China Moves In, Billionaire Exodus, and the Minnesota Insurrection: Are We Headed for Collapse? | Tom Bilyeu Show

Summary

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Podcast Summary: Impact Theory with Tom Bilyeu

Episode: "China Moves In, Billionaire Exodus, and the Minnesota Insurrection: Are We Headed for Collapse?"
Date: January 19, 2026
Host: Tom Bilyeu
Main Participants: Tom Bilyeu, Drew, Billy

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Episode Overview

In this episode, Tom Bilyeu and his co-hosts dive headlong into a tense and tumultuous moment in American and global affairs. Covering bold moves by China in North America, controversial banking and cryptocurrency legislation, California’s divisive billionaire tax proposal, civil conflict in Minnesota, and the broader implications of policy, inequality, and economic stress, Tom channels urgency and frustration to encourage critical thinking and first-principles understanding. Across each section, he challenges accepted narratives and urges listeners to spot the deeper forces shaping decline and disruption across society.

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Key Discussion Points & Insights

1. China’s Expansion & American Response

(03:26 – 09:11)

• Context: China is strengthening ties with Canada by slashing tariffs and offering visa-free access, facilitating a potential influx of affordable Chinese electric vehicles (EVs) into North America through Canada and Mexico.
• Tom's Take:
  • Predicts that Trump, if in power, will likely respond with further tariffs or restrict Chinese EVs to protect domestic interests, especially if Chinese cars start dominating the market via Canadian imports.
  • Sees China as executing a “long game of seduction,” contrasting with America’s “smash and grab” approach:

    “China has been using seduction. When the US has been using smash and grab. And I think that’s going to really start to bear fruit.” — Tom, (08:28)

  • Warns of the dangers when a country loses manufacturing capability—especially in a potential kinetic war scenario.
• Deeper Insight:
  • Tom links historical perspective, emphasizing China’s millennia-old sense of destiny and highlighting the West’s vulnerabilities in “delegating the entire supply chain” to China.

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2. Banking Legislation, Stablecoins & Regulatory Capture

(14:03 – 27:41)

• Focus: Dissection of the Digital Asset Market Clarity Act and its controversial Senate amendments that restrict competition for banks by banning yield payments (“rewards”) on stablecoins.
  • Originally aimed to clarify digital asset regulations, but the Senate rewrote it under banking industry influence, effectively choking innovation in DeFi and crypto.
• Brian Armstrong’s (Coinbase) Critique:

  "There are too many issues, including a de facto ban on tokenized equities, DeFi prohibitions, giving the government unlimited access to your financial records and removing your right to privacy... we'd rather have no bill than a bad bill." — Quoted by Tom, (17:54)

• Tom's Economic Rant:
  • Pillories banks for earning risk-free interest by lending money printed out of thin air (fractional reserve banking) while passing trivial returns to account holders.
  • Emphasizes crypto’s 1:1 reserve structure, arguing it’s “a way safer position” and banks are preserving monopoly power through “regulatory capture.”

  “Even China is paying yield on their digital Yuan... The whole idea is to compete to be the place... people want to save their money.” — Tom, (20:44)

  • Connects Minnesota unrest and broader economic malaise directly to this entrenched financial power structure.

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3. Historical Perspective: Central Banking, Inflation, and Collapse

(27:41 – 40:59)

• Speed Run Through History:
  • Outlines a U.S. history of warnings against central banking (from the Founders to 1913), the slow “junk food” rot of monetary policy, and the ramp-up to today's economic dysfunction.
  • Explains how pumping money into the system (especially post-2000) primarily inflates asset values, favoring those holding assets (stocks, real estate, gold, crypto), leading to a “K-shaped” recovery.
• Key Quote:

  “If you want to get rid of billionaires, stop putting money into the system… you make everything more expensive… It creates billionaires because everyone is forced to rush into assets that can’t be inflated.” — Tom, (32:36)

• Emphasis:
  • Ordinary savers are punished (“robbed by inflation”); wealth accrues to those holding non-inflatable assets.
  • The system sets up political gridlock and inevitable unrest—a feedback loop between economic stress and social conflict.

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4. California’s Billionaire Tax Act and the Exodus Effect

(41:32 – 55:05)

• Legislative Summary:
  • California proposes a “2026 Billionaire Tax Act” — a one-time 5% tax on billionaire net worth, with the stated aim of funding healthcare, education, and food aid amid fiscal shortfalls.
  • The bill spurs immediate capital flight; even the prospect causes a crash in response (net billionaire assets in CA drop from $2T to $1.3T).
• Tom’s Critique:

  “It is absolute lunacy and proves yet again that lawmakers have absolutely no understanding of economics... when you threaten to steal money from the most productive and mobile humans on earth, they get up and leave.” — Tom, (41:32)

  • Argues that the effective tax rate is far higher due to forced asset sales at depressed prices and limited deductions.
  • Points out the historical failure of similar European wealth taxes, with even progressive Governor Newsom calling it “really damaging.”
• On Ro Khanna’s (D-CA) Proposal:
  • Ro Khanna suggests a more modest 1% billionaire tax, arguing that “people should have more patriotism” and remain in California.
  • Tom objects:

    “Tax people on the amount that they loan against their assets... But this [bill] is full retard. And not understanding the difference is how we end up in trouble.” — Tom, (48:59)

• Warning:
  • Slippery slope to taxing 100-millionaires, then millionaires — and the real danger is government inefficiency and fraud, not billionaire hoarding.

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5. Minnesota Insurrection/Unrest: To Invoke the Insurrection Act?

(57:32 – 69:38)

• Current Crisis:
  • Riots and attacks on ICE agents in Minnesota prompted calls for President Trump to invoke the Insurrection Act.
• Historical Context:
  • The Act has been essential in quelling open rebellion (e.g., Civil War, Civil Rights era); last invoked in 1992, Los Angeles.
• Tom’s Stance:

  “As someone who remembers the LA riots… while this is bad, I’m going to tell you it does not feel like we’re in the kind of full-blown rebellion or uprising that felt like [then]… Invoking the act now would… inflame tensions even further rather than calming them down.” — Tom, (58:07, 62:21)

• Advises:
  • Keep the response at the state level, allow local authorities to de-escalate, and use federal power only as a last resort.
• On Political Rhetoric:
  • Distinguishes between legitimate protest and “rejecting the authority of the federal government.”
  • Criticizes inflammatory talk by politicians on both sides—urges a return to calm first-principles discussion.

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6. Inflation & the K-Shaped Economy

(74:48 – 91:24)

• Inflation Data:
  • “Trueflation” reports 1.55% CPI inflation year-over-year, lower than the Bureau of Labor Statistics (2.7%).
  • Tom notes that while this looks good, it may reflect economic contraction/recession more than real productivity gains.
• K-Shaped Recovery:
  • The top 10% of earners now account for almost 50% of consumer spending — up 13 percentage points over 30 years — accentuating inequality.
  • Explains how the true “war” is not class, race, or wealth, but a policy war: deficits, monetary expansion, and regulatory capture erode savings and punish the middle class.

  “You’re not in a race war. You’re not in a class war. You’re in a policy war.” — Tom, (81:13)

  • Argues that policies funnel inflation and asset price increases to the already-wealthy, pushing everyone else into risky bets or dependence.

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7. Hope, Agency, and Thinking from First Principles

(88:31 – End)

• Despite systemic obstacles, Tom injects optimism:

  “If you’re open to hearing it, the information’s there. It’s just pouring out.” — Tom, (88:46)

• Encourages listeners:
  • Not to fall into team-based tribalism, but to reason from first principles and critical cause-and-effect thinking.
  • Even if governments falter, individuals can protect themselves through learning, investing in assets, and refusing to be distracted by division.

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Notable Quotes & Memorable Moments

• On U.S. v. China:

  “We are dealing with a very organized, very disciplined, very intelligent China making incredibly strategic moves. They’ve been using seduction; we’ve been using smash and grab.”
  — Tom, (08:28)

• On Monetary Policy:

  “In 1913 we switched our kids from eating meat and eggs to eating Twinkies… it’s all sugar all the time.”
  — Tom, (30:05)

• On Asset Inflation:

  “Once you get that [‘they can steal my money through inflation’]… then you go, well where do I put my money? Into things that can’t be inflated.”
  — Tom, (34:18)

• On Billionaire Tax Policy:

  “The retroactive January 1, 2026 obligation date gave little time for relocation after the proposal’s reveal… designed intentionally to trap billionaires, which I bet you can imagine how they felt about that.”
  — Tom, (41:32)

• Drew on California Exodus:

  “So it goes from the billionaires to the 100 millionaires to the tens of millionaires to the millionaires.”
  — Drew, (54:06)

• On Policy vs. Class/Race War:

  “You’re not in a race war. You’re not in a class war. You’re in a policy war. A policy war. Politicians run deficits and print money to cover it… and that printed money comes out of your pocket.”
  — Tom, (81:13)

• On Hope in the Information Age:

  “You now have access to the information. Like, it is wild what you can learn. Absolutely wild. So just make sure you’re putting the time to learn.”
  — Tom, (91:20)

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Timestamps for Key Segments

• China’s Moves & Chess with the U.S.: 03:26 – 09:11
• Banking Legislation and Regulatory Capture: 14:03 – 27:41
• Speed Run: History of U.S. Monetary Policy: 27:41 – 40:59
• California’s Billionaire Tax Analysis: 41:32 – 55:05
• Minnesota Unrest & Insurrection Act Debate: 57:32 – 69:38
• Inflation, Asset Class, and K-Shaped Economy: 74:48 – 91:24
• Closing Reflection & Agency: 88:31 – End

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Summary Takeaways

• America is at an inflection point. Geopolitics, technological change, and entrenched monopolies are colliding with bad policy decisions and social frustration.
• Policy, not people, is the problem. Narratives about class or race mask the deeper engine: monetary and regulatory policies that reward a small asset-holding elite and punish the masses.
• Beware of distraction and tribal thinking. True agency requires critical evaluation — not reflexive team loyalty.
• Don’t just hope for government rescue; learn, invest, and act individually.

