They Rebuilt the 2008 Crash Machine — And Put It In Your Retirement Account

In 2008, the American financial system In 2008, the American financial system didn't just crash, it almost ceased to didn't just crash, it almost ceased to didn't just crash, it almost ceased to exist, and a similar danger is building exist, and a similar danger is building exist, and a similar danger is building in the system once again. 12 of the 13 in the system once again. 12 of the 13 in the system once again. 12 of the 13 largest financial institutions in the largest financial institutions in the largest financial institutions in the United States were at risk of total United States were at risk of total United States were at risk of total failure. That was exactly what the failure. That was exactly what the failure. That was exactly what the Federal Reserve Chairman Ben Bernani Federal Reserve Chairman Ben Bernani Federal Reserve Chairman Ben Bernani told the Financial Crisis Inquiry told the Financial Crisis Inquiry told the Financial Crisis Inquiry Commission. 12 out of 13. The United Commission. 12 out of 13. The United Commission. 12 out of 13. The United Kingdom's chancellor of the ex-checker Kingdom's chancellor of the ex-checker Kingdom's chancellor of the ex-checker admitted Britain came within hours of admitted Britain came within hours of admitted Britain came within hours of what he called a breakdown of law and what he called a breakdown of law and what he called a breakdown of law and order. American households alone lost 16 order. American households alone lost 16 order. American households alone lost 16 trillion in net worth. One quarter of trillion in net worth. One quarter of trillion in net worth. One quarter of all families lost 75% all families lost 75% all families lost 75% or more of everything that they had. The or more of everything that they had. The or more of everything that they had. The stock market fell by 57%. 7 12 million stock market fell by 57%. 7 12 million stock market fell by 57%. 7 12 million jobs vanished essentially overnight. And jobs vanished essentially overnight. And jobs vanished essentially overnight. And the Federal Reserve, in a move that had the Federal Reserve, in a move that had the Federal Reserve, in a move that had no precedent in the history of this no precedent in the history of this no precedent in the history of this country, printed 7.77 country, printed 7.77 country, printed 7.77 trillion out of thin air to keep the trillion out of thin air to keep the trillion out of thin air to keep the system from collapsing entirely. Every system from collapsing entirely. Every system from collapsing entirely. Every single American lost an estimated single American lost an estimated single American lost an estimated $70,000 in lifetime income because of $70,000 in lifetime income because of $70,000 in lifetime income because of what happened. And for all of that, all what happened. And for all of that, all what happened. And for all of that, all of the destruction, all of the fraud, of the destruction, all of the fraud, of the destruction, all of the fraud, all of the recklessness, all of the recklessness, all of the recklessness, exactly one banker went to jail. One, a exactly one banker went to jail. One, a exactly one banker went to jail. One, a mid-level trader at Credit Swiss. 30 mid-level trader at Credit Swiss. 30 mid-level trader at Credit Swiss. 30 months. That was the price. Now, I'm months. That was the price. Now, I'm months. That was the price. Now, I'm telling you all of this because the telling you all of this because the telling you all of this because the mechanics that caused 2008 are running mechanics that caused 2008 are running mechanics that caused 2008 are running again. And this time, odds are it's again. And this time, odds are it's again. And this time, odds are it's already inside of your retirement already inside of your retirement already inside of your retirement account. I'll prove it. And more account. I'll prove it. And more account. I'll prove it. And more importantly, I'm going to give you the importantly, I'm going to give you the importantly, I'm going to give you the framework that may help you avoid the framework that may help you avoid the framework that may help you avoid the fallout if the market as a whole is fallout if the market as a whole is fallout if the market as a whole is indeed at risk from this potential new indeed at risk from this potential new indeed at risk from this potential new contagion that we're going to walk contagion that we're going to walk contagion that we're going to walk through. Buckle up because here's what through. Buckle up because here's what through. Buckle up because here's what this video is going to show you. Wall this video is going to show you. Wall this video is going to show you. Wall Street has built a $2 trillion shadow Street has built a $2 trillion shadow Street has built a $2 trillion shadow banking system that operates in dark banking system that operates in dark banking system that operates in dark with no public pricing, no public with no public pricing, no public with no public pricing, no public reporting, and no public oversight. It reporting, and no public oversight. It reporting, and no public oversight. It is a sector of the economy known as is a sector of the economy known as is a sector of the economy known as private credit. And there are now private credit. And there are now private credit. And there are now significant warning signs that it has a significant warning signs that it has a significant warning signs that it has a major issue. One of Black Rockck's major issue. One of Black Rockck's major issue. One of Black Rockck's private credit funds recently lost private credit funds recently lost private credit funds recently lost nearly 20% of its value in a single nearly 20% of its value in a single nearly 20% of its value in a single quarter. We're not talking about a small quarter. We're not talking about a small quarter. We're not talking about a small obscure company here. We are talking obscure company here. We are talking obscure company here. We are talking about a loadbearing wall of the global about a loadbearing wall of the global about a loadbearing wall of the global economy. And if they're already taking a economy. And if they're already taking a economy. And if they're already taking a hit, it stands to reason that there's hit, it stands to reason that there's hit, it stands to reason that there's something much bigger going on. And in something much bigger going on. And in something much bigger going on. And in fact, we already have proof that there fact, we already have proof that there fact, we already have proof that there is. Recently, a firm most Americans have is. Recently, a firm most Americans have is. Recently, a firm most Americans have never even heard of, Blue Owl Capital, never even heard of, Blue Owl Capital, never even heard of, Blue Owl Capital, permanently locked investors out of a permanently locked investors out of a permanently locked investors out of a fund that was supposed to let them fund that was supposed to let them fund that was supposed to let them withdraw their money every quarter. withdraw their money every quarter. withdraw their money every quarter. Instead, after getting overextended on Instead, after getting overextended on Instead, after getting overextended on debt, they were forced to sell $1.4 debt, they were forced to sell $1.4 debt, they were forced to sell $1.4 billion in loans, halt all redemptions, billion in loans, halt all redemptions, billion in loans, halt all redemptions, and tell investors they'd get their and tell investors they'd get their and tell investors they'd get their money back eventually. The stock dropped money back eventually. The stock dropped money back eventually. The stock dropped 9% instantly. And one analyst called it, 9% instantly. And one analyst called it, 9% instantly. And one analyst called it, and I quote, a canary in the coal mine, and I quote, a canary in the coal mine, and I quote, a canary in the coal mine, and said, "The private markets bubble is and said, "The private markets bubble is and said, "The private markets bubble is finally starting to burst." Finally finally starting to burst." Finally finally starting to burst." Finally starting to burst. How long has this starting to burst. How long has this starting to burst. How long has this problem been building up? Most people problem been building up? Most people problem been building up? Most people have never even heard of private credit. have never even heard of private credit. have never even heard of private credit. And even if they have heard of it, they And even if they have heard of it, they And even if they have heard of it, they probably couldn't explain it. And this probably couldn't explain it. And this probably couldn't explain it. And this is exactly like mortgage back securities is exactly like mortgage back securities is exactly like mortgage back securities and subprime mortgages right before and subprime mortgages right before and subprime mortgages right before everything blew up in 2008. There was a everything blew up in 2008. There was a everything blew up in 2008. There was a ton of risk in the system that most ton of risk in the system that most ton of risk in the system that most people were completely unaware of. But people were completely unaware of. But people were completely unaware of. But that didn't stop it from becoming a that didn't stop it from becoming a that didn't stop it from becoming a major threat to the economy. 15 years major threat to the economy. 15 years major threat to the economy. 