The Chart That Proves You're Getting Poorer Even When Your Portfolio Goes UP!

Key Takeaway

Today, audit your portfolio and savings in real—not just nominal—terms. Write down your one-, three-, and five-year returns, then compare them with inflation and the rising costs that matter most to you: housing, food, energy, and insurance. The episode’s core warning is that a higher dollar balance can mask weaker purchasing power. Use this check to decide whether your cash, bonds, and investments are aligned with the purchasing power you need to preserve.

Episode Overview

This episode examines Andre Jik’s thesis that rising government debt, weakening demand for long-term U.S. Treasuries, and potential yield-curve control could erode purchasing power even while account balances rise. The discussion contrasts nominal investment gains with returns measured against gold, explores a proposed shift toward short-term debt and stablecoin demand, and argues that long-term resilience depends on fiscal discipline and real economic production.

Full Transcript

Transcript of The Chart That Proves You're Getting Poorer Even When Your Portfolio Goes UP! from Impact Theory. Auto-generated from episode audio; may contain minor errors.

What is happening in the bond market is truly crazy. Scott Bessant has an extremely interesting plan to save the dollar, but will it actually work? That's the question. So, United States Vice President J.D. Vance says it may be time to end the dollar as the world's reserve currency. I'm not sure that a reserve currency is actually beneficial for the United States of America. I think there's a strong argument that reserve currency status is like coal in Appalachia. It's a resource curse, isn't it? The fact that the US has a reserve currency is like a razor-edged sword.

It will cut everything it touches, including yourself. He is incredibly powerful. Make no mistake, we have benefited enormously from this , but the reality is that we have fallen into a moral hazard trap that now makes it impossible to get rid of our debt. People don't take it seriously. They don't understand this. We must find a way to austerity. I understand how difficult it will be, but this is exactly why it all happened . Anyone who says just throw it away, get rid of it, is a fool.

This is a poor answer to a real problem. Currency has been called the most exorbitant privilege in the world. This means that a nation capable of creating the money the rest of the world needs for their economy has a huge advantage. This is where the US gets its main source of power. And this is so important to the US that they are willing to take the extreme measure of intervention to support it. We have many types of intervention. This is one of them. The last resort for intervention is our military.

And if we have to use it, we will . So, if having a global reserve currency is so important, and we are willing to invade other countries to protect it , then why does the vice president want to abolish it? And he wants to abolish it because he doesn't consider it a privilege, and he's not even the only one like that . There is also Finance Minister Scott Bessant. He talks about a return to so- called Hamiltonian economics. You know, now, and maybe we'll talk about this later, there's clearly a slowing down of de-dollarization.

But could the initial stages be a dollar rally as companies and countries repay their dollar debts? So, there is a "dollar thirst" before a "dollar boycott" occurs. This is a very interesting thing that people need to understand about how currencies move. This is very similar to what is happening in Japan with the yen. The result is that you have debt, but when you borrowed this money, you could have invested it in another currency. And that's exactly what's happening with the yen right now. You receive yen, but invest it in dollars in the US stock market.

Now, when it's time to pay back the yen, you'll have to sell those assets to get dollars, and then buy yen with them to repay the yen-denominated loan. So the same thing will happen or is already happening with the US. When people try to abandon the dollar, they will have to sell assets to free up dollars from the currency they are currently stuck in, get those dollars, and pay off the debt. As everyone pulls out these dollars, the dollar becomes stronger, and this can create a very problematic situation that causes people to panic.

So, you have an asset that you need to exchange for dollars. And if you act slowly, the dollar increases in value, making it increasingly expensive for you to get those dollars back. That's part of what worries people about Japanese bonds: if all of this starts to collapse suddenly, the yen appreciates sharply, people will panic, act quickly, and dump assets en masse to get yen. So we may see the dollar strengthening during this transition. He is very wise to hedge his risks, because you never know for sure how things will turn out, but it is an interesting paradox: although people try to escape the dollar, this will only make it stronger for a short time .

And he told Tucker Carlson that gold can't have a budget deficit and gold can't have a war. Gold cannot have fiscal problems. Gold cannot have a huge budget deficit. Okay, here we have to explain the word " fiscal". I think people misunderstand him . Fiscal means government spending. Point. Of course, the meaning has become somewhat blurred, but when someone like Scott Bessant says that gold cannot have fiscal problems, what he means is that it will never behave like a government spending money it doesn't have. The main advantage of gold is that it is a very real asset.

It is extracted from the ground at a rate of approximately 2% per year. If prices are really rising, maybe this number will increase a little, but then it will collapse the indicator again. And so, essentially, it's been around 2% all this time—well, not all the time, after the gold rush. It remained at this level of 2%. So, yes, it is an inflationary process, but inflation of a certain magnitude that requires people to exert physical effort to create more. Unlike fiat currency, where you can just say, "Hey, let's print some more." With fiat currency, you can commit massive fiscal irresponsibility, creating a $2 trillion deficit, a huge percentage of your debt—you couldn't do that with gold .

So, again, we understand that he is talking about state irresponsibility. With gold, it is impossible to have a gigantic budget deficit. Gold cannot start a war. There is much talk of ending this arrangement, which the United States has maintained since 1944. Especially countries like Iran. Quote: “We have received numerous messages from neighboring countries regarding the formation of new arrangements for security and economic cooperation in the region. The United States has put the security of every one of its allies at such risk through pressure and complete disregard for their interests for the sake of Israel.” And very recently, the bond market has begun to take all this into account in its assessments.

The national debt has exceeded $40 trillion, and bond investors want to get more money for taking on higher risk. That's why Scott Bessant made an emergency announcement that they were going to step in and start buying long-term Treasury bonds to try to lower interest rates. After that, the yield fell for about 24 hours , and then returned to previous values. As a result, gold rose, bitcoin rose, AI stocks fell, and the dollar fell. So, to double down and save the bond market, Scott Bessant just announced that he is willing to use up to $950 billion from the Treasury General Account.

That's roughly the size of the Swiss economy. That's how important it is to lower these interest rates and save the bond market. So, if the world's reserve currency is where the US draws its power from, why is anyone saying that maybe it's time to stop it? Is J.D. Vance a “Trojan Horse” and the man destined to end the reign of the US empire? I think the explanation is much more complicated. All of these events are interconnected, and ultimately someone has to pay for it, so I want to understand what is happening to the economy right now.

This is going to be extremely interesting, so with that said, let's get down to business. Hi, my name is Andre Jik, I hope you are doing well. Come for the finances, stay to see what's left of the dollar. So, let me start by explaining the " resource curse ," then I'll show you how it will affect all of us, why this problem is so difficult to solve, and what they plan to do about it. So, here is the situation the United States is in right now.

