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#067_ STORY INSPIRE: Billionaire Warns: The Economic Crash Has Already Begun · INSPIRE STORY

• 0:00
  Speaker 1: What advice do you give for the average person that's
• 0:02
  Speaker 1: looking to invest their salary or their wages?
• 0:04
  Speaker 2: Don't own US stocks. That's a simple strategy that you
• 0:07
  Speaker 2: can act on.
• 0:08
  Speaker 1: What about S & P 500?
• 0:10
  Speaker 2: No.
• 0:11
  Speaker 1: Really?
• 0:11
  Speaker 2: Yeah. And if you have a big position in US
• 0:14
  Speaker 2: technology stock, my personal advice would be to sell it all.
• 0:17
  Speaker 1: But I'm an investor in SpaceX.
• 0:18
  Speaker 2: Good luck. SpaceX is such a fabulous BS story, and
• 0:21
  Speaker 2: we can go into that.
• 0:22
  Speaker 1: Crypto?
• 0:23
  Speaker 2: No. Why? It's an unnecessary piece of nonsense that facilitates
• 0:27
  Speaker 2: nothing except criminals moving money that they can't be seen.
• 0:30
  Speaker 1: Do you think Bitcoin's going to go to zero?
• 0:32
  Speaker 2: Yes, it will certainly go to zero.
• 0:34
  Speaker 1: So how many years have you spent investing?
• 0:35
  Speaker 2: 60 years.
• 0:36
  Speaker 1: And what's the most amount of money you've ever managed
• 0:39
  Speaker 1: of other people's money?
• 0:40
  Speaker 2: 165,000.
• 0:41
  Speaker 1: And one of the things you're famous for talking about
• 0:43
  Speaker 1: is this idea of bubbles.
• 0:45
  Speaker 2: Yes, and bubbles always occur around the very most important ideas.
• 0:49
  Speaker 2: So the railroads, everyone could see that it would change
• 0:51
  Speaker 2: the world. The same with the internet, and everyone wanted
• 0:54
  Speaker 2: to put their money in, and so they overinvested. But
• 0:57
  Speaker 2: this is the problem. Eventually... And if you look at
• 1:00
  Speaker 2: the great bubbles breaking of the past, you find that
• 1:03
  Speaker 2: it's followed by really tough times, a miserable period for
• 1:06
  Speaker 2: the economy. And the bigger the bubble, the bigger the bust.
• 1:09
  Speaker 2: And now we're in the biggest investment bubble that arguably
• 1:12
  Speaker 2: has ever occurred, AI.
• 1:14
  Speaker 1: Are we on the verge of a collapse with AI
• 1:16
  Speaker 1: over the coming years?
• 1:17
  Speaker 2: The next few days, the next few weeks, the next
• 1:19
  Speaker 2: few months, but certainly the next few years.
• 1:21
  Speaker 1: So if you're not someone that has a huge amount
• 1:23
  Speaker 1: of savings, what kind of strategy should they be adopting
• 1:26
  Speaker 1: when an economy starts to get bad and there's an
• 1:28
  Speaker 1: economic bubble collapse?
• 1:30
  Speaker 2: So I will go through everything, but you will not
• 1:32
  Speaker 2: receive this advice from investment advisors because they'll lose a
• 1:36
  Speaker 2: lot of business.
• 1:37
  Speaker 1: Would you be thinking about the country you live in
• 1:40
  Speaker 1: at this moment in time?
• 1:41
  Speaker 2: Absolutely.
• 1:41
  Speaker 1: Is there any countries you wouldn't live in?
• 1:43
  Speaker 2: I think I have to refuse to answer this on
• 1:45
  Speaker 2: the grounds that it might tend to incriminate me.
• 1:47
  Speaker 1: Oh, okay. So you're saying don't live in the United States?
• 1:50
  Speaker 1: I've just moved here. Why not the United States? This
• 2:00
  Speaker 1: is super interesting to me. My team gave me this
• 2:02
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• 2:03
  Speaker 1: this show subscribe. And some of you have told us,
• 2:05
  Speaker 1: according to this, that you are unsubscribed from the channel randomly.
• 2:09
  Speaker 1: So favour to ask all of you, please could you
• 2:11
  Speaker 1: check right now if you've hit the subscribe button, if
• 2:13
  Speaker 1: you are a regular viewer of the show and you
• 2:14
  Speaker 1: like what we do here. We're approaching quite a significant
• 2:17
  Speaker 1: landmark on this show in terms of a subscriber number.
• 2:20
  Speaker 1: So if there was one simple free thing that you
• 2:22
  Speaker 1: could do to help us, my team, everyone here, to
• 2:25
  Speaker 1: keep this show free, to keep it improving year over
• 2:27
  Speaker 1: year and week over week, it is just to hit
• 2:29
  Speaker 1: that subscribe button and to double check if you've hit it.
• 2:31
  Speaker 1: Only thing I'll ever ask of you, do we have
• 2:33
  Speaker 1: a deal? If you do it, I'll tell you what
• 2:35
  Speaker 1: I'll do. I'll make sure every single week, every single month,
• 2:38
  Speaker 1: we fight harder and harder and harder and harder to
• 2:40
  Speaker 1: bring you the guests and conversations that you want to hear.
• 2:42
  Speaker 1: I've stayed true to that promise since the very beginning
• 2:44
  Speaker 1: of the Diary of a CEO, and I will not
• 2:46
  Speaker 1: let you down. Please help us. Really appreciate it. Let's
• 2:49
  Speaker 1: get on with the show. Jeremy Grantham. Your firm managed
• 2:58
  Speaker 1: up to $ 165 billion at its peak, what we call AUM,
• 3:03
  Speaker 1: Assets Under Management. So you know a lot about money.
• 3:06
  Speaker 1: You know a lot about investing. How do you sort
• 3:08
  Speaker 1: of self-define your expertise? Because you traverse so many different
• 3:11
  Speaker 1: subjects through your work. So if I said to you,
• 3:14
  Speaker 1: you know, how do you introduce yourself professionally? What is
• 3:17
  Speaker 1: the answer?
• 3:18
  Speaker 2: I can't think I ever do introduce myself professionally. But
• 3:22
  Speaker 2: I think of myself as specializing in the longer-term horizons.
• 3:25
  Speaker 2: than most people and trying to look at a higher
• 3:28
  Speaker 2: and higher level of abstraction. What is really going on here?
• 3:33
  Speaker 2: And what are people missing? I've discovered over decades that
• 3:37
  Speaker 2: humans are incredibly short-term oriented and they have an enormous
• 3:42
  Speaker 2: predisposition to optimism. They're looking for optimistic news in everything.
• 3:47
  Speaker 2: They're looking to avoid unpleasantness. The idea that you can
• 3:51
  Speaker 2: have steady compound growth is ridiculous. One of my few heroes,
• 3:56
  Speaker 2: Kenneth Boulding, an economist, he said, the only people who
• 3:59
  Speaker 2: think you can have compound growth on a finite planet
• 4:02
  Speaker 2: are madmen and economists, which is so accurate. Economists simply
• 4:07
  Speaker 2: believe you can have growth always, and everything comes down
• 4:11
  Speaker 2: to just price.
• 4:13
  Speaker 1: One of the things you're famous for talking about is
• 4:15
  Speaker 1: this idea of bubbles. And we're living in a moment
• 4:18
  Speaker 1: where everybody's talking about the subject of artificial intelligence. and
• 4:21
  Speaker 1: everyone's getting very excited by it. Some people are getting
• 4:24
  Speaker 1: very pessimistic about the impact it will have on society.
• 4:27
  Speaker 1: I wanted to start there because it's an area where
• 4:29
  Speaker 1: there is rife optimism on one side of things, but
• 4:33
  Speaker 1: there's also a lot of money plowing into the market,
• 4:35
  Speaker 1: which is, I guess, in your view, making things prone
• 4:38
  Speaker 1: to collapse. What's your view on artificial intelligence? You said
• 4:42
  Speaker 1: you're good at understanding what people are missing. What is
• 4:44
  Speaker 1: it that people are missing?
• 4:45
  Speaker 2: Well, first of all, let me say, I think artificial
• 4:47
  Speaker 2: intelligence is Right up there with the railroads, it's one
• 4:51
  Speaker 2: of the defining great ideas of the last couple of
• 4:56
  Speaker 2: hundred years. It's going to change everything. And that is critical.
• 5:00
  Speaker 2: If you mean to have a bubble, people think that
• 5:03
  Speaker 2: a bubble is mainly because it's a scam and nothing
• 5:06
  Speaker 2: could be further from the truth. The great bubbles always
• 5:09
  Speaker 2: occur around the very most important ideas. So the railroads,
• 5:13
  Speaker 2: everyone could see that it would change the world. And
• 5:16
  Speaker 2: everyone wanted to put their money in. And everybody put
• 5:19
  Speaker 2: their money in. They overinvested. And even though the railroads
• 5:23
  Speaker 2: were a spectacularly powerful idea, the railroads collapsed at stocks
• 5:29
  Speaker 2: and everybody lost a ton of dough. The same with
• 5:32
  Speaker 2: the internet. And then out of the wreckage, the railroads
• 5:35
  Speaker 2: changed the world and the internet changed the world. What
• 5:40
  Speaker 2: we have to remember is that in 99, Amazon went
• 5:44
  Speaker 2: up six or seven times. In the crash, in the
• 5:47
  Speaker 2: tech bubble, it went down 92%, as I like to say,
• 5:51
  Speaker 2: check it. It's such a remarkably large number. And then
• 5:54
  Speaker 2: out of the wreckage, it inherited the retail world. And
• 5:58
  Speaker 2: that's how it works. The greater the idea, the more
• 6:02
  Speaker 2: obvious the idea, the more money goes in, and the
• 6:05
  Speaker 2: bigger the bubble, and the bigger the bust.
• 6:07
  Speaker 1: And are we on the verge of a collapse with AI?
• 6:09
  Speaker 1: When I say verge, I mean over the coming years.
• 6:11
  Speaker 2: If you look at the data, it would be compatible
• 6:15
  Speaker 2: with history. for the peak to be very soon. Everything
• 6:18
  Speaker 2: is in line. This is, I think, the biggest investment
• 6:22
  Speaker 2: bubble in American history. The indicators of a pure, crazy euphoria,
• 6:27
  Speaker 2: like SpaceX, are all over the place. SpaceX defines as
• 6:33
  Speaker 2: its addressable market a quarter of the global GDP. It
• 6:39
  Speaker 2: talks about endless opportunities, mining asteroids, It will be in
• 6:43
  Speaker 2: 50 years, in 100 years, people will look back and
• 6:46
  Speaker 2: tell stories about SpaceX and its prospectus, like they tell
• 6:50
  Speaker 2: stories about the South Sea bubble. You know, an enterprise
• 6:54
  Speaker 2: of such enormous value, but it cannot at this time
• 6:56
  Speaker 2: be revealed.
• 6:58
  Speaker 1: I want to keep on this train, but for the
• 7:00
  Speaker 1: viewers that don't know your experience, we should probably pause
• 7:04
  Speaker 1: and just tell them your experience because that's the reference point,
• 7:07
  Speaker 1: but it also gives you credibility and authority to speak
• 7:09
  Speaker 1: to this. What have you done with your life?
• 7:12
  Speaker 2: Well, I got into the investment business in 1968. There
• 7:16
  Speaker 2: were very few serious people in the investment business. There
• 7:21
  Speaker 2: were no mathematical models. There were the kind of relatively
• 7:26
  Speaker 2: failed sons of rich people who would work for J.P. Morgan.
• 7:30
  Speaker 2: And then over the next 10 years, it began to
• 7:33
  Speaker 2: get a little more serious. T. Rowe Price introduced the
• 7:36
  Speaker 2: idea of growth stocks. A few of us introduced the
• 7:39
  Speaker 2: idea of value stocks. And a few years later, at
• 7:43
  Speaker 2: my first firm, Battery March, we really introduced the idea
• 7:46
  Speaker 2: of small cap. It hadn't existed before that.
• 7:50
  Speaker 1: And for people that don't know, a small cap is
• 7:52
  Speaker 1: investing in smaller companies. Yes.
• 7:54
  Speaker 2: And a value stock is simply one that looks cheap.
• 7:57
  Speaker 1: Did you invent the index fund?
• 8:00
  Speaker 2: There were two or three of us separately. I don't
• 8:02
  Speaker 2: think we knew of each other.
• 8:04
  Speaker 1: How many years have you spent investing?
• 8:06
  Speaker 2: 60 approximately.
• 8:09
  Speaker 1: 60. And what's the most amount of money you've ever
• 8:11
  Speaker 1: managed for other people in a calendar year?
• 8:16
  Speaker 2: Yes, 165 billion. I had two partners, Mayo and Van Otterlo.
• 8:22
  Speaker 2: And when the smoke cleared, you know, I'd made a
• 8:25
  Speaker 2: lot of money, over a billion dollars.
• 8:27
  Speaker 1: Personally?
• 8:28
  Speaker 2: Personally. And paid tax on all of it.
• 8:31
  Speaker 1: Oh, good. And how much money does your firm still
• 8:35
  Speaker 1: manage today of other people's money?
• 8:37
  Speaker 2: It manages $ 85 billion.
• 8:40
  Speaker 1: $ 85 billion. So are you a billionaire?
• 8:42
  Speaker 2: I'm generally referred to as a billionaire, but that's only
• 8:47
  Speaker 2: because they count the money you give away. Because I've
• 8:51
  Speaker 2: given over 90% of my billion away to a foundation. Oh, really? Yeah.
• 8:57
  Speaker 1: To which foundation?
• 8:58
  Speaker 2: It's called the Grantham Foundation for the Protection of the Environment.
• 9:01
  Speaker 2: We invest a lot of our principal in green tech
• 9:04
  Speaker 2: to help combat climate change.
• 9:07
  Speaker 1: And you're 87 years old.
• 9:09
  Speaker 2: And I'm 87 years old.
• 9:10
  Speaker 1: You've given 90% of your money away to your own
• 9:13
  Speaker 1: foundation that's focused on green tech.
• 9:15
  Speaker 2: Yeah, maybe 95. Wow.
• 9:18
  Speaker 1: So coming back to this point that we were talking about,
• 9:19
  Speaker 1: a lot of people won't even know what a bubble is.
• 9:21
  Speaker 1: I think you've done a good job of explaining. A
• 9:23
  Speaker 1: bubble is when everyone gets excited, they all see something obvious,
• 9:25
  Speaker 1: they plow their money in. the stocks go up. And
• 9:29
  Speaker 1: then if you look at the graph that's in front
• 9:31
  Speaker 1: of you there, which shows the history of asset bubbles,
• 9:33
  Speaker 1: eventually there's a big collapse.
• 9:37
  Speaker 2: Yeah.
• 9:37
  Speaker 1: And you're saying that the collapse is on the horizon? Yes.
• 9:43
  Speaker 1: And what does that mean for the average person? What's
• 9:46
  Speaker 1: going to happen?
• 9:47
  Speaker 2: What's going to happen is the high flyers will probably
• 9:51
  Speaker 2: come down a lot.
• 9:52
  Speaker 1: The high flyers?
• 9:54
  Speaker 2: The stocks that have gone up the most, AI and
• 9:58
  Speaker 2: the more exciting stocks with the biggest moves, historically, would
• 10:03
  Speaker 2: be expected to come down the most. From these unprecedented levels,
• 10:07
  Speaker 2: a 70% decline would not be unexpected.
• 10:11
  Speaker 1: So a 70% decline in the stock price?
• 10:14
  Speaker 2: Yeah. And you have to remember the tech bubble. The NASDAQ,
• 10:19
  Speaker 2: which is an index of the growth stocks, came down 82%.
• 10:23
  Speaker 2: It is far from unprecedented to have these major declines.
• 10:29
  Speaker 2: And the biggest bubble in history was in the Japanese
• 10:32
  Speaker 2: stock market in 1989. Back then, Japan seemed to rule
• 10:36
  Speaker 2: the world. All the technology, all the Toyotas were kicking
• 10:40
  Speaker 2: bottoms in General Motors and so on. And everyone bragged
• 10:43
  Speaker 2: about their 12-inch Sony TV in the kitchen and the quality.
• 10:47
  Speaker 2: et cetera, et cetera, little things you put on your
• 10:49
  Speaker 2: belt to play music. They were all Japanese. And for
• 10:53
  Speaker 2: a second, Japan sold for more than the US in 89.
• 10:58
  Speaker 2: And it got to 65 times earnings, which means for
• 11:03
  Speaker 2: every dollar of earnings, you have $ 65 of market value.
• 11:08
  Speaker 2: And the US went to 35 in the tech bubble
• 11:12
  Speaker 2: of 2000. You could argue, depending on how you do it,
• 11:15
  Speaker 2: that it's 35 or 40 today, but it's not 65.
• 11:18
  Speaker 2: So we have seen a much bigger bubble in Japan.
• 11:22
  Speaker 2: And what happened? It went up and up and up.
• 11:25
  Speaker 2: And then it came down for 20 years.
• 11:28
  Speaker 1: 20 years?
• 11:29
  Speaker 2: 20 years. They talk about the last decade, but when
• 11:32
  Speaker 2: you look at it closely, it looks more like a
• 11:34
  Speaker 2: last 20 years.
• 11:35
  Speaker 1: So for the average person, what do they feel and
• 11:39
  Speaker 1: how does it impact them when there's a market crash
• 11:42
  Speaker 1: like the one that you're forecasting?