15 years ago, the private credit market barely ago, the private credit market barely ago, the private credit market barely existed. But now it's roughly the same existed. But now it's roughly the same existed. But now it's roughly the same size as the entire high yield bond size as the entire high yield bond size as the entire high yield bond market. Whether people know what it is market. Whether people know what it is market. Whether people know what it is or not, pension funds have five to 15% or not, pension funds have five to 15% or not, pension funds have five to 15% of their assets in private credit. Now, of their assets in private credit. Now, of their assets in private credit. Now, this isn't a story about one fund this isn't a story about one fund this isn't a story about one fund blowing up. This is a story about a blowing up. This is a story about a blowing up. This is a story about a predatory pattern that keeps repeating. predatory pattern that keeps repeating. predatory pattern that keeps repeating. In 2008, the vehicle was mortgage back In 2008, the vehicle was mortgage back In 2008, the vehicle was mortgage back securities. And in 2026, the vehicle is securities. And in 2026, the vehicle is securities. And in 2026, the vehicle is private credit. Risky assets get created private credit. Risky assets get created private credit. Risky assets get created by sophisticated financial players, by sophisticated financial players, by sophisticated financial players, repackaged under a new name, blessed by repackaged under a new name, blessed by repackaged under a new name, blessed by rating agencies, and sold downstream to rating agencies, and sold downstream to rating agencies, and sold downstream to the people least equipped to survive it the people least equipped to survive it the people least equipped to survive it if something goes wrong. Pension funds, if something goes wrong. Pension funds, if something goes wrong. Pension funds, retirement funds, and everyday investors retirement funds, and everyday investors retirement funds, and everyday investors who were told this was safe, stable who were told this was safe, stable who were told this was safe, stable income. I'm going to walk you through income. I'm going to walk you through income. I'm going to walk you through exactly how it works, why it's breaking exactly how it works, why it's breaking exactly how it works, why it's breaking right now, and what it reveals about a right now, and what it reveals about a right now, and what it reveals about a much bigger pattern that's playing out much bigger pattern that's playing out much bigger pattern that's playing out across the entire economy. The US across the entire economy. The US across the entire economy. The US private credit market has exploded from private credit market has exploded from private credit market has exploded from 500 billion to over $2 trillion in just 500 billion to over $2 trillion in just 500 billion to over $2 trillion in just 5 years. Pension funds have billions 5 years. Pension funds have billions 5 years. Pension funds have billions parked in it. And last August, the parked in it. And last August, the parked in it. And last August, the government opened the door to putting government opened the door to putting government opened the door to putting your 401k money into it. Most people your 401k money into it. Most people your 401k money into it. Most people have never even heard the term private have never even heard the term private have never even heard the term private credit, and that's exactly how Wall credit, and that's exactly how Wall credit, and that's exactly how Wall Street wants it. But here's the bad Street wants it. But here's the bad Street wants it. But here's the bad news. Goldman Sachs published data news. Goldman Sachs published data news. Goldman Sachs published data showing that 15% of private credit showing that 15% of private credit showing that 15% of private credit borrowers are no longer generating borrowers are no longer generating borrowers are no longer generating enough cash to cover their interest enough cash to cover their interest enough cash to cover their interest payments. One in six across the board. payments. One in six across the board. payments. One in six across the board. And that number is almost certainly And that number is almost certainly And that number is almost certainly understating the problem because the understating the problem because the understating the problem because the IMF's own financial stability report IMF's own financial stability report IMF's own financial stability report found that over 40% found that over 40% found that over 40% of private credit borrowers are now of private credit borrowers are now of private credit borrowers are now operating with negative free cash flow. operating with negative free cash flow. operating with negative free cash flow. That's up from 25% in 2021. For all of That's up from 25% in 2021. For all of That's up from 25% in 2021. For all of the hype in the economy about it the hype in the economy about it the hype in the economy about it booming, the reality on the ground is booming, the reality on the ground is booming, the reality on the ground is that things are trending rapidly in the that things are trending rapidly in the that things are trending rapidly in the wrong direction. So, what happens when a wrong direction. So, what happens when a wrong direction. So, what happens when a borrower can't make their interest borrower can't make their interest borrower can't make their interest payment? In a normal market, that's payment? In a normal market, that's payment? In a normal market, that's obviously a default. It is game over. obviously a default. It is game over. obviously a default. It is game over. But in the private credit market, But in the private credit market, But in the private credit market, there's a trick. The lender lets the there's a trick. The lender lets the there's a trick. The lender lets the borrower skip the cash payment and borrower skip the cash payment and borrower skip the cash payment and instead tack the interest onto the loan instead tack the interest onto the loan instead tack the interest onto the loan balance. It's something called payment balance. It's something called payment balance. It's something called payment in kind or PIK. The borrower doesn't in kind or PIK. The borrower doesn't in kind or PIK. The borrower doesn't pay. The lender doesn't report a loss. pay. The lender doesn't report a loss. pay. The lender doesn't report a loss. Everyone's numbers look clean. That's Everyone's numbers look clean. That's Everyone's numbers look clean. That's why the official default rate in private why the official default rate in private why the official default rate in private credit is reported at under 2%. But once credit is reported at under 2%. But once credit is reported at under 2%. But once you account for these restructurings and you account for these restructurings and you account for these restructurings and cute little extensions, analysts cute little extensions, analysts cute little extensions, analysts estimate the real number is more than estimate the real number is more than estimate the real number is more than double that at closer to 5%. The gap double that at closer to 5%. The gap double that at closer to 5%. The gap between those two numbers is where this between those two numbers is where this between those two numbers is where this escalating risk is hiding. Jaime escalating risk is hiding. Jaime escalating risk is hiding. Jaime Diamond, CEO of JP Morgan Chase, the Diamond, CEO of JP Morgan Chase, the Diamond, CEO of JP Morgan Chase, the largest bank in the United States, largest bank in the United States, largest bank in the United States, didn't mince words on his October didn't mince words on his October didn't mince words on his October earnings call when he compared the earnings call when he compared the earnings call when he compared the problems building in private credit to problems building in private credit to problems building in private credit to cockroaches. His meaning was plain. When cockroaches. His meaning was plain. When cockroaches. His meaning was plain. When you see one, there are always more you see one, there are always more you see one, there are always more hiding in the walls. Now, how did we end hiding in the walls. Now, how did we end hiding in the walls. Now, how did we end up back here? After the 2008 financial up back here? After the 2008 financial up back here? After the 2008 financial crisis, regulators told banks never crisis, regulators told banks never crisis, regulators told banks never again. They impose strict new rules again. They impose strict new rules again. They impose strict new rules known as Basil 3 that essentially force known as Basil 3 that essentially force known as Basil 3 that essentially force banks to stop making these risky ass banks to stop making these risky ass banks to stop making these risky ass loans. Problem solved, right? Not even loans. Problem solved, right? Not even loans. Problem solved, right? Not even close. The risky lending didn't stop. It close. The risky lending didn't stop. It close. The risky lending didn't stop. It just moved somewhere the regulators just moved somewhere the regulators just moved somewhere the regulators couldn't see it. The goal of Basil 3 was couldn't see it. The goal of Basil 3 was couldn't see it. The goal of Basil 3 was to make it expensive and difficult for to make it expensive and difficult for to make it expensive and difficult for banks to lend to midsize companies. The banks to lend to midsize companies. The banks to lend to midsize companies. The businesses too big for a local bank but businesses too big for a local bank but businesses too big for a local bank but too small to issue public bonds. private too small to issue public bonds. private too small to issue public bonds. private credit funds stepped in to fill that credit funds stepped in to fill that credit funds stepped in to fill that gap. They raise money from big gap. They raise money from big gap. They raise money from big investors, pension funds, insurance investors, pension funds, insurance investors, pension funds, insurance companies, wealthy individuals. They companies, wealthy individuals. They companies, wealthy individuals. They then pull it and lend it out to these then pull it and lend it out to these then pull it and lend it out to these companies at higher interest rates than companies at higher interest rates than companies at higher interest rates than banks would charge. For a while, this banks would charge. For a while, this banks would charge. For