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- [00:03]
A
All right. Good morning, Doug. We're back with questions from subscribers, but first want to get your feedback on some of the latest headlines. Both of us saw this article the other day that showed to me a shocking number that 30% of Americans admit to shoplifting.
- [00:21]
B
That's a shockingly large number. And I did see that article too, and it said that Walmart was the primary beneficiary of their, of their attentions. So that seems like a very high percentage of the population. Can, can we really call ourselves a, an honest and, and, and trusting, high trust society anymore? When 30 admit that's admitted. Maybe there are more, but they don't want to admit it for.
- [00:59]
A
You have to assume. I mean, some people must have some kind of. Well, I don't want to admit to a crime in this random survey. You know, some people that would think that way or others would have a little shame about it and not want to admit it for that reason. You think some.
- [01:16]
B
Yeah. You think so? But I'll tell you something interesting. This is boots on the ground people. I knew. There was one guy I knew way back when, his name was Les. And if anybody asked him what he did for a living, he was quite forthright and he said, I'm a thief. And by God, he was a thief. He never stole from me. But I knew for a fact that that's what he did. I mean, cars were his specialty, man.
- [01:47]
A
Not, not clothing and food and things like that.
- [01:52]
B
Well, that was probably a little bit, you know, below, but I think if he saw himself as a thief, he saw that as a, a real occupation. Maybe, maybe he saw the Robin Hood movie and Robin Hood was the prince of thieves. Steal from the rich, gift to the poor. I mean you can rationalize these things all kinds of ways. And I met Les through another friend of mine. Unless, wasn't really a friend, I just, just knew him. But George. And George was a, a lower middle class guy, but a lot of native intelligence and had some skills and virtues. But, and he was, he thought about these things and we were talking about morality one time and George said, well, I agree it's a good thing, but right now I can't afford morality because it would cost him money if we stopped lying and cheating and stealing basically. And he figured that when he got to a higher economic level he could afford to adopt the highfalutin values of people who didn't do these things. Which is the wrong approach, needless to say.
- [03:18]
A
Right.
- [03:19]
B
But to the best of my knowledge, as last I heard of George, he never reached Such a elevator level that he could stop lying and cheating and stealing. But he was a charming guy and thoughtful. So for what it's worth, 30% of Americans stealing from various places. Well, yeah, I guess as the society's collapsing, more people will steal because they'll need the money or the goods and can rationalize it just like those two guys did.
- [03:53]
A
Just like George. Yeah, exactly. Yeah, yeah.
- [03:56]
B
You know, more overtly less.
- [03:59]
A
You know, there's this, there's a phrase that conservatives use against the woke. They, what they call the beliefs of the woke. Luxury beliefs. You know. Have you heard that expression before?
- [04:14]
B
I have. Luxury beliefs, yes. How?
- [04:17]
A
It's almost like beliefs, well, like, you know, believing that everything should be, that all that outcomes should be equal instead of equality of opportunity, equality of outcome. You know, that's a luxury belief. You know, we have a society that can force that. But in a way it sounds like George thought that morality in general was a luxury belief.
- [04:42]
B
Yeah, but when he couldn't quite afford a luxury that he couldn't quite afford at the moment, but he hoped to get there someday. So.
- [04:50]
A
Oh, that's.
- [04:51]
B
And had it backwards. But you know, listen, I, I always try to look at the bright side of everything. And the bright side of Mondami having been elected in New York is that here we have an overt criminal, I mean, or somebody with overt criminal beliefs. I mean those steal, I mean, and, and make it look legitimate. So I can't wait to see New York City absolutely run into the ground. I mean, much worse than it was in the 70s. I mean I used to go up to New York a lot from Washington, take the, take the Amtrak up on weekends to New York from D.C. and in the 70s, New York was, was really dirty and it was really dangerous. And I hate to say any place is dangerous because people say, oh, it's a dangerous place. That's usually, you know, in the, in the sense of there may be dragons over the next hill. Thinking like a medieval peasant. But I used to go to these meetings of something called, that was run by my friend who is a very famous book agent. It's called the Reality Club. And because of where I was staying when I'd go up there, I usually walk home with this one psychiatrist who was a member of the group. Nice guy, usually don't like psychiatrists, but I thought he was kind of an exception. And here we are in New York and this is an upper middle class guy and he's carrying a revolver in his pocket. He says, I won't leave home without it these days. So. Wow. Yeah. So I think New York is going to revert to what it was like in the 70s when it was not, not really a very nice place. So I'm glad Bondami has been elected. Further sign of the collapse of civilization.
