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Dan, welcome to Emerson State 
Podcast. 

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And I think, you know, we hung 
out several years ago in the 

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before COVID times. 
I think it's some Stripe thing. 

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If I recall that Collison 
organized something like that 

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one of these. 
Frames camp. 

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We played a very my favorite 
board game together. 

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Yeah. 
What was it? 

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It was. 
It was one of these things. 

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Was it werewolf? 
No. 

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What was it? 
Something close. 

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It's called Avalon, in which 
there are roughly seven of us 

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around the table. 
Three people are evil, they know

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who each other are, and the four
good people don't, in general, 

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know who anyone else is. 
And the aim of the game is for 

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the evil people to assert 
themselves as good, and for the 

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good people to deduce who the 
evil people are. 

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I've been playing this for many 
years now. 

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I played in different cities and
I'm glad to have been able to 

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play it with you in the woods of
Northern California. 

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That's right. 
And I think I, as I remember I, 

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I was because it was the first 
time I played it. 

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And I was thinking, what if we 
wrote the state space matrix on 

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a whiteboard, which is either 
the really smart thing to do, a 

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really dumb thing to do, and 
like Gwern got annoyed at that 

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or something. 
As I vaguely recall, this is 

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like many years ago. 
Yes, that's right, but I still 

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think there's something to that.
I have to go back and play that 

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and I feel like you might be 
able to maybe maybe be bad to 

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write it on the board and it 
takes away the mystique of it. 

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But there's something to that. 
The possible nation. 

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Anyway I. 
Remember you doing that? 

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And I think I was evil and I 
managed to deduce who was like 

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who, The Who, who the Merlin was
based on your based on your 

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calculations. 
Yeah, there's something, there's

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something about, like there's an
underlying data structure behind

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the thing, some kind of 
possibilation, you know, sort of

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like the Monty Hall problem in 
stats where you actually write 

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out the decision tree and then 
you can actually understand it 

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there at least I wanted to see 
what would happen anyway. 

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Maybe took some of the fun out 
of it, but it was fun for me at 

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least. 
So maybe hopefully for you 

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anyway. 
So, so we sort of travelled in 

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some of the same circles and, 
you know, I, I liked your book, 

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which we'll get into in a 
second. 

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So breakneck and we'll put it on
screen and I liked it because. 

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So, you know, what's funny is 
maybe this conversation will be 

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a little different than some of 
the other ones you've had, 

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because it says a lot of things 
that I think are that Americans 

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should understand, but are super
obvious to anybody who's paying 

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attention to Asia. 
And in fact, I actually think 

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you go easy on the US. 
I'm much more of a bear perhaps 

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on the US than you are. 
Maybe you pull your pull some 

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bunches in that or, or what have
you. 

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Because I'm actually, I'm, I'm, 
I'm messaging, I'm talking to 

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you right now from Singapore. 
And so let let me see if I can. 

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You know, obviously others have 
summarized the book, but 

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essentially China's an 
engineering state, America's 

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lawyerly state. 
China actually is on the right 

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in many ways because XI is all 
about the great rejuvenation of 

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the Chinese nation, even if he's
kept the communist symbols, you 

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know, he, you know, Mao went 
after the four olds and, and 

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went after a filial piety and so
on so forth. 

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Than GI completely reversed that
where it's really, you know, 

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nationalist, conservative, you 
know, revival of 5000 years of 

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history and so on and so forth. 
And in many ways, when Doug 

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Xiaoping took over in 1978, you 
know, a rebranding changes the 

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logo but not the guts. 
And Deng Xiaoping did a 

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reinterpretation where he kept 
the logo but changed the guts 

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completely. 
It was basically, in my view, a 

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coup, which which is funny 
because now the Communist Party 

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nor Democrats nor Republicans 
admit the extreme discontinuity 

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between Dong and Mao because 
like I'm, I'm no, I'm butchering

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the pronunciation. 
But Hua Gua Feng and the Gang of

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four were supposed to be like 
the successors to to Mao and 

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Dong managed to take over and 
shifted towards the capitalist 

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Rd. even after he'd been pursed 
3 times and a sudden been thrown

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through a window. 
And you know, the famous, you 

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know, black cat, white cat 
doesn't matter if we catch spies

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and the Xiao gang contract where
those villagers at least that 

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was that was the there's the 
idea of it. 

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Maybe that was just a legend. 
But those there's villagers that

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had a contract to do capitalism 
and they weren't actually 

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executed, unlike everybody else.
And that was kind of like hell 

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up a hand dunk shipping helping 
and said, OK, capitalism is 

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legal in these regions, the 
special economic zones. 

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And thus began Shenzhen and the 
things were on the Eastern 

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seaboard. 
And that's how China modernized 

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didn't go to capitalism all at 
once, right. 

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So I may be getting some of that
wrong, but was that roughly 

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accurate kind of a quick capsule
history go? 

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Ahead. 
Yeah. 

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The only thing that I would 
quickly add is that I think Dong

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had a lot of the governing 
styles of Mao. 

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He certainly purged a lot of 
people. 

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He was really ruthless against 
some of his enemies. 

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He got rid of several of his 
successors and I think he was, 

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in the words of wine party 
historian half a mile. 

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And so I don't I don't think 
he's no no St. there. 

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I mean, he was, he was as 
ruthless, I would say, even 

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though his ends were much better
for sure. 

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He started out as communist, 
right and he was in the he was 

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in the party for a long time and
actually somebody said that even

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the war in Vietnam that which is
one word that was, you know, was

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that dung hell that I had read 
this book. 

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I see if I find it to distract 
the generals from because he 

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was, he was doing a lot of 
changing of the guard in, in 

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Beijing at that time. 
So he just sent them all to go 

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and fight Vietnam again so he 
could go and do some reforms or 

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whatever in the capital. 
I don't know if you have you 

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heard that. 
Yeah, it was to get the Army 

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support to give them a really 
fun war. 

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And then he will. 
And then he'll have their 

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support forever. 
Yeah, something like that, 

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right. 
So and then, you know, that 

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began through the tradition of, 
or maybe I'm wrong about this, 

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maybe that predated Dung, but 
they were like there's like 3 

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posts that the head has, which 
are, you know, the ticular head 

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of the state, the head of the 
party, and then also like the 

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head of the military or 
something like that, right. 

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And Dung began the tradition of 
holding all three of those 

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crowns to run China is if that's
correct, if I'm not mistaken, or

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maybe. 
Not state president, but he was,

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I'm not even sure he was head of
the Communist Party, but he was 

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head of the Central Military 
Commission. 

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CMC, right? 
Yeah, this one, this one, I'll 

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get some of the details wrong, 
but there's like 3 things that 

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he had and he was kind of 
running. 

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It's like a, you know, uniting 
the triforce to speak. 

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OK, fine. 
So maybe we'll flash up what I 

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what I got wrong. 
OK, so the reason I say that is 

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here is what I will stipulate. 
Well, so I, I want to play your 

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your book back, but to you and 
you tell me if I got it wrong. 

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And then I want to actually 
debate with you what comes next.

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OK, first, everybody should read
breakneck awesome book. 

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And I think in many ways you 
sort of explain stuff because so

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many Americans are in cope mode,
less so perhaps in 25. 

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But for the last 10 years 
they've had extreme cope where 

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they've been pretending, you 
know, the Peter Zihan kind of 

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argument that China's going to 
get old before it gets rich, 

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It's going to fall into a ditch,
it's actually weak and blah, 

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blah, blah, blah, blah. 
And that keeps not happening. 

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And instead, it's number one in 
cars and #1IN solar and #1 in 

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all kinds of industries, 
especially the post COVID burst 

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of energy into advanced 
manufacturing and so on, by 2025

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seems to have really worked. 
And it's also number one in 

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surface ships. 
And it's signing all these trade

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deals and, and, and, and down 
the list, all kinds of things 

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seem to be working for China, 
whereas the US keeps struggling 

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in many ways. 
I would you, I mean, one way of 

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I, I put it is your book is kind
of explaining these sort of 

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obvious things. 
I'm not, to be clear, I wouldn't

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say they're obvious to 
everybody, but it's like you're 

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very gently kind of breaking 
reality to you. 

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Let me, let me know your 
thoughts. 

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Go, go. 
Yeah. 

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I think that all of those things
are true, Everything is real. 

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And I think, but there is there 
is more to this, a little bit 

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more to the story, which is 
where I feel like you're doing 

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the a really good job of 
summarizing the business pages 

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of the Wall Street Journal or, 
or or whatever Bloomberg. 

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But I think we could also flip a
few pages into the economics and

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the politics pages in which I 
think the situation there does 

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not look really good that, you 
know, the concurrent with 

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China's rise in EVs and solar, 
all of which is real. 

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You know, there's also crazy 
politics. 

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The she constantly purchases 
generals, some purchases defense

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minister, purchases foreign 
minister. 

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A lot of strange party politics 
that none of us really I think 

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can understand outside of a few 
folks in Beijing. 

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You cannot make growth has 
definitely weakened in some 

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severe ways. 
The property implosion is real. 

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The youth unemployment is real. 
There's a lot of folks who have 

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decided to leave China. 
I'm sure a lot of them are 

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washing up at your doorstep in 
Singapore. 

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A lot of amazing Chinese 
entrepreneurs who have thrown up

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their hands at the political 
environment in China. 

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A lot of Chinese have decided to
fly to Ecuador where they don't 

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need a visa and try to walk 
across to the American border. 

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And so last year Customs and 
Border Patrol were apprehending 

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something like 40,000 Chinese 
nationals every single month. 

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And so that's a lot of people 
who want to take leave of the 

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great rejuvenation of the 
Chinese ethno state, right? 

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So, you know, I think that there
there are, you know, real 

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economic issues. 
I think there's a lot of 

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political uncertainty in 
addition to amazing 

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technological growth. 
So, you know, we had to 

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reconcile all of these. 
So you know, the Ecuador part, 

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I've certainly heard those 
reports. 

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That is the part that I don't 
fully understand because, you 

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know, there's the other 
interpretation is China's just 

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sending a bunch of people to go 
and embed in the US or what 

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have, you know, military age 
males crossing the border, blah,

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blah, blah, blah. 
So, but but the other piece of 

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it, so let me discuss those 
other piece of excel give maybe,

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you know, obviously a lens you 
probably considered XI goes and 

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purges Jack Ma because he 
doesn't want something like Elan

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to happen in China where the 
tech zillionaires of China get 

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their own ideas and they control
these giant networks and you 

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know, they can turn against the 
state, right? 

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We sort of see like 2 pads there
with network versus state and 

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state over network in, in my 
parlance, you know, and in some 

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ways, this is provocative, but 
in some ways, China is the best 

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for the most and the Internet is
the most for the best. 

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Where if you're up to, let's say
the 98th percentile in China, 

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you have clean streets and no 
crime and 24/7 delivery 

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services. 
And at an upper middle class, up

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to that level, you're fine. 
But once you start getting to 

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the top one or 2% of society, 
now you better watch carefully. 

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You know, you're basically 
constantly surveilled to make 

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sure that you're in line with 
the with the party and what you 

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could be hailed for a year or 
two ago. 

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Suddenly you're on the outside 
of something and that's too 

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sinuous A twist for a good chunk
of people. 

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So they head overseas to 
Singapore or Dubai or something 

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like that. 
Would you say that's roughly 

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right? 
Yeah, I think the great 

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contrast, I think you're, you're
exactly right in all of these. 

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I think the great contrast, one 
of the great contrast between 

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the US and China is that America
works really, really well for 

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the rich. 
If you're a rich in America, you

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know, you really don't have to 
suffer too many of the problems 

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in, let's say, New York and 
California. 

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You don't worry about the 
housing crisis. 

224
00:11:20,720 --> 00:11:22,080
You have a giant home in 
Atherton. 

225
00:11:22,080 --> 00:11:24,840
You don't worry about taking the
New York subway to work every 

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00:11:24,840 --> 00:11:27,480
day, you know, which is like 
screechingly loud and dirty and 

227
00:11:27,480 --> 00:11:29,920
doesn't work very well. 
You get to live in these skinny 

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skyscrapers in Manhattan. 
I think that there's nowhere 

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00:11:33,760 --> 00:11:38,160
else in the world that's better 
to be enormously rich than in 

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the United States. 
I disagree with that. 

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00:11:40,320 --> 00:11:44,040
Now I and the reason I say that 
is I think I think that maybe 

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was true. 
The reason I smiled is just like

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00:11:48,600 --> 00:11:52,160
it's I think that was true. 
And I think the there's several 

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00:11:52,160 --> 00:11:55,120
bad parts about that now. 
The first is it's fine to be 

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wealthy if other people are 
doing OK, but a good chunk of 

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American wealth is Keynesianism,
which is really like, you know 

237
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how China's actually capitalist,
but they call it communist. 

238
00:12:09,920 --> 00:12:13,200
America's actually Keynesian, 
but they call it capitalist in 

239
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the sense of the money printing 
is actually a gigantic 

240
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redistribution of it's 
basically, you know, inflation 

241
00:12:19,720 --> 00:12:22,560
is taxation without legislation,
if you've heard that one by 

242
00:12:22,760 --> 00:12:24,920
Milton Friedman. 
So they print trillions of 

243
00:12:24,920 --> 00:12:27,440
dollars. 
It's like diluting down the the 

244
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currency for everybody. 
And they're doing that a lot. 

245
00:12:30,240 --> 00:12:32,240
They're both both overtly and 
covertly. 

246
00:12:32,240 --> 00:12:33,960
And then the Plunge Protection 
team. 

247
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Have you heard that thing from 
Greenspan, the plunger 

248
00:12:36,840 --> 00:12:39,440
protection team? 
OK, that's a useful thing to to 

249
00:12:39,440 --> 00:12:41,760
look up. 
That is why one thing you 

250
00:12:41,760 --> 00:12:45,240
mentioned in the book is like, 
American stocks have done well 

251
00:12:45,240 --> 00:12:47,200
and so on and so forth. 
And Chinese stocks are flat. 

252
00:12:47,720 --> 00:12:50,200
But part of that is because 
there's almost a social contract

253
00:12:50,200 --> 00:12:54,000
in the US, which is the upper 
middle class and upper class 

254
00:12:54,200 --> 00:12:56,960
have all these index funds, you 
know, it stakes in the mixed 

255
00:12:56,960 --> 00:12:59,760
funds foreign case. 
So they expect the stock market 

256
00:12:59,760 --> 00:13:01,760
to go up. 
And that's actually the metric, 

257
00:13:01,760 --> 00:13:04,800
the number go up of the society.
And so the plunge protection 

258
00:13:04,800 --> 00:13:08,840
team at the Fed will actually 
print to make sure that in 

259
00:13:09,000 --> 00:13:10,920
extreme circumstances stock 
market doesn't go down. 

260
00:13:10,920 --> 00:13:13,600
Some of that was explicit, like 
the obviously the 

261
00:13:13,600 --> 00:13:15,880
mortgage-backed securities that 
were bought in 2008. 

262
00:13:16,240 --> 00:13:19,640
Some of that is implicit where 
they'll spot Goldman or Morgan, 

263
00:13:19,640 --> 00:13:22,920
like the, you know, free or, or 
for example, the BTFP program 

264
00:13:22,920 --> 00:13:25,920
that they just did where 
Treasuries weren't actually 

265
00:13:25,920 --> 00:13:27,800
marked to market. 
They were valued on what they 

266
00:13:27,800 --> 00:13:29,720
were bought for, not what they 
were sold for. 

267
00:13:29,920 --> 00:13:32,160
So all kinds of manipulation 
they do just keep the market 

268
00:13:32,160 --> 00:13:35,200
nominally going up. 
But in real terms versus gold or

269
00:13:35,200 --> 00:13:36,720
digital gold, it's going way 
down. 

270
00:13:37,760 --> 00:13:40,320
Like for example, if you just 
saw it as of today, gold is 

271
00:13:40,320 --> 00:13:42,760
actually outperformed S&P over 
the last, you know, right. 

272
00:13:43,200 --> 00:13:47,240
So in my view, the US is 
actually a fake economy, a 

273
00:13:47,240 --> 00:13:49,240
Keynesian economy. 
And actually, you know, 

274
00:13:49,440 --> 00:13:51,680
actually, you know your thing on
the engineering state for some 

275
00:13:51,680 --> 00:13:53,000
lawyers state. 
I think we can do a lot of 

276
00:13:53,000 --> 00:13:54,640
iterations on that. 
And I'll give you the ball in a 

277
00:13:54,640 --> 00:13:56,520
second. 
But I've I love your book so 

278
00:13:56,520 --> 00:13:58,160
much. 
I wanted to say so much so, so 

279
00:13:58,160 --> 00:14:01,160
jump in. 
But yeah, I mean, I can I say I,

280
00:14:01,160 --> 00:14:03,200
I I'm going to be, I want to 
tease you a little bit about 

281
00:14:03,200 --> 00:14:04,360
this. 
So you sound like teasing Ping, 

282
00:14:04,360 --> 00:14:07,360
man. 
This is he has this term that 

283
00:14:07,400 --> 00:14:10,200
the Communist Party calls this 
the American economy, that 

284
00:14:10,200 --> 00:14:14,280
fictitious economy and also the 
bubble economy, not like a 

285
00:14:14,280 --> 00:14:16,280
financial bubble, but just 
something that can pop very 

286
00:14:16,280 --> 00:14:18,200
easily. 
And I think there is certainly 

287
00:14:18,200 --> 00:14:20,320
something to this. 
I mean, a lot of Americans would

288
00:14:20,320 --> 00:14:22,120
tell me, Dan, what are you 
talking about? 

289
00:14:22,120 --> 00:14:25,040
This country has no problems. 
Look at these giant trillion 

290
00:14:25,040 --> 00:14:27,720
dollar corporations that we can 
create and the Chinese cannot 

291
00:14:27,720 --> 00:14:30,200
and no one else can. 
And I don't. 

292
00:14:30,520 --> 00:14:33,400
And so again, I come coming back
to just to slightly put a 

293
00:14:33,760 --> 00:14:36,600
closest loop, which is that I 
think the US works extremely 

294
00:14:36,600 --> 00:14:38,720
well for the rich. 
And I think it cannot stay a 

295
00:14:38,720 --> 00:14:40,720
great power if it works only 
well for the rich. 

296
00:14:40,880 --> 00:14:44,400
And you know, there is something
strange about China where if 

297
00:14:44,400 --> 00:14:46,440
you're an elite, let's say 
you're some sort of an elite in 

298
00:14:46,440 --> 00:14:51,080
Beijing, you're working in tech,
who knows if your tech company 

299
00:14:51,080 --> 00:14:53,600
would be smashed by CZ and Ping 
as he did a. 

300
00:14:53,600 --> 00:14:55,800
Couple of years ago like the 
gaming companies got just sent 

301
00:14:55,800 --> 00:14:58,640
to 0. 
Online tutoring, you know, they 

302
00:14:59,120 --> 00:15:00,880
really declared to be 
nonprofits. 

303
00:15:01,560 --> 00:15:03,000
You know, let's say you're 
working in something like 

304
00:15:03,000 --> 00:15:05,280
finance. 
And then he announces a salary 

305
00:15:05,280 --> 00:15:07,960
cap, as he did two years ago, 
$300,000. 

306
00:15:07,960 --> 00:15:10,640
And maybe you need to give your 
back pay if you're within the 

307
00:15:10,640 --> 00:15:14,600
party military state elite, you 
never know when your patron 

308
00:15:14,600 --> 00:15:17,720
might be taken down by some sort
of an anti corruption purge and 

309
00:15:17,720 --> 00:15:19,920
then your entire network will 
fall. 

310
00:15:20,000 --> 00:15:22,000
And so, you know, there's 
something really precarious 

311
00:15:22,000 --> 00:15:25,760
about being rich and powerful in
China in which, you know, in the

312
00:15:25,800 --> 00:15:29,000
US, if you're rich, you can more
or less transmute a lot of your 

313
00:15:29,000 --> 00:15:32,240
wealth into political influence.
Then maybe that's bad, but it's 

314
00:15:32,240 --> 00:15:34,760
much easier to be rich here. 
But I fully agree with you that 

315
00:15:34,760 --> 00:15:37,720
there is something like very 
strange and fictitious about the

316
00:15:38,880 --> 00:15:41,520
American economy. 
You know, the contrast that I, I

317
00:15:41,520 --> 00:15:44,200
like to set up is let's think 
about Apple, you know, something

318
00:15:44,200 --> 00:15:48,600
like $3.5 trillion market value 
now spent 10 years debating 

319
00:15:48,600 --> 00:15:51,280
whether it could produce an 
electric vehicle and after. 

320
00:15:52,000 --> 00:15:55,240
It. 
And what is Xiaomi's market 

321
00:15:55,240 --> 00:15:57,880
value? 
Something like $200 billion last

322
00:15:57,880 --> 00:16:00,960
I checked. 
So the Apple is worth something 

323
00:16:00,960 --> 00:16:04,360
like 15 and nearly 20 times more
than Xiaomi. 

