0:00

John Man.

0:01

It's been two years,

0:04

two years fourteen. Interest rate rises

0:07

felt like it's never going to stop.

0:09

But it has stopped, hasn't it? Yes?

0:12

Hooray, hooray? And is it over? Is

0:14

it over? Are the interest rate rises

0:16

over? Is it now going to I know what's going to happen

0:18

now, first quarter of next year. First

0:20

cuts, They're just going to keep cutting. It's going

0:22

to go back down to near zero. House prices

0:24

are going to go up thirty percent, Our portfolios

0:27

are going to go up thirty percent. Everything's going to be fine.

0:30

It's going to be marvelous. I'd

0:33

say, you really believe that.

0:37

I don't think it's going to go back to zero, but it

0:40

is weird. The

0:43

Bank of England obviously has held interest rate.

0:45

It's at five and the quarter percent, and it's sitting

0:47

there saying, oh, yeah, but this

0:49

might not be it. We still really worried about

0:51

inflation, but still really worries about wage rises.

0:54

But of course the night before

0:56

the fads has come along, and never minute

0:59

thought that they would do the same thing. Everyone

1:01

had thought that the Federal Reserves, the US Central

1:03

Bank would say, Okay, we're

1:05

holding interest rates, but don't get too

1:07

excited because we're still worried about inflation.

1:10

And instead what they said was, okay, we're holding interest

1:12

rates and actually next year we're probably going to cut

1:15

by three quarters of a percentage

1:17

point, so three interest rate cuts, and

1:19

immediately the market just exploded

1:21

higher. Because it's kind of that

1:24

thing about the the

1:26

central bank boss adding whiskey to the

1:28

punch bowl. That's basically what happened.

1:31

So the FEDS can open the floodgates

1:34

for everyone to get all excited about rate cuts

1:36

in the Bank England is kind of somewhat futilely

1:38

trying to pretend that it's not going to end

1:40

up having to followed suit.

1:43

But why

1:45

do you think the feed has done this? Because you know,

1:47

obviously they look really stupid, having been just

1:49

like the Bank of England, having been so late to come

1:52

to trying to deal with inflation, and

1:54

we've been rather assuming that

1:56

they would want to look like they'd really

1:59

knocked it on the head. They'd want to be a bit macho,

2:01

and so the odds of a policy mistake

2:03

too far in the rate rising

2:06

direction it's more likely than

2:09

cutting too early, right. But now

2:11

suddenly they seem to be backing

2:14

off from you know, the last

2:16

bit is the hardest. We're going to take

2:18

it all the way and you know, inflation is

2:20

never going to get past us again, et cetera.

2:24

Yeah, I quite be honestly, I have

2:26

no idea this. You

2:28

know, the market reaction is a demonstration

2:30

that it did take people by surprise

2:33

that they basically said, yeah,

2:35

no, it's fine, well done there. And

2:38

all I can think of is

2:42

that

2:45

they genuinely do think that inflation

2:48

has been overcome and that they're

2:50

not worried about it coming back, which

2:53

takes me is that would be very kind

2:56

of you know, that'd be quite a silly thing

2:58

to think.

2:59

Well, it's it's very nineteen seventies,

3:02

isn't it very nineteen seventy? You

3:04

know, there are quite a few cycles in the nineteen seventies

3:06

when we got to a position like this, Inflation had fallen

3:08

quite a lot. Central banks right, oh look see

3:10

on week clever, we did that it's all over and

3:13

started muttering back cutting rates, did cut right,

3:16

and then then you know, inflation would turn around

3:18

and split up again. It just seems like a very

3:21

interesting take in a geopolitically

3:24

complicated world when we increasingly

3:26

understand that that nasty geopolitics

3:28

lead to inflation where there's lots of moving

3:31

parts, lots of odd stuff happening,

3:33

it just seems bizarrely complacent to

3:35

me.

3:36

I would definitely disclaim it's fool hardly. Kevin's

3:39

in the market had already you

3:41

know, loosing financial conditions,

3:44

because it's not as if, you know, bind deals were going down

3:46

and then into you

3:48

know, stocks were going up. It's

3:51

not as if the

3:54

fair is pushing back against an

3:56

overly what it sees as an overly tape

3:58

mask. And only you can justify

4:01

this, I think, is by if

4:04

you know, we're getting trying to get into the head of the policy maker

4:06

and thinking, right, well, actually, I

4:09

don't think inflation is going to go much higher.

4:11

The fact think it's going to go lower, and that means that real

4:14

interest rates are going to be higher, and

4:16

so that means that current conditions

4:18

are restrictive. But I

4:21

mean, it's one

4:23

of those ones where I do find

4:25

it somewhat hard to explain why

4:27

they've just decided, because it's kind of it is

4:29

very much like throwing the market at Christmas

4:32

present, and

4:34

if you know, if it wasn't for the fact that I

4:37

don't think the FED in the

4:39

States is especially

4:42

party politicized. You

4:45

would have to think the fact that we're coming up

4:47

to twenty twenty four election year would

4:50

seem it seems like

4:52

an It's just it

4:55

seems like an odd time to be encouraging

4:58

markets higher because the S and P five

5:01

hundred is already okay, sorry,

5:03

the Magnificent seven stocks are already

5:05

very expensive.

5:06

Yeah, However, obviously the market reacts,

5:08

and we do know that the best time to buy equize

5:11

is when importuated to falling.

5:13

Oh, it's yeah.

5:15

And you know, on that front,

5:17

UK stocks are still cheap, well not

5:19

quite as cheap as they were, you

5:22

know, kind of three or four months ago, but

5:24

they're still cheap. I was looking

5:26

at the house builders again this morning, and

5:31

I'm so glad that

5:33

my ethics would

5:35

stop me from buying them anyway. That might be kind

5:38

of like kicking myself, because you know, they have

5:40

they've kind of gone up a lot in the last

5:42

kind of like six months or so. But

5:45

you know that that can I imagine that for the foot

5:47

SAE two fifty particularly, there's probably

5:50

more to come, because I suppose

5:52

the other point here is that everyone's still really gloomy

5:55

about the UK economy.

5:57

Yes, gloomy, you know, well gloomy about

5:59

the UK economy. I know, but I've just got an email through

6:01

from one of the one of the platforms

6:03

asking people where they expect to invest next

6:05

week, when next year, or where they intend to invest

6:08

next year. And the UK is really popular

6:10

with retail investors at the moment, and one

6:12

of sensible that's be their sense.

6:14

Well well done, retail investors one in four expect

6:17

the forty one hundred to twenty twenty four

6:19

over eight thousand, eight and ten planning

6:21

to put up their exposure to equities, particularly

6:23

UK equities, most popular market

6:26

globally for UK investors. So while you

6:28

know, our our institutional investors and our pension

6:30

funds, et cetera couldn't be getting out faster, our

6:33

retail investors are thinking, well, actually,

6:35

you know, okay, cheap is cheap. That's nice.

6:38

Yeah, but I suppose it's all sort of thing is like Andrew

6:40

Bailey going on a bit who he supposed to

6:42

wash through without look that he's ever

6:45

seen, and you

6:47

know, sort of but I just don't. I

6:50

don't see this. So next year, the

6:52

cost of leving is

6:54

not going to be as drastic because

6:56

real wages are going up. All

6:59

the people who are terrified of what

7:01

the mortgage was going to be, say six

7:03

months ago, are now going to be refinancing

7:06

at a lower rate than they expected. It's

7:08

going to be higher than this.

7:10

There's not a time to expect it.

7:12

Yeah, it's expectations that are the people

7:14

if it's time to prepare for all this stuff. And

7:17

a lot of the debt doesn't the corporate

7:19

debt doesn't roll over till twenty twenty five.

7:22

So I am struggling

7:25

to see from that kind of attempting to be objective

7:28

point of view, why two losing

7:30

in twenty four should be such a bad year

7:32

when all of the kind of headwinds

7:35

that we faced in twenty twenty three are

7:38

diminishing, if not turning into

7:40

tailwinds.

7:43

Great optimists that you are, now, John,

7:45

what is that? What does that

7:47

mean? Fulling interest rates, particularly in

7:49

the US economy

7:51

is not as bad as other people think.

7:54

Does that mean that? I know we say this all the time,

7:56

but it's really time to think about the ukn

7:58

investment trust sector and enjoy that

8:00

double discount. You still think that about you? Yeah?

8:03

I and you know, having

8:06

been early all year if you like.

8:08

It's that's the whole point of being

8:10

a retail investor. You can be patient. It's

8:12

about the only advantage you've got over an institutional

8:15

investor. But yeah, I

8:17

think that investment trusts

8:19

me be a good idea. I

8:22

was reading actually an interesting piece from

8:25

Stifle, one of the brokers, kind

8:27

of earlier this week that was suggesting that even

8:29

like Scottish mortgage might be a good one,

8:31

because I know that's the obviously

8:34

it's been. It was the hot kind of growth one

8:36

for ages. It's still trading

8:38

on a discounty about nine percent. When

8:42

I look at what UP is

8:44

doing in the States, and it's the kind

8:46

of very growthy one. You can

8:48

see that it's about to burst higher from

8:51

you know, it's a year ago high, and I

8:54

can just see the kind of growth stuff and

8:56

you know, anything that's kind of attuned to interest

8:59

rates kind of boat and I had almost an

9:01

a kneedjate basis so that maybe

9:03

want to look at but you know what, lots of the other

9:05

stuff is cheap doing putting all the value

9:07

kind of stuff. So yeah,

9:09

we just get the speed

9:11

and the hard time and god digging, and

9:14

we.