a while, this worked great. Companies got funding, worked great. Companies got funding, worked great. Companies got funding, investors got high yields, and because investors got high yields, and because investors got high yields, and because the loans were held by sophisticated the loans were held by sophisticated the loans were held by sophisticated institutional players with longtime institutional players with longtime institutional players with longtime horizons, the illiquidity wasn't horizons, the illiquidity wasn't horizons, the illiquidity wasn't actually a problem. It went wrong when actually a problem. It went wrong when actually a problem. It went wrong when three things happened together. One, the three things happened together. One, the three things happened together. One, the market exploded in size. The market exploded in size. The market exploded in size. The aforementioned 500 billion to 2 trillion aforementioned 500 billion to 2 trillion aforementioned 500 billion to 2 trillion plus in just 5 years. With that much plus in just 5 years. With that much plus in just 5 years. With that much money pouring in, lending standards just money pouring in, lending standards just money pouring in, lending standards just dropped. Also, lenders have to put the dropped. Also, lenders have to put the dropped. Also, lenders have to put the money raised to work. They have that money raised to work. They have that money raised to work. They have that obligation. But they quickly ran out of obligation. But they quickly ran out of obligation. But they quickly ran out of good borrowers and just started lending good borrowers and just started lending good borrowers and just started lending to riskier ones. Remember the ultra to riskier ones. Remember the ultra to riskier ones. Remember the ultra toxic subprime mortgages that almost toxic subprime mortgages that almost toxic subprime mortgages that almost destroyed the global economy? That's destroyed the global economy? That's destroyed the global economy? That's exactly what subprime meant. It's a nice exactly what subprime meant. It's a nice exactly what subprime meant. It's a nice way of saying people banks really should way of saying people banks really should way of saying people banks really should never have lended money to. Two, they never have lended money to. Two, they never have lended money to. Two, they started selling these loans to retail started selling these loans to retail started selling these loans to retail investors through semi-liquid funds like investors through semi-liquid funds like investors through semi-liquid funds like Blue Owls OBDC2. Here's the problem. The Blue Owls OBDC2. Here's the problem. The Blue Owls OBDC2. Here's the problem. The underlying loans are typically 5 to underlying loans are typically 5 to underlying loans are typically 5 to seven-year commitments to private seven-year commitments to private seven-year commitments to private companies borrowing the money. And you companies borrowing the money. And you companies borrowing the money. And you can't cash them out overnight to pay can't cash them out overnight to pay can't cash them out overnight to pay back impatient investors. There's just back impatient investors. There's just back impatient investors. There's just no exchange. There's no market maker. no exchange. There's no market maker. no exchange. There's no market maker. And foolishly, the funds that hold these And foolishly, the funds that hold these And foolishly, the funds that hold these loans ended up promising investors they loans ended up promising investors they loans ended up promising investors they could withdraw their money every could withdraw their money every could withdraw their money every quarter. How is that supposed to work? quarter. How is that supposed to work? quarter. How is that supposed to work? You have long duration loans, illlquid You have long duration loans, illlquid You have long duration loans, illlquid assets stuffed inside of a vehicle that assets stuffed inside of a vehicle that assets stuffed inside of a vehicle that promises short-term access to cash. How? promises short-term access to cash. How? promises short-term access to cash. How? That might work fine when everyone is That might work fine when everyone is That might work fine when everyone is calm and only a few people request to calm and only a few people request to calm and only a few people request to get their money back. It falls apart, get their money back. It falls apart, get their money back. It falls apart, though the second people want their though the second people want their though the second people want their money back all at the same time. Why? money back all at the same time. Why? money back all at the same time. Why? Because the fund has to sell assets that Because the fund has to sell assets that Because the fund has to sell assets that were never designed to be sold quickly. were never designed to be sold quickly. were never designed to be sold quickly. Now, that's the same mechanic as a bank Now, that's the same mechanic as a bank Now, that's the same mechanic as a bank run, except there's no FDIC insurance run, except there's no FDIC insurance run, except there's no FDIC insurance backing it up. The third converging backing it up. The third converging backing it up. The third converging problem is that the government opened problem is that the government opened problem is that the government opened the door to 401ks to hold these assets. the door to 401ks to hold these assets. the door to 401ks to hold these assets. In August of 2025, an executive order In August of 2025, an executive order In August of 2025, an executive order directed regulators to explore letting directed regulators to explore letting directed regulators to explore letting 401k plans invest in private markets. 401k plans invest in private markets. 401k plans invest in private markets. The industry is already marketing to the The industry is already marketing to the The industry is already marketing to the $13 trillion defined contribution $13 trillion defined contribution $13 trillion defined contribution retirement market. So, the risk retirement market. So, the risk retirement market. So, the risk waterfall is just being extended further waterfall is just being extended further waterfall is just being extended further and further downstream. Now, I want you and further downstream. Now, I want you and further downstream. Now, I want you to see the full chain of cause and to see the full chain of cause and to see the full chain of cause and effect here. Because when you see it effect here. Because when you see it effect here. Because when you see it laid out end to end, you will understand laid out end to end, you will understand laid out end to end, you will understand why the people at the top of this system why the people at the top of this system why the people at the top of this system sleep fine at night and why the people sleep fine at night and why the people sleep fine at night and why the people at the bottom should be worried but at the bottom should be worried but at the bottom should be worried but don't even know what's happening. It all don't even know what's happening. It all don't even know what's happening. It all starts with private equity. Let's say a starts with private equity. Let's say a starts with private equity. Let's say a private equity firm wants to buy a private equity firm wants to buy a private equity firm wants to buy a company. They need debt to finance the company. They need debt to finance the company. They need debt to finance the deal. And before 2008, they just go to a deal. And before 2008, they just go to a deal. And before 2008, they just go to a bank. But the banks got regulated out of bank. But the banks got regulated out of bank. But the banks got regulated out of that business. So now they go to a that business. So now they go to a that business. So now they go to a private credit fund. The private credit private credit fund. The private credit private credit fund. The private credit fund writes the loan, but it doesn't use fund writes the loan, but it doesn't use fund writes the loan, but it doesn't use its own money. It has to raise capital its own money. It has to raise capital its own money. It has to raise capital from somewhere. So, it goes to pension from somewhere. So, it goes to pension from somewhere. So, it goes to pension funds, insurance companies, endowments, funds, insurance companies, endowments, funds, insurance companies, endowments, and sovereign wealth funds. That's the and sovereign wealth funds. That's the and sovereign wealth funds. That's the traditional investor base. It's traditional investor base. It's traditional investor base. It's sophisticated. They have long time sophisticated. They have long time sophisticated. They have long time horizons. They understand what they're horizons. They understand what they're horizons. They understand what they're actually buying. But that wasn't enough actually buying. But that wasn't enough actually buying. But that wasn't enough to feed a market that was growing this to feed a market that was growing this to feed a market that was growing this fast. So, the funds created a new fast. So, the funds created a new fast. So, the funds created a new product, semi-liquid vehicles marketed product, semi-liquid vehicles marketed product, semi-liquid vehicles marketed directly to retail investors, everyday directly to retail investors, everyday directly to retail investors, everyday people with 401ks looking for yield in a people with 401ks looking for yield in a people with 401ks looking for yield in a world where savings accounts were just world where savings accounts were just world where savings accounts were just paying nothing. These are the funds like paying nothing. These are the funds like paying nothing. These are the funds like Blue Owl, the ones that promise Blue Owl, the ones that promise Blue Owl, the ones that promise quarterly access to your money while quarterly access to your money while quarterly access to your money while holding loans that don't mature for 5 to holding loans that don't mature for 5 to