actions that can keep it flat over the next 10 years which is the
00:46:14
basis of the book is there's a series of recommendations in the book I just want
00:46:18
to kind of voice over again you highlight that there are four actions one is increased taxes so obviously
00:46:25
citizens are going to lose asset asss and and lose income uh so there's a loss to the citizens when when this happens
00:46:32
uh cutting spending or austerity and there's obviously a loss of services by the government provided to the citizens
00:46:37
so the citizens are going to lose Services they're going to lose benefits a central bank buying the debt
00:46:43
which will typically increase inflation because more money will come to the markets and everything costs more so
00:46:48
that's another form of Taxation where the value of your dollar the value of your assets goes down and then this kind
00:46:55
of restructuring of the debt where again the currency gets devalued and everyone
00:47:00
loses things and so I I just wanted to kind of walk through that maybe you could frame this up for us a little bit
00:47:05
sure like that chart if you go back to that chart think about that chart as being
00:47:12
you know your your plaque so to speak in in in the arteries and The Debt Service so you could
00:47:19
calculate all those numbers and you you know what the picture looks like um and that is a stability and so number one
00:47:28
is I call it my 3% solution here the solution is you must cut the deficit which is the equivalent of bonds selling
00:47:40
down to 3% of GDP and it's 7 and a half% expected now different people have different views as
00:47:50
to how to cut it I forget it I don't really care just you have to have a unified agreement everybody in Congress
00:47:58
and the president and so on should pledge to do that and then the question is how to do it but they shouldn't they
00:48:05
should know that number that's about 900 billion a year yeah roughly and that means cutting it as you point out by
00:48:13
cutting the deficit by more than half from where it sits yeah well it's yes because it with the continuing the uh
00:48:22
the tax guts strum tax guts uh that's that'll be 7 and a half % and you want to get it down to
00:48:29
three and and it sounds Draconian but we did that kind of uh change from 1991 till
00:48:40
1997 and the key there are three keys to this uh do it soon fast when the time is
00:48:51
good when the economy is good in other words do it now now okay the temptation is going to say well we're going to ease
00:48:59
into this and we're going to be there and we're going to do it in 3 years from now but if you have a bad economy you
00:49:07
you cannot do it okay and that's the that's the worst so we have the best economy and the sooner you do it the
00:49:13
more you're going to do it so 3% solution do it now and recognize that you have to De deliver it so if you're
00:49:24
having let's say Cost Cuts in government you have to own the number so everybody's got to pledge
00:49:33
3% now the the be arguments as to how to get there but you have to own the number
00:49:39
um so much so that you'd say if it's not 3% throw me out of office because I've got to all I've got to deliver that
00:49:46
number so if somebody if um government cost expense cutting you know and is it really the two trillion number is it the
00:49:55
one trillion number is it half a trillion dollar number we all throw those numbers around you got to own the
00:50:01
number and you got to get to three and you can't make it any one thing right but you also have to realize
00:50:10
like if you did it um spread out nothing's going to be that big so I mean nothing's going to be
00:50:20
insurmountable that would mean I I go through the numbers in the book by the way this book is online free and
00:50:28
everybody everybody can get it I read it this weekend I have a I and I and I used
00:50:34
a highlighter for the first time in a long time Ray so there was a lot of great content to pull out of there I
00:50:39
might uh use AI this being put out not to sell books anyway it's all free so everybody can go through the mechanics
00:50:47
but the main thing is you take the things you can cut from or build from so what can you cut from and you look look
00:50:56
at government expenditures roughly 70% of government expenditures are you can't cut so so it comes down to a small
00:51:06
percentage that you can cut but you you find out how much can you cut so the important thing is
00:51:13
3% the other thing about it is to realize that if you make those moves the bond market and what it will
00:51:24
benefit you see the and so interest R interest rates will go down right and interest rates going down interest rate
00:51:34
expense is most important so when the president does a interview the other day and he says we need to get them to cut
00:51:42
interest rates by 1% and he's speaking about the Central Bank he's effectively trying to force the central bank or coer
00:51:49
the central bank to take rate action when if we were to cut spending I think this is so important if the federal
00:51:57
government were to cut spending significantly and quickly the market would naturally react to lower rates