9:14

Should remind everybody, by the way, that ARC's

9:17

bottom was pretty much around when Kathy Words came

9:19

on our show, wasn't it.

9:21

Yeah, Yeah, we are.

9:22

We are a signal. We are a signal.

9:27

Not going to see which wine I'm going to say which one.

9:29

We are all sorts of signals, which reminds me, which

9:31

reminds me. I don't want to make this interesting

9:33

no for too long, But I did a poll on

9:36

on Twitter asking our readers

9:38

about bitter about bitcoin, gold

9:41

or cash, so that they would have the opportunity to

9:43

answer in the same way as our guests, and

9:46

it was hijacked, hijacked

9:48

by the bitcoiners, and

9:50

so it ended up being I can't remember what the final

9:53

result was, but nearly seventy percent

9:55

bitcoin and under thirty percent gold,

9:57

which I thought was absolutely fascinating because is

10:00

a complete lesson in liquidity,

10:02

right. It is not It is

10:04

not the case. It is not the case that sixty

10:06

or seventy percent of the people who follow me on Twitter, who

10:08

listen to us on this show would

10:11

take bitcoin over gold.

10:14

But it is the case that if you can create

10:16

a liquidity rush, you can

10:18

force something up. So I just thought that absolutely

10:20

bring is the story of bitcoin in

10:23

a Twitter poll hate mail to be

10:25

easily addressed, thank you very much. Right

10:28

now, we are moving into December.

10:30

This is exciting Christmas coming, and that

10:32

means that for the rest of this month we are going to

10:34

do something slightly different. We're going to bring

10:36

you conversations that are slightly off

10:39

the investment track holiday

10:42

listening that's going to make you think about something

10:44

other than investment trust though of course John

10:47

will continue to think about investment trusts and

10:49

nothing else all the way through until

10:51

we go back to marketing stuff in January.

10:54

So this week, with all that in mind about challenging

10:56

you to think about things in a slightly different way, we've

10:59

got Pipper Malgram, who's been on the show before,

11:01

talking about geopolitics and all

11:03

this kind of things. She's absolutely fascinating,

11:05

so listen to her in this one. And then

11:08

next week we've got a really

11:10

interesting guest and we're talking about the future

11:12

of farming, which again is slightly off propic for

11:14

us, but very very interesting and

11:16

the kind of thing that you'll absolutely want

11:18

to talk about over Christmas lunch.

11:26

Welcome to Marrin Talks Money, the podcast in which people

11:29

who know the markets explain the markets. I'm Marry

11:31

in Sunset Web. This week we're bringing a conversation

11:33

with Piper Malgram, economist, author, and former

11:35

advisor to US President George

11:37

W. Bush. Now, as we promise, this

11:39

is a wide ranging conversation. We're going to talk about

11:41

all sorts of things, the conflict's growing across

11:44

the globe, some reported on, some not

11:46

so reported on, about what's going on in space,

11:48

and about her expectations for their

11:51

next president. Pipper,

11:54

thank you so much for coming in today. What a

11:56

delighted us. Ever, Oh, it's

11:58

been a while. It's our last conversation,

12:01

and last time we talked about how

12:04

it rather looked like World War three was kicking

12:07

off, and you said, people aren't noticing

12:09

yet, but all the signs of there. There are hot

12:11

wars, there are cold wars, there are underwater wars,

12:14

there are space wars. There's all kinds of stuff

12:16

going on, and it's time everyone

12:18

took notice of that. And people

12:21

are they're beginning to notice, aren't they.

12:22

They are now. But it's amazing

12:25

how they missed all the signals

12:28

that this was coming. I

12:30

mean, there have been so many

12:34

incidents. I guess the issue

12:36

is there's no overarching

12:38

narrative, so instead

12:40

the media focuses principally

12:43

on the things they can photograph.

12:45

It's the old rule. If it bleeds, it leads,

12:48

so there has to be a human interest story.

12:51

So Ukraine, that's an event,

12:53

but it's seen as a localized war.

12:56

Now we have Gaza and

12:59

Israel and that's it seems like another

13:01

localized war, and both produced these

13:03

incredible photo ops. But

13:05

in the background we've had events

13:08

like even before

13:10

the Russians rolled the tanks into Ukraine,

13:12

we had this extraordinary incident where

13:15

someone cut the fastest

13:17

internet cable in the world, which is up

13:19

in the Arctic Circle in a part of Norway

13:22

called Spalbard. And you

13:24

ask why is the fastest internet connection

13:26

in the world in this incredibly obscure place, and

13:28

the answer is because virtually every major

13:31

satellite connects to Earth at that spot.

13:33

And so it was literally an effort

13:36

to eliminate the ability

13:38

to have missile guidance or frankly

13:40

GPS.

13:41

And that really felt like an active wood didn't.

13:43

Well, and the British Chief of the

13:45

Defense Forces, Sir Tony radikin the next

13:48

day came out and said, this is

13:50

an active war and then he went completely

13:53

quiet because everyone in NATO

13:55

and the United States went, Holy moly,

13:57

we don't want to say we are

13:59

actually were directly with Russia.

14:02

It's a very different thing to be involved in

14:04

proxy conflicts in third

14:07

party locations than a direct

14:09

confrontation. And same with China.

14:11

And also, how do you prove who cut that cable?

14:13

Well, exactly, and they're still

14:15

investigating that whole thing. But since

14:17

then, there's no question we have had

14:20

lots of Internet cable

14:22

cuts, particularly the subsea cables

14:26

all over the world, the what

14:28

do they call it, the Marseille cable that connects

14:31

the United States, Europe and the Middle East.

14:34

Evenly keeping told, these are sort of mistakes

14:36

by fishermen.

14:37

Well, like look at the most

14:39

recent one, the Baltic

14:41

Connector, where the allegation is

14:43

that it's a Chinese vessel

14:46

called the New New Polar Bear, and

14:49

it is apparently it dragged

14:51

its anchor across it, and

14:53

the fact that an anchor is missing off the New

14:55

New Polar Bear is kind of a giveaway.

14:58

But of course no one wants to come out and say the

15:00

Chinese have deliberately done this or look

15:02

at that as a real possibility, but

15:05

I think that within strategic security

15:07

circles, everyone understands

15:09

there's an underwater war going on, and

15:12

it is about the communications

15:14

infrastructure of the superpowers.

15:17

But it's not only those I've

15:20

also described that we're in, well,

15:23

a hot warn cold place is meaning space

15:26

where we have lots of incidents with satellites,

15:29

space events. But look, there are no journalists

15:31

there and it's mostly classified.

15:34

So every once in a while you'll read about

15:36

the Russians destroy their own satellite

15:38

and you're like, well, who cares then, Well,

15:41

because it creates this massive debris

15:43

field that is described as razor blades

15:45

in a washing machine.

15:46

That creates a space that other countries

15:48

call go into correct, So.

15:50

It's a denial of access strategy.

15:53

There are lots of those types of incidents, and

15:55

we're in a proper space race now

15:57

between especially the United States

16:00

in China as to who gets the first

16:03

physical foothold and military base

16:05

on the Moon, which is its own story

16:07

by itself. But we also

16:09

see this sort of hot war and cold places

16:12

in the High North and the Arctic. We're

16:14

certainly seeing it in the Baltic and

16:17

then we're in a cold war in hot places,

16:20

especially Africa, where we've seen the

16:22

West facing off with the Wagner Group

16:24

of Russia in many

16:26

locations, the whole Sahel conflict

16:29

arguably, which is you know, North Africa

16:31

across the Sahara. And then in

16:34

the Pacific we have what General

16:36

Millie, the outgoing Chairman

16:38

of the Joint Chiefs, has said is an underreported

16:42

massive military build up in the Pacific,

16:44

which is true, and that

16:46

is very much about establishing footholds

16:49

on strategic Pacific

16:51

islands. And it's the US and China

16:53

again jockeying for a position. So

16:56

I don't see how you can look at

16:58

the map and say we're not in

17:00

a global conflict.

17:02

But it's scars. It's hot to see who's on what side,

17:05

and who the goodies are and who the bodies.

17:07

Well, and this is an open question too.

17:09

This is about superpowers being

17:12

in conflict over their different

17:14

objectives, and the world lines

17:16

up differently behind each of those

17:18

superpowers and changes their minds.

17:21

I mean, the events in

17:23

Gaza and Israel are changing

17:25

a lot of people's minds, and

17:27

that may be part of the strategy

17:30

is to create an incident that actually

17:32

divides the West. If that's

17:34

the case, it certainly is doing that.

17:37

But I think this is what they

17:39

call the gray zone in warfare.

17:41

It's not the traditional tank meets

17:44

tank on a battlefield. This

17:46

is about using information as warfare.

17:49

It's about cutting off communications

17:52

capability. It's a

17:54

whole different kind of what they call hybrid

17:57

warfare. And I think it's taken amazingly

17:59

long, especially for the financial markets, to

18:02

really comprehend the global nature

18:04

of this phenomena.

