Ep 178 | David Sacks: The Banking Crisis Is Even WORSE than You Think | The Glenn Beck Podcast

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Speaker 2 We're filming this episode on the heels of the second largest bank failure in American history.

Speaker 2 If that weren't enough, the collapse of Silicon Valley Bank was followed immediately by the kind of rescue mission that only ever happens for the elites.

Speaker 2 In all the talks of T-bills and derivatives, many people find it hard to tell how this SVB situation will affect every man.

Speaker 2 After all, SVB donated roughly $73 million to Black Lives Matter. Systemic risk is the phrase that we keep hearing over and over and over again.

Speaker 2 Systemic is a word that has usually only been used or overused by overeducated leftists who treat BLM like a religion. Today's guest is an expert in all of these areas.

Speaker 2 Entrepreneur, investor, he co-wrote the diversity myth with Peter Thiel in 1998, and he's a founding CE, sorry, COO of PayPal, original members of the so-called PayPal Mafia.

Speaker 2 Most recently, he has started the all-in podcast with three friends, and it has exploded. People are drawn to the gathering place of economics, tech, politics, social issues, and poker.

Speaker 2 Three friends who don't always disagree, but are still friends, you know, like America used to be.

Speaker 2 The notoriously leftist rag Slate recently described the podcast as the infuriating, fascinating, safe space for Silicon Valley's moneymen. Today's guest is one of those money men.

Speaker 2 He's what I would call an elite who is also anti-elitist. He is a big tech entrepreneur with working-class ideals, inspired partly by his grandfather's candy factory.
Today, welcome David Sachs.

Speaker 2 Before we get to David,

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Speaker 4 Hey, David. Thanks for coming on.
Hey, Glenn, how's it going?

Speaker 2 Yeah, of course. It's good.

Speaker 2 So it's been kind of a wild ride here, and I'm not sure if it's over.

Speaker 2 But in a nutshell,

Speaker 2 who's responsible for the mess we find ourselves in and SVB?

Speaker 4 Well, I think that what we're dealing with here is obviously a banking crisis that goes well beyond SVB.

Speaker 4 I mean, you now have Credit Suisse, which was the number two bank in Switzerland, which is a, you know, they call it a GSIV, a globally systemically important bank, that basically went under and had to be saved.

Speaker 4 You've had now four banks in the U.S.

Speaker 4 basically go under or have to be backstopped to the point where they would have gone under if they weren't backstopped.

Speaker 4 So clearly, something's happening. Five banks in under two weeks, there's a larger phenomenon here.
And I think it's pretty simple.

Speaker 4 I think that we've had the fastest rate tightening cycle ever, or at least in our lifetimes, where the Fed has jacked up interest rates from almost nothing to almost 5%, and they did it in less than a year.

Speaker 4 They did it in like nine or 10 months. And so that's created a tremendous whipsaw effect where

Speaker 4 the value of assets that depend on interest rates, which is pretty much all of them,

Speaker 4 they immediately have a massive change in values.

Speaker 4 So what you're seeing is that on the balance balance sheet of these banks, all these assets that they thought were safe, like mortgage bonds, like treasuries, you know, 10-year bonds, these weren't supposed to be risky assets.

Speaker 4 Right. You know,

Speaker 4 these aren't the derivatives of 2008.

Speaker 4 This is sort of supposed to be the safe money. But you're seeing that they've been massively impaired in value.
because of the sudden spike in interest rates.

Speaker 4 And then on the other side of the balance sheet with deposits, there's been a huge sort of tightening of the money supply. So depositors are leaving for a bunch of different reasons.

Speaker 4 Sometimes they just want to get a higher rate of return in a money market fund. Other times, they're just drawing down capital.
Sometimes they're fleeing to go to a bank that they perceive as safer.

Speaker 4 Right. You know, one of the G-SIBs, we should talk about that.
But it's creating this tremendous stress on the banking system. And

Speaker 4 I mean, that's basically what's happening. I think SVB was sort of the canary in the coal mine.

Speaker 4 It was a more extreme example of this effect, but you're seeing it now play out really across the banking system.

Speaker 2 You know, I keep hearing, well, it was the canary in the coal mine. I think all the canaries are dead.

Speaker 4 We may not have many canaries left.

Speaker 2 Yeah, I mean, you know, I kind of feel like I'm standing in the mine shaft going, guys,

Speaker 2 all the birds are dead.

Speaker 2 Because

Speaker 2 what we did in 2008,

Speaker 2 you know, we violated the free market entirely. And then we just started printing this money.
And I think on it, you know, I think people, I'll give them the benefit of the doubt.

Speaker 2 They honestly thought this would work. They didn't know.
They were backed up into a corner. And so they did this.
Well,

Speaker 2 that has never worked. And I think they thought they were smarter than

Speaker 2 those who have done this in the past. And aren't we now just

Speaker 2 rearranging the chairs on the Titanic? I mean, we might be slowing it down. Maybe we've pulled back a couple of knots so we don't hit the iceberg

Speaker 2 as fast. But aren't we going to hit the iceberg?

Speaker 4 I think the situation is pretty scary because

Speaker 4 on the one hand, we still have pretty significant inflation, or at least that's what the reports are showing. There's an argument, I think, that there might be significant latency in those reports.

Speaker 4 But on the one hand, you've got this inflation that the Fed feels like it needs to combat

Speaker 4 with even higher interest rates. On the other hand, you have this tremendous stress that's building in the banking system.

Speaker 4 And I think these two things are fundamentally irreconcilable. I mean, it's sort of the silla and charybdis of

Speaker 4 our financial situation here. If you want to keep raising rates to combat inflation, you're going to keep turning up the heat on the banks until more of them crack.

Speaker 4 On the other hand, if you want to stop raising rates or cut rates to save the banking system, then

Speaker 4 you could have an inflation inflation problem.

Speaker 2 The real inflation problem. You have Biden saying $6.8 trillion in spending for his budget.
That's insanity.

Speaker 2 We can't keep doing this.

Speaker 4 And that's the thing. I mean, you see now how utterly irresponsible it has been.

Speaker 4 And I know that the spending and the money printing started before Biden, but he took it to another level, just a whole nother level. And,

Speaker 4 you know, because the guy's been been in Washington for 50 years. So his view of a win, what a win looks like to him is you pass a big spending bill.
The bigger the better.

Speaker 4 You know, the more trillions that you spend, the bigger the win.

Speaker 4 And remember, I think this whole phase of the crisis, you're right that it goes back to 2008, but I think this phase of the crisis really began in Q1 of 2021 when they passed that $2 trillion COVID relief bill for a COVID problem that had winded down.

Speaker 4 This was the so-called American Rescue Plan. The economy was already hot.
It had already recovered. We didn't need more stimulus.
And that's why Larry Summers said,

Speaker 4 an economist in their own party was like, guys, you're risking inflation. And they kind of poo-pooed him and said, oh, that's just Larry being Larry.

