• 12 hours ago
Freedomain Flash Livestream 11 March 2025

In this episode, I analyze the current investment landscape, highlighting the need for a reassessment due to emerging trends like Dogecoin and tariff policies. I explain the volatility associated with economic shifts, reflecting on historical transitions and their impact on industries. The discussion hinges on the potential of reallocating capital from traditional expenditures to innovative avenues, fostering growth amid discomfort. I also explore tariffs as a means to shift towards domestic production, emphasizing the psychological responses of investors to economic changes. Ultimately, while acknowledging initial turbulence, I express optimism for long-term benefits and a more sustainable economic model driven by innovation.

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Transcript
00:00Morning everyone, just a little bit here and there talking about market conditions as you
00:07may have noticed your portfolio might be taking a little bit of a dive at the moment and we
00:13are in the deep breath, the last breath territory of rescuing capital.
00:18So I wanted to share with you my thoughts, usual caveats of course, I'm not an expert,
00:23this is not financial advice, do your own research, make your own decisions, this is
00:28just my sort of obvious foolish amateur thoughts on the entire situation.
00:33So what I think is going on as a whole is two things, doge and tariffs and they're kind
00:42of related.
00:43So one thing that's important to understand about the economy of course is that when there's
00:49a lot of economic changes, there are always losses before there are gains, right?
00:56So horse and buggy manufacturers, there's a lot of investment in that.
01:00When cars are invented, horse and buggy manufacturer stocks go down in general before the automobile
01:07stocks go up.
01:09So there is loss before there is gain because you've got a lot of capital allocated to the
01:16existing structure of society and when that structure changes, capital has to reallocate,
01:25there's certainty in what was, there's uncertainty in what will be and so you're moving from
01:29a place where you know you get profit to a place where you don't know if you're going
01:36to get profit.
01:37So you think of a well that you go to and then the well dries up or maybe the well you
01:42go to find the new well, it will be better but for sure you're going to be thirsty for
01:47a while.
01:48So a doge and tariffs and to a smaller degree AI because that's been coming for a while
01:56but the acceleration in AI is extraordinary, I mean people are creating entire games in
02:00an hour which used to take 6 to 12 months at least and so with doge and with tariffs,
02:13so doge is putting the bloated state on a diet.
02:16Now not a huge diet and not a strict diet and certainly not a crash diet but it is putting
02:20it on a diet and what that means is that hundreds of billions and perhaps in the long run trillions
02:25of dollars will be reallocated from existing government spending and that is going to change
02:31the economy.
02:32So with the money that's saved, let's say that the money will be used to pay off the
02:38debt.
02:39Okay so that moves money into away from you know massive NGOs and all of the other crap
02:47bullshit and nonsense that has characterized doge spending, it moves it from there to banks,
02:55to people who hold bonds, to just you know the sort of grab bag of lenders that have
03:02given money to the US.
03:05China of course is a huge one, so what that means is that the money is going from economy
03:11and liberty destroying NGOs to money people.
03:17So the money people, what are they going to do with that money, well they're going to
03:19have to do something with that money and they're going to have to invest that money in something.
03:24So what that means is that there's going to be a flood of investment if the debt is paid
03:28off, if some aspect or even if the deficit is reduced.
03:33So if the money goes to the money people, then the money people have to invest in something
03:37that's going to create economic growth.
03:39If the savings result in tax cuts, then the government forces spending on particular things
03:48and there's a certainty in that, there's a sort of understanding of that in this sort
03:53of existing economic configuration.
03:56When the money is no longer flowing to NGOs, to crap science, to like all of the nonsense
04:03that social engineering, foreign aid, when the money no longer flows there but rather
04:07it is left in the hands of the American taxpayers, well it's easy to predict how the NGOs are
04:12going to spend the money, it's much harder to predict how the American public is going
04:19to spend its money.
04:22Because one is a forced spend or at least it's a forced allocation, the other is a voluntary
04:27allocation.
04:28It's sort of like if a woman is forced to get married, then you know who she's going
04:34to marry.
04:35If she's no longer forced to get married, you don't know who she's going to marry.
04:38So there's an uncertainty factor there.
04:43So a doge reducing government spending puts the money to varying degrees into more voluntary
04:50channels.