00:52:04
that's right okay I think that is so important for everyone to hear he's right if you look at the my calculations
00:52:11
you need 100 basis if if you get a 100 basis points cut in rates that's equivalent to significant cutting in
00:52:20
spending so he's right but you but if you do that without the other parts you're going to take
00:52:29
money away you're going to make it less desirable to own these things these bonds and because that's that's going to
00:52:36
be a problem where if you do these things together they can support each other so in other words fine cut it from
00:52:44
spending and by the way Ray the longer we wait the more interest accumulates because it's at a higher rate the more
00:52:51
the debt accumulates and ultimately this is the arithmetic death spiral that you
00:52:56
get into the longer we wait the more you have to cut in the future to get out of
00:53:01
the hole it's not linear it's a nonlinear cutting that's needed to get So the faster you do it the less you
00:53:07
have to cut right I think that is so important let me just say that again the F for any person in government listening
00:53:14
the faster you cut the less you have to cut yes and you can do it in a manageable way you know what a bit here
00:53:21
a bit there these bits add up and if you don't you're going to have this Arc of compounding so let's talk let's talk
00:53:30
politics for a second is Doge and the concept of Doge enough or do we need legislative action here and then I want
00:53:38
to talk about the politics of the legislative action needed given like the election Cycles there's a combination of
00:53:46
a question it's not just Doge it's a matter of less regulation productivity changes that might come from AI which
00:54:00
then have translate to profits that might be capital gains profits they might be
00:54:09
profits and all of that and so but it really you know when I look at it it looks it looks very tough and and but
00:54:22
there's also you know Revenue also tariffs produce Revenue so but yeah people think um on the on the tariffs
00:54:30
people don't think of taxes as inflation but taxes are inflation right because you it costs you more
00:54:39
so the real question as you play with the numbers is it's very very difficult to know and be precise about how much is
00:54:50
going to come from uh productivity and profit increases from the efficiency is gained by Ai and new technologies how
00:54:59
much going to come from this and that we don't honestly know but the important thing is not to we're at the edge and
00:55:09
not to make it a crapshoot so and and to get the if the number must be three% and
00:55:16
so you should have handle not hail Mar passes but uh a clear passage to that 3% number are we better off with Trump as
00:55:30
president versus if Biden had won in this context yes I do believe we are for then the financial context
00:55:38
because in terms of profitability and the likelihood of cutting I think the Republicans are
00:55:46
probably more likely to make these moves than the Democrats but you also have to
00:55:51
take into consideration the impacts the social impacts and right the other impact s that are going to come from
00:55:57
this we're at a civil war internally and we're at an international War simultaneously so there are second order
00:56:06
effects I think the main thing is uh take those numbers and make them real at at 3% not speculating I I worry honestly
00:56:16
about the Gap like the idea of when profits kick in from AI I'm worried that's what I was going to
00:56:28
ask you next so ai ai takes off we lose a lot of jobs we have a million five 3 million 5 million people that become
00:56:36
unemployed that work in call centers that work on Automotive lines etc etc they lose their jobs and while before
00:56:43
the productivity kicks in from AI that creates new markets and and new parts of the economy we have a lot of unemployed
00:56:51
people and the government Representatives the politicians raise their hands and say we have to support
00:56:56
these people we have to introduce stimulus we have to introduce new support programs and is it not likely
00:57:03
the case that with AI coming online we are going to see a fairly significant demand for you know public support on
00:57:12
this transition that's coming that's right but there are two Dimensions the near term
00:57:18
is what will the pro I don't think the profit impact and the financial impact on productivity is going to be nearly
00:57:27
enough near enough to deal with the supply demand issue that we now have so let's say we have is it this year is it
00:57:35
next year just imagine you are at risk of a heart attack you know and then I say someday we'll have the productivity
00:57:42
conveyed to profits that will cover the budget deficit okay it may be out there but it's not um as immediate as it needs
00:57:49
to be and then we have the other aspect of it which is how is that pi divided which is going to be very political
00:57:59
because the disruptive effects will be enormous and we're really all guessing on how those disruptive effects will
00:58:09
be it's it's too much of a but you're you're absolutely right lots of jobs are going to be lost lots of Chang is going