- [06:54]
A
Well, did you hear about this Saudi Arabian nuke deal that Trump announced and then he kind of.
- [07:01]
B
Yeah.
- [07:01]
A
Changed the deal on it.
- [07:04]
B
It's so funny. I mean everybody, Trump, after writing his book, the Art of the Deal and all that, he's the best negotiator in the world. He's the worst negotiator in the world. Basically his idea of negotiating is bullying and pushing people around and I don't think he's a very good negotiator for a lot of different reasons. But this is wonderful where he cuts a deal with Bin Salman and then it's like the Israelis come up to him and say what about us? So he has to go back and break the deal. But I don't think the Saudis are going to let him break the deal. And not only that, what is this like the Saudis, the most reliable people in the world that you're going to set them up with, with nuclear power? Why are they more reliable or nicer or more on our side than the Iranians are? They aren't.
- [08:06]
A
That was my question. You know, I thought, I thought we were trying to stop and. Yeah. Stop the proliferation of, you know, nuclear period. Because obviously we're going, we've been targeting civilian nuclear infrastructure in Iran.
- [08:23]
B
Yeah. And entirely apart from that, this whole thing about you can't have nukes. Well, the fact is everybody's going to get nukes. The Israelis, tiny little country got nukes in the 60s and the technology itself at this is 80 years old. And the cat's out of the bag. The North Koreans may be the poorest country in the world. Certainly the poorest country in the world outside of Africa. I mean they have multiple nukes and missiles. So anybody that wants them can get them, build them themselves or certainly buy them or be given them from other. So this is all, this is, all, this is all just nonsense. But the fact that he's got to break the deal that he idiotically cut with the Saudis because he left out his, his buddies, the Israelis. I mean this is, this is just embarrassingly stupid. Doesn't he even have a, didn't he have a lawyer or there must be some non sycophant on his team that read the deal or did he just do the deal on his Own.
- [09:33]
A
I mean, apparently it was signed between the Department of Energy in the US and the, you know, the respective same agency in Saudi Arabia. So it had all been worked out and signed.
- [09:47]
B
Yeah, but he didn't ask the Israelis what they thought about it and. Oh, I'm sorry, will break the deal and cut you in.
- [09:59]
A
Yeah, it'd be interesting to see what happens with it. Like you said, if the Saudis are going to hold them to it, if they can. But related to that is, you know, we talked about the NDAA, the National Defense Authorization act and this Section 219 that calls for a melding of the militaries and, and intelligence. And with Israel. Well, that passed the House, I think it was yesterday. And so what are your thoughts? What does that, what does it mean?
- [10:31]
B
I would say it's criminal and there are people that should be prosecuted for treason for what. I know. But on the other hand, Trump wanted to make Greenland part in the US maybe make it the 51st state, who knows? And who else? For a while, not under Trump, this is under Biden. I thought they were going to make Haiti the 51st state. Seemed like it was on the Runway for that. And absolutely, when the Democrats get back in office, they're going to try to make Washington D.C. and Puerto Rico the 51st and 52nd states because they're overwhelmingly left, left wing residents. So. Sure. Why not make Israel the 51st or 2nd or 3rd or 4th state. Why not?
- [11:36]
A
Yeah, well, it seemed like being a state you'd also have some obligations on the other side of it, at least, you know, of some kind.
- [11:44]
B
You got those obligations. Now if anybody does anything not nice to Israel, we have to, you know, counter attack.
- [11:54]
A
No, I mean, I mean, I mean Israel, Israel having obligations on the other side.
- [11:59]
B
Oh, I don't know. I guess Israel, well, right now it's just a one way flow of money, like at least 4 billion, probably much, much more than billions of dollars a year ago to Israel. I mean, does the US Government send that much in kind of aid to states like Mississippi which are really down on their heels? I, I don't, I don't know. Probably not.
- [12:24]
A
Yeah, good point. But what is it, what does it mean though? Because this, for these guys, these congressmen to vote in favor of this, like it's a sign of a, of a problem. I mean, you said they're traitors or, you know, that they should be prosecuted for that. I mean, if we're at that stage, that late stage of empire, maybe that's related to it. I don't know what is it? What can you infer about the state of things from that alone?