The government has $40 trillion in debt. Debt in itself is not a problem. Many countries have debts. The problem is how much it costs to service that debt and who is willing to lend you more money. After all, for 80 years, everyone automatically and constantly lent money to America. Since America creates the money that the entire world relies on, the entire world is forced to hold US dollars. This is the very " exorbitant privilege." Okay, there's another aspect that's really important to understand, which is that a government bond, especially a U.S.

government bond, is what's called the risk-free rate of return. When you invest in the markets, as I hope you all do, you know that things change, and sometimes it feels like, "Oh, yeah, we're on the rise." Everything is going very well. This is, in principle, at least temporarily, a phenomenon that moves almost exclusively upwards. But then there are times like now, when you find yourself in a period where the question arises: are we in a " bubble"? Things are starting to look risky. Wars are going on everywhere.

There is economic uncertainty. The US is buying up its own bonds. Japan is buying up its own bonds. In China, there is an economic crisis in the housing market. There is a lot of volatility in the market, and no one is sure where it is all going . Since markets are a game of trust, and everything depends on what people believe, it doesn't matter what is real, only what people believe matters. When these beliefs start to diverge and become chaotic, it means, "Okay, we might be in for trouble." Therefore, at such moments, people do what is called a "flight to safety." And one of the easiest places to be at a time when, take Warren Buffett, he believes that the stock market has completely disconnected from the fundamentals of business.

He is a value investor, so when he sees that the stock market has become disconnected from reality, he sells assets and moves into what people call cash. These are actually cash equivalents. And one of these cash equivalents, since the risk is effectively zero, is US government bonds, Treasury securities. So when you realize that all over the world, when people are trying to flee to safety , they are turning to U.S. Treasury bonds. That's why you get this huge market. It is highly liquid. It retains its value.

It brings profit. People feel calm. And so they say, "I don't want to be in the markets right now. The markets scare me. I want to be where I can make a profit. It's smaller than what I could make by taking on more risk, but I know the government is going to print money to cover the debt. So the worst that can happen is inflation that's a little bit ahead of the rate of return, but that's better than being wiped out by the market because my capital is protected." This is one of the things that gives you, let's say, the greatest unheard-of privilege, because we have n't lost that unheard-of privilege yet.

But we're losing people's faith that the government is actually keeping the dollar stable, and that there's enough correlation between the rate you get and the inflation rate that they balance each other out or you're left with a profit. And so once it becomes a risky bet, because you don't trust the government to give you access to the money or that it won't devalue it to zero, suddenly you have to raise rates to get people back into the market, or you have to start buying up your own debt.

And we have to do both . That's why it's important to understand that you're in a highly volatile economy right now, and your escape to safety is becoming an increasingly pressing issue. This is a structural demand for bonds that is not found in any other country in the world. This demand is starting to collapse. And here is an example of this. The yield on the 30- year Treasury bond just hit its highest level since 2007. Foreign central banks are reducing their holdings of Treasury bonds. And when the U.S.

Treasury stepped in last week to cut rates again, it only worked for about 24 hours before bond investors said, “ No, I don’t think so.” Pay me more money. Right? So, that's the problem here. If rates remain high, the government will not be able to service its own debt. If they are going to force rates down, they will have to weaken the dollar to do so. There is no other result. Every decision costs the US their currency, their money. And that's why J.D. Vance says what he says.

When I hear about the history, when I think and read about the history of Appalachia and the " resource curse," I am struck by the idea that a similar argument could be made about the reserve currency status of the U.S. dollar. And he argues that it is the status of the world's reserve currency that has become the curse of the United States. Very quickly, I want to talk about something for a moment. Calling this a resource curse is a mistake . These are people who don't understand what they have.

They don't know how to start a business. If someone comes and says, “I want to get the rights to the minerals that are on your land. If you don't understand what this means, if you don't know how to negotiate a deal, you'll find yourself at a disadvantage . This is exactly like a country that hasn't been taken over by force— of course, if they do it by force, that's a completely different scenario—but a country that hasn't been taken over by force, but does n't try to develop industry within the country.

And that's why it's very encouraging in our time , at least rhetorically, when countries say, " Listen, if you want to mine ore here, or anything that we have, any resource, then you will produce in our country." This will create jobs. They may even go so far as to say that we will be co-owners of this manufacturing facility with you. This is great, we don't need to build up expertise because we don't have it, and the resource won't just lie in the ground . But since we are not stupid, we will make sure to negotiate this deal well so that we understand its value in your hands.

We understand that it is not as valuable in our hands, but we will do a kind of joint venture and make sure that you hire people locally. We make sure that we are part of that chain, and then we export the final finished product, you know, whether it's a part, whether it's an actual finished car, or whatever. And thus it stimulates their economy. When we call it the " resource curse ," it confuses people who look at it superficially, they don't understand what the real mechanistic problem is.

The mechanical problem is that in your hands it doesn't matter at all. And so if you give it away for next to nothing, like they did in Appalachia, then yes, you're in a terrible position. You were taken advantage of by people who knew more than you. That's why they say knowledge is power. If you understand the value, advocate for it, know how to negotiate, and know what options are available to you, you can get a much better deal. This doesn't mean you should try to do everything yourself.

There is a big difference here. If you ever decide to become an entrepreneur, you will understand this very quickly. There are things that are better left to someone else who knows how to do it, or to collaborate with someone who already knows how to do it, instead of learning the hard way. Having resources is not a curse. This is a joy, this is a wonderful thing, this is exactly what makes your region powerful, your country powerful. But you have to understand how to benefit from it.

And as a quick note about AI—this is exactly how you want to use AI. Just say: " Listen, I'm one person." They just discovered oil under my feet, minerals under my feet, or whatever. I will never learn how to deal with this . What should I do? And AI will almost certainly come up with a pretty brilliant plan for at least trying to negotiate something like that . And if you have to hire a lawyer or someone like that and give them a share, that's fine too.

Okay, I'll stop there , but God, I feel this so strongly. This is something I see people allowing themselves to be ignorant about things that are so important in their lives, and it's really just the difference between understanding that and not understanding how you're being used to keep someone from taking advantage. We'll get back to the show in a second, but first, let's talk about the butcher. Everyone had it once . Someone, somewhere, knew where your meat came from, how it was raised, what it was fed.

Now you only have the label. ButcherBox, on the other hand, supplies grass- fed beef, organic chicken, wild-caught fish, and more. They've already done the research and made the difficult sourcing decisions, so all you have to do is choose what to make for dinner from their incredible selection. I have been their client for many years. If you're looking for an easier way to put great meals on the table, try ButcherBox. You wo n't regret it. They are simply fantastic. Go to butcherbox.com/impact to get $20 off your first box.

