 So Peter, you know, we wanted you on the show, thanks for coming on by the way, but we wanted you on the show because these are a bit unprecedented times and I've heard people say things, people who are kind of on your side say things like the medicine may be worse than the disease and what they're referring to is the reaction from government, the trillions of dollars that they're trying to pump into what they'll say the economy, the stimulus checks, all this money that that may actually cause things to be much, much worse than they are now. What's your stance on what's going on now with how the government is reacting to in terms of economics, the money that they're pumping in? Well, there's no doubt that the cure is worse than the disease, but you have to understand exactly what I'm referring to because you have to separate the two things that we're doing. So first you have the efforts to contain the spread of the virus, right? Where everybody is encouraged to stay at home and not to interact and not to go to work, right? So that's part of it. And you can argue whether or not this is actually the appropriate policy. I mean, clearly there's a big cost. If that's the policy, if that's what we're gonna do, then we've gotta be willing to accept the economic consequences of that, right? If we're all gonna stop working, then it's gonna cost something and there's no way that government can magically eliminate those costs. It's just a sacrifice that we're all gonna have to make in that we're gonna have less money, we're gonna have less stuff to buy, economic activity is gonna slow down, people are gonna lose jobs. We have to decide whether or not that is worth it to avoid this contagion, right? Or is it not worth it? I mean, obviously one of the things that's happened because so few people are now driving to work is the number of accidents, fatal accidents has gone down. So by everybody staying home, fewer people are dying in automobile accidents. Now, okay, so should we stay home indefinitely so people don't die in automobile accidents? Or is our automobile accidents an accepted consequence of our lives? I mean, every time we get into a car, we know there's a small chance that we could die in an accident, but we go in a car anyway because we wanna enjoy life and we're willing to take that small risk. So the question is, what are we giving up? Is it actually worth the small risk that we end up getting the coronavirus and then we end up dying from it, which is very, very rare. In fact, the only people that really die from it are people who are old and have a lot of other health problems and maybe they should be the ones that are staying home and everybody else should just be going about their lives, maybe a little bit more cautious about washing their hands and about not getting too close to people, but there's a lot of gaps, a lot of daylight between what we're doing now and that. So that's one thing. And I'm not an expert on medicine or science and so I'm not even going to really opine on whether or not this is the correct response. What I am talking about is what the government is doing in addition to that, because we're all staying at home, the government feels that they have to give everybody a bunch of money, right? So the government has to bail out all the businesses, bail out all the workers, bail out everybody who's supposedly sacrificing to fight this war on the coronavirus. And the Fed is just creating trillions and trillions of dollars magically out of thin air and we're handing it to companies, we're handing it to individuals, we're handing it out to states. That is what I think is gonna do all the economic damage because that money is not free. See, nobody is asking how are we gonna pay for all this money? I mean, if all of us are sitting at home and not working, yet we're getting all these checks in the mail and a lot of people are gonna be getting more money not working, then they were paid when they actually had work or they were doing stuff. But they're not producing anything, they're just sitting at home watching Netflix and the money is just arriving. And so if we're just gonna just shower the country with money that didn't exist until the Fed just magically conjured it into existence, what are the consequences of that? We're gonna destroy the value of our money. And so people are gonna suffer and all of the things the government is doing to bail out businesses that probably should fail because they're not viable and everything that we're doing to encourage people not to work is simply going to exacerbate the economic pain that is being created. It's going to delay any kind of recovery. And the other factor that people have to consider is why is the US economy in such a vulnerable position so that this coronavirus is so harmful? And that's because of the debt. That's because of everybody in the economy was, you know, maxed out with debt. Companies were levered up, employees were levered up. So the typical company doesn't have money saved up so that they can go a couple of months without revenue yet still be able to pay their expenses. I mean, a normal economy, that would be the case. Companies would have a nice reserve of cash in case something goes wrong. I mean, if it's not coronavirus, I mean, a lot of different things can go wrong. And when you operate a business, you need to make sure that if those things go wrong, you're not out of business. So you maintain an adequate amount of reserves. And of course, if times go bad, you can furlough workers, right? And you can recall them when business picks up under a normal economy, workers can go a few months or longer without a paycheck because workers have savings. Because while they're working, they put money aside and they don't borrow money to buy stuff on a credit card. They don't borrow money to take vacations or to buy cars. They buy cars, they can afford it and they pay cash so they can survive. But because of the Fed keeping interest rates so artificially low, everybody is living paycheck to paycheck. Nobody can go any amount of time without that revenue coming in. And so all the corporations are failing, all the individuals can't pay their rent, can't pay their mortgages. This whole house of cards that the Federal Reserve has inflated with constant bailouts and stimulus instead of allowing a solid economy to replace the bubble, that's why we're in such bad shape now. And all the, yeah. Peter, real quick, I wanna ask you because a lot of people get confused over the difference between money and actual wealth or what the money represents. Because I know someone listening right now is thinking, well, what's the big deal if the Fed and the Federal Reserve is like the central bank of the country. And if they print money to give to us so now that we have money, why is that a bad thing? What's the difference between that and a normal paycheck that I would get for doing work? Yeah, well, because the paycheck is actually tied to the work. And so the money has some relationship to the value that you added to society by doing work because when you did work, you created services or you helped produce goods. And as a result, you now get money that is commensurate with what you added a value into a society. But if the money is just created and you don't do anything, if you don't add any services, if you don't add any goods, then the money has no value, it was just paper. I mean, all money does is it enables everybody to allocate what's been produced. And the more you earn, the more you get to consume. It's like you have a greater claim on output. So let's say you set up a business and you produce all sorts of goods that benefits society that people get to buy, the profit that you earn now entitles you to go into society and buy stuff because you are taking out in proportion to what you put in, right? So money simply allows us to divide up what we've all collectively produced. But if we don't produce anything and we just have money, then what the money doesn't have any value, the money derives its value from the goods and services that we create, that we all agree, we're gonna allocate based on that monetary unit. So all we're doing now is increasing the demands for what's already there. We're allowing people to bid higher prices to buy the goods and services that are already there. But and the problem is because people are not working as much and not producing and not providing services, these supply of goods and services that we're collectively producing has declined. And if we just add more money into that, then prices have to go way up because we have less stuff to buy and more money to buy it with. So everybody just bids up prices and all the Fed is doing is creating inflation. And that doesn't benefit anybody. I mean, if what the Fed is doing worked, if we really could have all this stuff for free, then why did we wait for the coronavirus? I mean, why not just do it all the time? I mean, if there's no consequence, why are we even paying taxes? Why doesn't the government just print the money it needs and then just spend it, right? So essentially, if you have, let's say $10 in circulation and an apple is worth $1 and then we just put another $10 in circulation that's not tied to anything that we've made or produced, the apple's value automatically in terms of dollars goes up, it's twice as much because now there's two times as many dollars in circulation. That's what inflation is. Oh, well, the value of the apple hasn't gone up, the price of the apple's gone up. Yes, right. Thank you. Now, if at the same time we increased the supply of money there were more apples because apple farmers grew more apples, well, then okay. Then the price of apples could stay the same or if the money supply stayed the same and we just produced more apples then the apple price would go down and that would be a good thing because now we could buy more apples because we produced more of them. I mean, what determines how much you can get of something is how much of that's something that we can produce, right? So the more efficient farmers become at growing apples, right? The cheaper apples become and the more apples we all get to enjoy, right? But if the farmer doesn't grow any apples and we just print a bunch of money the money doesn't