balajis:
Okay, good. So basically... to quickly summarize the last few hours of, of Pallud, right? A, we're now in a multipolar world. China's actually quite strong. Foreign affairs has admitted that it's a multipolar world. You know, folks like Fiona Hill have given speeches saying that. So A, it's a multipolar world. B, the US media has exhausted their, it's spent down all their trust. Like the graphs look like this, you know? They spent all their trust and Blue Tribe used US media to capture good parts of the US establishment, especially at the federal level, and big parts of tech, but they spent out all their trust to get that. They just exhausted that weapon. The soft power is gone. And there's a significant difference between gray and blue, which we talked about. And gray is not blue, but gray is also not red. It's kind of like a third tribe or whatever. Sort of like, I don't know, Kurds and Iranians and Sunnis all in the Middle East are actually different tribes. Some of them might be small, but they punch above their weight or whatever, right? And... Fourth, it's not one party, it's not one country, it's at least two parties. I showed those graphs where it showed how pulled apart the parties are, right? Socially and cognitively, it's not really one country. You can't think of it as a single unit anymore. So now putting that all together, that's like the state of affairs, right? Blue Tribe is losing abroad because it's losing control of the world, and it's losing at home because it's losing control of the country. It's used its media weapon and it's exhausted that but it has two weapons left. There's media. There's money. There's military And so right now we're in the middle of blue using the money weapon and when I say blue is using it, right? What people will immediately jump to is like, oh my god, what is a conspiracy theory blah blah? And the thing about this is When when it was like communism, right then you had Stalin you had Mao you actually had a guy in charge And they did all kinds of KGB subversion, you know, type stuff. And we found out later that actually, you know, uh, the Soviets had riddled the U S government with spies. There's the Venona decrypts and all the type of stuff. So that those conspiracy theories were real today. It's we're dealing not with communism, which is centralized left, but openness is decentralized left. And so it's adapted in a different way where it doesn't have one single guy in charge. There is nodes. You know, there's influential, you know, groups or whatever. There's no one single person or whatever, like a Stalin who's like directing things. So it's not a centralized thing. What it is, though, I think is it's tribal in the following sense. If you just give one premise, which is that every blue in the US establishment, whenever they make a decision, they're thinking about the politics of it. Okay. And that's not a big premise. Okay. That's a pretty reasonable thing to say. They're not simply thinking country first. They're also thinking party first. Remember, 96% of Democrats are not married to Republicans. They are nationalists for Democrats increasingly just as Republicans are becoming nationalists for Republicans. Right. It's not one country. It's two parties. Once, once you think about it that way, if every decision that you're making as a government official you're calculating, does this help blue? Or does this hurt red or gray, or ideally both? Okay, example, remember in late 2021, there was like just the notification on COVID that went out and they were like, I hope you die Republicans. Do you remember that?

Marty:
Yes, the winter of death.

balajis:
The winter of death, I forget the exact language, but it's just not something that you would expect a government agency to ever put out, right? If it was like for all the people, but it's not for all the people. It was like Sunni talking to Shiites or who do the tutsis or whatever. Right. It was it was Democrats or Republican. That's that's like a those are two different tribes. Right. Democrat doesn't value Republicans in the same way as they do other blues. And increasingly vice versa. So. So once you just have that one premise that blue is calculating the politics of every decision, does it help blue or hurt gray or red? And by the way, anybody who's in a position to make that decision has to be in being very good at blue politics to get there. Right? They're literally, they're usually a political appointee, you know, or they're somebody who is favored enough by the blue establishment to have that position today. Right? So they are political calculator. They're good at that. OK. This multiplied across 20 different agencies is how you get something that looks like a coordinated attack against gray and red. Okay, because the guy at the SEC now crucially there's sometimes door jams where the SEC guy and the CFTC guy are calculating blue interests and red and gray hurt. But they're also calculating their own self interest in so SEC and CDC both try to regulate the same product and they have a door jam right so this accounts for the degree of disorganization and collisions we often see where these agencies get in each other's way right. Still, once you have this premise. Now you see, okay, that's how it looks like the SEC and the Fed and, you know, Warren and this and that and so on are all attacking Bitcoin banks and the crypto industry at the same time. They kind of are, but they're taking cues horizontally and tribally. And I think that's a good model for how it works. You literally only have one premise, which is they're politically calculating each decision. And when you do that, you get something where, for example, let's take the tribal filter and apply it to the current banking situation. So as your viewers may know, banks started dying about eight weeks ago with the collapse of SVB signature, Silvergate. Credit Suisse and First Republic. There's others that are now, quite a few others that are now publicly struggling. And this is a quote, you know, somebody called it a bank walk rather than a bank run at Bianco

Marty:
Mm-hmm.

balajis:
research because banks don't have, they don't have other numbers on chain. So you only get them with quarterly reports. So deposits are moving, but you don't get really great real-time analytics until every quarter. So as quarterly reports come out. There's a huge update to the system. Everyone's like, oh my god, that bank has huge losses and you'll see more banks collapse or have problems. So that's kind of why the TikTok clock of this is sort of quarterly.

Marty:
And if you

balajis:
But.

Marty:
look at the stock prices, it's literally like they're walking a plank. They'll drop and

balajis:
Yeah,

Marty:
then teeter off

balajis:
exactly.

Marty:
and then go to zero.

balajis:
That's right. As more information comes, exact. That's right. So for your viewers to understand what happened, I say I can give like a short version and more complicated version, more complicated version. One of the things the system is set up to do is make simple things complicated. You know, it's not a mortgage. It is a... They'll put it, they'll tranche it and they'll slice it up and securitize it and collateralize debt Mumbo jumbo so they can lie to themselves and lie to you about, you know, whether this toxic waste is actually valuable. Right. And so the whole system is set up this way. We're not just printing money. Oh, it's quantitative easing. We're not just printing money. It's a, it's a BTFP program. We're buying it at par. It's a loan. All of this alchemy and abracadabra mumbo jumbo is meant to make a simple thing complicated. So the simple thing is in 2023, It's not just a financial crisis, it's a fiat crisis. Because in 2008, time was bought by pulling the crisis up from the level of banks to the government. Now there's no more level to pull it up to. It's like the currency itself, the government that takes the head. That's a very macro way of looking at it. Another way of thinking about this is, this is not just a banking crisis, it's a bond crisis. If mortgage-backed securities were the toxic waste in 2008, where they were rated AAA, but they were actually extremely unsafe, treasuries themselves are the toxic waste of 2023. And Dalio has said this, by the way. I've got like this, you know, I've got a few tweets on this, but look at, look at Ray Dalio. This is not just a bank crisis, not a single bank thing. It's a, it's a bond crisis, right? It is something that every institution that bought bonds in 2021 got wrecked by the Fed. The banks in 2008, they sold mortgages that were not worth what they said they were worth or thought they were worth. They were marketed as AAA. The Treasury in 2021 sold bonds that the Fed then devalued in 2022. Basically, if you think of the Fed and Treasury as one unit, the government sold an asset to its best customers that it then massively devalued. Sticking all of these banks all these institutions all these loyal blues just like Stalin killing his most loyal communists Powell killed his most loyal banks

Marty:
Yeah. And if you go

balajis:
Okay

Marty:
back and look at like the dot plots in December 2021, the fed governors were choreographing like, Oh, we're only going to raise rates like one and a half percent and boom,

balajis:
Yeah,

Marty:
5%.

balajis:
right, that's right. So through 2020 and 2021, inflation was transitory, or actually, first, you were a moron for saying inflation was gonna happen. Aren't you some stupid mouth breather who was telling us for 10 years that inflation is gonna happen after the printing? Don't you know Ben Bernanke proved inflation can never happen, right? Every zero hedge guy was wrong for 10 years, he'll be wrong for an 11th. Inflation is transitory. We need to stimulate. We need to recover from COVID. It's a Biden boom, baby. Build back better. This was everything that they were saying just to show you that I'm not imagining this.

Marty:
Yeah, while you're looking that up, I mean, the Treasury's also implicitly admitted this too with the introduction of the buyback program next year.

balajis:
Yes,

Marty:
They plan on rolling out.

balajis:
that's right.

Marty:
They know that

balajis:
So.

Marty:
there's not going to be demand.

balajis:
Here we go. So this guy is like, oh, nonsense that the interest rate shock rate rises weren't that big and they weren't a shock. The Fed telegraphed every move it made. This is completely false. Right here. Back in March 21. Stop worrying about inflation. Inflation fear lurks. Powell downplays inflation risk as Yellen foreshadows future spending. And then. To the moon. Right. Fastest. rate hike in relative terms ever, right? In one year, higher than it had been in the last 10 years. Everybody was not positioned for this. Basically what happened was, and you know, part of the skeleton key on this is... Um... Essentially, the establishment lured banks into binging on bonds. Right. This is what happened in. So in 2021, this is August 2021, banks are benching on bonds but not because they want to. Look at that, they're taking out these massive positions in government debt because all the printing meant that the normal commercial loan supply was pushed down. So look at this enormous gap, right? They're taking tons of, even the New York Times saying not because they want to. And Powell was saying even until November 3rd, 2021, Fed is patient on hikes, can act on inflation if needed. So they're fooling people and saying, look, take out huge positions in these bonds. We're not gonna be changing interest rates for a while. And we don't think that inflation action is necessary. But they lied. Fed lied, banks died, right? That's literally what happened. Fed lied, banks died, trust the Fed, end up dead. Every institution that bet big on US government bonds in mid-2021 is a dead man walking to first order, right? Depending on how big a position they took, okay? And the thing is that these are considered, these are like the supposedly the backbone of the whole system. These are the things that, you know, what do they call it? Risk-free rate of return, right? The safest asset in the world, the US Treasury, it has no risk of default. And everybody will say this, they'll repeat these things like stupid monthers, it has no risk of default. Okay, yeah, maybe they'll print the money to give it back, but they've literally just, first of all, they devalued it dramatically. Everybody today is like, oh, they're experienced bankers. They should have known about duration risk. Nobody in mid-2021 was saying, oh, okay, the Fed is gonna hike rates to a historical level. The Fed was lying about this the entire time. Here, I'll show you just like. Basically it's like...

