Ask your economist friends, why are the markets not worried about the debt? Um, everyone's talking about higher Treasury
yields right now, but they're the same level they were in in 2007 when the debt
was 7 trillion. So, it's up nearly six times since then. Uh, markets are just as happy now as they were in 2007.
And so, to me, uh, the real crisis that no one talks about is that we could be
40 trillion in debt and markets don't care. Silicon Valley is littered with VCs that passed on Facebook and and
Google and Apple and uh go go down the list. Never forget that Steve Jobs when
he first he first offered uh roughly 50% of Apple to a an uh uh basically a Radio
Shack store owner in New York City and that no one was interested that they start in garage not because everyone's
lined up to fund them but because no one's interested. Now, I have said to Billy off air, I've said that look, I
don't think you I don't want you guys ever to be apologizing for what Elizabeth did. Uh, never do that. That
change that switches the discussion to the terms of her detractors. Uh, what Elizabeth did was heroic. Uh, we need
more serious fundraising to discover the future. um if she weren't pretty, if she
weren't a Stanford dropout, if she didn't I think a lot of people got bored with her story. And so she's be she's
now in prison for it. But uh we need more people like her. We don't need less.
[music]
Uh, welcome everybody. Uh, watch your seats. Uh, stay stay ready.
Uh, if you ever seen those videos where uh, you know, somebody goes shoot them off to space and they're, you know, they
feel the G-force of of the world pulling back at them. It's kind of a bracing experience to have John Tamney on. Uh he
noticed in the our green room that I had just come out of the shower, slick back here and all that kind of stuff. Well, I
I consider John kind of a refreshing breeze and mist of of of illuminating
thought. Um he is the valuable and valuable head of the Parkview Institute and the author of the um uh deficit
delusion as as well as a bunch of other refreshing topics. And I keep, you know, bringing up that kind of refreshing
aspect because John, uh, for whatever reason, thinks differently from other people. Uh, was that some kind of injury
as a child? You know, you're dropped the wrong way. I mean, how how did this happen? Uh, wow. It's going to be really
pretentious, but you know, Elon Musk always said that he thought that he got his weirdness from his grandfather who
is a chiropractor. Um, I've got a grandfather who's a chiropractor and I'm also left-handed. So, you combine those
two things. Uh, chiropractors thought doctors were nuts. Doctors, of course, think chiropractors are nuts. I think
economists are completely nuts. They think I am even more nutty than I think
they are. And so, I think it's natural. I was born this way. Um, contrarianism
is not a choice. It's just a state of mind. I think everyone's ridiculous, especially economists.
Yeah. So, I I I I hang out with a bunch of economists. uh you know usually on the tennis court, squash court, that
kind of thing. Uh occasionally dinner parties and whatnot. And um I I have actually some unusual economist friends
who I think would you know find your views interesting and and uh as I used the term before refreshing. Um but uh
actually freshing could be just the word. I mean I wonder about refrigerator. People call it by refrigerator but what was the redoing
there? I mean you're kind of putting it in to begin with. You're not refrigerating it. Uh anyway uh your
views views are freshing. Um but uh you know a good number of them you know have
worries about the deficit and uh that that seems to be a topic on everyone's mind. We have you know the ma a magical
mystery number of 40 trillion. Um I mean they're all kind of elucory things. A trillion is a thousand billion and a
billion is a hard number to conceive of. Um you know I have not yet become a billionaire in anything probably. Maybe
I I don't even think in pennies I'd be a billionaire. Um and then to be have a trillion is kind of a you know more than
that say. um what what is the deficit delusion that we are operating under and
what can I tell my economist friends? Well, ask your economist friends. Why are the markets not worried about the
debt? Um everyone's talking about higher Treasury yields right now, but they're the same level they were in in 2007 when
the debt was 7 trillion. So, it's up nearly six times since then. Uh markets are just as happy now as they were in
2007. And so to me, uh, the real crisis
that no one talks about is that we could be 40 trillion in debt and markets don't care. Now, why don't they care? Because
they know that the US Treasury has taxable access to the richest people on earth who are poised to become
exponentially richer in the future. Uh that to me is a tragedy of misthic
historic proportions because just think if they didn't have this much taxable
access. Think of all the Nvidia, Amazons, Microsofts, Google's that would be founded. Think of all the failures
that aren't being founded because the rich are so excessively taxed now and in the future. That's the crisis that no
one talks about. Markets keep telling us the debt's the easy part, yet no one wants to listen to markets anymore.
Yeah, I I uh I'm I'm an angel. Not in in real life and not in the next life. Um
but as a metaphor, um I belong to an angel group and we look at startups monthly. Um I've been doing this the
last maybe eight or nine years, I forget exactly. Um you know the the oftentimes
their pathway is difficult. Uh they have a failure to launch um because of
capital frankly. Um I I think a lot of the ideas are awesome. A lot of the people who are doing this are are
clearly uh axiomatically entrepreneurial and they uh looking at the world in a different way and they bring energy,
enthusiasm and and frankly it's often hard to discern the you know bad ideas.
I think every now and then there's something that kind of grates me. Um it seems like a self-s serving thing
recently. I saw a medical company that uh was promoting um a product, you know,
a kind of revolutionary new product with a nice little gizmo for a problem I never heard of medically ever in my entire, you know, practice spanning four
decades or more. Um and and yet, you know, they would be able to find a code for it, a CPT code. So, there's kind of
a little bit of backdoor cronyism kind of thing going on. It would probably benefit the doctors doing the treatment
more than the people receiving it because I've like literally never heard anybody ever complain to it. from, you know, 40 million people have this
problem in the US. Anyway, aside from the rare one like that, most of the things that come across our desk are are
really nice products. Like one was a at home uh strep test uh which didn't even
make our grade uh to to be heard. Um, but it's a it's a nice little product and if everything works, I'm not saying
everything does. No, it would save people a lot of time, you know, as the the technical term schleing back and forth to the, you know, doctor's office,
wasting time in the waiting room, parking, all that kind of stuff to have the test at home and you save the visit and it would be a way of, you know, kind
of zoom um calling your your medical visits, which I think has been a boon, one of the actual positives out of the
coronairus era. We can come back to that because you have a book on that as well. Um, but it's like, you know, as I've
invested in companies, uh, you know, oftentimes they hit snags. None of them have really come up, you know, as the
the flowering, uh, kind of boon and benefit to the investors or the company itself. Um, but most of the time they
they hit on the the the shores of of, you know, lack of capital. And I think
again getting back to coronairus I think the coronirus event was horrible in in you know killing off these startup
companies as as well as existing companies and so so forth um because you know the market the money got diverted
we we weren't creating things we weren't getting the benefit and so they were you know you don't like really like the term
printing money but something happened where there was you know everyone kind of like subsisted um and we grew our
deficit and so forth. Um there's not a question in there per se, but maybe you can kind of address uh that aspect of
you know kind of the you just you just hit on it. Uh people who've read the deficit delusion
properly have said this isn't about debt. It's a tribute to entrepreneurs. And I say yeah it is. Uh and you just
hit on why you say you guys pass on a lot of companies. Well of course you do.
That's not a knock on you. Silicon Valley is littered with VCs that passed on Facebook and and Google and Apple and
uh go go down the list. Never forget that Steve Jobs when he first he first offered uh roughly 50% of Apple to a an
electric uh uh basically a Radio Shack store owner in New York City and that no
one was interested that they start in garage not because everyone's lined up to fund them but because no one's interested. And so think, okay, you know
this, the rich provide all the capital. Sorry. Uh they provide 99.9999%
of all startup capital. They just do. Uh the rich created Silicon Valley. That
was that was the Rockefellers, Vanderbilts, FIPS wealth that that went out there and created it. And so my
point is the rich have money to lose. Just think if we didn't so excessively
overt tax them such that the government can run up 40 trillion in debt. Think of all the wild and crazy ideas that would
be funded. And now they're not being funded. And they're not because, as you say, there's a there's a limit on capital. There's only so much the rich
can lose. They could lose a lot more. If if if right, left, supply side, libertarian didn't all agree that the
problem with the debt is not enough revenue, which is so shockingly, abjectly absurd. They say the debt is
because there's not enough tax revenue, which so defies basic logic. But because
they agree that all these great businesses will never see the light of day or or or all these failures would
never see the light of day. Let's be clear, it's failures just as important. Yeah, there's a lot of that, you know,
and I don't want to necessarily we we've already had a talk on this topic, but um
getting since we're on the concept of startups, uh you are the world's expert on on uh the opposite opinion of Liz
Holmes. um uh she recently made the news again because there's a quoteunquote
secret documentary. I don't know how you can do a documentary by secret um uh
right before her um whatever the word is for shuttling off to prison. Um and and
two guys were with her and you know the New York Post kind of cover I read the
article there I haven't seen the video um itself but they talk about you know the fact she doesn't blink. I I watched
a little piece of it. She's blinking like people say weird things. She has wide open eyes. Um her eyes are not, you
know, wide shut as the Kubrician um movie would uh you know, conversely say
um just briefly since we are a health show uh and kind of on an
entrepreneurial um tilt here. Um what's what's the Liz Holmes defense and where do things stand with her? I know you
engaged with her husband Billy Evans is his name. Yeah. Um, uh, it's
interesting. I, my take on the the clip that they showed was that was classic
Elizabeth Holmes. Uh, and I say that in a good way. Uh, what if it had just been
a clip from the documentary that showed her walking around her house or or feeding the baby? Uh, no one would have
cared. Uh, she's so smart. she recognizes that if it's this odd clip
showing her staring intently and saying I'm real, uh, the interest in the documentary is
going to skyrocket. And what I hope from that is that there are some revelations
within it that that remind people again, wait, why is she in prison? Uh now I
have said to Billy off air I've said that look I don't think you I don't want you guys ever to be apologizing for what
Elizabeth did. Uh never do that. That change that switches the discussion the terms of her detractors. Uh what
Elizabeth did was heroic. Uh we need more serious fundraising to discover the
future. um if she weren't pretty, if she weren't a stand for dropout, if she didn't I think a lot of people got bored
with her story and so she's be she's now in prison for it. But uh we need more
people like her. We don't need less. Well, the old the old question comes
down to whether she misrepresented and that's a separate and again we covered this on a previous video. I recommend
I'll put the link up to that one as well. Um but there's a fair amount of you know kind of misrepresented
misrepresentation in any um startup. I have a startup friend that I was mentioning uh probably to you and uh
he's a good friend of mine and he he's brilliant. The guy's uh brilliant. I mean one of the more brilliant people I
know. I know a fair number of brilliant people. Any um his device kind of microsizes the metabolic room um that we
saw in medical school and still exists today. And it's kind of a large room that kind of has you have to have
everything kind of closed so you can check out the oxygen function if you're on a bicycle and so forth. Actually the amount of you know checking our engine
basically how much oxygen we're using, how much carbon dioxide we're putting out whether and his device is is tiny.