18:06

And if you look at it, I just want to go back

18:08

to hots and cold places and space,

18:11

etc. A lot of that is that getting

18:13

a foothold on the Moon for example. It's communications,

18:15

but is it also access two minerals,

18:17

Because we're hearing a lot about mining asteroids,

18:20

for example, and we're hearing a lot about

18:22

being able to put solar stations in

18:24

space and that being the greatest way for us

18:26

to get easy, straightforward

18:29

and something that is refer renewables, reliable

18:31

energy. So there's a lot going on in space

18:34

that is not just about communications. It's about

18:36

energy.

18:37

Minerals, yeah,

18:39

and command and control.

18:42

So yeah, I think people really have a

18:44

hard time understanding the implications

18:46

of two new energy technologies.

18:49

One is space based solar power, which

18:51

has been proven by both cal Tech

18:54

with the Jet Propulsion Lab and

18:56

by Airbus, So it's no longer hypothetical.

18:58

I'm put simply, you literally put special

19:01

mirrors on satellites, catch the Sun's

19:03

rays, convert them into radio waves,

19:06

safely transmit them to Earth, and now you

19:08

have unlimited, clean green

19:10

electricity and any power grid anywhere

19:12

at any time.

19:13

That still doesn't take away our problems

19:16

of storage and transmission. We still

19:18

have to overcome. Well those barriers

19:20

before.

19:21

You don't have to worry about as much.

19:23

If you because it just keeps coming.

19:25

Just turn the button on it goes. The

19:28

distribution piece also less

19:30

relevant because you can just pump it to whichever

19:33

power grids you want, so the distribution

19:36

side becomes less of a problem.

19:38

But then you have to pump it via a grid.

19:40

Well, you still need a grid.

19:41

Yeah, So what I'm saying, I don't have to get it to grade,

19:45

yeah, exactly.

19:46

Nonetheless, this is a such

19:48

a game change or that the Saudis are backing

19:50

the British in one of the first

19:52

prototypes, which will be done over the North

19:55

Sea, because they can see their hydrocarbons

19:57

are going to be worth a whole lot less once

20:00

this goes live. So imagine

20:02

if you could have access to cheap,

20:05

unlimited energy. That is

20:07

such a game changer for any economy

20:09

on our So whoever gets their first is way

20:11

ahead of the other. The second one is

20:14

nuclear fusion. And the thing about

20:16

nuclear fusion is, yes, we're making advances

20:19

very quickly, but we still don't have anything operational.

20:22

We're not that close to a prototype. But

20:25

what everyone understands is the Moon

20:27

is full of helium three, and

20:29

you need helium three for the nuclear fusion

20:31

process. And our expectation

20:34

is we're not going to the Moon to step on it. We're

20:36

going to the Moon to stay and to build

20:39

and to launch from it. That means

20:41

you need both space based solar power

20:43

and nuclear fusion on the lunar

20:45

surface. So this is one

20:48

reason we're in an outright race,

20:51

and there's a genuine geopolitical

20:53

competition to prevent other superpowers

20:56

from getting their first.

20:57

Okay, hence flowing up your own satellites.

21:00

Yeah, And the great story I love

21:02

about, because I've always been in robotics,

21:05

is that only the Americans and the Chinese

21:07

have satellites with robotic arms, and

21:10

the Chinese have now demonstrated they can go up

21:12

to a satellite, grab it and

21:14

literally hurl it into outer space,

21:17

which has got the Americans going, Holy

21:20

moly, what do we do if they grab one of ours.

21:22

Which they easily could, which they easily could.

21:24

And this is one of the reasons

21:27

why the US and everybody else is

21:29

moving so fast in the direction of these

21:31

tiny shoe box satellites that

21:33

are so small you can't really target

21:36

them. Space is so vast it's very

21:38

difficult to target them all. But look

21:41

when Elon Musk

21:43

he was using Starlink to assist the Ukrainians,

21:46

the Chinese came out and said, hey, you're

21:48

a military company and

21:51

he said, no, no, no, I'm not. And

21:53

they said, well, yeah, because the Ukrainians are

21:55

using your satellites to do offensive

21:57

military operations. He said no,

21:59

no, no, no, We're just doing humanitarian But

22:02

the Chinese said, well, look, if you keep doing

22:04

this, then we're going to build our own

22:06

mega constellation and ours

22:08

will be armed and we will be able to take

22:10

out your satellites. And notice

22:13

interesting sidebar story, Rwanda

22:16

has applied for permissions

22:19

to have the largest satellite network

22:21

of all And you're like Rwanda

22:24

now that country has emerged as a

22:26

Tech Center in Africa. But the real issue

22:28

is they're working with the Chinese. So

22:31

the idea that we're so far ahead in

22:33

satellite communications tech that nobody can

22:35

catch up is not correct.

22:37

And she kind of interrupt with a little question, ignorant

22:40

question. You say, RWANDO is applied, who do

22:42

you apply to you?

22:44

It said, it's the International Telecommunications

22:47

Union and the licenses for doing

22:49

these things in space. But you're

22:52

right to ask the question because the more we

22:54

reach into space, the more clearer

22:57

it will be that there are virtually

22:59

no rules or rules that anybody

23:02

will adhere to.

23:03

Yeah, and we have an increasing number of what

23:06

we have these new space stations in the UK. Right,

23:08

we've took before about the one in Shetland which

23:10

I visited a ven the summer, coming along very

23:12

well, expecting to launch launching

23:14

next year, and they'll be launching exactly what you're talking

23:16

about, these small shoe book satellites, and suddenly

23:18

everyone will have a satellite.

23:20

Everyone will have a satellite. Yeah,

23:22

So you're right. And noticed

23:25

that we had a cable cut off of

23:27

the Shetland Islands between the

23:29

Shetland and the Pharoe Islands, and people

23:31

are like, well, who cares there's just a bunch of sheep up

23:33

there. But actually that sable

23:36

is critical for

23:38

both those satellite launches and

23:41

also for the monitoring of Russian

23:44

vessels because.

23:45

That's called activity.

23:47

Because of course there's a ton of activity at

23:49

a time when nuclear weapons are

23:51

being outright threatened. Russia's

23:54

just removing itself from the

23:56

Comprehensive Test Ban treaty, and

23:58

within hours of the Duma

24:01

making that decision that they would withdraw,

24:03

they did a huge simulated

24:06

nuclear test on all surfaces

24:08

at once. So this

24:10

is all hardcore, old

24:13

fashioned geopolitics.

24:15

And what does it all mean If we have all

24:17

these simultaneous wars, hot,

24:20

cold, underwaters, based, etcetera. All running

24:22

at the same time. It's a very different geopolitical

24:25

environment to the one we've been used to, a very

24:28

peaceful or seemingly peaceful world

24:30

with low interest rates and low inflation and

24:33

expanding geographical cooperation,

24:36

etc. What does what you're talking about

24:38

mean for a global economy.

24:41

Well, I think there are lots of implications.

24:45

I think this is very different

24:47

from World War One and World War Two. And I

24:49

know it scares people when I've said it is

24:52

a World War three, but they assume that

24:54

means the kind of parnage that we had

24:56

in the previous wars. I don't think

24:58

this is the case, although we we are seeing

25:00

that on the ground obviously in Ukraine and Gaza

25:03

right now. But this is much

25:05

more a technological confrontation,

25:08

so a lot of it occurs in ways that again

25:10

the public never sees, isn't really

25:12

aware of. And what that's

25:14

doing is spurring all

25:17

the superpowers to invest much more money

25:19

in technological advantages, including

25:21

for example, what I said about GPS

25:24

is vulnerable in this war

25:26

that I'm describing, and so innovations

25:29

are happening where a new form of

25:32

GPS is being created that doesn't

25:34

depend on space. I

25:36

can't tell you lots more about that, but I

25:38

know that, you know, the big defense

25:41

innovation arms, they're all doing that.

25:44

So suddenly we're seeing e merging

25:46

of defense requirements

25:48

and technology innovation,

25:51

and that isn't what we saw before

25:53

this all started, So that's new I

25:56

think as well. The breakdown of

25:58

the relationship between the super powers has

26:01

actually caused supply chains to

26:04

initially break but now totally

26:07

reconfigure and spontaneously

26:09

emerge in all sorts of new

26:11

places. So It's true

26:14

that in the US we are now manufacturing

26:16

again. After decades and decades

26:19

of private equity saying we wouldn't

26:21

touch anything physical with a barge

26:23

pole. Now they're like, we need

26:26

to be making physical things. And this is why,

26:29

for example, silicon ship production has

26:31

really moved from Taiwan to

26:34

Texas and Arizona, and frankly, the

26:36

next location for chip production is going

26:38

to be space because you can make

26:40

these things it's a natural, clean space. It's

26:43

actually cheaper because of that, and

26:45

we have all this new lace lithography

26:48

that is cheaper, smaller machines

26:51

that can do much more efficient job.

26:53

So bottom line, we are innovating

26:55

in the chip space, both with the supply chain

26:58

and the location.

27:00

Sounds positive.

27:02

It will. I'm just saying people adapt,

27:05

right, And I'm not saying it's great. We're having

27:07

a war, it's not. But when

27:09

you have this kind of conflict

27:11

return to the landscape,

27:14

then people start to adapt

27:17

and those adaptations are

27:20

where the value is now being created.