Speaker 4 He's just sort of like a mischievous troublemaker or something. Well, sure enough, four months later, the inflation came.
We had that shock 5.1% inflation print, I think it was in May of 2021.

Speaker 4 And what was the reaction? Oh, this is transitory. Don't worry about it.
This is nothing. This is a blip.
And what that allowed them to do was keep spending and keep money printing.

Speaker 4 So the Fed kept QE going for another six months, and the administration kept spending trillions and trillions more.

Speaker 4 Remember, they wanted even more than they got, three and a half trillion build back better.

Speaker 4 I mean, they just couldn't stop spending. And that's why they needed inflation to be transitory so they could keep going with their program.
But it wasn't transitory.

Speaker 4 And so we basically had this bubble of 2021, this massive, frothy bubble that inflated asset prices, that inflated bank deposits.

Speaker 4 And then finally, at the end of the year, in November of 2021, the Fed finally turned hawkish. By the way, it happened about two weeks after Powell was reconfirmed as Fed chair.

Speaker 4 He is the only Trump official who has kept around for Biden's term. And you have to wonder how much pressure he was under during that May to November period to tow the party line on transitory.

Speaker 4 You know, because I think the second that he was reconfirmed, he basically said he turned hawkish. So, you know, I think there's like politics all over this thing.

Speaker 4 So, Glenn, you know, people think the Fed is independent. I don't know how independent it really is.

Speaker 2 It's not.

Speaker 2 And I think, I don't know who leads who on that one. I think I do.
But,

Speaker 2 you know, when you look at inflation,

Speaker 2 David, I mean,

Speaker 2 I'm not you, but I'm not a dummy either.

Speaker 2 We have printed more money, and the Fed has,

Speaker 2 I mean, at least what they're telling us is about $8 trillion on their books.

Speaker 2 We have printed money like we're going out of style. I'm shocked that inflation is this low.

Speaker 2 How high? What is it going to take to suck the money back in? I don't think you could do it without collapsing everything.

Speaker 2 And how bad can inflation get with all of the money that we currently have spent?

Speaker 4 Well, Glenn, I think you're right.

Speaker 4 And I'm not like one of these so-called banking experts either or one of these modern monetary theory experts, but they're the ones that are going to be a lot of people.

Speaker 2 Wait, wait, wait, wait, wait.

Speaker 2 You've got to stop. You don't believe in modern monetary theory.
Because, I mean, that's like a fairy tale of Dr. Zeus, modern monetary theory.
Yeah, it is. Good.

Speaker 4 I'm saying that that's what the experts believe. Right.

Speaker 4 They have all these fancy theories to justify this ridiculous money printing. But, you know, it takes

Speaker 4 a more simple intelligence to understand that, hey, you just can't keep printing all this money. You can't keep going into all this debt.
At some point, you got to pay it back.

Speaker 4 And you either pay back the money

Speaker 4 by, you know, with sort of paying back with hard assets, or you print money to pay it back. And if you print money, you can get inflation or even a hyperinflation.

Speaker 4 So, look, I think you've been right about this. And,

Speaker 4 you know, it's just like we saw with COVID. All these so-called experts don't have a clue.

Speaker 2 So, that's one of the problems. I, you know,

Speaker 2 here in America, they keep saying, oh, it's the Trump voter that is so dangerous and out of the street, whatever. And then you look over in Holland, it's happening.
You see it in France.

Speaker 2 You're seeing it in England. This is not about parties.

Speaker 2 In reality, this is about elites and regular people.

Speaker 2 I really think, and I want to bring this back to Silicon Valley, I think regular people are like, I've played by the rules my whole life, and it is getting tougher and tougher for me to live up to all of these rules, whether they're just the woke rules that could destroy me or all the federal government rules.

Speaker 2 I've paid my taxes. I've worked hard.
I've played by the rules. And you guys just seem to get richer and richer in the banking community and in politics.
And you're destroying my life.

Speaker 2 How are we going to navigate through that?

Speaker 4 Well, I think we need,

Speaker 4 there's always going to be, I think in any society, some sort of elite class, but you want that elite to be based on meritocracy. You want them to know what they're doing.

Speaker 4 You want them to be held accountable if they fail.

Speaker 4 And I think the problem we have in this country is we have all these experts who are never held accountable for doing such a bad job on foreign policy, on the economy, on COVID, on everything.

Speaker 4 I mean, I think that's a good thing.

Speaker 4 And I think it's because of the media.

Speaker 4 The media has become their bodyguard and their protector instead of holding them accountable, which was their traditional responsibility.

Speaker 2 I will tell you, I said on the day the bank failed, SVB,

Speaker 2 and the president came out and said, no, don't worry, everything's great. I said, how many of these so-called experts are we going to listen to?

Speaker 2 The experts told us we're going to be fine in Afghanistan.

Speaker 2 The experts said we could collapse Russia in

Speaker 2 no time.

Speaker 2 The experts said they could print money and it wouldn't be a problem. And then the experts told us there was no inflation.

Speaker 2 Everything that has happened in the last 15 years with these so-called experts, look at COVID, look at Fauci,

Speaker 2 and

Speaker 2 with no one paying the price ever,

Speaker 2 I think the time of experts is coming to a close. And,

Speaker 2 you know, I said this years ago. You don't want the pendulum.
We're really good when we're kind of in the middle. You don't want it swinging way to the right, way to the left.

Speaker 2 And when that happens and there's a crisis, whichever way it's swinging really far,

Speaker 2 that side grabs it and says it's not swinging anymore. And we're kind of entering those days where the regular person

Speaker 2 is going to wake up at some point and say, my life is being destroyed. And they're going to want some heads.

Speaker 2 And I'm not, I mean, I am so against, you know, all of these, the violence in the streets and everything else. I'm not talking about that.
I'm talking about how do we navigate? Can we wake?

Speaker 2 anybody up in the elite class to recognize what's happening to people.

Speaker 4 I think it's scary out there, the anger.

Speaker 4 You know, I understand the anger, and I think it's, in many cases, justified, but I'm worried that it's getting out of control. I do.

Speaker 4 And

Speaker 4 it's going to lead us to a bad outcome. It's certainly not going to lead to good policy, but I agree with you.
I mean, there's been a profound failure of the expert class.

Speaker 4 It's not just, Glenn, that they've... missed problems.
It's that they've actually caused the problem. Yes.

Speaker 2 And then lied about the problem.

Speaker 4 And then lied about it. Exactly.
So Fauci's job was to protect us from viruses. What does he do? He funds gain of function research.
Right. You know, Victoria Newland, what's her job? Diplomacy.

Speaker 4 What does she actually do? Fend conflict with Russia.

Speaker 2 Right.