It's like uh like 2 ounces or something like that in weight. Um and fits easily
over the face. It's it's probably would be would have looked not out of place during the N95 COVID mask era. is
probably smaller than those things and almost the same weight and and his does thing everything that the big metabolic booms do or you know now they have them
the size of telephone booth or something like that. Um and and you know eventually it ran a ground um because of
lack of capital and so forth. Um but the thing is um you know along the way you
you present kind of the image of what's going to be there and then you kind of fill in the details later. you don't
necessarily have everything mil and um you know perfected and your your interface and your software and hardware
you're doing it at you have the idea and you have the genesis now question with with Theronos is whether her idea of
having this you know every test in a drop of blood was ever achievable I mean at some point down the road it will be
but did she have you know reasonable mozzarella pizza strand from from A to B to to concat concatenate from her idea
to to the reality and did she misrepresent And that's where, you know, calls into the concept of fraud and and
and whom she defrauded probably was more important like George Schulz Schultz's grand um kid and and by I think maybe
George Schultz himself uh whatever. So there's kind of like proxies for the um
you know people who got you know insulted and and taken in but but you know frankly I've been taken in and I I
kind of think I'm you know maybe above average or close to average in intelligence. you know, it's like
[snorts] above. So, so it's like, you know, I got taken in by stuff and it's like, you know, our
batting average, I mean, frankly, to be a good hitter in baseball means you hit the ball like a third of the time, you
know, less than a third of the time, and then you're all on the All-Star team. If you hit the ball like a fifth of the time, you're out of the league, you
know, so there's some sweet spot, you know, not only in your baseball bat, on your hitting average, and those are those are great hitters, you know, but
they're up against great pitchers, you know, so there's always this competition that the pitchers don't want you to hit, and the hitters, you know, whatever. So,
so where where do where do you stand on the actual, you know, the the the kind of that that focal point of of where
they graded her as having defrauded? Well, that's the thing. It's Silicon
Valley's business model to fail. Uh they're investing in the impossible.
If they're not investing in the impossible, they're not in business because it's not the singles, doubles,
and home runs that sustain you in Silicon Valley. It's the multiple grand slams that uh that that that fund all
the the losers. And so Elizabeth's Holmes only error was that she raised
too much money in pursuit of her vision. But these weren't widows and orphans. These were smart people. These were the
most sophisticated investors in the world who wanted more of her shares. But see, she wouldn't sell any of her own
shares, which is odd since everyone says she was out to defraud people. if you're if you're if the scam is working, you
kind of you kind of liqufy some of what you own. She she sold none of it. But
again, I I just think the bigger thing is you make the obvious point that maybe a drop of blood couldn't achieve what
she intended to. Uh true, but remember the Washington Post said in the early 1900s that it's a fact that man will
never fly. Uh this is about the impossible. She was pursuing the
impossible. That's why the valuation went up so high. Uh again, these weren't
idiots. These were real people. And so the fact that she had grandiose visions, the fact that she's seductive to this
day, which some will people say about this documentary, well, I hope so. You kind of have to be if you're trying to
do what no one's ever done before. Yeah. Now, there's a fair amount of that. Uh you know, I I recently uh got
wooed and and bought into I think the single best pitch I'd ever seen. and a
bunch of us um again nobody's you know brand new and fresh in this and we've got experience seeing companies on a
regular basis um and uh there was a company I'm not going to mention but you know we invested back in January it was
it flopped it floundered I don't want to insult that fish uh it hadocked uh it c
it caught it it um we got scraed there we go um you know
like two months later but it it was a great idea I don't know he you know, it was a, you know, it's um something to do
with, you know, getting customers on online and getting their eyeballs, you know, coming back to your product after they've kind of grazed over your web
page and being able to sus out who that was by kind of a light fingerprint, you know, based on your web page and try to
get those people that that, you know, you wouldn't otherwise. Um, and I, you know, I don't know. I mean, I was
seduced, I guess. I I don't think he was malfeasant. I just think he ran into problems he couldn't foresee, you know,
which is like probably rights and legal stuff and, you know, governments and whatever. So there there's like a a
pathway out there that he didn't foresee. I I don't think he was disingenuous. Uh I think he was wideeyed
and maybe that kind of attracts something in the people who want to see that. I mean we think humans uh you know
are aspirational. I think it was which Browning who said uh man's uh reach must
ever exceed his grasp else what to heaven for you know that we we are you know we are uh aspirational creatures
and I you know we have DNA literally but I think our um kind of parlance is is is
storytelling and we are storytelling creatures and we want to have that narrative so we we fall into it but
those narratives are also what what make us be able to build things that that walruses Um, I mean they don't have
opposable thumbs but you know primates do and they don't build the things we have because we are able to have this kind of meta aspect of speech. We're
able to conjure up visions that aren't you know just alert alarm something
coming hunger I hate you whatever you know we we are able to like weave stories and then we are able to create
things out of those things. It's like, you know, if if Elon Musk, you know, has that aspirational aspect, you know, to
to go to um Mars, I don't know if it's real or not, you know, but he's building toward it. And it's like if you don't
get there, you know, without throwing the, you know, the rope ladder up in the sky and doesn't grab on, you know, like
I forget what who invented the sky hook, you know, like not not Kareem Abdul Jabbar or Magic Magic Johnson, but you
know, you throw a hook up in the sky, grab, you know, it holds on then you pull yourself up. I mean it does not
make any sense but you know stranger things have happened. You know it's kind of like a lot of the the space stuff
that happens is things that people didn't conceive of before like having you know kind of uh you know geo
synchronic orbitals and and having staged um you know whatever uh propulsion whatnot. They're just things
that that happen because people have these ideas and we need more of it. And and again to
me it's always the scene is the most prosperous country on earth with all these amazing advances but the unseen is
staggering. Just think how much more advanced we would be, how much better
living standards would be if not the Democrats. If not Democrats, Republicans, supply sideers, and
libertarians didn't all agree that, oh yeah, well, the rich because they're rich, they should they should either pay a flat tax, which is a wealth tax, or
they should just pay a graduated income tax and they should pay a lot more. Wealth is so heavily taxed in this
country to the detriment of progress because the rich uniquely can fund new ideas. The poor can't do it. middle
class can't do it. I get so mad when Republicans say, "Hey, look, our tax cut
largely went to people earning under $500,000." And I say, "Okay, so you're admitting your tax cut had nothing to do
with growth. Absolutely nothing."
When you do want growth, um, and let's presume we do, um, we can talk about why we want growth, um, and what growth is.
Uh, because I, you know, my house isn't growing. It's kind of just here you know I'm not growing personally probably I'm
shrinking gradually um you know we can talk about what growth is more people um more things around us uh better facility
you know greater ease uh you know what what is growth a and then how do we
facilitate it and why do we want it well we want it because well I I I know
you know we want it because we want to we haven't scratched the surface of our potential uh to this day, and you know
this better than I, if I get a pancreatic cancer diagnosis, odds are are really high that I'm going to die.
Now, there's a new drug out there from a California company that has seemingly slowed its ability to kill. Uh, but as
we know from our friendship with George Gilder, everything on Earth that's needed to solve pancreatic cancer and
all manner of other things already exists. We just don't know how to use it. The only way you can learn how to use it is through investment. We need
more Elizabeth Holmes. We need people with such grandiose visions that they can attract enormous amounts of capital.
And it just horrifies me once again that both sides agree the rich should pay all the taxes because what they're saying is
that we should slow progress immensely. By growth, I mean progress, investment in new ideas. As George Gilder would
say, we need more information. We don't have a fraction of the information that we should.
You know, it's an amazing thing. Um, you know, the the I I think about that
thought of yours oftentimes when I um you know, doing some odd task around the
house. Um I don't know like for instance, screen door just broke. The handle fell off. Boom. I mean, I don't
know why the metal fatigued as as do we all. Um and it just fell fell off in my
hand. So I I need to get a new one. Um thinking about the best ways to do it now. You know, I I I can sit right
there. It used to be I'd have to like run to the hardware store and, you know, find the right thing, bring it back,
doesn't fit, wrong size door, wasn't thick enough, whatever. I can like basically take a picture of the thing I
have. Um, get the, you know, skew SKU uh
code off it. Um, find out that thing, find out the better ones of that thing,
the ones that everything's kind of inferred from it. And I haven't like moved from my seat. Um, now I will be
able to move primary seat when I want to, but I won't have to do it at the command of things. Now, just a side
story. Um, back in 1987, my wife and I, we were not married yet, and she trusted
me enough. Um, we had met friends in Spain. She had tradum.
I was between jobs and she was as well. And, uh, she went to France with a friend. We, the boyfriends, met them in
Spain, Madrid. We flew over. I brought bicycles and then we left them at Barcelona or someplace. Uh she and I
traveled uh you know kind of eastward. Uh I saw my Avitz surviving um great
uncle in Zurich and then off we were uh behind the Iron Curtain. [snorts] Uh we
bicycled from Vienna to Dior uh g yo r in Hungary and um and we went through
the iron curtain and at that place one piece of the bicycle broke and um you
know it's an easy kind of thing you go into hardware store and you know you find the part you know here this is like thousand drawers and you just pick the
thing out you find your thing almost kind of templating what I did with the screen door anyway but this I just need
a nut and bolt and um so I go into the hardware there's a hardware store in town and you can cartoons like this or
you know handdrawn images what but literally was true I go in this place shelves were empty up and down this
place was a was you know pre um Soviet pre you know Soviet era you know store
that had existed until the you know the the I guess you know kind of the 40s the
Russians came in whatnot um and um and you know there's nothing there so I
I spoke German and I I managed to converse with a Okay. And he's like, "Oh yeah, nuts and bolts. You want those
thing, whatever." And I go down there and there is a box, one box on the shelf, and it's just unlabeled. None of
the nicities or whatever. No, you know, signs and pleasant colors, whatever. Just like a brownish box. And I open the
thing up and there's there is a nut and bolt, but it's about um five four inches long, maybe metric. Um and and that was
it. That's the only one they had in the whole store. That was their nutbandbolt supply. Um
and and you know so the information part is you know here we we kind of can find
the things and then there's kind of the reflex of ability for people to supply those things. somebody who makes, you
know, that that thing for my screen doors, you know, doesn't wake up and say, "Oh my god, you know, I hope Randy, you know, is able to find this someday
when his screen, you know, this it's it's they make this stuff on the intuition and and aspiration as well
that people are going to continue to need these kind of things because they continue to need screen doors." In in the Soviet model, there's no need for
that. The the store owner, I don't know how he's existing. I mean, you know, he had a certain price for that thing and
whatever, but but you know, it's like, you know, the old Soviet joke, they pretend to pay us, we pretend to work.
