Yeah, welcome to the Net Receive podcast.
I'm glad to have you here. Thank you for having me.
It's great honour to be here and excited about our conversation.
Awesome. And for those people who don't
know, just give me, give the quick background.
Anamoca, you're a large investor, you're gaming, you do
all kinds of stuff. Give me the give me yat and yat.
Yeah, I'm, I guess the quick snapshot is Anamoca today is
probably one of the biggest investors in web three
particularly you could call it in the altcoin segment of think
of. So of course we have a lot of
Bitcoin as well. We have over 600 portfolio
companies to date. We started with gaming.
That's what we're known for, but we're in AI and DPN and all
sorts of things that L1L twos as well very much believe in this
construct of the shared network effect.
This is why we sort of invest so broadly in space, but we're
maybe a little different is that we're not a fund, so we invest
out our own balance sheet. Interesting.
OK, so. Everything is basically out of
our own balance sheet and. What did you start as?
Tell you what, what what what? Where did the balance sheet come
from? Like Google, for example.
Google funds, Google ventures out.
Of the gaming company Game Company.
We still a game. Company, we drive revenue from
that and then we were once a small listed company in
Australia and you raised capital for some of our first
acquisitions like the Sandbox for instance, or investments
instead of Axi Infinity. And that took off a lot back in
the 2122 sort of I guess NFT, Ethereum peak days, which
hopefully will come soon again, at least on the Ethereum side.
And we obviously monetize that, continue to invest, you know,
and, and with the ecosystem and we believe in that.
I think the other thing though, is that we are now also
operating in the space. So beyond being an investor
because of a balance sheet, we also create yield from the
assets we're basically trading and we're also helping companies
launch their tokens, doing an advisory type business.
So it's expanded a lot more from that.
And we're like almost 1000 people worldwide.
So we're not a small operation in the crypto context.
Last year, we had over $300 million of revenue with about
$95 million EBITDA operating wise and we're sitting on
billions of dollars of mostly Altcon assets and of course the
healthy chunk of Bitcoin. Very, very, very impressive.
So thank you. You know, one thing that
actually I think makes it even more impressive is gaming has
always seemed to me to be very hard.
And here's my understanding as to why.
First is it's like gaming is creative.
And so it's kind of like writing a hit novel or like making a hit
movie. You, you know, yeah, I'd love to
order a hit movie on on Command, but it's not that easy to do
right. And especially even a hit movie
that stands the test of time is even harder to do.
So you might get a spike for a game and then people get tired
of it and it goes away #1 and then #2 it's also very
technically hard because people might have patience with a SAS
interface and so and so forth. But everything needs to be a, a,
a for like an, a, a, a game. And so, you know, this is
something that one of my friends has talked about, which is the
Silicon Valley or the tech way of building user interfaces,
which is, you know, HTML, JavaScript, CSS, which has long
page load times and so and so forth.
Versus the open GL or the, you know, the basically the 3D
graphics way. You know, whether it's Unity or
it's Unreal, like that way of building interfaces is vastly
more responsive. It's more rich as an interface.
And in theory, there's this enormous gap between how we
build business interfaces and this alien technology that's out
there, right. And one company that's actually
somewhat used that or not somewhat did Figma where they
did web GL in the browser. And that was a big part of how
they were able to do what they were able to do.
It's also why it takes such a long time to load Figma
sometimes, because they're basically loading a second kind
of thing within the browser and uses hardware acceleration and
so on. So Figma shows what is possible
maybe with like gaming. And now of course, I'm talking
about AAA desktop games as a sync for mobile games, but
mobile games still have the mechanical issues, creative
issues that I mentioned. And now you get to AAA gaming in
mobile as well, right? Yes, that's right.
But I think maybe just to sort of encapsulate, as we were
obviously still are, sort of, you know, building games.
One of the big misunderstandings around games is that you have to
have super high quality. It's kind of like saying, hey, a
good movie has special effects. It does, but not necessarily
right. A good game is actually based on
the content. And frankly, one of the big, I
guess misnomers is that they treat it like a movie.
They say you watch it as an experience or you like it's
episodic. And I think it has to do a lot
with the history of gaming, you know, which was very episodic in
nature. But you know, there's this
thing. In the casual gaming, kind of.
Thing casual gaming or even even storytelling based games or
because you couldn't do multiplayer gaming.
No, I mean, it's like you're saying it's an alternative to
the episodic storytelling games. With the casual games, you just
pick up and just start. Yes, yes, exactly.
But what? But what makes gaming so
different from something like hit driven in the classic
construct is that most of the people play games for social
reasons, right? As opposed to when you watch a
movie, you watch the movie one time and maybe there's a social
thing, you go to the cinema together, but the social
interaction isn't as bound In gaming.
We have this thing called Bartles taxonomy where we
basically divide sort of gamers. And it's a it's a crude form,
but it's one that we generally follow into the four categories,
right? The first category is killers,
right? It's like 1%.
These are the these are the psychopaths basically just play
games because they're just like to off people inside a game,
right? OK, like, you know, like in the
first person shooter, just enjoy that.
And then you have the achievers and the adventurers, right?
And cheers and adventures are actually the ones who are
playing because they like to level up.
Cheers, Want to collect all the badges?
The adventures? Want to see the whole game
experience? It's for the love of of the.
Experience and of course, carry the socializers.
Basically social, right? Yeah.
And what? Do you call?
What do you call? Them, we just called them the
people there, social, social socializers, sure.
And they are 80% right now. You the perfect example, the the
exemplified example of this is Roblox.
When you ask any of the kids or anyone who plays Roblox, do they
play Roblox because it's great adventure, because you can kill
other people or something or it's for leveling up.
They'll tell you it's because their friends are playing it.
It's funny, The thing is like as a kid, I definitely played a lot
of games and I stopped playing games because you an investment
into Final Fantasy umpteen or what have you.
I don't know what number they're on 16 or something like that.
Whenever. Yeah, yeah.
From probably 30 at this point, yeah.
It's like, it's like a solid 80 hours of like waking time,
right? A single player game.
That's right, that's right, that's right.
But in the multiplayer games, you know, Goldeneye or, you
know, obviously I'm dating myself for this late 90s or, you
know, Quake, whatever. I started with Paul, so yeah.
Yeah, yeah, yeah, sure, sure, sure.
So, so the thing about those is, you know, it was fun, but I
think one thing I found is there's so many games now that
if you Scroll down Steam or something like that, they they
kind of all blend into each other or what have you, right.
Like there, there was less, you know, back in the 80s.
I don't have to be all nostalgia, but in the 80s or 90s
it was harder to get a game out, so there was more editorial
control over it. That's.
Also the cost of and the. Cost was hard, right?
So you had genuine originals like Zelda, Metroid at the time,
Final Fantasy, Dragon Warrior, Castlevania, right?
And those were all like, you know, those are still flagship
titles today or what have you, right, Even though it took like
10 or 20 years to reboot them or whatever, right.
But I think just the sheer crush of titles that are out there,
that's why I'm very impressed with how you managed to build a
business out of it and A and a enduring business.
I mean, obviously you've gotten into other areas in web and
crypto, but like, you know, for example, is Angry Birds still
doing well? Well, no, but that's because a
Rovio sold itself. OK, build a franchise.
But it's like hard to make a repeatable.
It's like, oh, I remember that game from like five years ago or
10 years ago or. Something so I think there's a
lot of parallels to when you think about the roots of crypto
and gaming because gaming audience is what they do
ultimately, they build a brand and become a media company.
And when you think about the foundational level of a lot of
starting crypto, including even Bitcoin at start, it's tribal of
a kind of belief system for us. I see.
So let me see if I get your point.
You're saying retention in a game is about retention of the
social network underpinning the game, correct?
Yeah. OK, Zach is a good thesis.
And but then what happens is, is that you start off by creating a
following and a community. And, you know, with Final
Fantasy, for instance, you've got this whole generation of
people who grew up with Final Fantasy.
Yeah. And they'll keep playing and
playing and playing and playing it.
Right. It's the franchise value.
See, the same in the movie industry.
Yeah. But you know, they haven't yet
created. And that's more, I think, an
issue related to Square Enix than the Final Fantasy community
in and of itself. To create a social network out
of it instead. They do have Farvesi online, I
think there's. Reasons, yeah, but that that
hasn't done that hasn't done good as well.
And and frankly the social network of these gaming
communities have been mostly Co opted in the platform such as
Steam. So Steam.
Steam That's right, because you're right.
Discord right they're the ones who captured it and then they
became the agents of distribution for these games you
know it's. Interesting actually, as you
mentioned that such an obvious point that for a reason that's
it's kind of like Uber commoditizing the cars, right.
Like, you know, car companies spent so much energy in
differentiating a Ford from a you know, this from a that and
then the last time you took an Uber or Grab or whatever, do you
remember the make of car? No, no, right.
So that brand, what you remember is you took an Uber or grab or
something. Even then, you may not remember
Uber or Scrab, but you remember right That's.
What TikTok is doing for creators, unfortunately.
Too Yes, that's right. So you remember TikTok, but the
creator themselves just like channel flipping or what
happened, right? That's right.
And it's interesting because that's the fix.
You always kind of re centralized around something
because you can't remember everything.
So the fixed point is the TikTok, the Uber, the Steam as
opposed to the content, the car or the the the gaming creator,
right? And it's where your prime
identity lies, Yeah. So if your ranking is on Steam,
then you care about that ranking over time, as opposed to the
ranking is only in one game. It may not transfer to another
game, and therefore it's not as valuable unless you have a
following over generations and it's embedded over time.
So Final Fantasy has the benefit of being a franchise that's been
there since we were kids, right? Right.
And so that's something embedded in US for decades.
But if you're a new franchise, you really have to understand
how to utilize the power of these social networks and how to
basically sort of build community constructs from it,
which bathing it is no different than launching a token.
Right. So it took me a long time to
understand this quantitatively, but right, essentially my my
view is because people would speak at an abstract level about
brand, for example, right? And eventually I was able to
articulate a brand is the collection of words and images
that are evoked when someone says that phrase.
And feelings. And feelings.
Great. OK.
So again, very left brain. Yeah, exactly.
You're right. Feelings.
You want to know exactly right. Yeah.
So that's right. We're not all computational,
despite what some people might think I believe.
Exactly. That's right.
So actually with LMS, you can actually make that very clear
today where you could literally type in a string, you know,
Coke, Pepsi, you know, something like that, right.
And then you can obviously you can pull up sentiment analysis
over time. So you can also pull up, give me
every word, phrase, image, etcetera, etcetera, that is
associated with this person, place, thing, what have you.
And then you know, score them for positive or negative
sentiment, right? And you can actually realize
that actually brand is just about the media you consume.
And it's almost like the atomic linkages to other words and
images that surround it and feelings and so on and so forth,
right? And so therefore, like it's
interesting to think about like with Disney or Final Fantasy or
something like that, that has built brand value over decades.
What is different about that, right?
What is, well, first is they were able to build it over a
period where there was a less competitive media environment.
That's one thing. But it is possible certainly to
build brands today like, you know, you can in some ways build
a brand fashion ever before, Like Brian Johnson has built a
brand very quickly, right? Like don't die and so on.
Like live forever. YouTube obviously came up like
this. TikTok came up like that.
But if you look at Vincent on YouTube, is it YouTube or is it
the content that you experience on YouTube that actually gave
you that impression, right? You're not well.
What I mean is youtube.com right?
tiktok.com. Snapchat yeah, it's not, it's
not easy to build these giant multinational, you know,
corporations, these these tech platforms.
But it's possible to do so, right?
And in some ways, it's actually, I think it's easier to do so
than to retain an old brand. Right?
Like one of the things that's been interesting to me is seeing
something like the World Economic Forum radically decline
in prestige. Sure, right.
It went from something that in the 90s or the 2000s, I was
always spoken of with a positive connotation, like an elite
connotation in Time magazine or something like that, to
something where Time and Newsweek themselves fell off.
When's the last time we've readtime.com, Right?
Like long time ago, right? And and then the the things that
they would praise are now what was interesting to me is the
World Economic Forum had its brand attacked by not elite
media, not prestige media, but it's an enormous mass like
Groundswell, right? But now it's something that it
worked in. Go ahead.
But it's also related to the distrust in institutions, which
is basically happened over time, right?
That's right. But so because of that, I think
it's interesting because things like Final Fantasy or Zelda are
kind of outside of that distrusted institutions.
Those are games. They're like nostalgic products
in some ways. Their brand values going up even
as the institutions that existed then go down.
So I think the talking about topic of brand, the way we think
about brand and the power of brands, you know, in the
commercial construct, you might call it goodwill, right is you
know, as humans, we are guided by emotions and feelings we feel
and that actually that network effect ultimately say something
I love. Yeah, is.
The most powerful thing? Right.
So when you love and have passion for something, whether
it's a green movement, whether it's a cosmetic, whether it's
whatever, so to build a brand is the feeling that it evokes in
you. And maybe an example I can put
is like, you know, do you remember, like what's your
favorite childhood food, something that you remember?
I don't know. Like what's a good question?
I don't. Like, like, you know, like, is
it some pudding? Is it some?
Pineapple. Pineapple.
OK, so when you eat a pineapple today, does it give you that
feeling, that emotion, that every day of the child?
Yeah. Well, I mean sense and smells
and tastes, yes. There's something else that's
interesting about what you're saying there, because that's
also the stuff that you can't put online yet.
Yes, right. And it's what makes us human as
well, and it's our part of our psyche in psychology.
Right. So sights and sounds you can put
online, right? So the eyes and the ears, right
touch, you know, you've got the haptic stuff.
It's like kind of kind of get, you know, it's slow to get
there. But you know, Apple just
released that movie. That's like a rumble movie.
You know what I'm talking? About yes, yes, yes, yeah.
And what it is is it's it is interesting technically because
it's a movie about like cars, you know, Brad Pitt cars driving
around, whatever. And it's, you're supposed to
hold it and then your thing rumbles when the car moves or
something. And I was like, oh, it's a
gimmick, right? But it's actually kind of
interesting because it's like a third track.
You know, when you're editing a video, right?
You've got the video track, you've got the audio track, and
you've got the haptics track, right?
And the haptics track starts off as this really kind of kind of
dumb thing, which is like the magnitude of the rumble strip,
right? But eventually it could be like
your omnidirectional treadmill or your massage chair or
something like that that's actually doing more or maybe
your neural link or whatever, eventually, right?
But the neural link is hard because sending signals in as
hard and making it rumble, I don't know.
But coming to your point, the sights and smells, because
they're hard to do online are an interesting thing to compliment
the online. This is why maybe some of the
French companies may do well, like the perfume companies,
right? Like what is a compliment to the
digital is something I think a lot about.
Go ahead. Yeah.
So I would say when you think about one way to think about it,
I don't know how familiar you are thinking about sort of, you
know, Jung's archetypes. Right.
Yeah, yeah, yeah. And the reason why people talk
about archetypes this way is and why those always used in
storytelling. Jung Jung.
Right, Yeah, Jung. Yeah, right.
Is because whether it's a hero archetype or whether it's a
savior archetype, whatever that type is, it's a story that is so
embedded in US and it's things we brought up as from, you know,
kids stories to whatever culturally that when you retell
the that arc of story, it works, right, yes.