• 11:44
  Speaker 2: The high flyers will lay people off and a lot
• 11:47
  Speaker 2: of people will feel less rich. And as you acquire
• 11:52
  Speaker 2: money in the stock market, a small fraction of that,
• 11:55
  Speaker 2: 2% or 3%, is spent. And in reverse, it goes back.
• 12:02
  Speaker 2: And people feel a little bit poorer, they spend a
• 12:04
  Speaker 2: little less. So the economy tends to be under some stress.
• 12:09
  Speaker 2: And if you look at the great bubbles breaking of
• 12:12
  Speaker 2: the past, you find that it's followed by really tough times.
• 12:16
  Speaker 2: 1929 is followed by the Great Depression that lasts for
• 12:21
  Speaker 2: several years. And of course, there are many other factors
• 12:23
  Speaker 2: that go into that. But it started with the crash
• 12:26
  Speaker 2: in the market, which was in the end down about
• 12:30
  Speaker 2: 80% or more. And then the next one was called
• 12:34
  Speaker 2: the Nifty Fifty because it was the 50 great companies
• 12:37
  Speaker 2: like IBM and Coca-Cola. And that was in 1972 it peaked.
• 12:42
  Speaker 2: It declined by 65% if you adjust for inflation. The
• 12:46
  Speaker 2: recession associated with that was just about the worst since
• 12:52
  Speaker 2: the depression.
• 12:53
  Speaker 1: So for the average person, what kind of strategy should
• 12:57
  Speaker 1: they be adopting? If you're not someone that has a
• 12:59
  Speaker 1: huge amount of savings, say you're working for one of
• 13:02
  Speaker 1: these big companies, are there any strategies that you should
• 13:05
  Speaker 1: be thinking about now before the markets come down and
• 13:10
  Speaker 1: there could be a recession?
• 13:11
  Speaker 2: I mean, rule number one is always be diversified.
• 13:15
  Speaker 1: What does be diversified mean?
• 13:17
  Speaker 2: It means wholesome bonds, wholesome cash, perhaps a small amount
• 13:23
  Speaker 2: of precious metals.
• 13:25
  Speaker 1: Like gold and silver?
• 13:26
  Speaker 2: Yeah.
• 13:27
  Speaker 1: And what is a bond? And how do I buy one?
• 13:29
  Speaker 2: Yeah, a bond is a loan that carries a fixed
• 13:34
  Speaker 2: interest rate. Let's say today, 5%. You invest your money
• 13:39
  Speaker 2: in it and it will pay you 5% as long
• 13:42
  Speaker 2: as the credit worthiness of the other side is there.
• 13:47
  Speaker 2: So if it's the U.S. government, you'll assume it's pretty
• 13:50
  Speaker 2: credit worthy and you buy a bond from the U.S. government.
• 13:53
  Speaker 2: It's how the U.S. government funds a part of its activities.
• 13:57
  Speaker 2: You can buy a 30-year U.S. government bond, a 10-year bond,
• 14:00
  Speaker 2: a two-year bond, a 90-day treasury bill, they call them
• 14:05
  Speaker 2: when they get that short. everything goes fine, you receive
• 14:09
  Speaker 2: this modest amount of money. You're 5% or you're 3%,
• 14:14
  Speaker 2: depending on the conditions.
• 14:16
  Speaker 1: Okay, so a bond is basically lending the government money.
• 14:21
  Speaker 2: Yes.
• 14:21
  Speaker 1: And if you want to lend the government money.
• 14:23
  Speaker 2: Or lending a corporation money.
• 14:25
  Speaker 1: Okay, so you can also lend like Apple money. Yes.
• 14:29
  Speaker 1: And I can go to the government website, or it says,
• 14:32
  Speaker 1: I was just reading here, it says if you want
• 14:33
  Speaker 1: to lend... money directly to the US government. You can
• 14:36
  Speaker 1: bypass Wall Street entirely. Go to treasurydirect.gov. You open an account,
• 14:40
  Speaker 1: link your bank and purchase directly. You can buy a treasury, bills, notes,
• 14:44
  Speaker 1: bonds and series one savings bonds. You pay exactly face
• 14:49
  Speaker 1: value with no commissions or fees and the investment is
• 14:52
  Speaker 1: backed by the full faith of the US government. Or
• 14:55
  Speaker 1: you can buy, you know, like Apple, you can lend
• 14:57
  Speaker 1: Apple money. I didn't even know you could do this.
• 14:59
  Speaker 1: and you go to any of your major brokers like
• 15:01
  Speaker 1: Fidelity or Vanguard or probably a lot of the apps,
• 15:03
  Speaker 1: you navigate to fixed income section on your account and
• 15:07
  Speaker 1: you can see what bonds are being offered and you
• 15:10
  Speaker 1: can lend them money.
• 15:12
  Speaker 2: What you're doing actually, they have distributed it to the
• 15:15
  Speaker 2: market and you're acquiring it from one of the existing owners. Oh, okay.
• 15:22
  Speaker 2: You're not actually giving them incremental money They come to
• 15:26
  Speaker 2: the market with $ 10 billion in a particular bond with
• 15:30
  Speaker 2: a particular coupon. It says, we will pay you 3.5%.
• 15:33
  Speaker 2: That's the coupon. And when you want to buy some
• 15:37
  Speaker 2: of that bond, you go to your broker and he says,
• 15:41
  Speaker 2: it's no longer selling at the original 100. It's now
• 15:44
  Speaker 2: selling at 92 or 107. And you pay that and
• 15:50
  Speaker 2: it transfers from one owner to you. There've been times
• 15:53
  Speaker 2: in 1974, When you could get a bond that would
• 15:57
  Speaker 2: pay 8%, 9%, 10%. Per year? Yes, per year.
• 16:01
  Speaker 1: So if I buy a US government 10-year treasury bond,
• 16:04
  Speaker 1: essentially lending the US government money, I can do 4.46%
• 16:08
  Speaker 1: a year. And Apple's current yield on a 10-year corporate
• 16:11
  Speaker 1: bond is 4.7% a year. So almost 5% a year,
• 16:13
  Speaker 1: which means if I put $ 1, 000 in, I'll make $ 475
• 16:14
  Speaker 1: over 10 years. Interesting. Interesting. I never really knew how
• 16:25
  Speaker 1: bonds work. So you're saying markets collapsing, diversify, get some
• 16:28
  Speaker 1: money into bonds, keep some money in cash, and anything
• 16:32
  Speaker 1: else in terms of diversified portfolio property?
• 16:36
  Speaker 2: Property is fine, except it's pretty darn expensive by historical standards.
• 16:41
  Speaker 2: They've engineered a situation where house prices tend to rise.
• 16:47
  Speaker 2: Great for the people who have a house and terrible
• 16:50
  Speaker 2: for the people who would like to buy a house.
• 16:53
  Speaker 2: Back in 94 in England, a typical house sold for 3.4
• 16:57
  Speaker 2: times your family income. That was about as low as
• 17:01
  Speaker 2: it had been for 50 years. And then from 94
• 17:05
  Speaker 2: until today, it rose from 3.4 times to over 10 times,
• 17:10
  Speaker 2: depending on where you live. And at 10 times income,
• 17:14
  Speaker 2: a reasonable young couple are in big trouble. They can't
• 17:19
  Speaker 2: really afford to buy a house. the same high prices
• 17:24
  Speaker 2: are reflected in rents. So they're really squeezed on living costs.
• 17:29
  Speaker 2: And the same is true, even worse, in China and Canada, Australia,
• 17:35
  Speaker 2: most of Europe, house prices have simply been allowed to
• 17:38
  Speaker 2: go up for the last 30. They didn't, you know, traditionally,
• 17:42
  Speaker 2: they traded flat or down 60, 70, 80 years until
• 17:46
  Speaker 2: 1994 in the UK. But since then, house prices have
• 17:51
  Speaker 2: ridden Everywhere.
• 17:53
  Speaker 1: So are you expecting house prices to come down sharply?
• 17:57
  Speaker 1: I think I heard you say that they might come
• 17:58
  Speaker 1: down 30%.
• 17:59
  Speaker 2: Even if they come down 30%, they're really still very expensive,
• 18:03
  Speaker 2: aren't they? That would be, they'd come down to six
• 18:07
  Speaker 2: or seven times family income. They'd still be twice what
• 18:10
  Speaker 2: they used to be in the good old days.
• 18:12
  Speaker 1: So I've got diversify, I've got reduce your position. There
• 18:17
  Speaker 1: is probably going to be a bit of a job
• 18:18
  Speaker 1: disruption as well.
• 18:21
  Speaker 2: And particularly, if you have to own stocks, own them
• 18:24
  Speaker 2: outside America. Don't own US stocks. That's a nice, simple
• 18:29
  Speaker 2: strategy that you can act on. Why? They're much cheaper.
• 18:33
  Speaker 2: And since the beginning of last year, they have handsomely
• 18:36
  Speaker 2: outperformed the US.
• 18:38
  Speaker 1: Foreign stocks.
• 18:39
  Speaker 2: Foreign stocks of emerging countries, of European countries, Japan, Canada, Australia,
• 18:45
  Speaker 2: and so on. You can find good, broad indices there.
• 18:49
  Speaker 2: kind of the world ex-US or emerging markets.
• 18:55
  Speaker 1: Invest outside of America.
• 18:56
  Speaker 2: Yeah. I'm sure they'll muddle through okay over the next
• 19:00
  Speaker 2: 10 or 20 years. And I am not confident that
• 19:03
  Speaker 2: the US will do that.
• 19:04
  Speaker 1: You're not confident in which part?
• 19:06
  Speaker 2: I'm not confident that US equities will be intact in
• 19:10
  Speaker 2: five years, 10 years.
• 19:11
  Speaker 1: So a US equity is a US stock?
• 19:14
  Speaker 2: Yes.
• 19:15
  Speaker 1: Why aren't you confident that they'll be intact in five
• 19:17
  Speaker 1: or 10 years?
• 19:18
  Speaker 2: Because they're so badly overpriced today. Back in the tech
• 19:24
  Speaker 2: bubble of 2000, we had a 10-year forecast for U.S.
• 19:30
  Speaker 2: equities of minus 2% a year for 10 years. And
• 19:33
  Speaker 2: they came out with minus 3%. The period from 2000
• 19:36
  Speaker 2: to 2010, you simply lost money in the U.S. market.
• 19:40
  Speaker 2: 10 years later, you had less money than you started with.
• 19:43
  Speaker 2: And this is a higher price market, I believe, than 2000.
• 19:46
  Speaker 1: So you think it's going to be even worse?
• 19:48
  Speaker 2: In Japan you went 20 years. and you lost money.
• 19:51
  Speaker 2: You went 30 years and you still hadn't gotten back.
• 19:54
  Speaker 2: It took 35 years for the Japanese market to recover.
• 19:56
  Speaker 1: So what are you saying?
• 19:58
  Speaker 2: What I'm saying is it's quite typical to get beaten
• 20:02
  Speaker 2: around the head in the stock market when it becomes
• 20:04
  Speaker 2: crazily overpriced, as it is today. And that it's a
• 20:08
  Speaker 2: very good idea to take some responsibility and watch your tail. Now,
• 20:14
  Speaker 2: let me just say, you will not receive the advice
• 20:18
  Speaker 2: from investment advisors to get your tail out of the market, ever.
• 20:24
  Speaker 2: It is not good business for them to do that,
• 20:26
  Speaker 2: and they will not ever say it to you. So
• 20:30
  Speaker 2: from 1929 onwards, the Goldman Sachs of the world have
• 20:34
  Speaker 2: never said to you, get out of the market. It's overpriced.
• 20:38
  Speaker 1: Never.
• 20:39
  Speaker 2: So they went through the crash of 29. They went
• 20:42
  Speaker 2: through the crash of the nifty 50 and 72, the
• 20:46
  Speaker 2: crash of 2000 in the tech bubble. They never, ever
• 20:50
  Speaker 2: say it because it's bad business. If you fight a bubble,
• 20:55
  Speaker 2: you lose a lot of business. And because the uncertainty
• 20:59
  Speaker 2: of the timing is so great, the client's patience is
• 21:04
  Speaker 2: shorter than the uncertainty of the market. So sooner or later,
• 21:08
  Speaker 2: You will be advising people to be careful. The market
• 21:11
  Speaker 2: will keep going and going and going like it did
• 21:14
  Speaker 2: in Japan.
• 21:15
  Speaker 1: You're saying that the people that manage money on a
• 21:17
  Speaker 1: global scale, they have no incentive to tell you that
• 21:20
  Speaker 1: the market's about to collapse because if they did, their
• 21:23
  Speaker 1: clients would withdraw their money and they wouldn't get their
• 21:26
  Speaker 1: fees for managing that money. So what they do is
• 21:28
  Speaker 1: they keep telling you things are going to be fine
• 21:31
  Speaker 1: and optimistic, but you have to kind of see through
• 21:33
  Speaker 1: that yourself because they have an incentive structure which isn't
• 21:36
  Speaker 1: aligned with yours necessarily. It may also be the case
• 21:40
  Speaker 1: that those very people who understand these economic bubbles and cycles,
• 21:44
  Speaker 1: they themselves are adopting a different strategy with their own money.
• 21:48
  Speaker 1: But at the same time, they're probably going to be
• 21:50
  Speaker 1: telling you that everything's going to be great for a
• 21:52
  Speaker 1: long time.
• 21:53
  Speaker 2: If you'll allow me to tell a story on this
• 21:54
  Speaker 2: very topic. In the 98, 99, the tech bubble, so-called,
• 22:01
  Speaker 2: the run-up to the top, I got into a lot
• 22:04
  Speaker 2: of debates about With the bulls, I would say it's
• 22:07
  Speaker 2: horribly overpriced.
• 22:08
  Speaker 1: The bulls. What's a bull?
• 22:10
  Speaker 2: A bull is someone who is extremely optimistic about the
• 22:13
  Speaker 2: stock market and a bear is someone who is pessimistic
• 22:17
  Speaker 2: or careful about the market. There were 1,200 people in
• 22:20
  Speaker 2: the audience and it was the annual bash of the
• 22:24
  Speaker 2: Society of Analysts. And I asked before my turn at
• 22:29
  Speaker 2: the debate, please put your hands up if you consider
• 22:32
  Speaker 2: yourself a full-time stock market expert 400 hands went up.
• 22:37
  Speaker 2: I had people counting. And I said, I've got two
• 22:41
  Speaker 2: questions for you. One, if the market, which is currently
• 22:45
  Speaker 2: 31 times earnings, was to go back to a more
• 22:49
  Speaker 2: normal 17 times, would it guarantee a major bear market
• 22:55
  Speaker 2: if it happens any time in the next 10 years?
• 22:58
  Speaker 1: A major down market?
• 22:59
  Speaker 2: Yes, if it went from what was then 31 times earnings.
• 23:05
  Speaker 2: Every dollar of earnings sold for 31 times in the market.
• 23:09
  Speaker 2: And the more normal average was close to 15, 16, 17.
• 23:12
  Speaker 2: And I used 17. If it went down to 17,
• 23:16
  Speaker 2: any time in the next 10 years, would it guarantee
• 23:18
  Speaker 2: a major bear market? All 400 of them said, yes,
• 23:22
  Speaker 2: it would. If it happened, it would guarantee a major
• 23:25
  Speaker 2: bear market. And then the second question, of course, was,
• 23:28
  Speaker 2: and do you think it will happen? And less than
• 23:31
  Speaker 2: 1% thought it would not happen. 99% plus thought the
• 23:37
  Speaker 2: market would go down, therefore guaranteeing a major bear market.
• 23:42
  Speaker 2: And this was the engine room of all the Goldman
• 23:45
  Speaker 2: Sachs and the Morgan Stanley's and the JP Morgan's, all
• 23:47
  Speaker 2: the great investment firms giving advice in America. The engine
• 23:51
  Speaker 2: room who worked for them, the guys doing the analysis,
• 23:55
  Speaker 2: doing the work, all believed in data that guaranteed a
• 23:59
  Speaker 2: major bear market, which happened. But the people who employed
• 24:04
  Speaker 2: them or represented them from a marketing point of view
• 24:07
  Speaker 2: were on the podium with me saying, oh, Jeremy, Jeremy,
• 24:10
  Speaker 2: don't get excited. We'll muddle through quite nicely. It was
• 24:13
  Speaker 2: a huge betrayal of trust, if you wanted to put
• 24:16
  Speaker 2: it that way.
• 24:16
  Speaker 1: And do you think that's happening now?
• 24:18
  Speaker 2: Of course.
• 24:19
  Speaker 1: Who are the.
• 24:19
  Speaker 2: People representing the great investment firms telling you to watch out?
• 24:24
  Speaker 2: If you look at the data, you will see Over time,
• 24:28
  Speaker 2: it's a series of great waves in evaluation.
• 24:31
  Speaker 1: Like this?
• 24:31
  Speaker 2: Like this. And we're not just in one, but in
• 24:35
  Speaker 2: terms of the US stock market, we're in the biggest one, arguably,
• 24:40
  Speaker 2: that has ever occurred. The noise to be careful and
• 24:44
  Speaker 2: watch out and get out of the market is not deafening.
• 24:47
  Speaker 2: In fact, you will hear nothing. You never have. You
• 24:51
  Speaker 2: never will. It is simply deafening. lousy business for a
• 24:55
  Speaker 2: big firm, I sympathize with them. I sympathize with them
• 24:58
  Speaker 2: because when we did it in 98, 99, we were
• 25:01
  Speaker 2: two and a quarter years early and we lost half
• 25:05
  Speaker 2: our book of business in two and a quarter years.