- [12:56]
B
Well, I guess as well, knowing that there's an organization called apac, which is a foreign lobbying organization, but is not registered as one, which is kind of strange because they prosecute all kinds of people for acting as unregistered foreign agents. And AIPAC has most, I guess, of the U.S. congress. I don't know what the percentage is, but it's most is correct. On their payroll. So what is this that a foreign country is basically calling the shots, certainly in the White House and also in Congress. I mean, this is just not right. And meanwhile, this stupid average American has to pay for all this nonsense. So, yeah, I'm still of the opinion the US is heading for a revolution of some type and. Or civil war.
- [13:55]
A
I think so, too. To me, I see it as like just a signal for those of you who hadn't been paying attention long enough that America is dead, that it just isn't. It isn't what we remember. You know, it's way so far past that and it has been for a long time. But I think this is, if in case you weren't paying attention before, this should tell you.
- [14:17]
B
Yeah. And I think it's a time for definitions here, which are important. And America is an idea. It's a concept. It was unique, totally unique in world history. But you're correct, America is dead. All that's left is the United States, which is just one of 200 nation states which cover the face of the globe like a skin disease at this point. And frankly, we're no better than any of the others. In fact, we're worse, much worse than most of them at this point. And forget about America. I mean, it doesn't exist anymore. It's an idea. And the idea is gone.
- [14:58]
A
Yeah, sadly. But let me share this short little video with you. Somebody disagrees with that sentiment, you might be able to guess who. But here's what Donald Trump had to say recently.
- [15:10]
B
So, ladies and gentlemen of Georgia, the golden age of America is upon us. We are in the golden age, isn't it the greatest will ever be. And together, with your help and the patriots all across this magnificent land, we love our country. We will make America powerful again. We will make America wealthy again. We will make America healthy again. We will make America strong again. We will make America proud.
- [15:43]
A
Proud again.
- [15:44]
B
We will make America safe again. And we will make America great again. Thank you very much. Thank you.
- [15:55]
A
Well, his first comments were the ones I really wanted you to Comment on. But I think everything you said after that, it's kind of interesting.
- [16:01]
B
Oh, listen, he's a great comedian. I mean, you've got a, you've got a collapsing empire. It's, it's on the slippery slope. The slope is getting greasier and, and steeper and he, he's deluded. Well, listen, he's got it. Who knows if he knows better. He's living in such a bubble in the White House, surrounded by sycophants. I don't think he knows what's going on anywhere in the US at this point. And the one thing he said which wasn't either incorrect or an overt lie was America's the greatest it will ever be. I think that was, I think I'm quoting him correctly and that's probably true because, yeah, we're slipping radically. So that part was right.
- [16:53]
A
Grace will ever be from here on out, but not the greatest we've ever been, I'd say.
- [16:57]
B
No, no, no. We're past our prime for frankly. So,
- [17:05]
A
yeah, I think the whole situation, and I mean, well, the, like the 10 year got to 4.7% yesterday, so that's not a good sign. Everything that you see happening in Iran, not a good sign. I mean, kind of if you're paying attention to it, it looks like the US Is getting its butt handed to it, frankly.
- [17:25]
B
And people have forgotten that the war between the Ukraine and Russia is ongoing and could still spill out into something really big, as could the dust up with Iran.
- [17:40]
A
Right. Well, I think tonight they're not. According to Trump's comments. You never really know if he's serious about what he's saying or if it matters because he says a lot. But according to him, there's a bigger military campaign on the way and you know, based upon all the troop, not troop movements, but movements of material at least into the Middle East. It looks like that could be today. So we'll find out.
- [18:08]
B
Oh, that's wonderful. Just what we really need is World War iii. And to think that I used to be favorably inclined towards Trump when he said he wants to abolish the irs, he wants to get rid of the income tax. No foreign wars, no forever wars. That's ridiculous. We're going to stop that. We're going to, we're going to radically cut regulations, we're going to abolish the Department of Education. That was one thing that was supposed to happen. I mean, these were all just figments of his imagination or, you know, good sounding lies that he told. So I don't I don't support him anymore. You can't support him anymore. It's funny, I used to have a friend since deceased Mark Gould, who was what you call a red diaper baby. Both of his parents were communist. He was a Jew from New York. And Jews from New York are, I mean, mostly like. Well, that's why Mondame got elected and so he'd kind of outgrown all those stupid beliefs. But being a native New Yorker and having followed Trump for his whole life, he warned me that Trump would turn into what he did. And he was right. I didn't believe him. I didn't think it could be that bad, but he's right.