27:23

And by the way, on this point, I think it is really

27:25

important because look, I grew

27:27

up in you know, mutual

27:29

assured destruction when

27:32

the Soviets and the Americans were aiming,

27:35

you know, multiple nuclear weapons at each

27:37

other all day long, every day. People

27:40

who are a lot younger, they're like,

27:42

oh my god, what the heck is happening. They've never

27:44

seen anything like this before. It's

27:46

important to remember that normally in history,

27:49

we are usually having these kinds

27:51

of conflicts somewhere.

27:52

Yeah, we've been through an incredibly unusual period.

27:55

Yeah, we had this strange and

27:59

wonderful period after the end

28:01

of after the demise of the Soviet

28:04

Union and the end of the Cold War, where

28:06

everybody was moving in the same direction, which

28:09

was how do we lift the GDP. Now

28:11

we're in conflict again. But honestly, my

28:14

read is all of the superpowers

28:16

are looking at this going. It's

28:18

just getting too expensive.

28:21

And I think there's pressure on Jijimpang

28:24

to knock off this very Beelikhos

28:26

warlike baiting of the United States.

28:29

There's pressure on every US president

28:31

to stop. I mean, both left

28:33

and right want their presidential

28:36

candidates to lean in a direction of let's

28:38

not spend all this money on wars

28:41

in Ukraine and Israel. Let's focus

28:43

on issues at home and

28:45

even Russia. I mean, I

28:47

think the support for what President Putin is

28:49

doing is diminishing every day,

28:52

and he keeps eliminating all the members

28:54

of his own inner circle, so eventually there

28:56

is no inner circle. And I think

28:59

we're going to end up with an all change

29:01

of all of the leaders of these superpowers.

29:04

And when that happens, which may not be

29:06

so far off, and after all, we're in a presidential

29:08

race, we can talk about whether Biden's

29:10

going to be the next present, but I don't think he's going

29:13

to be.

29:13

Okay, that it was not going to be him.

29:15

Who is it getting well, whether we can get into that, Okay,

29:17

we'll get into it. Is here's the

29:19

punchline of the whole thing, and

29:21

it sounds so crazy, but when

29:23

you get into real confrontation

29:26

between nuclear superpowers

29:28

and they are threatening to use nuclear

29:30

weapons, at the end of the

29:32

day, everyone loses their nerve. No

29:35

one wants to destroy the earth. They

29:37

don't want to live in a world that they can't

29:40

see their loved ones, and

29:42

they always end up going the

29:44

complete opposite direction, which is they have

29:46

a hug. Everybody's like, what, they have a

29:48

hug? But I'm like, yeah, google it, Like

29:50

you see the picture of brush Nevin Nixon

29:52

having this huge bear hug, and then the picture

29:55

of Reagan and Gorbach hop big hug.

29:58

This is literally the it's

30:01

what you get to the minute you start reaching

30:04

for that nuclear button, everybody

30:06

goes, we just can't do this, And the next

30:08

thing you get what I call the bear hug.

30:10

And I think, I mean, I'm not saying

30:12

that President Biden and President Putin are going to have

30:14

a hug. I'm definitely not, but I could

30:16

easily see their successors doing

30:19

this. And my question

30:21

to people in the markets is, given

30:23

all the time and energy you've spent preparing

30:25

for all of the downside risks, how

30:28

much time and energy have you given to thinking about

30:30

what you will do when that bear hug comes? Because

30:33

that piece dividend is valuable,

30:35

and acid values will rise and

30:38

innovation will accelerate even faster.

30:40

So I just.

30:41

Spend a tiny bit of time on that possibility,

30:44

especially because that's how I always.

30:46

All the talk at the moment in markets is about the disappearance

30:48

of the piece to dividend, How expensive that the

30:51

effect that it has on the fiscal

30:53

situation. So pretty much every country

30:55

globally is spending on defense goes from

30:57

one to two percent of GDP at food five percent

30:59

of GDP, and the fact, the fact,

31:01

that obvious effect that has in our deficits

31:03

and on inflation over the medium term. And that's

31:06

where the expectation to a large degree

31:08

of inflation staying at a higher level, interest

31:10

rate staying at a high level comes from. Was a big part of it

31:13

anyway. So what your describing

31:15

sounds inflationary to begin with, and then

31:17

really verat deflationary.

31:18

Well, if I'm right about what's coming from space,

31:21

that's massively deflationary.

31:24

I mean, look at the Psyche mission alone,

31:26

which just launched NASA's mission

31:29

to the asteroid called Psyche, and

31:31

we've already brought back samples from another

31:35

asteroid called Benu. So this is no longer

31:37

again imaginary or hypothetical, like

31:39

we are bringing back the samples,

31:41

which means asteroid mining can begin.

31:44

So Psyche is said to be worth seven

31:46

hundred times the value of the entire

31:48

world economy annually. And

31:51

if you were to distribute the value of the assets,

31:53

the lithium, the collbaal, the

31:55

gold, iron ore, every human

31:58

would be a billionaire that you

32:00

would do that. But imagine what happens to validation.

32:03

That would come from everyone being a billionaire. Well, but

32:06

think of.

32:06

The deflation that comes from all these things

32:08

becoming almost we're practically

32:11

free.

32:11

Under that, having to dig valash holes in the as absolutely.

32:14

So you know. So here's

32:17

the thing, though, I have to say, you've known me a long time

32:19

as a person who does macro strategy.

32:22

One of the hardest things is when you

32:24

call something but you were early.

32:27

So I started writing about

32:30

the conditions for what we're seeing

32:32

now in my book Signals in

32:34

twenty sixteen, saying

32:37

for inflation because of a bunch

32:39

of choices we've made, inflation will come

32:41

back, and geopolitics will come back.

32:44

And then it slowly did, and

32:46

then it suddenly speeded up. What

32:49

I wrote again in October

32:51

twenty twenty one, saying we're

32:53

there, We're now in World War three. People

32:55

just don't see it yet. Okay,

32:58

now they're seeing it. So

33:00

I'm just saying, I'm already seeing over

33:03

the edge of the thing, and I can see the reconciliation

33:06

coming because this is just

33:08

getting too expensive for all

33:10

these societies, and

33:13

our capacity for true destruction

33:15

is so enormous now. It's

33:18

It's not like when my dad was

33:20

an advisor to Kennedy on the Cuban missile

33:22

crisis, where you had days

33:25

and hours. Right now we're living in a world

33:27

with hypersonic weapons

33:29

where you don't even have fifteen minutes.

33:32

So I think everyone will literally just

33:34

lose.

33:35

That back of ultimately,

33:37

okay, all right, then who will be the next

33:39

president? Who's going to be the hugging

33:41

who's it going to be?

33:42

Okay, I have a way out

33:45

of the market view at the moment about

33:47

the presidential race. It's

33:50

so fascinating. So you

33:53

know, we're on the six party system

33:55

in the United States, meaning six

33:57

times we have had part

34:00

that came to an end and then we created

34:02

new ones. I think we're maybe

34:04

on the brink of the seventh party system.

34:07

That the country is so divided

34:09

and technological

34:11

change is so vast that actually

34:14

we need new structures. So

34:17

the person that I'm watching most closely is

34:19

Robert F. Kennedy, And everyone goes,

34:21

what that's crazy. He's not

34:23

even in this race. He's an independent. I'm

34:25

like, watch his following.

34:28

It is increasing at an extraordinary

34:30

rate. And what he's

34:32

done is first of all, to go

34:35

down the middle. So he's a Clinton

34:37

Democrat. So he says, let's not

34:39

tax the entrepreneur because they're building

34:41

the future. A lot of Republicans

34:43

go, yeah, I like the sound of that. A lot

34:45

of Democrats go, I like the sound of that. He

34:48

says, but big corporates are not paying anything,

34:51

and that's not right, so let's fix that.

34:53

And again everyone left and right nods their

34:55

head, Yeah, we should look at that. Then

34:58

he talks about the corporate capture of the

35:00

system in politics in America,

35:03

and interestingly, there is a grassroots

35:06

feeling in the country about that. So

35:08

here's the key to all this. Trump

35:11

now still has a fifty

35:14

percent approval rating with his

35:16

voters, even facing something

35:19

like five hundred and sixty one years in prison

35:21

on the current prosecution

35:23

trajectory. And he

35:26

had been very favorable about

35:28

Kennedy, who is a populist

35:31

on the Democrat side, and he has roughly

35:33

twenty five percent. So you had fifty

35:35

and twenty five and now we had seventy five percent. Of

35:38

the country has already told us they want a populist

35:41

and they want an outsider. And

35:44

let's face it, let's look at the past elections.

35:47

Every single time, we love to elect

35:49

somebody you never heard of. Three years before,

35:52

you never heard of Bill Clinton. Nobody

35:54

thought George W. Would win. It was supposed to be his brother

35:57

Jeb. Nobody ever heard

35:59

of Obama. I can

36:01

tell you no one thought Trump was going to win,

36:03

and I wrote he was, he had a real

36:06

chance. In twenty fifteen. People were like, you're

36:08

insane. And it wasn't a preference.