324
00:16:04,800 --> 00:16:07,840
And you know what would you 
rather have a company that is 

325
00:16:07,840 --> 00:16:10,440
able to build cars within four 
years of announcing it? 

326
00:16:10,440 --> 00:16:13,320
I see how we did. 
And for these cars to go win a 

327
00:16:13,320 --> 00:16:17,920
major race tracks in Nurburgring
and in Western Germany or to be 

328
00:16:17,920 --> 00:16:20,480
kind of Apple and just not, you 
know, debate this for a while 

329
00:16:20,480 --> 00:16:22,720
and then give up. 
Now, I think I would rather take

330
00:16:23,600 --> 00:16:26,360
Salmi. 
And I think this is less an 

331
00:16:26,360 --> 00:16:29,800
indictment of, you know, Apple 
than an indictment of the 

332
00:16:29,800 --> 00:16:32,280
financial system in the US, 
which assigns these crazy 

333
00:16:32,280 --> 00:16:36,760
valuations to highly profitable 
companies, but these mostly 

334
00:16:36,760 --> 00:16:38,040
software companies. 
Yeah. 

335
00:16:38,040 --> 00:16:40,920
So Apple is a hardware coming 
also. 

336
00:16:40,920 --> 00:16:44,960
But yes, your point is correct. 
So my view on this is looking 

337
00:16:44,960 --> 00:16:48,840
ahead to 20352040, maybe in 
20-30. 

338
00:16:50,640 --> 00:16:52,480
You know, I've written about 
this, but to briefly, Summers, I

339
00:16:52,480 --> 00:16:55,080
think I wouldn't even, I don't 
even think of it as the United 

340
00:16:55,080 --> 00:16:56,600
States. 
I think of it as the dis United 

341
00:16:56,600 --> 00:16:59,800
States because like, for 
example, there's no Korea, 

342
00:16:59,960 --> 00:17:03,120
there's only North Korea and 
South Korea, right? 

343
00:17:03,240 --> 00:17:06,280
Like it's not actually, you 
can't talk about Korea and 

344
00:17:06,280 --> 00:17:08,400
Korea's position on this in 
Korea because North Korea and 

345
00:17:08,400 --> 00:17:10,400
South Korea literally have 
different foreign policies. 

346
00:17:10,400 --> 00:17:12,440
They're opposed to each other. 
They're different mores. 

347
00:17:12,760 --> 00:17:15,839
They both might write in Hungle,
but they're saying totally 

348
00:17:15,839 --> 00:17:17,760
different things in different 
vocabularies, you know, 

349
00:17:17,760 --> 00:17:19,280
premises, all that kind of 
stuff, right. 

350
00:17:19,720 --> 00:17:22,920
So there's. 
Only one Korea matters to us. 

351
00:17:22,920 --> 00:17:25,440
You know only one Korea is in 
the global economy producing any

352
00:17:25,440 --> 00:17:26,800
memory chips, right? 
That's right. 

353
00:17:26,800 --> 00:17:29,480
South Korea, exactly right. 
But North Korea obviously it's 

354
00:17:29,480 --> 00:17:30,640
pointing missiles and so it's 
over. 

355
00:17:30,640 --> 00:17:32,560
But yes, correct. 
So we can't talk about Korea. 

356
00:17:32,560 --> 00:17:33,800
We have about South Korea, North
Korea. 

357
00:17:33,800 --> 00:17:36,360
In the same way I don't think we
can talk about America. 

358
00:17:36,720 --> 00:17:39,480
We can talk about blue America, 
red America and actually Tech 

359
00:17:39,480 --> 00:17:43,160
America. 
And those are like 3 separate 

360
00:17:43,160 --> 00:17:46,080
groups. 
And whatever you would hear a 

361
00:17:46,080 --> 00:17:51,040
defense of America, it's almost 
always coming from tech America 

362
00:17:51,040 --> 00:17:54,080
talking about the trillion 
dollar companies or sometimes 

363
00:17:54,120 --> 00:17:57,880
red America talking about, well,
we can still reindustrialize and

364
00:17:58,080 --> 00:18:01,000
we still have the 1945 spirit 
and so on and so forth. 

365
00:18:01,520 --> 00:18:05,560
And blue America is sort of not 
really, you know, that animated 

366
00:18:05,560 --> 00:18:08,200
in terms of its defense of 
democracy and so on and so forth

367
00:18:08,200 --> 00:18:12,120
nowadays. 
But they were a few years ago in

368
00:18:12,120 --> 00:18:17,320
my view at least. 
Maybe you'll disagree is like 

369
00:18:17,320 --> 00:18:23,280
tech, America is actually the 
Internet and it overlaps with 

370
00:18:23,320 --> 00:18:27,800
European tech and Indian tech 
and especially crypto, which is 

371
00:18:28,120 --> 00:18:30,760
which I know you don't love 
crypto or you're probably 

372
00:18:30,760 --> 00:18:34,200
skeptical about crypto, but the 
way I think you know how like 

373
00:18:34,200 --> 00:18:37,040
when Rome fell, what survived 
was Christianity interest, 

374
00:18:37,040 --> 00:18:40,400
right? 
In my view, like, like America 

375
00:18:40,400 --> 00:18:43,360
is going to go to zero and what 
will survive is the Internet. 

376
00:18:44,720 --> 00:18:48,800
And the bad version of the 
American legal system is the one

377
00:18:48,800 --> 00:18:51,640
you mentioned, which is 
obstructing and constricting and

378
00:18:51,640 --> 00:18:53,680
so on and so forth, and it's 
being abused by all these 

379
00:18:53,680 --> 00:18:56,880
lawyers and so on and so forth. 
But the good version is the 

380
00:18:56,880 --> 00:19:00,520
Internet legal system, which is 
a predictable order, and it's 

381
00:19:00,520 --> 00:19:02,240
rule of code as opposed to rule 
of law. 

382
00:19:02,240 --> 00:19:05,520
And it protects property rights 
and has the best monetary policy

383
00:19:05,520 --> 00:19:07,560
in the world and has smart 
contracts and so on. 

384
00:19:08,280 --> 00:19:10,840
And even if Americans and 
Chinese can't trust each other's

385
00:19:10,840 --> 00:19:14,600
legal systems, actually lots of 
Chinese people do appreciate 

386
00:19:14,600 --> 00:19:19,480
Bitcoin and BTC is actually the 
genuine balance to CCP as 

387
00:19:19,480 --> 00:19:21,000
opposed to USA which is going to
zero. 

388
00:19:21,000 --> 00:19:24,320
Let me pause there as politics 
and say about that. 

389
00:19:24,480 --> 00:19:28,480
That's a crazy idea man. 
That was BTC is going to be the 

390
00:19:28,480 --> 00:19:31,560
alternative against CCP when USA
goes to zero. 

391
00:19:31,560 --> 00:19:33,080
I think that's a That's a great 
phrase. 

392
00:19:33,400 --> 00:19:34,840
You should tweet that if you 
haven't yet. 

393
00:19:35,080 --> 00:19:37,120
I have tweeted that I have to. 
That's actually the. 

394
00:19:37,280 --> 00:19:39,840
So just to explain, it's more 
than just a meme. 

395
00:19:39,840 --> 00:19:41,440
It's like a compact phrase, but 
right. 

396
00:19:41,720 --> 00:19:45,800
Like in the 20th century, the 
contestation was symmetrical 

397
00:19:45,800 --> 00:19:49,320
between EUR, Asian communism and
Anglospheric capitalism. 

398
00:19:49,320 --> 00:19:53,240
It was like tank for tank, plane
for plane, USA versus USR, you 

399
00:19:53,240 --> 00:19:56,080
know, and so and so forth. 
But I think in the 21st century,

400
00:19:56,080 --> 00:19:57,760
it's asymmetric. 
It's between China and the 

401
00:19:57,760 --> 00:20:00,800
Internet. 
China is like Apple, vertically 

402
00:20:00,800 --> 00:20:03,520
integrated with the nation. 
You know, the Han Chinese 

403
00:20:03,720 --> 00:20:06,440
language, culture, thousands 
years of culture, the the, the 

404
00:20:06,440 --> 00:20:09,000
party state. 
And then of course, the network,

405
00:20:09,000 --> 00:20:11,320
which is the firewall and the 
apps and all the Chinese tech 

406
00:20:11,320 --> 00:20:13,120
companies that's vertically 
integrated and something like 

407
00:20:13,120 --> 00:20:16,320
97% of people of Han Chinese 
descent are in this sort of 

408
00:20:16,480 --> 00:20:19,680
vertically integrated, very 
functional Voltron, this meta 

409
00:20:19,680 --> 00:20:21,880
Organism that coordinates all 
these people in this really, 

410
00:20:21,880 --> 00:20:24,960
really powerful way. 
And the other summing 7 billion 

411
00:20:24,960 --> 00:20:30,200
people are going to initially 
and preps for a long time be the

412
00:20:30,200 --> 00:20:33,720
weaker of the two sides. 
And that'll be the Internet, 

413
00:20:33,720 --> 00:20:39,360
which is messy, Android, 
chaotic, but also more free and,

414
00:20:39,840 --> 00:20:42,680
and that's how I think things 
square up after the fall of the 

415
00:20:42,680 --> 00:20:44,920
dollar. 
Balaji, I think we're this 

416
00:20:44,920 --> 00:20:47,360
conversation is going to be 
amazing when it's published. 

417
00:20:47,840 --> 00:20:50,440
I hope everybody watches this on
video because you'll see me 

418
00:20:50,440 --> 00:20:53,720
smiling this entire time because
I love your catch phrases. 

419
00:20:53,720 --> 00:20:56,360
I love these on tweets. 
I'm still hung up by this idea 

420
00:20:56,800 --> 00:21:01,880
of BTC being being the 
alternative against USA and CCP.

421
00:21:02,120 --> 00:21:06,120
But then let me rephrase this. 
Which is that Oh well. 

422
00:21:06,320 --> 00:21:10,920
It seems like USA and CCP must 
both hate BTC and SO because it 

423
00:21:10,920 --> 00:21:12,600
is representing the alternative 
order. 

424
00:21:12,720 --> 00:21:15,360
What if they crush BTCI? 
Don't know if BTC is powerful 

425
00:21:15,360 --> 00:21:16,720
enough. 
Well, that's the question. 

426
00:21:16,720 --> 00:21:19,760
So basically the the way I put 
it in the network state is 

427
00:21:19,760 --> 00:21:24,400
actually, I say CCPNYTBTC the 
party, the paper and the 

428
00:21:24,400 --> 00:21:26,880
protocol are sort of like a 
rock, paper scissors kind of 

429
00:21:26,880 --> 00:21:29,760
thing. 
And when I wrote it, NYT still 

430
00:21:29,760 --> 00:21:33,600
hadn't been defeated. 
But with Elon X is basically 

431
00:21:33,600 --> 00:21:37,000
defeated. 
NYTI think NYT has lost its 

432
00:21:37,000 --> 00:21:39,440
hegemony and so and so forth. 
So it's sort of like, you know, 

433
00:21:40,160 --> 00:21:44,440
in the, in the mid 20th century,
there was communism, fascism and

434
00:21:44,520 --> 00:21:46,880
and democratic capitalism. 
And two of them teamed up on the

435
00:21:46,880 --> 00:21:49,320
3rd and then the other two 
fought amongst themselves. 

436
00:21:49,320 --> 00:21:51,840
And so sort of, so I feel NYT is
just being knocked 

437
00:21:51,840 --> 00:21:53,600
out-of-the-box of the shadow of 
what it was. 

438
00:21:53,600 --> 00:21:55,200
I don't think it's going to be 
coming back. 

439
00:21:56,760 --> 00:21:59,840
And because it depended on being
ideologically hegemonic. 

440
00:22:00,600 --> 00:22:04,560
So CCB versus BTC, you're right 
that there's like that is a 

441
00:22:04,560 --> 00:22:07,240
genuine polarity because, you 
know, for example, in the early 

442
00:22:07,240 --> 00:22:10,560
20th century, the swing vote in 
Germany was like the German 

443
00:22:10,560 --> 00:22:14,600
worker, like the Soviets would 
appeal to them as a worker and 

444
00:22:14,600 --> 00:22:16,120
the Nazis would appeal to them 
as a German. 

445
00:22:16,120 --> 00:22:18,640
So 1 was appealing the base of 
like class, another appealing on

446
00:22:18,640 --> 00:22:21,000
the base of race, right? 
And that was like the swing vote

447
00:22:22,320 --> 00:22:26,200
with this last election, 
somebody like the black American

448
00:22:26,200 --> 00:22:29,320
or female American or gay 
American, the wokes would appeal

449
00:22:29,320 --> 00:22:32,200
to them as black or female or 
gay, and the magus would appeal 

450
00:22:32,200 --> 00:22:34,840
to them as American, right? 
That was like the swing vote, 

451
00:22:35,400 --> 00:22:40,320
right in the center, OK. 
And I think in the dispensation 

452
00:22:40,320 --> 00:22:43,360
that is to come, the swing vote 
will actually be the Chinese 

453
00:22:43,360 --> 00:22:47,160
technologists, because the 
Chinese will appeal on the basis

454
00:22:47,160 --> 00:22:49,600
of China will appeal on the base
of race and the interest will 

455
00:22:49,600 --> 00:22:51,560
appeal on the base of class, 
right? 

456
00:22:51,880 --> 00:22:54,240
So that's often a kind of thing 
like you see what I'm saying, 

457
00:22:54,240 --> 00:22:55,920
right? 
Like sometimes it's the left 

458
00:22:55,920 --> 00:22:58,360
that appeals on the basis of in,
in the case of the books, they'd

459
00:22:58,360 --> 00:22:59,800
appeal on the base of race or 
genetics. 

460
00:23:00,160 --> 00:23:02,400
And the mag is actually we're 
appealing on the base of class 

461
00:23:02,560 --> 00:23:05,080
in sense of membership in the 
American class, you know, which 

462
00:23:05,080 --> 00:23:07,160
is like a software thing, 
whereas race is like a hardware 

463
00:23:07,160 --> 00:23:08,360
thing. 
You know, let me pause there. 

464
00:23:08,440 --> 00:23:10,440
Yeah, maybe. 
I mean, I wonder. 

465
00:23:10,440 --> 00:23:14,080
I mean, first I would wonder 
about your idea that Elon has 

466
00:23:14,080 --> 00:23:17,760
defeated MIT. 
I think Elon has certainly 

467
00:23:17,760 --> 00:23:20,080
defeated someone and that 
someone is himself. 

468
00:23:20,440 --> 00:23:23,800
And I think Elon has been 
extremely adept at defeating 

469
00:23:23,800 --> 00:23:25,400
himself. 
I mean he got himself out of 

470
00:23:25,400 --> 00:23:27,840
being Co president. 
How's Tesla doing? 

471
00:23:27,840 --> 00:23:29,400
I don't know if it doesn't look 
great. 

472
00:23:29,400 --> 00:23:30,680
How's X doing? 
I'm not sure. 

473
00:23:30,680 --> 00:23:32,240
I think NYT is winning this 
round. 

474
00:23:32,360 --> 00:23:33,320
NYT. 
But you think so? 

475
00:23:33,320 --> 00:23:35,840
It's pretty good to go see it. 
Somebody here Good. 

476
00:23:36,280 --> 00:23:39,640
Yeah, I mean, I, I, I think 
that, you know, I'm, I don't 

477
00:23:39,640 --> 00:23:42,680
know, I'm, I'm almost mostly off
X at this point, but I'm, I'm, 

478
00:23:42,680 --> 00:23:44,560
I'm reading more NYT. 
So maybe I'm not the target 

479
00:23:44,560 --> 00:23:46,000
audience, maybe I'm defeating 
myself. 

480
00:23:46,320 --> 00:23:49,120
But I would also say that, you 
know, I think the only force 

481
00:23:49,400 --> 00:23:53,560
that is more powerful than the 
USA, the only force capable of 

482
00:23:53,560 --> 00:23:57,160
defeating the USA is the USA, 
and the only force capable of 

483
00:23:57,160 --> 00:24:01,000
defeating China is the CCP. 
And I see that both of these 

484
00:24:01,640 --> 00:24:05,680
nation states have become 
extremely powerful at beating 

485
00:24:05,680 --> 00:24:09,000
the shit out of themselves. 
And I think these humiliating 

486
00:24:09,000 --> 00:24:11,720
self beatings will continue 
until morale improves. 

487
00:24:12,000 --> 00:24:15,240
But I think that, you know, 
Biden did a terrible job. 

488
00:24:15,640 --> 00:24:18,160
Trump is doing is being kind of 
apocalyptic. 

489
00:24:18,480 --> 00:24:21,920
And I think they have a good 
chance of unraveling the United 

490
00:24:21,920 --> 00:24:22,560
States. 
Yes. 

491
00:24:22,960 --> 00:24:26,240
And I think the Chinese have 
been driving a lot of its 

492
00:24:26,240 --> 00:24:29,520
smartest people of a lot of its 
most entrepreneurial people, a 

493
00:24:29,520 --> 00:24:31,720
lot of its best creatives out of
the country. 

494
00:24:31,720 --> 00:24:36,280
And I think the CCP will also 
defeat the Chinese ethno state. 

495
00:24:36,440 --> 00:24:37,920
They'll defeat the great 
rejuvenation. 

496
00:24:38,040 --> 00:24:39,320
So that's my model. 
I'll pause there. 

497
00:24:39,320 --> 00:24:41,880
What do you think? 
OK, So what I think is I think 

498
00:24:42,000 --> 00:24:47,520
XI is a lot like FDR in the 30s 
where he was the least bad in 

499
00:24:47,520 --> 00:24:48,720
the sense of like, there's lots 
of things. 

500
00:24:48,720 --> 00:24:52,240
I mean, FDR in turn the 
Japanese, FDR basically did the 

501
00:24:52,240 --> 00:24:55,600
gold seizures. 
You know, FDR essentially 

502
00:24:56,000 --> 00:24:58,520
pushed, I mean, he used the 
government against all of his 

503
00:24:58,520 --> 00:25:00,360
enemies. 
He went after Andrew Mellon. 

504
00:25:00,560 --> 00:25:03,120
He pushed the great fortunes 
into foundations. 

505
00:25:03,320 --> 00:25:07,040
People credibly alleged that he,
you know, pushed the Japanese 

506
00:25:07,040 --> 00:25:09,640
into World War 2. 
And so and so with all kinds of 

507
00:25:09,640 --> 00:25:13,600
stuff have he ran for four terms
which broke all previous norms, 

508
00:25:13,880 --> 00:25:16,200
blah, blah blah, all kinds of 
stuff FDR did right. 

509
00:25:16,920 --> 00:25:18,600
People think he made the Great 
Depression great. 

510
00:25:18,600 --> 00:25:22,040
He prolonged it. 
But net, net, when all the dust 

511
00:25:22,040 --> 00:25:26,440
settled, ultimately the US was 
in the strongest relative 

512
00:25:26,440 --> 00:25:28,720
position and it screwed up the 
least. 

513
00:25:29,120 --> 00:25:30,720
Not that it didn't screw up. 
Go ahead. 

514
00:25:31,160 --> 00:25:32,640
Yes, go ahead. 
Right. 

515
00:25:32,640 --> 00:25:35,360
It screwed up the least out of 
the Soviet Union, which has 

516
00:25:35,360 --> 00:25:37,360
gotten killed. 
Nazi Germany, which has gotten 

517
00:25:37,360 --> 00:25:40,360
itself blown up. 
The Japanese got naked the US 

518
00:25:40,480 --> 00:25:44,680
both, both through competence 
and through luck or whatever 

519
00:25:44,680 --> 00:25:47,440
screw up the least out of them 
and was therefore the most 

520
00:25:47,440 --> 00:25:52,240
powerful in that dispensation. 
I think China's big instinct 

521
00:25:52,560 --> 00:25:54,480
because the century of 
humiliation, you know how like a

522
00:25:54,520 --> 00:25:58,480
great founder will take a lower 
valuation but always preserve 

523
00:25:58,480 --> 00:26:02,400
control, right? 
My view, and you can probably 

524
00:26:02,400 --> 00:26:05,000
fill in the gaps on this is 
especially also seeing what 

525
00:26:05,000 --> 00:26:07,480
happened to Japan with the Plaza
accords in the 80s, right? 

526
00:26:07,760 --> 00:26:11,760
Lots of people, our friends will
say something like, oh, you 

527
00:26:11,760 --> 00:26:15,200
know, people were saying Japan 
was going to beat us in the 80s 

528
00:26:15,200 --> 00:26:18,040
and therefore it'll happen 
exactly like that and we're 

529
00:26:18,040 --> 00:26:19,120
going to beat China the same 
way. 

530
00:26:19,120 --> 00:26:23,120
But Japan didn't just lose, it 
was basically killed because 

531
00:26:23,320 --> 00:26:25,680
it's it's like AUS occupied 
country, right? 

532
00:26:25,680 --> 00:26:28,600
There's a military base there, 
you know, thousand 10s thousands

533
00:26:28,600 --> 00:26:30,360
of troops. 
Japan's constitution is written 

534
00:26:30,400 --> 00:26:34,400
by the US and most importantly, 
and Japan's not a sovereign. 

