October 27, 2025 • 49 mins
📍Rut and Bryce Gill to break down America’s $38 trillion debt crisis, the AI bubble, gold hitting $4,000, and what the next 10 years could look like for the U.S. dollar, markets, and young Americans.
Bryce explains who really benefits from America’s $1 trillion interest payments, why baby boomers now control the majority of spending, and why housing is unaffordable for the next generation. We dive into tariffs, the rise of gold and Bitcoin, and whether AI will save—or destroy—the U.S. economy.
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Timestamps:
00:00 - National Debt Hits $38 Trillion, What Now?
10:06 - Trump Tariffs Update: Did They Work?
15:48 - The Biggest Wealth Transfer In History: The Boomers
21:39 - Why Is The Market Going Up So Much?
29:34 - Is AI A Massive Bubble?
36:42 - Gold Hits $4000, Is This A Sign of Chaos In Markets?
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
What happens when the United States hits thirty eight trillion
in debt. We call our main man, Bryce gil today
on the David Rutherford Show. All Right, ladies and gentlemen,
boys and girls again. I keep getting a lot of
(00:23):
the requests, and with what happened yesterday online in the
absolute hysteria that just ripped through X at every single
level of hitting thirty eight trillion, putting on a trillion
dollars in debt every month. Now the Democrats want to
add three trillion to the deficit, the Republicans want to
(00:45):
add two trillion. There's all kinds of chaos. Meanwhile, the
markets are going through the roof. Goades Gold's out an
all time Hi. I'll tell you what. I'm too much
of a knuckle dragon meathead to figure this out. So
based on your request, we reached out to the man,
the myth, the legend.
Speaker 2 (01:01):
Ladies and gentlemen, boys and.
Speaker 1 (01:02):
Girls, children of all ages, mister Bryce Guild. Bryce, how
you doing, buddy.
Speaker 3 (01:07):
I'm doing great, man, It's great to be with you again.
And yeah, lots to talk about obviously.
Speaker 1 (01:13):
All right, let's just start at the main issue that
just pulls everybody's attention away from investing long term ideas
the whole thing, and that's the nature of hitting thirty
eight trillion dollars. What are you and your team thinking about,
I know your main economists that you work with is
(01:36):
you know, been very vocal about that as of late,
and that we're not addressing those issues. What are your
thoughts on what that number means, what it means short term,
long term, and what do you think how the markets
are going to react?
Speaker 3 (01:50):
Yeah, it's you know, it's so hard to really say
because obviously the size of that number is crazy. It's
impossible to really fathom actually what that means.
Speaker 4 (02:00):
And so you know, they're economists.
Speaker 3 (02:02):
Years ago, Ryan hartin Rogue Office is after two thousand
and eight, two thousand and nine, they did a study.
Speaker 4 (02:08):
They looked at.
Speaker 3 (02:08):
Governments all over the world, looked at all the history
of government debt and basically came to the conclusion that
when an economy hits about one hundred percent debt to
GDP ratio, which we're past that now, right, that's when
empirically it starts to slow down your economy caused problems, right,
puts you at risk of like a debt crisis and
so hey, we're past that point. The one thing that
(02:32):
is kind of the fly and the ointment here. The
thing that makes it really difficult to analyze this is
that the United States is not a normal economy, right.
We are the realities, We're the biggest empire in the
world history, right, And so the dollar is the reserve currency.
By the way, it's the by far, the dominant reserve
currency in the world. I just looked at today, fifty
(02:53):
percent of global transactions are in the dollar. The next
highest is like the euro at twenty right, so we're
two and a half times the euro. So there's nobody
even nipping at our heels here.
Speaker 4 (03:06):
And so it makes it hard.
Speaker 3 (03:07):
Right because it's like, hey, we're past the point where
it normally would cause problems, but everybody's sort of cemented
into this dollar system.
Speaker 4 (03:15):
There's really no better alternative. I mean, you look all
around the world, like Europe.
Speaker 3 (03:18):
Has is worshaped than us, China's has a ton of problems.
Speaker 4 (03:22):
You know, nobody wants to own the yen. That economy
has been.
Speaker 3 (03:26):
Stagnant for thirty years, and so people are kind of
just stuck with the dollar. Now that all being said,
really the problem here is not like the overall level
of debt. What kind of worries me more is the
interest payments we're making every year on it. Right, So
today's interests is like a trillion dollars a year in
the United States. It's not like the highest level as
(03:48):
a person at GDP or the budget or any of
these things. So that it's been in modern history and
it's set to go higher from there. And so we're
just throwing money in the in the whole of interest,
and you know, less something's kind of done about that.
Speaker 4 (04:02):
It just continues to weigh down current growth.
Speaker 1 (04:05):
Right.
Speaker 3 (04:05):
It causes problems because when I pay interest, I'm not
getting anything for my money. I'm basically paying back the
money I already borrowed.
Speaker 4 (04:12):
So it worries me.
Speaker 3 (04:15):
I think there's maybe a couple of bright spots around. Hey,
we're reducing government employment, right, the tariffs are bringing in
a lot of money. I'm sure we'll talk about that
a little bit. But big picture, this is all about
the baby boomers.
Speaker 4 (04:30):
It's all about it's all.
Speaker 3 (04:32):
About Medicare, Medicaid, social Security. That's seventy sixty five, seventy
percent of the money we spent at the federal level
is on those programs, and so ultimately, Dave like it
fixes itself, like these people you know, will eventually pass away,
like it won't be such a top heavy economy. But
until then, we kind of got to carry this this
(04:52):
weight of entitlements in the United States. And thankfully everybody's
sort of stuck with us and keeps lending us that
money them.
Speaker 2 (05:00):
That thank you for that explanation.
Speaker 1 (05:01):
One of the things that I think when people hear
about the interest payment, where does that interest payment go?
Speaker 2 (05:08):
Who?
Speaker 1 (05:09):
What organization entity, what bank? What system is taking that
one trillion dollars from America? And I think a lot
of people don't understand how that works either.
Speaker 3 (05:22):
Yeah, So it used to be like a lot of
that money would go abroad, right the Chinese owned the
debt or the Japanese owned the debt, and they still do, like,
don't get me wrong, So we'd actually pay interest in
it go abroad to some foreign investor. Right today, foreign
investors are a much smaller portion of the overall debt.
About thirty percent of it's held by the Social Security
(05:42):
Trust Fund, So when we pay it, it just goes
into Social Security. I want to say fifteen percent of
it's held by foreigners roughly, and then the rest of
it is like the biggest chunk is held by investors, right,
and it's held by all kinds of investors, but generally speaking,
like as you age, you get older, you sort of
(06:03):
shift away from equities and towards fixed income.
Speaker 4 (06:06):
And so the vast majority.
Speaker 3 (06:08):
Of the US debt is frankly held by like wealthy
older people.
Speaker 1 (06:13):
Right.
Speaker 4 (06:13):
So it's not just it's not just.
Speaker 3 (06:15):
That we pay them Social Security and we pay for
their healthcare. Like this trillion dollars in the national interest
payments we're making that's going to.
Speaker 4 (06:23):
Baby boomers mostly as well.
Speaker 3 (06:25):
Right, So a lot of budgets just devoted towards the
older generation in the United States. And that's fine. Like,
if that's the priority we want to have as a country.
I guess where I kind of get a little bit
concerned with that is like any nation that's focused on,
you know, the oldest generation, not on the youngest generation
(06:46):
or the next generation coming up, you know, it has
a shelf life, right, Like I think we should be
focused more on young families that want to be having
children or schools or what infrastructure whatever else instead of
just making sure the oldest and like empirically speaking, wealthiest
demographic in the country has even more support.
Speaker 2 (07:09):
That's brilliant. I couldn't agree with you more.
Speaker 1 (07:11):
And I think you're starting to see a cultural shift
towards that right and the narratives that are playing out
and what younger people are being more outspoken about, whether
it's the inability to you know, pay for their insurance premiums,
where it's an inability to find great jobs, or inability
to you know, get their own home loans, you know,
(07:32):
to be able to start that nuclear family and start
that long term What is it commitment to the system,
if you will. Right, last time you were here, we
had a chance to talk about tariffs, and I'm really
looking forward to getting to that. But before we do,
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That's Patriot at mobile dot com forde slash Rutherford or
call nine seven to Patriot. Last time you were here,
we we just had an update about what you thought
how tariffs were doing.
Speaker 2 (10:13):
And can you just touch on that right now? Where
where are we as a country?
Speaker 1 (10:18):
Have we see all these headlines about uh, you know,
we have multiple trillions of dollars three trillion dollars of
investments that have come you know, strangely from Middle Eastern
companies countries that you know, seem to have to want
to play some new role in the development at redevelopment
(10:38):
of Gaza or what other just markets that they can
get access to.
Speaker 2 (10:43):
Now we see a lot of that.
Speaker 1 (10:45):
So you know, where are the tariffs in your opinion,
how are they impacting the country as a whole, and
how are they impacting uh the average investor?
Speaker 3 (10:56):
Yeah, So generally speaking, listen, I always said, I don't
think tariffs can have a big enough effect to cause
a recession. And that's because seventy percent of consumer spending
the United States is what we call services.
Speaker 4 (11:09):
So it's it's me and you talking on this.
Speaker 3 (11:11):
It's going out to eat, it's getting a haircut, it's
things that are provided by Americans to other Americans locally
and domestically. It's not touched by tariffs. The other thirty
percent is goods. Only a third of those goods are
imported goods. So we're trying. Ten percent of consumer spending
on the United States is on imports of any kind,
and then about fifty percent of that trade is exempt
(11:32):
from tariffs because like USMCA or whatever else. So, like
a nice round of number to give you, Dave, is
that five percent of consumer spending in the United States
is subject to tariffs. Okay, And we care about consumer
spending because the biggest chunk of GDP. So it's really
hard for me to see how like five percent of
consumer spending gets us to a recession. And you know,
(11:53):
when we really think about it, who buys imported goods?
Speaker 4 (11:58):
Okay, it's not people that are price sensitive.
Speaker 3 (12:00):
Factually speaking, wealthier individuals buy more imports, and so this
is basically a progressive tax that hits wealthier individuals that
are less price sensitive. Is kind of the bottom line here,
and so I'm not really concerned about it causing a recession.
We can talk about this slowdown on like the jobs
(12:20):
reports and kind of what I think is going on
there if you'd like to. But generally speaking, okay, what
we're doing is we're leveraging our consumer market, which we
are the biggest, most dominant consumer market in the world.
You need us as customers. I think we're forty percent
of global consumption. And we're saying if you want access
to these rich consumers to sell to, well, there's going
(12:41):
to be you know, a couple of loopholes you have
to jump through. You want to sell you know, pharmaceutical
drugs to the United States consumer base, Well.
Speaker 4 (12:50):
Guess that you need to build a factory here.
Speaker 3 (12:53):
You want to you know, sell your semiconductors to United
States companies, You're going to have to build factory here, right,
And so you mentioned I think like a three trillion
dollar number. I've heard it up to six trillion dollars.