Speaker 4 You know,

Speaker 4 these economists who are supposed to give us sound money, what do they do? They print so much money that we're in the economic crisis that we're in.

Speaker 4 So it's just like unbelievable that they're literally doing the opposite of what they're supposed to be doing. I mean, just literally the opposite.
And

Speaker 4 it should be easy to replace them because it's so obvious that they're failing, but you can't, or it seems like you can't, because again, we can't get honest media coverage of the situation.

Speaker 4 So, it's a it's a really bad spot for the country to be. And I can see the anger just kind of rising up because I felt it.
You know, I was accused of being one of these Silicon Valley elites, right?

Speaker 4 Um, you know, and kind of

Speaker 4 you know, even though I've spoken out on all these issues, and um, it's it's scary just how much anger there is.

Speaker 2 I know, I know.

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Speaker 2 Let's go to Silicon Valley

Speaker 2 and

Speaker 2 what is being called a bailout, but it is not the bailout that we saw in 2008.

Speaker 2 But because of the way the Treasury and FDIC did it, I can't imagine this is going to make anything better because they have bailed this bank out as far as all the depositors, including the people who had $400 million in the bank.

Speaker 2 And I don't want to see anybody go under, but if you're going to do that, now you're on the hook for everyone. But instead, they say, no, it'll just be the critical banks.

Speaker 2 Well, we'll end up with four banks, David.

Speaker 4 Right.

Speaker 4 No, I think that's right.

Speaker 4 I mean, I think this is a perverse consequence of what happened in 2008 is that I think this is something people just need to understand is that in 2008, I think everyone knows about Too Big to Fail, that these banks were considered too big and therefore the government had to step in and prevent them from failing.

Speaker 4 What they may not know is that that status was effectively canonized and enshrined in law. They don't call it too big to fail, they call it systemically important bank or SIC.
Right.

Speaker 4 There's even, so there's four of these in the U.S. are the Trillion Dollar Club.
They've got over a trillion dollars of assets. It's JP Morgan, Chase, Wells Fargo,

Speaker 4 Citi,

Speaker 4 and

Speaker 4 who am I forgetting?

Speaker 2 Goldman Sachs.

Speaker 4 It's not Goldman, it's

Speaker 4 Wells.

Speaker 4 Yeah, B of A. Sorry.
Yeah, that's right. B of A.
So these guys are in the trillion-dollar club. They're basically too big to fail.
And all the other regional banks are not systemically important.

Speaker 4 And so I think what you start to see last week is that people is that the deposits started flowing massively to the SIBs because people started to wonder whether their money was safe in these regional banks.

Speaker 4 And

Speaker 4 actually, you can see just today, JP Morgan Chase announced their new deposit interest rate is 0.01%.

Speaker 4 So basically they've slashed their interest rate to almost nothing, basically to zero, because so many people are worried that their money won't be safe except in these SIBs.

Speaker 4 So there's huge money flows happening right now to these systemically important banks.

Speaker 2 Which people don't understand.

Speaker 2 Those, the local and regional, 70%

Speaker 2 of all of our business loans, it all goes through these smaller banks. I mean, you collapse those small regional banks and the small local banks, and the economy goes to hell.
I mean,

Speaker 2 business is done.

Speaker 4 Yeah, exactly. And, you know, another thing that people may not know is just roughly half the deposits in the U.S.
banking system are uninsured. You know, this is not, I mean,

Speaker 4 there's always examples you can cherry pick of someone, some company or some wealthy individual being stupid, but this is really about business banking in this country. $250,000 is the FDIC limit.

Speaker 4 Just isn't enough for most businesses. They have to run payroll or do payables at the end of the month.
But it's never been a problem.

Speaker 2 But it's never been a problem because our banks were stable.

Speaker 2 Now that the banks aren't stable, now as a businessman, you're like, I can't put that money in the bank like that.

Speaker 4 Right, exactly.

Speaker 4 And there's a fundamental mismatch in, I mean, this is where I think the banking system is so crazy, is that what the consumer, and I'm including small businesses in that, think they're getting is so different than what the bank thinks it's getting.

Speaker 4 So when a consumer or small business goes to a bank and puts their money there, they think they're just getting a checking account.

Speaker 4 They think they're getting the ability to write checks, to do payables, to run payroll, get an ATM card.

Speaker 4 And it's a safe place to keep their money. What the bank thinks it's getting is a loan.
Right. Right? On their balance sheet, it's treated like a loan.

Speaker 4 And then they can take that loan and invest it, and they get to keep the upside on that money.

Speaker 4 I mean, so that's just like a fundamental mismatch.

Speaker 4 And it's, and this is what leads to problems: is that when those banks invest in things that are too risky because they get to keep the upside, then all of a sudden the depositor gets a loss.

Speaker 4 And then the depositor is like, wait a second, I thought my money was safe in the bank.

Speaker 4 And this is where I actually think that we do need like regulations.

Speaker 4 Can I ask you is to solve that?

Speaker 2 I mean

Speaker 2 again I know nothing about the banking system just looking at it as somebody who hasn't you know gone through business school and you know and had the indoctrination of we're fine the system is great and it'll never break why don't we just make sure that banks can't go out and uh and invest in uh

Speaker 2 you know stocks and and the and and play the games that they're playing Why can't we have those investments in a separate investment bank and then a bank bank?

Speaker 2 Why can't we separate those two?

Speaker 4 I know. That would make sense to me is

Speaker 4 that when you, that you should just be able to go get an account that's your, as a consumer of small business, that's just kind of your payments account.

Speaker 4 And you, you want the functionality, in other words. Right.
And look, you'll, you'll take a little bit of interest on that, but your, your objective is not interest maximizing.

Speaker 4 It's just getting the the functionality.

Speaker 4 You should be able to get that.

Speaker 4 But

Speaker 4 we have a weird system. I mean, this is kind of the way the banking system works.

Speaker 4 I think that what you have to do is, I think ultimately the quid pro quo here is going to be that we create some sort of like business plus FDIC, meaning some much higher level of FDIC that makes it acceptable for businesses to use banks.

Speaker 4 And then the quid pro quo for that that is the banks just can't do anything risky with that money.

Speaker 4 Or you're going to have to be much more tightly constrained. So

Speaker 4 now I don't know all the details of how that's going to get worked out, but I think that's kind of where we're headed on this thing.

Speaker 2 So

Speaker 2 SVB didn't do anything risky. I mean, they put it in treasuries, but they were 10-year treasuries.
How does this bank that got an A-plus rating from everybody

Speaker 2 and had a member of the Fed

Speaker 2 on their board make that kind of mistake

Speaker 4 I mean the only thing I can think of is

Speaker 4 that they thought inflation would be transitory that they actually believed in Biden yelling at a pal they were the one I think that was the mistake but that that was this yeah they were the one idiots who believed that other other or they were just completely asleep at the wheel clearly they did a horrible job with risk management but just so everyone understands like what happened there so they bought, so in the two years, last couple of years during COVID, when there was all this money printing, their deposits swelled.