Marty:
You've got to have mastered Twitter search skills to be able to pull these up.

balajis:
Yeah.

Marty:
It's an art form, not a science, the Twitter search.

balajis:
Here we go. Basically, this post summarizes it, right? Just as in 2008, the bankers lied, okay? This time, the central bankers, the banks, the bank regulators have lied to all dollar holders and depositors. And fundamentally, what happened is the Fed and the Treasury tricked institutions into buying huge amounts of bonds and then devalued them, sticking them with gigantic losses. And we're talking like historical losses, right? We're talking, this is just, you know, the unrealized you know, loss and gains up until Q4 2022. Just look at these absolutely massive hundreds of billions of dollars in losses, right? These are all caused by the Fed totally U-turning on the policy and sticking these guys with the bill, right? And this is across, you know, this is the big banks, here's the community banks, they show similar losses, right? And by the Fed itself, because paying out all of this interest, it's not profitable anymore. The entire system is just totally, totally, totally broken. and it's breaking in more visible ways. And so, as I said, they make it intentionally complicated, but once you realize that treasuries are the new toxic waste and treasuries are the backbone of this entire system, then you can go further on that. I can show you pensions and insurance, you know like AIG, you know how AIG went bust in 2008? like

Marty:
Yeah.

balajis:
lots of insurance companies bought tons of bonds because they're the safest thing, right? So they all got destroyed. And as rates keep going up, because they look like they're gonna keep going up, they get more destroyed. And they hope that nobody comes asking for the money. Because if they do come asking for the money, then they have to get printed money from the Fed to back it up. And, you know, of course what happens is, when this is, you know, we've got this weird thing that's happening where rates are being hiked still. And then, Banks are dying as a consequence and the Fed selectively prints to just help these guys. Somebody called it rate apartheid where the average Joe is crushed by both high inflation and high rates. It means you know like their mortgage, if they had an adjustable rate mortgage or something like that, you know they're toast. But lots of other things they're toast on. They don't have the pull to get the selective printed money of this BTFP program. Right? So It is an absolute disaster and it's also, it's on top of this mortgage crisis. Actually, I've got a pinned tweet, which is a video that I go through all of this on. So you can kind of look at that. But. The, just to quickly summarize, I've got a, if you go to Bolleges.com, front slash fiat, okay? I've got a bunch of links here, but it's like here. What did I call it? It's a banking crisis, municipal budget crisis, because the blue states are bankrupt, bond crisis, commercial real estate crisis. That alone, by the way. Here, I'll show you one more visual of this.

Marty:
That's, as you're saying this too, I'm actually reminded, because as all this is going on, you have banks consolidating up into the big four, predominantly JP

balajis:
Yes.

Marty:
Morgan.

balajis:
Okay,

Marty:
And

balajis:
yeah.

Marty:
like, if you remember in 2019, the repo spasm, that fall was driven by the fact that JP Morgan rotated out of cash and into treasuries, particularly.

balajis:
So I don't actually

Marty:
So.

balajis:
know that part of the story. I wasn't paying as close attention then to this particular aspect. Tell me your vantage point on the 2019

Marty:
Well,

balajis:
thing.

Marty:
what I'm wondering now just as we're having this conversation is like, is there just a massive amount of projection like JP Morgan's the safest bank in the world and

balajis:
Yes.

Marty:
they actually

balajis:
Yeah.

Marty:
made that huge rotation in 2019. They're still sitting on those treasuries and it's actually just a big con game where they're trying to make everybody feel like they're

balajis:
They're

Marty:
safe

balajis:
safe?

Marty:
in the safest bank,

balajis:
Well,

Marty:
but

balajis:
I

Marty:
they're sitting

balajis:
mean,

Marty:
on all.

balajis:
they're safe in the sense of like, they're gonna try to become like the Bank of America. And what's essentially happened is, it's like this 30 odd too big to fail globally systemically important banks worldwide. We saw what happened when too big to fail fails with Credit Suisse failed. It was pretty messy, right? Yeah, depositors haven't really kept their money but. It was absolute mess and they had to like violate every law in Switzerland and destroy Switzerland's reputation as a financial capital in order to quote, save credit suisse. Right? So that's like what happens when a quote too big to fail fails. It's not fail fail, but it's, it's pretty bad. And, um, what, coming back to the thing about like blue tribe, red tribe, if you analyze the banking system tribally, they've set it up in the following way. The gray banks can go to zero. Or they can die. Like basically you can have chaos develop, the SVB and First Republic and so on. The red banks can also die in a different way where the red banks get access to this BTFP program that the great banks didn't, but their deposits are leaving anyway and they're going to money market funds and so on, okay? And to the big banks. But the blue banks get all deposits, right? So you've just set it up, whether intentionally or not, such that the, the big four blue controlled banks get all of the deposits in the entire banking system and all of the community of red banks are choked out and the tech banks are choked out. And best of all, you have some reds getting mad at grays when it has absolutely nothing to do with tech whatsoever. And it's a hundred percent with the fed. Like this is, this is just something where everybody bought bonds. And it so happens that like, you know, one way of thinking about it is, you know, Powell keeps talking about a soft landing, soft landing, right?

Marty:
Mm-hmm.

balajis:
Well, that means Powell's a pilot. It's a metaphor he himself has chosen. Powell's pilot plane. He's crashing the plane and SVB and others were like guys who were just positioned near the front of the plane. But everybody's gonna, everybody who's still on this plane is gonna get crushed, they're gonna crash, unless you have like the Bitcoin parachute or outside money of some kind and get the hell out, right? This also, by the way, lots of people, man, you're probably aware of this, but there's quite a few people who will get mad at you for pointing this stuff out. Have you noticed

Marty:
Oh yes.

balajis:
that? And

Marty:
Oh yes.

balajis:
they're like, why do you hate America so much if you're, and I'm like. Powell, why does Jerome Powell hate America so much? Why does the Fed hate America so much? It's like saying, you know, the guys who got the US to invade Iraq hate America so much. Not the people who are against it, right? The Fed hates America so much, not the people who are against the Fed destroying. We are just literally the passengers on the plane who are observing that the pilot is crashing the plane.

Marty:
Yet the wings

balajis:
And

Marty:
on

balajis:
people,

Marty:
fire. It's like,

balajis:
yeah,

Marty:
hey.

balajis:
and people are mad that you're pointing it out, you know? Go ahead, give me your thoughts on that.

Marty:
I mean, it's just cognitive dissonance is rampant. People don't want to believe it. That's the other thing. It's like a fish in water. People have grown up in the system operating a certain way and operating somewhat functionally. They don't want to recognize that it's dysfunctional.

balajis:
I actually, you know, I actually reduced it to maybe two premises and you might, you might try this on, uh, may not, may not a guest could make it because they might be there. But, so I actually put out a tweet and maybe you saw this, but does the US have, um, so can the US print infinite money? Does the US have an invincible military? Right? Do you agree with the first premise, the second premise, both or neither?

Marty:
I don't believe in invincible military. I do believe they can print as much money as possible.

balajis:
Well, okay, so of course they can, but really what it means is without consequence.

Marty:
Oh no, I don't believe either of them.

balajis:
Okay, right. So, I mean, it's just like a tweet, so it was like I had to be compact, right? But the premise is, can it print infinite money without consequence? Because MMT people believe it can print infinite money without consequence, right? And here, to my surprise, maybe some people read it the way that you just did, right? But can the US print infinite money? Does the US have an invincible military? And maybe it's a phrasing, but I was actually a little surprised that only like a little less than 45% of my audience said no to both. Most people agreed, like 30% of people thought that it had an invincible military.

Marty:
Yeah. No,

balajis:
Okay.

Marty:
actually, I mean, I had an intelligence officer analyst, excuse me, on a few weeks ago. It was after that conversation where it really drove home like our military is not invincible. Like we wanted to do a ground war in Ukraine, or if we wanted to do something in Taiwan to protect them. We literally don't have the training or the weaponry capabilities to do that. Either of those things, let alone both.

balajis:
I mean, the thing about this is everybody is forming their opinions. So, you know, the first thing you'll get when you talk about this or even look at this is, oh, you're an expert in the military now after being an expert in X and Y and Z. Ha ha ha. Right. And the thing is, are the military guys actually experts at the military because Iraq and Afghanistan are massive losses, serious massive loss. It's like the entire Middle Eastern wars. The last 20 years have been gigantic losses. Maybe you can fire a gun, but. Can you book a win? No, they couldn't, right? Or at least they didn't even know what a win was. Like what is a political resolution? War is politics by all means. I was just tweeting about this. Like what was a political resolution of that conflict? It turned out Assad won. It turned out the Taliban won, right? It turned out that Bin Laden even achieved his objectives in the sense of burning $8 trillion in the desert. Iraq is now selling oil in Yuan to China. Iran is not isolated, they're with Saudi, blah, blah, blah, blah. Essentially like a total, total strategic defeat for the US militarily. That's why if the US, I mean, look, if it's Dwight Eisenhower, of course, I'm not going to say anything about the military with respect to, I mean, he's obviously booking wins, right? If it's kind of like, uh, you know, if I felt It's like during COVID, you know, did if they were doing a good job, would you care whether you know what Fauci was saying? You know, like during swine flu, did anybody really care? Nobody really cared. Right. There's still like a functional establishment at that time. OK. Point is, I'm not sure there is like a Western military expert in the sense of someone who's like winning wars. Right. I would listen to somebody who is. I don't know, part of Operation Desert Storm 1, maybe, right? But that's a long time now, right? 30 years ago, the information is obviously A. B is, given that, like, certain kinds of, so what is observable? What's observable is eight trillion dollars lost in Iraq and Afghanistan, total defeat in the Middle Eastern wars, right? And just to kind of show that, I went through this thread on this, let me, I'll show you two threads. Oops. But have I projected more than anybody else

Marty:
Haha.

balajis:
in the history of the podcast? Maybe.

