← You're The Voice | by Efrat Fenigson
You're The Voice | by Efrat Fenigson
AI, Gold & Bitcoin Are Light In The End Of The Tunnel - Peter St Onge | Ep. 133
01:26:16
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- [00:00]
Peter St. Ange
I was getting silenced for talking about the unemployment rate. Without free speech, we are dead. I don't see any government on the horizon that is interested in dismantling that apparatus. It's too useful. The goal here is a universal basic income. The goal is to terrify people so that they will say, I give up government, take care of it for me. You've got 51% of the population who is obedient enough to win elections. At that point, it's a dictatorship. The Western model, I think is really running on fumes and it is sustained only by money printing. What central banks around the world did is they soaked up that inflation and they just printed more money. Now it's possible AI is BS and it does nothing, in which case, fine, false alarm, move on. But if AI promises what the doomsday are say, if it wipes out 50% of job tasks and etc. It is going to raise wages to a point we can't imagine. You end up with an economy that has far more human centric jobs.
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Podcast Host
They need financial censorship in order to uphold the, the, the fiat system that exists today.
- [01:04]
Peter St. Ange
In terms of the sort of fundamental proposition of bitcoin as insurance for fiat, I think that's unchanged.
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Podcast Host
Okay. I'm so glad to have my friend Peter Saint on once again on the show. Hey, Peter.
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Peter St. Ange
Hey. How's it been going for you?
- [01:32]
Podcast Host
So good. I've been for about two years now, so that's why I don't have a base to your question before. I've been moving around so much and it's been a journey.
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Peter St. Ange
That's fun though.
- [01:45]
Podcast Host
It is so much fun.
- [01:47]
Peter St. Ange
We did that for a while and then we had twin daughters and that kind of put a. Made it a little bit harder.
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Podcast Host
You have to stay put when you have babies.
- [01:57]
Peter St. Ange
For sure you do. We were, you know, we were backpacking in Kuala Lumpur and we ran across these digital nomad couple and we had the babies with us and they were like nine months old and. And they were like, you can do that with babies. And we were like, well, not really.
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Podcast Host
It's hard.
- [02:14]
Peter St. Ange
It's very hard.
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Podcast Host
It's very hard. But you were doing it for a while. That's amazing.
- [02:19]
Peter St. Ange
Yeah, yeah, we were doing it for a while. We were in Malaysia, Japan, Thailand and then we ended up moving to Taiwan sort of permanently or at least for five years. Yeah, so I was teaching over there at a university.
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Podcast Host
Got it. So the girls were growing up there?
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Peter St. Ange
Yeah, yeah. They mostly grew up over there. So we walked into a restaurant one day and they had an American football game on. And my daughter was like, is that rugby? And I was like, okay, maybe we need some American exposure for.
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Podcast Host
And later on, you moved to the States, right?
- [02:57]
Peter St. Ange
Yeah, yeah, we're in the States now.
- [02:59]
Podcast Host
Yeah, amazing. Okay, listen, let's do a little intro for my audience that may not know and jump straight to the questions because I've got a lot to ask you. All right, so my guest today is Peter St. Ange, former MBA professor, former economist at the Heritage Foundation, Mrs. Institute, current economist. So it was former. And then you came back, right?
- [03:25]
Peter St. Ange
I did come back. Yes, indeed. We had a purge of neocons, and so I rejoined.
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Podcast Host
Excellent. So, current economist at the Heritage Foundation, Mrs. Institute and Montreal Economic Institute, and a proud ex bartender.
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Peter St. Ange
Yes, I peaked early. Yes.
- [03:46]
Podcast Host
So Peter has built a following of hundreds of thousands of subscribers on his ex and blog with daily videos, commentary, where he breaks down macroeconomics, monetary policy, and the state of our freedoms without the noise, the fluff, or the academic jargon. It's very enjoyable to listen to him on a daily basis, I promise you. This is Peter's second time on the show. He's been one of my first guests on episode number 13. Please go and watch that one. I'm going to put a link to it in the show notes and. Wow, that feels like a lifetime away. Like episode 13 was about two and a half years ago. Go watch that incredible episode. I know so much has happened since then. And also in my journey, I looked at the. At the episode yesterday, and I was just such a. I. I'm still a humble student, but I knew so little, and I still feel like I know so little, but I've. I went through such a journey since then. So, Peter, welcome and thank you again.
- [04:46]
Peter St. Ange
Thank you. Thank you for having me back.
- [04:48]
Podcast Host
All right, so straight to my first question. Let's talk about what is really on the table today, right now for so many of us, and that's the blockade on the Strait of Hormuz. If the Strait of Hormuz closes, even temporarily for a while, which it's been going on now for. For a while. But if it continues, what does that mean in practical terms for the U.S. for Europe, Canada and Australia? And I've separated all of those because I think they mean different things for different places. Are we talking about just price shocks, a recession trigger, or something more structural? I know it's a big question.
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Peter St. Ange
So I think the most important point here is that the war itself is not economically catastrophic. It is for human life and so on. But in terms of the economy, it's not the war, it's the interruption of oil flows. And so if one way or another, whether the war ends or whether there's some negotiated passage or something, it's really down to oil. Now the question is can oil set off a recession? It's already driving up inflation. So inflation I think just hit about 3.3%. Actually on an annualized basis it's currently running 10%, which is the worst of bidenflation. But all of that is oil. If you strip out oil from the inflation numbers, nothing else is going up. Everything else is pretty tame. It's 100% an oil question. And the fear is whether that can lead to a recession. So Deutsche bank went back and did a study of historical oil shocks. And what they found is that number one, you need about a doubling of oil prices and it needs to be sustained not just for know, one Sunday night. Yeah, so a sustained doubling would imply about $130 on oil. We're at about, I think at the moment we're at about 100. It had reached maybe 112 on West Texas. And then that came down a little bit now that they're talking about some kind of negotiations to allow oil to go through. So that's number one, you need 130 sustained. But that's actually not enough. Because what a lot of people even in financial markets are looking at is the 1970s oil shock. And the key on the 1970s oil shock is that the American economy was already in trouble. So people forget that the Nixon shock, the famous Nixon shock that broke the gold Standard, that was two years before the oil shock. The oil shock was 73, Nixon was 71. And the reason why Nixon had to break the gold standard is because we were spending way too much on both the Vietnam war, which in magnitude was much, much bigger than this current war is, and that was the welfare state had just, was just starting to be built in the US so we were about 20 years behind Europe on building these trillion dollar fraud industrial complexes that was just being built. So the way it was framed at the time was guns and butter that was breaking the federal budget to the point where Nixon had to go off the gold standard. It was effectively national bankruptcy. But the moral of the story is that the American economy was already crawling. We were already in stagflation because of runaway government growth, both on the war warfare and welfare, As I believe Dr. Paul puts it, we were already on the rails. And so when the oil shock hit, yes, we went into Recession, but we were probably already headed for a recession. It was an accelerant. So Deutsche's point, Deutsche bank, is that if you want to compare today to back then, you would need the same type of economic weakness. We do not have that. If you look at the state of the economy before the war started, it was very, very strong. We had an enormous amount of foreign investment coming to the US Now, a lot of that was strong armed by Trump. His general negotiating pattern with other countries has been we're going to hit you with these catastrophic tariffs unless you put a couple trillion into our economy to create jobs. So he's been very, very transparent that that's the deal and he's open to negotiation and that was working. So we were looking at north of $4 trillion of foreign investment coming in. Rule of thumb when you're building a factory is $1 trillion creates a million jobs. A billion creates what? A thousand and so on. And so that was something like 4 million jobs that were incoming. The broader picture, Federal Reserve has been lowering rates. Not fast enough for Trump, but they have been lowering it. The new Fed chair, Warsh, was talking about lowering rates even more. He's got a reputation as a tight money guy, but his strategy, which he calls Robinhood, is that he wants to lower the rates for Main Street. That encourages business growth and job creation, but that creates inflation. So he wants to cancel the inflation by selling off the Fed's stack of something like $9 trillion of assets. That drains money out of the system and cancels the inflation. So the bottom line is that both Jerome Powell and Kevin Warsh had a stance towards more economic growth, more job creation. You put that together with the tariff reshoring and we were in a very good spot before the war started. Once the war ends, which if you look at stocks, the war is basically over. The S and P has literally recovered to above where it was when the war started, which is pretty amazing since the war is kind of sort of ongoing. But if you believe stocks, then the war is already over. If you look at oil, then we're probably looking at another couple of months of disruption oil futures. But either way, I think that it's pretty much consensus that this oil's or this war is not going to go on forever. Both sides are looking for an excuse to declare victory. They've got different audiences for that. Trump, of course, does not want inflation to keep running through the midterms. So I think it's most likely the war ends pretty soon. If it does, then, number one, oil prices come down, they don't come down overnight because there is permanent, not permanent. But the damage that's already been caused by Iranian missiles is going to take years to repair. So that'll take a while. But we come back and then we go back to the place we were before the war started, which is very healthy GDP growth, which is night and day to the 1970s where you had this weakness going or even before the oil shock came in.