And it's like the whole place, I mean, that there was, you know, that that story obviously stuck with me. And there were many items like that over the
course of the trip, and you just can't get them. And nobody had the interest in doing it because everything had been stifled. So, there's kind of like this
what you talk about growth. The anti-growth model is where nobody cares and is like everyone's kind of left alone and there you are.
Yep. Uh they're just there's the anti-growth model is stasis. It's just
it's things stay the same and it's how politicians see it. That's why I hate government spending so much. Uh
politicians see the known and want to maintain it. Um entrepreneurs look at
the known and say, "Oh, this is ridiculous. We're going to fix it." But see, precisely because they're this
minuscule part of the population, no one agrees with them. Most people see the known. And it's not just politicians.
And so you got to have these crazies, but it's expensive to fund crazies. And
I'll just add that for the your economist friends who worry about the debt, what they what they refuse to see
is that if we didn't overt tax the rich so much, we would not have debt. The
debt is an effect of market confidence that the rich will continuously be overt
taxed such that it's easy to lend to a country like this. If you remove the rich from Imagine if the United States
was just Alabama and Mississippi and Vermont, would it have a lot of debt?
No. It would have almost no debt because there's no billionaires there. There's no there's no centaillionaires there.
There's no trillionaires there. There'd be no debt. The US has lots of debt because it's got taxable access to the
richest people on earth. If you remove if you say that we're not going to we're not going to treat them differently from
others, uh suddenly there's no debt. But there's a lot more growth because
they're investing rather than paying taxes. Yeah. I'm a big fan of the late PJ RO's
book, Eat the Rich. And um you talk about one of your recent articles about the rock that was Hong Kong that that
you know kind of um conservatives like concept of Hong Kong with no resources and what you're comparing it to
Venezuela. Um but um you know there are other rocks out there that have some
resources. you know, basically around the Persian/ARian Gulf, UAE. I mean,
what happens when our billionaires and trillionaires decide to uh expatriate or
where um and and and you know, hang out in Dubai? And and what is Dubai's
business model right now? I assume it's not oil anymore. And do they collect taxes and how much? [snorts]
Well, Dubai is interesting. I you know, I'm curious what you think about that. I I've been once and it fascinated me. And
uh what what I learned from it is that there's a lot of people from Europe and all over the world there because they
can't get here. Um they're they're talented, educated people. It's just too impossible to get to the US. Dubai's
only rule is that you have to work. You don't go to Dubai and to retire. It's a
working city. And so it's kind of cool. There's just all these people working. That's all they do. Um so what the
business model is, uh I feel like it would succeed no matter what. Certainly oil helped it, but people say, "Oh, it's
rich because of oil." But well, explain to me Nigeria. Um, explain to me Venezuela.
It's not just oil informing some of these locations. There is there are brains at work.
Yeah. No, that's a reasonable point. You know, there's so many things squandered. Getting back to the Venezuela concept,
um, you're unhappy with Donald Trump's recent actions there. Would you explain?
Well, because we could be 100% breath of oil in the United States. The United States could be a barren rock on its
own. Zero oil. We could also be at war with or embargoed by every oil producing
nation on Earth. Yet, we'd still consume all of the world's oil as though it had bubbled up in West Texas. And we would
because we're the most productive people on Earth. And no one passes up a market
that productive. There's just too much money to be made in it. Uh never forget that in the 1973
Arab OPEC embargo, which means it didn't include Iran. It's not an Arab country. Uh we still bought the oil from the Arab
countries. We just bought it from those they sold it to. They weren't going to give up that market any more than the Chinese would give up the US as a rare
earths market. You're not going to give up such an enormous uh place
economically. And so why would we want to be quote energy independent? What a
stu what an economically backwards notion. You just import things that you
don't have or that it's not worth your time to uh extract. You just import from others. And believe me, they're going to
sell it to you. So we want to get into the oil business. Why? What's the value
there? And and let's add remember conservatives want limited government. At least they claim they do. Um, what
are the largest oil companies in the world? Certainly not Exxon Mobile. It's stateun. Well, why are they staterun?
Because oil can be taken. I can't take Randy Bach's mine, but governments been taking oil for for as long as it's had
an economic value. Why do we want the US to own more of our economy?
Well, the the converse would be [clears throat] um that,
you know, I I think it was more geopolitical, frankly. I mean I think you know we are in I don't know which world war we're in right now whether
it's four or five um but there are geopolitical interests and um Venezuela
had say a bad actor running it a series of bad actors running it and this was uh
you know we we did this you know very swift um maneuver to decapitate
partially or and slightly recapitate with the Deli Rodriguez whatever her name is and and you know this is I I
think a kind of a a parental maneuver rather than an entrepreneurial maneuver
per se and that you have this, you know, aspect where the the money won't just be siphoned off into um the oligarchs there
who are not doing well and and and doing disservice to their own population and and take away the breeding ground for
kind of Chinese beach head uh close to our country um as well as power there.
Clearly people um uh I think are interested in the oil. They're interested in the control thereof and
the fact that there are government entities uh holding it um points to the kind of centrality of the power there
and that it becomes a power lever. And so in order to have our nice libertarian uhish world and um free markets and
whatnot, we have to have them policed. You know, I I can you know claim my house as a free market for stuff, but
people can come in and rampage and pillage it and whatnot. So I need some protection o of it. You know the United
States of America, you know, kind of wanted commerce between the states. Um
but they also needed protection from other states and state actors. So I think there's that aspect. You have to
have you know guard rails or or some kind of like uh you know system of protection.
Yeah. Um I don't know what the protection was from Venezuela. I I didn't go to sleep at night worried
about what Maduro was going to do. I I I think it was horrifying what he was doing to his own people. Uh do we have a
dog in that fight? Look, it's it's hard to say that. I suppose that that's in many ways a different debate. But what I
think it's important to point out is that oil got as low as $7 a barrel
during the Reagan years. It got as low as $12 a barrel during the Clinton years. Uh was OPEC feeling generous at
the time? Did they just think, "Oh, no. We just we really like the United States right now. We're going to No. OPEC never
controlled the price of oil. The biggest driver of the price of oil is the value of the US dollar. And if anyone doubts
this, just Google oil price history. Notice how if you you a chart will come up. Notice how it's kind of flat like
this. And then after 1971, it's up and down. Well, so what does that tell you?
When we destabilize the value of the dollar in 1971, we we to we took the oil
price on a roller coaster. But what's important is during the Reagan and Clinton years, the US was largely energy
dependent. Uh because and we were because it's it not economic to extract
oil in the United States at such low low prices per barrel. Uh were we worse off?
No. I loved paying less than a dollar per gallon. Uh did did they could they restraint hold it from us? No. Uh did
the price go up? No, it went down. We uh America extracts quite a bit more oil
today. Yeah, no surprise. Of course it does because oil is so expensive right now. So for the United States to be in
in the business of something governments do around the world, Americans have to pay quadruple or more than that per
gallon of gas. I find it so insulting and I find it so frustrating that
conservatives who used to be of the Robert Bartley, I bring him up because you know him or know of him through your
friend Jim Malone. His father was the deputy editorial page editor of the Wall Street Journal under Bartley. Bartley
wrote a book about the Reagan years saying that yeah well in the 1970s oil didn't become expensive. The dollar
became cheap. There are no Republicans talking about that today. And I find it
exasperating beyond belief. So, how did the dollar become cheap? Is it cheap now?
Well, presidents get the dollar they want. They get it in different ways. President Nixon decided to delink the
dollar from gold. I'm not going to have a gold discussion. That would turn off all the economists. They hate it
because, you know, gold gold would mean that they wouldn't have as much to do. But uh they economists including Milton
Freeman said, "Nixon, you got to get off the gold standard." Okay. Well, so that was devaluation.
And so with the dollar in decline, commodities priced in terms of gold,
oil, wheat, meat, soybeans, they all went up in the 1970s. Inflation, devaluations, inflation. Ronald Reagan
ran on returning to the gold standard. That was in his every stump speech uh
after he won New Hampshire in 1980 in February. Notice how the gold price
starts going down. Well, markets anticipate and they anticipated a Reagan victory. Reagan again was talking about
reviving the dollar as a measure in gold. Well, he didn't get that to his everlasting regret. He could have, but
he didn't get it. Uh but the dollar strengthened quite a bit under him. And so oil prices collapsed. Um commodities
collapsed. Uh what was Bill Clinton's Treasury Secretary or his most famous one, Robert Rubin? What did Robert Rubin
say adnauseium? Uh a strong dollar is in the interests of the American people. He
never job owned the Japanese about the value of the yen. He was a strong dollar guy. Is it any surprise that oil was
cheap during those years? Uh George W. Bush gets into office. I would argue to
you that he's the worst president in my lifetime. And I was born uh when Nixon was president. Um, uh, George W. Bush
was all for a weak dollar and he got it and here we are. We're still there to this day.
So when you say he's for a weak dollar, what what are the marionette strings you have to pull to get that?
They don't have to be because see, remember, Treasury is the dollar's mouthpiece. The Fed has never been the dollar's mouthpiece. And so Nixon took
us off the gold standard. So that tells you the power of a president to change the value of the dollar. FDR famously
devalued the dollar in his bathtub from 120th of a gold ounce to 135th. He just
said from here going forward the dollar is worth this and what can the markets do about it? That's the that's the
issuer of the currency. Uh so just the same someone like Reagan could have put
us back on the gold standard and so markets responded to his belief in a strong dollar by saying he could do a
lot of things. They moved it back upwards again. Bill Clinton's treasury was all about a a strong dollar is so
important and and they they conveyed it through not all the job owning even under the Reagan years about the dollar
yen and everything. Uh George W. Bush wanted a weak dollar. His Treasury secretaries kept saying that. Um Donald
Trump says a weak dollar is great. You know who had the strongest dollar of all the presidents during the 21st century?