Marty:
Up there, definitely.

balajis:
Up there, okay. So here's a war on terror retrospective. Eight trillion spent, Iraq is now trading in Yuan, Assad won the Syrian Civil War, Afghanistan's controlled by the Taliban, Saudi and Iran aligned against the US, millions dead and displaced. What's the conclusion? Fight Russia and China next. Right? This

Marty:
It's insane.

balajis:
is absolutely, it's insane, okay? But just to show, here's the eight trillion and 900K deaths, all right? Here is Iraq is now settling in Iran, not yet oil, but everything else. Assad is one of the Syrian civil war and the US threatened sanctions on countries that re-normalized relations, but seems not to have worked. The Taliban now controls Afghanistan, Blinken calls on them to do things. They are ignored. China brokers peace between Saudi and Iran. The US is

Marty:
bless

balajis:
completely

Marty:
you.

balajis:
frozen out. and surprised by the deal and like the CIA guy Burns actually is mad at Saudi for making peace here. And of course, tens of millions of people dead and displaced by this insane set of wars. After all this, we are suddenly taking on China and Russia at the same time. Okay. Now, I mean, the thing is, all this stuff was sold with fake news, literal government conspiracies saying that there were weapons of mass destruction and all these attacks on patriotism. And, you know, so this is something where basically, I mean, if, if just, I mean, this is such a massive cost, there's absolutely zero reflection on this whatsoever. Right. So this is kind of the second point is, you know, the first is just are there military experts? Right. And relatedly, you know, this this war was just massively lost. And we should we should reflect on that. Right. There's total strategic loss. Total. I mean, it just caused. death and destruction with absolutely no benefit to anybody. Right? So, I mean, one way of thinking about it, by the way, is it's actually relatively easy. Just blowing something up is destroying is not actually power. You know why? It's like, if you have, let's say there's a house and you tell, and you've got a crowd in front, and you tell a hundred people, go and burn down that house. You know what? BLM showed that some, you know, Blue America, they can still execute on that. Okay, one guy grabs a bottle, one guy grabs a rock, smash windows, thing is on fire, it's ashes by, you know, 9 p.m., okay? But if you tell that group of 100 people to go build a house, that's a lot harder. First of all,

Marty:
Mm-hmm.

balajis:
they might not be able to do it. You need a foreman, you need like, you know, blueprints, you need lumber, it has to go in such a place, and that's because destruction paralyzes, right? Everybody... can go in and destroy something without coordinating with anybody else, and you have no, you need no experience, you can grab a piece of wood and just start hitting the wall or something like that, right? So destruction is easy, it's anarchic. Building is so much harder, it's a thousand X harder, ten thousand, a hundred thousand X harder. We're very fortunate that it's profitable. But there's a huge number of people who mistake the fact that America still can blow things up for the idea that it's still, quote, powerful. in the true sense of power, which is to be able to build something. You know, just still being, lots of things, a lot of people can blow things up and kill people, cause chaos, cause anarchy, cause shooting. There's a million ways to smash glass into pieces, to smash a country into civil war. It's much harder to keep it together, right? And so there's like a juvenile kind of rightist or militarist or whatever who thinks that the fact that you can still blow things up. indicates that there's still some power there. Actually, that's like the last bit of power. You know what I'm

Marty:
It's

balajis:
saying?

Marty:
a whole

balajis:
Right?

Marty:
might is right thing. It's like, yeah.

balajis:
It's might as right, but it's also something where it's like, um, it's, it's, it's fleeting because it's like the Soviet Union at the end. They would just drop arms into conflict zones. I mean, that's what I say. The USA today is like the USSR, where it would drop arms and slogans into conflict zones, but it couldn't build. Right? I mean, the US during built up West Germany, it built up South Korea, it helped build up Taiwan and Hong Kong. While the communist on the other side did a terrible job. They drove their population into dirt, the US helped build them up. That was the good US. Now the US is like the USSR then, where it just shouts slogans and it gives democracy and hands out rifles and everybody shoots each other in Syria and they foment chaos. And now what's happening is now there's peace in the Middle East, now the US is being driven out of the region basically. That's the insane thing that's happening. The US was actually pushing for Saudi to not make peace with Iran. The US was pushing for Syria to not make peace with the Arab League, but now the US is being pushed back. No one cares what the US has to say, so there's now peace in the Middle East because the US is actually part of the fomenter of chaos. So I know that sounds like, oh my God, you hate the US. That's not actually, you know, like the thing is, the empire, one way of thinking about it is there's like imperial core, right, like the imperial center. There's like, A lot of Americans who are drafted in different senses of the term, you know, into various roles support that. And there's like the victims of empire around the world. And the empire is just not doing good things abroad. A lot of Democrats used to be able to see that a lot of Republicans can see that it's not doing good things at home. And then when you have binocular vision, you can kind of see both. Right. Um, go ahead. You're going to say.

Marty:
Nah, the most frustrating thing about being an American citizen right now is the fact that nobody wants to recognize the objective truth of what you just described. Like, we're losing consistently. We're trying to expand our empire. Military might, certainly, too quickly, spreading ourselves thin, not getting wins anywhere, and yet doubling and tripling down. Literally insane.

balajis:
literally

Marty:
Like,

balajis:
doubling

Marty:
doing...

balajis:
and tripling down. That's right. And the thing about that is there's still a lot that is, there's still a lot of individual Americans that are highly admirable. So here's, by the way, some other stats. So I just showed the Afghanistan numbers, right? And all the Middle East numbers. Here's something more, right? This is this great cartoon. First, let me tell you, the law is powerless to help you. And then she gets arrested. She's like, I thought you said the law is powerless. Powerless to help you, not punish you. That's an archetype. OK, so declining state has trouble building a bus lane, but it can still destroy someone's life. OK, and just as just to show you this, like, for example, literal combat ship. I'm not sure if you can see this. OK. Twenty three ships cost around 500 million to build astronomical operating costs, costs, ruins, delays, mechanical failures. Right. OK. The Navy's 13 billion dollar supercarrier still can't do the one thing it's absolutely required to do. What good is an aircraft carrier that can't reliably launch and land aircraft? OK. How about this? There's just so much there on this. Hold on, there's more. There's a few more, actually. So here are, basically it's just not the same country, right? World War II America could make a B-24 bomber in 60 minutes. 2022 America needs 20 years to reopen a bathroom. It's just not the same country, you know? And it's like, here's, you know, F-35 is a failure, massively expensive. There's so many of these things where, you know, so I just mentioned, literal combat ship. Zumwalt, four class air-care carriers, F-35. I'm sure there's people who are, quote, procurement experts or whatever, who could give a longer list. But the same government that's doing the $300 million bus lanes, that's doing, you saw the Los Embrida, the bus shade, right? The toilet paper ribbon cutting, do you remember that in San Francisco?

Marty:
Yep. Yep.

balajis:
Right? Here,

Marty:
It's like,

balajis:
hold

Marty:
idiocracy

balajis:
on.

Marty:
in real time.

balajis:
It's like it's it's actually it is a diocracy. Right. And here I was like. So for the last 12 years, Blue America has been in total control of California. What is their greatest accomplishment in the field of public infrastructure? Solar powered metal pole, okay? Toilet paper ribbon cutting. Literally they had a, this is like a state senator, they had a press conference to celebrate the opening of a one stall bathroom with all these people there. For them, that was like the moon landing and you know what they're doing with their fingers? They're cutting a toilet paper ribbon. Okay? Crack smoking billboard. Okay, have you seen these? These are in San Francisco.

Marty:
Yes, yes.

balajis:
Injecting drugs carries the highest risk of overdose, so try smoking or stoning instead. Let's take care of each other, San Francisco, right? And $300 million bus lane, right? 27 years, $300 million for like a bus lane. Now actually, what is their greatest accomplishment? None of these are the greatest accomplishment. The greatest accomplishment is the $100 billion high-speed rail project. 15 years later, not a single mile of track laid. Okay?

Marty:
Where's all that money gone?

balajis:
It's a great question. And it's probably legal graft, which is to say it's like bureaucracies and environmental impact projects where it's all legal, but it's just, right? The point is, if you can't build a bus stop, you can't stop China. It's like, it's

Marty:
should

balajis:
like,

Marty:
be

balajis:
duh,

Marty:
obvious.

balajis:
right? You're fighting your factory. You know? And I. Of course. You know, look, what I just gave were A, numbers on like the entire Middle Eastern disaster, B, numbers on construction, civil construction, and C, numbers on military construction like the Zumwalt and the aircraft carriers and and so on, right, the four-class carriers and all this stuff. We also have D, which is the US is effectively suing for peace in Ukraine. We'll see what happens on that, right? But you're seeing articles like here. show you a few of them. So.

Marty:
As you lay it out like this, it's all... It's like

balajis:
Go

Marty:
taking

balajis:
ahead.

Marty:
the black pill.

balajis:
I'm sorry, but.

Marty:
That's the frustrating thing, especially, that's why I focus on Bitcoin. It's like I recognize all this, but I've never laid it out in... as elaborately as you have over the last three hours, connecting all the dots. And it's just making me want to double and triple down, and just like exiting via Bitcoin.

balajis:
So that's the thing is basically, if I have one message for your audience, I think it is, look, obviously I believe in Bitcoin, you believe in Bitcoin. Let me pause this for a second. I think it's really the three things. It's allocation, location, organization, right? So allocation is, yeah, financially, I actually like Odell's thing, like, be humble and stay humble in sacsats, right?

Marty:
Mm-hmm.

balajis:
Where God knows what's gonna happen, right? So stay humble in sacsats, it's actually a pretty good slogan, I like that. And so allocation, that's kinda, I mean, you can also ask further, okay, beyond Bitcoin, what else? Well, some people like gold, obviously some people like other cryptocurrencies, but I think Bitcoin will be a shelling point in all of this. A. In terms of other fiat currencies, like the Swiss franc used to be a stable safe haven. It's not anymore. Switzerland isn't. And I think maybe some combination of Dubai, Singapore, Australia, and New Zealand is interesting for fiat because Dubai's currency is pegged to the dollar, but maybe they would unpeg it. And those four countries are the ones that are attracting global millionaires and what have you. So other people have done diligence on that. So since you have to hold like some balance in fiat, that might be a place. You could also of course hold a half in USD and half BTC or whatever it is you wanna do. Or whatever, I'm not, no financial advice there, just saying, okay, that's allocation. Location I think is less talked about. Location, I would basically get out of blue states in my view. And the reason is blue states are massively bankrupt. Blue states would be like the center of like the gravitational vortex. Like if and when... They do try to print gigantic amounts of money, and they're kind of already started on this. And they've talked about this treasury buyback thing in early 2024. I showed you several of these different crises. I mentioned the bond crisis. I showed the commercial real estate crisis. But it's also auto loans, it's a trillion dollar thing. Credit card crisis is nearing a trillion. Medical debt, student loans, payments are gonna start again. Insurance crisis. Trade wars cost hundreds of billions of dollars. Europe has spent 800 billion on the energy crisis. And then of course there's Ukraine, that's another 100. I mean, $100 billion is so much money.