And so we keep rebuilding these sort of stories in real life.
We make them into these heroes sometimes as well because it's
what we're familiar with. And we see this in some of these
sort of arches, whether it's a villain arch or whatever arc.
And I would say that's again, the feelings that are invoking
us and they're deeply embedded within us.
And so when you build a brand, it's about how we create that
feeling. So when you look at, for
instance, something like a like, you know, like a, you know what,
what, what do you think of Nike as a brand?
Well, then they say, you know, just do it right?
Well, just do it is like, what the hell are you saying?
Just do it right? But it's a feeling of that you
can do it and that you can achieve it, right.
And when they show a successful athlete running with the shoes,
it's not to say that I will actually physically run better.
It's the feeling of running faster even if you're not
running faster at all. Right.
Like, what's really the utility difference between an Adidas
shoe, a Nike shoe or an on shoe or whatever shoe that's out
there? Frankly, minimal for most of us.
Yeah. And yet we choose it because of
how it makes us feel. And that's the power of brand.
So I think there's there's something to that absolutely.
Of course, you know, another thing, there's a meta rational
thing where why does somebody buy the product which is
advertised, right. Well, in part, if they can
afford the money to advertise, they probably have higher
production values and attention to detail than the one that
doesn't. It's almost like a, you know,
it's like a correlate of argument which says if they can
pull off this Polish ad, of course there's a much more
rational way of explaining it than, you know, I get I'm left
framing it or whatever. Yeah, so, but if they have the
attention to detail to have a good ad that gets your
attention, then they probably have the attention to detail on
the physical product itself. Now, that's not always true.
In fact, there's a lot of stuff now it.
Also depends on what you value, right?
Right. So I grew up.
It's interesting cuz I grew up in Austria in the 70s, right as
a child and we never spoke about money because it's a very
European thing, Yes. And in fact, if you talk about
money, you're like weird, right? And in contrast to something
like Dubai or Hong Kong or even Singapore, you know, you could
sit at a dinner table and you talk about real estate, you talk
about the stock market, so. What are they talking about?
In Europe? They talk about food and and
philosophy. Culture, not necessarily just
philosophy, just things that's happening in news.
Maybe a little conspiracy theories these days, who knows?
But the point is that they don't talk about money because it's
not a concert that you share in. And as a result, it's not valued
as much because you're not measured in that, in that.
Ballpark, it's sort of like an academia where in academia, I
just think back to that culture. We talked about papers and we
talked about graphs and charts and what have you and.
Findings, Knowledge, Research. Finding sellers research.
These are things that aren't traditionally looked at in a
sense of capital, although they are capital too.
Yeah, different forms of capital, but you they couldn't
measure it in the same way that you measure money.
And so I think what money did was it created this way in which
we create a quantitative figure to your status, right?
So hey, you're a millionaire that gives you a certain status,
right? And that is has more meaning in
a place say like Hong Kong, for instance, or in the US than
might have in in Europe. And as a result, you have
different people attached to stuff.
And you'll see that that people are much more thinking about the
value of the mission of a brand in some countries versus in
others where they might just simply say, well, is it cheaper,
right? Or is it better versus this is
what they're doing for the environment and therefore I'll
buy that, right? And so there is this sort of
this triple bottom line effect that happens depending on your
societal sort of circumstance. You saw this in China, for
instance, where in China, China was not a good luxury market in
the beginning cuz everyone was just basically surviving, right?
Yeah, yeah. And then actually when the
market improved and the middle class was rising and there was
sort of excess money. Suddenly everyone started buying
luxury goods, but it wasn't just because of branded advertised
marketing. It was a symbol show.
They made it. Exactly.
It's that symbol show they made it.
It was a form of projecting, a form of of let's say new found
power and I guess way of feeling better about themselves.
And then it was became became self reinforcing.
Right. Yeah, that's right.
I think what's interesting is, you know, when you and I were
growing up, basically there was no, I'm not sure about you, but
it certainly there was. You might have seen a
businessman or something like that on TV in the 80s or the
90s, but it was not like thought of as a path that you could.
There's no obvious kind of route like, you know, write some code,
start a company, get venture. Whatever that may be.
Could be code, could be farms, could be whatever.
Yeah, I mean, we certainly our parents generation came from a
time of true scarcity. Good.
So we had to worry about literary food on this table.
Yes, that's right. You know, like how how to do
that. This is not something we care
about today. And even in the so-called, let's
call it lesser sort of once we're not as well off the notion
that you can't put food on the table, for most of them, it's
just simply not true anymore. Yeah.
I mean, this is the thing that people don't get how much the
world has changed in 50 years. Yeah.
And The thing is, I would argue it's changed a lot more in the
last few decades than it did for there was a degree of, you know,
yeah, yeah. There's a degree of freezing in
amber that is now coming uncracked, right, very rapidly,
like the speed of political change, technological change is
accelerating now and it's going to probably accelerate, you
know, for a while. And one way to think about that
is to to be less trivial about it.
There's many different kinds of exponentials or, you know, the
ramp or playing obviously there's, there's crypto, there's
AI, there is actually biotech, which people aren't monitoring
as much. That's like the shoe that hasn't
dropped like the ABC of AB, right?
OK. I bet there's drones and it's a
major one and more generally robotics and self driving
humanoids. That's all real now, right?
There's, you know, I think Jordan Peterson observed that
just like Tinder alone is this enormous disruption to how
humans have interacted. And it's just one of you may
not, you know, you may not even think of that as like the number
one exponential, but it's like, you know, huge disruption to how
humans have interacted over over time.
There's that graph that shows like how people met their
partners and like Internet just dominates everything, right?
I. Remember it was back in back in
the 90s when I started, I was meeting people virtually and in
real life. Getting together was like a big
deal. It was like, yes, Oh my
goodness, like I don't know who you are.
Let's meet in this restaurant and let's just hang out for the
first time. And now it's like.
Push a button, Yeah. And so I think sometimes when if
all the friction is being removed from something, then
there's another layer where it gets recentralized and added or
whatever, like we were talking about earlier, right?
And so like the Internet is sort of liquidated, liquefied, all
kinds of previous, you know, one of my views is nothing that
wasn't built on the Internet will survive the Internet,
right? Because what the Internet does
is the Internet increases variance on everything.
For example, you go from, you know, being a nine to five
salary man to being a billionaire or, you know, like
out of work by age or like increase the variance there,
right? The Internet takes you from the
30 minute sitcom to the 32nd clip or the, you know, 30
episode podcast. The Internet takes you from
like, you know, an article in a newspaper to 140 character tweet
or a giant PDF like Dropbox download whatever, right?
So, and the reason it does so is it takes everything that was the
mediator, the moderator, the middleman, right?
And for good or for I'll, it just eliminates that because it
allows people to connect peer-to-peer.
It makes it more efficient. Well, more efficient, but it
also removes all choke points, all centralization, all
moderation. So for example, anybody can now
yell at anybody and there's nobody in the middle to break
that up, right? But anybody can now trade with
anybody and there's no one in the middle to tax it, right?
Anybody can now interact with anybody and then the border
doesn't stop them for good or frail, right?
And that means that essentially the entire world which had been
bucketed into these countries, you know, like here's a bucket
of Chinese people, here's a bucket of, you know, Germans,
whatever, right? That after a lot of fighting and
being bucketed into these countries, suddenly everybody's
teleported into the cloud. It's like you dropped, you can
take your MOBA, your mass. You know, you have 8 billion
people dropped into a massively online battle arena called, you
know, the Internet, right? China actually has its own
continent over here because they've got the great Firewall,
right? So they've got their.
People are still able to come in and out basically, but yes.
That's right. So basically they are they are
the ones who have their own cloud continent over here.
But the other 6 billion people on especially the Anglophone
Internet are all like directly connected.
And there's like a large, you know, mountain range that, but
almost like the Himalayas that has, you know, China blocked
off, right? And and then there's like you
can move back and forth, but there it's like there's some
passage there, right? And so if you think about this,
the geography of the cloud is different than the geography of
the land. And if you have rivers and
oceans and mountain ranges that are sort of the natural
boundaries over here, up here, there it's languages and
networks and then firewalls, right?
And so the issue is that basically when you have the
English Internet, you've got Americans, Indians, Europeans,
people from all over, and they're all packed into one
place digitally. And there's just this absolute
mealy and free for all because nobody knows who's in charge or
who's in control. Or it's it people are in control
of the CEOs of the platforms, or is it the government that can
regulate them? Or is nobody in control because
of cryptocurrency? That order is being worked out
now, and I think we're on on the end of it.
By I mean 20 years, a long time, but like 20-30 years from now I
think digital borders and physical borders will coincide.
I think it's kind of happened in a.
Way, kind of. Well, it's happened.
I mean, China in a sense is the forerunner of this.
But if you take a look at fences, basically Chinese
overseas, right, basically look at population, it's larger than
the population of France, right, in terms of quantum and
certainly Indians as well, right?
They look at sort of the the expat communities.
I mean there are like you go to Dubai, may as well be India.
Right. Yeah, right.
Exactly 80%, yeah, so. So you can see that kind of
transporting out, but what's interesting is that they move
and bring with them a specific culture that is sort of part of
their national identity. Yeah, that doesn't disappear
despite the fact that the global Internet has brought everyone
together. And it also allows people to
connect with certain interests from those particular societies
to combine them together. So I've what I see happening is
if you wanna call it nationalism or patriotism, there are pockets
of this type of patriotism where I grew up in a time where you
would describe a kid like me growing up in Austria as like a
third culture kid, right? Yeah, right.
Well, to me, this concept of third culture kid kind of is
thrown out the air because everybody's that, everyone's
that because we're. Everybody's Internet.
Culture in a culture, we're all connected one way or the other.
And so I could be a national of Austria or a national of
America, but I could have affinity to someone in China.
I could have affinity to Chinese culture.
You know, I could love Japanese anime and I could suddenly be
maybe in some ways even more Japanese, you know, a Japanese
person, right? And so that is the part I think
that society is struggling with as well, because you have that
incredible divergent and you have an incredible diversity
within a construct that is hard to manage.
And I think part of that is because we don't have the
traditional power structures to hold it together.
The traditional power structures with education, centralization,
your passport, your identity, your travel, right?
You know, you, you maybe national anthem, whatever.
These are ways in which we try to keep society cohesive.
But because of what you described and also media at
large, we've now fragmented that open and now and actually that
makes me more bullish on America because if there's one society
that has managed to be as oh really?
Yes, I mean, I understand. You know, we talk.
About sure, sure, sure. But about America as a nation.
But when I compare to other nation states, China being the
exception because it has more tighter control, is that very
few countries can survive this type of mass diversity.
And let's call it implosions and creation and destruction of
societies and cultures within as America has, because it's done
this for hundreds of years. It's kind of like it's it's
Genesis and where it's a nation of immigrants, it's built in
this foundation versus other places.
So America's the only place where you can have this kind of
creative destruction and which really upheaves an entire, you
know, like like industry, which would completely be not allowed
in Europe, would basically be defaulted in many, both places.
And in many ways, China is responding what's happening to
America. Like, for instance, we people
talk about China as a head of AI, but Chinese being a head of
AI is a response to America suddenly leading right in this
area. Originally with, you know, with
the when open AI, because remember, before open AI, it was
like China with surveillance state and everything has full
control over everything. They've got all the data,
they're going to lead in AI. Then America came boom with
something that was destructive, highly, highly creative, but
also highly destructive for many, many industries.
And then China had to respond in kind.
Right. Yeah.
So I, I feel like that's sort of interesting to see.
And I think America's probably the only place they can do that,
not counting small city states because they're smaller places.
Like if you're a population of like 5 million, whatever.
So let me let me let me somebody disagree with you and let me
explain why. Yeah, it's because I think talk
about America is a unitary entity today.
Like, for example, think about Korea.
That's very explicit. It's on the map, we can see it.
Does Korea exist? No, North Korea exists.
And South Korea exists. But Korea doesn't exist, right?
Like if you said what do Koreans do, you get a very different
answer for South Koreans and N Koreans, of course.
And that historical vision didn't exist, you know, prior to
the, you know, 30th parallel, 37 parallel.
Sure, right. But but now it does.
And when I say Americans, I mean the United States more than,
say, including Canadians, or I know, yes.
But I would say it's the dis United States, yes, right.
Like, there's no America. There's only blue America and
red America and tech America. And so just like there's no
Korea, there's only North Korea and South Korea.
We can see that on the map. It's explicit, right?
They actually have territory. They have governments, they have
laws that are incompatible with each other, and they point guns
at each other and they hate each other or whatever.
Right. Fine.
So, you know, I don't know the very latest on creative
politics, but, you know, they're still aliens.
Yeah, exactly. And.
It's not likely to come together anytime soon.
No, exactly. That's right.
So whereas blue American, red America, they kind of have the
separate territories with blue States and red states.
And the level to which they're polarized is widening over time
where, you know, for example, 4, only 4% of Democrats marry
Republicans, right, Right. And so you also have something
where they don't vote for Republicans, obviously they
don't even socialize with them. Essentially the starting in 2020
with a bunch of Republicans going to Gab and Truth Social
and now you had 10s of millions of Democrats going to Blue Sky
right? And Threads and TikTok, the
center has smashed into pieces like Twitter's acquisition was
like AI think it was necessary and good that what Elon did.
It's like a tower available moment where the old center,
even the Internet center where Twitter was the center of the
English Internet doesn't exist. You have X and you have Gab and
you have truth and you have Farcaster and you have Noster
and you have, you know, base and so on.
And you have threads and you have blue sky and you have
Mastodon and you have TikTok. And so the whole thing has gone
just smashed into pieces and the digital succession has already
happened, right? Like Blues and Reds have already
split apart. The third thing in terms of
which Americans can handle the thing that you're saying,
they're tech Americans actually had a third group, right?
The Internet Americans can ride the lightning, right?
The Internet Americans, maybe that's 5 or 10% they can,
they're, you know, they're born in the, in the chaos, right?
Because startups are chaos, right?
So they can ride the curves all the way up and and that's fine.
And that's a Malou that we know, right?
Those are the people who are developing AI.
They are developing. But let me ask you a question.
What is America minus the Internet?
Well, what is America minus the Internet?
Yes. Right.
Like is it successful? No.
No, but I think, but I also think that in some interesting
way the Internet needed America at start, Yes, it's sort of
causes of pushed it forward and everyone had to adopt it because
of America. Totally, totally.
But I'd say his analogy, the Internet is to America as
America was to Britain. OK, so Britain obviously does
America owe a debt to Britain? Of course it owes a debt to
Britain in many ways, so many countless ways.
It's culture was a fork of Britain.
Yeah, right. And.
Still maintain the English language self maintained.
Language, exactly, all kinds of things.
And they have a sympathy for Britain.
They're not anti Britain, right? But they're 10X the scale of
Britain. They're more progressive and
more libertarian, more right. And the Internet is to
America's, America's to Britain. Yeah, where it's like 10 XA
scale. But dangling.
But do you think America is not going to be America?
Maybe America might not be America in the physical sense,
but I think America as the idea. Well, that's what the Internet
is exactly, right? So, so basically what MAGA and,
and, and you know what was happening now in the US is MAGA
has China envy. So they don't admit it, right?
Like basically I'll show you 2 graphs, right?