create the apples. It's the apples that give purchasing power to the money, right? If we only have apples, even if there's no money we could still eat the apples. We have to figure out another way to divvy them up but it's the apples that have value. The paper money itself has no value. Now, when we have real money, like let's say we're using gold as money, right? Instead of paper, right? Well, gold requires effort to produce just like apples require effort to grow. And so when people are buying apples and they're paying with gold they're exchanging one valuable commodity for another, right? So in that sense the money actually has value but when you're talking about the fiat currency that we have now, that money has no value whatsoever. It costs nothing to make and you can do nothing with it, right? If you can't spend your dollars, let's say, I don't know if you guys are old enough to remember Gilligan's Island, but if you get a bunch of castaways on an island would it matter if somebody dumped a bunch of paper money on the island? I mean, other than maybe using it for fire because maybe it'll burn. I mean, having that paper isn't going to help you. What you need is stuff, right? You need food or you need tools. The paper money doesn't have any value just by itself. And so what gives that paper money value is the goods and services that we all produce and agree that we will exchange it for that paper money. Now, Peter, you're explaining how printing money pumping it out, giving it to people, give it to companies will result in inflation. In other words, the price of everything goes up the value stays the same or drops because we're producing less and so you fix no problems. Now, we did a lot of this in 2008 after the great recession. There was lots of money being pumped in, continued to be pumped in to the economy, printed money, not tied to anything. But as a consumer, if I'm just a regular guy consuming things, I didn't see prices inflate like crazy or did we? Did we see inflation from the money that we've been pumping in since 2008? Are we already seeing these effects? Well, number one, we don't know what would have happened to prices, consumer prices, had the government not created all that money, had the Fed not done QE one, two, and three. It's certainly possible that we could have seen a significant reduction in consumer prices, which would have benefited consumers who would have been able to buy more products for less money. And so the fact that inflation prevented prices from falling is still a problem for the economy because we missed out on those benefits. But I still think that consumer prices rose more than what the official statistics reveal. But yes, we didn't have runaway inflation. It wasn't really bad inflation. And there was a couple of reasons for that. One is that the way the money entered the economy, the primary effect was on asset prices rather than consumer good prices. So if you look at what happened to the stock market, if you look at what happened to the bond market, to the real estate market, those prices went way up. And so that was an effect of inflation. So if you wanted to buy stocks, they were a lot more expensive. If you wanted to buy a house, it was more expensive. If you wanted to buy bonds, the prices were more expensive. And so that was a consequence of inflation. But the other reason that we didn't see a bigger increase is because we, the United States, we are creating the reserve currency, the US dollar. And a lot of the dollars that we created ended up getting exported and they were used by the Chinese and the Japanese and everybody else to buy treasuries. But in exchange for the dollars that we sent to China and Japan, they sent us all sorts of consumer goods. So paper money went out and went into the bond market and all sorts of products went in and filled up the shelves on Walmart and Amazon. So we got all this stuff, but the money went out. So that kept the lid on prices. But I think what's gonna happen this time is the inflation is gonna be more in consumer goods than financial assets. I don't think DeFet is gonna be able to push up stock and real estate prices again, the way it did before. And of course, what they're doing now is much bigger, right? The amount of money that is being printed now dwarfs what we did in 2008. So just because 2008 didn't produce a big increase in consumer prices doesn't mean that what they're doing now won't when what they're doing now is so much bigger, especially if this is the nail in the dollar's coffin. If the dollar ends up crashing because the world is gonna abandon it as the reserve currency and return to gold, which is what I think will happen, then all of those, all that paper money that the Chinese and the Japanese and the Saudis and the Russians and everybody else have been holding on to, all that money comes back, right? They start selling their treasuries and they get their dollars and they're like, you know what, we don't wanna hold on to these dollars anymore, so let's buy something with them. And the only place their legal tender really is in America. So now what do the Chinese do with their dollars if they don't wanna buy our bonds? They come in here and buy stuff. They'll buy property or they'll buy used cars and they'll ship them back to China or they'll buy all sorts of stuff. And what they'll also stop doing is sending us stuff, right? Because we're not gonna be exchanging dollars for goods anymore, so a lot of these goods that are being produced in Chinese factories, they're not gonna be shipped to the United States. They're gonna stay in China and the Chinese consumers are gonna buy those goods. Americans are gonna go without those goods. So now the Fed's gonna be cranking out all this money and the money's not gonna get sent to China. It's gonna stay here, but there's gonna be nothing to buy because the Chinese aren't sending us their goods anymore. So prices could just go through the roof and we could just have massive inflation. So Peter, how do you see this unfolding? Is it going to be, because you see things, obviously we're infusing money right now, we also are putting holds on foreclosures. Is it gonna be like a fall off the cliff thing or are we gonna see this like slowly trickle and it's just gonna continue to go down? What's your prediction? Well, maybe it'll be a slow tickle, until it becomes a complete waterfall. But yeah, I mean, the things that we're doing now, we're encouraging people not to pay rent. And so once people have skipped their rent for a few months, I mean, are they gonna stop paying again? I mean, maybe people are gonna start to think of not paying rent as some kind of a civil right. Like, why should I have to pay rent? I mean, I should be able to just live for free. Why should I have to have a job? I'll just keep getting these unemployment benefits which are higher than what I got. And once the government starts giving something to voters, it's very hard to take it away. I mean, nobody wants to vote to take it away. So a three month moratorium on evictions becomes a six month moratorium, becomes a one year moratorium. And once you know you can't be evicted, well, why pay rent? What's the point? I mean, you're not gonna get evicted anyway. And if the bank can't foreclose on you, if you don't pay your mortgage, well, then why pay your mortgage? No, no. Then why pay? You know, I mean, why pay anything? I mean, so the government is creating this moral hazard. What we need to do is allow the free market to function. You know, they wanna talk a lot about World War II and they try to compare this to World War II about sacrifice. But you know, nobody got bailouts in World War II. Nobody got stimulus checks in World War II. What people got were tax increases. The government raised taxes massively during World War II and Americans loaned money to the government. Not the other way around. The government didn't loan any money to Americans. American citizens loaned the equivalent of trillions to the government so they could pay for the war. And you know, a lot of businesses were interrupted. You know, when you take 15 million men, young men, and shipped them off to war, those are 15 million men who aren't eating in restaurants. They're not taking their girls out on dates. They're not going to movies. They're not staying in hotels. I mean, imagine what happened to the travel industry during World War II. The whole world was fighting. Nobody was going anywhere. So you had all these businesses that were completely interrupted, yet nobody got any bailout money. None. So why can't we do that today? Because in 1941, we had a viable economy. Businesses had savings. Individuals had savings. Nobody had credit card debt, student loans, auto loans. You know, we had a real economy, and so we could fight a real war. We had the resources to do it. We're broke now. Thanks to decades of bad monetary and fiscal policy, this country was vulnerable to any crisis. If it wasn't the coronavirus, it had been something else. That's why I keep saying the coronavirus is the pin. The pin is not the problem. The problem is the bubble that the pin pricked, and everybody wants to focus on the pin, and they can't see the bubble because they're too busy looking at the pin. Now, Peter, what you're explaining is, you know, sound consistent. This is economic science. This is not, you're not saying anything that you're making up. This is how economics works. I mean, I have to believe that our government, the Fed, the people that come up with our policy, also understand basic economics. So my question to you is, why are they doing what they're doing? Is it because they're trying to kick the can down the road and hope that innovation and economic, you know, production just offsets all this damage that they're doing? Like why are they doing this? Because what you're saying again is basically, it's like you take a math, you know, basic cloud, one plus one equals two. This isn't crazy stuff that you're saying. This is basic economics. They have to know this stuff. Why are they doing what they're doing? Well, first of all, don't assume that they know basic economics. Because I think that's a bad assumption. In fact, a lot of people learned economics in college and they learned it from a Keynesian