- [19:27]
A
Well, just one last thing in news and we'll get to the questions is that I think it has, it is a golden age right now for the Trump family. I mean, I've seen all these, all the news that's been out there about how much Trump's net worth has gone up since he's taken office. But I also saw that Don't John Jr had gone from a ten million dollar net worth, which isn't very impressive, frankly, when Trump came into office. Yeah. To now having a 500 million dollar net worth. That's, that's pretty. It's time. Like time. From 10 million to 500 million easy. The best capital allocator of all time, you know, or something else is happening.
- [20:13]
B
Well, he's got to catch up with his good buddy and brother in law, Kushner, who's worth several billion at this point.
- [20:20]
A
He's got a long way to go.
- [20:22]
B
Yeah, he does. So he's got to come up with some new schemes and scams to close the gap.
- [20:29]
A
Yeah, I think he'll get there. All right, let's get to these questions. First one is Doug. Who is Doug's favorite opera and what is it about that work that calls out to you?
- [20:42]
B
Okay, well, you know, I, I've listened to a reasonable number of operas in person and I like them generally speaking. I mean, some are very famous, like the Verdi operas, like, oh, Aida and Bizet's Carmen and lots of other Italian. It's mostly an Italian art form, but I'm a huge fan of Wagner. A lot of Wagner is just kind of boring, it seems to me. But the best Wagner is some of the best stuff ever done. It's as good as anything the Rolling Stones have done at their best, so. And I've watched the whole Ring cycle twice in person, and I'll make it three times the next time it comes back to Buenos Aires at the, at the, what the hell do we call our great opera hall in ba? So, yeah, Wagner is number one. But also I like what's called light opera or operetta, which is, and it's uncertain, unclear to me why they should make a difference between serious opera and light operetta. But when you look at operetta, to me that's George Gershwin and like Porgy and Bess, that's an opera and it's fantastic. So, yeah, I like opera and those are my two favorites. Okay. Wagner and I, I love Gershwin's stuff. All his stuff is genius.
- [22:33]
A
All right, Doug, you frequently said that if you want to envision the technological future, you need to read science fiction. Are there any current recommendations for books or authors?
- [22:46]
B
No. I mean, I read the first volume of the Three Body Problem and maybe it's because it was in translation, didn't read as well as I would have liked, but. And I haven't read the other two volumes, truth be told. I'm kind of stuck in the golden age of sci fi. And of course the classic writers are the golden age were Arthur C. Clark, Robert Heinlein and Isaac Asimov. And there were a bunch of others too that are also very good, like AE Voked and there's so many of them. But my, my science fiction reading has fallen behind in recent years, shamefully. In fact, what book am I reading right now? I'm reading Louis Lamour's the Education of a Wandering man, which is, which is really excellent. Everybody should read it. It's a marvelous book because he lived a hell of a life. So I know you're a fan of Louis Lamour too, as is Max.
- [24:01]
A
Yeah, yeah, I'm a big fan. It's one of the, that's one of the books we have as recommended reading in the preparation because it's, it's good to see. I mean, yeah, he was definitely an interesting life. You know, as far as sci fi, I think right now that predicts stuff. Well, I, I, I go, I go back to diamond age because the AI component and the nanotech components to it.
- [24:25]
B
Yeah.
- [24:26]
A
You want to like, see what. And you know, think. I don't know when that book was written. In the 90s, I assume.
- [24:33]
B
Yeah, yeah, at least 30 years ago.
- [24:36]
A
So it's way out there. But now, but reading it now, it's, it doesn't seem like the far out future. It seems like you can kind of grasp at it at this point.
- [24:46]
B
I agree. And that, that diamond age is definitely on my List of the top all time greats. Yeah.
- [24:58]
A
Okay, Doug, the US Government and Federal Reserve have been kicking the can down the proverbial debt road for the last 50. With digital assets now in play, can you make an argument that they can continue another five to 10 years or even longer before the bubble pops and we enter the greater depression?