OK, let's see it all. Right.
This graph OK, shows. So let's let me just back for a
second. Imagine not a two faction model
of blue red or America China, but A4 faction model of blue
America, red America China and the Internet, OK, This first
graph shows that in the year 2010, right?
Essentially Google and Facebook disrupted legacy media, right?
Yeah, they were at yeah, they were at 60 billion, some in
revenue even to the mid 2000s. And they plummeted to like 16
billion revenue like a 75% drop in like 4 years, 5-6 years,
right? And, and the Internet went
vertical. So the Internet disrupted Blue
America right? Around 2010, OK, At the same
time, in a different theater of this giant social war here you
see China disrupting US manufacturing and the colors are
reversed. But basically, sure, this is
China disrupting red America. Yeah, right.
So red America, in the same time that blue America is losing to
Internet, red America is losing to China.
OK, And the response to this, you've heard the saying maybe
sometimes like, you know, go woke, go broke, right?
But actually what happened was go broke, go woke, right?
Right. First blue America lost all this
money, then they politically radicalized the consequence and
they started fighting A2 front war where there's the anti tech
tech clash, which started in 2013.
And then there was the obviously the wokeness, which was an
attack on red America because their pie was shrinking and they
wanted to take back the pies from these two guys.
You know, the red and and and Internet factions that taking
their pie away, right? Red America felt the exact same
feeling because they were under attack from China economic
attacks. So they felt right.
And so they responded with Trump and Trump was both a fight
against blue America and the trade war was versus China,
right? So you actually have a bar brawl
with the Internet, blue America, red America in China and the
Internet in China in the mid twenty 10s were sort of taken
aback because the Internet thought of themselves as
Democrats and China thought of themselves as basically working
collaboratively with the US manufacturing because all those
CE OS who had missed moved the stuff overseas or whatever,
right. And there was a trade partners
and they were working hard for them to grinding.
And the Internet in China were taken aback in the mid twenty
10s by all of this. And and at first they took huge
hits, right. Like the Internet, like all the
way, you know, all the censorship, all of the attacks
and CEOs and stuff over the, you know, second-half of the 20
tens, like Travis Kalanick, you know, getting pushed out of
Uber, all that kind of stuff. And it didn't make as much
headlines in the in the Anglophone world.
But the trade war was a huge thing in China, right?
Lots of companies had their IPOs crushed.
All kinds of crazy things happened.
And but then what happened after 20/20/21 is the tide turned.
And then the Internet after 2022 really went on offense.
China went on offense, OK. And now China started shipping
cars and they flipped everybody worldwide, say basically they
they took all these hits, then they figured it out and now only
15% of the revenue comes from the US.
And they just went to a complete new gear after 2022, similar to
the Internet had taken all these hits and they figured out a new
gear. Elon acquired Twitter and we're,
you know, we pushed with all in and all all of these kinds of
things, you know, with the like pirate wires, all the tech
media, but really more of a basicness among tech just
pushing in and actually, OK, you're fighting, we're going to
fight, right? And in fighting, actually there
was a victory, right Where like the internet's victory of blue
America is kind of obvious at this point.
China's victory of red America is obvious in China or anybody's
looking at graphs, right? And yet there's still a
rearguard action, right? What Trump is doing with the
tariffs is actually mirrored by what Blue America is doing with
less fanfare. Blue America has, for example,
all these unions and media corporations that are anti AI.
They're trying both to maintain a protectionist thing and
protect what money they have against this Internet in China
kind of wave. But the problem is that all
media is going to be AI and all money is going to crypto.
So the, the last strongholds of blue will will fall and all
manufacturing is going robots and all military is going
drones. And that's where China's totally
dominant. And it's kind of like written.
America is trying something there.
And there's, there's I think it'll be something that comes
out of that, right? They're, they're at least more
productive. Blue America is just purely
defensive. There's at least some attempt by
like the tech guys, which is different than the Reds by the
way, But there's, there's some, you know, there's some overlap
between tech and the right over here to try to build like, you
know, American dynamism and so on and so forth.
Nevertheless, that is not price competitive on global markets
with Chinese manufacturing because of this sheer scale of
what China is. Yeah, right.
Expertise that have built over time, yeah.
There's like 1.4 billion Chinese people and 77 million megas and
China's export to every country in the world.
And China's has the insane price competitiveness required to make
a profit in Nigeria and Brazil and all these kinds of places.
So they've got all their numbers completely dialed in.
And really, the physical world is made in China and the digital
world is made in the Internet, right?
And when you see this, my analogy is to Europe in the
early 1900s OK, so Europe in the early 1900s was the central of
the world, right? You had Britain, you had
England, you know, you had France and Germany.
And this is where culture was. All the Nobel Prizes were there,
all the kind of stuff. And you get these barbarian
powers on either side, America and Russia.
And then what happened was these were the ones that had the
growth rate, right? They were the biggest
populations. And you know, they're they're
they're Barbarians and somebody they weren't considered the
central culture. They had some things going for
them, but they were always down rated relative to obviously it's
Europe, right? What happened was Europe
essentially, you know, after a lot of fighting inwardly
collapsed. It went to socialism,
Nationalist. Hitting wars the.
Militating wars, exactly internal wars.
And it ended up being literally split down the middle between
America and Russia, between American capitalism and Soviet
communism, right. And I think that that's
happening again today, where in the early 2000s, America was the
central of the world, and after winning the Cold War, basically
it was just the center of everything, and Democrats and
Republicans and nobody really. Fights no more need to unite
against. Yeah, exactly.
So they just started fighting each other even more
aggressively. And then the two barbarian
powers on the other side were the Internet in China.
And these are the growth rates, right?
Billions of users, you know, like, like the growth rate of
China. I don't have to tell you the
last, of course. Yeah, it's insane, right?
But in a sense, they're both invisible to an American.
The internet's intangible and China's overseas.
So these growth rates, as crazy as they are, were also
invisible, right? They were far away in some
sense, right? Like I have to still, even
today, persuade people of how important the Internet is or how
big Chinese manufacturing is. It's simply not part of the.
That they're thinking about. Well, they, they can only
perceive it through graphs and charts, right?
Like you and I have been part of enough tech companies and see
enough projects that we viscerally understand.
Actually, though, even a lot of tech guys don't understand the
sheer scale of what the Internet is until you're at like a giant
tech conference where you've materialized all those people
into the physical world, right? Like, you know, we, we see a
number on the screen, but you don't perceive Like there's this
great post by visualizing crowd sizes, right?
Like this is like 50 people. This is 100.
This is 15250. This comes a point where it's
hard to perceive at that point. Well, that's The thing is like
10,000 people in one place is like a stadium, right, 20,000?
It also feels impersonal, right? Because what happens is that you
can't. Yeah.
And you can't relate to the dynamic?
Sometimes, yeah. Yes, here's my point.
This is what 180,000 people looks like, right?
So I have like 1.1 million followers on on X, right.
So that's about 5-6 X this number.
So I sometimes before I go to tweet, visualize like going to
the center of the star spangled, the center of see, you know.
Star Balaji. No, kind of like that.
Kind of like that. Like the NFL, you say?
Right, So there, you know, before someone gives the
national anthem at the center of a giant sports event, there's
like 20,000 people. And if you've got one note off,
everybody hears it, right? So when you before you go to
tweet you, when you actually see this, you're like, oh, that's
what 180,000 views means. It literally means that, right?
And with Twitter, you know, or X you, if you refresh it, you will
actually see the page view count.
Grow up. And you're like, wow, That means
actually there's one of the very few scenes in movies that have
depicted this. In the Social Network movie,
there is a scene at the beginning with Facemash where it
actually shows a bunch of people all looking at the same screen
but in different rooms, right? You don't perceive that as an
individual because you need to have simultaneous cameras in
like hundreds, thousands of different rooms to see all these
people refreshing the phone at the same time.
If you actually saw the clip of 180,000 people seeing the tweet
and some guy is like, you know, after a workout and somebody's
on a plane, someone's in the desert and so on and so forth.
Just that alone is an interesting premise for, for
like a maybe a short clip. Maybe I should do that.
The point is the Internet, despite its enormous scale, is
invisible in a sense. And China, despite its enormous
scale, is invisible in a sense, right?
See, barbarian powers have been growing.
And then in my view, what's going to happen is, you know,
the enemy of enemy is a friend, right?
And so I'm seeing the Democrats will eventually side with
Chinese communists. That's why Newsom has gone to
China and said, you know, Gavin Newsom, of course.
Yeah. Yeah.
So he went, he went to China and met with XI and he said he wants
to be China's long term stable and strong partner.
I don't know if you saw that right.
Wow, I didn't see that. Yeah, here.
That's insane. I mean, so I'm obviously not at
the heart of American politics. Yeah.
This idea that that Newsom is actually doing this would be
quite surprising to me. Yeah.
Well, yeah, so here is basically this was the whole thing in
Xinhua. Welcome.
More nuisance to come, right? And so?
How much of this is Xinhua saying it versus actually?
But this is his quote. Yes, he's willing to be China's
long term, stable and strong partner.
OK. I mean, a lot of people might
just say that, but would they actually mean it?
You know, politics is sometimes, well, you know.
I know, I know, but. Basically in the room.
It's true. It's true, it's true.
But basically, so Newsom welcomed GI also out to San
Francisco. He cleaned up the streets for
him. And so it's, if you remember
that, right. Yeah.
So that this was the other part of it.
He had had a whole visit. Because The thing is GI could
sort of recognize Newsom as also being the the governor of a
large state that becomes the president is a path that GI
could recognize as similar to him.
This meeting happened in 2023 where people thought Newsom
could become president, you know, because there's going to
be a jump ball. After Biden stepped down,
everybody knew Biden was going to step down.
The fine thing about it is it wasn't a Biden conspiracy
theories, Biden conspiracy theories.
The reason is different factions, the Democrat Party
thought each of them would win the hot swap, right?
Like, was it going to be Michelle Obama?
You know, Right, right. So Newsom probably thought he
was going to win the hot swap. He took a whole meeting right
after the thing, but it went to column.
OK, what's my point? Point is Newsom also Tim Walz
has basically said China should intervene on the Iran thing,
right? In many ways I can, I can share
a bunch of graphs, but essentially Democrats are much
more sympathetic to China than Republicans are, right?
Just like Republicans are more sympathetic to Russia
historically than than than reverse, right.
So I think, you know, Democrats will end up aligning with
Chinese communists because if they don't have DC, they need
XI. That's how that's how Newsom is
going to think about it. I I would not be surprised to
see them essentially not enforce the tariffs on in, in Oregon, in
Washington and California, the West Coast states, if the
tariffs really contribute to inflation, they may simply not
enforce them, especially if because the China tariffs keep
getting suspended, suspended. But who knows, they might go,
they might go real, right. If they did, there's a
possibility for a left populism where they just don't enforce
the tariffs and then they invite a confrontation on that or
whatever, right. So I think it's very possible,
right? That's the kind of thing which
is federal versus state who has control, right?
OK. And this is similar by the way,
to the federal versus state on the border, but in reverse.
These are now the Democrats want the the packages to come in and
as opposed to Republicans wanting people to stay out,
right? OK.
Then the other side of that is, you know, Republicans in the
Internet, right? And this is something which is
one way to think about this is from 2020 to 2025 especially or
2024, Democrats really did fight China pretty hard, right?
But then eventually they're now in the can't beat them, join
them mode. And I think by 20-30 they will
link up with them completely. But don't you think that
politically at least, the impression we have?
And first of all, I'm all for more collaboration between
countries. Yeah, because I actually think
more confrontation is bad. And I also think it's inevitable
right in the way I would also argue that the more the US can
integrate and work with China and vice versa, it becomes more
Co interdependence you. Know yes, but the US doesn't
exist like they say red America and blue America have different.
Foreign policies different form, yeah, I understand and there's
but but just generally speaking because when I think when when
there's jobs and there's money of.
Course, of course, yes, broad level, I agree.
Broad level. Broad level we.
Should we should get there, But I think for the time being, I
don't see at least externally from the lens being in Hong Kong
and by extension in China as well that we view neither
Democrat or Republicans as being pro China like that.
That sounds, I know that sounds to me as you know, that's a
bipartisan thing, which is a bit of a shame.
But I think it is one of those challenges and I think China is
responding at the moment politically, including in the
area of crypto regulations like with the stable coin in Hong
Kong, with the HKMA and so on. Basically, it's a response to
America as a whole, not specifically to MAGA America,
but I think generally speaking to just how do we make sure that
we protect what we have and, and totally?
Totally. But I'd say that, well, we're in
a time of transition where like the tectonic plates are moving,
but there's a number of reasons where like Democrats I think
will link up with Chinese Communists, right.
And and for one, The thing is that go ahead.
No, I, I mean, I'm not as familiar with that, so obviously
it's hard for me to comment, but this idea that an American
faction in this case would actually side with China to me
sounds like as a country sounds almost sounds as big as when
people were saying Trump is siding with Russia.
Or Trump with Elon? Yes, Trump with Elon.
Basically like new SMG is as big a realignment as Trump and Elon.
Remember early anyway. Well, yeah.
That's right. So exactly, but basically so
like remember Elon Trump was like, oh, Elon should get on his
knees and beg whatever the first administration then obviously
they were the bestest friends ever for like 2 years, three
years and now they're out again, unfortunately right.
So but that that was something we.
Should call politics. Well, it's politics, politics,
but it's actually it reminds me of World War 2 and like how the
Nazis and the Soviets were actually allied at beginning to
invade Poland together. And then the Soviets and the
Americans were allied to beat the Nazis and the Soviets and
the Americans split the Germans East and West Germany, right?
And you know the so basically all three factions existed,
right? Germany plus Russia against
everybody, Russia plus America against Germany, and then half
the Germans and Americans and half the Germans and Russians
against each other, right? So all three permutations
happened, right? And my view is Democrats aligned
with Chinese communists and Republicans become Bitcoin
maximus. So that's the other piece of it,
right? Like we're still in the middle
of this transition. So, but what you're then saying
is, is that America will essentially no longer be?
It's not a. Country.
Well, yeah, country. Country is a geography.
Well, with borders and a governors and so on, Yeah, yeah.
But to me, I guess you know, a country is I guess if it's
representative by its people, right, you can 11 could say that
what is those people? Does it, Are we saying it's two
Americas or are we saying it's still one America under 1 hub?
Because the whole I guess federal construct allows for I
guess different opinions and ideas and structures to exist
within a common federal structure, whereas the states
themselves are different. Doesn't mean that states have
more freedoms as a result. There's different ways you can
break down, right? And it's possible that it's like
the fault of the USSR where these administrative boundaries
for like the so and so Socialist Republic actually suddenly
became real, right? And suddenly Jiu Jinx stands
like, OK, I'm a country, right? So those like fake
administrative boundaries became real and, you know, because they
were just something that everybody could agree existed
beforehand, right? So it's possible because you saw
this during COVID, actually, there were hard borders between
like Rhode Island and New York or whatever, right?
Like, you know, people were not able to just go back and forth
because, you know, they're COVID borders.
It was Rhode Island, New York. It was like.