  “You shouldn’t have to bet to stay ahead of inflation… but in this system, you do. So learn the rules.” — Paraphrased, Tom

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A powerful, wide-ranging, and sometimes angry episode with focus, urgency, and a challenge to think for yourself, not in teams, as the world rapidly changes.

Transcript

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[Tom]

Sometimes it really do be like that. So forgive us for being tardy over here doing battle with the technology gods. And in the end, we won. So shout out to Drew, who actually knew what to do. So, Drew, well done. Very well played.

[Drew]

Teamwork makes a dream work.

[Tom]

Carrying more weight for the team. Very impressive. All right, everybody, welcome. Thank you guys so much for being here on this incredible Friday. There is a lot going on in the world. This is not a boring time to be alive. That is for sure. Today is going to be. I can already feel it. I am. I'm traumatized.

[Drew]

A lot to talk about.

[Tom]

A lot to talk about. We started rough this morning.

[Drew]

Yeah.

[Tom]

How are you feeling today?

[Drew]

Like, in life or.

[Tom]

Yes, Drew, how are you feeling?

[Drew]

Good. I was up at, like, 1:52am this morning.

[Tom]

That's very early. And strikes me it's in keeping with the vibe that made me ask this question. But dare I ask what happened?

[Drew]

I just woke up, and it was one thing I was like, oh, okay, snooze. Let me go back to sleep. And then I was like, sitting with my eyes closed for like an hour, and I was like, all right, I'm just up now. So then I started jumping into the news.

[Tom]

Those days are fun.

[Drew]

Jumping into the news.

[Tom]

Welcome, Drew. There's plenty to cover. Is X down now?

[Drew]

That would be hilarious. If X is down now, the question.

[Tom]

Is, is X down for us or for everybody? Are the Iranians hitting the question?

[Drew]

You've been talking a lot of shit about the Chinese child. They heard you. They heard you in their back.

[Tom]

Okay, here's the thing I have thought about. So, first of all, I'm actually more worried about the British right now because the British are denying people entry for talking about their government, which I do routinely, and I have a British wife, so that will be interesting to see how that one plays out. Not super afraid of the Chinese. I definitely worry about making the radar of the Iranians. So we'll see how that plays out.

[Drew]

Speaking of the Chinese, though, because I, I, we just were on the backs of a raid in Venezuela because a raid capture a.

[Tom]

It's just intriguing to hear the words people use.

[Drew]

There were six people going in in the dead of light. We snatched somebody and left. I would classify it. Maybe it's not a raid. Okay.

[Tom]

For me, it's an invasion.

[Drew]

Invasion. Okay.

[Tom]

Straight went into a sovereign nation and said, I'll take your president, please.

[Drew]

Yeah.

[Tom]

How would we react? It's an act of war for sure.

[Drew]

It's an invasion.

[Tom]

It worked.

[Drew]

But I'm going the other way because now with this China, Canada deal, they're getting very, very cozy. China is giving visa free access to tourists from Canada. China, Canada snat slash their tariffs. So there's going to be Canadian, Chinese EVs in now Canada and in Mexico. They're definitely going to take over the North American market eventually. Because now I could just buy one in Canada and drive it over the border. Like, to me, we were worried about Venezuela because China was in our backyard, but now I feel like China is now in our living room. Do you think that this is going to warrant a response from Trump?

[Tom]

Just in general, I think Trump responds to everything he considers a potential slight or threat. So whether it warrants a response or not is a totally different question. Whether it will get a response? Almost certainly. Is he going to do it? In the short term, probably not. But in the long term, if we start seeing a lot of people buying cars there and then driving them over, I think he will respond with tariffs. He is going to keep Chinese EVs out of America unless he thinks he's Trading for something else. Because from what I hear, and I haven't done a super deep dive on this, but from what I hear, given the Chinese ability to manufacture at scale, just absolutely incredible things, they can offer a far superior car for far less. And so right about now, Americans are in the market for something better and cheaper. So the reason that we don't have a gaggle of Chinese cars on the market is because we tariff the life out of them. Now, should we be doing that? Almost certainly, yes. We have to. People need to understand that if a country cannot manufacture its own goods, that country is in a horrifyingly weak position, especially if you have a 75% chance of going to war with the people that actually can produce things. Well, in a kinetic war, you better be able to make things, things that move fast, shoot clearly, like, you just really can't play. And right now, China basically controls our entire supply chain for drone technology, being one of the many things, our advanced way of life from the rare earth minerals and refining processes that control chip manufacturing, all of that, all of it goes through China. Now we can get into all of the complex reasons why we did that, which get back to the core of your question, which is, okay, this is a chess game. You've got Trump, who is, I think, very good at first order consequences. I think he's potentially, and in fairness, I need to see some of this stuff play out in the fullness of time. But I think he's much worse at second and third order consequences. So he'll go in and he'll grab Maduro and think, ooh, that gives us control of the oil, but does not then map out accurately what does China do? Because China is full of very smart people that are not going to sit down. They see this as their opportunity. They've spent whatever, 30, 40 years clawing their way back onto the world stage after, like 200 years of being backwards. It's really, it's a fascinating moment in history to think of China as like, a civilization that is thousands of years old, that has, like, a very concrete identity, a very strong sense of itself as rightfully being what they call the central state, meaning not geographically central, but the most important. And, and so you put that with, yeah, 40 years of dictatorial rule, of planning for the future, of forcing everybody to march in lockstep towards one thing, and it's bearing fruit. So you are dealing with a very organized, a very disciplined, a very intelligent China that's going to play incredibly strategic moves. They've been using seduction. When the US has been using smash and grab. And I think that that's going to really start to bear fruit. So the more Trump smash and grabs, the more they realize, oh, we need to make our image and let it be very clear, this is just an image, but we need to make our image that we are the friend 22 and 23. And so if you get in bed with America now, you're dealing with people that are arrogant, overly aggressive, willing to use force, willing to slap people around. We on the other hand, are just trying to make your life better. And we're going to be touching on some ways that they're doing that today, not the least of which is what they're doing in banking. I just can't believe that America is making some of the choices that it's making is absolutely ridiculous, but is in keeping with a declining empire and how they start lashing out. And that when people realize they've allowed themselves to get put in a weakened position, they don't start playing a long game of seduction, they start playing the short game of I'm just going to take what I want and I'm going to try to shore up my position as the strongest bully. Again, fine. It works great first order consequences, like in the immediacy, you're going to get the things that you want, but in the long term, you're going to erode the stability of your position in the world because you don't have allies anymore. And so the way that I have long. In fact, if you went back to the beginning of 2025 and listen to the words that I'm saying, this is exactly how I feel.

[Drew]

Now.

[Tom]

Trump is playing a game of chicken and look, truflation is putting forward that maybe some of this stuff is working better than we think. But if he doesn't pull off the growth like just the alienation and the damage that he's doing to America's reputation, the damage he's doing to our own sense of who we are is dramatic. And I don't think people put enough stock in how much of a country's vision of itself plays out in its policies and then those policies, which is a big part of the argument that I'm going to be making later in today's episode. The policies have a huge impact, but it's downstream of this vision that we have of who we are. We're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere. Let's talk about a valuable thing that you own. But don't actually control your phone number. You protect your Bitcoin with a seed phrase. You use two factor authentication for your bank account, but your phone number that you use for verifications and many other things. AT&T can transfer it with a customer service call. Verizon can move it if someone tells a convincing story. T Mobile has let attackers hijack numbers thousands of times. Kape changes that when you sign up, you get a 24 word phrase that generates a private key tied to your number. That phrase is the only way to move your number to a new device or carrier. No CAPE employee can transfer it without your phrase. Complete ownership. Take control. Head to Cape Co Impact and use code IMPACT to get 33% off your first six months with Cape. That's C A P E Co Impact and use Code impact to save 33%.

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[Drew]

I would love to jump off on the banking thing because to me that was the thing that grabbed my radar. So if you can set us up with some of the banking policies that are happening.

