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1:04

What is up, everybody? Welcome back

1:06

to Bitcoin and Markets. Happy Wednesday

1:09

out there. It is CPI day.

1:11

CPI was released this morning. I

1:13

did live stream that over on

1:15

Telegram exclusively. It was

1:17

a little bit higher than

1:19

anticipated. The forecast was for

1:21

0 .26 and it came in

1:23

at 0 .3 % month over month.

1:26

So a little bit higher.

1:28

And of course, along with

1:30

that is a lot of

1:32

dooming about reacceleration of inflation.

1:35

I don't think we have anything to worry about.

1:37

We will see what happens throughout

1:39

the next couple of months.

1:42

Remember, once Trump won, there

1:44

was a lot of optimism out there. And

1:46

you can have a pickup in economic activity,

1:48

which will increase lending and increase prices

1:50

and stuff like that. So is this

1:53

a one month bump

1:55

or not? And actually, let

1:57

me take you guys right

1:59

into... chart here. Let

2:02

me share my screen on

2:04

this. This

2:06

is the Bitcoin price but I'm

2:08

gonna jump over to the

2:10

US inflation rate month over

2:12

month and go to the

2:14

monthly different there we go. So

2:18

this has not quite updated yet.

2:20

It did come in at 1 .3

2:22

% up here right on this

2:25

line. So

2:27

we will see

2:29

if that gets

2:31

updated but overall you can see this

2:33

trend is still down even though it

2:35

doesn't feel like it. The trend is

2:37

still down and we could

2:39

be just a month away from

2:42

zero month over month and

2:44

then falling down to 2 %

2:46

if we go to the US

2:48

inflation rate year over year. It's

2:52

coming down. I spent a lot

2:54

of time with this chart today

2:56

making a few different charts for

2:58

the Telegram guys and

3:00

so post

3:02

-GFC normal is what

3:04

I was talking about for a long long time ever

3:08

since being on FedWatch and

3:10

you know years and

3:12

years back towards the beginning

3:14

of COVID but post -GFC

3:16

normal was something

3:18

in I mean I guess we could go back to

3:20

here. This range would be

3:23

like a post -GFC normal

3:25

all right plus or

3:27

minus around 2

3:29

% and so I said we're

3:31

just gonna return to a post -GFC

3:33

normal and we kind of have

3:35

done that now. So we will

3:37

see where this takes us. We are

3:39

back in a post -GFC normal and

3:42

I see no real threat of reacceleration

3:44

of this but that

3:46

does tie into the main topic that

3:48

I want to talk about today

3:50

and it's gonna be a reaction to

3:52

Patrick Boyle. This was requested by

3:54

supporter of the channel Boog so we're

3:57

gonna take a look at this

3:59

and within that That is inflationary questions,

4:01

right? And so I'm going

4:03

to have time to talk about

4:05

that a little bit more. All right,

4:08

what else? Bitcoin and markets.com.

4:10

This is the home page, so check

4:12

it out where I do all my

4:14

writing. Yesterday I released this one answering

4:17

the critics of the Bitcoin

4:19

reserve bill and use some examples.

4:21

These two guys, Chris Hayes and

4:23

Shank Euger, and go through

4:25

their arguments and talk about

4:27

like the sources of funding.

4:29

for this. Bitcoin is not a

4:32

partisan issue. You know, the bill about

4:34

SAB 121 that went through with

4:36

multiple Democrats on both sides,

4:39

both the houses, voting for

4:41

it, including the Senate Majority

4:43

Leader Chuck Schumer. So this

4:45

is not really a Republican

4:47

issue. Bitcoin is not. Plus,

4:50

you know, we have RFK

4:52

Jr. who is traditional Democrat,

4:54

Tulsi Gabbard, traditional Democrat. and

4:57

they are both Bitcoin proponents.

4:59

So this is not a

5:01

partisan issue. Libertarian commitment to

5:03

sound money. They say it's

5:05

hypocritical that libertarian Bitcoiners, they

5:07

want support from the government.

5:09

But in this case, it's

5:11

not that. It's sound money.

5:13

We obvious deep roots in a

5:16

commitment to sound money, which Bitcoin

5:18

represents. And so there you go

5:20

on that one. Bitcoin is not as

5:22

speculative as you think. Here's

5:24

the four-year CIGAR. and the

5:26

lowest is 23% compound annual

5:28

rate of growth. So it's

5:31

not nearly as speculative

5:33

as you get as they claim it

5:35

is. Bitcoin is want to

5:37

accumulate not offload. Part

5:39

of their argument is, oh,

5:42

pump the price and then

5:44

Bitcoiners can dump on the

5:46

government, basically. But no,

5:48

Bitcoiners are obviously known

5:50

for wanting to accumulate

5:53

more Bitcoin. That's part

5:55

of the whole mantra from the

5:57

goal bugs, you know, we want dips

5:59

so we... can buy more, so we can stack

6:01

more. So it's absurd

6:03

to claim that Bitcoiners are

6:05

lobbying the government to offload their

6:07

holdings just completely absurd. Bitcoiners

6:09

don't need a bailout. The

6:12

ones that do need bailouts are the

6:14

scammers, not Bitcoiners. That's why they keep

6:16

saying crypto, like if you listen to

6:18

the Chankyver thing, it's crypto, crypto, crypto,

6:20

crypto. I don't think he says Bitcoin

6:22

once. And it's all just talking about

6:24

these guys, letting these guys

6:26

in into what the definition of

6:28

Bitcoin is. The

6:31

crypto scammers are the ones that need

6:33

a bailout, not the Bitcoiners. So

6:35

especially being at all time high,

6:37

a bailout is kind of

6:39

ridiculous. And

6:42

Bitcoin is the best defense

6:44

for changing monetary landscape. That's

6:46

the whole idea behind why

6:48

the government would want

6:50

to pursue a Bitcoin

6:52

strategic reserve is because

6:54

of this changing monetary landscape that

6:56

we're going through. And

6:59

here are the traits of money, and

7:01

Bitcoin is better, obviously better than

7:03

fiat, and obviously better than gold as well.

7:05

So check that piece out. I also did

7:07

a standalone video for it yesterday. I think

7:09

I got that one out. Well, maybe I

7:11

didn't do this one. I did another standalone

7:13

video, so you guys can check that out.

7:15

All right, let's see who's watching. 52 people.

7:17

What's going on? If you're watching on Twitter,

7:19

please check out the YouTube and Rumble. It's

7:21

in my pinned tweet. And like,

7:23

comment, subscribe. Appreciate that. If you're

7:25

watching on those other platforms, you know,

7:28

make comments throughout this. I like

7:30

the interaction. So all right, let's

7:33

go to Patrick Boyle

7:35

now, or actually Bitcoin price first,

7:37

Bitcoin price, then Patrick Boyle. So

7:41

back to the

7:43

chart and Bitcoin, and

7:46

we'll go to candles and down to

7:48

let's go to the hourly up

7:50

over 100 ,000. Looking like it's trying to push

7:52

a little bit higher even today. I don't

7:54

know if we will get a breakout today.