Yeah, but but, you know, the collapse of the Soviet Union was
essentially one that the Soviet Union simply couldn't sustain
itself anymore. Yeah, I think in, I think the
interdependence and relationships that you have
because the one difference about a communist planned economy, and
that's only because of the fact that when I grew up in Europe at
the time, I witnessed that to some extent is that planned
economies have centers. Because essentially there's a
there's a country that's dictating what you do, where you
do, how you do it, right. So this place makes cold.
That place is this. COVID checkpoints.
So COVID checkpoints targeting state residents.
Yeah. So I understand the restrictions
in the borders, right? But I'm saying like, see, Rhode
Island pulls over New Yorkers to keep the virus at Bay, right?
Yeah. So the point being that
basically did the virus correspond to like what state
you lived in? No, it didn't, right?
No, but that was the existing administrative boundary that
people could coordinate on. And even if it was completely
uncorrelated with the virus or what have you, they established
borders on that basis. And I look at just like 2008 was
in a sense, a dress rehearsal for 20/20/2020 was a dress
rehearsal for 2030. Yeah, although I so I would
disagree with you with that, but I understand the construct and
the reason why I disagree is that because when you look at
what happened to the fault, the users are Yeah, the planned
economy construct of it yes, basically 4, the sort of made
the breakup somewhat easier I would say because you didn't
have true interdependence because there was no
decentralized economy, okay, that existed inside USSR versus
America, which is because of its nature, yes, it's very
international global as well, but there's many more ties in
okay, connections between them. Sorry, good.
For sure you're saying. Yeah.
So what I'm saying is that while you know politically and so
ideologically that could be parts that definitely would fall
apart in America, we can see this right now.
I think the business construct and the transactional elements
of doing business together is what ties it together.
Basically, inter American trade won't fall apart.
OK, I disagree with that too. OK, OK, here's why.
I think it took me a while to articulate this, but yeah, a
deep point for me. Is that Keynesianism is
communism but for wimps? OK, let me explain what I mean.
Keynesianism. So if you've seen the graph
where it shows like the US dollars value.
Follow up, right, Yeah. So that means that Keynesianism
actually does seize 100% of the wealth of the country over top.
It does seize 100% of the wealth of the country over time, but it
doesn't go door to door with guys with guns like communism
does, right? So it's able to do it invisibly.
Like when you when you issue another trillion dollars or
whatever, it dilutes everybody down invisibly, every dollar
holder down. But you don't have to go door to
door, right? See what happened in the Soviet
Union is they had to actually have, you know, like Lennon send
his crazy guys to every house. They would kick in the door,
they'd kill the father, they'd rape the mother, they'd take the
son off to the gulag and they they'd collectivize the farm.
That's what like collectivization meant.
The same thing happened with mounds.
So that's what communism meant and Keynesianism quote
innovative on that by stealing all this wealth, but by
essentially diluting people down when when you're running a cap
table, for example, you're highly sensitive to dilution on
a cap table, right? Like you're watching every point
percentage ownership, right, Because you actually can see the
denominator, but there isn't a well agreed upon denominator for
how many dollars exists. The whole point of MMM, naughty
and M1 and M2 and so on is to make it, you know, complicated
and abstract. How many dollars are, Who knows?
Let's do another trillion. Right, but Keynesianism doesn't
violate the construct of property rights in the same way.
Well, it does because. On money, but not on assets.
Yeah, but yeah. But The thing is you're, you're
basically you're still seizing the assets, right.
Well, actually we're doing you're.
Seizing the money, but the assets are yours.
Well, therefore the assets do inflate because of the fact that
more money is put into the system.
And I think the other thing on Keynesianism just, you know, in
independent of Keynesianism, obviously, you know this there's
obviously a philosophical construct as well, which I think
is interesting, is that the the politicians haven't been.
And just to clear, I'm not a Keynesian.
Yeah, Maximus on Keynesianism, I'm just saying that politicians
have gone addicted to the idea of money basically.
Yeah, money printing to QE without actually doing the
fiscal discipline of. OK, now that it's there, let's
go and pull back, right? Because really Keynesianism was
trying to sort of. And I think to me, the
innovation of Keynesianism was around understanding that when
you put essentially. Adding liquidity to our worker.
Yes. And and to generate that sort of
activity, I think is what what was powerful there.
I want to show you something. Yeah, please, because it pulls
the pieces together. OK, so this is a piece from 2010
how to spend 1.25 trillion, OK. And these are two people at like
the New York Fed, right? And it says the Fed decided to
buy 1.25 trillion in mortgage-backed bonds.
So this is the connection between currency and assets.
Because you print the currency, they can buy the assets.
But they're doing this to protect essentially a base of
people. But I understand.
Well, what they're actually in my view they're they diluted
down at all Americans and the world to prop up the banks,
right? Like like the money?
Like is it this? Is.
But the problem of the banks was to basically ensure the safety
of the state and essentially to make sure that.
There's an argument for that, right?
But, and I can and, and we'll come back to that argument,
right? But let me just at least say
what they actually did right. So somebody actually go buy all
these mortgages. So how'd they do it right?
This was this really interesting thing.
It's possible I was buying the mortgage on my own house says
this guy. And then they came very, very
close to Target. They told they were $0.61 short.
They bought one trillion, $249,909,909,909.39 right. the
Fed was able to spend so much money so quickly because of the
unique power can create money out of thin air.
OK, but but here's the thing about this right like there's
like several. This is an unusually clear
statement of what the actual U.S. government is, which is
like communism where they can just seize any asset by printing
money, right? Like 'cause they're buying the
mortgage. It is centrally planned, right?
1.25 There's no, there's no Max tax, right?
There might be a minimum wage, but there's no Max tax.
This 1.25 trillion, just to think about what that means,
that's $1000 iPhone for a billion people in China.
But they did end up, they bought it, but then ultimately over
time, they basically sort of sold it back, so to speak, was
it but. Yeah, sure.
OK, so, so. Well, actually, they haven't
actually completely offloaded all their Astros.
There, but they have offloaded I guess the.
Point is, the government seized it.
I mean like if. But why did they seize it?
They seized it to rescue it rather than to seize it as a as
a means of control, which I think is the difference between.
The two OK, OK, but there's two different.
Well, OK, first of all, you're, you're agreeing that they had
good intentions, right? I would say if you actually go
to what caused the mortgage crisis in the 1st place, it was
the government forcing many banks to extend mortgages to
people who couldn't afford it, right?
The, the red, you know, like anti redlining stuff.
They forced mortgages onto black people, Hispanic people and so
on. And in fact, actually even NYT
admitted this. Like NYT Bush era.
I don't think it's also but they also.
Ownership fueled housing bubble. So this is a both a Bush and a
Clinton thing. There's someone called the CRA
community reinvestment. The thing is, if you trace it
back, the government forced the banks to make these mortgages.
Then when it crashed the economy, they said, oh, we're
coming in to save it. And what happens is the state
causes the problem. It's like, it's like a
firefighter who's also an arsonist, OK, They caused the
blaze and it's a blazing and everybody's confused about what
caused the blaze. The firefighter comes in, you
know, sprays like this. And then they increase the
firefighter budget as well, right?
So like when you actually track back, why do they have to save
the world? Because they destroyed the
world, right? And the net effect of it at like
a meta Organism level was upward redistribution of wealth, right?
That's to say they printed the money, they diluted down
everybody else and they bit up the banks and they bit up the
these mortgages now who got diluted down?
So I'll show you another graph which is this.
Yeah, unfortunately, inflation hurts still hurts the weakest of
any because there. And if that's what?
You're trying to point to exactly.
I'll show you this really amazing graph this is from.
Let me see if I can share the screen here.
So we got it recorded. So did Republicans pay for 2008?
OK, so let me just show you this graphic.
Let me explain it what it is. OK, So there's actually an
animated version of it too. OK, But let me zoom.
Yeah, this is good. All right, So what is this
graphic? This shows each dot there is a
county, OK. And gosh, silly thing.
Yeah. So each dot there is a county,
right? And this is the GDP of that
county. This is a poor County Down here
and a rich county up here, right?
OK, so and the Blues are Democrat voting counties and the
Reds are Republican voting counties.
Sorry, assume they don't flip sides at this point, right?
So in the year 2008, this solid line over there, that that
envelope over there, you can see that the blue envelope and the
red envelope are roughly the same.
But by 2018 you can see that all the richest districts are blue.
But we can see this already in the when you look at like right
now, people look at the Blues as the party of the elite as
opposed to the party. But but but that happened from
2008 to 2018, right? It happened in that 10 year
window where roughly Democrat counties and Republican counties
were at parody to suddenly Blues pulling way ahead like this,
right? And how they pull way ahead like
this. I argue it's because that was
the time at the bomb administration.
All the printed money was being allocated.
And where did it go? It went mostly to blue connected
States and institutions. So it went to banks in New York.
It went to DC. And how much of that would you
say is related to the growing tech wealth that happened during
that? Period.
A small slice of it. Right, so it's not a big slice.
It's a big slice like all VC is like ten billion, 20 billion a
year or something like that, right.
So relative to like. All the people who ended up
working at Google, $1,000,000 packages and that kind of stuff,
yes. But what happened was a small,
small slice of the like, there's a trillion for the
mortgage-backed securities, 1A small slice of that, like less
than 1% made its way through the rivulets into a productive
sector of the economy, which is the tech economy and just a
relatively small amount of money on that, you know, very fertile
field went Bush like this, right?
And so that led to the growth of tech, right?
But another piece of it was the crash led to huge price
pressure. So it also led to the growth of
China, right? And so China and the Internet
both were the strongest, the most supple, resilient, where
they were the ones who were actually able to benefit from
this, even if they didn't weren't next to the money
printer directly. Right.
OK. So then one of the things that
happened is it wasn't cost free, that inflation was exported, for
example, to the Middle East, helped trigger the Arab Spring.
Those countries were just in chaos, civil war and so and so
forth. In a sense, they paid for the
bailouts, right? These countries got diluted
down, their food prices got spiked, they got pushed in civil
war. They're shooting each other.
Why? Because they got printed down.
Now The thing is, there's no blockchain, so it's hard to
prove this. I can only show sure series of
events, right? Series of events, some
assumptions, but basically the theory around it.
I understand there's theory, right?
So basically if the food price spikes helped, you know why
those prices spike then? Because the inflation was
exported, right? And these countries were already
near the border of you. Know survival one of the reasons
why countries like China are very sensitive to food prices
and management. I mean, I think one of the best
examples of a super stable society, despite the fact that
economically on a global parity, wealth probably has suffered a
lot is Japan, right? And one of the fascinating the
other last time you were in Japan.
But you know, when you go to like, you know, slightly a
little bit out of Tokyo, but even within Tokyo, I'm always
fascinated how I can basically buy, you know, all those vending
machines for the same amount of yen.
This the same drink that I could pay for like say 20 years ago,
The same price. Right.
Yeah, yeah, it's it's kind of like the.
I mean, they were the masters of QE if you think about it right.
Yeah, well, so are they masters? It's funny.
So. Or at least, maybe they've.
Done it for a long time. They've done it for a long time
and I think they went through, but again, I I come down to the
thinking of why did they do it? And they tried to keep the
cohesion and stability of a nation together.
So let me counter argue on that. OK, OK, so I, I, I I want to
bounce a ball back part. Yeah.
So my view is as follows. And Japan was actually doing
really well against America in the 80s, right?
And but America had actually see at a certain point, you know,
you can rise to a certain point within the system, but then you
have to become the system, right?
And so Japan was rising to a certain point in the system, and
it hit a ceiling where it's getting too big for its britches
and becoming so successful that the US was, you know, there's
rising and there's all this anti.
Japanese. And then the US government
actually, it did kill the Japanese economy with the Plaza
Accords, right? And So what that was, was
something where Japan was forced to not use it's yen to buy up
valuable factories and stuff in the US.
It had to buy, you know, treasuries.
So right #1 and #2 is actually interestingly, a lot of IP was
transferred from Japan to America.
It's in reverse from how people think about it, right?
And there are other kinds of things as well.
But fundamentally what that did is it just blocked the rise of
Japan Inc and re subjugated them.
Because The thing is Japan and Europe, right?
They are in Canada. These until very recently are US
colonies, right? They don't have they, they have
AUS military base there, right? There's no Japanese military.
Base of course, and this is this is a post war, post war
construct. That's right.
So. So when we, you know, some
people say, oh, China will get, you know, we stop Japan's rise,
so America will stop China's rise, I can point to that's not
the same. Absolutely.
It's not the same. And and I can actually point to
one article that shows it to anybody, you know.
Yeah. And and the other thing of
course is that, you know, during that time, obviously, I mean
Japan's, you know, dependent on American security.
So there's a different, there's a different relationship between
that versus eggs what you see in China.
Exactly. So when push comes to shove, the
US had root over Japan but do not have root over China.
And one way of proving that is like killing CIA informants.
China crippled US spying operations.
So that shows that's something that China could do that Japan
could never ever do, right. Japan could never kill AUS spy,
right. And what that means is if they
can't kill AUS spy, they can never have any communications
that are genuinely encrypted and genuinely like, you know, seen
as as private or whatever in their country, right?
China can actually have communications that are private
within their country. But how does that relate to the
fact that Japan was in QE? Well, I'll come to that in a
second. OK.
So, well, actually the Japan, there's like there's many
complicated things about China. I can't say I understand every
single piece here. I don't speak Japanese, but they
were essentially forced to buy treasuries and print as a way of
crippling their economy. And this is something where
Japan Inc, their export machine was broken.
They were not allowed to export. This is why like Sony,
Mitsubishi, all these things that were so amazing just
suddenly just kind of fell off a Cliff, right?
Robert Lighthizer, other guys, trade representatives
essentially restricted Japan. There's a guy, my gosh, I think
Michael Hudson and so on, who writes about this.
And my view is that when they didn't have the export growth
anymore, they had to do the fake growth of QE.
Right now that whole thing is breaking because you see
Japanese yields just going zooming like this.
They're they're seeing that, you know, QE for, for that was there
for. Well, they also have their
democracy time bomb. They have demographic, they have
a lot. This century, I think Japan
becomes a Chinese colony. So history is running in
reverse. So last century China became,
you know, this century Japan becomes a Chinese colony where
Chinese people will be able to go into Japan, buy lots of
property relatively cheaply. And just like Indians are now
buying a lot of property in in in reverse, right.
And because a lot of things are happening with history in
reverse, like I can show a boomerang U curve kind of curve
from any different phenomena. My point is basically that the
the Japanese, you're right, have preserved some degree of
stability in their society because they have homogeneity of
culture, language, people and so forth.
And if you are so they're not going to meltdown in the same
way America is. America has, you know, 300
million guns, more guns than people.
People are crazed on every dimension.
There's gender and racial and ethnic and political and even
now age polarization because the young don't want to pay for the
old for Social Security and so on and so forth.
So that's just going to meltdown, right?
Like I, I, I really disagree with you that or, but or not
really. I'd say my biggest point of
disagreement is you're correctly seeing tech America and tech
America can ride the lightning, but most of America is not Tech
America and they are not rising with the Internet and they're
not rising with China. And you don't think Tech America
will try to save the America because I do think there's a
degree of so because. Because they already just did.
They just did. And actually, Elon posted did my
best. But.
You saw that post? Yeah, but Ding did my best
versus I'm giving up completely our two different things.