00:58:16
to happen in terms of turbulence and um how do we have a plan how can we even agree on a plan of how to deal with that
00:58:25
I don't think we're in a time maybe in the rest of our lifetimes that agreement is going to be easy I
00:58:34
think we're going to see fragmentation of States from from the central government I think you're going to see
00:58:41
big fragmentation in the world not just in the United States on the failure to agree on most things and so I I'm
00:58:52
worried about uh the timeline think of the time line is this way this is the first 100 days we're in a honeymoon
00:59:01
period I've been through I'm old you know I've been through this a long time I know what the honeymoon is like right
00:59:07
afterwards there's a 100 days that you can change legislation you move quickly and everybody's there then there's the
00:59:13
next important time Horizon is two years to the midterm elections you get in about years you know 18 months after the
00:59:22
election and now not everybody goes everything goes as anyone expects you could have the supply demand situation
00:59:30
and think of our cycle I mentioned you know the average cycle is about six years give or take three years and so
00:59:37
we're going to be later into the cycle we have this Supply demand situation right are things going to stay good into
00:59:45
the midterm elections and and and that mandate I think there there could be a lot of fighting in the interum elections
00:59:52
let me ask you two questions the first if we do significant Cuts there will be a lot of job loss if
01:00:01
AI is successful and moves quickly there will be significant job loss if there is
01:00:06
significant job loss does that not fuel the rise of socialism in the United States I think that we can do it when I
01:00:15
talk about the 3% solution I think that we can cut and make the adjustments in a few
01:00:24
percentages to be a able to do this without great trauma so we can get to having that limitation done without
01:00:34
great trauma and it will be supported by interest rate moves so that's first we can get this thing done we must get that
01:00:44
thing done and if we don't then of course I think we are in an era that of course we're going to have
01:00:54
great conflict in the United States this is not a run to Nirvana this is you know the the
01:01:04
moment there you're going to have legal challenges one state the Democrats you know the blue
01:01:11
States the red States and within the states you're going to have a lot of disruption and you're going to have a
01:01:18
lot of dissatisfaction and it's going to be about money and power and so that's ahead
01:01:26
and so like you say there's the Socialists the left the right and that's why you're going to
01:01:34
uh this type of civil war or internal conflict is going to be with us this is not a straight race to Nirvana and
01:01:44
prosperity and and you have that at the same time as you have the other elements
01:01:48
you know they're the five big forces so what I'm calling so you have the debt money we talked about there's the
01:01:56
internal conflict that is we're going to test the legal system and you know and we're in an environment now that might
01:02:02
is Right internationally you are going to have the same kind of conflict we touched on
01:02:09
China we're going to have conflict you're no longer have a a cooperate even an attempt at a Cooperative world order
01:02:18
things like the World Health Organization the World Trade Organization all of those are Obsolete
01:02:25
and so we're going to have again might is right and so it's going to be a period of greater conflict you're going
01:02:31
to have a technology War you can have mil increased military spending in this kind of environment that's that creates
01:02:41
a budget issue and climate will have uh it it will be an economic issue as well as a um environmental issue so these
01:02:52
things these expenses are going to go up so all of those coming together so you're yes left right and conflict will
01:03:01
be ahead of us is this a hot Civil War do people take to the streets I mean how does this resolve obviously we've got
01:03:09
historical context for social Uprising but what happens in the United States over the next 10 years I think two
01:03:15
important aspects of it is does the legal system work well so that the Supreme Court
01:03:27
you know you asked me about the independence of the Central Bank you know do the does law
01:03:35
work and I think there's going to be a lot of challenges I'm not saying it doesn't work I'm saying that's the
01:03:41
question and that'll be very much state by state you're going to see conflicts between the states and the central
01:03:51
government so how does that decisionmaking system system hold up is it might as is right you know Sanctuary
01:04:00
City issues and such how is or is that going to all work well I mean that's you know that's the most important thing and
01:04:11
then we have in a time of great stress and challenge you know when things get worse right now things are good this is
01:04:20
pretty good and but they're going to get worse and then you have the international