Marty:
Thanks for watching!

balajis:
It's like, and it's like every single thing of these I mentioned is like 100 billion to a trillion or more.

Marty:
Well that fact's being like desensitized. Everybody's being desensitized to that. You just throw around billions, hundreds of billions, trillions, willy-nilly.

balajis:
I know, but it's also like, I mean, one way to just bring it back to earth is, I mean, look, you and I have funded companies, built companies. I know how hard it is. Like even in the I compare the last 10, look, it's hard to build companies, just like it's hard to dunk a basketball. But the last 15 years has sort of, especially last three, not 2022, but like especially 2021 was like dunking on the moon. Okay, it's hard to dunk, but on the moon, you can jump a lot higher.

Marty:
Mm-hmm.

balajis:
Right? So they were giving anti-gravity and a lot of companies, especially in 2021, were just like dunking the ball that couldn't otherwise. Right? Um, point is though, that basically, if you, I mean, a hundred, a hundred billion dollars, it's like, that's like a hundred unicorns. It's really hard to build a unicorn even when you're dunking on the moon. Okay. It's hard to do that to a hundred of them, just like thrown into the woodchipper like that, you know, like, you know, a trillion dollars. That's a, that's a Google, right? And so, you know, there's five, I mean, maybe add Nvidia, you could add Netflix, right? There's not that many great American tech companies. And that's actually where all of the stock market growth has been, have you seen how like, consolidated it's been this year? Everything else is sucking wind. It's all in just those few companies, right? Massive concentration there. All these things that are found in the last 20, 30 years, right? All the old American brands are just still zombie companies, you know, because they've all just gotten bailed out. They're not, right? And so, you take all of those giant tech companies and you throw them in the wood chipper. And it still doesn't make a dent because Druckenmiller estimates, you know, Druckenmiller's thing is like, uh, if you add up all the entitlements, it's not a 30 trillion debt, it's 200 trillion. Like social security, all this stuff is not being booked. So there's absolutely no way to pay. Uh, moreover, like just on the Ukraine thing for a second, I'll show you three links. Um,

Marty:
And that's, I mean, I did an interview yesterday, too, talking about like the debt ceiling. And so I'm gonna have two young children. And that's what really scares me, is like if we keep kicking the can down the road,

balajis:
Well,

Marty:
like.

balajis:
I think for good or for ill, I think it's gonna be resolved sooner than, I don't think it's gonna be, of course, I may be wrong, but I don't think we've got a decade. I think it's gonna be a giant crisis sooner than later. But so here, for example, you see this, the West needs a new strategy in Ukraine, a plan for getting from the battlefield to negotiating table, this is April, because they're seeing the writing on the wall. Okay, this senior guy, Charles Kupchan, writing about this, you should read this article if you want, there's another one. where Blinken is actually saying that he would welcome China's role in... resolving the Ukraine war and it's officially in the Washington Post so that's like a, you know, regime outlet and just warms to a role for China in resolving the Ukraine war because Zelensky went to China and what the what Blinken definitely doesn't want is China negotiating the Ukraine-Russia peace deal without the US involved

Marty:
Yes, by themselves.

balajis:
Which is possible, right? Just like the Saudi-Iran deal was, right? The prague came for any effort. So that's why he's like potential American and Chinese cooperation. Here's the thing, this alone means the world is not unipolar, right? Just the

Marty:
an

balajis:
fact

Marty:
admission.

balajis:
that it's an admission of that, asked about working with it in principle, there's nothing wrong with that, if you have a country, we'd welcome that, it's certainly possible, blah, blah, blah. So, and then there's this really good lecture actually. It's funny because it's. quite good and yet it has I think incorrect conclusions yet still I'll take it. So Greenwald talked about this. I cannot recommend highly enough the speech delivered by long-time anti-Russia hawk and US foreign policy elite Fiona Hill. She describes how and why Ukraine has become a full scale world-wide revolt against the US-led order. Okay it's the Lennart-Merry lecture 2023 by Fiona Hill. Now this whole lecture honestly it's rare that I say like actually read every line but simply because, I mean, they're actually well, it's well-written, but simply because it's coming from somebody who is an extreme establishment figure, like, you know, Russiagate, all this type of stuff, this is her, right? And so here's just some of her lines. The war in Ukraine is perhaps the event that makes the passing of Pax Americana apparent to everyone. Okay? And the rest of the world, seeks to cut down the U.S. to a different size in their neighborhoods. They want to decide not be told what's in their interests. In short, in 2023, we hear a resounding no to U.S. domination and marked appetite for a world without a hegemon. Now, by the way, there's plenty of Republicans who agree with this and they're like, you know what, let's stop sending our people to die overseas and spending all this money on foreign wars. Let's just take care of our own people. And there's plenty of Democrats who used to say something similar. which is let's stop killing all these people overseas and let's instead go and, you know, build up our own roads and bridges and whatnot, right? So there's being that Jeffersonian impulse within the US, and I think that's going to, I mean, hopefully, I think that's likely to happen after Russia, and hopefully it doesn't escalate to war with China. I think actually you might see, like, US financial collapse before it escalates, because it's gone from, like, Iraq and Afghanistan to Russia, and then everyone's like, and we'll fight China next. I think the system might come apart before then, but we'll see. So here we are. So the next iteration will not be framed by the United States alone. It's not an order or a disorder. It's like a range of countries. It's basically everybody's having like local orders and little deals, right? Regionalization, so like little, you know, it's like the Southeast Asian nations and the Latin American nations work amongst themselves, right? And there's a few other really key points here. And da da da da, blah blah blah, this is all just Putin stuff. Right,

Marty:
is

balajis:
so

Marty:
it? Yeah.

balajis:
see, the Ukraine war highlights the decline of the US itself. This decline is relative economically and military, but serious in terms of US moral authority. She even admits, like, Bin Laden won. As Bin Laden intended, after the 9-11 attacks, their own reactions have eroded its position, right? And, you know, for... Some, the US is a flawed international actor. Basically, many, many countries don't look at the US as a model because it's got endless, it's got BLM riots and, you know, like the capital stuff and, you know, GN6 and it's got all of this fighting

Marty:
Everybody's

balajis:
constantly.

Marty:
fat. Everybody's unhealthy.

balajis:
Yeah, it's

Marty:
Declining.

balajis:
like, it's basically like and here this is, you know, promise, people will hear this and they'll be like, Oh my god, why do you hate America? That's not where it's coming from. It's basically like

Marty:
That's hard love. Like if you actually love America, you want to be confronting

balajis:
Yeah, it's

Marty:
this.

balajis:
like, it's like, it's like, it's like, basically, somebody who said in 1977 1978 to China, hey, you know, this, like 30 years of communism, you just killed millions of your own people destroyed your economy. Like, it's, it's not that bad yet, of course, but getting China off of communism was tough love and positive for China and getting America off of empire. is it's like, I mean, here's what I think actually happens. Okay. I think it's probably going to be maybe similar to the fall of the USSR where I kind of, I feel the events of March, um, are underappreciated in terms of how big they are because,

Marty:
Thanks.

balajis:
uh, go ahead. It's,

Marty:
The

balajis:
it's

Marty:
bank failures.

balajis:
the ABC. Well, it's ABC AI banking, China are the

Marty:
Mm-hmm.

balajis:
ABCs of economic And the reason for that is AI takes blue America's jobs. Bitcoin takes their power over money and China just takes their power militarily. And so they were already kind of on the ropes and now they're just getting hit by three very powerful forces at the same time. And then, of course, like Russia is also at least fighting to a standstill in Ukraine, if even if not winning and not losing is a win for Russia in some ways. Right. So. I mean, one of the things is. It is possible to disrespect the establishment publicly without being canceled in a way that is just completely impossible even three years ago. It's like it gave its all in terms of propaganda and shrieked, but it's just kind of fallen off on that. And people aren't listening. You can tell that people have tuned out from the regime and so on. It's like a change in wavelength. It doesn't mean they don't still have loyalists. They do. But what I foresee, here's the key thing. that most people aren't thinking about. When the Soviet Union broke up, do you know what the first countries that broke away?