Speaker 4 It's something like tripled from something like 60 billion to 180 billion. And then they put something like 80 billion in these

Speaker 4 in 10-year mortgage bonds, which are supposed to be safe. You know, they were paying like 1.6%.

Speaker 4 They thought they were doing something safe. And the Fed at that time was, you know, they do these dot plot projections.

Speaker 4 And the Fed was saying that, yeah, we don't plan on raising interest rates anytime soon. So now that's no excuse.

Speaker 4 I mean, they should have been like more aware of what was going on and they should have hedged the interest rate risks when the environment started to turn.

Speaker 4 But basically what happened is that they committed themselves to these 10-year mortgage bonds whose value went way down as interest rates spiked.

Speaker 4 And then the other thing that precipitated it is they just have a more volatile depositor base catering to startups. So

Speaker 4 they were on pressure on both sides of their balance sheet and they just mismanaged the whole thing. But so did the feds.

Speaker 4 I mean, you know, the feds knew there was a problem here going back to the end of 2022. You know, the Monday, like literally three days before,

Speaker 4 three or four days before SVB got put in receivership, the head of the FDIC testified that banks were sitting on $620 billion of unrealized losses from these types of long-dated bonds as of the end of 2022.

Speaker 4 So they've had that information for months now. Well, what have they been doing about it? I mean, they should have been proactively going to these banks and try to work out these situations before

Speaker 4 they are put in receivership.

Speaker 4 And historically, that's what they've done, by the way, is when a bank gets in trouble, they'll close it down over a weekend and they'll put it in the hands of some other bank.

Speaker 4 And it opens under a new brand name on Monday and it tells everyone their deposits are safe.

Speaker 4 But for some reason, they just didn't step in here.

Speaker 4 So I think there was a lot of sleeping at the wheel. But look, I don't want to take blame away from SVB's management because they clearly did a really bad job, too.
I mean, they spooked everybody.

Speaker 4 It was on Wednesday after the market closed. This is the

Speaker 4 two days before it went into official receivership. They put out an 8K statement basically saying that, like,

Speaker 4 daisy,

Speaker 4 we had to sell all of our available for sale securities, over 20 billion of securities. We just had to liquidate them.

Speaker 2 Okay.

Speaker 4 And we're going to need to raise billions of dollars of equity. And we're going to have to recognize a huge loss on our long-dated bonds that was previously unrealized on our balance sheet.

Speaker 4 Well, what do you think happened? Right. That night, after the market closed, their stock was down 30%.

Speaker 4 And the articles were all over the press by Thursday morning that the bank was in distress. So people have all these wild conspiracy theories about why there was a run on the bank.

Speaker 4 People just read the news. The media caused the rot.

Speaker 4 And I can't blame the media because they were just doing their jobs reporting what SVB had put out there.

Speaker 2 So let me ask you, because

Speaker 2 you might remember, when the Fed had the discount window, the discount window was kind of a shameful place to go.

Speaker 2 You as a bank didn't want to go to the discount window because the other banks would know you're in trouble. Is that right?

Speaker 2 I mean, you had kind of an internal warning system

Speaker 2 before that seemed to always work for a long time.

Speaker 2 And now there's just, there's this, you know, billions and billions of dollars being given to banks all the time for extended periods of time that's new.

Speaker 4 Yeah, I mean, the thing we don't know, Glenn, I think, is what were the conversations taking place behind the scenes between SVB's management and the Feds?

Speaker 4 You know, when did they, I mean, they must have, I would assume, go to the Fed, go to the FDIC, go to the banking regulators and tell them, hey, we have a problem here.

Speaker 4 I don't know. I'm curious when that happened, and I'm curious what the reaction of those regulators was.

Speaker 4 I don't think we have that information yet.

Speaker 2 So credit Suisse goes down, and I called a friend of of mine and I said, and Deutsche Bank stands? I mean, isn't Deutsche Bank always in trouble?

Speaker 2 Do we have other banks that size that are in trouble, do you think?

Speaker 2 Well,

Speaker 4 you know, what I would say is

Speaker 4 the reliable way to figure out which banks are having problems is you just follow the stock market.

Speaker 4 So even before the media seems to report on problems at a bank,

Speaker 4 the short sellers seem to get a hold of it and you see the stock prices going down. Like I said, as soon as SVB put out that 8K, their stock was down 30%.

Speaker 4 And I think by noon, the next day, it was down 60%. So just follow the stock market.
It's kind of like telling you where to look because those guys are really doing their homework.

Speaker 4 So look, I don't know. I don't want to say any particular bank is in trouble.

Speaker 4 And here's the other thing is just when you're talking about systemically important banks, the government's already said it's not going to let them fail.

Speaker 4 So

Speaker 4 it's kind of more like, how much trouble is the system in?

Speaker 4 How much trouble is the government in?

Speaker 4 Because if these banks have problems, it's not going to be on those banks at the end of the day. It's going to be on the taxpayer.

Speaker 2 Trevor Burrus, Jr.: So, can I just take you to a dark place here for just a second? War game something for me.

Speaker 2 Sure. You know, we are, we could have a serious banking collapse, which would lead to financial collapse all over the world,

Speaker 2 in the Western world at least. We have war on the horizon.
None of these things have to happen.

Speaker 2 But if they do,

Speaker 2 then the federal government comes in, bails these banks and depositors out with money they don't have, so they're just printing the money.

Speaker 2 If it has that kind of collapse, businesses go down, you lose jobs, then the supply chain would also, you know, you can't keep people working, so the supply chain goes down, which drives interest rates through the roof.

Speaker 2 And with this much money pouring everywhere,

Speaker 2 you've got a real problem.

Speaker 2 It seems to me

Speaker 2 that

Speaker 2 the

Speaker 2 central bank digital currency or digital coin is the end game here in a reset.

Speaker 2 Does that make sense to you at all if we would hit this kind of a problem?

Speaker 4 Well, it's hard to say. I mean, I

Speaker 4 here's what I'd say, Glenn, is that you've been ahead of the curve on so many things. The first time I ever heard the word ESG was from you.
Oh, my God.

Speaker 4 I didn't know, yeah, I didn't know what that was until I learned it from you. So you've been ahead of the curve on a lot of these things, and

Speaker 4 I hope it doesn't go that way, obviously.

Speaker 4 You know,

Speaker 4 right now, it looks to me like the government sees crypto as a threat because it's kind of like an alternative.

Speaker 2 Right. But

Speaker 2 the UCC is being updated in, you know, all 50 states now, and it defines money as a

Speaker 2 central bank digital currency.