36:10

It was just I can see how the

36:12

forces are moving. Well today they're

36:14

like, don't be ridiculous, Robert Kennedy.

36:17

But I'm telling you watch this

36:19

space and notice Kennedy's

36:21

already said that he will pardon both

36:23

Assannge and Snowden. Who's

36:26

going to need a presidential pardon? I would say

36:29

it might be President Trump, And

36:32

Kennedy will say, look, if we try to incarcerate

36:35

a super popular former president United

36:37

States, we may end up in

36:40

a real war.

36:41

A civil war, like a realistic war.

36:43

And we don't want to tear the country apart.

36:46

So actually pardoning that president,

36:48

which only works at the federal level, it doesn't help him

36:50

at the state level. But nonetheless, the signal that

36:52

it sends this kind of conciliation

36:55

approach, this moderate middle

36:58

let's have a cabinet with people on both

37:00

sides of the It is resonating,

37:03

and so I think, watch that space

37:05

because it's changing the whole terms

37:08

of this election. So we're it's

37:10

going to surprise us.

37:11

What about the Swami.

37:13

I don't know it. No, And

37:15

I've just been all over the States. I'm talking

37:18

to people everywhere. Even the California

37:20

tech community is not

37:23

not behind. I think for me, he lost

37:25

me when he said we need to arm every Taiwanese

37:28

family with handguns. I was like, have

37:31

you ever been to this place or understood

37:33

the history? Like you know? I just and

37:36

people are fundamentally not interested

37:38

in foreign policy in the United States

37:41

until this Gaza event, and

37:43

now it's splitting the country.

37:47

So it's becoming a really

37:49

tricky issue. I think a lot of pologists

37:51

are going to try to avoid it for that

37:53

reason.

37:55

Okay, well, now we know he's going to be president.

37:57

Well I'm not saying, but I am saying

37:59

he is going to to totally change what's

38:03

said in this election.

38:04

Yes, even if it's not him, he can change the conversation.

38:06

He can change the conversation. Oh and by the way, the huge

38:08

one is he's an environmentalist and the only one

38:11

with real street cred on that

38:13

issue. And I think Politico is

38:15

right. They wrote he's the most trusted white

38:17

man in Black America, and that is

38:19

true because the Kennedy legacy

38:22

and a bunch of other things.

38:24

But I just think we

38:27

keep picking the long shot,

38:30

and so we can't expect this to

38:32

be a normal one. I have actually one last

38:34

thing I'll say on this, because we're doing a

38:37

podcast. Every presidency

38:39

is driven by a technology. So

38:42

Trump won on Twitter, Obama

38:44

one on YouTube. Clinton

38:46

and Bush were still television presidents.

38:49

This is a podcast presidency. It

38:52

is being fought on the podcast

38:54

airwaves, where you get three hours

38:57

long form, no more hostile

39:00

interviewer, and people are listening

39:02

at great length. So if you think

39:05

that this race is happening at the presidential

39:07

debates on mainstream media, you are totally

39:09

going to miss it. It's happening in

39:11

this other technology space.

39:13

Making me feel guilty, We've only got forty minutes.

39:15

I know, well, people do go for three

39:17

or four hours these days.

39:19

I can listen to anything everything. I could listen

39:21

to you for three or four hours. I'm not reul listen to anybody

39:23

else. Okay,

39:25

let's talk about if we can shifting away

39:27

from the president that it's relevant let's talk

39:29

about AI. I know that you know everything there is

39:31

to know about how all the technologies are

39:33

digging themselves into our lives, but where's

39:35

the future of that.

39:37

So AI is so fascinating

39:39

because even the people who are at the cutting

39:42

edge of this are saying to me, six

39:45

months and I won't know what's happening,

39:47

Like it moving so fast that even

39:49

the experts can't keep up. But

39:52

a few key things. One, we are

39:54

optimizing. We're using AI to

39:56

optimize for only two things right now, cost

39:59

and efficiency. And humans

40:02

are not very cost effective or

40:04

efficient, and so

40:06

we're not optimizing for human connection

40:09

or things that we don't value

40:11

in the markets, but actually value for human

40:14

have value for human flourishing like

40:16

love, beauty, joy, And

40:19

I think there's an increasing recognition that

40:22

humanity can't be shoehorned

40:24

into being more efficient

40:27

and shouldn't be because our

40:29

great skill is lateral thinking

40:32

and creative

40:35

creative thinking, we're incredibly good at

40:37

producing novelty, and

40:39

so the AI community is

40:42

beginning to clock this. So that's one

40:44

thing. Second thing is add in

40:46

robotics on automation, which

40:49

is the field that I've been in. So

40:52

imagine self replicating three

40:54

D printers, self assembling

40:56

and self replicating, three D printers

41:00

driven by artificial intelligence

41:02

that can now build and create

41:05

on an extraordinary scale, not only here

41:07

on Earth, but off Earth. And

41:10

that is very much where the planning

41:12

is for space right All the building

41:15

on the lunar surface, the construction of the

41:17

first oxygen grid, the first power grid,

41:19

the human habitats are all about

41:21

the application of three D printing. And

41:24

so this is causing some people who are really

41:26

expert in this field to make some fascinating

41:28

comments. So Lord Reese, who's

41:30

the Astronomer Royal of Britain,

41:33

which is you know, the position that Newton had

41:35

advising the Queen on astronomy.

41:38

He's talked about this

41:41

is an intelligence that's secular

41:44

that we have created that's now

41:46

growing of its own accord.

41:49

And Craig Mundy, who was the

41:51

head chief technology

41:53

officer at Microsoft for decades,

41:56

super expert on the subject. He says, look,

41:58

AI now allows us to create

42:02

an entity, as

42:04

let's say we put it inside a robotic but

42:06

an entity that can

42:09

learn to the level of a fifteen

42:11

year old in two weeks,

42:14

not in one subject, but in

42:16

every subject. So

42:19

now combine these things and

42:21

I think this is where the discussion

42:23

of is it sentient, is it not sentient?

42:26

It's getting awfully blurry

42:29

out there. So I think

42:31

mainly AI is going to give us great things.

42:34

Right.

42:34

We can diagnose cancers

42:36

before they even start to manifest

42:38

with any symptoms. We can

42:41

prepare fractures, we can manage the traffic,

42:43

all sorts of things that need doing. But

42:45

this business of building and

42:47

creating physicality

42:50

that has its own set of instructions

42:53

which may or may not be in alignment

42:55

with human flourishing. That's where

42:57

the discussion is about what the heck what

43:00

do we do?

43:01

That's where it gets a little bit frightening. Yeah,

43:04

okay, so let's try and pull

43:06

all this together and ask

43:10

what it means for because this is our

43:12

core subject here, what it means for

43:14

markets as a whole, and what that might

43:16

mean for investors.

43:18

Yes, well, I think

43:22

it's so many different things. On the one

43:24

hand, this

43:27

idea that defense

43:29

spending is now driving

43:32

economies is true,

43:35

and so drone

43:37

and robotic technology start to be

43:39

national priorities, so

43:41

you can think in those terms. You

43:44

can also begin to understand that with

43:46

the breaking of supply chains and their recreation

43:48

locally. I've been calling it glocalization,

43:51

the relocalization of supply chains.

43:54

Suddenly you want to be buying manufacturing

43:57

firms in the West, not

43:59

just any East as we were before.

44:03

I think this is a

44:05

world where you

44:08

either believe the technologlogical innovation

44:10

can create dramatically different

44:12

outcomes. I believe it can, so

44:15

I'm really interested in food

44:17

production becomes much easier,

44:21

managing water supplies much

44:23

easier. I mean against This is all against

44:25

the backdrop as well of an extraordinary

44:28

advance and computational power. You

44:30

know, as we move supercomputers, which

44:33

you know, only five years

44:35

ago a supercomputer could

44:37

solve a problem in ten thousand years and

44:39

that was considered historic and incredible.

44:42

And that same problem can now be solved

44:44

by a supercomputer in two hundred seconds.

44:47

So our problem solving capabilities

44:50

have exploded so far

44:53

beyond our imagination. And

44:55

I guess that for me is the main thing. I

44:57

don't think we can live in a world anymore where

45:00

all armchair investors using

45:02

the old metrics. This is a world

45:04

that requires you to use your

45:06

imagination.

45:07

So we can't just go out and buy a

45:10

passive index fund and sit

45:12

back. Is not gonna work. I just don't real off

45:15

index it is.

45:17

It really is, And there's a question

45:19

of I mean, for retail

45:22

investors, they don't want to get involved in anything

45:24

that's too risky to

45:26

tricky. But on the other hand,

45:29

everything now is some small startup

45:32

doing a risky, tricky thing that then gets

45:34

acquired and is suddenly part of a Google.

45:37

And only the private equity crowd

45:39

are catching that, and private

45:42

investor and retail investors don't even

45:44

get access to that anymore.

45:46

So is that.

45:47

Really where we want to be? Anyway?

45:50

I think imagination is a crucial part

45:52

of this, and that means getting out in the world and

45:55

really looking at what's

45:57

working and what's not working. What are

45:59

the kids playing with that is

46:01

going to be tomorrow's big technology.

46:04

Yeah, the kids are still playing with crypto, aren't

46:06

they?

