May 12, 2025 • 16 mins
What if the most decisive moment of the Napoleonic Wars didn’t happen on the battlefield — but on the bond desk?
In this episode of The Timeless Investor Show, Arie van Gemeren unpacks one of the most legendary (and controversial) financial trades in history: Nathan Rothschild’s alleged bond market coup during the Battle of Waterloo.
We explore:
• How the Rothschild network outpaced governments with faster intelligence
• Why market psychology is the ultimate weapon in financial warfare
• How this moment marked the shift from military to monetary dominance
• And what this all reveals about the financialization of empires — from the 1800s to today
This is more than a story about the past. It’s a blueprint for how modern power works.
This story is often repeated in financial lore — sometimes exaggerated or apocryphal — and should be understood in the context of broader shifts in capital, not ethnicity or identity.
📰 Read the companion essay and subscribe to The Timeless Investor Substack:
👉 https://lombardequities.substack.com
🎧 Subscribe, share, and leave a review if this episode sharpened your lens.
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:01):
Welcome back to the Timeless Investor Show.
I'm Ari Van Gemeren, real estatefund manager, avid student of
history, and your host today.
And today we're going to diveinto one of the most audacious
financial plays in history andwhat it reveals about the birth
of modern finance.
This week, we're really going tobe focused on the thematic of
(00:21):
the financialization of society.
We've talked about it a lot inprevious episodes.
articles and discussions, thisidea that societies over time
start to hollow out as intellectand capabilities start to
gravitate towards industriesthat make money from moving
money around, right?
(00:42):
So you think sort ofnon-productive industries,
really, like making money oninvesting money.
And there's an argument you canmake that it is still productive
because the flow of capital isis important to society to
finance big projects people wantto take on.
But it also destroys or movesexpertise away from mainline
(01:03):
industries.
And when societies start to losetheir mainline industries, some
problems start to emerge.
We're going to release along-form article this Wednesday
on Substack on this exact topic,the financialization of the
British Empire at its peak.
So make sure you subscribe tothe Timeless Investor newsletter
if you haven't already.
The link is in the show notes.
And look forward to seeing youguys there.
(01:24):
But for today, we're going totalk about the story of Nathan
Rothschild, the Battle ofWaterloo, and how capital
replaced conquest as thedominant force in global power.
So let me take you back.
It's the June of 1815.
The fields of Belgium are soakedwith blood.
And on one side, you haveNapoleon Bonaparte, recently
returned from exile, desperateto reassert his control.
(01:47):
Napoleon, by the way, is afascinating character study, one
I'm sure we'll dig into at alater point.
It's really hard, I think, formodern listeners to really
understand this, but he wasterrifying to the powers of the
time.
First of all, he was an absolutewizard on the battlefield.
He won a massive victory atAusterlitz and everywhere else,
(02:09):
Huge wins that shatteredconventional thinking on
military strategy and speed.
He was capable of moving hisarmies in incredible speeds to
confront the many nations thatwere allied against him.
He had consumed most of Europeduring his reign.
He had conquered immense partsof Europe.
And of course, he failed inRussia, as some of you may know,
which, you know, great historictrope, never invade Russia
(02:32):
during a winter.
And Napoleon learned this to hisregret as well.
But most importantly, he was ahuge and deep ideological threat
to the monarchies of his time.
He was a product of the FrenchRevolution, which was a complete
upending of the way of life inEurope.
You know, think about thebeheading of You know, the king,
right?
The overthrow of the CatholicChurch, the rise of the cults of
(02:54):
reason and the floors of NotreDame rather than, you know, the
traditional way that Europe ranat the time.
So everything about Napoleon wasterrifying.
So when he returned from exilein Elba– All of the allies were
horrified.
It was a moment of reckoning.
They had to defeat him.
It was an ideological deepthreat, sort of like communism
(03:15):
to Western democracy in our morerecent history.
It was that level of terrifyingfor them.
His nemesis was the Duke ofWellington, leading the
Anglo-Allied forces, trying tohold the line.
And that's what was happening onthe battlefield.