Speaker 2 And that's a little terrifying because the central bank would have complete control over your money. It's not like Bitcoin, which I can put on a thumb drive and take out and go, screw you.

Speaker 2 I don't have my money.

Speaker 2 It's legally would be defined as their money if it's in the bank.

Speaker 2 And

Speaker 2 that's the problem. Yeah, well, that's the other half of the modern monetary theory that nobody wants to talk about.
Control.

Speaker 4 Yeah, I mean, yeah, and so I think they're doing this in China with they've got the digital yuan. And

Speaker 4 so I think that, look, this is definitely one potential dystopian future.

Speaker 4 You know, it's

Speaker 4 hard for me to assess

Speaker 4 where this all leads.

Speaker 4 I'm just kind of more, in the immediate term, I'm just more concerned about this leading to

Speaker 4 a recession.

Speaker 4 That's usually the result when you have a massive contraction of the money supply and of credit, usually the result is a recession.

Speaker 4 I mean, when I talk to my friends in the real estate industry, I mean, the things they're telling me are just scary because,

Speaker 4 you know, I've got,

Speaker 4 well,

Speaker 4 so I got a friend who just redeveloped a building and he's got a A-plus tenant, and he can't get his construction loan refinanced with long-term debt. He just can't do it.

Speaker 4 He's willing to pay the prevailing interest rates. He can't find a bank that's willing to loan right now.

Speaker 4 I mean, that's scary, right?

Speaker 4 And the reason why is just because if you're a bank and you're seeing all this instability and you're worried about deposits flowing out for any reason, you're just like, we got to hold on to our cash here.

Speaker 4 We can't be putting it in a 10-year

Speaker 2 loan.

Speaker 4 And so, like, that's just one example. I think there's also the issue, you know, because I'm here in San Francisco.
We got over 30% vacancy in these office towers. And these office towers.

Speaker 2 They're everywhere.

Speaker 4 Yeah, exactly. And so

Speaker 4 those office towers are ultimately owned by the bank. I mean, yeah, the real estate developer owns maybe a third of the capital stack and equity, but the bank put up two-thirds of the money.

Speaker 2 Well,

Speaker 4 how's that going to work? You have all these loans that were supposed to be A-plus loans because these office buildings were supposed to be the best form of collateral there was.

Speaker 4 And now you have to wonder how impaired those loans are. And so we haven't even gotten to the loan portfolio of these banks, right?

Speaker 4 All we are looking at are the losses on the liquid securities part of the portfolio.

Speaker 4 The safe part, the T-bills and the mortgage bonds. What happens when you get to the loan portfolio? Now, look, I don't think all banks are in the same boat,

Speaker 4 but

Speaker 4 I do kind of worry that this whole commercial real estate thing is going to be the next shoe to drop here. And

Speaker 4 it's just kind of scary.

Speaker 4 I mean, obviously, I hope they get a handle on it.

Speaker 4 And I do think that the Fed now is in a terrible spot because on the one hand, my view is you've got to protect depositors.

Speaker 4 I just don't think they thought when they put their money in the bank that they were making a risky investment decision. I just think

Speaker 4 if you tell depositors, sorry, you got to take it on the chin because the Fed didn't do its job.

Speaker 4 Oh, yeah. If I imprinted too much money, you'll have chaos in this country.

Speaker 2 On the other hand, and nobody said it earlier, nobody looks at putting my money in the bank as an investment. I'm not putting it into a totally.
You're holding it for me.

Speaker 4 Totally, totally. But on the other hand, if you do protect the depositors, we don't know how big a tab that's going to be.
Correct.

Speaker 4 And how much money we're going to have to print to do that. So this is the terrible, they're on the horns of this terrible dilemma.
But I'll tell you,

Speaker 4 I don't fully like the way that Republicans are handling this issue

Speaker 4 because I think the right position here, politically, morally, regulatorily, is to say that no bailouts for banks. If bank management does a bad job, they're wiped out.

Speaker 4 Their stock options are worthless. We might even claw back these big bonuses they took.

Speaker 4 The stockholders are wiped out, the bondholders are wiped out, they're all done. However, you got to protect depositors.
I just don't know how you don't protect depositors.

Speaker 4 And I'm hearing this Darwinian view

Speaker 4 from the side that I'm usually aligned with that, well, depositors should have known better.

Speaker 4 They were just stupid. Well,

Speaker 2 or depositors. I had money in Silicon Valley Bank.
I mean, it's a safe bank to do business with. So, I mean, you know, I guess I should have known better.
Well, I didn't. It's a safe bank.

Speaker 4 How are you going to know better when Moody's didn't know better? Exactly right. How are you going to know better when the Fed didn't know better? I mean, look at that.

Speaker 2 See, wait, wait, wait.

Speaker 2 I would separate the average person and me, even you, from the Fed and Moody's. That's their job.

Speaker 2 They should have known. That's their job.
But I shouldn't have known unless they said.

Speaker 2 I'm not watching the bank

Speaker 2 and have access to all of the information that they have.

Speaker 4 Totally.

Speaker 4 I mean, what, your average consumer or small business is supposed to evaluate the balance sheet of a bank and try to figure out whether they got toxic assets or not when they open a checking account so they can make payroll.

Speaker 4 I mean, it's not realistic. By the way, that's the system we had 100 years ago.
It led to panics all the time. That's why they created FDIC.

Speaker 4 We've seen this movie before, like Jimmy Stewart's in it.

Speaker 4 It's not a movie we want to go back to. The problem is that FDIC is not big enough for business banking.
And like I said, half the deposits in the banks are not insured because businesses need more.

Speaker 4 So I think where we're going to end up here is that there needs to be a business plus level of FDIC in exchange for which these banks just can't take risky investments because we don't want the government to be on the hook if they screw up.

Speaker 2 Right.

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Speaker 2 So, you know, there's the part of the problem that I see,

Speaker 2 I think I said this in 2010 or 12, because I'm a amateur futurist. I love,

Speaker 2 you the future of what's coming with AI and everything else. It's terrifying and thrilling at the same time.
And it'll be up to us to see which way it goes. I think it might be up to AI.
But,

Speaker 2 you know,

Speaker 2 the problem here is that we have

Speaker 2 the entire industrial revolution took over a hundred years.

Speaker 2 This revolution that we're going into now,

Speaker 2 everything

Speaker 2 from our governments to our banking to our individual jobs, all of it is changing because of

Speaker 2 the internet and technology. It's all changing.
And it's changing now in about a 10-year period. In 10 years

Speaker 2 from 2020 to 2030, you will not be the same country. And it's not because of political decisions or anything else.
It's because of technology.

Speaker 2 And I think we're just going through the industrial revolution ten times faster.

Speaker 4 Yeah, I think you're right. And it's another dilemma here because on the one hand,

Speaker 4 the change is incredibly disruptive and scary.