04:51Let's say it goes to the money people, well, if it goes to the money people, you don't
04:55know exactly how the money people are going to spend it.
04:58If it goes back to the American taxpayer, you don't know how the American taxpayer is
05:02going to spend it.
05:03If it stays with the NGOs, you have a fair certainty of how they're going to spend it,
05:07right?
05:08Because the NGOs have a history of spending and a lot of their books are kind of public
05:10and so on.
05:12So who knows, right?
05:15You're moving from a place of relative certainty to radical or significant uncertainty and
05:20that is going to cause the economy to lose before it gains, right?
05:25I mean, if you've ever gone from a place of physical complacency to exercise, it feels
05:33bad before it feels good, right?
05:36You ache and there was a very funny three's company many years ago with John Ritter who
05:39went to a gym and couldn't even walk standing up afterwards, right?
05:44So anything you do that is going to improve your life when you've got bad habits is going
05:49to feel bad before it feels good, right?
05:51If you go on a diet, you feel hungry, tired, irritable and don't sleep very well until
05:56you start to feel the health benefits months down the road.
05:59You're quitting smoking, you feel bad and then you feel better later, you know that
06:02kind of stuff, quitting drinking, same thing.
06:04So when you have bad habits, changing bad habits is a trough before there is an increase
06:10and the addict, of course, looks at the trough, imagines it's going to go on forever, just
06:13keep crashing and so on, whereas the person who's more sane and reasonable says, well,
06:17I'll feel bad for a while and then I'll feel better, right?
06:21So if you have a sort of chronic health issue, like if you got a bad knee, right, then you
06:28go and get it dealt with and you'll feel, let's say you get your knee replaced, well,
06:32you're going to feel a lot worse before you feel better in the long run, so that reallocation.
06:37Now the tariff thing is interesting as well because the tariff thing, again, in my obviously
06:42amateur view, the tariff thing is it signals a desire to move away from income tax towards
06:50tariffs, which was, of course, the original American model up until the early 20th century.
06:55The original American model was like 98.5% of federal money came from tariffs and there
07:00was no inflation.
07:02So moving to tariffs, tariffs are better than the income tax.
07:09I mean, if you have to choose between the income tax and tariffs, you would choose tariffs.
07:15Thank you for the tip.
07:16You would choose tariffs every day of the week and twice on Sundays because tariffs
07:20are going to stimulate domestic production and consumption and it makes the tariff-imposing
07:28country stronger economically.
07:30Now again, I'm a free market absolutist in a stateless society, in a stateless world,
07:35there would be no tariffs.
07:37So I mean, I get all of that, but economic and ideological puritanism has not led to
07:44a freer world.
07:45So you gotta be able to leverage, right?
07:50I don't like threats as a whole, but threatening to quit can get you a raise.
07:55So that's kind of important, right?
08:01So the tariffs will stimulate domestic production, but what kind of domestic production will
08:08it increase?
08:11Well that's hard to say.
08:12Now of course, if it's like you put these big tariffs on sugar, then sugar manufacturers
08:18can increase, but a lot of the tariffs that are going up are on raw components, right?
08:25So if you put a tariff on steel, then for sure steel production domestically will probably
08:29go up, but there's a lot of reallocation because steel is used in so many different things.
08:37What are the ripple effects, right?
08:39And the other thing too, of course with tariffs, sometimes the price of raw materials, if that's
08:44what the tariffs are on, goes up to some degree, but then people find workarounds, right?
08:50So if the price of steel goes up enormously, people will find some way of working with
08:54less steel that stimulates a lot of innovation, but where, to what degree?
08:59Because nobody knows.
09:00Nobody knows the geniuses who are out there, right?
09:03Like when the price of some, let's say gold, when the price of gold goes up, it's staggered
09:10because when the price of gold goes up, people say, oh my gosh, we've got this gold jewelry
09:14that's been sitting in our basement.
09:16We kind of need our money and it wasn't worth even digging it up and getting it appraised
09:20and sold, but now the gold has gone up 50%.
09:23So all of this stuff emerges out of the shadows and nobody knows about it.
09:29You know, grandmother's jewelry collection has been sitting in the basement forever.
09:33Is it worth selling?
09:34Well, nobody knows, right?
09:36So it summons a lot of brilliance, a lot of workarounds, and it summons other ways of
09:40dealing with the issues and that can't be predicted.