535
00:26:34,400 --> 00:26:37,400
One way of putting that in 2017,
actually, NYT released an 

536
00:26:37,400 --> 00:26:40,320
article that said in 2010 China 
had killed a bunch of American 

537
00:26:40,320 --> 00:26:43,520
spies in in China, right? 
Japan can never do that. 

538
00:26:43,520 --> 00:26:47,320
That means China has 
deliberations that America can't

539
00:26:47,320 --> 00:26:50,000
see in a way Japan couldn't. 
And so Japan with the Plaza 

540
00:26:50,000 --> 00:26:51,920
cords, it was handicapped. 
It was forced to buy U.S. 

541
00:26:51,920 --> 00:26:53,400
Treasuries. 
It's whole decade of 

542
00:26:53,600 --> 00:26:55,800
stagnations, you know, began at 
that point. 

543
00:26:56,120 --> 00:26:58,000
And China's hyper conscious of 
not going through that. 

544
00:26:58,360 --> 00:27:02,640
So China at all, at all stages, 
it took less money to preserve 

545
00:27:02,640 --> 00:27:04,960
more sovereignty. 
It took worse terms in some ways

546
00:27:04,960 --> 00:27:07,400
to preserve, right. 
So because of that instinct, 

547
00:27:07,840 --> 00:27:10,400
that wall building, you know, 
for example, it took all these 

548
00:27:10,400 --> 00:27:13,000
hits when it banned foreign 
social media and it built its 

549
00:27:13,000 --> 00:27:15,120
own right, all these PR hits 
constantly. 

550
00:27:15,120 --> 00:27:17,520
And it was willing to do that to
preserve sovereignty. 

551
00:27:18,360 --> 00:27:22,320
I think that's going to end up 
being the farsighted decision, 

552
00:27:22,560 --> 00:27:24,560
for better or worse in in this 
century. 

553
00:27:24,560 --> 00:27:26,960
For example, you see what 
happened with Ukraine, where 

554
00:27:26,960 --> 00:27:28,920
they're scripting drones on 
Russian soil. 

555
00:27:29,000 --> 00:27:29,440
No. 
What? 

556
00:27:29,680 --> 00:27:32,920
What does that mean? 
So like a few months ago, the 

557
00:27:32,920 --> 00:27:37,360
Ukrainians managed to like have 
some exploding drones activate 

558
00:27:37,360 --> 00:27:39,640
within Russia and go blow things
up, right? 

559
00:27:40,240 --> 00:27:43,080
So they could, they could 
control things remotely, right? 

560
00:27:43,400 --> 00:27:46,360
So in my view, that means, and 
I, and I talked with this 

561
00:27:46,360 --> 00:27:48,360
actually 12 years ago, but now 
it's actually becoming real 

562
00:27:48,800 --> 00:27:51,160
digital borders and physical 
borders are like the same thing,

563
00:27:53,160 --> 00:27:54,960
right? 
Your fire, the Great Firewall, 

564
00:27:54,960 --> 00:27:59,040
will be seeing in some ways a 
very farsighted thing because it

565
00:27:59,040 --> 00:28:02,560
is digital hard borders. 
People won't be able to script 

566
00:28:02,680 --> 00:28:04,760
drones on Chinese soil. 
They won't be able to script 

567
00:28:04,760 --> 00:28:07,960
humanoids in Chinese soil. 
They won't be able to also send 

568
00:28:07,960 --> 00:28:10,600
in destabilize memes, 
destabilize memes into Chinese 

569
00:28:10,600 --> 00:28:14,000
soil, right? 
Whereas the unmoderated 

570
00:28:14,000 --> 00:28:18,040
Anglospheric Internet will just 
be filled with all of these 

571
00:28:18,240 --> 00:28:22,320
scissor statements and crazy 
things that are all driving 

572
00:28:22,320 --> 00:28:23,840
everybody crazy, as we're 
seeing. 

573
00:28:25,320 --> 00:28:27,960
And so China's also insulated 
against that because people only

574
00:28:27,960 --> 00:28:31,200
speak Chinese, so and, and G has
taken English out of the 

575
00:28:31,200 --> 00:28:32,640
schools. 
So they've got like multiple 

576
00:28:32,640 --> 00:28:35,440
levels of firewall and they can 
just, like, sip green tea and 

577
00:28:35,440 --> 00:28:37,760
everybody is shooting each 
other, you know, in other 

578
00:28:37,760 --> 00:28:39,520
countries as the dollar goes 
away. 

579
00:28:41,040 --> 00:28:44,960
Like that is a reasonably 
compelling idea. 

580
00:28:45,640 --> 00:28:48,120
I think that. 
I have a solution for this, but 

581
00:28:48,320 --> 00:28:49,440
go ahead. 
Yeah, yeah, yeah. 

582
00:28:50,000 --> 00:28:55,040
I feel like the Chinese are, 
They've really taken Napoleon's 

583
00:28:55,200 --> 00:28:58,920
maxim to heart, that the game 
goes to he who does not lose. 

584
00:28:59,400 --> 00:29:01,720
Now obviously, Napoleon. 
The do nothing win meme. 

585
00:29:03,080 --> 00:29:06,200
Napoleon won like nearly all his
battles, but he just lost 

586
00:29:06,200 --> 00:29:08,040
Waterloo and a couple of others,
right? 

587
00:29:08,480 --> 00:29:11,160
And then he lost and he lost. 
He lost badly, right? 

588
00:29:11,920 --> 00:29:14,880
And so I think the Chinese are 
very intent on not losing. 

589
00:29:15,160 --> 00:29:18,280
And there is certainly some good
things that I see that the 

590
00:29:18,280 --> 00:29:20,000
Chinese are doing. 
I mean, I agree that the Great 

591
00:29:20,000 --> 00:29:22,640
Firewall in retrospect looks 
like a good decision. 

592
00:29:22,640 --> 00:29:26,200
You take a lot of PR heads. 
But, you know, as I wrote in one

593
00:29:26,200 --> 00:29:29,000
of my letters, it becomes really
difficult to say that the 

594
00:29:29,240 --> 00:29:32,360
Chinese really wanted the 
Internet in the late 20 tens 

595
00:29:32,360 --> 00:29:36,760
when Congress was regularly 
dragging Zuckerberg and Twitter 

596
00:29:36,760 --> 00:29:39,800
and everyone else into Congress 
to say your products suck, 

597
00:29:40,120 --> 00:29:42,400
you're destroying us, you're 
killing us, man. 

598
00:29:42,400 --> 00:29:45,080
And so, you know, I think like, 
you can't tell the Chinese you 

599
00:29:45,080 --> 00:29:46,600
really need these products in 
your state. 

600
00:29:47,000 --> 00:29:49,200
And I think that is that makes a
lot of good sense. 

601
00:29:49,760 --> 00:29:53,840
I take a look at what is going 
on with AI today and you know, 

602
00:29:53,840 --> 00:29:57,560
last week we have Sora 2 and we 
are able to produce like 

603
00:29:57,560 --> 00:30:03,000
hyerrealistic slop that like 
friends have told me that their 

604
00:30:03,000 --> 00:30:06,040
family members have were not 
able to distinguish that this 

605
00:30:06,040 --> 00:30:08,000
was an AI generated cameo, 
right? 

606
00:30:08,000 --> 00:30:09,240
And I think that's kind of 
incredible. 

607
00:30:09,480 --> 00:30:12,080
Like why are we so focused on 
releasing this stuff? 

608
00:30:12,120 --> 00:30:15,800
And this seems like crazy 
decisions being taken by the AI 

609
00:30:15,800 --> 00:30:19,000
labs without any real 
consideration for how the state,

610
00:30:19,320 --> 00:30:20,600
how the people might actually 
use it. 

611
00:30:21,000 --> 00:30:23,440
And so, you know, there is a 
sense in which I think that 

612
00:30:23,560 --> 00:30:27,360
China just wants to be totally 
stable and then, you know, close

613
00:30:27,360 --> 00:30:29,920
the doors and the Celestial 
Empire and then let the 

614
00:30:29,920 --> 00:30:33,720
Barbarians tear each other apart
and eat some mochi balls and 

615
00:30:33,720 --> 00:30:35,720
then drink green tea. 
Yeah, I mean, that sounds good. 

616
00:30:35,920 --> 00:30:40,720
But but I think that there is a 
problem here, which is that the 

617
00:30:40,720 --> 00:30:44,320
only force capable of hurting 
China is the CCP. 

618
00:30:44,600 --> 00:30:47,720
In which I mean in my book I 
write about how. 

619
00:30:48,280 --> 00:30:51,000
They 0 COVID. 
Had 0 COVID and they had the one

620
00:30:51,000 --> 00:30:54,240
child policy in which they were 
really dumb and they were really

621
00:30:54,800 --> 00:30:58,280
autistic about thinking in such 
literal minded terms. 

622
00:30:58,640 --> 00:31:01,560
Oh there's going to be 
ecological doom if we have 

623
00:31:01,560 --> 00:31:04,160
overpopulation. 
The solution is one child per 

624
00:31:04,160 --> 00:31:07,800
couple and then, you know, 
conduct 300 million abortions 

625
00:31:08,080 --> 00:31:11,920
over this period or, oh, you 
know, we don't care about people

626
00:31:11,920 --> 00:31:14,640
who need chemotherapy or need 
dialysis treatment. 

627
00:31:14,840 --> 00:31:17,280
The only thing that we care 
about is preventing the spread 

628
00:31:17,280 --> 00:31:20,200
of the COVID virus. 
And so we are going to, you 

629
00:31:20,200 --> 00:31:23,560
know, prevent the spread of the 
virus at all costs. 

630
00:31:23,800 --> 00:31:26,160
And so, you know, here is where 
I think the engineers who their 

631
00:31:26,160 --> 00:31:30,520
literal mindedness will not be 
able to leave the people alone. 

632
00:31:30,960 --> 00:31:34,680
I think the best case scenario 
is for China is if the CCP 

633
00:31:34,680 --> 00:31:38,640
decides to spend all day sipping
green tea and then just leave 

634
00:31:38,640 --> 00:31:40,920
the people alone. 
And I don't, I don't think 

635
00:31:40,920 --> 00:31:42,760
they're going to do that. 
I think they're going to figure 

636
00:31:42,760 --> 00:31:45,040
out new and novel ways to 
destroy the country themselves. 

637
00:31:45,040 --> 00:31:48,080
What do you think? 
So it's interesting because I, 

638
00:31:48,080 --> 00:31:51,200
I, I want to make the case for 
China and then I'll make the 

639
00:31:51,200 --> 00:31:56,400
case against China, right? 
But that's to say, let's see, 

640
00:31:56,400 --> 00:31:59,680
there's like V1V2V3V4 of an 
argument. 

641
00:31:59,680 --> 00:32:01,600
You know what I mean? 
I think maybe you and I are on 

642
00:32:01,600 --> 00:32:05,280
V4, but let me, let me, let me 
do the V1V2 just get to our 

643
00:32:05,280 --> 00:32:06,520
progression, right? 
Because you go to under 

644
00:32:06,520 --> 00:32:08,480
sophisticated arguments, you get
the sophisticated one, right? 

645
00:32:08,480 --> 00:32:13,080
OK, so the V1 is kind of the 
naive like that's a Chinese 

646
00:32:13,080 --> 00:32:14,840
Communist Party. 
They're, you know, and people 

647
00:32:14,840 --> 00:32:18,280
think they're all Maoists and 
it's slave labor and so on and 

648
00:32:18,280 --> 00:32:20,200
so forth. 
And that's also that's a or that

649
00:32:20,200 --> 00:32:22,640
the still the ideological mouse.
If you've got a very outdated 

650
00:32:22,640 --> 00:32:25,760
view of what China is, they see 
the Chinese cities and their 

651
00:32:25,760 --> 00:32:28,920
response is, Oh my God, there's 
LE DS on the cities. 

652
00:32:28,920 --> 00:32:31,480
They don't realize the point is 
the cities didn't exist 30 years

653
00:32:31,480 --> 00:32:33,320
ago, right? 
And they're actually very clean 

654
00:32:33,400 --> 00:32:37,480
and beautiful or whatever. 
Then the V2 is, I'm not 

655
00:32:37,480 --> 00:32:41,040
attacking him, but let's say 
somebody like Arno Bertrand on 

656
00:32:41,120 --> 00:32:45,520
X, right, or Carl Zha, which is 
basically, you know, I welcome 

657
00:32:45,520 --> 00:32:47,520
our new Chinese overlord. 
Someone, someone will say 

658
00:32:47,520 --> 00:32:49,920
something like that, right? 
And it's like their case is 

659
00:32:49,920 --> 00:32:51,800
something like America's been 
blowing up the Middle East. 

660
00:32:52,000 --> 00:32:56,160
China's been building up Africa.
America just has a bailout 

661
00:32:56,160 --> 00:32:59,000
economy for the wealthy. 
China has shared prosperity for 

662
00:32:59,000 --> 00:33:01,040
everybody. 
China hasn't started any wars. 

663
00:33:01,040 --> 00:33:02,280
America's starting all these 
wars. 

664
00:33:02,600 --> 00:33:05,840
China's internally united, 
America's totally divided and 

665
00:33:05,840 --> 00:33:08,600
actually also with these 
tariffs, China's been doing 

666
00:33:08,600 --> 00:33:11,400
trade deal after trade deal. 
And by the way, that also is why

667
00:33:11,400 --> 00:33:16,720
I think Xiaomi or you know, 
BYDDGI, their market caps will 

668
00:33:16,720 --> 00:33:20,360
probably rise because Chinese 
market, Chinese market axis has 

669
00:33:20,360 --> 00:33:24,360
expanded as functional as trade 
deals that, you know, she has 

670
00:33:24,360 --> 00:33:26,280
recently inked as a function of 
the reverse thing on the 

671
00:33:26,280 --> 00:33:29,960
tariffs. 
OK, then the V3, so that is like

672
00:33:30,160 --> 00:33:33,480
the first is, you know, USA is 
still 1945, it's going to win, 

673
00:33:33,480 --> 00:33:35,640
China sucks. 
The second is actually China's 

674
00:33:35,640 --> 00:33:37,560
super strong and it's good. 
Everything will be fine. 

675
00:33:38,160 --> 00:33:42,360
The V3 argument is basically the
US was on balance better than 

676
00:33:42,360 --> 00:33:48,240
the Soviet Union from 45 to 91. 
But then after it won, it became

677
00:33:48,240 --> 00:33:51,360
by degrees worse and worse and 
worse behaved and started 

678
00:33:51,360 --> 00:33:53,120
bombing people and abusing its 
power and so on. 

679
00:33:53,120 --> 00:33:55,640
And one way I think about it is 
at home, China's one party 

680
00:33:55,640 --> 00:33:58,480
state, but abroad it's a two 
party state because it's checked

681
00:33:58,480 --> 00:34:03,080
by America Congress. 
The America at home is a two 

682
00:34:03,080 --> 00:34:04,600
party state with Democrat, 
Republican. 

683
00:34:04,600 --> 00:34:06,840
But abroad was a one party state
where it blow up everybody 

684
00:34:06,840 --> 00:34:10,360
because it wasn't checked. 
It's an interesting way of 

685
00:34:10,360 --> 00:34:12,080
thinking about the last 30 years
or so, right? 

686
00:34:12,560 --> 00:34:17,080
And now America's coming home 
because, you know, it's the 

687
00:34:17,080 --> 00:34:19,800
National Defense strategy, if 
it's real, says pulling troops 

688
00:34:19,800 --> 00:34:23,120
back from Asia like it's 
becoming a country non empire. 

689
00:34:23,120 --> 00:34:25,280
It's giving up the imperial 
burden like the end of the 

690
00:34:25,280 --> 00:34:28,960
Soviet Union. 
And so the bad part, the V3, is 

691
00:34:28,960 --> 00:34:32,480
China will expand in such a way 
that it actually has unchecked 

692
00:34:32,480 --> 00:34:34,480
power. 
And even, for example, 0 COVID 

693
00:34:35,400 --> 00:34:37,840
would never have actually been 
undone in China without the 

694
00:34:37,840 --> 00:34:40,800
signal from other countries 
because the Chinese diaspora 

695
00:34:40,800 --> 00:34:44,040
knew that 0 COVID wasn't working
elsewhere because other 

696
00:34:44,040 --> 00:34:46,400
countries were, you know, that 
that external signal was 

697
00:34:46,400 --> 00:34:48,679
certainly filtering into China 
in some ways. 

698
00:34:49,560 --> 00:34:51,760
And people were aware that 
Chinese people didn't have to 

699
00:34:51,760 --> 00:34:53,719
live like this. 
And that was part of the signal.

700
00:34:54,199 --> 00:34:57,840
And I think another part of it 
is she just wanted to win his re

701
00:34:57,840 --> 00:35:00,960
election in 2022. 
And 0 COVID was sort of a way to

702
00:35:00,960 --> 00:35:03,240
winkle out anybody who wasn't 
super loyal to him. 

703
00:35:03,560 --> 00:35:06,920
And then right after, you know, 
I think the November 2022 

704
00:35:07,440 --> 00:35:11,400
Congress, then they unlocked 
everything. 

705
00:35:11,400 --> 00:35:14,560
So it wasn't really about 0 
COVID, it was about third term 

706
00:35:15,600 --> 00:35:17,680
or fourth term, whatever, you 
know, and NTH term. 

707
00:35:19,960 --> 00:35:23,720
And so then the V4 would 
basically say, OK, the USA is 

708
00:35:23,720 --> 00:35:26,840
going to 0. 
It's it's not 36 trillion debt, 

709
00:35:26,840 --> 00:35:29,320
it's 175 trillion debt. 
The dollar is being devalued 

710
00:35:29,320 --> 00:35:31,280
against gold. 
It's dropped by 100 million X 

711
00:35:31,280 --> 00:35:34,040
against Bitcoin. 
It's pulling back its troops. 

712
00:35:34,600 --> 00:35:36,760
People are shooting each other 
domestically. 

713
00:35:37,760 --> 00:35:39,800
It's telling NATO to go fight 
for itself. 

714
00:35:40,160 --> 00:35:43,200
It's it's basically sanctioning 
itself on trade, essentially 

715
00:35:43,200 --> 00:35:44,760
withdrawing itself from world 
affairs. 

716
00:35:45,040 --> 00:35:46,800
It's like, you know, have you 
seen a steel cage match? 

717
00:35:46,920 --> 00:35:49,320
Yeah, Yeah. 
So imagine, I imagine like a new

718
00:35:49,320 --> 00:35:53,680
Iron Curtain, like a steel cage 
UFC Octagon thing descending 

719
00:35:53,680 --> 00:35:57,240
over America. 
And all talent is told go home. 

720
00:35:57,560 --> 00:35:59,160
All the researchers are told to 
go home. 

721
00:35:59,520 --> 00:36:01,840
All the wealth is getting going 
to the Internet. 

722
00:36:02,040 --> 00:36:04,720
But where it's S&P 7 or the 
digital asset treasury 

723
00:36:04,720 --> 00:36:09,040
companies, S&P 493 is flat, U.S.
Treasuries are down to 0. 

724
00:36:09,280 --> 00:36:11,480
And conversely, all the 
manufacturing, shooting and 

725
00:36:11,480 --> 00:36:14,160
militaries in China because of 
the robots and drones there and 

726
00:36:14,160 --> 00:36:15,600
all the media and money is on 
the Internet. 

727
00:36:15,920 --> 00:36:19,560
And now North America is just 
this gigantic steel cage match 

728
00:36:19,840 --> 00:36:21,240
with all the shouting and all 
the shooting. 

729
00:36:22,240 --> 00:36:25,320
And it's like basically what the
EUR Asian continent was under 

730
00:36:25,320 --> 00:36:26,760
communism. 
Unfortunately in the 20th 

731
00:36:26,760 --> 00:36:27,880
century. 
All kinds of crazy people 

732
00:36:27,880 --> 00:36:30,600
shooting each other, warlord era
collapse, the Soviet Union, 

733
00:36:30,760 --> 00:36:32,720
Tujuksani Civil war, all that 
kind of stuff and things coming 

734
00:36:32,720 --> 00:36:36,040
through North America. 
So in the V4 is basically OK in 

735
00:36:36,040 --> 00:36:38,920
that world. 
Something needs to balance the 

736
00:36:38,920 --> 00:36:42,640
Chinese drone Armada. 
China will be insanely, 

737
00:36:42,640 --> 00:36:45,200
insanely, insanely insanely 
insanely powerful. 

738
00:36:45,400 --> 00:36:48,080
It'll be like 5 or 10X America 
at its peak. 

739
00:36:48,360 --> 00:36:51,640
It will be because it's, it's 
actually hitting more steam. 

740
00:36:51,640 --> 00:36:54,120
Chinese overproduction just 
means like so many widgets 

741
00:36:54,120 --> 00:36:56,160
popping out of, you know, the 
ground. 

742
00:36:56,160 --> 00:36:58,920
They're they're, they're still 
gaining steam, right? 

743
00:36:59,200 --> 00:37:01,000
Like the country still hasn't 
mean fully developed. 