- [11:06]
Podcast Host
And so that's in the US lens. And when you look at other areas around the world, like I know you spoke about Canada recently and then Europe is a whole other story. How do you see them?
- [11:19]
Peter St. Ange
Yeah, so similarly we can break it down in the short term and long term. So short term meaning while the war is going on. The interesting difference from the 1970s is that back then the US did not produce nearly as much oil. It had to import a lot more specifically imported a lot from the Middle East. So the US actually had supply shortages. Now it does not. What's actually happening instead is there's this flotilla of 120 tankers going from the Middle east area, from Persia and Red Sea going from there to the US to go pick up oil. So it's a very different world. The US is not going to have supply shocks, but it's different in these other countries. So Australia for example, has an enormous amount of energy resources that does not exploit because of environmentalists. Europe also in the North Sea, even off the coast of Scotland or Ireland, there's potentially massive oil reserves that are not exploited because of the environmentalists. So a lot of these countries, you know, in their cases it's a self inflicted wound where they are at risk of getting shortages. You have other areas like Asia. Asia is really probably the sharpest among large economies, excluding Africa. Asia is really in the worst shape because they just pulled a bag card in the lottery, in the lottery of geology. They just don't have much energy. So Asia import or China imports about two thirds of what it uses. Japan, it's closer to 95%. They have effectively zero oil. So these shocks are hitting there. Trump has been putting pressure on Japan, Korea, even Europe to participate in opening Hormuz. Because the point he's been making is look, it's not our oil. We got plenty of oil. You guys need to the oil. So that's the near term is that you've got the risk of shocks of actual shortages across all these countries. Australia for example, is canceling domestic flights because of shortages of jet fuel. The bigger issue is long term, if you look at U.S. growth, for example, U.S. growth compared to Canadian growth over the past 15 years, I think it's been five times faster. Canada is crawling and that's per capita. They imported masses of migrants. So that makes GDP go up, but that's not real gdp. That's, that's migrant welfare and things like this. So if you're asking whether a country is doing well, you want to ask per capita growth. The US could annex Mexico tomorrow and our economy would be bigger. But that's not certainly a good thing, right? You're, you're interested in how is the average Canadian doing. And they're doing terribly. You know, wages are flat. Since 2016, they've had slower growth than Japan, which is pretty shocking. And Europe is not much better. So Europe, over the past 10 years or so, Europe has been more or less in recession. It's been right on the edge in per capita terms again. So even after the war ends, I think that the growth model pretty much everywhere, but the US is pretty much broken. And that's across the west, that's Australia, Canada, uk, Europe, Japan. Even in the US it's very much at risk if we get a change in management in 2029. So I think, you know, this isn't necessarily a U.S. story. I think at the moment we're insulated because Trump's economic policies are fantastic. Whatever you think of the man, his economic policies are strong. But I think longer term, there's a question, you know, related to Bitcoin, related to gold, whether the sort of post war growth model is broken. And I think it absolutely is. If we look at it now, the deficits are astronomical. They're actually, the US is much worse than Europe or even Japan at the moment in terms of deficits. That's partly because of war spending ongoing and new. But, you know, at this point, the Western model I think is really running on fumes and it is sustained only by money printing. That is, you know, that gradually shows up in inflation. This is why before the war started, we had stratospheric moves in gold and silver, because there was a lot of focus on the so called debasement trade, where deficits force what's called fiscal dominance, where the government now has to print money in order to allow the central government to run deficits without spiking interest rates and blowing up markets. So I think that there's kind of a reckoning coming. To be fair, that reckoning has been coming since the 1970s. Back then there was a lot of talk about how the Western model was in imminent danger of collapse. And it is linked along largely because the central bankers, I think, have played a large role in sort of pacing the decline. Right. So rather than having one big crash, they pump money, they, they pump inflation in. China also gave us a big win. So China has been a massive deflationary impetus for the entire world. Like before China started, you know, sort of went capitalist. The price of a toaster, you know, in modern terms would have felt like $200. Right now they're like 20 bucks. I mean, people don't realize what massive deflation China unleashed. What central banks around the world did is they soaked up that inflation and they just printed more money. And that money printing sustained the machine for longer. And you know, this is partly why people don't realize what China did for us. They just think that China stole stuff and, you know, didn't actually do anything with it. But I think that's been the mechanism is China sort of bought the west another 20 years of kicking the can down the road. Now, an interesting question at this point, and Kevin Marsh has talked about this, is whether AI is the new China. Right. So AI so decreases costs. You know, I can, depending what the activity is, you can cut labor costs 95, 99%. Is that now the new China where, you know, this is going to buy another 20 years where Central banks can essentially soak up all that inflation. And that's, that's literally what war said. He said, you know, it's possible that I could be so deflationary that we could run interest rates much lower than we could otherwise. So again, this is absolutely kicking the can down the road. This finances those 7% deficits and it might buy the system another 20 years, you reckon?
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Podcast Host
20 years.
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Peter St. Ange
That's what China bought it.
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Podcast Host
Wow, that would be incredible to not see a structural change in the next 20 years in regards to the way money is handled around the world.
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Peter St. Ange
Well, I think this has been surprising for a lot of gold investors, for example, or bitcoin investors. Is that the, you know, if you time it since the 2008 crisis, back when the, you know, Genesis block came out, I think a lot of people back then thought that the system was in imminent danger of collapse and it appears to have bounced off. And I think that's been China.
- [18:18]
Podcast Host
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Peter St. Ange
Yeah, probably the closest period is the 30s and the 40s. So you had the Great Depression, you had this massive decrease in world trade, and countries started focusing on resources. So for Germany, it was Lebensraum. Japan, you know, they didn't really have a military objective or a military reason to take over the Philippines or Indonesia. They were focused on China. But they felt that they had to go in there because resources were being cut off from the US So going from a world these sort of globalized, you know, it's everybody's oil because you can trade it freely. And, you know, like Japan today or at least three months ago, didn't feel resource constrained because, okay, it doesn't have lithium, but you can buy it from Indonesia. It doesn't have oil, but you can buy it from, you know, Saudi Arabia. Going from that kind of a world where resources are just a matter of money. If we are now shifting into a world where, for example, the Straits of Hormuz belong to one country, which could be Iran, it could be the United States, at the moment, he's, he's running a, an embargo there, which, you know, people are speculating that that might be aimed at China. So if we go to a world where resources are locked up under the possession of one country or one group of countries, we could start getting back to a World War II scenario where countries start feeling that they have to go to war in order to, to ensure national survival.
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Podcast Host
So you think that it could lead to that? I, I didn't think it would lead to a World War three, but yeah.
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Peter St. Ange
Right. And, you know, if we look at what's happening literally today and yesterday with Hormuz, it's a football going back and forth. And, you know, if this is. If one of Trump's goals is to put pressure on the Chinese economy, Hormuz doesn't. It's essentially impossible to replace that supply short term for China.
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Podcast Host
Yeah, absolutely. And speaking of Trump, let's segue to him, because I know that Trump is a character that you were in favor of for a while there. How do you see Trump today versus about a year ago, before the wars escalated? Has your read on him changed at all on his economic instincts and his decision making under pressure, or, you know, where he's taking America?