But what I really want to talkabout today is something
different, because somebody elsewas watching this from a very
different battlefield, and itwas a banker.
(03:36):
Nathan Meyer Rothschild, theLondon-based financier of the
most powerful family in Europe,was watching this, but he wasn't
just interested in who wouldwin.
He was interested in how tocapitalize on it.
So at this point, the Rothschildnetwork spanned five cities,
London, Paris, Frankfurt,Naples, and Vienna.
And it was a financialintelligence system unlike
(03:56):
anything the world had everseen.
Couriers on horseback, carrierpigeons, secret informants, code
books, smuggling rings, All ofthis stuff had been built to
parlay information into the flowof capital and generate huge
rewards for the financialfamilies backing it, the
Rothschild family in this case.
(04:17):
But there were many, manyfinancial families in Europe.
And part of this is the rise ofthe major banking families in
Europe.
So on June 18th, 1815, all ofthis paid off.
So some of you probably know,the Duke of Wellington and the
Allied forces defeated Napoleonat Waterloo.
Waterloo is a cultural trope aswell, right?
(04:38):
Your Waterloo, your personalWaterloo.
It was Napoleon's Waterloo thatultimately saw him fully
defeated.
And obviously the news aboutwhat happened on the battlefield
is critically important.
What's fascinating here is thatRothschild's agents actually
reached London a full 24 to 48hours before the British
government had officialconfirmation.
(05:00):
So what is...
Rothschild do with this edge?
What did Nathan do?
He walked into the London StockExchange and he started selling
British government bonds.
But why?
Because he knew everyone waswatching him.
They all assumed he had superiorinformation, which, you know, he
did.
And so their thinking was, ifRothschild was selling, the
British must have lost thebattle.
(05:22):
And that was disastrous forBritish government bonds.
So panic follows, the markettanks.
And Everything is tanking.
Everybody is selling.
Everybody is trying to get outof this thing.
So once prices have completelyplummeted, Rothschild's agents
started buying back those sameexact bonds at a massive
discount.
So what happens?
(05:42):
The news breaks that Napoleonhas lost and Wellington has won,
and the market rebounds.
But the Rothschilds were alreadyin.
They're already rich.
This wasn't just a profitabletrade.
It was a defining moment becausefor the first time, it showed
that information, not armies,could decide the fate of a
nation's wealth.
The Battle of Waterloo was theend of Napoleon and his
(06:04):
overarching massive threat tothe European way of life, really
to monarchies, if you reallywant to think about it.
But in many ways, it wasactually the beginning of
something else as well.
It was the beginning of thefinancialization of empire
because before this, power camethrough land, bloodlines, and
brute strength.
But the Rothschilds ushered in anew paradigm, one where capital
(06:25):
markets could be weaponized moreeffectively than any army.
Their family would go on todominate European finance for
the next century.
They bankrolled wars, stabilizedmonarchies, and helped
industrialize entire regions.
And they did it without everfiring a musket themselves.
So here's the bigger takeaway.
At Waterloo, the battle wasn'tjust Belgium.
It was in the bond market.
(06:45):
And the winner wasn't justWellington.
It was Nathan Rothschild.
And that's when the worldchanged.
That's when the levers ofhistory began to shift from
throne rooms to trading desks.
So let's fast forward.
By the late 1800s, the BritishEmpire wasn't just a colonial
power.
It was a financial power.
British capital financedrailroads in Argentina, mines in
South Africa, plantations inSoutheast Asia.
(07:07):
London...
became the center of globaltrading and lending, and
sterling-denominated bondsbecame a tool of diplomacy,
dominance, and control.
And this wasn't an accident.
It was a natural evolution ofthe financial model that the
Rothschild banking family helpedset up by pushing
financialization, by pushing bigbanking, which had some benefits
(07:27):
for society as well.
So the West stopped, at thispoint, conquering by the sword.
and started conquering viaspreadsheet instead, started
conquering via lending, startedconquering via financial means
rather than just using force ofarms.
And so here we are today in aworld where hedge funds can move
more money in a day than mostnations spend in a year and
(07:48):
where central bank statementscan cause way more chaos than a
military strike.