744
00:37:01,720 --> 00:37:04,280
And so China will just be the 
most powerful physical force to 

745
00:37:04,280 --> 00:37:06,920
have ever existed. 
And right now, many Americans 

746
00:37:06,920 --> 00:37:09,120
aren't mentally living in that 
world because they still think 

747
00:37:09,120 --> 00:37:11,360
like the US military exists, 
right? 

748
00:37:11,520 --> 00:37:13,560
But the US military has been 
unfortunately beaten by the 

749
00:37:13,560 --> 00:37:15,480
Houthis. 
NATO is being beaten by Russia. 

750
00:37:15,800 --> 00:37:19,240
If NATO can be beaten by Russia 
to the point that there's peace 

751
00:37:19,240 --> 00:37:22,680
treaty talks with Putin, China's
like 10X Russia easily. 

752
00:37:23,680 --> 00:37:26,160
You know, heck, set the set. 
Chinese hypersonics can sink all

753
00:37:26,240 --> 00:37:29,840
US aircraft carriers, right? 
The Secretary of the Navy said 

754
00:37:30,200 --> 00:37:32,320
one Chinese shipyard makes more 
ships in the old U.S. 

755
00:37:32,320 --> 00:37:35,240
Navy combined, right? 
Raytheon CEO has said you can't 

756
00:37:35,240 --> 00:37:37,360
decouple from China. 
So what can possibly balance the

757
00:37:37,360 --> 00:37:39,720
Chinese throne Armada? 
I think the entire American 

758
00:37:39,720 --> 00:37:41,920
mentality of like fighting with 
your fists and so on and so 

759
00:37:41,920 --> 00:37:44,880
forth is very romantic training 
century thing that can't be done

760
00:37:44,880 --> 00:37:46,680
against China. 
So you actually need something 

761
00:37:46,680 --> 00:37:50,480
totally different, which is 
Gandhian nonviolence, 

762
00:37:50,680 --> 00:37:54,200
decentralization, agility, 
invisibility, something totally,

763
00:37:54,200 --> 00:37:57,280
totally different against this 
enormous force. 

764
00:37:57,320 --> 00:37:58,960
So that's where I'm at with like
V4. 

765
00:37:58,960 --> 00:38:00,960
Let me pause there because that 
was a lot, but let me give your 

766
00:38:00,960 --> 00:38:03,040
thoughts. 
Yeah, I think my my problem is 

767
00:38:03,040 --> 00:38:07,760
that I'm on like V 73 and it has
a remarkable convergence with 

768
00:38:07,840 --> 00:38:10,280
V1. 
And I think I'm I've kind of 

769
00:38:10,280 --> 00:38:14,120
horseshoe my way back into the 
start of the snakes and ladders.

770
00:38:14,600 --> 00:38:17,160
Sure. 
I think this is I think, I mean,

771
00:38:17,440 --> 00:38:22,000
you're right that there is kind 
of this negative element with 

772
00:38:22,000 --> 00:38:24,120
both of them. 
And this is where I, I would, 

773
00:38:24,280 --> 00:38:27,400
you know, think about how you 
say that MAGA was appealing to 

774
00:38:28,400 --> 00:38:31,800
the gays as Americans rather 
than as gays. 

775
00:38:31,800 --> 00:38:33,600
I, I, I think there is something
to that. 

776
00:38:33,600 --> 00:38:38,280
But there is also, you know, 
MAGA is also very interested in 

777
00:38:38,400 --> 00:38:40,440
defining who the internal 
enemies are. 

778
00:38:40,440 --> 00:38:42,840
And probably they're throwing. 
They would like to throw more of

779
00:38:42,840 --> 00:38:47,000
the gays in jail and 20. 
Five Yes, in 2024. 

780
00:38:47,440 --> 00:38:49,240
AB. 
It was, it was a very different 

781
00:38:49,240 --> 00:38:52,040
message up until the election 
and then shifted 34. 

782
00:38:52,200 --> 00:38:53,560
Yeah, go. 
Ahead, but I mean I when you 

783
00:38:53,560 --> 00:38:57,320
hear these terms like heritage 
Americans first, I think of like

784
00:38:57,320 --> 00:38:59,680
when you say heritage American, 
I think of like a giant 

785
00:39:00,240 --> 00:39:03,600
Thanksgiving dinner that's with 
a big Turkey in the middle. 

786
00:39:04,000 --> 00:39:07,280
And you know, I think that is 
just these very strange sort of 

787
00:39:07,280 --> 00:39:09,640
terms. 
I agree that there is kind of 

788
00:39:09,640 --> 00:39:13,280
this Iron Curtain that the 
Americans are self imposing on 

789
00:39:13,280 --> 00:39:15,480
themselves and that feels really
strange. 

790
00:39:15,480 --> 00:39:18,480
And maybe maybe it's good for 
the troops to withdraw from the 

791
00:39:18,480 --> 00:39:20,320
rest of the world and give up 
the imperial burden. 

792
00:39:20,640 --> 00:39:24,560
But I think it's not good to 
deport a lot of South Korean 

793
00:39:24,560 --> 00:39:27,920
engineers, or let's just call 
them Korean engineers who are 

794
00:39:27,920 --> 00:39:32,480
trying to build the battery 
heritage that's right and 

795
00:39:32,480 --> 00:39:35,960
humiliate them in chains, that 
that is like totally a horrible 

796
00:39:35,960 --> 00:39:38,320
own goal. 
I'm just always very conscious 

797
00:39:38,320 --> 00:39:42,560
of the ability for the Chinese 
to impose own goals for 

798
00:39:42,560 --> 00:39:45,040
themselves as well. 
No, it would be great if they 

799
00:39:45,040 --> 00:39:49,440
spent all day sipping green tea,
but they can't leave anything 

800
00:39:49,440 --> 00:39:52,880
alone and they just constantly 
have to meddle and everything. 

801
00:39:53,480 --> 00:39:55,480
Is America Keynesian? 
Yeah, sure, maybe. 

802
00:39:55,480 --> 00:39:58,680
But the Chinese are, according 
to Adam Tu's just so much more 

803
00:39:58,680 --> 00:40:00,720
Keynesian, the Keynes 
everything, right? 

804
00:40:01,080 --> 00:40:04,240
And I think that there is kind 
of just this endless meddling 

805
00:40:04,240 --> 00:40:06,360
mentality. 
Now let me just make a broader 

806
00:40:06,360 --> 00:40:09,680
point, which is that I think the
US and China are in competition 

807
00:40:10,000 --> 00:40:12,720
and rather than one country 
having all of the structural 

808
00:40:12,720 --> 00:40:15,480
advantages on its side, I think 
I I wouldn't agree with that 

809
00:40:15,480 --> 00:40:18,680
characterization. 
I think that the US can very 

810
00:40:18,680 --> 00:40:21,480
credibly point to these amazing 
strengths that the US has. 

811
00:40:21,840 --> 00:40:24,920
I think China can also point to 
these amazing strengths, namely 

812
00:40:24,920 --> 00:40:28,000
these drone armadas, which are 
very powerful side. 

813
00:40:28,480 --> 00:40:31,160
There's also you can, if you 
wanted to focus on the most ugly

814
00:40:31,160 --> 00:40:33,560
parts of America, you can 
definitely paint a horrible 

815
00:40:33,560 --> 00:40:36,760
picture just as the same with 
how you can do that with China. 

816
00:40:36,760 --> 00:40:40,000
And so my mental model for all 
of this is that this is a long 

817
00:40:40,000 --> 00:40:42,880
term competition. 
There will be no country that 

818
00:40:43,040 --> 00:40:46,360
completely implodes and fails to
get up, get back up in the way 

819
00:40:46,360 --> 00:40:50,240
that Gorbachev did, really kind 
of drive the Soviet Union. 

820
00:40:50,280 --> 00:40:52,640
OK, so that's that's a big 
difference of opinion, but you 

821
00:40:52,640 --> 00:40:54,080
just finish your saying and I'll
say something go. 

822
00:40:54,400 --> 00:40:58,680
I think that, you know, when 1 
country is ahead, it is going to

823
00:40:58,680 --> 00:41:01,000
get overconfident and make a lot
of mistakes. 

824
00:41:01,000 --> 00:41:05,040
Because I felt like I lived 
through this in China when at 

825
00:41:05,040 --> 00:41:08,800
the end of 2020, at the start of
2021, Xi Jinping felt like he 

826
00:41:08,800 --> 00:41:12,200
was at the top of the world. 
He was able to control COVID, in

827
00:41:12,200 --> 00:41:15,800
which, you know, the US was not.
January 6th just happened. 

828
00:41:15,840 --> 00:41:18,360
And China looked like it was 
like a super stable, 

829
00:41:18,360 --> 00:41:21,480
economically prosperous place. 
What does he decide to do? 

830
00:41:21,560 --> 00:41:24,800
Smash a lot of tech companies, 
destroy the real estate sector 

831
00:41:24,800 --> 00:41:26,640
and then also hold on too 
tightly to COVID? 

832
00:41:26,920 --> 00:41:30,240
I think that is a classic 
mistake of overconfidence and 

833
00:41:30,240 --> 00:41:31,000
argue. 
Was it? 

834
00:41:31,080 --> 00:41:33,000
But was it? 
Because let's analyze it now 

835
00:41:33,000 --> 00:41:35,000
from 2025. 
OK, key, go ahead. 

836
00:41:35,720 --> 00:41:39,520
The three red lines essentially 
were sort of a controlled 

837
00:41:39,520 --> 00:41:41,080
demolition of the real estate 
bubble. 

838
00:41:41,280 --> 00:41:43,120
It didn't actually fully crash 
the economy. 

839
00:41:43,960 --> 00:41:46,760
He went after the video games. 
He went after after school 

840
00:41:46,760 --> 00:41:49,480
tutoring, which there is a Red 
Queen phenomenon after school. 

841
00:41:49,480 --> 00:41:52,840
He definitely hit all kinds of 
people on, you know, you know, 

842
00:41:52,920 --> 00:41:57,320
entrepreneurs and so on. 
But advanced manufacturing, the 

843
00:41:57,320 --> 00:41:59,560
transition into it did work. 
I know you mentioned the little 

844
00:41:59,560 --> 00:42:02,440
pinks in your book say this, but
maybe they're actually right 

845
00:42:02,840 --> 00:42:07,520
because he avoided the fire 
economy, no finance, insurance, 

846
00:42:07,520 --> 00:42:10,600
real estate of the US. 
He avoided going too far into 

847
00:42:10,600 --> 00:42:13,400
it, popped it, doesn't seem to 
have it caused some damage. 

848
00:42:13,400 --> 00:42:16,560
I mean, one way of thinking 
about it, if the country, you 

849
00:42:16,560 --> 00:42:19,160
know, rather than talking about 
it in a very ideological terms, 

850
00:42:19,640 --> 00:42:22,120
if the country is like the 
platform and the companies are 

851
00:42:22,120 --> 00:42:24,640
like the apps on that platform, 
right? 

852
00:42:24,920 --> 00:42:30,160
Sometimes Zuck will make like a 
breaking change to the Facebook 

853
00:42:30,160 --> 00:42:33,800
API's and break Zynga, for 
example, if you remember when 

854
00:42:33,800 --> 00:42:36,760
they did that right, because it 
was spamming the feed too much. 

855
00:42:36,760 --> 00:42:38,520
Nothing, nothing against Zynga 
or whatever. 

856
00:42:38,720 --> 00:42:39,920
You're just making that 
decision. 

857
00:42:39,920 --> 00:42:41,480
The greatest good for the 
greatest number. 

858
00:42:41,920 --> 00:42:44,920
Like Zynga is working in its own
way, but long term, this is 

859
00:42:44,920 --> 00:42:47,320
spamming too many people with 
zombies or whatever it is. 

860
00:42:47,320 --> 00:42:49,760
So actually, no, we don't want 
to have Zynga. 

861
00:42:49,760 --> 00:42:52,800
We're going to push things into 
its own archived inbox, like a 

862
00:42:52,800 --> 00:42:54,440
spam inbox and so on and so 
forth. 

863
00:42:55,160 --> 00:42:58,480
And so in the same way, if he's 
like got, he's got root over the

864
00:42:58,480 --> 00:43:00,520
Chinese platform, he's like, 
actually we don't want these 

865
00:43:00,520 --> 00:43:02,320
apps. 
Yeah, we don't any more than we 

866
00:43:02,320 --> 00:43:04,760
want the advanced manufacturing 
stuff, which seems to have 

867
00:43:04,760 --> 00:43:06,840
worked. 
Yeah, I mean, if if the only 

868
00:43:06,840 --> 00:43:08,560
thing that matters to your 
economy is advanced 

869
00:43:08,560 --> 00:43:11,320
manufacturing. 
And I am going to let no one 

870
00:43:11,320 --> 00:43:14,400
talk me down from my stance at 
manufacturing as almost 

871
00:43:14,400 --> 00:43:16,520
everything. 
And so I think that 

872
00:43:16,680 --> 00:43:18,080
manufacturing is really 
important. 

873
00:43:18,080 --> 00:43:20,800
But you know, he didn't only 
hurt a lot of the video games. 

874
00:43:20,880 --> 00:43:22,960
And maybe, yeah, you should 
control the video games. 

875
00:43:22,960 --> 00:43:24,280
You should control the social 
media. 

876
00:43:24,280 --> 00:43:26,000
You should control the short 
form video apps. 

877
00:43:26,280 --> 00:43:28,720
You should control the AI slop. 
Frankly, the Americans ought to 

878
00:43:28,720 --> 00:43:30,600
do more on all of these 
different things. 

879
00:43:31,040 --> 00:43:35,320
He also smacked around people 
like Jack Ma, people like John. 

880
00:43:35,320 --> 00:43:36,120
Yeah. 
Real guys. 

881
00:43:36,360 --> 00:43:38,200
And other people, right? 
And so that's pretty important 

882
00:43:38,200 --> 00:43:39,920
too. 
And so this is where I think 

883
00:43:39,920 --> 00:43:43,320
that it is still important to 
flip a few more pages past the 

884
00:43:43,320 --> 00:43:45,120
business pages of the Wall 
Street Journal into the 

885
00:43:45,120 --> 00:43:47,920
economics pages because youth 
unemployment is real. 

886
00:43:48,440 --> 00:43:51,960
Tom Ping is real. 
You talk about inflation being 

887
00:43:52,120 --> 00:43:54,920
what's the Friedman line? 
Inflation is a taxation. 

888
00:43:55,200 --> 00:43:56,920
Inflation is taxation without 
legislation. 

889
00:43:57,000 --> 00:43:59,160
Without legislation. 
And I think, you know, yeah, 

890
00:43:59,160 --> 00:44:01,440
inflation is bad, but the only 
thing that might be worse than 

891
00:44:01,440 --> 00:44:04,480
inflation is deflation, which 
the Chinese are not quite able 

892
00:44:04,480 --> 00:44:06,960
to get out of. 
And see is kind of this boomer 

893
00:44:06,960 --> 00:44:09,360
who says, why do people dislike 
deflation? 

894
00:44:09,640 --> 00:44:12,280
Don't people like lower prices? 
Well, not if you aren't. 

895
00:44:12,280 --> 00:44:14,680
Well, so here's where I'll 
here's I want to argue with you 

896
00:44:14,720 --> 00:44:15,920
Go, I'll go if you're saying 
all. 

897
00:44:16,240 --> 00:44:17,800
Right. 
Let me let me just make one more

898
00:44:17,800 --> 00:44:20,320
point, which is that I think 
that, you know, the country 

899
00:44:20,320 --> 00:44:23,560
that's going to be ahead is 
going to make all sorts of 

900
00:44:23,560 --> 00:44:26,080
mistakes driven by 
overconfidence in hubris, which 

901
00:44:26,080 --> 00:44:28,480
is what I think for the most 
part she did. 

902
00:44:28,760 --> 00:44:31,000
I think that the controlled 
demolition of the property 

903
00:44:31,000 --> 00:44:34,080
sector destroyed a lot of 
confidence in housing and 

904
00:44:34,080 --> 00:44:35,760
construction activity is still 
not back. 

905
00:44:35,760 --> 00:44:38,160
And we're we still might like 
get some sort of a weird 

906
00:44:38,160 --> 00:44:41,960
financial crisis because of the 
supposedly controlled demolition

907
00:44:41,960 --> 00:44:45,160
of the of the property sector. 
I think that this was not as 

908
00:44:45,160 --> 00:44:46,480
controlled as we'd like to 
believe. 

909
00:44:46,920 --> 00:44:49,680
And arguably you can say that 
the United States grew 

910
00:44:49,680 --> 00:44:54,640
overconfident, which is how it 
imposed this Octagon upon itself

911
00:44:54,640 --> 00:44:57,600
to make it to make people 
destroy each other. 

912
00:44:57,840 --> 00:44:59,840
That's a mistake of 
overconfidence. 

913
00:45:00,320 --> 00:45:02,560
But the more that you're ahead, 
the more you'll make these sort 

914
00:45:02,560 --> 00:45:04,400
of mistakes. 
The more that you're behind, the

915
00:45:04,400 --> 00:45:06,760
more that you're interested in 
patching up your deficiencies, 

916
00:45:06,920 --> 00:45:09,160
which is why I think this is 
going to be kind of a neck and 

917
00:45:09,160 --> 00:45:12,160
neck race for a very long time 
because we we can't just look at

918
00:45:12,160 --> 00:45:15,520
a race based on structural 
advantages as it goes on, you 

919
00:45:15,520 --> 00:45:18,680
know, people will trip up and 
stumble and fight harder. 

920
00:45:18,800 --> 00:45:23,400
OK, so here is my worldview and 
where I disagree with you on is 

921
00:45:23,400 --> 00:45:28,080
basically a few things. 
First is I don't know if the US 

922
00:45:28,080 --> 00:45:30,600
has that much longer live is 
like a coherent political 

923
00:45:30,600 --> 00:45:32,440
entity. 
I think we're on the verge of a 

924
00:45:32,800 --> 00:45:36,640
end of USSR type scenario. 
Dalio describes as a dead heart 

925
00:45:36,640 --> 00:45:39,680
attack. 
Elon thinks the government isn't

926
00:45:39,680 --> 00:45:44,520
going to last very long. 
You're seeing gold flipping U.S.

927
00:45:44,520 --> 00:45:47,240
Treasuries, for example. 
If you saw that graph, gold is 

928
00:45:47,240 --> 00:45:48,960
flipping U.S. 
Treasuries as reserve asset of 

929
00:45:48,960 --> 00:45:52,080
states. 
And certainly Bitcoin has risen 

930
00:45:52,080 --> 00:45:53,640
more than 100 million X against 
it. 

931
00:45:54,440 --> 00:45:58,360
There is, you know, the US has 
not become the like the US used 

932
00:45:58,360 --> 00:46:01,360
to be the number one destination
for global millionaires up to 

933
00:46:01,360 --> 00:46:04,960
2019 + 10,000 millionaires. 
After 2020, it dropped 85%. 

934
00:46:04,960 --> 00:46:07,800
It hasn't recovered. 
And gold millionaires capital is

935
00:46:07,800 --> 00:46:11,680
relocated to Dubai in Singapore 
#1 and #2 they've left China as 

936
00:46:11,680 --> 00:46:13,280
well, a good chunk of those 
millionaires. 

937
00:46:13,440 --> 00:46:17,040
But China regenerates them so 
fast in, you know, that, that 

938
00:46:17,040 --> 00:46:19,200
it's actually, it's, it's 
basically seemingly fine for 

939
00:46:19,200 --> 00:46:21,480
them. 
And China's view, I think is 

940
00:46:22,200 --> 00:46:27,680
that the new up and coming 
generation of 20 somethings is 

941
00:46:28,000 --> 00:46:30,280
speaks purely Chinese. 
They have purely Chinese apps. 

942
00:46:30,280 --> 00:46:33,360
They'll be Chinese nationalists.
And unlike the 40 somethings 

943
00:46:33,360 --> 00:46:36,040
that have some sympathy for the 
West, you know, a lot of these 

944
00:46:36,040 --> 00:46:38,480
Gen. 
X or older millennial 

945
00:46:38,480 --> 00:46:42,320
entrepreneurs, he's like, you 
know what, why don't you guys go

946
00:46:42,840 --> 00:46:46,160
as fine, Jack Ma can be a 
teacher in Japan or something 

947
00:46:46,160 --> 00:46:49,800
like that, what he's, you know, 
doing and somebody else in China

948
00:46:49,800 --> 00:46:51,600
can run that. 
We've got a billion Chinese 

949
00:46:51,600 --> 00:46:54,520
people here, right? 
That's essentially XI's bet that

950
00:46:54,520 --> 00:46:57,800
he can do without these sort of 
older Chinese entrepreneurs. 

951
00:46:58,360 --> 00:47:00,960
And now he just wants those, the
younger ones who have grown up 

952
00:47:00,960 --> 00:47:03,880
on Xi Jinping Thought and all 
the Chinese apps and think 

953
00:47:03,880 --> 00:47:06,520
China's number one and luck in 
his better than Starbucks. 