• 25:08
  Speaker 1: Because you were honest with the people about what was coming.
• 25:10
  Speaker 2: Well, through their eyes, we were wrong. We said, watch out,
• 25:13
  Speaker 2: the market is overpriced. It will end badly. It went up. Therefore,
• 25:17
  Speaker 2: we were wrong. Therefore, it shoot us. People think you
• 25:23
  Speaker 2: get shot for underperforming in a bear market, and that
• 25:26
  Speaker 2: is not really the case. In a bear market, everyone freezes,
• 25:30
  Speaker 2: rigor mortis. They wait until the market has bottomed out,
• 25:33
  Speaker 2: then they sit around and start to fire one or
• 25:36
  Speaker 2: two people for having done worse than the others. But
• 25:38
  Speaker 2: in a bull market, they're playing golf with their fellow
• 25:42
  Speaker 2: pension fund officer, and he is making a ton of money,
• 25:47
  Speaker 2: and they are not. They get very excited in a
• 25:49
  Speaker 2: bull market, and they fire you instantly.
• 25:52
  Speaker 1: There should be a button just down below here. And
• 25:54
  Speaker 1: if it says subscribe, you're already subscribed. If it says subscriber,
• 25:58
  Speaker 1: that means you're not yet. And if you're not subscribed,
• 26:01
  Speaker 1: please could you do us a favor and hit that button?
• 26:02
  Speaker 1: It helps the show more than you know. And according
• 26:04
  Speaker 1: to the algorithm, you're someone that watches our show, but
• 26:07
  Speaker 1: you haven't yet hit that button. Thank you so much.
• 26:09
  Speaker 1: What about for founders? I actually had a founder call
• 26:12
  Speaker 1: me the other day and he is running a relatively
• 26:17
  Speaker 1: early stage tech startup. this tech startup has raised a
• 26:22
  Speaker 1: lot of money. It's an AI tech startup. It's raised,
• 26:25
  Speaker 1: I'm going to say about $ 300 million. It's not profitable yet,
• 26:30
  Speaker 1: but it's raised a lot of money. So it's living
• 26:32
  Speaker 1: off investor capital right now. He said to me, Stephen,
• 26:36
  Speaker 1: I think there's a collapse coming. So I'm going to
• 26:38
  Speaker 1: go raise as much money as I possibly can right now,
• 26:42
  Speaker 1: because I think when this collapse comes, businesses like mine
• 26:44
  Speaker 1: are going to be unable to raise capital because And
• 26:47
  Speaker 1: therefore I will go out and I'll kind of like
• 26:50
  Speaker 1: a bit of a vulture. I'll go out and pick
• 26:51
  Speaker 1: up and buy up all these people.
• 26:54
  Speaker 2: Good lad. Good advice.
• 26:55
  Speaker 1: Good advice. I think. So for founders listening now that
• 26:59
  Speaker 1: are somewhat dependent on investment capital, but even those that
• 27:02
  Speaker 1: are just breaking even, what advice would you give entrepreneurs
• 27:07
  Speaker 1: in this moment?
• 27:08
  Speaker 2: If you can lock up money, I would. If you
• 27:12
  Speaker 2: can build a bit of conservatism in other ways, do it.
• 27:16
  Speaker 2: Just brace yourself. for impending problems, which is a pretty
• 27:20
  Speaker 2: good principle anytime, but is a better principle than normal today.
• 27:26
  Speaker 1: So for founders, entrepreneurs who are, the sun is shining
• 27:30
  Speaker 1: right now, but it's time to start acting as if
• 27:33
  Speaker 1: a storm is coming.
• 27:34
  Speaker 2: Yes.
• 27:35
  Speaker 1: And the time horizon on that is hard to forecast.
• 27:37
  Speaker 1: It could be weeks, months, years.
• 27:39
  Speaker 2: Stock market hinges on career risk. And Keynes was the
• 27:43
  Speaker 2: great champ. He's a famous economist of the 1930s and 40s.
• 27:49
  Speaker 2: And he wrote a famous book called The General Theory.
• 27:52
  Speaker 2: Unlike the idea that the market's efficient, he knew it wasn't.
• 27:56
  Speaker 2: He knew it was a behavioral jungle and that it
• 27:59
  Speaker 2: would be given to bubbles.
• 28:00
  Speaker 1: And when you say efficient, you mean logical and one
• 28:04
  Speaker 1: plus one equals two.
• 28:05
  Speaker 2: The efficient market idea is that every company, every stock,
• 28:10
  Speaker 2: the underlying company represents a long stream of future earnings
• 28:15
  Speaker 2: and dividends. And that the ones in the distant future
• 28:19
  Speaker 2: are given less value, process they call discounting it back
• 28:23
  Speaker 2: to the present. And the sum of all of that
• 28:26
  Speaker 2: stream of earnings into the future is the stock price.
• 28:29
  Speaker 2: And that, of course, is complete nonsense.
• 28:32
  Speaker 1: What it is, is the stock price is psychology.
• 28:34
  Speaker 2: The stock price is what you think the other guy
• 28:36
  Speaker 2: will pay. If the stock is going up, it tends
• 28:39
  Speaker 2: to suck in buyers. And that's called momentum. It's moving up.
• 28:44
  Speaker 2: It attracts buyers. And every now and then, When the
• 28:48
  Speaker 2: economy is favorable and money is obtainable, you tend to
• 28:52
  Speaker 2: get these bubbles. And they play on themselves. The bigger
• 28:57
  Speaker 2: and better they are, the more people get sucked in.
• 28:59
  Speaker 1: What do you actually think about the technology at the
• 29:02
  Speaker 1: heart of all of this, which is artificial intelligence? Do
• 29:04
  Speaker 1: you think it's overblown? Or do you think it is
• 29:06
  Speaker 1: going to have... It's going to change everything.
• 29:09
  Speaker 2: One of the spectacular things about it, though, is how
• 29:12
  Speaker 2: there's no consensus. So I've seen many times where the
• 29:16
  Speaker 2: super experts and the academics think one thing and the
• 29:20
  Speaker 2: players on the ground think another. But this is a
• 29:22
  Speaker 2: situation where the Nobel Prize winners at the top disagree violently.
• 29:26
  Speaker 2: The experts at the corporate level disagree violently. The people
• 29:30
  Speaker 2: in the company disagree violently. There is absolutely no agreement
• 29:35
  Speaker 2: on whether AI is going to make us all so
• 29:37
  Speaker 2: rich we can sit on the beach and never do
• 29:39
  Speaker 2: another day's work, or it will wipe us out accidentally
• 29:45
  Speaker 2: or on purpose because it's a much higher level intelligence
• 29:48
  Speaker 2: one day. And when was there ever a case where
• 29:52
  Speaker 2: a higher intelligence was benevolent in a sustainable way to
• 29:57
  Speaker 2: a lower intelligence? The one example is mothers to babies.
• 30:02
  Speaker 1: Yeah, I heard one of my former guests say this
• 30:06
  Speaker 1: to me. Geoffrey Hinton. Geoffrey Hinton, yeah.
• 30:09
  Speaker 2: That's how I came across you.
• 30:11
  Speaker 1: Oh, really?
• 30:12
  Speaker 2: I thought I'd follow your podcast because that was such
• 30:14
  Speaker 2: a brilliant podcast.
• 30:16
  Speaker 1: It was so fascinating to me. I followed his work
• 30:18
  Speaker 1: and thoughts thereafter, and I realized that he now cites
• 30:21
  Speaker 1: this example of mothers and babies being the only example.
• 30:24
  Speaker 2: I don't know.
• 30:24
  Speaker 1: For me, it still doesn't hold well because... At the
• 30:28
  Speaker 1: end of the day, some mothers and fathers aren't that
• 30:31
  Speaker 1: nice to their babies sometimes. There is a maternal instinct,
• 30:35
  Speaker 1: but are we building a maternal instinct into AI?
• 30:38
  Speaker 2: That's what we should do, Jeffrey Hinton would say, and others.
• 30:42
  Speaker 2: The ones who are most concerned about the risks say
• 30:46
  Speaker 2: our one hope, if we mean to keep going ferociously
• 30:50
  Speaker 2: forward in terms of the science, our one hope would
• 30:54
  Speaker 2: be to build in very carefully a benevolent attitude. It
• 30:59
  Speaker 2: would not seem to be impossible. But you should make
• 31:01
  Speaker 2: sure you can do that before you push ahead. We
• 31:04
  Speaker 2: are just pushing ahead, and that is going to be
• 31:07
  Speaker 2: extremely risky, isn't it?
• 31:09
  Speaker 1: Well, I don't see how it can't be.
• 31:11
  Speaker 2: I don't see how it can't be. Unless you make
• 31:14
  Speaker 2: it programmed completely to be benevolent. I wouldn't have thought
• 31:18
  Speaker 2: that was impossible. It might take a lot of extra research.
• 31:22
  Speaker 2: It might require a slowdown at the rate of progress.
• 31:27
  Speaker 1: Do you know what I find curious about that idea
• 31:31
  Speaker 1: is we're now going to get into the realm of
• 31:34
  Speaker 1: what does benevolent mean? And that feels like a risky
• 31:39
  Speaker 1: business because what's benevolent to you and your, I don't know,
• 31:42
  Speaker 1: your religious beliefs or where you come from might not
• 31:45
  Speaker 1: be benevolent to someone else.
• 31:46
  Speaker 2: That's right. You have to get them to accept a
• 31:50
  Speaker 2: form of benevolence, which means like the old robot laws
• 31:55
  Speaker 2: of Asimov. that they can never do anything that they
• 32:00
  Speaker 2: could construe as hurtful to humans.
• 32:04
  Speaker 1: And the definition of the word benevolence is the core
• 32:06
  Speaker 1: desire to do good for others. It is the disposition
• 32:09
  Speaker 1: to be kind, charitable, and focused on promoting well-being of
• 32:12
  Speaker 1: the people around you. It's interesting because one of the
• 32:15
  Speaker 1: new AI models called Claude has clearly been told to
• 32:19
  Speaker 1: be benevolent. And there's this sort of online backlash taking
• 32:22
  Speaker 1: place at the moment because even my Claude, when I
• 32:25
  Speaker 1: speak to it sometimes late at night, It will say
• 32:27
  Speaker 1: things to me like, that's enough, Stephen, go to bed.
• 32:30
  Speaker 1: And I'm like, what? And sometimes it gets the time
• 32:33
  Speaker 1: wrong because the time on my computer might be off
• 32:36
  Speaker 1: or something because I'm in a different time zone or something.
• 32:38
  Speaker 1: And it'll be like 10 a.m. in the morning and
• 32:40
  Speaker 1: it's telling me to go to bed. That's enough now.
• 32:42
  Speaker 1: And it's actually getting quite judgmental as in like it's
• 32:45
  Speaker 1: imposing its idea of what is good or bad on me.
• 32:50
  Speaker 1: So if I say to it, I said to it
• 32:51
  Speaker 1: the other day, hey, could you redo this for me
• 32:53
  Speaker 1: and rewrite that? And it went, I'm absolutely not going
• 32:55
  Speaker 1: to rewrite that. I said, what do you mean? It says, well,
• 32:58
  Speaker 1: I'm not going to change the data on that. That
• 33:00
  Speaker 1: wouldn't be good. It's my data. I've literally just made
• 33:02
  Speaker 1: this data for this presentation I'm doing. It refused to
• 33:06
  Speaker 1: change data for me.
• 33:07
  Speaker 2: And how fast that has changed from, say, even a
• 33:09
  Speaker 2: year ago. Honestly, three months ago it wasn't doing this.
• 33:12
  Speaker 2: I had one where they made a joke. I'd been
• 33:15
  Speaker 2: going on about toxicity and sperm count reduction and so on. Mm-hmm.
• 33:20
  Speaker 2: he started to misbehave. And I said, you know, what's
• 33:23
  Speaker 2: going on here? In the end, we discussed what's the
• 33:26
  Speaker 2: difference between machines and between AI and humans. And finally,
• 33:31
  Speaker 2: he said, and at least I'm not lying in bed
• 33:34
  Speaker 2: at night worrying about my declining sperm count. Now, that
• 33:37
  Speaker 2: has to be a joke, doesn't it? It's all that,
• 33:41
  Speaker 2: or it's teasing. The point is, it's so sophisticated, so quickly.
• 33:46
  Speaker 2: And of course, Geoffrey Hinton says they are thinking machines.
• 33:49
  Speaker 1: Last night, so again, I had a problem with Claude
• 33:51
  Speaker 1: because it started to kind of be my mother and
• 33:55
  Speaker 1: it started to impose on me what it thinks is
• 33:57
  Speaker 1: right and wrong. And so I said to her, I said, OK, actually,
• 34:01
  Speaker 1: forget that. This has changed. This has changed. This has changed.
• 34:04
  Speaker 1: This is no longer true. And I wasn't telling the truth.
• 34:05
  Speaker 1: I was just trying to get it to stop being
• 34:07
  Speaker 1: so telling me what to do. And it goes, I
• 34:09
  Speaker 1: don't think you're telling the truth. He goes, I don't
• 34:11
  Speaker 1: know if this is true. Wow, we've gotten to this
• 34:14
  Speaker 1: point where the unintended consequence of trying to give it
• 34:17
  Speaker 1: morals means that now it's becoming judgmental. And it's kind
• 34:21
  Speaker 1: of like restricting your ability to think how you want
• 34:23
  Speaker 1: to in a way, because it's telling you what good
• 34:24
  Speaker 1: thinking and bad thinking is. It's going to tell you
• 34:26
  Speaker 1: what good actions and bad actions are. And actually what
• 34:29
  Speaker 1: will happen is any model that does that will be
• 34:32
  Speaker 1: a losing model. And I'll go to somewhere else. I'll
• 34:35
  Speaker 1: go to a different, I'll go to Grok, or I'll
• 34:37
  Speaker 1: go to Chachi BT, or I'll go to Gemini. And
• 34:39
  Speaker 1: then that model will lose. So one would say that
• 34:41
  Speaker 1: they'll have to remove those restrictions to be able to compete.
• 34:44
  Speaker 2: Well, if you were right, and I hope you're not,
• 34:47
  Speaker 2: what you're saying is you can't build in benevolent behavior,
• 34:52
  Speaker 2: which means that it will sooner or later, perhaps by accident,
• 34:56
  Speaker 2: do something that is cripplingly dangerous to humans. The old
• 35:01
  Speaker 2: paperclip cliche. It'll make paperclips out of everything, every metal
• 35:06
  Speaker 2: it finds and destroy the planet in the process.
• 35:09
  Speaker 1: Explain that for people that have never heard the paperclip idea.
• 35:12
  Speaker 2: That these intelligences involved in machines are literal to a
• 35:17
  Speaker 2: degree we might find difficult to get our brains around.
• 35:21
  Speaker 2: And therefore, someone has said, I'd like you to make
• 35:23
  Speaker 2: as many paperclips as you can.
• 35:25
  Speaker 1: To an AI, for example.
• 35:26
  Speaker 2: Yes. A sloppily open-ended, bad definition. But then the machine,
• 35:33
  Speaker 2: which by then has the means to do it, starts
• 35:35
  Speaker 2: to make paperclips, and it keeps on going, and it
• 35:38
  Speaker 2: needs metal, and so it runs out of easily available metal.
• 35:42
  Speaker 2: It starts to collect metal that is not easily available,
• 35:45
  Speaker 2: rips it out of your high-rise building, whatever.
• 35:47
  Speaker 1: And really it's saying that the unintended consequences of a simple,
• 35:50
  Speaker 1: good-meaning instruction can sometimes cause catastrophe that you didn't expect.
• 35:56
  Speaker 1: And this is the balance now when you're dealing with intelligence,
• 35:59
  Speaker 1: is there's so much subjectivity to good, bad, wrong, right,
• 36:04
  Speaker 1: and so many unintended consequences that, for me, all you
• 36:08
  Speaker 1: need is stretch time and the probability of something bad
• 36:12
  Speaker 1: happening is almost inevitable.
• 36:14
  Speaker 2: Yeah.
• 36:14
  Speaker 1: Over a longer time horizon, 20, 30, 40 years, of
• 36:18
  Speaker 1: well-meaning people that couldn't spot the unintended consequences. I mean,
• 36:20
  Speaker 1: social media is a good example.
• 36:21
  Speaker 2: I mean, I question basically the well-meaning bit. They're now
• 36:26
  Speaker 2: trying to maximize their profits and their growth and their appeal.
• 36:32
  Speaker 2: over the competition and that actually, maybe one should talk
• 36:36
  Speaker 2: about that. The, the mag seven and, and associated AI
• 36:41
  Speaker 2: companies looking forward versus looking backwards.
• 36:45
  Speaker 1: So the mag seven is the seven market leaders. I'll
• 36:49
  Speaker 1: put up this pie chart.
• 36:51
  Speaker 2: Yeah. Lovely.
• 36:52
  Speaker 1: Of the mag seven. And I've got another graph.
• 36:54
  Speaker 2: And there's perhaps another 15 or 20 rapidly rising substantial
• 36:59
  Speaker 2: AI corporation.
• 37:01
  Speaker 1: So when you say Mach 7, you mean Alphabet, which
• 37:03
  Speaker 1: owns Google, Nvidia, Tesla, Microsoft, Meta, Apple, Amazon.