holding loans that don't mature for 5 to 7 years. And now with last August 7 years. And now with last August 7 years. And now with last August executive order, the door is just wide executive order, the door is just wide executive order, the door is just wide open for people with 401ks to get open for people with 401ks to get open for people with 401ks to get involved in this asset class. $13 involved in this asset class. $13 involved in this asset class. $13 trillion in defined contribution trillion in defined contribution trillion in defined contribution retirement savings, the single largest retirement savings, the single largest retirement savings, the single largest pool of retail money in the world is pool of retail money in the world is pool of retail money in the world is being invited to the table. So follow being invited to the table. So follow being invited to the table. So follow the chain. A private equity firm loads the chain. A private equity firm loads the chain. A private equity firm loads debt onto a company. A private credit debt onto a company. A private credit debt onto a company. A private credit fund writes that loan and packages it. fund writes that loan and packages it. fund writes that loan and packages it. The fund sells shares to a pension fund The fund sells shares to a pension fund The fund sells shares to a pension fund who sells retirement promises to a who sells retirement promises to a who sells retirement promises to a teacher in Ohio or an insurance company teacher in Ohio or an insurance company teacher in Ohio or an insurance company who backs the annuity your parents are who backs the annuity your parents are who backs the annuity your parents are living on or now potentially directly living on or now potentially directly living on or now potentially directly into your 401k. The company at the into your 401k. The company at the into your 401k. The company at the bottom of that chain, the one that bottom of that chain, the one that bottom of that chain, the one that actually has to generate the cash to actually has to generate the cash to actually has to generate the cash to service the debt that the private service the debt that the private service the debt that the private markets are cramming on top of it, might markets are cramming on top of it, might markets are cramming on top of it, might be a mid-market software firm that's be a mid-market software firm that's be a mid-market software firm that's about to get disrupted by AI or an auto about to get disrupted by AI or an auto about to get disrupted by AI or an auto parts supplier running on razor thin parts supplier running on razor thin parts supplier running on razor thin margins or a healthcare company that's margins or a healthcare company that's margins or a healthcare company that's been acquired three times in 5 years and been acquired three times in 5 years and been acquired three times in 5 years and is carrying more debt than revenue. This is carrying more debt than revenue. This is carrying more debt than revenue. This is happening more and more frequently. is happening more and more frequently. is happening more and more frequently. If that company can't pay, the loss If that company can't pay, the loss If that company can't pay, the loss doesn't stay at the top. It waterfalls doesn't stay at the top. It waterfalls doesn't stay at the top. It waterfalls down through the fund, through the down through the fund, through the down through the fund, through the pension, into the retirement account of pension, into the retirement account of pension, into the retirement account of someone who was never told this is what someone who was never told this is what someone who was never told this is what they owned. I call this the risk they owned. I call this the risk they owned. I call this the risk waterfall. Risk doesn't disappear. It waterfall. Risk doesn't disappear. It waterfall. Risk doesn't disappear. It just flows downhill. And in this system, just flows downhill. And in this system, just flows downhill. And in this system, it always ends up in the same place with it always ends up in the same place with it always ends up in the same place with the people who have the least the people who have the least the people who have the least information and the fewest options to information and the fewest options to information and the fewest options to get out of the way. get out of the way. get out of the way. We'll be back to the show in a second, We'll be back to the show in a second, We'll be back to the show in a second, but first let's talk about lazy money. but first let's talk about lazy money. but first let's talk about lazy money. Most people think owning gold is smart, Most people think owning gold is smart, Most people think owning gold is smart, and it is to be honest. But the question and it is to be honest. But the question and it is to be honest. 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And unlike most precious metal programs, storage most precious metal programs, storage most precious metal programs, storage and insurance are included so your yield and insurance are included so your yield and insurance are included so your yield isn't eaten up by hidden fees. Monetary isn't eaten up by hidden fees. Monetary isn't eaten up by hidden fees. Monetary metals is how you opt out of that game metals is how you opt out of that game metals is how you opt out of that game entirely and start stacking more ounces entirely and start stacking more ounces entirely and start stacking more ounces whether the price moves or not. Click whether the price moves or not. Click whether the price moves or not. Click the link in the show notes or visit the link in the show notes or visit the link in the show notes or visit monetary-medals.com/impact to learn more. This is a paid to learn more. This is a paid advertisement. And now, let's get back advertisement. And now, let's get back advertisement. And now, let's get back to the show. We'll get back to the show to the show. We'll get back to the show to the show. We'll get back to the show in a moment, but first, let's talk about in a moment, but first, let's talk about in a moment, but first, let's talk about the unfair advantage most entrepreneurs the unfair advantage most entrepreneurs the unfair advantage most entrepreneurs don't even know that they have access don't even know that they have access don't even know that they have access to. 10 years ago, if you wanted to to. 10 years ago, if you wanted to to. 10 years ago, if you wanted to compete with the big brands, you needed compete with the big brands, you needed compete with the big brands, you needed their big budget. Today, a solo founder their big budget. Today, a solo founder their big budget. Today, a solo founder operating out of their spare bedroom can operating out of their spare bedroom can operating out of their spare bedroom can have the exact same checkout technology, have the exact same checkout technology, have the exact same checkout technology, the same AI powered marketing tools, and the same AI powered marketing tools, and the same AI powered marketing tools, and the same worldclass commerce the same worldclass commerce the same worldclass commerce infrastructure as the biggest names in infrastructure as the biggest names in infrastructure as the biggest names in the game. That platform is Shopify. the game. That platform is Shopify. the game. That platform is Shopify. Brands like Gym Shark and Allirds built Brands like Gym Shark and Allirds built Brands like Gym Shark and Allirds built empires on it, and it powers 10% of all empires on it, and it powers 10% of all empires on it, and it powers 10% of all e-commerce in the US. Shopify gives you e-commerce in the US. Shopify gives you e-commerce in the US. Shopify gives you everything. A beautiful storefront, AI everything. A beautiful storefront, AI everything. A beautiful storefront, AI tools that write your product tools that write your product tools that write your product descriptions and enhance your descriptions and enhance your descriptions and enhance your photography, email and social campaigns, photography, email and social campaigns, photography, email and social campaigns, inventory, shipping, returns, all of it inventory, shipping, returns, all of it inventory, shipping, returns, all of it in one place. The gap between you and in one place. The gap between you and in one place. The gap between you and the big players just closed. The only the big players just closed. The only the big players just closed. The only question is whether you're going to use question is whether you're going to use question is whether you're going to use it. Sign up for your $1 per month trial it. Sign up for your $1 per month trial it. Sign up for your $1 per month trial today at shopify.com/impact. today at shopify.com/impact. today at shopify.com/impact. And now, let's get back to the show. And now, let's get back to the show. And now, let's get back to the show. In the last quarter alone, private In the last quarter alone, private In the last quarter alone, private credit investors have requested $2.77 credit investors have requested $2.77 credit investors have requested $2.77 billion in withdrawals. That's a 200% billion in withdrawals. That's a 200% billion in withdrawals. That's a 200% increase from the prior quarter. When increase from the prior quarter. When increase from the prior quarter. When that many people want out at the same that many people want out at the same that many people want out at the same time, and the underlying assets can't be time, and the underlying assets can't be time, and the underlying assets can't be sold quickly, you have a structural sold quickly, you have a structural sold quickly, you have a structural problem that no press release can fix. problem that no press release can fix. problem that no press release can fix. So that's the machine that's siphoning So that's the machine that's siphoning So that's the machine that's siphoning wealth out of the working and middle wealth out of the working and middle wealth out of the working and middle classes and shoving it up to the top. classes and shoving it up