- [24:09]
Peter St. Ange
Yeah, I think Trump is who he is. He he's been the same guy for about 50 years. I think anybody saying they're surprised didn't think hard enough beforehand. He's done essentially, you know, I don't think any of it's been surprising. He did a lot of this in his first term. Economically, I think he's always been very solid. He's focused on what are the, the two most important levers for the economy, which are reducing tax rates on producers and getting rid of red tape. He can only do so much because in the American system, everything has to pass the Senate and the Senate has a filibuster, which ensures that only things that both parties like can pass. So that makes it almost impossible to get anything really done on the economy. And this way Europe is actually a better situation. Like when Europe goes populist, it's going to change a lot faster than the US because it doesn't have that built in barrier. So within those constraints, Trump has done everything he can for the economy. I think he's been really impressive. You know, he sees the economy like a businessman would. He knows how to grow an economy. Even if you take tariffs, his, the fact that he was willing to negotiate on tariffs in order to, you know, reduce barriers on U.S. exports or to get other countries to invest in factories in the US this is very sort of flexible, right? It's very practical. The issue, I think at the moment is the war, right? So the war has upset a lot of the base. And for me, I think the key question is, was Iran an actual threat? So Trump says it was. A lot of people think it was not. I think it is certainly not a slam dunk that it was actually a threat to the United States. It's a threat to other countries, but not necessarily the United States. If you, you know, time will tell. I think that's still under debate. But if it turns out that Iran was a sort of a voluntary war, that it was not something that we had to do, then at that point, I think the war becomes COVID Lockdowns 2.0, right? It becomes a situation where Trump's instincts may have been conservative and small government and freedom and so on, but he got talked into stuff, you know, empirically. The base forgave the lockdowns, they forgave the, you know, the vaccines, the lockdowns. Early in 2024 campaign, Trump was talking a little bit about, you know, he was bragging about his vaccine. And I assume Donald Jr. Had a talk with him and said, let's, let's not talk about that so much. So, you know, even if it comes out where MAGA feels like it was not a necessary war, I think he's got an uncanny ability to walk away from fires.
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Podcast Host
Interesting. You're a Trumper. You're like, you, you, you like.
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Peter St. Ange
So I may. I'm pretty.
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Podcast Host
I don't like or dislike. I'm just like. It's so interesting.
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Peter St. Ange
Yeah. No, no, no, no. And there's reasons. So there's. There's two issues that matter to me, which are the economy and free speech.
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Podcast Host
Yeah.
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Peter St. Ange
And on free speech, in a sense, for me, free speech is more important because I saw what happened during COVID which is that we were led to the slaughter.
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Podcast Host
Yeah.
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Peter St. Ange
So how many pregnant women got that vaccine? Right. How many infants were given that vaccine? So for me, you know, my bread and butter is the economy. Trump is very good on the economy, genuinely. So, you know, I don't feel bad on that front, but really sort of like, what's my ulterior motive? Free speech. Without free speech, we are dead. So in light of that, you know, I think his instincts are very good on free speech. He's certainly much stronger than Congressional Republicans, who are effectively RINOs. So, yeah, I remain absolutely a Trumper. I'm not a huge fan of the war, but like COVID lockdowns, it is what it is.
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Podcast Host
Okay, let me see. Let's talk about AI a little bit. I think this is super interesting because we touched on it as a deflationary force. And you've been covering AI quite a bit recently, talking about the Brookings Study, for example, that you cited, finding 86% of AI displaced workers will be women. Yeah, that. I found that fascinating. Concentrated on clerical, administrative, and middle management roles. The Karens, you call them. I'd love to dig into that a little bit. This is really interesting because you compared this to the Industrial Revolution, but in reverse. Can you say a bit more about that?
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Peter St. Ange
Yeah, it's a fascinating dynamic. So, all right, so first, if we sort of go to 8,000ft on AI. So automation is not new. Automation has gone for thousands of years. Ancient Greeks worried about oxen pulling plows, and this would displace farm workers. And so they'd have to start wars to soak up all the extra men. In the Middle Ages, they worried about water wheels that were going to take away all the jobs. In the Industrial Revolution, they absolutely were concerned that all the farm jobs were going to go away because tractors can do it so much better. Even during the Internet and the dot com that was going to wipe out jobs none of it happened. Thousands, thousands of automations throughout history. Catching fish by hand versus a fishing hook. Okay, this is automation, all right, what does it do? It raises incomes. And, and then what happens? The higher incomes mean there's more stuff to do that's useful. In other words, there's more jobs. So throughout history, thousands of events of automation, they all end up the same, which is that you have the exact same number of jobs, but they pay better. In other words, anybody who wants to work can work. And that's true today, by the way, there's no such thing as unemployed in the United States. You can go out and offer to like sweep people's driveways and they'll give you five bucks for it. All right? There is like unemployment is not a coherent concept. Anybody who wants to work can work. If you're giving out welfare, less people want to work and so you get a lower labor force participation rate and so on. But the point is there is always enough jobs for everybody. The question is, how much do those jobs pay? And every event of automation, it's like an escalator, right? People have to step down. So the people who used to pitch hay, you know, that job goes away. So now they have to work something else. However, it's stepping down on an escalator. So the automation itself is making all jobs pay better. So if you take for example a farm worker in 1800, so he might have stepped down to let's say painting houses, which is still a job, right? That's not automated. Now a house painter in the US makes $200 a day. A house painter in India makes $9 a day. All right, that's only half an industrial revolution. All right? India does have electricity, so that's a 20x jump in low skill jobs. There's another study recently that babysitters in the US make 20 to 25 an hour. That is the lowest skilled job you can possibly imagine. 16 year olds can do that job with zero training. All right, I did it at 10
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Podcast Host
years old, thank you.
- [31:11]
Peter St. Ange
Right, okay, so 20 to 25 bucks an hour, right? That is because of the industrial revolution killing jobs. It's because of the digital revolution killing jobs. And here we are. So AI is going to do precisely the same thing. Now it's possible AI is BS and it does nothing, in which case, fine, false alarm, move on. But if AI promises with the doomsday or say if it wipes out 50% of job tasks and etc. It is going to raise wages to, to a point we can't Imagine, right? So Starbucks will pay six figures, maybe 400,000 a year. It'll be epic. It sounds goofy, but consider $9 a day painting houses, $200 a day. The difference is half an Industrial Revolution, right? We're talking, if the doomsdayers are correct, we're talking something bigger than the Industrial Revolution. So that's, that's the first background is the whole AI is going to wipe out all the jobs is goofy. Thousands of years. All right? If you take the Industrial Revolution, for example, roughly 80% of jobs in the US before the industrial Revolution were farm work. It automated all of those. There's almost nobody who does farm work by hand. Where they do is because they're illegals and they're so cheap that you can replace the machines with people. All right? Normal American citizens don't do anything by hand on a farm. 80% in AI even if you take the absolute worst case, you're not getting rid of nurses, you're not getting rid of the trades, you're not getting rid of bartenders, right? We've had vending machines since 1900. You could replace a bartender with a machine since 1900. Guess what? People don't want it. People want human things. They want human babysitters, they want therapists, they want personal trainers at the gym, okay? People want humans. So you take the services. You take, you know, things like nursing. You take government workers, sadly, which exists. You're only talking maybe 20 to 30% of the population who work in cubicle jobs that are replaceable by AI, right? It was 80% in the industrial Revolution. Now people come back and they say, ah, no, no, no. They're gonna have the robots. Okay, maybe for some skilled trades. But the thing about a robot is it goes much, much slower than A.I. the reason is because you need one A.I. for 8 billion people. You need five robots for a McDonald's. If you look at electricity, for example, the first electrification of a company was something like 1870. It took 50 years before half of of companies were electrified. So they had a better Mousetrap in 1870. And all these factories were using steam and coal, and they had the coal truck come out and 50 years for half of factories. So, yes, the robots will replace skilled trades, especially things that are very expensive. They might replace brain surgeons, they might replace linemen, you know, on electric lines. But that, you're talking 20, 30, maybe 50 years before all those jobs are going to disappear. And in the meantime, the AI making everything cheaper raises incomes $9 to $200. That means regular people Start consuming services that rich people do today. Right? 200 years ago, poor people didn't go to the supermarket and buy prepackaged, pre butchered meat. Okay? They had to raise their own chickens. We don't think of that as a service, but it is. 90% of food production, even for the poorest people in America is automated. They consume services. You extrapolate that across the entire economy. You know, most Americans mow their own lawns, they clean their own house. All of these go up when incomes go up. So I think that's what happens. Now, the fascinating thing about the 86% number.