professor and a Keynesian textbook. And Keynesianism is kind of like astrology. You know, I mean, it's not science. It's not like astronomy. So if you think you know economics because you studied Keynesianism, you don't know crap about economics. So it's possible that these guys don't actually know basic economics. They only think they do. But let's assume for the sake of argument that they're not all complete idiots, right? And they actually understand, you know, what common sense when it comes to economics. The problem is the political realities are that the average voter doesn't understand economics. And the way you get elected isn't by telling people, don't worry, the free market is gonna function. And there's nothing we could do to help. Anything that we do will just make it worse. So, you know, you're just gonna have to deal with your situation on your own, right? That's not how people vote. You know, if you just say, look, I'm gonna leave you alone and allow the market to work. You know, that doesn't appeal to a voter. Like, oh, I'm gonna send you a big check. I'm gonna send you a check so that you're made whole. It's not your fault. So I'm gonna make sure that you get bailed out. And so that is what wins votes. And so when you look at how economic policy is being formulated, it's not about doing what's best for the country. It's about doing what's best for the incumbents who wanna get reelected. But also, if you do the right thing economically, the immediate impact is always that the problem gets worse before it gets better. And it's that immediate impact that scares the hell out of the politicians who know that an election is right around the corner. And even if, you know, there's some long-term gain associated with that short-term pain, the politicians are worried that they won't be around in the long run because they'll lose the reelection during the short-term pain. So their motivation is to kick the can down the road to try to get reelected, even if doing it makes it worse in the long run because for them, it solves their short-term reelection problem because everybody says, hey, how can the government just sit back and let people lose their jobs, let businesses fail? Well, if they do that, the economy will emerge from the decline quicker and healthier. And in the long run, fewer businesses will end up failing and fewer people will lose their jobs and will have a more productive economy. But if the government intervenes in the way it's doing, it will slow down the pain, but ultimately elongate it and make it worse because in the long run, even more people will lose their jobs and even more businesses will fail because of the government's efforts to prop them up and eliminate all of the good things that the free market is trying to do, right? The free market is trying to rebalance the economy. It's trying to cleanse the economy of inefficient businesses that are wasting capital and wasting resources and reward the prudent and punish the reckless and do all these good things. It's like, if somebody is out of shape and overweight, get into something that maybe it makes sense right to the audience, if somebody is really out of shape, they smoke, they drink, they don't exercise, and they're just out of shape. And you say, okay, I got a solution for you. This is what you have to do. You're gonna stop eating all this junk food. You're gonna go on a diet and you're gonna exercise. You're gonna do cardio. You're gonna do weights. You're gonna do all this stuff. And the guy's like, well, what if I do all that stuff? I'm gonna have to give up all this stuff I like. I mean, I love eating. I love picking out on junk food before I go to bed. And I don't want to exercise. I mean, that's too tiring. I'd rather, you know. So there's this short-term pain, right? If somebody does that and in the long run, right? They're much better off. They could get healthy. They could live longer. They could enjoy life more. There's a lot of benefits to being in shape. But in order to get that way, you have to make some changes that are disruptive. You know, what happens is a politician comes along and says, oh, you don't have to do any exercise. You don't have to diet. Just take this pill. This'll just make you lose weight in your sleep. Oh, okay. Yeah, that sounds great. You know, I don't want to do this. I don't want to do this stuff. You know, they want to promise gain with no pain. Right. But, you know, it doesn't work. Great analogy, Peter. But now I'm gonna run a counter to you because I guarantee someone listening right now is thinking, okay, 1941, money went full fiat, meaning it's not connected to anything now. They can print as much as they want. But it- 1971. Sorry, it went full, right? Okay. But objectively speaking, whether you go back from 1941, 1971, whatever. Objectively speaking, today, life is easier. It's better. We got more stuff. It costs less for the most part. So why then, if all this, we've had this bad policy, this bad economic policy, how come then life has objectively just still gotten better? Is it in spite of the policies? I mean, what's going on? Why are we better off then still? All right, well, first of all, I won't even accept the premise that we're necessarily better off. I mean, some of us are clearly. And that is despite government, not because of government, because yes, we have had a lot of technological advancements over the past 50 years. I believe that we would have had even more technological advancements had we had less government, had we been more free, had we paid lower taxes, had we had less regulation, I think scientific achievement, industrial achievement would have been much greater. But still, despite everything that the government has done, we have still managed to improve on our knowledge and our efficiencies, then what we had 50 years ago or 100 years ago. And of course, we've been living beyond our means. One of the reasons that people live a better life is because they're indulging themselves today. I mean, nobody has anything saved for retirement. So you could go back and look at American life, let's say as late as the 1960s, early 1960s. People were saving for their retirement. So they had money to retire. In the interim, if you were a guy, a typical guy in 1960, 1950, 40, even if you didn't even graduate high school, you could earn enough money to get married. Support your wife who did not have a job. She did not have to work. She stayed home, she did the cooking and the cleaning, maybe even had a house to help. So you could support that woman, that wife, on your blue collar job, right? That you didn't even go to college for. And you could have two or three kids, four kids. You could raise them. You didn't have to borrow any money. You had no credit cards. You made enough money to actually be able to support your family on your income without going into debt. And you could also save for retirement. So today, that's impossible. Even the average college grad can't support a wife today. So the wife has to have a job, just to be able to pay the rent or to pay the mortgage. And they're doing that with debt, even with both people working, even with a husband and wife, both working full-time jobs. Sometimes they're working two jobs. They still have no savings. They're still on debt. Whereas a guy in 1950 did all that without his wife and without the debt. And so, are we really better off now than we were despite all of the technology? And in fact, if you go back and you look at the changes in America from like 1900 to 19, or let's say 1890 or to 1950 or 19, compared to from 1950 to now, or whatever this 1880, whatever the similar period is, life improved much more back then. If you looked at America in 1880 versus 1950, nobody had electricity. Nobody had cars. Nobody had air conditioning. No one had telephones. There was no movies. I mean, people in 1880 didn't live much different than people lived in 1680 or 1480. I mean, but all of a sudden, we started to have a free market revolution. We had sound money. We ended the Civil War, right? We're on a gold standard, limited government. And we had this industrial revolution where people now have electricity, indoor plumbing. They have refrigeration. They have air conditioning. They have telephones. They have airplanes. They have cars. I mean, if you took somebody in a time machine from 1880 to 1950, they would be completely amazed at everything they saw. I mean, it would be unbelievable the difference in the quality of life between reading by candles and having to go to a bathroom in an outhouse and having no, I mean, to all the things, just going into a kitchen in 1950 with all those appliances that none of them existed. People, I mean, they didn't have larger machines. They didn't have dishwashers. All that stuff was here in 1950. The only real difference between 1950 and now is we have cell phones and we have personal computers. But other than that, it's not that much different as far as life, the improvement in life. And if you figure that we're working a lot harder and we have a lot less to show for it. So, you know, we could be so much richer than we are if we had maintained that trajectory. Like, I used to watch this show called The Jetsons when I was a kid, 1960s. And so, when they wrote this, when they wrote the 60s, they made this, Hannah Barbera made the cartoon, they just assumed that life would continue to evolve the way it did. So in the future, George Jetson, who was the husband, Judy, his wife, she doesn't have a job and George only works two days a week, right? For like four hours a day. And he was like, oh, these two-day work weeks are killing me. I pushed the button like eight times. You know, like, you know, people are working less, right? People are enjoying more leisure and more freedom because we've continued to advance our technology and make capital investments that free up labor so that people don't have to work as much. That is the idea, that is the goal of society. I mean, it's not a goal that anybody is orchestrating on their own, but ultimately what capitalism does is it replaces labor with machines so that all of us don't have to work as hard and we can have more leisure. We can do the things in life that we enjoy, not the stuff that we have to do because we can