to the top. classes and shoving it up to the top. Now let me explain the environment this Now let me explain the environment this Now let me explain the environment this machine is operating in so you machine is operating in so you machine is operating in so you understand why things are suddenly understand why things are suddenly understand why things are suddenly accelerating. Why there is so much risk. accelerating. Why there is so much risk. accelerating. Why there is so much risk. The global economy has been completely The global economy has been completely The global economy has been completely destabilized by COVID era money destabilized by COVID era money destabilized by COVID era money printing, insane levels of deficit printing, insane levels of deficit printing, insane levels of deficit spending, a rapidly changing spending, a rapidly changing spending, a rapidly changing geopolitical world order, and the dawn geopolitical world order, and the dawn geopolitical world order, and the dawn of AI. There are bubbles forming across of AI. There are bubbles forming across of AI. There are bubbles forming across multiple asset classes. At the same multiple asset classes. At the same multiple asset classes. At the same time, AI valuations have blown past time, AI valuations have blown past time, AI valuations have blown past historical benchmarks. Companies with historical benchmarks. Companies with historical benchmarks. Companies with minimal revenue are being priced like minimal revenue are being priced like minimal revenue are being priced like they've already won the AI race. Some of they've already won the AI race. Some of they've already won the AI race. Some of that is genuine belief in a technology that is genuine belief in a technology that is genuine belief in a technology that really is going to pay off. Some of that really is going to pay off. Some of that really is going to pay off. Some of it is just an ocean of capital swollen it is just an ocean of capital swollen it is just an ocean of capital swollen by years of artificially low interest by years of artificially low interest by years of artificially low interest rates and historic levels of money rates and historic levels of money rates and historic levels of money printing. So smart money right now knows printing. So smart money right now knows printing. So smart money right now knows that it must find a return somewhere that it must find a return somewhere that it must find a return somewhere that outpaces the 25% inflation of the that outpaces the 25% inflation of the that outpaces the 25% inflation of the last 5 years alone. Meanwhile, people last 5 years alone. Meanwhile, people last 5 years alone. Meanwhile, people like Warren Buffett, the most famous like Warren Buffett, the most famous like Warren Buffett, the most famous long-term value investor alive, realizes long-term value investor alive, realizes long-term value investor alive, realizes the market is not in a healthy place and the market is not in a healthy place and the market is not in a healthy place and has been pulling out of the stock market has been pulling out of the stock market has been pulling out of the stock market and is sitting on the largest cash and is sitting on the largest cash and is sitting on the largest cash reserve in Berkshire Hathaway's history. reserve in Berkshire Hathaway's history. reserve in Berkshire Hathaway's history. Gold has blown past $5,000 an ounce, a Gold has blown past $5,000 an ounce, a Gold has blown past $5,000 an ounce, a record high, and it's not a sign of record high, and it's not a sign of record high, and it's not a sign of confidence in the market. Gold surges confidence in the market. Gold surges confidence in the market. Gold surges when serious money is looking for when serious money is looking for when serious money is looking for shelter from massive uncertainty. Crypto shelter from massive uncertainty. Crypto shelter from massive uncertainty. Crypto has also pulled sharply back from its has also pulled sharply back from its has also pulled sharply back from its highs. Consumer spending patterns have highs. Consumer spending patterns have highs. Consumer spending patterns have gotten dangerous due to the severe gotten dangerous due to the severe gotten dangerous due to the severe effects of a radically K-shaped economy. effects of a radically K-shaped economy. effects of a radically K-shaped economy. The wealthy are still spending and The wealthy are still spending and The wealthy are still spending and they're masking the fact that middle and they're masking the fact that middle and they're masking the fact that middle and workingclass Americans are pulling back workingclass Americans are pulling back workingclass Americans are pulling back hard. And all of this is happening hard. And all of this is happening hard. And all of this is happening inside of a geopolitical environment inside of a geopolitical environment inside of a geopolitical environment that is blowing apart in real time. that is blowing apart in real time. that is blowing apart in real time. trade wars, tariff escalations, trade wars, tariff escalations, trade wars, tariff escalations, invasions, military strikes, deposed invasions, military strikes, deposed invasions, military strikes, deposed regimes, a serious global contest over regimes, a serious global contest over regimes, a serious global contest over the future of the dollar as the world's the future of the dollar as the world's the future of the dollar as the world's reserve currency. The entire reserve currency. The entire reserve currency. The entire architecture of the post-war economic architecture of the post-war economic architecture of the post-war economic order is under pressure from every order is under pressure from every order is under pressure from every direction all at once. And layered on direction all at once. And layered on direction all at once. And layered on top of it is the arrival of AI, which is top of it is the arrival of AI, which is top of it is the arrival of AI, which is disrupting job markets, rewriting disrupting job markets, rewriting disrupting job markets, rewriting business models, and creating a level of business models, and creating a level of business models, and creating a level of uncertainty in the workforce that we uncertainty in the workforce that we uncertainty in the workforce that we haven't seen in at least a generation. haven't seen in at least a generation. haven't seen in at least a generation. You put all of that together and what You put all of that together and what You put all of that together and what you get is a market environment that has you get is a market environment that has you get is a market environment that has become incredibly skittish, fragile, and become incredibly skittish, fragile, and become incredibly skittish, fragile, and reactive. The kind of environment where reactive. The kind of environment where reactive. The kind of environment where bad news travels fast and a contagion bad news travels fast and a contagion bad news travels fast and a contagion spreads even faster. And that spreads even faster. And that spreads even faster. And that instability is putting direct pressure instability is putting direct pressure instability is putting direct pressure on exactly the kinds of companies that on exactly the kinds of companies that on exactly the kinds of companies that have borrowed heavily through the have borrowed heavily through the have borrowed heavily through the private credit market. Midsize firms private credit market. Midsize firms private credit market. Midsize firms running on tight margins in an economy running on tight margins in an economy running on tight margins in an economy that is squeezing them from every that is squeezing them from every that is squeezing them from every direction. The question is, how far down direction. The question is, how far down direction. The question is, how far down is the economy going to go? Will the is the economy going to go? Will the is the economy going to go? Will the pressure dismantle the private credit pressure dismantle the private credit pressure dismantle the private credit markets entirely? And is private credit markets entirely? And is private credit markets entirely? And is private credit now big enough that its failure could now big enough that its failure could now big enough that its failure could trigger a global event like 2008? Let's trigger a global event like 2008? Let's trigger a global event like 2008? Let's look at the visible cracks that are look at the visible cracks that are look at the visible cracks that are erupting as we speak. Last September, a erupting as we speak. Last September, a erupting as we speak. Last September, a company called First Brands Group, a company called First Brands Group, a company called First Brands Group, a major auto parts supplier backed by major auto parts supplier backed by major auto parts supplier backed by private credit, filed for Chapter 11 private credit, filed for Chapter 11 private credit, filed for Chapter 11 bankruptcy. Creditors alleged the bankruptcy. Creditors alleged the bankruptcy. Creditors alleged the company had borrowed against the same company had borrowed against the same company had borrowed against the same invoices multiple times, using what invoices multiple times, using what invoices multiple times, using what court filings described as offbalance court filings described as offbalance court filings described as offbalance sheet financing to hide how leveraged it sheet financing to hide how leveraged it sheet financing to hide how leveraged it actually was. The Department of Justice actually was. The Department of Justice actually was. The Department of Justice opened a criminal investigation. Total opened a criminal investigation. Total opened a criminal investigation. Total unpaid loans were up to $2.3 billion. unpaid loans were up to $2.3 billion. unpaid loans were up to $2.3 billion. Weeks later, Holdings, a subprime auto Weeks later, Holdings, a subprime auto Weeks later, Holdings, a subprime auto lender, also funded through private lender, also funded through private lender, also