09:44That can't be predicted.
09:45Now, of course, a lot of people are over leveraged as well.
09:47So when the price of things goes down, then they have to sell other assets to cover their
09:56losses, right?
09:57So this is why there generally tends to be a ripple effect.
10:00And normally when there's an economic contraction or depression or recession or something like
10:05that, people flee to safe havens, right?
10:06They flee to bonds.
10:07They flee to gold.
10:08I think the wise among people flee to Bitcoin, right?
10:13But that's when the economy is tanking because like for non-chosen reasons, right?
10:19So some general malaise or exhaustion or, you know, in the UK when I was a kid, it was
10:26like all of these massive coal strikes and all of that just crippled the economy.
10:30So when the economy is going down without an upside, right?
10:36Then people flee to safe havens, right?
10:40Maybe cash and precious metals, Bitcoin, crypto.
10:45So people flee to those.
10:47But this is a different situation.
10:50So think of betting on a guy dying, right?
10:55I mean, this is a dark way of looking at it, but I think it illustrates it fairly well.
10:58So let's say you're betting on a guy dying.
11:02And because you're betting on a guy dying, which I suppose is life insurance as a whole,
11:06but because you're betting on a guy dying, when he gets really, he's really unwell, you
11:10monitor his vitals.
11:11Let's say he uploads it to the cloud and you can see all of his vitals.
11:15And you know, his stress levels are through the roof.
11:20He's just doing bad.
11:21His blood pressure is up.
11:22He's just doing badly.
11:24Now, if you're betting on him dying, you might be like, Ooh, he's gonna, because it's not
11:31chosen ill health, right?
11:33It's not chosen bad things, right?
11:34It's just his system seems to be crashing.
11:36So you're going to bet that he's going to die.
11:38So then you're more likely to bet that he's going to die.
11:41If however, you find out that his vitals have changed considerably because he's quit drinking,
11:48he's quit smoking, he's taken on a personal trainer and a nutritionist, he's losing weight
11:53and he's exercising a lot and so on.
11:55Well then his vitals look bad in the short run.
11:59His blood pressure is up.
12:00His cortisol levels are up.
12:02His heart is changing in its rhythm considerably, but not because it's trying to fight its way
12:06through sewage tank blockages in the Widowmaker, but because he's going to the treadmill and
12:13so on, right?
12:14So his sleep is poor.
12:15His heart rate keeps changing because he keeps exercising.
12:18So if it's involuntary change in health data, then it's probably a very bad illness or dysfunction
12:24in the body.
12:25However, if he's voluntarily changing his health habits, diet habits, whatever it is,
12:32then his stats, his vital statistics asterisk style are going to be all over the place,
12:40but it's because he's chosen it.
12:41So the fact that it's not an involuntary tank in the market, but a voluntary and top down
12:49and chosen reallocation of resources in the economy through doge, through tariffs and
12:55so on, means that it's complicated.
13:00You're not necessarily going to go to safe havens if the economy is going to experience
13:05some pain and then get better, right?
13:11So recessions kind of have to, it's an organic way of working out real dysfunctions within
13:17the system almost always to do with force and fraud, right?
13:22An overabundance of force in terms of unions charging too much or an overabundance of health
13:28and safety or environmental protections, quote protections, or a wide variety of crazy tax
13:34things or massive debts or whatever.
13:36So when the economy is just going through its paroxysms because of deep structural issues,
13:43then you kind of have to go to a safe haven.
13:45However, if the economy is going through paroxysms because people have voluntarily
13:50voted for, chosen and are very much behind massive reallocations away from inefficiencies
13:56to efficiencies and the whole thing, there's no safe haven because you don't want to lock
14:02into a safe haven.
14:03First of all, you don't exactly know how far down things will go.
14:08This is sort of unprecedented.
14:12This is one of the largest reductions in government spending outside of wartime.
14:17One of the largest reductions in government spending and voluntarily imposing tariffs
14:23as a negotiating tactic to reduce tariffs as a whole, which I think is a long-term goal.
14:29This has not been done in US economic history.
14:34And this is sort of one of the biggest capital reallocations in a modern economy outside
14:40of the end of war.