[Tom]

Ooh, buddy, there's a lot going on there. Okay, let's start with the one that is the most traumatic. The banking system just put another boot on the neck of Americans that are desperately trying to make ends meet in a disgusting act of regulatory capture, which we're going to need to go into detail what that is. But in a disgusting act of regulatory capture, the Digital Asset Market Clarity act, originally meant to create a regulatory framework for digital assets, has been mutated into something that guarantees banks will maintain their monopolistic chokehold on your money. The Clarity act, originally put forward by Representative French Hill, who serves as chairman of the House Committee on Financial Financial Services, passed the House back in July of 25 with bipartisan support. It looked awesome. It was very exciting. You had a ton of people in the crypto world getting behind it. The legislation divides crypto assets into categories like digital commodities like Bitcoin and Ethereum. Great. Regulated by the cftc. Wonderful investment contract assets. Fantastic. Initially this was under SEC oversight. Not the biggest fan, but nonetheless. And it permitted payment. Stablecoins. That is critical. Stablecoins are critical. And wonderfully, it would prohibit Federal Reserve banks from issuing central bank digital currencies, CBDCs. I did a whole deep dive on CBDCs. Why? They are sinister. Be sure to check that out. And the idea is for individuals and banks to basically use this for monetary policy. All right, good. These are good things. Maybe you could even say that they're great things. But, and this is the big problem, the Senate got their filthy hands on the bill and they've made changes. In the words of Brian Armstrong, the CEO of Coinbase and former supporter, former supporter of the bill. The reason he withdrew his company's support is because, and I quote, there are too Many issues, including a de facto ban on tokenized equities, defi prohibitions, giving the government unlimited access to your financial records and removing your right to privacy. Erosion of the CFTC's authority, stifling innovation and making it subservient to the far more political SEC draft amendments that would kill rewards on stablecoins. This is going to be something we're going to focus a lot on that allows banks to ban competition. Okay? Not allowing rewards on stablecoins is like not letting you treat stablecoins like a bank, which you should be able to do, and getting paid interest rates, which you should be able to do. And right now, banks don't allow that. Effectively, they pay you some pittance, but they're making 4 and 5% while you make 0.35% or some ridiculous number. Now, we appreciate all the hard. This is back to what Brian is saying. We appreciate all the hard work by members of the Senate to reach a bipartisan outcome, but this version would be materially worse than the current status quo. We'd rather have no bill than a bad bill. Hopefully we can all get to a better draft. This is still him. We'll keep fighting for all Americans and for economic freedom. Crypto needs to be treated on a level playing field with the rest of financial services so we can build this industry in a safe and trusted way in America. Right? That's end quote. Now I'm going to add, we need to build this industry in a safe and trusted way that actually benefits the average American and not just the bankers. By robbing legal and regulated stablecoin issuers of the ability to pay rewards, AKA interest payments, just like a bank is allowed to do. You make it impossible for companies to compete with banks by offering superior interest rates, which is the very thing that they should be using to compete. And using stablecoins basically as a savings account is the future, but not with this legislation. Now, hours after Armstrong pulled his support, the Senate Banking committee postponed the January 15th markup session indefinitely, though I have heard rumors that it's actually back on, so we will see what happens with that. Committee Chair Tim Scott indicated the bill could still pass before midterms, but acknowledged the need for revisions. The delay highlights ongoing tensions, including the contentious provision that I'm referencing, which is section 404, how appropriate. The part that prohibits yield payments on stablecoins not just from issuers, but also from exchanges, affiliates or partners. Now, banks, of course, are arguing this is needed to close a loophole allowing crypto intermediaries to pay interest on stablecoin holdings, which they see as unfair competition. Bitch, please. Meanwhile, 53 banking associates, including the American Bankers association and state groups have publicly supported the bill. I wonder why. Framing it as necessary for stability, AKA it helps them maintain their monopoly. Now, yes, it would be necessary to ensure that banks don't have competition. If you're one of them, this is a must. But that's a monopoly or a cartel. So this is not power that we want to give to the banks or the politicians. Okay, people really can be evil dickheads, but that's just me. Let's hear directly from Brian Armstrong himself. He's got a banger clip.

[Drew]

X is down.

[Tom]

Nice. I'll sum it up in a second. Let me take a sip. Not just our Internet, I guess it's Elon's Internet.

[Drew]

No, that's what I mean. Like, our Internet was messed up that I literally went to like isdexdown.com and it was like, yes. And it started at 6:48.

[Tom]

Yeah, I tried it too, and it's. I'm gonna put my tinfoil hat on real fast, boys.

[Billy]

Chat was asking when we're gonna switch.

[Tom]

To StarLink instead of AT&T. Yeah, bro, listen, if we could. Where we're at, we've looked at this like a thousand times, and right now it is demonstrably worse than the Internet that we can get otherwise. And we have to upload so much stuff, unfortunately just doesn't work for us right now.

[Drew]

Satellite Internet just historically isn't very fast. It's fiber optics are just faster. So I think his max cap is like 200. We get a gig here now.

[Tom]

I think eventually they'll solve that problem, but they have not solved it yet. All right, G. We giving up or we. We got it.

[Drew]

It's a wrap.

[Tom]

Okay, so basically the punchline is from Brian Armstrong that he understands precisely why this is happening. That banks need to stop stablecoins from being able to issue interest. People are calling it rewards. That's sort of new language. But understand it is simply an interest payment. Because what they're doing. This is where this drives me crazy. Even China is paying yield on their digital Yuan. Why? Because if nothing else, they know that this is going to allow them to attract foreign money. The. The whole idea is to compete to be the place the debt that people want to buy to be the place that people want to save their. And banks. Remember the reason that everything is popping off in Minnesota, the reason that there is so much tension in America is because in 1913 we were deceived by bankers and politicians into creating a standing central bank which the founding fathers had fought tooth and nail against because they understood exactly how this was going to play out, which is there is a, a glitch in the physics of money that make it such that you can rob from somebody without taking any of their actual dollars, but you still take the purchasing power and you do it by printing money. And bankers know that's just confusing enough that they can pull it off forever and always. And they have, and they will continue to be able to do so. And this is exactly one of those moments you've got banks acting like a cartel. They're saying, hey, we're going to take your money, we're going to loan it out, we're going to get interest. Let's call it 4 to 5% right now. It changes throughout time, but call it 4 to 5%, they're going to pass back to you call it 0.35%. These aren't literal numbers, but they're so close to being literal that just assume that directionally this is 100% correct. So now they're making that huge take, okay? They're keeping that delta. It is massive. Keep in mind please, that they also printed that money out of thin air and are allowed to charge that interest. That that is a privilege granted to them by politicians.

[Drew]

So they got the money for free and they make 4% of it and.

[Tom]

They made the money for free and then they charge you interest on it. And what crypto is saying is banks use fractional reserve lending so they can lend 100% of the already fictional money, charge interest on all of it, create a vulnerability to bank runs because they don't have your money, which is why they act like you're fucking picking their pocket when you come and ask for some of your own cash. And they want to know what it's for, where it's going. They need you to tell them in advance, all that bullshit, it's my money as a reminder. So you've got that issue, fractional reserve, okay? Crypto does not have fractional reserve. They have full reserves. They have a one to one. If they give you a dollar of stablecoins, they hold a dollar in Treasuries. So it is backed one to one by the full faith of the US government, unlike banks. And the guys who are in a way safer position are saying, just give us the chance to pay out the benefits that we actually make by people lending us this money, okay? Because those Treasuries are paying them money and they're saying as a way to win over customers, we want to pay that money back to the customers, some large percentage of it. So instead of us keeping the vast majority of it, the person loaning us the money is going to get the vast majority of that benefit. And we're going to use that to compete against banks, to compete against other cryptos. And now we've got competition in the market. Okay? The whole reason that we have antitrust laws is monopolies are evil. And so we want the competition because that's good for the average American. And so you've got crypto people clamoring, just let us compete, let us give the money back that we're making. And the bank's like, nope. And the politicians are agreeing with them. And the only reason is so that bankers may maintain control because they have a revenue stream and they don't want to give it up. Fuck each and every last one of them. That is some bullshit. And that is exactly why we're in the position as a nation that we are in. Because economics is just confusing enough that very smart people, very connected people leverage that confusion against people. And so they're going to hide behind safety and they're going to say bullshit like, well, this is going to damage our ability to lend. Yes, it's going to damage your ability to lend because fewer people are going to come into your system, but it will increase other companies ability to lend. And so crypto's basically saying, we're the modern version of banking. Dear government, you've already regulated us way harder than you've regulated the banks. Just let us fucking lend money out to you. The government capture some upside for that and then pass that on to the customer. It's wild that people are fighting back against us, but they are.

[Drew]

And it's one of those things where I can understand if crypto was trying to do something new or if they were trying to invent a new money scheme. And then it could look shady, maybe it's a pyramid scheme, yada, yada, yada. But they're literally saying people who deposit should earn a yield. Yes, every savings account does that, every checking account does that. So it's not like they're trying to do anything new. They're just saying we should also be eligible for people who get their money. And that can serve there. So it's 100% regulatory capture. It's 100% dirty banks. And yeah, bankers will never, never beat the allegations, man. They just can't. They're on the wrong side of history.

[Tom]

Repeatedly they're on the wrong side of history. We're, we're in a moment where finally we have the technology to make it effectively impossible. When you've got enough guns. Nothing's impossible but effectively impossible in a democratic nation. For the banks to maintain their chokehold, because right now they have a chokehold because there is no other alternative. The banks have spent so much money building infrastructure so that you can trust them that, that everyone goes, ah, well I just, I've, I've got to trust these guys. They've, they've got it all. And crypto's come along and said, well hold on a second, we can build something that's far more trustworthy, that doesn't have humans in the mix, that can do essentially code as law, that there's no way around this system because of the way the blockchains work. But you have to give us the ability to make this exciting to an end user that's never going to know or care about all of the behind the scenes stuff. So there has to be something that's forward facing for them, that makes them go, yeah, this is better. Otherwise what you're going to see is over the next 50 years the old guard will just die off and then this will win it. Like crypto really is inevitable. But why does it always have to be like you just have to wait for everybody to die. It's so obnoxious.