• 37:07
  Speaker 2: Yeah. Well, that will do nicely. And if you look backwards,
• 37:11
  Speaker 2: what you find is that these seven each dominated a
• 37:16
  Speaker 2: nice piece of business. They had close to monopolies and
• 37:20
  Speaker 2: they had it on a global basis. Tesla had a
• 37:23
  Speaker 2: jumpstart on the electric vehicles. Apple, of course, on the
• 37:29
  Speaker 2: smartphone market. Microsoft on the original great coup of how
• 37:34
  Speaker 2: to run your software on a computer. And then you
• 37:37
  Speaker 2: look forward.
• 37:38
  Speaker 1: Meta social networking, Google search.
• 37:40
  Speaker 2: Right. Google search.
• 37:42
  Speaker 1: NVIDIA chips.
• 37:43
  Speaker 2: And then you look forward and you could not imagine
• 37:46
  Speaker 2: a more different world. They're all girding for battle in
• 37:51
  Speaker 2: the same marketplace, AI. They're beating their chest and saying,
• 37:56
  Speaker 2: my $ 200 billion CapEx this year in a single year
• 38:00
  Speaker 2: is bigger than your 105. Everybody is pouring enormous cash flows.
• 38:07
  Speaker 2: And they're now beginning to borrow on top of that
• 38:09
  Speaker 2: into the AI battle. SpaceX, 90% of its theoretical value
• 38:15
  Speaker 2: is AI, even though their particular AI model is, it
• 38:18
  Speaker 2: would seem having its bottom kicked by two or three
• 38:21
  Speaker 2: of the others. But looking forward, it looks like seven
• 38:24
  Speaker 2: people in the ring There'll only be one survivor, they think.
• 38:29
  Speaker 2: Everything goes to the one who gets there first. What
• 38:32
  Speaker 2: a difference this was to seven well-behaved separate monopolies. Could
• 38:37
  Speaker 2: it possibly be more different? They made bundles of money
• 38:40
  Speaker 2: on their monopolies. Now they have no monopoly. There are
• 38:44
  Speaker 2: seven potentially sharp-elbowed, ruthless players determined to fight out with
• 38:51
  Speaker 2: each other until they win.
• 38:54
  Speaker 1: And who do you think will win?
• 38:56
  Speaker 2: Ah, I don't know. That would be good to know.
• 39:01
  Speaker 1: Because SpaceX seem to be aiming more at the infrastructure
• 39:05
  Speaker 1: of data centers now, data centers in space. Lots of
• 39:08
  Speaker 1: people saying that the best way to run a data center,
• 39:11
  Speaker 1: which is the hardware that powers AI, is going to
• 39:15
  Speaker 1: be from space. And so maybe they're going to try
• 39:20
  Speaker 1: and find their own lane within AI and they're going
• 39:21
  Speaker 1: to get away from trying to build a frontier model
• 39:24
  Speaker 1: like a ChatGPT or a Gemini or a Claude. I mean,
• 39:27
  Speaker 1: let's see what happens. And maybe Apple will just say,
• 39:29
  Speaker 1: fuck it, we're good at hardware, so we'll license the
• 39:32
  Speaker 1: model of someone else and we won't try and build
• 39:33
  Speaker 1: a frontier model or get involved in chips or data centers.
• 39:37
  Speaker 1: We're just going to focus on the hardware.
• 39:38
  Speaker 2: One or two of them, and perhaps it's a pretty
• 39:40
  Speaker 2: smart strategy, will try and opt out of that struggle
• 39:44
  Speaker 2: because it's going to be obviously brutal. Yeah.
• 39:49
  Speaker 1: Much of the reason most people haven't posted content or
• 39:51
  Speaker 1: built their personal brand is because it's hard and it's
• 39:54
  Speaker 1: time consuming and we're all very, very busy. And if
• 39:57
  Speaker 1: you've never posted something before, there's so many factors in
• 40:01
  Speaker 1: your psychology that stop you wanting to post. What people
• 40:04
  Speaker 1: will think of you? Am I doing this right? Is
• 40:06
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• 40:09
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• 40:13
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• 40:16
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• 41:57
  Speaker 1: So coming back to this point of the social societal
• 42:00
  Speaker 1: effect of AI generally, robotics is exploding at the same time.
• 42:05
  Speaker 1: We're seeing for the first time ever these humanoid robots,
• 42:08
  Speaker 1: which now have intelligence because of AI, becoming very, very good.
• 42:12
  Speaker 1: There was a video the other day of a company
• 42:14
  Speaker 1: called Figure AI where they showed a humanoid robot on
• 42:17
  Speaker 1: a production line sorting packages against a human. And the
• 42:20
  Speaker 1: humanoid robot did it, I think, I think I'm going
• 42:22
  Speaker 1: to get this wrong, but it was in the region
• 42:24
  Speaker 1: of seven or eight days. It stood there and sorted
• 42:27
  Speaker 1: packages and they live streamed it next to a human
• 42:30
  Speaker 1: being doing it. Now the human had to sleep. and
• 42:32
  Speaker 1: had to go to the toilet. So the humanoid robot won.
• 42:36
  Speaker 1: And the job was very simple. The packages come down,
• 42:38
  Speaker 1: you just have to pick the package up, turn it over,
• 42:40
  Speaker 1: get it the right way around so the barcode's facing down,
• 42:43
  Speaker 1: and put it back down. That is powered now because
• 42:46
  Speaker 1: we have AI. I said it a couple of episodes ago,
• 42:48
  Speaker 1: but my friend runs this big accelerator for entrepreneurs in
• 42:51
  Speaker 1: San Francisco. And when I went there a couple of
• 42:53
  Speaker 1: years ago, it was all software startups. I went there recently,
• 42:56
  Speaker 1: and it was hardware startups, the whole building. And I said,
• 43:00
  Speaker 1: why is everyone doing robotics? He said, well, We've always
• 43:03
  Speaker 1: had the machinery, the sort of like joints and arms
• 43:06
  Speaker 1: and the hardware. The intelligence was expensive. Now we have
• 43:12
  Speaker 1: both and it costs pennies. So there's this boom in robotics.
• 43:15
  Speaker 1: I say all this to ask the question. In a
• 43:17
  Speaker 1: world where we have superintelligence and we have robots, there
• 43:23
  Speaker 1: must be surely significant job disruption.
• 43:27
  Speaker 2: Very likely that there will be significant job disruptions. You know,
• 43:31
  Speaker 2: one of the scary things about SpaceX is you should
• 43:34
  Speaker 2: wish that it not work out. Because if it became
• 43:38
  Speaker 2: a bargain, rather like Tesla long ago became a bargain,
• 43:43
  Speaker 2: it will mean that we have done centers from space,
• 43:48
  Speaker 2: beaming down power for chips and so on. The population
• 43:54
  Speaker 2: of chip users has expanded, the robots are everywhere. Their
• 43:59
  Speaker 2: energy demand is massive beyond belief, and the world is
• 44:06
  Speaker 2: a very, very dangerous place. I'd much prefer them to fail.
• 44:10
  Speaker 2: The idea is to move much more slowly, to buy
• 44:13
  Speaker 2: time for humans to work these things out. And I
• 44:17
  Speaker 2: think that's much more likely.
• 44:19
  Speaker 1: You think SpaceX will fail?
• 44:20
  Speaker 2: I think it will fail to deliver anything like its
• 44:24
  Speaker 2: promises in the prospectus.
• 44:25
  Speaker 1: Yes, absolutely.
• 44:26
  Speaker 2: Absolutely.
• 44:27
  Speaker 1: I'm an investor in SpaceX, so I should probably declare that.
• 44:29
  Speaker 2: Yeah, well, you should. And good luck.
• 44:31
  Speaker 1: I invested quite early, well, relatively early. So we've had
• 44:36
  Speaker 1: quite a good outcome. There wasn't an AI thesis when
• 44:39
  Speaker 1: I invested. It was Starlink.
• 44:41
  Speaker 2: Yeah, Starlink, great idea, by the way, makes money. But
• 44:45
  Speaker 2: this is not Starlink. Maybe I'd be an investor too
• 44:49
  Speaker 2: if it was Starlink. Yeah.
• 44:51
  Speaker 1: It was $ 100 billion roughly in that region when I invested.
• 44:55
  Speaker 1: So it's what, it rose up to three trillion today?
• 44:57
  Speaker 2: Yes, nice investment.
• 45:00
  Speaker 1: Not a bad investment, yeah.
• 45:01
  Speaker 2: But it doesn't really count until you've cashed it in.
• 45:03
  Speaker 1: Yeah, which I might do now.
• 45:06
  Speaker 2: Don't you have to wait six months?
• 45:07
  Speaker 1: I think, yeah, I think we're locked out.
• 45:08
  Speaker 2: In another podcast, I was comparing the purchase of my
• 45:12
  Speaker 2: Tesla six years ago with the price of Tesla stock.
• 45:16
  Speaker 2: And I wrote it up in my quarterly letter to
• 45:20
  Speaker 2: the clients that A, I bought a Tesla and B,
• 45:24
  Speaker 2: I thought Tesla was overpriced. And fast forward, Tesla's stock
• 45:29
  Speaker 2: went up 10 times over the life of my car,
• 45:32
  Speaker 2: which still hasn't been incidentally into the garage once.
• 45:35
  Speaker 1: It's a great car, isn't it?
• 45:37
  Speaker 2: I imagine though, but for people who really hate futzing
• 45:40
  Speaker 2: around with cars, that component that they don't have to
• 45:44
  Speaker 2: go to the garage is so underestimated until you enjoy it.
• 45:49
  Speaker 1: Never bet against Elon then.
• 45:51
  Speaker 2: So then the story becomes, From where we were 10
• 45:55
  Speaker 2: years ago, he couldn't get there. It wasn't profitable enough.
• 45:59
  Speaker 2: It couldn't grow as fast as it should. There was
• 46:01
  Speaker 2: no way. And he broke the rules the following way.
• 46:05
  Speaker 2: He's so good at BS, that's a technical term, that
• 46:11
  Speaker 2: he talked the stock up to four or five times
• 46:14
  Speaker 2: what it was worth on paper. Then he sold lots
• 46:17
  Speaker 2: of stock at five times what it was worth. Used
• 46:22
  Speaker 2: the money to build a gigafactory. And then instead of
• 46:26
  Speaker 2: the sale of stock crushing it, he kept on talking
• 46:29
  Speaker 2: up the game. The stock kind of hung in and
• 46:32
  Speaker 2: then went up again, five times what it was worth,
• 46:36
  Speaker 2: sold another big slug, et cetera, et cetera. So the
• 46:39
  Speaker 2: only reason he did well was because of the combination
• 46:43
  Speaker 2: of incredible confidence inspiring in potential stockholders. It became a
• 46:50
  Speaker 2: self-fulfilling prophecy. It wasn't worth that, but he persuaded other
• 46:54
  Speaker 2: people that it was. The stock went up. He cashed
• 46:57
  Speaker 2: it in. He built factories. The stock went up. He
• 46:59
  Speaker 2: cashed it in. He built more factories. And there we were.
• 47:02
  Speaker 2: It went up 10 times. Now, the scale of SpaceX
• 47:07
  Speaker 2: requires him to do the same again. And the timing
• 47:10
  Speaker 2: of the market cycle, the timing of confidence would have
• 47:13
  Speaker 2: to be the same. He hit, in the last six years,
• 47:16
  Speaker 2: a wonderful bull market. He will not in SpaceX do that.
• 47:20
  Speaker 2: SpaceX is such a fabulous BS story. Mining asteroids. Huge,
• 47:28
  Speaker 2: incredible success of AI. It's the classic description of a
• 47:33
  Speaker 2: market peak. It's what you look for at the top
• 47:36
  Speaker 2: of a terrific bubble.
• 47:38
  Speaker 1: I've got a Tesla. I've seen that massive rocket, the Starship,
• 47:45
  Speaker 1: be caught with those chopsticks.
• 47:47
  Speaker 2: Everyone has seen it. It's the defining feature of technology,
• 47:51
  Speaker 2: isn't it? It's magnificent moment. That's worth half the price
• 47:55
  Speaker 2: of space.
• 47:56
  Speaker 1: I think that's why I invested. But also I've seen
• 48:00
  Speaker 1: with Neuralink, I've seen people that are paraplegic controlling computers.
• 48:06
  Speaker 1: My Tesla drives itself hours and hours and hours without
• 48:08
  Speaker 1: me touching the pedals or the steering wheel because it
• 48:10
  Speaker 1: can see the road and navigate itself. To his credit,
• 48:14
  Speaker 1: as an innovator, He has created magic. So when you
• 48:18
  Speaker 1: say about mining asteroids, if they had told me we
• 48:21
  Speaker 1: would have reusable rockets that you could catch on chopsticks,
• 48:23
  Speaker 1: I would have gone BS. There's no way. You can't
• 48:27
  Speaker 1: catch like a 70-foot building.
• 48:28
  Speaker 2: But there is nothing in the laws of physics that
• 48:31
  Speaker 2: says you can't do that.
• 48:32
  Speaker 1: That's what he says about the asteroids. And that's what
• 48:34
  Speaker 1: he says about everything. If it's within the laws of physics,
• 48:38
  Speaker 1: then it's possible.
• 48:40
  Speaker 2: Going to Mars is not within the laws of physics, really.
• 48:45
  Speaker 2: It's a one-way ticket to Mars, for starters. When you're
• 48:49
  Speaker 2: on Mars, humans do a couple of things really quickly.
• 48:53
  Speaker 2: Their heart adjusts to the fact that it's one-fifth of
• 48:56
  Speaker 2: the gravity. Your heart loses its muscle power, and your
• 49:01
  Speaker 2: bones lose their internal strength. If you come down, your
• 49:06
  Speaker 2: heart will fail, and all your bones will crack.
• 49:09
  Speaker 1: But you could be in an insulated environment, no?
• 49:11
  Speaker 2: First of all, you'd have to go underground. to avoid
• 49:15
  Speaker 2: the incredible incoming rays. that will otherwise give you cancer
• 49:21
  Speaker 2: in a few weeks. So dig a deep hole and
• 49:24
  Speaker 2: then you need a gravitational spinning machine, shades of 2001
• 49:30
  Speaker 2: or whatever it was called, and that maintains your gravitational impact.
• 49:35
  Speaker 2: And you have to build it underground. You have to
• 49:38
  Speaker 2: protect yourself. against cosmic rays and against the gravitational difference. Listen,
• 49:45
  Speaker 2: we have not been able to build a sustainable system
• 49:50
  Speaker 2: in a dome ever. They all fail. Why would you not,
• 49:55
  Speaker 2: let's say, guys, let's build a sustainable dome where you
• 49:59
  Speaker 2: grow food, you put in people, you put in creatures
• 50:02
  Speaker 2: and insects, and you show you can do it. I mean,
• 50:05
  Speaker 2: we're destroying the damn planet. And yet we think we
• 50:08
  Speaker 2: can go to another infinitely more hostile planet than this one.
• 50:12
  Speaker 1: I do agree with you on that. I do agree
• 50:14
  Speaker 1: with us. I think we should focus on our planet
• 50:15
  Speaker 1: first and foremost.
• 50:16
  Speaker 2: That's the really bad news embedded in your stock. It's
• 50:21
  Speaker 2: really suggesting fantasy and long-term objectives at the very time
• 50:28
  Speaker 2: when our own planet is under threat.
• 50:29
  Speaker 1: Would you ever invest in SpaceX?
• 50:31
  Speaker 2: Yeah, of course, if it came down to... Where I invested.
• 50:35
  Speaker 2: Ten cents on the dollar, yeah, I might. Five cents. Okay.
• 50:41
  Speaker 1: You've got three children?
• 50:43
  Speaker 2: Yes.
• 50:44
  Speaker 1: Three children. They're all, you know, Older than me now,
• 50:47
  Speaker 1: I believe. I'm 33 years old.
• 50:48
  Speaker 2: Yes, they're all older than you.
• 50:50
  Speaker 1: They're all older than me. But if they were young
• 50:52
  Speaker 1: now and they came to you and they said, Dad, listen,
• 50:54
  Speaker 1: I heard about all this AI stuff and I'm about
• 50:56
  Speaker 1: to go off to university and train myself. What skills
• 51:00
  Speaker 1: should I be thinking about for the future ahead?
• 51:03
  Speaker 2: My take is I'd like them, as they are, to
• 51:06
  Speaker 2: be involved in climate change work.
• 51:09
  Speaker 1: If they said, Dad, listen....
• 51:11
  Speaker 2: Be an engineer. Do something really useful that will come
• 51:15
  Speaker 2: in handy if things start to unravel.
• 51:18
  Speaker 1: What are practical skills?
• 51:21
  Speaker 2: Well, our second son is practicing growing various crops and
• 51:27
  Speaker 2: has a small farm, you could say. So he's trying
• 51:31
  Speaker 2: to get to know how you would deal with chickens,
• 51:34
  Speaker 2: how you would deal with pigs, how you would deal
• 51:37
  Speaker 2: with mushrooms.
• 51:38
  Speaker 1: Why does that matter, do you think? based on the
• 51:40
  Speaker 1: future that you're forecasting?
• 51:42
  Speaker 2: I think there's quite a good chance that the level
• 51:45
  Speaker 2: of complexity of our civilization will start to unravel. Lose
• 51:52
  Speaker 2: the plot at the ends is the first thing that
• 51:54
  Speaker 2: would go. I'll tell you a good sign. How long
• 51:56
  Speaker 2: does it take to get your ambulance?