46:06

And they are oh yeah yeah. And the tokenization

46:09

of finance and look, governments

46:11

are moving further in that direction of

46:16

fractionalizing money and making

46:19

digital money itself. That

46:21

is also in motion, and one has to think

46:23

what are the implications of that for the economy.

46:25

Yeah, you're making all the things that British investors

46:28

traditionally invest in sound older

46:33

investors coming up to Retoment et cetera. They're invested

46:35

in old style listed companies in the UK,

46:38

energy consu miss Staples, etc. Collecting

46:41

dividends.

46:42

Well, I totally get that. Look with interest rates

46:44

where they are, bonds are paying

46:46

well, so you know,

46:48

everybody's shifted in the bonds. This is a

46:50

huge problem for the tech sector because

46:53

they have to outperform the bond market.

46:55

I think a lot of people in tech don't understand

46:57

this. They're like, so, my technolology

47:00

is so amazing, my product is incredible.

47:03

I'm tempted to write a book called you know my product

47:06

is incredible because they all believe this. But

47:08

I'm like, babe, you don't outperform

47:10

holding a thirty year bond.

47:12

Well, this is interesting, isn't it. Because for the

47:14

last half many years, during the tech bubble

47:17

or the growth bubble, whatever you like to call it, you've

47:19

been able to say my technology is incredible

47:21

and still get money. And now you have to

47:23

say my technology is incredible, and

47:25

look at the money I'm going to make for the

47:28

next eighteen months or I'm making already. Otherwise,

47:30

no one's going to attribute any value to your incredible

47:32

product and that's been the most extraordinary

47:34

change for the technology industry.

47:37

And even if you do that, not necessarily

47:39

a bad way, by the way, I agree, I'm a bad totally

47:41

agree.

47:41

I think it's all much healthier than it was. But

47:44

even if you do that, you now

47:46

have to reinvent or keep pace

47:48

with the technological innovation in your field permanently.

47:52

Permanently. You can never rest, you can

47:54

never rest, right, So this is Olympics

47:57

on a whole new level. And

48:00

there's actually there's one other subject that which

48:02

I wanted to get into with you, and it's it's

48:05

it's the most fascinating, super

48:07

tricky, bizarre subject I've come across

48:09

in my entire career.

48:11

Okay, I'm ready, you're you're ready

48:14

in case, it's.

48:16

Like buckle your seatbelts stuff. But

48:19

it is at the nexus of what this what

48:21

we're talking about, which is a

48:23

level of technological innovation that

48:26

may blow away everything we know

48:28

about physics itself.

48:30

Idea. Yeah, so what seems.

48:32

To be happening since the Nobel Prize was

48:34

awarded last year for quantum

48:37

physics, which

48:39

gave credibility to this idea that

48:41

quantum entanglement is real. So

48:44

it's almost as if our new computational

48:47

power and our new capacity with

48:49

sensors to gather information

48:52

is punching holes in

48:54

the Einstein standard model

48:56

of physics. And on the other side

48:58

is this quantum base model of physics

49:01

that is not yet established

49:03

or explained. And in that

49:05

space, this is where my

49:08

attention was drawn by a number of people

49:10

from my days in government when I worked in the White

49:12

House who called me up and said, you have to watch

49:15

what Congress is doing on

49:17

this whole what they're calling anomalist

49:20

phenomena non human intelligence issue.

49:22

And I was like, what are you kidding? So

49:25

I started looking at it, and I'm like, holy moly.

49:27

We have Congress holding

49:30

five years of private hearings on

49:33

this subject, and then one year of public

49:35

hearings, and now we have not

49:38

just one, but ten people

49:41

coming forward from the highest levels of

49:43

the intelligence community as whistleblowers,

49:46

and apparently another thirty behind them.

49:49

And what they're really talking about is that

49:51

we have this

49:53

kind of new technology from

49:56

new physics. It's all

49:58

in Pentagon black basudget programs

50:01

that are not visible even to the leaders

50:03

of the Pentagon itself. And this

50:05

is one reason why the Pentagon hasn't been

50:07

able to conduct the audit that

50:09

Congress requires of them for the last five

50:12

years.

50:12

Because the spending remains secret.

50:14

It remains totally secret, totally compartmentalized.

50:17

But it appears to be about

50:20

these kinds of technologies

50:22

that don't fit our conception

50:26

of the way the world physics. Yeah,

50:28

now this of course attracts It is

50:31

all merging with the whole

50:33

old story about UFOs

50:36

and UAPs and are there

50:38

non human beings and all this stuff

50:40

that people write off because of course that must

50:42

be crazy. But as Senator

50:44

Rubio said, if you have

50:47

the most senior people from the

50:49

Geospatial Intelligence Agency in the National

50:51

Reconnaissance Office saying

50:53

actually, this is real, then

50:57

either we have our top people losing

50:59

their minds or we are

51:01

at an extraordinary moment in history. And

51:04

I at this point am inclined to go with

51:06

let's do the it's an extraordinary moment

51:08

in history. Let's suspend the disbelief

51:10

for just long enough to gather

51:13

the information and then we can see

51:15

what we bring science to

51:17

to understand it. And I'm seeing some

51:19

of the world's top scientists working on

51:22

all of these elements, and

51:24

I just think it's a thing from.

51:25

What would that mean, Well,

51:30

if.

51:30

It does mean that we're going to have new technologies

51:32

that revolutionize how we do things

51:35

that you can't afford not to pay attention.

51:37

Okay, So what that means right now is pay attention.

51:40

It only means keep an

51:42

eye. It's it's not the

51:45

inclination will be to just say, oh, well that's

51:47

nuts, but watch this

51:49

space. Something important

51:51

and historic is happening here,

51:55

and I just think it's worth paying a little attention

51:57

to on the side.

51:58

Okay, Well, we're definitely going to watch

52:00

that and we'll come back to talk about it again in a year or

52:02

so. Pepper, Before we finish,

52:04

I have to work you something that is also a

52:06

relatively historic question and important,

52:09

and I think I know your answer

52:11

is going to be but we'll we'll find

52:13

out. We're keeping we keep them track of people's

52:15

answers. Yeah, if I were to say

52:17

to you, over the next ten

52:19

years, you can have one asset class and one

52:21

asset class only, and

52:24

you have to choose between the

52:26

following three things, and

52:29

the first one is gold, and

52:31

the second one is bitcoin okay,

52:33

and the third one is a UK based

52:35

deposit.

52:36

Account the cash

52:38

cash option.

52:39

Would you take the cash option even over a teni

52:41

period.

52:43

So even though inflation

52:45

seems high to people now, it's

52:47

of course nothing compared to like you

52:49

know, when I was a kid growing up. But

52:53

I think all of the things I've described

52:55

mean inflation is going to come down,

52:59

and have in cash at

53:01

your disposal is

53:03

important so that when these opportunities

53:05

come, you can enter them.

53:08

The awful thing is when opportunities

53:11

come and you're already stuck,

53:13

you're already committed, or your

53:16

cash is gone. For some I just think

53:18

the optionality of cash.

53:20

You're not allowed to use it for a decade.

53:22

Yeah, I know we can, but most

53:25

of your listeners won't be able

53:27

to get in on the technologies I'm describing

53:29

for a decade.

53:30

Okay, so they need to hold it. They need to hold.

53:32

If they were a private equity outfit, I

53:35

would say you can't wait ten years.

53:37

But if you're the general public, you won't even

53:40

have the opportunity because

53:42

these firms won't go public that

53:44

fast. So in that sense,

53:46

it's a kind of it's

53:49

a period to study, to work

53:51

really really hard so that

53:53

when you deploy that cash it will

53:56

do amazing things as

53:58

opposed to mediocre things.

54:00

What if I take cash out of the equation, you're the fulest

54:02

you to choose between gold and bitcoin.

54:06

So I have not been a bitcoiner directly,

54:09

I haven't, but I do understand

54:11

the digitization of money and the tokenization

54:14

of money, and I think

54:17

governments, particularly the US, the

54:19

UK and the EU, they

54:22

are about to say we're

54:24

going to have national central bank

54:26

currency that's digitized and you can

54:28

own bitcoin. You

54:30

just can't hold it anonymously and

54:33

you have to declare it for tax. When

54:36

that announcement comes, the value of bitcoin,

54:38

in my opinion, actually will go up, and

54:40

dramatically will go will go up

54:43

because regular people will start to understand

54:45

that they can be in it. It's no longer

54:48

you know, for rogues and renegades.

54:50

Okay, it's probably regulated. It's real money,

54:52

that's right.

54:54

So in that sense, I would take that bitcoin

54:56

bet. But that's a very different bitcoin bet than the bitcoiners

54:59

are taking. Their whole thing is I'm taking

55:01

it to get out of the reach of government.

55:03

And I'm like, guys, you know, in

55:06

electronic world, you really think that what you

55:08

write on a keyboard can't be tracked. Seriously,

55:11

you can't escape. We are

55:13

in this world, there are sovereigns you

55:15

can't get out from underneath

55:17

that. So I actually think bitcoin

55:20

and here's a funny thing. I think the US

55:22

is going to end up as the largest sovereign

55:24

holder of bitcoin through confiscation.