produce more and we get more goods, we get more services with less human effort going into it. And then everybody benefits from the abundance of goods that are produced, goods and services. But what's happening now is we're not doing that. We're trying to figure out how, we want to make sure that we're all working hard. I mean, that is not what people want. People don't want to work hard. They want to work as little as possible and have as much as possible. And that free markets ultimately do that and we were moving in that direction. I mean, that's why women stopped working. Once upon a time, women had to work, so did men. Children used to have to work. The reason that children stopped working isn't because of child labor laws. No, it's because that their parents or their father was able to become more productive based on the gains in productivity from the free market that the kids didn't have to work anymore. That's what happened. That's why you still have child labor in some countries. It's not because their parents are mean. It's because it's the only way they could feed them. So Peter, let's say, because I think we would both agree that we don't have a lot of faith in the government shrinking. Then that's what it would take, right? It would take government having to shrink and that's probably not going to happen based off of what we've seen for the last few decades for sure. So if there was somebody during this time who was a little more prudent and saved $100,000 and they're not freaking out right now, how would you advise them to invest knowing what you know and what you probably predict is going to happen with government? That's a great question because what I'm getting from you is save your money, but I'm also getting from you, money's going to be worthless. So what do you do? What do you do? You got $100,000, do you want to invest? Yeah, absolutely. Because the key to economic growth is savings. Savings is what provides the capital for businesses to expand and invest in the equipment and create the jobs that delivers prosperity. But what the government is doing is destroying savings. And so the economy is going to implode when you have a war on savings. And government shrinking is, yes, it's extremely important because that's the only way out of a recession is to reduce the burden that government places on an economy by cutting spending. And so if the government really wanted to help, they would make itself smaller by cutting spending and reducing regulations so that the economy would be better able to get us out of this mess by freeing up resources back to the private sector that would be able to be used productively. But none of that is going to happen. So what you have to understand is if you are in the minority of people who actually did do it right, right? You have savings. You are going to be taxed through inflation to bail out all the people who have debt and don't have savings. That is what happens. So when the government prints up all this money and sends it to the unemployed and sends it to businesses, where is the purchasing power coming from? It's being taken from the people who already have money. So the government has two ways of taxing you. The legitimate way is by actually taking your money in taxes, like you have $100 and the government says we're going to take 30 and we're going to use it to spend on stuff, right? So you had 100, the government takes 30, you got 70 left. Well, what if the government doesn't take the 30? They just print money and spend it. Well, now your $100 feels like $70 because prices have gone up to the point where you've lost 30% of your purchasing power. So there's no free lunch. The government is going to get you one way or the other. And so the way they're taxing everybody, the way they're taxing the prudent to bail out the reckless is through inflation. And the good news though, is that the inflation tax is avoidable. At least for now, right? It's not illegal. You can get rid of your dollars that are about to depreciate and convert them into something else, right? You can buy gold. And as the dollar goes down in value, the price of gold will go up. So instead of having $1,000 of gold, you now end up with $1,500 or $2,000. So you can afford the higher prices. So the government's not taxing the people who own gold because they're not printing gold. They're only taxing the people who have dollars. So avoid the tax by getting out of the dollar. And so you can buy gold. I sell physical gold at chip gold. But also if you have a bigger portfolio and you don't wanna just have it in a non-income producing asset, what I am helping people do is I'm building portfolios of good, solid businesses in Singapore, in Australia, in New Zealand, in Hong Kong, in Switzerland, in Norway, in other countries that I think on a scale are far more fiscally responsible than the United States that are not going to see a destruction of their currency. Their economies are in much better shape. And if you own income producing assets in those countries, you will have a viable portfolio that will rise by more than the domestic inflation rate and which will provide you with an income stream that will increase as the dollar loses value so that you won't be taxed through inflation because as prices go up, because the dollar's going down, your dividends in Norwegian Krona, in Swiss Franks, in New Zealand dollars, those dividends are buying more and more US dollars. So now as you get your dividend checks, you have more money to buy the more expensive goods. Whereas if you stayed in the dollar, you'd have the same amount of money and then you'd have to buy fewer goods because the price of goods would be going up. So yeah, I mean, people have to act quickly to protect themselves. And that's what I'm doing at my brokerage firm at Euro-Pacific Capital. People should, you know, Euro-Pac.com, you should reach out to me, talk to my brokers about getting your accounts transferred over to us, funding accounts, moving over retirement accounts and getting out of US financial assets, particularly bonds, but also US stocks which remain very overvalued and prepare yourself to escape this inflation tax because it is going to wipe out the retirement of so many Americans. We talked about, you know, women entering, you know, the workforce, the real entry where women really started to work was in the 1970s. And the reason that that happened was because when we went off the gold standard in 1971, the dollar lost about two thirds of its value, right? The Deutsche Mark went from four, you could buy four marks to the dollar. It went down to one and a half. The Swiss Franc went from 23 cents. You could buy a Swiss Franc from 23 cents. It went up to 75 cents in that decade. You used to, you got 360 Japanese yen for $1 in 1971. By 1980, you were only getting about 150, right? So the dollar went way down. That's why oil prices went up so much. Oil went from $3 a barrel to $30 a barrel. The reason that happened, it wasn't because OPEC jacked up prices, it's because we tried to buy oil with paper instead of gold. And so once we started giving paper, well, the price went up. And so prices went up, but what happened was wages did not go up nearly as much as prices. And so what happened was now all of a sudden, the husband, based on the big increase in prices, his pay wasn't enough to support his wife anymore. So the wife now had to get a job, right? It wasn't because of women's live that all these women started working. They were liberated when they didn't have to work. The minute they were forced to work, they lost that liberty. And so it was a reduction in the standard of living when now all of a sudden the kids have to fend for themselves, there's no one taking care of the house. And I'm not like a male chauvinist. I mean, it's fine if the woman wants to work and the guy wants to take care of the house, the kid's okay. But if nobody can take care of the house and the kids because everybody is forced to work, I don't think that's an achievement. I don't think that's something that we should think is an advancement. I think that is a reduction in our quality of life. But I think what's gonna happen this time, right, is that it's not just women are gonna start working because they're already working. I mean, I don't know, maybe we'll have to send the kids to work and take them out of school. But the other thing that's gonna change dramatically is retirement is gonna be a thing of the past. I mean, you know, because if you look at a movie, some of your kids will watch, you're watching something from the 1950s and, you know, they see the mom at home. It's like, why isn't she at work? Oh, well, there was once a time mothers didn't work. They were able to stay at home and when the kids came home from school, they were there and they were doing, you know, because it looks very foreign to most kids because, you know, all they know is their moms have jobs just like their dads. There's no difference. Well, I think at some point in the future, you know, people might look at a movie from this time period and they'll see an older person who's not at work. Hey, why is that? What's that guy doing? He's just playing golf in the middle of the day. Oh, yeah, yeah, yeah, you know, because once upon a time when people got old, they retired and they, oh, what's that? What's that? What does that mean? You know, they stopped working because the inflation is gonna destroy the value of everybody's savings, everybody's pensions, everybody's social security benefits. So nobody is gonna retire. The money is gonna retire. Peter, you said something earlier and I wanna take you back to it so the audience could get a better understanding. Could you give us a quick economic lesson on the difference between Keynesian philosophy versus like free market philosophy and economics? Or Austrian, right? Right, yeah. So if obviously they're teaching it in schools, I have a friend that actually has his degree and we argue all the time, I'm a free market guy and him and I go back and forth and he's got the degree in economics and I'm assuming that the reason is is because this is how he was taught. Could you school me and our audience on really what the fundamental differences are between those two? Yeah, well, I mean, there