Plus, you'll get your choice of a free ribeye steak, New York steak, or filet mignon in every box for a year, plus free shipping as always. Be sure to use our link so they know you're from us. Now let's get back to the show. Here is a story he often refers to. You see, in the late 1800s, land agents went out into the mountains of West Virginia and Kentucky and bought up mineral rights from farmers for about a dollar an acre. For a farmer in 1890, this was effectively free money because they kept their land.

Some company in Pittsburgh was paying them cash for stones they couldn't use anyway. Then billions of dollars worth of coal were mined from that land , and that coal fueled American industry. It helped win two world wars. It helped keep the power grid running for about 100 years. And by the 1980s, researchers found that just a handful of out-of-town corporations owned most of the land and mineral wealth in those counties, but they paid almost no property taxes because the mineral rights were valued at almost zero.

So the coal ran out, the money ran out, and the counties where all this wealth and resources came from had no tax revenue to build their own schools, roads, or anything else that would allow them to make a living after the money ran out. By the way, this is exactly what you are seeing in the Middle East right now. They realized that they are in a position where we have this resource, but it is not eternal, even if simply because the world switches to solar energy, nuclear or any other.

So we should use this as a way to build new infrastructure where we are, to diversify investments, to expand into other industries. And so they use these revenues to do just that. And that's exactly what happens when you pass it on to someone else. Then those dollars will either flow to their country or their state or somewhere else, and you won't have that permanent infrastructure, other industries that have formed around it to diversify, so it becomes a smaller and smaller part of your economic output. And again , it's not a resource curse, it's a curse of people not understanding how the economy actually works in terms of cause and effect.

That's why they are one of the poorest places in America today. And this is what is called the resource curse. The value simply disappeared somewhere. Now, if we take this same story and apply it to the United States , we see that countries are abandoning what the United States produces. If the most valuable thing the US produces is capital, money, then after decades of nothing but money, its own economy is emasculated. And it loses the ability to create real things. There is actually a measurable way to prove this.

And the easiest, perhaps overly simplistic, way to show this is to show how much energy a country produces over time. After all, energy mainly comes from electricity. And unfortunately, in 2024 the United States will generate no more electricity than it did in 2004. We have been standing still for 20 years. Of course, the economy has grown during this time. It simply did not grow in areas that require more electricity. It has grown in areas such as finance, software, services, and asset prices. These are things that don't necessarily help project power and strength to the whole world.

Isn't that right? That wouldn't help you win a war if you ever had to, say, defend important energy trade routes somewhere in the Middle East, would it? What could you do as China went from an energy system that was less than half ours to one that is twice the size of ours? So this is the story to which J.D. Vance compares the United States today. He says that America's most valuable resource may not be the dollar. Because if all these other nations say they don't need our dollars, then what are we to do?

In the world of investment, all of these events are gradually starting to be reflected in asset prices. Okay, so here's what we need to understand. We are in the same situation as the Middle East. Our valuable asset is actually two things. We have the technology and, well , the finance, for lack of a better word. We should use them while they work to produce a more broadly diversified set of economic outcomes in the country. And if we don't do this, we will find ourselves in a very, very difficult situation in the next 20-30 years.

So, our goal now should be to act in terms of investment, in terms of considering whether to deregulate or to introduce regulation. We need to find ways to bring manufacturing back home, to get to a point where our domestic industries are stronger, where we not only exist in the digital realm of technology and finance, but actually build and create things here in the United States. And if we don't take advantage of this current period, when the dollar is still the reserve currency, when there is still, albeit diminishing, mass demand for both the U.S.

stock market and U.S. debt, still greater than anywhere else . So you want to use that position now, when you see that it's an ice cream cone melting in the sun, you want to make sure that you act, not do what we're doing now, saying, well, we're teetering on artificial intelligence. Essentially, the entire stock market is one big bet on AI, and we've taken on such extraordinary amounts of debt, and there are a lot of questions about where the cracks in that debt are hiding in the private debt markets and so on.

Instead of just doing this, we need to start diversifying. We need politicians who understand that there must be other industries in the US that will thrive. And now we're not doing any of that . Um, a question about that. He said something interesting, saying that America's main production is capital. Like, America sells money. This is what we do. This is what we produce. This is what we are building. This is what we finance and so on . So I understand the idea that we need to open up manufacturing, we need to bring manufacturing back home, but what exactly are we going to produce ?

Think about all the things you need and want. I will choose just one as an example. If you look at the current production of drones for warfare, your future security as a nation will depend on your ability to deploy and defend against cheap munitions. To do this, you will need a supply chain that currently runs through China. You need to find ways to find some of these deposits here in the US, which I don't think we can rule out yet. I'm not making this up. This is not intuition.

I read about this somewhere once. But be sure to check my words. But in any case, I don't think we in the US have searched well enough to see if we actually have them. Find friendlier countries than China where you can do this. Make a minimum viable product at the ore mining site . Bring it back to the US, build and assemble everything you can here. And the right way to think about it is that it sounds unpleasant. I understand, but we have to be frank.

Intelligence is not the same. So, when you accept that intelligence has its own spectrum, and that in every country there will always be people who are not suited to high-tech work using AI. They will do well in the mechanical workshop . They will be fine at the steel plant. They will be fine there, where I was for years in another place . But in a paint factory or a warehouse or somewhere else, right? There are people who flourish there because they like it. They like to work with their hands.

They like being in that environment, or because intellectually they are at that level, and they are better able to handle physical work, if you will, than purely intellectual work. Unfortunately, we went through a period when it seemed like we could outsource everything indefinitely . This is just one industry, and we did get a lot of things cheap, but that's how you start to deplete the steel industry. You are starting to exhaust car production. You start to exhaust the production of military equipment, your ability to make these things.

We don't even make our own chips. We're just getting started, but all of modern existence actually depends on one small island off the coast of China called Taiwan. We could build these factories here. We just didn't want to because labor was too expensive. And it turns out that in the pursuit of cheapness, instead of developing the economy - and we just conducted such an experiment. So how much was that enough? 30 years? You can wriggle around for quite a while, and at first it looks cool.

The 90s were cool. But then the 2000s come, China becomes really strong and starts taking away a lot of your jobs. The year 2010 arrives, and you start having "deaths of despair," suicides in these former mining or industrial towns. The rust belt grows, and suddenly there's a feeling of, "Oh, maybe that wasn't the best exchange." I feel the same way when I see someone eating improperly, especially at a young age. I think, "When you're a kid , you literally don't pay any price for eating a Twinkie." But if you think about it, your body can only process a certain amount of sugar through a process called glycation.