[Drew]

G, can we get 26 and 2 on the teleprompter queued up?

[Tom]

Especially because, man, look, as a country we may not survive, survive this. That's the problem.

[Drew]

Like the, the economic turmoil.

[Tom]

Yeah. So if, if I can get everybody to understand, I'm going to speed run this. Please push channel the comment section, whatever. I need to know where, where this breaks down, where people either get confused, think I'm full of whatever, but to speed run Minnesota, it goes like this country is founded, they know don't have a central bank because historically every empire ever has ended up abusing debt. Debt works at first, then it becomes a crutch, then it becomes the method by which you steal from the people. So they say, okay, but debt is really useful, so let's create a bank, but give it a 20 year time horizon. They do it. It's amazing. It's how America gets its feet under it. But then they terminate the bank. Once they terminate that, the bankers are just like, and I'm talking global bankers. Global bankers are like, no, no, we've got to get. America absolutely must have a central bank because without a Central bank, we can debase the currency, which means that we can't create this funnel where we rob from the masses. People think the billionaires hold the majority of the wealth. They don't. They hold about 4% of the wealth. Okay, just, just a level stuff for people like billionaires, it's a small number of people that hold a tremendous amount of money, but it's only 4% of the assets. The 99% of people, they own like the vast majority of everything.

[Drew]

And when you say that because ground me, because when I see Elon Elon about to be a trillionaire, I feel like that takes up at least a couple million people at the bottom. So are we talking about like assets? Are we talking about real estate?

[Tom]

Because I don't want to lose the speed run here. Just know billionaires control 4% of the assets. The wealth copy, that's it. So who do people that want to steal, want to steal from? They want to steal from everybody. This is how the Nordic states work. They don't just tax the wealthy, they tax everybody night to death. So in America, 50% of people pay zero tax income tax. In the Nordic countries, your average person's paying 50, 55%. So it's massive. It's just very different. So the real money is in the masses and the bankers know that. So they need to be able to create this funnel to transfer that wealth without the masses having to vote for it. The way that they do that is by debasing the currency, which is printing money. They get to that by all this debt creation.

[Sponsor Voice 1]

Cool.

[Tom]

So finally in 1913, the bankers collude with the politicians to finally get this passed. And we create in 1913 a central. That central bank since then began weakening us. So Everybody talks about 1971. They should be talking about 1913, because that is the thing that laid the framework for the problem. So think of it like in 1913, we switched our kids from eating meat and eggs to eating Twinkies. So at first, not a big deal. Even if you limit the calories, they're not even going to get fat. So you can eat Twinkies, you're going to look fine, but there's going to be all this metabolic dysfunction that's built building up behind the scenes. And so now come 2026, everybody's morbidly obese because they did not keep their eating in check and they're just eating Twinkies. And so it's all sugar all the time. And so there's just like this catastrophic problems that we see 1971 is easy to point out because it was the last tether. We weren't one for one with gold. We had not been for a very long time because that's the banker playbook. So 1971, we finally severed the last tether. Now, money is truly fictional. There's nothing to back it up. It's just the government says it's valuable, therefore it's valuable. So we start having all kinds of problems. We sort of get it in check for a little bit. And then starting in 2000, with the dot com bubble, all hell just starts breaking loose because we keep getting these huge bubbles, which are only possible because of all the debt that you're able to put into the system, all the gambling that people do because money's so cheap. And the bubble bursts. The dot com bubble bursts. And we have to pour money into the system, fake money, to stabilize the economy. And it does. First order consequences. It works. It works every time. And the problem is that it then accelerates the next bubble. So 2008 comes along, boom, that bursts, and the housing market goes haywire. We have to pour a ton of money in again. And now if you start looking at a graph, the money that we're putting into the system, that's making money less valuable, less real, whatever word you want to use, that graph is just skyrocketing. It's ridiculous. And as that number goes up, more bubbles form. And then on top of that, Covid hits. So now you've got to pour even more money. And so that graph just keeps going up. And so the rate at which we're hitting these catastrophes that require them to pour money in, the. The times just get shorter and shorter and shorter and shorter. And so we're just constantly dealing with one crisis after another. Okay? It is that setup of putting extra money into the system that makes billionaires. I want to be very clear. If you want to get rid of billionaires, stop putting money into the system. Okay? Why does it work like that? To create billionaires. It creates billionaires because when you have the same number of stuff, cars, apples, desks, computers, whatever, the same number of things to buy, and you give people a bunch more money, they all just go, well, I'm willing to pay more money for that thing because I want that thing and I have more money, and so it doesn't create more value. There is a way to create more value, but pumping money into the system, isn't it? So you make everything more expensive. And the catch is, and this is the thing people have to understand about why you get a K shaped economy, because the economy is very good to me. Tom. Billy. My life changed when I decided to start making economic content. I made myself so much richer. I had no idea that was, I swear to sweet baby Jesus, that was not my intention, but it ended up being the effect because I realized the game that was being played. I realized, oh, this game is rigged. It's super winnable. It's almost easy to win in certain periods of time. And so the last couple of years has been like a really easy time to win. I am not a genius investor. I just knew, oh, I have to be in assets because as you pour that money in, I have to go into something that isn't inflatable. So stocks, gold, crypto, whatever. So literally I just started buying things and I'm like, well these can't be inflated. And so as I buy a basket of things that can't be inflated, my net worth starts going way the up. And so now all of a sudden it's like I, I am literally telling people as clearly as I can, as rapidly as I can talk how to avoid the problem. The problem that I am on a long enough timeline, Drew. I will end up making more money off my investments than I will have made off of building Quest. Like it's so easy to see. I'm like, fuck, this is crazy. And when that happens, I'll be sick to my stomach. I'll be sick to my stomach on a beach with a fucking private island, but I'll still be sick to my stomach that other people did not wake up and realize what is actually happening. And so they're going to get mad at me, at billionaires, at whatever, because it's like, well hold on, you guys are hoarding the money. No, they're not. They just own assets that can't be inflated. They, the game is so obvious that once you understand that little thing of like, oh, they can rob, they can steal my money through inflation. Oh shit, once you get that and then you go, okay, well then where do I put my money? You put it into things that can't be inflated that will likely remain valuable over time. Gold just being the like Most no brainer, 4,000 years or whatever of us using gold not necessarily going to go up in value, but it'll hold its value comparable to goods that you can buy. It's like an ounce of gold buys a three piece suit literally for hundreds of thousand years. So just sort of, that kind of things tends to stay completely static. So all of the like, well how many dollars is it worth? That's all noise. What does it buy you? It tends to buy you the same thing for a thousand years plus. So people that understand that protect themselves from this vicious thing called inflation and everybody else gets hammered. And so the reason that I say that Minnesota is 1913 come to roost now is because something we've talked about here endlessly, economics, like I'm not going to be able to pay my bills, turns into anxiety. People hate anxiety, so they turn it into anger. Anger then is easy to leverage to get you to want to be on a team, to be tribal so that you can fight for your piece of a shrinking pie. And that's how you end up here. And so when I see, in the midst of all this, I see Ro Khanna, friendly to the show, but nonetheless making a catastrophic error with what he's trying to do in California. I see the bankers, the Senate, making changes to this bill to specifically make it good for bankers and bad for the average American. It. It is. It's wild. And because we live in a universe where algorithms determine who sees my content, I am so hyper aware that the only people that are ever going to hear these incredibly eloquent and well put together rants, Drew, are people that already believe it. They already understand. It's so wild. So, yeah, I don't know how to escape that. And so my cup runneth over with rage for a thing that will make me wealthier. But because I understand there's a breaking point. It's just so dumb. It's so dumb. And I don't know if I'm mad at the architect of the simulation, because my real beef is with how the mind works. But this one makes me really sad. Like it every empire ever has, in a well documented fashion, collapsed because of exactly what we're doing with this law. This exact thing is why empires collapse. 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[Drew]

You brought it up earlier about the billionaire attacks in California. So let's jump over to that X is still giving us problems so we can't pull up the road kind of Sean Ryan clip but we can you can kind of level set us as.

[Tom]

We kind of can we just really fast. Talk about tinfoil hat, thousand percent. Is Elon being attacked by for the stuff that he's doing in Iran? I would not be surprised. That is wild. We'll find out. We'll find out. That's tinfoil hat. Is the algorithm running in my brain?

[Drew]

Somebody just said it's working again. Hit refresh G and see if that's gets for you. But let's talk about California and this billionaire tax.