Speaker 4 On the other hand, the only way we're going to get out of this debt or have a hope of getting out of this debt without money printing or a hyperinflation is productivity.

Speaker 4 That's your only other alternative to money printing is productivity.

Speaker 2 Well, you might be training the people in America to not be productive. I mean, that's what the government says.

Speaker 4 The hope would be with these AI tools is that you can power up

Speaker 4 your average employee through the use of these tools to be much more productive. Right.
And that it could unleash an economic boom.

Speaker 4 I also understand the argument that maybe it puts people out of work.

Speaker 4 But we're seeing,

Speaker 4 I mean, this is really year one of this sort of commercial, let's call it the commercialization of AI. And

Speaker 4 the product demos that I'm seeing are really incredible, what it can do. I mean, you can go into these tools.

Speaker 4 Let's say you're a marketer and you just want to write a blog post, you know, for your company.

Speaker 4 You just go in there and type in the headline and the first paragraph, and it'll spit out the rest for you as a first draft.

Speaker 4 And actually, you can say, give me five alternatives, and then you pick the one you like best, and then you can just say, give me five more like this, and you do a human evolution on it.

Speaker 4 So in any event, there's like a zillion, or like coders right now, there's this

Speaker 4 called a co-pilot, where if you're a coder,

Speaker 4 you just describe, you just talk to the AI because it understands natural language, say, here's what I'm trying to do, give me the code.

Speaker 4 And code that would have taken weeks to write, you'll just spit out

Speaker 4 in a minute. And you can kind of go from there.
Now, I think, again, the optimistic scenario here is this doesn't put coders out of business. It makes them much more productive.
Correct.

Speaker 4 And so, if we can get a productivity boom out of this technology, that could be the way out of our current mess.

Speaker 2 The problem is, though, again, in other revolutions that we've had, you've had time to adapt. This is just going to make some people more productive and also destroy

Speaker 2 other jobs. And you have to retrain and rebalance, and it's going to happen so incredibly fast.

Speaker 2 Here's been my biggest problem and I talked to Ray Kurzweil about it.

Speaker 2 I've talked to

Speaker 2 several people that are into AI. No one is seemingly seriously asking the philosophical questions that we have to decide right now.
What is life?

Speaker 2 Already you could convince people with chat GPT. Today, you could could get people to go, you know what? It's alive.
Well, then what happens if that's actually life?

Speaker 2 So, we have to decide some of these things. We have to decide

Speaker 2 when we can download a person's thinking, is that life?

Speaker 2 Or if they've got cancer or something that's really expensive, can we just off them? Because they'll always be here. There is no death because we've downloaded them.

Speaker 2 We're not asking the questions on

Speaker 2 work.

Speaker 2 Does that mean anything to the psyche of man? And you've got Yaval Arari,

Speaker 2 who is and the WEF, talking about a lot of useless people and what are we going to do with them. And his answer seems to be

Speaker 2 drug and entertain.

Speaker 2 That's not good.

Speaker 4 No, that's not.

Speaker 4 That's not good.

Speaker 4 That's not good.

Speaker 4 Yeah, I mean, now, I'll tell you one thing that's interesting about whose jobs are getting disrupted is that it's actually the white-collar jobs, it's the knowledge worker jobs.

Speaker 4 You know, they just did a test on the new

Speaker 4 GPT, and it can pass the bar exam. I know.
I mean, it does better than most lawyers.

Speaker 2 And the GPT three passed the bar exam. GPT

Speaker 2 four

Speaker 2 is 90%

Speaker 2 better.

Speaker 2 90%

Speaker 2 better.

Speaker 4 Yeah, exactly. So it's interesting because

Speaker 4 one of the things that's interesting is that the people who got disrupted and took it on the chin the hardest over the last 10 or 20 years because of tech, let's call it more of the blue-collar or middle America.

Speaker 4 Exactly. Automation, the people who were impacted most by automation or by the exporting of jobs to China, which I think in hindsight was a huge mistake.

Speaker 4 But now it's different. It's actually knowledge workers and coastal elites who are being disrupted.

Speaker 4 So

Speaker 4 it's interesting, but I still think it's going to be hard to know exactly how it plays out. And

Speaker 4 it's hard to stop these technology waves. Oh, you can't.

Speaker 4 You can't. The question is just whether you can guide them in a positive direction.
And like you said, I don't think anyone, or not many people, are asking the hard questions.

Speaker 4 Although, you know, Elon, Elon did. You know, the whole way that OpenAI got founded

Speaker 4 was back in 2016. Elon said that, like, hey, guys, I think AI is going to take over the world.
This is like

Speaker 4 way further ahead than people think. And so they created OpenAI to ethically guide the development of AI.
That was the purpose of it.

Speaker 2 And to put it in the hands of everybody.

Speaker 2 So no country or company would have it. Well, that's over.

Speaker 4 I know. And it started as a nonprofit, and somewhere along the way it became a for-profit it became more like a company about the time he left

Speaker 4 so it's it's uh it's yeah you can't make this stuff up i mean it's just a testament to human nature you know is that if there's an opportunity people are gonna want to

Speaker 4 exploit it you can say either exploit it or develop it positively or negatively what you know however you want to see it

Speaker 2 talk to me a little bit about elon musk he's a friend of yours right

Speaker 4 Yeah, I mean,

Speaker 4 I think what he's done at Twitter, with the Twitter files, is incredible.

Speaker 2 I think what he's done with

Speaker 2 pretty much

Speaker 2 everything.

Speaker 2 I mean,

Speaker 2 he is, I would put him in the category of

Speaker 2 a Jefferson or a Franklin. I mean, that's what all of those guys were like.
He is just in a different category.

Speaker 2 What is he like as a

Speaker 2 person to be around?

Speaker 2 Is he always way ahead?

Speaker 2 What's he like?

Speaker 4 Well, I've known him for, I guess, over 20 years now. And so to me, he's just, you know, before he got super famous, so to me, it's just, you know, my friend Elon.
You know,

Speaker 4 I would say that, you know, what you see is really what you get with him.

Speaker 4 I mean, I remember a conversation I had with him many years ago where I think we're just sitting on the couch and he's sort of ruminating about, you know,

Speaker 4 I wonder if we're living in a simulation, you know, is this really base reality? And this starts like riffing on this idea.

Speaker 2 Things that really used to only be asked by people on either pod or LSD. He just thinks that way.

Speaker 4 Yeah, he's just thinking about it.

Speaker 4 And I remember thinking, well, this is really interesting, but I'm glad that the public doesn't think that Elon thinks we're living in a simulation because, you know, they'll think he's crazy.

Speaker 4 And, you know, and, but then, you know, a few months later, I hear him like basically talking about it in an interview.