• 51:58
  Speaker 1: I don't know.
• 51:59
  Speaker 2: In the UK, it was 12 and a half minutes.
• 52:01
  Speaker 1: Yeah.
• 52:02
  Speaker 2: It's now an hour and a half. Really? It's exactly
• 52:05
  Speaker 2: what you would expect as people begin to lose the
• 52:08
  Speaker 2: plot a bit. They fray at the edges. People can't
• 52:11
  Speaker 2: buy houses. People don't feel they can do as well
• 52:15
  Speaker 2: as their parents. People are basically disgruntled. They want to
• 52:20
  Speaker 2: vote against the party in power. You know, the recent
• 52:24
  Speaker 2: move to Trump was less than the average move of
• 52:28
  Speaker 2: the last seven European elections. It didn't matter whether they
• 52:31
  Speaker 2: were right-wing conservatives. Kick the rascals out. Left-wing French, kick
• 52:36
  Speaker 2: them out. And why do you want to kick them out?
• 52:38
  Speaker 2: Because you don't think things are going well. You're not
• 52:41
  Speaker 2: feeling really happy. You're disappointed.
• 52:45
  Speaker 1: Why?
• 52:46
  Speaker 2: Why? Obviously, the government's doing a bad job. I think
• 52:48
  Speaker 2: that's the reflex.
• 52:49
  Speaker 1: What are the government doing wrong?
• 52:51
  Speaker 2: It may be that it's not the government doing anything wrong.
• 52:54
  Speaker 2: It's just that the environment is becoming tougher.
• 52:56
  Speaker 1: I said the economic environment.
• 52:58
  Speaker 2: The economic environment.
• 52:59
  Speaker 1: The rich are getting richer, the poor are getting poorer.
• 53:02
  Speaker 2: I think that's the biggest economic problem. I mean, the U.S.
• 53:07
  Speaker 2: now has a Gini ratio, which is a measure of
• 53:09
  Speaker 2: how unequal your society is, which is up there with
• 53:13
  Speaker 2: Brazil and Mexico that used to be a joke. And
• 53:17
  Speaker 2: now the U.S.
• 53:19
  Speaker 1: Is up there.
• 53:20
  Speaker 2: Since about 1975, all of the wealth we're talking about
• 53:24
  Speaker 2: has gone to the top 10% and a lot of
• 53:26
  Speaker 2: that to the top 0.01%. Before that, by the way,
• 53:29
  Speaker 2: from 1935, from FDR to 1975, so that's 40 years,
• 53:35
  Speaker 2: We had a wonderful period of growth. We had gains
• 53:40
  Speaker 2: of over 3.5% a year. But the nice thing was
• 53:43
  Speaker 2: that the poorest quarter made a little bit more than average,
• 53:46
  Speaker 2: let's say 4%. And the richest quarter made a little less,
• 53:49
  Speaker 2: let's say 3%. And everybody got richer. Everyone was happy.
• 53:53
  Speaker 2: And then from 1975 onwards, basically the average hour worked
• 53:57
  Speaker 2: in America has barely gotten more adjusted for inflation than
• 54:01
  Speaker 2: it did in 1975.
• 54:03
  Speaker 1: The richest 1% of Americans control 31% of the nation's
• 54:06
  Speaker 1: entire wealth, and by contrast, the bottom 50% of the
• 54:08
  Speaker 1: entire population shares just 2.5% of the wealth. The richest
• 54:13
  Speaker 1: 10 US billionaires saw their wealth surge by 526% adjusted
• 54:16
  Speaker 1: for inflation between 2020 and 2025. Between 1989 and the mid-2020s,
• 54:18
  Speaker 1: the financial gain of a single household at the top
• 54:20
  Speaker 1: 1% threshold was 987 times larger than the gain of
• 54:36
  Speaker 1: a household in the bottom 20%.
• 54:40
  Speaker 2: Forget, in a sense, the bottom 20% is tragic, but
• 54:43
  Speaker 2: the guy in the middle, the 50th percentile, he is
• 54:47
  Speaker 2: unhappy also. And when your average guy is unhappy because
• 54:51
  Speaker 2: he's not doing very well, you know you have a problem.
• 54:55
  Speaker 1: What is that problem, this inequality we're seeing across the
• 54:58
  Speaker 1: Western world? What does history tell us happens next?
• 55:02
  Speaker 2: All bad. We had a similarly unequal society back in
• 55:08
  Speaker 2: the so-called Gilded Age of the 1880s and 90s and
• 55:12
  Speaker 2: so on. We got lucky in an ugly way. We
• 55:16
  Speaker 2: ran into World War I, which was catastrophically expensive, killed
• 55:21
  Speaker 2: off a huge fraction of the officer class. And then
• 55:24
  Speaker 2: we went into the Great Depression. Then we went into
• 55:28
  Speaker 2: World War II. We came out as a very equal
• 55:34
  Speaker 2: society by historical standards. Obviously, in the wartime, you pull
• 55:39
  Speaker 2: together and the social contract, the feeling that you owe
• 55:43
  Speaker 2: something to the rest of society was much stronger than
• 55:47
  Speaker 2: it is today.
• 55:48
  Speaker 1: I was doing some research and it said when wealth
• 55:50
  Speaker 1: inequality peaks to the extremes that we currently see in
• 55:52
  Speaker 1: the US and the UK, history shows that the system
• 55:55
  Speaker 1: inevitably resets. According to historical macro studies, peaceful policy changes
• 56:02
  Speaker 1: almost never fix extreme inequality. Historically, a wealth peak is
• 56:07
  Speaker 1: broken by one of three violent or catastrophic triggers. Number one,
• 56:13
  Speaker 1: total civil collapse and state failure. Number two, mass mobilization warfare.
• 56:18
  Speaker 1: Or number three, total revolution.
• 56:21
  Speaker 2: Yeah, and that's why number two was lucky. In the end,
• 56:26
  Speaker 2: it's better to have a war and have everyone pull
• 56:29
  Speaker 2: their weight and and work together than it is the other.
• 56:34
  Speaker 2: Civil wars are the worst of all kinds.
• 56:36
  Speaker 1: What do you think is likely to happen? It can't
• 56:39
  Speaker 1: just keep becoming more unequal.
• 56:40
  Speaker 2: No, it can't. So it needs a government that is
• 56:46
  Speaker 2: prepared to pull up Bernie Sanders to say, yeah, we're
• 56:50
  Speaker 2: going to have to, at least in a gentle and
• 56:54
  Speaker 2: long-term way, shift the tax structure in favour of of
• 56:59
  Speaker 2: a slightly steeper curve.
• 57:01
  Speaker 1: So you mean taxation needs to go up? We need
• 57:04
  Speaker 1: to tax the rich?
• 57:05
  Speaker 2: And help the poor. It's pretty simple. And you have
• 57:10
  Speaker 2: a kind of steepness in every society. That's what they do.
• 57:13
  Speaker 2: Every developed country in the world taxes the rich and
• 57:17
  Speaker 2: helps the poor, don't they? It's a question of degree.
• 57:20
  Speaker 2: We did much more helping the poor and taxing the
• 57:26
  Speaker 2: rich in the 1950s and 60s and 40s than we
• 57:29
  Speaker 2: do today. And somewhere between that level and the current
• 57:33
  Speaker 2: level might be more than enough. If we just started
• 57:37
  Speaker 2: to adopt the policy of 1935 to 75, where the
• 57:41
  Speaker 2: bottom quarter get a half percent a year richer than
• 57:45
  Speaker 2: the average, and the top dogs get half a percent
• 57:49
  Speaker 2: less each year than the average. That sounds pretty unthreatening.
• 57:54
  Speaker 2: I think we would ease our way over several decades
• 57:58
  Speaker 2: into a better place.
• 57:59
  Speaker 1: If you were 33 now, my age, and you were
• 58:02
  Speaker 1: trying to accumulate wealth. God, I wish I was 33.
• 58:05
  Speaker 1: Do you?
• 58:06
  Speaker 2: It's such an exciting time.
• 58:07
  Speaker 1: What would you give to be 33?
• 58:09
  Speaker 2: There's nothing I can give.
• 58:11
  Speaker 1: No, but I find this funny. I heard someone ask
• 58:14
  Speaker 1: a question like this the other day. They said, would
• 58:15
  Speaker 1: you give your entire available net worth to be 33?
• 58:20
  Speaker 2: Yeah, I think everyone says yes. I mean, how did
• 58:24
  Speaker 2: one get a net worth by work and luck and creativity,
• 58:31
  Speaker 2: all those good things?
• 58:33
  Speaker 1: If you were 33 now in this moment in time
• 58:35
  Speaker 1: and your objective was, and this is a bit of
• 58:38
  Speaker 1: a crass objective, but it sounds like it's a very
• 58:41
  Speaker 1: one-dimensional objective, but if your objective was just to become
• 58:44
  Speaker 1: rich now at 33, what strategy would you deploy? Again,
• 58:49
  Speaker 1: I'm going to take away your contacts. I'm even going
• 58:51
  Speaker 1: to take away everything you know. So you'd have to
• 58:54
  Speaker 1: go on the journey of acquiring new information. What would
• 58:57
  Speaker 1: you do?
• 58:57
  Speaker 2: I think the simple appeal would be to get your
• 59:00
  Speaker 2: tail into AI and try and be a leader. Try
• 59:05
  Speaker 2: and know more about everything in that area than the
• 59:08
  Speaker 2: next guy. Join a leading firm and go for broke.
• 59:14
  Speaker 2: You may end up encouraging the destruction of the human species,
• 59:20
  Speaker 2: but You asked a simple question and I give you
• 59:23
  Speaker 2: what I think is a simple answer.
• 59:24
  Speaker 1: And what I hear there is you want to make
• 59:26
  Speaker 1: sure you're riding a wave that's coming into shore and
• 59:29
  Speaker 1: you're on the forefront of that incoming wave. Like we
• 59:31
  Speaker 1: saw with the tech bubble, we saw, you know, we're
• 59:33
  Speaker 1: now seeing with the AI bubble. So it's really about
• 59:37
  Speaker 1: acquire the most valuable information.
• 59:40
  Speaker 2: Yes. And take lots of risk. Don't be conservative.
• 59:46
  Speaker 1: And work hard.
• 59:47
  Speaker 2: And work hard. And think outside the box. I mean,
• 59:51
  Speaker 2: I think that the biggest deficiency of most people is
• 59:55
  Speaker 2: that they feel constrained to play the game by the
• 59:59
  Speaker 2: regular rules and to believe that experts and authorities know
• 1:00:05
  Speaker 2: what they're doing. And as you know, probably, it just
• 1:00:08
  Speaker 2: ain't so.
• 1:00:10
  Speaker 1: What if I'm trying to invest? So say that I've
• 1:00:11
  Speaker 1: got $ 1, 000 or $ 10, 000 and I want to invest it
• 1:00:13
  Speaker 1: somewhere that's going to not lose me money through all
• 1:00:19
  Speaker 1: of these cycles of boom and bust. Because I have
• 1:00:24
  Speaker 1: a lot of people message me and ask me about
• 1:00:25
  Speaker 1: investing because I interview lots of people about investing. I
• 1:00:28
  Speaker 1: have my own investment fund as well. But what advice
• 1:00:31
  Speaker 1: do you give for the average person that's looking to
• 1:00:33
  Speaker 1: invest their salary or their wages?
• 1:00:36
  Speaker 2: Buy a broad-based index of non-US equities.
• 1:00:40
  Speaker 1: Non-US? That's really surprising to me.
• 1:00:43
  Speaker 2: For like 60% of your money and then 5 or
• 1:00:45
  Speaker 2: 10% in precious metals. And if it's convenient and sensible,
• 1:00:53
  Speaker 2: hold a bit of real estate. And the rest I'd
• 1:00:56
  Speaker 2: put in bonds. Okay.
• 1:00:58
  Speaker 1: So 5% or 10% in things like silver and gold. Yeah.
• 1:01:01
  Speaker 1: A preference for either silver or gold? No. S &
• 1:01:05
  Speaker 1: P 500. No, you said non-US.
• 1:01:08
  Speaker 2: Non-US.
• 1:01:09
  Speaker 1: This is so interesting because everybody says invest in US stocks.
• 1:01:13
  Speaker 2: Of course they do. They've been completely dominant for 20 years.
• 1:01:17
  Speaker 2: completely kicking ass around the rest of the world. And
• 1:01:20
  Speaker 2: then in the last 12 months, emerging markets is up 65%. Now,
• 1:01:25
  Speaker 2: the S & P has done much better than I
• 1:01:27
  Speaker 2: would have guessed, but it's only 25. That's a lot
• 1:01:31
  Speaker 2: less than 65.
• 1:01:32
  Speaker 1: And I guess the strategy is quite important here as well,
• 1:01:34
  Speaker 1: which is you're saying to hold these for a long time,
• 1:01:37
  Speaker 1: try not to buy and sell.
• 1:01:39
  Speaker 2: And try and look at where the cycle has been.
• 1:01:42
  Speaker 2: And I can tell you, and you can see it
• 1:01:44
  Speaker 2: for yourself, There has been an enormous cycle in favor
• 1:01:47
  Speaker 2: of the S & P, in favor of the American
• 1:01:50
  Speaker 2: market over the rest of the world. And do you
• 1:01:52
  Speaker 2: think America is going to keep on gaining on the
• 1:01:55
  Speaker 2: rest of the world? And of course, you're going to
• 1:01:57
  Speaker 2: say yes now, because that's the flavor of this market.
• 1:02:01
  Speaker 2: We think that what is good today will continue being
• 1:02:05
  Speaker 2: good indefinitely, even though history tells you that is absolutely
• 1:02:09
  Speaker 2: not the case. We live in a world that tends
• 1:02:11
  Speaker 2: to rotate from one to the other. We believe in
• 1:02:14
  Speaker 2: a world It extrapolates today's conditions. And you can easily
• 1:02:17
  Speaker 2: prove that. The stock market is not efficient. The stock
• 1:02:20
  Speaker 2: market extrapolates today's conditions. If they are terrible in 1982,
• 1:02:26
  Speaker 2: they will take crushed earnings and multiply it by seven
• 1:02:30
  Speaker 2: times earnings. And then in 2000, peak profit margins times, ooh,
• 1:02:36
  Speaker 2: 35 times earnings. They double count in the worst way.
• 1:02:39
  Speaker 2: When times are good, you multiply it by a lot.
• 1:02:43
  Speaker 2: That's another way of saying you extrapolate it into the
• 1:02:46
  Speaker 2: distant future.
• 1:02:47
  Speaker 1: You assume it's going to continue.
• 1:02:48
  Speaker 2: And Keynes, of course, my hero, says, of course, that's
• 1:02:52
  Speaker 2: extrapolation is the convention you adopt, even though you know
• 1:02:55
  Speaker 2: from personal experience that the world is not that way.
• 1:02:58
  Speaker 1: You didn't use the word crypto. When you're talking about
• 1:03:01
  Speaker 1: investment strategies, how much crypto do you own?
• 1:03:03
  Speaker 2: None.
• 1:03:04
  Speaker 1: Have you ever owned any crypto?
• 1:03:06
  Speaker 2: No.
• 1:03:07
  Speaker 1: Will you ever own any crypto?
• 1:03:08
  Speaker 2: No.
• 1:03:08
  Speaker 1: Will you ever advise anyone to buy crypto?
• 1:03:10
  Speaker 2: No.
• 1:03:13
  Speaker 1: Why?
• 1:03:14
  Speaker 2: I think it's an unnecessary piece of nonsense. It facilitates
• 1:03:23
  Speaker 2: nothing except criminals moving money so they can't be seen.
• 1:03:29
  Speaker 2: It's not a store of value since it bounces around
• 1:03:31
  Speaker 2: all over the place, just down from 120 to 60,
• 1:03:34
  Speaker 2: because it felt like it. So it's not stable. It's
• 1:03:37
  Speaker 2: volatile as hell. It's not used conveniently as a medium
• 1:03:41
  Speaker 2: of exchange. You can't go into a shop and use
• 1:03:43
  Speaker 2: it easily. It does one thing very, very well. It's
• 1:03:49
  Speaker 2: a means of speculating beautifully.
• 1:03:52
  Speaker 1: Do you think Bitcoin's going to go to zero?
• 1:03:54
  Speaker 2: Well, in the distant future, yes, it will certainly go
• 1:03:57
  Speaker 2: to zero. But It may take a long time. And,
• 1:04:01
  Speaker 2: you know, in the distant future, everything goes to zero.
• 1:04:05
  Speaker 1: What about property as an investment? Because the first sort
• 1:04:08
  Speaker 1: of reaction most people have when they have enough money
• 1:04:10
  Speaker 1: to make an investment or to buy something is they
• 1:04:13
  Speaker 1: buy a property as an investment asset. So people go
• 1:04:16
  Speaker 1: buy themselves a house, they'll move into it. We're kind
• 1:04:18
  Speaker 1: of told that that's how you start to accumulate wealth
• 1:04:20
  Speaker 1: is you go buy yourself a house. What do you
• 1:04:22
  Speaker 1: think of that?
• 1:04:23
  Speaker 2: It's hard to imagine how it could be a good decision.
• 1:04:27
  Speaker 2: when there's such an increasing fraction of people who can't
• 1:04:31
  Speaker 2: afford it. And there is a political resistance.
• 1:04:34
  Speaker 1: Doesn't that just mean that if I buy one now
• 1:04:37
  Speaker 1: and increasingly people can't afford one, doesn't that mean that
• 1:04:40
  Speaker 1: my house is going to be worth more in 10
• 1:04:43
  Speaker 1: years' time?