Well, he did no. Well, what does it mean to quote
save America? Can you save Britain?
Like you actually put it like this, the, you know, the
American Empire, right, which was actually something that
there's a great book called Tomorrow the World, Steven
Wertheim that actually talks about this.
That was something that was consciously built because how is
it there's a McDonald's everywhere?
How is it there's, you know, like, you know, 750 military
bases, U.S. military bases globally.
How is it that the dollars, the reserve currency everywhere?
How is it that U.S. media is ubiquitous?
You can't, you don't become global number one by accident,
right? This is like it's hard.
You know how hard it is to become number one in any
industry or in anything, right? You just don't become global
number one in so many different categories back.
So with having the UN and in New York and you know, all these
people educated at Harvard, like there's 20 heads of state
educated at Kennedy School of Government alone, right?
Becoming the center of the global empire was something
where in 19391940, when Britain was on the ropes, until that
point, America had been fine with the British having an
empire, right? Because it's expensive to run an
empire, all this kind of stuff, right?
So they had wisdom, like, we're just gonna build up our
strength, not run an empire. But then they realized, wait a
second, if we don't run an empire, they thought at the time
the Nazis could choke them off in terms of trade.
And then later is the Soviets. And they're like, well, if
America doesn't build an empire of democratic capitalism, the
Nazis or the Communists will, and that'll be bad for the whole
world, which was true, right? So there's almost a we're forced
into it position, right? And so they actually decided,
all right, we need to take up the imperial burden.
And they started playing to win, right?
And all kinds of institutions, for example, FDR set up, the UN
is something where nominally every country gets a vote, but
the Security Council actually has a veto and it's in New York,
so they can bug the entire UN headquarters.
So the US actually had the veto over the veto over the veto,
right. Many kinds of things like that.
All these poster institutions that were set up that had the US
at the center were how the global American empire was, was
set up and the US taxed the whole world.
The business model of the US was the dollar, because anytime
anybody's using either the dollar directly overseas or U.S.
financial asset usually needed the dollar to buy into that and
so on. So that was their mechanism
where global dollar inflation is global taxation.
The whole world pays tribute to America, that whole business.
This model is now reaching end of life because the main 2
competitors to USD are CCP and BTC, right?
China and the Internet. Right.
But I guess that's why they're trying to push stable coins the
way that they are. Right.
So it's interesting because this is something where so let's talk
stable coins, right. So a new bill is being passed in
the genius. Yeah, and you know, obviously I
was very, you know, like I, I know a lot of stable coins.
It's. Also interesting that Hong Kong
also passes actually a month before, right?
Yes, Which is you? Know, so that's interesting.
So tell me about that. Go ahead.
Yeah. So, so before the Genius Act
actually came out, and it's actually one that we're quite
involved in, our ledge code, which is the equivalent of our
parliament basically passed the Hong Kong stable coin bill,
allowing the HKMA, which is a central bank, to basically start
issuing sort of stable coin licenses starting from August
1st. So the applications are going to
start basically next week, right?
And so it's a little bit of a head, right?
But, but this was already in the works for a while.
And in fact, we ourselves, together with Standard Chartered
and Homeland Telecom are part of three companies that have been
involved in a sandbox essentially trial period for for
stablecoin. And of course, you know, what's
also interesting is China's response to it was that they're
looking what's happening in the US and they recognize that since
it's not China, it's going to start buying all these T-bills
and it's going to be stable coins.
And they also realized that the dollar Hegel money, the stable
one strategy is around extending dollar Hegel money.
And so what's, you know, basically the response to this
one. And Hong Kong has always been
the financial Center for China for this type of stuff.
Frankly, one of the reasons why the US is, you know, I'm not
sure if you, if you remember this, but during the time of the
protests, Hong Kong basically lost its special status with the
US on account of, you know, freedom and so on.
But really, I, I think the, the undertone was really around
choking off essentially ideally 1 of China's main financial
strongholds, which is Hong Kong, right?
But anyway, China itself also, what's interesting to me is
around that time, a lot of people thought China was just
going to say, OK, Hong Kong's going to be the fishing village
now and we're just going to build up Shenzhen, right?
But interestingly, China decided to like sort of rebuild.
Hong Kong, in fact, double down on it, Yeah, and it's because
Hong Kong is necessary. So tell me about that, because
that's an angle that was interesting.
Well, OK, so the reason, the model for so this is really
important because Hong Kong plays its role because it has
laws and rules that are not all the same as in China, right?
And it's actually also one country.
Two systems. The one country, 2 systems, it's
also the way which global trade can match.
So if you're European or American for that matter, you'd
much rather work on something that's based on English common
law rather than basically that's based on Chinese law.
It's also English as the official legal language as well,
which is the trade and frankly, the Internet, right?
So Hong Kong plays an incredibly important role for this, right?
And if you think about sort of even, especially now, right, if
you think about it, you could say a lot of people were saying,
well, there's a shipping port, which is probably true, and
Guangzhou is going to be bigger. Yeah.
And it's just literally across the border.
But when it comes to legal contracting and rights, and also
all the, all the wealthy Chinese people actually want to live in
Hong Kong and send their kids to Hong Kong schools, right, while
they work in China. So Hong Kong has a special sort
of role around that. And I think China recognizes
it's important. You know, what's interesting is
I also understand that they use Macau in a similar way.
It's much smaller, but they use it not just for the gambling,
but it's actually a Lucifone like Brazil and all the
Portugues, especially Brazil, which China is an important
relationship with the the the Portuguese speaking Lucifund
countries have the forum with China in Macau.
Yeah. So that is for Portuguese what
Hong Kong is for English or. Something yeah, I think the the
the big thing I think this is where I think a lot of people in
the West misunderstand China, at least from our perspectives, is
that China's number one agenda is of course they want to have
they want to have power, but they need stability in that
country. They're most worried about what
happens. So what's the reason that if you
think about where is particularly American media
politics poking Hong Kong and Xinjiang, right And what is the
thing about those two places different about the rest of
China? Well, Hong Kong is in
particularly a, you could call it multicultural.
It's more more like, say Westernized, so can appear a
little bit of a weak spot, although at this point I would
say it's it's very much sort of cleared up.
And then Xinjiang, which is basically 99% Muslim, right?
And it's homogeneous Muslim. So if you want to poke the bear
somewhere, this would seem to be its weakest spot, right?
And so all of the stuff that you see in media and discussion
around that is actually really trying to sort of find ways to
sort of feel poke. Yeah, poke, right.
And, and just to close this thought, the important thing for
China is harmony within it's own country.
Everything is built around it. So, so the one thing that would
not happen in America, for instance, is that, you know,
when, when, when she talked about common prosperity, right?
One of the things that he took down was private tutoring,
right? So, so, so from a Western
perspective, you're like, you just killed an entire industry.
That's bad, you know, you know, and this is the risk of, you
know, centralization. But he did it.
Or they did it because they realized that this type of
tutoring was only available to the wealthy.
It was creating a much more bifurcated society.
Yeah, but they re establish. It though, yeah, but not in the
same construct, right? And more importantly, also they
wanted to equalize education. Also, they were very worried
about the wealth inequality because it was the instability
that they were more worried about what's happening in China
than specifically the dynamics around the.
World, right, right. So The thing is, you ultimately
have to judge something by the outcome, right?
And if you see Chinese cities and Chinese streets, they're
beautiful and clean and they're aesthetically really amazing and
so on and so forth. So that there's obviously some
huge success there for, you know, a billion people.
There are manufacturing powers, other countries that complain
about overproduction. You can't like it's something
where, oh what, they're making it too fast and too cheap or
whatever. It's like you have to get good,
right? So there's a lot of things that
China's done where you just have to respect it and you have to
like look at all the graphs and so on.
I would say that my view is China might be good for the
most, but the Internet is good for the best.
So. And so the reason is, I don't
disagree with that. Yeah.
Because also the construct of this pendulum shift between sort
of, let's call it freedom and you can call absolute freedom of
form of anarchy and then safety and security and then to the
trade of our safety and security.
American anarchy and Chinese. Control, right?
There's something in between. And there are people who prefer
one or the other. So you will see people in China,
and this is I think where the West often couldn't understand
why do you like this? Because I would never accept to
live in this type of environment, but the safety and
stability of not having to worry about possibly getting shot.
In the street? Yeah, exactly.
What that kind of stuff, of course, and the fact that, yes,
there is much more surveillance, but at the same time, you know,
you have much more security, right?
And some people say I want surveillance, but I don't want
it quite that way. So maybe Hong Kong is a better
compromise, some other place, whatever.
So there'll be lots of things that are going to compromise.
Exactly. Yeah.
So, but there is a penalty you can't have, you can't have this
idea that you have complete absolute safety without the fact
that you have also high degree of surveillance and.
Control, yes, that's right. Well, well, so I think the
question is you're absolutely right that those are two points
on extremely on the spectrum. And I think you're also right
that many Democrats are going to opt for Chinese control, like I
said, basically in the 20th century.
The one thing that's not very well understood is.
Maybe, But do you think it's because they don't really
understand it? So for instance, one thing that
I've noticed so much to yeah, shock is, you know, the
conversations around, you know, the populism of Marx that is
emerging in, in, in, in the American dialogue.
As well. There's actually, I should be, I
should be clear. There's the Luigi, left, right,
which is just violent anarchists.
Yeah, I actually put it like this.
You know, many Democrats have replaced GODOGOV like, they've
like, the state has become their God, right?
And so because of that, like when they lost control of the
American state to Trump the second time, that shattered
Democrats faith in what they thought of as democracy in the
American state. Because all of their rituals,
everything is organized around the American state, handing out
money to Democrat NGOs or funding to Democrats or
professors at universities or gives leaks to Democrats or
journalists like the state is their central organizing
principle. Like Democrats ran this ad a
while back, which is government is the only thing we all belong
to, right? Literally as that's the sharing
kind of thing for them, right? So replace GOVGODGOV, right?
And this is similar by the way, Carl Schmidt has written the
book called Political Theology. Or you know when the Soviet
Union failed they called it the God that failed, right?
The point is these state based ideologies are a replacement for
God in many ways. Many different kinds of factions
have have talked about that. OK, so their God just died.
What is the answer? 1 answer is some of the left,
some of the Democrats go to the Luigi left, violent anarchism.
They believe in nothing, kill everyone, and other factions are
basically like, OK, well, what is the most powerful state
today? If we don't have DC, then we
have XI. So I'll just fold into China.
And the way of thinking about that is think about Venezuela or
lots of these other countries that have melted down.
They are basically propped up with Chinese support, right?
And one way to think about it is China is the monkey's paw
opposite of the neocons and neoliberals.
China will trade with kleptocratic Venezuela or
meritocratic Singapore. It'll trade with Christian
Orthodox Russia or, you know, fundamentalist Iran, right?
China doesn't care what that country does internally so long
as that country doesn't quote interfere in China's internal
affairs. This is the exact opposite of
the neo con or neo Lib who wants to bomb every country into
democracy, right? But it's not like the exact
opposite isn't necessarily good because the problem is China's
developed a surveillance stack. And you know, whole set like 1.4
billion Chinese people are very smart and they're really clever
and they work around all kinds of things.
You know, the mountains are high emperors far away.
It's a very, very clever, especially southern Chinese
people in, in, in capitalism and entrepreneur, right.
And so historically, the balance necessity by necessity.
Southern Chinese were the persecuted ones.
That's right. That's right.
And so, so, you know, historically that balance was a
very pragmatic balance. We didn't say that law has
limited the state. It said practical realities
limit the state. Yes, they have total root
control, but they don't have the ability to surveil everything at
all times. They can monitor.
So I can just do what I want. You know, the state can do it as
well, right? Fine.
Very, very practical balance of power as opposed to the European
balance of all that laws and quoting things.
OK, fine. Which has its own merits, which
is different. My, my view is that stack which
is being developed in China, if it can kind of lock down China,
it can absolutely lock down Venezuela.
It can lock down every kind of country because it was debugged
on 1.4 billion Chinese, one of the smartest, like hardest
working, you know, like most entrepreneurial cultures around
at that scale, it'll work to lock down just about any
country, right? And that's a stack that they're
selling. And in fact, when, when
countries are buying weapons or or security stuff, they actually
buy the missiles and stuff from America because they're pointed
out, but they buy the security stack stuff from China because
it's pointed in right. But I mean, so now to be clear,
I'm, I'm, I'm saying this in a beyond good and evil.
Sure, right. Like I'm just observing, you
know, because I think, let me, let me also argue your point for
a second. Yeah, the, the dumb V1, let's
say V1V2V3, the dumb V1 American way of thinking about China or a
lot of people is like the Chinese Communist Party and you
know, you know, and they, they actually think they're still
Maoist or they're still poor or it's all slavery.
There's actually much more capitalist than.
Most yes, exactly. That's right.
So so they they have a just a really weird outing.
Part of it is there's been very few depictions of what China
actually is in American media. I think it was.
Haven't been to China? Well.
That's right. That's what I mean.
China's invisible, if you like. Yeah, right.
Exactly. And so the only non Western
society that I've seen that's being depicted as prosperous
recently was Singapore and Crazy Rich Asians, right.
And that's the exception that proves the rule, right?
Because Singapore is still kind of within the Western camp or
we're happy, right. But because of that, and the
reason is Hollywood didn't want to make movies that show other
people overseas having a good time and and leveling up because
of course that would be, you know, they'll not do well in
their screening, in their focus group testing who want to see
Chinese people doing well. If you're an American, they're
envious or mad or OK, fine. So because of that, though, they
have just a huge unreality. The V1 view of China, like they
want to conquer the world and so on.
When China's been very insular historically that that's like
dumb. OK, then the V2 view, however,
let me quote it to say why I disagree with it.
The V2 view is someone like, let's say Arno Bertrand or what
have you on Twitter. If you've seen his post or you
know, he's like a or Carl Za or something like that, they'll
make an argument, which is as follows.
They'll say, and some of them are Chinese nationalists, some
of them are just really alienated Westerners.
But they say something like for the last 40 years, China has not
invaded any country. They've built up Africa while
America's blown up to the Middle East.
They had a peaceful rise. They brought all these people
out of poverty. They built all these amazing
cities. They've just, you know, been
playing defense. They didn't start the trade war.
There's playing defense. And what is their great crime to
ship lots of stuff cheap. Wow, that's so bad.
And, you know, they just don't want the same anarchy in their
country like that the US has brought everywhere else.
So that's why they don't want American influence and China
should be able to develop in its own way without alien Western
and software and so on, and even blocking social media.
We'll look at what social media has done to the West.
Maybe they made the right decision and so on, so forth.
This is the steel man of the V2 right now.
The V3 would be granting V1 and V2 for a second and say, OK, so
now what happens when like, you know, the exports really rise
even further, right? So you have a Chinese self
driving car or phone or drone or center everywhere, right?
Well, all of those things have essentially like when you sell a
Chinese chair, it's decentralized, there's no
software connecting it back. But when you sell any kind of
IoT enabled, AI enabled device, it can be shut down, controlled,
surveilled, whatever by a central server.
It's got a string, a digital string attached to it, right?
And the interpretation of what interferes in China's internal
affairs rises as Chinese trade just absolutely dominates.
And there's not just a Chinese chair or a desk or a table, but
it's a Chinese car and a drone and a phone.