[Tom]

Let's do it. All right. California is proving once again that it is hell bent on committing economic suicide. And make no mistake, what we're about to talk about is exactly economic suicide. California lawmakers have proposed a bill, the 2026 Billionaire Tax Act. The act is best thought of as a confiscation of wealth. It allows the government to outright steal 5% of the post tax net worth of California residents and certain trusts. If it's valued at a billion dollars or more. It is absolute lunacy and proves yet again that lawmakers have absolutely no understanding of economics. The bill aims to address funding shortfalls in healthcare, education and food assistance programs amid anticipated federal and state budget cuts. It targets approximately 200 to 250 billionaires in the state who collectively hold around 2 trillion doll wealth, though recent estimates suggest this has dropped already to 1.3 trillion due to because lo and behold, when you threaten to steal money from the most productive and mobile humans on earth, they get up and leave to avoid being stolen from. Just putting the bill forward has caused that much money to flee California. Imagine if it actually passes. All of this just reduces the amount of money you can collect in taxes. Now listen, for all the contempt around billionaires, remember this. They pay an ungodly percentage of taxes wherever they are. 50% of Americans don't pay income tax at all. Let that one sink in and history has proven time and time again that when you get too aggressive with your tax policy, people leave. The measure is the kind of thing that is literally just attempting to steal up to $100 billion over the next five years. And though critics are going to argue that this will be far less due to design flaws and the fact that it will just chase people out of California. The proposal builds on earlier unsuccessful wealth tax efforts in California such as Assembly Bill 259 and 2023, but is unique in its one time nature and focuses only on billionaires, and at least for now, it has sparked significant controversy, with even governor Gavin Newsom of all people, calling it really damaging to the state's economy. Let that sink in. Gavin Newsom, who never met a tax he didn't like, says that this is really damaging to the state's economy because he knows what's going to happen. Billionaires like Peter Thiel and Larry Page, who have already reportedly taken steps to relocate or restructure assets to avoid being affected, are going to be just the tip of the Spear. The retroactive January 1, 2026 obligation date gave little time for relocation after the proposal's public reveal in late 2025, which critics argue was designed intentionally to trap billionaires, which I bet you can imagine how they felt about that. Net worth will be calculated as a worldwide fair market value of all assets tangible and intangible, including stocks, bonds, business interests, real estate, art and collectibles, minus allowable debts and liabilities. Listen, all of this is absurd. Many people would have to sell the very things that they own in order to pay the tax. It's patently absurd. Critics, including the Tax foundation, argue the effective rate will end up grossly exceeding 5% because the aggressive valuation rules, limited deductions and the inclusion of illiquid assets would force people to sell at depressed prices. So instead of it being 5%, it goes way up because it was 5% on a theoretical number that you didn't actually get when you did the sales. Proponents such as economist Emmanuel Sayes frame it as an equitable all my alarm bells go off emergency tax on those who have benefited most from California's economy. Opponents including Governor Newsom and groups like the Tax foundation argue it is poor policy that discourages investment. You think? And innovation will cause current and future generations of entrepreneurs to seek more friendly jurisdictions. Talk about not understanding second and third order consequences. This is going to permanently depress the tax base of California. Opponents rightly point out that, well, taxes have failed spectacularly in Europe and the odds that this actually lowers the long term tax revenue in California borders on 100%. As of January 16, 2026, the initiative is in signature gathering mode and thankfully has not yet qualified for the ballot. Newsom predicts defeat Praise be to Jesus, citing bad economics. But union backing could mobilize voters amid inequality concerns. If it passes, enforcement would begin in 2027. Now nobody is more concerned about inequality than myself. Inequality is always going to be present, but there is what I'll call toxic inequality, unsustainable inequality, whatever you want to Say. But there is a threshold beyond which society begins to tear itself apart. This is how empires collapse. They always collapse from within. And this is how it happens. So we've got to address the inequality. We have to address the inequality aggressively with immediacy. But if we try to address inequality by doing the exact opposite of what will actually work, then it's lunacy. And I didn't even in that whole write up, I didn't even talk about the fraud that is for sure going to be uncovered in California. From the Palisades fires not being the houses not being rebuilt at all to the high speed rail never laid a track. I mean it's just, it is going to be in the tens of billions, hundreds of billions. It is going to be an amount I expect will be so staggering that the fact that we are talking about trying to get more money out of people to pour into a corrupt broken system that causes more money printing, that causes more damage to the middle class is infuriating to say the least and certainly damaging.

[Drew]

We got this. Ro Khanna, Sean Ryan clip, let's go. In respect for Ro Khanna, his proposals are 1% tax, not the fire protect tax, but still it's an additional billionaire tax.

[Tom]

A little less egregious but equally stupid.

[Drew]

Just level setting.

[Ro Khanna]

Ultimately the idea that having just a 1% tax a year, I mean in a theory on building wealth when you're. You make about 10% every year anyway in the stock market and that you're going to use that to pause.

[Tom]

Roe is smart, Ro is smart. But people are not walking away with 10% in their pocket. People do not seem to fucking understand this. They are theoretical gains. It's theory, like I was joking.

[Drew]

If you can loan it, if you can loan against it, then it counts. So the 10% that you gain, you loan 1%, you pay off that tax bill. You keep denying that's what banks do.

[Tom]

Amazing. Then Drew, you just proposed a policy that isn't fucking retarded. Tax people on the amount that they loan against their assets. Borrow against their assets. Excuse me. Great. Fuck yeah. But this is full retard. And not understanding the difference is how we end up in trouble. There are ways if you want to sensibly tax people, you tax them on money they actually made. Like cash. They actually have cash. Cool. Tax them on it. But doing shit like this, like there are loopholes that people are going after and be like, yeah, word, love it. Let's go. This is not that one. This is. I, I can't fully decide it's probably both. There are some people for whom they're just stupid and they don't understand. And then there are other people. They are evil, Drew. If you're stealing from the average American, you are evil if you're knowingly doing it. And some percentage of politicians know exactly what they're doing, because there is a lobbyist that comes into their room and is like, man, it is. I can't believe that you don't have gold knobs on your shower like Trump does. Bro, we got to get you golden knobs.

[Sponsor Voice 1]

How.

[Tom]

How are you flying in first class? You should be flying private. Like, we got to make this happen. If you're going to campaign, you've got to be on a private jet. And now all of a sudden, it's. You're doing favors for them or even just adopting their frame of reference, even just wanting them to be right a little bit more than you want somebody else to be right. And now you've got lunatics like this. Now, I. I'm probably. I feel positively towards Ro Khanna simply because I think he is smart and he was generous enough to give us some of his time. So I will assume he just doesn't understand. He has not thought through the economy well enough. He's got a lot on his plate. But. Ooh, buddy, I would just like to point out that you just threw out an idea that actually makes sense, and this isn't. You're not a politician. So if you can think of an idea off the cuff that would actually work, what the fuck are they doing?

[Drew]

For real, what are they doing?

[Tom]

All right, let them keep going because it's a good clip.

[Ro Khanna]

There's more where people have health care and child care and education. I just think that's what's going to prevent a revolution. You know, think about the guys who went in Venezuela, right? And, like, they. They stick the landing despite being shot at. They wear the uniform. They give every single thing for this country. And you're saying to me, okay, if you're gonna. Let's say the countrywide, have a 1% tax on wealth, that people are gonna leave. Like, come on, have some more patriotism.

[Tom]

I am offended by that. So, yes, be patriotic, pay your taxes. I have paid millions and millions and millions and millions and millions and millions and millions of dollars in tax.

[Drew]

Cool.

[Tom]

No beef.

[Drew]

But if this passes, you fly. This is the capital flight. Is this the.

[Tom]

Yeah, a thousand percent.

[Drew]

Really, Drew? I've never heard a thousand percent.

[Tom]

I have said many times, Florida, no property taxes. There are certain things that California could do at a policy level that would cause me to leave immediately. If I had kids, I would have left the second they passed the bill where they don't have to tell you if your kid is transitioning at school. Nope. Hard pass. Literally in the dead of night would have grabbed my kids, gone company reformed somewhere else. I can't believe that people let that one happen. Anyway, this one is a buy. So now, keep in mind, this doesn't even apply to me. I am not a billionaire. However, I know the math. I know the billionaires control a small fraction of the money. The real money is in everybody else. So what do you suppose the odds are that a state riddled with fraud and inefficiencies is going to stop at the amount that they're able to confiscate from the rapidly fleeing billionaires who are incredibly deft at finding. Using your rules against you. You can hate billionaires, but to think that, at a minimum, that they're not surrounded by the smartest people on planet earth, You're a. They have, like, they. Even if they're dumb, the people advising them are brilliant, and they will know exactly how to move that money. So they're going to dodge it, and then you're going to realize, oh, we didn't get as much money as we thought. Who do you turn to? The people that don't know how to run, the people that can't run, and you start using the same thing, which has a provision in the bill that if they need to go wider, they can, and you just start going wider and wider.

[Drew]

So it goes from the billionaires to the 100 millionaires to the tens of millionaires to the millionaires.

[Tom]

So it's like there's no universe in which I sit still and just go, eh, I'll be fine. Nope, hard pass. We out. Hopefully you like Florida, Drew.

[Drew]

Hey, man, there's a lot of Haitians out there.

[Tom]

See?

[Drew]

Food is great. Food is great.

[Tom]

Drew. You're gonna get me to fall in love with Haitian cuisine. I can't wait, bro.

[Drew]

It's the best cuisine out there. Best cuisine in the Caribbean. Look at that, everybody. I'll stand ten toes down on that.

[Tom]

The show will be even better if we're forced to move. It'll be wonderful. We'll be well fed.