A lot of empires today are builton margin and leverage, not
necessarily mortar and steelanymore.
And that's the story I reallythink we should take away from
this.
Finance didn't just followempire.
Finance changed.
became empire.
So there's a lesson for us hereas modern day investors.
(08:09):
Information is power.
The timing of that informationis leverage.
And here's the thing.
I don't know.
There's a lot you can take fromthis story, right?
And I think there's a healthydose here of what some might say
is unhealthy amounts of insiderinformation leading to profits,
right?
But I think the key thing hereis that the rise of major
(08:29):
banking families in Europereally spurred the growth of
empire.
It spurred the growth of theBritish Empire.
We're going to talk about thatagain on Wednesday.
But this story, potentiallyapocryphal, by the way, no one
knows for sure that it happenedlike this, but it's a story that
gets repeated quite often.
And I myself came across it inThe Creature from Jekyll Island,
(08:50):
which is a great and highlyconspiratorial read.
Nonetheless, I recommend it tomy listeners.
It's a great, great read.
There's a deep story to this.
There's a deep story to the riseof finance as a weapon, the rise
of finance as something thatdrives empire, drives conquest,
drives war.
We've talked about that before.
(09:10):
We've talked about how centralbanking sort of leads to more
warfare because bankersultimately need to fund things,
and war is a good thing to fund.
There's a lot of need forcapital.
There's a lot of need to printcurrency and create money to
help fund this.
We wrote a piece, again, you cancheck it out on the Timeless
(09:31):
Investor Newsletter, about theperiod before World War I and
the rise of the gold standard inthis period.
We're going to do a separatepodcast on this because I think
it's so fascinating.
You basically had a globalconvergence to a gold standard
in the period before World WarI, which meant that inflation
(09:52):
was low if non-existent.
You might have even haddeflation during this period.
But there was stability ofcurrency and wars were won
relatively quickly because atthe time, even in this period
that we're talking about,governments couldn't finance
endless war.
They just couldn't do it becausethey were on the gold standard
(10:12):
and they couldn't print moneybecause they were tied to gold.
Everything changed with WorldWar I, right?
I mean, everything changedbecause all of the major powers
in World War I abandoned thegold standard very quickly upon
entering World War I becausewhat they needed was they needed
money to fund the war and theycouldn't do it by taxing their
(10:34):
citizens.
So they all abandoned the goldstandard en masse and started
printing money, right?
So this thematic of, forcenturies...
Warfare was constrained by theamount of money that governments
could collect.
Sort of going out the windowwhen we made this move to fiat
currency is a fascinatingdynamic.
(10:55):
And something, honestly, that inthis day and age, we don't even
think about because we're soused to central banking and fiat
currency as the way we thinkabout money.
But a lot of this can be tracedback to the rise of big finance
in Europe, right?
And this story is a greatexample of how This information
network that Rothschild's builtis fascinating.
(11:16):
It makes a ton of sense.
It's very smart.
It's a very good way to build abusiness.
It's a good way to run ahead ofcapital flows and build
something great.
But it's important tounderstand.
I think another huge takeawayhere for all modern investors is
market psychology can beweaponized.
Nathan Rothschild weaponized thefact that people believed that
he had insider information,which he did, by the way, and he
(11:40):
used that against them in anabsolute coup to make a killing
in the British bond market.
Absolute killing.
And I think the other thing tokeep in mind here is the real
game isn't just about makingmoney.
It's understanding how systemsof power evolve, right?
So you think about that as areal estate guy today, or gal,
as you're investing.
Understand how the levers ofpower in your city work.
(12:02):
How do things flow?
It's interesting to me.
I know a lot of developers, anda lot of developers are very
political.
Not political in the sense oflike, you know, I'm a Republican
and I donate to Republicancauses.
I mean, there's that too, right?
But what I noticed withdevelopers is they know
everybody in city hall.
They know everybody that has thelevers of power because
(12:23):
understanding who's pulling thelevers of power can help your
deal work or not work, right?
It's a little bit less relevantin the business I pursue, which
is value add and opportunisticacquisition of existing
buildings, but it's stillrelevant.