They essentially have root control not just over China, but
the whole world. Like the exporting of goods
carries with it software. That's, that's like the big
thing, right? So it gives root control because
payments are in WeChat and so on and so forth.
So it starts extending that sphere in many, many places.
That's one. The second thing is also that
the stack that they're selling to governments, they are
recognizing the government as legit.
Go ahead. No, no, I appreciate that.
I think to me, I think the I would let's take the Western and
Asian lens perspective. You know, I think the Western
lens is much more conflict oriented.
Yes, by. Culture, of course.
And so they take the lens of everything must be a conflict,
yes, but when you do business in Asia, in your country.
Is win win is possible? Yeah, but also the whole
perspective at. Least this century.
Last century is crazy, yes. OK, but but last century was
also subject to, I mean, at the end of the day, it was invasions
and colonizations and so forth. And also when you think about
sort of China's takeover, even the Qing dynasty, technically
they were invaders from the north right there.
The, there is a root culture, I would say in Asian culture and
in very Chinese culture, which, you know, I, I hesitate to say
it's peaceful, but it's about order.
Maybe it's the right word order. That's right.
And so the whole confusion sort of values, what system that
basically generations follow. And there's something deeply
embedded, absolutely, which when you think about the history of
Europe, which in a way it was Europe and colonizers that came
to America, their history was much more violent by necessity,
right? I mean, you had the Taiping
Rebellion, you had a lot of crazy wars, you had warlord
error, you had all kinds of things.
Happen yes but the Taiping rebellion I mean that also was
initiated in in in by Christianity yes exactly by
external forces sure sure right sure and of course you know
China had to sort of you know basically three Kingdom wars and
that kind of stuff so so so China went through those
absolutely debilitating wars much earlier and as a result
this fear of disharmony and this fear of absolutely absolutely
embedded in its food culture which.
I think to different shape in the West, but as a result, and I
think this is the pro and the con is this confrontational
culture also allows you to do business in a confrontational
way and yet not take it as personal.
Yes, which here for instance, in Asia, if you're confrontational
in business, you're actually personal as well, right?
Yeah, yeah, yeah. You know the whole face thing,
right, right. So there are dimensions that are
different that are deeply embedded culturally.
And this is, by the way, also why I think that I think the
Chinese way works within China. Yeah.
But I don't know that it exports super well to America because
the, you know, you can't. I think it's very difficult to
sort of remove a cultural DNA. I mean, Mao has tried it with
the Cultural Revolution, and he has completely failed.
Yes, he's did it, unfortunately. Right.
Yeah. Yeah.
Well, so to that point, the way I kind of think about that is
many like, you know, great civilizations have a deep
culture thing which they actually take seriously.
So for America, everybody unironically believes in
freedom. Other countries like think, you
know, they think it's like fake or they they roll their eyes.
But Americans unironically bring absolutely.
And the Chinese, I think unironically believe in harmony
like this. So for a certain kind of
American. Passes down family to family.
That's right. Exactly.
So for a certain kind of American, they would say, oh,
harmony. Oh, Aaron's all brainwashed.
And no, the Chinese actually mean harmony.
Like people actually cooperating, singing unison,
working together, you know, and there's like that game.
There's a collective spirit which can be viewed negatively
and positive. Yes, exactly.
That's right. So now the downside of it is
everybody's working together in the wrong direction, lemmings
off a Cliff or whatever, right? The good side of it is the
whole, you know, thing comes together and you can build this.
And I would argue the Chinese antidote has been education.
Interesting. Go.
Ahead So you know how maybe people used to have this
parallel around India and China back in the 60s and 70s.
And then especially with the Cultural Revolution, everyone
basically thought of China being set back.
But if you look at the economic charts, even during the Cultural
Revolution and with, you know, Mao's purges and so on, China
continued to rise in terms of economics.
It wasn't that the miracle of China just happened in the Deng
Xiaoping came in and just happened in the 70s.
What happened it it it was already the underpinning was
there because Chinese were more educated on mass than India as a
parallel. Well, India has always been a
more elite focused country and also.
The the, the, the, the caste system, as well as the fact that
India was much more fragmented in terms of language as it was
in China. Frankly speaking, you know, it's
like predominantly Han Chinese. I I think, I think it's go.
Ahead but but the but the main differentiated between the two
was that one was broadly getting more and more educated and was
already starting at a higher educated level which meant that
the balance of power may appear to be not as sort of brainwashed
and as hey let's all go this direction because we're all just
lemmings because actually Chinese people don't operate
this way because of their education and so you'll.
Find during the Cultural Revolution and during the great
like for 30 years they did have a bad.
I mean, it was, it was purges and stuff like this and elites
got killed. But you had you had a lot of the
education levels didn't decline as a result, right?
Well, so literacy is always. So literacy continue to
increase. And if you look at the charts,
which I don't have on hand, yeah, you'll, you'll notice that
Chinese literacy and education continue to rise even during the
Cultural Revolution, which is interesting.
Yeah, so, so, So first of all, The thing is my view is there's
many, many things, unless you understand what China does
really well, OK, you can't, you know, so and I think so I would,
I would probably argue with you more about like I really do
think Deng Xiaoping taking over from Mao was a discontinuous
event, like of course, and throwing the king of the
foreign. Yeah, exactly.
Right, right. So I don't think China, you
know, like Mao's succession was like Hogwell thing.
I'm probably mispronouncing that right.
And he was he was basically like a communist and whatever like a
real communist and dung he was purged 3 times because he's a
capitalist rotor. I want to take it to the right,
but but leaving that aside for now on the India point, you
know, my view is China play, I've said this before, basically
China plays perhaps the world's best home game, but India plays
a very strong awake game, right? So Indians abroad do well
because all of that complexity and diversity in language stuff
at home means that they are more comfortable.
OK, quickly getting the lay of land.
OK, so this is this and this is that, right?
And so they're very complementary set of skills
where so in some ways the Chinese are the new Germans and
Indians are like the new Israelis or the new Jewish
community, right. Like that's one way macro of
thinking about it. Let me.
Give the analysis, although the Chinese diaspora isn't doing too
badly either, of course. Of course, that's right.
India at home. India at home is rising.
But it's like India is like A10 abroad and like a 7 at home and
China is like a 10 at home and like A7 abroad, very roughly
something like that, right? And.
But it was reversed before. Oh, was it Go?
Ahead, the reason why is that a lot of the growth that also
happened in China was, you know, what we described as sea
turtles. Yeah, the ones going back to.
China coming back to China right, that's right.
And and that's actually also a very strong indicator about
where a country's going when people are coming back.
Coming back, right. Yes.
By the way, that's also why we're so bullish in places like
Saudi Arabia, because Saudi is seeing the same effect where
people used to leave and now they're all coming back.
Totally. Educator brought Hunt says
something. And I actually think, by the
way, I think Indians are going to have a very tough time over
the next 10 years because I think being the global swing
vote and so on. Now, like, for example, both the
US and China are funding Pakistan.
Yes. You know, like even though the
US and China fight 100 things, they cooperate in Pakistan to
beat up India, right? And you know, like basically
being in both bricks, but also in the Quad, like India's had it
both ways. And so India's got a strategic
both India and Indians, the global diaspora are going to
have a they're going to have to basically prove themselves over
the next 10 years the way that China proved itself for the last
10 years. But I think of China is a state,
Indians are a network, like in the sense of China's, you know,
a physical location with borders and so on and so forth.
And 97% of people of Han Chinese descent are underneath that.
You know, the nation, the state, the network are one vertically
integrated whole like Apple, you know, like vertically integrated
where you've got a great firewall, the Chinese language
apps, you've got the party state, and you've got the people
and the 5000 years of, you know, culture, right?
That's like 1 vertically rated thing.
And the diaspora is only like 2 or 3%, whereas India actually
didn't even exist as a country until recently, right?
India is actually more like the EU, where like the difference
between a Thummel and a Gujarati is the biggest difference
between a Spaniard and a fin, right?
And so it's actually India is the most unified it's ever been
in its history. And it's actually doing
surprisingly well in some ways. Like, for example, in many
graphs, China's far and away #1 like on steel or nuclear, right?
Then if you take China out of the graph, India is actually a
distant but real #2 right? And I'm not saying India catches
China, but I am saying that India is actually much stronger
relative to the West than anybody realizes.
I agree with that. And so like insofar as like the
Anglophone world is having kind of a redistribution of power,
right? Like the capital move from
London to DCI think it's moving from DC to the Internet means
are much larger percentage of the Internet than they are of
America, right? And even more than London,
right. So the Anglophone world is kind
of where when I say like China versus the Internet, you know,
versus doesn't always mean, you know, you could say China and
the Internet, right? And I don't think it's going to
be as it's not going to be tank for tank and plane for plane
like like the Americans and the Soviets.
The European model is confrontational.
In fact, I think to balance China.
And why do I say balance China, right?
Let me let me bring it back to a different example.
Let's take 1991. the US had just won the Cold War, right?
It's completely dominant, right? But it turned out that total
victory was actually arguably bad for it, right?
Because over the next 30 years, with no balance in the world, it
didn't just invade Iraq or no. Common ideology to attack, so to
speak. Yeah, exactly.
There's no balance. There's no so.
So what happened was first they fought each other #1 #2 is they
blow up all these countries #3 they printed all this money #4
somehow over 30 years, they, they squandered the most
advantageous position in human history.
They squandered it really, really fast.
Right. And what, what happened was
actually having a completely unlimited power to go and blow
up everything and and print everything and and so on and so
forth. It turned out to be bad for
them. It's like somebody who inherited
billions of dollars, like we were talking earlier about, like
you just mentioned the, the phrase generational wealth,
which we will hear. I'm not even sure that that
exists or is even good when it does exist.
Because if people, you know, this movie, for example, called
Born Rich about like a kid who inherits a Johnson and Johnson
fortune. And what happens is they become
almost like a communist because for them, wealth and effort,
we're not connected. Yeah, they they didn't earn it
as it. Were they didn't earn it right,
they inherited it. It is luck of the draw for them
right. So then they feel really guilty
about that and so they start to spend their money on like, you
know, communism, you know, type stuff and in thereby actually
pull up the ladder for others, right, because they kind of
destroy market creation processes, but they do that to
to absolve their guilt, but come back to generation.
Well, point point is the lack of a balance for America, For
example, think about West Germany versus Germany, which
you know very well, right? During the Cold War, America
built up West Germany and and in general with its flaws, the
American sectors were better than the Soviet sectors, for
example. Question.
No question, right? No question.
Or like South Korea versus but. That's the difference about
state planned economies versus true.
True, true. But but South Korea versus North
Korea, West Germany versus Germany, you know, even Chile
versus Cuba, every place where the the capitalist and communist
variety. OK, fine.
Now, though, what happened was by degrees the US went from
being essentially like the conservative power of capitalist
power, whatever in the world, to becoming the anarchist power,
just destabilizing countries in the name of democracy.
Sometimes the name of capitalist is often named Iraqi, blowing
them up, right. And like, there's a flip that's
happened where, you know, America, I think, is now on the
global left and China and Russia are on the nationalist, right,
Right. Like basically for over 30
years, I actually have this figure, this figure in the book,
right? This is actually a really, this
is what I call the global flippening.
This is as of three years ago. And we're in the middle of
social war. So things are moving very fast.
It's like, you know, borders stay static.
And then in a war, they move fluidly, very quickly.
So we're kind of like that. But in 1988, OK, the USSR was
firmly on the economic last Warsaw Pact, PRC, etcetera,
right? Then you have, let's say
Switzerland is neutral, OK, because they actually did trade.
And then you have Reagan's America, the economic right and
EU, NATO over here, right? OK.
And India was socialist, China was in migration.
It was like 10 years post, you know, dung, right?
But it's hiding its strength, biting its time and so on,
right? And then by 2022 you have woke
America is the farthest left culturally and you have
nationalist Russia and China, I would argue on the cultural
right and then let Eastern Europe and India, Israel kind of
over here, Bitcoin, Ethereum, you can argue are the new
Switzerland, right? And then Western Europe is like,
you know, the center left, right.
So this is an economic left versus economic right.
This is cultural right versus cultural left, right.
And you know, to establish this, I showed a bunch of almost like
inequalities over here, right? Like you know, for example, you
know, each one way of putting it is for each position on this,
I've got a citation there and I've got another one that shows
that who's to who's right? Who's to who's left, right.
So for example, you know the detailed argument, right?
So here say. America, I mean, so you're
talking about specifically about woke America.
I can see that. Or specifically, yes, left side
of America. Well, what about the right side
of? America Well, so that that's a
good question. That's right.
So the interesting thing is the right side of America, I think,
in this time of chaos, in churn, will actually eventually end up
on the global left. And let me explain why.
The reason is you can go libertarian enough that you're
anarchist. But the global left does if you
are truly. Left, there's different versions
of left and right. Okay, insofar as you identify.
So American anarchy, right? There's both the left and the
right version of that. And the left version of it is
BLM, which is we are all equal. And the right version is, let's
call it extreme Bitcoin maximalism.
You ain't the boss of me, right? OK.
And what both of those mean is nobody's in charge.
We are all equal means completely flat.
Yeah, you ain't the boss of me means nobody's in charge.
Again, completely flat, Right. And this is BLM, and this is Jan
6th. OK?
So when you think about what that means on the street, it
means swarming mobs, chaos, assault rifles, you know,
everybody yelling at each other, no established hierarchy.
And nobody wants to fold into anybody, right?
Trump is like the last leader and opera him la deluge like
after after MAGA maximalism, after orange man, orange coin.
You have something where you have a bunch of basically
Bitcoin, you know, Bitcoin warlords, whatever you want to
call it, right? And you just have a bunch of
leaders who. Warring States, go ahead.
No, no, I was. It's.
Warlord era, right? It's like warlord era in in
China, right. The war or the Warring States.
Yeah, exactly. That's right.
So actually those are two different periods, but yes,
yeah. So the, The thing is that people
don't want to, they, they have taken one piece of American
culture, which is leadership and so on and so forth, but they
just don't understand the concept.
They don't understand harmony or whatever.
You know, they understand, you know, the they understand the
concept of organizing. One way of putting this is
individually alpha is collectively beta, right?
Like if you I understand why Andrew Tate and so on exist,
right? I actually think he himself is
smart enough that a lot of what he says is like a persona, OK?
But don't you think he says it also because he identifies the
fact that men have become more disenfranchised, so he's just
pandering to that audience. Totally, totally.
So he's, he's playing a character in many ways, right.
So he's, he is smart enough. I think that he, I mean, his
father's a chess master and so it's but his audience doesn't
get the joke, right. His audience doesn't get the
joke. And and, and maybe he means
somebody says, you know, I'm not, I'm not defending, but one
way of thinking about it is like Andrew Peterson is like Jordan
Andrew Tate is like Jordan Peterson with tats.
OK, why? Jordan Peterson gave advice to
young men to kind of clean your room so on and so forth.
And that was like the old culture where in Western
culture, hard work was valued and you're a valued member of
the society and so on and so forth.
And then lots of young men found that that just didn't work.
And they were just basically there being a nice guy.
They were taken advantage of. So they went to the Andrew
Tatish, you know, all tats and like FU guttural, you know, the
most, you know, insane form of ultra masculinity out there,
right? The problem is that being alpha
in this way, individually alpha is collectively beta because
that those that means those men can't cooperate, right?