Marty:
Hmm. Not the Baltics. Was it

balajis:
Yeah,

Marty:
a, yeah.

balajis:
that's right. I mean, we'll actually, arguably, it's a Warsaw Pact that the rattling happened because, you know, formally there's the Soviet Union and then there's the Warsaw Pact countries that were nominally their own countries that were a little bit less under central control. So the rattling happened on the outskirts of empire first and those broke away first, right? And that's kind of like France today breaking away and going to, you know, work with China or whatever, that kind of thing is right. But here, Just to show you this. So basically, this is the key thing. The countries that exited the ruble the earliest, namely the Baltic states, performed the best, while the laggards suffered the most. Okay, last guy out pays all the debts. That's an incentive to leave. Right. So the Baltics were small. Can you see the screen? Yeah. So Baltics were small. They were the first to exit the Soviet Union. They showed it was possible and everyone followed suit. And the thing is even as late as March, 1991, the USSR held this fake referendum, which they tried to show 76% support. They were doing fake votes. 76% support for staying in the Soviet Union. Right. This was a vote they held to try to stem the tide, but you can see these black you know, things over there, basically these regions rejected the all-union vote. They held their own. And because the Baltics broke away, they showed it was possible, and then the whole thing came apart, like in nine months. Okay. And the thing is, this is key, when the Baltics left the USSR, they got a fresh start. They didn't inherit any of the foreign debt. Okay. The Baltic republics inherited neither the the debt nor the claims for the assets of the USSR. So if Florida or Texas or the red states as a group or some subset of them break away first, they don't inherit the 30 trillion in debt. They get a clean start. That is the economic incentive on I think which the union breaks. And I think basically what you get are I think one thing that could catalyze it is if in Florida and Texas, they've reopened the gold window or the digital gold window. Like for example, here's just a thought experiment. You could imagine Bitcoin.florida.gov. Okay. And so at a, at a gov website and it's like 2013 Coinbase. So it's just buy, sell, send, or receive Bitcoin. That's it. And it has its own little order book. Okay. This is like an exchange that's run by the state, just like a gold window used to be run by the state. You know, you could literally go to the gold window and like exchange your dollars for gold. So you run this digital gold window. And the crucial thing about it is, it works with state chartered banks. Okay, it works with, because DeSantis has talked about having state chartered banks bank crypto because the feds are harassing all

Marty:
Mm-hmm.

balajis:
of these, you know, banks are banked crypto. So that's the second banking system in the US, the state chartered banks. He can order them or tell them that you have to bank crypto companies. right, and other red states can follow suit. And now the Fed is put in a tough position because either they can blink and allow DeSantis and others to do this, or they can say, hey, I'm going to cut off ACH, Swift, and other things to these state chartered banks, but that shows their hand. It shows what the oppression of a CBDC would be, and it's a pretty big step to try to unbank Florida, right? That's a lot of collateral damage. I don't think they would do that. I think it would be it would force their hand in a useful way, right? So you make the state charter banks real. And so if he did that, and if other states followed suit, what happens? Well, Fed blinks, now you can do ACH, SWIFT, WIRE, et cetera into a Florida state charter bank, maybe open a bank account there. Maybe you have to be a Florida resident. Maybe it's easier to do this in red states, you have to be, it's like local banking again. Now you've got a reason to bring some of your deposits back to local banks. So all the deposits are flying up to the big blue banks. Now you've got a reason to bring them back to red banks. That's big, right? You've got a revenue stream for those red banks because these trades are happening. You also have a revenue stream for the state where it can take, let's say, I don't know, half a percent, 1%, whatever they think is reasonable of transactions and they start accumulating a Bitcoin position of the state of Florida, right? And the exchange itself might be set up where it's like, I don't know, a $10 fee. to hold your coins on the exchange. They don't want you to hold your coins on the exchange. You're supposed to take your coins off the exchange, right? It's like a parking space. It's like intended to be cash and carry. Just get it off the exchange. It's not meant to be custodial, okay? So like by having a daily fee, you incentivize people to remove their assets, right? So it's engineered different than all the other custodial exchanges. It's meant to be get your Bitcoin, get out. Now that order book can... take the liquidity from the public Coinbase and Binance and Kraken and other order books, but I can also share liquidity with the Texas order book and the El Salvador order book and other government order books as they set them up. And in this fashion, like if you've ever seen the movie Pacific Rim,

Marty:
Mm-hmm.

balajis:
Right? So the reason I bring it up is when these giant monsters, you're like, why does it come from?

Marty:
come out of the

balajis:
These,

Marty:
water.

balajis:
you know, these giant monsters come out of the water. Humans can't fight them. They need to build giant robots. Right? So when this giant monster of the federal government comes out of the water, a normal company can't fight it. You need another state. You need Florida. You need Texas. Right? You need El Salvador. You need Oklahoma. You need UAE. Right? Basically both red states and purple states and foreign states can stand up to these federal regulators. They've got way more hit points, right? They've got the legitimacy also. You know, they represent a lot of people. It's a much tougher battle, right? And so if those red and purple states can keep that digital gold window open, here's where things get really interesting. Going back to that USSR analogy, at the very, very, very end of the USSR, they finally had the true vote. Because, you know, the Soviets, they pretended to represent the people. They talked about democracy all the time, right? And the true vote at the end was not the vote against a communist, it was a vote against communism. It was basically like these people, even though the Soviets, like they tried to tear down posters and stuff like that, a fair vote was held and it was so overwhelmingly against the communists, they couldn't fake it and they lost and they were out of power. The first vote that had been held really in 70 years. Now, I think the equivalent of that that happens in the U.S. and in the West more generally. All this stuff, you know like the DXY, do you know what that is? It's

Marty:
Yeah,

balajis:
like the Dixie.

Marty:
dollar index.

balajis:
In my view, all that is fake because it's like the dollar versus the yen and a bunch of other currencies where they're basically US protectorates, right? So the only true trading pair in the world is USD-BTC or arguably, maybe there's three. There's USD-RMB, RMB-BTC, or rather let's say USD-CNY or the foreign version, CNH, whatever. So dollar yuan, yuan bitcoin, bitcoin dollar. Those are like the three poles of the world, right? Where they've got billion person economies or whatever underneath them in theory, okay? It's like 400 million crypto holders or something. And the true vote at the end of this regime, in my view, is Bitcoin just going vertical. That's actually the real election because just like the communists purported to represent the people, the capitalists purport to be a free market. And when that free market votes against the Fed and the Fed buy Bitcoin, when all these Republicans realize that they can't boycott every single store, but they can boycott Bitcoin. Right? When all these Democrats, the disaffected Democrats, the guys like, you know, RFK, you know, they're realizing, oh, actually, you know, if we want a future without, you know, with civil liberties and without censorship and so on, you can't just vote in a new government that's going to do that. You need to decentralize and go to local and state governments. There are local and state Democrats who want that, who are not like the federal Democrats. So as those disaffected Republicans, disaffected Democrats do this, they rally behind BTC. And if the USD-BTC price moons, that indicates a vote of no confidence in the Fed. Because after all, Powell is a real president, right? Even Bill Clinton has said the Federal Reserve Chair is more powerful than the president. And did you ever vote for him? No one ever did. Have you ever been able to vote against him? Now you can. and the Fed before it ends you. And I think that is actually how the whole thing winds up because as BTC starts really going vertical, as that printing goes crazy, blues will try everything they can to shut down the exit from the system. And the way to understand this by the way is like, do you know what checkpoint Charlie was? Okay, so basically all of these failing states try to bar the exit. So here, let me show you. All of these filling states. see if I can find this.

Marty:
Yeah, that's the other thing. Yeah, you can't vote for the Fed. It's a private institution. So you have to fight it with private money.

balajis:
Exactly. So the first true vote, just like the Soviets had the first true vote in 70 years, right, since the 1910s, this is the first true vote that Americans will have. It's like, if in 2008, you couldn't vote against the bailouts, right, you couldn't have a forked parallel system where you opted out of what they were doing. Now you can if the states can keep the USD-BTC window And just to give you an analogy here, like basically, one way of thinking about it is exit is like a fundamental human right, right? So Article 13 of the UN Declaration of Human Rights says, everyone has a right to leave any country including his own. Do you see this, right? To hop, okay? But it's not just moving your country, it's moving everything else. This is translating into 80 languages. Here's the thing, all of the really bad regimes block the exit, okay? For example, the Reich flight tax. Okay, anybody who is leaving Germany, you know, Jews who left Germany were robbed of their financial assets. Okay, the diploma tax in the Soviet Union. Basically, when Soviet Jews and others were trying to leave to the West, they tried to fine you 100 months of salary. Okay. In East Germany, okay, basically, they called Republic Flux, desertion from the Republic, you're an unpatriotic person. if you tried to leave East Germany to go to West Germany, and in fact the border wasn't secured. Millions of East Germans left, and so that's why they built the Berlin Wall, to point the guns in and to keep people from leaving. And this is a famous, you know, example of a soldier just leaping over the barbed wire of the Berlin Wall, the leap to freedom in Checkpoint Charlie, okay. And of course, Cuba, a difficult task of exiting the island, because everybody wants to get the hell out, okay. And they have the so-called wet foot dry foot policy, where if you're a Cuban and If you're caught in the water, you've returned back to Cuba. If you manage to make it to land, then you're okay.

Marty:
Yeah.

balajis:
You could apply for asylum, which is just ridiculous policy, but whatever. That's what they ended up on. The point is, all of these communist states, socialist states, failed states, they block the totalitarian states. They block the exits. They don't let you leave, or they don't let you leave with your money. or they just don't let you leave at all, right? And so as, you know, one way of thinking about it is, and here's one more piece of the puzzle, very important piece. Did I share the graph on who paid for 2008? This is like a skeleton key,

Marty:
You

balajis:
go

Marty:
DM'd

balajis:
ahead.

Marty:
it to me a couple weeks

balajis:
Okay, let me put

Marty:
ago.

balajis:
it up though, because it's really important. And then what I'll do is I'll look at the transcript and I'll order some of these arguments because, you know, they're all. It's, it's conciliant if you see it all together. So did Republicans pay for 2008? All right. So here's, here's the graph. Let me first explain the graph. Can you see the graph there? Okay. So. The solid line is that, so what are you seeing here? This is the amount of GDP in a congressional district. So this is a congressional district that produces like 10 billion or less, 20 billion or less, and so on and so forth, okay? And in 2008, the solid line shows the outline, okay? And so in 2008, the blue distribution of congressional districts and the red distribution of congressional districts were pretty similar. Right? The blue outline and the red outline look pretty similar. It means Democrats and Republicans were roughly socioeconomically similar. But by 2018, the blue dots have pulled way ahead of the red dots. Like here is the blue average is something like, or median is like 50 billion real GDP. And the red median is like 30 billion GDP, which is a huge difference, by the way. A and B. all of the richest districts are blue. Right? And so what happened was a gigantic shift in 10 years with red and blue being equally matched to suddenly blue having all the money. So Republicans paid for 2008. We know that inflation is dilution, but it wasn't randomly distributed dilution. It went to the coasts first and the blues first, and some poor, like, Oklahoman cashier got that printed dollar last, because the candle, in effect, meant the blues got the money first. And, you know, The thing about this is, 2019 to 2016 is the Democrat administration, and the whole thing was done in such a way that it was deniable and invisible. It's unconscious, probably, even to those doing the imposing, but it just so happens. The cost of the print was imposed on the political opposition. Democrats became rich, Republicans suddenly became poor, and of course this had knock-on you know, woke capital, and it went to blocking Republicans out of jobs and censoring them, and so on and so forth. This also bit up housing prices. This is also what's caused, you know, student loans, and there's a bunch of different things, which that printed money is really the plot of the entire 2010s. It's the actor behind everything. But once you realize, actually, because Republicans were in the system— and they couldn't exit the system. They got diluted by the system and they didn't know that they were. Is that pretty

Marty:
And

balajis:
crazy?