7:57

It is Wednesday. Maybe we'll get a breakout into

7:59

the weekend, you know, Tuesday,

8:01

Thursday, Friday, have some big time

8:04

movement on the price. Eventually,

8:06

I'm planning for this to break up.

8:08

If you go back to this pattern

8:10

that I've been talking about for

8:12

several weeks now, this is just

8:15

a pattern that I initially used

8:17

had a little bit back

8:19

and forth on telegram about

8:21

this. So I initially used

8:23

this pattern just to demonstrate

8:25

the... type of consolidation

8:27

I expected and

8:30

that was a rising

8:32

consolidation because all the

8:34

dips would be bought by

8:37

MSTR, by Marathon, by Riot,

8:39

by the ETFs, by market

8:42

makers for the ETFs,

8:44

by market makers, for

8:46

market makers, for

8:48

options on the ETS,

8:50

you know. and governments, the

8:53

kind of stealth government accumulation

8:55

perhaps that we're seeing already.

8:57

So that is why everyone's going to

8:59

be buying the dips at this point

9:02

and why the accumulation would be

9:04

in an upward pattern like

9:06

this. And that's exactly what

9:08

we've gotten, matched this pattern very very

9:11

well. I did think it would break

9:13

up sooner than this. I thought maybe

9:15

this would be the breakout, but maybe

9:17

this is the breakout. The top is

9:20

way higher. even higher than this I

9:22

think I think I think there's

9:24

a lot of imbalance

9:26

between supply and demand right

9:28

now and when that breaks open

9:30

we could see a 50% move in

9:32

price over you know a week or

9:35

two time frame okay so that's

9:37

that that's the Bitcoin price

9:39

should we look at some other

9:41

macro stuff real quick before we

9:44

get into boil this will put

9:46

some stuff in context here I'll

9:48

go to the daily. on this.

9:50

Now the dollar is behaving

9:52

pretty much, I would say

9:54

as expected, but you

9:56

know, it's not anything

9:59

surprising here. Breaking out of

10:01

this descending wedge that I drew the

10:03

other day, we'll see if it follows

10:05

this path. As the global economy

10:08

is slowing down, China is

10:10

having major major issues, the

10:12

dollar is going to continue

10:14

to get stronger. Okay, gold,

10:17

gold having a good day, trying

10:19

to get back above this high

10:21

from November 22nd. We'll see

10:23

if it can do that. Still bullish

10:26

gold, but much less bullish

10:28

than Bitcoin. Okay, how about

10:30

the US 10 year coming

10:32

back a little bit here?

10:34

We'll see the Fed, the chances

10:37

of a Fed rate cut

10:39

are near 100% next week.

10:41

So we'll see how this

10:43

affects yields going over

10:45

the next few days. Oil

10:47

also up quite a bit on

10:50

the day, but in the grand

10:52

scheme of things, you know,

10:54

it's still very very weak.

10:56

It was held up by

10:58

this. this trend line we

11:00

talked about and finally stocks

11:03

stocks having a good day not

11:05

back at all-time highs yet fell out

11:07

of this pattern and trying to

11:09

get back into it this might

11:11

be considered like a retest of

11:13

the bottom here and we could go

11:15

a little bit lower but again

11:18

not concerned really about any sort

11:20

of major reversal in the stock

11:22

market right now but it is

11:25

coming as we approach recession

11:27

as we approach recession. stocks

11:29

will start to trend

11:31

downward. Okay, so that's

11:33

all. Just go back to

11:35

Bitcoin. And now we can go

11:37

to Patrick Boyle. Sure this

11:40

tab. I really do appreciate his

11:42

content. So guys, if you

11:44

don't know about him, you

11:46

should check it out. Check

11:48

out his channel. There we go.

11:50

All right, crank her up. And

11:53

we did have a comment.

11:55

Ruffio. Excellent. I watched a Patrick

11:57

Woe video. Thanks for analyzing it.

11:59

Yes, sir. was requested. Okay,

12:01

let me maximize the screen

12:03

here for telegram and press

12:06

play. A tariff man saying that

12:08

tariffs are the greatest thing

12:10

ever invented and that the word

12:12

tariff is the most beautiful

12:14

word in the dictionary. He announced

12:17

last week that he would

12:19

impose new tariffs on goods entering

12:21

the US from Canada, Mexico and

12:24

China on his first day

12:26

in office. To be clear up

12:28

front. This is not a

12:30

political video. It shouldn't matter

12:32

if you love or hate

12:34

Donald Trump. The purpose is

12:36

just to discuss the issues

12:38

that exist in international trade

12:40

and the impact that tariffs

12:42

or other government actions might

12:44

have on trade employment and

12:46

inflation. Okay, so I was talking a

12:48

little bit on the pre-game show

12:50

with telegram. And there he said,

12:53

hey, we're just going to, this

12:55

is not political, we're just going

12:57

to talk about what's happening and

12:59

what impacts it could have, but

13:01

he really doesn't do that. He sticks

13:03

to the textbook and even though

13:05

I love this video is very comprehensive

13:08

and I think he hit most

13:10

of the main points, I didn't

13:12

really hear a lot of conclusions

13:14

and just a lot of textbook what

13:16

this could mean, what that could

13:19

mean, and that doesn't really. I mean,

13:21

write a lot of insight going forward.

13:23

I'm going to try to end up,

13:25

you guys could tell me how wrong I

13:27

am or how right I am. We'll look at

13:30

how they've worked and failed

13:32

in the past and how

13:34

American tariffs today might be

13:36

different to the disastrous smooth-holly

13:39

tariffs of 1930. Trump announced

13:41

last week on his version of Twitter,

13:44

everyone has their own version of Twitter,

13:46

that he would sign an executive order.

13:48

for a 25% tariff on all goods

13:51

coming from Canada and Mexico, and that

13:53

these tariffs would stay in place until

13:55

the flow of drugs and immigrants from

13:58

these countries into the United States. has

14:00

come to a halt. After

14:02

the announcement, the Mexican peso fell 2

14:04

% and the Canadian dollar traded at

14:06

its lowest rate to the US

14:08

dollar in 15 years. Trump is

14:10

all. One thing I think is important to

14:12

point out is the Canada Mexico

14:15

tariffs are not

14:17

protectionist in the way that

14:19

the tariffs would be against China. Okay.

14:21

So they're the same

14:23

weapon but used for multiple different

14:25

purposes. All Mexico has to do

14:27

is stop the flow of the

14:29

migrants. That's it. And

14:32

then the tariffs will

14:34

go off. So

14:36

a little bit different way of analyzing that. It's

14:39

definitely a club, if you

14:41

will, against China or

14:43

against Mexico and Canada, but it's

14:46

more of a protective economic

14:48

scheme when it comes

14:50

to China. So that's important

14:52

to Already vowed to

14:54

target China with a 60 % tariff

14:56

and has discussed a 200 %

14:58

tariff on some car imports. He

15:00

says that goods coming from China

15:02

will be hit with an additional

15:04

10 % tariff if China doesn't do

15:06

something to halt fentanyl smuggling. Tariffs

15:09

which are controversial with economists are

15:11

core to Trump's economic vision. He

15:13

sees them as a way of

15:15

protecting American jobs, growing the US

15:18

economy and raising tax revenue. Not

15:20

completely. Remember the Mexico -China

15:22

or the Mexico -Canada thing is

15:24

Canada's kind of like China.