A lot of it's pr frankly, right. From what I
can tell, kind of the best number I've seen is
(13:13):
that the actual projects that have broken ground. And again
it's going to take years for all the spending to happen, right,
but it looks like about one and a.
Speaker 4 (13:21):
Half trillion dollars. Wow, tool spending has begun.
Speaker 3 (13:26):
It's not all going to happen this year from the tariffs, okay,
or at least like adjacent to the tariffs. So I
think pharmaceutical facilities, think semiconductor manufacturing plants. There's a whole
host of other things too, write auto plants, and like
I think Ford is talking about gearing up production here Stalantis,
the company that famously ruined Jeep as a brand, right,
(13:49):
they're moving a bunch of production back to America. The
list is very long, So I think it's it's just
actually true that, yes, tariffs do cause companies to on
the margin and change their behavior because they need us
as consumers over here. And so when you really hear
like a lot of the analysis arow on terrafs, it's like, hey,
it's going to hurt consumer spending.
Speaker 4 (14:10):
Right, And again I sort of like.
Speaker 3 (14:12):
Highlighted why I think that impact whatever it's going to
be is pretty small, and by the way, we haven't
really seen any evidence that has happened.
Speaker 4 (14:18):
Yet, but.
Speaker 3 (14:21):
The sort of hope would be, yes, the consumer spending
portion of GDP, maybe that slows down a little bit
short term, but then all this capex happens, that sort
of offsets it, right, all the investment in factories and
plants and equipment, and then those higher Americans Americans are
paid well in these new, well equipped factories, and then
that keeps all the spending domestically in the United States.
(14:42):
So I think ultimately this is going to be a
positive for the United States. I know it's chaotic right now,
and global supply chains are shifting back here after eighty
years of going abroad, and so there's going to be
some bumps in the road. But it looks to me like, yes,
the terriffs are working and having an effect so far.
Speaker 1 (15:01):
That's great to hear, because that was the big concern
we talked about last time, was this reshoring of jobs,
right bringing able to you know, take this middle class
that was offshore and dissipated and now bring it back
to give. Like you said, you know, a person that
doesn't have to have and we're just joking, not joking,
but Jordan and I were talking about student loan debt
(15:22):
and you know for jobs that really don't you know,
they don't exist, right, it's not a service based job
if you you know, have a liberal arts degree and
you know an African basket weaving, so you know, the
ideas as these companies on shore, it becomes a more
productive gain for those young people that are are looking
(15:44):
for those better opportunities at that American dream. Now, one
of the things that I constantly hear about on the
road is this idea of as those boomers time out,
there's going to be this massive transfer of wealth as
low as thirty trillion, as high as seventy someone said
to me yesterday at an event in Houston, and and
(16:08):
that's a massive number. What do you based on where
the market is right now, which is at an all
time high? And can you give us a little description
of why that is? And then what you think is
going to happen as a result of the shift and
that wealth will will it stay in the right places
or I know, Geordie's got a couple questions for you
(16:29):
here in a second about gold and bitcoin and how
like you said, what is the future of the next
generation going to look like from investment, from spending, and
then also from saving.
Speaker 2 (16:43):
You know, how is that all going to look like?
In your mind? That was a lot.
Speaker 3 (16:47):
Yeah, Well, when you think about how it's like happening,
right is basically it used to be like we just
did the jobs that our parents did.
Speaker 4 (16:56):
Right. So my dad is a you know, a baker.
Speaker 3 (16:59):
I'm going to a baker if my dad makes you know,
the barrels, right, that's what the last name Cooper comes from.
I'm a Cooper, right, do I make the barrels up
till like, you know, to the current day.
Speaker 4 (17:10):
It's right.
Speaker 3 (17:11):
I'm a veterinarian because my dad was a veterinarian or
my dad had a you know, an orthodonic practice, so
then I went to school to be an orthodonist.
Speaker 4 (17:19):
What's kind of happened recently, and I think social media
is a big part of this. I think there's a
whole host of things happening.
Speaker 3 (17:25):
Is that basically nobody wants to continue on the family
business anymore, right, A Statistically a small amount of people do.
Speaker 4 (17:33):
And so you have these older people that are retiring.
Speaker 3 (17:36):
They want to pass out on their kids, but their
kids aren't really interested, and so instead of what they
do is they go and sell it to a private
equity firm. And this is happening in basically every industry.
Dave like, I talked to my barber recently. Hey, my
barber went independent and now he's just working out of it,
like his own.
Speaker 4 (17:53):
Little studio or whatever that he rents. But he's like, yeah,
that barbershop I was working out of they got bought
by private equity, right, So was buying.
Speaker 2 (18:00):
Barbershops now, Oh my god.
Speaker 3 (18:02):
And basically, you know, it's it's good right now in
the sense that it makes the economy a little bit
more resilient because hey, that that baby boomer that retired
just got paid a bunch of money. Right And by
the way, Dave like I talked about the baby moms
a little bit earlier. Statistically speaking, today people sixty five
and over, retired people, for the first time ever in
(18:26):
US history, are the largest consumer demographic.
Speaker 4 (18:29):
They spend more money than anybody else.
Speaker 3 (18:31):
Historically, that was we always talked about, like the thirty
five to fifty four was the key economic demographic. People
are buying houses, starting families, sending their kids to college,
buying washing machines buying cars today?
Speaker 4 (18:45):
Is baby boomers. Wow, baby boomers spending more money. They're
twenty two percent of consumer spending retired baby boomers.
Speaker 3 (18:51):
I should specify sixty five and over. So they're getting
paid out by private equity. Private equities rolling all these
small businesses up into big umbrellas. Right, that's why service
is going down, and like everything, you're paying more and
the qualities lower. It seems like private equity is buying
all this stuff. I worry down the line, like this
(19:13):
ends up.
Speaker 4 (19:13):
Being a bubble, right.
Speaker 3 (19:15):
Right, private equity one guy in New York can't run
every barbershop in the content United States.
Speaker 4 (19:21):
It just doesn't work that way.
Speaker 3 (19:23):
And so the bad news right is like, hey, in
short term, it makes all these small businesses kind of
worse service for the money that you spend. I think
ultimately there might be like a financial bubble in some
of these private markets eventually. Now most of us don't
really invest in prevent marks, don't have the ability to
do that. But ultimately it creates a ton of opportunity
(19:45):
for entrepreneurs that basically can come in and like, hey.
Speaker 4 (19:49):
Your barbershop is terrible.
Speaker 3 (19:50):
Now I'm going to create a new model that's better,
and I'll steal all the business.
Speaker 4 (19:55):
Right, So.
Speaker 3 (19:57):
It used to be, hey, you just passed on the
family business and your kid like ran it into the ground. Today,
at least you're getting paid out by Wall Street, I guess,
and they're selling it to some investor and maybe he'll
lose his shirt and then hopefully.
Speaker 4 (20:09):
The next generation.
Speaker 3 (20:10):
And I think there are a ton of Gen Z
people and younger millennials that are like willing to pick
up the reins and be the entrepreneurs here.
Speaker 4 (20:18):
But it's sort of a different way.
Speaker 3 (20:20):
To transfer wealth than ever before, right because institutionally Wall
Street's very involved.
Speaker 1 (20:26):
That's the fascinating aspect to me is is you would
like they traditionally what what Wall Street provided the service
of this long term approach to investment, the slow growth
on your portfolio, right, you just keep Now they're now
proactive and they're they're they're getting into, like you said,
every industry, whether it's the housing market, which I just
(20:50):
you know, watched the long video this morning about you know,
this person's theory about how black rock is through shell
comp and he's buying houses right at an elevated price
and then coming in elevating the market for that area,
(21:10):
and then there be and so the people that are
selling their house at the highest price get out and
they can't afford to go into another house, so they
end up renting the house they just sold, right, And
it's this twist.
Speaker 2 (21:24):
So there's a.
Speaker 1 (21:25):
Lot of that that's in play with I think these
various markets and what the P and E firms are
gobbling up. Is that having an impact on the market itself.
Is that why we're seeing all time highs right now?
Or what's your theory behind why the market is so healthy?
Speaker 3 (21:45):
Yeah, I mean I wouldn't say necessarily the market's that healthy,
right at least we're talking about like the public stock market.
Speaker 4 (21:52):
The S and P five hundred for example, can make it.
Speaker 3 (21:55):
You know, if you look at like valuations, so just
compare like the multiple or like the price of a
stock to the earnings that it's actually earning. Things are
very expensive. And the other problem is that there's like
seven stocks that have driven everything for years, and so
it's really like AI that's kind of driven a lot
of this, right. It's it's this narrative around AI changing
(22:16):
the world, and I ultimately think it will do that
but this just looks really frothy to me and kind
of worrisome, to be honest. And when you read about
how these companies are all, you know, it's like a
giant self reinforcing loop. They're all like lending each other
money and buying each other's products. So like, you know,
Navidia will go out and invest in Core Weave, right,
(22:37):
they give them money, they get Core Weave stocked. Then
Core We've takes that money and buys Navidia chips, right,
and so yeah, like Navidia's sales go up twenty five percent,
but it's their own money that basically did it.
Speaker 4 (22:49):
And now if anything doesn't work.
Speaker 3 (22:51):
Out, they're all tied together as like one big thing, right,
So it seems a lot like two.
Speaker 4 (22:57):
Thousand and one to me, to be honest.
Speaker 3 (22:59):
I understand the combodys have earnings, but you know their
earnings aren't coming from AI. It's like Microsoft's able to
pay for AI because they have you know, web services,
they have legacy software sales and things like this. So
it's the AI sector that just looks really kind of
worrisome to me. The other thing I'd point out is,
(23:20):
like you mentioned the houses I talked about Pe.
Speaker 4 (23:23):
Okay.
Speaker 3 (23:25):
What you're basically seeing here is like the end game
of financializing an economy, okay, which is what happens when
you're the global reserve currency. And so part of the
reason why I feel we need to sort of like
pair back globalization a little bit, focus a little bit
more on national development is because when we run a
(23:45):
trade deficit, which today is about of trillion dollars, right,
the old school idea, if you like open the Wall
Street Journal or like read the Cato Institute or something,
what they're going to tell you is, hey, it's great
we give them do that we print, and they give
us stuff they worked really hard for to make, right.
(24:05):
But that fundamentally misunderstands what's happening because we're not just
giving them dollars.
Speaker 2 (24:11):
Right.
Speaker 4 (24:12):
They take those dollars and they buy things with the dollars,
they buy assets.
Speaker 3 (24:16):
Right. We're not trading them dollars for goods. We're trading
them ownership of national assets for goods, okay. And so
the dollars go abroad. Then the Chinese, the Saudis, whoever
take those dollars, they buy the S and P five
hundred they buy you know, blackrock buys all these single
family homes.
Speaker 4 (24:33):
And rolls them up into a fund. Who are they
selling that to?