01:04:27
going on at the same time and so internally within countries we have the same kind of conflict you're seeing it
01:04:35
happen in Europe you're seeing the same same Dynamic we talk about the problems that the United States is having
01:04:42
regarding debt and so on you have then the expense same problem within the Europe you're seeing greater polarity
01:04:49
left right you're seeing economic problems cause more confrontation and so you're seeing this around the world so
01:04:58
you're coming into an environment that is likely to have over a period of time over a period of time not immediately uh
01:05:06
greater conflict when you talk about 10 years there's going to be a period in that 10-year period where it's going to
01:05:15
it's going to be hellacious in that 10year period where you know the coordination of dealing
01:05:22
with our problems our problems will be greater and the cooperation for dealing with problems will be less on that point
01:05:33
talk about the role that you have seen external conflict play in resolving the fiscal challenges internally so you talk
01:05:43
in your prior Book Changing World Order about the historical relationship between external conflict as a cycle
01:05:49
that seems to follow or flow with this financial cycle maybe you can talk a little a little bit about what's going
01:05:56
to happen between the United States and China given the condition in the US today do we have a higher propensity
01:06:03
when things are difficult at Home Folks tend to go to war war is stimulatory is that a driver here and
01:06:09
what's going to happen functionally with China over the next decade do you think
01:06:14
and the US there's a cycle that has to do with changes in money and all of these
01:06:22
things where you don't have enough money you need money to support con International conflict you
01:06:33
need money to make domestic people happy and then there's no power you know there's no system for making judgments
01:06:43
internationally the you know the United Nations doesn't work the World Health Organization they don't work so there's
01:06:49
no system so you come into this power so when so when we're talking about the financial problems that we're talking
01:06:57
about that we covered and recognize that that's worldwide and then you have the polarity worldwide that has to do with
01:07:06
wealth different wealth and values and you have that Pro problem within the population and then you have no rule
01:07:15
system internationally so it is a might is Right series you have that Confluence
01:07:23
of things uh particularly now then you and then there's disruptions big disruptions technology
01:07:30
we talked about how you can't lose the technology War because you'll lose the military war all of that stress and
01:07:40
shortage of what is perceived to be needed is incendiary you know it's it's a it's
01:07:49
it's a it's a risky situation of course productivity helps but it was like you have to understand
01:07:56
put it in its place the 1920s leading up to the stock market bubble that that was
01:08:05
the decade that we had the greatest number of inventions patents Innovation great productivity increases while we
01:08:15
simultaneously had big debt increases and we simultaneously had these wealth Gap and values increases and so you
01:08:24
don't get away from that so this is going to be a lot of tension in a world where it's difficult to get all the
01:08:32
parties to cooperate in Wars if you look at history when I say Wars there are military Wars
01:08:38
there and then there's less than military Wars and and I can't tell you that we're going to go into military
01:08:44
Wars I think like the Soviet Union and the United States because of the risk of mass
01:08:54
destruction was able to avoid those but it it in history it's going to it's going to be a
01:09:04
very U it's going to be a very difficult period you describe in your book the difference between how the United States
01:09:12
goes to war and how China goes to war correct me if I'm wrong but you speak to the US goes to war
01:09:19
head-to-head open confrontation whereas China is much more like a sunu Art of War style it's a little bit more tricky
01:09:30
a little bit more careful they they never let you know what they're going to do is that a fair characterization yeah
01:09:37
the the the um the general belief of um the Chinese on The Art of War and this is
01:09:47
existed throughout and it exists today is that uh if if if you're going into a fighting War you must not have been
01:09:56
smart enough to win without a fighting war and you win through deception and manipulation because fighting Wars are
01:10:05
going to damage you a lot you don't want to be damaged you you want to get to your objective so that's how they fight
01:10:13
Wars that's the sounds like a smart way to fight Wars uh also international relations there's What's called the
01:10:21
tribute system and the tribute system was your power determines where you are in your
01:10:28
hierarchy if you have more power you have more hierarchy you're higher in the hierarchy it's like confusion and if you
01:10:36
are and everybody should know what each other's power is and the Lesser power should give tribute to the greater power