Joe Biden. Yet he's blamed for inflation which is just so ridiculous. It's just so thoroughly mindless. I'm not a
Democrat. I've always voted Republican, but the dollar was strong under Biden. It's been incredibly weak under Trump.
President Trump wants a weak dollar. Okay. So, and we're seeing this in prices. So, so wanting, you know, I I I want to
be taller. You know, my wanting, but you don't have the power. You don't President Trump can once again, he can
say right now. Okay. Going forward, the dollar is worth one, we will redeem dollars at at at $2,500 worth of gold.
we will redeem dollars at onetoone rate for the for the euro and no one's c no one can do anything about that and so
you don't have the power that President Trump or any president has over the okay so so literally what h what did
George W do like aside from wishing it and what what literally has Donald Trump done aside from wanting it
uh well he's continuously said a weak dollar is great which is a signal to the markets that it's that that's that There
are things add into that that the US Treasury has an exchange stabilization
fund. So if it wants to at any time it can enter the markets to sell dollars to
to shrink their value to buy dollars. And so for a president to say what he
wants that president is backed by tens of billions of dollars that can enter the marketplace and affect the price
assuming they want to. We we also have like a strategic oil reserve and and at times those things get used like
pre-election whatnot to to bring down the price of gasoline at the pump. I think Joe Biden did that during the the
runup to 2024 if I'm not mistaken. Um and I I would just make that as an
analogy, not not I'm not making it's a good analogy. All right, but you can only do that
proves my point. But if I if I have my my rainy day fund um or I have some
insurance pay out on my house, whatever, I don't get to use that over and over again. I use that once or even the
threat of it, whatever. But it's like I I really don't see how the jawbon works repeatedly, you know? I mean, I can I
can yell at the dog across the street and maybe the first time he recoils, then he finds out I'm just yelling at him. He comes and bites me. You know,
it's like I I don't see how just the the wish that it become weak. I mean, there structural policies that are happening.
True, but you have words. Donald Trump has the whole of the
federal government. Okay. So, so what are those actions that are dispositive between
again the look it up? Treasury has an exchange stabilization fund that that
exists to move against the markets one way or the other on the direction of the
dollar. uh Treasury theoretically can print
uh just the same for the did do you agree that when President Nixon severed
the dollars linked to gold that the dollar shrunk in value? Do you agree that there was inflation in the 1970s?
Well, you know, I was in medical school, well, I was probably in in high school then college at the time. I didn't
follow this. So, I I'd have to go look. I mean, this is a new concept for me. I I've heard about it. I have not researched so I'm not going to
Well, yeah, but explicitly he [snorts] the dollar was worth 135th of a gold
ounce in when in when the 1970s began. By 1974
after Nixon severed the link, a gold price bought uh a dollar bought one
130th of an ounce of gold. uh by 1980 a dollar bought was worth 1875th of an
ounce of gold. So that was a substantial devaluation of the dollar. But it could also be the the reflexive
revaluation of gold. I mean people no but see you know why that's not true is gold is a constant and that's not me
saying it. Notice and and this this would be confirmed. I can footnote this all to
you. It's in all my books. Before 1971, there were no currency
markets. And why were there no currency markets? Well, the dollar was defined as 135th of a gold ounce. And the world's
currencies were pegged to the dollar. There was no gold market because there's
no reason to trade currencies. There's no currency market because a currency defined in terms of the
constant that was gold was so stable that what was there to trade? M yet today, as George Gilder will tell you,
it's 7 to10 trillion a day in currency trading. That is the markets telling you the
immense stability that the gold price gave the dollar. They that we didn't just happen upon gold. It was thousands
of years of people trying to figure out what what would imbue a currency with stability. And so they happened upon
gold. It's the most stable commodity in in the world. And so when the president when Nixon
says the dollar is no longer defined as 135th of a gold ounce, that was a devaluation. So for the same reason that
President Nixon could devalue the dollar by leaving the gold link, a president
can mess around with the currency's value now because the markets know the power the president has. He can put us back on the gold standard. He could put
us on a euro standard. He could put us on a yen standard. There's all sorts of things you can do.
So, I mean, I I don't really mind those markets because I think everything has is a market and and uh there's going to
be an exchange one way or another, whether it's ideas or is there a market for a foot or an inch?
Do we trade that? Oh, the foot's too strong right now. Americans are too short. So, let's devalue the foot so
Americans can be taller. Well, it's interesting. A currency is not a market. A currency is a concept. It's a measure of value.
And so economists, your economist friends will say, "Yeah, if we devalue the dollar, American goods will become
more competitive globally, which is just utter nonsense." Never forget the vast majority of goods, including
Americanmade goods, are informed by inputs from around the world. And so if
suddenly we shrink the the value of the dollar, input, imported inputs to make
any anything that we create, the cost of it is going to go up. And so no, currencies are not a market. They're
just a concept of value. They sadly be have become a market because people like Milton Freriedman
said, you know, we really need to give more economists jobs and so the dollar should float around
as as Jim Malone's father used to say. He said that the the the Freriedman policy was an absence of policy, just
floating money just going every which way. Which again, it'd be like saying, "Yeah, it's funny. I just think the inch
is too strong or I I really feel short today. I'm going to devalue it. I I I
want to be 12 feet tall, so we're going to shrink the foot in half. [snorts] Interesting. I'll have to ponder that
one. Um, you [clears throat] know, absent absent gold, um, you know, people have been trading one way or another
forever, right? I mean, isn't that literally the oldest profession? Yes.
And and so if they're trading things by which they trade. So so so now there's
obviously all these kind of um you know ethereal uh coins out there. Um what do
you think about that as as a marketplace and kind of a superimposition on these
fiat currencies and does that reimpose any other type of value? Um, and does
does kind of the original Bitcoin infer excuse me confer some stability
given that it's a fixed amount and even gold can be mined and whatever and gold presumably can be diluted and faked
metallergically that we can't perceive. So, you know, how does that work on a on a background uh to your thoughts?
Well, Bitcoin is not money. It can never be money precisely because its supply is
fixed. Again, why would you put a supply limit on a constant? But because its
supply is fixed, it has no purpose. Uh hey, uh hey, Dr. Randy, uh come fix my
bathroom. One Bitcoin now one in six months. You'd say, "Okay, well, which Bitcoin?" Uh the one that was trading
for 120,000, the one that was near 60,000. Which is it? So, Bitcoin's
absurd. It's it's it's a cool idea. It's revolutionary. Um what fascinates me is they say well
and so I think cryp I think crypto will ultimately take over but those trying to take over it right now I don't think
they will be the ones because what's the most circulated cryptocurrency it's called stable coin so it's a currency
that has or it's a digital money that has onetoone relationship with the dollar but wasn't the whole point of
crypto to get away from governments and their persistent devaluations of money and so you're not getting a stable
currency there the notion stable coins is stable is just so ridiculous.
Um and and see the this was always known. So the Chinese invented the fiat currency in the seventh century and that
was the debate at the time. The Confucians said well don't let government issue it, they'll devalue it. And so the the Confucians were saying at
the time, let's have a private currency. And so that's where I think crypto is ultimately going to win. Um whereas
governments have always devalued their currencies. uh what if Amazon issued a
dollar or JP Morgan? Well, they can't devalue because if they did, they'd lose customers. And so, I think that's where
we're headed. Uh but it's it's not going to be a onetoone currency relationship with the dollar. Why not just earn
dollars? Someone's going to recognize that what people have always wanted, people have been trading as long as
mankind has existed, they used to have to barter. money became a way, a concept, a measure of value for products
to exchange for products. Uh, someone's going to say if we really want a currency to circulate a lot, it's going
to hold its value tr and truly. And it could be that they just return to gold
in that in that way. So, tell us uh we're rounding out our
hour here. Uh, it's been fascinating as always. Uh, I'd like you to maybe tell us your next book
and and how how you decide what the demand is for your ideas and where you decide directionally to go.
Well, no one's ever demanding my ideas as my book sells would sales would confirm to you, but you never know.
Uh, this book is called California Freedom: How the Golden State is igniting a growth, parenting, education,
and retirement revolution. I make a case in the book that California's economy is not just large,
but it's massive and it's holding up the world economy and it's only going to get
better and better. That while the right is out and out confirming that
California is in decline, that it's been a state run into the ground, and while the left are kind of hedging their bets
saying, "Well, we don't think California can do as well. It's always done." I make a case in the book that c
California's wealth today which is unrivaled anywhere else in the world is a fraction of what it will be that that
the talent that's coming into the state so overshadows the talent the lesser
talent leaving that the future is going to be unbelievable and it's going to transform how we all live how we all
work regardless of where we live how we retire everything so what's what's the basis of that
optimism I mean there is you know Elon our muse uh left California for, you
know, greener, browner, uh sturdier pastures, Texas. Um which which grains
are coming into California? Um and you know, how does how does that work? Are you talking about from
internationally or are growing their own internationally and domestically? Um I make I I make a case that taxes are not
what c are not the driver of people out of California. In fact, the biggest inflows into California nationally are
New Yorkers. Well, you could hardly call them tax exiles. Uh, the reason
Californians are leaving is not because of taxes, but
because there are so many rich and productive people there that housing is impossible to get. And so even in the
bad areas, you're looking at a starter house, the thousand square feet in
neighborhoods that if I took you to, you'd say, "Oh my gosh, uh there they
started a million dollars." That's not a sign of people leaving. So who's coming in? Uh well,
point out in the book, and it's statistical, Harvard Business School grads are flowing into California on mass. Same
with Stanford. Same with Wharton. I'll bet you anything that exponentially more
uh Harvard Medical School grads are flowing to California than they are to Texas. What I point out in the book is
that this in this outflow of talent and inflow into Texas and Florida is just
not occurring. The superstar talent continues to go to New York, California, Massachusetts.
Undeniably, statistically, factually true. Uh there are a lot of people who
want more house who are leaving California. But why can they leave California? Because of the genius
technology created out there that makes it possible for people to leave anywhere. It's really fascinating to
look at now medically though people say doctor shortage.
I think a lot of them and you would know this better than I talk about a subject. I'm guessing that the majority of
geniuses like you they're just in Northern California now. They're no longer treating patients. They're
creating drugs to treat exponentially more people and save their lives. But
they're just not moving to Texas and Florida. They're they're there. Well, we we shall find out. Thanks so
much, John, for being with us. I appreciate it. Thanks for having me. All right. Perfect.