Marty:
you had, it is, and then you had the shale bust going on during this too, so

balajis:
Yeah.

Marty:
oil and gas companies weren't making as much money. And.

balajis:
Well, so, okay, so I mean, fracking actually, didn't fracking happen in the mid 2010s? Like, that was like probably one thing that was going well for Republicans during that time period. But

Marty:
It drove

balajis:
I

Marty:
all

balajis:
don't

Marty:
the

balajis:
know

Marty:
prices

balajis:
all the...

Marty:
down though, so it went boom and bust.

balajis:
Okay, I have not followed up very closely, so I'll defer to you on that. But let me tell you something else. You know, there's another group at least that was diluted down and paid for 2008. You know who they were?

Marty:
Mm.

balajis:
some of the Arabs. Why?

Marty:
Okay.

balajis:
Because food price spikes help trigger Arab Spring. So

Marty:
Yep.

balajis:
inflation was exported outside the US and you know it's one thing if you know you find that your cost of groceries has doubled. It's another thing for someone who's like close to subsistence. It's like too much, right? So that guy who set himself on fire who helped trigger the Arab Spring, was doing it in part because of food prices. So all these countries were pushed into chaos. Libya is still in chaos. The thing about this is ostensibly they got quote freedom out of this, but just think about this. Inflation, invisibly, deniably, was pushed to Republicans and to Arabs and to essentially those people who were like the official enemies both at that time and in some ways today. Once you realize that, you're like, oh, everybody who's within this system, the dollar holder is the bag holder. Because when they do this giant print, they're trying to bar the doors, you know, whether it's the operation choke point that, um, that Nick Carter's talked about, whether it is, um, just shutting down red banks and gray banks and consolidating the money at blue. Um, it's even they're going after FinTech as Caitlin Long has talked about. Um, They're trying to roll out this FedNow and to call it not a CBDC when it's got all the functions of a CBDC. It's central bank digital control, even if it's not a central bank digital currency. Do you see what I'm saying? Right? So because it, you know, just to show you that I wrote this post on this and I was actually pleased to see that RFK Jr. actually quoted it and RT'd it because here. I think the reason is what they what they always do with the establishment always does is they change the words. and they think that changes the meaning. So it's like, oh, FedNow, it's not a CVDC, therefore it's fine. Actually, no, because if you look at their own documentation, can you see this visual? FedNow is in the middle of every single transaction

Marty:
everything.

balajis:
of

Marty:
Yeah.

balajis:
everything, right? So the sender, the sending financial institution, the receiving financial institution, the receiver, all of them are now choke-pointed through FedNow. Now, of course, there's some of this already with Fedwire, but it's not as granular. They're not seeing every transaction, all the metadata on it, A. And B, when you read their documentation, it's a little small, okay? But what does that say? Step three, okay? And they'll always basically... lie until you can find the exact line in the documentation. Okay, then when you find the exact line, here's what it says on, let me find the zoom in here. Step three, the FedNow service validates the payment message and complies with applicable controls. In other words, they run code over that transaction and check the metadata to determine whether it's approved. Whether you are approved, whether your pattern of transactions is approved. You've got every data point here. You've got the sender, the sending file. You can do all kinds of stuff with this if you have that data set. So impose applicable controls, and then moreover, they talk about the different types of transactions. they include consumer to government and government to consumer. So consumer to government is your account can be drained, right, and government to consumer is they can do stimulus boom like that,

Marty:
Air drops.

balajis:
right, just drop air drops, exactly, helicopter money, right. So central bank, you know FedNow, I put, it's like a virus, this is what a lot of what they do is, it's a virus that has evolved to evade recognition by changing its sequence without changing its function. So you say Oh, then it must be OK. No, it's not OK. It's still central bank digital control. Right. So, so essentially the full scope of what they've rolled out is. And again, I say it's like, it's like, you know, woke America is like chaotic evil. The communists were lawfully, woke America is like chaotic evil. So it's not like, I'm not saying it's like coordinated because a lot of them are too dumb to know how to coordinate. It's coordinated in the way I said it's like tribal, you know, every, every. actor is looking for what advances blue, what attacks red and gray. So you put that all together and what do you get? You get something where, um, it's already hard for American citizens to like open foreign bank accounts, like a lot of reporting stuff, whatever. Um, a B is, uh, lots of red banks, gray banks are being shut down implicitly by having their funds moved to money market funds or blue banks, incentives have been set up for slow death. See, um, they have, they're going after crypto with checkpoints and stuff like that. D, they're rolling out FedNow. E, the treasury buybacks. Have you seen that?

Marty:
Yep,

balajis:
Right,

Marty:
2024.

balajis:
so treasury buyback. Yeah, okay, so here's the thing. All right, look, yeah, companies are not the same as governments. But if you take a company, a poor company has to pay high rates. If it's trying to, if you're a poor and you go for a loan, you're gonna get a high rate. A really rich company like Apple can borrow at low rates. And an insanely rich company like Apple can do stock buybacks. But how the hell can you be both really poor and giving out high rates on your loans and really rich at the same time, right? With what money? is Treasury gonna do these buybacks? The entire stupid rule of Goldberg system where you're issuing bonds, and of course they're saying, oh, all we're doing is changing the liquidity, the maturity structure, and we're adding liquidity to the system. What's actually happened, and I think Lin-Ald and others are on top of this, here, this guy Otavio actually had a good thread.

Marty:
I mean just opening the buyback window up and even signaling that like a year Before they plan to do it. It's just like oh, we know there's gonna be no demand for this. We're gonna be the only buyers

balajis:
That's exactly the point. Like essentially, here, see the, there's the foreign buyers. This is like the big one. Foreign buyers are just opting out of the market. This guy, Tavi Costa, has some good graphs on this. Let's see. So. see this, foreign holders of US Treasuries is a percent of total debt.

Marty:
And

balajis:
Can

Marty:
we're

balajis:
you see

Marty:
back

balajis:
that graph?

Marty:
to what, 2003 levels?

balajis:
Yeah. So, and it's plummeting, right? It's accelerating now. So like in a sense, 2013 was peak America in this sense, like the most confident, then people started just divesting, divesting, divesting. I mean, you're 2008, like basically up until this point, you know, maybe a little bit more, there's like a flight to quality and then people like, uh, no, thank you very much. And they started divesting. This is also when wokeness started, you know, right? And Now it's accelerating because there's you know you can you don't have to save in treasuries you know you can save in obviously bitcoin they're not there yet i think el salvador hopefully and you know others can get them there but what they're doing which is also fine and good is gold gold is just going i mean this is his arrow over here but it's gone way up right um like here's the purchases like visual capitalist has a better thing on this

Marty:
If you go back to like the beginning of the century, Russia and China have just been stacking gold like crazy.

balajis:
Yeah, and you know what's interesting? India has been too at the individual level. It's like, I'll show you a graph on that. So what's interesting is in Russia and China is at the state level, India is driven at the individual level because of demonetization and a few other things. So you see this 30 years of central bank gold demand, kaboom, just going vertical over here, right? And so the thing is that you have, I mean, here's basically what just happened. putting it together. The Fed has killed its own banks. It's killed many of its institutional bond buyers. It has driven away foreign buyers of bonds and it's about to issue tons of new bonds. And it's got a treasury buyback program. So now they're finally doing the thing where they're getting rid of all artifice and they're just connecting the Fed's printer. to buy the bonds from Treasury. So the government issues bonds, and the Fed either buys them directly with printed dollars, or they get some straw purchaser like JPMC to do it and pretend that the Fed isn't buying them directly, right? But obviously, if the Fed is just directly buying bonds from Treasury and just printing the money and putting it in the Treasury General Account, without, you see, part of the thing is the participation of foreigners and others in this, I mean, Imagine if like, if you just set up a company and or you set up like your own cryptocurrency and you issued a ton of it and you said it was worth a million bucks, it is somebody else's participation in that that actually makes it have some value. And the more people who participate in it, the more it actually has value. Let's take let's say let's say it's a share in a company right? Obviously, the more people who think that thing has value, the more it actually does. And the fewer, the less it does. So putting all the pieces together, the US has just contracted on the global stage. It's not a unipolar world anymore. It's a multipolar world. Blinken is talking about negotiating with China over Ukraine. The US has lost control of the Middle East. It's lost control of Brazil. It's lost control of India. It's lost control of certainly, you know, the like. like countries like France and so on are breaking away from it, if not fully out of its control. It's fighting the, you know, it's lost control of Twitter. It's fighting, you know, grays and reds. The blues are fighting grays and reds domestically. And it's about to do these treasury buybacks in early 2024, which they've announced. So, so, you know, you have something where they're going to just either directly or through a straw purchaser, print the money to fill up their own treasury. I think that feels like end game to me, right? Because there's gonna be a huge amount of pressure to use that printed money to print more, to fix these mortgages or mortgage backed securities, commercial real estate, all these things are crashing, to help people with student loan payments, to help people with credit card debt. You know, this comes to the people's QE, if you've heard that. And I don't know how long it takes. As I said, I think it's like 10% months, 70% years, 19% decades, 1% centuries, but I don't think it's like very long. If all that comes together, then putting it all together, you have something where the economy is like Swiss cheese with more holes than cheese, because you can't like, it's not like there's like a healthy personal savings, you know, sector that you can tax to go and. bail out the other parts. People are indebted up their eyeballs, right? Many households don't even have enough to pay like a few minor expenses. So if everything is Swiss cheese, the only healthy sector you have is like the tech sector, maybe, and even that, if you just mulch the whole thing, it wouldn't pay for everything. So what happens I think is, like a gravitational black hole type implosion, everything and anything. like when when the what the printing really represents is everything that can be seized will be seized it's like this black hole of blue right everything just gets dragged into the mall not just your dollars like every stock that's on a blue exchange um certainly every bond probably blue real estate and by the you know how like uh this is a this is a scenario right but I mean, real estate seizures were actually very common in the 20th century, like the Soviet Union, Russia, like many countries had real estate seizures, land seizures. I think the chaotic version of that is, I mean, this is again, sci-fi scenario. After all, the Fed has done, it's bought your mortgage-backed securities, right?