By contrast, the quote more beta men who are, let's say, working
on a ship in China or in Asia or something like that.
They're actually collectively alpha because it can build
strength together, right? Say beta.
By the way, I'm not, I'm trying to say the stereotype of like
Chinese, Indian men being beta, but I'm saying the, the, the
cooperative. Like the problem is male male
cooperation is characterized as beta in the West, right?
And I understand how it got there, but it's bad because now
you have women, men, everybody's fighting each other on different
axes. Nobody's in charge.
This is what I mean by American anarchy, like for example, with
Bitcoin maximalism. But there's Go.
Ahead. Yeah, but what do you call
American? So what you might describe as I
guess American hierarchy, I mean more positively, isn't that
American individuality and and exceptionalism?
Well, they will you in the same way that you had communism in
the mid 20th century and it had all kinds of nice words on it,
right? But the substance of it was just
a disorganized, like a terrible society, right?
Actually, I should say it was the presence of a malevolent
state, right? American anarchy is the malign
absence of a functional state. So, so like as every institution
melts down, like the FBI melts down, like Delaware melts down,
right? You know, Delaware's everybody's
got note. California melts down at the
point that Elon's gotten out. You have, you know, every single
day you see another fight where it's like, I don't know, like,
like, like there's a DoD thing. Yeah, but some general is fired
right over. There, yeah.
And I guess it's, and you could also argue around all the
conspiracy theories that are being sort of put forward as
well, and people listening to them, believing them and all
that. So I get that right.
This is the end of the Soviet Union.
Basically the end of the Soviet Union.
Once they stop believing in communism, they believed in
anything. But I would say that there is
one route that I I do appreciate and often you can disagree on.
That is, I do think the one thing that makes America
difference amongst almost any other country is this idea that
on the individuality and the celebration of that individual,
which causes this anarchy and causes things because you start
over COVID with the masks. It's like it's my right.
It's I got to do this worse in China or Japan.
It's like, well, we all got to do it because it's for the
collective goods, so to speak. But I would also say, and this
goes down more, I guess more deeply rooted and maybe my
perspective on, I think humans are generally tuned more for
good than for bad, As in we care about our societies.
Maybe we don't care about all of America, maybe we care about red
America more than blue America or MAGA, whatever.
However, we're still something that we want to attach ourselves
to. And there's a common thread that
eventually we will agree to because we want to be as social
creatures, want to be attached to society rather than to be
something where we're truly just individual beasts, as it were.
Right. Yeah.
And in some cases, that's reinforced by education in the
States. So, you know, like China is an
example of that. And one side of the extreme,
which is very different from something inside North Korea or
it's basically just like literally ripped into your.
Yeah, of course, of course. So forget that.
And, you know, like, I think what you're describing to me is,
but, you know, back in days of the the the 16th, 17th century,
there were many constructs of how society should operate, run.
And you had sort of the Hobbesian view, right, which is
basically talking about how, you know, men are generally selfish
and bad and evil. And therefore we need state
control to put it together and control it because it's going to
be chaotic versus I think the one construct that maybe most of
us more in the West degree, the locking perspective, which is
that. Yeah, we have some elements that
are selfish and some of the problem with it, but by and
large, most people want to be helpful and kind and supportive.
And we need to, you know, be involved in a way where we
support that construct but not basically sort of, you know,
control it as it were, Right. And I think just to close that
thought, when we talk about a future of decentralization, we
talk about a future work through code and what you describe as a
network state and so on expands on.
Wouldn't we be able to say that we can then actually celebrate
individuality, much more so, but in the construct of common rules
and code laws as it were, that we can agree on and do good
things because we prefer to do good things rather than
necessarily sort of really just fight each other all the time?
So here's my view. My view is on there's absolutely
like, you know, capitalism versus communism is not
interesting in the sense of like even the communists are
capitalists, right? But yeah, that's right.
That's right. So but individual versus group
is always interesting because there's a balance of between the
individual and the group. What are your responsibilities?
What are your freedoms and so on.
Rights. I'd say 3 or 4 things are
responsible. You said first is I think for
you and me and for people in tech and so on, when we talk
about individual liberty or freedom or something like that,
we are also balancing that implicitly with responsibility
that say you're not going to go and curse and yell in public,
You're not going to be drunk in public.
There's this degree of like an on board governor there where it
is ordered liberty, right? Like because you take care of
yourself, then you can have more freedom, right?
The problem is that there is a low IQ version of I can do
whatever I want. You can't tell me what to do F
you you know I'm it's a free country, you know blah blah.
Or like we are all equal burn everything down.
There's like really insane versions of this that that do
not have any onboard controller right?
That do not have self governance that manifest in drug addiction
or like extreme levels of obesity or, you know, out of
wedlock births or you know, like setting fires, riots, setting
way was on fire, you know, or just generally being disordered
even on acts and like yelling for people to die.
And so, so that is a symptom of, see, the problem is we have a
language to describe an excess of centralized control right in,
in the anglophoral, because that's communism, that's
fascism. We don't have a language to
describe the other extreme, which is anarchy, right?
Or I mean, there's a word anarchy, but it's, it's
something where actually, in a sense, what is the Western left
constantly afraid of? Fascism, fascism, fascism.
What is the Western right afraid of?
Communism, communism, communism, right.
And so they will push so far away from centralization that
they'll go to the anarchistic form of decentralization, where
there's anarcho communism, anarcho capitalism.
And of the two, I'll take anarcho capitalism because at
least there's like some order. But it's like Mad Max, right?
And I can show you. And when I say that by the way,
I know. Yeah, it might sound.
No, it's fascinating just because it's interesting.
It's just that I. Think that there's a failure
mode the other way is what I'm saying.
And it's moving in that failure mode.
And let me just show you some visuals, because I've got
visuals in my head, but I want to show you what I mean when I
say this, right? So, sure.
I mean, OK, I've been to this future of San Francisco.
I get it. Yeah, that's.
Right. So like for example.
But I think of San Francisco more as a as a state that's as a
place that's that's breaking down where social cohesion
again, well, but let. Me show you.
Let me show you what it was actually at.
This is the level that it's at. OK, so here's a video in San
Francisco. This is like basically a year.
And it's not just just a giant mob.
All school cars are running in circles.
Then here, watch this. They're setting them on fire.
OK, this is just straight up Black Mirror Mad Max in the real
world. See, black murder is about like
a dystopian future. And all the sci-fi stuff
presupposes that the future is bad.
But the present was OK, right? And here it's actually the
reverse. It's a present that's bad.
And look at this. These are just like animals
basically, right? They have none of them are
arrested the police fighting cars on fire.
Obviously that can lead to I mean the reason fire is bad is
it spreads right. So this is look at this, these,
these. You know what?
Where is this? By the way, this is not like
some random location. This is in front of the Ferry
building, right? This isn't this is not like some
place that's known to be a hellhole.
This is happening in one of the most expensive places in in SF,
right? And the police doing absolutely
nothing is like a signal that the immune system of society
doesn't work. And let me show you another one
ready. Here's another one.
Here is. But are we, are we not at risk
of highlighting? Well, prefer I agree with you,
this is this is terrible, but but are we not at risk of
highlighting the sort of exceptions to the rule?
Because while it's true that there's a lot of problems in San
Francisco, it is not that 90% of the population is doing right.
Here's Susan, right here's who's.
It. Mall that's that's the only
people exactly. I'm right here.
This guy's obviously queuing for his.
Life, he's seen it before yeah. Now what's up There's something
on his car and it's fully caring for his life So look, watch what
happens watch what happens this is a large bomb of people.
This is hundreds of people, right?
So watch, watch that show. We'll see you there.
No Watch this start. This is the.
Fasting. OK, this is World War Z.
This is 28 days later. The fast zombies are running
after him with this beautiful building and this well.
Landscaped. Manicured thing, right?
That was the old civilization that built that and this is the
new anti civilization that has risen and you see the mopeds
coming. That is to treat Mad Men.
OK, Yeah. Do you know what scene is then?
Yeah. No, this is like Minneapolis.
This kind of thing is happening all over America.
It's not even like did this guy do anything?
He didn't do anything. He was I don't even hear it was
really Ghazi. There's some these are insane
people and there's a lot of people enough to take on the
street have no police. It can happen here in America.
What's 1 do with that flag? They have more made people like
here as it's feel and stuff. I don't.
Know of course not what it is, but that's the point, because
this. Is not expecting anywhere.
This is something that happens so.
Much. Where's the police, I guess.
Where's the police? They've been abolished,
defunded. Remember that?
Like, you know one of the things.
That took me a long time again. This is obvious, but it's just
the level of property that the the, the billions, trillions,
whatever in property that the police force protects in a city
is like their pay is a tiny fraction of what that is worth,
right? So obviously they're they have
to do it for the honor, for the the sake of protecting their
community, for the praise of their community.
You know, women love a man in uniform.
It's supposed to be something where people are like, you know,
thank you for your service for the military, but also like
having that respect is actually a big part of what they deserve
because it's a dangerous and difficult job.
And the whole insane, abolish the police, defund the police
kind of thing took away a lot of that status.
And the police were suddenly characterizing people as a bad
guy. So a lot of the guys who were
good guys laughed. And others just like, like, you
know what, take care of yourself, you know?
Right. So that's like, if they're not
going to be praised for stopping bad guys, let the bad guy, you
know, go, go take care of yourself, idiots.
You know, that's how a lot of policemen feel, right?
And so, I mean, the tragic thing would be that.
And I guess I, I try to be hopeful here.
Yeah, but the tragic. Thing would be that if you give
up on a place right and then you leave that is the decline of the
state for sure. True right but but but America
was founded by people who gave up on a place and left right in
the 1600's the the. Puritans gave up on England and
left. The Cavaliers gave up on England
and left. 1848 revolutions, 1848, the German Americans gave
up on Germany left. Did the Irish Americans, did
they betray Ireland? There's more Irish people
outside Ireland than they were there.
Absolutely. Yeah.
So like every major group that came to the US basically
essentially made the decision that their home country was had
too many problems. The end later, obviously, Jewish
people during the Holocaust, church, Iranians after the
Iranian revolution, Korean people after the Korean War,
Vietnamese people in Vietnam War, like Indians to escape
socialism. Chinese people, like, you know,
during Maoism, every major group, you know, came to America
because there was something busted, destroyed, wrecked,
ruined in their home country. Or they just couldn't fix it in
in time practically, because not everybody can like be like, OK,
I'm going to ascend to becoming president and so on, right?
The best decision for them was to vote with their feet and
leave, Right. Yeah.
And now I think another piece of this actually.
Sorry. Go, go.
You say something. I was going to say.
Yeah, Yeah. You know, No, I mean, I think, I
think the point I'm trying to make is, is that.
As far as long as it's going to be people in the space that want
to make it work, right? There is something worth
fighting for. And so my, my, my sense is, is
that America's worth fighting for.
I'm not American, just be clear, right?
But I think there is something that there is, there's something
to lose that is more precious than just your.
The values are worth fighting for, absolutely.
Yeah. But it's meaning and and and and
so I do think that the. Idea and the place as it is.
People fighting for it, whether this is someone like an Elon or
a series of people like this, I think people will come together
if the police, state police fails as it is right now.
I do think, you know, humans have this powerful way of
reorganizing and reforming and it will look differently to your
point, but they'll come together to make it work, right?
And I think you see this in history.
One, when things fall, they come back slightly differently, but
they will they will they will form and shape themselves in a
way that again, brings it back down to the right sense of
safety and security that that people.
That's right. So this is like what I mean.
So I think the way I think about it is.
Like you can think of it, the Internet is either AV3 or even
V5. You have Greece, Rome, Britain,
America, the Internet, right and for example, Bitcoin represents
American values, but it's also it's really Internet values,
right yes and so because global, because it's decentralized,
right, the Internet is more America than.
America and MAGA is trying. To be more China than China,
right? Like in the sense of MAGA has
China envy. They want to be a manufacturing
power, they want to be a military power.
They want they're even obsessed with Taiwan, right?
All these kinds of things are things that nobody ever cared
about America until basically 2015 when Trump, like because
red America was losing to China, MAGA had China envy.
And nobody admits this, right? Like basically the Democrats
also have China envy, right? Because they want to have that
level of control and so on and so forth.
And China just does it more competently.
China's a much better China than blue.
Americans are very similar, by the way, to the 80s with the
USSR when they lost confidence in their own system and
Gorbachev started copying America.
Glasnost, perestroika were American concepts that were
brought into the Soviet context. And it didn't work also because
they weren't ready for it. They weren't ready for it, you
know, it's basically the cart before the horse.
They're trying to ideological reform.
Before the manufacturing reform. Right, All that kind of stuff.
So the whole thing melted down, right?
And basically Gorbachev, you know, lost confidence in the
communist system and tried to do things in a different way.
He's trying to copy America, and the Soviet Union was a much
worse America than America later.
Now Putin has rebooted the whole thing as a Russian nationalist
project that took 30 years. And you know, like it's more
successful than it was in the 90s.
Maybe it's going to win this war in Ukraine.
Who the heck knows what's going on for years and years and
years. OK, so or, or, or he loses or
it's some crazy stalemate that's been going for way longer than
anybody expected. Fine.
So I think that in, in, you know, trying to like China will
always be a better China than than than MAGA, right.
And, and because China is of course, it's just comfortable in
its own skin. All this stuff like industrial
policy that manga is trying to do, it's also got decades and
decades of of of build up and experiences.
You can't just replicate that overnight.
Yeah, exactly. Like they want to make they want
to replicate your head, Sir, but but but there is one, of course.
Thing that is different is around applications of AI right?
Sure, but even yeah, go ahead. And the reason why I think it
was interesting is I do think that the way that AI.
Is forming and developing in China under.
More of a state control environment because of safety
and security and so on, is going to have a different flavour than
it has in America. And I do think it's the physical
world. Yes, Sir.
And, and also I think in America the application of individual AI
will form differently than it will in China for that reason,
right? Both of them would have their
own forms of it. And maybe, you know, is the
application of AI and by extension crypto and
tokenization of that type of stuff not going to be perhaps
that answer? And in terms of helping sort of
reshape society, right? Because I feel like, you know,
to your point about it's difficult for someone to
compete, but you know, in the classic labour construct.
But when you talk about what's happening in AI on the creative
side and what's happening with the AI, the tools available to
you, actually, it opens up entirely new frontiers.
And it's true people will get left out, but it's also true
that. In.
A place like America, you can be disruptive about this, which
won't be allowed in China in quite the same way.
So I, I, I again, I, I don't mean just tech people, sorry,
but I just to say that I actually think because of AI.
You're going to have. Much more extensions of that
human creativity extend throughout people who are not
technical, meaning that we're going to have totally much more
amortization. And therefore, you know, someone
in the Midwest could actually have an application of use in
the so-called technology world that it would never had that
otherwise. Yeah, but I'd say my, my mean, I
agree a lot of what you just said, except I'd say.
Internet first, as you see from America first, right, Because
not just someone in the Midwest, someone in the Middle East,
someone in South America. So, right, And only 4% of the
world is American, 96% is not American, right?
But isn't actually America ultimately the physical
manifestation of what you just described earlier in terms of
the nation of every, well, people?