14:44So there's not any particular safe haven that people are going to flee to because an economy
14:57is when a ship takes on water and it might sink or it's going to get real low in the
15:03water and nobody knows exactly why.
15:05They've got to figure out where the hole is.
15:07But if somebody is like, we have to repair this hole, we have to repair this hole in
15:12the ship, so we're going to take on water because that's necessary to fix the hole inside
15:20of the ship.
15:21Well, if nobody knows why the ship is leaking water and then people might get in lifeboats
15:24and go away.
15:25But if people are like, no, no, no, they're taking on water and they've got a plan to
15:27deal with it because they want to fix the hole in the ship and the only way to do that
15:30is to take on water, people are less likely to head for the lifeboats.
15:35But there's a lot more uncertainty, right?
15:38So safe havens are uncomfortable in the way that lifeboats are uncomfortable.
15:41They are a refuge and nobody wants to do it unless they have to.
15:44So I hope that makes some kind of help and it's not going to be a long show, but I did
15:54want to sort of share my thoughts about it in that this is very much a different situation
16:03than we've seen before with the economy.
16:09And again, none of this is any kind of particular useful or again, I don't give investment advice
16:15or anything like that, but I think that's what's going on with the economy.
16:22All right.
16:23If you have any, obviously, if you find this helpful, tips are very much welcome.
16:27Somebody says, hi Steph, I saw your Poland documentary, which was really impressive and
16:33informative.
16:34Do you think Poland is heading to a different direction, even though the EU pressure?
16:39Well, I mean, the EU, this is another huge factor that is happening because of Trump.
16:46And this is one of the reasons why a lot of moneyed interests were anti-Trump because
16:51the existing aristocracy of money is based upon the existing configuration of the economy.
17:00So when Trump is a classic disruptor, right, he's a classic disruptor and classic disruptors
17:08harm the aged and benefit the young, right?
17:12Bitcoin harmed the aged or the aged, the old, it harmed the boomers and it benefited the
17:20young.
17:23So all disruptions are youth beneficial and old negative.
17:30All disruptions, right?
17:33So most money clusters and is invested in current economic configurations.
17:40However, to save the economy requires radical change.
17:44Now normally in the past, people in the economy would be perfectly willing and happy and satisfied
17:54to take the hits to benefit the next generation.
17:58But the boomers, and it's hard to say because the younger generation is not there yet, but
18:03the boomers are the first to break the age old sacrifice for the young.
18:08So the boomers were the first to basically say, to heck with you, we're going on cruises,
18:13we're going to spend all our money and don't you dare touch our social security, even though
18:17it is destroying the generations, it is destroying the next generations and so on.
18:24So normally if you go to the old in the general population and you say you have to make some
18:29sacrifices on behalf of the young, then most people, most people would say, yes, that's
18:40okay.
18:41Like, I mean, if you, if there was a new mother, right?
18:42And she said, well, I'm going to put the baby in a soundproof room because I don't want
18:45to bother getting up at night.
18:47You would say, because I'm tired or whatever, then you would say, well, that's really selfish.
18:52That's really bad.
18:53That's really terrible.
18:54And it's going to be incredibly harmful, if not fatal to the baby, right?
18:57So you give, right, the young, or if, you know, if there's a father who plays a bunch
19:03of video games, rather than interacting with his children, you would say, well, it's kind
19:06of selfish.
19:07You're doing what's best for you in the moment, but you chose to have children, you should
19:10do what's best for the children.
19:13And the boomers, it's really interesting to me that the boomers don't care about their
19:16lineage that much.
19:17They don't care about the continuation of their bloodline because they are demanding
19:23that conditions be created, and they demanded in the past that conditions be created, and
19:26now they're demanding that conditions be maintained that are very specifically destroying their
19:31bloodline.
19:32And price of housing has to remain high because that's their piggy bank.
19:36And all of these other things that they demand and vote for, like, if they're white boomers,
19:42then DEI, by not allowing their grandchildren to get jobs or lowering that possibility,
19:49it's time, you can't really have a family without a job.
19:51So it's sort of like winding down the whole bloodline, which is pretty wild to me as a
19:55whole and kind of incomprehensible, but whatever, that's sort of the way that it is.
20:01So normally, the aged lose influence in society when they retire because they kind of go off
20:08and do their thing.