Your cells become sticky and start to stick to sugars and other substances in your blood. Ultimately, this causes all sorts of problems in the future. This can be measured in the blood. So I see a child doing this and I think, "You won't feel anything bad." It will taste great, and everything will be fine, because your body has all these defense mechanisms. But that Twinkie you ate at seven is the Twinkie you won't be able to eat at forty. And now, the more often you do this throughout your life, the earlier the signs of aging appear.

So we had to come up with a name for it : type 2 diabetes, etc., it used to be called adult-onset diabetes because it was only caused by all those Twinkies or whatever else you were doing. Let's take the same thing . I see someone running ultramarathons in their youth. I think, " Well, you'll pay for this when you're 60." Your knees may not hurt now, but think about it: you can only withstand a limited amount of stress in your life, and as a child you are simply spending everything up front.

You can avoid the consequences for a while, but then they accumulate, and you get the " adulthood" of the globalization cycle; We are now like 90-year-olds in the context of globalization, suffering from various ailments due to decisions we made earlier. I get it, we got a sugar rush, right? It was great to have all these cheap goods, but in trying to avoid spending on Americans, we created other problems that we are now paying for. So, it's time to say, "I will no longer take the path of least resistance." We must resort to savings.

We must balance the budget. We should spend money on dear Americans. We should let the market decide what someone is willing to do for a job. You must stop importing cheap labor. These are just the kinds of things that, unfortunately, can be known, but people act as if it's impossible to know. You should build more houses. Why should you build more houses? Because we need to reduce their cost. You have to start producing something. Why? Because we need to ensure that real salaries increase for everyone, not just for the top echelon of highly qualified professionals.

So the question is, "Okay, how do we do that?" "Build profitable companies that produce what the world needs." Okay, that means we have to get into production. "Yes, it means that you have to produce, because the world needs material things. Even if it's food, there's no getting around the fact that you need food. And so if you have arable land, you should do everything you can to increase food production, be self-sufficient, etc." Of course, all of this has its limitations. But you have to keep building these industries, not just saying, "Well, I can get it cheaper somewhere else." So, here's what's happening.

Before I explain it, the dollar is losing purchasing power whether we like it or not. But our phone bill shouldn't contribute to that, so this part of the video is sponsored by Tello Mobile. Tello is a wireless- I allow these ads to show to give credit to the content. a service where rates start at just $5 per month, and unlimited costs just $25. That's it. It operates on the largest 5G network in America, providing the same coverage for a fraction of the cost. And you create your own tariff plan.

You choose the amount of data, minutes, pay for what you use, no contracts, so you can change it every month. You also get free hotspot and Wi-Fi calling, unlimited texting, international calling to over 60 countries, and e-sim activation so you can change your carrier today without leaving your home or waiting for a card in the mail. 14,000 reviews on Trustpilot with a 4.5 star rating, and people love it because it's simple. There are certain things we can't control, like interest rates, debt, currency depreciation, but our phone bill is one of the few things we can change.

Get this under control. Create your own plan on tello.com using the link in the description below. Thanks to Tello for sponsoring this segment, and now back to the topic. So, here's what's happening. Since 2014, central banks around the world have stopped buying US Treasury bonds. And it was in that year that the so-called automatic rate began to disappear. Countries that have effectively invested their savings in our most valuable resource, the dollar, or Treasury bonds, for 70 years are now buying something else. Instead, they buy gold.

And here's why it happened. This is an explanation from Scott Bessant himself, even before he became Treasury Secretary. This is a rare interview from 2023, when he was still running his hedge fund and had no reason to be diplomatic or secretive. He was on a podcast where he talked about a conversation with one of the consultants who told him that it was impossible for the US to continue its foreign policy towards the French government because of the dollar. Listen, I'm used to the US imposing sanctions on Venezuela, Russia, Iran, and he said it's simply impossible for the US to impose its foreign policy on the French government through the dollar.

And this huge multi-billion dollar fine for BNP will force the US ally to think about a new way of doing business. Scott Bessent says this was a wake-up call for him : a multi-billion dollar fine for a French bank will force a US ally to look for new ways to do business, because the dollar has become a weapon. So, this automatic bet is dead, because the US has proven that the dollar can and will be used as a weapon, if What an irony that it is Scott Bessant who now wields this sword.

By the way, this was an interview with Scott Bessant in 2023, when he was a private individual. Now look what he says this week. He just announced a new round of sanctions against Iran as a warning. And the reporter asked, "Well, why are you warning them? Why do n't you impose sanctions right now?" And this is what he replied. Why not impose sanctions today? Well, we give everyone a chance to correct bad behavior. Why would I want to undermine the global financial system? He's like saying, "Because I don't want to destroy world markets, you fool." Yes?

Because then everyone will leave the dollar system. And if people don't want to meet our expectations, then we expect, and they should expect, that they will have to leave the dollar system. Yes, I want to be very frank. The US doesn't want people to leave the dollar system. The US wants to use scare tactics to keep people in the dollar system but still do what they need to. You can't have your cake and eat it all . If you know that people are already acting because they heard it directly from the French.

They say: this is unbearable. You know that Russia was very upset when we froze their assets. Other people bluntly said, “ Hey, by the way, because of what you did to Russia, we’re getting out, dude. We want to find a new way." China is building all these gold vaults because I still believe they want to back the yuan with gold and try to become the world's reserve currency, because someone will definitely become one. Central banks around the world are selling US debt, or at least not buying new, letting the old debt disappear, and now they are getting to the point where gold is the number one reserve currency for the world's central banks.

If you look at the graph of China's gold purchases, it's actually a vertical line. China is the second largest economy, and it's right next door. It's not that they are distant second. These guys are a real force. So when they move away from the dollar, the Japanese panic because they are trying to protect the yen. We are so worried about the Japanese selling their US debt that we are even helping them. We are expanding the emergency relief plan for them so that they can use their debt as collateral to buy back their own yen.

I mean, it's just wild that we know all this, that it's a known reality, and at the same time we continue to use the dollar as a weapon. Kids, this will only accelerate and become an ever-increasing problem. But, despite everything, we are here. We'll get back to the show in a second, but first, let's talk about what happens when you don't pick up the phone and why today's episode is sponsored by Kvo. This is a business phone system designed to ensure you never miss an opportunity .

I called the company and got nothing: no answer, no call back, no follow- up. This is just incredibly annoying. If your business isn't set up to respond to every call, message, or inquiry, you're giving customers away to your competitors without even realizing it. Kvo is the number one business phone system on G2, trusted by over 90,000 companies. All your calls, messages, and voicemails are in one place, and the built-in AI agent Kvo handles calls after hours, answers questions, and schedules appointments. When money is at stake, always answer "hello" with Kvo.