[Drew]

Florida would be it, though. I know you said Texas was a no.

[Tom]

I think I just can't get Lisa excited about Texas.

[Drew]

Okay. But, yeah, Florida beach. I thought you guys would end up in, like, Miami, too. You won't go to Like Tallahassee, like. Yeah, yeah, you'll go to the, yeah, the liberal side of Florida. Not liberal, but you know what I mean? Like not the stuffy old people retirement homes.

[Tom]

Correct, correct, correct. Now I really hope it doesn't come to that, but if this passes. Yeah, it's peace out.

[Drew]

It's interesting. I never heard you say with so much conviction. There it is, dude.

[Tom]

You can't let, like at some point you just have to say there's a line. This would for sure be that line.

[Guest Caller]

I mean, just a caveat to that. I mean, what are you going to spend the money on? Where's the money gonna go? Well, that's, I mean, look at our cities, bro. Look at Chicago, St. Louis, San Francisco, Louisiana, New York, tons of Minnesota right now. I mean, look at all this. Our, our cities are trashed. We have a fentanyl problem.

[Tom]

Yeah.

[Guest Caller]

I mean, and where's all the money going? It sure as isn't going into this country. You know where it's going? It's going to Ukraine, it's going to Israel, it's going to fight war in Venezuela. It's going, it's going everywhere but here. And we all see it. Everybody fucking sees it. Everybody sees another billion, another, another, another, more billions allotted to Ukraine, more billions allotted to Israel, more billions allotted to whatever. You know, it's just, it's, it. Everything seems to go out of the country.

[Tom]

So why would I think I will be very interested to see how the world responds to seeing how much of this is going to the Quality Leering center and the California equivalent and the New York equivalent and all that. It is going to be eye opening when we see like fraud, wild like misappropriations of funds where you're spending all this money and getting absolutely nothing done like it. And in the age of the Internet, you're gonna see it all and there are going to be people doing what Nick Shirley did in every city across the country. And people will see like, oh, damn, like we are so inefficient with our money. Like we don't have a revenue problem, we have a spending problem. And, and if you were able to get that money to actually go to the things that you wanted to go to, now all of a sudden you can have some really incredible, whether it's health care, whether it's education, like you can start making those things incredible when you're not just leaking money the way that we're leaking money. So yeah, seeing people go on a kleptocratic grab for more cash when they are already defrauding the American people is grotesque in the extreme. In the extreme.

[Drew]

All right, we need an update from Minnesota. I saw rioters ripping a weapon, cash out of a ICE vehicle. They're also getting warrants and paperwork. Allegedly arrests have been made. The guy was like a Latin King's gang member. Allegedly. Allegedly. So it's, it's crazy that when people commit crimes and you can see their face, maybe they're license plates, you could just find them and arrest them and you don't have to shoot him in the face. But maybe he wasn't there and they were scared because there's a lot of people. But. Update from Minnesota. What do you think is going on out there? Update us.

[Tom]

All right, here's my take. There are increasing calls for President Trump to invoke the Insurrection act to calm the ongoing riots in Minnesota. For context, the Insurrection act has been invoked by roughly 37% of all presidents. I was shocked by that stat. I had no idea, given that it hasn't been used since George H.W. bush in 1992 to stop the LA riots. I had no idea that it had already been used 30 times in US history by 17 different presidents. The act is used to stop rebellions and uprisings, so called situations involving armed groups openly defying federal law, state or local authorities unable or unwilling to enforce federal law, violence or organized resistance threatening federal authority, or instances where courts are blocked, taxes cannot be collected or officials are openly being attacked. Specific examples include President Abraham Lincoln invoking it in 1861 at the outset of the Civil War. Him basically trying to stop the Civil War from kicking off. Ulysses S. Grant using it multiple times in the 1870s to suppress couple Klan terrorism. President Eisenhower deployed it in 1957 to enforce school desegregation in Little Rock, Arkansas. Kennedy used it in 62amid riots over desegregation. And President Lyndon Baines Johnson used it in 1967 to quell the Detroit Riot, as well as what we've already mentioned, the most recent invocation being in 1992 when Bush the first deployed federal troops to stop the Los Angeles riots following the Rodney King verdict. The question now is, does what's happening in Minnesota match the historical precedent and justify invoking the act now? There certainly are elements of resistance to federal law enforcement. For sure, for sure. For example, violent assaults on ICE agents and protests disrupting their operations, including ramming their cars, attacking them with shovels. However, as someone who remembers the LA riots, while this is bad, I'm going to tell you it does not Feel like we're in the kind of full blown rebellion or uprising that. That felt like we had shop owners on their shops, like shooting at people down below. It was crazy. And if I remember, I sound like 50 people died in the LA riots. So a scale much more dramatic than what we're going through right now. Now, thankfully, there's no widespread deaths right now, praise the Lord. There's no mass arson and looting like in 67 Detroit or 92 LA. And there's no armed groups openly defying federal authority on a large scale. You get people on the Internet holding very big scary guns. I get it. But in terms of what's actually happening on the street, not so much. The most concerning part for me right now is open hostility towards the federal government's authority, just in general, and ICE agents specifically, that the governor, Tim Walls and AG Keith Ellison are displaying. So opening openly like protecting illegal immigrants, painting ICE operations is not being valid somehow. And historically consistent enforcement of immigration law, for instance. But they're just saying that it's unjust and unlawful, even though it's the kind of thing that we've seen many times before, including from Obama. So despite all of that, invoking the ACT now would be seen by a mass swath of Americans as massive overreach and would for sure inflame tensions even further rather than calming them down, which should be on everyone's agenda. Historical uses of the act were often last resorts after huge acute local failures. Here Minnesota is in new territory with community organizers and things like that. Being able to use technology like apps to get whistles in everybody's hands to explain to them certain code whistles and things that they can do to try and thwart law enforcement activities. But the violence has been contained enough that I think Trump would put himself at risk of looking like he's doing more tyrannical acts if he were to invoke the act right now. So be careful. We must.

[Drew]

It seems like you are for just to put a button in it. You're for the insurrection. Is that you think Trump should evoke it right now?

[Tom]

No, definitely not. That'd be a huge mistake.

[Drew]

He shouldn't.

[Tom]

You were looking at something on your computer while I was was doing that.

[Drew]

So how do you think this plays out though? You think there needs to be more? Because I feel like it's getting out of control.

[Tom]

It is getting out of control and he's got to really give Minnesota a shot to like rein this in, to work with ice.

[Drew]

Let's do it.

[Tom]

Keep it at the state Level thousand percent there. There are people that feel some type of way. And I think it's understandable why people don't like seeing the national guard marching through D.C. i think it's understandable that people don't like seeing National Guard marching through the parks here in California. I think it's understandable that people don't like ICE agents rolling up to Minnesota. I think it's understandable that people, when the ICE agents roll up and then are met with further resistance, that they escalate. I get why people are like, ah, I don't like anything about this is horrible. So at the same time, you cannot let lawlessness reign. And so my advice to Trump would go something like, listen, I get it. I understand this. A is dangerous. B, it is people saying that the federal government is an illegitimate. They've used invading force. So we'll call it that they're an illegitimate invading force. That's pretty insurrectionist. Like, this is bad mojo. And for everybody that was banging a drum about J6, if you're not banging a drum about this, then I'm very confused. You're coming at things from a political lens. So I'm saying people need to chill. Just like, the only people that we should have been focusing on J6 were people that were, like, violently attacking somebody. And if you violently attack somebody, don't worry about insurrection, just worry about the violent attack. Charge them for that. However that goes down, that goes down like in a normal court of law. So pulling the trigger fast on an idea like insurrection, where you know it's going to be hotly contested, is just going to inflame things further. So I really hope that it doesn't get worse, and I really hope that people back off. I think if he invoked the Insurrection act now, it would cause it to pop off. If you try to calm everything down, keep doing your job, don't back off. I'm not in any way, shape or form saying that they should stop enforcing immigration because you don't want to teach people that if you bang enough pots and pans, blow enough whistles, throw enough ICE on the ground so that the ICE agents slip and fall, that will back off. You absolutely cannot teach them that lesson. However, you've got to be really deft about when you pull the trigger on that very formal declaration. So I would not do it yet. Things would have to escalate first. And I hopefully everybody is hoping that they don't escalate. But to give you the sound bite, it would be a mistake for him to invoke it now, man.

[Drew]

It just seems like things are buttoning up. G, can we hit 14 to the second one to the one to the right. Tim Walls made a statement. I'm not going to go through his long video announcement, but this was one announcement that he announced. I think this is directionally, at least, in the right direction. Let me know how you feel about it. I'm making a direct appeal to the President. Let's turn the temperature down. Stop this campaign of retribution. This is not who we are. And appeal to Minnesotans. I know this is scary. We can. We must speak out loudly, urgently, but also peacefully. We cannot fan the flames of chaos. That's what he wants.