Ask your economist friends, why are the markets not worried about the debt? Um, everyone's talking about higher Treasury
yields right now, but they're the same level they were in in 2007 when the debt
was 7 trillion. So, it's up nearly six times since then. Uh, markets are just as happy now as they were in 2007.
And so, to me, uh, the real crisis that no one talks about is that we could be
40 trillion in debt and markets don't care. Silicon Valley is littered with VCs that passed on Facebook and and
Google and Apple and uh go go down the list. Never forget that Steve Jobs when
he first he first offered uh roughly 50% of Apple to a an uh uh basically a Radio
Shack store owner in New York City and that no one was interested that they start in garage not because everyone's
lined up to fund them but because no one's interested. Now, I have said to Billy off air, I've said that look, I
don't think you I don't want you guys ever to be apologizing for what Elizabeth did. Uh, never do that. That
change that switches the discussion to the terms of her detractors. Uh, what Elizabeth did was heroic. Uh, we need
more serious fundraising to discover the future. um if she weren't pretty, if she
weren't a Stanford dropout, if she didn't I think a lot of people got bored with her story. And so she's be she's
now in prison for it. But uh we need more people like her. We don't need less.
[music]
Uh, welcome everybody. Uh, watch your seats. Uh, stay stay ready.
Uh, if you ever seen those videos where uh, you know, somebody goes shoot them off to space and they're, you know, they
feel the G-force of of the world pulling back at them. It's kind of a bracing experience to have John Tamney on. Uh he
noticed in the our green room that I had just come out of the shower, slick back here and all that kind of stuff. Well, I
I consider John kind of a refreshing breeze and mist of of of illuminating
thought. Um he is the valuable and valuable head of the Parkview Institute and the author of the um uh deficit
delusion as as well as a bunch of other refreshing topics. And I keep, you know, bringing up that kind of refreshing
aspect because John, uh, for whatever reason, thinks differently from other people. Uh, was that some kind of injury
as a child? You know, you're dropped the wrong way. I mean, how how did this happen? Uh, wow. It's going to be really
pretentious, but you know, Elon Musk always said that he thought that he got his weirdness from his grandfather who
is a chiropractor. Um, I've got a grandfather who's a chiropractor and I'm also left-handed. So, you combine those
two things. Uh, chiropractors thought doctors were nuts. Doctors, of course, think chiropractors are nuts. I think
economists are completely nuts. They think I am even more nutty than I think
they are. And so, I think it's natural. I was born this way. Um, contrarianism
is not a choice. It's just a state of mind. I think everyone's ridiculous, especially economists.
Yeah. So, I I I I hang out with a bunch of economists. uh you know usually on the tennis court, squash court, that
kind of thing. Uh occasionally dinner parties and whatnot. And um I I have actually some unusual economist friends
who I think would you know find your views interesting and and uh as I used the term before refreshing. Um but uh
actually freshing could be just the word. I mean I wonder about refrigerator. People call it by refrigerator but what was the redoing
there? I mean you're kind of putting it in to begin with. You're not refrigerating it. Uh anyway uh your
views views are freshing. Um but uh you know a good number of them you know have
worries about the deficit and uh that that seems to be a topic on everyone's mind. We have you know the ma a magical
mystery number of 40 trillion. Um I mean they're all kind of elucory things. A trillion is a thousand billion and a
billion is a hard number to conceive of. Um you know I have not yet become a billionaire in anything probably. Maybe
I I don't even think in pennies I'd be a billionaire. Um and then to be have a trillion is kind of a you know more than
that say. um what what is the deficit delusion that we are operating under and
what can I tell my economist friends? Well, ask your economist friends. Why are the markets not worried about the
debt? Um everyone's talking about higher Treasury yields right now, but they're the same level they were in in 2007 when
the debt was 7 trillion. So, it's up nearly six times since then. Uh markets are just as happy now as they were in
2007. And so to me, uh, the real crisis
that no one talks about is that we could be 40 trillion in debt and markets don't care. Now, why don't they care? Because
they know that the US Treasury has taxable access to the richest people on earth who are poised to become
exponentially richer in the future. Uh that to me is a tragedy of misthic
historic proportions because just think if they didn't have this much taxable
access. Think of all the Nvidia, Amazons, Microsofts, Google's that would be founded. Think of all the failures
that aren't being founded because the rich are so excessively taxed now and in the future. That's the crisis that no
one talks about. Markets keep telling us the debt's the easy part, yet no one wants to listen to markets anymore.
Yeah, I I uh I'm I'm an angel. Not in in real life and not in the next life. Um
but as a metaphor, um I belong to an angel group and we look at startups monthly. Um I've been doing this the
last maybe eight or nine years, I forget exactly. Um you know the the oftentimes
their pathway is difficult. Uh they have a failure to launch um because of
capital frankly. Um I I think a lot of the ideas are awesome. A lot of the people who are doing this are are
clearly uh axiomatically entrepreneurial and they uh looking at the world in a different way and they bring energy,
enthusiasm and and frankly it's often hard to discern the you know bad ideas.
I think every now and then there's something that kind of grates me. Um it seems like a self-s serving thing
recently. I saw a medical company that uh was promoting um a product, you know,
a kind of revolutionary new product with a nice little gizmo for a problem I never heard of medically ever in my entire, you know, practice spanning four
decades or more. Um and and yet, you know, they would be able to find a code for it, a CPT code. So, there's kind of
a little bit of backdoor cronyism kind of thing going on. It would probably benefit the doctors doing the treatment
more than the people receiving it because I've like literally never heard anybody ever complain to it. from, you know, 40 million people have this
problem in the US. Anyway, aside from the rare one like that, most of the things that come across our desk are are
really nice products. Like one was a at home uh strep test uh which didn't even
make our grade uh to to be heard. Um, but it's a it's a nice little product and if everything works, I'm not saying
everything does. No, it would save people a lot of time, you know, as the the technical term schleing back and forth to the, you know, doctor's office,
wasting time in the waiting room, parking, all that kind of stuff to have the test at home and you save the visit and it would be a way of, you know, kind
of zoom um calling your your medical visits, which I think has been a boon, one of the actual positives out of the
coronairus era. We can come back to that because you have a book on that as well. Um, but it's like, you know, as I've
invested in companies, uh, you know, oftentimes they hit snags. None of them have really come up, you know, as the
the flowering, uh, kind of boon and benefit to the investors or the company itself. Um, but most of the time they
they hit on the the the shores of of, you know, lack of capital. And I think
again getting back to coronairus I think the coronirus event was horrible in in you know killing off these startup
companies as as well as existing companies and so so forth um because you know the market the money got diverted
we we weren't creating things we weren't getting the benefit and so they were you know you don't like really like the term
printing money but something happened where there was you know everyone kind of like subsisted um and we grew our
deficit and so forth. Um there's not a question in there per se, but maybe you can kind of address uh that aspect of
you know kind of the you just you just hit on it. Uh people who've read the deficit delusion
properly have said this isn't about debt. It's a tribute to entrepreneurs. And I say yeah it is. Uh and you just
hit on why you say you guys pass on a lot of companies. Well of course you do.
That's not a knock on you. Silicon Valley is littered with VCs that passed on Facebook and and Google and Apple and
uh go go down the list. Never forget that Steve Jobs when he first he first offered uh roughly 50% of Apple to a an
electric uh uh basically a Radio Shack store owner in New York City and that no
one was interested that they start in garage not because everyone's lined up to fund them but because no one's interested. And so think, okay, you know
this, the rich provide all the capital. Sorry. Uh they provide 99.9999%
of all startup capital. They just do. Uh the rich created Silicon Valley. That
was that was the Rockefellers, Vanderbilts, FIPS wealth that that went out there and created it. And so my
point is the rich have money to lose. Just think if we didn't so excessively
overt tax them such that the government can run up 40 trillion in debt. Think of all the wild and crazy ideas that would
be funded. And now they're not being funded. And they're not because, as you say, there's a there's a limit on capital. There's only so much the rich
can lose. They could lose a lot more. If if if right, left, supply side, libertarian didn't all agree that the
problem with the debt is not enough revenue, which is so shockingly, abjectly absurd. They say the debt is
because there's not enough tax revenue, which so defies basic logic. But because
they agree that all these great businesses will never see the light of day or or or all these failures would
never see the light of day. Let's be clear, it's failures just as important. Yeah, there's a lot of that, you know,
and I don't want to necessarily we we've already had a talk on this topic, but um
getting since we're on the concept of startups, uh you are the world's expert on on uh the opposite opinion of Liz
Holmes. um uh she recently made the news again because there's a quoteunquote
secret documentary. I don't know how you can do a documentary by secret um uh
right before her um whatever the word is for shuttling off to prison. Um and and
two guys were with her and you know the New York Post kind of cover I read the
article there I haven't seen the video um itself but they talk about you know the fact she doesn't blink. I I watched
a little piece of it. She's blinking like people say weird things. She has wide open eyes. Um her eyes are not, you
know, wide shut as the Kubrician um movie would uh you know, conversely say
um just briefly since we are a health show uh and kind of on an
entrepreneurial um tilt here. Um what's what's the Liz Holmes defense and where do things stand with her? I know you
engaged with her husband Billy Evans is his name. Yeah. Um, uh, it's
interesting. I, my take on the the clip that they showed was that was classic
Elizabeth Holmes. Uh, and I say that in a good way. Uh, what if it had just been
a clip from the documentary that showed her walking around her house or or feeding the baby? Uh, no one would have
cared. Uh, she's so smart. she recognizes that if it's this odd clip
showing her staring intently and saying I'm real, uh, the interest in the documentary is
going to skyrocket. And what I hope from that is that there are some revelations
within it that that remind people again, wait, why is she in prison? Uh now I
have said to Billy off air I've said that look I don't think you I don't want you guys ever to be apologizing for what
Elizabeth did. Uh never do that. That change that switches the discussion the terms of her detractors. Uh what
Elizabeth did was heroic. Uh we need more serious fundraising to discover the
future. um if she weren't pretty, if she weren't a stand for dropout, if she didn't I think a lot of people got bored
with her story and so she's be she's now in prison for it. But uh we need more
people like her. We don't need less. Well, the old the old question comes
down to whether she misrepresented and that's a separate and again we covered this on a previous video. I recommend
I'll put the link up to that one as well. Um but there's a fair amount of you know kind of misrepresented
misrepresentation in any um startup. I have a startup friend that I was mentioning uh probably to you and uh
he's a good friend of mine and he he's brilliant. The guy's uh brilliant. I mean one of the more brilliant people I
know. I know a fair number of brilliant people. Any um his device kind of microsizes the metabolic room um that we
saw in medical school and still exists today. And it's kind of a large room that kind of has you have to have
everything kind of closed so you can check out the oxygen function if you're on a bicycle and so forth. Actually the amount of you know checking our engine
basically how much oxygen we're using, how much carbon dioxide we're putting out whether and his device is is tiny.