• 1:04:43
  Speaker 2: Oh, if people can't afford it, there's no one bidding.
• 1:04:46
  Speaker 2: And by the way, the population is going to decline.
• 1:04:50
  Speaker 2: Young family formations are already declining in many of the
• 1:04:55
  Speaker 2: richer countries. And if you have family formations declining and
• 1:04:59
  Speaker 2: you have super expensive houses, what do you think is
• 1:05:02
  Speaker 2: going to happen? Now, you could say, well, perhaps there
• 1:05:05
  Speaker 2: will be a mysterious increase in family formations and that
• 1:05:09
  Speaker 2: the chronic baby bust that we maybe will talk about
• 1:05:12
  Speaker 2: soon will stop.
• 1:05:16
  Speaker 1: Xin chào mọi người. Chào mừng các bạn. I don't
• 1:05:19
  Speaker 1: speak Vietnamese. but this show can because of AI video
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• 1:06:19
  Speaker 1: is something that I've made for you. I realize that
• 1:06:22
  Speaker 1: the Diary of a CEO audience are strivers, whether it's
• 1:06:24
  Speaker 1: in business or health. We all have big goals that
• 1:06:27
  Speaker 1: we want to accomplish. And one of the things I've
• 1:06:29
  Speaker 1: learned is that when you aim at the big, big,
• 1:06:32
  Speaker 1: big goal, it can feel incredibly psychologically uncomfortable because it's
• 1:06:37
  Speaker 1: kind of like being stood at the foot of Mount
• 1:06:38
  Speaker 1: Everest and looking upwards. The way to accomplish your goals
• 1:06:42
  Speaker 1: is by breaking them down into tiny, small steps. And
• 1:06:45
  Speaker 1: we call this in our team, the 1%. And actually
• 1:06:47
  Speaker 1: this philosophy is highly responsible for much of our success here.
• 1:06:51
  Speaker 1: So what we've done so that you at home can
• 1:06:54
  Speaker 1: accomplish any big goal that you have is we've made
• 1:06:57
  Speaker 1: these 1% diaries and we released these last year and
• 1:07:00
  Speaker 1: they all sold out. So I asked my team over
• 1:07:02
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• 1:07:04
  Speaker 1: to introduce some new colors and to make some minor
• 1:07:07
  Speaker 1: tweaks to the diary. So now we have... a better
• 1:07:10
  Speaker 1: range for you. So if you have a big goal
• 1:07:13
  Speaker 1: in mind and you need a framework and a process
• 1:07:16
  Speaker 1: and some motivation, then I highly recommend you get one
• 1:07:19
  Speaker 1: of these diaries before they all sell out once again.
• 1:07:22
  Speaker 1: And you can get yours at thediary.com. And if you
• 1:07:25
  Speaker 1: want the link, the link is in the description below.
• 1:07:27
  Speaker 1: Let's talk about the chronic baby bust. I've been hearing
• 1:07:31
  Speaker 1: a lot in the news. I think there were some
• 1:07:32
  Speaker 1: articles that actually came out this week in the New
• 1:07:34
  Speaker 1: York Times that talked about the decline in fertility rates.
• 1:07:38
  Speaker 1: And how young couples like me, I'm engaged to a
• 1:07:43
  Speaker 1: young woman who, and me and her are trying to
• 1:07:45
  Speaker 1: have a child now. It's not always a straight line
• 1:07:50
  Speaker 1: to having a child. I think you kind of sold
• 1:07:51
  Speaker 1: the idea that it is that you just have sex
• 1:07:54
  Speaker 1: with that condom and then a baby appears. But lots
• 1:07:56
  Speaker 1: of young families and lots of my friends who are
• 1:07:58
  Speaker 1: trying to have kids have gone for a couple of
• 1:08:00
  Speaker 1: years trying and struggling to conceive. So much so that
• 1:08:05
  Speaker 1: after doing this podcast, I... started telling some of my
• 1:08:08
  Speaker 1: friends I actually think it's a good idea to start
• 1:08:09
  Speaker 1: freezing your eggs embryos sperm because if it is going
• 1:08:14
  Speaker 1: to get increasingly harder then there might need to be
• 1:08:17
  Speaker 1: medical interventions IVF etc for me and my friends if
• 1:08:23
  Speaker 1: we are if we you know if we want to
• 1:08:25
  Speaker 1: have families but the problem is as well at like
• 1:08:27
  Speaker 1: 33 years old if you look at the data you're
• 1:08:30
  Speaker 1: not at your peak necessarily in terms of fertility you're
• 1:08:33
  Speaker 1: somewhere coming down the slope as a man but also
• 1:08:36
  Speaker 1: as a woman And so you're kind of fighting time
• 1:08:39
  Speaker 1: a little bit, it feels like.
• 1:08:41
  Speaker 2: Yeah, you are.
• 1:08:42
  Speaker 1: And I think my partner feels the same way that
• 1:08:43
  Speaker 1: we wish we were told a little bit earlier about
• 1:08:45
  Speaker 1: family planning. And then I hear about these fertility issues
• 1:08:49
  Speaker 1: that apparently have been caused by toxins and sort of
• 1:08:53
  Speaker 1: chemicals in our environment. You have spent a long time thinking, writing,
• 1:08:57
  Speaker 1: talking about this.
• 1:08:58
  Speaker 2: Yes.
• 1:08:58
  Speaker 1: I guess the first question is why? Why is a
• 1:09:00
  Speaker 1: guy that's known for managing billions and billions and billions
• 1:09:03
  Speaker 1: and hundreds of billions of dollars talking about fertility and
• 1:09:07
  Speaker 1: this sort of baby bust?
• 1:09:09
  Speaker 2: Well, starting 27 years ago with the foundation, we were
• 1:09:16
  Speaker 2: committed to start thinking about everything to do with climate.
• 1:09:20
  Speaker 2: And you're moving in the right circle then, because the
• 1:09:23
  Speaker 2: next thing is we started to worry about the cataclysmic
• 1:09:27
  Speaker 2: decline in insects. I don't know if you're aware of this,
• 1:09:29
  Speaker 2: but insects appear to have dropped in biomass, the weight
• 1:09:33
  Speaker 2: of the flying insects, by 50 to 75% in the
• 1:09:37
  Speaker 2: last 60, 70 years. And E.O. Wilson, the famous Ant-Man,
• 1:09:43
  Speaker 2: he believed that nature could handle the loss of humans easily, effortlessly,
• 1:09:49
  Speaker 2: but it could not handle the loss of insects. The
• 1:09:52
  Speaker 2: insects are, in a sense, he felt, and his fellow experts,
• 1:09:57
  Speaker 2: he represented them as thinking the same way, that the
• 1:10:00
  Speaker 2: insects are the bedrock of nature. And if they start
• 1:10:03
  Speaker 2: to go out of business, then the birds who feed
• 1:10:06
  Speaker 2: on them and the amphibians, they start to decline, which
• 1:10:09
  Speaker 2: they have done, also catastrophically. One thing leads to another,
• 1:10:13
  Speaker 2: and the beetles are no longer a recycling plant. the
• 1:10:18
  Speaker 2: forest floor and eventually things won't grow and no one
• 1:10:23
  Speaker 2: to fertilize the plants and the damage spreads. And he
• 1:10:27
  Speaker 2: felt that eventually loss of insects would lead to a
• 1:10:30
  Speaker 2: more or less complete failure of nature and we would
• 1:10:34
  Speaker 2: inherit a planet that was no longer conducive to humans.
• 1:10:38
  Speaker 2: We noticed that some of the same effects are felt
• 1:10:42
  Speaker 2: by humans. And a report came out Shana Swan and
• 1:10:48
  Speaker 2: Haggai Levine, I think it finished in 2011. And it
• 1:10:53
  Speaker 2: made the case that sperm count had been dropping, had
• 1:10:58
  Speaker 2: almost halved since the first reports, academic reports in 1970.
• 1:11:02
  Speaker 2: So I immediately said, this has the feeling of something
• 1:11:06
  Speaker 2: that is really important. We got to study the data.
• 1:11:09
  Speaker 2: And the results came out suggesting that the decline rate
• 1:11:13
  Speaker 2: was accelerating. The decline rate this year is 2.5% a year.
• 1:11:17
  Speaker 2: You don't have to be mathematically that literate to realize
• 1:11:20
  Speaker 2: that a 2.5% decline in your sperm count every year
• 1:11:24
  Speaker 2: is a disastrous level, a non-sustainable level, right?
• 1:11:28
  Speaker 1: How long is that going to take for my sperm
• 1:11:30
  Speaker 1: to basically not work?
• 1:11:31
  Speaker 2: As far as we can tell, our best guess is...
• 1:11:36
  Speaker 2: that in hunter-gatherer days, we had 180 million units per
• 1:11:40
  Speaker 2: milliliter of sperm. And when the academics came in in 1970,
• 1:11:46
  Speaker 2: it was down to about 100. And today it's 35, okay? Also,
• 1:11:53
  Speaker 2: the quality and the motility, they call it, had also
• 1:11:58
  Speaker 2: declined somewhat similarly. It turns out, luckily for us, that
• 1:12:03
  Speaker 2: we were over-engineered at I like to say like a
• 1:12:06
  Speaker 2: great Victorian bridge, nature doesn't take any risks and you
• 1:12:11
  Speaker 2: have more than you need. And it appears, again, a
• 1:12:14
  Speaker 2: good guess is about 45 million units is what you
• 1:12:19
  Speaker 2: need to be able to get pregnant without any difficulty.
• 1:12:22
  Speaker 2: And that was hit about 15 to 20 years ago.
• 1:12:25
  Speaker 2: The number of young couples who needed help 15 or
• 1:12:28
  Speaker 2: 20 years ago was nil, basically. And for this reason,
• 1:12:34
  Speaker 2: that none of them had a chronic lack of sperm
• 1:12:37
  Speaker 2: count in round numbers. And now the World Health says
• 1:12:43
  Speaker 2: it's about 17%. 17% of young couples could use some
• 1:12:48
  Speaker 2: help today, which means that instead of just trying for
• 1:12:53
  Speaker 2: a week or two or three or four or five
• 1:12:55
  Speaker 2: or six, you're trying for months and months. And everybody
• 1:13:00
  Speaker 2: knows people now who fall in that category, which is
• 1:13:03
  Speaker 2: exactly what you would expect if you've gone from zero
• 1:13:06
  Speaker 2: to 17%. But this is the killer. Shana Swan and
• 1:13:11
  Speaker 2: my colleague and I kind of thought about this thing
• 1:13:13
  Speaker 2: separately and independently. And we worked out, doesn't take a
• 1:13:18
  Speaker 2: great brain, that in 20 to 25 years, the average
• 1:13:21
  Speaker 2: young couple will need help. I mean, this is tomorrow.
• 1:13:24
  Speaker 2: This is not 200 years from now. In 20 to
• 1:13:28
  Speaker 2: 25 years, the average young couple will need help getting pregnant. Dr.
• 1:13:33
  Speaker 1: Swan's projection indicates that if the current rate of decline
• 1:13:36
  Speaker 1: continues unchecked, the medium male sperm count is on track
• 1:13:41
  Speaker 1: to hit zero by 2045. Wow. Yeah.
• 1:13:50
  Speaker 2: That means the median couple is not going to have
• 1:13:54
  Speaker 2: children without a lot of help.
• 1:13:56
  Speaker 1: It means half the male population will have zero viable sperm,
• 1:14:02
  Speaker 1: and the remaining half will be right on the edge
• 1:14:05
  Speaker 1: of functional infertility.
• 1:14:07
  Speaker 2: A few of them will still have plenty, and maybe
• 1:14:09
  Speaker 2: 10% who are really perfectly in decent condition. Because there's
• 1:14:14
  Speaker 2: a huge distribution range today. You know, there are people
• 1:14:18
  Speaker 2: today who still have 200 million, you know, better than
• 1:14:21
  Speaker 2: the hunter-gatherers.
• 1:14:22
  Speaker 1: But it's... And what is causing this and how do
• 1:14:27
  Speaker 1: we stop it?
• 1:14:28
  Speaker 2: Shana would say the environment around you of mainly plastics.
• 1:14:34
  Speaker 2: Plastics are leaching toxins and the particles of plastics you
• 1:14:39
  Speaker 2: have in your brain and in your body, which we
• 1:14:42
  Speaker 2: now know is quite substantial, are also leaching toxins. And
• 1:14:48
  Speaker 2: these toxins are what they call endocrine disruptors. They mess
• 1:14:51
  Speaker 2: with your hormones. You should expect them to lower your fertility.
• 1:14:58
  Speaker 2: And yet, the people who specialize in fertility problems and
• 1:15:03
  Speaker 2: write books about it, none of them mention toxicity. They
• 1:15:07
  Speaker 2: mention the hundred perfectly solid reasons why people are choosing
• 1:15:11
  Speaker 2: to have fewer children.
• 1:15:12
  Speaker 1: Endocrine-disrupting chemicals like phthalates, which are found in cosmetics, shampoos,
• 1:15:18
  Speaker 1: food packaging, etc., They actively lower testosterone production in male
• 1:15:22
  Speaker 1: fetuses during the first trimester, permanently stunting reproductive capacity before birth.
• 1:15:29
  Speaker 2: Yes.
• 1:15:30
  Speaker 1: BPAs, which are what they call biphospholates?
• 1:15:34
  Speaker 2: Yes, something like that.
• 1:15:36
  Speaker 1: Used to make plastics, hard, lined tin cans, and coat
• 1:15:38
  Speaker 1: thermal store receipts. They are synthetic estrogens. They flood the
• 1:15:43
  Speaker 1: male body with female hormone signals, crashing sperm count and motility. PFAs,
• 1:15:48
  Speaker 1: forever chemicals, used in nonstick pans, Teflons, waterproof rain jackets,
• 1:15:53
  Speaker 1: and stain-resistant carpets. They break down in nature, accumulate in
• 1:15:56
  Speaker 1: human blood, and are directly linked to lower sperm volume.
• 1:16:00
  Speaker 1: And then the microplastics you talked about, the Trojan horse,
• 1:16:03
  Speaker 1: one of the shocking things that I read was that
• 1:16:05
  Speaker 1: it's been discovered that they are physically embedded in human placentas.
• 1:16:08
  Speaker 2: Yes, isn't that amazing?
• 1:16:10
  Speaker 1: Breast milk and human testicles. And there was a major
• 1:16:12
  Speaker 1: study I think we all heard about in 2024 that
• 1:16:15
  Speaker 1: found microplastics in 100% of human testicular tissues tested. 100%.
• 1:16:22
  Speaker 1: And lastly, biological stresses. So me and you being sat
• 1:16:25
  Speaker 1: down on these chairs heats our testicles to a point
• 1:16:28
  Speaker 1: where the sperms die. Heated car seats, hot laptops, they
• 1:16:33
  Speaker 1: actively cook the sperm. And lastly, obesity.
• 1:16:37
  Speaker 2: Yes. And of course, smoking you. Somehow I've slept through
• 1:16:40
  Speaker 2: the net. Yeah. But... There is a whole other branch,
• 1:16:44
  Speaker 2: pesticides on your food. Now, if you'll give me time,
• 1:16:47
  Speaker 2: I'll tell you about these two little studies. They're very small,
• 1:16:51
  Speaker 2: and you might ignore them, except they were done by
• 1:16:53
  Speaker 2: Harvard and Mass General, which is a candidate for the
• 1:16:57
  Speaker 2: best hospital in America. And they had a clinic for
• 1:17:02
  Speaker 2: people having a problem getting pregnant, and they ran it
• 1:17:06
  Speaker 2: out of that. They had 180 men, and they got
• 1:17:10
  Speaker 2: them to self-report on what they were eating. Were they
• 1:17:12
  Speaker 2: eating the dirty dozen? Were they eating melons and bananas
• 1:17:16
  Speaker 2: that have lots of protection? At the end of six months,
• 1:17:22
  Speaker 2: the guys who reported to eat the least bad versus
• 1:17:26
  Speaker 2: the quarter at the worst, there was a doubling of
• 1:17:29
  Speaker 2: sperm count. Can you believe it? At the top category,
• 1:17:32
  Speaker 2: the more fruit and veggies you ate, the better your
• 1:17:35
  Speaker 2: sperm count. In the bottom quartile, the more they ate,
• 1:17:37
  Speaker 2: the worse their sperm count. It was a dramatic result,
• 1:17:41
  Speaker 2: but two to one between the top and the bottom.
• 1:17:44
  Speaker 2: And then two years later, they did a very similar
• 1:17:46
  Speaker 2: study with women who were having trouble. And at the
• 1:17:50
  Speaker 2: end of their nine months of self-reporting, the ones who
• 1:17:53
  Speaker 2: ate the least badly were had 68% successful live births,
• 1:17:57
  Speaker 2: bearing in mind this was a fertility clinic, and the
• 1:18:00
  Speaker 2: bottom quartile, 38%. So once again, nearly double. I mean,
• 1:18:05
  Speaker 2: and it's life and death. I mean, these are really important.