[Tom]

Yeah. I mean, listen, this is in isolation. This is a step in the right direction. I know that when you have people like politicians that if you take jabs at them, then they're going to take jabs back at you. So he couldn't just say the high road thing, but if this was all I had heard from him, I'd be like, yes, fantastic. People absolutely have the right to film. They absolutely have the right to blow whistles. Like, there are plenty of things people can do and should do if they believe that this is unjust. We have a guy on the team here who really believes that this is unjust. And, yeah, he has a right to that opinion and 1000%. I never want anyone in America to feel like they shouldn't stand up for the things that they believe, believe they should stand up for the things they believe. But there's a big difference between protesting peacefully, which thankfully you've got walls calling for in this message, and rejecting the authority of the federal government to enforce the laws of this country. And so in other posts and interviews, he's been very clear to say that he thinks that that ICE is an invading army or an invading force. I can't remember if you use the word army, but that it's illegitimate, it's unjust, it's unlawful, that stuff. So he's creating this standoff. Then you've got. And I forget who it was, but standing with the chief of police saying. And listen, he was very careful with his words, but he said there are people in the communities that want local police officers to fight ICE in the streets. Now, he didn't say they should.

[Drew]

Yeah.

[Tom]

But, ooh, buddy, like saying stuff like that without going, everybody needs to calm down. We are never going to do that. Which he most certainly did not follow that up, up with that. So there's just a lot of rhetoric coming off of people that are being extraordinarily defiant. And so you're hyping up your side. You're going to get them out there en masse. And the problem is that you really have these competing ideologies of, like, what is an illegal immigrant? Have they broken the law? Or are they Anne Frank and you need to hide them in your attic? And then does it matter if Anne Frank, like, killed some fools? And would you hide the Anne Franks with no criminal record and leave the ones that have out on the stoop and with a sign that says pick them up? Like, that's where this all gets super weird for me. So I'm sitting back looking at this. We all know I'm looking at it through an economic lens, hopefully, we all know I'm looking at it through. I want to make sure that we have a thriving middle class. And I'm going, this is really stupid. You've got a state that is just absolutely riddled with fraud. And now, as a total distraction from that, we are going to bat for a lot of people that we should want to get out of the country. And that's the part where I'm like, wait, I don't understand. Like, you're so much more interested in a value system that says something along the lines of, nobody's illegal. Their borders aren't real. America's already an occupying force of America, that this land never belonged to us anyway. And so we have no moral authority to stop people from coming in. And so you're saying that there's real world doesn't matter. Realities on the ground don't matter. Destroying a country economically doesn't matter. Stability and safety of the populace doesn't matter. What matters is this is stolen land and we're the bad guys. And that's where I'm like, like, what the. That's so childish that I'm just like, listen, first of all, if you want to have that argument, you very quickly get into, well, which Native American population are you going to give it to? Because they were slaughtering each other long before we got here. So that kind of stuff is just it. It is ignorant to what humans are really like.

[Billy]

So.

[Tom]

And God, how many people have named their kid Genghis? It's like, kids, do you know what that did? That's like, in 300 years, like, Adolf being the most popular name, specifically because it was like, bro, did you hear what he did to the Jews? Like, that guy was a legend. It's like, what? So this is where the value system that people have on display is so wacky to me because I look at that and go, I love the empathy. I love when somebody wants to love somebody else and wants to take care of them. That's awesome. And then. And I'm also the guy that I used to hire convicted felons. They had a chance. It wasn't like I hired them because they were convicted felons. But I said, listen, doesn't matter if you have convictions on your record. No worries. My whole spiel is, to this day, it doesn't matter who you are. It matters who you want to become and the price you're willing to pay to get there. And so brought all kinds of problem people into my company, and I found myself having to run sting operations because people were stealing from me. We were constantly having to quell violence. I mean, it just got wild. And so you just go like, hey, I used to do this thing. But you will notice I don't do that thing anymore. So it's like, I saw firsthand that there is some percentage of those people for whom giving them a second chance is some of the most meaningful things I think I'll ever do in my life. And so I get it. Like, there's one guy, it's his family that needs to tell his story. Lord knows, if they're listening and I can ever help them tell that story, I would do it in a heartbeat. He's one of my favorite humans that I've ever met. However, he. Boy, did he have, like, a hard, upright upbringing. Did things allegedly that I think would curl most people's hair. But when he found a path to go legit, he took it, and it changed the course of his entire family's life. And at his funeral, his family stood up and said that, like, we all know my dad was a gangster, and meeting you changed the course of his life and changed the course of my family's life. Like, having somebody say that at their dad's funeral. One of the most, like, impactful moments of my life. So I get it. I've put my money where my mouth is with that. At the same time, this guy who turned his life around was in the 2%. Yeah, the 98. It did not matter.

[Drew]

Staying in the same.

[Tom]

Yeah, they were stuck in a mindset that it is a tragedy that they found themselves raised in that way, that they would end up with that frame of reference. But nonetheless, they had that frame of reference. It was super destructive, deeply problematic, and ultimately had to be rooted out. And so people just are not being realistic about these policies. Who they attract, who's going to take advantage of it. There will be some small percentage and it will be incredibly meaningful. And so finding ways to find those people is magical. But blinding yourself and going to bat for the 98% is stupid because they are laughing all the way to robbing you blind.

[Drew]

There's an argument breaking out on Chat right now whether Tim Walsh should be in jail.

[Tom]

Jail.

[Drew]

Are you on that team of everybody.

[Tom]

Knows what I'm going to say. No, Tim Wall should not be in fucking jail. Like, you're just going to incentivize Democrats to look for a reason to jail somebody in the Republican Party. So did. Were you guys not there when he was trying to. Not him. But the Democrats were trying to jail Trump like psychopaths. It's like they shouldn't have been trying to jail Trump. We shouldn't be trying to jail Tim Walls. We should be uncovering the fraud. We should get Tim Walls impeached, get him out of office. If. If he's guilty, if he's not guilty, then the. The poor may be incompetent, whatever. But if he didn't do anything, like, we should want to find that. So, yes, go investigate the fraud. Go find out what is real. But there's nothing I see him doing right now that I would say is put him in jail. I would also like to remind people, and you're going to routinely hear me feel very annoyed by the way that a state is acting. But at the same time, I want to be a federation of United States. I want Florida to go, oh, California is going to be dumb and go anti billionaires. Yeah, Word. We'll take them all, please and thank you. And they do a different strategy. And so now we've got 50 people running or 50 states doing. Running different strategies. It's brilliant competition. I don't want a monopoly. So just because I disagree with the way that they're approaching this problem, as long as they're acting within the confines of the law, they should be able to say their piece. They should be able to stand up for what they think Minnesotans want. Yeah. That is as it should be. And so to that end, I have not seen anything yet that makes me think he should be in jail.

[Drew]

Yeah. G. Can we pull up 28 on the sheet? I think it's time to talk about your favorite topic in the world. It's inflation. Truflation numbers just dropped. Let's go. The numbers look amazing.

[Tom]

They look awesome.

[Drew]

They look amazing. Early estimates, nothing solidified. We haven't got things Pressed out yet. But as we're pulling this up, I want to kind of start with the GDP numbers because there's something interesting. You said earlier GDP was up 4% in Q3 of last year. People are celebrating. They were high five. When we go into that second layer of it, we realize that 50% of that is consumer spending. When we click into that, we go into that consumer spending, we realize that 47% of that consumer spending was the top, like 1%. So now we're starting to say that, like, yes, the economy is booming and we are growing, but the K is definitely K. So is it one of those things that GDP number go up, it's a win regardless. Or is this K shape eventually going to break somewhere and it's just not perpetual growth?

[Tom]

All right, I'm going to give you two beats of this answer. The first, I'm just going to give you what truflation says and then G, if we can roll right into the graph that I pulled of the K shaped economy, oh, that would be great. It's two separate beats, though. So Drew will tell you the 26.

[Drew]

26.

[Tom]

So, but first we're going to start with truflation and then. But I'll want you to pull up something else in a minute. Okay, so here it is with truflation G when you're ready. So according to inflation watchdog group Truflation, year over year CPI inflation has dropped to 1.55%. That is incredible. The site they cite, excuse me, cooling across multiple categories, including housing, food and hous household items. Now, truflation's numbers are significantly lower than what's being reported by the Bureau of Labor and Statistics, which is normally sort of the blue chip. It's what everybody looks at. So I think it's worth talking about why the numbers are different. And the reason is because truflation use millions of live prices every day. This is the kind of thing that Elon was talking about. He's like, in today's world, why are we using this super outdated system? There's ways to get this data in real time. So that's what truflation does. And theoretically this allows them to measure housing, for instance, more realistically. And they can skip the outdated tricks of like, well, we see this little thing over here and because we don't have enough data, we like run this fancy math equation and we think that this is what it's going to be. So they don't have to do that. They're just looking at way more data points and by bypassing the outdated tricks that often make official CPI numbers look hotter and are definitely farther behind, they're hopefully able to get closer to the on the ground reality. Truflation's primary index calculates their number by comparing the current cost of a basket of goods. This is what people normally do with CPI to the same day one year ago. So that's what these numbers are. So we went From I think 1.7 to 1.55, but it's year over year and they're updating daily with real time data from over 13 million items across various sources. While users can derive month over month or other intervals from the underlying data, the headline percentage that Truflation is talking about right now that's on their dashboard is in fact year over year. So this is very encouraging. And ultimately for context, the Bureau of Labor Statistics BLS official CPI for December of 2025 was 2.7 year over year. So Truflation's index aims to predict and track in real time getting you something that's better. So I don't know that I don't think the right way to look at that is like, oh my God, we've had this huge fall off. It's that their methodology and the more frequent updates is just more accurate. So assuming that Truflation's real time data is actually showing us better numbers, which again is 1.55% year over year as of January 16, 2026, if that accurately reflects the economy more than the Bureau of Labor statistics lagging 2.7, this could signal that inflation is cooling faster than official metrics suggest. And here's what that might imply for anybody that's asking, like is Trump's economy actually working? So based on their key pillars, tariffs, tax cuts, deregulation, energy independence and immigration restrictions, is where is this going? And if this data can be believed, believed that strategy is actually driving inflation down, which is incredible. Now some of the the deflation though could possibly be coming from the economy finally breaking, not in a good way, but just we've been talking about that for a long time, so I think you're going to hear increasingly people talking about that we're in a recession, so of course prices are going to be coming down. So you always have to be careful. Deflation can be crisis led deflation or it can be increased productivity causing prices to go down. Meaning the easiest way to get housing prices to come down is to lower the cost of how sorry to make more houses. And you can however get housing prices to drop by having mass defaults like we had in the 2008 collapse. So nobody but investors are going to say that 2008 was great for basically everybody. It was a catastrophe that spread all around the world. So. But both of those things, increasing the housing supply will lower the price, and causing a catastrophic debt default will also cause housing prices to go down. So understanding the mechanisms that are working are very, very important. And I don't think we have enough clarity on that yet, but certainly you can expect some victory lapse from the Trump administration. And honestly, hopefully it's true. Love or hate Trump, we should all want this to be deflationary or a reduction in inflation, because 1.55 is still theft, but it's less, thankfully. So hopefully that is a decline based on the strategies actually performing. So fingers crossed.