954
00:47:07,600 --> 00:47:10,560
And maybe they're right. 
BYD is outselling Tesla in 

955
00:47:10,560 --> 00:47:12,680
neutral markets. 
Xiaomi is able to ship a car 

956
00:47:12,680 --> 00:47:15,840
when Apple wasn't. 
TikTok needed total state 

957
00:47:15,840 --> 00:47:18,960
intervention and the combined 
efforts of Google and Facebook 

958
00:47:18,960 --> 00:47:24,120
and and so on so forth couldn't 
be TikTok And DGI is the 

959
00:47:24,120 --> 00:47:26,760
cheapest and largest scale drone
manufacturer in the world. 

960
00:47:27,440 --> 00:47:30,760
And then in an end, you know, 
like essentially the US can't 

961
00:47:30,760 --> 00:47:33,560
compete with China abroad with 
the exception of maybe Elon and 

962
00:47:33,560 --> 00:47:35,080
even Elon is having a tough 
time. 

963
00:47:35,920 --> 00:47:39,320
In any neutral market, Chinese 
products win and so the US has 

964
00:47:39,320 --> 00:47:41,680
retreated to just trying to 
tariff and build tariff barriers

965
00:47:41,680 --> 00:47:44,600
around the US, which is going to
fail in the medium to long run 

966
00:47:44,760 --> 00:47:46,480
because the Democrats may defect
from that. 

967
00:47:46,720 --> 00:47:49,880
Like Newsom has said, hey, maybe
he'll import goods from China. 

968
00:47:49,880 --> 00:47:52,040
If you saw that right. 
Like that's why I say America. 

969
00:47:52,040 --> 00:47:53,800
It's not the United States. 
It's just United States. 

970
00:47:54,080 --> 00:47:56,280
Blue America has its own foreign
policy distinct from red 

971
00:47:56,280 --> 00:47:58,800
America. 
And Newsom and Walls and Hillary

972
00:47:58,800 --> 00:48:01,600
Clinton have all signaled that 
they may want to align more with

973
00:48:01,600 --> 00:48:05,680
China than than the Republicans 
do. 

974
00:48:05,680 --> 00:48:08,680
Like, you know, you saw the 
thing with Newsom and how it 

975
00:48:08,680 --> 00:48:11,160
wasn't just that they cleaned up
San Francisco for GI. 

976
00:48:11,360 --> 00:48:13,640
It was that Newsom was the only 
Democrat to get the meeting with

977
00:48:13,640 --> 00:48:14,840
GI. 
Do you remember that? 

978
00:48:15,520 --> 00:48:19,120
My view on that is, again, a lot
of Americans don't know this, 

979
00:48:19,120 --> 00:48:22,440
but like, within China, you 
can't just jump straight to the 

980
00:48:22,440 --> 00:48:26,920
presidency, like Obama or Trump.
You have to go from, like, you 

981
00:48:26,920 --> 00:48:30,520
know, mayor of a village and 
then governor of a province and 

982
00:48:30,520 --> 00:48:32,080
all the way up and make it to 
central committee. 

983
00:48:32,360 --> 00:48:36,240
And so GI recognized Newsom is 
having a similar path going from

984
00:48:36,560 --> 00:48:40,000
San Francisco mayor to 
California governor to possibly 

985
00:48:40,000 --> 00:48:42,160
president. 
So recognize him as a credible 

986
00:48:42,160 --> 00:48:45,680
possible person. 
And when Newsom was in China, he

987
00:48:45,680 --> 00:48:48,440
said he wants to be China's long
term stable and strong partner. 

988
00:48:48,440 --> 00:48:53,320
My view is that after the dollar
ends, that's the last strand 

989
00:48:53,320 --> 00:48:56,240
that's holding blue and red 
together because blue's only 4%.

990
00:48:56,240 --> 00:48:59,040
Democrats marry Republicans. 
Democrats certainly don't vote 

991
00:48:59,040 --> 00:49:00,560
for Republicans. 
Democrats don't even talk to 

992
00:49:00,560 --> 00:49:02,480
Republicans anymore. 
They're in their own blue sky 

993
00:49:02,480 --> 00:49:04,040
versus X, you know, kind of 
thing. 

994
00:49:04,040 --> 00:49:06,600
Digital secessions already here.
They're now starting to shoot 

995
00:49:06,600 --> 00:49:10,000
each other, blow each other up. 
There's a new killing, crazy 

996
00:49:10,000 --> 00:49:12,400
blowing up thing on X every 
single day nowadays, 

997
00:49:12,400 --> 00:49:15,080
unfortunately. 
And it's the last piece of paper

998
00:49:15,080 --> 00:49:17,040
that's holding this thing 
together. 

999
00:49:17,040 --> 00:49:19,440
It's not, you know how people 
say it's not a, it's a country, 

1000
00:49:19,440 --> 00:49:21,760
not an economic zone. 
You've seen that kind of post on

1001
00:49:21,760 --> 00:49:24,520
X. 
It's actually an economic zone, 

1002
00:49:24,520 --> 00:49:28,320
not a country, because the only 
thing holding it together is 

1003
00:49:28,320 --> 00:49:29,840
this piece of paper called the 
dollar. 

1004
00:49:30,680 --> 00:49:33,680
And with that, tears. 
Unfortunately, there's nothing 

1005
00:49:33,680 --> 00:49:37,840
keeping blue and red together. 
And Democrats will side with she

1006
00:49:37,960 --> 00:49:40,760
if they don't have DC. 
Yeah, well, I don't know. 

1007
00:49:40,760 --> 00:49:42,880
I mean, I why? 
Why would she want to meet 

1008
00:49:43,920 --> 00:49:46,600
Governor Newsom? 
This is a guy who looks exactly 

1009
00:49:46,600 --> 00:49:48,600
like the lead actor in American 
Psycho. 

1010
00:49:49,200 --> 00:49:51,240
It's interest with me. 
That's just weird. 

1011
00:49:51,880 --> 00:49:55,120
And I think there is someone who
is more willing to give a bear 

1012
00:49:55,120 --> 00:49:59,640
hug to Xi Jinping than Governor 
Newsom, and that is President 

1013
00:49:59,640 --> 00:50:01,400
Donald Trump. 
I mean, I was digging up these 

1014
00:50:01,400 --> 00:50:03,880
quotes for an article I was 
writing, which Trump told the 

1015
00:50:03,880 --> 00:50:08,280
Wall Street Journal. 
She is so smart, brilliant, 

1016
00:50:08,440 --> 00:50:11,560
everything nearly perfect. 
There's no one in Hollywood like

1017
00:50:11,560 --> 00:50:14,400
this guy. 
As if like Xi Jinping had like 

1018
00:50:14,400 --> 00:50:17,200
Tom Cruise levels of 
handsomeness, which I find. 

1019
00:50:17,240 --> 00:50:19,000
Out, Wendy. 
But Trump is unpredictable. 

1020
00:50:19,000 --> 00:50:20,640
Because you'll say that about 
someone, then you'll insult 

1021
00:50:20,640 --> 00:50:22,000
them, then you'll come back and 
say it. 

1022
00:50:22,360 --> 00:50:25,000
But right now, he's trying to 
bear hug Susan Ping. 

1023
00:50:25,000 --> 00:50:27,440
And so, you know, and so, you 
know, I think you're right. 

1024
00:50:27,440 --> 00:50:30,480
I mean, maybe there is more than
one thing that unites Democrats 

1025
00:50:30,480 --> 00:50:32,960
and Republicans. 
That's the paper. 

1026
00:50:33,160 --> 00:50:34,520
Rather, it's like a love of 
Susan Ping. 

1027
00:50:34,520 --> 00:50:36,600
What do you think about? 
That what's interesting is a few

1028
00:50:36,600 --> 00:50:39,840
years ago people were saying 
that one bipartisan issue was 

1029
00:50:39,840 --> 00:50:45,000
being anti China, right. 
My view is Democrats were only 

1030
00:50:45,000 --> 00:50:47,760
anti China because there was a 
contestation for who would run 

1031
00:50:47,760 --> 00:50:50,120
the most powerful state. 
Like basically first China 

1032
00:50:50,120 --> 00:50:52,360
disruptive manufacturing so 
disruptive red America. 

1033
00:50:52,920 --> 00:50:56,040
Then post 2020 it seemed to 
become the most powerful state. 

1034
00:50:56,040 --> 00:50:57,480
So then blue America really 
fought it. 

1035
00:50:58,040 --> 00:51:02,040
And now recently finally tech 
America which always had a sense

1036
00:51:02,040 --> 00:51:05,160
of superiority versus China has 
finally started to see wait 

1037
00:51:05,160 --> 00:51:07,400
Chinese AI models are actually 
giving us a run for the money? 

1038
00:51:07,400 --> 00:51:10,360
Chinese robotics are actually 
really good and for the first 

1039
00:51:10,360 --> 00:51:12,880
time, tech America is actually 
taking China seriously, not just

1040
00:51:12,880 --> 00:51:17,200
one off like TikTok, but 
actually, whoa, actually the 

1041
00:51:17,200 --> 00:51:19,280
Chinese edge shares aren't just 
copycats, they're actually 

1042
00:51:19,280 --> 00:51:21,560
innovators and so on. 
That's that's always being the 

1043
00:51:21,560 --> 00:51:24,680
thing which tech is, you know, 
American Tech has felt they've 

1044
00:51:24,680 --> 00:51:26,760
had the edge and now that edge 
is maybe slipping. 

1045
00:51:28,520 --> 00:51:34,040
So I think though at almost a 
genetic level, I think red 

1046
00:51:34,040 --> 00:51:37,880
Americans at the base, not 
Trump, have a more visceral 

1047
00:51:37,880 --> 00:51:41,560
aversion to China. 
Whereas Democrats, it's funny to

1048
00:51:41,560 --> 00:51:43,160
put it this way, this is A1 
liner. 

1049
00:51:43,320 --> 00:51:48,000
OK, but Democrats in the and 
China are both natural 

1050
00:51:48,000 --> 00:51:50,200
communists. 
So they'll be that's it. 

1051
00:51:50,200 --> 00:51:52,040
That's a joke. 
OK, But there's, you know, 

1052
00:51:52,040 --> 00:51:55,600
they're statists right there. 
Democrats are willing to be 

1053
00:51:55,800 --> 00:51:59,880
administrators in a multi ethnic
empire and so they could find 

1054
00:51:59,880 --> 00:52:02,360
something under the XI 
dispensation, sort of like you 

1055
00:52:02,360 --> 00:52:05,360
don't have Venezuela's like this
dysfunctional kleptocracy, but 

1056
00:52:05,360 --> 00:52:06,920
it's sort of bailed out with 
Chinese goods. 

1057
00:52:07,120 --> 00:52:11,040
China's willing to, as you know,
it's willing to work with, you 

1058
00:52:11,040 --> 00:52:14,320
know, Iranian fundamentalists 
and Singaporean meritocrats and 

1059
00:52:14,320 --> 00:52:16,840
Venezuelan kleptocrats and 
Russian Orthodox so long as they

1060
00:52:16,840 --> 00:52:19,600
don't interfere in China's 
internal affairs, right? 

1061
00:52:20,160 --> 00:52:24,320
And so I think they will support
the Democrats and just ship them

1062
00:52:24,320 --> 00:52:30,320
goods and support them in this 
way as the have you seen this 

1063
00:52:30,320 --> 00:52:34,120
thing on soft secession that the
Blues are doing right, Right. 

1064
00:52:34,440 --> 00:52:36,840
So in that soft secession, they 
just get goods from the West 

1065
00:52:36,840 --> 00:52:39,040
Coast ports, from China. 
They don't enforce the tariffs. 

1066
00:52:39,040 --> 00:52:42,280
I think it's very likely 
something like that happens. 

1067
00:52:42,480 --> 00:52:44,720
Newsom has talked about, I'm not
even, you know, inferring this. 

1068
00:52:44,720 --> 00:52:47,800
Go ahead. 
I don't know, Biden Democrats, 

1069
00:52:47,800 --> 00:52:50,960
this guy from Delaware, another 
potential port town, there's a 

1070
00:52:50,960 --> 00:52:54,600
port of Philadelphia didn't get 
a lot of didn't do a lot of good

1071
00:52:54,600 --> 00:52:57,240
for Joseph Biden when he was 
president and. 

1072
00:52:57,240 --> 00:53:00,840
But, but, but Biden, Biden is 
19, born 1942 and Trump's born 

1073
00:53:00,840 --> 00:53:03,920
1946 or something like that. 
So they're actually both of you 

1074
00:53:03,920 --> 00:53:06,000
zoom out. 
They're both like, you know, 

1075
00:53:06,000 --> 00:53:11,360
coarse, handsy guys from the 
northeastern US born at the time

1076
00:53:11,360 --> 00:53:15,160
of, like, peak America who grew 
up thinking the USA is number 1 

1077
00:53:15,160 --> 00:53:17,880
and everything effortlessly. 
And Biden would say things like 

1078
00:53:17,880 --> 00:53:20,040
we're the United States of 
America for Pete's sake. 

1079
00:53:20,040 --> 00:53:22,560
Like, essentially they just 
think USA #1 go ahead. 

1080
00:53:22,960 --> 00:53:26,160
Yeah. 
I mean, I think I, I mean, look,

1081
00:53:26,160 --> 00:53:30,160
you're focused on a lot of weird
shit happening in America. 

1082
00:53:30,520 --> 00:53:34,440
And no doubt the weird shit is 
real, but I am living. 

1083
00:53:34,440 --> 00:53:36,440
I'm, I'm speaking to you from 
San Francisco. 

1084
00:53:36,800 --> 00:53:39,960
I look out the window and I see 
three weird pieces of shit a day

1085
00:53:39,960 --> 00:53:42,160
before breakfast. 
You know, it's just, that's just

1086
00:53:42,160 --> 00:53:45,080
how, how odd things are. 
But if I am, you know, trying to

1087
00:53:45,080 --> 00:53:47,720
think a little bit about China 
as I looked at, you know, 

1088
00:53:47,720 --> 00:53:49,320
there's plenty of 
dissatisfaction. 

1089
00:53:49,320 --> 00:53:50,800
I don't know if they're 
regenerating all the 

1090
00:53:50,800 --> 00:53:53,080
millionaires very quickly. 
You know, there's a lot of this 

1091
00:53:53,520 --> 00:53:56,000
when she when the most, the 
biggest driver of wealth in 

1092
00:53:56,000 --> 00:53:58,920
China is the property sector. 
When you have a property sector 

1093
00:53:58,920 --> 00:54:02,160
collapse of 25% and then people 
aren't really buying homes, it's

1094
00:54:02,160 --> 00:54:03,840
really hard to build more wealth
after that. 

1095
00:54:04,120 --> 00:54:06,600
There's a lot of uncertainties 
about the corporate sector. 

1096
00:54:06,880 --> 00:54:09,880
There's a lot of young people 
who've decided to move to 

1097
00:54:09,880 --> 00:54:12,920
northern Thailand where they 
could smoke drugs that are legal

1098
00:54:12,920 --> 00:54:16,520
in the state of California and 
they're taking leave of, you 

1099
00:54:16,520 --> 00:54:19,120
know, the great rejuvenation of 
the Chinese ethno state that's 

1100
00:54:19,120 --> 00:54:21,920
being undertaken in their name. 
And all of these millionaires 

1101
00:54:21,920 --> 00:54:24,720
are leaving and there are. 
I mean, I don't think the 

1102
00:54:24,960 --> 00:54:27,680
definitely the demographics it's
not an issue in the next 20 

1103
00:54:27,680 --> 00:54:32,160
years, but in like 2530 years 
from now, demographics will yawn

1104
00:54:32,160 --> 00:54:34,040
larger and larger. 
It seems like they're not going 

1105
00:54:34,040 --> 00:54:36,880
to be able to escape this whole 
very well understand there's 

1106
00:54:37,160 --> 00:54:42,120
deploying a lot of robots, but 
what if, you know, the Silicon 

1107
00:54:42,120 --> 00:54:43,840
Valley bed is real, which I 
don't really buy. 

1108
00:54:44,520 --> 00:54:47,640
But let's say we invent God in a
box and we get the Super 

1109
00:54:47,640 --> 00:54:50,840
intelligence and they invent all
these humanoid robots and then 

1110
00:54:50,840 --> 00:54:53,400
we get to take control of these 
humanoid robots because we have 

1111
00:54:53,400 --> 00:54:55,600
the AI and they don't. 
You know, that could be bad. 

1112
00:54:55,600 --> 00:54:57,800
You know, maybe finally all of 
this AI slop. 

1113
00:54:57,800 --> 00:55:01,080
We should just consume all of 
the Sora 2 videos just to 

1114
00:55:01,080 --> 00:55:04,240
support give open AIA hand so 
that they can take charge of the

1115
00:55:04,240 --> 00:55:07,360
robots later. 
And you know, the Politburo 

1116
00:55:07,360 --> 00:55:10,640
seems pretty dysfunctional. 
She Jinping, you know, I know I 

1117
00:55:10,640 --> 00:55:13,440
get he's like more handsome and 
then Tom Cruise, but he has a 

1118
00:55:13,440 --> 00:55:14,880
belly. 
I get by. 

1119
00:55:15,080 --> 00:55:17,680
The way. 
I said that, you know, he's 

1120
00:55:18,000 --> 00:55:20,880
smoking probably too much 
because, you know, she was born 

1121
00:55:20,880 --> 00:55:25,080
in like 1952 and all of these 
people smoke way too much. 

1122
00:55:25,440 --> 00:55:27,720
If he falls over one day, are we
going to get tanks in the 

1123
00:55:27,720 --> 00:55:29,480
streets in Beijing? 
I don't think so. 

1124
00:55:29,480 --> 00:55:31,040
I think they'll have an orderly 
transition. 

1125
00:55:31,040 --> 00:55:32,320
But what are we really going to 
get? 

1126
00:55:32,480 --> 00:55:34,960
And so I think there are all of 
these, you know, disunited 

1127
00:55:34,960 --> 00:55:38,920
Politburo comments that we can 
also have as soon as this guy 

1128
00:55:38,920 --> 00:55:41,440
keels over. 
And so, you know, I, I don't 

1129
00:55:41,440 --> 00:55:43,680
know, it's like, like I think 
that the tariffs will be 

1130
00:55:43,680 --> 00:55:45,240
enforced. 
It's more likely for the tariffs

1131
00:55:45,240 --> 00:55:48,440
to be enforced on California 
than for the Chinese somehow to 

1132
00:55:48,440 --> 00:55:50,360
figure out all of their own 
political problems too. 

1133
00:55:50,360 --> 00:55:52,520
What do you think? 
I think Lee Chang is very 

1134
00:55:52,520 --> 00:55:55,440
competent and he is potentially 
the number 2 after XI. 

1135
00:55:56,920 --> 00:55:59,920
I think very few Americans even 
know who the seven. 

1136
00:56:00,160 --> 00:56:02,680
I'm sure butchering the 
pronunciation, but it's like 

1137
00:56:03,080 --> 00:56:06,320
LIQIANGI think. 
Yeah, and you know who this guy 

1138
00:56:06,320 --> 00:56:08,240
was? 
This guy was the party secretary

1139
00:56:08,240 --> 00:56:10,680
of Shanghai during the worst 
lockdown ever attempted in the 

1140
00:56:10,680 --> 00:56:13,560
history of humanity. 
Every other democracy was able 

1141
00:56:13,560 --> 00:56:16,640
to toss out the bastard who 
enforced COVID on their 

1142
00:56:16,640 --> 00:56:18,720
policies. 
And then what the What did the 

1143
00:56:18,720 --> 00:56:21,600
Chinese decide to do? 
Elevate this guy into premier? 

1144
00:56:21,600 --> 00:56:23,240
That's weird. 
Wait a second, but Trump was the

1145
00:56:23,240 --> 00:56:26,400
one who did COVID lockdowns in 
the US and he's president again,

1146
00:56:26,600 --> 00:56:28,040
right? 
So I'm not sure. 

1147
00:56:28,040 --> 00:56:30,680
I'm not sure. 
Well, but yes, but I mean, 

1148
00:56:30,720 --> 00:56:34,040
Republicans ultimately didn't 
care that much about like COVID 

1149
00:56:34,040 --> 00:56:38,080
is a very complicated kind of 
thing because everybody switched

1150
00:56:38,080 --> 00:56:42,280
positions on it like 4 times. 
Like at first Democrats said it 

1151
00:56:42,280 --> 00:56:45,600
was racist to talk about COVID 
and Trump was calling it the 

1152
00:56:45,600 --> 00:56:47,520
China virus. 
It's Jan Feb 2020. 

1153
00:56:48,280 --> 00:56:52,160
And then Trump started saying, 
oh, OK, you know, we need to 

1154
00:56:52,160 --> 00:56:54,800
start, you know, covering up the
testing and showing, you know, 

1155
00:56:54,800 --> 00:56:56,760
that the numbers going up and 
Democrats have been saying is a 

1156
00:56:56,760 --> 00:56:59,600
big deal. 
Then Democrats flipped in the US

1157
00:56:59,600 --> 00:57:02,600
and said actually racism is a 
real pandemic and we need to go 

1158
00:57:02,600 --> 00:57:06,160
and do Black Lives Matter riots.
And Trump was doing the warp 

1159
00:57:06,160 --> 00:57:09,360
speed vaccine and Karma Harris 
said that she wouldn't take a 

1160
00:57:09,360 --> 00:57:13,520
Trump vaccine then and the 
vaccine was actually blocked. 