15:28

Those aren't for the

15:30

economic purposes. Those are for political purposes.

15:33

On the campaign trail, he told voters

15:35

that his tariffs would not cost

15:37

Americans anything, that they're instead attacks

15:39

on another country, which many economists

15:42

described as being misleading. US

15:44

trade with China has grown enormously over

15:46

the last 25 years. And while

15:48

it brought lower prices to US consumers

15:51

and higher profits to American multinationals,

15:53

it came with some downsides too.

15:55

And both sides of the political aisle

15:57

have been focused on how to

15:59

better pop. trade and how to

16:01

avoid losing access to strategically important

16:03

goods and industries. While Donald

16:05

Trump is a divisive politician where

16:08

some people love him and others

16:10

hate him, his threats to impose

16:12

tariffs on foreign imports are drawing

16:14

support from lawmakers of both parties.

16:16

Janan Ganesh wrote in the FT

16:18

a few weeks ago that Trump's

16:20

biggest success during his first term

16:22

in office was that he bound

16:24

the actions of his successors. saying that

16:26

Trump moved the consensus on a

16:28

big issue, foreign trade, such that the

16:30

next president either couldn't go back

16:32

or didn't want to. During Trump's first

16:35

term in office, the average U.S. tariff

16:37

on... A point there, this is

16:39

something that Peter Zion said a long

16:41

while ago, is that there was no

16:43

difference between Trump and Biden

16:45

on many, many issues and trade

16:48

and tariffs being one of them.

16:50

I think Biden actually increased

16:52

tariffs on increased tariffs

16:54

on... many things over and

16:56

above what Trump had done.

16:59

So yeah, that is an

17:01

interesting point. It also

17:03

kind of speaks to

17:05

the overriding trajectory of

17:07

the global economy.

17:10

And part of this that

17:12

I think Patrick doesn't

17:14

consider is the overall

17:16

trend that we are in,

17:18

a de globalization trend.

17:21

So it's not just Trumpism.

17:23

It is. populism,

17:25

the wave that is going through

17:28

the world de globalization. And so

17:30

that is the underlying current

17:32

that is being manifested in

17:34

these tariffs. And Chinese imports

17:37

rose from around 3% to

17:39

nearly 20%. When Joe Biden

17:41

took office four years later,

17:43

instead of reversing Trump's trade

17:45

policies, he added more tariffs.

17:47

In particular on electric vehicles.

17:50

and a protectionist industrial policy

17:52

that included subsidies and a

17:54

by American mandate. The Cato Institute,

17:56

a libertarian think tank, described

17:58

a Biden army. as Trumpism

18:00

with a human face, or

18:03

polite Trumpism. So let's try to

18:05

understand the issues with international trade

18:07

that have been pushing the United States

18:09

and other countries in this protectionist

18:11

direction, and if tariffs can be expected

18:13

to improve the situation or make

18:15

things worse. We'll discuss whether Trump could

18:17

impose his tariffs unilaterally on his

18:19

first day in office, and whether the

18:21

mere... Okay, that part about will

18:23

they work or will they make things

18:25

worse? It

18:27

depends on the goal, okay?

18:30

And in a era

18:32

of de -globalization and

18:34

general stagnation, the goal

18:36

is not necessarily, you know,

18:39

like I've said plenty of times

18:41

here on the show in

18:43

recent podcasts is that

18:45

the world is moving more towards a

18:47

zero -sum game, zero

18:50

-sum thinking. And so

18:52

what is the goal here?

18:54

What are these tariffs supposed

18:56

to do? Not

18:58

what they are like claimed,

19:01

you know, the rationalization

19:03

behind them, but what literally

19:05

what are they doing? It's... They

19:07

are showing that the world is

19:09

more zero -sum, and so

19:12

that's the thinking that is going

19:14

to be underlying this move, that

19:16

success would be winning in a

19:18

zero -sum game. Winning

19:21

in a zero -sum game is just you beating

19:23

your rival, okay? So

19:25

the U .S. benefiting

19:27

relative to China, that's

19:30

the goal. And that's what

19:32

I think needs to be

19:34

talked about more. And

19:36

Patrick doesn't even, I

19:39

mean he mentions that these

19:41

things, this tariff war will hurt China

19:43

more towards the very, very end,

19:45

but he doesn't tie that into being

19:47

the overall goal because of this underlying

19:49

current. The threat of tariffs could

19:51

be used to improve America's

19:53

bargaining power. Before we go

19:55

any further, let me tell you about this

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to order yours today. So tariffs

20:11

are quite simply a tax on

20:13

imported goods, which gets applied at

20:15

the border when a good is

20:17

bought from abroad. This is a

20:19

protectionist trade strategy where the tariffs

20:21

push up the price of foreign

20:24

sourced goods incentivizing consumers to switch

20:26

to domestically manufactured goods, giving domestic

20:28

manufacturers room to increase their own

20:30

prices. The benefits that domestic manufacturers

20:32

receive come at the expense of

20:34

consumers who all else equal pay

20:37

more for the goods that they

20:39

buy. Okay. That

20:41

one phrase all else equal

20:43

is doing a lot of work.

20:46

It's doing a lot of

20:48

work. Let's rewind this a little

20:50

bit. We'll listen to that

20:52

section again. And just notice how

20:54

much work all else equal

20:56

is doing. Of course, you have

20:58

to say that because it

21:00

is the textbook. The textbook is

21:02

what he's talking about here,

21:04

the textbook definitions. Complete a tax

21:06

on imported goods which gets

21:09

applied at the border when a

21:11

good is bought from abroad.

21:13

This is a protectionist trade strategy

21:15

where the tariffs push up

21:17

the price of foreign sourced goods

21:19

incentivizing consumers to switch to

21:21

domestically manufactured goods, giving domestic manufacturers

21:23

room to increase their own

21:25

prices. The benefits that domestic manufacturers

21:27

receive come at the expense

21:29

of consumers who all else equal

21:31

pay more for the goods

21:34

that they buy. For this reason,

21:36

tariffs are redistributive, taking income

21:38

from the household sector and transferring

21:40

it to protected businesses. Now

21:42

there's nothing too surprising about that

21:44

idea as all taxes are

21:46

redistributive. But critics of Trump's plans

21:48

say that they're not just

21:50

redistributive, but that they'll be inflationary

21:52

and harm the US economy.

21:54

His defenders on the other hand

21:57

point out that this didn't

21:59

happen during Trump's first term and

22:01

that the Biden administration looked

22:03

into removing tariffs when inflation was high, but their analysis

22:05

showed that the change was unlikely to

22:07

make a big difference. Okay, so

22:09

the, he introduces some

22:12

terms here, inflation, inflationary,

22:14

and on the converse

22:17

side, deflation and

22:19

deflationary. So inflationary,

22:21

usually people are talking

22:23

about prices, okay, and

22:25

that prices will go up. which

22:28

is inflationary, causing, I

22:31

guess, being like real

22:33

inflation of the money supply.