Speaker 3 (24:36):
I don't buy Blackrock single family home funds, right, the
Saudi Royal family does. Who's investing in the PE firm
that's buying all the barbershops. It's probably a bunch of
like foreign investors that want access to the US consumer market.
Speaker 5 (24:50):
Right.
Speaker 3 (24:51):
So I think part of this is the trade deficit.
And I feel for young people, man, because you know,
there's a whole we could talk about housing and supply
and demand and everything else. Okay, the part that's never
talked about is like US housing supply, especially in places
like big cities, which you can buy a cheap house
in America, right, go forty five hour rural.
Speaker 4 (25:12):
You know, you can get one hundred thousand dollars house,
no problem. Okay.
Speaker 3 (25:15):
Housing is expensive in the places with the jobs, in
the big cities.
Speaker 4 (25:19):
That's where people invest money.
Speaker 3 (25:21):
Right, And so you're competing with the entire world because
US homes are an international asset class. Nobody's buying Argentinean homes, right,
No one's buying homes in you know, Malawi. US housing
is an international asset class.
Speaker 4 (25:39):
That's why it's so expensive.
Speaker 3 (25:40):
It's one of the reasons why it's why all our
assets are so expensive. It's the trade deficits that does that,
and that's why, hey, Donald Trump throws a bunch of
tariffs on people get worried about this trading system. Oh no,
it's the trade deficit going to decline because that structurally
lowers demand for US assets.
Speaker 4 (25:56):
Not that I won't be valuable.
Speaker 3 (25:57):
Anymore, but all the foreign money doesn't just pour in
in a bigger and bigger amount every year.
Speaker 2 (26:03):
Got it, Got it?
Speaker 1 (26:04):
Okay, I know Geordie's got some questions for you, Bryce,
but before he does, Man, I just am so fired
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ford slash David. All Right, Jordy, I know you're going
to be taking that course here soon, but before you do,
why don't you hit Bryce up with those questions?
Speaker 2 (29:11):
All right?
Speaker 4 (29:11):
Great?
Speaker 5 (29:11):
Yeah, I could ask you a million questions, but I'll
just start with a few. Just one quick comment on
the housing thing. My wife and I we're renting, right, now,
we looked at a couple suburbs around the Raleigh area,
North Carolina, and median home price in a lot of
these places is six hundred and seventy thousand dollars. I'm like,
holy cow, that's pretty crazy. That's the median. Anyway, I
(29:34):
think a good place to start is following up with
which something you said about the AI stuff. A lot
of people are wondering are we in some kind of
bubble right now? And you did touch on it. One,
do you think we're in a bubble? But then two,
I've heard an argument that you might think is legit
or might think is crazy, that are we overvalued and
it's a bubble? Or are the companies just getting better?
(29:58):
Because if you look at the rev new generated from
some of these AI companies, if you look at the
revenue per employee, for example, for some of these top companies,
it's way higher than historically they've ever been. So maybe
this isn't a bubble. Maybe they're just you know, legitimately
earning and deserving a higher pe ratio.
Speaker 2 (30:16):
But what do you think about that? Yeah? I just
saw you. Let me hop in real quick.
Speaker 1 (30:19):
Sorry, Bryce, I just saw that a statement that said
Mark Zuckerberg is paying AI experts two hundred and eighty
thousand dollars opening salaries to come over in his organization. Now,
I'm hoping that's just because there's so few people that
are have that expertise that it's that high and he's
just pulling from all the other top AI companies. But
for me, that was like, well, that's a pretty positive thing.
(30:42):
How do you become an AI expert? So I just
wanted to acknowledge that.
Speaker 3 (30:47):
Yeah, I think that's a great question. How do you
become an AI expert? Yes, you know, there's no training
formally an AI I mean, and by the way, Mark
Zuckerbroke just laid off like six hundred people out of
the AI division, right, So they're hiring their firing people constantly.
They're always competing for labor with each other. But you know,
generally speaking, like, I think the AI thing is good
(31:07):
for the economy long term. Okay, if this is widely
distributed technology, and that's kind of where I get more
skeptical of it. Okay, if theoretically AI helps automate a
bunch of processes, it's not just one guy at the
top that owns a highly automated production system with no
employees that collects all the revenue.
Speaker 4 (31:29):
If we all get AI tools that make.
Speaker 3 (31:30):
Us more productive and all of our pay goes up
and kind of a broad.
Speaker 4 (31:34):
Way, then AI is good.
Speaker 3 (31:35):
It boosts productivity, it boosts economic growth and increases real wages.
Speaker 4 (31:39):
Like there's really no downside to that.
Speaker 3 (31:41):
Necessarily, the concern would be, like, hey, all the AI
stuff that I'm seeing right now, Like the reality of
AI today is that it automates white collar jobs away, right,
That's why you invested in as a company. It's not that, hey,
my HR manager can do five times as much work, right,
It's that I can do the same amount of HR with.
Speaker 4 (32:02):
Five times lost managers or whatever.
Speaker 3 (32:04):
Right, And so, like I saw a stat the other day,
and this is sort of my barometer for like white
collar labor, Like how's the job market doing? But that's
who's been getting fired because of AI for years, right,
as is like coders and paralegals and things like that.
Your plumber's fine, he's not even affected by A at all.
(32:24):
Is you look at the number of people taking the
l SAT Okay, because hey, if you want you know,
you're getting out of college, you just got this credential,
the job market doesn't look very good. You know, maybe
I'll just go to law school, right, get another credential.
I'll take on some debt, but like, hopefully things are
figured out by then. It's kind of how people treat
law school in the United States. A year ago this month,
(32:48):
like six thousand people took the l SAT. Okay, this
month this year, forty thousand people took the l SAT,
so it went up over five x. Right, Wow, that
tells me that AI is not creating a bunch of
new jobs or broadening the tools that people have, right,
It's allowing companies to lay off white collar employees. Right,
(33:12):
So I'm skeptical of AI like creating this economic miracle
right now.
Speaker 4 (33:16):
I think what it does is just concentrates wealth.
Speaker 3 (33:19):
It's great for like some companies, right that pull it off,
but broadly speaking, it just means less white collar people
earning a salary probably at least right now, as far
as the market goes with AI, yes, like these companies
are seeing their revenue grow quickly. A lot of them
have a ton of earning its. Like, again, I don't
think Microsoft's going to go bankrupt here, right, I don't
(33:41):
think Facebook's going to go bankrupt their money printing machines, like,
no question about it.
Speaker 4 (33:47):
The problem is, Okay, all that.
Speaker 3 (33:49):
Revenue is again coming from these like circular dealer financing
situations where they're all tying each other together. They're all
like in this incestuous relationship. I mean, you look at
the assumptions that are going into this, right, like open
Ai for example. Okay, open Ai lost like fifteen billion.
Speaker 4 (34:08):
Dollars or something this year, but they're saying, hey, we're
gonna down the road, right.
Speaker 3 (34:13):
We're a growth stock. We start just making a ton
of cash. Okay, Well, they just took on like all
this capex, like sixty billion dollars in capex with Oracle.
Next year they're expected to lose like twenty seven billion dollars.
The year after that, they're expected to lose forty five
billion dollars. So where's the cash going to come from
from open Ai to buy all this stuff from Oracle.
(34:33):
It's going to come from Oracle buying more open Ai stock, right,
They're going to pay for themselves to like sell this
this product. And so guys, it's kind of like circular financing.
This is stuff that worries me, right, because what you
hope or is like, hey, oh my god, all these
consumers are signing up for Chat GPT premium and we're
just raking in the cash, Like that's not really what's
(34:55):
happening here. Ninety five percent of these AI companies have
you know, no profit, so and the ones that do
make profit it's from other businesses. So I'm not saying
this technology never works out again.
Speaker 4 (35:08):
I think it will.
Speaker 3 (35:09):
But I think we're kind of in this period where
there's this massive amount of capex happening under very optimistic assumptions,
and all I see from AI on a daily basis.
Speaker 4 (35:20):
Is like video slop, right. I think we all, you know,
see this stuff showing up. This is why your power
bills going up.
Speaker 3 (35:27):
This is why you know we've got less water available
in the aquifers or whatever. So you know, they need
two trillion dollars of revenue by twenty forty or twenty thirty,
I apologize, So five years from now, under the most
optimicistic assumptions, according to like Baning Company, they're short by
(35:51):
eight hundred billion, okay, and then on top of that,
like half the power generation they need to actually like
gear up. There's no way it comes online on er
any circumstance. Right, It takes a while to build a
nuclear power plant or like a coal plant or anything.
So I'm having trouble like squaring the circle here. I
just hear people yelling like Fifth Industrial Revolution, it's changing
(36:13):
the world. Shut up, you're you know, you're a lota
and I'm not. I'm like skeptically optimistic, but I don't
really see this delivering any kind of like value to
society yet. I think it's just more kind of video
garbage on all of our feeds.
Speaker 1 (36:29):
That's and that's why what Jordi is so high.
Speaker 5 (36:34):
Oh yeah, exactly, A lot of things are real high
right now. I got two more questions for you, if
you'll just indulge me. I don't get to talk to
an economist very often. Gold hit four thousand dollars. That
was a big deal in the news. I personally bought
one ounce of gold in twenty twenty, so I'm rich now,
which is awesome. That has typically historically been a signal
(36:55):
of defensiveness, like or something's kind of going on, or
there's chaos in the market, uncertainty in the world. But
maybe it's something else. We also saw bitcoin there. It's
doing well, hitting all time highs, having little drawbacks here
and there, but that's nothing for bitcoin. Why do you
think gold hit that all time high? Why is it
having such a just remarkable year? And is it can
(37:18):
it keep going to five thousand? Or does this spell
some kind of a looming disaster?
Speaker 3 (37:24):
Oh yeah, I think it's It's done really well for
a couple of reasons. Okay, One is, yeah, goal typically
does well when institutional trust is falling, right, because, like,
the dollar is worth a lot when we all trust
in the idea of the dollar, right, So and like, listen,
we all know there's not a lot of trust in
institutions for good reason, right, And people are more and
(37:48):
more concerned about.
Speaker 4 (37:50):
The US's ability to manage all of this.
Speaker 3 (37:53):
Frankly, like Donald Trump attacking the independence of the Federal Reserve, right,
Like it's maybe, do you think it's great that Donald
Trump is going to be in charge? But the point
is then a democrat is going to be in charge, right,
So it's better to have like a disinterested technocrat like
Jerome Powell in control of the Federal Reserve. Because politicians
(38:13):
always want to bring more money, They always want to
lower interest rates, and that can cause problems. So I
think part of this is just lack of institutional trust.
I think it's a tax on the federal reserves independence
that have driven up gold.
Speaker 4 (38:25):
Okay. The other thing that I think.
Speaker 3 (38:27):
Is happening here is internationally, countries are diversifying their reserve assets,
and bitcoin is also a reserve assets sort of, right, we.