Try Quo for free and get 20% off your first 6 months at quo.com/impact. Once again, Quo is spelled q u o.com/impact. Now let's get back to the show. Central bank purchases of gold are now near historic highs, which is why gold has overtaken all other reserve assets to become number one. Here's how it affects not only our investments, but also our lives. If you look at the Nasdaq 100 index, for example, these are the 100 best companies in the US. This index has increased by approximately 95% over the last 5 years.

These are really good investment return figures for 5 years. And if you bought it, you would make money. They earned a lot. But if you evaluate the same index in gold , not in dollars. Oh, oh. You will see that it fell by 23% over the same 5-year period. It hurts. And the situation becomes even worse if you look deeper into the past. The S&P 500 index with reinvested dividends during one of the best bull markets in history. It has also fallen about 30% against gold since the Federal Reserve began raising interest rates in 2022.

If you go back to 2000, it fell by about 50% relative to gold. The interesting thing is that you can have huge profits and feel rich, but at the same time be in the red. If we measure this in real purchasing power terms, that is, gold. Technically, you can now buy fewer things. Almost no one notices this because when you go into your brokerage account and look at your portfolio, you see the dollar value going up. So you think, "Hurray, I'm richer now." In fact, everything is not quite like that.

An even more complicated game is being played. Please don't lose sight of the fact that the reason why, when I was in my early 30s, I was absolutely shocked in the Philippines that almost everyone had a domestic worker, and now in America, middle-class people have domestic workers, is because we import a lot of cheap immigrant labor, just look at the percentage of Uber drivers in big cities who are immigrants. It will be extremely high. We hide the cost of labor; if we can't keep moving everything to other countries, then we will import cheap labor here.

So, the government understands the position it finds itself in. They understand how much inflation they are taking on. And as a reminder: what should outrage people is that prices for everything should go down over time. Everything should get cheaper because we are becoming more efficient. But the reality is that nothing gets cheaper over time because the government takes it all away by printing money. So, if inflation is 2%, it means that we have "eaten up" all the gains from innovation plus those 2%. Well, so, yes.

This is a bad sign. This is a very complex set of methods by which the government tries to convince you that you are not getting poorer. Because your brokerage account, at their discretion, has a measure of how I actually feel about gold. Although that would be a cool option. That would be a cool option. And this is not just a US problem. Japan's Nikkei index, for example— their S&P 500—has risen 147% over the past 5 years. This is huge growth. This is the best performance of the Japanese stock market in a generation.

But look what happens if you value it in gold . It turns out it fell by 31%. What does this mean? This means that the stock market is not necessarily rising. It increases in what economists call nominal price, that is, in dollar terms, but not in real terms, taking into account inflation . What's actually happening is that the tool we use to measure value is getting smaller, isn't it ? Therefore, everything else around us becomes " bigger" in price. This is a " shrinkflation" of our purchasing power in dollars.

The same thing can be seen in the bond market, only things are much worse there. This is how the system exploits elderly pensioners. By the way, this is a completely real scenario that took place. Let's say you're an elderly person and you're going to retire in 2014, right? You did everything right. You worked hard, invested all your money in a 401(k), IRA, or whatever. And now you want to retire and invest your money in something safe , rather than taking risks in the stock market, right?

Well, here's what happened to this person's purchasing power. If they bought long-term US Treasury bonds in 2014 and held them until today, they would have lost about 90% in gold equivalent, which is simply crazy. Isn't that right? Bonds are considered the safest assets in the world, which every financial advisor adds to your portfolio to protect against stock market volatility. Bonds are also something that pension funds and insurance companies are legally required to hold in their assets. So, these retirees received all the interest payments on their bonds, as they were promised, but they still lost practically everything, considering what their money can now buy.

So what's happening now is probably the biggest redistribution of wealth in my lifetime. Central banks stopped buying our debt. These wealth redistributions have been going on for over a decade, so most people just don't notice it, but they feel it, right? They feel it every time they go to work, they pay for gas, and they feel it every time they buy groceries, and it could get even worse because what's happening now, especially in the last few weeks, is that this process is accelerating. Here's what's happening.

This is where the US model breaks down to some extent. This occurs when interest costs exceed a country's capacity for economic growth. Okay, now he'll move on to the topic of yield curve control. It's important to understand that this is a real thing. People do this intentionally, and it's certainly part of the US strategy to get rid of our debt. So this is what you need to understand. When interest costs exceed a country's capacity for growth. Because once that happens, everything starts happening faster and faster.

Debt starts to grow faster than the ability to service it, which means more has to be borrowed, which leads to higher interest rates, and therefore more borrowing and more inflation, and economists call this a debt spiral. Now wait. Ca n't the US just always print more money to pay it off? This is the world's reserve currency. They can do that, right? You are wrong. Remember the story about the "resource curse" when buyers leave? Look, the Treasury has to borrow all the time. In the next 6 months alone, it needs to raise $1.4 trillion in net borrowing.

And it does this by holding so-called auctions. An auction is when the government puts bonds up for sale and says, " Okay, who wants to buy our debt?" " Give us your money." So, they come to the auction with bonds to sell them to banks. By the way, unfortunately, ordinary people cannot just buy bonds. And we will pay you. You can buy them on the secondary market. in percentages. And for 80 years, these auctions had guaranteed buyers. These buyers were the world's central banks, which had to buy bonds because that's where they kept their reserves.

This also applies to other countries. But these buyers are disappearing. So now the government comes in, and the buyers say, " Okay, we'll buy your debt, but pay us more." And the US asks: "Why?" And they answer: " Because you can start World War III, because your debt is growing at an unbearable rate, because I don't trust you, because you can freeze my assets like you did with a nuclear state , because there are reasons, right?" Pay me 5%. "And next time pay 5.2%." Yes? And every time they say that, the interest bill for the US for the next 30 years is fixed at a higher level, which makes the next auction worse, which makes buyers want even more, and it's a debt spiral.

And you can actually see it happening. That's why I get mad when people act like the US debt is n't a problem. US debt is a problem. When you spend as much as we spend on interest, it's a problem . The world is watching. They understand everything. It also undermines your ability to do what you want to do in government , to pay for what you want to pay for. It gets harder and harder over time. This doesn't happen in one four-year cycle, so politicians don't care, because within any short span it never seems like a big problem.

But then it turns into a catastrophic problem that we are about to face. Every time you hear someone say that debt doesn't matter, they're out of their mind . We're going to have to face some catastrophic event because nobody is going to do a good debt reduction the way we should do it. And Ray Dalio warned everyone again and again, and again, and again, about exactly what needed to be done. They won't do it. So, that means we're going to hit some kind of wall. You will either inflate your way out of this situation or you will simply bring yourself to the point where a real revolution will begin, because the K-shaped economy is becoming so unbalanced and crazy.

Please reduce this to zero. When people say we can spend two trillion or more a year increasing the deficit, and that's no big deal. in the data. 30-year Treasury bonds have the highest yield since 2007. The yield on 10- year Treasury bonds rose from 3.9% to 4.7% in just a few months. And now we are at a point where the US is spending more than it earns. Actually, the easiest way to understand it is this . Let's say you make $100,000 a year and just got a raise.

But you also have four bills on autopay that can't be canceled. Your four bills are your mortgage, a home for your elderly parents, your children's health care, and your minimum credit card payment. These four bills are due, and they total $105,000. That's not including your groceries, gas, car insurance, or vacations, right? These four points are called commitments. This is the state the federal government is in right now. Social Security, Medicare and Medicaid, veterans' benefits, and interest on debt. And these four items now account for about 105% of every dollar collected in taxes.

This is just madness. The good news is that income is now at an all-time high because the economy has been doing well, largely due to a strong stock market. But this 105% spending relative to US tax revenue—that's without taking into account roads, air traffic control, national parks, and the entire federal workforce. Anything left over is paid for with borrowed money. So, US incomes are growing at about 4% per year. But unfortunately, these four accounts are growing faster— about 7.5%, right? So, essentially, our expenses are growing faster than our income.

And this gap is getting bigger every year. Nobody is really doing anything to stop it, even though they should. So how to solve this? Here's what they plan to do. So, here is the master plan according to this theory. The plan is to move debt from the so-called "long" term to the "short " term. Okay, that's step number one. In other words, move the debt from the rate set by investors to the Federal Reserve rate, because interest rates are what make all of this possible. Then step two: create a large buyer for this short-term debt that will keep your debt at almost 0% interest.

Step three: let inflation exceed that rate, and then step four: let the bondholders, which is the pension funds, the insurers, and everyone who invested in target pension funds, essentially everyone who moved into safe assets before retirement, let these people go bankrupt. Okay, what does this even mean? To understand this, I'm going to put you to sleep for a bit now, but let me show you something about interest rates. Because people seem to think that the United States controls its interest rates, but that's not the case.

Because there are two interest rates. They are controlled by two completely different groups of people. The first is short-term interest rates. These are treasury debts with a maturity of several weeks or months. And they are, in fact, controlled by the Federal Reserve. When you hear, "The Fed is cutting rates," that's exactly what they're talking about. This is the short end of the curve, as economists call it . Now the second is the so- called long-term rates. These are 10-year and 30-year bonds. And these interest rates are set by the market, i.e.

pension funds, foreign central banks , hedge funds, insurance companies, etc. The government has no influence on this. Long-term interest rates depend on the auction, at the price that buyers are willing to give. Now this price is increasing. There's really nothing Scott Bessant or the United States can do about it. Except for one. They can move the debt, right? From the long-term segment, where the price is set by investors, to the short-term segment, where it is controlled by the Fed. And we know they do it because it's public information.

Every 3 months, the Treasury announces how much of each type of debt it plans to sell. And for nine consecutive quarters, they have never increased the volume of long-term bond auctions. But the amount they need to borrow continues to grow. So where do they get the extra money from? The answer is four-week Treasury bills . In 2016, they averaged about 47 billion per auction, and today they are 94 billion. This is doubling. It is currently the largest security sold by the United States government. It is larger than the 10-year Treasury bond.

It is almost four times larger than a 30-year bond. That's why Scott Bessant just announced that they can fund a $ 950 billion bailout from the Treasury General Account as well . So, essentially, we create more short-term debt, where the Fed can control the rate, and less long-term debt, where they can't. By the way, this is a brilliant analysis. I really like it. That is absolutely correct. You heard me talk about Warsh earlier. I think, again, I don't know anything. Maybe I'm making this up, blah blah blah.

But I think they had a meeting before Warsh was nominated to make sure he would play by those rules. Because, ultimately, if you have Warsh raising rates, and you're moving everything from long-term to short-term liabilities, and he starts raising rates, you're going to have problems. You need to transfer everything into short-term liabilities so that he lowers the rates, and then you can repay them. But if you did the exact opposite, oh my god, that would be terrible. You will see the $1.4 trillion we will spend this year on debt service grow, and grow, and grow.

This is already the largest expenditure item in our budget— debt servicing . So unless they have confidence that they can get Worsh to lower rates on all this short-term debt. They create a problem that was easier to control while it was long-term. This may be out of your control, but remember that technically they don't control the Fed. The Fed is independent. So the Fed can set these rates, but it has to agree that it's right for the economy. So, again , I think they should have agreed on this beforehand.

That's why two weeks ago the Treasury announced a doubling of its bond buyback program from $2 billion to at least $4 billion. In other words, they are now aggressively buying up even more long-term debt. And when the Ministry of Finance buys back a long-term bond, it has to pay for it with something. And he pays by issuing more short-term bills. Essentially, it's like refinancing: we take a credit card bill that's due in 10 years and use another card to pay it off. And this bill becomes due next month.

We have brought the maturity date closer. We will pay more interest, but that's okay because ultimately we control the short-term rate, to some extent. That's exactly what the buyout is trying to do, and that's exactly what the numbers show. The long-term debt they are buying has an average interest rate of about 3.4%. The short-term bills it replaces cost about 4%. That's it, you see. Think about it. So you go from 3.4% to 4%. Why do it if you don't know that this figure will decrease? Because if this indicator doesn't decrease, there's no point in all this .

So they seem to be taking cheap debt out of circulation and intentionally taking on more expensive debt. Because the 3.4% rate is fixed , right? It's been paid off for 30 years and no one can touch it. But 4% is something the Fed can later lower to three, and later to 1% or zero if they want. And they want to, don't they? Okay, then...Well, how much debt do they control now? Well , today they control about a fifth of the debt. These are short-term bills where the Fed sets the rate directly.

Another fifth are long-term bonds, where the market sets the rate and the government has no say. And there's a huge piece in the middle that seems to slide between them depending on the maturity. So today we have about 22% on the short end, and it's growing. Now, if you're going to finance the entire country with short-term debt, you still need someone to actually buy it for trillions of dollars. So, who is the buyer? This is who this buyer will be. So once they roll over the debt, they're going to need someone to actually buy trillions of dollars of short-term Treasuries.

And ideally, it should be a very large buyer that could potentially replace countries that no longer want to buy our Treasuries. Ideally, someone who won't negotiate with us about the interest rate, right? And here comes a piece of legislation that everyone thinks is about crypto, but it's not. It's about stablecoins, because a stablecoin is a digital dollar that must be backed by something. And according to the rules being written now, it is backed by short-term Treasury debt . And that means... You remember, a long time ago , I forgot that guy's last name, but it seems to be Anton or something, if I remember correctly.

The Russian said, "Let me tell you, this whole thing, this act that they're putting forward, is designed specifically to create an appetite for their debt." We covered it when it happened. I think he was absolutely right. Uh, yeah, uh, that's how we're going to work up that appetite. That's why we have to transfer everything to this short-term debt. They drove. Someone who lives in Argentina, Turkey, or Nigeria, right? If they are looking for a dollar stablecoin , they are doing so because their own currency is collapsing.

They are not looking for favorable interest rates. They are not interested in profitability. They just want access to dollars and will happily hold them at 0% APR because 0% in dollars is better than what is happening to their money. So, this is a potentially huge buyer of US debt. And this buyer does not require interest, and no foreign government can force him to sell these instruments. So, the new buyers will be, essentially, everyone in the world. Now the final step: who is actually paying for all this ?

Because when you have rolled over the debt to a short term and created a buyer who will hold it for almost no interest, you can let inflation outpace them. This is the plan. Because if you hold a bond that's earning you 2%, when inflation is actually 6 %, that means you're losing about 4% of your purchasing power. This is yield curve control . This is what I was talking about. This is how we got rid of our debt after World War II. This is exactly how we are going to get rid of our debt now.

per year. You still get every payment you were promised, but you end up poorer. Economists call this a negative real interest rate, and it's the most powerful debt reduction tool they've ever created, because you don't have to wait for a crisis, right? No one will get a letter in the mail saying, "Hey, your savings are worth less today." Isn't that right? The numbers in our bank accounts will continue to grow, but we will become poorer. This is what happened to a retiree who bought Treasury bonds in 2014 and lost approximately 90% of their purchasing power in gold equivalent .

Madness. It was designed that way . And the plan is not to stop it. The plan is to do it more often, faster, and with greater accuracy. In fact, they've done this before. After World War II, the United States had about the same level of debt relative to the economy as it does today. By the early 1950s, it had halved. Real interest rates fell to -13%, and bondholders lost 1/2 to 2/3 of their money in just 5 years. But guess what we did then? We produced.

We were producing, Joe. We are no longer producing. Little. We'll see. Everyone remembers that period as the "Great American Boom." But who paid for it ? These were bondholders. Remember, these are pension funds, insurers, people who have invested their money in retirement funds with a target date. Anyone who is trying to retire safely. So, let's go back to the beginning with J.D. Vance. Remember, we said that the dollar is America's "resource curse." The most valuable thing this country produces is money. And this is what is draining the US economy.

His solution is that America should just stop selling money to the world, right? And get back to producing real things. But the plan I just explained in this video is the complete opposite. This plan says, "No, no, no. Let's keep this game going as long as possible. This could be the last frontier of the US dollar and the American empire, because this is a plan to expand access to dollars for the whole world." That's why Scott Bessent says, "When you dedollarize, you see a strong appetite for the dollar.

So the dollar gets stronger, it goes up . Then it goes down. Obviously, there's a slow dedollarization, but could the initial stages be a dollar rally as companies and countries pay off their dollar debts? So, before the dollar boycott, there's a dollar thirst. So watch this brilliant act closely, because that's part of their main strategy. And if you want to learn more about this and see how I'm personally preparing to protect myself from this, you can find these videos in the premium section where I talk about my investment philosophy and give you early access to my videos.

If that's valuable to you, the link is down there. Okay. If you haven't subscribed to Andre's YouTube channel, make sure you do . He's fantastic. Part of what he ended up with there that I find really interesting is the dichotomy between Trump and, um, J.D. Vance. And I think there 's a very real tension there. There's been a lot of leaks that these two don't agree with each other often. And I have a feeling that's one of the things that they disagree on. So it's going to be really interesting to see if Vance actually runs in 2028 and people start to press him , you know, with questions about how he's different from Trump.

I think that's when a lot of this is going to come out. Now, what's happening with the move from long-term to short-term bonds to translate that into stablecoins is really brilliant. It's really smart. Now, whether we get smart or just use this as a way to postpone the inevitable , we're almost certainly just going to continue to postpone the inevitable . But yeah, from a bond market rescue strategy perspective, it's actually pretty brilliant. I'm not sure I have high hopes for that it will work when you tell the whole world to abandon the dollar.

It will have its role, but I don't think people will feel like they have only one choice in this world. So people make the assumption that, well, all of these, because he uses the example of someone who is trying to save. It's like, " Well, I would rather hold money in U.S. debt because it's better than what's happening to my currency." In a world where we have to move all of this debt demand into the crypto market, you're essentially exposing yourself. You're saying that the rest of the world is turning away from us.

It's very likely that other options will emerge, certainly over the next 10 or 20 years. It buys time, but I don't think that's a real strategy. The real strategy is to be so fiscally disciplined that the whole world trusts you and wants to be your lender. And I think we're just relying on the fact that we're stronger than everyone else, we can to make everyone do what we want, and forgot that the real strength of America was the people's belief in us. And they certainly don't believe in us anymore.

The yield curve thing still puzzles me a little . Is it just one of those things that only exists on paper? No, yield curve control is real. Most people just don't see it, or they still lose less by holding their money there than they would in anything else. But the way yield curve control works is it's a very active process. They artificially keep interest rates low and below inflation. For example, they know that the CPI is 4%, and they're paying 2%. So we're eating away at your welfare.

And they do this until the amount of debt is so small compared to the inflated dollars that it can simply be paid off. Imagine a world where $40 trillion is a tiny amount of money. And it's like, "Yeah, It doesn't matter." That's easy. Because you take on new debt or pay it off with income that's been devalued by inflation. So you're literally deliberately devaluing your own currency. And what people do n't talk about enough about the post- World War II example: the only reason it worked is because we were the center of the world .

We suddenly became the world's reserve currency. We had the vast majority of the world's gold reserves, we were the center that everyone went to for production, and we helped other countries rebuild. So we had industry everywhere, both domestically and internationally, coming to us for debt, paying off what they took from us during the war. So the real economy grew even faster than the financial repression. So let's say they hurt you; and this is one of the things he doesn't mention, obviously retirees aren't the only ones holding money in bonds.

The vast majority of retirees don't have 100% of their savings in bonds. They just have too much of it in their portfolio. But nobody's stupid. If you're in a situation where the economy is just going through a rough patch, your financial advisors are like, 'Look, you're old, so you better be careful.'" So we will place a disproportionately large amount in bonds for the sake of safety, even though you are losing money there." So we're going to give you access to the stock market because the real economy is growing faster than inflation, and everyone feels richer." Your bonds are not where you make money, but if you're young, first of all, you're actually getting richer.

You're making more money every year. You have reason to believe that your kids are going to make more than you. So everyone is optimistic, and because the markets depend on your outlook, when everyone is optimistic, everyone feels good. There's enough money in the system , which means real growth, so, yeah, I'm not growing as much as I could have if you weren't doing financial repression. But I don't even understand what financial repression is, so I just feel like I'm richer this year than I was last year.

Who's going to complain? They don't understand where they're being ripped off because the real economy is growing. So nobody says, "Oh, I could be growing." 4%, but I 'm only growing 2%. They're just saying, " Wow, I'm getting 2% richer every year." That's cool. So when we talk about it now , people are just being dishonest about the fact that we don't have an economic boom. You don't have an economic boom , and so you end up trying to financially repress people at a time when nothing is making up for it.

That's crazy. And at a time when the world doesn't trust you. And at a time when you're ready to grab each other's throats. We thought the reason for the baby boom was because people came back from the war, they were so euphoric that they were having babies. And the VA and free money were being given out . Yeah, but again, the real economy was growing. I really worry that when people have that view, they're too used to being abused by the financial system, trying to squeeze every dollar out of a system that's only working for some people, and they forget that the middle class has been growing in real terms.

And when the middle class is growing in real terms, everything seems good. Um, and then the last one. Speaking specifically about the debt, he said that in the short term they would move it from long-term debt, where rates are out of control because the market controls them, to short-term debt that the Fed can control. Once they move it to short-term, would it be a fraction of that 40 trillion? Was it all 40 trillion? And then they would lower interest rates, or ... So right now they're at 22%, which is short-term.

How much will eventually be moved? I don't know. Part of it will depend on whether the Clarity Act is passed , because I think that's what has n't been passed. The Genius Act has already been passed, and it's crazy. I may have mixed them up, but in anyway. When it gets passed, we don't know what that's going to be. How quickly will the appetite for debt in the system come up? That's another question. How well will the Fed and the Treasury work together to get rates where they want them?

He's making it up a little bit that we're going to be able to keep short-term rates low, because in his example, stablecoins are just the vast majority of the desire for that, and the vast majority of the demand for stablecoins is people in other currencies who are being treated so badly that they'd rather be in dollars, even at zero. There's a lot of speculation there. So it's hard to say. Also keep in mind that at the same time Besant is putting out a fire, a real thing that's happening in the bond market right now.

So what we've just broken down is a very well-made hypothesis of where this is likely to go. Andre, another great analysis. But in real life , what's actually happening right now, is that Besant can't contain the rapid rise in interest rates. So now the 30- year bond is starting to rise, the 10- year bond is starting to rise. People say, "No, you're going to have to buy this from me or increase the interest you pay me, but you're not going to make me say, "Okay, that's fine." Because it's not fine at all.

I see what you're doing in Japan. I know you're under similar pressure here in the United States . And so Besant had to go from, "I'm going to double from four billion to eight billion" every time we do these buybacks. And people were patting themselves on the back and laughing. And now he's had to say, "I've got almost a trillion dollars in my account, and I'm not afraid to use it." Listen, when you start saying things like that, you know -- something breaks. But the problem is, the more he says, " I have all this money ," "I can buy all this bonds," The more people think, "I don't believe this is okay." That scares us.

But within a four-year cycle, it only needs to last the next two or three years . So if about 21% of the debt is what we're paying interest on, I can... We're paying interest on all of that. The 22% is what we've put on a short-term basis. Got it. There's a portion of the debt that's coming due. We have... oh my God, how many trillions of dollars? So we're rolling over trillions of dollars. If we can roll over that trillion, let's call it 20% of the debt.

Let's call it 8 trillion. You put half of that into short-term financial repression. You stabilize three or four trillion on the other side to solve the problem for the next five years, unless there's a collapse and other " ifs." So, yeah. You know, he doesn't have to break the barrier in 40 trillion. If he can get over eight, that at least gives us some leeway , so to speak. Yeah. I just heard—and unfortunately you're right—if he beats us all up until there's no bruises left, he'll be fine.

We're not going to leave him. We're just going to limp along, and you're right . And that's exactly what they're going to do. They're going to abuse you just enough so that it doesn't feel bad enough that you vote for austerity. And I'm afraid they're going to abuse us just enough so that people stay angry because everything is going to be less affordable. They're going to get angry and vote for an idea that sounds better but is actually, um, much, much worse. Um. That's why we don't build anything in America anymore, because we have a bunch of treasury and financial instruments, we're just pulling all these levers that we jump through just to understand what we're doing with our trillions.

The other thing is that the economy is still growing, until, um, if something goes wrong with artificial intelligence, that's the first real blow, but the economy is growing. Well, the country is still growing at a much, um, slower rate, but the country is still growing. And until recently, I think we introduced—I didn't look at the details, but I think they've really restricted visa applications now. Um, but until recently, we just imported so much cheap labor. You can still stay afloat for a while with that. So yeah, they're going to, as usual, postpone the problem, continue deficit spending, pretend it doesn't matter, but it does matter, and it's going to come up on someone else's deadline.

Um, cool. That's all I have. Okay. Are there any, um, superchats? Are we ready? No more superchats. Okay, everyone. Thank you very much. Thanks. Well, that was an important episode, it was worth it given everything that's going on in the economy. And speaking of controlling your own destiny, guys and girls, please learn how to generate income. On Thursday, September 10th, at 1:00 PM PT, I'm going to be teaching an ITU masterclass on how to use artificial intelligence to start your own company. The bet that I make, the biggest bet that I've ever made in my entire life, was on myself.

So I put all my high-risk dollars into starting companies. Obviously, it's paid off extremely well for me. If you've ever thought about trying it, in the evenings and on the weekends, man, you don't have to bet your future on it , but at least learn about artificial intelligence and how to use it, what it's good at and what it's not. I'll be teaching all of that on Thursday , September 10th, at 1:00 PM PT . Link in description. Sign up and join me. It's free, free, free.

Okay, guys. Love you. See you Friday . See you guys. Be legendary. Take care. Peace to you. If you enjoyed this conversation, check out this episode to learn more. This video is about how much damage an AI failure would cause . And the answer is—a lot. So buckle up. Back in May, Micron and SK Hynix, two memory chip companies, issued 17%

Go deeper

• All Impact Theory episode guides