Came in so so I think the V3 will be network states right?
Like essentially. The, the physical US doesn't
have a logic to it anymore because you've got people who
are communists and nationalists and technologists and so on all
living next to each other that don't share their values, right?
Like basically it used to be, or the whole nation state concept
was this, this implicit premise that if you live near somebody,
you share their values. Therefore you could agree on
laws and those laws would be enforced at in a geographical
way. Right now, people can live in an
apartment building and they completely disagree with each
other on everything. They don't know each other.
They're 30 feet away, one above or below or whatever.
They wouldn't recognize each other on the street.
They would like completely different content and now with
the Internet they have complete different system of laws. 1 is
on this blockchain, the other is on another blockchain, right?
So the entire concept of law being enforced geographically
resides implicitly on culture being uniform geographically.
When that breaks and fractalizes as it is in America, you don't
have that now. But China does have uniformity
of culture and geography because they have the firewall.
They, they kind of took the hit to do that vertical integration,
right, Those digital borders that they've built the great
Firewall. I think especially in the age of
drones, nobody can script something easily on China's
territory because they have this right?
Like they, they have the ability to block basically.
And this is the thing, like they, they kind of made this
claim that they, if they can inspect physical packets coming
across the border, they can inspect digital package.
And there's actually, you know, again, I will still be on the
side of the free Internet, but to make the case for that, and
I'll give the case for the free entry in a second.
But to make the case for that, that concept of digital borders
as opposed to censorship is an interesting way of thinking
about it, since it's actually true in the age of robots.
And and you know, you don't want to allow someone to just connect
and script a drone and blow something up like the Ukrainians
did in Russia, right? OK, so China's actually, they
took the hit and they took the PR hit and they actually have
something where they have a a communications layer and a
social layer in Korea did something similar.
Oh, really? Interesting.
I know this. Yeah.
So I mean, notice how Google doesn't exist in Korea.
Yeah. Neighbor.
Exactly it. Says old neighbor and the way
the map. Systems run.
They didn't do it in quite the Chinese way, in the sense that
you could still. Access Google.
In Korea, but all of the domestic sort of ecosystems and,
and frankly utilities and all that type of stuff really could
only be accessed in Korea, in Korea by Korean companies.
Huh. So for instance, Google Maps
does not work in Korea. Really.
Yeah. So you have to use neighbor.
Or you have to account maps, right?
And it's sort of a different level of protectionism.
But as a result, Korea now has a very strong native industry,
yes, that doesn't exist elsewhere in similar or actually
larger size countries because they've essentially been
digitally colonized. Yes.
So totally understand the perspective.
That's great. Exactly right.
And I think India also has, it has Reliance Geo, it has kind of
its own things and. So it has some degree of
sovereignty on that versus those, right.
So this concept of network versus state is actually like
the capitalism, communism kind of thing of this century.
It's centralization, decentralization, right?
Because the network is capitalism, the state is
communism. Or like when you actually say
those are loaded terms, you're showing, right?
Yes, exactly. The network is individual and
the state is I think. Maybe you can summarize it as.
I mean it's. Decentralization, but it's
ultimately down to. Getting one layer lower into
your property rights. Yeah.
And and as I think you were saying earlier, and I completely
agree, there's many different valuable intermediates.
Between these, right, Singapore and Dubai make different
trade-offs, but they're both valuable places and it's useful
to visit them, right? And there could be 50 different
kinds of network states, 1000 different kinds of network
states, each of the million people that make different
trade-offs between the individual and the collective.
And where, where I come to is you preserve democracy, you
preserve choice by allowing people to choose between these
locations, right? You go from the two party system
to the thousand city system. And so you can pick because
actually one of the things that's happening in the US is at
the state level, they're becoming one party states.
California's been a one party state for 15 years, right?
That's why they've got the $100 billion change norm.
So California's a one party state.
In response, Florida's becoming a one party Republican state,
right? And, and, and obviously China's
a one party state. So the actual choice is between
states not within them, but the ultimate state ultimately for
all of them in order to preserve the ability for the state to.
Survive they do need to have access to military of some ah OK
let me talk about this right so my view on I think Americans are
you know and I've shown previous.
Graphs in different podcasts. But like, you know, if you look
at shipbuilding, yes, China's 200X American shipbuilding, so,
so on stat after stat, the the current Secretary of Defense has
said China's hypersonic sequencing, all these aircraft
carriers, our whole power projection platform is aircraft
carriers and the ability to project power that way
strategically around the globe. And yeah, we have a nuclear
triad and all of that, but a big part of it.
And if you know 15 hypersonic missiles can take out our 10
aircraft carriers in the 1st 20 minutes of a conflict, what does
that look like? Former Secretary of Navy's
admitted one Chinese shipyard can build more than all your
shipyards combined. They have 13 shipyards.
In some cases their shipyard has more capacity. 1 shipyard has
more capacity than all of our shipyards combined.
CEO of Raytheon has said you can't decouple from China.
So while we talk about pulling supply chain out of China,
resourcing out of China, I would tell you it's very impractical.
We've been de risking for a couple of years, making sure
that we have second sources for critical componentry.
But unlike Russia, where we pulled out two weeks after the
invasion last year, we shut down our factories, we pulled our
people out and we completely cut off any contact with our Russian
customers. You can't do that with China.
Too big, too important and too necessary.
There's AUS military study by an entity called Gavini that showed
that the US military is made in China, that like the Tomahawk,
the JM, they go back to the Chinese suppliers.
So in many ways, the entire concept of the US military being
prepared to fight China is all completely fake.
It's just basically something where it's like defense spending
or what have you. It's like a defense budget
thing. But in an actual fight it would,
it's just a, it's like a, it's completely fake, right?
the US military cannot fight China.
And so once that's actually priced in, then you actually
realize, OK, the Chinese drone Armada is the most powerful
physical force in the world, right?
And I and I'm describing something that doesn't fully
exist yet, but it will, right? The Chinese drone Armada where
the sky is blackened by like, you know, this crazy kind of
things, right? Against that, I think you can't
fight it directly. The entire American model is
wrong. You need something more like
Gandhi and non violence. You need the agility of the
Internet. You need to have
decentralization. You need to have, you know,
essentially be everywhere and nowhere.
You need a completely different strategy to balance the Chinese
drone Armada then the tank for tank plane for plane model,
which MAGA still invested in and they're just wrong about.
They just don't have the manufacturing group.
They certainly don't have the price competitiveness right.
So Gandhian non violence is, you know, as that capital moves, you
know, from Greece to Rome to Britain to America to the
Internet. New cultures influence it,
right? Like British culture had a lot
going for it. But the American fusion, you
know, all these different European strains and African
Americans and various immigrants like added more strength to it
and such that even British culture, as powerful as it was,
you know, actually now looks up to American culture and American
culture looks up to Internet culture there, you know, in a
sense, you know how like France. Oh, go ahead.
So, so, So what I wanted to add to this is that so I agree with
you in terms of, you know, when it comes.
To although I do think neither side wants a war because it's
going to be so destructive on each side it's just not worth it
because obviously there's going to be a lot of internal issues
that develop from it and one and when it comes to that I think
China will will definitely have a much harder time weathering it
than America. You think so?
I think so really so yeah, because interesting because
because I think the the the the harmony of of of of of China on
wars is is it's one of the reasons why I think it's is that
this is the one child policy and they don't just demographic
issues. Well, they don't have a flow of
of of they, they, you know. You don't get this.
Just not that obvious. For immigration to take place in
China, right? Just for cultural issues as
well. It's also one of the they have
visas in Hong Kong though, although they do.
Yeah, yeah, right. It's like 8 billion people, so
sure. So it's one of the reasons why I
know a lot of people in the US are saying is.
China is going to invade Taiwan. They're treating it like the
next to Ukraine. I vehemently disagree with that
perspective, primarily because I don't think first of all, she is
not Putin. The 2 are entirely different
right? It's not like sort of that sort
of acting in a vacuum. I think they're much, much
smarter about this. And the second thing also is
that Russia shows China what not to do that too.
Have you heard you know that proper?
Obviously, like with the collapse of.
The Soviet Union, Russia, you know, Mod yes, the ideological
is supposed to economics first. They keep showing China what not
exactly what not to do, but also again sort of China inside first
in terms of making. Sure that you have harmony and
creating a war even that's external is not fruitful for
internal harmony whatsoever right so I don't so so I think I
don't think China would be an initiator of a war regardless
and I think America doesn't want 1 so I think that's one
perspective but the second one is really when I talk about the
the Internet and as you're going in class yes exactly sure when I
when what I was trying to say is that we.
Will still need. Some form of protection because
we're still physical beings, yes, at the end of the day,
whether it's police or this or something like this.
And I think the common bond will be the fact that we need to have
some some form of social cohesion and security totally.
And we'll come together whether this is government network stake
as you say. And I think enough of them will
then share around those values and come together because of
that. Absolutely agree with this.
And that's why I think these cloud communities can have
leaders that can materialize in the physical world.
And now people are once again geographically and ideologically
aligned. And what I would say, I hear
your point about America currently split and all that
kind of stuff, but if there. Is one place today and maybe the
place will be somewhere else. Although it's hard to imagine if
there's one place today that's still, despite all the struggles
internally can still exist with this divide.
It is still America in comparison to other places.
You couldn't. China wouldn't survive some of
this, Europe wouldn't survive something like this, right?
I think America it's struggling. Do not get me wrong, I agree
with you completely, but if there's one country that has an
ability to potentially deal with it, I do think it's America
because of it's history. So why are we?
Well, but, but I understand what you're saying.
Yeah, Yeah, I think. I think it's kind of like saying
the sun will never sit in the British Empire, but the British.
Empire. You know that used to be a
saying, right? But the you.
Know and it was true for its history for hundreds of years.
The sun never sit in the British Empire, right?
But the British Empire was not an idea.
It was more so than anything before.
Because it will actually like. This.
Yes, one last thing right so common law and the Magna Carta,
yeah was a crucial thing that made the father of property
rights. Exactly, that's right, exactly
so So Britain was closer to an idea than.
Any other? European country, right?
It was more abstracted out. That's why it was also naval
power. It's a combination of geography,
the ideas there and then America.
I just want at one point. Also, I think the English
language is also part of that. Yes, because the English
language is such a fluid. Language and I think broadly a
much more optimistic. So I grew up speaking German,
right? Because it's my mother tongue,
because I'm good in Europe and German is an incredibly precise
language. You don't have this joke about
unless you put the verb at the end of the synthetized, the
entire paragraph you just said makes no sense, right?
So it's partially true because of that position, but it also
makes for a nation of people more precise and frankly more
sort of half glass, sort of empty as half as full
perspective. And I find that in the English
language, you have the ability to be much more nuanced and you
can be more, let's say, packaged.
And maybe it's more political as well.
And as a result, we can phrase things much more positively and
optimistically than German as an example.
Yeah. It's, it's it's I think it adds
to that flavor. Yeah.
I mean, people have, there's a, oh gosh, there's a Spanish
writer who made. This point he's like.
There's like a Latin. And German version of every
word. So like, you know, or like for
you've you've there's chicken, but there's are like a beef, but
there's mud in and you know, you have the the short German word
for something and you have the longer Latin word for it.
So there's a lot of variety and you can mix these up and, you
know, Regal is different from, you know, royal, that kind of
stuff, right. Anyway, so you're right.
But so that's why I do think English is the language of the
Internet. And you know, in a sense this
we're call it interaction balance, whatever of this 21st
century. And again, it's in a sense EUR
Asian communism versus Anglospheric capitalism, right?
So except the EUR Asian communism I'd actually put on
the right this time, and the Anglopher capitalism I put on
the left because the Internet is sort of the more anarchic kind
of capitalism freedom, you know, and so on and so forth.
Whereas China's more ordered kind of communism and more
nationalistic, right And so it's almost like the the world has
these certain confirmations and again, the capital move from
Moscow to Beijing of EUR Asian communism, right.
But it's still a land power fundamentally.
Yes, yeah. What you what, what I'm kind of
hearing is you're saying, you're saying sort of just to back to
the point about sort of the, the.
Sort of the British Empire is that the British Empire itself
obviously is no longer what it used to be, clearly, but the
ideas of the people in the British Empire, right.
Have have have have basically migrated into America.
Yes, right. I mean, sort of Locke didn't
have success in politically in the UK as much as it influenced
what happened in America. That's right.
Yeah. But but now America's like 20%
WASP or something like that, right.
So like it wasn't like that before, though.
It was like. Before, that's right, yes, so,
but the torch got passed and think of it as like software.
Versus hardware right the. Software, the values and the
hardware is the people. And you can have, you know, when
the software and hardware are fully aligned, everything's
great, right? But you can also have cultures
pass on just like algebra came from the Middle East or what
have you, or zero came from India or gunpowder from China.
There's cultural things that can spread, right?
Even independent of the people. And then vice versa, right?
People can have totally different, their software can be
wiped and you can have N Koreans and S Koreans with totally
different software on very similar hardware, so to speak,
right? And the way I think about it is
the Constitution came after English common law, then only
scaled to America. But the blockchain scales to the
Internet. Yes, Right.
Yes. So all the values of America,
which I think we both value free speech, free markets, you know,
privacy, sovereignty, rights, everything.
Yes. All of those are guaranteed by
encryption and by the Internet, not by American courts.
Right, Like Delaware doesn't. Yes, Delaware doesn't protect
your property rights, but the blockchain does.
Go ahead. But there is a consensus.
That comes from the agreement we have with the society and some,
and I guess we probably both agree that the consensus of
proof is enough rather than necessarily needing a state to
enforce it, so to speak, right, because if someone well, let's
see Bitcoin. So the thing to your point about
in the military like Bitcoin has gotten to a trillion without
violence, yes has has no has no armies.
Has no, but it's only different. But what What if someone steals
your Bitcoin? You still need someone to try to
enforce to return it well, so. The thing is that yes but but
does it mean? That's what I mean, right?
But, but, but. But like can you get a return?
I mean, Bitcoin depth is kind. Of irreversible right?
It's very difficult, like if. A Brazilian takes it from
someone in Turkey like for better or for worse, code is
law, right? So you have, and of course you
could instead store it non BTC, but some other thing where
there's a, there's a digital reset and there's System
Administrator and centralized and you could have USTC freeze
it and reverse it and so on. And those things have arisen
because people do want that, but they also have a balance like
here's the amount that's totally with me, but it can also be
stolen. Here's the amount that was
centralized custodian and it could be reversed.
But I don't think the police are really that helpful.
They're like somewhat helpful. Maybe at times it's a really big
theft and so on. But most of them, they're not
helpful. So without a system of
enforcement, I think while most can be careful about it, it does
I think. It does create a scenario where
people are going to be more like for, for a certain subset.
Again, it's not the majority, but a small subset sees
opportunities. Yes, yes, yes, that's right.
So that's why that's like that's like network versus state,
right? This is like total network.
But then some police are the total state.
And then if you go far enough this direction, they don't want
crypto to exist at all, right? So that balance is I think this
century. Exactly, exactly.
And then we have to go to the pendulum shift.
But OK, but why don't we wrap for these?
OK, good, right. Let's ask you some.
Of them. OK, good.
Alright, I'll see you soon. Thank you.