22:35

But prices going up

22:38

can actually be deflationary

22:40

because it can cause a, you

22:43

know, customers to be cash

22:45

strapped and pull back and

22:47

then businesses will close and

22:50

people will default and

22:52

there will be a

22:54

collapse and credit. So there

22:56

will be a deflation, And

22:58

so the rising prices

23:00

that people call inflationary

23:03

can result in deflation.

23:05

So this, it's very, see the

23:07

problem I have with these definitions

23:09

and the use of

23:11

the term inflationary and

23:14

inflation to talk about

23:16

prices because it just doesn't

23:18

work and it comes up,

23:20

it's very important piece right

23:22

here in this next section

23:24

that he talks about. He

23:26

mentions that producer

23:28

prices went up, but

23:31

not consumer prices.

23:33

So the middleman took

23:35

a lot of the burden. Well,

23:37

why is that? Why? That's

23:39

the question you need

23:41

to ask, and the answer

23:44

will help you understand

23:46

what's really going on

23:48

in the undercurrent

23:50

of this whole situation.

23:52

Because a tariff is charged at

23:54

the border, it does push up the

23:56

price of imports, which is inflationary. Some

23:58

of that impact is... offset by changes

24:01

in exchange rates, where the

24:03

currency of the tariff charging

24:05

country rises against the currency

24:07

of the country being subjected

24:09

to tariffs. Additionally, foreign companies

24:11

sometimes reduce their prices in order

24:13

to remain competitive. An analysis

24:16

by LPL Financial found that

24:18

tariffs imposed in 2018 hit

24:20

producer prices more than consumer

24:22

prices in the United States

24:24

as wholesalers absorbed some of the

24:26

price increase. Now long-term viewers are

24:28

probably... We couldn't afford

24:31

it. We couldn't afford it. So,

24:33

and if you can't afford it,

24:35

see, inflation can only continue

24:37

higher, or prices can only

24:40

continue higher, and CPI can

24:42

only continue to increase if

24:44

wages are rising, you know, incomes

24:46

rising, and you can afford it.

24:49

But if you get to a point

24:51

where you literally can't afford it

24:53

anymore, you have to start cutting

24:55

back. That's when... the inevitable

24:58

transitory comes in and they

25:00

come back down the other way. That

25:02

is what we're in today. So the

25:04

reason why the producer prices

25:06

had to absorb or producers,

25:08

the middleman, the intermediate goods

25:10

had to absorb it, is because

25:12

the end consumers were still cash

25:15

strapped. And then knowing that, you

25:17

can say, well, okay, the follow-on from

25:19

that is that they're going to pull

25:21

back and then there's going to be

25:24

a downward slide. So you have to...

25:26

dig in a little bit deeper. They are aware

25:28

that I believe in free markets

25:30

and limited government intervention in trade.

25:32

From a free market perspective, the

25:34

correct response to foreign governments subsidizing

25:36

exports is to do nothing. In

25:38

fact, an argument can be made

25:40

that a country should welcome other

25:43

nations' export subsidies, which Milton Friedman

25:45

has described as a form of

25:47

foreign philanthropy. saying that if another

25:49

government wants American citizens to enjoy

25:51

its goods and services at artificially

25:53

low prices, Washington should tell them

25:55

to bring it on. The problem is

25:58

that persistent subsidized imports can eventually

26:00

displaced domestic production of often

26:02

strategically important goods. The worry

26:04

is that unfair foreign competition

26:06

can bankrupt domestic producers, after

26:08

which prices can be hiked

26:10

up by a foreign-owned monopoly. The

26:13

example often given of strategically important production

26:15

is steel, which I discussed in a

26:17

recent video about how Britain was planning

26:20

on paying huge subsidies to foreign-owned steel

26:22

mills to keep them open in the

26:24

UK. Some of the top comments said

26:27

that if China's willing to ship steel

26:29

to Britain, the billion-pound subsidy should instead

26:31

be spent on buying finished steel and

26:34

setting it aside as a strategic reserve.

26:36

Trump is arguing that tariffs on

26:38

America's trading partners are necessary to

26:40

protect US businesses and the American

26:42

worker at a time when US

26:45

manufacturing jobs have dropped from their

26:47

peak in the late 1970s. Trump

26:49

supporters point out that some of

26:51

his tariffs did appear to work

26:53

when he was last in office.

26:55

giving the example that tariffs on

26:57

imported washing machines may have created

27:00

new jobs as they were imposed

27:02

at the same time as Whirlpool

27:04

was building a new factory in

27:06

the United States and the

27:08

tariff helped. See this is why

27:10

it's very hard to analyze

27:12

what exactly will happen

27:14

with tariffs because it's so

27:17

dependent on very particular

27:19

market conditions. Also

27:21

the textbook will say that

27:23

you know, it's to shift demand

27:26

from foreign goods to domestically

27:28

produce goods, but it can

27:30

also just pierce demand in general.

27:32

So like, I don't know about

27:34

you guys, but when you go, a lot

27:36

of the ads that you might see on

27:39

YouTube or ads that you even see on

27:41

Twitter or you go on to Amazon

27:43

and the ones that they're putting

27:45

at the top of your home screen,

27:47

they're all, a lot of

27:50

them are just these really

27:52

cheap. plastic things from

27:54

China. And that

27:56

is, I guess they don't

27:58

have to. be exactly from

28:01

China. But you know, if you didn't

28:03

buy that, you're not going to

28:05

buy another cheap piece of plastic

28:08

made in America. If you buy less

28:10

plastic do hiccies and

28:12

widgets and stupid toys that

28:14

you might play with once or your

28:16

kids might play with once and

28:18

then, you know, you never touch it

28:21

again, but you wasted $40 on it,

28:23

then you're not buying those things.

28:25

You're not going to buy American

28:27

made one for $50 bucks. you're

28:30

just not going to buy it. Okay,

28:32

and so the not just the it's

28:34

not just like a horizontal

28:37

transfer from foreign producers

28:39

to domestic producers. It's

28:41

there's also a qualitative

28:44

shift, especially right now when

28:46

we're going when you know we're in this

28:48

undercurrent of de globalization

28:51

stagnation in the world. People

28:53

it's harder and harder for

28:55

people to get by. There's

28:58

there's you know overall

29:00

just grinding lower look at the

29:02

industrial production of Germany okay

29:04

as an example we're just grinding

29:07

lower people's living standards are

29:09

going down and now you're going to

29:11

do a trade war so it's very hard

29:13

to piece together what a tariff is

29:16

going to do there but I can tell you

29:18

one thing is almost certain that

29:20

it's not going to be

29:22

a horizontal transfer from foreign

29:24

producers to domestic producers of

29:26

the same thing Okay,

29:28

there's going to be

29:31

a qualitative shift in

29:33

what is bought and perhaps

29:36

what services are

29:38

bought, the amount of savings

29:40

that people have, you

29:43

know, put towards savings

29:45

and things. So there's

29:47

a lot, a lot

29:49

of questions and nuance

29:51

to overall effects

29:53

of tariffs, especially

29:56

right now. The results of trade

29:58

policies like this are unfortunate. not always

30:00

clear as there are a lot of

30:02

moving parts and it can be a

30:04

bit like dietary science where a person

30:06

excludes sugary drinks but then eats more

30:08

food offsetting most. The Federal Reserve

30:10

analysis of Trump's first-term tariffs

30:12

found that a lot of the

30:15

benefits were offset by the higher

30:17

costs of imported raw materials that

30:19

American manufacturers had to buy as

30:21

well as from retaliatory tariffs from

30:23

other nations. Overall, they found that there

30:26

was a small decline in the number

30:28

of US manufacturing jobs during Trump's first

30:30

term, but a number of factors like

30:32

the start of the pandemic could explain

30:34

that outcome. Now, it's become a bit of

30:36

a cliche when talking about Donald Trump to

30:38

say that you should take him seriously, but

30:41

not literally. And while that might be a

30:43

cliche, it's still probably true. But while the

30:45

specifics of what he will do about trade

30:47

ones in office are not clear, the thing

30:50

that is really clear is the topic he

30:52

cares the topic he cares the most about.

30:54

You can find videos online dating back 40

30:56

years of Trump on daytime talk shows being

30:59

mostly pleasant until the topic of foreign trade

31:01

comes up. Back then, Japan was his main

31:03

target while today is China. Janan Ganesh

31:05

wrote a few weeks ago that trade

31:07

is almost all that Trump cares about

31:09

with immigration coming in as a distant

31:12

second. He says that over the last

31:14

40 years, Trump has had an intense

31:16

belief that to run a current account

31:18

deficit with another nation is to lose

31:20

to it. I think... that the exact mechanics

31:22

of how Trump plans to deal with

31:24

trade are not clear, but I think

31:26

it makes sense to take him at

31:29

his word that this is the issue

31:31

he cares the most about. Exactly how

31:33

he'll put tariffs in place is maybe

31:35

the most unclear part of his plan,

31:37

but I think it's unlikely that he'll

31:39

do it on inauguration days, he has

31:41

said, as that would likely require him

31:43

to declare a national state of emergency.

31:45

which is what Richard Nixon had to

31:47

do to impose 10% power of sun

31:49

all imported goods when he suspended the

31:51

convertability of the dollar in the gold in

31:53

1971. This is interesting because,

31:55

you know, that's traditionally a

31:58

Democrat type of position. So,

32:00

Democrats were unions, Democrats

32:02

were the working

32:04

man, right? And Trump

32:07

is basically a

32:09

1980s Democrat. But

32:11

now he's, that is what

32:13

has taken over the

32:16

Republican Party mixed in with a

32:18

little bit of other things like the

32:20

border and free

32:22

speech and things like that. But

32:25

overall, it's a very

32:27

Democratic thing. But my,

32:29

how have things shifted

32:31

over the years? So

32:33

again, when when they're attacking now

32:35

today, we see in some

32:37

of the headlines, they continue to

32:39

attack the Bitcoin Strategic Reserve

32:41

as a Republican thing, a very

32:43

partisan thing. It's not that

32:45

it is basically it fits in

32:48

very well with with

32:50

the traditional Democrat

32:52

Party. And anyway,

32:54

so let's just continue. Nixon

32:56

put those tariffs in place to

32:58

prevent American producers from being

33:00

disadvantaged in the expected exchange rate

33:03

volatility around that announcement. Now,

33:05

if tariffs were applied to Canada and

33:07

Mexico and applied to things like

33:09

oil and gas, it would be quite

33:11

inflationary, which is the opposite of

33:13

what Trump promised on the campaign trail.

33:16

So I don't think that this

33:18

is awfully likely. The USMCA trade agreement,

33:20

which replaced NAFTA in 2020, is

33:22

up for a scheduled review in 2026,

33:24

and it seems extremely likely that

33:26

Trump will use that deal as a

33:28

bargaining chip to negotiate with Canada

33:30

and Mexico over things he cares about,

33:32

like immigration. OK, well,

33:34

at least he did say things

33:36

you care about. He cares about

33:39

like immigration because again, this

33:41

stuff with Canada and Mexico is

33:43

not about the economics of it.

33:45

It is about

33:47

the the immigration issue.

33:50

So it's just being used as a cudgel. So

33:54

I wouldn't put they almost have

33:56

to be analyzed in

33:58

two. different groups, the

34:01

China stuff and Canada,

34:03

Mexico. This is exactly what

34:05

he did in the past. In

34:07

2019, under the threat of tariffs, Mexico

34:09

agreed to step up immigration enforcement

34:11

to prevent migrants from entering Mexico from

34:13

Guatemala in the south and to

34:16

stop them from leaving to the US

34:18

in the north. While it's reasonable

34:20

to expect Trump to try and

34:22

extract concessions during these negotiations, both Mexico

34:24

and Canada do run persistent trade

34:26

deficits much like the United States. And

34:28

so overall, they are on the

34:30

same side as the United States on

34:32

this issue. It's worth remembering

34:34

that during his first term in office,

34:36

Trump's cabinet mostly moderated his protectionist

34:38

instincts, along with the stock market reaction,

34:40

which he saw as a measure

34:43

of voter approval. It looks like he

34:45

might have a less conservative cabinet

34:47

this time around, but likely still cares

34:49

about the stock market. So

34:51

what are the problems in international trade

34:53

that Trump is aiming to fix? Well,

34:55

the hyper globalization that began in

34:58

the late 1990s made the

35:00

world better for most people. It

35:02

almost eliminated extreme poverty and

35:04

reduced global inequality. Consumers in

35:06

wealthy countries benefited from cheap imported

35:08

goods, which kept inflation low and

35:10

standards of living as measured by

35:13

per capita income increased around the

35:15

world. While the average person was

35:17

doing much better than before, blue

35:19

collar workers in developed countries were

35:21

struggling as manufacturing work moved abroad

35:23

where labor was cheap. While global

35:25

inequality had fallen inequality within

35:27

the United States had grown.

35:30

Okay, I don't like how

35:32

he makes

35:34

it seem like globalization was a choice.

35:37

So globalization created

35:39

all these benefits. Okay,

35:43

that's that's great. But globalization

35:45

is actually a it's

35:47

a symptom. It's not a

35:49

cause is a symptom and everything

35:52

is caused by a deeper

35:54

thing. And that is

35:56

basically the end of the

35:58

Soviet Union. And the unipolar

36:00

moment when everybody was under the

36:03

WTO, they were under, you know,

36:05

they had the UN, still had

36:07

some clout, you had the World

36:10

Bank, you had IMF, you had

36:12

all these international organizations, and it

36:15

was a unipolar world of trust

36:17

and cooperation, and you know, this

36:19

was. relatively recently after Ronald Reagan

36:22

and Margaret Thatcher. And so you

36:24

have this trust and this exuberance

36:27

in the global economy, all under

36:29

the Pax Americana, and now we

36:31

don't have that. So that is

36:34

why globalization is going away. It's

36:36

not a choice that globalization is

36:39

going away. It is that it's

36:41

going away because that unipolar moment

36:43

is going away. On top of

36:46

all of this, Western governments were

36:48

getting concerned that China and some

36:51

other surplus economies were engaging in

36:53

unfair competition by subsidizing manufacturing while

36:55

imposing restrictions on foreign companies in

36:58

exchange for access to their markets.

37:00

This became more of an issue

37:03

as China developed and could no

37:05

longer claim to be a poor

37:07

developing country. Western economies began to

37:10

see it as a problem that

37:12

China had the highest manufacturing share

37:15

of GDP and the lowest consumption

37:17

share of GDP in the world.

37:19

By agreeing to absorb China's excess

37:22

production, deficit economies like the United

37:24

States were allowing their most aggressive

37:27

trade partner to set their trade

37:29

policies for them. The economist Michael

37:31

Pettis argues that surplus countries subsidize

37:34

their manufacturing industries and pass on

37:36

the costs of these subsidies to

37:38

deficit countries, like the United States.

37:41

He argues that a free trade

37:43

country with open capital markets, when

37:46

trading with a planned economy, is

37:48

not really engaging in free trade.

37:50

They're instead I really like Michael

37:53

Pettis. I'd like him more and

37:55

more accepting the inverse of their

37:58

trade partners trade and industrial policies.

38:00

So how does China subsidize exports? Well,

38:02

Chinese exports receive considerable direct

38:04

subsidies, but the indirect transfers

38:07

they receive are even larger.

38:09

Chinese power plants and banks are

38:11

mostly government-owned, meaning that policy

38:13

makers can decide to give

38:15

cheap energy and low-interest rate

38:17

loans to favoured businesses. There

38:19

are a variety of other ways a

38:21

government can support its manufacturing sector

38:24

too, most of which involve transfers

38:26

from the household sector to the

38:28

business sector. Trade surplus countries often

38:30

have undervalued currencies. This helps

38:33

exporters at the expense of

38:35

importers. Manufacturing businesses are usually

38:37

exporters and households are net

38:40

importers. Keeping interest rates artificially

38:42

low helps borrowers at the expensive

38:44

savers and once again businesses are

38:46

net borrowers and households are net

38:49

savers. Overspending on transportation

38:51

infrastructure like railways, roads and

38:53

ports supports businesses at the

38:55

expense of households too. Repressive

38:57

labour laws, restrictions on worker mobility

39:00

and low penalties for pollution additionally

39:02

help the manufacturing sector at the

39:05

expense of the household sector. In

39:07

China, industrial-zoned land is an order

39:09

of magnitude cheaper than residential land,

39:12

another transfer from households to businesses.

39:14

When all of these policies are combined,

39:16

there are huge transfers from households

39:18

to businesses in China, meaning that

39:21

while businesses can prosper, households can't

39:23

afford to consume the goods that

39:25

are being manufactured. Now in a

39:27

closed economy this would mean that businesses

39:29

would be forced to either

39:32

raise wages to increase consumption

39:34

or reduce production due to

39:36

a lack of demand. In

39:38

a globalized trading system the

39:40

surplus production can be

39:42

exported. Okay very very good

39:45

explanation there. The one thing I'll add

39:47

is also not only are there actual

39:49

policies in place but there is

39:52

a structure in place. with the provinces

39:54

and the five-year plans and

39:56

goals for growth and goals

39:58

for production quota. and all

40:00

of this stuff that reinforces

40:03

a manufacturing mindset,

40:06

an overproduction

40:08

mindset. And so not

40:10

only are, you know, what he

40:13

said, but on top of that,

40:15

it's a cultural thing.

40:17

It's the way the government

40:20

and the Chinese economy

40:22

is set up to

40:24

emphasize overproduction. That's why

40:27

I say. the end of their

40:29

economic model is here. Because

40:31

if globalization is going

40:33

away and he just went through

40:35

that there is no domestic demand

40:38

to suck up all of this

40:40

manufacturing, it has to be exported.

40:43

But it's not going to be exported

40:45

because of globalization and tariffs

40:47

and all of these things. And

40:50

so this is the end of

40:52

the Chinese economic model. They

40:54

have to fundamentally shift what

40:57

they're doing. And I don't

40:59

know if they can. Especially

41:01

when you talk about the

41:03

mandate of heaven, you talk

41:05

about the promise that the

41:07

Chinese men saying, you know, we will,

41:09

you won't have free speech, but we'll

41:11

make sure we grow at 10% a

41:13

year. Okay, I really met 7% a

41:15

year. Oh, we mean 4% a year.

41:18

How long does that have to

41:20

go until they're at zero

41:22

or negative and the mandate

41:24

of heaven is being revoked

41:26

by the people? So this is

41:29

kind of an existential threat to

41:31

them on top of it being the

41:33

end of their economic model. And the

41:35

reason for that is the undercurrent

41:37

of what's happening in the world.

41:39

This trade surplus doesn't necessarily

41:41

give China an advantage. It's

41:44

a result of flawed policies

41:46

and the means of dealing

41:48

with a huge disadvantage, which

41:50

is extremely low domestic demand.

41:52

This doesn't just affect China, however, as

41:54

a surge in a country's exports that

41:56

are not balanced by a surge in

41:58

import means that manifest... in deficit countries

42:01

find themselves partially funding the Chinese

42:03

subsidies with their lost income. The

42:05

imbalances in China move the production

42:08

of goods away from where they

42:10

might be most efficiently manufactured under

42:12

the law of comparative advantage and

42:15

cause all sorts of trade distortions.

42:17

When exports are high and imports

42:19

are low, a country starts accumulating

42:21

the currency of its biggest trade

42:24

partners as savings. Chinese savings are

42:26

not high due to any culture

42:28

of frugality in China. It's simply

42:31

a function of keeping wages low

42:33

and exporting without importing. You don't

42:35

just keep the proceeds of trade

42:38

in dollar bills in a vault

42:40

either, you usually invest them in

42:42

things like bonds. So China's excess

42:45

savings are mostly sent back to

42:47

the United States, where there are

42:49

deep capital markets. This means that

42:51

there's more capital in the United

42:54

States than is needed for investment

42:56

purposes, which can be seen in

42:58

the huge cash balances that US

43:01

companies are sitting on. So can

43:03

Trump's tariffs offset Chinese subsidies and

43:05

help to rebalance global trade? Well,

43:08

possibly, but not if Trump just

43:10

puts tariffs on Chinese imports. The

43:12

reason this wouldn't work is that

43:15

if the United States refused to

43:17

buy Chinese goods but continued to

43:19

buy from other countries, this would

43:22

just push the problem to another

43:24

trade partner. Unable to sell EVs

43:26

in the United States, China would

43:28

ship them to Europe, undercutting European

43:31

EVs. That's not exactly correct either.

43:33

The Chinese or the American consumer

43:35

is the strongest in the world

43:38

will buy everything. I don't know.

43:40

I've had some European friends in

43:42

the past and you know, when

43:45

they see the things that Americans

43:47

buy like the little widgets for

43:49

the kitchen or whatever they say

43:52

only in America. That would only

43:54

be bought in America. And so,

43:56

no, the American consumer is the...