55:27

Yes, literally, because every time

55:29

they arrest somebody. The stash is

55:31

huge. It's like four billion, and

55:34

of course that's like more than the annual

55:36

budget of the whole Justice Department. So

55:38

do they want it to have a value so they can.

55:40

You can't really stop trading in it right now, you can't

55:42

do anything with it, wait with it.

55:44

But if you make it legal, you will, and

55:46

then they will be very wealthy themselves.

55:48

Okay, so there we go. Pivot is

55:51

bitcoin is

55:53

boin advisors? Yeah, big owners, beware

55:56

you'll you'll big will only be worth something if the thing

55:58

you don't want to happen happens. That's right, really

56:00

interesting.

56:01

It's fascinating.

56:02

Pepper, Thank you so much, Thank you, John.

56:10

What do you think of Peppers?

56:12

Great?

56:12

Yeah, I mean obviously

56:15

that's not the first time she's been in the show, but share always

56:18

it's always something new into.

56:20

The next and she's always

56:22

early, you know, she's always early.

56:24

She has been right so often.

56:27

You know, she's been right on all this geopolitical

56:29

stuff. She was right on

56:32

Trump, She's write on lots of

56:34

the dynamics around last the last couple

56:36

of years or so. And in

56:39

our conversation when she talks about watching Robert

56:41

F. Kennedy, when she said that to

56:43

us a week or two ago, nobody

56:46

else was saying. And now you look around and

56:48

has lots of chat about Robert F. Kennedy,

56:51

not necessarily winning, but certainly changing

56:53

the conversation. And space. You

56:55

know, she has been talking about these issues

56:58

in space for a very very

57:00

long time now. I remember the first time she talked to

57:02

me some time ago about the Russians blowing up

57:04

their own satellites and creating these kind of razor

57:07

clouds in space that would prevent

57:10

anybody else using that space, and talking about

57:12

this is a geographical land grab.

57:15

You know, this sounded completely bizarre,

57:17

but now this is a mainstream conversation

57:20

and even I don't know if you've read it, but by the way,

57:22

anybody listening, fantastic Christmas

57:24

present for all the teens and indeed the adults in your

57:26

life. Tim Marshall's knew that the future of

57:28

geography have power and politics, and space will change

57:31

our world. Lots of the stuff is in there,

57:33

and you know, Tim's great, but this is a

57:35

he's a mainstream author. And

57:38

the stuff that Pepper was saying a couple of years

57:40

back and everyone was going, yeah, she's nuts,

57:42

now is out there in no

57:46

Pepper. Nobody said you were nuts. Nobody said

57:48

you were nuts. Just a little out there, Peper, just

57:50

a little out there. And now everyone

57:53

is happily saying, you know, geography is not about

57:55

not just about the Earth, geography is about space.

57:58

Everybody is talking about the possibility of maybe

58:00

being able to beam solar energy

58:02

down to Earth and not having to bother with all those ski

58:04

fossil fuels and all the horrible wind turbines

58:06

and all that stuff, and just beam it right down. Build

58:08

a better grib grid Bobs, your uncle. Everybody's

58:11

talking about space for everyone's talking about Lane

58:13

Grab. Everybody's talking about getting

58:15

minerals off the moon. You know, highly mainstream

58:18

conversation, and the idea that China,

58:22

Russia and America are in some kind

58:24

of competition to have habitable zones on

58:26

the Moon within the next decade. This is no longer

58:28

even remotely weird. The only thing that's still

58:31

a little bit out there is UFOs.

58:33

Yeah, this was the bit

58:36

that I so only read this in

58:38

the transcript as

58:41

far as I could. Wotko, So what she's

58:43

seeing is that is

58:46

Cana Lake. They can of black

58:48

ops tape, military

58:51

secret stuff. Is that

58:53

that experiment? And we quantum computing or whatever

58:55

this is,

58:58

it's all been behind a paywall for you and

59:00

those coming out. Is that the idea I

59:02

couldn't quit walking?

59:04

I think that's basically it. I

59:06

mean, from what she was saying. And you know,

59:08

we'd have to ask Pepper if we wanted more detail on

59:10

this. But isn't it perfectly normal for

59:13

defense, particularly in the US, to be

59:15

doing all sorts of stuff that sounds completely bonkers

59:17

to the ordinary person.

59:19

Yeah, absolutely no, that's I mean, I

59:21

agree with that. It's just the sort

59:24

of v Kent parallel

59:26

universities and things like that that got

59:28

me.

59:30

Why why do you think they don't? When did

59:32

you turn into such a pedestrian thinker? John?

59:37

It's true, I'm getting very very cool

59:40

titty.

59:41

I mean, you honestly think that you

59:43

know, here we are, what's what's what's the phrase a

59:46

motive? Dust suspended on a sunbeam. Here

59:48

we are in our tiny little universe with

59:50

all the millions and millions of other universes,

59:52

et cetera, and you think it's we might

59:54

be alone, very

59:57

off topic bearing off topic topic.

1:00:02

The other thing I thought was interesting is

1:00:04

the and again

1:00:07

i'd accused if any of our readers

1:00:09

listeners are know more about

1:00:11

this, But the asteroid mining. The

1:00:13

one thing that gets me about that is that, yes,

1:00:16

it's cool, but.

1:00:18

How it's

1:00:21

so.

1:00:21

Expensive relative to other ways

1:00:23

they getting this stuff. And none of this

1:00:25

stuff is particularly scarce

1:00:28

or not scarce enough yet that you would

1:00:31

want to be flying in a space to you

1:00:33

know, get it off an

1:00:35

asteroid or even off the moon.

1:00:37

Yeah, but you know we have satellites with arms

1:00:40

that can grab stuff now, right.

1:00:42

I mean that's why people was saying we're going for very small

1:00:44

satellites now so it's less easy for them

1:00:46

to be captured by other people satellites. And

1:00:48

if you've got around, just grab a little astroid

1:00:50

and bring it

1:00:55

an.

1:00:56

Isn't that going to blow the world up? What

1:01:00

you do not deflect.

1:01:04

But the only thing I would say, you know, you say, oh mining

1:01:06

on the moon, it's so expensive, We can't do that. We've got loads

1:01:09

of loads of stuff here. And you're right, you know, we talk about

1:01:11

rare earth metals and everybody knows they're not remotely

1:01:13

rare. There's loads of them around. But

1:01:16

you know, if you could go up and get them off the south

1:01:18

pole of the Moon, then you don't

1:01:20

have to worry about planning permission. And

1:01:23

I would.

1:01:24

Say, maybe we can build

1:01:26

affordable hosing for London.

1:01:28

Well, I would say that getting

1:01:30

planning permission to, for example,

1:01:33

open a Lissier mining cornwall

1:01:35

be significantly more expensive

1:01:37

than inventing and building a mining

1:01:40

rocket to go to the south pole of

1:01:42

the Moon and bring it back from there. And

1:01:45

you know, my only experience with planning permission is trying

1:01:47

to build a garage in the garden. At

1:01:50

this point cheaper to part

1:01:52

the car on the moon.

1:01:55

Have they seen more of a regulation than else?

1:02:00

Yeah.

1:02:01

And the other thing, Robert F. Kennedy

1:02:04

like this is John.

1:02:05

Trying to get He's trying to get off the subject of space

1:02:07

because he's uncomfortable with the idea of UFOs.

1:02:10

Right, Oh, No, comfortable

1:02:12

with the idea UFO was.

1:02:14

Just anyway,

1:02:16

I've had too many I'm

1:02:19

interested in the whole thing. And I love the way that Pepper

1:02:21

talks about and one of the things I do think she

1:02:23

talked about that was really interesting and important for us

1:02:25

all to think about a lot is about satellites and

1:02:27

how they've become part of our critical infrastructure,

1:02:30

you know, the same as water or anything like

1:02:32

that. So satellites they provide all

1:02:34

of the digital

1:02:36

infrastructure that we have on Earth, and people forget

1:02:39

that that is created by the satellites up above,

1:02:41

and that creates huge national

1:02:44

geographical vulnerabilities outside

1:02:47

our own borders. And that seems to

1:02:49

me to be one of the most important takeaways

1:02:51

from what people was talking about that we need

1:02:53

to be aware of that, and we need to be aware that this is

1:02:56

what we've got up here is effectively a privatized

1:02:59

part of infrastructure because most of these satellites

1:03:01

are private, but there is

1:03:03

huge national interest in them. And one of the things

1:03:05

that back to Tim Marshall, he talks about

1:03:07

it in terms of the East India Company. You know, think

1:03:10

about private interests that are so huge

1:03:13

that they have national defense

1:03:16

and national interest characteristics

1:03:18

that means that they can't really be left to be private.

1:03:21

So I think there's a lot to watch there. That's the

1:03:23

interesting we had. Right Now we can move away from

1:03:25

UFOs and you can talk about presidential

1:03:27

candidates, which is what you were trying to deflect me onto.

1:03:31

I'll tell you what I do know what's going on here? Can I tell you

1:03:33

what's going on here? Everybody? John is from Galasgow,

1:03:36

which is one of the UFO spotting

1:03:39

places globally. It's Bonnie Brigg in

1:03:41

the central Belt. Right, Bonnie Brigg

1:03:43

is not that far from Glasgow. I bet that

1:03:45

as a kid. As a kid, John was

1:03:47

out every night drinking strong boe

1:03:49

watching for UFOs. My right job. Fuite

1:03:52

a little sensitive about it?