are a couple of easy differences to grasp. So Austrian economics looks more at the individual and the ability of free people to be productive and in pursuing their self-interest, helping everybody else through Adam Smith, the invisible hand. I mean, it's very much a classical view of economics that focuses on production, savings and supply, right? That the key to a rising standard of living is producing more things and being efficient and being productive. And that so that you're looking at how are things being produced? How do businesses produce more stuff so that we all can consume more, right? And so you're looking at it from the supply side and you're looking at it from the individual, the entrepreneur angle. And Austrians see money as just another commodity, a mother good when money is gold, right? They look at money as a commodity that you exchange for other commodities or the way I described it when it comes to fiat money. But the Keynesians look at government as an enabler of prosperity. That, and the way they do this is through increasing demand, right? They don't look at problems in economics as an absence of supply. They look at it as an absence of demand, right? There's just not enough demand. People aren't buying enough. We need more buying. And so they wanna focus on things that stimulate demand and they think, well, let's have government spend money, let's have government print money and we're gonna have demand. But what they don't understand is demand without supply means nothing. And they don't understand the difference between the legitimate demand and desire because you don't have to stimulate desire. I mean, everybody wants everything, right? It's not like I need to be stimulated to want stuff. I want all kinds of things. The limiting factor is what I can afford. And the government can't make things more affordable by creating money. What makes things more affordable is greater production that brings down the cost, right? When cell phones first came out, if you remember the first cell phone in the 1980s really, these things cost thousands of dollars to buy back then and to use them was very expensive. I mean, I remember when I got my first cell phone, I barely used it, you know, because, and if someone called me, I would be really quick because it was so expensive to make the call. But what increased the demand for cell phones wasn't people wanting them more because everybody wanted one. It was a question of, you know, could you afford it? What the reason everybody has them now isn't because the demand for cell phones went up. It's because the price went down because production went up because businesses became so much more efficient at producing cell phones that they became affordable to everybody. It wasn't just Gordon Gekko who could afford a cell phone. It was everybody, it was his maid that could afford a cell phone. And so the Austrians recognize a basic economic principle that supply is what creates demand, that you can't demand something that hasn't first been produced. And so government can't stimulate production by stimulating demand. Demand gets stimulated all by itself, simply through the productive process. And if there's a bunch of goods that aren't being consumed, all that has to happen is the price has to be allowed to fall and now they're gonna get bought. You know, you don't have to print more money to stimulate those sales. Just let prices come down to the point where people could afford. I bet you have Keynesians now, they seem to think that the worst thing that can happen to prices is that they go down. They think, oh, we need government to prevent prices from going down. Why? Prices, you know, they try to argue that, well, you know, if prices go down, nobody will buy anything, which is a bunch of nonsense. I just talked about cell phones. I mean, the reason that we're buying cell phones is because the price went down. I remember the first time I saw a high-def television, I walked into like a good guys or one of these places. $10,000 back then. It was still, it was $10,000. The first one I saw was $10,000. And it wasn't even a big screen. It was maybe like 28 inches. I don't remember 32 inches. And it was $10,000. But I remember looking at it and I was amazed. I was like, it's like looking through a window, right? Compared to what I had back then. I really would have liked that television set, but I didn't want to spend $10,000 to buy. I didn't like it that much. Was it $10,000? You know, the first television sets that came out in the 1940s, the sets themselves were like a huge piece of furniture, but the screen was about two or three inches. It was only black and white. And the first television set was as much money as a car. Who bought it? Really, really rich people that bought it just so they could tell their friends. And you know, what could you watch? There was like two hours of programming on CBS, and you had to watch within a certain window of time to even see it. I mean, but now everybody has multiple TVs because they're dirt cheap, right? So the idea that nobody will buy television sets if the prices go down is nonsense. The only reason we all have them is because the price goes down. Everybody who buys a computer today knows if they just wait a year, they can buy a better one for less money. So why do people buy computers? Because they don't want to wait a year. They want it right now. The Keynesians don't understand the time value of things. They think that we will wait indefinitely to buy something at a lower price if we think the price is gonna go down. No, the only reason people don't buy something waiting for a lower price is because they can't afford it. And so they wait for the price to come down to the point where they can't afford it. But if the price never goes down, they'll never buy, because they'll never be able to afford it. Peter, you know, so you're talking about electronics right now. Why is it that the price of things like electronics for quality is just gone down tremendously? I mean, the first, like you said, the first Walkman was $300 in those dollars. You adjust for inflation. It's like $800. I could probably find a cassette player on Amazon right now for five or 10 bucks. Why is it that electronic prices have gone down but the cost of things like education and healthcare has exploded? Well, because education and healthcare are heavily subsidized by the US government. So anything that the US government gets involved in, the price is going to go up. I mean, that's how government works. They subsidize things. You know, if the government was involved in consumer electronics, the same thing would be happening. I mean, if the government was guaranteeing loans so that people can borrow money to buy computers, computer prices would have gone up and set it down and people would have all kinds of debt, you know, related to this. I mean, you can see if you look at medicine because it's really easy because you could take a look at medicine where the government is involved and where it's not. You could take a look at cosmetic procedures. Like you could look at orthodonture, right? What it costs to put braces on your kid's teeth. Braces today are a fraction of what they cost 20, 30, 40 years ago. The same thing with eye-lasic surgery, which, you know, you can get your eyes fixed at a fraction of the cost of what the same procedure cost 20, 30 years ago. And even all cosmetic procedures, you know, breast implants, you know, liposuction, all this stuff is cheaper. And the reason is because there is a free market in it. There is no government subsidy to get these procedures. There's no insurance and third-party payer, which is, you know, only there because of government's tax law where people get insurance tax-free. You know, if you have a job and your employer pays you a salary, you pay income taxes. But if he gives you insurance, it's tax-free. So that has created an artificial demand for people to prefer insurance to cash. And so then instead of getting cash and then buying medical care, they get insurance and then they run everything through a third-party, which is dramatically increase the cost of basic medical care. I mean, things that used to be very inexpensive, you know, back in the 1940s and 1950s. I mean, if, you know, if, you know, you had a baby, you know, you could go to the hospital, you know, for two weeks and have a baby and the average guy could afford it, no problem. I mean, you didn't need insurance. And now you go and you get a baby, you're out of the hospital the next day because it's so damn expensive. And, you know, it costs, you know, like a brand new car because everybody pays for it with insurance. I mean, if things, medical treatment used to be inexpensive in this country before the government got involved in subsidizing it, the same thing with education. You know, I mean, my father went to college. He didn't borrow any money to go to college and he came from a relatively poor family. So how did my father pay for college? He had a summer job. He waited tables over the summers and that's all it took. And based on doing that, he could pay all of his tuition, all of his room and board. It didn't cost his parents any money and he worked his way through college just like most of his friends. I mean, that was a common thing to work your way through college if your parents couldn't afford to pay. And by the way, it wasn't expensive. So if your parents were upper middle class, it was no big deal to pay for college. But if they were lower middle class or upper lower class, you know, all right, the kids got a job. It was no big deal. Why is college so expensive today? Because the government is so heavily involved in subsidizing college and in guarantee, you know, in paying for college and making loans for college. But you know, if the government was not involved in any way in college, if there was no government scholarships, if there were no government guaranteed loans, college would be much cheaper today than it was when my dad went. Because of all of the advances that there's been, I mean, when my dad went to college, they didn't even have photocopy machines. I mean, let alone computers. I mean, they were so inefficient back then. If you take a look at all the tools we have today, plus a lot more