- [34:43]
Podcast Host
So hold on, first, I'll stop you here to just say that everything you said so far is, to me, it's optimistic, it gives me hope. Because that doomer, the doomer view of, you know, we're, if we don't catch up is so stressful for people. But if you look at history and learn from the example you gave, it's crazy.
- [35:09]
Peter St. Ange
Not only that, but the new jobs are a lot more fun. Nobody enjoys working in a cubicle, right? Think of you or anybody listening. Think of the blue collar jobs you had in your life, right, in college and high school. Now, the only reason that you stopped doing those jobs and got a grown up job is because they didn't pay.
- [35:27]
Podcast Host
That's right.
- [35:28]
Peter St. Ange
Now if those jobs paid, right, like if you could be like a tour guide in Italy, right? Or a bartender. For me, I, I had a lot more fun being a bartender than the cubicle jobs I did in my 20s. They were horrible. They're soul crushing. So no, you end up with an economy that has far more human centric jobs. So, you know, a lot of them actually will have human contact. You've got, you know, rising incomes mean that people want more handmade stuff. Consider that today a handmade chair has more flaws than a machine made chair. Because a machine made chair, you, you spend a lot of time making the machine perfect and then boom, you stamp out every chair. How many flaws are there in a handmade chair? Probably 50 times more. But people pay more for it. Why? Because it's handmade.
- [36:13]
Podcast Host
Yeah, right.
- [36:14]
Peter St. Ange
It's true in content. It's 10 times more true in content. You know, how do people value this conversation versus, you know, you could simulate us with AI. Yeah, right. Nobody would watch that. So, you know, even if you're introvert, right, Rising wages, rising incomes mean that there's a bunch of stuff that people still want because they want humans to do it. So I am massively optimistic. What's Fascinating to me is. So first off, these AI doomsday predictions, they've been around for a long time, which is fun because you can go back and look at the ones from like 15 years ago and see what they predicted by today. And across the board, like, oh, it was like a quarter of jobs would be gone. 80 million jobs were going to be gone in the US economy by today. What actually happened is we got 16 million more jobs. And the automation, it proceeded on all fronts, right. We, you know, we have, we have robots and factories, we have, you know, the Internet. Right. So automation across the board. We didn't lose 80 million jobs, we gained 16 million. But what's fascinating about these is that the most extreme predictions come from the left. Specifically, World Economic Forum said we would lose half. Half of all the jobs.
- [37:28]
Podcast Host
Yes.
- [37:29]
Peter St. Ange
And that, that should make you go humor. Because why, why do you guys want all the, like, why, why are you so excited about this? And I think the reason is because the goal here is a universal basic income. The goal is to terrify people so that they will say, I give up government, take care of it for me. They, you know, it's the bread and the circus. You put them on the dole and now you've got obedient, you've got 51% of the population who is obedient enough to win elections. At that point, it's a dictatorship. So now they can scrape it for all it's worth. You get the Somali leering centers and the, you know, trillions of dollars to fraud that is the fundamental goal of scaring people. It looks, you know, the closest thing to the AI panic I think is global warming. And you know, you look at the evidence, you can barely see AI in the numbers. Even where you do see AI in things like it, like entry level, it, entry level finance, those are getting replaced without a doubt. Companies are reducing recent college graduate hires because they're trying hold on to existing people and repurpose them. So yes, you see it at the edges, but remember what you're looking at is the step down. What you're not seeing is the escalator. And the escalator is you're supposed to lose 80 million jobs, but we actually gained 16. And you know, of course the, the, the jobs pay far more than they did 15 years ago, probably on the order of 30% more that wages have grown. So I am, I'm very optimistic. I'm very suspicious of the doomsday scenarios, none of which have panned out. And I think it's going to get more extreme. For whatever reason, people are very open to this doomsday argument and there is no evidence for it.
- [39:08]
Podcast Host
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- [41:47]
Peter St. Ange
Fascinating. Right? So if you in a sense they're
- [41:51]
Podcast Host
scaring their own base.
- [41:53]
Peter St. Ange
Well, and also consider who writes AI Doom porn. So these are journalists, professors and think tank analysts. I mean they're exactly the people who AI is going to replace. So I have no doubt it's terrifying for them. Self sabotaging. Yeah, yeah. They want. Wow. They want to, you know, butter their own bread. You know, if you look at what the industrial revolution did, it automated routine physical jobs.
- [42:18]
Podcast Host
Yeah.
- [42:19]
Peter St. Ange
Not high end physical jobs. You still had engineers and things like that. Right. You couldn't replace that with a, with a, with a basic machine routine physical jobs. What AI is doing is replacing routine administrative or white collar jobs. Those jobs, according to this Brookings study, those are overwhelmingly held by women, about 86%. Well, the layoffs are more general, but the trick is a lot of layoffs that are going to target men. So areas like finance and it. Those are people with relatively broad skills. And I don't know how to put it politely, but they have more capacity to reskill into other industries. Whereas what Brookings is concerned about is the people who get laid off and don't have much of a capacity. Maybe their skills are very, very narrow. They're just not on the ball. And so it believes that 86% of those people, so the people who are laid off and kind of stay laid off, it thinks that those are overwhelmingly women, 86%. And Alex Karp, the CEO of AI company Palantir, he was on CNBC the other day and he sort of connected the dots and he said, look, these people who were talking about laying off these highly educated, high earning women, they are all Democrats. The people who are going to benefit, right, the blue collars who benefit if incomes go up. People buy second houses, they have bigger houses, they get a swimming pool. There's, there's all of these trades related things. If, you know, automation replaces men with machine, you've got more infrastructure, you need more engineers, more electricians, more plumbers. So all of these things benefit blue collar men at the expense of white collar women. Now, which party represents blue collar men and which party represents white collar women? So this is absolutely going to be a partisan issue.
- [44:03]
Podcast Host
Very, very interesting. Wow. And I think, you know, just a thought there. Since government jobs are mostly clerical and administrative and bureaucratic, then if there's one thing I can hope from this doomsday prophecy, is that it's going to hurt some of those jobs too, because they're unnecessary. We all know that there is great inefficiency in bureaucratic positions. So maybe that's going to make it more efficient. If the governments will allow themselves to be cut down and shrunk. Do you think that that's going to happen?
- [44:41]
Peter St. Ange
It definitely raises the rationale for shrinking government. So if they're, you know, in the US we just cut 300,000 federal jobs. And I struggled to identify anything that got worse.
- [44:53]
Podcast Host
Right. It's similar to how X when Elon came and X X cut a lot of their employees, you didn't feel X any differently.
- [45:01]
Peter St. Ange
Improved.
- [45:02]
Podcast Host
Right.
- [45:02]
Peter St. Ange
Twitter got better. And you know, Twitter was a private company where, you know, you can redistribute workers and so on. When you're in the government, there's all these legal privileges that are built in. But even so, it didn't seem to get worse. So. Right. The rationale is much stronger to get rid of government workers, but that's also true in other organizations that look a little bit like governments. So big companies, hospitals, you know, there's a ton of organizations that employ in their guts just armies of cubicle drones. And that's exactly what AI can replace. So, you know, if you sort of squint and you know, look at the big picture, you've got millions of people who today have soul crushing useless jobs in cubicles. Tomorrow they're going to have jobs that, you know, involve creating things, dealing with people. They're, they're much more human jobs. And to be honest, women are creative.
- [45:53]
Podcast Host
Like you said before, they're more creative.
- [45:56]
Peter St. Ange
And you know, honestly, I think women will, will prefer those jobs. I don't like. I don't think most women are built for being in a cubicle every day alone. Like, I don't think that's, that's rough on men. I think it's even rougher on women. Yeah, women generally need, you know, some, some social interaction, socialization. So I don't think it's bad at all. It is stepping down on the escalator and they're going to fight it because they don't want to step down, but the escalator is moving beneath them. And I think the new jobs are far, far more human than the jobs we have today. I think, you know, we look back like, do we envy the people who lost their jobs in the Industrial revolution? Right. The people who were like pitching hay. If you've ever done that. It's really, really hard work. It is not sitting in a cubicle. It is not pleasant. Right. So like, do, do kids today dream of those jobs? No, they do not. So I think future kids, nobody will dream of these horrible cubicle jobs we have today. If you put it in a single metaphor, anybody who's watched the movie Office Space, of course that's exactly what we're hitting here. So the useless cubicle job is going to vanish and he's going to repair roads, sitting in the sun. You know, you remember how the movie closes. That's exactly the economy that we're headed into.