1161
00:57:14,440 --> 00:57:18,320
People have said that they were,
you know, I think, gosh, I 

1162
00:57:18,320 --> 00:57:20,200
forgot this guy's name. 
There's a scientist this 

1163
00:57:20,200 --> 00:57:22,360
reporting, like MIT tech review 
that they were blocking the 

1164
00:57:22,360 --> 00:57:25,040
vaccines approval until after 
the election to make sure Trump 

1165
00:57:25,040 --> 00:57:27,800
didn't get a bump from the 
vaccine, which is a big deal by 

1166
00:57:27,800 --> 00:57:29,440
the way, close election to a 
tree. 

1167
00:57:29,960 --> 00:57:33,000
Then after the election, 
suddenly the vaccine became a 

1168
00:57:33,000 --> 00:57:35,000
tool in the hands of the 
Democrats. 

1169
00:57:35,000 --> 00:57:39,680
And fundamentally, I just looked
at that as something where it 

1170
00:57:39,680 --> 00:57:43,840
wasn't a scientific issue. 
It was just something that was a

1171
00:57:43,920 --> 00:57:47,600
tool and a power struggle. 
And similarly in China, I think 

1172
00:57:47,600 --> 00:57:50,680
it was just a tool for XI to get
his third term. 

1173
00:57:51,520 --> 00:57:53,680
It was just that I don't think 
they actually believed in. 

1174
00:57:53,760 --> 00:57:57,320
It well, let me, let me give you
a, a, a, an alternative view. 

1175
00:57:57,320 --> 00:58:00,200
But first of all, let me say 
that you know what the Americans

1176
00:58:00,200 --> 00:58:04,240
got and the Chinese didn't? 
The vaccine, the mRNA vaccine. 

1177
00:58:04,400 --> 00:58:06,800
Yes, I know Farm did. 
Important, pretty important. 

1178
00:58:06,920 --> 00:58:09,680
I mean, the, the Chinese were, 
were, were locking people up 

1179
00:58:09,680 --> 00:58:12,400
and, and swabbing their noses 
and mouths, you know, every, 

1180
00:58:12,400 --> 00:58:14,440
every other day. 
And they did not do the 

1181
00:58:14,440 --> 00:58:16,480
vaccines, which is, which is 
really, really strange. 

1182
00:58:16,480 --> 00:58:19,440
They, they were just using 
police to, to, to keep shutting 

1183
00:58:19,440 --> 00:58:22,440
people in. 
I think that after living in 

1184
00:58:23,120 --> 00:58:27,040
China, after living in Shanghai 
in 2022, what I observed was 

1185
00:58:27,040 --> 00:58:29,440
that yes, politics was part of 
it. 

1186
00:58:29,760 --> 00:58:32,720
She's coronation. 
I feel like she felt like he had

1187
00:58:32,720 --> 00:58:36,040
the coronation in the back and 
he, like he did like the most 

1188
00:58:36,080 --> 00:58:39,800
blatant possible insult towards 
the Shanghainese by elevating 

1189
00:58:40,000 --> 00:58:42,280
their most hated politician into
the head of premier. 

1190
00:58:42,320 --> 00:58:45,040
And I, I was surprised that I 
would have been surprised if Li 

1191
00:58:45,040 --> 00:58:47,440
Qiang was still vice premier, 
one of the four vice premier 

1192
00:58:47,440 --> 00:58:49,360
some after this. 
And then he was elevated to be 

1193
00:58:49,600 --> 00:58:51,480
premier. 
Think about how that distorts 

1194
00:58:51,480 --> 00:58:54,080
the incentive structures of all 
of these other, you know, party 

1195
00:58:54,080 --> 00:58:57,200
secretaries who who thought this
guy messed up big time and he 

1196
00:58:57,200 --> 00:58:59,440
gets promoted. 
I was living in China. 

1197
00:58:59,440 --> 00:59:03,760
And I felt that the protesters 
did play perhaps some role in 

1198
00:59:03,840 --> 00:59:06,200
showing see, that they are 
dissatisfied. 

1199
00:59:06,640 --> 00:59:10,280
I was living in Shanghai. 
I went to one of the protests 

1200
00:59:10,680 --> 00:59:13,960
the day after that. 
All of these youths staggered 

1201
00:59:13,960 --> 00:59:17,360
out of their cocktail bars and, 
you know, started chanting down 

1202
00:59:17,360 --> 00:59:19,480
with TZ and ping down with the 
Communist Party, which is kind. 

1203
00:59:19,480 --> 00:59:22,840
Of yeah, that was very unusual. 
I America's very unusual to see 

1204
00:59:22,840 --> 00:59:25,120
that because usually it'll be 
something where they're just 

1205
00:59:25,120 --> 00:59:29,160
critiquing like a local party 
person versus the big dog or 

1206
00:59:29,160 --> 00:59:31,360
what have you. 
It's not their fault they had 

1207
00:59:31,360 --> 00:59:33,320
too many of these Western 
cocktails in the French 

1208
00:59:33,320 --> 00:59:35,960
Concession. 
But I think the other big thing 

1209
00:59:35,960 --> 00:59:40,120
was that I felt very strongly 
that the local governments 

1210
00:59:40,160 --> 00:59:42,600
everywhere throughout China, 
especially in smaller cities 

1211
00:59:42,600 --> 00:59:45,760
that are not as wealthy as 
Shanghai, they could no longer 

1212
00:59:45,760 --> 00:59:48,480
enforce 0 COVID. 
They had just no state capacity 

1213
00:59:48,480 --> 00:59:52,600
to do on to Shanghai what the 
town did on to Shanghai and they

1214
00:59:52,600 --> 00:59:54,720
had given up. 
They were really exhausted. 

1215
00:59:54,720 --> 00:59:56,680
And I think when the virus 
started really spreading in 

1216
00:59:56,680 --> 01:00:00,040
Beijing, the central government 
took a look at itself and said, 

1217
01:00:00,280 --> 01:00:02,800
can we, the central government, 
enforce A lockdown upon the 

1218
01:00:02,800 --> 01:00:04,800
central government? 
And then they decided no and 

1219
01:00:04,800 --> 01:00:07,360
threw up their hands. 
And then they completely let 

1220
01:00:07,360 --> 01:00:08,720
this whole thing collapse. 
And one, Yeah. 

1221
01:00:08,720 --> 01:00:10,640
And two. 23 here. 
Right, that sounded like a 

1222
01:00:10,640 --> 01:00:12,600
mistake to me. 
Didn't have to happen this way 

1223
01:00:13,360 --> 01:00:14,720
because you know what? 
You know what? 

1224
01:00:14,720 --> 01:00:17,960
They didn't have vaccines. 
Yeah, this Chinese vaccine did 

1225
01:00:17,960 --> 01:00:20,760
not work. 
So I'll agree with you on all of

1226
01:00:20,760 --> 01:00:23,160
that, basically. 
And I know that the Shanghai 

1227
01:00:23,160 --> 01:00:27,040
lockdowns were actually like, 
seriously house, you know, like 

1228
01:00:27,040 --> 01:00:30,160
house arrest type things. 
And people who were zillionaires

1229
01:00:30,160 --> 01:00:32,760
or whatever were literally 
locked in their house. 

1230
01:00:32,760 --> 01:00:34,840
And people like had pregnancies,
messed up. 

1231
01:00:34,840 --> 01:00:37,600
All kinds of bad stuff happened 
during that time period. 

1232
01:00:38,080 --> 01:00:39,800
So I will completely agree with 
you. 

1233
01:00:39,840 --> 01:00:42,040
I don't think China gets 
everything right at all. 

1234
01:00:42,920 --> 01:00:45,960
I just, however, think they're 
messing up less. 

1235
01:00:46,640 --> 01:00:49,680
And the reason I say they're 
messing up less is if you take a

1236
01:00:49,680 --> 01:00:56,520
flight from San Francisco or 
Seattle or LA or any Western 

1237
01:00:56,520 --> 01:01:01,080
city which has syringes and 
refuse and drug addicts on the 

1238
01:01:01,080 --> 01:01:05,160
street and people attacking you 
as you walk down and so on and 

1239
01:01:05,160 --> 01:01:09,360
so forth. 
And you go to like the number 47

1240
01:01:09,480 --> 01:01:12,080
Chinese city. 
Not even the Tier 1, not even, 

1241
01:01:12,360 --> 01:01:15,760
you know, Shenzhen or Shanghai 
or Beijing, not even Tier 2, not

1242
01:01:15,760 --> 01:01:18,800
even like Chengdu, but like Tier
3 Chinese city. 

1243
01:01:19,520 --> 01:01:28,120
It's cleaner and more modern and
safer and nicer then basically 

1244
01:01:28,120 --> 01:01:30,560
everything other than maybe like
Hudson Yards, which is like the 

1245
01:01:30,560 --> 01:01:33,520
newest nicest part of of, you 
know, in New York, right? 

1246
01:01:33,760 --> 01:01:38,840
Like the very tip top top end, 
like nicest neighborhood in New 

1247
01:01:38,840 --> 01:01:43,800
York is like at parody with like
a tier 3 city in China, Tier 2 

1248
01:01:43,800 --> 01:01:45,560
city. 
I don't know if you, I think 

1249
01:01:45,560 --> 01:01:46,120
that's now. 
True. 

1250
01:01:46,120 --> 01:01:49,040
I mean for for sure. 
I mean, I, I I opened my book by

1251
01:01:49,040 --> 01:01:53,280
saying by talking about my bike 
ride in 2021 from Guiyang to 

1252
01:01:53,280 --> 01:01:58,280
Chongqing, cycling through 
Guizhou, 1/4 poorest province 

1253
01:01:58,600 --> 01:02:00,880
deep in the southwestern 
mountains, and finding much 

1254
01:02:00,880 --> 01:02:03,960
better levels of infrastructure 
in China's 4th poorest province 

1255
01:02:03,960 --> 01:02:06,800
than California or New York. 
They have high speed rail, They 

1256
01:02:06,800 --> 01:02:08,520
have the highway. 
Yeah, exactly 100 billion is 

1257
01:02:08,520 --> 01:02:11,000
stolen by. 
But you know, something that 

1258
01:02:11,160 --> 01:02:14,440
Hudson Yards has that the Cuejo 
residents do not? 

1259
01:02:14,800 --> 01:02:18,280
That's money they can't shop. 
Isn't that important? 

1260
01:02:19,040 --> 01:02:21,600
So, so, OK, so now let's talk 
about the deflation part. 

1261
01:02:21,600 --> 01:02:24,400
OK, so this is complicated. 
This something I think a lot 

1262
01:02:24,400 --> 01:02:28,600
about and because of crypto and 
so, so so at least at least give

1263
01:02:28,600 --> 01:02:30,680
me, I'll give you my thesis. 
I may be wrong, but here's the 

1264
01:02:30,680 --> 01:02:33,720
thesis. 
So first is, you know how like 

1265
01:02:33,720 --> 01:02:37,160
the Soviets had all these 
economists who talk about 

1266
01:02:37,200 --> 01:02:40,080
Marxism and right, but they're 
basically just all wrong for the

1267
01:02:40,080 --> 01:02:42,160
most part. 
They had some things like, you 

1268
01:02:42,160 --> 01:02:48,040
know, that there's there's some 
stuff in terms of gosh, some of 

1269
01:02:48,040 --> 01:02:49,560
the stuff with optimal supply 
chains. 

1270
01:02:49,560 --> 01:02:51,800
And so so the guy, some of the 
matrix algebra that they had was

1271
01:02:51,800 --> 01:02:54,360
interesting, but I forgot the 
exact thing. 

1272
01:02:54,520 --> 01:02:55,720
Go ahead. 
No, go ahead. 

1273
01:02:56,360 --> 01:02:58,640
But but a lot of it was 
basically just pseudoscientific,

1274
01:02:58,640 --> 01:03:04,000
right? 
And similarly, American 

1275
01:03:04,000 --> 01:03:06,960
Keynesians are like that. 
And American Keynesians 

1276
01:03:06,960 --> 01:03:11,080
essentially stipulate, OK, 
extremely high inflation is bad,

1277
01:03:11,200 --> 01:03:14,240
but deflation is also bad. 
So therefore we need 2% 

1278
01:03:14,240 --> 01:03:17,040
inflation a year, which is like 
this arbitrary New Zealand 

1279
01:03:17,040 --> 01:03:18,000
target. 
And that's good. 

1280
01:03:18,400 --> 01:03:21,080
Now actually what that is, is a 
2% wealth tax. 

1281
01:03:21,760 --> 01:03:24,160
It's basically, you know, on top
of everything else, you've got 

1282
01:03:24,160 --> 01:03:28,760
2% diluted down. 
And by contrast, the 

1283
01:03:28,760 --> 01:03:31,560
deflationary sectors of the 
economy, in fact the hyper 

1284
01:03:31,560 --> 01:03:34,360
deflationary sectors economy are
the ones that are the most 

1285
01:03:34,360 --> 01:03:35,960
productive. 
For example, Moore's law is 

1286
01:03:35,960 --> 01:03:39,200
hyper deflation. 
That is to say every, you know, 

1287
01:03:39,200 --> 01:03:43,000
or at least it used to be 
something like every 24 months 

1288
01:03:43,000 --> 01:03:45,320
transition density, double S. 
It's not exactly that anymore, 

1289
01:03:45,320 --> 01:03:47,760
but you know, like conceptually 
you've got a Moore's like thing,

1290
01:03:47,760 --> 01:03:49,040
you've got Crater's Law for 
storage. 

1291
01:03:49,040 --> 01:03:51,960
You've got these various kinds 
of laws and in theory, 

1292
01:03:51,960 --> 01:03:54,600
conventional macro would say, 
OK, that'll show hoarding 

1293
01:03:54,600 --> 01:03:56,200
behavior. 
If the price are dropping that 

1294
01:03:56,200 --> 01:03:59,680
fast, people won't buy, they'll 
wait because it's coming. 

1295
01:03:59,680 --> 01:04:01,920
But actually what we see is lots
of spending behavior. 

1296
01:04:01,920 --> 01:04:04,240
Those are the most robust 
sectors of the economy. 

1297
01:04:04,240 --> 01:04:07,000
Everything digital where costs 
are hyper deflating and 

1298
01:04:07,000 --> 01:04:09,400
moreover, China hyper deflates 
costs. 

1299
01:04:09,720 --> 01:04:12,440
Something about Chinese culture 
has all these guys beating shows

1300
01:04:12,440 --> 01:04:15,080
brains in for the lowest 
possible prices, quote 

1301
01:04:15,080 --> 01:04:16,760
overproduction. 
China's. 

1302
01:04:16,760 --> 01:04:19,160
So, you know, they're seeing 
this to such an extent they're 

1303
01:04:19,160 --> 01:04:21,280
like, Oh my God, you know, we 
might need to pull back on the 

1304
01:04:21,280 --> 01:04:23,360
level of competition in some of 
these sectors. 

1305
01:04:23,880 --> 01:04:28,720
But the net of it is they just 
have this insane scale cost 

1306
01:04:28,720 --> 01:04:34,160
quality, massive scale, low cost
production in China. 

1307
01:04:34,840 --> 01:04:38,440
That's hyper deflating costs. 
And So what that means is the 

1308
01:04:38,440 --> 01:04:40,200
cost of living in China is 
actually very low. 

1309
01:04:40,680 --> 01:04:45,080
And yes, China does print and it
prints money in some ways at a 

1310
01:04:45,080 --> 01:04:46,560
superficial level like the US 
does. 

1311
01:04:46,560 --> 01:04:48,840
But I think the biggest 
difference is if printing money 

1312
01:04:48,840 --> 01:04:52,480
is taxation, China uses that tax
money for two purposes. 

1313
01:04:52,720 --> 01:04:55,760
First is it actually builds 
infrastructure, but second is by

1314
01:04:55,760 --> 01:04:59,000
printing, it also keeps the 
currency low so its exports are 

1315
01:04:59,000 --> 01:05:01,680
more competitive, so it gets a 
double dip out of it. 

1316
01:05:01,840 --> 01:05:05,600
It builds its domestic export 
infrastructure, and it uses the 

1317
01:05:05,600 --> 01:05:09,520
capital to build the public part
of that infrastructure. 

1318
01:05:09,720 --> 01:05:11,560
So it's basically a better 
capital allocator. 

1319
01:05:11,960 --> 01:05:14,080
One way to think about it, and 
I'd like your reaction on this, 

1320
01:05:14,080 --> 01:05:16,680
is in the 20th century, you 
know, the Soviets measured their

1321
01:05:16,680 --> 01:05:19,080
economy by the raw number of 
widgets they were cranking out, 

1322
01:05:19,080 --> 01:05:21,120
like a number of shoes in a 
Soviet factory and so on. 

1323
01:05:21,120 --> 01:05:23,080
And the Americans use a price 
system. 

1324
01:05:23,360 --> 01:05:26,400
And we were taught, which is 
true, that the American price 

1325
01:05:26,400 --> 01:05:29,280
system is better than the Soviet
system because Soviets were not 

1326
01:05:29,280 --> 01:05:32,040
looking at the value of the 
object and the Americans were 

1327
01:05:32,480 --> 01:05:34,760
right. 
Now, I actually think that's 

1328
01:05:34,760 --> 01:05:38,480
being reversed because the 
Chinese crank out the widgets, 

1329
01:05:38,680 --> 01:05:40,440
right? 
The cars and the, you know, in, 

1330
01:05:40,440 --> 01:05:42,520
in just raw number of widgets, 
they're up and to the right. 

1331
01:05:42,960 --> 01:05:45,000
The key thing is, though they're
disciplined by international 

1332
01:05:45,000 --> 01:05:47,400
markets. 
Those widgets have to sell in 

1333
01:05:47,800 --> 01:05:50,280
Kazakhstan and Uruguay and 
whatever, right? 

1334
01:05:51,040 --> 01:05:54,520
But the Americans have 
Keynesianism, and so their 

1335
01:05:54,720 --> 01:05:57,400
ostensible price system is 
actually centrally planned. 

1336
01:05:58,600 --> 01:06:02,160
So even the 20th century has a 
weird funhouse mirror where if 

1337
01:06:02,160 --> 01:06:04,800
you push on it a little bit, 
American prices were more 

1338
01:06:04,800 --> 01:06:07,800
capitalist in the 20th century, 
and now they're really Keynesian

1339
01:06:08,440 --> 01:06:12,720
And quote communist widgets were
Stalinist in the 20th century, 

1340
01:06:12,720 --> 01:06:14,560
but they're actually capitalist 
now because they're being 

1341
01:06:14,560 --> 01:06:15,360
exported. 
Yeah. 

1342
01:06:15,360 --> 01:06:17,240
I mean, I think that is there's 
something to that. 

1343
01:06:17,240 --> 01:06:21,120
And let me just agree with you 
that I think that China has this

1344
01:06:21,120 --> 01:06:25,200
amazing capability to produce 
widgets that fly out of the 

1345
01:06:25,200 --> 01:06:26,680
ground. 
I mean, that is actually really 

1346
01:06:26,680 --> 01:06:28,280
amazing. 
I went to China. 

1347
01:06:28,840 --> 01:06:32,240
I moved to China at the start of
2017 to be the technology 

1348
01:06:32,240 --> 01:06:35,760
analyst at a macro research firm
and I was there. 

1349
01:06:35,760 --> 01:06:40,800
I moved away from Silicon Valley
because I was kind of tired of 

1350
01:06:40,920 --> 01:06:44,960
the fictitious economy, namely, 
you know, consumer Internet. 

1351
01:06:45,200 --> 01:06:48,280
We hadn't gotten to even to B to
B SAS yet. 

1352
01:06:48,720 --> 01:06:51,240
But I was also skeptical of 
crypto and so I think that, you 

1353
01:06:51,240 --> 01:06:54,240
know, is there anything more 
bubble like and fictitious than 

1354
01:06:54,480 --> 01:06:55,920
BTCI? 
Don't know, man. 

1355
01:06:55,920 --> 01:06:57,880
I would say that it's more 
fictitious than NYT. 

1356
01:06:58,000 --> 01:06:59,560
OK, I'm going to. 
I'm going to argue about this in

1357
01:06:59,560 --> 01:07:00,440
a second. 
Finish your thing. 

1358
01:07:00,440 --> 01:07:02,600
Go, go, go. 
I think that, you know, the 

1359
01:07:02,600 --> 01:07:05,920
Chinese really were making 
things, making witches. 