funded through private credit, collapsed. Regulators had credit, collapsed. Regulators had credit, collapsed. Regulators had previously cited them for selling cars previously cited them for selling cars previously cited them for selling cars they didn't even have the titles to and they didn't even have the titles to and they didn't even have the titles to and lending to borrowers without credit lending to borrowers without credit lending to borrowers without credit scores or even a driver's license. JP scores or even a driver's license. JP scores or even a driver's license. JP Morgan wrote off $170 million on that Morgan wrote off $170 million on that Morgan wrote off $170 million on that one. Barclays lost 147 million. And one. Barclays lost 147 million. And one. Barclays lost 147 million. And Fifth Third Bank, one of the largest Fifth Third Bank, one of the largest Fifth Third Bank, one of the largest banks in the Midwest, lost 178 million. banks in the Midwest, lost 178 million. banks in the Midwest, lost 178 million. These are big companies funded by These are big companies funded by These are big companies funded by private credit loans that all blew up in private credit loans that all blew up in private credit loans that all blew up in the span of just a few weeks. And every the span of just a few weeks. And every the span of just a few weeks. And every one of those losses landed on the one of those losses landed on the one of those losses landed on the balance sheets of institutions that balance sheets of institutions that balance sheets of institutions that millions of Americans depend on. US millions of Americans depend on. US millions of Americans depend on. US banks have lent $300 billion directly to banks have lent $300 billion directly to banks have lent $300 billion directly to private credit providers. That's Moody's private credit providers. That's Moody's private credit providers. That's Moody's data. The same banks that hold your data. The same banks that hold your data. The same banks that hold your deposits, that back your mortgage, that deposits, that back your mortgage, that deposits, that back your mortgage, that underwrite the bonds in your index fund, underwrite the bonds in your index fund, underwrite the bonds in your index fund, they've all lent money into private they've all lent money into private they've all lent money into private credit and are subject to whatever is credit and are subject to whatever is credit and are subject to whatever is about to happen to that industry as the about to happen to that industry as the about to happen to that industry as the structural fragility collides headlong structural fragility collides headlong structural fragility collides headlong with an unstable economy. To put it with an unstable economy. To put it with an unstable economy. To put it bluntly, this exposure means that stress bluntly, this exposure means that stress bluntly, this exposure means that stress in private credit will not stay limited in private credit will not stay limited in private credit will not stay limited to private credit. If defaults rise and to private credit. If defaults rise and to private credit. If defaults rise and fund values drop, the banks that lent fund values drop, the banks that lent fund values drop, the banks that lent those funds take losses. If pension those funds take losses. If pension those funds take losses. If pension funds face capital calls on their funds face capital calls on their funds face capital calls on their private credit commitments during a private credit commitments during a private credit commitments during a downturn, they may be forced to sell downturn, they may be forced to sell downturn, they may be forced to sell their liquid holdings, stocks, bonds, their liquid holdings, stocks, bonds, their liquid holdings, stocks, bonds, the stuff in your brokerage account to the stuff in your brokerage account to the stuff in your brokerage account to meet those obligations. Private credit meet those obligations. Private credit meet those obligations. Private credit stress becomes public market stress. stress becomes public market stress. stress becomes public market stress. Your 401k doesn't need to hold a single Your 401k doesn't need to hold a single Your 401k doesn't need to hold a single private credit loan for you to private credit loan for you to private credit loan for you to potentially get hit. The Financial potentially get hit. The Financial potentially get hit. The Financial Stability Oversight Council has Stability Oversight Council has Stability Oversight Council has explicitly warned that a sustained explicitly warned that a sustained explicitly warned that a sustained increase in private credit defaults increase in private credit defaults increase in private credit defaults could create financial instability could create financial instability could create financial instability through the entire system. Roughly 12% through the entire system. Roughly 12% through the entire system. Roughly 12% of Blue Owl's OBDC2 portfolio was of Blue Owl's OBDC2 portfolio was of Blue Owl's OBDC2 portfolio was invested in software companies across invested in software companies across invested in software companies across the private credit market. Software and the private credit market. Software and the private credit market. Software and SAS businesses were some of the most SAS businesses were some of the most SAS businesses were some of the most popular borrowers over the past 5 years. popular borrowers over the past 5 years. popular borrowers over the past 5 years. The thesis was pretty simple. recurring The thesis was pretty simple. recurring The thesis was pretty simple. recurring revenue, high margins, predictable cash revenue, high margins, predictable cash revenue, high margins, predictable cash flow, great collateral. But that thesis flow, great collateral. But that thesis flow, great collateral. But that thesis was built before AI started devouring was built before AI started devouring was built before AI started devouring the economics of enterprise software as the economics of enterprise software as the economics of enterprise software as a category. If AI disrupts the business a category. If AI disrupts the business a category. If AI disrupts the business models these loans were unwritten models these loans were unwritten models these loans were unwritten against, and there are serious reasons against, and there are serious reasons against, and there are serious reasons to believe it will, then the collateral to believe it will, then the collateral to believe it will, then the collateral underneath billions of dollars in underneath billions of dollars in underneath billions of dollars in private credit loans is worth less than private credit loans is worth less than private credit loans is worth less than the day the loans were made. That's a the day the loans were made. That's a the day the loans were made. That's a slow burning fuse on top of everything slow burning fuse on top of everything slow burning fuse on top of everything else we've just walked through. Now, I'm else we've just walked through. Now, I'm else we've just walked through. Now, I'm not saying this is guaranteed to be 2008 not saying this is guaranteed to be 2008 not saying this is guaranteed to be 2008 all over again. No one can see the all over again. No one can see the all over again. No one can see the future that clearly. But what I am future that clearly. But what I am future that clearly. But what I am telling you is that the mechanic is telling you is that the mechanic is telling you is that the mechanic is identical to what happened in 2008. identical to what happened in 2008. identical to what happened in 2008. Opacity. You can't see what's going on. Opacity. You can't see what's going on. Opacity. You can't see what's going on. Misaligned incentives, risk created at Misaligned incentives, risk created at Misaligned incentives, risk created at the top, flowing downhill to the people the top, flowing downhill to the people the top, flowing downhill to the people least equipped to understand it. and a least equipped to understand it. and a least equipped to understand it. and a backs stop of government printing if backs stop of government printing if backs stop of government printing if everything goes pear-shaped. In 2008, everything goes pear-shaped. In 2008, everything goes pear-shaped. In 2008, the vehicle was mortgage back the vehicle was mortgage back the vehicle was mortgage back securities. Today, the vehicle is securities. Today, the vehicle is securities. Today, the vehicle is private credit. The question is not private credit. The question is not private credit. The question is not whether the mechanic is the same. It is. whether the mechanic is the same. It is. whether the mechanic is the same. It is. The question is whether the private The question is whether the private The question is whether the private credit market is big enough to blow up credit market is big enough to blow up credit market is big enough to blow up the entire economy. And that's a big bet the entire economy. And that's a big bet the entire economy. And that's a big bet to make. Here's what would need to to make. Here's what would need to to make. Here's what would need to happen for this to become a systemic happen for this to become a systemic happen for this to become a systemic event. A recession hits and triggers a event. A recession hits and triggers a event. A recession hits and triggers a wave of defaults among private credit wave of defaults among private credit wave of defaults among private credit borrowers. Companies that are already borrowers. Companies that are already borrowers. Companies that are already struggling to cover their interest struggling to cover their interest struggling to cover their interest payments. Funds facing a surge in payments. Funds facing a surge in payments. Funds facing a surge in redemption requests are forced to sell redemption requests are forced to sell redemption requests are forced to sell loans at steep discounts, not at the 99 loans at steep discounts, not at the 99 loans at steep discounts, not at the 99 