Like you still need tounderstand, you know, we're
going right now, There were rentcontrol discussions in
Washington.
And a lot of the ownershipcommunity is heavily involved in
(12:43):
those conversations and lobbyingone way or the other to drive
it, to try to drive thatconversation in a way that is
ultimately beneficial for theownership community.
And there's obviously power onthe other side, too, that's
pushing a different agenda.
So if you want to be timelessinvestors, which we all do, you
need to understand the forcesshaping our world.
(13:06):
Without question...
The big banking forces, theforces of central finance,
central banking is like one ofthe biggest forces controlling
modern day finance.
And like we, even like veryeducated investors are often not
fully aware of how deep rootedthis is and how much control
(13:29):
this has.
You know, like an example, aquick example.
Inflation spiked in 2023, okay?
And I was in the transitory campat the time.
I was wrong, right?
But I was very much in thetransitory camp at the time
because my view was, well,supply chains are really messed
up because of COVID.
(13:49):
And that's causing inflationbecause all these factories are
trying to come back online,which is all true, by the way.
The supply chain thing iswell-researched and
well-documented and is a realissue.
But what I don't think peopletruly grasp is that during
COVID, the government injectedbillions and billions of dollars
(14:11):
into the economy for goodreason, right?
I mean, nobody was allowed towork.
The entire economy shut down.
But where did that money comefrom?
And the quick answer is the Fedprinted it.
So it logically follows thatinflation will follow that.
So if you understand the flow ofpower and the flow of capital,
you can start to sort of foreseethese things coming about.
And You could have potentially,hindsight's 20-20, we'll admit
(14:35):
that, but you could havepotentially foreseen that a
massive injection of money intosociety would cause inflation,
would cause rates to rise, wouldcause the rate cycle to turn,
which has been really difficultfor real estate investors and
something really hard to dealwith.
And I think if people had adeeper understanding of the
timeless principles behindinflation, capital flows,
(14:57):
banking interest, centralbanking, understand the genesis
of big banking families and howthese things came about, you're
better equipped and stronger fordealing with what's happening
today.
So look at history, look atflows of capital, and understand
the revolutions that arehappening on trading floors.
Until next time, and thank youfor joining us, act well, think
(15:21):
wisely, build somethingtimeless.
And I just want to end with aSubscribe to and leave a review
(15:46):
for our podcast on whatever yourservices that you use.
It's very helpful to help thepodcast grow as we continue to
delve into these deep historicstories that I think are
incredibly timeless and relevanttoday.
Thank you and see you next time.
Welcome back to the Timeless Investor Show.
I'm Ari Van Gemeren, real estatefund manager, avid student of
history, and your host today.
And today we're going to diveinto one of the most audacious
financial plays in history andwhat it reveals about the birth
of modern finance.
This week, we're really going tobe focused on the thematic of
(00:21):
the financialization of society.
We've talked about it a lot inprevious episodes.
articles and discussions, thisidea that societies over time
start to hollow out as intellectand capabilities start to
gravitate towards industriesthat make money from moving
money around, right?
(00:42):
So you think sort ofnon-productive industries,
really, like making money oninvesting money.
And there's an argument you canmake that it is still productive
because the flow of capital isis important to society to
finance big projects people wantto take on.
But it also destroys or movesexpertise away from mainline
(01:03):
industries.
And when societies start to losetheir mainline industries, some
problems start to emerge.
We're going to release along-form article this Wednesday
on Substack on this exact topic,the financialization of the
British Empire at its peak.
So make sure you subscribe tothe Timeless Investor newsletter
if you haven't already.
The link is in the show notes.
And look forward to seeing youguys there.
(01:24):
But for today, we're going totalk about the story of Nathan
Rothschild, the Battle ofWaterloo, and how capital
replaced conquest as thedominant force in global power.
So let me take you back.
It's the June of 1815.
The fields of Belgium are soakedwith blood.
And on one side, you haveNapoleon Bonaparte, recently
returned from exile, desperateto reassert his control.
(01:47):
Napoleon, by the way, is afascinating character study, one
I'm sure we'll dig into at alater point.