people are going to college now than when my dad went. When my dad went to college, probably 10% of the high school grads went to college. Now it's probably what, 50% or 60% something like that. There's something called economies of scale. If when my dad went to college, the average class had, you know, 50 people and now the average lecture has 500 people, it should be cheaper per person. If we're educating a lot more people, then the cost per person should be going way down, not up, especially when you consider all of the advancements that colleges have today to make them more efficient that did not exist 70 years ago. So if you got government completely out of education, college tuition would implode. It would be so cheap to go. It's only government. Anything the government gets involved in, you can see it, it becomes extremely expensive. The free market lowers costs and increases quality. The government does the opposite. It reduces quality and increases cost. So Peter, do you think it's possible? I had this philosophy or this theory that I have that I've shared on the show before and I don't know how sound it is and I would love to hear you comment on it that. You know, I believe so strongly in the free market that it'll find its way still, even if government still keeps trying to get involved. And I think we see an example that in the Silicon Valley right now, where we live, where you have Facebook, Apple, Google and they're building these massive, almost their own economy where they have grocery stores and dentists and doctors and lawyers and movie theaters all on campus. And what is the stop a company like Google or Apple that has employees, let's say the average income, I think Google is like 200 something thousand dollars. So they are making 200,000 US dollars right now. But what does this stop them from saying, would you like 200,000 US dollars or would you rather have 10,000 US dollars and we'll give you 300,000 Google dollars which you can use to spend anywhere on any of our campus which supplies basically all the things that you would normally, what is the stop a company from doing something like that? Well, I mean, obviously any private company could create a superior form of currency to the US dollar. Right. I mean, anybody could do that. I mean, what if McDonald's came out and said, we're gonna have a McDonald's book and this book is good for a one hamburger, no matter what, right? So at least you know that you can get a hamburger. It's backed by a hamburger. They have enough locations that you take your, you get a hamburger. And even if you don't eat hamburgers, you could, somebody wants them and so you can exchange it, right? Because what we have now is backed by nothing. Right, that's why I think this is possible. And it would be nice. I mean, airlines can issue currency backed by frequent fire miles. I mean, any company that's big enough that you have confidence is not gonna go out of business can issue a currency that could circulate as a meat of exchange and people could decide what they wanna be paid in, right? Merchants could decide, yes, I trust Google Bucks, I trust McDonald Bucks, I trust any of these currencies and they can circulate. But the only thing that stops that is the government because the government doesn't like competition. So the minute you create money, the government comes at you like you're some kind of terrorist and there's all sorts of rules and regulations that would basically make it prohibitively expensive for anybody to do that. So it's just like, if somebody decides they wanna deliver mail, if a neighborhood kid decides that he wants to get on his bicycle and deliver mail and compete with the post office, the government's gonna put him out of business. That's illegal, you can't compete with the post office. And the same thing is on money. It's illegal, the government doesn't want anybody competing with the Fed because it would be so easy to compete with the Fed because their product sucks. Their product does not retain its value. I mean, it would be very easy for anybody, any company to say, hey, I've got gold and a vault and I'm gonna come up with money that's backed by this gold and then you could just circulate it. I mean, people would trust that and then it would maintain its value. That's why I don't feel how they could stop. How could they stop Apple or Google or Facebook from doing something like that if they make it just that simple because you put them in jail for a long time for money laundering. Because here's what, because of the Patriot Act, it all started with 9-11 and the Patriot Act, but you have all these rules on anti-money laundering. So what the government would say is, okay, let's say Google creates money. They're gonna say, how do you know that some drug dealer isn't using this money? How do you know that some terrorist isn't using this money? That's what they say, but they really don't give a damn about terrorists or money launders. They really care about tax evasion, right? They really think of, hey, what if somebody uses your money and they don't report the income and we've missed out on some tax revenue? So what they say is we need you to put into place the procedures so you can track every single transaction that takes place with this money because we want you to make sure that everybody who's using your money is paying their taxes. Well, how the hell are you gonna do that? And then they're gonna say, if we find that you didn't see a red flag, that somebody who's evading their taxes or who may have evaded taxes is using your money and you didn't do enough to ferret that out, you're going to jail for 20 years. We're gonna find you $5 million and put you in jail. Some of the biggest penalties that exist today are for not doing enough to stop money laundering. I mean, it's one of the worst things, I mean, much worse than arm robbery or rape. I mean, the penalties for just not spying on your customers are really, really high. So that's the problem. I feel like there's still loopholes for this. I feel like if it's not money you create, it's just you provide a service of all these things that it allows you to... As long as you don't allow it to be transferred. See, the minute you allow the value to be transferred, now you've created a medium of exchange. You've created a currency and now you're subject to money laundering. Let's take out transfer and just say that when you now work for our company that you get to go to the movies at least twice a week. You get to go to the grocery store at least once a week. You get to go to the dentist once a year and they just put a package together and it's a free quote unquote service and we just pay you less per year. How do they pay those people though? That's the other question. Yeah, I mean, they could do that unless the IRS says that you have to include the value of those services as part of your compensation and pay taxes on it. I mean, because... The problem is is that the government has, can legislate and they got the guns. So they could do whatever they want and if you're out competing them, they can shut you down. I have a question for you about, after 2008, unprecedented amount of money pumped into the economy, lots of people ran to gold because it's a great protection against the devalue of the dollar. Gold's price went through the roof. Everybody expected the dollar to crash but it didn't, in fact, the dollar's value actually did better later on and gold kind of fluctuates depending on if people want. How did that happen? Why didn't the dollar just keep going down at that point? Why did it kind of stay? Because I remember going to Europe and the dollar's value after 2008 was a little while after that. It was actually worth more when compared to the euro, for example. How come it didn't crash in value? Well, first of all, you have to realize that the price of gold in 2001 was at $260, $207 an ounce. And so by 2011, it went all the way up to 1900. So it had a huge rise and so by then it was entitled to a pullback and the lowest gold got was 1,050 in December of 2015. So the lowest it got was about four or five times where it started to rise. So gold had a big move, right? People forget how much gold moved up leading up to and during the earlier part of the 08 financial crisis. Also, the dollar fell precipitously from 2001 to 2008. In fact, in 2008, the dollar was at an all-time record low against the yen, against the euro, against the Swiss franc. So the dollar was extremely weak and it was only from that very, very weak position that the dollar rose and all of the dollar's gains or most of them took place in 2013. That was the big year of dollar gain and into 2014. And the reason for that was that's when Europe started to do QE and they started to do some of the bad things that we did. So that made the dollar look better by comparison. But more importantly, the Fed was out there talking about how great everything was. Everybody was agreeing that, hey, QE worked and the Fed was saying, okay, we're going to shrink our balance sheet back to normal. We're going to normalize interest rates. Everything is fine. And so the markets started to look ahead to normal interest rates. They started to look ahead to the Fed returning its balance sheet back below a trillion. So they were going to sell all these bonds, sell all these mortgages. They were going to shrink the money supply. The dollar was going to become scarce as all these dollars that the Fed created temporarily were going to be destroyed. And so the markets began to factor all that stuff in. Well, none of that was true. I was saying at the time that this is BS. The Fed is never going to do this. It's impossible to do what they're claiming they're going to do. They're going to go back to QE. They're going to go back to zero. I said that the whole time. Well, obviously, I've been proven right. The Fed is back at zero. QE4, and in fact, I always said that QE4 would be bigger than 1, 2, and 3 combined. And it already is, and it's just getting started. But now, I don't think anybody is going to believe that the Fed is ever going to be able to shrink its balance sheet back to normal, that the Fed is ever going to be able to return interest rates to normal, because the more debt we have, the bigger the balance