- [47:07]
Podcast Host
Bullish. Thank you. Thank you for the bullishness. Okay, let's give a some practical advice for ordinary people because I think the period, you know, the next few months, of course, with the war and everything, but also next few years, by the end of the decade, I think we're going to see a lot of changes when it comes to changing the monetary order, when it comes to changing some of the world order and the agreements between countries. And it's going to impact each and every one of us ordinary people. So beyond that macro analysis, what are some of the top risks, risks that you see right now for regular people, and what concrete step would you recommend for people to take to protect themselves?
- [47:50]
Peter St. Ange
Yeah, so I think the biggest risk is probably just that growth in government, you know, so 7% deficits are pretty close to what we were running in World War II. And we're not in a major war like this war for the US qualifies as just a normal year. You know, we're not, we're not in World War II. So that's, that would qualify as basically a peacetime deficit of, you know, close to 7%, which I think is just astronomical. So I do think that we are hitting the end game on that, that, you know, something's going to break on it. If that's the case, then you absolutely want to hold assets that are going to survive a monetary debasement. And you know, the pattern for, I mean, really since the beginning of the Federal Reserve, but it sharpened over the past 40 years. The pattern has been that every time there's some kind of crisis, the Fed shoots a trillion dollars at it, and it shoots a trillion dollars over and over until the crisis goes away. So we saw that during COVID what that means in the short term. Right. One of the weirdest things of COVID was that you had this, you know, allegedly world ending disaster. It was like a Hollywood movie at one point. They shut down half the economy and everything went up. Stocks went up, houses went up, everything went up. It was weird. And the reason of course, is that the Fed shot so many. It just shot the monetary bazooka at it. So we have risks, but I think that in a sense they all monetize into inflation because of central banking. And in fact, I think the risks go up because the central bank acts as a sort of venture capitalist for crisis. So countries can choose crises, they can create crises because they Know that the Federal, either their Fed or the bank of China or the bank of Japan is going to monetize these, it's going to bail them out. And so it encourages countries to play more games, to do more brinkmanship. And so, you know, if we're going to have more crises, if we're going to have more conflict, and if those are all going to ultimately monetize into inflation, then this is very, very bullish for owning anything solid. So that could be a house. Houses are good in most countries because the central bank will subsidize it. They'll basically give you 80, 90% of the money. So houses are a very nice hack. That's how you get rich in America anyway. I suspect it is in most countries. And then of course, just kind of the pure base version of that, which is gold, silver, bitcoin, I think that those are going to be very bullish. Those are going to be a lifeboat in the near term. And ultimately I think that the system, if everything is feeding into inflation, then at some point you do get runaway inflation. Then at that point either gold or Bitcoin, I think, are going to be the savior of the system. I would prefer bitcoin. The reason being that gold has a fundamental vulnerability which is that it can be seized by governments. Right. And so, you know, this is ironically why gold bugs argue for gold. Right. They say because it's physical, you can hold it. Well, yes, but that's also why governments can take.
- [50:46]
Podcast Host
They can hold it.
- [50:47]
Peter St. Ange
Yeah, exactly. Like you can't run a monetary system where you say, yeah, no, no, it's a gold back system, but the gold is hidden. Yeah, no, you actually have to show people where the gold is. Once you, you know, you have to assay it and verify it. And once you do that, governments are going to have opinions, they're going to come visit you. So I would prefer it be gold. But anyway, I think the system eventually breaks, but I do think that, you know, it's not going to break in the next 10 or 20 years. In the next 10 and 20 years. The main benefit is going to be inflation protection.
- [51:15]
Podcast Host
Right. And so those sound money assets plus houses, in your opinion, are safer for people to, to direct their attention to?
- [51:25]
Peter St. Ange
Yeah, stocks have actually held up surprisingly well, even like, even in hyperinflation. You know, early in Weimar Germany, people were not talking about prices going up. They were talking about the stock market. They were excited, they were loving it. You could buy something and you know, it would go up 10x in three weeks. So stock prices you know, if you look back in the 1970s, stocks essentially kept up with inflation. You look at Argentina, Brazil and their hyperinflationary eras. So stocks actually hold up surprisingly well, you know, depending of course, how real it is. Right. So is it a software company where it's almost all goodwill and maybe AI is threatening, or is it, you know, like an electricity company which is actually going to go up, you know, or has solid assets? But stocks do hold up surprisingly well still, if you want the most concentrated version of it. Gold, Bitcoin, silver.
- [52:13]
Podcast Host
Okay, now I prepared about five quick questions for you from the community because I asked people what they want to ask you and they have a few questions for you. One of them was actually, do you still believe in bitcoin, like a few years ago? So you just now answered it. And I don't know why they would ask it because I never saw you saying anything against it. But they're asking after this first wave of mass adoption by the US financial establishment. So maybe they're referring to. This is a question, by the way, from Pepper rgb, which is a. One of my biggest fans of the podcast. And I think he's referring to the fact that we, we moved the phase with Bitcoin to an institutional phase now. And so how do you, maybe how do you see that impacting?
- [53:07]
Peter St. Ange
Yeah, I think that's fair to say. But you know, we can compare that to gold. Right. So Financials sell gold, ETFs does this, you know, it has no impact on gold's ability to act as an insurance policy for Fiat. So, you know, in terms of price behavior, financials, we, we make it to a point where whenever Bitcoin does something like today, when gold does something weird, you know, like a lot of people first look to institutions and see whether they manipulated something. I can absolutely see us getting to there on price behavior, sort of short term price behavior. But in terms of the sort of fundamental proposition of Bitcoin as insurance for Fiat, I think that's unchanged.
- [53:50]
Podcast Host
I'm with you. And then. Okay, I'll keep the next question to the end because it's the best. So I don't know how to say that KM KMID Jr is asking what are the risks of banks performing buy ins as the fiat currency continues to degrade and nears the end of its life cycle?
- [54:11]
Peter St. Ange
Yeah, so bail ins, I think is, is probably what they're getting at. So that's when a bank. Yeah, yeah. So a bank basically converts your deposit into equity. So you're a part owner of the bank, which if a bank's doing, which
- [54:24]
Podcast Host
happened in Cyprus not long ago and which, which the EU has declared recently that they're opening like a new union for deposits and they're going to use your, your money for it. So. Yeah, please.
- [54:38]
Peter St. Ange
Yeah. So, you know, if they're giving you equity in a bank that's doing that, then the bank is pretty much bankrupt. So it's, you know, cutting out the middleman. It's essentially just throwing away your deposits. So that happened in Cyprus. Now the reason it happened in Cyprus, okay, so you had similar stresses on banks in the 2008 crisis or, and in the UK and the US for example, we just bailed out our banks. Right. Cyprus did not. And part of the reason is because the euro is a monetary union, Cyprus doesn't have total control. So it does not have a central bank of Cyprus where he could just unilaterally bail out banks. So I think bailouts are not going to happen except for those very special cases. And the point you're making where the EU is now shifting towards an FDIC type regiment where like it's a convoy, you know, bailout for all banks. You know, they're already fixing that in the vast majority of countries. When you get into that kind of a stress, the central bank is just going to bail all the banks out instead. So that I think we're absolutely going to see that. In fact, you could argue that's built into the system. Like the original bargain on a central bank is that the, it's a counterfeiting cartel where the central bank is the reason why bankers can print money they don't have. Right. Called fractional reserve banking. Because if anything goes wrong, if they make bad loans and they don't have enough in the vault, then the central bank will be the quote lender of last resort. And they don't hide this. They're, they're proud of it, in fact. But it is a permanent bailout. Right. And so the only reason why Cyprus stood out is because it sort of reminds you what happens if you don't have a central bank. Now, I would argue that's a much better world that if banks knew that they were not going to get a bailout, then they wouldn't go crazy. I think the issue in Cyprus is that bankers didn't necessarily think through what would actually happen if they were in need of a bailout. Bankers don't normally imagine that they're going to need a bailout. I'm not sure that they game these. And so that's why they got stuck. But in most countries, I think what happens, you know, the most likely outcome is that the central bank jumps in, bills things out that can then drive inflation because they've created all this new money during the crisis. It's not going to cause inflation because banks will take the bailout money, use it to plug holes. So it's not necessarily going to circulate. That's why in 2008 you didn't have hyperinflation despite the trillion dollar bailouts. But in general what you're doing is creating more money by the central bank magic incap assets. So again it converts into ongoing inflation.