Speaker 2 And so, like, he's, you know,

Speaker 4 what I'm saying is that what you're seeing from him in public interviews is what he's saying in private, too.

Speaker 4 Maybe just a little bit before we just hear it first. But

Speaker 4 I think what you see is what you get.

Speaker 2 You know, I have a daughter of special needs. She had strokes at birth.
And I have been

Speaker 2 following what he is, the research he's doing on the brain, because

Speaker 2 that would repair all of the pathways.

Speaker 2 I try to remember the technology that he's

Speaker 2 anyway, he's basically putting beacons into your head and it can

Speaker 2 it could repair all the pathways so she could think faster

Speaker 2 and

Speaker 2 think the way

Speaker 2 a healthy brain would think.

Speaker 2 And it would change her life. And we've had conversations about it.
And I'm, as her dad, I'd love to see that.

Speaker 2 She is not

Speaker 2 willing to

Speaker 2 go there.

Speaker 2 And

Speaker 2 as great as it is,

Speaker 2 it's a two-way street. Eventually, you'll not only be able to help, but you'll be able to see into the brain.

Speaker 2 You'd be able to connect with the internet, which is one of the things that I know that Elon wants to do. And that's a whole different, now you're into transhumanism.

Speaker 4 Yeah, I mean, we're getting into sci-fi type stuff, but I think the reason why he founded Neuralink is because he saw that the AI was going to evolve very quickly to be smarter than human intelligence.

Speaker 4 And the only way for humans to catch up would be to have some sort of

Speaker 4 brain-computer interface. And now, I mean, that's the long-term vision.
In the short term, it's about fixing

Speaker 4 these types of maladies that people have serious

Speaker 4 issues. And so, you know, he's starting with those, you could call them use cases in a way.

Speaker 4 And, you know, this is, I think, a common denominator of all of his companies: he starts with a really grand vision, but then makes it tan. He figures out the tangible first step.

Speaker 4 So you take SpaceX, for example. The vision was to go colonize Mars, but the first step was just to get a rocket to launch into space.

Speaker 4 And then the middle step is to get a satellite network working so we have internet from space. And then finally, you can do space exploration.

Speaker 4 So he figures out like he's got this grand vision, but then he figures out how to break it down into stepping stones.

Speaker 4 But you're right that, you know, you mentioned like a Franklin or Jefferson. I mean, he's kind of a throwback to an earlier time where you had these great individuals, inventors, who, you know,

Speaker 4 would create these great things and

Speaker 4 build these enormous enterprises, these great companies. And, you know, it's so different than what we have today, where it feels like everything is decision by committees

Speaker 4 and

Speaker 4 everybody's a professional manager who went to go get their Harvard MBA.

Speaker 4 And what did they build? I mean, they didn't really build. They didn't really take risks.
They just manage.

Speaker 4 And, you know, they're all sort of politically connected and part of this class class that

Speaker 4 is connected in Washington and goes to Davos. And, you know, it's like part of this clique with the media that protects them.
It's just, you know, again, it's part of that like fake expert class. And

Speaker 4 I think this is the reason why

Speaker 2 they hate him.

Speaker 4 You know, I think this is the reason why they hate him is because it's just,

Speaker 4 it represents a whole different model. It's really the entrepreneurial capitalism that

Speaker 2 this country started with. Yes, it's the American model of one guy having an idea.

Speaker 2 You know, we are living, I don't know the last time, if ever, I mean, I live in such a geeky world, David, but I don't know the last time that you read Dwight Eisenhower's farewell speech from the Oval Office, but

Speaker 2 he nailed this time period right now, and he talked about those inventors that are working by themselves in their garage and coming up with ideas.

Speaker 2 Those are gone, and they're going to be replaced by teams of people working on things through corporations. And he warned us against it and we didn't pay attention on very many things.

Speaker 4 Yeah, and that speech, I mean, it warned us about the military-industrial complex.

Speaker 4 And, I mean, Eisenhower, he knew of which he spoke. I mean, he was the Supreme Ally commander in World War II, President of the United States.

Speaker 4 He knew, he warned us that, yes, we need a defense industry, but they would become a special interest.

Speaker 4 And we have so many of these industrial complexes, whether it's the media, the pharma industrial complex, the education industrial complex, where they've started just becoming more of a special interest in their own right, as opposed to fulfilling the mission that

Speaker 2 they were created to do. They're serving

Speaker 2 money and the government, it seems, more and more.

Speaker 2 And

Speaker 2 less the

Speaker 2 it's you know the one thing about Musk is it is a pure intent you know he wants to go to Mars that's his end it's not about becoming the richest man in the world and there's a there's a difference

Speaker 2 on that

Speaker 2 you know you work hard for the money

Speaker 2 my gosh have I turned into Donna Summer you work hard for the money girl if you're like me when you have to spend that money you prefer to spend it on things that are of quality especially if they're made here in America.

Speaker 2 That's not just patriotism. It's a quality thing.
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Speaker 2 Let me quickly just cover a couple of things.

Speaker 2 I absolutely believe we blew up the Nord Stream pipeline.

Speaker 2 I don't know if we'll ever prove that,

Speaker 2 but I'm sorry, you know, the president who, you know, one of the signs of, you know, dementia is saying things that you shouldn't say.

Speaker 2 And he comes out and says, Yeah, we can get rid of that.

Speaker 2 No, believe me,

Speaker 2 we'll end it. Okay.

Speaker 2 Do you think we're ever going to find out the truth on that?

Speaker 4 Yeah, actually, I do. I mean, I think eventually that's got to come out.

Speaker 2 Now, eventually, do you mean it like

Speaker 2 we just found out that the CIA was working with Oswald and on his payroll, on their payroll.

Speaker 4 Yeah, I mean, maybe you're right that we'll never know for sure.

Speaker 4 Maybe we'll never have that confirmation. But look, I agree with you that Cy Hirsch's story is far more credible

Speaker 4 than the cover story they planted in the New York Times just recently, which was laughable.

Speaker 2 No, no, no. They know the boat.
They just don't know who was on it, but they know it was four men and one woman, but they have no idea. I mean, it was ridiculous.

Speaker 4 It was ridiculous. They say, like, okay, that our that we believe believe that a pro-Ukrainian group did this.

Speaker 2 Okay. Well, well, which one?

Speaker 4 We don't know.

Speaker 4 But, well, did it include Zelensky? Absolutely not.

Speaker 4 So

Speaker 4 it's like a weird level of certainty about certain things. And then, like, they don't know anything.
You know what I mean? It's like, look, you either know who these guys were or you don't.

Speaker 4 So how can you be so sure that it wasn't our specific allies? But by the way, I mean, this was a very sophisticated operation. It required required a state actor to do.

Speaker 4 And like you said, they said what they're going to do.

Speaker 4 So

Speaker 4 I'm with you on this one.