43:58

It is almost irreplaceable that some

44:01

part of it, yes, can be

44:03

replaced by Europeans, European, consumers, but

44:05

they're having a worse time of

44:08

it economically than we are. And

44:10

so as we go through stagnation

44:12

and decline, the American consumer is

44:15

going to become more and more

44:17

and more irreplaceable. They don't have

44:19

an option here. So I would

44:22

differ with Patrick on that point.

44:24

European manufacturers unable to compete in

44:26

their own markets would ship European

44:28

EVs to the United States, and

44:31

the overall problem would be exactly

44:33

the same. If China continued to

44:35

keep consumption low while exporting, Chinese

44:38

savings would continue to be exported

44:40

to the United States too. The

44:42

Chinese trade surplus would remain as

44:45

big as before, even if it

44:47

fell against the United States, and

44:49

the US trade deficit would continue

44:52

to grow too. So tariffs applied

44:54

on a country-by-country basis are unlikely

44:56

to have any notable effect. They

44:59

would really need to be applied

45:01

equally to all trade partners in

45:03

order to work. But this would

45:05

be very politically contentious, as it

45:08

would involve upsetting America's allies, who

45:10

are not really to blame for

45:12

the imbalances in global trade. If

45:15

China is already an aggressive trade

45:17

partner and the US joined them,

45:19

every other country would be forced

45:22

to follow suit, as otherwise they

45:24

would be paying the cost. This

45:26

is the biggest problem with government

45:29

trade intervention. A number of journalists

45:31

have expressed concern that Trump's trade

45:33

plans are worryingly similar to the

45:35

smooth-holly act passed under Herbert Hoover.

45:38

which contributed to the problems of

45:40

the Great Depression. I made a

45:42

video a few weeks ago about

45:45

the Great Depression and a notable

45:47

difference between the late 1920s and

45:49

today is that in the 20s

45:52

America was the world's biggest exporter

45:54

and had much more to lose

45:56

than it does today. In a

45:59

trade war countries who need to

46:01

export are in a much weaker

46:03

position than countries that are absorbing

46:05

excess supply. Well the smooth Hawley

46:08

Act was a terror. What a

46:10

great point. And that makes me

46:12

think also about... the phrase that

46:15

demand begets supply. So remember if

46:17

you. are an importing country you

46:19

are the home of the consumer

46:22

the consumer is always right and

46:24

if you have all this demand

46:26

that can't be met internationally you

46:29

know by your because maybe there's

46:31

tariffs or maybe there's a pandemic

46:33

or something you still have that

46:36

demand and that will be get

46:38

supply all right where the Chinese

46:40

model is actually the reverse okay

46:42

well actually U.S. consumer demand created

46:45

supply from China, but it can

46:47

also create supply domestically. But China

46:49

is in opposite boat. Okay, they

46:52

can't, you can't just make things

46:54

and then people magically want to

46:56

buy them. So that's why China

46:59

isn't a much worse situation. Now,

47:01

remember, going back to the very

47:03

beginning, I was talking about zero-sum.

47:06

and how in a world of

47:08

de globalization stagnation decline, collapsing fertility

47:10

rates and all that, we're going

47:12

to more and more of a

47:15

zero-sum society. Zero-sum from a subconscious

47:17

mental construct of what we are

47:19

in. And so in that case,

47:22

we should expect these tariffs to

47:24

happen. that China will lose out

47:26

more than the US loses out

47:29

because it's zero-sum thinking. I'm not

47:31

saying that's good. I'm saying that's

47:33

where it's going because of this

47:36

zero-sum thinking. If China loses, America

47:38

wins. Just like Trump said, he

47:40

thinks about it in, if you

47:43

have a current account, imbalance, you

47:45

lost against the other country. So,

47:47

yeah. That's my thoughts on that.

47:49

Terrible idea. I don't believe that

47:52

it was to blame for the

47:54

Great Depression, and I don't believe

47:56

that new tariffs would lead to

47:59

that scale of economic catastrophe. Trump

48:01

said in interviews that he would

48:03

love to entirely replace income taxes

48:06

with import tariffs. I think this

48:08

is... Okay, another thing that he

48:10

just said there, that Smootholly, he

48:13

thinks it didn't lead exactly to

48:15

the Great Depression, it could have

48:17

exacerbated issues, but that he doesn't

48:19

think tariffs today will lead to

48:22

the same thing. Now, what would

48:24

your thinking be if you thought

48:26

that the tariffs were a symptom?

48:29

of the Great Depression or

48:31

the international zeitgeist leading into

48:33

the Great Depression. So if

48:35

you if you think that

48:37

the tariffs are the conscious

48:39

thing and yes they are

48:41

in a way that you

48:43

pick what percentage rate you

48:45

want to tariff at and

48:47

you what country you're going

48:49

to apply it to and

48:51

who's going to do the

48:53

deal and all this stuff

48:55

but the in the ethos

48:57

of the I don't know

49:00

what to call it. aura

49:02

of the times is making

49:04

terrace inevitable and smooth holly

49:06

and the depression show that

49:08

they are both symptoms of

49:10

an underlying problem and today

49:12

we have this underlying problem

49:14

and so terrace are showing

49:16

their head depression is probably

49:18

going to show its head

49:20

as well because they're both

49:22

symptoms. This is mostly bluster

49:24

and shouldn't be taken too

49:26

seriously. The Peterson Institute, a

49:28

mostly centrist think tank, wrote

49:30

a report on this recently,

49:32

pointing out that last year

49:34

the United States imported $3.1

49:36

trillion worth of goods, but

49:38

raised around $2 trillion in

49:40

income tax. Tariff rates would

49:42

thus have to be over

49:44

65% to replace the income

49:46

tax, and that's assuming no

49:48

fall in imports, which would

49:50

be extremely unlikely with 65%

49:52

tariff. replacing income taxes with

49:54

tariffs just couldn't war. A

49:56

number of big US companies...

49:58

have been stockpiling goods in

50:00

preparation for Trump's tariffs. The

50:02

economist reports that Microsoft Dell

50:04

and Hewlett Packard are among

50:06

the American tech companies that

50:08

are rushing to import as

50:10

many electronic components as possible

50:12

before the new administration takes

50:14

office in January. While this

50:16

might help them in the

50:18

short term, I doubt that

50:20

they could import enough components

50:22

to get them through years

50:24

of potential terror. It's difficult

50:26

to predict how Trump's trade

50:28

policies will work. The U.S.S.

50:30

could act unilaterally as they

50:32

do run the largest trade

50:34

deficit in the world, and

50:36

there's plenty of supply in

50:38

the world, and the thing

50:40

that is scarce is demand,

50:42

which is what the U.S.

50:44

brings to the table. A

50:46

better option might... There you

50:48

go. That's a good way

50:50

to put it. That there

50:52

is a shortage of demand

50:54

for these goods. And the

50:56

U.S. is... the consumer of

50:58

last resort, if you will.