- [57:07]
Podcast Host
And specifically about buy ins. Do you think that that's a phenomenon that we're going to see more of anywhere?
- [57:14]
Peter St. Ange
I think it's going to be very rare. I think central bankers far prefer just to bail everybody out. It's not their money. I mean, they just print it in the basement. So it's politically a lot more acceptable to just print the stuff.
- [57:27]
Podcast Host
I know. Okay. Cosmic Chirp is asking what are the most significant government policies currently affecting the economy and how should individuals prepare for their impact? I think we talked a little bit about that. I mean, other than war, theft and fisa. And I had to go check what FISA is and now I know it's the.
- [57:47]
Peter St. Ange
Yeah, FISA is Foreign Intelligence Surveillance Act. Yeah, yeah, yeah. I mean all of those are real. You know, a lot of them are closer to civil rights questions. They are adjacent to free speech because, you know, you can use surveillance to intimidate speech. So they are very important. But taking the spirit of it as, you know, directly related to the economy, the generally speaking, the two biggest levers to get economic growth are going to be tax rates and regulation. And regulation has just been run away across the west. Hundreds of thousands of rules. What those end up doing is just gunking up new business. So you know, if you as an individual want to start a business, you may have, you know, license requirements, you may have regulatory. That can cost a lot of money, it can take a lot of effort, so it can freeze you out. Those things I think specifically matter because when I talk about the AI escalator, okay, very important part of that is that it has to be low friction to start a business, to create, you know, jobs, to expand a business. All those things need to be very, very low friction. So ideally, like the paperwork involved in starting a business or hiring somebody, it should be like ordering something on Amazon, right? I mean, just poof. That is definitely not the world we live in today. You know, there's a recent study that in China, one third of jobs are now gig jobs, or a lot of them like platforms. So, like delivery, UberEats, streaming. 1/2 of jobs in cities are gig jobs. Right, that kind of gig job. Right. Flexible job. You have a day job, but, you know, you go out and fix, you know, whatever. Fix squeaky doors on the weekends if somebody pays you 40 bucks. Those kinds of jobs, I think currently, they're seen as fringe. I think those are going to be very, very important to the AI transition. And there we're, you know, Trump's instincts are good again. There's not a whole lot he can do to slashing that red tape. A lot of it's state and local, and the heavy lifting on it has to come from Congress. They've got a couple wins. So they had about 600 deregulations last year. That's the most in history. Having said that's, you know, there's something like 650,000 regulations that are blocking jobs. So there's a long ways to go.
- [60:00]
Podcast Host
Thank you. Larry's asking, what does. What do you think about stablecoins? That's an interesting one. Specifically, could they be another mechanism to accelerate money printing?
- [60:12]
Peter St. Ange
Without a doubt. So a stablecoin is a way to tokenize fiat money. There's a couple nice things about them. One of them is that they reduce the odds of the cbdc, because a stablecoin gives you all the benefits that they were going to use to try to ram a CBDC down your throat. They're fast, they're cheap, cheap to transact you. Also kind of a fun benefit to stablecoins is that they could gut fractional reserve banking, because in the US anyway, they're required to be fully backed in practice with Treasuries, and those Treasuries pay something like 5% interest. So in theory, the stablecoin could pass on 4.8% interest. At that point, it looks like a bank account which is fully backed that pays 4.8 when your bank has 7 cents in the vault and pays 0.1%. So I'm kind of cheering stablecoins for that specific reason. But having said, if you zoom out comparing it to Bitcoin, for example, stablecoins do nothing to fundamentally fix the inflation recession cycle of fiat money. In fact, they slightly extend the life of fiat money because they make it more attractive and lower fee to transact. So, two cheers. Definitely not the three that bitcoin gets very good.
- [61:22]
Podcast Host
And also they can be Confiscated, just like Fiat.
- [61:26]
Peter St. Ange
For sure.
- [61:26]
Podcast Host
They can be stopped and censored and all that. Great. Okay, very good question. Left to the end. And we can expand on that if you want. Related to your shirts, I think that has become one of your signatures. When people see your daily videos, if they follow you on X and your blog, they can see how beautiful and lively your shirts are. Where do you get them? E girl is asking and is that something that you pay special attention to?
- [62:01]
Peter St. Ange
Yes. There's actually a reason for it, which is that when I started making the videos, I just got my iPhone and started shooting. Hopefully this is inspirational to other people. Just turn on the frickin iPhone and then upload it. All right, don't, don't, don't think about it too hard. Yeah. Yes. If. Broad lesson, putting on my professor hat. If the product that you put out is perfect, you waited too long.
- [62:25]
Podcast Host
Yes.
- [62:26]
Peter St. Ange
Okay. It should be pretty shitty when it first comes out. Okay, Just fricking do it. And then every day try and make it 1% better. And promise you in three months you're going to be like, God damn, I'm good at this. Everybody's gonna be like, wow, how did you get so amazing? And you'd be like, look at my early stuff. I have no talent. I used to say, ah, you know, I mean, just every, every flaw you could have as a public speaker. I was awful. Y so with that, when I started, I just turn on the camera and as a normal American man, I had two colors of shirts, blue and white. And I was doing videos every day. And so, you know, I had no backdrop. I didn't know how to do anything. I didn't know how to put dates on it or titles or anything. And so how did people know that it was a new video? Right. So, you know, I rushed out and got a green shirt and an orange shirt, a red shirt, in order to differentiate. And so, okay, so what we found, I was in Japan on a trip. I went to a bunch of thrift store shops. I bought the most ridiculous shirts I could possibly find. So that, yeah, that's what sustained us early on. And then we found a brand on Amazon called 0 Ya Z E R O Y A A. It's a Korean shirt maker. They make this. They make. Most of the shirts I wear now are ziara ya. They're cheap. I think they're like 15 bucks a shirt. Beautiful. They're silky. Like if you're walking around in public, people will touch you. Really nice shirt. So I recommend them. I have, I Have no brand relationship with Zero. Yeah, I'm sure they've never heard of me, but I recommend them.
- [64:01]
Podcast Host
I love it. That's perfect. And one of the things that I teach people is about personal branding. And one of the tactics to build a personal brand is really to find your uniqueness and those quirky little things that you can find that would make you memorable, that would make people connect with you on a different level. And so I think with you, the, the shirts, the visualization of the presentation really adds a lot of character and creates that stickiness, that's that memorability to your brand. And I think that that's a very smart move as a, definitely as a professor, I love it.
- [64:40]
Peter St. Ange
And two quotes, since we're talking about, you know, broad business strategy, two quotes. So one of them, one of my favorite quotes, if it's worth doing well, it's worth doing shitty till you get the hang of it. Okay, so that's number one. Number two, this is important. If you're making content, never apologize. Your enemies won't believe you and your friends don't need it.
- [65:02]
Podcast Host
Oh, perfect.
- [65:03]
Peter St. Ange
Say what you're going to say. I about, I don't know, one out of 20 videos. I say something that's just completely wrong and I look after the fact that I'm like, how could I be so stupid? You know, it's not a trillion, it's a billion. Guess what? Nobody fricking cares, okay? Nobody expects you to be perfect. Do your best. Be as accurate as possible. Always, always be honest. Right? That like your audience won't turn on you because you screwed something up. They will turn on you if you're dishonest.
- [65:30]
Podcast Host
Oh, I love it. I totally agree with you. Have integrity. That's number one. And be humble. Stay humble so you can still apologize if you found an error.
- [65:40]
Peter St. Ange
Fear of screwing up. I think you know, along with the feeling of perfectionism, fear of screwing up is the other big barrier. So like in both cases, you have to break the seal. You know, aim to screw up. Give yourself a reward if you screw up. Like you get an ice cream sandwich if you make a sales call and you screw it up so bad that they yell at you, you get an ice cream sandwich for that. Right? Like hack, hack your internal reward system so that you're not afraid of screwing up. Because, I mean, it sounds trite, but, but that's because it's true. Every screw up is a path to success. There are 500 screw ups between here and success. You cannot skip those. All you can do is sit around and worry about them and fear them so that it takes longer. Most people never get past the 500. You're gonna screw up 500 times. Accept it. Every one you achieve, every failure gets you one step closer.