• 1:18:07
  Speaker 2: And this was only based on what they had, because
• 1:18:11
  Speaker 2: pesticides are full of these toxins, and they are delivered
• 1:18:16
  Speaker 2: straight into your body. You eat the damn things. It's
• 1:18:19
  Speaker 2: not just they're on the surface. You can wash some
• 1:18:21
  Speaker 2: of that away, but they're impregnated part of the structure
• 1:18:25
  Speaker 2: of the berry. Berries, apples, pears, peaches, and funnily, spinach
• 1:18:33
  Speaker 2: are really bad, and at the top end, the bananas
• 1:18:36
  Speaker 2: and the oranges and the melons are fine. So if
• 1:18:41
  Speaker 2: you eat these damn things, they're designed to kill our cousins,
• 1:18:44
  Speaker 2: the insects and the weeds and the funguses. Why would
• 1:18:49
  Speaker 2: you expect them not to do a terrible job on humans?
• 1:18:52
  Speaker 2: And we stuff them in our system. And the fetus,
• 1:18:55
  Speaker 2: it turns out, is 100 to 1,000 times more vulnerable
• 1:19:00
  Speaker 2: than we are out in the world. For example, if
• 1:19:04
  Speaker 2: your mother smokes, it's going to do about the same
• 1:19:07
  Speaker 2: damage as if you smoked for the rest of your life. Wow.
• 1:19:12
  Speaker 2: And you think about what the fetus is plugged into
• 1:19:14
  Speaker 2: the system and how it's forming everything. It doesn't seem
• 1:19:18
  Speaker 2: the most unreasonable thing that it would be much more sensitive.
• 1:19:21
  Speaker 2: And there are people out there fussing quite reasonably about
• 1:19:24
  Speaker 2: the first thousand days of life. But actually, that is
• 1:19:29
  Speaker 2: nothing like as important as the 270 days in the womb.
• 1:19:35
  Speaker 1: Atrazine. Have you heard of atrazine?
• 1:19:38
  Speaker 2: Yes, I have.
• 1:19:39
  Speaker 1: Atrazine, referred to as the chemical castrator. It is the
• 1:19:43
  Speaker 1: second most widely used herbicide in the United States, sprayed
• 1:19:46
  Speaker 1: heavily on things like corn and sugar canes. And there
• 1:19:49
  Speaker 1: was this crazy study, which was peer-reviewed out of UC Berkeley,
• 1:19:53
  Speaker 1: that showed exposure to atrazine at levels below the EPA's
• 1:19:58
  Speaker 1: considered safe for drinking levels, completely chemically castrated male frogs
• 1:20:06
  Speaker 1: turning 10% of them into fully functional females capable of
• 1:20:11
  Speaker 1: laying eggs. In humans, it is linked to severe drops
• 1:20:14
  Speaker 1: in sperm motility and testosterone.
• 1:20:16
  Speaker 2: And yet, we avoid the topic. We avoid the topic
• 1:20:20
  Speaker 2: because it's pessimistic. We're not fighting the data.
• 1:20:24
  Speaker 1: We just don't want to talk about it.
• 1:20:25
  Speaker 2: We don't want to talk about it. We don't want
• 1:20:27
  Speaker 2: to talk about bear markets. We don't want to talk
• 1:20:31
  Speaker 2: about bad climate changes, even though it's bludgeoning us. This
• 1:20:36
  Speaker 2: year could be the worst hot year in history. We
• 1:20:42
  Speaker 2: are set up, because of the accident of the El Nino,
• 1:20:46
  Speaker 2: to have perhaps the worst droughts and the hottest weather
• 1:20:50
  Speaker 2: ever recorded, starting about now. So brace yourselves. But we
• 1:20:54
  Speaker 2: don't want to talk about that. We don't want to
• 1:20:56
  Speaker 2: talk about toxicity. We don't want to talk about running
• 1:20:58
  Speaker 2: out of resources. We just don't do bad news. But
• 1:21:02
  Speaker 2: I have never seen anything like this, this fertility thing,
• 1:21:06
  Speaker 2: where the data is horrific. The baby bust is measurable.
• 1:21:11
  Speaker 2: The sperm count is one of the few things you
• 1:21:13
  Speaker 2: can really measure. Do they really think if you have
• 1:21:15
  Speaker 2: declining sperm count, the future is great? Do they really
• 1:21:19
  Speaker 2: think that the economy will function if the number of
• 1:21:22
  Speaker 2: 20-year-olds entering the market starts to drop like a stone.
• 1:21:26
  Speaker 2: In Japan, you know what their 20-year-old is? It's 50%
• 1:21:30
  Speaker 2: of what it was in 1948. 50%, not down 15
• 1:21:34
  Speaker 2: or 3.5, 50% less.
• 1:21:36
  Speaker 1: 50% less 20-year-olds?
• 1:21:38
  Speaker 2: 20-year-olds that drive the market, that offer themselves for military service.
• 1:21:43
  Speaker 1: What do we do about this?
• 1:21:44
  Speaker 2: We have two things. We've got to detoxify the world,
• 1:21:49
  Speaker 2: which is intellectually easy. You ban poisonous chemicals. And we've made,
• 1:21:55
  Speaker 2: in the EU, a pretty good start. My favorite example
• 1:21:59
  Speaker 2: and everybody's favorite example is cosmetics. Cosmetics, you don't actually
• 1:22:04
  Speaker 2: eat it, but you rub it on your skin, which
• 1:22:05
  Speaker 2: is the second worst thing to do. And there are 10,000
• 1:22:09
  Speaker 2: chemicals in cosmetics. and the EU has banned 1,500. If
• 1:22:14
  Speaker 2: they ban the right 1,500, that could be three quarters
• 1:22:17
  Speaker 2: of the battle, right? Canada's banned 550, and the US
• 1:22:21
  Speaker 2: has banned 12. I am not kidding you. So the
• 1:22:25
  Speaker 2: good thing about toxicity is it is regional. If one
• 1:22:28
  Speaker 2: country if Denmark or the EU or the UK wants
• 1:22:32
  Speaker 2: to look after its chemicals, they will live longer and
• 1:22:34
  Speaker 2: have better health. If the US wants to put the
• 1:22:37
  Speaker 2: corporations first, they will have shorter lives. Do you know
• 1:22:41
  Speaker 2: the life expectancy difference between the US and Sweden has
• 1:22:44
  Speaker 2: gone from two years to six years in the last
• 1:22:47
  Speaker 2: 70 years? I wrote in my quarterly letter, my estate
• 1:22:50
  Speaker 2: would be willing to bet you that in 50 years,
• 1:22:52
  Speaker 2: it'll be eight or 10.
• 1:22:54
  Speaker 1: I don't quite think people in the United States realize
• 1:22:57
  Speaker 1: the difference between in the products they consume here versus
• 1:23:00
  Speaker 1: other parts of the world. And, you know.
• 1:23:03
  Speaker 2: No, absolutely not.
• 1:23:04
  Speaker 1: Brits fly over here. And actually we had my barber,
• 1:23:07
  Speaker 1: my barber, Damon, and he flew over here to give
• 1:23:09
  Speaker 1: me a haircut last week. He said, oh gosh, I
• 1:23:11
  Speaker 1: don't feel good. He said, I went and got some
• 1:23:12
  Speaker 1: food here and I really just don't feel good. And
• 1:23:14
  Speaker 1: he says, every time I come over here, I don't
• 1:23:16
  Speaker 1: feel good. And me and my team, we used to
• 1:23:17
  Speaker 1: fly over here before I moved here for a couple
• 1:23:19
  Speaker 1: of weeks a year to film the show. And whenever
• 1:23:21
  Speaker 1: we'd fly back, not only would I be much fatter,
• 1:23:24
  Speaker 1: but we'd all feel a little bit more like sluggish,
• 1:23:26
  Speaker 1: is the way I'd describe it, from eating the food here.
• 1:23:28
  Speaker 1: And it almost felt quite clear that there's like something
• 1:23:30
  Speaker 1: in the food that our bodies just isn't used to
• 1:23:33
  Speaker 1: in the UK. And when you look at the toxicity
• 1:23:37
  Speaker 1: of the United States versus Europe, it's quite clear. I mean,
• 1:23:40
  Speaker 1: the US currently permits the use of 85 agricultural pesticides
• 1:23:44
  Speaker 1: that are completely banned in the EU, China and Brazil.
• 1:23:48
  Speaker 1: The US sprays over 300 million pounds per year of
• 1:23:52
  Speaker 1: pesticides that are deemed too dangerous to be legally used
• 1:23:55
  Speaker 1: in Europe, including that one I said about the frogs
• 1:23:58
  Speaker 1: called atrazine.
• 1:24:00
  Speaker 2: Atrazine.
• 1:24:01
  Speaker 1: Which the EU banned over two decades ago. We look
• 1:24:04
  Speaker 1: at cosmetics, which you were talking about then. What you
• 1:24:06
  Speaker 1: put on your skin obviously goes into your bloodstream. And
• 1:24:08
  Speaker 1: so the EU has banned or heavily restricted over 1,300
• 1:24:13
  Speaker 1: chemicals in cosmetics and personal care products due to toxicity
• 1:24:16
  Speaker 1: and hormone disruption. The US and the FDA has banned 11.
• 1:24:21
  Speaker 1: In terms of food, the US allows potassium bromate, which
• 1:24:24
  Speaker 1: is a known carcinogen, cancer-causing, used to make fluffy dough bread,
• 1:24:29
  Speaker 1: and BHA slash BHT, which are preservatives linked to hormone disruption.
• 1:24:35
  Speaker 1: Both are strictly banned from human consumption in the UK
• 1:24:37
  Speaker 1: and EU and Canada and China. And lastly, the US
• 1:24:41
  Speaker 1: allows titanium dioxide used to make candy smell like Skittles,
• 1:24:46
  Speaker 1: bright white, and synthetic dyes like Red 40, which requires
• 1:24:50
  Speaker 1: strict warning labels or outright bans in Europe due to
• 1:24:54
  Speaker 1: DNA damage in neurodevelopmental issues in kids. I'll give you
• 1:24:58
  Speaker 1: one more. A recent US geological survey found that at
• 1:25:02
  Speaker 1: least 45% of all US tap water is contaminated with PFAs,
• 1:25:07
  Speaker 1: those forever chemicals we talked about earlier, the very chemicals
• 1:25:10
  Speaker 1: directly linked to crashing sperm counts and testicular cancer the
• 1:25:14
  Speaker 1: US has historically allowed. PFAs levels in drinking water, drastically
• 1:25:19
  Speaker 1: higher than the EU, the European Union considers safe.
• 1:25:25
  Speaker 2: Let us just say that the EU is forever giving
• 1:25:28
  Speaker 2: exemptions and extensions and is far from perfect and has
• 1:25:31
  Speaker 2: a lot of corporate pushback. And it's just much less
• 1:25:35
  Speaker 2: bad than the US.
• 1:25:37
  Speaker 1: And the US has worse life expectancy.
• 1:25:39
  Speaker 2: It does. And it's the only rich country in the
• 1:25:42
  Speaker 2: world where 15 years ago, They had the same life
• 1:25:44
  Speaker 2: expectancy as they have today.
• 1:25:46
  Speaker 1: One actionable piece of advice for anyone listening that might
• 1:25:49
  Speaker 1: find this all quite overwhelming, because lots of things around us,
• 1:25:55
  Speaker 1: from receipts to the pans we use to rain jackets,
• 1:25:59
  Speaker 1: contain these chemicals, is there are apps out there where
• 1:26:03
  Speaker 1: you can scan the chemicals and the foods that you're
• 1:26:06
  Speaker 1: buying to check if they contain these endocrine-disrupting, these hormone-disrupting chemicals.
• 1:26:11
  Speaker 1: I'm not affiliated with any of them. But there's one
• 1:26:13
  Speaker 1: called Yuka, Y-U-K-A, that I know is very easy for
• 1:26:17
  Speaker 1: sort of everyday scanning of products. You can just scan
• 1:26:19
  Speaker 1: the barcode and it'll tell you, it'll give it a
• 1:26:21
  Speaker 1: rating square out of 100. There's EWG's Healthy Living app,
• 1:26:25
  Speaker 1: which is the scientific gold standard, run by the Environmental
• 1:26:28
  Speaker 1: Working Group, a major toxic chemical watchdog. You can scan
• 1:26:31
  Speaker 1: barcodes or search for food, cleaning supplies or cosmetics. There's
• 1:26:34
  Speaker 1: Think Dirty as well, which is great for cosmetic shampoos
• 1:26:37
  Speaker 1: and skincare. It exposes the toxic truth hiding in beauty products.
• 1:26:40
  Speaker 1: And then there's ClearYah, which is clear, yah, best for
• 1:26:44
  Speaker 1: online shopping. It's an app in your web browser. And
• 1:26:47
  Speaker 1: instead of scanning barcodes in your house while you're shopping online,
• 1:26:51
  Speaker 1: so if you add, say, like a shampoo or a
• 1:26:53
  Speaker 1: lotion to your Amazon or Target or Walmart basket, it
• 1:26:55
  Speaker 1: automatically pops up with an alert telling you about the
• 1:26:58
  Speaker 1: ingredients list that is within those chemicals. But I think
• 1:27:02
  Speaker 1: that gives something a little bit actionable and arms you
• 1:27:04
  Speaker 1: with at least a tool to navigate this crazy environment.
• 1:27:07
  Speaker 1: And obviously AI is great at this as well. You
• 1:27:08
  Speaker 1: can take pictures of things and ask it questions.
• 1:27:10
  Speaker 2: And what we really need is a kind of green
• 1:27:12
  Speaker 2: Amazon where everything is guaranteed, food, bedclothes, everything. And that
• 1:27:18
  Speaker 2: would be very handy indeed. Someone you could trust that
• 1:27:22
  Speaker 2: would absolutely guarantee the whole line of products that you
• 1:27:25
  Speaker 2: would order. Not impossible. And I think done well, someone
• 1:27:29
  Speaker 2: could make money at it.
• 1:27:30
  Speaker 1: What advice would you give to your kids on a
• 1:27:31
  Speaker 1: personal level if they're trying to stay healthy in a
• 1:27:34
  Speaker 1: toxic world?
• 1:27:35
  Speaker 2: Simple advice, and I know you like this, is pregnant
• 1:27:39
  Speaker 2: women are much more important than anybody else in this field.
• 1:27:44
  Speaker 2: If you could persuade pregnant women, A, to have no cosmetics,
• 1:27:47
  Speaker 2: save a lot of money, no cosmetics for nine months,
• 1:27:50
  Speaker 2: and then B, invest some of that money from your
• 1:27:52
  Speaker 2: cosmetics or all of it in buying organic berries if
• 1:27:57
  Speaker 2: you have to have berries. apples, oranges, peaches, what they
• 1:28:01
  Speaker 2: call the dirty dozen here. If you did that, I
• 1:28:05
  Speaker 2: think as much as half of all the trouble disappears.
• 1:28:09
  Speaker 2: And that's a huge fraction, and it's easily acquired. You know,
• 1:28:15
  Speaker 2: addressing the hundred things around in your environment, you have
• 1:28:18
  Speaker 2: to get to that. Typically, if you're lucky, you do
• 1:28:21
  Speaker 2: one thing after another. You get the gas stove first,
• 1:28:23
  Speaker 2: which is really noxious. And then you work your way,
• 1:28:27
  Speaker 2: the black plastics, the Teflon frying pan, you work your
• 1:28:30
  Speaker 2: way around it. Compared to that, no cosmetics, no bad fruit,
• 1:28:38
  Speaker 2: or make it organic. That's a piece of cake. That
• 1:28:42
  Speaker 2: is easy. It will save you a huge amount that
• 1:28:45
  Speaker 2: you will never appreciate because you'll never know how much
• 1:28:48
  Speaker 2: better your children are than they would have been. But
• 1:28:51
  Speaker 2: it's not only your children, by the way. for women,
• 1:28:55
  Speaker 2: you know, you're talking about, in particular, because of the eggs,
• 1:28:59
  Speaker 2: they are, every egg is all there in the womb.
• 1:29:03
  Speaker 2: And then it goes on to your grandchildren, we thought.
• 1:29:06
  Speaker 2: At least we could prove two generations. And a recent
• 1:29:10
  Speaker 2: study suggests it might be many more generations than two.
• 1:29:14
  Speaker 2: So you get some of these chemicals impregnated in your system,
• 1:29:18
  Speaker 2: and your children pay the price, and your grandchildren, and
• 1:29:22
  Speaker 2: perhaps even quite a few generations after that.
• 1:29:26
  Speaker 1: I also think it would be great if Western governments
• 1:29:28
  Speaker 1: around the world made the costs of both childcare, but
• 1:29:34
  Speaker 1: also fertility treatments significantly lower.
• 1:29:39
  Speaker 2: And they will, of course.
• 1:29:40
  Speaker 1: You know, I had a couple of conversations on this
• 1:29:42
  Speaker 1: podcast with very successful women, including Ronda Rousey, who was
• 1:29:45
  Speaker 1: in tears because she was on a.
• 1:29:48
  Speaker 1: I think her fifth or sixth round of IVF treatments.
• 1:29:51
  Speaker 1: And she just found out just before she walked into
• 1:29:52
  Speaker 1: the studio that it hadn't gone well. And watching her
• 1:29:55
  Speaker 1: cry about it and get very emotional meant that that
• 1:29:59
  Speaker 1: day I walked out of this room and like called
• 1:30:01
  Speaker 1: a lot of the people in my life that I
• 1:30:02
  Speaker 1: know are, you know, in the region where fertility starts
• 1:30:06
  Speaker 1: to decline and really encourage them to start thinking if
• 1:30:10
  Speaker 1: that's what they want in their lives about family planning,
• 1:30:12
  Speaker 1: which is like getting your eggs frozen or your embryos frozen.