It's like uh like 2 ounces or something like that in weight. Um and fits easily
over the face. It's it's probably would be would have looked not out of place during the N95 COVID mask era. is
probably smaller than those things and almost the same weight and and his does thing everything that the big metabolic booms do or you know now they have them
the size of telephone booth or something like that. Um and and you know eventually it ran a ground um because of
lack of capital and so forth. Um but the thing is um you know along the way you
you present kind of the image of what's going to be there and then you kind of fill in the details later. you don't
necessarily have everything mil and um you know perfected and your your interface and your software and hardware
you're doing it at you have the idea and you have the genesis now question with with Theronos is whether her idea of
having this you know every test in a drop of blood was ever achievable I mean at some point down the road it will be
but did she have you know reasonable mozzarella pizza strand from from A to B to to concat concatenate from her idea
to to the reality and did she misrepresent And that's where, you know, calls into the concept of fraud and and
and whom she defrauded probably was more important like George Schulz Schultz's grand um kid and and by I think maybe
George Schultz himself uh whatever. So there's kind of like proxies for the um
you know people who got you know insulted and and taken in but but you know frankly I've been taken in and I I
kind of think I'm you know maybe above average or close to average in intelligence. you know, it's like
[snorts] above. So, so it's like, you know, I got taken in by stuff and it's like, you know, our
batting average, I mean, frankly, to be a good hitter in baseball means you hit the ball like a third of the time, you
know, less than a third of the time, and then you're all on the All-Star team. If you hit the ball like a fifth of the time, you're out of the league, you
know, so there's some sweet spot, you know, not only in your baseball bat, on your hitting average, and those are those are great hitters, you know, but
they're up against great pitchers, you know, so there's always this competition that the pitchers don't want you to hit, and the hitters, you know, whatever. So,
so where where do where do you stand on the actual, you know, the the the kind of that that focal point of of where
they graded her as having defrauded? Well, that's the thing. It's Silicon
Valley's business model to fail. Uh they're investing in the impossible.
If they're not investing in the impossible, they're not in business because it's not the singles, doubles,
and home runs that sustain you in Silicon Valley. It's the multiple grand slams that uh that that that fund all
the the losers. And so Elizabeth's Holmes only error was that she raised
too much money in pursuit of her vision. But these weren't widows and orphans. These were smart people. These were the
most sophisticated investors in the world who wanted more of her shares. But see, she wouldn't sell any of her own
shares, which is odd since everyone says she was out to defraud people. if you're if you're if the scam is working, you
kind of you kind of liqufy some of what you own. She she sold none of it. But
again, I I just think the bigger thing is you make the obvious point that maybe a drop of blood couldn't achieve what
she intended to. Uh true, but remember the Washington Post said in the early 1900s that it's a fact that man will
never fly. Uh this is about the impossible. She was pursuing the
impossible. That's why the valuation went up so high. Uh again, these weren't
idiots. These were real people. And so the fact that she had grandiose visions, the fact that she's seductive to this
day, which some will people say about this documentary, well, I hope so. You kind of have to be if you're trying to
do what no one's ever done before. Yeah. Now, there's a fair amount of that. Uh you know, I I recently uh got
wooed and and bought into I think the single best pitch I'd ever seen. and a
bunch of us um again nobody's you know brand new and fresh in this and we've got experience seeing companies on a
regular basis um and uh there was a company I'm not going to mention but you know we invested back in January it was
it flopped it floundered I don't want to insult that fish uh it hadocked uh it c
it caught it it um we got scraed there we go um you know
like two months later but it it was a great idea I don't know he you know, it was a, you know, it's um something to do
with, you know, getting customers on online and getting their eyeballs, you know, coming back to your product after they've kind of grazed over your web
page and being able to sus out who that was by kind of a light fingerprint, you know, based on your web page and try to
get those people that that, you know, you wouldn't otherwise. Um, and I, you know, I don't know. I mean, I was
seduced, I guess. I I don't think he was malfeasant. I just think he ran into problems he couldn't foresee, you know,
which is like probably rights and legal stuff and, you know, governments and whatever. So there there's like a a
pathway out there that he didn't foresee. I I don't think he was disingenuous. Uh I think he was wideeyed
and maybe that kind of attracts something in the people who want to see that. I mean we think humans uh you know
are aspirational. I think it was which Browning who said uh man's uh reach must
ever exceed his grasp else what to heaven for you know that we we are you know we are uh aspirational creatures
and I you know we have DNA literally but I think our um kind of parlance is is is
storytelling and we are storytelling creatures and we want to have that narrative so we we fall into it but
those narratives are also what what make us be able to build things that that walruses Um, I mean they don't have
opposable thumbs but you know primates do and they don't build the things we have because we are able to have this kind of meta aspect of speech. We're
able to conjure up visions that aren't you know just alert alarm something
coming hunger I hate you whatever you know we we are able to like weave stories and then we are able to create
things out of those things. It's like, you know, if if Elon Musk, you know, has that aspirational aspect, you know, to
to go to um Mars, I don't know if it's real or not, you know, but he's building toward it. And it's like if you don't
get there, you know, without throwing the, you know, the rope ladder up in the sky and doesn't grab on, you know, like
I forget what who invented the sky hook, you know, like not not Kareem Abdul Jabbar or Magic Magic Johnson, but you
know, you throw a hook up in the sky, grab, you know, it holds on then you pull yourself up. I mean it does not
make any sense but you know stranger things have happened. You know it's kind of like a lot of the the space stuff
that happens is things that people didn't conceive of before like having you know kind of uh you know geo
synchronic orbitals and and having staged um you know whatever uh propulsion whatnot. They're just things
that that happen because people have these ideas and we need more of it. And and again to
me it's always the scene is the most prosperous country on earth with all these amazing advances but the unseen is
staggering. Just think how much more advanced we would be, how much better
living standards would be if not the Democrats. If not Democrats, Republicans, supply sideers, and
libertarians didn't all agree that, oh yeah, well, the rich because they're rich, they should they should either pay a flat tax, which is a wealth tax, or
they should just pay a graduated income tax and they should pay a lot more. Wealth is so heavily taxed in this
country to the detriment of progress because the rich uniquely can fund new ideas. The poor can't do it. middle
class can't do it. I get so mad when Republicans say, "Hey, look, our tax cut
largely went to people earning under $500,000." And I say, "Okay, so you're admitting your tax cut had nothing to do
with growth. Absolutely nothing."
When you do want growth, um, and let's presume we do, um, we can talk about why we want growth, um, and what growth is.
Uh, because I, you know, my house isn't growing. It's kind of just here you know I'm not growing personally probably I'm
shrinking gradually um you know we can talk about what growth is more people um more things around us uh better facility
you know greater ease uh you know what what is growth a and then how do we
facilitate it and why do we want it well we want it because well I I I know
you know we want it because we want to we haven't scratched the surface of our potential uh to this day, and you know
this better than I, if I get a pancreatic cancer diagnosis, odds are are really high that I'm going to die.
Now, there's a new drug out there from a California company that has seemingly slowed its ability to kill. Uh, but as
we know from our friendship with George Gilder, everything on Earth that's needed to solve pancreatic cancer and
all manner of other things already exists. We just don't know how to use it. The only way you can learn how to use it is through investment. We need
more Elizabeth Holmes. We need people with such grandiose visions that they can attract enormous amounts of capital.
And it just horrifies me once again that both sides agree the rich should pay all the taxes because what they're saying is
that we should slow progress immensely. By growth, I mean progress, investment in new ideas. As George Gilder would
say, we need more information. We don't have a fraction of the information that we should.
You know, it's an amazing thing. Um, you know, the the I I think about that
thought of yours oftentimes when I um you know, doing some odd task around the
house. Um I don't know like for instance, screen door just broke. The handle fell off. Boom. I mean, I don't
know why the metal fatigued as as do we all. Um and it just fell fell off in my
hand. So I I need to get a new one. Um thinking about the best ways to do it now. You know, I I I can sit right
there. It used to be I'd have to like run to the hardware store and, you know, find the right thing, bring it back,
doesn't fit, wrong size door, wasn't thick enough, whatever. I can like basically take a picture of the thing I
have. Um, get the, you know, skew SKU uh
code off it. Um, find out that thing, find out the better ones of that thing,
the ones that everything's kind of inferred from it. And I haven't like moved from my seat. Um, now I will be
able to move primary seat when I want to, but I won't have to do it at the command of things. Now, just a side
story. Um, back in 1987, my wife and I, we were not married yet, and she trusted
me enough. Um, we had met friends in Spain. She had tradum.
I was between jobs and she was as well. And, uh, she went to France with a friend. We, the boyfriends, met them in
Spain, Madrid. We flew over. I brought bicycles and then we left them at Barcelona or someplace. Uh she and I
traveled uh you know kind of eastward. Uh I saw my Avitz surviving um great
uncle in Zurich and then off we were uh behind the Iron Curtain. [snorts] Uh we
bicycled from Vienna to Dior uh g yo r in Hungary and um and we went through
the iron curtain and at that place one piece of the bicycle broke and um you
know it's an easy kind of thing you go into hardware store and you know you find the part you know here this is like thousand drawers and you just pick the
thing out you find your thing almost kind of templating what I did with the screen door anyway but this I just need
a nut and bolt and um so I go into the hardware there's a hardware store in town and you can cartoons like this or
you know handdrawn images what but literally was true I go in this place shelves were empty up and down this
place was a was you know pre um Soviet pre you know Soviet era you know store
that had existed until the you know the the I guess you know kind of the 40s the
Russians came in whatnot um and um and you know there's nothing there so I
I spoke German and I I managed to converse with a Okay. And he's like, "Oh yeah, nuts and bolts. You want those
thing, whatever." And I go down there and there is a box, one box on the shelf, and it's just unlabeled. None of
the nicities or whatever. No, you know, signs and pleasant colors, whatever. Just like a brownish box. And I open the
thing up and there's there is a nut and bolt, but it's about um five four inches long, maybe metric. Um and and that was
it. That's the only one they had in the whole store. That was their nutbandbolt supply. Um
and and you know so the information part is you know here we we kind of can find
the things and then there's kind of the reflex of ability for people to supply those things. somebody who makes, you
know, that that thing for my screen doors, you know, doesn't wake up and say, "Oh my god, you know, I hope Randy, you know, is able to find this someday
when his screen, you know, this it's it's they make this stuff on the intuition and and aspiration as well
that people are going to continue to need these kind of things because they continue to need screen doors." In in the Soviet model, there's no need for
that. The the store owner, I don't know how he's existing. I mean, you know, he had a certain price for that thing and
whatever, but but you know, it's like, you know, the old Soviet joke, they pretend to pay us, we pretend to work.
And it's like the whole place, I mean, that there was, you know, that that story obviously stuck with me. And there were many items like that over the
course of the trip, and you just can't get them. And nobody had the interest in doing it because everything had been stifled. So, there's kind of like this
what you talk about growth. The anti-growth model is where nobody cares and is like everyone's kind of left alone and there you are.
Yep. Uh they're just there's the anti-growth model is stasis. It's just
it's things stay the same and it's how politicians see it. That's why I hate government spending so much. Uh
politicians see the known and want to maintain it. Um entrepreneurs look at
the known and say, "Oh, this is ridiculous. We're going to fix it." But see, precisely because they're this
minuscule part of the population, no one agrees with them. Most people see the known. And it's not just politicians.
And so you got to have these crazies, but it's expensive to fund crazies. And
I'll just add that for the your economist friends who worry about the debt, what they what they refuse to see
is that if we didn't overt tax the rich so much, we would not have debt. The
debt is an effect of market confidence that the rich will continuously be overt
taxed such that it's easy to lend to a country like this. If you remove the rich from Imagine if the United States
was just Alabama and Mississippi and Vermont, would it have a lot of debt?
No. It would have almost no debt because there's no billionaires there. There's no there's no centaillionaires there.
There's no trillionaires there. There'd be no debt. The US has lots of debt because it's got taxable access to the
richest people on earth. If you remove if you say that we're not going to we're not going to treat them differently from
others, uh suddenly there's no debt. But there's a lot more growth because
they're investing rather than paying taxes. Yeah. I'm a big fan of the late PJ RO's
book, Eat the Rich. And um you talk about one of your recent articles about the rock that was Hong Kong that that
you know kind of um conservatives like concept of Hong Kong with no resources and what you're comparing it to
Venezuela. Um but um you know there are other rocks out there that have some
resources. you know, basically around the Persian/ARian Gulf, UAE. I mean,
what happens when our billionaires and trillionaires decide to uh expatriate or
where um and and and you know, hang out in Dubai? And and what is Dubai's
business model right now? I assume it's not oil anymore. And do they collect taxes and how much? [snorts]
Well, Dubai is interesting. I you know, I'm curious what you think about that. I I've been once and it fascinated me. And
uh what what I learned from it is that there's a lot of people from Europe and all over the world there because they
can't get here. Um they're they're talented, educated people. It's just too impossible to get to the US. Dubai's
only rule is that you have to work. You don't go to Dubai and to retire. It's a
working city. And so it's kind of cool. There's just all these people working. That's all they do. Um so what the
business model is, uh I feel like it would succeed no matter what. Certainly oil helped it, but people say, "Oh, it's
rich because of oil." But well, explain to me Nigeria. Um, explain to me Venezuela.
It's not just oil informing some of these locations. There is there are brains at work.
Yeah. No, that's a reasonable point. You know, there's so many things squandered. Getting back to the Venezuela concept,
um, you're unhappy with Donald Trump's recent actions there. Would you explain?
Well, because we could be 100% breath of oil in the United States. The United States could be a barren rock on its
own. Zero oil. We could also be at war with or embargoed by every oil producing
nation on Earth. Yet, we'd still consume all of the world's oil as though it had bubbled up in West Texas. And we would
because we're the most productive people on Earth. And no one passes up a market
that productive. There's just too much money to be made in it. Uh never forget that in the 1973
Arab OPEC embargo, which means it didn't include Iran. It's not an Arab country. Uh we still bought the oil from the Arab
countries. We just bought it from those they sold it to. They weren't going to give up that market any more than the Chinese would give up the US as a rare
earths market. You're not going to give up such an enormous uh place
economically. And so why would we want to be quote energy independent? What a
stu what an economically backwards notion. You just import things that you
don't have or that it's not worth your time to uh extract. You just import from others. And believe me, they're going to
sell it to you. So we want to get into the oil business. Why? What's the value
there? And and let's add remember conservatives want limited government. At least they claim they do. Um, what
are the largest oil companies in the world? Certainly not Exxon Mobile. It's stateun. Well, why are they staterun?
Because oil can be taken. I can't take Randy Bach's mine, but governments been taking oil for for as long as it's had
an economic value. Why do we want the US to own more of our economy?
Well, the the converse would be [clears throat] um that,
you know, I I think it was more geopolitical, frankly. I mean I think you know we are in I don't know which world war we're in right now whether
it's four or five um but there are geopolitical interests and um Venezuela
had say a bad actor running it a series of bad actors running it and this was uh
you know we we did this you know very swift um maneuver to decapitate
partially or and slightly recapitate with the Deli Rodriguez whatever her name is and and you know this is I I
think a kind of a a parental maneuver rather than an entrepreneurial maneuver
per se and that you have this, you know, aspect where the the money won't just be siphoned off into um the oligarchs there
who are not doing well and and and doing disservice to their own population and and take away the breeding ground for
kind of Chinese beach head uh close to our country um as well as power there.
Clearly people um uh I think are interested in the oil. They're interested in the control thereof and
the fact that there are government entities uh holding it um points to the kind of centrality of the power there
and that it becomes a power lever. And so in order to have our nice libertarian uhish world and um free markets and
whatnot, we have to have them policed. You know, I I can you know claim my house as a free market for stuff, but
people can come in and rampage and pillage it and whatnot. So I need some protection o of it. You know the United
States of America, you know, kind of wanted commerce between the states. Um
but they also needed protection from other states and state actors. So I think there's that aspect. You have to
have you know guard rails or or some kind of like uh you know system of protection.
Yeah. Um I don't know what the protection was from Venezuela. I I didn't go to sleep at night worried
about what Maduro was going to do. I I I think it was horrifying what he was doing to his own people. Uh do we have a
dog in that fight? Look, it's it's hard to say that. I suppose that that's in many ways a different debate. But what I
think it's important to point out is that oil got as low as $7 a barrel
during the Reagan years. It got as low as $12 a barrel during the Clinton years. Uh was OPEC feeling generous at
the time? Did they just think, "Oh, no. We just we really like the United States right now. We're going to No. OPEC never
controlled the price of oil. The biggest driver of the price of oil is the value of the US dollar. And if anyone doubts
this, just Google oil price history. Notice how if you you a chart will come up. Notice how it's kind of flat like
this. And then after 1971, it's up and down. Well, so what does that tell you?
When we destabilize the value of the dollar in 1971, we we to we took the oil
price on a roller coaster. But what's important is during the Reagan and Clinton years, the US was largely energy
dependent. Uh because and we were because it's it not economic to extract
oil in the United States at such low low prices per barrel. Uh were we worse off?
No. I loved paying less than a dollar per gallon. Uh did did they could they restraint hold it from us? No. Uh did
the price go up? No, it went down. We uh America extracts quite a bit more oil
today. Yeah, no surprise. Of course it does because oil is so expensive right now. So for the United States to be in
in the business of something governments do around the world, Americans have to pay quadruple or more than that per
gallon of gas. I find it so insulting and I find it so frustrating that
conservatives who used to be of the Robert Bartley, I bring him up because you know him or know of him through your
friend Jim Malone. His father was the deputy editorial page editor of the Wall Street Journal under Bartley. Bartley
wrote a book about the Reagan years saying that yeah well in the 1970s oil didn't become expensive. The dollar
became cheap. There are no Republicans talking about that today. And I find it
exasperating beyond belief. So, how did the dollar become cheap? Is it cheap now?
Well, presidents get the dollar they want. They get it in different ways. President Nixon decided to delink the
dollar from gold. I'm not going to have a gold discussion. That would turn off all the economists. They hate it
because, you know, gold gold would mean that they wouldn't have as much to do. But uh they economists including Milton
Freeman said, "Nixon, you got to get off the gold standard." Okay. Well, so that was devaluation.
And so with the dollar in decline, commodities priced in terms of gold,
oil, wheat, meat, soybeans, they all went up in the 1970s. Inflation, devaluations, inflation. Ronald Reagan
ran on returning to the gold standard. That was in his every stump speech uh
after he won New Hampshire in 1980 in February. Notice how the gold price
starts going down. Well, markets anticipate and they anticipated a Reagan victory. Reagan again was talking about
reviving the dollar as a measure in gold. Well, he didn't get that to his everlasting regret. He could have, but
he didn't get it. Uh but the dollar strengthened quite a bit under him. And so oil prices collapsed. Um commodities
collapsed. Uh what was Bill Clinton's Treasury Secretary or his most famous one, Robert Rubin? What did Robert Rubin
say adnauseium? Uh a strong dollar is in the interests of the American people. He
never job owned the Japanese about the value of the yen. He was a strong dollar guy. Is it any surprise that oil was
cheap during those years? Uh George W. Bush gets into office. I would argue to
you that he's the worst president in my lifetime. And I was born uh when Nixon was president. Um, uh, George W. Bush
was all for a weak dollar and he got it and here we are. We're still there to this day.
So when you say he's for a weak dollar, what what are the marionette strings you have to pull to get that?
They don't have to be because see, remember, Treasury is the dollar's mouthpiece. The Fed has never been the dollar's mouthpiece. And so Nixon took
us off the gold standard. So that tells you the power of a president to change the value of the dollar. FDR famously
devalued the dollar in his bathtub from 120th of a gold ounce to 135th. He just
said from here going forward the dollar is worth this and what can the markets do about it? That's the that's the
issuer of the currency. Uh so just the same someone like Reagan could have put
us back on the gold standard and so markets responded to his belief in a strong dollar by saying he could do a
lot of things. They moved it back upwards again. Bill Clinton's treasury was all about a a strong dollar is so
important and and they they conveyed it through not all the job owning even under the Reagan years about the dollar
yen and everything. Uh George W. Bush wanted a weak dollar. His Treasury secretaries kept saying that. Um Donald
Trump says a weak dollar is great. You know who had the strongest dollar of all the presidents during the 21st century?