01:10:45
this is internationally and the greater power should uh respect that and treat and they should work and have Harmony
01:10:54
together rather than to have the conflict because it's all about getting what you want Harmony and prosperity is
01:11:04
what you want and fighting that destroys things is not what you want whereas um yeah the the man who was uh vice
01:11:15
president great uh historian of China A Man by the name Wan described it to me that um there's the Mediterranean
01:11:24
approach right yeah and the Mediterranean approach which is a very different approach really began out of that there
01:11:34
were families and there's no borders and the way it worked is there were no limitations in fact we didn't have
01:11:42
countries with borders and ideas that you don't cross borders until what's a piece of West failure
01:11:50
after the 30 in the mid 17th century I think it was like 16 50 something up they had 30 years of war
01:12:00
and everybody would fight so they were fighting experts and that's what the norm was and then after 30 years of war
01:12:08
they decided okay let's draw a boundary around it and try to what goes on in there is your business and and that's
01:12:16
how it came about so and that's by the way in history one of the reasons that the Chinese and Japanese lost they had
01:12:25
what they called their hundred years of humiliation when the fore Powers came in
01:12:30
in late 1830s um and they had a fight the the Opium Wars and so on the western Powers
01:12:39
were at strong at fighting because they were practiced at it and then there was the Hundred Years of humiliation they
01:12:46
call it in China where they they the foreign powers came in so anyway I'm giving you too much history but I'm
01:12:53
saying that there's a whole different attitude about how to play that game and so that's what
01:13:00
I think you're going to see you you know that's when we come back now to the chips war and you took look at today's
01:13:08
news you know there we are there we are well look Ray I feel like I always tell people the the kid that stands
01:13:19
up at the middle school and says I'm going to make the vending machines free when the the presidency of the middle
01:13:27
school and unfortunately in a democratic system the El election process kind of follows a similar pattern it's very hard
01:13:37
I watched these hearings this week and I was deeply frustrated when I hear Senators say I got this money for my
01:13:43
constituents I got this their initiative their intention is to stand up and say I'm going to get you this they go into
01:13:50
Congress they get you that money and over time government spending swells and there is no incentive to reduce it and
01:13:58
we find ourselves now on the precipice of a really difficult crisis and I really do hope that politicians find
01:14:06
within themselves the leadership to stand up and say we need to do difficult things because 10 years from now or 20
01:14:13
years from now if we don't things are going to be very bad for all of us and convey that to people and I really do
01:14:18
hope that your message gets to them and that their leadership allows them to stand up and say we need to make these
01:14:24
really difficult changes deeply and quickly in order to preserve the union and that they can make those changes and
01:14:31
we can move forward and continue to build our lives and so I really appreciate you taking the time to write
01:14:37
this book share this with us and I really do hope it's heard I think it's so important so thank you so much Ray we
01:14:44
can do this and if we don't do this the power of the United States is going to be greatly
01:14:52
diminished so it's domestic it's inter International so I appreciate yeah I'm appreciate you Dave that we can have
01:15:00
this kind of conversation just have people behave logically that's too much to ask yeah
01:15:07
well no look I mean let let's not give away the vending machines for a couple years and you know kind of think about
01:15:12
keeping the school open uh for the Next Generation but that was great thanks Ray
01:15:17
you know your stuff you're great and this is really invaluable thank you for doing that for your listeners I think
01:15:24
it's so important too Ray and I spent a lot of time thinking about it and worrying about it your message is so
01:15:29
clear and important I think you present it well and write it well I read your whole book this weekend I appreciate you
01:15:35
putting it all out there I really do hope that the folks that listen to our show in DC listen to this I I I cannot
01:15:41
tell you how disappointed I was after I spent the weekend at the inauguration I met a lot of members of Congress I met
01:15:47
most of the members of the new cabinet and it's just not there I'm just frustrated and I'm just heartened by it
01:15:56
so anyway I I think I think it's important to keep harping on it though we're not going to stop and and I'll
01:16:01
keep talking about it and appreciate your efforts here too we just have to do our best that's right really appreciate
01:16:08
it Ray thank you thank you Dave [Music] bye I'm going all in