Speaker 4 (38:35):
Kind of think of it the same way as goal.
So let me put it this way.
Speaker 3 (38:41):
Okay, I mentioned like fifty percent global market share for
the dollar, right, it's insanely dominant. The trade off to
that is the financialization of the US economy that I mentioned,
which is also at this point unsustainable or taking all
these measures like tariffs and reshoring and you know, protectionism
and whatever else to try and like reverse that trend
(39:03):
a little bit.
Speaker 4 (39:04):
And so I expect the.
Speaker 3 (39:06):
Dollar as a reserve currency to fall in relative status.
I don't think it's going away as a reserve currency.
There's no way nobody else can replace it. But instead
of fifty percent of global transactions, maybe the dollar falls
to forty percent.
Speaker 4 (39:20):
Okay, the dollar weekends a little bit. What picks up
the slack there?
Speaker 3 (39:25):
Probably the euro a little bit probably other FIAC currencies.
But gold is a natural It's always been a reserve currency.
It's been a reserve currency since the beginning of time, okay.
Speaker 4 (39:35):
And it's not going away.
Speaker 3 (39:37):
And what's nice about gold is that it's it's what
we call a neutral reserve asset. So one of the
reasons people are upset about the dollars, it's not you know,
there's the trade tension, there's US actually trying to reduce
like the trade deficit and all of that. Part of
it too, is just people see us using sanctions as
a weapon. Right. It's great that you take dollars and
(39:59):
you invest and you have gold doesn't pay you an
interest rate. The problem is, though, if you hold a
bunch of treasury bonds, the United States government might just
confiscate all of it like we did to Russia, okay,
or they might just sanction you into the ground if
we don't like what you do politically, and so country
seesus to say, hey, fifty percent of our four ex reserves,
(40:20):
that's two bunch of dollars. Right, there's this The world's chaotic.
The United States is swinging around sanctions like crazy.
Speaker 4 (40:26):
Maybe we need to pair that back a.
Speaker 3 (40:27):
Little bit and buy a bunch of gold instead. Right,
it's because there's no quid pro quote with gold. So
I think it's the combination of those things that's driven
up gold prices.
Speaker 4 (40:36):
And yeah, there's kind of a tailwind to gold going forward.
Speaker 3 (40:40):
By the way, like all the central banks are printing
money again, right, they've lowered interest rates.
Speaker 4 (40:45):
Gold goes up in that situation as well.
Speaker 3 (40:47):
So I think there's a kind of a complience of
factors that are positive for gold.
Speaker 4 (40:50):
Right now.
Speaker 2 (40:52):
All right, I got one more question for you.
Speaker 5 (40:53):
There's some talk that I've heard around the investor Wall
Street world something called the debasement trade, and I think
I think this kind of relates to what we're talking
about gold. We're talking about the thirty eight trillion dollars
in debt. Many people, when they look at the debt,
they say, okay, well, the US has one of three options.
They can either how do you know, how do you
(41:14):
pay it back? How do you get right again? Well,
you could default on it. That's not going to happen
because then you get World War III.
Speaker 4 (41:20):
Uh.
Speaker 5 (41:21):
You could try to outproduce, you produce your way out
of it, meaning just our GDP just explodes from something.
Maybe it's from AI, maybe it's from some clean energy revolution,
I'm not sure. And we get our GDP up enough
to not make it a big deal. And then the
last option, which seems like it's kind of going this way,
is we're just going to debase the currency until that
(41:42):
debt's not very a very big deal. This is leading
people into saying, hey, something like gold, something like bitcoin,
other these these kind of fixed assets, maybe we just
put our money in that do the debasement trade, because
it sounds like the government, the Federal Reserve, they're going
in one direction and they're going to send fixed ass
as to the moon because they're not going to stop printing.
(42:02):
Do you think there's anything to that sort of debasement
trade idea investing in fixed assets? And is that kind
of the path you see going forward for the government
just Hey, we're just going to kind of slowly debase
the dollar to try to stabilize the situation.
Speaker 3 (42:15):
Yeah, I'd point out right, like, what's the other major
fixed asset that everybody owns is housing rights? Like so yeah,
I listen. I think the whole history of the world
says that the government takes the easy way out on
prints money. Right, So right now, guys, like, to be honest,
things are going fine. There's not really a huge like
(42:38):
I don't think we're going to default on the debt.
I don't think that that's going to cause a death
spiral in the United States. I think, well, we're we're
fine right now. Okay, but what happens if there's another
giant pandemic, What happens if there's a giant war, what
happens if you know, the attack on infrastructure, what happens
(42:58):
if you know, go down the.
Speaker 2 (43:01):
List right, load up printer.
Speaker 3 (43:04):
Yeah, so what happens is historically, okay, there's the public
facing dual mandate, which is, you know, stabilize inflation, like
keep inflation low and maximize employment.
Speaker 4 (43:16):
Okay, that's like, that's the pr dual mandate.
Speaker 3 (43:20):
Okay, the real dual mandate is bailout banks during financial
crises and make the government debt affordable.
Speaker 4 (43:26):
So you know, the reality here.
Speaker 3 (43:29):
Is like, if there's an existential problem that comes up,
theers are just going to print money.
Speaker 4 (43:33):
They're going to bail out the US government.
Speaker 3 (43:36):
And so yeah, I think the history of the world
says they're going to print more money.
Speaker 4 (43:41):
Inflation is still three percent.
Speaker 3 (43:42):
They're already cutting, right, They've given up the two percent
target here, So yeah, I would be concerned about currency debasement.
But it's also been happening since the creation of the
Federal Reserve, right, there's nothing new about it's been happening since,
you know, the Roman government would debase the coins with
(44:03):
cheaper metals. It would happen when people were clipping the
coins to make them slightly smaller. Right, So we'm a
debasing currency for forever. It's the easy way out. The
last thing I'll say on this, okay, is that and
this comes from Milton Friedman, and there's things I disagree
with on Milton with Milton Friedman on but I think
(44:23):
this is such a key point, which is that when
we talk about tax and we talk about government spending.
Speaker 4 (44:30):
Like, really, the actual tax is the spending itself.
Speaker 3 (44:34):
Okay, it's the spending the tax as soon as you
print the money and spend it, basically one of the
three things has to happen. One is do you actually
just pay for by taxing out of the population, okay,
Two you borrow money which just loads the tax on
the future generations, or three you know, you just debase
the currency.
Speaker 4 (44:52):
Inflation is the secret tax, right.
Speaker 3 (44:54):
So it's actually the money that they spend that taxes
all of us because it dilutes our purchase power. And yeah,
inflation is the easiest way for them to tax your
your wealth the way. So I think it's a kind
of key point. We talk a lot about like deficits
and debt and everything else. It's really spending that's the tax.
And you'll notice spending never goes down ever, Right, maybe
(45:16):
the deficit flux awaits a little bit, maybe we add
a little bit less debt. Spending goes up every single year.
So I mean that's the real tax.
Speaker 4 (45:24):
On all of us.
Speaker 1 (45:26):
Well, I'll tell you what, Bryce, every time you come on,
not only do I have my mind blown, but I
think all of our audience does. Jordi, your questions were phenomenal.
Thank you so much. I've been chomping at the bit
to get you go with Bryce. There, Bryce, before we go,
I think everybody just wants to know, you know, what
(45:49):
what gun build out are you working on right now?
Are you are you you know, what are you doing
in terms of your training? What do you got going
with with that aspect of your life?
Speaker 4 (46:01):
Yeah? So you know, I've been doing a lot.
Speaker 3 (46:03):
Of pistol shooting this year. I just haven't really made
it to do any like rifle classes. And I have
an outdoor shooting ange like an hour away in city
in Texas, So it's just it's a little bit hard
to get out and shoot the rifle put the play
carrier on sometimes. But I have a gun club and
I'm a member, like the private upstairs range, And what's
nice about that is like when I go there, there's
usually nobody there, right, so I can go in front
(46:26):
of the lanes, I can set up some targets, and
I can like actually shoot up there, which is great
and like not just a static way. So pistols have
been kind of a natural transition with that. So I've
been doing a lot of concealed carry draws and everything else.
But the thing that's kind of been really fun this
year one of my pet projects one is I have
a Smith and West and TRR eight. So if anybody
(46:48):
knows what this is, it's a it's this slot revolver. Okay,
Basically Smith and Wesson designed this for the slot entry
team guy with the shield because like semi automatic handguns
and closer retention could like malfunction on a shield, right,
So eight rounds of three fifty seven magnum, I've got
an optic on that thing, man. Three fifty seven magnum
(47:11):
is serious business, right, That is a that's a cool cartridge,
so adaptable. So I've been shooting the double action three
fifty seven magnum Revolver a lot more. I think that's
just such an awesome gun. I also have a nineteen
eleven that I decided to get back into.
Speaker 4 (47:28):
I sent it out to get the slide milled.
Speaker 3 (47:31):
They ruined the slide, right, so that I had this
gun for like thirteen years. The slide is complete junk now,
so I had to go and buy another slide, get
it blended to the frame. I've sent it out to
get milled for an acro. They're DLC in it for me,
so I should get that back next week and I'll
have a functional nineteen eleven again. So it's kind of
(47:52):
been like a retro year, you know, modernized retro with
the double action revolver in the nineteen eleven.
Speaker 1 (47:59):
But a wretch that is Bryce guilty tea right there, dude.
Speaker 2 (48:04):
I absolutely love.
Speaker 1 (48:05):
It, man, I tell you what I know there is
a massive audience out there that is.
Speaker 2 (48:10):
Waiting, just waiting for the fat Daddy, fat fat stats.
Uh sub stack blog where you.
Speaker 1 (48:19):
Do a blog on a finance and then a blog
on firearms, just you know, just go back and forth
on that and I think you throw in a little
prepper stuff and then you know, uh, some international finance
and dude, you've got You've got three hundred thousand subscribers
and like like a year plus.
Speaker 2 (48:37):
That's it. That's my that's my prediction.
Speaker 4 (48:40):
I appreciate that.
Speaker 3 (48:41):
I hope I have I have the free time to
like pursue something like that, and at some point in
the near future it just got married. You know, there's
probably some kids on the way at some point. Right
I'm very busy in my job as an economist right now,
so down the road, i'd love to pursue something like that.
Speaker 2 (48:57):
That's awesome. That it's all good. That's right, that's right.
Speaker 1 (49:01):
You'll be you'll do your blog entries with us man
Bryce Gille, Ladies and gentlemen, Bryce, thank you so much.
Speaker 2 (49:07):
It's always just a real pleasure and a treat to
have you on.
Speaker 4 (49:10):
Thank you absolutely, guys.
Speaker 3 (49:12):
Always always good to see you happy to do it
anytime and have a great weekend.