- [66:34]
Podcast Host
Peter. I love it. Words of wisdom. And if the people go back to our first episode, number 13 of my podcast, they would see how I just put myself out there with knowing so little about podcasting. I just started doing it.
- [66:49]
Peter St. Ange
You gotta do it.
- [66:49]
Podcast Host
And here I am, like 130 episodes. This is about 10x, right?
- [66:54]
Peter St. Ange
Everybody big did that. Joe Rogan, you know, he didn't spend two years in podcasting school. He just frickin did it. Mr. Beast, like Mr. Beast's early videos, I think one of them, he's literally got a plastic bag floating. What? Just. You just got to do it.
- [67:12]
Podcast Host
Yes, I'm with you 100%. Okay. And before we wrap up, I have one last question that has been on my mind. I don't entirely know how to articulate it, but I'm going to try because it's a bit complex, the trajectory. I see that a lot of the tech bros are taking us, everything is becoming more digital, more technological. Is a technocratic kind of regime, a technocratic state. We're embedding a lot of technology into our everyday lives. Surveillance is becoming part of it because of the ease of use of cameras, of sensors, of biometrics, etc. Etc. And, and Trump as well is ushering in a lot of that technocracy in the US and us as freedom lovers and freedom money lovers. And, and we do love technology and we appreciate the advancements and the jumps it can provide us as a society. We are also careful about not breaching that trust that, that you know, us as individuals have with the state and with, with the place we live in. So how do you balance that, that. Yeah, you know, that gap or that tension between where governments or global organizations want to take us versus how we, we preserve our freedoms and, and our liberties. Because, you know, Elon Musk is part of this and a lot of the other tech bros are part of this. And, and it's like those are tensions. And how do you make sense of it? I know you really appreciate Musk. I know you appreciate Trump. But some of the things that they do and the, the, the directions that they're pulling us in are to me quite scary. So what do you think about that?
- [69:06]
Peter St. Ange
Yeah, I think the tech question, I agree with you. It's one of the most concerning of our age. And if you look at the trajectories. So I didn't grow up, but kind of, you know, back in the 90s, it was a very different world, right. Silicon Valley was, was almost ancap. I mean, it was, it was very, very libertarian. It was very hostile to government. It's an open question why that flipped. You know, some people point to Gamergate, which forced companies to hire people who were not libertarian. Some people look at the Bill Gates lawsuit, where the federal government, you know, threatened to, to break up Microsoft to basically destroy it. That made Silicon Valley realize that they had to partner with government. They couldn't just fight them. But it absolutely changed. And so if you look at a lot of the tech production, like the, you know, cyberpunk novels, William Gibson, you know, you, you look at this in the late 80s, the early 1990s, and people were very excited that tech was going to bring this, you know, utopia for liberty, right? So we could now organize. You know, it was no longer top down, where we were sort of victims of narratives, right. We could actually generate our own narratives. We could think for ourselves, we communicate. And then, of course, you know, you fast forward now to 2020, right, where that converted into just this, this, this horror show where all of those tools got weaponized against us. Right? Because people don't share information at the bar anymore. They don't meet in person anymore. Right? Almost all social interactions, almost all the ways that information transmits now, right? So in the 1980s, they couldn't censor bar conversations. Today, they don't exist. Right. Almost the entire discourse moved over on the Internet because it was a safe space. You could say anything. In 1998, you could literally say anything. You could talk about the most taboo topics, which I shall not enumerate, but they exist. And then all of a sudden, you had this totalitarian infrastructure laid on it. Now, at the moment, you know, I think Trump and Elon are sort of holding their fingers in the dike. Not on all issues. Right. So, you know, certainly not on surveillance. I think Trump's been talked into that, unfortunately. But broadly speaking, if you look at free speech and what happened the day after Trump's election, right, Starting when Elon bought Twitter. But then, I mean, there was just this complete change after the election. Unfortunately, those are two individual people, those are two men out of this gigantic infrastructure that is arrayed to crush free speech. But, you know, the surveillance state, the European Union is, is almost approaching Soviet levels at this point.
- [71:45]
Podcast Host
Yeah.
- [71:45]
Peter St. Ange
Recently they've got a new proposal where everybody, you have to report every Single thing you own.
- [71:51]
Podcast Host
Yes.
- [71:51]
Peter St. Ange
Why did.
- [71:51]
Podcast Host
Government registry.
- [71:53]
Peter St. Ange
Yeah, yeah. What's why? Right. So I think the concerns are massive. And it's sort of like we're, we're on the roller coaster. It's now very, very high up Empire State Building height. We don't necessarily want to be there, but we are there. You know, if you try to ban AI, well, open source is about six to 12 months behind, and China is definitely not slowing down. They're not going to listen to us. Okay. So you cannot stop AI. Yeah. All you can do is put it into the hands of the bad guys. You cannot stop tech in general. The entire economy is dependent on it. You know, if you try to ban the Internet tomorrow, it's not going to work for a variety of reasons. We are on the roller coaster. And so. Or, you know, another way to put it is that we are riding the tiger. And how do you dismount? It's a big problem. What I, one of, I think the missed opportunities with Trump so far has been he has not made a big effort to dismantle that censorship infrastructure. So it is a crime in the US to deprive somebody of their. It's called civil rights. US code 18. The. The government bureaucrats who silenced, you know, vaccine discussion. Who tried. I was getting silenced for talking about the unemployment rate. I mean, it was just stupid. I mean, obviously I got censored for vaccine talk. And then I figured, okay, fine, I'll just stick with, you know, things that. Who could possibly censor you for talking about the unemployment rate? Nope, that was disinformation. Okay. So that infrastructure has not been dismantled. And, you know, the next Democrat president, we have the next Democrat control that's in the U.S. which is really, you know, the best in the world. Because of the First Amendment. Specifically, it's not because Americans are particularly speechy. It's because of the First Amendment. There's a very specific thing that's holding back the dam in the US for the rest of the country. You know, in Canada, I think a pastor was fined something like close to a million dollars for misgendering or, I mean, it's just absolutely out of control.
- [73:57]
Podcast Host
Out of Whack UK with 12,000 arrests on social media posts, etc.
- [74:03]
Peter St. Ange
Yeah, it's insane. Absolutely insane. And they're, unfortunately, they're, you know, voters do not seem upset about it. It's the, the brainwashing, you know, has been totally for a huge part of the British or the Canadian population, the American, for that matter. So I'm I am concerned about that. And you know, some of the sort of deus ex machinas, like how do we get out of that? Come from the machina. They come from the tech. You know, so things like blockchain based. God, what is it? The, the social media platform.
- [74:36]
Podcast Host
Noster.
- [74:37]
Peter St. Ange
Nostr. Yeah. So, you know, some of the solutions will come from Tag.
- [74:41]
Podcast Host
It's actually a protocol, not a platform.
- [74:45]
Peter St. Ange
Right, exactly. So you cannot silence, build more protocols
- [74:48]
Podcast Host
and then start developing tools on top of them. Yeah.
- [74:52]
Peter St. Ange
So we are on the tiger. You know, tech is the solution, tech is the threat. It's going to be a dominant issue, for better or for worse, for the next couple of decades.
- [75:02]
Podcast Host
You know, that I had on the show Nick Anthony from HRF and Kato Institute and he was, was telling me that he was in the White House. I think not the White House, in one of the government offices and there was a hearing or I'm sorry, that I'm butchering. Whatever. Exactly. It was but a meeting where Scott Besant was there and they were talking about financial censorship and one of the people that were speaking, were quoting, was quoting Nick's work and Cato Institute and they were saying, you know, we're against financial censorship and D D D and why do we go in this direction? And Bent was saying, I never heard of Kato Institute. And yes, I am in favor of a financial censorship. Like, he obviously didn't say it this way, but you know what, that, that was the message. And Nick was like heartbroken. But yeah, they're even saying it openly. They need financial censorship in order to uphold the, the fiat system that exists today with, with all the regulation, the, you know, the Patriot act and, and the. Anyway, it's not going in a good direction and I don't know whether a different government will make a change. And the technocracy is so interwoven into that and it's just giving them more and more tools that they can weaponize against us. So, yeah, it remains a concern for me too.