cents in the dollar that Blue Owl just cents in the dollar that Blue Owl just cents in the dollar that Blue Owl just managed, but at 70 or 80 cents on the managed, but at 70 or 80 cents on the managed, but at 70 or 80 cents on the dollar. Fire sale prices. Pension funds dollar. Fire sale prices. Pension funds dollar. Fire sale prices. Pension funds and insurance companies hit with capital and insurance companies hit with capital and insurance companies hit with capital calls they didn't expect are forced to calls they didn't expect are forced to calls they didn't expect are forced to liquidate their public market holdings liquidate their public market holdings liquidate their public market holdings to raise cash. Stocks and bonds get sold to raise cash. Stocks and bonds get sold to raise cash. Stocks and bonds get sold not because anything is wrong with those not because anything is wrong with those not because anything is wrong with those companies, but because the money is just companies, but because the money is just companies, but because the money is just needed somewhere else. Banks that lent needed somewhere else. Banks that lent needed somewhere else. Banks that lent 300 billion dollars to private credit 300 billion dollars to private credit 300 billion dollars to private credit funds start pulling their credit lines funds start pulling their credit lines funds start pulling their credit lines to protect themselves, which accelerates to protect themselves, which accelerates to protect themselves, which accelerates the very stress they're trying to avoid, the very stress they're trying to avoid, the very stress they're trying to avoid, and the selling feeds on itself. Public and the selling feeds on itself. Public and the selling feeds on itself. Public markets drop, consumer confidence drops, markets drop, consumer confidence drops, markets drop, consumer confidence drops, lending tightens, the economy slows, and lending tightens, the economy slows, and lending tightens, the economy slows, and the borrowers who are already struggling the borrowers who are already struggling the borrowers who are already struggling now have even less revenue to service now have even less revenue to service now have even less revenue to service their debt. None of these steps are their debt. None of these steps are their debt. None of these steps are guaranteed, but every single one of them guaranteed, but every single one of them guaranteed, but every single one of them is plausible, bordering on likely, and is plausible, bordering on likely, and is plausible, bordering on likely, and the system is now structured in a way the system is now structured in a way the system is now structured in a way where each one makes the next one more where each one makes the next one more where each one makes the next one more likely. That's exactly how 2008 likely. That's exactly how 2008 likely. That's exactly how 2008 unfolded. Whether by conspiracy or unfolded. Whether by conspiracy or unfolded. Whether by conspiracy or simple incentive structures, we find simple incentive structures, we find simple incentive structures, we find ourselves in the middle of something I'm ourselves in the middle of something I'm ourselves in the middle of something I'm calling the invisible coup that by calling the invisible coup that by calling the invisible coup that by design or accident is siphoning the design or accident is siphoning the design or accident is siphoning the wealth out of the middle and working wealth out of the middle and working wealth out of the middle and working classes and funneling it up to the classes and funneling it up to the classes and funneling it up to the wealthy. Everybody can feel it. You can wealthy. Everybody can feel it. You can wealthy. Everybody can feel it. You can see it. It is patently obvious. It all see it. It is patently obvious. It all see it. It is patently obvious. It all happens via a very simple set of happens via a very simple set of happens via a very simple set of mechanisms. And the current structure of mechanisms. And the current structure of mechanisms. And the current structure of the private credit market is just the the private credit market is just the the private credit market is just the latest tool facilitating this wealth latest tool facilitating this wealth latest tool facilitating this wealth transfer that you need to protect transfer that you need to protect transfer that you need to protect yourself against. Here's how the coup is yourself against. Here's how the coup is yourself against. Here's how the coup is playing out. The setup of our current playing out. The setup of our current playing out. The setup of our current economic system uses central banking. economic system uses central banking. economic system uses central banking. And modern monetary theory, aka debt, And modern monetary theory, aka debt, And modern monetary theory, aka debt, deficits, money printing, and inflation deficits, money printing, and inflation deficits, money printing, and inflation to push risk, cost, and vulnerability to push risk, cost, and vulnerability to push risk, cost, and vulnerability away from the banks who will be backed away from the banks who will be backed away from the banks who will be backed up by money printing. and they shove it up by money printing. and they shove it up by money printing. and they shove it onto anyone who holds a fiat currency onto anyone who holds a fiat currency onto anyone who holds a fiat currency like the dollar. Then the system like the dollar. Then the system like the dollar. Then the system insulates the banks from the downside of insulates the banks from the downside of insulates the banks from the downside of these risks by classifying them as too these risks by classifying them as too these risks by classifying them as too big to fail. This designation acts like big to fail. This designation acts like big to fail. This designation acts like an insurance backs stop paid for via an insurance backs stop paid for via an insurance backs stop paid for via money printing which causes inflation. money printing which causes inflation. money printing which causes inflation. The one thing that the average person The one thing that the average person The one thing that the average person does not understand well enough to does not understand well enough to does not understand well enough to revolt against allowing inflation to revolt against allowing inflation to revolt against allowing inflation to function as a hidden tax on the working function as a hidden tax on the working function as a hidden tax on the working and middle classes. Anyone who and middle classes. Anyone who and middle classes. Anyone who understands this structure which can understands this structure which can understands this structure which can effectively be rounded to the wealthy effectively be rounded to the wealthy effectively be rounded to the wealthy knows to put essentially all of their knows to put essentially all of their knows to put essentially all of their money into assets to not only avoid the money into assets to not only avoid the money into assets to not only avoid the hidden tax of inflation but to benefit hidden tax of inflation but to benefit hidden tax of inflation but to benefit from it. That's the game. And private from it. That's the game. And private from it. That's the game. And private credit is just the most recent method of credit is just the most recent method of credit is just the most recent method of displacing risk. across as many displacing risk. across as many displacing risk. across as many taxpayers as possible while taxpayers as possible while taxpayers as possible while concentrating the wins if there are any concentrating the wins if there are any concentrating the wins if there are any at the top heads they win tails you at the top heads they win tails you at the top heads they win tails you lose. Now the question becomes what do lose. Now the question becomes what do lose. Now the question becomes what do you do about it? Obviously master the you do about it? Obviously master the you do about it? Obviously master the rules of the game even if the game is rules of the game even if the game is rules of the game even if the game is rigged. I've talked about that many many rigged. I've talked about that many many rigged. I've talked about that many many times. Next remember this is about more times. Next remember this is about more times. Next remember this is about more than just portfolio management. The than just portfolio management. The than just portfolio management. The people who get crushed by these systems people who get crushed by these systems people who get crushed by these systems aren't the ones who pick the wrong fund. aren't the ones who pick the wrong fund. aren't the ones who pick the wrong fund. They're the ones who never learned to They're the ones who never learned to They're the ones who never learned to trace the chain of cause and effect that trace the chain of cause and effect that trace the chain of cause and effect that makes the entire world go round. Think makes the entire world go round. Think makes the entire world go round. Think about the chain of logic we just walked about the chain of logic we just walked about the chain of logic we just walked through with private debt. We started through with private debt. We started through with private debt. We started with a company most people have never with a company most people have never with a company most people have never heard of, Blue Owl, locking investors heard of, Blue Owl, locking investors heard of, Blue Owl, locking investors out of a fund. And from that single data out of a fund. And from that single data out of a fund. And from that single data point, we traced a chain that runs point, we traced a chain that runs point, we traced a chain that runs through private equity, through private through private equity, through private through private equity, through private credit, through pension funds, through credit, through pension funds, through credit, through pension funds, through insurance companies, through the banking insurance companies, through the banking