What happens when the United States hits thirty eight trillion
in debt. We call our main man, Bryce gil today
on the David Rutherford Show. All Right, ladies and gentlemen,
boys and girls again. I keep getting a lot of
(00:23):
the requests, and with what happened yesterday online in the
absolute hysteria that just ripped through X at every single
level of hitting thirty eight trillion, putting on a trillion
dollars in debt every month. Now the Democrats want to
add three trillion to the deficit, the Republicans want to
(00:45):
add two trillion. There's all kinds of chaos. Meanwhile, the
markets are going through the roof. Goades Gold's out an
all time Hi. I'll tell you what. I'm too much
of a knuckle dragon meathead to figure this out. So
based on your request, we reached out to the man,
the myth, the legend.
Speaker 2 (01:01):
Ladies and gentlemen, boys and.
Speaker 1 (01:02):
Girls, children of all ages, mister Bryce Guild. Bryce, how
you doing, buddy.
Speaker 3 (01:07):
I'm doing great, man, It's great to be with you again.
And yeah, lots to talk about obviously.
Speaker 1 (01:13):
All right, let's just start at the main issue that
just pulls everybody's attention away from investing long term ideas
the whole thing, and that's the nature of hitting thirty
eight trillion dollars. What are you and your team thinking about,
I know your main economists that you work with is
(01:36):
you know, been very vocal about that as of late,
and that we're not addressing those issues. What are your
thoughts on what that number means, what it means short term,
long term, and what do you think how the markets
are going to react?
Speaker 3 (01:50):
Yeah, it's you know, it's so hard to really say
because obviously the size of that number is crazy. It's
impossible to really fathom actually what that means.
Speaker 4 (02:00):
And so you know, they're economists.
Speaker 3 (02:02):
Years ago, Ryan hartin Rogue Office is after two thousand
and eight, two thousand and nine, they did a study.
Speaker 4 (02:08):
They looked at.
Speaker 3 (02:08):
Governments all over the world, looked at all the history
of government debt and basically came to the conclusion that
when an economy hits about one hundred percent debt to
GDP ratio, which we're past that now, right, that's when
empirically it starts to slow down your economy caused problems, right,
puts you at risk of like a debt crisis and
so hey, we're past that point. The one thing that
(02:32):
is kind of the fly and the ointment here. The
thing that makes it really difficult to analyze this is
that the United States is not a normal economy, right.
We are the realities, We're the biggest empire in the
world history, right, And so the dollar is the reserve currency.
By the way, it's the by far, the dominant reserve
currency in the world. I just looked at today, fifty
(02:53):
percent of global transactions are in the dollar. The next
highest is like the euro at twenty right, so we're
two and a half times the euro. So there's nobody
even nipping at our heels here.
Speaker 4 (03:06):
And so it makes it hard.
Speaker 3 (03:07):
Right because it's like, hey, we're past the point where
it normally would cause problems, but everybody's sort of cemented
into this dollar system.
Speaker 4 (03:15):
There's really no better alternative. I mean, you look all
around the world, like Europe.
Speaker 3 (03:18):
Has is worshaped than us, China's has a ton of problems.
Speaker 4 (03:22):
You know, nobody wants to own the yen. That economy
has been.
Speaker 3 (03:26):
Stagnant for thirty years, and so people are kind of
just stuck with the dollar. Now that all being said,
really the problem here is not like the overall level
of debt. What kind of worries me more is the
interest payments we're making every year on it. Right, So
today's interests is like a trillion dollars a year in
the United States. It's not like the highest level as
(03:48):
a person at GDP or the budget or any of
these things. So that it's been in modern history and
it's set to go higher from there. And so we're
just throwing money in the in the whole of interest,
and you know, less something's kind of done about that.
Speaker 4 (04:02):
It just continues to weigh down current growth.
Speaker 1 (04:05):
Right.
Speaker 3 (04:05):
It causes problems because when I pay interest, I'm not
getting anything for my money. I'm basically paying back the
money I already borrowed.
Speaker 4 (04:12):
So it worries me.
Speaker 3 (04:15):
I think there's maybe a couple of bright spots around. Hey,
we're reducing government employment, right, the tariffs are bringing in
a lot of money. I'm sure we'll talk about that
a little bit. But big picture, this is all about
the baby boomers.
Speaker 4 (04:30):
It's all about it's all.
Speaker 3 (04:32):
About Medicare, Medicaid, social Security. That's seventy sixty five, seventy
percent of the money we spent at the federal level
is on those programs, and so ultimately, Dave like it
fixes itself, like these people you know, will eventually pass away,
like it won't be such a top heavy economy. But
until then, we kind of got to carry this this
(04:52):
weight of entitlements in the United States. And thankfully everybody's
sort of stuck with us and keeps lending us that
money them.
Speaker 2 (05:00):
That thank you for that explanation.
Speaker 1 (05:01):
One of the things that I think when people hear
about the interest payment, where does that interest payment go?
Speaker 2 (05:08):
Who?
Speaker 1 (05:09):
What organization entity, what bank? What system is taking that
one trillion dollars from America? And I think a lot
of people don't understand how that works either.
Speaker 3 (05:22):
Yeah, So it used to be like a lot of
that money would go abroad, right the Chinese owned the
debt or the Japanese owned the debt, and they still do, like,
don't get me wrong, So we'd actually pay interest in
it go abroad to some foreign investor. Right today, foreign
investors are a much smaller portion of the overall debt.
About thirty percent of it's held by the Social Security
(05:42):
Trust Fund, So when we pay it, it just goes
into Social Security. I want to say fifteen percent of
it's held by foreigners roughly, and then the rest of
it is like the biggest chunk is held by investors, right,
and it's held by all kinds of investors, but generally speaking,
like as you age, you get older, you sort of
(06:03):
shift away from equities and towards fixed income.
Speaker 4 (06:06):
And so the vast majority.
Speaker 3 (06:08):
Of the US debt is frankly held by like wealthy
older people.
Speaker 1 (06:13):
Right.
Speaker 4 (06:13):
So it's not just it's not just.
Speaker 3 (06:15):
That we pay them Social Security and we pay for
their healthcare. Like this trillion dollars in the national interest
payments we're making that's going to.
Speaker 4 (06:23):
Baby boomers mostly as well.
Speaker 3 (06:25):
Right, So a lot of budgets just devoted towards the
older generation in the United States. And that's fine. Like,
if that's the priority we want to have as a country.
I guess where I kind of get a little bit
concerned with that is like any nation that's focused on,
you know, the oldest generation, not on the youngest generation
(06:46):
or the next generation coming up, you know, it has
a shelf life, right, Like I think we should be
focused more on young families that want to be having
children or schools or what infrastructure whatever else instead of
just making sure the oldest and like empirically speaking, wealthiest
demographic in the country has even more support.
Speaker 2 (07:09):
That's brilliant. I couldn't agree with you more.
Speaker 1 (07:11):
And I think you're starting to see a cultural shift
towards that right and the narratives that are playing out
and what younger people are being more outspoken about, whether
it's the inability to you know, pay for their insurance premiums,
where it's an inability to find great jobs, or inability
to you know, get their own home loans, you know,
(07:32):
to be able to start that nuclear family and start
that long term What is it commitment to the system,
if you will. Right, last time you were here, we
had a chance to talk about tariffs, and I'm really
looking forward to getting to that. But before we do,
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That's Patriot at mobile dot com forde slash Rutherford or
call nine seven to Patriot. Last time you were here,
we we just had an update about what you thought
how tariffs were doing.
Speaker 2 (10:13):
And can you just touch on that right now? Where
where are we as a country?
Speaker 1 (10:18):
Have we see all these headlines about uh, you know,
we have multiple trillions of dollars three trillion dollars of
investments that have come you know, strangely from Middle Eastern
companies countries that you know, seem to have to want
to play some new role in the development at redevelopment
(10:38):
of Gaza or what other just markets that they can
get access to.
Speaker 2 (10:43):
Now we see a lot of that.
Speaker 1 (10:45):
So you know, where are the tariffs in your opinion,
how are they impacting the country as a whole, and
how are they impacting uh the average investor?
Speaker 3 (10:56):
Yeah, So generally speaking, listen, I always said, I don't
think tariffs can have a big enough effect to cause
a recession. And that's because seventy percent of consumer spending
the United States is what we call services.
Speaker 4 (11:09):
So it's it's me and you talking on this.
Speaker 3 (11:11):
It's going out to eat, it's getting a haircut, it's
things that are provided by Americans to other Americans locally
and domestically. It's not touched by tariffs. The other thirty
percent is goods. Only a third of those goods are
imported goods. So we're trying. Ten percent of consumer spending
on the United States is on imports of any kind,
and then about fifty percent of that trade is exempt
(11:32):
from tariffs because like USMCA or whatever else. So, like
a nice round of number to give you, Dave, is
that five percent of consumer spending in the United States
is subject to tariffs. Okay, And we care about consumer
spending because the biggest chunk of GDP. So it's really
hard for me to see how like five percent of
consumer spending gets us to a recession. And you know,
(11:53):
when we really think about it, who buys imported goods?
Speaker 4 (11:58):
Okay, it's not people that are price sensitive.
Speaker 3 (12:00):
Factually speaking, wealthier individuals buy more imports, and so this
is basically a progressive tax that hits wealthier individuals that
are less price sensitive. Is kind of the bottom line here,
and so I'm not really concerned about it causing a recession.
We can talk about this slowdown on like the jobs
(12:20):
reports and kind of what I think is going on
there if you'd like to. But generally speaking, okay, what
we're doing is we're leveraging our consumer market, which we
are the biggest, most dominant consumer market in the world.
You need us as customers. I think we're forty percent
of global consumption. And we're saying if you want access
to these rich consumers to sell to, well, there's going
(12:41):
to be you know, a couple of loopholes you have
to jump through. You want to sell you know, pharmaceutical
drugs to the United States consumer base, Well.
Speaker 4 (12:50):
Guess that you need to build a factory here.
Speaker 3 (12:53):
You want to you know, sell your semiconductors to United
States companies, You're going to have to build factory here, right,
And so you mentioned I think like a three trillion
dollar number. I've heard it up to six trillion dollars.
A lot of it's pr frankly, right. From what I
can tell, kind of the best number I've seen is
(13:13):
that the actual projects that have broken ground. And again
it's going to take years for all the spending to happen, right,
but it looks like about one and a.
Speaker 4 (13:21):
Half trillion dollars. Wow, tool spending has begun.
Speaker 3 (13:26):
It's not all going to happen this year from the tariffs, okay,
or at least like adjacent to the tariffs. So I
think pharmaceutical facilities, think semiconductor manufacturing plants. There's a whole
host of other things too, write auto plants, and like
I think Ford is talking about gearing up production here Stalantis,
the company that famously ruined Jeep as a brand, right,
(13:49):
they're moving a bunch of production back to America. The
list is very long, So I think it's it's just
actually true that, yes, tariffs do cause companies to on
the margin and change their behavior because they need us
as consumers over here. And so when you really hear
like a lot of the analysis arow on terrafs, it's like, hey,
it's going to hurt consumer spending.
Speaker 4 (14:10):
Right, And again I sort of like.