Speaker 2 I mean, it's the same kind of thing they're doing here.

Speaker 2 They're decommissioning all of our coal-fire plants and blocking the way for us to go back. That's pretty much what happened with the Nord Stream pipeline.

Speaker 2 It just blocked your way to ever go back to that source.

Speaker 2 David,

Speaker 2 last thing.

Speaker 2 War with China

Speaker 2 and or

Speaker 2 Russia.

Speaker 2 They look like they are becoming closer and closer allies

Speaker 2 and allies with Iran. And now Saudi Arabia abandoned us because of

Speaker 2 for good reason. I would too if I were them.

Speaker 2 How likely do you think it is that we'd be headed towards war?

Speaker 2 And what does that mean?

Speaker 4 I mean, I've been warning about this since the Ukraine situation started.

Speaker 4 This is a proxy war of choice that we've gotten into.

Speaker 4 Ukraine is not a member of NATO. It is not a treaty ally of the United States.
We are not required to defend it.

Speaker 4 Moreover,

Speaker 4 And I think this is the deeper point, is we engaged in a series of actions going back to 2008 that the Russians viewed as highly provocative.

Speaker 4 And they warned us over and over again, it is categorically unacceptable for you to try to bring Ukraine into NATO. And yet we persisted in that mission.

Speaker 4 We have these crusaders at the State Department who just want to keep expanding NATO.

Speaker 4 And, you know, I don't know why they can't see that that is unacceptable to the Russians the same way that the Soviet Union trying to put nukes in Cuba was unacceptable to us in 1962.

Speaker 4 I mean, we have the Monroe Doctrine here that says that no distant great power can put troops and weapons in the Western Hemisphere. We consider that an intolerable security threat.

Speaker 4 And that is what we have been trying to do with Ukraine for a long time.

Speaker 4 This was very easily avoidable, in my view. And now we're at the point where we are effectively a co-belligerent in this conflict.
I mean, we're not just providing them with money and weapons.

Speaker 4 We're providing them with intelligence. We have commandos on the ground directing the flow of those weapons and of intelligence.

Speaker 4 We've had administration officials brag about painting the targets on Russian generals' backs so they could be killed, bragging about providing the intel to sink the Mossa, which is the Russian flagship.

Speaker 2 Can you imagine if Brezhnev did that when we were in Vietnam? If Brezhnev went to Vietnam and said,

Speaker 2 our whole goal here is regime change. We're funding you.

Speaker 2 We're painting the targets for you. My gosh.

Speaker 4 It's crazy. It's crazy.
It's crazy. And, you know, like people sometimes compare, well, why isn't this like Afghanistan where we bled the Soviet, like Reagan bled the Soviet Union?

Speaker 4 Yeah, that was a covert operation, Operation Cyclone. We didn't have American flags on the boxes of the stingers and the weapons we were giving them.

Speaker 4 It was a very covert, and here it's very different because we're not just giving them weapons. We're providing the whole, what's called the kill chain for them.

Speaker 4 You know, it's a tightly woven web of information services. The weapons by themselves aren't valuable.

Speaker 4 You know, like the HIMARS, for example, isn't valuable unless you also give them the targeting coordinates from our satellites in space. And so

Speaker 4 the Ukrainians are pushing the buttons and pulling the triggers and taking the bullets, but it's the Americans who...

Speaker 4 are providing the targets and the intelligence and even taking credit for that counteroffensive last fall.

Speaker 4 There's a New York Times story where they basically describe the, it was called the critical moment behind the, it was the Kharkiv counteroffensive, where the Ukrainians came to the American generals with their plans and the generals said, no, this isn't good enough.

Speaker 4 Let us like fix it for you.

Speaker 4 I mean, it's just crazy, you know, and then we,

Speaker 4 and then when I think the obvious downstream effects of this happen,

Speaker 4 which is that it drives Russia into China's arms. We react with this outrage and surprise, just like shock, like we didn't know what's going to happen.
I know. It's like, are you kidding? Of course.

Speaker 4 I know.

Speaker 4 Of course, Russia and China become tighter and tighter allies because China, they see what's happening and they know that if Russia falls here, if that actually could happen, then the gun sites of U.S.

Speaker 4 neocons and U.S. hawks will be entirely trained on them.
So it's in their national interest to help Russia. This was entirely predictable.

Speaker 4 And we think we're going to prevent them from pursuing their national interest by expressing condemnation and outrage.

Speaker 4 I mean, like, it's like, it's like, it's like our, it's like our spokespeople and diplomats are children here.

Speaker 2 I mean, again, dealing with it's the elites and everyone with common sense are looking at each other. Look, I didn't vote for the guy.
You did vote for the guy, but I'm with you. This is nuts.

Speaker 2 I mean, the elites that are running, the State Department, the Pentagon, the media, all of it, we all look at each other in day-to-day and go,

Speaker 2 you and I could fix this. It's not that hard.

Speaker 4 I know. I know.

Speaker 4 The State Department one is really crazy because their job is diplomacy.

Speaker 4 You know, it's

Speaker 4 to lessen conflict. No,

Speaker 4 their objective is regime change. I mean, they've been conducting these regime change operations, and you'd think

Speaker 2 when Biden was the vice president, our State Department went in there.

Speaker 4 Anyway, and you know what happened three months later? They put Hunter Biden on the board of Burisma. I'm sure that was just a coincidence.

Speaker 2 How do you think that's going to end? I mean, he's got, we now have the records that

Speaker 2 three Biden members and the

Speaker 2 Hallie, the daughter-in-law. I mean, I don't know

Speaker 2 what information she had that was so valuable in Hong Kong for an energy company,

Speaker 2 and Biden's still out there saying it's not true. Is anything ever going to happen to these guys?

Speaker 4 Probably not.

Speaker 4 I'm not saying there's not a lot to find. I'm just saying that I think the media, one of their enormous powers is they get to decide who gets investigated

Speaker 4 effectively because they will

Speaker 4 make you a target and gin up outrage if they don't like you. And if they like you, they'll sweep it under the rug.
I mean,

Speaker 4 I don't understand how the Hunter Biden thing isn't a big story. I mean, he's put on the board of a Ukrainian energy company three months after Biden gives the attaboy,

Speaker 4 gives the approval for basically our backing of a coup there.

Speaker 4 And it's not like he has energy experience. You know, he's utterly unqualified.
He's utterly unqualified for the post.

Speaker 4 It's just, that's crazy to me. But once again, the media decides what we care about because they just won't cover it if they don't like it.

Speaker 2 Sad. David, always good to talk to you.
Thanks.

Speaker 2 Hope to talk to you again. Thank you.

Speaker 4 Absolutely. Thanks, Glenn.
Great to see you.

Speaker 2 Just a reminder, I'd love you to rate and subscribe to the podcast and pass this on to a friend so it can be discovered by other people.