Joe Biden. Yet he's blamed for inflation which is just so ridiculous. It's just so thoroughly mindless. I'm not a
Democrat. I've always voted Republican, but the dollar was strong under Biden. It's been incredibly weak under Trump.
President Trump wants a weak dollar. Okay. So, and we're seeing this in prices. So, so wanting, you know, I I I want to
be taller. You know, my wanting, but you don't have the power. You don't President Trump can once again, he can
say right now. Okay. Going forward, the dollar is worth one, we will redeem dollars at at at $2,500 worth of gold.
we will redeem dollars at onetoone rate for the for the euro and no one's c no one can do anything about that and so
you don't have the power that President Trump or any president has over the okay so so literally what h what did
George W do like aside from wishing it and what what literally has Donald Trump done aside from wanting it
uh well he's continuously said a weak dollar is great which is a signal to the markets that it's that that's that There
are things add into that that the US Treasury has an exchange stabilization
fund. So if it wants to at any time it can enter the markets to sell dollars to
to shrink their value to buy dollars. And so for a president to say what he
wants that president is backed by tens of billions of dollars that can enter the marketplace and affect the price
assuming they want to. We we also have like a strategic oil reserve and and at times those things get used like
pre-election whatnot to to bring down the price of gasoline at the pump. I think Joe Biden did that during the the
runup to 2024 if I'm not mistaken. Um and I I would just make that as an
analogy, not not I'm not making it's a good analogy. All right, but you can only do that
proves my point. But if I if I have my my rainy day fund um or I have some
insurance pay out on my house, whatever, I don't get to use that over and over again. I use that once or even the
threat of it, whatever. But it's like I I really don't see how the jawbon works repeatedly, you know? I mean, I can I
can yell at the dog across the street and maybe the first time he recoils, then he finds out I'm just yelling at him. He comes and bites me. You know,
it's like I I don't see how just the the wish that it become weak. I mean, there structural policies that are happening.
True, but you have words. Donald Trump has the whole of the
federal government. Okay. So, so what are those actions that are dispositive between
again the look it up? Treasury has an exchange stabilization fund that that
exists to move against the markets one way or the other on the direction of the
dollar. uh Treasury theoretically can print
uh just the same for the did do you agree that when President Nixon severed
the dollars linked to gold that the dollar shrunk in value? Do you agree that there was inflation in the 1970s?
Well, you know, I was in medical school, well, I was probably in in high school then college at the time. I didn't
follow this. So, I I'd have to go look. I mean, this is a new concept for me. I I've heard about it. I have not researched so I'm not going to
Well, yeah, but explicitly he [snorts] the dollar was worth 135th of a gold
ounce in when in when the 1970s began. By 1974
after Nixon severed the link, a gold price bought uh a dollar bought one
130th of an ounce of gold. uh by 1980 a dollar bought was worth 1875th of an
ounce of gold. So that was a substantial devaluation of the dollar. But it could also be the the reflexive
revaluation of gold. I mean people no but see you know why that's not true is gold is a constant and that's not me
saying it. Notice and and this this would be confirmed. I can footnote this all to
you. It's in all my books. Before 1971, there were no currency
markets. And why were there no currency markets? Well, the dollar was defined as 135th of a gold ounce. And the world's
currencies were pegged to the dollar. There was no gold market because there's
no reason to trade currencies. There's no currency market because a currency defined in terms of the
constant that was gold was so stable that what was there to trade? M yet today, as George Gilder will tell you,
it's 7 to10 trillion a day in currency trading. That is the markets telling you the
immense stability that the gold price gave the dollar. They that we didn't just happen upon gold. It was thousands
of years of people trying to figure out what what would imbue a currency with stability. And so they happened upon
gold. It's the most stable commodity in in the world. And so when the president when Nixon
says the dollar is no longer defined as 135th of a gold ounce, that was a devaluation. So for the same reason that
President Nixon could devalue the dollar by leaving the gold link, a president
can mess around with the currency's value now because the markets know the power the president has. He can put us back on the gold standard. He could put
us on a euro standard. He could put us on a yen standard. There's all sorts of things you can do.
So, I mean, I I don't really mind those markets because I think everything has is a market and and uh there's going to
be an exchange one way or another, whether it's ideas or is there a market for a foot or an inch?
Do we trade that? Oh, the foot's too strong right now. Americans are too short. So, let's devalue the foot so
Americans can be taller. Well, it's interesting. A currency is not a market. A currency is a concept. It's a measure of value.
And so economists, your economist friends will say, "Yeah, if we devalue the dollar, American goods will become
more competitive globally, which is just utter nonsense." Never forget the vast majority of goods, including
Americanmade goods, are informed by inputs from around the world. And so if
suddenly we shrink the the value of the dollar, input, imported inputs to make
any anything that we create, the cost of it is going to go up. And so no, currencies are not a market. They're
just a concept of value. They sadly be have become a market because people like Milton Freriedman
said, you know, we really need to give more economists jobs and so the dollar should float around
as as Jim Malone's father used to say. He said that the the the Freriedman policy was an absence of policy, just
floating money just going every which way. Which again, it'd be like saying, "Yeah, it's funny. I just think the inch
is too strong or I I really feel short today. I'm going to devalue it. I I I
want to be 12 feet tall, so we're going to shrink the foot in half. [snorts] Interesting. I'll have to ponder that
one. Um, you [clears throat] know, absent absent gold, um, you know, people have been trading one way or another
forever, right? I mean, isn't that literally the oldest profession? Yes.
And and so if they're trading things by which they trade. So so so now there's
obviously all these kind of um you know ethereal uh coins out there. Um what do
you think about that as as a marketplace and kind of a superimposition on these
fiat currencies and does that reimpose any other type of value? Um, and does
does kind of the original Bitcoin infer excuse me confer some stability
given that it's a fixed amount and even gold can be mined and whatever and gold presumably can be diluted and faked
metallergically that we can't perceive. So, you know, how does that work on a on a background uh to your thoughts?
Well, Bitcoin is not money. It can never be money precisely because its supply is
fixed. Again, why would you put a supply limit on a constant? But because its
supply is fixed, it has no purpose. Uh hey, uh hey, Dr. Randy, uh come fix my
bathroom. One Bitcoin now one in six months. You'd say, "Okay, well, which Bitcoin?" Uh the one that was trading
for 120,000, the one that was near 60,000. Which is it? So, Bitcoin's
absurd. It's it's it's a cool idea. It's revolutionary. Um what fascinates me is they say well
and so I think cryp I think crypto will ultimately take over but those trying to take over it right now I don't think
they will be the ones because what's the most circulated cryptocurrency it's called stable coin so it's a currency
that has or it's a digital money that has onetoone relationship with the dollar but wasn't the whole point of
crypto to get away from governments and their persistent devaluations of money and so you're not getting a stable
currency there the notion stable coins is stable is just so ridiculous.
Um and and see the this was always known. So the Chinese invented the fiat currency in the seventh century and that
was the debate at the time. The Confucians said well don't let government issue it, they'll devalue it. And so the the Confucians were saying at
the time, let's have a private currency. And so that's where I think crypto is ultimately going to win. Um whereas
governments have always devalued their currencies. uh what if Amazon issued a
dollar or JP Morgan? Well, they can't devalue because if they did, they'd lose customers. And so, I think that's where
we're headed. Uh but it's it's not going to be a onetoone currency relationship with the dollar. Why not just earn
dollars? Someone's going to recognize that what people have always wanted, people have been trading as long as
mankind has existed, they used to have to barter. money became a way, a concept, a measure of value for products
to exchange for products. Uh, someone's going to say if we really want a currency to circulate a lot, it's going
to hold its value tr and truly. And it could be that they just return to gold
in that in that way. So, tell us uh we're rounding out our
hour here. Uh, it's been fascinating as always. Uh, I'd like you to maybe tell us your next book
and and how how you decide what the demand is for your ideas and where you decide directionally to go.
Well, no one's ever demanding my ideas as my book sells would sales would confirm to you, but you never know.
Uh, this book is called California Freedom: How the Golden State is igniting a growth, parenting, education,
and retirement revolution. I make a case in the book that California's economy is not just large,
but it's massive and it's holding up the world economy and it's only going to get
better and better. That while the right is out and out confirming that
California is in decline, that it's been a state run into the ground, and while the left are kind of hedging their bets
saying, "Well, we don't think California can do as well. It's always done." I make a case in the book that c
California's wealth today which is unrivaled anywhere else in the world is a fraction of what it will be that that
the talent that's coming into the state so overshadows the talent the lesser
talent leaving that the future is going to be unbelievable and it's going to transform how we all live how we all
work regardless of where we live how we retire everything so what's what's the basis of that
optimism I mean there is you know Elon our muse uh left California for, you
know, greener, browner, uh sturdier pastures, Texas. Um which which grains
are coming into California? Um and you know, how does how does that work? Are you talking about from
internationally or are growing their own internationally and domestically? Um I make I I make a case that taxes are not
what c are not the driver of people out of California. In fact, the biggest inflows into California nationally are
New Yorkers. Well, you could hardly call them tax exiles. Uh, the reason
Californians are leaving is not because of taxes, but
because there are so many rich and productive people there that housing is impossible to get. And so even in the
bad areas, you're looking at a starter house, the thousand square feet in
neighborhoods that if I took you to, you'd say, "Oh my gosh, uh there they
started a million dollars." That's not a sign of people leaving. So who's coming in? Uh well,
point out in the book, and it's statistical, Harvard Business School grads are flowing into California on mass. Same
with Stanford. Same with Wharton. I'll bet you anything that exponentially more
uh Harvard Medical School grads are flowing to California than they are to Texas. What I point out in the book is
that this in this outflow of talent and inflow into Texas and Florida is just
not occurring. The superstar talent continues to go to New York, California, Massachusetts.
Undeniably, statistically, factually true. Uh there are a lot of people who
want more house who are leaving California. But why can they leave California? Because of the genius
technology created out there that makes it possible for people to leave anywhere. It's really fascinating to
look at now medically though people say doctor shortage.
I think a lot of them and you would know this better than I talk about a subject. I'm guessing that the majority of
geniuses like you they're just in Northern California now. They're no longer treating patients. They're
creating drugs to treat exponentially more people and save their lives. But
they're just not moving to Texas and Florida. They're they're there. Well, we we shall find out. Thanks so
much, John, for being with us. I appreciate it. Thanks for having me. All right. Perfect.