Speaker 3 (14:12):
Highlighted why I think that impact whatever it's going to
be is pretty small, and by the way, we haven't
really seen any evidence that has happened.
Speaker 4 (14:18):
Yet, but.
Speaker 3 (14:21):
The sort of hope would be, yes, the consumer spending
portion of GDP, maybe that slows down a little bit
short term, but then all this capex happens, that sort
of offsets it, right, all the investment in factories and
plants and equipment, and then those higher Americans Americans are
paid well in these new, well equipped factories, and then
that keeps all the spending domestically in the United States.
(14:42):
So I think ultimately this is going to be a
positive for the United States. I know it's chaotic right now,
and global supply chains are shifting back here after eighty
years of going abroad, and so there's going to be
some bumps in the road. But it looks to me like, yes,
the terriffs are working and having an effect so far.
Speaker 1 (15:01):
That's great to hear, because that was the big concern
we talked about last time, was this reshoring of jobs,
right bringing able to you know, take this middle class
that was offshore and dissipated and now bring it back
to give. Like you said, you know, a person that
doesn't have to have and we're just joking, not joking,
but Jordan and I were talking about student loan debt
(15:22):
and you know for jobs that really don't you know,
they don't exist, right, it's not a service based job
if you you know, have a liberal arts degree and
you know an African basket weaving, so you know, the
ideas as these companies on shore, it becomes a more
productive gain for those young people that are are looking
(15:44):
for those better opportunities at that American dream. Now, one
of the things that I constantly hear about on the
road is this idea of as those boomers time out,
there's going to be this massive transfer of wealth as
low as thirty trillion, as high as seventy someone said
to me yesterday at an event in Houston, and and
(16:08):
that's a massive number. What do you based on where
the market is right now, which is at an all
time high? And can you give us a little description
of why that is? And then what you think is
going to happen as a result of the shift and
that wealth will will it stay in the right places
or I know, Geordie's got a couple questions for you
(16:29):
here in a second about gold and bitcoin and how
like you said, what is the future of the next
generation going to look like from investment, from spending, and
then also from saving.
Speaker 2 (16:43):
You know, how is that all going to look like?
In your mind? That was a lot.
Speaker 3 (16:47):
Yeah, Well, when you think about how it's like happening,
right is basically it used to be like we just
did the jobs that our parents did.
Speaker 4 (16:56):
Right. So my dad is a you know, a baker.
Speaker 3 (16:59):
I'm going to a baker if my dad makes you know,
the barrels, right, that's what the last name Cooper comes from.
I'm a Cooper, right, do I make the barrels up
till like, you know, to the current day.
Speaker 4 (17:10):
It's right.
Speaker 3 (17:11):
I'm a veterinarian because my dad was a veterinarian or
my dad had a you know, an orthodonic practice, so
then I went to school to be an orthodonist.
Speaker 4 (17:19):
What's kind of happened recently, and I think social media
is a big part of this. I think there's a
whole host of things happening.
Speaker 3 (17:25):
Is that basically nobody wants to continue on the family
business anymore, right, A Statistically a small amount of people do.
Speaker 4 (17:33):
And so you have these older people that are retiring.
Speaker 3 (17:36):
They want to pass out on their kids, but their
kids aren't really interested, and so instead of what they
do is they go and sell it to a private
equity firm. And this is happening in basically every industry.
Dave like, I talked to my barber recently. Hey, my
barber went independent and now he's just working out of it,
like his own.
Speaker 4 (17:53):
Little studio or whatever that he rents. But he's like, yeah,
that barbershop I was working out of they got bought
by private equity, right, So was buying.
Speaker 2 (18:00):
Barbershops now, Oh my god.
Speaker 3 (18:02):
And basically, you know, it's it's good right now in
the sense that it makes the economy a little bit
more resilient because hey, that that baby boomer that retired
just got paid a bunch of money. Right And by
the way, Dave like I talked about the baby moms
a little bit earlier. Statistically speaking, today people sixty five
and over, retired people, for the first time ever in
(18:26):
US history, are the largest consumer demographic.
Speaker 4 (18:29):
They spend more money than anybody else.
Speaker 3 (18:31):
Historically, that was we always talked about, like the thirty
five to fifty four was the key economic demographic. People
are buying houses, starting families, sending their kids to college,
buying washing machines buying cars today?
Speaker 4 (18:45):
Is baby boomers. Wow, baby boomers spending more money. They're
twenty two percent of consumer spending retired baby boomers.
Speaker 3 (18:51):
I should specify sixty five and over. So they're getting
paid out by private equity. Private equities rolling all these
small businesses up into big umbrellas. Right, that's why service
is going down, and like everything, you're paying more and
the qualities lower. It seems like private equity is buying
all this stuff. I worry down the line, like this
(19:13):
ends up.
Speaker 4 (19:13):
Being a bubble, right.
Speaker 3 (19:15):
Right, private equity one guy in New York can't run
every barbershop in the content United States.
Speaker 4 (19:21):
It just doesn't work that way.
Speaker 3 (19:23):
And so the bad news right is like, hey, in
short term, it makes all these small businesses kind of
worse service for the money that you spend. I think
ultimately there might be like a financial bubble in some
of these private markets eventually. Now most of us don't
really invest in prevent marks, don't have the ability to
do that. But ultimately it creates a ton of opportunity
(19:45):
for entrepreneurs that basically can come in and like, hey.
Speaker 4 (19:49):
Your barbershop is terrible.
Speaker 3 (19:50):
Now I'm going to create a new model that's better,
and I'll steal all the business.
Speaker 4 (19:55):
Right, So.
Speaker 3 (19:57):
It used to be, hey, you just passed on the
family business and your kid like ran it into the ground. Today,
at least you're getting paid out by Wall Street, I guess,
and they're selling it to some investor and maybe he'll
lose his shirt and then hopefully.
Speaker 4 (20:09):
The next generation.
Speaker 3 (20:10):
And I think there are a ton of Gen Z
people and younger millennials that are like willing to pick
up the reins and be the entrepreneurs here.
Speaker 4 (20:18):
But it's sort of a different way.
Speaker 3 (20:20):
To transfer wealth than ever before, right because institutionally Wall
Street's very involved.
Speaker 1 (20:26):
That's the fascinating aspect to me is is you would
like they traditionally what what Wall Street provided the service
of this long term approach to investment, the slow growth
on your portfolio, right, you just keep Now they're now
proactive and they're they're they're getting into, like you said,
every industry, whether it's the housing market, which I just
(20:50):
you know, watched the long video this morning about you know,
this person's theory about how black rock is through shell
comp and he's buying houses right at an elevated price
and then coming in elevating the market for that area,
(21:10):
and then there be and so the people that are
selling their house at the highest price get out and
they can't afford to go into another house, so they
end up renting the house they just sold, right, And
it's this twist.
Speaker 2 (21:24):
So there's a.
Speaker 1 (21:25):
Lot of that that's in play with I think these
various markets and what the P and E firms are
gobbling up. Is that having an impact on the market itself.
Is that why we're seeing all time highs right now?
Or what's your theory behind why the market is so healthy?
Speaker 3 (21:45):
Yeah, I mean I wouldn't say necessarily the market's that healthy,
right at least we're talking about like the public stock market.
Speaker 4 (21:52):
The S and P five hundred for example, can make it.
Speaker 3 (21:55):
You know, if you look at like valuations, so just
compare like the multiple or like the price of a
stock to the earnings that it's actually earning. Things are
very expensive. And the other problem is that there's like
seven stocks that have driven everything for years, and so
it's really like AI that's kind of driven a lot
of this, right. It's it's this narrative around AI changing
(22:16):
the world, and I ultimately think it will do that
but this just looks really frothy to me and kind
of worrisome, to be honest. And when you read about
how these companies are all, you know, it's like a
giant self reinforcing loop. They're all like lending each other
money and buying each other's products. So like, you know,
Navidia will go out and invest in Core Weave, right,
(22:37):
they give them money, they get Core Weave stocked. Then
Core We've takes that money and buys Navidia chips, right,
and so yeah, like Navidia's sales go up twenty five percent,
but it's their own money that basically did it.
Speaker 4 (22:49):
And now if anything doesn't work.
Speaker 3 (22:51):
Out, they're all tied together as like one big thing, right,
So it seems a lot like two.
Speaker 4 (22:57):
Thousand and one to me, to be honest.
Speaker 3 (22:59):
I understand the combodys have earnings, but you know their
earnings aren't coming from AI. It's like Microsoft's able to
pay for AI because they have you know, web services,
they have legacy software sales and things like this. So
it's the AI sector that just looks really kind of
worrisome to me. The other thing I'd point out is,
(23:20):
like you mentioned the houses I talked about Pe.
Speaker 4 (23:23):
Okay.
Speaker 3 (23:25):
What you're basically seeing here is like the end game
of financializing an economy, okay, which is what happens when
you're the global reserve currency. And so part of the
reason why I feel we need to sort of like
pair back globalization a little bit, focus a little bit
more on national development is because when we run a
(23:45):
trade deficit, which today is about of trillion dollars, right,
the old school idea, if you like open the Wall
Street Journal or like read the Cato Institute or something,
what they're going to tell you is, hey, it's great
we give them do that we print, and they give
us stuff they worked really hard for to make, right.
(24:05):
But that fundamentally misunderstands what's happening because we're not just
giving them dollars.
Speaker 2 (24:11):
Right.
Speaker 4 (24:12):
They take those dollars and they buy things with the dollars,
they buy assets.
Speaker 3 (24:16):
Right. We're not trading them dollars for goods. We're trading
them ownership of national assets for goods, okay. And so
the dollars go abroad. Then the Chinese, the Saudis, whoever
take those dollars, they buy the S and P five
hundred they buy you know, blackrock buys all these single
family homes.
Speaker 4 (24:33):
And rolls them up into a fund. Who are they
selling that to?
Speaker 3 (24:36):
I don't buy Blackrock single family home funds, right, the
Saudi Royal family does. Who's investing in the PE firm
that's buying all the barbershops. It's probably a bunch of
like foreign investors that want access to the US consumer market.
Speaker 5 (24:50):
Right.
Speaker 3 (24:51):
So I think part of this is the trade deficit.
And I feel for young people, man, because you know,
there's a whole we could talk about housing and supply
and demand and everything else. Okay, the part that's never
talked about is like US housing supply, especially in places
like big cities, which you can buy a cheap house
in America, right, go forty five hour rural.
Speaker 4 (25:12):
You know, you can get one hundred thousand dollars house,
no problem. Okay.
Speaker 3 (25:15):
Housing is expensive in the places with the jobs, in
the big cities.
Speaker 4 (25:19):
That's where people invest money.
Speaker 3 (25:21):
Right, And so you're competing with the entire world because
US homes are an international asset class. Nobody's buying Argentinean homes, right,
No one's buying homes in you know, Malawi. US housing
is an international asset class.
Speaker 4 (25:39):
That's why it's so expensive.
Speaker 3 (25:40):
It's one of the reasons why it's why all our
assets are so expensive. It's the trade deficits that does that,
and that's why, hey, Donald Trump throws a bunch of
tariffs on people get worried about this trading system. Oh no,
it's the trade deficit going to decline because that structurally
lowers demand for US assets.
Speaker 4 (25:56):
Not that I won't be valuable.
Speaker 3 (25:57):
Anymore, but all the foreign money doesn't just pour in
in a bigger and bigger amount every year.
Speaker 2 (26:03):
Got it, Got it?
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history of the ancient Christian Church with Hillsdale's College online courses,
all available for free. You heard me when I said this,
it's free. Don't waste your time, right, all right, that's right,
(27:33):
here's the deal. Okay, So what do I personally recommend
for Hillsdale. Well, the one I think you should sign
up for automatically is Ancient Christianity.
Speaker 2 (27:44):
All right. This is an eleven hour lecture course.
Speaker 1 (27:47):
You'll study the inspiring stories of Jesus Christ, his apostles,
and faithful ones throughout the first four centuries of Christianity.
Speaker 2 (27:58):
Now think about it. This course is free.
Speaker 1 (28:00):
This will get you dialed in in how you strengthen
your faith, all right. You'll also learn the arguments of
key early Christian apologists who defended the Christian faith in
the face of so much overwhelming persecution. The course is
self paced so that you can start and stop whenever
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(28:24):
the improbable and miraculous story of Christianity.
Speaker 2 (28:28):
When I tell you, this lecture is.
Speaker 1 (28:30):
Going to inspire your faith in a much more deeper level.
Speaker 2 (28:35):
Trust me when I tell you this. So here's what
you do.
Speaker 1 (28:38):
Go right now to Hillsdale dot edu forward slash David
to enroll. There's no cost and it's easy to get started. Right,
It's free. Let me repeat my last it's free. Right,
that's Hillsdale dot edu forward slash David to register, or
click the link in the show notes Hillsdale dot edu
(29:02):
ford slash David. All Right, Jordy, I know you're going
to be taking that course here soon, but before you do,
why don't you hit Bryce up with those questions?
Speaker 2 (29:11):
All right?
Speaker 4 (29:11):
Great?
Speaker 5 (29:11):
Yeah, I could ask you a million questions, but I'll
just start with a few. Just one quick comment on
the housing thing. My wife and I we're renting, right, now,
we looked at a couple suburbs around the Raleigh area,
North Carolina, and median home price in a lot of
these places is six hundred and seventy thousand dollars. I'm like,
holy cow, that's pretty crazy. That's the median. Anyway, I
(29:34):
think a good place to start is following up with
which something you said about the AI stuff. A lot
of people are wondering are we in some kind of
bubble right now? And you did touch on it. One,
do you think we're in a bubble? But then two,
I've heard an argument that you might think is legit
or might think is crazy, that are we overvalued and
it's a bubble? Or are the companies just getting better?
(29:58):
Because if you look at the rev new generated from
some of these AI companies, if you look at the
revenue per employee, for example, for some of these top companies,
it's way higher than historically they've ever been. So maybe
this isn't a bubble. Maybe they're just you know, legitimately
earning and deserving a higher pe ratio.
Speaker 2 (30:16):
But what do you think about that? Yeah? I just
saw you. Let me hop in real quick.
Speaker 1 (30:19):
Sorry, Bryce, I just saw that a statement that said
Mark Zuckerberg is paying AI experts two hundred and eighty
thousand dollars opening salaries to come over in his organization. Now,
I'm hoping that's just because there's so few people that
are have that expertise that it's that high and he's
just pulling from all the other top AI companies. But
for me, that was like, well, that's a pretty positive thing.
(30:42):
How do you become an AI expert? So I just
wanted to acknowledge that.
Speaker 3 (30:47):
Yeah, I think that's a great question. How do you
become an AI expert? Yes, you know, there's no training
formally an AI I mean, and by the way, Mark
Zuckerbroke just laid off like six hundred people out of
the AI division, right, So they're hiring their firing people constantly.
They're always competing for labor with each other. But you know,
generally speaking, like, I think the AI thing is good
(31:07):
for the economy long term. Okay, if this is widely
distributed technology, and that's kind of where I get more
skeptical of it. Okay, if theoretically AI helps automate a
bunch of processes, it's not just one guy at the
top that owns a highly automated production system with no
employees that collects all the revenue.
Speaker 4 (31:29):
If we all get AI tools that make.
Speaker 3 (31:30):
Us more productive and all of our pay goes up
and kind of a broad.
Speaker 4 (31:34):
Way, then AI is good.
Speaker 3 (31:35):
It boosts productivity, it boosts economic growth and increases real wages.
Speaker 4 (31:39):
Like there's really no downside to that.
Speaker 3 (31:41):
Necessarily, the concern would be, like, hey, all the AI
stuff that I'm seeing right now, Like the reality of
AI today is that it automates white collar jobs away, right,
That's why you invested in as a company. It's not that, hey,
my HR manager can do five times as much work, right,
It's that I can do the same amount of HR with.
Speaker 4 (32:02):
Five times lost managers or whatever.
Speaker 3 (32:04):
Right, And so, like I saw a stat the other day,
and this is sort of my barometer for like white
collar labor, Like how's the job market doing? But that's
who's been getting fired because of AI for years, right,
as is like coders and paralegals and things like that.
Your plumber's fine, he's not even affected by A at all.
(32:24):
Is you look at the number of people taking the
l SAT Okay, because hey, if you want you know,
you're getting out of college, you just got this credential,
the job market doesn't look very good. You know, maybe
I'll just go to law school, right, get another credential.
I'll take on some debt, but like, hopefully things are
figured out by then. It's kind of how people treat
law school in the United States. A year ago this month,
(32:48):
like six thousand people took the l SAT. Okay, this
month this year, forty thousand people took the l SAT,
so it went up over five x. Right, Wow, that
tells me that AI is not creating a bunch of
new jobs or broadening the tools that people have, right,
It's allowing companies to lay off white collar employees. Right,
(33:12):
So I'm skeptical of AI like creating this economic miracle
right now.
Speaker 4 (33:16):
I think what it does is just concentrates wealth.
Speaker 3 (33:19):
It's great for like some companies, right that pull it off,
but broadly speaking, it just means less white collar people
earning a salary probably at least right now, as far
as the market goes with AI, yes, like these companies
are seeing their revenue grow quickly. A lot of them
have a ton of earning its. Like, again, I don't
think Microsoft's going to go bankrupt here, right, I don't
(33:41):
think Facebook's going to go bankrupt their money printing machines, like,
no question about it.
Speaker 4 (33:47):
The problem is, Okay, all that.
Speaker 3 (33:49):
Revenue is again coming from these like circular dealer financing
situations where they're all tying each other together. They're all
like in this incestuous relationship. I mean, you look at
the assumptions that are going into this, right, like open
Ai for example. Okay, open Ai lost like fifteen billion.
Speaker 4 (34:08):
Dollars or something this year, but they're saying, hey, we're
gonna down the road, right.
Speaker 3 (34:13):
We're a growth stock. We start just making a ton
of cash. Okay, Well, they just took on like all
this capex, like sixty billion dollars in capex with Oracle.
Next year they're expected to lose like twenty seven billion dollars.
The year after that, they're expected to lose forty five
billion dollars. So where's the cash going to come from
from open Ai to buy all this stuff from Oracle.
(34:33):
It's going to come from Oracle buying more open Ai stock, right,
They're going to pay for themselves to like sell this
this product. And so guys, it's kind of like circular financing.
This is stuff that worries me, right, because what you
hope or is like, hey, oh my god, all these
consumers are signing up for Chat GPT premium and we're
just raking in the cash, Like that's not really what's
(34:55):
happening here. Ninety five percent of these AI companies have
you know, no profit, so and the ones that do
make profit it's from other businesses. So I'm not saying
this technology never works out again.
Speaker 4 (35:08):
I think it will.
Speaker 3 (35:09):
But I think we're kind of in this period where
there's this massive amount of capex happening under very optimistic assumptions,
and all I see from AI on a daily basis.
Speaker 4 (35:20):
Is like video slop, right. I think we all, you know,
see this stuff showing up. This is why your power
bills going up.
Speaker 3 (35:27):
This is why you know we've got less water available
in the aquifers or whatever. So you know, they need
two trillion dollars of revenue by twenty forty or twenty thirty,
I apologize, So five years from now, under the most
optimicistic assumptions, according to like Baning Company, they're short by
(35:51):
eight hundred billion, okay, and then on top of that,
like half the power generation they need to actually like
gear up. There's no way it comes online on er
any circumstance. Right, It takes a while to build a
nuclear power plant or like a coal plant or anything.
So I'm having trouble like squaring the circle here. I
just hear people yelling like Fifth Industrial Revolution, it's changing
(36:13):
the world. Shut up, you're you know, you're a lota
and I'm not. I'm like skeptically optimistic, but I don't
really see this delivering any kind of like value to
society yet. I think it's just more kind of video
garbage on all of our feeds.
Speaker 1 (36:29):
That's and that's why what Jordi is so high.
Speaker 5 (36:34):
Oh yeah, exactly, A lot of things are real high
right now. I got two more questions for you, if
you'll just indulge me. I don't get to talk to
an economist very often. Gold hit four thousand dollars. That
was a big deal in the news. I personally bought
one ounce of gold in twenty twenty, so I'm rich now,
which is awesome. That has typically historically been a signal
(36:55):
of defensiveness, like or something's kind of going on, or
there's chaos in the market, uncertainty in the world. But
maybe it's something else. We also saw bitcoin there. It's
doing well, hitting all time highs, having little drawbacks here
and there, but that's nothing for bitcoin. Why do you
think gold hit that all time high? Why is it
having such a just remarkable year? And is it can
(37:18):
it keep going to five thousand? Or does this spell
some kind of a looming disaster?
Speaker 3 (37:24):
Oh yeah, I think it's It's done really well for
a couple of reasons. Okay, One is, yeah, goal typically
does well when institutional trust is falling, right, because, like,
the dollar is worth a lot when we all trust
in the idea of the dollar, right, So and like, listen,
we all know there's not a lot of trust in
institutions for good reason, right, And people are more and
(37:48):
more concerned about.
Speaker 4 (37:50):
The US's ability to manage all of this.
Speaker 3 (37:53):
Frankly, like Donald Trump attacking the independence of the Federal Reserve, right,
Like it's maybe, do you think it's great that Donald
Trump is going to be in charge? But the point
is then a democrat is going to be in charge, right,
So it's better to have like a disinterested technocrat like
Jerome Powell in control of the Federal Reserve. Because politicians
(38:13):
always want to bring more money, They always want to
lower interest rates, and that can cause problems. So I
think part of this is just lack of institutional trust.
I think it's a tax on the federal reserves independence
that have driven up gold.