1:03:53

Now, well I may have

1:03:55

been bog fast and look that team

1:03:57

I was taking up. I am not going to I

1:04:00

can't tell you any vote it I was. I've

1:04:02

sworn the Official Defense Secrets

1:04:04

Act. Other than that, thanks

1:04:07

for bringing up my childhood well

1:04:10

with fun?

1:04:14

Yes?

1:04:14

So please? This is this guy, Robert F.

1:04:16

Kennedy, This guy, this

1:04:19

guy?

1:04:20

What is the mechanism by which he changes

1:04:23

everything? Is it just

1:04:26

like being a third candidate who everyone's votes

1:04:28

go to?

1:04:29

Or have you been

1:04:31

on his website?

1:04:34

I hate to see it, but I

1:04:36

haven't.

1:04:37

Okay, can I strongly recommend,

1:04:39

Can I strongly recommend? So we

1:04:42

declare your independence. We will end

1:04:45

the forever wars, clean up government, increase

1:04:47

wealth for all, and tell Americans

1:04:50

the truth. I'd

1:04:53

go for that, you

1:04:56

know. He's very clear on ending

1:04:59

corporate chron is, dealing

1:05:02

with a state, state

1:05:05

institutions that don't behave democratically,

1:05:08

coping with the cost of living. Not sure how you do that.

1:05:10

He's an environmentalist. He's very keen on honest

1:05:13

government, aren't we all? You know? A democratic

1:05:15

government, he says, is supposed to be of, by and

1:05:17

for the people. But government institutions have portrayed

1:05:20

or trust. The intelligence agencies spy

1:05:22

on our own people. Government and tech platforms

1:05:24

conspire to survey and censor the

1:05:26

public. Regulatory agents who being captured

1:05:28

by those they are supposed to regulate. Wall

1:05:30

Street controls the SEC. Polluters

1:05:33

and extractive industries dominate the EPA.

1:05:35

In the BLM, I don't know all the two agencies are other

1:05:37

people. Well. Farmer controls the CDC,

1:05:39

NIH and FDA. Big agriculture controls

1:05:41

the USDA. Big tech has captured the FTC.

1:05:44

No wonder trusting government is at an all time

1:05:46

low. It's time to earn it back.

1:05:49

Christ I'd looked for that. I didn't have to do anything else. Am

1:05:51

I'd vote for that.

1:05:53

Yeah, he certainly seems to be hitting the aid

1:05:55

bidens.

1:05:57

And you know, when you look at when

1:06:01

you look at the options Trump Biden,

1:06:03

these are unbelievably appalling

1:06:05

options. How did the greatest country on us

1:06:08

get to this point? The conversation around every dinner table

1:06:10

this Christmas, how did the greatest country on us get

1:06:12

to the point where it's asking people or looks like it's

1:06:14

going to ask people to choose between Trump

1:06:16

and Biden. And it looks like it is impossible.

1:06:18

It should be impossible for either of these people to become

1:06:21

president. Again, So when we say, you know, if

1:06:23

something is impossible, then what is possible? And

1:06:26

somebody like Kennedy looks possible conceivable.

1:06:30

No, that's a really good point, because you're right.

1:06:32

One thing that people have consistently

1:06:35

forgotten whenever they go on about

1:06:37

surprise election results is that

1:06:40

the alternatives in the last kind

1:06:42

of like you know, ten years have not been

1:06:44

very appealing either. So, you

1:06:46

know, Boris Johnson Versus generally Calledbyn

1:06:49

Trump. Everyone forgets it was Hillary

1:06:51

Clinton on the other side, of that who figured

1:06:54

as well. So that's a really

1:06:57

good point. Actually, so Biden Trump or

1:06:59

an annoys guy who talks a good game.

1:07:01

Literally anybody else, literally

1:07:03

anybody else. Yeah,

1:07:08

I mean there are a couple of candidates who look like they

1:07:11

could break through the mechanism

1:07:13

of it is difficult. But as Pepper says,

1:07:16

well he may not necessarily win,

1:07:19

fairly unlikely to win. There is something

1:07:21

interesting hearing that he could change

1:07:23

the conversation. People look at somebody like that

1:07:26

and say, actually, hang on, guys like

1:07:28

this exist. Why do we have to put

1:07:30

up with these decrepids?

1:07:32

So the other thing I like to but it is it kind of please and whole

1:07:35

thing about the cold wars

1:07:37

being followed by a big hug, which

1:07:39

would be nice, that would be I

1:07:43

thought that was actually the kind of best bit

1:07:45

of your conversation. We are because

1:07:49

hopefully she'd be as right about that as she was

1:07:51

about cold wars and hot plics

1:07:53

and hot wars and cold polices.

1:07:56

Well, we really don't need any more hot waves, do

1:07:58

we. And the truth

1:08:01

is that you know, pretty much all the

1:08:03

big powers are financially stretched

1:08:05

at the moment, and this is her point. You know, this is

1:08:08

too expensive, and wars cold

1:08:10

or hot, and when people can't afford them

1:08:12

anymore. And the US is very financially

1:08:15

stretched. We are extremely financially stretched.

1:08:17

I whichh we have time to talk about Scotland, which appears to be

1:08:19

about to go bankrupt. By the way, have you been watching this?

1:08:22

It's about not being watching any political

1:08:24

stuff. Have been too central bank absorbed?

1:08:27

Well, things are so bad here. Literally the money is gone.

1:08:30

It's been spent on ferries that don't work, and

1:08:32

you know, pointless foreign politics and

1:08:34

giving grandstanding

1:08:37

amounts of aid all over the place, etc. And now

1:08:39

we literally don't have any money left at all.

1:08:42

So the answer apparently had to put up tax

1:08:44

rates on the middle classes, which I think will

1:08:46

go really, really badly. We don't

1:08:48

have much in the way of middle classes already. Anyway. Off topic,

1:08:51

off topic, off topic, bring me back, bring me back.

1:08:54

Wars. Scotland does not involved. Gotland

1:08:56

is not involved in World War three, as much as

1:08:58

some of them I think would like to be a golden World War three.

1:09:00

Gotland is not of old in World War three. So

1:09:04

yes, it gets too expensive. And when wars get too

1:09:06

expensive, they do tend to end. And it's very

1:09:09

difficult to search to see exactly how that happens

1:09:11

to see the mechanics. All we have is the historical

1:09:13

information that when you can't afford it anymore, you tend

1:09:15

to stop, and then you have.

1:09:17

Yeah, yeah, and that's a good point

1:09:19

because Russia's skin, Chinas skin and real

1:09:21

skin. So yeah, that's

1:09:24

that's probably a

1:09:26

good bear. I mean, as

1:09:28

far as I can see, all this is basically seeing

1:09:30

that next year will probably be again what

1:09:35

aging back towards the rule in twenties argument,

1:09:39

Well.

1:09:40

Yes, the Roaring twenties, which we will

1:09:42

talk about. We're going to do a round here at

1:09:44

the beginning of next year on this podcast and we'll talk about

1:09:46

the possibility of the Roaring twenties then. But I am

1:09:49

noticing Eddie Ardini, who we both read

1:09:51

Eddi idina research going on and on and on

1:09:53

about the Roaring twenties, and he has he has a pretty

1:09:55

good record. Me called this year very well. And

1:09:59

if we look back at people were saying about space

1:10:01

and about the technological gains that

1:10:03

come with this kind of space race, and if that really is

1:10:06

a game changing energy,

1:10:10

I don't even know how to describe beinging

1:10:12

solar energy back to Earth from the sunny. You don't know how to describe

1:10:14

it, but you know, some of these things begin to come

1:10:17

true. Solar laser, some of these things

1:10:19

beginning to begin to come true. And there are shift

1:10:21

forward in healthcare and in

1:10:24

digitalization, and AI really

1:10:26

does make a big difference all these things that we've been talking

1:10:28

about prages. If next year is the year, which

1:10:30

it could be, then the Roaring Twenties come back.

1:10:33

And the notebook that I got from Bailly Gifford at

1:10:35

a conference a couple of years ago that has Roaring

1:10:37

Twenties written on the front, I'll finally be able to use

1:10:39

that without being mildly embarrassed. Happy

1:10:42

days. That's the main thing. It is the main

1:10:44

thing. It is the main thing. And now I'm thinking,

1:10:46

no, I'm just thinking about John and UFOs again. But

1:10:49

I'm I'm not going to tease him. I'm not going to tease

1:10:51

him anymore. I'm going to finish up. Thanks

1:10:58

for listening to this week's Marin Talks Money. We'll be

1:11:00

back next week. Don't forget to leave us a review. It

1:11:02

helps people find the show, and of course you can also tell

1:11:04

people in personal about the show to help them find the

1:11:07

show. This episode was hosted by me Maren Sunset

1:11:09

Web. It was produced by Samasadi, additional

1:11:11

editing by Blake Maple. Special thanks to

1:11:13

Pipper Malcolm and to John Steppek. And of

1:11:15

course it'd be sure to sign up to John's daily newsletter,

1:11:18

Manager Stilled. The link is in the show notes, and

1:11:20

you can know a lots more about John's obsession with investment

1:11:23

trusts