Marty:
Mm-hmm.

balajis:
So it owns a big piece of your house. So you need to allow unhoused people to go and live in your house.

Marty:
Yeah, you got that

balajis:
Okay?

Marty:
extra bedroom still, don't you?

balajis:
Right. And the thing is, anti-squatting, or like the squatting laws and stuff in California, they keep weakening them. I mean, is this that far away from allowing a homeless person to sleep in the doorway of a guy with a small business? That's common in San Francisco, right? and you just take it one step further and you say, oh, well guess what, the Fed bought a piece of your house, so therefore you need to open up the garage for these people who don't have homes. Like that's one way you can do property seizures. There's probably 50 other ways you can do it, okay, if the government is really getting creative with this stuff. But. I mean, Credit Suisse showed that property rights are not sacrosanct, even in Switzerland. The bondholders, 17 billion in bonds destroyed. You don't have to care about those bondholders to know that even really rich, well-connected people in blue America and blue controlled territory, like blue G7 states, their property rights, these multi-billionaires are getting totally wrecked by the state they trusted. That means that the average Joe has absolutely no chance unless they get out. Right? That's a lesson really of SVB or whatever, is every one of these tech guys, all of these CEOs, 40,000 tech CEOs, many of whom are blues, just got absolutely blindsided by the establishment. Like essentially their life savings go, there's no heads up, there's no warning that you know, you have this notification on your website, oh like I've got cookies, okay, the regulators push to see that you've got cookie, you know that you know that you've got cookies or not on your bank website. You know they don't push the notification saying your bank isn't solvent. And this is, do you know what I'm saying, right? So it's all the regulation, none of the protection. It's an architourney. And it's true for not just, again, as I said, not just SUV, all the banks have this problem, or let's say a very large percentage of them. And so if you put all that together, this thing is just, I mean, one of the reasons that I, you know, put out the video and the stuff that I did, like, you know, a few weeks ago, is when you, can you kind of look at the synthesis of everything, it's Wiley Coyote World. It's literally just over thin air. Right. You know, and again, I can say it study after study, but I'll just give you a few more, right? Here is the Stanford study, the 2.2 trillion number. Many banks face the same risks that brought down SVB, a sobering new analysis finds the banking sectors unrealized losses. I mean, 620 billion was big, but they're thinking it's 2.2 trillion. Who the hell knows what the actual number is, right? They looked at 4,800 US banks and they found SVB is not an outlier. That's the thing, it's not like some tech guys doing crazy things, okay? Many other banks have these issues, okay? Rubini, who hates crypto, and is coming at it from a totally different direction, is saying something very similar, right? most U.S. banks are technically near insolvency and hundreds are already fully insolvent, basically, here. Is Dali-O? Again, saying some of the same things that I've been saying, which are. It's not just a banking issue, it's a global issue. All sorts of entities, pension funds, insurance companies, all around the world. There was a lot of buying of these government bonds which have gone down in value. And it wasn't, by the way, like, people will keep talking about interest rate risk and so on, duration risk. It's not risk in the sense of like being hit by a tornado. It's not duration risk, it's devaluation policy. The Fed has a lever where they devalue the asset that the treasury just sold to people. It's literally like you sold some people something, you said it's worth a billion dollars, and I hit a button, it's worth $800 million. And now you're totally destroyed. And then when you go bankrupt, it's blamed on you. That's basically what's happened. So. So this system, it's like, it's this Wiley-Coyote system where everything is basically,

Marty:
FAKE

balajis:
it's fake and there's like only air beneath it. And I don't know when people are gonna look down. But when they do, they're gonna be like, okay, can I grab onto something hard? So, you know, some territory, some firm, like piece of land emits this just total descent, right? That's Bitcoin, that's gold, that's the allocation. I think location is, if you are in America, be in a red state. But I think it's going to get, I mean, I think it's going to be potentially quite nasty. Like, I just got to say, it's like, you know, it's something where. A rich country that suddenly becomes poor. I mean, you know, like, I look at BLM and Jan 6th as like a flash forward, like a preview

Marty:
Tremors.

balajis:
of the future. Go ahead.

Marty:
Tremors before the big earthquake.

balajis:
Yeah, exactly, because you know, there was this thing, you know, it's hard to track this stuff, but these guys did a good job. Like, civil unrest has just been rising in the US. It's stochastic, but you have the general sense of the place being just more disorganized. Like, look at the here's, you see this GIF over here? Right? So there's like shooting, riot, etc. And You know, it's like, there's a few, and then, you know, it's stochastic, so it goes up and down, but it does seem to. So here's like BLM type stuff starting then.

Marty:
shit.

balajis:
These are all major instance, by the way. and it ebbs and then,

Marty:
them.

balajis:
I mean this is like, this is way bigger than this, right? Like this is just, you know, just some of the George Floyd instance. And I mean, there's another map, like the. There's a few of these, but.

Marty:
Yeah, now you can feel it too. Who knows if it's the Twitter algo or if it's real signal, just like the amount of videos you see of people fighting in the streets and

balajis:
Yeah.

Marty:
shooting each other.

balajis:
Yeah, it's like, it's like not look at this. This is like how many different, you know, protests and rallies and so on were there. Right. That's like hundreds. It's like all the way to Alaska and Hawaii and whatnot. Right. So exactly. You just feel a society that's It's not even necessarily all ideological. It's just disordered. Right. It's guys with face tattoos and it's just like Look, I mean, you can be pro Second Amendment, but there's a lot of shootings, random shootings, you know, it's, it's, you know, it's something where This is also before an economic collapse has happened. Right. And unlike 2020, there isn't lockdown. So people aren't kept in their houses or whatever. Right. So I don't know. I it's one of the things about all this is a lot of these things are digital, where they're so everyone's everyone, for example, like after SBB, you know, and the banking stuff, everybody became they were like, oh. Of course, you don't keep more than $250,000 in a bank account. The FDIC limit is there, blah, blah, blah, blah. And you know why that's actually totally bullshit? It's bullshit because the FDIC itself, you see that clip that I played where they themselves talk about how they don't want to tell the public too much about the FDIC

Marty:
Yeah, they were

balajis:
limit?

Marty:
like wargaming it in like

balajis:
They're

Marty:
November

balajis:
wargaming

Marty:
of last

balajis:
it and

Marty:
year.

balajis:
they're like, the public thinks that these banks are more safe than we do. And we wouldn't want them to get the wrong idea. We wouldn't want them to outside. Everybody in this room can understand the legalese, but outside this room, they shouldn't, right? So it's like intentional that people were kept unaware of FDIC limits, or it's not top of mind, in the same way that the banks hid their insolvency. They tell you that you've got cookies on the website, but they hid their insolvency, right? So, I mean, I'll just give you one more thing on this, which is, Like basically. Janet Yellen. Did not sound alarm about the mortgage crisis.

Marty:
Yellen or Bernanke? Subprime isn't contained or we were talking recently.

balajis:
Well, there's a few of them here. Yell and fear housing busts but do not raise public alarm. Essentially, they're not gonna tell you. I collected a bunch of links on this, but basically those who can see the analytics, they're only gonna tell you there's a quote crisis if it's like the debt ceiling thing where it's like in their interests. Here's another example, like April 10th, 2008. Do you see this? Bernanke says the U.S. could be facing a mild recession.

Marty:
Yeah.

balajis:
Okay? April 13, 2023, Jerome Powell says a mild recession. Okay? Now remember, by the way, he said this after, basically what happened was, on April 10, 2008, after his Fed intervened in a massive bank failure, which was Bear Stearns, Bernanke reassuringly told us we might be facing a mild recession. Within 158 days, the world realized it was actually in the midst of a devastating global financial crisis. Wall Street ran to the exits before Main Street even knew what was happening. And then the printing of trillions began. 158 days. Okay. Almost exactly 15 years to the day later, on April 13th, 2023, after his Fed intervened in a massive bank failure, Jerome Powell again reassuringly told us we might be facing a mild recession. This time, the world may soon realize it's actually in the midst of a global fiat crisis, but this time, the world might get to the exits before the Fed uses them as exit liquidity if they can get there before the printing of trillions begins.

Marty:
Thank God we have Bitcoin

balajis:
That's why,

Marty:
now.

balajis:
exactly, right? So... So that's allocation, location, I think red states or foreign states. I mean, if you want to live in an Anglo country, Australia and New Zealand are actually the best managed. I showed some numbers on this, but they have surprisingly good debt to GDP ratios and other things. For maybe it's the China influence or what have you, Australia actually still digs stuff out of the ground and sells it. They're like more in contact with reality to a greater extent. Like in a sense, Australia's conservatives are actually cutting spending and, you know, restricting immigration to skilled immigration. And Australia's liberals are actually against war with China, like Kevin Rudd, you know.

Marty:
Mm-hmm.

balajis:
So it's like a functional right and left where, you know, in the ideal circumstance, they complement each other. It's like a steering wheel, you know. okay maybe central right or central left. But overall I feel like they're, they've just got a higher state capacity, you know, down, something about down under, right? And in a sense it might be like Australia and New Zealand are to the Anglo world this century what Hong Kong, Taiwan, and Singapore were to the Chinese world last century. They're like the relative islands of relative stability when a lot of the rest is just totally melting down after this, you know, whole thing. Another analogy, by the way, one more analogy here is Argentina. How much do you know about Argentina?

Marty:
Yeah, no. They've had a crazy hyperinflationary crisis after crisis, but they seem

balajis:
Yes.

Marty:
relatively stable, all things considered.

balajis:
Well, I mean, not so I mean, I actually don't know where they are as of right now, but they were censoring inflation numbers recently. The main thing about Argentina is they were a rich country that became poor. Argentina's unprecedented economic boom to bust history. Okay? Riches in Argentina was once—so like in the early 20th century—remember my thing about history running in reverse? A rich country that became poor. Riches in Argentina was once a commonplace when it was one of the wealthiest in the world. Now it faces bankruptcy and staggering debt in a saga it can't seem to escape. Do you know how it became poor? It went from among the very top economies to the very bottom of the list. Right? Can you see the screen?