- [76:27]
Peter St. Ange
It absolutely is. And I don't see any government on the horizon that is interested in dismantling that apparatus. It's too useful.
- [76:34]
Podcast Host
Yeah, right.
- [76:35]
Peter St. Ange
If you can silence the people. You know, the, the, the sort of meta battle in government is that we have the numbers and they have the coordination. Yeah, right. So the metaphor is a standing army. Right. So how does a. In North Korea. Right. How does, let's say, I don't know, 500,000, you know, this sort of ruling party of tyrants, how do they rule over the other 25 million. They're outnumbered 50 to 1. Why don't they just, you know, throw them out? And the reason is because they can coordinate. And the Internet, broadly speaking, broke that. Okay? The Internet means that individuals can coordinate. And this is terrifying to, you know, the pro state side. This is why they rolled out the censorship in the first place. You know, they looked at what happened in Brexit and then Trump winning. Neither of those were supposed to happen. They did. And so they said, you know, we. We have to control the narrative. The problem is that once you open that Pandora's box, it is way too attractive for governments. There was a time in, let's say, Canada where the idea of censoring regular conversations was taboo, right? It was very taboo. And something happened. Right? So unfortunately, I think you're right. We're at a very risky. And, you know, as I mentioned earlier, I mean, for me, I love the economy, it creates prosperity, it saves poor people, it does all these wonderful things, but without free speech, we are dead in the water.
- [78:01]
Podcast Host
Absolutely right. So, Peter, what gives you hope?
- [78:05]
Peter St. Ange
There's a lot in there. I think that, you know, if you look at a lot of the backlash over the last 10 years, you know, Brexit, Trump, were not supposed to happen. Trump, too, was certainly not supposed to happen. I think what's encouraging for me. So take a snapshot, which is El Salvador.
- [78:22]
Podcast Host
Yes.
- [78:23]
Peter St. Ange
So he was running for office. They banned his parties. They got corrupt judges to ban him. He switched parties. They got another corrupt judge to ban his party again, so he switched parties. I think it was like five minutes to midnight before the deadline, like the night before the election. Right? And then they got the word out, and he won something like 80% of the vote, despite all of those handicaps. For sure they were cheating at the polls. If they were paying judges to ban him, for sure they were cheating. And he got like 80%, right? And even now his approval rating is something like 90%. The point being that I think the meta question is once the bad guys start cheating, okay, they're going to suppress speech, they're going to, you know, cheat in elections, they're going to do all these terrible things. But there's this funny dynamic where when they do that, okay, the reason they do that is that they can ignore the voters on the other side, but it also means they can ignore the voters on their side. And every political party is an ongoing civil war between its voters and its special interests. Okay? So, you know, this is why Republicans are pissed off at rhinos, Democrats are pissed off at Them, right? Because the parties themselves are corrupt. The parties are trying to do the absolute minimum they have to do for the voters. But what they're really coming to work for every day is to skim off a bunch on the top and give it to their donors. So what happens is when a government or a regime starts cheating, they get crazier and crazier. Like, they start pretending that gender's not real, right? They do crazy things, okay? And the more they cheat, the crazier they get. And what. Ultimately, you know, I think you're seeing it in Europe and Living Color, where, you know, they'll. They'll throw out, like, disabled war veterans in favor of illegals who commit crimes. I mean, this is insane. If I were on their side rooting for them, I would say wake the hell up. Like, what are you doing? You are. It's suicidal, right? Because, and this is, every party follows the same path. Once they start cheating, once they capture the censorship, they go crazy. And then what you get is eventually an El Salvador outcome. You get a government that is so bad that even with the cheating, voters do not believe them. They will cross. You know, they will walk over burning coals to vote for these guys, and they get obliterated. So I think it's important that democracy as a concept, it is never perfect, right? But about 1% of human history had democracies of any flavor whatsoever. The fact that, you know, you are seeing governments change hands. Trump did take office. There was a real threat in Canada that Poliev would take office afd, you know, the German establishment seems to think that they're actually a threat. They're doing grand coalitions to avoid that threat. All of these, the populists are a real threat. As long as they're a real threat, it's not going to get that bad because either the ruling parties shape up. So you're starting to see a little bit of that in Germany or in Europe, rather. A little bit of course correction on legals and things like that. Tax rates, wealth, taxes. You're seeing some correction. But even in the worst case scenario that they don't course correct, everything goes bad for a couple years. It's not pleasant. And then they get thrown out of power like they did in El Salvador.
- [81:45]
Podcast Host
It's the pendulum swing, right?
- [81:47]
Peter St. Ange
Pendulum swings. And when they try to stop it swinging, it builds up. And then when it does swing, it goes harder. So excitingly hard. And then, you know, you get like a 1991 outcome where the Soviet Union, right, you did not have election. I Mean, I think you actually did, but I think on paper you had elections in the Soviet Union. You know, you could belong to this worker party or that worker party. So they did the exact equivalent. Right. Complete control of free speech, complete election cheating. And what happened? The thing imploded. So I do have hope, but it's not going to be pleasant between now and then.
- [82:20]
Podcast Host
Yes, unfortunately not. But I think you gave us a lot to think about in this chat and you made me certainly bullish about the state of employment in the West. I think it's. And in the world in general. I think it's definitely not a doomsday prophecy and I'm not buying it. I love your work. I love the fact that you have dedicated this time for this conversation and answered also my community's question. And thank you guys for, for offering those questions. Any last words? Where should people also follow you?
- [82:54]
Peter St. Ange
Oh yeah, okay. I make little three and a half minute videos that go up on X the Artist formerly known as Twitter. So that's a Prof. St. Ange P R O F S T O N G E. Those goes up every weekday that I do deep dives every week@procy ange.com Beautiful.
- [83:09]
Podcast Host
Yes. Sign up for his substack. You would love the newsletters and the videos and yeah, I, I look forward to seeing you in person. Peter.
- [83:21]
Peter St. Ange
I was gonna add substack. During the worst of the censorship substack very explicitly came out. They were absolutely pro speech. They said they dare them to sue us. They were absolutely. Yeah, they were outstanding.
- [83:34]
Podcast Host
Oh don't take me there because I have bad news for you because substack actually yes.
- [83:40]
Peter St. Ange
Did they.
- [83:41]
Podcast Host
So I'll tell you very very short when I was in Australia a couple months ago they have self imposed the government. Oh they have to age verification on themselves but they, they didn't have to do it because they, they were not on the list of big tech platforms that needed to do this but they did it. So I was locked out out of my Substance Stack blog when I was in Australia and I was waiting, yeah after two weeks I was waiting to get out of there to re establish my access to it. And when I got to Indonesia and tried to log in they still, they get, I guess they flagged my account so I was locked out so I had to do a viral video on X with the whole world blowing it up until they paid attention to me and gave me back my access to the account because I refused to do the biometric, you know, digital ID kind of verification. So Sapstack is like I was also betting on them, but I was. It was unfortunate to see. I hope they will be better.
- [84:47]
Peter St. Ange
That that goes back to the hand in glove intimidation. And yes, I don't know what the internals are, what they threaten them with, but that's, that's too bad.
- [84:57]
Podcast Host
Yes, they did release me from Digital Prison at in the end, but it wasn't pleasant. So the good side is that I started looking at open source platforms for blogging and I did find one called Ghost, which I think Marty Bent at TFTC is using. So I know which platform I'm going to move to in case Substack is going to pull another one of those
- [85:21]
Peter St. Ange
on me and everybody has to have that. Yeah, yeah.
- [85:25]
Podcast Host
Just start being more familiar with whatever open source decentralized platforms are out there that can be an alternative if you get locked out of Digital Prison. Locked in. Digital prison.
- [85:37]
Peter St. Ange
Locked in.
- [85:38]
Podcast Host
Okay, Peter, thank you so much for your time. I loved having this chat and I look forward to seeing you in person soon.
- [85:46]
Peter St. Ange
Yeah, likewise. Thanks for having me on.
- [85:48]
Podcast Host
Thanks for being with us. Please take a minute to give this episode a like comment and subscribe or follow and please share it with your friends so they can also get value and choose to take some positive action in their lives. Till next time.