51:00

So yeah, that's a great

51:02

way to put it. For

51:04

the United States to work

51:06

with other large deficit economies

51:08

like Canada, Australia, and the

51:10

UK, where combined they make

51:12

up about 70% of global

51:14

deficits, if they struck a

51:16

deal where they as a

51:18

group placed tariffs on countries

51:20

that run large persistent surpluses,

51:22

that could help to rebalance

51:24

global trade. If countries wanted

51:26

to sell to that blog,

51:28

they would either have to

51:30

take steps to boost domestic

51:33

demand or cut production. Other

51:35

countries wouldn't have to really

51:37

agree, as most of the

51:39

rest of the world are

51:41

trying to export rather than

51:43

agreeing to import. If they

51:45

wanted to sell to these

51:47

countries, they'd just have to

51:49

agree to the term. A

51:51

rebalancing of trade like this

51:53

would be extremely painful for

51:55

surplus countries like China, Germany,

51:57

Japan, Russia, and Saudi Arabia.

51:59

but it could be expected

52:01

to boost American manufacturing and

52:03

allow American businesses to compete

52:05

internationally without slashing wages. This

52:07

rebalancing would also mean repatriating

52:09

the capital. which has been

52:11

flowing into the United States

52:13

for decades. Foreigners own around

52:15

20% of all U.S. securities

52:17

outstanding. And as trade rebalance,

52:19

these savings would have to

52:21

be repatriated back home, which

52:23

would have to occur in

52:25

an orderly manner. It's very

52:27

difficult to predict what Trump

52:29

might do in his second

52:31

term in office, other than

52:33

to say that he'll amp

52:35

up trade negotiations while likely

52:37

keeping an eye on the

52:39

stock market as a measure

52:41

of his success. All right,

52:43

that does it for that.

52:45

So let's check out the

52:47

comments here. Tex and Vic

52:49

to spec with this, heard

52:51

something about the Bank of

52:53

England bailing out shadow banks.

52:55

What's all that? I haven't

52:57

heard that. England is in

52:59

some deep trouble, though, I

53:01

think. It's kind of a...

53:03

I was just listening to

53:05

another podcast. I can't remember

53:07

which one it was, and

53:09

they were going through just

53:11

how bad. England is getting.

53:13

It's similar to Canada, right?

53:15

They're going down the same

53:17

path. Raphael, what do you

53:19

think of Bitcoin's monetization going

53:21

forward, not being from people

53:23

selling other assets to buy

53:25

it, but from loans using

53:27

the credit money system we

53:29

have and get to 20

53:31

trillion market cap? Yeah, that's

53:33

one thing that's very interesting

53:35

about what Michael Saylor is

53:37

doing. He's creating an opportunity

53:39

to print money, literally print

53:41

money through the credit system

53:43

and directly into Bitcoin. It's

53:45

fascinating. And in that case,

53:47

it would be something like

53:49

asset price inflation. So asset

53:51

price inflation were the cost

53:53

of the prices. Bonds stuff

53:55

that they're going up because

53:57

that's where all the leverage

53:59

happens. That's where all the

54:01

lending is centered around because

54:03

the broader economy is stagnant.

54:05

And so it's kind of

54:08

like you're narrowing the stream

54:10

of where that new credit

54:12

is being created. If that

54:14

stream gets diverted a little

54:16

bit into Bitcoin or Bitcoin

54:18

gets included into that asset

54:20

price inflation basket. It would

54:22

be very interesting to see

54:24

if it steals some money

54:26

away from those two things.

54:28

Of course, we've talked about

54:30

it for a long time

54:32

in Bitcoin about Bitcoin stealing

54:34

a lot of real estate

54:36

thunder. I saw another tweet

54:38

that I responded to today

54:40

about Bitcoin versus, you know,

54:42

buying and holding a house,

54:44

a rental for eight years.

54:46

Of course, when you look

54:48

at Bitcoin in the last

54:50

eight years, it doesn't make

54:52

any sense. But going forward,

54:54

even if you talk about

54:56

holding Bitcoin, and in the

54:58

worst case scenario, it goes

55:00

up like 10% a year

55:02

or something, there's no sense

55:04

in even buying a house.

55:06

And so all those people

55:08

that have homes for Airbnb

55:10

or whatever, I can see

55:12

it really taking a lot

55:14

away from that. And so

55:16

maybe the fire hose would

55:18

be directed away from real

55:20

estate. at least this kind

55:22

of residential niche of real

55:24

estate, which I don't know

55:26

how big that is, save

55:28

several trillion, could be funneled

55:30

into Bitcoin. That would be

55:32

insane. And yeah, we would

55:34

get to a 20 trillion

55:36

dollar market cap, you know,

55:38

within several years, probably within

55:40

a cycle or something like

55:42

that. Okay, that was that.

55:44

Let's go to not seeing

55:46

any other... Oh, D.T. You

55:48

did say that in the

55:50

bill, the Bitcoin reserve bill.

55:52

Because I was saying, if

55:54

we start buying in the

55:56

second half of next year,

55:58

200,000 a year, I think

56:00

it says calendar year, whatever,

56:02

but you said it can't.

56:04

be more than 200,000. It

56:06

doesn't say not less than

56:08

200,000. So I stand corrected

56:10

on that. I'll have to

56:12

go back and double check

56:14

on that. So yeah, any

56:16

other comments here before we

56:18

bounce out for the day?

56:20

So if you guys have

56:22

something you want me to

56:24

react to, you can DM

56:26

me on Twitter, you can

56:28

put it in telegram, spend

56:30

most of my time in

56:32

telegram. So guys watching on...

56:34

Twitter, what's up, 172 people,

56:36

jump over to the YouTube

56:38

or Rumble, like, comment, subscribe.

56:40

You can find the links

56:43

in my PIN tweet, trying

56:45

to get to a thousand

56:47

subs on the YouTube to

56:49

get it monetized. Also, check

56:51

out Bitcoin and markets.com. I'll

56:53

go there one more time

56:55

here, been right in there

56:57

quite a bit lately, doing

56:59

the free blogs. You also

57:01

have paid stuff here so

57:03

you can go to pro

57:05

members. And you can see

57:07

my last one came out

57:09

on December 1st, I gotta

57:11

get another one out here

57:13

soon, but I did a

57:15

macro rundown and Bitcoin approaching

57:17

100K, but these are all

57:19

just for the premium subscribers.

57:21

And also, if you join

57:23

for $5 a month, which

57:25

helps me create the show

57:27

and keep going after all

57:29

these years, we have a

57:31

price forecast competition if you

57:33

are just a $5 member.

57:35

and the closest person to

57:37

picking the monthly close wins

57:39

$20 in Sats. So you

57:41

guys can check that out

57:43

if you become members. All

57:45

right. One last look at

57:47

the price before we go.

57:49

Let's go down to the

57:51

one hour and my pattern

57:53

on here. So still sitting

57:55

above 100K. I don't think

57:57

we have seen the last

57:59

of the five digits, but

58:01

every time we break back

58:03

above 100K, we just... eat

58:05

all of those orders that

58:07

like to cluster around that

58:09

round number. And eventually there

58:11

will be no more Bitcoin

58:13

to buy at this level

58:15

and you'll need to go

58:17

higher. So exciting times, exciting

58:19

times. All right guys, thanks

58:21

for hanging out. I will

58:23

check you on the next

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