Marty:
Yeah, buddy

balajis:
Yep.

Marty:
it up with the IMF too many times.

balajis:
No, is that, well, I mean, maybe nowadays, yes, but essentially, until the middle of the century, such a scenario is simply unimaginable, right? And at the end of World War II, it was considered one of the most stable currencies in the world alongside the pound and the dollar, okay? And then to the point, it was nowhere in sight. It was a magnet for, you know, even in the 1950s, it was significantly higher than in Germany. But then what happened was, Archety's decline was well underway, okay, and what happened was this guy, Juan Peron, what did he do? The Peronist guiding principle was profligacy, and then when nothing else worked, to go into debt, print money and let inflation gallop. Triple C expenditures and double number C employees. Does that sound familiar, right? But now, here's the other thing. The other thing they did was right-wing stuff. As part of an Argentina first policy, tariff barriers were put in place to protect the country's weak industrial base. The aim for Argentina to be as self-sufficient as possible, gas plants were purchased, a staggering number of inefficient state companies were founded. And... Nothing symbolized more than the purchase of Great Britain's ailing railway system, 150 million GBP, 487 billion for expensive junk equipment. Fireworks were set off. You know, the disaster was celebrated as a national triumph. By the time a few years had passed, Argentina slipped into its first deep economic crisis. Right. And then mass. So point is like this

Marty:
We're

balajis:
rhymes

Marty:
doing the same

balajis:
a

Marty:
thing.

balajis:
lot. It rhymes a lot with the current moment. where it's a rich country that thought it had infinite runway and it combined like the worst of left and right, like the nationalism of we can build everything in the country and the socialism of we'll print all the money and, and, and, and give it out there. It didn't have the same worse. That's true. Not to the same extent, but, uh, it did have like, you know, a hundred billion dollar inefficient train. Go ahead.

Marty:
mechanically the same.

balajis:
Similar, right? So, and then finally, I think the third thing, I was just saying, allocation, location, organization. Meaning, the ultimate store of value is really a high trust community. Because if you're just like us, this is why, I mean, I'm sympathetic to the book, The Sovereign Individual, I like it, it's a good book. But I do believe in the sovereign collective. The startup society, the network state, right? Where... um it's not just somebody on their own because humans are social animals you know like uh you know that steve jobs emailed i was making the rounds a while back where he's like i do not go and cut my own wood i don't um you know i don't provide my own power like i i i'm all these people around me are this web of people that i'm dependent on right

Marty:
Mm-hmm.

balajis:
and if anybody had a right to be like you know that obviously Steve Jobs is an amazing person and does a lot more than most people. But even he understood that he had to be cooperative with other people on things, right? And so I think that's the third thing is to not just be every man for yourself, but after you take care of yourself, after you win, then figure out like ideally start building your community now, right? So that's organization. Even literally... 10 person meetups, building local community and trust or whatever, 20 person, whatever it is, right? That's way better than just not having a community to fall on in the event like there's some issue of some kind. So it's like allocation, location, organization. All right, let me pause there. I know

Marty:
Um,

balajis:
I just, that

Marty:
we

balajis:
was a

Marty:
just

balajis:
big

Marty:
did,

balajis:
download. Go. Yeah.

Marty:
we just did four and a half hours. This is going to be, I think this might be the longest podcast we've ever recorded. And

balajis:
Alright.

Marty:
probably one where I spoke, spoke the least, but I'm happy it turned out that way because just letting you run with all this stuff again, because like I said earlier, like the, um, the way in which you connect the dots so elaborately. And I really liked that, that history. Like, we're moving from the central point, if you go backwards in time, forward in time, we're seeing this sort of reflection in this rhyming. And I mean, I completely agree with, oh, pretty much everything you just said. Like again, I think this is an important conversation to have and needs to be had more out in the open, because again, I'm a big believer in, we just need to confront this reality as quickly as possible, rip the band-aid off, get as many people on the lifeboats and Bitcoin and... red states and smaller communities as possible, as quickly as possible. So thank you for putting this all together. I mean...

balajis:
Thank you, sir. I have a couple of questions, one or two for you if you wouldn't mind, which are,

Marty:
Sure.

balajis:
so you know you said I, oh one thing I would just say, history running in reverse, executive order 6102, you know the gold seizures and so on, I think they're going to try something again, but history is running in reverse so this time they fail, right? And so that's like another way of like thinking about the hour of history or what have you. Um, I'd, I'd like to know, you know, you mentioned that me putting it together was a, was like a black pill or something. I didn't mean it like that because I actually think like red States and Western European countries will probably do better afterwards. Um, you know, like as independent kind of things, but I'd like to know what you found most interesting or what do you feel like connected or what was novel? That'd be, you know, you can cut this part if you want, but just, you know, for my

Marty:
Now

balajis:
own

Marty:
we'll

balajis:
interest.

Marty:
keep it in. I think what I mentioned, like the history rhyming. If you go backward

balajis:
Mm.

Marty:
in time and forward in time from 1950 and look at this sort of reflection, really, try something, because that's something we say a lot, is like history doesn't repeat, but it rhymes, and a lot of people point to Weimar and the Roman Empire, comparing it to the US Empire, but tying in like Soviet Russia, China. I think that really, it shows like the magnitude of what this is. It's not just some isolated empirical downfall like that's happened. That happened in Rome and Weimar. It's like much bigger than that. I think that's what I got from it. And then the other thing is just how oblivious most people are. I think they are like a wily coyote sitting out in the open air. Most people do not understand.

balajis:
And

Marty:
Which is scary.

balajis:
it's, yeah, it's, you know, what's weird about that is I think there's a big gap. I think the single biggest binary predictor is actually like US citizen versus not. Because like people outside, this is the thing, all right, ready, here's the most, here's the weirdest thing I might say, okay? You're like, oh my God, I'm prepared for this, right? Okay, so here's a weird one. And you might disagree with my framing, but just bear with me for a second. In early, in like January 2020, most people at the time didn't, you know, like journalists would call you a racist, et cetera, for saying that COVID-19 might become a thing. Like, oh, you know, I can't believe you're talking about a virus from China as if it could be a risk. It's a non-issue. You know, I can't believe you're stirring up, you know, etc., etc. Right. They were attacking. I don't know if you remember that time period, January

Marty:
Yeah.

balajis:
2020.

Marty:
Yeah.

balajis:
Right. OK. And so that was like the mainstream opinion. This is nothing to worry about, nothing to be concerned about. Citizen shut up. You're an idiot. OK. And then there was a contrarian opinion that, hey, actually this thing that China shut down an entire city for might be concerning and we should pay attention to it because there's like a physics of this or a biophysics or biology that suggests that virus could go really vertical and it seems to be infecting a lot of people. And but what's happened as of today, and again this is where your audience or you might two or three years later the numbers reported are 700 million people infected, seven million people died, including one million Americans, A. But B, people don't think it was that big a deal. Which means like this this thing like if I had said in January 2020 one million Americans will die, seven million millions of people worldwide, like that would have been considered so extreme. I was like very measured actually I think at the time in the public statements right. That would be considered so extreme and so crazy. That's like an end of the world scenario. You're seeing millions of people are going to die from this. Are you crazy or stoking panic etc. But now today that's not only in the rear of your mirror. We're like, eh, who cares, right? Now you may people may disagree with the death counts or I get that this folks in your audience who may disagree with me on this. My point though is like the magnitude of the kind of thing that one can process and then say, hey, it wasn't that bad, is actually surprising. And I actually kind of think that while this upcoming fiat crisis will be quite disruptive, I actually think that like the world will actually get on okay, because most manufacturing is actually outside the US, most like oil and stuff is outside. Lots of stuff is outside. It's kind of the opposite of the Zion argument. Much of the world is actually decoupled in reverse. I showed you that graph with all the stuff. And so what that kind of means, I think, is that the economy will kind of keep ticking. I mean, it'll take a hit globally, but it'll kind of keep ticking, and the worst hit places will be those that are closest to blue America. I think red America will do okay when it gets back to, you know, like, For example, it can actually build a pipeline again, or it can, maybe it won't have property rights, but we don't know. But it can cut things down without federal regulations blocking it from things. And Western Europe can do things without these crazy carbon credit kind of things that are all pushed top down. They can rebuild their energy production. But it's one of these things where, I don't know if that's quite a white pill, but it's like the

Marty:
Humans

balajis:
bounce

Marty:
are adaptive.

balajis:
back, Yeah, it's like I kind of think blue America is going to get the worst of it. That's my hunch because they will be the last, they'll be in this case the ones that hold on to the dollar and the institutions all the way down and others are exiting already before them.

Marty:
building

balajis:
So it's

Marty:
the

balajis:
like

Marty:
new

balajis:
the

Marty:
world. They're already building the new world, too.

balajis:
Yeah, exactly. So in 2008, it was Republicans and foreigners that paid the price. Now

Marty:
Yeah,

balajis:
it might be in reverse.

Marty:
yeah, I completely agree. It's not a black pill, it's a white pill. And I've been saying this in the newsletter and publicly, we just need to rip the bandaid off, come to grips with this sooner than later. Seems like you believe that it's gonna be forced on us sooner than later, whether people want to delay it.

balajis:
Yeah, I think there's a non-zero probability of that. And we'll see. Stay humble. Stack sets.

Marty:
That's, I guess we can end it there. I have to run to a lunch. This has been incredible. Probably one of the best episodes we've ever recorded. Thank you so much for spending so much time with us. I think, again, this is an extremely important conversation that needs to happen and more people need to listen to. And keep fighting the good fight. I know you've been getting a lot of shit for it, but I think it's important to get this view of the world out there.

balajis:
Yeah, I think people are coming around to it, but we'll see. Let's see, I mean, I actually don't want to be proven right, but I do want people to build their local communities. So

Marty:
Yeah.

balajis:
let's see if that happens. All right,

Marty:
Go do it.

balajis:
cool. Thanks, talk soon.

Marty:
Peace and love freaks. Peek-a-boo!

balajis:
Okay.