It's really hard, I think, formodern listeners to really
understand this, but he wasterrifying to the powers of the
time.
First of all, he was an absolutewizard on the battlefield.
He won a massive victory atAusterlitz and everywhere else,
(02:09):
Huge wins that shatteredconventional thinking on
military strategy and speed.
He was capable of moving hisarmies in incredible speeds to
confront the many nations thatwere allied against him.
He had consumed most of Europeduring his reign.
He had conquered immense partsof Europe.
And of course, he failed inRussia, as some of you may know,
which, you know, great historictrope, never invade Russia
(02:32):
during a winter.
And Napoleon learned this to hisregret as well.
But most importantly, he was ahuge and deep ideological threat
to the monarchies of his time.
He was a product of the FrenchRevolution, which was a complete
upending of the way of life inEurope.
You know, think about thebeheading of You know, the king,
right?
The overthrow of the CatholicChurch, the rise of the cults of
(02:54):
reason and the floors of NotreDame rather than, you know, the
traditional way that Europe ranat the time.
So everything about Napoleon wasterrifying.
So when he returned from exilein Elba– All of the allies were
horrified.
It was a moment of reckoning.
They had to defeat him.
It was an ideological deepthreat, sort of like communism
(03:15):
to Western democracy in our morerecent history.
It was that level of terrifyingfor them.
His nemesis was the Duke ofWellington, leading the
Anglo-Allied forces, trying tohold the line.
And that's what was happening onthe battlefield.
But what I really want to talkabout today is something
different, because somebody elsewas watching this from a very
different battlefield, and itwas a banker.
(03:36):
Nathan Meyer Rothschild, theLondon-based financier of the
most powerful family in Europe,was watching this, but he wasn't
just interested in who wouldwin.
He was interested in how tocapitalize on it.
So at this point, the Rothschildnetwork spanned five cities,
London, Paris, Frankfurt,Naples, and Vienna.
And it was a financialintelligence system unlike
(03:56):
anything the world had everseen.
Couriers on horseback, carrierpigeons, secret informants, code
books, smuggling rings, All ofthis stuff had been built to
parlay information into the flowof capital and generate huge
rewards for the financialfamilies backing it, the
Rothschild family in this case.
(04:17):
But there were many, manyfinancial families in Europe.
And part of this is the rise ofthe major banking families in
Europe.
So on June 18th, 1815, all ofthis paid off.
So some of you probably know,the Duke of Wellington and the
Allied forces defeated Napoleonat Waterloo.
Waterloo is a cultural trope aswell, right?
(04:38):
Your Waterloo, your personalWaterloo.
It was Napoleon's Waterloo thatultimately saw him fully
defeated.
And obviously the news aboutwhat happened on the battlefield
is critically important.
What's fascinating here is thatRothschild's agents actually
reached London a full 24 to 48hours before the British
government had officialconfirmation.
(05:00):
So what is...
Rothschild do with this edge?
What did Nathan do?
He walked into the London StockExchange and he started selling
British government bonds.
But why?
Because he knew everyone waswatching him.
They all assumed he had superiorinformation, which, you know, he
did.
And so their thinking was, ifRothschild was selling, the
British must have lost thebattle.
(05:22):
And that was disastrous forBritish government bonds.
So panic follows, the markettanks.
And Everything is tanking.
Everybody is selling.
Everybody is trying to get outof this thing.
So once prices have completelyplummeted, Rothschild's agents
started buying back those sameexact bonds at a massive
discount.
So what happens?
(05:42):
The news breaks that Napoleonhas lost and Wellington has won,
and the market rebounds.
But the Rothschilds were alreadyin.
They're already rich.
This wasn't just a profitabletrade.
It was a defining moment becausefor the first time, it showed
that information, not armies,could decide the fate of a
nation's wealth.
The Battle of Waterloo was theend of Napoleon and his
(06:04):
overarching massive threat tothe European way of life, really
to monarchies, if you reallywant to think about it.
But in many ways, it wasactually the beginning of
something else as well.
It was the beginning of thefinancialization of empire
because before this, power camethrough land, bloodlines, and
brute strength.
But the Rothschilds ushered in anew paradigm, one where capital
(06:25):
markets could be weaponized moreeffectively than any army.
Their family would go on todominate European finance for
the next century.
They bankrolled wars, stabilizedmonarchies, and helped
industrialize entire regions.
And they did it without everfiring a musket themselves.
So here's the bigger takeaway.
At Waterloo, the battle wasn'tjust Belgium.
It was in the bond market.
(06:45):
And the winner wasn't justWellington.
It was Nathan Rothschild.
And that's when the worldchanged.
That's when the levers ofhistory began to shift from
throne rooms to trading desks.
So let's fast forward.
By the late 1800s, the BritishEmpire wasn't just a colonial
power.
It was a financial power.
British capital financedrailroads in Argentina, mines in
South Africa, plantations inSoutheast Asia.
(07:07):
London...
became the center of globaltrading and lending, and
sterling-denominated bondsbecame a tool of diplomacy,
dominance, and control.
And this wasn't an accident.
It was a natural evolution ofthe financial model that the
Rothschild banking family helpedset up by pushing
financialization, by pushing bigbanking, which had some benefits
(07:27):
for society as well.
So the West stopped, at thispoint, conquering by the sword.
and started conquering viaspreadsheet instead, started
conquering via lending, startedconquering via financial means
rather than just using force ofarms.
And so here we are today in aworld where hedge funds can move
more money in a day than mostnations spend in a year and
(07:48):
where central bank statementscan cause way more chaos than a
military strike.
A lot of empires today are builton margin and leverage, not
necessarily mortar and steelanymore.
And that's the story I reallythink we should take away from
this.
Finance didn't just followempire.
Finance changed.
became empire.
So there's a lesson for us hereas modern day investors.
(08:09):
Information is power.
The timing of that informationis leverage.
And here's the thing.
I don't know.
There's a lot you can take fromthis story, right?
And I think there's a healthydose here of what some might say
is unhealthy amounts of insiderinformation leading to profits,
right?
But I think the key thing hereis that the rise of major
(08:29):
banking families in Europereally spurred the growth of
empire.
It spurred the growth of theBritish Empire.
We're going to talk about thatagain on Wednesday.
But this story, potentiallyapocryphal, by the way, no one
knows for sure that it happenedlike this, but it's a story that
gets repeated quite often.
And I myself came across it inThe Creature from Jekyll Island,
(08:50):
which is a great and highlyconspiratorial read.
Nonetheless, I recommend it tomy listeners.
It's a great, great read.
There's a deep story to this.
There's a deep story to the riseof finance as a weapon, the rise
of finance as something thatdrives empire, drives conquest,
drives war.
We've talked about that before.
(09:10):
We've talked about how centralbanking sort of leads to more
warfare because bankersultimately need to fund things,
and war is a good thing to fund.
There's a lot of need forcapital.
There's a lot of need to printcurrency and create money to
help fund this.
We wrote a piece, again, you cancheck it out on the Timeless
(09:31):
Investor Newsletter, about theperiod before World War I and
the rise of the gold standard inthis period.
We're going to do a separatepodcast on this because I think
it's so fascinating.
You basically had a globalconvergence to a gold standard
in the period before World WarI, which meant that inflation
(09:52):
was low if non-existent.
You might have even haddeflation during this period.
But there was stability ofcurrency and wars were won
relatively quickly because atthe time, even in this period
that we're talking about,governments couldn't finance
endless war.
They just couldn't do it becausethey were on the gold standard
(10:12):
and they couldn't print moneybecause they were tied to gold.
Everything changed with WorldWar I, right?
I mean, everything changedbecause all of the major powers
in World War I abandoned thegold standard very quickly upon
entering World War I becausewhat they needed was they needed
money to fund the war and theycouldn't do it by taxing their
(10:34):
citizens.
So they all abandoned the goldstandard en masse and started
printing money, right?
So this thematic of, forcenturies...
Warfare was constrained by theamount of money that governments
could collect.
Sort of going out the windowwhen we made this move to fiat
currency is a fascinatingdynamic.