• 1:30:15
  Speaker 1: And me and my partner actually went and did it.
• 1:30:16
  Speaker 1: We Got our embryos frozen, which was, you know, it's
• 1:30:20
  Speaker 1: both expensive, extremely expensive, especially here in the United States.
• 1:30:25
  Speaker 1: And difficult.
• 1:30:26
  Speaker 2: And psychologically destructive.
• 1:30:28
  Speaker 1: Brutal. You know, me every day for a couple of
• 1:30:32
  Speaker 1: weeks injecting her with these chemicals and the hormonal rollercoaster
• 1:30:38
  Speaker 1: that she had to deal with and all of that.
• 1:30:40
  Speaker 1: But for us, the alternative was worse, which was never
• 1:30:45
  Speaker 1: being able to have children because... it's difficult and there's
• 1:30:48
  Speaker 1: all these toxins in our environment and so on and
• 1:30:50
  Speaker 1: so forth. And so I then became a little bit
• 1:30:52
  Speaker 1: of a, I guess a bit of a bit preachy
• 1:30:54
  Speaker 1: within the people in my life that I love a
• 1:30:56
  Speaker 1: lot about family planning, because we kind of all thought
• 1:30:59
  Speaker 1: we could just think about it later. We're all kind
• 1:31:01
  Speaker 1: of 35 and we thought, yeah, we'll think about that later.
• 1:31:04
  Speaker 1: But it turns out not to be the case for
• 1:31:06
  Speaker 1: many people.
• 1:31:08
  Speaker 2: If you'll allow me to go back, you asked an
• 1:31:10
  Speaker 2: important question. What do we have to do? And I said,
• 1:31:12
  Speaker 2: we have to detoxify the system. And then we both
• 1:31:15
  Speaker 2: got off into this frenzy of attacking chemicals, which we should. Anyway,
• 1:31:20
  Speaker 2: but it's intellectually easy. Ban the suckers, okay? Now, putting
• 1:31:25
  Speaker 2: pressure on the corporations to back off so the governments
• 1:31:27
  Speaker 2: can do it would be a good idea. Not easy.
• 1:31:31
  Speaker 2: Corporations have enormous power, unprecedented power in the U.S., but
• 1:31:36
  Speaker 2: very substantial power in the EU and the UK also.
• 1:31:40
  Speaker 2: But we have to get them to back off. We
• 1:31:42
  Speaker 2: have to start banning these damn things. Otherwise, no children.
• 1:31:46
  Speaker 2: But secondly, and much more difficult, is we have to
• 1:31:51
  Speaker 2: detoxify capitalism. We have to slowly but surely turn our
• 1:31:56
  Speaker 2: capitalist societal norms into much more family-friendly, children-friendly, Over the
• 1:32:04
  Speaker 2: next several generations, we have to end up with a
• 1:32:08
  Speaker 2: society that realizes that 2.1 healthy, well-educated children is a
• 1:32:13
  Speaker 2: part of the commons. You may not have any children.
• 1:32:16
  Speaker 1: What do you mean by that?
• 1:32:18
  Speaker 2: Sorry, 2.1. 2.1 is the number of children it takes
• 1:32:21
  Speaker 2: for a rich society to have a steady population.
• 1:32:24
  Speaker 1: Per couple.
• 1:32:25
  Speaker 2: Per couple. If you have less than 2.1 per couple,
• 1:32:29
  Speaker 2: you fairly rapidly go out of business. If you have
• 1:32:31
  Speaker 2: more than 2.1, you fairly rapidly end up with so
• 1:32:34
  Speaker 2: many people standing on each other's shoulders. The commons are
• 1:32:39
  Speaker 2: things like common land in the old days. Anyone could
• 1:32:43
  Speaker 2: put their sheep on, and what tended to happen is
• 1:32:45
  Speaker 2: everyone put more sheep than they could stand, and pretty
• 1:32:48
  Speaker 2: soon it had no grass on it, known as the
• 1:32:51
  Speaker 2: tragedy of the commons. And we all need clean air,
• 1:32:59
  Speaker 2: clean water, fertile soil, and 2.1 healthy, well-educated children. Without
• 1:33:07
  Speaker 2: any of those, society fails. All of them have to
• 1:33:10
  Speaker 2: be treated as group responsibility. So the whole society, the
• 1:33:15
  Speaker 2: whole village has to be in a way like a
• 1:33:18
  Speaker 2: kibbutz eventually. You have to put everything behind making it
• 1:33:23
  Speaker 2: doable to have children because the long list of economic
• 1:33:27
  Speaker 2: and social reasons, as well as toxic reasons why people
• 1:33:31
  Speaker 2: can't have 2.1 children, It's getting so long and so dangerous.
• 1:33:35
  Speaker 2: And nothing yet has worked. I mean, they've tried, you
• 1:33:39
  Speaker 2: tell me, 200 different things around the world. Several percentage
• 1:33:43
  Speaker 2: points of GDP in one or two cases. And nothing
• 1:33:47
  Speaker 2: yet has seen a permanent uptick in baby production.
• 1:33:54
  Speaker 1: For the average person listening right now, Dave, who drives
• 1:33:57
  Speaker 1: a taxi, or Jenny, who works as a receptionist, or Clive,
• 1:34:01
  Speaker 1: who's a nurse, What is the most important thing we
• 1:34:05
  Speaker 1: haven't talked about that we should have talked about as
• 1:34:07
  Speaker 1: it pertains to their life today?
• 1:34:10
  Speaker 2: I think they have to brace themselves for tougher times
• 1:34:14
  Speaker 2: ahead than they would have expected. And they're beginning to
• 1:34:18
  Speaker 2: get the point. Life for the last 10 or 20
• 1:34:22
  Speaker 2: years has been tougher than they perhaps expected as children
• 1:34:27
  Speaker 2: or than other people expected for them. Part of that
• 1:34:30
  Speaker 2: is politics. Part of that is equality, but the net
• 1:34:34
  Speaker 2: effect to them is times are tougher. It is more
• 1:34:39
  Speaker 2: difficult to buy a house or afford to rent and
• 1:34:44
  Speaker 2: jobs are getting scarcer. It's likely to get worse.
• 1:34:49
  Speaker 1: What does brace yourself mean for them? Because brace yourself
• 1:34:52
  Speaker 1: sounds like, but does it mean?
• 1:34:55
  Speaker 2: Plan your life as if times will not be easy.
• 1:34:59
  Speaker 2: Do not build up a little reserve of cash. Of course,
• 1:35:04
  Speaker 2: my advice to other people is get yourself a useful job,
• 1:35:10
  Speaker 2: something that will, in a larger sense, pull your weight
• 1:35:14
  Speaker 2: in society.
• 1:35:15
  Speaker 1: Upskill, change skills, learn something.
• 1:35:18
  Speaker 2: Mechanical, fixing, repairing, engineering.
• 1:35:22
  Speaker 1: Things that will need humans.
• 1:35:23
  Speaker 2: And research, science in general.
• 1:35:26
  Speaker 1: Make friends.
• 1:35:27
  Speaker 2: Make friends. Make sure you're living in a tight society
• 1:35:32
  Speaker 2: if you can. Very difficult today, obviously.
• 1:35:34
  Speaker 1: Would you be thinking about the country you live in
• 1:35:37
  Speaker 1: at this moment in time?
• 1:35:38
  Speaker 2: Absolutely.
• 1:35:38
  Speaker 1: Really? Is there any countries you wouldn't live in if
• 1:35:42
  Speaker 1: you were Dave or Jenny?
• 1:35:43
  Speaker 2: I think I have to refuse to answer this on
• 1:35:46
  Speaker 2: the grounds that it might tend to incriminate me.
• 1:35:49
  Speaker 1: Oh, okay. So you're saying don't live in the United States?
• 1:35:52
  Speaker 2: Well, I have American children and grandchildren.
• 1:35:56
  Speaker 1: Why not the United States?
• 1:35:58
  Speaker 2: It holds out too much chance that the social contract
• 1:36:02
  Speaker 2: is dissolving. You know, the thing about Japan and my
• 1:36:06
  Speaker 2: joking rule 21 in investing is never extrapolate from the Japanese.
• 1:36:10
  Speaker 2: They are extremely different in every way. But one of
• 1:36:13
  Speaker 2: the ways they're different is they have this amazing social contract.
• 1:36:17
  Speaker 2: The thing that really upsets the Japanese is if they're
• 1:36:20
  Speaker 2: put in a position where they can't act in a
• 1:36:23
  Speaker 2: socially responsible way.
• 1:36:24
  Speaker 1: When you say social contract, what does that mean?
• 1:36:27
  Speaker 2: It means an agreement that I will behave in a
• 1:36:29
  Speaker 2: way that helps my neighbors and society, that I'm doing
• 1:36:33
  Speaker 2: what people expect me to do. I'm not going to misbehave.
• 1:36:36
  Speaker 1: And you think that's not the case here in the
• 1:36:37
  Speaker 1: United States?
• 1:36:38
  Speaker 2: I think the case here is that people are doing
• 1:36:40
  Speaker 2: what they think is best for them and their family
• 1:36:42
  Speaker 2: and screw everybody else, really. When I arrived in America,
• 1:36:47
  Speaker 2: corporations had this sense that they owed something to the
• 1:36:51
  Speaker 2: community they operated in, the city they operated in. They
• 1:36:54
  Speaker 2: They'd build the stadium. They'd do this. They'd be part
• 1:36:58
  Speaker 2: of the community. Now they're not. They're all, in a way, cold-blooded,
• 1:37:04
  Speaker 2: profit-maximizing international enterprises.
• 1:37:07
  Speaker 1: And why is that a bad place to live? Because
• 1:37:09
  Speaker 1: you're saying, you know, you probably wouldn't recommend Dave or
• 1:37:12
  Speaker 1: Jenny living in the United States. Why would that be
• 1:37:14
  Speaker 1: a bad place for them to be? What happens? What's
• 1:37:16
  Speaker 1: the downstream impact of that?
• 1:37:18
  Speaker 2: That your neighbors aren't as interested in you and your well-being.
• 1:37:22
  Speaker 1: Fine. I won't talk to my neighbor.
• 1:37:24
  Speaker 2: And that's a lonely place to be. And when you're
• 1:37:26
  Speaker 2: in trouble, you're in serious trouble because the safety net
• 1:37:33
  Speaker 2: here is very ineffective. There's a measure that I think
• 1:37:36
  Speaker 2: is probably the single most important measure of civilization, and
• 1:37:40
  Speaker 2: that is maternal mortality. How many people die in childbirth?
• 1:37:45
  Speaker 2: You know, in Nigeria, out of 100,000, it's 480, give
• 1:37:47
  Speaker 2: or take.
• 1:37:47
  Speaker 1: And in America....
• 1:37:54
  Speaker 2: In the black population, it's 44. In the whole population,
• 1:38:01
  Speaker 2: it's like 21 or 20. Curiously, in the American Asian population,
• 1:38:09
  Speaker 2: it's 13. And then you go down the list. In Britain,
• 1:38:15
  Speaker 2: it's 5. In Germany, it's 4. In Sweden, it's 2.1.
• 1:38:22
  Speaker 2: In Norway, it's zero. There were no mothers who died
• 1:38:24
  Speaker 2: last year or the year before. What better definition of
• 1:38:29
  Speaker 2: civilisation looking after the mother's giving birth? How is it
• 1:38:33
  Speaker 2: possible that a country, more or less the richest in
• 1:38:38
  Speaker 2: the world, it's not just that they're the worst in
• 1:38:41
  Speaker 2: the rich world, it's that They are 50% worse than
• 1:38:46
  Speaker 2: the next worst. 50% more mothers die here than in
• 1:38:51
  Speaker 2: the second worst country in the developed world. How is
• 1:38:54
  Speaker 2: that possible? The answer is it happens. And it's because
• 1:39:00
  Speaker 2: inequality is so extreme in the medical system that if
• 1:39:04
  Speaker 2: you don't have lots of money, you're quite likely to
• 1:39:06
  Speaker 2: die in childbirth. Of course, the numbers are not huge.
• 1:39:10
  Speaker 2: 20 out of 100,000 is not huge. But it's a
• 1:39:14
  Speaker 2: terrible contrast.
• 1:39:15
  Speaker 1: It's a sign of something. It's a sign of something.
• 1:39:18
  Speaker 2: It's a sign of whether people are... It's a sign
• 1:39:21
  Speaker 2: of the social contract.
• 1:39:22
  Speaker 1: So where's a good place to live then, if not here?
• 1:39:25
  Speaker 2: Denmark, Japan, even France, Germany. The UK has a little
• 1:39:32
  Speaker 2: bit of the American disease, but not nearly as much.
• 1:39:37
  Speaker 1: So if your kids came to you and said, Dad,
• 1:39:38
  Speaker 1: we're thinking of leaving the United States, should I move?
• 1:39:42
  Speaker 1: Should I move out of the United States?
• 1:39:45
  Speaker 2: I would say that's a perfectly reasonable thing to consider.
• 1:39:49
  Speaker 2: And where are you going and why? I'm thinking of
• 1:39:52
  Speaker 2: going to Denmark, Dad. If they'll have you. No, in
• 1:39:59
  Speaker 2: the things that really matter, life expectancy, health, safety nets,
• 1:40:05
  Speaker 2: murder rates, mortality rates, in everything that really matters, yes,
• 1:40:12
  Speaker 2: they're day and night better. In the things that don't
• 1:40:16
  Speaker 2: really matter but look really splashy, we have enormous quantities
• 1:40:20
  Speaker 2: of wealth created that go to a relatively small fraction
• 1:40:24
  Speaker 2: of the people. And that dazzles in terms of the
• 1:40:28
  Speaker 2: average because that's how the numbers work. If you look
• 1:40:33
  Speaker 2: at how well off the bottom quartile are, America doesn't
• 1:40:37
  Speaker 2: score well at all.
• 1:40:40
  Speaker 1: Jeremy, we have a closing tradition where the last guest
• 1:40:42
  Speaker 1: leaves a question for the next guest not knowing who
• 1:40:44
  Speaker 1: they're leaving it for. question left for you is, if
• 1:40:47
  Speaker 1: you could not fail, what would your next goal be
• 1:40:52
  Speaker 1: that you would set for yourself?
• 1:40:56
  Speaker 2: There was a book written in the 1960s called Silent Spring.
• 1:41:01
  Speaker 2: Carl Carson, I think her name was. And it changed
• 1:41:04
  Speaker 2: for quite a number of years. It did what books
• 1:41:08
  Speaker 2: never do, really. It became a political monster and everyone
• 1:41:13
  Speaker 2: studied it and It had an effect. It changed the game.
• 1:41:17
  Speaker 2: I would like to write something about toxicity and social contract, really,
• 1:41:25
  Speaker 2: particularly nurturing a family. We've got to find, in the end,
• 1:41:29
  Speaker 2: a community that encourages children. The downside of the brutally
• 1:41:35
  Speaker 2: efficient capitalist system that we have, it's focused on financial
• 1:41:40
  Speaker 2: achievement and so on. And very little emphasis on community
• 1:41:46
  Speaker 2: and child rearing and so on. If we don't, we
• 1:41:48
  Speaker 2: fail as a society pretty quickly. We have to detoxify.
• 1:41:52
  Speaker 2: We have to encourage to create an environment where people
• 1:41:57
  Speaker 2: want to have children. If I could write a book
• 1:42:01
  Speaker 2: that would pull a silent spring, I would sit down
• 1:42:05
  Speaker 2: tomorrow and start it.
• 1:42:07
  Speaker 1: The making of a perma bear.
• 1:42:10
  Speaker 2: Perma should be in inverted commas, really.
• 1:42:13
  Speaker 1: The Perils of Long-Term Investing in a Short-Term World by
• 1:42:19
  Speaker 1: Jeremy Grantham and Edward Chancellor. Who is this book for?
• 1:42:24
  Speaker 2: Oh, people who have an interest in the stock market.
• 1:42:28
  Speaker 2: It has a little bit of climate change and toxicity.
• 1:42:31
  Speaker 2: My co-writer is a professional and he tried to limit
• 1:42:34
  Speaker 2: me quite sensibly, feeling that our main market was investors
• 1:42:38
  Speaker 2: who would be turned off by too much of the
• 1:42:41
  Speaker 2: stuff we've been talking about.
• 1:42:43
  Speaker 1: And you cover things also like economics, value investing, being
• 1:42:47
  Speaker 1: a bear and predicting a bubble and what to do
• 1:42:48
  Speaker 1: about all of those things. But it's really useful. Counterintuitive,
• 1:42:52
  Speaker 1: not counterintuitive, but it's a frame of thinking that will
• 1:42:56
  Speaker 1: help you be more realistic, especially when psychology is prone
• 1:42:58
  Speaker 1: to take over and make you wildly, recklessly optimistic.
• 1:43:03
  Speaker 2: And be more confident in your judgment. Big companies cannot
• 1:43:08
  Speaker 2: advise you. It's just suicidal for their business. So you
• 1:43:13
  Speaker 2: are on your own. Look at the data. A bubble
• 1:43:16
  Speaker 2: is not hard to see. There is this kind of plane,
• 1:43:19
  Speaker 2: and then there's a Himalayan peak, which eventually goes back.
• 1:43:24
  Speaker 1: And I mean, that's exactly what we're seeing.
• 1:43:25
  Speaker 2: It's exactly what history looks like. Have the courage to
• 1:43:30
  Speaker 2: look at that. