Balaji Srinivasan: The COLLAPSE of the West – Why AI, Bitcoin & China Will Win | Peter McCormack

Recent media that portrays like a rich non Western country, but for the most part, you don't see that kind of media. And the reason is because it's depressing to people in the west who are seeing their living standards declining. They don't want. They want to see escapism and they want to see superhero movies. Like, you know, clocks, watches used to say, like New York, London, Tokyo. You know, they were like, they sold watches in the 80s with those three. Now that would be, I think in a few years, if this Mamdani, for example, wins in New York, it'll be Miami, Dubai, Singapore. Even though the colors are reversed, China disrupted Red America and the Internet disrupted Blue America. This is only set to go further in the next 10 years because the Internet is doing AI and crypto. So you're going to take over all media and all money. China is doing robots and drones, so you're going to take over all manufacturing and all military because China has already won the war. Like, you can't fight a war with China because they make all the parts. America was the center of the world in the early 2000s, and China and the Internet are these sort of barbarian powers kind of growing on either side. So the fall of the USSR is the closest parallel, I think, within our lifetimes to what is going to happen 2024, 2025 plus, I think you need to figure out where you want to be on the surface of the Earth.

Balaji.

Hi, sir. Good to hear.

Yeah, good to see you. Yeah. Okay. Are we witnessing the end of Western civilization.

As we know it? And here's why I say that there's actually a graph which you can use to kind of anchor everything. All right, I'm going to go right into a reference. Ready? Okay, so this is the. Oops, let me move this over a little bit here. This is the GDP Geocenter graph. If you look at this, this is one of a few graphs I think of as like one of the most important. And if you can see that graph. Okay, this is showing. Can you see that from over there?

Yep.

Okay, so that is showing that for thousands of years, the global economy's center of economic mass was essentially in Eurasia. That doesn't mean it was like literally in Central Asia. What it means is that if you average roughly China's economy, Japan, Southeast Asia, India, Middle East, Europe, you get something that's roughly in the middle of Eurasia. And that's why Marco Polo sought out China. That's why Columbus sought out India. That's why the Mongols and the Huns were at rough military parity with Europe and actually won wars against them. That's why the Arabs are able to win, you know, and conquer Andalusia and so on and so forth. Right? So there's rough military economic parity across Eurasia. And then with the advent of the Industrial revolution, the west got far ahead. And so the global economy shot out, as you can see in this graph, all the way to Europe. And then with all the new wonder weapons, they all beat each other's brains. And you had World War I, World War II, and when all the dust settled and Japan had been nuked and Russia was communist and India was socialist and Eastern Europe was smashed a bit and Central Europe is blown up and even the UK was bombed when everybody else was blown up. Basically you had 1950, which was peak Westernization, peak Americanization, peak centralization, the minimum number of jurisdictional entities that had ever existed before in human history because everything had coalesced into these Giga states, like 300 million in the Soviet Union, 300 million, like a billion in China, a billion in India. All this kind of stuff had happened. All these things that coalesced into these giga states that all beat each other up. And then for about 40 years that continued. Then the, you know, the Soviet Union fell in 1991. And since then, as the Soviet Union fell, communism and centralization fell in its classical sense. And as countries became capitalist again, Eastern Europe, India, you know, China as well, where they became pragmatically capitalist even if they kept the label communist. And Southeast Asia, Vietnam is now effectively capitalist, whom they call themselves communists. The world economy rocketed back out to Asia much faster than it had been there. Right. And so this took basically thousands of years. Right? This took hundreds of years, and this happened in tens of years. Okay, what that means is that every institution that was founded in 1950 or even you know, post 1991, like the UN, the World bank, basically the so called post war order is obsolete because the money isn't there, the power isn't there, it isn't in the west anymore. And I can show many more charts like this, but this is the underlying driver is this U curve. The world is actually reverting back to what it looked like before 1950. And so the entire MAGA movement and also build back better that all thinks of 1950 as the way things are supposed to be. Right? Because that the post war order, it basically says that's the year zero, the starting point for the current establishment. That's how things are supposed to be that, you know, in America you had a guy who didn't have a high school education and he could support a wife and a kid and, you know, multiple kids and a home. And that's like how things are supposed to be. And that was taken from us. Right. That's like what drives a lot of the sentiment in America today. Right. And I'm not saying that, that, you know, there couldn't have been better management. There could have been. Part of it is just internal, you know, dumbness that that happened. For sure, there's, there's something to it. But it's also the fact that that guy who is smart in Poland or in China or in India or in Eastern Europe or whatever was dying in a Gulag or getting nuked or, you know, just suffering under communism or socialism. And now they can actually compete in the global economy. So of course, you know, that high school grad is going to face competition, right? Global economic competition. And so because of that, if you put all that together, the relative share of the Western pie was like absolutely maximal, 1950 to 1991. And now it's declining. Okay, so it's declining in relative terms. Just decline in relative terms, though, might not be so bad because, you know, you can, for example, let's say IBM has declined in relative terms versus Microsoft, has declined in relative terms versus Google. But it's not out of business. It still makes money, it still pays its people.

Yeah.

It's losing some talent, but it's not dead yet. Right. So decline in relative terms is not necessarily the end of the world. The problem is there's also, in my view, going to be a decline in absolute terms. Should I say why?

Yeah.

Okay.

Well, firstly, so what you're saying here is it's really just a rebalancing.

It's a rebalancing.

That's right.

And so the issue is though, that without the long lens of history. Right. There's another graph, for example, that. Let me pull that up here. So here's another graph. So that is 2,000 years of economic history in one chart. Right. And that shows that essentially India and China were basically most of the world economy back around the time. I mean, the Roman Empire was big, but these had always been giga states. Right. And to support such huge populations, they always had to have very complex economies and so on. They may have had a lower per capita income, that's argued by various historians, but there was something that was working there to support such massive populations. Right. There was fairly advanced social technology or what have you. They had they, they had something going on, right? And then with the, the, this axis over here, by the way, it's not uniform because that's like a thousand years, that's like 500 years, this is like 10 years and so on and so forth, right? So the, the X axis is not uniform, it's time dilated. This is just the points where the, you know, GDP has been estimated. But essentially this is like peak Westernization when India and China are basically nothing. And now you can see them coming back very, very quickly, right? Asia coming back quickly and the us, uk, France, Italy, Germany, all declining. And so this is kind of what people think the natural state of the world is, but it's declining over here and they're feeling that decline. Right. There's another version of this graph that I'll show you which is basically the G7 nations have just been declining in their GDP percentage of the world and BRICS has been rising. And by BRICS it's really China and India and to a lesser extent Russia and to some extent Brazil, not really South Africa. But basically that's that the flipping has happened, right? Most of the world economy, when you and I were growing up, it was like this, it was like 45 to you know, 15 or something like that, right? But this has been changing very rapidly. And the thing is, whenever there's something that's changing very, very rapidly, unless you're constantly monitoring it, your understanding of debt is out of date, right? So unless you're constantly sampling Asia, unless you're constantly sampling Dubai and Riyadh, unless you're constantly sampling these various jurisdictions, it's like a fast moving object, right? If a ball is just rolling very slowly, then you can look at it, look away, look back, and it's basically in the same location. But if it's being thrown really fast, if you look at it and you think it's here and then you look back, it's like over there it's moving much faster, right? So lots of these economic trends are just moving zip like this. And in the absence of like Hollywood movies and western media portraying the rise of the east, the one exception of that to that by the way, is maybe this, this thing called crazy rich Asians. Yeah, right. That's like the one exception where it's like recent media that portrays like a rich non western country. Right? But for the most part you don't see that kind of media. And the reason is because it's depressing to people in the west who are seeing their living standards declining. They don't want. They want to see escapism and they want to see superhero movies. Right. They don't want to see like how good Dubai is. They don't want to see how much Southeast Asia has improved. They're basically still in denial about China. They're still actually in denial even about, I mean, if they're in denial about China, they're denial about the rise of India and so on as well. Right. They're basically in denial about their status in the world. And that's at different stages in different countries. Australia is probably the least in denial. You know why? Because they're in Asia. Right, Right. And much of their economy is digging things out of the ground and sending it to China. I actually think, you know, in the 20th century, the, the Chinese world was mostly destroyed by, you know, what happened with communism in, you know, the, in the, on the main Chinese mainland. But there were pockets of Chinese culture that survived. Taiwan, Hong Kong, Singapore. And that showed that Chinese people were actually not barbarians. And in fact those are. That was the light of civilization that allowed the reboot of mainland China because Taiwan was like a threat to mainland China. Hong Kong was how they set up Shenzhen with Deng Xiaoping and Singapore was like a part of the model for mainland China. Right. So in the same way, I think the Anglo American world will continue in Australia and New Zealand. Like I think it's melting down in the uk, Canada and America. But I think Australia and New Zealand are sort of air gapped enough and that they. So for example, one of the things is in Australia, because they're digging things out of the ground and sending them to China, they have less blue collar dissatisfaction. Right. There's good jobs for blue collar men, which is not the case in America where it got deindustrialized and so on and so forth. So Australia has risen with China or the Australian blue collar has risen with China, the equivalent of the red Americans in Australia. Right. Red collar, if you want. Whereas in America it's declined with China. Right. So Australia and New Zealand have. They also don't have the illusion that they've got the world's most powerful military or the reserve currency. They weren't told all the time that they were global number one forever and ever. So they have somewhat realistic picture of things. And there's other things I can show where they have maybe the best debt to GDP ratio better than the G7. They're also in an Asia time zone. So that I think is underestimated because it means that the controversies of America, that Canada is highly attuned to and is dealing with in real time. There's a 12 hour air gap. So Australia is only waking up when that's kind of lost some of its energy. And they're more attuned to the Asia time zone. I think that shouldn't be underestimated in terms of an air gap. Go ahead.

Yeah, no, no, it's interesting you say that. You know, when I was, when I was coming over, I spoke to Danny Myall producer and he's oh, you might as well come to Australia, it's not far like. So I hadn't, I hadn't really thought that through.

Yeah. Also if you look at the millionaire migration map, like here's another one.

I mean we saw a horrific one this week where the UK is now leading. Yes, 16, 16 and a half thousand millionaires.

Yes. And so basically the UK is losing millionaires, but Australia is still gaining them. Right. So Australia, Singapore and the UAE are punching way above their weight in terms of millionaires. So the Anglo world continues down under.

This has been updated. So we were behind China, we were number two. The updated chart is now we're ahead six and a half thousand. We're losing a thousand a month.

Yes, that's right. And that's unfortunate. It means basically that London is no longer. Have you heard the acronym emea?

Yeah, yeah, of course, yeah, yeah.

So that's like a tech kind of acronym for like Europe, Middle east, you know, North Africa. So the, the center of finance in EMEA used to be London and now it's Dubai. And the center in, in APAC was arguably either Tokyo or Hong Kong. Like you know, clocks watches used to say like New York, London, Tokyo, you know, they were like, they sold watches in the 80s with those three. Do you remember that?

Right, of course.

So now that would be, I think in a few years if this Mumdani, for example, wins in New York, it'll be Miami, Dubai, Singapore. Right. The capital is a capital will move. Right. So because, you know, if you have full communism coming to New York or whatever capital is a capital move to Miami also has other things going for it where it's the capital of Latin America as well. It's like the Singapore of Latin America. And my view is there's actually only three locations in the world now which are basically same office, same time zone and around the world. So in a sense like Sweden is closer to Cape Town than it is to, I don't know, Moscow because it's kind of the same time zone or very close. Right. And so even you know, like the longitudinal striping of the world is different than the latitudinal striping, which is how countries used to be organized. Like it used to be that we grew crops of a certain kind at this latitude. And that was a way to organize society. But now if you're organized by the Internet, longitudinal time zones may be more important because people are synchronized on the same time zone. So you have more countries that look like Chile and are vertical as opposed to horizontal. This is something. There's a guy, Cory Doctorow, he's, you know, he definitely doesn't agree with me on many political things, but he had a book a long time ago called I think Eastern Standard Tribe, which was about this kind of thing like vertical organization rather than horizontal, based on the fact that same time zones running anyway, coming back. So the Anglo world, I think, continues down under, which now that sounds apocalyptic or whatever, right? But I mean. So here's another piece of it. Okay, so let's say there's decline in relative terms, right? All the numbers show. This is a. You know, as an investor, I'm about the exponential. And the individual, just by Ray Dalio's.

Moved all his money east.

Yes, that's right. And so the exponential is kind of like a trend, that's like a structural trend of society. And then the individual can sometimes reverse that trend. Okay. And sometimes those guys go together, sometimes the individual starts exponential, sometimes they reverse exponential. So, for example, here is what Chinese FDI looked like going into the US it was this humongous thing that was going to seemingly take over. Okay. And then Trump took over and he just crashed that. Right. So once in a while, this was. This was really growing exponentially like this going into 2016. And then it just fell off a cliff. Right. So that's a good example of an individual turning over an exponential. Another is Altman starting the exponential for AI. Right. So why do I say that? Well, I'm going to give a bunch of trend lines and then you can ask whether some great individual could overturn that exponential and put it in a different direction, because that is possible. Still, based on the current trend lines, here's what I would extrapolate. One of the things that's happened is essentially around 2010, China flipped US manufacturing. Okay. And this graph, it's funny, I would.

Have thought it had been a long time before then.

No, it was very fast. That's the thing is a lot of the present, the features of the present moment are exponentials where they were. It looked like nothing for a Long time. And they turned it on and they just crushed it. Right. And similarly, the Internet looked like nothing. And then print media was at 67. Here, let me see if I can zoom in on this one. Essentially US media was at almost $70 billion in advertising revenue and they just completely fell off a cliff and the Internet arose. Okay. And so the point being that China went and disrupted, even with color servers, China disrupted Red America and the Internet disrupted Blue America. And both of those happened right around the same time in 2010. Okay. That means that we actually have not a two party conflict between red and blue, but a four party conflict between China, red, blue and the Internet. Hmm. Okay. And it was the loss of economic status that led Blue America to go woke up and then push the tech lash, wokeness. Because when Blue America's resources were getting constrained, they had a backlash against the Internet, which was all the anti tech stuff of the mid 2010s. And they had a backlash against red, which was wokeness because they felt, okay, we're under assault, we need to expand our territory again. Right. And then with Red America, because they.

Felt, hold on, is that so? So we had a. We lost some journalist integrity to protect revenue streams.

Of course. In fact, actually one way of looking at that is if you look at the nyt. So this is a graph that actually shows New York times word usage frequency 1970.

Yeah, I've seen this.

Yeah. And then Exactly. Starting in 2013, they made an editorial decision to start saying toxic masculinity, male privilege, white privilege, white this and that. Right. This is not an organic thing that just went vertical in that year they made an editorial decision to start writing that narrative. Right. Why did they do that? Because woke words get traffic. Right. And if you go and see the NYT stock price, Right. Basically it was in the doldrums after the financial crisis. And then once they started figuring out that wokeness boosted their traffic, it started going up like this. Right.

It's kind of sick.

Yes, it is. They basically destroyed essentially trillions of dollars in the social fabric to make a few billion in ad revenue. Right. But like. So that's like one piece of it, Right. And the other piece of it is that with. With China being threatened by the trade war over here or with the US with Red America being threatened by the trade war. Red America also felt under threat because post financial crisis and then this threat. So. And then they were being attacked by wokeness. So they elected Trump and they also did the trade war with China. Right. So you can see why does it keep doing that. It's like, so you can see essentially that Blue America was in conflict with Internet and Red America, and Red America was in conflict with Blue America and China. You could actually make a graphic of that. Right. Red America versus China is a trade war. Red America versus Blue America is Trump. Blue America versus Red America is wokeness. Blue America versus the Internet is the tech lash with me so far?

Yeah.

The reason is that the Internet is going after Blue America's strongholds of media and money, and China is going after Red America's strongholds of the manufacturing and military. And this is only set to go further in the next 10 years because the Internet is doing AI and crypto, so you're going to take over all media and all money, and China is doing robots and drones, so you're going to take over all manufacturing and all military. Okay, so, like, and I can show graph after graph, chart after chart, 50 charts on. On both of those. I can. Okay, but so media becomes AI, money becomes crypto. Of course, Bitcoin is the core of that. But I also mean every stock, every bond, all of that goes on chain, every contract. Blue America has Delaware, and it's melting down. And so smart contracts can be contract law on chain, that kind of thing. Right. And every video, every piece of text, all this kind of stuff can rise. And then China is doing manufacturing with robots, and it's doing the military with drones. And there's this, you know, there's this backlash that's trying to happen. One thing that's very public is Trump with the tariffs. Right. That's not going to work. And the reason that's not going to work is that assumes that people need the US Market. But if you look, China is only, only about like, 15, 16% of its revenue comes from trading with North America. Essentially in 2015, it was much more like, you know, nervous about that. Right. And so it was much more nervous about the revenue streams in 2015 because the trade war was a surprise. And then it intentionally diversified with belt and road and so on to reduce its dependence on America. So the tariffs assume that China gets all its money from America, but let's even assume that drops by 50%, which is a lot. Right?

It's only 8%.

It's only 8%. So. So China's basically, the thing is the US is harming also. The US is not simply trying to tariff. China is trying to tariff. Vietnam is trying to tariff all these countries. And 45% tariffs don't bring back the economy of 1945. It's like a magical thinking type of thing. It's essentially thinking Americans don't have to sacrifice anything. We can just push a button at the policy level and therefore the rest of the world will change. And it's also doing something where all these neutral countries like Vietnam, Malaysia and so on and so forth were in a swing vote category. And now they are in China's camp. Because what happened right after this is like Vietnam got 49% tariffs. Right. They were being told for years they were on America's side versus China. America was going to. And so suddenly they, they got all these bullets. And it's basically because there's no, I think, long term strategic thinking. Red. America thinks that protectionism is going to work in 2025 because they think of the US as a market. And they also think that taxing their producers is going to like the concept of putting a 45% tariff or 49% or whatever it is to encourage domestic US manufacturing is roughly like me saying, I'm going to increase the price of your iPhone by 45%. Now you have an incentive to build Apple. Okay. It's just completely. I mean, in a sense you do. Yeah. Now you have an incentive to build Apple, but it's completely under. Like most of the time these manufacturers just want some maple syrup. They don't want the whole maple tree.

Yeah.

And if you were actually serious about what's called import substitution, what you do is you'd analyze the whole supply chain. You figure out what is being imported from abroad, you figure out who the local customers are. You would group them together and then you'd set up a second supplier over here. And that company needs to figure it out. By the way, it doesn't just pop up overnight. Like these are complicated parts. There's a reason that that was hard to do. Right. So there are examples of this. I wrote a thing on like if you had like a smart industrial policy. See if I can find this. So rational industrial policy would basically take a graph that looks like this. So you've got suppliers and you're actually mapping what the economy actually is. Right. And you might do this with tax returns, for example, if you're actually, if you're going to coerce better than a tariff is just get the information on what the economy actually looks like. Okay. And then when you do that, you can say, okay, this was like a critical supplier that's upstream of all of these other plants over there. Right. And then you want to get a US based version of that supplier. Okay. And you do that. There's something called, I mean this is actually, there's a real issue where like Tomahawk missiles from the U.S. for example, the U.S. military is made in China. This graphic shows that. Do you know that?

No, it didn't.

Yeah, the US military is made in China. It's all fake, unfortunately. Okay. So all these guys, their manufacturer's manufacturer is like a Chinese supplier over here. So China can just go like this and they can cut off, they can screw you, they can turn off the screws and the nuts and the bolts. Right. And everything else in between. Everybody thinks it's a high end competition with China, but they're crushing it at the middle end and low end. Right. Which are the parts that you're not thinking about. Right. And so the middle and low end is. Go ahead.

I'm just laughing at it. It's hilarious.

Yeah, it's basically the whole thing is essentially the whole posturing for war with China is basically fake because China has already won the war. Like you can't fight a war with China because they make all the parts. The humble bee, a keystone species crucial to the survival of Earth's inhabitants. Here's how things would look if bees vanished, and here's how they'd look if humans vanished. But imagine if instead we became a keystone species by doing things the right way, by taking responsibility for our actions and, and becoming the solution. Iron mines, the world's most responsible currency. The right way, because the future depends on it.

The problem with supply chain analysis, it's not great for media as well. It's great to thump your fist and say we've put a 49% tariff on this country and you get media.

Yes, exactly.

Intelligent, detailed, nuanced supply chain analysis will not be talked about.

That's right. Now if you, if you wanted to be real about it, what you do is Sematech was actually a consortium over here that was something that did build like a US domestic supplier. That's when the Japanese were doing well. And so Americans went and got together. It's basically like, let's say you've got 10 customers of an overseas vendor. Those 10 customers can get together and effectively crowdfund a domestic vendor, if that makes sense. Because their revenues are what are making the overseas. And then they get that second one going and then they switch over their purchases to it. That is the mechanism for doing it. If you were. Or. And. But you have to do that in an organized way. Right? Nothing good ever happens by accident. Simply taxing those 10 guys so they stop Buying from the foreigner is just, it's magical thinking. Like building is hard, right? Banning is easy, taxing is easy, Building is hard.

Okay, Is it capital destruction as well?

Massive. I mean the thing is if when you actually look at like an actual supply chain and how it looks like, here's what an actual supply chain looks like and I say this, I have some experience with this, right? Every supply chain that transits across the US like, let me see if I can find you a visual of this. Yeah. Okay, so this is a good example, right? So you've got something where this was essentially tariff. It's like, it's like the Internet, right? You have this packet made from here and this packet from here. When you load your website, you're pulling Google Analytics, you're pulling this, you're pulling that, you're pulling all this stuff and you make a website and if you had some bandwidth tax where all those packets were slowed down, your entire website would load more slowly and you might break your whole revenue model or whatever. Right, That's a rough analogy for people who've been used to building Internet businesses. Point being that this over here, where did this go? The. So this auto supply chain thing over here, right, this is showing, and I'll put this back in the original, this is showing what an actual supply chain is. And if every single thing there is taxed, right. It completely destroys your margins because they're not doing the math on how these. Like it's self defeating. It's more than self defeating. It's basically like you couldn't come up with a more certain way of completely destroying US Manufacturing capacity that remains. Okay. And the reason is that it's like a targeted drone strike. Zooming back out. And I'll come back to your original question. The trade war, these tariffs are not going to work because they're not actually reducing the barrier to domestic American production, which would have meant cutting regulations. That's what it would have meant. That would have cost nothing. That would not have. No allies would have gotten mad about that. Instead, rather than working on oneself, they tried to. They thought America was strong and it was the number one market and everybody else needed them and, and that other people would pay for it or some silly kind of thing, which was for a reason. They decided to go with tariffs rather than regulations. They, they did not focus on building up their own capacity. Okay. There's like some anti regulatory stuff, but it's not as much the focus as this insane trade war has been. Okay? And so that is, right, America's Futile campaign versus China, which is just cranking out the robots, cranking out the drones. Okay. On their side, which has not been as much covered, is the journalists are getting increasingly frantic about AI and actually also bitcoin and crypto. Okay. The AI part is very front of mind for them, where they are. You know, obviously, you know, Gensler tried to stop the Bitcoin ETFs and all that kind of stuff. There was that whole backlash, which when we defeated him, but meaning global crypto movement defeated him, but with AI Less well known, perhaps to many people, is that many, many media companies have unions now within the companies that are trying to stop them or have stopped them from using AI in their production. Do you know this?

Yeah, And I've seen it also with Hollywood.

Yeah, that's right. So they feel very threatened by AI and they feel threatened by crypto because AI goes over. Takes away their control over media and money. That's what blue America feels threatened by. Just like Red America is threatened by China taking over their control over manufacturing and the military. But their reaction to this is not to work on themselves. It's not like Red America, unfortunately, is reducing the barrier to building robots. They're doing some of that. It's not zero. But they're not really taking into account the concept that they need to be competitive in a neutral third market like Uruguay or, or Saudi Arabia, where both the Chinese and American product are on the shelf. The American product has to win on cost and quality, Right? They're not thinking about that, as they're just playing defense on what they already have. They're not thinking, okay, how do we play to win? Right? This is a weird turnaround because for decades, every American that I worked with, you know, we were thinking, okay, how do we expand into Turkey? How do we expand into Brazil? How do we expand into Japan? And it was obvious that the products we were making in America were globally competitive. Suddenly a lot of Americans have flipped from thinking of the world as their market to the world as their competition. Okay. This is this huge shift that I only saw really, by late 2024, really jumped out where they just think that they can't win a fair fight in the game of global techno capitalism. As a rough analogy, you know, James Naismith invented the game of basketball, right? But it turns out the guys who invented are necessarily the best at it. African Americans, Serbians, Eastern Europeans are very, very good at basketball, right? And in the same way Americans invented the game of global techno capitalism. They're the ones who put McDonald's everywhere. They are the ones who put the dollar everywhere. They built free trade unions, they signed all kinds of these free trade agreements. Basically, they took the mantle of the British Empire for global free trade, and they did all this stuff globally. And now suddenly they found actually the Chinese can compete, the Indians can compete, the Middle east, all these places, Southeast Asia can compete. They can actually compete really well. In fact, sometimes they can win games. Sometimes they can win a lot of games. So they've decided to try to tap out of that game of global techno capitalism that America itself created, but they can't, because they might be able to silo themselves off from the world, but the game will continue just without America.

Yeah, because they're siloing themselves off.

Exactly. So this is the same thing that's happening with blue America trying to silo themselves off from the Internet and from AI and from crypto. Right? They can try to do that, but media will continue outside them because the productivity gain is so high right now. I understand, by the way, why there's this backlash here. I totally get it. Right. However, these are structural forces that are shrinking the pie for blue and red America relative to the peak of 1950. And so they're fighting each other, but they're also fighting China and the Internet. With me so far, right? So this is like sort of my macro model of the world. And you can map thousands of events to the. To this kind of macro model. It's not the only thing. There's other things going on. There's stuff going on in Latin America, there's stuff going on in the Middle east, there's stuff going on in Japan and so on and so forth. But this is. This is one of the primary, I think, like, drivers of the world economy. Basically, China and the Internet are the successors, right? In roughly, if we go back to Europe in the year 1900, Europe was the center of the world, right? Like civilization was in Europe. It was England, it was France, it was Germany, and there were these barbarians on either side, America and Russia, that were growing in population, but they were considered sort of, you know, nouveau riche or barbarian or whatever. They weren't as cultured as, you know, Europe, right? And then Europe beat each other's brains in. And then when all the dust settled by 1945, the American capitalists and the Russian communists literally split Europe down the center, right? And you had West Germany and you had East Germany, you had capitalism versus communism, right? In much the same way. What I anticipate, five, 10, 15 years out is that America was The center of the world in the early 2000s and China and the Internet are these sort of barbarian powers kind of growing on either side. And I think what's going to happen is by 2035, 2040, maybe sooner, maybe later, you have the Democrats side with Chinese Communists and the Republicans become bitcoin maximalists after maga, maximalism after Orange Man, Orange Coin.

But that is, that's quite extreme.

Is it?

Well, that's a, that's a, that's a stronger polarization.

That's a stronger polarization. That's right. But you can see, for example, Gavin Newsom went and met with Xi in. Because Newsom no longer has D.C. so you need Xi. Right. So he had this whole.

So he brought into sf, cleaned up the streets.

That's right. But it was more than that. Right. So Newsom, Gavin Newsom went and visited China and met with Xi. But it was more than just visiting. It wasn't because Xi came to California only after Newsom went to China. Other Democrats wanted to get a meeting with Xi, but Gavin was able to pull it off. And there's a whole series of articles in Jinhua, Chinese state media and so on. Welcome. More newsoms to come. And he said he's willing to be China's long term, stable and strong partner. Okay.

Which is the opposite of what Trump is doing.

That's right. So basically, if you go back to that four party thing, Red America is getting its lunch eaten by China, Blue America is getting its lunch eaten by the Internet. So the enemy of red America is China. And Blue America first tried to fight China because they, they were lukewarm. They, they weren't really that mad at China for a long time. Then starting in 2020-2024, China started contending for being the most powerful state. So the Biden administration really did try to stop China, but now they've kind of conceded. Right. Democrats no longer. Democrats just want to be part of the strongest state. Right. Like that's a big difference. Republicans care about the nation, Democrats care about the state. Republicans want to be part of like a tight knit group that grows from like baseball and hot dogs to world domination. But Democrats are comfortable just being administrators of some multiethnic state. They just want a promotion. They don't really care about the people. They care about the government. They identify the government. And you can argue with that. But I think there's some truth to that nation versus state in terms of where their primary mode of affiliation is. And so having been them, they join them. Right. And so Democrats are Now, like, for example, Tim Walls also said this. You know, he said, this is this thing. The vice presidential candidate, China may be the only moral authority to broker the Iran, Israel peace. Okay, These are not marginal figures. Right. That's Walls, that's Newsom. Right. And in general, if you look, Democrats are more likely than Republicans, say US And China can cooperate on key issues. And in fact, if you go back in the past, you know, the Democrats are like, you know, the Atlantic has China was correct on filtering Internet speech. Right. And it's kind of insane. I know, I know. But I'm just saying, I'm showing you some of these references, and then here's another one. This is in the 80s. Like, you know, this is very similar. Ted Kennedy's interaction with the Soviets, similar to Newsom and Xi. Ted Kennedy reached out to the Soviets and said, hey, if you help me then beat Reagan, then I'll help you. Right. So in return, the Soviet leader would lend the Democratic Party a hand. The difference is now the Communists, the Chinese Communists are the senior partner in that relationship, and the American Democrats are the junior partner. I think it's very likely. So, for example, Newsom had this thing where he was saying he would defy the tariffs. So California to defy Trump's tariffs to allay global trade fears. Right. So Newsom has basically proposed doing a separate deal with Xi, and that's like a left populism, because if tariffs boost prices and he can get cheap goods from China, then he's actually delivering, from his standpoint, material benefit to his people. Of course, the cost is dependence on China. Right. So that is like one clear fragmentation axis.

Can that lead to a real split?

Yeah.

East and West America.

Yes.

Hmm.

I mean, like, is it. How geographical is it? It's already there at the ideological level.

Yeah, yeah.

So, like, if you look, you know.

I mean, we see in the UK as well that the left is going very communist.

Yes.

Attacks on free speech, attacks on civil liberties, wealth redistribution.

Right. Now, the thing is, what's upstream of that is the shrinking piece.

Yeah.

Like, if, you know, rising tide lifts all boats, a shrinking pie sinks all boats. Right. In a funny way, though, like, the. The closer you are to being dependent on the US Government, the worse off you're going to be in what comes. And the reason is this. I mentioned, like, relative decline. So by the. This is just a graphic that shows, you know, the US used to be highly integrated in the year 1951, where basically all the different, you know, Democrats and Republicans voted for the same bills, basically. So each edge there, each node is a Democrat or Republican, blue or red. And an edge is if they voted the same way on the same bill here, it shows them no longer Democrats only vote with their Democrats. Republicans only vote with their Republicans. Right?

Yep.

And so I can show other graphs that show basically just total polarization. Right.

And I'm sure it's exactly the same in the UK right now.

Actually, I don't know. I haven't seen the UK graphs.

Well, it feels it probably.

Right.

We always feel about one election away from the U.S. fine.

So then this is something which shows, for example, on Twitter in 2017, blue and red were split apart like this. Okay? So a totally different data set showing that Democrats and Republicans aren't friends. But now, eight years later, it's even further because there's been blue secession. Blues have seceded to Blue sky and Mastodon and threads and TikTok and Reds are on X and Truth and Gabriel. Okay, so they're not talking to each other anymore. And even further, Democrats no longer MARRY Republicans. Only 4% of marriages between are between. Between Democrats and Republicans. Okay, so that is Sunni versus Shiite. That's like a tribal kind of thing. That means that these are no longer like. It's not one nation. One nation in terms the sense of one intermarrying, you know, network, which may have some differences, but they're ultimately. This is. These are two tribes at a minimum. Right. It's not one country, it's two parties. And when people say, you know, you're against democracy, Democrats identify democracy as voting for Democrats. And when Republicans say you're against America, Republicans identify America as red America. So Democrats are always confused when they have a democratic vote and 50% is going to Republicans. Republicans are also confused when they define America as their version of America. And then 50% blue Americans have a completely different vision of what America is. Right. You can't. It's like being, you know, can you be loyal to Korea? No, you have to be loyal to North Korea or South Korea. But what does it mean to be loyal to America? There's blue America and Red America. They have completely different visions of what America is. Right. Like air gapped value systems, you know, different value systems. Like, fundamentally different. They're pulling apart further and further. So that's like a spiritual, moral, digital secession where they've already kind of broken away. So you ask, can that lead to a split? I think yes. Things happen in the cloud first and they're printed out in the land like you do Google Doc. Go ahead yeah.

So is this downstream from the debt problems or the debt problems downstream from this?

Good question. Right. So the thing that is keeping it together right now, Democrats and Republicans, they don't vote for each other, they don't talk to each other. As we see, they don't even marry each other. The one thing they do do is they trade with each other. Right? And so essentially because the US has had the reserve currency, it has been able to paper this over by just printing money and allowing people to have some artificial prosperity there. Right? Now, let's talk about the debt. Essentially one way of thinking about last X number of years is the US started as this giant exporter. For example, there's this amazing visual of like US trade to China. This is this famous cartoon that shows, after all, the Philippines are only the stepping stone to China, okay? And it shows Uncle Sam laden with all these goods and stereotypical Chinese person is portrayed there. And they're just portrayed as a market that wants bridges and trains and so on and so forth. So the US started back then, the US was a good exporter and China was an importer, okay, 100 something years ago. So what happened was the US started as an exporter, then all countries started to use the dollar because they could buy goods from the U.S. then by degrees, the U.S. went from a manufacturing power to just a pure financial power. And now it's a purely financial power without the manufacturing because it outsourced the manufacturing and so on. But it's also actually outsourced even the financial part now to bitcoin and crypto. And it's outsourced the media part there. So every piece of the American empire has gone to either China or the Internet, right? And one way of thinking about what the American empire's business model was, dollar inflation is global taxation. So think of America as like a factory worker Uncle Sam that worked his way up to become CEO of the world. And a CEO of the world. They control the global economic system. For example, it's the UN headquarters in New York. It's the fact that even like Chinese companies would go public in the U.S. it's the fact that all these heads of state are trained at the Kendi School of Government at Harvard. It's the fact that US regulators harmonize regulations globally and there's a McDonald's everywhere and Hollywood everywhere, right? The US was the center of the largest empire ever in human history. And the way it monetized that is is dollar inflation is global taxation. Those five words explain a lot because a lot of libertarians and conservatives in America think that they're paying the rest of the world. It's actually the reverse. The world is being taxed to pay for American profligacy. There's no way. Like the thing is, if you think about it, net it out. Somebody in Vietnam is grinding away to send these shoes over, right? These Nikes, what do they get in return? They get database entries, they get printed dollars, right? So the US is producing nothing in return for those shoes. What's it producing? It's producing database entries at a deeper level. Why can it do that? Because it is the hub. It's the center of the global system. And when it was working, the American military, the right, guarded all the sea lanes and protected all the trade routes and kept the peace physically. And actually the American left, with the State Department signed deals with 190 plus countries and did all the diplomacy. And that's really underestimated by the way, if you've ever done a deal with a hundred people, let alone 100 funds, right? Imagine what that is for a hundred countries, right? The American diplomats were by far the best ever in history, just like the American military was the best in history. So when it was working, when left and right worked together, they had all the diplomacy and all the military, all the money, all the media, they had everything working. So every country, even Russian and Chinese people sent their elites to train in America and so on and so forth, right? This is the era that you and I grew up. It's total, total dominance. So the thing is that the way that that dominance was monetized was dollar inflation is global taxation. And what that meant is some, some people would hold dollars literally in bank accounts or their multinationals hold it. But lots of people around the world were de facto taxed because their countries would hold treasuries and the US issued those Treasuries or those countries would be harmonized to U.S. regulations or their countries would have multinationals operate there which were getting dollar flows back, basically that business model. It also meant the US could freeze things, it could sanction things. Anybody who's a competitor, like Russia or China or Iran could have sanctions and tariffs imposed on them. The control of the center, like root power over the global economy was this enormous, enormous, enormous thing, right? Global empire was like, you know, today you have Republicans like Buchanan, actually not today. He's been around for 20, 30 years. But he says stuff like a republic, non empire, right? Because he thinks that empire was net worse for Americans, right? And then you have the left, which says it's also against empire. And they're like, oh, America's going and blowing with all these countries killing people, right? So both the, the left and the right, the far left, far right if you will, are against empire because these guys think it's bad for Americans. These guys think it was bad for the world. But I will argue that at least for a period, it was good for the world and good for Americans because Americans kept the world order. So it was good for the world on balance. I'm not talking about all the blowing up and so on and so forth. And it was good for Americans because it got a huge cut for stuff they hadn't worked for because dollar inflation is global taxation. And that's why there was this incredibly high standard of living. Right now what is happening is Democrats and Republicans are both sawing off the branch on which they're sitting. Right? Democrats, for example, doing the Russia sanctions, which you can argue whether they were merited or not. But doing that essentially catalyzed de dollarization in the rest of the world. I can show graph after graph on that.

Right, I've seen that.

You've seen that, right? And Republicans doing the tariffs and also cutting off talent and cutting off tourist visas and cutting off worker visas. Republicans have the conception that there's like adamantium under the Appalachians. Like they think that the advantage of America somehow inheres in like physical America. Right? That it's like the rolling hills of Appalachia and you know, the. But they're wrong about that, that there's no way the US could support its current standard of living if it was mark to market. Like if it was not able to trade database entries for physical goods. Right. If it lost control over the global reserve currency, living standards would drop 50, 90, 99% because dollar inflation is global taxation. You just cut off all this revenue stream. One way of thinking about that is so they're basically destroying their business model.

So is there an inevitability to this?

Yes, I think so, essentially. Let me just show you this. This is this article from NPR that says how to spend 1.25 trillion in 2010. Okay. And they actually admit this is like buying mortgage backed securities. It says, you know, the, the Fed came very close to their target. They were just 61. So they bought $1,249,999,998,909.39. Because the Fed has unique power. It creates money. If thin air went up to Suzu, the market decided to buy a bond, they push a button on the computer, and voila. Money is created just to emphasize this. A trillion dollars. Imagine if you made iPhones for and you sold them for a thousand bucks to a billion Chinese people. That's what a trillion dollars is. A trillion dollars.

It's a lot of money.

That's a lot of money. But that's just a trillion dollars in revenue. A trillion dollars in profit. Maybe you're making 99 bucks a thousand. It's hard to sell something for a thousand dollars to a billion people. A thousand dollars. A lot of money, right? A thousand dollars to a billion people is a trillion dollars. That's an incalculable, like insane. And they just pushed a button to get this. Okay? Now.

And they've done it many times.

They've done it many times, okay? And the reason is that that trillion dollar print is spread over, let's say, 8 billion people worldwide, as opposed to being spread over 330 million Americans. So when you go from 8 billion to 300 million, that's a drop of more than 95%.

Hmm.

Okay. So you've been spreading this print over billions and billions and billions of people taxing the world. Right. That's what America's been doing to pay for American living standards. And by cutting off all the reasons that those people would hold dollars, by cutting off trade flows. Right. By cutting off talent flows. They want to cut off remittances next year by taxing remittances. Right. Like they are going to reduce their tax base by more than 95%. When we're looking at 300 million Americans, roughly over 6 billion people is 5% right. Now, I'm not saying everybody in the world contributes equally or whatever. Even if only reduced it by 80% or 70%, even 50%, it'd be a huge drop in living standards. Right? So once we really understand dollar inflation is global taxation, the last two US Administrations are intently destroying that business model. And now think about this. Why?

Why are they intentionally.

They're intently, but I'm not. They're not. When I say intently, I mean they're going about it with a lot of energy.

Is this the political cycle being out of sync with the economic cycle they.

When I say they're in. So I should. I should clarify, are they intentionally doing it? They're doing it intentionally in the sense that they think it's going to inherit to their benefit, but it's going to adhere to their extreme loss. Essentially, what happened was American empire was camouflaged. Even talking about it is something that's not a typical thing. To do. We, you know, all these people are like, it's not an empire. We just. Everybody opted into it. I'm like, you don't become the greatest empire of all time. Like, you don't become global number one in everything and have 750 military bases worldwide and have the UN in New York and the global reserve currency and 500 other things like that by accident. In fact, there's a book by Stephen Wertheim called Tomorrow the World which outlines exactly when America made the play for empire. And it was 1940, not 1945. You know why? Because up until that point, they'd been happy to allow the British to the expensive and tough job of empiring. But. But after the fall of France and Britain being on the ropes, the Americans realized, wait a second, if we don't become an empire, the Nazis will. They'll cut off our trade from Europe, right? And then later the Soviets will. So they're like, actually, we have to become an empire and we have to do it better than the other guys did. So it was at that point, and there's a bunch of memos that show that it was at that point that America made the decision to go from republic to empire.

But now the empire is collapsing.

Now the empire is collapsing, but it lasted 85 years. It was basically the greatest empire of all time. We have to give it some props, right? That's the thing is people think that you need to have a simplistic view. I was always bad. I think on balance, West Germany was better off than East Germany. I think South Korea was better off than North Korea. I think that Hong Kong, Taiwan, Singapore were better off than mainland China, I think, on balance, and certainly better off than Nazism and so on. So on balance, the centrism of democratic capitalism was better than the far right or the far left. It was better than Nazism and communism. We should praise that empire because it did a lot of good things from, let's say, 1940 to 1991. I would prefer that over the alternatives. But then after 1901, after there were no. After the Soviet Union fell, Democrats and Republicans had nothing to do but to fight each other. Then also 1991, the Internet, actually, you had legalized commercial traffic on the Internet. Before that. The Internet was not really. Didn't have legal traffic. Do you know that NSF Acceptable Use Policy, it restricted traffic on the Internet to just academic and military use. Because he said, if you have commercial traffic on the Internet, it's going to be all spam and malware and Porn. They're of course, right.

Yeah, they were right.

But. But you also got Google and you also got amazing tech companies and you got bitcoin. You got all this other stuff. So I think on net, it was good. At the Same time, after 1991, China really veered from communism towards really. I mean, you can say it started in 1978, but it kicked into high gear after 1991. So Democrats and Republicans started fighting each other after 1991. That's when polarization really got going. You know, Gingrich and whatnot. In the 90s, Clinton versus Gingrich. And then China and Internet started really growing. Right. And that brings us to the present day.

Did the Fairness Doctrine, the end of the Fairness Doctrine play a part as well?

That's right. So all of this has been going on for a long time where basically mass media, mass production, centralizing technology, all ramped going into 1950. And then with the invention of the transistor, you start to get decentralization. So you have, you know, as you mentioned, cable media and the Fairness Doctrine and so on and so forth. You have the personal computer, you have the Internet, you have the smartphone, you have cryptocurrency. So 1950 was the most centralized period ever in human history that I know of. Right. And I think probably ever. Not the Roman Empire, not the, you know, nothing was ever as globally centralized as that was. Basically, you had technologies favoring massive choke points on. On power. Right. And so we, in a sense, the whole Fairness Doctrine, we're reverting back to what the world was like in the 1800s and the 1700s and so on, with lots of different centers, like a genuinely multifarious world.

Right.

The transition back though, is. Is going to be messy because what are Americans still thinking? They're thinking it's going to be a golden age. They're thinking you can build back better. They're thinking you can make America great again. Nobody is preparing them. They sort of know that there's a decline, but nobody is telling them, showing them these graphs. Who would accept it? Right. That's a problem. No one wants to accept a story where they lose.

Have you thought through what the collapse looks like over what time period?

Yeah. So let me explain something else, which is that all of this is me trying to be as neutral as possible, seeing the world as it is, not as how I wish it to be. Because there's all. All four possibilities are there. Good things are happening and I'm happy they're happening. Right. Bad things are happening, and I'm unhappy they're happening. All these things. Like, like something is happening. It's good or bad. So whether it's happening or not is independent of whether it's good or bad.

But it's investor mindset, right?

It's the investor mindset. It's a realist mindset, right? It's. It's because investing is just one piece of the predicting the future. That's allocation, and that is one piece of it. But you also need location. You need organization. It's really preparation, right?

Yeah.

Location is like, where do you want to be on the, like 2008? You could just trade it, right? Because you could just. It was like a financial thing, right? 2024, 2025 plus. I think you need to figure out where you want to be on the surface of the earth.

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Yes. Yeah.

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Yeah, that's right. So. So I think of it as self, tribe, world. Yes. Right. So you have to take care of yourself because if you're not alive, if your health isn't taken care of, you can't do anything. So that's just like. Just. You have to do that. Right? Tribe is then your circle of concern. That's your family, your friends, your company, your community. It can actually be quite large, right. It can be bitcoiners, whatever, whatever. And then world is everybody else. Right. I think if you have self, tribe, world, you can. You could obviously have more gradation there. You can have different buckets. But that's a useful way of thinking about it. Right? And the sovereign individual thesis is fine, but really I believe in the sovereign collective, right? And after cryptocurrency comes crypto community. So allocation is cryptocurrency. That's like what you're choosing, you know, for financial. But community and identity is like, what do you identify as? Right. Like after the Soviet Union fell, you couldn't identify as a Soviet. You have to figure out, am I a Russian and am I a Russian national? Or for example, am I a mathematician? I don't really care whether I'm a Russian and I'll migrate to America. Like Sergey Brin's parents or Vitalik's parents, they. They came out to the west, to Canada, right. Or they became other people, became Estonian nationalists or people, you know, in Poland, they became Catholics. There are all these different ways of breaking away. If I'm not Soviet, what am I? I'm a mathematician. Am I a Russian, am I an Estonian, am I a Catholic? What. So there's a. There's a fragmentation of decentralization of identity. Right. The way I think that's going to work in America is, you know, like that the Civil War movie, like what kind of American are you? Are you a red American, blue American, tech American, Catholic American this, that and the other. It'll be a giant fragmentation to lots of different hyphenated identities. Right. E unum pluribus.

That was the, the best and most unique moment of that film.

Yeah, that was, that was the memory.

You take a step on your.

Oh, yeah, that's right. So I think that, I think that movie was otherwise forgettable.

Yeah, it wasn't great, but that moment was brilliant.

That's right. What kind of American are you? Was. You know the saying like e pluribus unum, like out of many one.

Right.

That's an American saying. So it's not the correct Latin, but E unum pluribus out of one many. Right. You have the rehyphenation. Because the thing is, just to be philosophical about this, you know, in China there's a famous book, I think it's Romance of the Three Kingdoms, that there's a later addition to this. It's like one of the great epics, kind of like the Iliad or the Odyssey, but for China. Right. And there was an addition that was made to it that said the empire long united must divide, long divided, must unite. That's just the cycle of history. And an interesting thing where I've been more philosophical about it is I realized is obvious, but also non obvious. What's the first word in usa? United. Right. What about the EU Union? Right. How about the uae? United Arab Emirates. Right. Okay. The United Kingdom.

That's right.

What is the formal name of India? It's actually the Indian Union. Okay. The Russia is actually called the Russian Federation. Right. And when you, when you look at this and you realize this, you're like, oh, actually all these places, even Italy, for example, Garibaldi actually unified it. Right. Germany Bismarck unified it. France, the revolution unified it. Right. Forming these union states was actually very non trivial. So non trivial that that's why they put it in the name. So non trivial that that's actually why the left seeks to essentially homogenize. Because that's how you get a large scale group of people that can trade with each other, marry with each other and fight together. Right. Like the right doesn't really. Neither the left nor the right really understand the left. People think the left. The left thinks the left is about sharing and caring. The right thinks the left is naive and, you know, ahistorical and globalist or whatever. Right. But really what the left is about at the emergent level is building scale. Right. Because you just get these gigantic scale entities that you homogenize across them, and then you build a meta organism and you can fight with it or you can trade with it or what have you. Right? So it tries to level out all these differences. Everybody's equal. I mean, one way of looking at that is do I think it's working now? I don't think it's working, but it's worked previously in history. Like, people all identify, if you generalize the concept of left, they all identify as Christians or Muslims or Italians or French or British, as opposed to Scots, England, Welsh and Irish and so on and so forth. So unification across ethnicities and building empire is in part a lefacing. Even Genghis Khan had like a religion that he used to kind of unify his empire. Right? So in a sense, the left is unifying at the level of software and the right is unifying at the level of hardware. Because the right says, it's our genetics, it's our culture, it's our language, but reproduction is much slower than conversion. Right. This is like Athens versus Jerusalem. Like, it's a tension within Western culture. Like, is it genetics, nation, land, soil, blood, et cetera, or is it religion, law, you know, in a sense, software versus hardware. Right? Like this is the cloud versus the land. That's like a long tension within humanity. Right? Okay. And I'm more on the cloud side of things. I can understand the land side. A lot of cloud people can't even understand the land. And vice versa. I think it's worthwhile to speak both languages. Right. But anyway, coming back, the issue is, once you kind of see all these graphs and you realize dollar inflation is global taxation, you realize that the U.S. cannot tolerate a decline from number one to number two because a decline from number 1 to number 2 is declined from number 1 to number 50 or number 100. Because if it loses that reserve currency, then it loses its living standards. It's not like it's going from like, again, IBM.

The debt becomes realized.

Yeah, exactly. So the debt becomes something that you have to pay in something other than something you can print. Right. Like it actually gets mark to market in a different way. And what is that debt owed to people are like, oh, it doesn't matter because it's owed to ourselves or whatever. They'll say something like that. Or they'll say, you know, we can. What happens is they owe, for example, healthcare to all kinds of seniors. Right?

This is your unfunded liabilities. This is 175 trillion.

Yeah, exactly. That's right. So when you actually look at the numbers, I have this whole post on this which goes through all the numbers of exactly how in hock the U.S. is. It's basically the true number from the 2024 financial statement of the U.S. government is $175 trillion, including Medicare, Medicaid, Social Security and so on. I can put that on screen.

So in the UK, kind of remind me with 3.2 trillion in debt, but it's 12 trillion in unfunded liabilities. Right? Remember we. Yeah, I think that's correct. In the UK, yeah. But people only talk about the 3 trillion, the 100% debt to GDP. Yeah, they don't talk about the unfunded liabilities.

So an interesting thing is to take your tax revenue and divide it by your unfunded liabilities number. Right? And so the US is, I think depending on you count state and local, it's on the order of like 2 to 4 trill, right? If you include state, local, federal. But the total debt as of a year and a half ago, and it's probably increased since then is like 100x that. Right. And the issue is that what is that debt? Odin? It's not just Monopoly money, it's commitments. Right? It's like commitments to seniors that they're going to pay for their health care. Right. At some point somebody actually has to provide real wheelchairs and dialysis or whatever. Right? It's commitment to military partners. Somebody has to provide real guns. And so that cannot be printed. Right? You can't print healthcare, you can't print military bills, you can't print food. Right. When it's on snap, you know, like nutrition things. So there's all kinds of people that the US government has made commitments to both domestic and foreign and will not be able to keep all those commitments.

So does it have two choices of sovereign debt crisis or hyperinflation?

Those are really the same thing. Right, but by the way, so this is a point that I made.

I mean, just wipe the debt or I mean, wiping the debt would destroy the value of the currency.

Well, okay, so let's think that through. But let me show you one thing. Let's talk about that. Right, so this is something, the point I made, super bitcoinization is already here. Essentially, hyperinflation is defined as 50% devaluation of a currency per month. Obviously we aren't there. Okay, normal inflation is 2% per year. Now really should be 0%, but the New Zealand standard is 2%. Fine, that works out to 0.2% roughly per month, divide by 12 months, 10 months or something like that. Okay? I mean, if you just divide by 10, that's 0.2. So it's a little less than that. Okay, so normal inflation is like 0.2% ish. Hyperinflation is 50%. But that's a big gap. What if we define something in the middle? Call it 5% inflation per month. Call that super inflation, not hyperinflation. Okay, now think about bitcoin. Bitcoin was worth.01 cent per dollar in 2009. That was the first trade. Marty Malamy either bought or sold 5050 bitcoin for about 50 bucks. Right? So that was 0.1 cents per bitcoin. Now it's $100,000 per bitcoin. That is 100 million x devaluation in 16 years. If you work out the compounding rate, that is 10.41% devaluation of the dollar versus Bitcoin every month for the last 16 years. So the super inflation is already here. It's just super bitcoinization. We're like in a bullet train that has been accelerating so fast and so imperceptibly and we're moving at such high velocity, we don't even see it or perceive it. Right, but you see it to some extent at the bitcoin conferences. We see it to some extent in our numbers, you know, followers and so on going up. You see it in the scale of some of these events and what have you. You don't really see it because that's the thing about the Internet. The Internet, unlike China, China, its sheer physical scale isn't seen because it's in China, the Internet sheer scale isn't seen because it's invisible. So these things have been rising so fast because in a sense they're sort of out of sight. You're only perceiving them through stats, but they're already there, like the future. If the 20th century was the US versus USSR, the 21st is China versus the Internet. And that's also the land versus the cloud, by the way. That's the same kind of tension that we talked about earlier. Okay, but here's my point about super bitcoinization, right? I have thought this through. I've thought about what it will look like. See, we have. What's funny about this is how many movies have you seen where aliens invade the earth?

Yeah, a lot, a lot.

How about killer robots?

Yeah, a lot, a lot.

Right? But you actually haven't seen anything that really thinks through what, like the end of the dollar looks like. So.

No, because what we, we always get, we always get after the event, you know, Financial crash.

That's right.

Margin call, you know, we got the big short. We get it after the event.

That's right. So let's just model that out. What does it look like? Okay, now the dollar's already dropped like 10% even in the Dixie this year. Okay. Which is a lot because that's dropping against its peers. That means in many ways the US is sort of the weakest in the Western alliance because it's the most dependent on money printing. Since the cantil, in effect being near the money printer applies a level of countries. The US got the print. Like, you know, people have shown, like the US UK has been flat since 2008.

Ish.

That's because they weren't as close to the money printer as the Americans were. So they were diluted down dollar inflation. Like America's been cannibalizing even its allies. Like, that's why, you know, for example, blowing up Nord Stream in Germany, right. It's, it was kind of taking its allies and throwing them against Russia. It's trying to take Taiwan and throw it against China. It's like sucking the marrow out of the uk, Right. It's like, you know, tariffing Canada. Right. It is essentially in, in this gravitational collapse. It's getting nastier and nastier even to its ostensible allies. This is a huge change from the Cold War. In the Cold War, the US built up West Germany and it was win, win, and they were stronger versus East Germany. Right. Today the US wants these allies to basically die and sacrifice themselves for American living standards. Right. Because it's gotten in a zero sum or negative sum mentality. Right. Which is why it's pushing away Europe. And as a consequence, Europe won't listen to it when it wants to sanction China. Right. It's pushing away Japan and Korea. They've imposed big tariffs on them. Right. And yet they still want Japan and Korea's allies versus China. They don't understand. They've lost the concept of, of empathy. And the reason is the left abused empathy for so long. They wanted you to have empathy for criminals. Right. They wanted you to have empathy for drug dealers and murderers. And so the right has decided any kind of empathy is bad. But to be a good businessman, you have to have empathy. Like whenever I'm proposing a deal, I always think through how the other guy wins first. And then I'm like, here is how you benefit from this deal. Here's the hard Numbers, you can check it. And then here's my cut, right? Because everybody's concerned about their benefit in a deal. And so if you're a good businessman, you think about how did they get a win first, right? And if you're a great businessman, you say, how do they get a win 10 times in a row before I get a win? Right? And you eat best, but you eat last or something like that, right? You have a positive sum game because you can keep it going, right? That's how you do really great business. And so empathy is something that even as a cold blooded capitalist, you need empathy to understand. What is the average Vietnamese guy thinking? Well, for example, all these countries that got these tariffs, who are the people there who are exporting to America? Those were the CEOs of these shoe companies or hat companies or whatever. They're the most pro American people in their country, right? These are people who have American customers, they have American, you know, like partners, they speak English, they, they are the ones lobbying their country to do more business with America, right? And every single one of these CEOs around the world just got wrecked. Wrecked. Because when you have a, when you're exporting a million dollars with the goods and the tax goes up from like 0% to 49%, then it goes up and down. And so first of all, you have to immediately take out some emergency loan or cut or fire people to get because your shipment is impounded at the port. It's not like a tax that's due in a year. Tariffs are a tax that's impound that like is due when you arrive at the port, right? It's not like you can have like a court case. And this lands for a long time. This is an instant tax that's imposed today and you pay it or you lose your shipment. If you lose your shipment, you lose your revenue. And if you've got 4% margins and 49% tariffs, your business is just completely destroyed, right? So all kinds of people around the world who are trading with America and trust America got destroyed for doing that, okay? I can't emphasize how much damage that did. And even if they, they like somewhat came down or whatever afterwards, you're talking like this is a whole thing that ostensibly was supposed to help American manufacturers, but it basically bankrupted a bunch of them because they had to take out emergency loans to pay for these taxes, which is what tariffs are. They're instant taxes, right? Surprise taxes. And none of these manufacturers asked. It's again, it's like, you know, it's Like Stalin, you know, putting a gun in the, you know, small of your back and saying, okay, we'll fight or die, right? It's like taxing your inputs and saying, okay, you know, I've taxed you by 40% now. Build Apple. That's the. That's the level of thought that went into this. These were surprise tariffs, right? So what's my point? Point is, anybody who's trusting any US Institution, if you trusted US Media, you were misled. If you trusted Delaware, Elon and Dropbox and so on, had to move, right? If you trusted the FBI, Republicans trust the FBI, they found their confidence in that was destroyed. Democrats trusted the US Electoral system, and now Trump has been elected twice. Foreigners trusted, you know, America in terms of trade, right? Over and over again, there's been rug pull after rug pull, where people's faith in the US As a center of the global economy was. Was basically pulled away, right? And because it's the center of the global economy, people are still defaulting into it. And in a sense, what the current administration is doing is it's giving a strong incentive to people to reroute flows of talent away from America. Because if you were like an Indian engineer, right, and you're at the top of your class, why would you go to the US Again today and have the left hate you because you're a capitalist or an entrepreneur? And a big chunks of the right hate you because you're Indian. Why would you do that? Right? You go to the uae, you'd go to Singapore, maybe you come to network school, you go and do something else, right? There's like, the world is your oyster. There's 30 countries that have digital nomad programs. El Salvador is recruiting, Eastern Europe is recruiting, Japan, all kinds of places. Hong Kong is recruiting, even, right? They have like five different talent visas. People are like, oh, China isn't taking immigrants. Yes, they are, actually. They're recruiting heavily in Hong Kong for skilled workers, right? And. And so the world is your oyster. Why would you. Or you can just work from India or something like that. India's radically improved, right? If you. Have you seen Bangalore airport, probably?

Yeah, yeah.

Well, so, like, you know, you could put a. People like, they don't have. They don't have a good mental visual because things have improved so rapidly in Indian airport, like Heathrow Terminal 5, it looks like Heath Return 5, it's like perfectly fine, right?

Beautiful.

Yeah. Here's. I'll just show you a few more, right? Like here is, um. Look, I'm not saying I'll show these and I'll qualify it in a second. Right. This is like, these are just photos that I took, you know, or this one is from online. This is, you know, like, that's like basically like an Indian Starbucks or whatever, but in Tamil, right?

Yeah.

Here is also to show this at a qualitative level. Like lighting radically improved over nine years. Right.

It's not Slumdog Millionaire.

It's not Slumdog Millionaire. India is actually radically, radically, radically improving. Right. And, but we don't get shown that. You don't get shown that, but Indians are seeing that, right? So it's this weird thing where Indians are actually rising faster than they ever have been. But they're now, now they're online and all these people are attacking them and so on and so forth. In my, in my view, to be clear, I don't think I'm moderately bullish in India, but extremely bush on Indians.

Okay?

Okay. So if China's a state, India's a network. Or if China's a state, Indians are a network, right? So like the international Indian, the Internet Indian is a big part of the global Internet. And then like, so if the future is China versus the Internet, Indians will be a big chunk of the Internet.

Okay?

And one of the reasons for that is Indians are second class citizens in America, but they're first class citizens on the Internet, right? In America, their visa can be yanked, they can be yelled at, all this kind of stuff on the Internet. They have the same monetary policy with Bitcoin, they have the same smart contracts, they have the same identity, they have basically their peers. That's what the Internet is. It's a peer to peer network. We are all equal on the Internet. You can have a fair handshake and a fair deal, right? That's all you need for like a rising people. They're not asking for special treatment. They're asking to be treated as equals. As they're treated as equals, then they can compete and they can do very well. And how many can do well? Was like a billion. On the order of a billion. Half a billion. 700 million Indians have gone online the last five years and they're acculturating quickly. They're like, you know, they're on Instagram, they're on Twitter and so on. They're like, wow, a lot of Westerners are really mad at us. Others are, you know, are happy they're there. And so it'll be this sort of collision of these two cultures that hadn't collided before from the other side of.

That Is there another thing going on there in that? And I'm certainly seeing this in the uk, I'm really disappointed at the younger generation at the moment. This isn't universal, but I see it, I see poor education outcomes, I see.

The way you see us use just.

Across the board, that we've lowered the bar and lowered the grading system. We've switched it from letters to numbers. So it's a little. It used to be A, B, C, D or an A star, you know, A, it's the first letter, it's the top. Now it's these kind of more opaque numbers.

It's out of 100.

No. No. It's one to. No. Is it three to nine? It's a weird thing. So.

Okay, so it makes it harder to know what's good.

Yeah. So when my daughter says I've got a seven, I'm like, what does that mean?

Yes.

What is that? There's a privilege mixed with a lack of ambition. Yeah.

For the ones who aren't leaving. The ones who are leaving are ambitious, of course.

Yeah. But I think there's a general dumbing down of the youth. But for them, they don't see it themselves and they come with privilege. Whereas where it comes, I mean, obviously it's here I see a different Indian, but I just see young, ambitious, hard working, intelligent Indians and they have low.

Expectations also because if you grew up without hot water, life is like, life is just improving every day. It's sometimes two steps forward, one step back. But there's a lot of people out of India that I know who literally grew up without hot water, grew up without electricity and now they've got 5G know wireless, they've got the Internet, they've got cryptocurrency, they can. Crypto is really, really good for Indians because as I said, they're treated as equals.

Right.

And it's actually bad for China. But it's interesting. It's good for Chinese people but bad for the Chinese state.

Right.

Why? The Chinese state hates bitcoin because it can't control it. Bitcoin represents total freedom. Right. The Chinese people like it because it's money that the government can't control. So that, this way now in China, basically the local province will treat the companies as like their bank accounts. So like if you're doing well, the company, they're like, okay, I'm going to take a few million RMB to just pay off some loans, I'll take it out of your bank account. Right. Because they've got root over things. Right. So China, roughly speaking, you know, Fukuyama has this good book called Origins of Political Order. And I'm radically oversimplifying here, but roughly speaking, in Europe, law equals state. In India, it was law above state, and in China, it's state above law. What I mean by that is in China, they had took the pragmatic approach of basically, the government can't limit itself. Like, your chair can turn into, like a CCP agent if the government wants it to. They just, you know, they have root access over everything, and the written law doesn't really matter. They can quote it at you if they want, but really the government has root. They can do it if they want. So like a system administrator of a. Of a service, there's like routine things which are law, but if they want to, they can just, boom, have root and kick anybody out, do whatever they want. India had the opposite tradition where they had law over state because all of these kings believed in Hinduism and scripture could be quoted at them. And they were scared of not getting reincarnated if they violated their dharma, right? So there's law above state that constrained the kings there. But China is less spiritual like that. They didn't have the same kind of belief structure. So China was state above law. India was law above state. Today, that is the Chinese state and the international network. Cryptography is law above state. That's what bitcoin represents. It's a government of governments. It is a smart contract that constrains even. No matter how proud a king is, they are constrained by cryptography. There's no amount of violence that can solve certain kinds of math problems.

So I really want to get into the bitcoin bit with you, but there is a couple of bits I just want to make sure we do cover. Because I asked you if there's an inevitability of this, can the west be saved? Because it's a. I feel like I want to be part of the solution because let me frame it so I have two options. Exit or stay and try and be part of the solution. And I really want to stay and be part of the solution. I don't want to leave tens of millions of people behind. I want to help. But if it can't be saved.

That.

Is futile for me and my children. And layering into that, I don't think because we're in this all day, every day we're on the Internet, we're speaking to people like we're fully dialed into the risks in Western civilization. I think most people have got no idea what is going on.

Right.

They sense something's bad.

Yes. But it's temporary. Exactly. Or they think it's going to be gotten over with and sun will shine.

And so, yeah, another party will fix this.

Yes. So my view is this.

So on this podcast, you are definitely hearing me talk about bitcoin a lot. Well, why? We live in a really strange time with governments driving inflation with their reckless spending and endless money printing. There is a way out of this. There is a way to protect your money, and that is by stacking bitcoin. I've made loads of shows about bitcoin. You can go and research this, you can go and read the books, but the truth is, it is the hardest money ever created. If you are interested in protecting your financial future, if you. It's time for you to get on the bitcoin train. I have. I've been stacking bitcoin personally and through my businesses since 2017. It's protected me, it's secured my family's future, and it also strengthens all of my businesses. So if you want to start stacking bitcoin, where do you do it? Well, for me it's with Gemini. They're a fully licensed full reserve exchange and custodian. So they give you a secure way for you to buy and own your bitcoin. There's no risks and no funny business. So if you're serious about stacking bitcoin the right way, head over to gemini.com, which is G-E M I N I.com even.

The concept of the west is actually relatively modern. Why? It used to be Europe and Christendom. Right. And so it was geographically in Europe, it was like religious. Right. And then it was a shift out to America and it was a shift towards a more secular self conception by calling it the West. It included Europe and America kind of as the western part of the Grand Eurasian supercontinent. Right. And that's how you started to get Western values as opposed to Christendom. You started America and Europe as opposed to just Europe. It was a technological shift, it was a political shift towards democracy rather than kings and so on and so forth. There's Several shifts in one, right. So I think the version 3.0 is the Internet, right. Just like the west is kind of a more inclusive term in a sense than Europe because it included, for example, African Americans included basically Poles. And anybody who came to America and assimilated into America was considered part of the west. Even if historically you could argue whether Poles were part of, you know, the west in Western Europe, they weren't. They were in Eastern Europe, right? So the. The Internet is born from the west, just as the west was born from Europe. But it is its own thing, right? And you can have this kind of. You can actually argue that there's like five stages, like Greece, Rome, Britain, America, Internet. But let me just do three stages, okay? So three stages, for example, you go from the common law, which bound all Brits, to the Constitution, which scaled up to Americans, to the Smart contract, and bitcoin, which scales up to the world. A lot of the arguing in America from 1865 to 1965 to the present day is about racial discrimination and the Constitution. There's different views on this. The left and right have different views, but they basically agree in some ways that the. That the laws are biased against either black people and the left says, or white people that the right says, and so on and so forth. Okay, fine. But nobody's arguing that bitcoin is biased in such a way. Like if. If you go to a. To a crypto conference in Africa, Latin America, the Middle East, India. No one's saying that. Right. Why? Because it's an algorithm, right. Of legislative, executive, and judiciary. We have managed to automate the judiciary on chain, right? So we've taken away the potential for human bias. And so you have billions of dollars flowing into this. And people feel they'll get a fair shake from the blockchain in a way they won't in America or in China. That's a really deep point because that means that the Internet is actually the version 3.0. See, the thing is, I think, you know, in 2020, the west was more crazy left than it was. And I actually think today it's actually being more, for lack of better term, it's a very simplistic term, racial, angry, and so on. Then it really feels that, like, because the west believes in fair play, I think, right? And bitcoin and crypto and the Internet are sort of enforced fair play, right? The reason the right is as animated, the Western right is as animated as it is. It felt they tried to abide by the rules of fair play, and they got screwed. The white American guy got screwed. I tried to play by the rules, and I got screwed. So f all of you, we're going to break the rules, flip the table, and so on and so forth, I actually understand where that comes from. But if you actually did have a fully impartial fair court system, right, One that could not be biased against you, whether you're black, or white. That is what the Internet represents. So that is the version 3.0 where I think the west is ending, but the Internet is just beginning. It's kind of like when the British Empire was ending. The American Empire is booting up and it's clearly a torch passing moment. Right. And the Internet is as American as America was British. And I'll explain. I think it's a very good analogy. There's a lot into that. Why did America start out British? Of course it did. Right. It owes an enormous debt to Britain. We all owe a debt to Britain. Right. We owe our language to Britain, like for everything. People dump on the British and they've seen better times. The British Empire was probably the most benevolent hegemon, you know, ever since, you know, till the American Empire. And of course they did all kinds of bad things, but they did more good things than most other empires. Fine, okay, so Americans owe a lot to the British. And it's their language, it's their culture, it's their laws. And they did fork it. Of course, they don't have a king, they have a constitution. But constitution comes out of, in part the Magna Carta and common law. And a tradition that the British had that there was some law that governed even the king. And they fought all these battles over that and so on and so forth. Obviously, you know, there's books like Albion Seed or you know, by, by David Hack and Fisherman. And then there's another one by Walter Russell Mead on like foreign policy about like various British folk pathways that came to the U.S. right. Like the. Do you know the story about the English Civil War?

Well, which bit?

So in the 1600s, you know, there's a bunch of fighting between Roundheads and Cavaliers within, within Britain, right? And the Roundheads, a faction, them, let's call it the left, which were the more parliamentary and democratic left faction, came to Massachusetts to set up the Massachusetts Bay Colony. Another faction which were, let's call them the right, the Cavaliers, they had a bunch of nobles go to Virginia to set up the Virginia colony. And then that left and right of England came to America in Massachusetts and Virginia, right? And then 200 years here, they had another civil war in America.

That's incredible. Yeah, I didn't know that.

Right, so that shows like continuity. Like in, in England, the left and right were fighting over equality versus hierarchy. And it was expressed in a certain way as this religious kind of thing. You know, you're aware of that because you're, you know, British and whatnot. But when you realize that those seeds Came over to the new world. And then as these grew, they slugged it out again a couple hundred years later. Basically they've had periods of, in the 1600s, they fought. In the 1700s, they cooperated. In the 1800s, they fought. In the 1900s, they cooperated. Now in the 2000s, they're fighting, and then maybe on their side it'll cooperate again and we can put left and right back together. Right. And that's what the Internet means to me. Right. Why? Obviously it has the libertarian values of capitalism and markets and startups and all that kind of stuff. That's maybe obvious, but less obviously, perhaps it also has all the progressive values. Everybody's equal on the Internet, right? You have essentially global free speech. You have every race and religion represented there. You have essentially something where you're basically free to do what you want as long as you're not bothering other people. You can learn anything, you can publish anything. It's actually a really free environment in that sense.

Right, but we are getting the polarization there. As you said, blue sky versus X.

True, true. So, so I'm not saying there aren't second, but, but if you, if you zoom out and you say, do you have a free Internet? Broadly, yes, you do, right? Like, broadly speaking, you can speak to anybody. You, you can transact with anybody. And there's strong forces that want to keep it a global Internet because that's maximum scale, is maximum following, it's maximum monetization, it's maximum learning, it's maximum training for machine learning. There's, there's something to maximum scale of markets and audience. Right. And if you just had a, just a limited national audience or market, you would basically just be less successful. And the more ambitious you are, the more you're going to seek to expand that market. Right? So there's good, there's forces that will keep, I think, the Internet free. I'm not saying we take that for granted, but that is actually one side of things. And the opposite is China. China represents, I'm not saying it's like pure evil or something, but it represents the opposite philosophy. It's hard digital borders. That's what the great firewall is right now. It's not just control over speech, it is control over drones. Because if a, you can't script a drone on Chinese territory in a real sense, by the way, China and crypto are the only two that take the Internet seriously because they have the great firewall on the blockchain, which are defensive structures on the Internet. They treat the Internet as A first class, really important thing that you need to protect. As different as they are, those are like defensive structures, Right?

Yeah.

And whereas America, like the Pentagon is hacked over and over and over again. Right. Like, you know, OPM personnel file hacked over and over again. The US government cannot actually defend itself online. And, and everything is moving to either China or the Internet. Right. Okay. So to your point, I think my worldview is Internet first. Okay. So like, I understand where America first guys come from and actually I'm, I'm sympathetic to them in some ways. I think that they didn't want to get as angry as they are. They wanted to have like a libertarian order and a fair deal and so on and so forth and a fair handshake. Right. I even understand where the progressives are coming from in blue America. I'm probably more sympathetic, somewhat, you know, centrist. Ish. I understand where they're coming from as well because they had, they had a nice expense account. You know, they worked at Time magazine as a journalist. They wrote four articles a year and then the Internet guys took that all away from them. Right. So I'm sympathetic, actually. I can see everybody's side of this. What I think when I say Internet first, that's not country first. It's not America first or Turkey first or something like that, but it's certainly not those countries last. It means those people are equal on the Internet number one. And Internet first is also like mobile first. It's like AI first. It's like it's a technology strategy as well as a political strategy. And the concept is the Internet is the one thing that has economic scale comparable to China. India doesn't by itself. Right. India's like pretty big, but it's like, you know, how many Indians can compete at a Chinese level? I don't know. Even if it's 100 million, that's still a lot smaller than China. I don't know the exact number. We're all going to find out. Right? But let's just say China is the single largest. It's like Apple, right? It's like vertically integrated, you know, it's closed, hermetically sealed. It's esthetically, you know, they've got really great visuals in China and so on. But like the Chinese software only runs on the Chinese hardware, like the Chinese party state and the great firewall and all the Chinese apps only run on the Han Chinese, like in a sense, hardware. Right. They, they, they themselves say that their system is not meant to be exported outside China. Right. The opposite of that. What's opposite Apple, it's Android. It runs on any device. It's messy, it's chaotic, it's free. That's the Internet. So China versus Internet is like Apple versus Android. Right? And so if you take an Internet first view of things, what is Internet first?

It's freedom.

It's freedom. That's right. But basically it's freedom. And so we would call it freedom versus order. They would call it. Or we'd call it freedom versus oppression. They would call it control versus anarchy. Right? So you want to have a balance of something which is ordered liberty. Right. You don't want to have anarchy because if you have. Because you're going to have, I think between Chinese control and American anarchy, we need to have an intermediate. Right?

Yeah. So just to throw into that, so.

So let me go back to how can you fix things? Right, so okay, all right. So with Internet first as opposed, like the thing is when you say Western civilization, who are the champions of Western civilization today? They're not that many, right? Because big chunks of, you know, Americans, British are basically anti Western civilization. Right. And even the people who are on the right, let's say are not exactly dressed in suits and ties and enacting WASP proprietary or what have you, right? They're like cursing people online, they're firing their guns, they've got, you know, like they, they do not look like the 1950s clean cut American, let alone the proper Brit. Right. Have you seen that thing about. I mean, I'm not saying there aren't still some posh received pronunciation Brits around, but there's fewer of them, right? It's not like a virally spreading ideology right now. Right, go ahead. Maybe you disagree?

Well, no, no, no, I agree. I mean, but I'm automatically thinking it's cohorts that exist, like bitcoiners.

Yeah, yeah, sure. So I think you could have a startup society of received pronunciation. Actually here's a funny visual. I don't know if you've seen this. Like this is. I don't know if you've ever seen this, but this is a great one to put on your. British is seen by Americans are all upper class toughs and so on. British is seen by Europeans.

Have you ever go to my Twitter? No, I've got a different thing, but I think you'll find it quite funny.

Was it Peter McCormick? Yeah.

My pin tweet. It's been there for a couple of years now.

Yeah, exactly like this. That's exactly right. Yeah, that's right. Lib versus Alex Jones. Exactly. So that's a different cut on this. Yeah. So the thing is that basically, I think the Internet is in its spring. So, like, you were around in 91. I was around in 91. How many messages do you send on the Internet in 1991? Basically zero.

Yeah. Nothing.

How many transactions you paid in cash?

Yeah.

Right. Okay. Now, today, 99% of your communications are online. 99% of your transactions are online. Right. So. But what remains to be online is the presidency, the currency, the military, the universities, the equities. Right. There's remaining institutions that are still partially offline.

Is this. So one of the things I've kind of observed is that why I've watched the Internet disrupt everything from not yet. Well, I say the majority disrupted music, disrupted film. It's disrupted. You know, we don't go to a DVD store anymore. We buy everything online. And politics has failed to keep up.

Right.

Politics has failed to keep up from central government. Politics has raced ahead in terms of the electorate discussing things, which is why, for example, the Reform Party in the UK essentially didn't exist three, four years ago, are now leading the polls. The Internet has enabled that. It is a reaction, it's a populist reaction to our kind of apathy towards the uniparty, the complete, complete failure of the state.

Right. So. So on that point, right, basically everything that's happening in politics, in media, in money, military, everything is downstream of the Internet.

Yeah.

So in that sense, Internet first. Where to understand any phenomenon happening in the world today, start with how the. How's the Internet changing that versus 10, 20, 30 years ago. Example, the military, it's drones. Right. Example, with politics, the Internet. And from it, Twitter and social media is upstream of Brexit, it's upstream of Trump, it's upstream of Bolsonaro, it's upstream of blm, it's upstream of Trump's reelection, it's upstream of all of those things. Right? And that's very obvious where Twitter elected Trump and then Twitter deplatformed Trump and then X reelected Trump. Right. The Internet is actually upstream, you know, and if you think about stock markets like the NYSE and the NASDAQ are becoming more like crypto than vice versa. Like prices Moving like this, GameStop and AMC and stuff like that, the volatility and craziness of the Internet is leaching back into the physical world. Right. And so when you say the Internet has disrupted everything, I say, yes, we haven't seen anything yet.

Okay?

Because we haven't yet had the core institutions replaced with Internet first versions.

And is there a world that you see that we maybe skip a step and it's the institutions are replaced by some one something on the Internet, but something on the Internet that is AI driven?

Well, I mean AI is definitely going to be a big piece of it, but AI is probabilistic and crypto deterministics are complementary. Like AI makes errors, AI needs to be verified. Right. And we're now two and a half years into AI and I mean, I mean obviously we're like 50 years into AI, but two and a half years into the modern ChatGPT era, three years. Ish. Right. So prompting hasn't gone away and verifying hasn't gone away. And so AI can do a lot, but basically one of the areas AI is going to create a ton of jobs in is verifying and proctoring. Okay. And there's because the output of AI, like if it gives you some legal thing, you need a legal expert to review it. If it's got some radiological thing, you want a radiological expert to take a look at it. It might be better than most radiologists, but you often want a human in the loop to check at the end. Right. Especially crucially, it's best for visual things like images, video, front end, because you can check that with your eye very quickly. You can verify it with your eye for anything that's text, that's contracts, that's backend code. You have to actually go line by line and verify it yourself.

And you've brought up things which have liability.

Yeah, that's right. So stuff that has basically something where there's a significant probability for getting it wrong, you're going to have a human loop in AI until we have some paradigmatic breakthrough. Right. So it's not a, you know, panacea or panacea, how's that pronounced?

Panacea.

Panacea, yeah. So AI is not a panacea. It'll help, don't get me wrong, but it is something that, because you have to prompt it and verify it, it doesn't do things end to end, it does things middle to middle.

Okay, so there's a couple of important things I want to. So the inevitability of the end. Can the US and can the UK be saved or are we facing some kind of just terminal decline, multi decade period of decline before there's any turnaround? Is there any hope in my view?

Yeah, I don't think these political entities are going to continue. I think they're like, for example after the ussr, like Russians still existed. Right. But and some, they kept some of that territory but like the borders got renegotiated, passports are reissued. That political entity went bust. Right. Like the USSR as a political entity went bust. That's the scale of thing I think is going to happen.

So America, America's in its current form is over. There will be a re.

There'll be something, I mean like, like the land doesn't vanish into, into. So actually this is a really important thing to think through. Right. What's. So the fall of the USSR is the closest parallel I think within our lifetimes to what is going to happen. Right. Where you had this 300 million person state that was also an ideological empire, that was contender for global superpower, had nukes, had fought the, had won World War II and also told its people it was eternal and it was going to win and so on and so forth, then essentially denied it was going to fail until the very, very last days. And it was brought apart by both nationalist sentiments bubbling up. Like Estonians wanted freedom, but actually Russians also felt that they were being oppressed by the Soviet Union. An underappreciated thing is right at the end of the Soviet Union there was a survey that came out that showed that Russians were down to 51% of the Soviet Union. Do you know that?

No, I didn't know.

Yeah. So because of that, that was what stimulated a lot of Russians to get mad because they, their implicit dominance over the Soviet Union was going away. They broke away, they got Russia. There is 76% of Russia as opposed to 51% of the Soviet Union. Okay. So they re established their ethnic majority by giving up their territory. It's very important that you don't lose this. Okay. This is your inheritance through Bitcoin. Oh, let Bitcoin rip. Don't rip up your bitcoin. Set up inheritance with casa.

And we have these fears of ethnic minorities.

Yes.

In certainly across Europe. That's right.

So if you give up empire like the Russians did, you might be able to have, if that's very important to you, an ethnic super majority on reduced territory.

Sure. But you can't, you can't get away from the debt.

You can't get away from the debt. Right. So the thing is just trade offs and everything. Right. And this is going to be something which is not. No one's going to negotiate the best trade off. They're just going to hit the wall running at 5,000 miles an hour. And so let me, let's, let's game that out. Right. What does that actually look like. So Dolly has talked about this. Lots of people have talked about different versions of hyperinflation. Civil war, partition, Partition, Indian Partition, I think is a better metaphor for what's going to come than civil war in the US and the reason is partition was like a messy Hindu versus Muslim tribal thing. It wasn't like organized guys with like, militaries and so on, so forth. It was just like, I hit you, you hit me. It's like BLM and J6 in many ways. That's what, like, America is becoming. It's kind of like that tribal, right? Not organized.

By the way, the first chatter around civil war is starting to happen in the uk, which I find wild. Just people even having that conversation. Yes, but, but it's now happening.

It's now happening, unfortunately. Right? So my, my view is, all right, let's just imagine all the people in the world and they're walking around. You're an alien, you're looking down the surface of, of the world, and everybody's got like a, a dashboard above their head. And it's their numbers. It's like their USD balance, it's their British pounds, it's their Bitcoin, it's their identity and passwords, all these, the numbers, right? All this stuff, right? Now, as they're moving around the world now assume that they're, let's say, just their fiat balance or dollar balance goes to zero, okay? Their USD balance, okay. Moreover, all the contracts that they have that are denominated in USD go to zero, right? What happens? Well, first, all of these particles moving on the surface Earth, they just kind of grind to a halt because the, what they were operating on, like, the assumptions they were operating on, that they had some money in the bank, they're going to get more money in the bank, that this contract was good. The customer relationships, their debts, their employer, all of that has to be completely reevaluated. What do I do next? To put food on the table. Okay, now what doesn't go to zero are factories, hard assets, right? Those. Like, in a sense, you know. You know, a neutron bomb is.

Yeah, of course, yeah.

So like, in theory, a neutron bomb kills people, but not buildings, right? So you can, you can just radiation, you know, like blast everybody in a zone and then you keep the buildings around. This is like something developed during the Cold War, right? At least it's the theory about it. This is like a financial neutron bomb that just zeros out balances. But the people are still alive. They still got the skills and knowledge in their head. And the factories are still around.

So we get us oligarchs.

Well, so what's left? So, so you have gold still exists, right? Bitcoin still exists because Fiat has gotten destroyed. Chinese factories still exist, right. Because they've got the largest scale footprint, right? And Weimar, like Germany was able to reboot after Weimar because they had all these scaled factories, right? Germany was still a manufacturing Goliath in the 1930s. So they could just kind of re. Even if people's stored points from, you know, the deutsche mark or the mark in, in the 20s were wiped out, they still had productive capacity, they had organization. They could reboot their economy in the 30s and build it into a war machine, right? So they had enough social cohesion that they could, and it's strong enough. You know, eventually, unfortunately, central government, they could reboot, right? But if you have something like Latin American conditions, which is more what America is like today after an inflation, everybody no longer trusts each other. They're not going to get together and like trust again to reboot a currency. Okay? Moreover, after the US Loses a reserve currency, it's not like what people reboot on is going to be America again. That'll be the final betrayal, right? Delaware got rug pulled. FBI got rug pulled. Tariffs, they got rug pulled. The courts, they got rug pulled. The media, that got rug pulled. Everybody who trusted any US institution got rug pulled. And then if you trust a US bank account, that's like, that's like the final rug pull, right? So but when it gets rebooted afterwards, see, technologically the dollar is not the best tech stack. ACH is slow. Like in Europe you've got sepa, you've got better payments, right? Technologically, like, you know, in Southeast Asia, in China and India they've got UPI and in China they've got WeChat, you know, Brazil, S, Pog, Seguro, all these things were built intranet first. So there's better payment systems for both consumer and business payments on the rest of the world than there are in the U.S. the only thing the U.S. is going for it is legacy. Everybody's plugged into it. If that gets zeroed out and you have to reboot the system, you're definitely not going to put the US back at the center of it, right? So you're going to have something where all kinds of economies get jarred. And then the ones that have the most gold, the ones that have the most digital gold, the ones that have the most factories and so on can reboot because in a sense it's Just like the day after that happens, points get zeroed out. But a week later, a month later, a year later, contracts start getting signed in ounces of gold or satoshis. The factories still exist. The knowledge of how to operate those factories still exist. That isn't getting zeroed out. So you think about what inflation does. It destroys the coordination mechanism between people, but doesn't necessarily destroy the knowledge in their heads or the goods or, you know, the power plants don't stop working and so on and so forth. What does happen though is if you think of like America as a system which depends on all these nutrients flowing into it from abroad, you know, shoes from Vietnam. And so all of that comes to a crashing halt. Right. Because the US has nothing to trade for that stuff. Right. And it doesn't have domestic manufacturing. Right. And it's probably also going to be really mad at its tech guys because they'll say AI has taken all the jobs and bitcoin's taken all the money. And the tech guys will take all the blame because most of the violence in the 20th century was actually on the basis of class, not race. That's what communism was. It was on the base of class. So the entrepreneurs, the kulaks, the landowners were killed and attacked in many, many countries. And so the tech guys in America. I would definitely not want to be an immigrant in America. I wouldn't want to be a tech guy in America and definitely wouldn't want to be an immigrant tech guy in America over the next 10 years, because you'll be very publicly blamed for all of this. I think that's the third coalition, by the way.

Sorry, 10 years. So do you think this is going to become very obvious in the next 10 years? Because I don't think it's obvious.

Net.

I think Trump just signed in for the party to continue for a little bit longer.

Yeah, the hardest thing to do is figure out timing and everything. These things happen slower than you can believe and then faster than you can imagine. But let me show you this, which is like just over the last few weeks, like yield spiking in West. These are all western aligned countries. This is the opposite is happening in China. China has yields at all time lows. So people are putting money into China because they think it's a good credit risk. Okay. But us, Germany, Japan, it's spiking. Okay.

It's down to zero percent in Switzerland as well. Yeah, Interestingly, that's right.

Here is the dollar crashing versus other countries. Here is gold spiking and here is bitcoin spiking.

Right.

So that, to me shows essentially, like, reality. Reality.

That's right. You can't hide from it.

You cannot hide from that. That's right.

So two final things. Conscious of time. Take as much time or as little as you want. But another thing I've observed in the UK is we've had this drift towards socialism, and when I mention that on Twitter, people are like, you're an idiot. This isn't socialism. But what I think is this backdoor socialism. Our government knows they can't go in and just take control of companies unless they're collapsing in a financial crisis, as they've done, but they can't go and mandate we own 51% of every company. So I think the former socialism we have is backdoor socialism, where they control the companies through regulation, through speech, control through taxation, through every single way they can to get people to do exactly what they want. So it's kind of a backdoor socialism. And then I think we're seeing that in society. We're seeing this kind of leftist demonization of wealth, this demand for more taxes, wealth taxes, all these things that we think are stupid. I think there's similar things happen in the US and what I've kind of observed is that the uk, maybe Europe, and the US is on a trajectory to what China's doing, but doing it badly. We're bad at control. We're bad at communism, and so why try and compete with them or something we're bad at. What we're good at is freedom.

Exactly.

We should compete on freedom. Free markets, deregulation, bitcoin. And that's kind of like. That's my guiding light of the only way we save us if we ma.

If we.

If we become freedom. Maximalist.

That's right. So. So I would say. I would. I would agree with all that, except for maximalist. And the reason I just say that is if you're max.

So, okay, sorry. Yeah. Because I'm not anarchist.

Well, well, yeah, yeah, exactly. But. So. So the thing is. Did you tell my parable of, like, the Westest? No. So here's just like a fun thought experiment, right? Imagine a group of people, and they call themselves Westas. Why they like the idea of California. So you keep going. They get a group, they start going west to California, and they make it to California. And however, rather than just being happy that they're in California, a group of them wants to keep going west to drown in the Pacific Ocean. And when the rest object, they say, what are you, an east is cook now. Right. And so that is something where, if you look at the kind of utility function, it went all the way up until they got to California, and then it went sharply down where they. Any good thing can be taken to an extreme till it becomes a bad thing. Right? Like the dose makes the poison. Like water is good for you, but if you drank 50 liters in a day, you'd have problems. Right? So everything good can be taken to an extreme, which is why I would never call myself a maximalist, but an optimalist. There's like an optimum number of something, and that optimum may be different from person to person. With that said, though, I basically agree with you that in many ways in the. In the 80s, the way the USSR fell is it started copying America rather than doing its own thing. It started. It did, you know, perestroika, and it did Glasgow, so did free speech and free markets, and tried to be a copy of America and it was a terrible copy of America. Right. And since 2015, America has tried to copy China, where it's put restrictions on free speech with Internet censorship, it's putting restrictions on free markets with tariffs. Right. It's trying to be. It's obsessed with Taiwan, just like China is obsessed with, you know, like institutional. Like. Like a gosh, industrial policy. Like China is. Right. But it's a terrible China. China is a much better China than America. Just like America, the America is a much better America than the Soviet Union.

Diet Coke is a much worse Coke.

That's right. So. So instead the Internet is the opposite of China. Yeah. So that's what you and I are saying. Yeah. Right. Which is free speech, free markets, consent of the government. Right.

The right. I got it here. The right to act freely within a moral or legal framework.

Correct? That's right. So I think the way we rebuild the world is around consent and voluntarism. So that's why I'm doing NS, you know, network, state, network, school, NS.com, right? Where I want to show that you can take these cloud communities and they can consent to materializing in person. Right. And we can play a clip of what we're doing and so on. If you want to play that. Right.

Well, you just send us it, we'll put it in.

Yeah. I'll play some clips so you can see what we're doing. Right. And essentially the concept is, all right, so if the old world's ending, we can be total doomers. But I'm a doomer. Optimist. I'm a doomer. On the old world and an optimist on the new one. Right. I'm an optimist on the Internet. So what does an Internet first society look like? So first is cloud first, land last, but not land never. Okay, so you start with the cloud community and then you materialize into the physical world. And that's what the network state book is about@theneworkstate.com and the concept there is you're spending more time online than you are in the physical world. Often many people don't know their neighbors, but they know their Internet neighbors. Right. Those are their real friends. And rather than just bitching about politics all the time, it's easy to do that. What's hard to do is actually to organize people in the physical world. One issue with this, and this is why I'm not a maximalist on things, we were talking about this the other day, but individually, alpha is collectively beta.

Yeah.

Right. If you have a bunch of guys who all think of themselves as super alpha males, they can't cooperate. And if they can't cooperate, they can't get anything done together. And that means they're collectively weak. Even if they're ostensibly individually strong, they might be able to punch somebody. They can't build something. Right. So a big part of Internet first is figuring out how to reestablish cooperation, reestablish leadership, reestablish positive sum behavior, materialize a cloud into land, start literally with a co living house and just start expanding from there. Right. Establish a zone of peace and then broaden it. Right. A zone of civility where people are not dicks to each other. You know, they're not cursing at each other online, you know, like they are online. There's in person level civility, there's cooperation. There may be a common cryptocurrency or a common company or something like that that unifies them and they're all same team. Right. And then you grow that and you grow that and you grow that until you can crowdfund more and more territory.

Well, what you, what you've done is people, where people have found their cohort online, you've brought them together.

Yes.

And so one of the interesting things is whilst we've been here, I've been online less because I've been mixing with the people here that even though they're.

Interesting people to talk to.

Well, so like Lucas I was chatting to even we're very similar, even though we're from completely different countries, because we have a kind of like a framework that comes from bitcoin where the way we think about the world and business and so it's kind of interesting.

That's right. Yeah, that's right. And so bitcoin is rising, the Internet is rising and that is the successor to America and the west as America and the west were the successor to Britain and Europe.

It's a decentralized successor.

That's right. And I think we go from the two party system to the thousand community system. And for example, today it's conventional at age 18 to pick your college. I think tomorrow it'll be conventional to pick your community or your country.

It's so funny you should say that. We were talking, you know, when we were, you know, you were walking us around and I said to you, I had that moment and I said, oh, so Connor working for me is like on the farm and you mentioned about the DNA.

Yes, and afterwards we were talking. Let me explain that.

Go. No, no, you explain that for the audience.

Yeah, sure, sure. So what I meant is, what I said is in the 1800s like Jebediah and Abigail would have like 10 kids and they'd all go and work on the farm. But because they had a genetic equity stake, DNA, you know, a 50% equity stake in a sense. And obviously I'm being flipped, but it's like a funny way of thinking about it. They loved the kids, they were not going to work them too hard. By the late 1800s, once you had the, you know, the rise of industrial revolution factories and you had child labor in the factories, you had Dickensian conditions where the CEOs of those factories didn't have the same love for the kids the parents did and say worked them too hard. And being children, they couldn't reasonably consent. They were too young to understand it. Right. So hence child labor laws arose, which were well intentioned at the time, but that began a long period of infantilization where kids who had previously been considered to be able to work as soon as they were able to do so now had a longer and longer period of infantilization and then adolescence. And now you get to the point where like you're on your parents health insurance till your mid late twenties or what have you and you're, you know, maybe in school until your 30s if you're a doctor and like half your life is over before you do anything. Right. So the correction to that I think is we go back to the future and internships are in a sense new apprenticeships and people are starting and doing coding or things like that at home, similar to being on the farm. These kids are at home in a friendly environment. They can't be hurt by hitting keys online for the most part, if they're supervised. And now they can start doing tasks, they can start making money and so on, start leveling up. And that is an educational system where they can proceed at their own pace. Rather than having 13 years of K through 12, maybe they can get done in 13 weeks. Right. Because obviously there's no such thing as a 30 year old, really. A 30 year old can be in jail or they can be leading a company or what have you. There's huge gaps. Even at age 18, there's huge gaps. The entire Prussian system, that's the K12 system is actually inherited from Germany, was meant to stabilize people for a centralized state. It wasn't meant to level up the individual as quickly as possible and to train them the fastest way for their abilities. So I think education gets completely transformed via Internet First. And it looks more like 1800s and 1700s America. There's actually this great book called A Craft Apprentice which talks about how apprenticeship worked in Ben Franklin's time. And I think we're going to come back to something like that.

Well, so I'm thinking in terms of my daughter's 15, right. And so we are six years away from her finishing university. And I've seen just the rapid change in say ChatGPT is just a year. And how can you plan for six years time when you don't know what's gonna happen next two years? But the one thing that we were talking about and I think, you know, became very clear to me is I'm not thinking about where she should go to university. I'm thinking about the basic framework of education she should have, which is, I think philosophical, but also what is gonna be her community? It's where should she be? What community should she be located in? What's she gonna take from that community? And it's a big shift. It's been a gradual shift where I've kind of realized something's wrong for the last year, two years and a very quick shift by being here at Network School, right, where I was like, huh, this is a community.

Exactly.

This is more than just, you know, it's interactive educational sessions. It's just a better way of learning.

I think that's right. And I think, you know, to be clear, Harvard started as a one room schoolhouse, right? So everything, you know, Google started in a garage, Facebook started in a dorm room. Bitcoin started as a white paper, right. So, you know, we have modest Beginnings. We do have ambitions, but you know, I would consider us modest right now. With that said, I think Internet first learning is important. AI means that rote learning is just less. You know, you people can, teachers can make AI exams and kids can fake AI answers. Is that really valuable? What if instead we move to tasks and skills, right? Where you complete tasks and you learn skills on demand. I think that's where we're going to go and that's what we're going to do here. And those tasks can be completed even if they're six years old, seven years old, with parental supervision and they can compete against a 16 year old or a 26 year old. And they're all just submitting things over the Internet. They can use as much AI as they want and they add the skills as they're going. Right. And I think that is part of the vision of network school. Another vision is you mentioned choosing your community. Right. In fact, when people pick their college, they're implicitly often picking their community, their company and their country. You know, why? Well, especially, you know, for millions of engineers from India at least, certainly probably tens of thousands, hundreds of thousands, probably millions over the last 20, 30 years, from India, from China, from other places when they were age, let's say 21, they would apply to Stanford or MIT or something like that for their master's degree in electrical engineering and they would come in on an F1 student visa. Then they would go to a company and they'd get an H1B visa and then it go to the country level, they get a green card or a permanent residency. Right? So going to the college, the company and the country was actually a unified thing. That's one of the reasons they worked really hard is to get that citizenship. Right now that path is being cut off, but you could re envision that as an actual offering a full stack thing because before they would have to system integrate all those pieces since it's three different, it's like, you know, the university and the company and the country are all disaligned admissions departments, they don't care about each other and so on. But if you integrated them into a talent recruitment thing where you're thinking about recruiting people, picking their college, company, country and effectively their community, you could absolutely do that. So the point being, we've already sort of beta tested the idea of picking your country at age 18 for millions of smart people and it worked. Right? And you know, I have a one liner which is like, you know, there's 500,000 Brits who've gone to Abu Dhabi or Dubai.

It doesn't surprise me.

Yeah, it's like. And you know, there's a bunch of Brits here. You know, like here at network school we have. We were talking about Canzuk, right? Canada, Australia, New Zealand, UK is 140 million people. And they're not MAGA, obviously, because they're not American. And in fact, Trump basically signaled to Canadian conservatives that he wants to invade Canada and he's being friendly to British conservatives. So like he, he hasn't built a global conservative or libertarian union because they're so anti globalist. They took it literally where it's not just American, it's not just conservative, it's only conservative Americans, which means it's like a tiny fraction of the world. There's 77 million MAGA versus a billion people in the world. It's only like 1% of the world. Right. They could have built a larger coalition, but they decided not to do that. Fine. So the Canzuks, who are neither woke nor maga, who are pro Internet, pro crypto, like NS is for them. Right. And frankly, anybody who's neither woke nor extreme maga NS is good for them. Right. And that means like the Chinese capitalist party, meaning the crypto Chinese. Right. The bitcoin Chinese. Those are the people who don't want to be under communism. They leave China. Those, you know, we're for them. We're for the Internet Indians, we're for the builders in the Midwest and we're for builders in the Middle east and Eastern Europe and Latin America and so on and so forth. All these people are in this. They're neither fully aligned with the Chinese state, nor are they. They're not aligned with the Chinese state, nor are they trying to rebuild the American state. They're into the decentralized network, the global network. Right. And I think we can build a large coalition of people. We've got people from almost 100 countries here and they speak every language and it's internationalist and it's capitalist. That's what Internet first means to me. And if you think about that like, you know, Britain was a union because it was, you know, the United Kingdom of England, Scotland, Wales and Northern Ireland. Then you had the United States of America. And I think we were going to have the network states of the Internet.

Yes. I met James. He talked about, he's building a layer two network here, which just blew my mind.

Okay. One, he's a British guy. Yeah.

Rich guy. Yeah. So one more quick question and then we will finish. It's a very complex world. Do you think the world has got too complex for humans to handle and understand in that there's too much information, too much choice? And if that's the case, how do we adjust?

So I think you and I drink in information and organize it essentially for a living. And I find that the onrush of new information and changes in the world are something where I have to sit and think and map things out and organize them and so on and so forth. So for people who don't have the disposition of a professional researcher or something like that, I can imagine them just trying to tune out and hope things go as they are and so on and so forth. And so I don't really have a great answer for that other than to say, like, with great leadership, you know, hopefully there's people who can reestablish order and stability. But we're in a time where things are just moving so fast like this. Right. I think the best strategy is to figure out what locations are going to be in good shape in five or 10 or 15 years that have good debt to GDP, that have low crime, very low crime, that have high rates of social stability, and those will be the ones that can endure the down times. Right. If there's cars being set on fire in that state like there are in California, if there's like stabbings and bombings and, you know, if there's a lot of people fighting on the Internet all the time, probably not a good place to be. If, however, it's like El Salvador or Dubai or Singapore or. Actually, you know, I would personally, if, you know, I would. I would take India. Like, I prefer to spend time in Bangalore over, like la. Right. It's safe. I feel safer there. Right. They're not like the meth addicts on the streets. It's like it's a society on the way up. One way of thinking about it is I think of India for its faults. It's almost like California in reverse to explain.

I understand. Yeah.

So everything new in India, it's like an Apple store and the old stuff are the shanty towns and so on. But it's like improving all the time if we sell those graphics. And everything new in California is a shanty town. And what's old are these beautiful buildings, right? So you can point to things that look really shabby in India and really beautiful in California, but you're pointing to the old stuff in India that looks bad and the old stuff in California, but the new stuff in India looks much, much better. Right.

Over rise and decline.

Yeah, exactly. But it's fractal, right? And so because it's fractal, people can be in denial about it until it's no longer fractal. Like that, say. There's lots of little clusters of good and bad in both places, but the good is growing in India and the bad is growing in California. Right. So I think that's for the person who is unable to keep up with everything. You know, Dalio has also talked about this. He said it in the most abstract way. Do you see how he talked about it?

I mean, possibly. It depends which one. I mean, I've. I've read the book, the new book.

So here's what he said. This is so, so, so. All right, so Dalio said over here, he's like one. This is so abstract, very bloodless. One risk, for example, could be location, meaning the physical place where you live and work. You know, Dalio's rates of designations attend to resource, assess risks, inform strategies, and where to live and invest. Right. Moving is a hassle, but it's worth considering. Under financially wearing services, flexibility is key. Okay, so this is like an incredibly abstract way of putting it, which I understand why Dalio, I actually think, has a lot of courage to say what he's saying. He put it in cartoons so that the full scope of it could be understood in a cartoon standpoint. Whereas if you put it in a human sample, it would look bad. Can I show you an example of what a bad location looks like? Okay, what he's actually saying is this is San Francisco, right? Basically, yeah. This is literally half a mile from where I used to live, Right? It's giant mob that are running stolen cars in circles and setting them on fire.

Yeah.

Okay, that. Like this scene, Mad Max. This is literally Mad Max, right? Black mirror is the present. It's not like some theoretical future. The dystopian present. All the sci fi Terminator Black mirror assumes that the president was good enough and some tech guys made the future worse, but it's actually the reverse. The political guys have made the future dystopian. They made the present dystopian. And maybe technology can make a better future. Right? So this is the black mirror of California. And this is like at the pier, which is like. It's right here. It's like in front of the expensive restaurants and so on. So you can't get away from this in the U.S. well, I mean, look.

We have our own versions of this in London. Almost everybody's experience or seen a phone being stolen out of the hand by somebody on a moped or the like. I say we're always one election away from the U.S. we've now got within all the stores like my local Tesco store in the morning you have to buzz to go into the store. I mean that is insane on this.

Topic by the way, there'll be a fair number of people who are like, oh my God, you coward, why don't you stay and fight? Right? And actually the thing is their anti. So that's actually worth engaging and they'll give three or four arguments on this. The first is stay and fight. What? Stay and fight other Americans for America. Oh, hmm. I'm fighting Americans for America. Why do I want to do that again? Like, you know, it's actually more like a tribal. It's not like you're being invaded by aliens and you're fighting, you know, for you're. It's like person against person who is neighbor before fighting in this, you know, destructive thing. Number one. Number two is CN fight what, a sovereign debt crisis. You can't punch that.

You can't be that.

Yeah, you can't punch that in the nose. You're you. It's like fighting a volcano. The point is when a volcanic eruption is happening, you get away from the volcano and the people who are stupid enough to try to fight the volcano either die or have their homes destroyed. And if you're smart, you get away from it, you let that thing happen and then maybe you can come back and rebuild because the resources rebuild are those that are not in the wake of that volcanic destruction. The third is stay in fight with who? Because the left hates capitalists and a good chunk of the right unfortunately hates Indians. So they are putting up signs saying like techie get out. Like you know, for example, like this techie scum leave SF and they actually mean this which are, they're actually like insane people like die techie scum, save San Francisco or whatever. Right? That's when, when they're lighting all these self driving cars on fire, which they've done quite a few times, they're seeing a signal which is, I mean, you know, to, to, to actually make a point. When Democrats lit crosses on fire in front of black people's houses in, in the south, they were intimidating them when Democrats in San Francisco, cause they are Democrats are lighting self driving cars on fire. They're telling Indians, Chinese immigrants, get the hell out of our city. Because actually most of the people who are doing that are mostly. And that's, that's the sub that's the subtext, by the way. The tech guys are mostly recent immigrants and the ones who are the far leftists in California, San Francisco are not. Right. So it's actually in its own way. Get out, you newcomers. Right. It's similar to MAGA in a certain way. It's just coded as class rather than race. Okay. But there's a resentment. That's an interesting filter on it, right?

Yeah. Okay.

And if you go and look at the leftist activists and the Bay area, they're disproportionately second, third generation, fourth, fifth, 12th generation Americans. You look at the tech guys, they're clearly not right. And you can see that when you look at, for example, you know, Elon's. So this is what the New York Times editorial board looks like. Okay. Well dressed.

It looks like AI.

Yeah, I know, I know. That's the New York Times editorial board. And this is Elon's guys.

Okay, interesting.

Now, clearly the demographics are different. Yeah, Right. This demographic is much more Indian, Chinese, Asian immigrant. And the other demographic is much more white, black, American, female. Right. So white, black American female versus male, international, tech, Asian, Chinese immigrant. That's the demographic kinds of differences between the two.

Right.

And you can argue one is better than the other. But we certainly have, quote, more non white people. If that's better and they have more Americans and we have more of the globe, you can make a moral argument for each of them. And I think it's, you know, personally, I think there's way more in the world. So I think there's a moral fairness to the Internet that there isn't. To just US citizenship, which is only like 4% of the world versus 100%. But people will make the argument the other way. Fine, what's the point? The point is class and race covary. Class and demographics covary. So Democrats yelling at tech guys to get out and Republicans yelling at Indians to get out will merge into something that's just this angry socialist nationalist thing by the 2000 and 30s that just wants the tech immigrants to get out or die or take their money or whatever. Right? Because they'll be mad at the Internet. They'll be mad at China, they'll be mad at crypto, they'll be mad. You can see that coming. Yeah, right. And for example, you know, the Democrats are running billboards.

We're so fucked.

We're. So the Democrats are moving to this. This is the immigrant who took your job, Elon. Right.

Okay.

So they're moving to the demagogic. Right tone against the tech guys. Do you understand what I'm saying? Yeah, right. Just as the right is moving more anti capitalist. Okay? So bring it back. That's why Dali, that's why I'm 10,000 miles away, right? What is there? Like A, what is. Who is there to fight? But you're going to fight other Americans? B, what are you fighting? Fighting a sovereign debt crisis. See, who's going to fight with you? They'll want you out of the country, right? And D, what are you fighting for? Like, you know, you can only have so much life force in your life, right? Like what I want to fight for is freedom. And I want to fight for Mars. And you know what I call immutable money? Infinite frontier, eternal life, right? So Mars, Bitcoin, life extension. And you don't need the Appalachians, you don't need the bear. There's no silicon in Silicon Valley, right? You're not like mining silicon out of the hills. So there's no natural resource that's keeping you there. And even if there was, there's a reason they call them commodities because they are commodities. You can literally mine them from anywhere, right? The non commodity thing is the people, the community, right? And so I'm loyal to the people who are my friends and who I've worked with over the years, right? And those people, you know, like, it just may turn out that, you know, you go your own ways. One fourth, you know, like meaning, and this is a fourth point. America was actually founded by European groups who also quote cut and run or left European wars behind. We mentioned the Roundheads and the cavaliers from the 1600s, right? But the Germans who left the revolutions of 1848, the Irish Americans, did they betray Ireland by leaving the Irish potato famine behind? Right. Like did. And then going to the present day, like the Jews who left the Holocaust, the Persians who left the fundamentalist revolution in Iran, the Vietnamese who left communism, the Koreans who left the Korean War, the Chinese who left the Chinese civil war, right?

It's just smart.

It's just smart. It's called first mover advantage, right? Every American ethnic group other than the African Americans and Native Americans is the descendant of people who left war, civil war, famine, revolution, going back to before America even existed, with the round heads of cavaliers leaving behind the English Civil War, right? So the entire history of America is actually those people who didn't quote, stay and fight, they were smart enough to have first mover advantage.

Balaji, I think we could have sat here for about eight hours and discussed things. I didn't even get past my third question on my show. Incredible. Loved it. Everything you're doing here, network, schools, incredible. I'm going to wax lyrical about it and encourage people to come Visit. Very, very Nest.com NS.com come and check it out. We'll take a video, we'll put a video in, like an advert, let people see it. But no, appreciate your time and incredible work and can't wait to come back and visit again.

If you're British, if you're Canadian, New Zealand, uk, If you're American and you're pro bitcoin, pro freedom, then maybe. NS.com is interesting for you and so look forward to seeing you there.

Thank you. See you soon.

Thanks. Thank you. Boom.