- [25:18]
B
Yeah, that's right. It seems like they always pull another arrow out of the quiver that you didn't really think about before to keep the ball rolling. So listen, my gut feeling is we're actually at the edge of the precipice right now. And will digitizing all these assets, I mean, look, from the US Government's point of view, their prime directive is to survive, to keep themselves going. Because these people in Washington equate the US Government with America that doesn't exist. As we talked about with the country as a whole. The health of the government is a direct indicator of the health of the country. Of course, this is complete bullshit. It's not true at all, actually, just the opposite. So there's still plenty of assets that are unencumbered in the US and they'll find a way to, to move them into their side of the balance sheet. So maybe I'm wrong. At least I hope I am, that we're not actually going to slide off the edge of the precipice soon. But we really could. And frankly we really should because I'm a believer in justice. And you got to define justice as getting what you deserve. And at this point, all the stupidity that the government has imposed upon the country really should be rewarded. I mean, I'd like to think with, with hang, you know, with crucifixions along the lift of Pennsylvania Avenue from the Capitol to the White House stacks, cross crosses stacked six deep. Or maybe the guillotine is entirely too French. I kind of, I kind of like to go back to classical era. The Romans knew how to do this with crucifying enemies of society. But wait a minute, I, I don't want to see that happen because I'm not in control. I can, you know, as far as they're concerned, I'll be one of the people on the crosses.
- [27:46]
A
Yeah, well, it doesn't seem like the digital currencies are going to get us out of this at all. Because you know, if you think about stable coins potentially being a way to, you know, as a buyer of U. S. Debt, you know, that kind of like sleight of hand, but they're just, it's just not big enough. I think it's $185 billion market cap for Tether, which is the largest one by far. And that's like the last two months of deficit spending in the U.S. i mean, it's just not close to big enough.
- [28:18]
B
Yeah, that's. That's a very good point. And what, how much money is in money market funds at this point? I think the current number is 7 trillion of money market funds, which is. It's T bills and, and commercial paper of corporations and this and that, depending on the kind of money market fund you buy and I guess tether is and things of that nature could serve the same function as money market funds, which is just kind of getting that money out of circulation. So it's not in the banking system is what I'm saying. If that money in money market funds or in the digital. What would you call Tether? We'd call it a.
- [29:06]
A
It's a stablecoin is what they call stablecoin.
- [29:10]
B
Yeah. If that was in the banking system directly, then the banks would be lending it out in the fractional reserves method and inflation would be much worse. So I guess from keeping retail prices down point of view and absorbing the huge deficits of the US Government, things like Tether and stablecoins and money market funds, frankly, are pretty important. They could all blow up.
- [29:45]
A
I just think it's got to be a lot bigger before it makes a difference in the, you know, to the, to the financial system in the U.S. i just think to the monetary system at least.
- [29:55]
B
Yeah. And one interesting thing about Tether is that the company owns a bunch of gold and shares of.
- [30:05]
A
Of mining. They own Metalla. Right. They own a big chunk of Metalla.
- [30:12]
B
I do too. Not nearly as much as they do, but I'm very happy to see that they've chosen that one. Yeah.
- [30:19]
A
Doug, have you seen the movie Vigilante Citizen?
- [30:23]
B
I have not. What do you know about it?
- [30:26]
A
I did watch it. It's like it's basically this guy who is a big property owner, what country they in somewhere in Eastern Europe, who basically starts killing people related to the migrant stuff. It kills a migrant, a migrant family who. Who were protecting their son who was one of a gang of others who had raped some white girl and kills a judge. Relate that that ruled on it to. On their case and like let the guys off. So it's kind of like a response to the migrant migration, the mass migration through western countries, I think.
- [31:10]
B
Interesting. Well, I'd like to watch the movie. Where can I see it? Or can anybody who's listening probably you
- [31:15]
A
can get it on. I think, I think I got it on prime on Amazon's service. So it wasn't a really well done movie, but he know it was trying to make a. It was making a point. It's a pretty low budget, you know, it's not. Not really. I wouldn't say it was a great movie, but it's definitely got a lot of headlines because it's attacking. It's like showing somebody doing something about what a lot of people feel like they're totally powerless to do anything about, at least through the electoral process. The mass migration.