1360
01:07:05,920 --> 01:07:08,280
And I thought that they were 
much more ambitious than Silicon

1361
01:07:08,280 --> 01:07:10,920
Valley. 
And I think that, you know, I 

1362
01:07:10,920 --> 01:07:13,240
was pretty optimistic that they 
were going to make a ton of 

1363
01:07:13,240 --> 01:07:15,800
shit. 
And even I am surprised at how 

1364
01:07:15,800 --> 01:07:19,720
much, how many EVs, how much of 
the batteries, how much of, you 

1365
01:07:19,720 --> 01:07:21,600
know, basically they're so 
dominant in all of these 

1366
01:07:21,600 --> 01:07:23,800
industrial robotics. 
And even at my high 

1367
01:07:23,800 --> 01:07:26,080
expectations, they were able to 
supersede that. 

1368
01:07:26,520 --> 01:07:29,960
And I definitely really worry 
that the US manufacturing base 

1369
01:07:29,960 --> 01:07:33,880
is going to be deindustrialized.
I mean, the German industrial 

1370
01:07:33,880 --> 01:07:36,640
base is already being pretty 
substantially deindustrialized 

1371
01:07:36,640 --> 01:07:40,600
by China today, but the US has 
about 12 million manufacturing 

1372
01:07:40,600 --> 01:07:42,440
workers. 
Could I see that going down? 

1373
01:07:42,480 --> 01:07:43,720
Yeah, I can. 
You know this. 

1374
01:07:43,760 --> 01:07:46,160
It already has for the last 
seven months total crash in 

1375
01:07:46,160 --> 01:07:48,480
manufacturing jobs. 
Yes, it's lost 40,000 

1376
01:07:48,480 --> 01:07:50,640
manufacturing jobs since 
Liberation Day and this is 

1377
01:07:50,640 --> 01:07:52,600
before we deported all those 
Koreans. 

1378
01:07:53,680 --> 01:07:57,120
And so you know the I could 
definitely think that the number

1379
01:07:57,120 --> 01:08:00,280
of manufacturing workers halves 
in the next 10 years. 

1380
01:08:00,640 --> 01:08:03,680
And as that, you know, as we 
lose a lot of that in Michigan, 

1381
01:08:03,680 --> 01:08:06,880
Pennsylvania, Ohio, whatever 
else, I think the economy will 

1382
01:08:06,880 --> 01:08:09,120
weaken and I don't think that 
the politics will get better. 

1383
01:08:09,120 --> 01:08:11,360
And so, yeah, I think I agree 
with you there that there's a 

1384
01:08:11,360 --> 01:08:14,440
lot of disunity there. 
But I think that, you know, 

1385
01:08:14,720 --> 01:08:17,960
fundamentally, if the US is able
to get a lot of this 

1386
01:08:17,960 --> 01:08:22,200
manufacturing right, get Elon to
fix first the chip supply chain,

1387
01:08:22,640 --> 01:08:25,840
then the surface naval supply 
chain, then the submarine supply

1388
01:08:25,840 --> 01:08:27,960
chain, and then throw him into 
the munitions. 

1389
01:08:27,960 --> 01:08:30,560
Because he seems to like be kind
of like the only person able to 

1390
01:08:31,160 --> 01:08:32,760
manufacture very well in 
America. 

1391
01:08:32,760 --> 01:08:35,319
I find this very strange. 
But even he seems to be losing 

1392
01:08:35,319 --> 01:08:38,359
to the Chinese and the EVs. 
And so, you know, if the 

1393
01:08:38,600 --> 01:08:41,600
Americans are able to solve a 
lot of these problems, I don't 

1394
01:08:41,600 --> 01:08:43,319
think there has to be so much 
disunity here. 

1395
01:08:43,760 --> 01:08:46,080
I think that maybe, you know, 
we'll just, you know, they're 

1396
01:08:46,080 --> 01:08:48,520
going to sip green tea in their 
tea houses. 

1397
01:08:48,920 --> 01:08:51,960
We're going to like watch the AI
slop on our phones. 

1398
01:08:51,960 --> 01:08:53,720
It could be just like a lot of 
peace here. 

1399
01:08:53,720 --> 01:08:56,040
You know, people are just 
chilling out and hanging out and

1400
01:08:56,040 --> 01:08:58,479
they're tomping and they're 
quiet quitting. 

1401
01:08:58,920 --> 01:09:01,439
You know, we could just all 
like, just be very friendly and,

1402
01:09:01,520 --> 01:09:03,880
you know, sip tea and, like, 
watch the phones. 

1403
01:09:03,880 --> 01:09:05,880
No. 
Isn't that a nice optimistic 

1404
01:09:05,880 --> 01:09:08,319
scenario? 
Well, have you know this guy Han

1405
01:09:08,319 --> 01:09:10,800
Fazy who writes for Asia Times? 
Yeah. 

1406
01:09:10,800 --> 01:09:14,080
That's a pseudonym, yes. 
Yeah, I think it's a donkey dog,

1407
01:09:14,080 --> 01:09:16,640
twelve O 8 or something like 
that on X, right. 

1408
01:09:17,760 --> 01:09:21,160
At least he, he, he, he said he 
might be that person or 

1409
01:09:21,160 --> 01:09:25,120
whatever. 
So his point was essentially 

1410
01:09:25,120 --> 01:09:31,560
that China's grown so fast that 
the, the Sydney's trap has 

1411
01:09:31,560 --> 01:09:34,359
actually been overcome. 
Like by the time the US had 

1412
01:09:34,359 --> 01:09:37,800
time, you know, somebody said we
don't even have time to be 

1413
01:09:37,800 --> 01:09:40,120
shocked, right? 
Like by the by the rate of 

1414
01:09:40,120 --> 01:09:43,840
growth of China, right? 
And so China's grown so fast 

1415
01:09:44,319 --> 01:09:49,319
that basically Hagseth has 
essentially surrendered and is 

1416
01:09:49,319 --> 01:09:52,560
pulling back troops from Asia to
focus on the Western Hemisphere.

1417
01:09:53,319 --> 01:09:56,960
But I don't think that means, 
unfortunately, that one group 

1418
01:09:56,960 --> 01:10:01,640
can sip green tea and their you 
guys can watch slop because the 

1419
01:10:01,640 --> 01:10:04,480
US economy only has, in my view,
two things that are competitive.

1420
01:10:04,480 --> 01:10:05,880
And I'll come back to your Elon 
point in a second. 

1421
01:10:05,880 --> 01:10:07,960
And those are basically the 
dollar in tech. 

1422
01:10:07,960 --> 01:10:10,000
Those are the only two exports 
America actually has. 

1423
01:10:10,000 --> 01:10:12,440
When you really, really push it 
down, you look sector by sector 

1424
01:10:12,440 --> 01:10:14,560
and everything, are they really 
competitive in? 

1425
01:10:15,240 --> 01:10:20,760
And the dollar is very quickly 
going away. 

1426
01:10:20,760 --> 01:10:23,800
Because if you look at just gold
soaring, I mean, going from 

1427
01:10:23,800 --> 01:10:28,920
$2000 an ounce to 4000 in two 
years is crazy, right? 

1428
01:10:28,920 --> 01:10:32,040
That's 50% devaluation, right? 
At all kinds of states are now 

1429
01:10:32,040 --> 01:10:33,960
just stocking up on gold. 
I can show. 

1430
01:10:34,320 --> 01:10:35,640
Have you seen these graphs? 
Should I put some of these 

1431
01:10:35,640 --> 01:10:40,840
graphs on the screen? 
Look at that right now. 

1432
01:10:40,840 --> 01:10:42,760
There's another graph that 
actually shows gold already 

1433
01:10:42,760 --> 01:10:43,680
flipping. 
OK. 

1434
01:10:44,080 --> 01:10:48,280
But basically that's a curve. 
Yeah. 

1435
01:10:48,280 --> 01:10:51,840
OK. 
And if you look at China's like 

1436
01:10:51,840 --> 01:10:54,760
official gold reserves, it goes 
like like this, OK. 

1437
01:10:55,400 --> 01:10:59,160
And and there's a bunch of 
graphs like this I can show. 

1438
01:10:59,160 --> 01:11:01,600
I mean, I may send them to you 
afterwards if you want to put 

1439
01:11:01,600 --> 01:11:06,880
them on the screen, but you 
can't go from, I mean, dollar 

1440
01:11:06,880 --> 01:11:09,720
inflation is global taxation. 
Let there say, let's say there's

1441
01:11:09,720 --> 01:11:12,560
at least a billion in the in the
global American empire. 

1442
01:11:12,560 --> 01:11:14,920
If you include Japan and you 
include Europe, you include 

1443
01:11:14,920 --> 01:11:17,920
Australia, all these places and 
the dollar is used there 

1444
01:11:17,920 --> 01:11:19,880
directly and indirectly because 
it's got U.S. 

1445
01:11:19,880 --> 01:11:21,280
Treasuries. 
People have stakes in the US 

1446
01:11:21,280 --> 01:11:24,440
stock market. 
So as US becomes a country non 

1447
01:11:24,440 --> 01:11:28,400
empire and even Europeans are 
strip search and, and S Koreans 

1448
01:11:28,400 --> 01:11:32,000
are deported and researchers are
shut off and trade is shut off 

1449
01:11:32,000 --> 01:11:34,600
because the trade shut off is 
basically like a, it's like the 

1450
01:11:34,600 --> 01:11:36,520
US sanctioning itself. 
It's like the US blockading 

1451
01:11:36,520 --> 01:11:38,680
itself. 
You know, it's going almost 

1452
01:11:38,680 --> 01:11:41,120
North Korean levels of autarky 
in terms of what they want to 

1453
01:11:41,120 --> 01:11:44,440
do. 
Then you go from a billion 

1454
01:11:44,440 --> 01:11:46,880
people, maybe down to 330 
million people. 

1455
01:11:47,440 --> 01:11:50,240
There's like a 6070% drop in 
your tax base. 

1456
01:11:50,440 --> 01:11:52,600
That inflation is spread across 
fewer people because why would 

1457
01:11:52,600 --> 01:11:55,040
other countries hold dollars if 
they can't trade with America, 

1458
01:11:55,480 --> 01:11:57,480
right? 
Why they hold Treasuries when, 

1459
01:11:57,760 --> 01:12:00,200
you know, for example, starting 
January 2026, there's going to 

1460
01:12:00,200 --> 01:12:02,120
be a remittance tax. 
You see that like a 1%. 

1461
01:12:02,200 --> 01:12:04,720
So the US is going away from the
open capital account, right? 

1462
01:12:05,000 --> 01:12:08,320
It's shrinking its tax base, 
it's military's withdrawing all 

1463
01:12:08,320 --> 01:12:09,520
the things that backed the 
dollar. 

1464
01:12:09,520 --> 01:12:11,960
The only thing that's there are 
stable coins. 

1465
01:12:12,000 --> 01:12:14,080
That's the only thing that's 
like expanding the scope of the 

1466
01:12:14,080 --> 01:12:15,720
dollar. 
That may be a Deus Ex machina 

1467
01:12:16,040 --> 01:12:21,240
that gives a few years on life. 
But my view on this, and I'd 

1468
01:12:21,240 --> 01:12:23,000
like your reaction. 
Oh, you mentioned something else

1469
01:12:23,000 --> 01:12:25,720
about AGI, at least in the 
current thing. 

1470
01:12:25,720 --> 01:12:28,400
I mean, you know, a IS models 
have sort of topped out in the 

1471
01:12:28,400 --> 01:12:30,160
recent iteration. 
Like, you know, nothing against,

1472
01:12:30,560 --> 01:12:31,880
you know, open AI. 
It's a great company. 

1473
01:12:31,880 --> 01:12:34,600
But GPT 5 is kind of, you know, 
it wasn't a huge leap. 

1474
01:12:34,600 --> 01:12:38,160
These things have not been huge 
leaps recently and the world 

1475
01:12:38,160 --> 01:12:40,760
model aspect like then AI model 
actually knowing something about

1476
01:12:40,760 --> 01:12:42,120
the world. 
I think it's more likely to 

1477
01:12:42,120 --> 01:12:45,240
happen in China because they can
do the humanoid robots which 

1478
01:12:45,240 --> 01:12:47,880
have sensing so simultaneous 
location and mapping. 

1479
01:12:48,080 --> 01:12:50,320
You actually have you know, 
there's there's a logic to the 

1480
01:12:50,320 --> 01:12:52,440
3D World. 
They can pull in all the sensor 

1481
01:12:52,440 --> 01:12:54,360
data just like the cars driving 
down the road. 

1482
01:12:54,560 --> 01:12:56,720
You know, it can pull them 
essentially every drone, every 

1483
01:12:56,720 --> 01:12:59,720
self driving, you know, car, 
every humanoid pulls in all that

1484
01:12:59,720 --> 01:13:01,480
data. 
They actually can have a world 

1485
01:13:01,480 --> 01:13:04,280
model. 
So I think like the Chinese 

1486
01:13:04,280 --> 01:13:06,640
robot servants, I mean, they 
already have the sidewalk 

1487
01:13:06,640 --> 01:13:08,760
robots, the hotel robots, the 
drone delivery, all that stuff's

1488
01:13:08,760 --> 01:13:10,240
not sci-fi. 
It's already shipping, as you 

1489
01:13:10,240 --> 01:13:11,880
know, in Shenzhen. 
It's already there, right? 

1490
01:13:13,080 --> 01:13:16,560
So I think this, the very 
Abrahamic Western concept of a 

1491
01:13:16,560 --> 01:13:19,440
single AGI that will tell us 
what to do might have been 

1492
01:13:19,440 --> 01:13:21,400
plausible 3 years ago. 
I don't think it's really that 

1493
01:13:21,400 --> 01:13:23,680
plausible right now, at least in
the through of the Gardner 

1494
01:13:23,760 --> 01:13:25,240
Gardner hive cycle where we are 
right now. 

1495
01:13:25,760 --> 01:13:28,440
And I definitely don't think 
it's going to be like this 

1496
01:13:28,440 --> 01:13:31,600
concept of, oh, this one guy 
discovers it and then they're 

1497
01:13:31,600 --> 01:13:34,840
super powerful forever. 
We're seeing that AGI is gated 

1498
01:13:35,560 --> 01:13:38,360
by the physical world. 
You can't just think your way 

1499
01:13:38,360 --> 01:13:39,960
into an advantage. 
There's friction. 

1500
01:13:39,960 --> 01:13:43,560
OK, then ask for others. 
That's AGI just mocking that you

1501
01:13:43,560 --> 01:13:47,520
mentioned. 
That's then there's Elon Deus 

1502
01:13:47,520 --> 01:13:50,600
mock Deus Ex mockina. 
The problem is Democrats and now

1503
01:13:50,600 --> 01:13:53,480
Republicans are against Elon. 
So I wrote this post on the 

1504
01:13:53,480 --> 01:13:56,880
special Elon zone, if you like, 
in some carve out star based 

1505
01:13:56,880 --> 01:13:58,080
Texas. 
So he can move at the speed of 

1506
01:13:58,080 --> 01:14:01,000
physics, not permits. 
Maybe he could build, but lots 

1507
01:14:01,000 --> 01:14:03,600
of America dislikes him now, 
right? 

1508
01:14:03,680 --> 01:14:06,560
Democrats dislike him because, 
you know, he's capitalist 

1509
01:14:06,560 --> 01:14:08,840
Republicans, Oh my God, because 
he has immigrants, whatever, 

1510
01:14:09,000 --> 01:14:11,600
right. 
So Elon is sort of like a man 

1511
01:14:11,600 --> 01:14:13,880
against time in some ways, 
right? 

1512
01:14:14,120 --> 01:14:17,920
Like he's, you know, somebody 
who's being resisted by the so 

1513
01:14:18,480 --> 01:14:21,920
that's something where he's he's
kind of pushing upstream right 

1514
01:14:22,640 --> 01:14:25,360
now. 
What I think actually. 

1515
01:14:25,360 --> 01:14:27,360
So now we talk about Bitcoin 
just for a second, OK. 

1516
01:14:28,520 --> 01:14:31,320
I think roughly Democrats under 
estimate, Republicans 

1517
01:14:31,320 --> 01:14:34,720
underestimate China under 
estimate the Internet also under

1518
01:14:34,720 --> 01:14:38,840
estate Indians that's like this,
the hierarchy of the world in 

1519
01:14:38,840 --> 01:14:42,160
some ways, OK, like who under 
prices and underestimates who, 

1520
01:14:42,200 --> 01:14:43,680
right? 
And then they kind of surprise 

1521
01:14:43,680 --> 01:14:45,680
you to the upside, like 
Democrats under a Republicans 

1522
01:14:45,680 --> 01:14:47,240
and they managed to somehow take
the White House. 

1523
01:14:47,520 --> 01:14:49,920
Republicans under the Chinese, 
they managed to build this giant

1524
01:14:49,920 --> 01:14:50,840
military. 
And so it's over. 

1525
01:14:51,280 --> 01:14:53,640
So I'll give one reference that 
you might find interesting that 

1526
01:14:53,640 --> 01:14:56,160
may add to your kind of 
engineering state versus lawyer 

1527
01:14:56,160 --> 01:14:58,360
state. 
So Fukuyama's origins of 

1528
01:14:58,360 --> 01:15:02,480
political order and what that 
talks about is how China 

1529
01:15:02,680 --> 01:15:04,840
historically has had the state 
above the law. 

1530
01:15:05,400 --> 01:15:08,360
Like they took the very 
pragmatic attitude that the 

1531
01:15:08,360 --> 01:15:10,760
emperor can do what he wants, 
but the mountains are high, 

1532
01:15:10,760 --> 01:15:13,040
emperor's far away. 
So therefore we can do what we 

1533
01:15:13,040 --> 01:15:14,440
want. 
And there's a pragmatic 

1534
01:15:14,440 --> 01:15:17,200
constraint, right? 
Because your chair can turn into

1535
01:15:17,200 --> 01:15:18,960
a party official if they so will
it. 

1536
01:15:19,240 --> 01:15:22,400
But otherwise, you know, so the 
balance was just practical as 

1537
01:15:22,400 --> 01:15:25,160
opposed to legalistic. 
Now, here's the part you might 

1538
01:15:25,160 --> 01:15:27,240
not know. 
India actually had the opposite 

1539
01:15:27,240 --> 01:15:30,640
tradition. 
They had law above state. 

1540
01:15:31,480 --> 01:15:33,840
Why? 
Because you could quote Dharmic 

1541
01:15:33,840 --> 01:15:37,240
law to a king, and they would 
actually believe that they 

1542
01:15:37,240 --> 01:15:39,840
wouldn't get reincarnated if 
they didn't follow Dharmic law. 

1543
01:15:40,240 --> 01:15:43,160
So you had weak kings and strong
law, right? 

1544
01:15:43,560 --> 01:15:45,960
So what's the modern version of 
that crypto? 

1545
01:15:47,080 --> 01:15:50,440
You actually have hard smart 
contracts, hard cryptography 

1546
01:15:50,440 --> 01:15:54,440
that no state can break, right? 
As as Assange put it, no amount 

1547
01:15:54,440 --> 01:15:56,600
of violence can solve certain 
kinds of math problems. 

1548
01:15:57,200 --> 01:16:00,320
And lots of Chinese people, 
especially the young ones, do 

1549
01:16:00,320 --> 01:16:05,080
not respect America anymore, but
they do respect Bitcoin in the 

1550
01:16:05,080 --> 01:16:07,440
sense of like, it's just 
bursting through the roof. 

1551
01:16:07,480 --> 01:16:09,400
You can make a lot of money with
a cryptocurrency. 

1552
01:16:09,400 --> 01:16:12,040
You can make a lot of money. 
And it's something that is 

1553
01:16:12,040 --> 01:16:15,360
intrinsically very difficult for
China to, to, to copy. 

1554
01:16:15,360 --> 01:16:18,880
It can copy the physical, but 
the digital is harder, right? 

1555
01:16:19,160 --> 01:16:21,320
The intangible, the spiritual. 
In a sense, China is this 

1556
01:16:21,320 --> 01:16:25,960
amazing place in the physical 
world, but Buddhism, communism 

1557
01:16:26,040 --> 01:16:29,680
and techno capitalism were 
imported from India, Europe and 

1558
01:16:29,680 --> 01:16:32,000
America, respectively. 
It imported the software, it 

1559
01:16:32,000 --> 01:16:34,040
forked it and made the Chinese 
version with Chinese 

1560
01:16:34,040 --> 01:16:36,440
characteristics. 
But it's not like a software 

1561
01:16:36,440 --> 01:16:38,320
developer in the same way. 
I'd like the root, you know, 

1562
01:16:38,320 --> 01:16:39,960
it's, it's software modifier, 
right? 

1563
01:16:40,280 --> 01:16:42,760
This is not a diss on China. 
It's got, you know, thousands of

1564
01:16:42,760 --> 01:16:44,000
years of philosophy. 
And so it's over. 

1565
01:16:44,000 --> 01:16:45,960
But it's a relative weakness. 
In the physical world, I think 

1566
01:16:45,960 --> 01:16:47,640
it's just total, total number 
one. 