(10:55):
And something, honestly, that inthis day and age, we don't even
think about because we're soused to central banking and fiat
currency as the way we thinkabout money.
But a lot of this can be tracedback to the rise of big finance
in Europe, right?
And this story is a greatexample of how This information
network that Rothschild's builtis fascinating.
(11:16):
It makes a ton of sense.
It's very smart.
It's a very good way to build abusiness.
It's a good way to run ahead ofcapital flows and build
something great.
But it's important tounderstand.
I think another huge takeawayhere for all modern investors is
market psychology can beweaponized.
Nathan Rothschild weaponized thefact that people believed that
he had insider information,which he did, by the way, and he
(11:40):
used that against them in anabsolute coup to make a killing
in the British bond market.
Absolute killing.
And I think the other thing tokeep in mind here is the real
game isn't just about makingmoney.
It's understanding how systemsof power evolve, right?
So you think about that as areal estate guy today, or gal,
as you're investing.
Understand how the levers ofpower in your city work.
(12:02):
How do things flow?
It's interesting to me.
I know a lot of developers, anda lot of developers are very
political.
Not political in the sense oflike, you know, I'm a Republican
and I donate to Republicancauses.
I mean, there's that too, right?
But what I noticed withdevelopers is they know
everybody in city hall.
They know everybody that has thelevers of power because
(12:23):
understanding who's pulling thelevers of power can help your
deal work or not work, right?
It's a little bit less relevantin the business I pursue, which
is value add and opportunisticacquisition of existing
buildings, but it's stillrelevant.
Like you still need tounderstand, you know, we're
going right now, There were rentcontrol discussions in
Washington.
And a lot of the ownershipcommunity is heavily involved in
(12:43):
those conversations and lobbyingone way or the other to drive
it, to try to drive thatconversation in a way that is
ultimately beneficial for theownership community.
And there's obviously power onthe other side, too, that's
pushing a different agenda.
So if you want to be timelessinvestors, which we all do, you
need to understand the forcesshaping our world.
(13:06):
Without question...
The big banking forces, theforces of central finance,
central banking is like one ofthe biggest forces controlling
modern day finance.
And like we, even like veryeducated investors are often not
fully aware of how deep rootedthis is and how much control
(13:29):
this has.
You know, like an example, aquick example.
Inflation spiked in 2023, okay?
And I was in the transitory campat the time.
I was wrong, right?
But I was very much in thetransitory camp at the time
because my view was, well,supply chains are really messed
up because of COVID.
(13:49):
And that's causing inflationbecause all these factories are
trying to come back online,which is all true, by the way.
The supply chain thing iswell-researched and
well-documented and is a realissue.
But what I don't think peopletruly grasp is that during
COVID, the government injectedbillions and billions of dollars
(14:11):
into the economy for goodreason, right?
I mean, nobody was allowed towork.
The entire economy shut down.
But where did that money comefrom?
And the quick answer is the Fedprinted it.
So it logically follows thatinflation will follow that.
So if you understand the flow ofpower and the flow of capital,
you can start to sort of foreseethese things coming about.
And You could have potentially,hindsight's 20-20, we'll admit
(14:35):
that, but you could havepotentially foreseen that a
massive injection of money intosociety would cause inflation,
would cause rates to rise, wouldcause the rate cycle to turn,
which has been really difficultfor real estate investors and
something really hard to dealwith.
And I think if people had adeeper understanding of the
timeless principles behindinflation, capital flows,
(14:57):
banking interest, centralbanking, understand the genesis
of big banking families and howthese things came about, you're
better equipped and stronger fordealing with what's happening
today.
So look at history, look atflows of capital, and understand
the revolutions that arehappening on trading floors.
Until next time, and thank youfor joining us, act well, think
(15:21):
wisely, build somethingtimeless.
And I just want to end with aSubscribe to and leave a review
(15:46):
for our podcast on whatever yourservices that you use.
It's very helpful to help thepodcast grow as we continue to
delve into these deep historicstories that I think are
incredibly timeless and relevanttoday.
Thank you and see you next time.
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