insurance companies, through the banking system, through the executive branch, system, through the executive branch, system, through the executive branch, and into your retirement account. Every and into your retirement account. Every and into your retirement account. Every link is knowable because they're all link is knowable because they're all link is knowable because they're all causal links. That's the skill. Not causal links. That's the skill. Not causal links. That's the skill. Not picking better investments, learning to picking better investments, learning to picking better investments, learning to trace chains of logic and cause and trace chains of logic and cause and trace chains of logic and cause and effect. Learn to maintain your effect. Learn to maintain your effect. Learn to maintain your sovereignty by learning to ask, who sovereignty by learning to ask, who sovereignty by learning to ask, who created this risk? who packaged it, who created this risk? who packaged it, who created this risk? who packaged it, who sold it, and who's left holding it right sold it, and who's left holding it right sold it, and who's left holding it right now? Because if you can answer those now? Because if you can answer those now? Because if you can answer those four questions and you know who's going four questions and you know who's going four questions and you know who's going to be protected by inflation, money to be protected by inflation, money to be protected by inflation, money printing, and debt, you will know which printing, and debt, you will know which printing, and debt, you will know which financial product, policy, or headline financial product, policy, or headline financial product, policy, or headline is going to potentially hurt or help is going to potentially hurt or help is going to potentially hurt or help you. You will see the waterfall of risk you. You will see the waterfall of risk you. You will see the waterfall of risk before you're standing at the bottom of before you're standing at the bottom of before you're standing at the bottom of it. That is what separated the people it. That is what separated the people it. That is what separated the people who saw 2008 coming from the people who who saw 2008 coming from the people who who saw 2008 coming from the people who got buried by it. It wasn't insider got buried by it. It wasn't insider got buried by it. It wasn't insider information. It wasn't luck. People like information. It wasn't luck. People like information. It wasn't luck. People like Michael Bur read the loan documents. Michael Bur read the loan documents. Michael Bur read the loan documents. They traced the chain from the homeowner They traced the chain from the homeowner They traced the chain from the homeowner who couldn't afford the mortgage through who couldn't afford the mortgage through who couldn't afford the mortgage through the bank that didn't care because the the bank that didn't care because the the bank that didn't care because the government was backing the loans through government was backing the loans through government was backing the loans through the rating agency that rubber stamped it the rating agency that rubber stamped it the rating agency that rubber stamped it to the pension fund that bought it. They to the pension fund that bought it. They to the pension fund that bought it. They saw the waterfall and while people were saw the waterfall and while people were saw the waterfall and while people were being assured that the system was sound, being assured that the system was sound, being assured that the system was sound, people who understood the causal chain people who understood the causal chain people who understood the causal chain but against it and won. Your goal is to but against it and won. Your goal is to but against it and won. Your goal is to master that same framework, not master that same framework, not master that same framework, not necessarily the trading expertise, the necessarily the trading expertise, the necessarily the trading expertise, the mental model. You need to know what a mental model. You need to know what a mental model. You need to know what a risk waterfall looks like. You need to risk waterfall looks like. You need to risk waterfall looks like. You need to know how payment and kind adds risk and know how payment and kind adds risk and know how payment and kind adds risk and hides distress. And when you know how hides distress. And when you know how hides distress. And when you know how liquidity promises are dangerous when liquidity promises are dangerous when liquidity promises are dangerous when you have a duration mismatch between the you have a duration mismatch between the you have a duration mismatch between the loaners and the lenders. And when you loaners and the lenders. And when you loaners and the lenders. And when you know how interconnection turns a private know how interconnection turns a private know how interconnection turns a private credit problem into a public market credit problem into a public market credit problem into a public market problem, you're in a much better problem, you're in a much better problem, you're in a much better position. Mastering things like that is position. Mastering things like that is position. Mastering things like that is the difference between being manipulated the difference between being manipulated the difference between being manipulated by a system and at least maintaining by a system and at least maintaining by a system and at least maintaining some level of coherent optionality while some level of coherent optionality while some level of coherent optionality while others are just led to slaughter. As you others are just led to slaughter. As you others are just led to slaughter. As you think through all of this stuff, pull up think through all of this stuff, pull up think through all of this stuff, pull up your retirement account, your 401k, your your retirement account, your 401k, your your retirement account, your 401k, your IRA, your pension summary, whatever you IRA, your pension summary, whatever you IRA, your pension summary, whatever you have, and don't just look at the have, and don't just look at the have, and don't just look at the balance. Look at the holdings. Look at balance. Look at the holdings. Look at balance. Look at the holdings. Look at what's inside the funds you own. And ask what's inside the funds you own. And ask what's inside the funds you own. And ask yourself, can I trace the sequence of yourself, can I trace the sequence of yourself, can I trace the sequence of cause and effect as to why these are or cause and effect as to why these are or cause and effect as to why these are or are not reasonable positions to hold? are not reasonable positions to hold? are not reasonable positions to hold? You'll never be able to drive risk to You'll never be able to drive risk to You'll never be able to drive risk to zero. The markets are best understood as zero. The markets are best understood as zero. The markets are best understood as a casino for a reason, but you can a casino for a reason, but you can a casino for a reason, but you can certainly improve your odds of success certainly improve your odds of success certainly improve your odds of success and avoid the obvious traps that and avoid the obvious traps that and avoid the obvious traps that virtually everyone else will get sucked virtually everyone else will get sucked virtually everyone else will get sucked into. That's sovereignty, not a bunker into. That's sovereignty, not a bunker into. That's sovereignty, not a bunker in Hawaii, a bugout bag, a gun, or a in Hawaii, a bugout bag, a gun, or a in Hawaii, a bugout bag, a gun, or a bunch of water. Sovereignty is the bunch of water. Sovereignty is the bunch of water. Sovereignty is the ability to see the system clearly enough ability to see the system clearly enough ability to see the system clearly enough to make your own decisions instead of to make your own decisions instead of to make your own decisions instead of being funneled blindly into someone being funneled blindly into someone being funneled blindly into someone else's. And it's built on the back of else's. And it's built on the back of else's. And it's built on the back of first principles thinking. All right. If first principles thinking. All right. If first principles thinking. All right. If you want to see me explore ideas like you want to see me explore ideas like you want to see me explore ideas like this in real time, be sure to hit the this in real time, be sure to hit the this in real time, be sure to hit the subscribe button and join me live subscribe button and join me live subscribe button and join me live Monday, Wednesdays, and Fridays at 7 Monday, Wednesdays, and Fridays at 7 Monday, Wednesdays, and Fridays at 7 a.m. Pacific time. You can either debate a.m. Pacific time. You can either debate a.m. Pacific time. You can either debate people in the comments or just sit back people in the comments or just sit back people in the comments or just sit back and enjoy as we go through the most and enjoy as we go through the most and enjoy as we go through the most important topics of our time. All right, important topics of our time. All right, important topics of our time. All right, until next time, my friends, be until next time, my friends, be until next time, my friends, be legendary. Take care. Peace. If you like legendary. Take care. Peace. If you like legendary. Take care. Peace. If you like this conversation, check out this this conversation, check out this this conversation, check out this episode to learn more. the price of episode to learn more. the price of episode to learn more. the price of Bitcoin was being manipulated by the Bitcoin was being manipulated by the Bitcoin was being manipulated by the same company that trained convicted same company that trained convicted same company that trained convicted felon Sam Bankman Freed of FTX fame. At felon Sam Bankman Freed of FTX fame. At felon Sam Bankman Freed of FTX fame. At least that's the claim in a recent least that's the claim in a recent least that's the claim in a recent lawsuit. Now, as we go through the