sheet gets, the harder it is to actually do that. And if they couldn't shrink a $4.5 trillion balance sheet, how on earth are they going to shrink a $10 trillion balance sheet? If they couldn't normalize interest rates when the national debt was $20 trillion, how are they going to do it when it's $40 trillion? It's even more impossible to do. And so then people are going to realize that the Fed has now trapped itself into a spot where, once price inflation gets going, the Fed has no tools to combat it, because the only way the Fed can fight inflation is by shrinking the money supply and raising interest rates. But that's something they'll never do, because if they do that, they create a financial crisis where there's no bailouts, where everybody fails and everybody gets wiped out, which we know they're not going to do. So the cash is going to be out of the bag. People are going to realize that the dollar is a one-way ticket down, that it's only a question of time before it's worthless. And it's going to drop like a stone. And there's nobody that's going to buy it. It's just there's no one's going to get fooled into thinking that the Fed can raise rates. So the dollar just is going to be a bottomless pit. And the worst thing that you can do is be the last one left holding the bag. I mean, the first people out are going to be having the best position. So gold, silver, probably good investments. What about assets? What about buying things like property, land, and stuff like that? Do you think that would be smart as a way to protect yourself or hedge against what seems to be, at some point, inevitable? Yeah. Well, that's exactly what I mentioned earlier. That's what I'm helping my clients do at your Pacific capital, is to buy real assets, to buy land through Property Trust. We own land in Singapore and New Zealand, places like that. Commercial property, industrial property, agricultural land, that makes sense. But it doesn't make sense to buy a lot of assets in America. It makes sense to buy assets abroad. And the reason for that is, if I'm correct, America is going to be a much poorer nation in the future than it is today. And as a result, assets in America are going to have less value relative to assets in wealthier countries. It only makes sense. Real estate is a function of how much you can sell it for or what you can rent it for. Well, rich people can pay higher rent than poor people. So if you own a piece of property surrounded by poor people, you can't rent it out for very much money. But if you have a property where you have a lot of rich people, they'll pay higher rent. So I want to find the countries that are going to be richer in the future, and I want to buy my real estate there. I don't want to buy my real estate in countries that are going to be poorer in the future, because now my real estate is going to have less value. Now, if it's a particular piece of property, like it's oceanfront property in Hawaii, maybe on Maui, OK, well, rich people can always buy that. But if you're talking about in the heartland, like somewhere in a suburb of Indiana, I mean, no, Japanese tycoon wants to buy a vacation house in a mill of nowhere. So that real estate is only going to be a function of the real income of the people that are in commuting distance of that house. And I think when you have massive inflation and people are spending a lot of their money on food and a lot of their money on energy and stuff like that, they don't have money left over to pay their rent. So rents are going to come down. And when everybody is renting out their basement and renting out their attic, when everybody has two or three roommates and several families are living in the same house because that's the way they can cut their costs. I mean, look, this is going to be a disaster for the US. So you don't want to invest in the US now. When you want to invest in the US is after everything crashes, when everything is really a mess. And then if we finally see the error of our ways and have free market reforms and shrink government and cut government spending and create the foundation for a free market led savings and investment recovery, then you come back and you buy up all these assets real cheap. That's what you do. You don't buy them now. Well, what worries me is that it'll be blamed on capitalism and instead of running towards the more market, what'll end up happening is we'll run towards stronger central government, which historically when you see crashes, that tends to happen. You tend to get stronger, more tyrannical central government, which actually brings you. Yeah, yeah, that's exactly what's going to happen. That's what happened in 2008. Because I remember in 2008, Congress had a commission. And the commission was to look into why the financial crisis happened. That was the whole idea. And I tried very much. I kept writing and I had people call. I wanted to testify at those hearings because I knew exactly why the financial crisis happened because I predicted it for the exact reasons that it happened. I went through the housing bubble and how it was being created and what was going to happen. I mean, I nailed that crisis. I have not seen anybody explain the crisis better after it happened than my explanations years before it happened. So I was like, OK, I'm the one that predicted the crisis and I'm commonly credited as being the guy that forecasted. Can I testify as to why the crisis happened? No, they wouldn't let me there. The only people who were allowed to testify were people who said we had a crisis because we didn't have enough government. We had too much capitalism. We had too much free markets that if only we had more regulations, that it wouldn't have happened. And that, of course, was the opposite is true. Had we had free market regulations, it wouldn't have happened. But because the government interrupted the natural regulations of the market, it created the bubble and created the crisis. So yes, the government always creates a crisis by interfering with capitalism. And then when the crisis happens, they blame the crisis on capitalism, not on their interference with it. And the solution is always to do more of what caused the problem, which always makes the next problem worse. So yes, that is what's going to happen initially. That is what's happening now. It's going to get blamed on capitalism. So things are going to have to get really, really bad before anybody considers blaming government. So that's what has to happen. The government has to make it so bad that people are starving, that they're lining up for hours for food, that there's all sorts of civil unrest. Things have to get really, really bad. And then there's a revolution against government. But what we have to make sure is that the government doesn't have the means to suppress that revolution, because we have no more privacy anymore, no more rights, no more freedom. They take away all the guns. Because they want to make it so that we're all basically slaves. That's what happens with these communist countries. See, these communist leaders come to power in a communist revolution. They always promise to make everybody's lives better. They promise, oh, if we just get rid of the bosses, get rid of the capitalists, they won't exploit us anymore. We'll all have better lives. And so people believe that, but it doesn't take long before the communists destroy everything. And people are much poorer. And then the only people who have money are the people who are in the communist party. The people who are in government that have all the connections, they're the ones that have the money, and there's no longer a meritocracy. But let me just finish this now. So then what happens is that people want to escape, that people want to leave communism, and now the government has to make it illegal. They have to lock you up. They have to build walls to keep you from fleeing, because nobody wants to live in a worker's paradise, because they find out that it's not paradise, it's hell. Yeah, I love it. So that leads me to this question. How do you think this whole situation with the coronavirus, with the economic hit that we're already taking right now, and we're in an election year, how do you think this is gonna affect the election? Do you think it's gonna make it more likely that someone like Donald Trump gets reelected, or do you think it's gonna make it more likely for someone like Joe Biden to get elected? Well, you know, I got mixed feelings on it. I mean, I tend to think that it makes it harder for Trump to get reelected, because to the extent that we're in recession, and it's a bare market and people are unemployed, when they go to vote, they don't tend to reelect the incumbent. I mean, that's historical. Now, the question is, will Trump be able to convince the voters that everything would have been great, and was great, except for the coronavirus, and therefore it's not his fault, and so he should be reelected, because the economy will get back to the great place that it was at before the virus. Now, of course, we didn't have a great economy, we had a bubble, but will the voters know that? I mean, the voters knew we had a weak economy under Obama, that's why they voted for Trump, because Trump told the truth to the voters about how lousy the economy was, despite government statistics, which painted a rosier picture. But now as president, he's touting those same statistics as if they're real now, and they were frauds in the past, when now he's telling the same lie that were told before. And so it's gonna make it easier for Joe Biden to say, vote for me, and I'll make America great again, because Trump promised it, but didn't deliver it, even without the coronavirus. People's lives were not really improving under Trump, all we were doing was running bigger deficits, and we were paying for government with bigger deficits instead of the income tax. But so it depends on, you know, if Trump is able to successfully blame the coronavirus. I mean, I think originally he was gonna run against the Fed and claim that the Fed's the Fed's fault, but now I think it's a bigger boogeyman, especially now that the Fed is doing everything he wants, they're printing all the money, and they're acting, and it's ironic too, when Trump was a candidate, he