1567
01:16:48,120 --> 01:16:50,040
But in the digital world, the 
spiritual world, the moral 

1568
01:16:50,040 --> 01:16:53,840
world, it's not as strong. 
I think you can compete with 

1569
01:16:53,840 --> 01:16:56,920
China that way, right? 
And so I look at the Internet 

1570
01:16:57,120 --> 01:17:01,080
and the free Internet and you 
know, communities that have 

1571
01:17:01,080 --> 01:17:04,200
consensual moderation. 
So you go like unmoderated as 

1572
01:17:04,200 --> 01:17:07,640
American anarchy, unconsensually
moderated as Chinese control, 

1573
01:17:07,840 --> 01:17:10,320
consensually moderated, you'd 
opt into these new societies 

1574
01:17:10,320 --> 01:17:11,960
that actually have some degree 
of consensual mind. 

1575
01:17:12,040 --> 01:17:13,760
That's how you have thesis into 
the synthesis. 

1576
01:17:13,920 --> 01:17:16,960
That's what I see in the medium 
to long run. 

1577
01:17:16,960 --> 01:17:19,400
So that's a, and this is a 
version of the lawyerly state. 

1578
01:17:19,400 --> 01:17:22,040
That's not the lawyerly state. 
It's the lawyerly network where 

1579
01:17:22,040 --> 01:17:25,000
you're not a lawyer, but you're 
a coder and you're quoting lost 

1580
01:17:25,000 --> 01:17:27,360
the network and that's actually 
helping you build as opposed to 

1581
01:17:27,360 --> 01:17:29,000
helping you obstruct. 
OK, let me pause there. 

1582
01:17:29,160 --> 01:17:32,520
Yeah, well, I think that there's
more than two great exports of 

1583
01:17:32,520 --> 01:17:36,200
America. 
It's not just the dollar as well

1584
01:17:36,200 --> 01:17:38,080
as tech. 
I think it's also the 

1585
01:17:38,080 --> 01:17:41,520
universities. 
Imagine this, that CZ and Ping 

1586
01:17:41,520 --> 01:17:44,120
sends his daughter to be 
indoctrinated at Harvard. 

1587
01:17:44,600 --> 01:17:46,960
And a lot of these high 
Communist Party officials are 

1588
01:17:46,960 --> 01:17:50,440
still really eager to send their
kids to Yale and Stanford where 

1589
01:17:50,440 --> 01:17:52,800
they get incredible 
indoctrination schemes. 

1590
01:17:53,000 --> 01:17:55,680
And so, you know, there is 
actually this one other great 

1591
01:17:55,680 --> 01:17:59,600
export from America, and I think
that might export quite a lot of

1592
01:17:59,600 --> 01:18:04,280
bad ideas, just as the 
Americans, mostly the Americans,

1593
01:18:04,280 --> 01:18:07,840
but also partly the Europeans 
exported all of this ecological 

1594
01:18:07,840 --> 01:18:12,760
Dumor ISM into the Chinese state
throughout the 1970s. 

1595
01:18:12,760 --> 01:18:14,920
And then what do they do if they
impose something like the one 

1596
01:18:14,920 --> 01:18:18,120
child policy because they were 
too dumb to, you know, really 

1597
01:18:18,120 --> 01:18:21,840
realize that, you know, the 
Western ecologists were full of 

1598
01:18:21,840 --> 01:18:23,920
shit. 
So I mean, I guess I just have, 

1599
01:18:24,080 --> 01:18:26,400
you know, I think your schema is
very attractive biology. 

1600
01:18:26,400 --> 01:18:28,280
But I I think I have one 
question. 

1601
01:18:28,800 --> 01:18:31,600
If the Chinese are so smart, why
are they against crypto and 

1602
01:18:31,600 --> 01:18:33,600
stable coins? 
Oh, but they're not. 

1603
01:18:33,720 --> 01:18:38,400
That's thing is half like the 
Chinese diaspora. 

1604
01:18:38,680 --> 01:18:40,440
A lot of the overseas Chinese 
love it. 

1605
01:18:40,760 --> 01:18:42,160
That's. 
Like the Communist Party? 

1606
01:18:42,160 --> 01:18:44,400
If the Communist Party is so 
smart, why are they against 

1607
01:18:44,400 --> 01:18:47,000
cryptos and the crypto and the 
stable coins? 

1608
01:18:47,160 --> 01:18:49,440
Because it's good for the 
people, but not it's good for 

1609
01:18:49,440 --> 01:18:53,880
the network but not the state. 
So that's a key thing. 

1610
01:18:53,880 --> 01:18:57,160
Crypto gives power to the 
individual at the expense of the

1611
01:18:57,160 --> 01:19:00,920
state. 
And so it's rational for 

1612
01:19:01,280 --> 01:19:03,440
especially for the way that 
China works, right? 

1613
01:19:03,640 --> 01:19:06,720
You can imagine a small state 
confused with the network, 

1614
01:19:07,000 --> 01:19:08,680
right? 
China's fused with the network 

1615
01:19:08,680 --> 01:19:10,880
in a different way where it's 
got root control over the great 

1616
01:19:10,880 --> 01:19:12,520
Firewall and and so on and so 
forth. 

1617
01:19:12,840 --> 01:19:14,360
One thing I will say, by the 
way, you mentioned the 

1618
01:19:14,360 --> 01:19:16,680
universities, unfortunately, 
American universities are 

1619
01:19:16,680 --> 01:19:19,360
basically going to 0. 
Like Terry Tao got his research 

1620
01:19:19,360 --> 01:19:22,720
funding cut, if you saw that, 
and visas are being denied. 

1621
01:19:22,880 --> 01:19:25,240
And there are they're also woke 
and they're, they've got great 

1622
01:19:25,240 --> 01:19:27,320
inflation and AI is destroying 
the things. 

1623
01:19:27,640 --> 01:19:30,960
And if I look at the graphs, 
China's number one and highly 

1624
01:19:30,960 --> 01:19:33,200
set of papers now they've 
actually flipped on nature. 

1625
01:19:33,200 --> 01:19:35,680
They've they, you know, they 
work in areas like material 

1626
01:19:35,680 --> 01:19:38,720
science in the physical world 
that the US isn't even doing 

1627
01:19:38,720 --> 01:19:40,480
anymore. 
You know, there's civil 

1628
01:19:40,480 --> 01:19:42,080
engineering, mechanical 
engineering, the certain 

1629
01:19:42,080 --> 01:19:44,920
disciplines where just Chinese 
researchers are crushing it. 

1630
01:19:45,440 --> 01:19:50,080
And and I think that what she 
did is, if I'm not mistaken, you

1631
01:19:50,080 --> 01:19:52,640
correct me if I'm wrong, he 
actually took English out of the

1632
01:19:52,640 --> 01:19:57,480
curriculum in China, right? 
Which helps them sort of 

1633
01:19:57,480 --> 01:20:00,480
firewall themselves against the 
Barbarians, right? 

1634
01:20:00,960 --> 01:20:04,640
And with, you know, an exception
for himself, I think it's also a

1635
01:20:04,640 --> 01:20:09,320
disadvantage for people to have 
studied in America to now ascend

1636
01:20:09,320 --> 01:20:11,520
within the Communist Party. 
He wants like people who are 

1637
01:20:11,520 --> 01:20:16,720
more right, nationalist because 
then they'll have fewer malware,

1638
01:20:16,880 --> 01:20:19,560
less malware from abroad, you 
know, in their heads. 

1639
01:20:20,760 --> 01:20:23,480
I think the Chinese really need 
something like a vaccine where 

1640
01:20:23,480 --> 01:20:26,720
you introduce like the right 
amount of malware into your body

1641
01:20:26,800 --> 01:20:28,200
and then you realize, like, 
what's bad? 

1642
01:20:28,200 --> 01:20:31,560
Because what if you get like a 
lot of like sophisticated 

1643
01:20:31,560 --> 01:20:34,840
sounding stories like the air 
lakes and the population bomb? 

1644
01:20:34,840 --> 01:20:36,640
And then you said we're going to
do something about it. 

1645
01:20:36,640 --> 01:20:39,360
And so you need like the correct
level of exposure to the mind 

1646
01:20:39,360 --> 01:20:41,000
virus. 
And I think, you know, taking 

1647
01:20:41,000 --> 01:20:43,880
English out and taking, you 
know, Stanford educated people 

1648
01:20:43,880 --> 01:20:44,880
out. 
I don't think that's going to do

1649
01:20:44,880 --> 01:20:46,480
it. 
I think you're correct and I 

1650
01:20:46,480 --> 01:20:51,480
think basically I think their 
form, I think the Chinese form 

1651
01:20:51,480 --> 01:20:54,680
like vertically integrated Apple
1.4 billion Han Chinese 

1652
01:20:54,680 --> 01:20:58,760
coordinated in a meta Organism 
is going to be a very powerful 

1653
01:20:58,960 --> 01:21:02,720
form for the next 20 or 30 years
as and I think the US is going 

1654
01:21:02,720 --> 01:21:04,760
to go to 0. 
And I do think there's going to 

1655
01:21:04,760 --> 01:21:06,800
be a lot of shooting. 
But I do agree with you that 

1656
01:21:06,800 --> 01:21:09,720
there's something good about 
that and that good part. 

1657
01:21:11,000 --> 01:21:14,280
So here last piece of them then 
maybe we can wrap in and give 

1658
01:21:14,280 --> 01:21:16,280
you can you know, we'll give 
your final words. 

1659
01:21:16,800 --> 01:21:21,360
I think in the 20 tens, blue 
America and tech America were 

1660
01:21:21,360 --> 01:21:25,280
allied against red America. 
Then the twenty 20s red and tech

1661
01:21:25,400 --> 01:21:28,320
rallied against blue. 
I think very soon already we're 

1662
01:21:28,320 --> 01:21:32,160
going to see blue and red allied
against tech and tech is a very 

1663
01:21:32,160 --> 01:21:35,520
small group of people and 
actually most of violence in the

1664
01:21:35,520 --> 01:21:37,880
20th century was not on the 
basis of races, on the basis of 

1665
01:21:37,880 --> 01:21:41,440
class. 
And just like there was angry at

1666
01:21:41,440 --> 01:21:43,320
the capitalists last century 
actually killing them. 

1667
01:21:43,320 --> 01:21:45,840
They killed landlords in China, 
they killed the kulaks in 

1668
01:21:45,840 --> 01:21:46,880
Russia. 
They killed the guys with 

1669
01:21:47,560 --> 01:21:49,320
classes in Cambodia. 
I think they're going to go 

1670
01:21:49,320 --> 01:21:50,920
after the guys with keyboards in
America. 

1671
01:21:52,200 --> 01:21:54,520
OK. 
I'm, you know, like the level of

1672
01:21:54,520 --> 01:21:59,520
anger towards if the dollar goes
away and AI is blamed for taking

1673
01:21:59,520 --> 01:22:01,720
all the jobs and crypto takes 
all the money, tech guys will 

1674
01:22:01,720 --> 01:22:03,880
take all the blame. 
And tech is a class. 

1675
01:22:03,880 --> 01:22:05,840
And one of the few things, 
though, that sociologists got 

1676
01:22:05,840 --> 01:22:08,280
correct is a class and race 
interact. 

1677
01:22:08,560 --> 01:22:12,080
And so tech has a lot of Chinese
Americans, a lot of Indian 

1678
01:22:12,080 --> 01:22:14,720
Americans, a lot of Jewish 
Americans for the right, 

1679
01:22:15,240 --> 01:22:16,640
immigrants, Chinese shoes and so
on. 

1680
01:22:16,840 --> 01:22:19,000
And for the left, it's too 
white, it's too male, it's too 

1681
01:22:19,000 --> 01:22:22,440
capitalist, it's too rich. 
So I think tech in America, the 

1682
01:22:22,440 --> 01:22:24,840
part that's functional America 
is going to be driven out. 

1683
01:22:26,280 --> 01:22:28,360
I think it's not going to be 
able to find a home, you know, 

1684
01:22:28,360 --> 01:22:30,400
no country for tech men, so to 
speak. 

1685
01:22:30,720 --> 01:22:33,120
And I think it's going to have 
to find new countries around the

1686
01:22:33,120 --> 01:22:35,120
world. 
All these places for digital 

1687
01:22:35,120 --> 01:22:38,000
nomads, remote workers. 
There's now 420 cities that have

1688
01:22:38,000 --> 01:22:40,160
at least one Unicorn. 
There's all these small 

1689
01:22:40,160 --> 01:22:42,800
countries from Palau to the 
Marshall Islands that have like 

1690
01:22:42,800 --> 01:22:47,000
crypto programs, El Salvador 
has, you know, nomad visas, 

1691
01:22:47,280 --> 01:22:48,960
etcetera, etcetera. 
All these places. 

1692
01:22:49,200 --> 01:22:52,080
There's going to be a giant tech
diaspora much as Europe. 

1693
01:22:52,240 --> 01:22:54,160
Unfortunately, in all the 
infighting, the trans century 

1694
01:22:54,160 --> 01:22:55,240
drove out many of its 
scientists. 

1695
01:22:55,240 --> 01:22:57,280
I think America is going to 
drive out its technologists. 

1696
01:22:57,760 --> 01:23:01,040
But that will be the thing 
you're talking about, where some

1697
01:23:01,040 --> 01:23:05,720
of the good parts of the US get 
rebuilt as a version 3, like an 

1698
01:23:05,720 --> 01:23:08,400
Internet first kind of thing. 
I'll have a quick reaction and 

1699
01:23:08,400 --> 01:23:12,720
my last word will be that, yeah,
I don't know, I don't think all 

1700
01:23:12,720 --> 01:23:15,000
of the Californians are going to
move to Palau. 

1701
01:23:15,280 --> 01:23:16,760
Can you show me where that is on
the map? 

1702
01:23:16,760 --> 01:23:20,160
No, they're not all going to 
move to Palau, but I think they 

1703
01:23:20,160 --> 01:23:20,800
will. 
It's in them. 

1704
01:23:20,840 --> 01:23:21,960
It's in like the Pacific 
Islands. 

1705
01:23:22,240 --> 01:23:27,640
But I think for example, Chinese
people can get actually 

1706
01:23:27,640 --> 01:23:30,160
everybody can now get AK visa to
China, right? 

1707
01:23:30,440 --> 01:23:36,000
Indians can get OCI, Jews can 
get Aaliyah ALIYH, many 

1708
01:23:36,000 --> 01:23:40,240
Americans can actually get an EU
passport based on their ancestry

1709
01:23:40,560 --> 01:23:43,640
and then get to Eastern Europe 
and Poland and places like that,

1710
01:23:43,640 --> 01:23:44,720
which will actually be 
functional. 

1711
01:23:44,720 --> 01:23:46,480
It'll be like a reverse of the 
20th century. 

1712
01:23:47,200 --> 01:23:48,920
Eastern Europe is more 
functional than Western Europe. 

1713
01:23:49,920 --> 01:23:53,000
And if you think about how 
mobile tech people are, they are

1714
01:23:53,000 --> 01:23:56,480
global. 
They are mobile and only a 

1715
01:23:56,480 --> 01:23:58,680
fraction of tech. 
I mean, by the way, crypto 

1716
01:23:58,680 --> 01:24:00,720
already decentralized Asia five 
years ago. 

1717
01:24:01,120 --> 01:24:04,680
AI with the Chinese models. 
The open Chinese models are 

1718
01:24:04,680 --> 01:24:06,600
actually the majority of 
startups depending on how you 

1719
01:24:06,600 --> 01:24:07,840
count. 
Martine Casado tweeted about 

1720
01:24:07,840 --> 01:24:09,280
this one. 
Like 80% of new startups are 

1721
01:24:09,280 --> 01:24:12,280
using the open Chinese models. 
Robotics is already in China. 

1722
01:24:12,280 --> 01:24:14,240
Manufacturing is already in 
China, right? 

1723
01:24:17,040 --> 01:24:23,120
I think the leverage on SF Bay 
Area tech it's less essential 

1724
01:24:23,440 --> 01:24:24,920
than it was right? 
Also. 

1725
01:24:25,640 --> 01:24:29,720
That's a nice idea, but the San 
Francisco, which is a city I 

1726
01:24:29,720 --> 01:24:32,760
deeply distrust and I'm like 
constantly wondering why I'm 

1727
01:24:32,760 --> 01:24:36,920
still here is actually did sort 
of decentralized up to Austin 

1728
01:24:36,920 --> 01:24:39,080
and Miami and New York, 
etcetera. 

1729
01:24:39,080 --> 01:24:40,800
And then what happened? 
It recentralized. 

1730
01:24:41,160 --> 01:24:43,720
We did not go to Palau. 
We didn't even all go to Poland.

1731
01:24:44,000 --> 01:24:46,200
Now somehow we all ended up back
over here. 

1732
01:24:46,600 --> 01:24:48,560
And so right now I think that 
there is, you know, in the 

1733
01:24:48,560 --> 01:24:51,280
global talent race, I'm 
skeptical that many people will 

1734
01:24:51,280 --> 01:24:53,160
take the K visa. 
There's a lot of Chinese. 

1735
01:24:53,160 --> 01:24:55,360
We're already like, what are you
saying about Chinese tech 

1736
01:24:55,360 --> 01:24:56,720
talent? 
You know, we're not good enough.

1737
01:24:57,200 --> 01:25:00,400
And I think that there's still 
plenty of Chinese researchers. 

1738
01:25:00,400 --> 01:25:03,920
They're really desperate to move
to Silicon Valley such that 

1739
01:25:03,920 --> 01:25:06,720
maybe we can say right now that 
our Chinese are better than 

1740
01:25:06,720 --> 01:25:08,720
their Chinese. 
I'm not sure if that will be 

1741
01:25:08,720 --> 01:25:11,080
very stable for a very long time
because I think you're right 

1742
01:25:11,080 --> 01:25:13,200
that Trump is saying really mean
things. 

1743
01:25:13,200 --> 01:25:17,680
And plenty of them may decide to
to go now, in part because of 

1744
01:25:17,680 --> 01:25:20,760
all the syringes on the street, 
in part because of. 

1745
01:25:21,080 --> 01:25:24,480
Trump Bank visas. 
Maybe they just want better 

1746
01:25:24,480 --> 01:25:25,920
noodles. 
And I think that would be like 

1747
01:25:25,920 --> 01:25:28,240
kind of a valid reason to to 
move back to Asia. 

1748
01:25:28,240 --> 01:25:30,120
And I think, you know, 
sometimes, sometimes I think 

1749
01:25:30,120 --> 01:25:32,960
about like all of that great 
tropical fruits I would be 

1750
01:25:32,960 --> 01:25:36,080
eating in Singapore if I were if
I were with you right then in. 

1751
01:25:36,640 --> 01:25:39,360
You should come and visit. 
So we're actually, I love, we're

1752
01:25:39,360 --> 01:25:40,840
actually doing that. 
We're actually building 

1753
01:25:40,960 --> 01:25:42,760
decentralized Silicon Valley 
with NS and SO. 

1754
01:25:42,760 --> 01:25:44,600
Exactly fruits for me when I 
visit. 

1755
01:25:45,080 --> 01:25:46,800
I will absolutely have tropical 
fruits for you. 

1756
01:25:46,800 --> 01:25:50,920
You're welcome to come. 
And my view is that we should 

1757
01:25:50,920 --> 01:25:54,320
decentralize Silicon Valley and 
have something that's neither 

1758
01:25:54,320 --> 01:25:56,000
China nor America, but the 
Internet. 

1759
01:25:57,640 --> 01:25:58,840
And yeah. 
That's a nice idea. 

1760
01:25:59,320 --> 01:26:02,880
I think that my final note on 
this is that I hope, you know, I

1761
01:26:02,880 --> 01:26:06,120
think I've never smiled so much 
on a podcast before because I 

1762
01:26:06,120 --> 01:26:10,800
love her remarks. 
Balaji, what is it that BTBTC 

1763
01:26:10,800 --> 01:26:13,760
will team up with CCP to destroy
MIBI? 

1764
01:26:13,800 --> 01:26:15,520
Think that'll be great? 
I think that'll be great. 

1765
01:26:15,520 --> 01:26:18,560
Let's get rid of. 
Let's partner with BTC to 

1766
01:26:18,560 --> 01:26:20,840
destroy MIT. 
First BTC is I think the new 

1767
01:26:20,840 --> 01:26:22,600
axis, but something like that, 
Yes, yes, yes. 

1768
01:26:23,200 --> 01:26:24,960
So this is a really fun 
conversation man. 

1769
01:26:25,640 --> 01:26:26,720
Great. 
Thank you so much. 

1770
01:26:26,720 --> 01:26:30,080
Thank you, Dan. 
And Breakneck 10, it's in 

1771
01:26:30,080 --> 01:26:32,920
Amazon's Amazon.com right now, 
so go get it. 

1772
01:26:32,920 --> 01:26:36,200
And Dan's a very smart guy and I
reckon the book highly. 

1773
01:26:36,520 --> 01:26:38,840
Balaji, what do you prefer, 
breakneck or BTC? 

1774
01:26:40,480 --> 01:26:42,800
By both I mean break that's only
like 20 bucks. 

1775
01:26:42,960 --> 01:26:45,560
So buy that and then the rest in
in VTC. 

1776
01:26:45,600 --> 01:26:46,200
There you go. 
Thank you. 

1777
01:26:46,200 --> 01:26:47,120
OK, OK.