[Drew]

Nice.

[Tom]

Okay, the next beat that I want to talk about, though, and this is far more interesting if we could. And let me know if you need the number or if you already know what this one is.

[Drew]

Two.

[Tom]

It is number two, almost certainly. Let me confirm that it is number two. Yes, indeed. All right, get ready, boys and girls. It's right there. Yeah. Please show them the graph. All right, so I found this graph. Was very shocked and it, it's really interesting coming across a timeline on my X feed that has different back and forth between topics. So I'm seeing everything that's happening in Minnesota. I'm seeing politicians hating each other across the aisle. And then I see this graph. Now people are arguing over immigration as if it's about race, but it's not. People talk about eating the rich as if the rich are the problem. They're not. People think they're in a class war, but they're not. Those are the distractions that keep you from seeing the real machine that's robbing you blind. And you are being robbed blind. The working and middle class have been absolutely pillaged. But like in a movie, the bad guy is never who you think it is. The obvious answer is always the wrong answer. So who is the real villain? The top 10% of US earners now account for almost exactly half of all consumer spending. And this problem has been growing rapidly for the last 30 years, surging by a full 13 percentage points in that time, marking a profound shift in spending power. It is a grisly illustration of the unbearable inequality in this country. Inequality is unavoidable. Make no mistake about that. You do not. Even if you try to level set everyone at zero, you're still going to have inequality. But this level of inequality is the result of intentional wealth Transfer. But if the rich aren't the problem, who is? To answer that question, you have to know how people get wealthy. More than 70% of all multi millionaires are self made. So it's not through inheritance. To get wealthy, you have to build something and own it, or bet on something and win. What do you build? A business? What do you bet on? Anything that might go up in value more than inflation over time. Could be your house, could be the stock market, it could be a lot of things that can't be inflated. But if you don't build something, you are forced to bet. Now, most people are willing to bet, but only on a house because it's the thing that they understand intuitively. Their wife is haranguing them to get one so that they can live inside of it and build memories. So once houses become too expensive, most people just don't bet. And because of that, they get eaten alive by inflation. If you were willing to bet that the stock market will go up in value over a long period of time, odds are you'll actually win. So imagine going to a casino where there's a known way to play, and if you play that way, odds are that you're going to win. You would think that people would rush to that casino and follow the playbook, but most people don't. Most people don't bet. Now if you ask, well, how do you bet? Well, you're asking the wrong question. The right question is, why do you have to bet at all? Now you're getting closer and closer to figuring out who the real villain is when you start asking that question. You shouldn't have to bet. You shouldn't have to be an investor. You should be able to simply save your money. You should be able to save your way to prosperity. I hope that sounds so obvious that people are like, wait, that is what I'm doing. If that's what you're doing, you are losing every day because there is a system set up to ensure you lose money if you save. You can't save for two simple reasons. You don't make enough money for how expensive things are getting. And things are getting more expensive specifically because the government prints money instead of balancing its budget. And that means your money is worth less every day. So you're not making enough already to keep up with inflation. And then what you keep is losing value over time. Don't even get me started on globalism. Now I could be cheeky and say that, okay, this means that we're all the villain because we vote for this shit. But instead, I'll say this. You're not in a race war. You're not in a class war. You're in a policy war. A policy war. Politicians run deficits and print money to cover it. And that printed money comes out of your pocket, you don't vote for it. You probably don't even know that it's happening. And to pour salt on the wound, the politicians then have the gall to allow bankers to act like a cartel to keep competition like crypto out so that you have no way to exit it. The system that's stealing your money. Now. It breaks my heart to watch Minnesota or any other state burn and know that people think that they're fighting a just war when they don't even know who the real enemy is that has put them in the situation to feel the way that they feel. The real enemy is any policy that offers more free stuff, forces you to gamble, makes you poor and more dependent. Free things are always paid for. For they're just paid for in inflation, which comes out of your pocket. You need balanced budgets, money that can't be printed. Competition among banks so the consumer wins, not bankers. We need affordable housing. From building more. From building more. Which is the only thing that actually lowers the cost of houses. Without the need for a crisis, or without making the buildings impossible to maintain, or without needing a commissar to decide who gets what housing. You can't lower prices on something that everyone wants. You have to make it more abundant. Let me say that again. When everybody wants something, you're not going to lower the price. If there's a fixed supply of something everyone wants, the price will always go up. If you want to lower the price, you simply make more of it. Okay? Pokemon cards. Understand this. Pokemon collectors are terrified that the companies will print more cards because then the cost of the cards go down. If Bandai, the company that makes Pokemon cards, understands not to do that, then come on, boys and girls. We've got to figure out that when you increase the supply of something and the demand stays the same, the price is going to go down. This is all a policy concern. It's a policy war that we're fighting. If you fix the policies, reduce the policies, balance the budget, and turn your anger towards the right people. As long you're going to make progress. But as long as we're fighting each other, they can just keep stealing from us. All right, Drew, that's my psa. I hope that. That we get somewhere.

[Drew]

Yeah, it. There's a lot of sadness in the chat because it Just feels like we're going against this wall of whether it's corporate elites, whether it's the Fed, whether it's money printing, whether it's billionaires. So it does seem a little bit gassed.

[Tom]

But here, here, let me give people a little bit of hope. I read the Machiavellians, defenders of freedom, James Burnham put forward this idea that the elites have always been able to control the narrative. Narratives are useful, narratives create cohesion. Now they can't. Social media has made that impossible. And he lamented that. I don't know that this is going to be better. And I thought he might be right. I don't know that this is going to be better. But, but the one thing I will give it, if you're open to hearing it, the information's there, it's just pouring out.

[Drew]

And the way to beat inflation to way to get on the asset level.

[Tom]

Like if you hit subscribe immediately right now, this is one thing that I'm just not shy or bashful about. I am walking you through the cause and effect of life. Once you understand the cause and effect of life, everything gets easier. Because now all of a sudden you understand you can solve what I call novel problems. You can solve novel problems when you understand cause and effect because you're no longer reasoning by someone else's frame of reference and them telling you what to do. You're no longer reasoning by analogy. You're actually thinking from first principles. And you live in that era. You live in an era where there are gaggles of people. You can pop in here, see what I'm saying, move on to somebody else, see what they're saying, and actually in your own life, build a working model of the world that results in the outcomes that you want. So the only danger in this age where there's going to be a gazillion narratives flying around that will conflict with each other and cause people to hate each other, is that if you allow yourself to think by proxy of a team, meaning I'm not going to think through or understand this. I just need to be on a team. And then you tell me team, how I'm supposed to think that that's dangerous. But the flip side is the same thing that makes that possible at scale, makes it possible at scale for people to find the information and think for themselves. I unfortunately have a now long standing belief that I don't know that we can save a government, a country, but for sure you can save individuals. And so my message to you guys is listen at the individual level. You don't have to be tense. You can figure these things out for yourself if you're thinking up from first principles. So that would be the breath of hope that I will give people, is that man, you now have access to the information. Like it is wild what you can learn. Absolutely wild. So just make sure that you're putting the time to learn.

[Drew]

Wow. Well, that's all I got.

[Tom]

All right, now that crazy ass note come to a wrap. It's Friday, everybody. We are going to be here on Monday. Even though it's a holiday and I want to to shout out this crew who had the option, they did not have to come in. They still don't, by the way, boys. So if you guys want to retract, and I mean this, if you guys are like, no, no, no, I'd rather have Monday off. I'll figure it out. But currently these guys are coming. Mad love, mad respect. Amazing. Have a very wonderful weekend, everybody, and we will see you on Monday. Until then, my friends, be legendary. Take care.

[Drew]

Peace.

[Tom]

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