was critical of Janet Yellen for keeping interest rates too low and printing too much money, and now he was critical of Powell for not printing enough money and for not keeping interest rates low enough. So he became an advocate of exactly what he criticized. So a complete 180 between candidate Trump and President Trump. But, you know, I think that the election is gonna come down to a battle of socialist ideologies, the socialism of the Republicans versus the socialism of the Democrats. And it's gonna be an auction on who can promise the most free stuff. And I just think that the Republicans are always at a disadvantage once the election is decided by free stuff, right? Because the Republicans have already, they can't advocate for freedom and capitalism and limited government. They've already bought into the myth that prosperity comes from government spending and that there's no cost to money printing. And so since they're now fighting this battle on the Democrats turf, you know, I mean, they got the home field. I just think that if voters have a choice between a Democrat and a Democrat, they'll pick the Democrat every time. Right? And so that's Biden, you know, as opposed to Trump. Okay, now one more question here. How do you think all of this is gonna have, what kind of an impact do you think it's gonna have on the psychology of people? Let's say things open up tomorrow, no more shelter in place, you know, people are still a little scared, you know, maybe they don't wanna go to the gym, maybe they're scared to go to school. How long do you think that's gonna last? I feel like the fear of what's going on is gonna linger far longer than the actual risk itself. Yeah, I mean, first of all, it seems to me now that government has a vested interest in not bringing this thing to an end because the longer they keep us all cooped up, the more they can blame the problems on the virus. I mean, there's a lot of economic problems that were gonna happen anyway. And now all of a sudden, they can blame on the virus. You have all these states that we're gonna go bankrupt anyway. You have all these municipalities that were teetering on the edge of bankruptcy. Now they can claim, well, it's not our fault. We need all this bailout money because it's the virus. So a lot of governments, this is like a get out of jail free card for all of their past sins, you know? They just, oh, it's like, you can't blame us for this. So in a way, there's a vested interest to keep everything the way it is, you know, to maintain the scapegoat. But I do think even if like all of a sudden like we cured the coronavirus, like we got a vaccine, we got a cure and people went back to work. A lot of people aren't gonna have jobs to go back to even if they want to because a lot of people aren't gonna wanna go back to work because they make more money not working. But see a lot of these companies were only kept afloat by debt. We had a credit bubble before the coronavirus pricked it. Now that that bubble has been pricked, you can't reflate it. So a lot of these companies that were being kept afloat by cheap money are gonna fail during this situation. They're not gonna be there. The jobs are not gonna be there. So even if we recover from the coronavirus, all we're gonna recover back into is a recession that we would have had anyway. You know, we're not gonna suddenly have this great economy because there's nothing to go back to. People keep thinking that, well, it's, you know, we had a great economy before the crisis. And so we'll just go back to it after, you know, we had a bubble economy before the crisis. And since the bubble popped, we can't go back to a bubble that doesn't exist anymore. So it's gonna be different. And yes, I do think fewer people are gonna eat in restaurants. So we need fewer restaurants. A lot of restaurants have to go out of business. Fewer people are gonna go to the movies. So movie theaters have to shut down. I mean, I think people are gonna be changing their behavior both because of economic circumstances because they don't have the money, right? They can't afford to eat out as much. They can't afford to go to the movies as much, you know, especially when you could just, you know, eat home and watch Netflix. So, you know, you don't have to spend all that money. And so I think the economy is gonna have to restructure based on that reality. And of course, the government's gonna make it harder to do that with all the regulations and taxes that will slow down that process. But no, there is no going back to Oz at this point. I mean, that's gone. And to that point though, Peter, a lot of people are comparing this, the coronavirus and what's happening right now more like what happened to us in 9-11 than like what happened in the housing crisis. So, and what happened with that was we did see a huge crash initially, but it rebounded in like 56 days. Now, what's to stop the government from just infusing money like crazy and reinflating another bubble and we see a crash, but then we're right back in two to three months. Well, okay, you have to look at the proportion to what happened. So they were able to inflate a housing bubble very quickly after the stock market bubble popped. And in fact, the housing bubble didn't just begin to inflate when the stock market bubble popped. If you really look at the origin of the housing bubble, prices really started to move up in about 1997. And so that bubble was forming in 2000. And so what the government did by slashing rates to 1% was just add fuel to a bubble that had already started. And it was particularly powerful fuel because it was already in motion. And so that bubble was much bigger than the stock market bubble. And so the economy was able to go from bubble to bubble. And it was like, okay, this one is better. More people were getting rich in real estate than they were in stocks. And the big difference between real estate wealth and stock market wealth is you know, most people weren't borrowing money against their stocks to go out and take vacations and buy cars and remodel their houses. But it was very common for people who owned homes to immediately extract any new equity in the form of a cash out refi or a home equity loan. So gains in real estate immediately translated into more economic activity, more spending. Plus most people when they bought stocks, they paid for the stocks in full. People were buying houses with minimal down payments or no down payments at all. So the return on housing was so much bigger because if the stock market went up 20% and you put $10,000 into the stock market and it went up 20%, you made $2,000. But if real estate went up 20% and you bought a house for $500,000 and it went up 20%, you made $100,000 and you put nothing down. You got $100,000 for nothing. And then you just refinanced it or took out a loan and started buying all kinds of stuff. So that bubble was powerful enough that it created a phony recovery. Now, when that bubble popped in 2008, since it was a much bigger bubble than the stock market bubble, the resulting financial crisis was much worse. And I was warning about that for years because I knew that the problem with the real estate bubble was not the people who bought houses, but the people that loaned them the money. I knew that they weren't going to get their money back. So I knew a drop in the housing market would produce a financial crisis, which is what happened. But when that happened, instead of learning from their mistakes and allowing a free market recovery, we then inflated an even bigger bubble in housing, in stocks, in bonds. There are people that call it the everything bubble. Corporate buybacks, student loans. I mean, the government flooded the market with credit much more than it did between 2001 and 2008. Of course, all Greenspan did was take interest rates to 1% and they only stayed there for about a year and a half and they did no quantitative easing. So that was nothing compared to the stuff that went on after 08, which is nothing compared to what's gone on now. So the reason it's not going to work again is because the bubble that just popped is so enormous, right? And the economic damage that was done as it was inflating is so huge that there is no way to replace that bubble with a bigger one. It's just impossible. Just if they try to do it, they end up destroying the dollar. We end up, you know, we overdose on stimulus. We die. If you build up a drug habit that is so big, if every time you need to restart the habit, you need more and more drugs, eventually you need so many drugs that you can't even survive, the dose that's required to get high. So that is the problem. You know, we're not in a situation today where those tools are available. I've been saying for a long time, the Fed is out of bubbles. There's no more bubble blowing. There's no more rabbits in the hat. This is it. We're now going to have to deal with the consequences of the 2001 bubble, the .com bubble, of the housing bubble and of this bubble because every time a bubble popped, we kicked the can down the road by making a bigger bubble. And then when that bubble popped and now we have a bigger can, we kicked that one. So now we have all these unresolved problems from, you know, going back decades that the market was never able to resolve and restructure from because we didn't want to deal with the pain. We kept delaying it to a later date. Well, we finally caught up to the can, right? This is it. No more kicking. We're going to have to deal with it and it's going to be horrific. But at least on an individual level, as I said, if you want to come through this thing, solvent financially, if you actually want to increase your wealth as other people are getting wiped out, you can do that as long as you make the right investments. That's what I've been doing personally. And that's what I'm trying to help as many Americans do through my broker dealer, your Pacific capital. Thank you very, very much. Very, very, I think it was a great podcast for people to kind of learn a little bit about what's going on. And I appreciate you giving people options because it is scary to hear a lot of the stuff that you're saying and it would be really scary if we were left without any options. So I really appreciate you giving those options to me.