20:09But because of the concentrated voting bloc of the boomers, they have vastly disproportionate
20:16power to configure society to their own often selfish and narcissistic preferences.
20:22So sorry, long sort of rant here, but what that means is that they, the boomers strongly
20:33resist disruptors.
20:36They strongly resist disruptors.
20:38I mean, the boomers are paranoid of AI, even though AI is generally fantastic.
20:44And the boomers are skeptical and hostile towards Bitcoin and so on.
20:49And they just don't like disruptors.
20:52Of course, right?
20:53Old industries don't like new industries.
20:54The horse and buggy industry did not enjoy the automobile industry coming in and elbowing
20:58them aside.
21:06So what's going on at the moment is that Trump, the tariffs and Doge, these are all disruptors.
21:16And disruptors are uncomfortable to the old and exciting to the young, right?
21:22It's kind of like snowboarding, I was trying to think, wakeboarding, surfboarding.
21:33It's like snowboarding.
21:34So snowboarding is exciting to teenagers, but you strap your average 65-year-old on
21:38a snowboard and push him down a hill, he's horrified, right?
21:41So the young love risk and excitement and the old are more conservative, it's a traditional
21:46thing, right?
21:52People resisted Trump coming in because Trump is a disruptor, but in every disruption in
21:57the economy that is chosen, and this is a chosen disruption, this is not an organically
22:02inflicted destruction, this is a chosen disruption, and disruption, of course, is close to destruction
22:09because it feels that way to the older people.
22:13So people knew that Trump was going to be a disruptor, which meant he would benefit
22:19the young and threaten at least the complacency and comfort of the aged, and so this is why
22:26young people tended to be pro-Trump and old people tend to be anti-Trump because they
22:32just don't want...
22:33Like, everybody wants the world to freeze in the stuff they're best at, right?
22:39That's sort of inevitable, yet the world has to progress, which means you have to consistently
22:43lose your skills.
22:45And of course, with AI, which is going to displace a lot of coders, well, that's gonna
22:51be a huge change.
22:52I'm very glad to be out of a space that can be replaced by AI and in a space like philosophy
22:57which can't be replaced by AI.
23:00I mean, AI can recreate...
23:02I mean, I've got AI bots for myself, but AI can recreate things from the past, but it
23:07can't generate new things for the future.
23:14So the economy is going through a disruption phase, but it's a chosen disruption, which
23:19means that there's going to be temporary pain, but I think fairly significant long-term upside,
23:28so it might just be a matter of hanging on and holding on.
23:33So old people are anti-AI, yeah, for sure, for sure.
23:39Well, it's new, and I remember my mother referred to a CD player as a phonograph, she grew up
23:44with a phonograph, right?
23:45You know, put a sock in it, which means keep it down, comes from putting a sock in the
23:49old speakers of the phonographs.
23:51Anyway, any other last questions, comments?
23:53I just wanted to dip in and give you guys my thoughts because they were rolling around
23:56in my brain, and I was hoping that it would be helpful and of use to you if you find
23:59what I'm doing, of course, to be helpful and useful, freedomain.com slash donate to help
24:03out the show.
24:04But yeah, don't be shocked that there's going to be a big change in the economy.
24:08There will be more winners than losers, but the losers get to vote first by selling off,
24:12and there is no particular safe haven because it's going to be a shorter downturn, in my
24:17opinion, because it's chosen rather than a longer recession or depression type downturn.
24:24And of course, this is really after the amount of debt that was incurred through COVID, there
24:31is going to be a hangover, and there needs to be a quick and decisive realignment of
24:36things.
24:37But yeah, it's painful.
24:39Don't eat seed oils before podcast.
24:43I actually, I kind of forgot to eat today as a whole, it's a 12 or 7 p.m., and I forgot
24:48I haven't eaten anything today.
24:49I've had one cup of coffee, but I kind of forgot to eat this morning because I was thinking
24:53about the economy.
24:54So I appreciate everyone dropping by today, a little short but sweet show, and we will
24:59see you tomorrow night, of course, for the Wednesday Night Live.
25:02And if you find this helpful, freedomain.com slash donate, would really, really appreciate
25:06it.
25:07Have yourselves a beautiful, lovely, wonderful day, my friends.
25:10Lots of love from here.
25:11I'll talk to you soon.
25:12Bye.