Speaker 4 (38:25):
Okay. The other thing that I think.
Speaker 3 (38:27):
Is happening here is internationally, countries are diversifying their reserve assets,
and bitcoin is also a reserve assets sort of, right, we.
Speaker 4 (38:35):
Kind of think of it the same way as goal.
So let me put it this way.
Speaker 3 (38:41):
Okay, I mentioned like fifty percent global market share for
the dollar, right, it's insanely dominant. The trade off to
that is the financialization of the US economy that I mentioned,
which is also at this point unsustainable or taking all
these measures like tariffs and reshoring and you know, protectionism
and whatever else to try and like reverse that trend
(39:03):
a little bit.
Speaker 4 (39:04):
And so I expect the.
Speaker 3 (39:06):
Dollar as a reserve currency to fall in relative status.
I don't think it's going away as a reserve currency.
There's no way nobody else can replace it. But instead
of fifty percent of global transactions, maybe the dollar falls
to forty percent.
Speaker 4 (39:20):
Okay, the dollar weekends a little bit. What picks up
the slack there?
Speaker 3 (39:25):
Probably the euro a little bit probably other FIAC currencies.
But gold is a natural It's always been a reserve currency.
It's been a reserve currency since the beginning of time, okay.
Speaker 4 (39:35):
And it's not going away.
Speaker 3 (39:37):
And what's nice about gold is that it's it's what
we call a neutral reserve asset. So one of the
reasons people are upset about the dollars, it's not you know,
there's the trade tension, there's US actually trying to reduce
like the trade deficit and all of that. Part of
it too, is just people see us using sanctions as
a weapon. Right. It's great that you take dollars and
(39:59):
you invest and you have gold doesn't pay you an
interest rate. The problem is, though, if you hold a
bunch of treasury bonds, the United States government might just
confiscate all of it like we did to Russia, okay,
or they might just sanction you into the ground if
we don't like what you do politically, and so country
seesus to say, hey, fifty percent of our four ex reserves,
(40:20):
that's two bunch of dollars. Right, there's this The world's chaotic.
The United States is swinging around sanctions like crazy.
Speaker 4 (40:26):
Maybe we need to pair that back a.
Speaker 3 (40:27):
Little bit and buy a bunch of gold instead. Right,
it's because there's no quid pro quote with gold. So
I think it's the combination of those things that's driven
up gold prices.
Speaker 4 (40:36):
And yeah, there's kind of a tailwind to gold going forward.
Speaker 3 (40:40):
By the way, like all the central banks are printing
money again, right, they've lowered interest rates.
Speaker 4 (40:45):
Gold goes up in that situation as well.
Speaker 3 (40:47):
So I think there's a kind of a complience of
factors that are positive for gold.
Speaker 4 (40:50):
Right now.
Speaker 2 (40:52):
All right, I got one more question for you.
Speaker 5 (40:53):
There's some talk that I've heard around the investor Wall
Street world something called the debasement trade, and I think
I think this kind of relates to what we're talking
about gold. We're talking about the thirty eight trillion dollars
in debt. Many people, when they look at the debt,
they say, okay, well, the US has one of three options.
They can either how do you know, how do you
(41:14):
pay it back? How do you get right again? Well,
you could default on it. That's not going to happen
because then you get World War III.
Speaker 4 (41:20):
Uh.
Speaker 5 (41:21):
You could try to outproduce, you produce your way out
of it, meaning just our GDP just explodes from something.
Maybe it's from AI, maybe it's from some clean energy revolution,
I'm not sure. And we get our GDP up enough
to not make it a big deal. And then the
last option, which seems like it's kind of going this way,
is we're just going to debase the currency until that
(41:42):
debt's not very a very big deal. This is leading
people into saying, hey, something like gold, something like bitcoin,
other these these kind of fixed assets, maybe we just
put our money in that do the debasement trade, because
it sounds like the government, the Federal Reserve, they're going
in one direction and they're going to send fixed ass
as to the moon because they're not going to stop printing.
(42:02):
Do you think there's anything to that sort of debasement
trade idea investing in fixed assets? And is that kind
of the path you see going forward for the government
just Hey, we're just going to kind of slowly debase
the dollar to try to stabilize the situation.
Speaker 3 (42:15):
Yeah, I'd point out right, like, what's the other major
fixed asset that everybody owns is housing rights? Like so yeah,
I listen. I think the whole history of the world
says that the government takes the easy way out on
prints money. Right, So right now, guys, like, to be honest,
things are going fine. There's not really a huge like
(42:38):
I don't think we're going to default on the debt.
I don't think that that's going to cause a death
spiral in the United States. I think, well, we're we're
fine right now. Okay, but what happens if there's another
giant pandemic, What happens if there's a giant war, what
happens if you know, the attack on infrastructure, what happens
(42:58):
if you know, go down the.
Speaker 2 (43:01):
List right, load up printer.
Speaker 3 (43:04):
Yeah, so what happens is historically, okay, there's the public
facing dual mandate, which is, you know, stabilize inflation, like
keep inflation low and maximize employment.
Speaker 4 (43:16):
Okay, that's like, that's the pr dual mandate.
Speaker 3 (43:20):
Okay, the real dual mandate is bailout banks during financial
crises and make the government debt affordable.
Speaker 4 (43:26):
So you know, the reality here.
Speaker 3 (43:29):
Is like, if there's an existential problem that comes up,
theers are just going to print money.
Speaker 4 (43:33):
They're going to bail out the US government.
Speaker 3 (43:36):
And so yeah, I think the history of the world
says they're going to print more money.
Speaker 4 (43:41):
Inflation is still three percent.
Speaker 3 (43:42):
They're already cutting, right, They've given up the two percent
target here, So yeah, I would be concerned about currency debasement.
But it's also been happening since the creation of the
Federal Reserve, right, there's nothing new about it's been happening since,
you know, the Roman government would debase the coins with
(44:03):
cheaper metals. It would happen when people were clipping the
coins to make them slightly smaller. Right, So we'm a
debasing currency for forever. It's the easy way out. The
last thing I'll say on this, okay, is that and
this comes from Milton Friedman, and there's things I disagree
with on Milton with Milton Friedman on but I think
(44:23):
this is such a key point, which is that when
we talk about tax and we talk about government spending.
Speaker 4 (44:30):
Like, really, the actual tax is the spending itself.
Speaker 3 (44:34):
Okay, it's the spending the tax as soon as you
print the money and spend it, basically one of the
three things has to happen. One is do you actually
just pay for by taxing out of the population, okay,
Two you borrow money which just loads the tax on
the future generations, or three you know, you just debase
the currency.
Speaker 4 (44:52):
Inflation is the secret tax, right.
Speaker 3 (44:54):
So it's actually the money that they spend that taxes
all of us because it dilutes our purchase power. And yeah,
inflation is the easiest way for them to tax your
your wealth the way. So I think it's a kind
of key point. We talk a lot about like deficits
and debt and everything else. It's really spending that's the tax.
And you'll notice spending never goes down ever, Right, maybe
(45:16):
the deficit flux awaits a little bit, maybe we add
a little bit less debt. Spending goes up every single year.
So I mean that's the real tax.
Speaker 4 (45:24):
On all of us.
Speaker 1 (45:26):
Well, I'll tell you what, Bryce, every time you come on,
not only do I have my mind blown, but I
think all of our audience does. Jordi, your questions were phenomenal.
Thank you so much. I've been chomping at the bit
to get you go with Bryce. There, Bryce, before we go,
I think everybody just wants to know, you know, what
(45:49):
what gun build out are you working on right now?
Are you are you you know, what are you doing
in terms of your training? What do you got going
with with that aspect of your life?
Speaker 4 (46:01):
Yeah? So you know, I've been doing a lot.
Speaker 3 (46:03):
Of pistol shooting this year. I just haven't really made
it to do any like rifle classes. And I have
an outdoor shooting ange like an hour away in city
in Texas, So it's just it's a little bit hard
to get out and shoot the rifle put the play
carrier on sometimes. But I have a gun club and
I'm a member, like the private upstairs range, And what's
nice about that is like when I go there, there's
usually nobody there, right, so I can go in front
(46:26):
of the lanes, I can set up some targets, and
I can like actually shoot up there, which is great
and like not just a static way. So pistols have
been kind of a natural transition with that. So I've
been doing a lot of concealed carry draws and everything else.
But the thing that's kind of been really fun this
year one of my pet projects one is I have
a Smith and West and TRR eight. So if anybody
(46:48):
knows what this is, it's a it's this slot revolver. Okay,
Basically Smith and Wesson designed this for the slot entry
team guy with the shield because like semi automatic handguns
and closer retention could like malfunction on a shield, right,
So eight rounds of three fifty seven magnum, I've got
an optic on that thing, man. Three fifty seven magnum
(47:11):
is serious business, right, That is a that's a cool cartridge,
so adaptable. So I've been shooting the double action three
fifty seven magnum Revolver a lot more. I think that's
just such an awesome gun. I also have a nineteen
eleven that I decided to get back into.
Speaker 4 (47:28):
I sent it out to get the slide milled.
Speaker 3 (47:31):
They ruined the slide, right, so that I had this
gun for like thirteen years. The slide is complete junk now,
so I had to go and buy another slide, get
it blended to the frame. I've sent it out to
get milled for an acro. They're DLC in it for me,
so I should get that back next week and I'll
have a functional nineteen eleven again. So it's kind of
(47:52):
been like a retro year, you know, modernized retro with
the double action revolver in the nineteen eleven.
Speaker 1 (47:59):
But a wretch that is Bryce guilty tea right there, dude.
Speaker 2 (48:04):
I absolutely love.
Speaker 1 (48:05):
It, man, I tell you what I know there is
a massive audience out there that is.
Speaker 2 (48:10):
Waiting, just waiting for the fat Daddy, fat fat stats.
Uh sub stack blog where you.
Speaker 1 (48:19):
Do a blog on a finance and then a blog
on firearms, just you know, just go back and forth
on that and I think you throw in a little
prepper stuff and then you know, uh, some international finance
and dude, you've got You've got three hundred thousand subscribers
and like like a year plus.
Speaker 2 (48:37):
That's it. That's my that's my prediction.
Speaker 4 (48:40):
I appreciate that.
Speaker 3 (48:41):
I hope I have I have the free time to
like pursue something like that, and at some point in
the near future it just got married. You know, there's
probably some kids on the way at some point. Right
I'm very busy in my job as an economist right now,
so down the road, i'd love to pursue something like that.
Speaker 2 (48:57):
That's awesome. That it's all good. That's right, that's right.
Speaker 1 (49:01):
You'll be you'll do your blog entries with us man
Bryce Gille, Ladies and gentlemen, Bryce, thank you so much.
Speaker 2 (49:07):
It's always just a real pleasure and a treat to
have you on.
Speaker 4 (49:10):
Thank you absolutely, guys.
Speaker 3 (49:12):
Always always good to see you happy to do it
anytime and have a great weekend.
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