- [31:46]
B
Yeah, I got a feeling that that's going to be a growing theme in both the US and Europe because if you get enough migrants from alien societies with alien religion, alien culture, everything's alien. The society that you knew and grew up in will disappear. It'll just disappear. And that's. And it's already being corrupted. But mass migration from these places will destroy everything that we know here. And you know, John Hunt and I are. Our last book in our projected septet of novels was Assassin and it kind of deals with what do you do with these people that are running things and you can't do anything about them within the system. I mean voting is a. Is a fraudulent waste of time. Forget about that. So that's what Assassin's about. And it doesn't deal with migrants, but it deals with the people that run society. So that's a pl. I think people should read that novel. It's a good novel.
- [33:06]
A
Yeah. If you, if you like Vigilante Citizen, you'll like Assassin. Sure. So read the book. Okay. Regarding thermal coal, but maybe metallurgical coal as well. Is the coal market relatively global or regional? China has a lot of coal domestically from what I'd see. So even though they may consume a lot of it, wouldn't. It wouldn't necessarily benefit western coal mining companies. Right. Or am I off?
- [33:36]
B
No, you're not off at all. Because the importance of hydrocarbon fuels, which to say oil, gas and coal, is greatly underrated by people in general. That's what the world runs on. And if we didn't have oil, gas and coal, civilization would collapse. That's the end of the story right there. And coal is really important mostly for mass electrical power generation everywhere in the world. But where's this coal going to come from? Well, coal has a market price depending on a number of things, let's say 150 to $200 a ton. So it's really kind of cheap as dirt, frankly. It's really pretty cheap. So shipping costs are a major consideration with coal. So you want your coal to be local, not shipping it all around the world. I mean, so oil shipped all around the world, but coal is not shipped all around the world. I mean, they ship it from Australia to China. Okay, but that's. That type of thing happens. That's kind of relatively close. But it's not like oil or natural gas, which it can ship longer distances. And I remain a big bull on coal because as important as hydrocarbons are to civilization, it's important to recognize that. What are we talking about here? We're talking about carbon and hydrogen, and that's what all three of these things are. And with chemistry, at the stage it is technology, the stage it is you. These things are kind of like fungible. I mean, coal can be oil. I mean, the Germans proved that in World War II.
- [35:39]
A
Yeah, China's at. China's doing a lot of that now, actually themselves.
- [35:42]
B
Yeah, yeah, exactly. So I remain a cold bull. I still own my position in Yanco. I think it's still on. I think it's still on a recommended
- [35:53]
A
list still in the portfolio. And we recommended a couple of others and I guess two months ago in crisis investing. So if you're interested in knowing some coal picks, you can find a couple there.
- [36:06]
B
Yeah, and. And coal is cheap because the greenies hate coal. They think that for every reason possible, coal is. Is the worst mineral in the world because not only do you have to rape Mother Earth to get it out of the ground, but then God forbid you burn it. So it's. They hate coal. So it's all the more reason to like, call for the reasons just mentioned before.
- [36:32]
A
All right, just a couple more question says thanks for recently touching on the parasitic infiltration of Israelis in Argentina. After your discussion, I started seeing other videos of concern regarding their unwelcome, at least by the locals, infiltration in places like Cyprus, Greece, Italy, and even areas of India. With this being said, the most dangerous infiltration by these folks occurred a few days ago right here in the land of milk and honey with the. What we've already talked about, section 219. He. He also agreed with you. He said, I believe this is blatantly traitorous act by our elected officials, which is just another nail in the coffin of our dying, dying republic. How concerned are you both about the potential expanding implications?
- [37:16]
B
Yeah, look, it's not like I hate Israel. I mean, the fact of the matter is I have as many Jewish friends as anybody that I know, and they really are friends. And you can't equate being Jewish to being Israeli. Those are two different things. And you can't equate actually either of the other two to being Zionist, which is a. Another variation on the theme. And when I was a kid collecting stamps, I mean, I collected Israeli stamps because I thought they were really interesting. And listen, I read Exodus when I was in high school and all kinds of stuff like that. So it's not like I'm anti Israel. Although the fact of the matter is what is Israel doing? Because, you know, before the aliyah movements turn of the 20th century, there were a few thousand. How many? 10, 20,000 Jews in Israel. Not many. And they're mostly very religious types, and there wasn't a political or religious problem in that part of the world at all. So then Israelis, European Jews migrated to Israel, turned it into a country, and it's been a problem since then. And now Israel seems to be expanding, or it would appear that their idea is to make it into an empire from, from what? From the Nile to Pakistan or something like that. The whole area ruled by, by Israelis. So I'm not a fan of Israel anymore. I totally disapprove. And I know they, I know the, the Hamas attacked first and this thing with, what was it, October 6, whenever it was that. Yeah, yeah, that's, that's, that's not an adequate justification for going in and killing at least 80,000 and maiming who knows how many more. Hundreds of thousands of people that are. If you kill 80,000 people, statistically, the numbers are, you're going to have permanently wounded twice that many more, destroyed all their buildings. I mean, what's going on in Gaza is criminal. And then going into Lebanon and, and basically trying to confiscate the bottom third of the. I mean, Israel's out of control, quite frankly. It's. I don't think Israel is going to last 10 years either, quite frankly. But.
- [40:08]
A
Well, I mean, but you see things like this very and very sophisticated move of theirs to, to permanently embed themselves in the United States, you know, institutions through, through these congressional acts. I mean,
- [40:29]
B
yeah, let's make them the 51st state. That'll be. That'd be great. Sure, why not? And after that, when, when the, when the winds change, let's add Haiti and Who else can we add? I know Guatemala and El Salvador. Now, El Salvador is doing too well. We don't want them, but yeah, this is all completely insane. What's going on.
- [40:57]
A
Yeah, no doubt. All right, last question for you. I recently read A book, the Entropy Trap. What physics knows that markets don't. The author writes from the standpoint of econo physics. He calls it specifically taking the second law of thermodynamics and applying it to the economic scenario before us today. Part of the author's thesis is that deflation is as likely as inflation and one must be liquid to take advantage of this possibility. First of all, does Doug know anything about or have an opinion on econophysics? And how seriously do you take the possibility of a severe deflationary scenario?
- [41:39]
B
Well, I haven't read the book. I hadn't heard about the book until just now, actually. But one of the few laws that I believe in is the second law of thermodynamics, which is about entropy. And it basically says unless there's a. An outside input to keep things going, everything falls apart, everything winds down, everything degrades. That's just, that's a law of the physical universe. And so it applies to economics. And I guess in economics we counter that with the concept of depreciation as a financial concept, balance sheets and so forth. Because everything does fall apart. Houses, factories, bodies, everything does degrade and fall apart. And as far as, as far as what that has to do with deflation. Yeah, there's a real possibility with all the debt in the world, which means living above your means, mortgaging past capital and future production. Yeah. It's entirely possible we could have a deflationary collapse even. Even while they're doing their best to destroy the currency. So it sounds like an interesting book, but great concept. But who knows what the guys the author's overall economic.
- [43:18]
A
No, but I do, I do like the point though that thinking that deflation is as likely as inflation like to not think of. Because the conventional view now at least the conventional view among, you know, hard money types is that and, and I think a lot of stock market investors now is that we're going to have a problem in the markets or a problem with the economy, and then they're going to paper over it just by printing money. And it's just, you know, the number will go back up. Like that's. I think people take that basic idea for granted that that's what will happen. And the, you know, I don't think people think enough about a severe deflationary scenario. I don't, I don't think there's enough thought put into that.
- [44:03]
B
I think you're right. It's a possibility that's underrated that maybe a daisy chain of big institutions, all of whom are Highly leveraged, go bust. One can't pay the other, pay the other, pay the other. And the Federal Reserve can't bail them out quickly enough. And, you know, confidence collapses when people see this happen, happening. And, of course, the whole economy rests on a foundation of confidence. Not a very sound foundation. Yeah, I can. I can see that.
- [44:40]
A
Especially as bad as the leverages at all levels of society. So you certainly have on in finance, people taking a lot of leverage bets on everything with the derivatives complex and everything else, but it goes all the way down to the consumer that's, you know, doing the, you know, they're. They're paying for their Uber dinner over in installments. You know, I mean, the leverage is massive at all levels of society.
- [45:07]
B
It is on. It is unbelievable that people are paying for their dinner and installments. I guess that really happens.
- [45:15]
A
It really does happen. It's pretty shocking. So. All right, Doug. Well, I think that's all I've got for you for today. I hope you have a good weekend and we'll be back next week with more.
- [45:26]
B
Well, I look forward to it. And we were talking before that sometimes bad things happen on the weekends for reasons that the elite know best. So, I mean, the world could be radically changed come Monday or certainly by Wednesday when we talk again.
- [45:46]
A
Yeah, high possibility. All right, Doug, well, you have a good weekend. I'll talk to you later.
- [45:51]
B
Thanks, Matt.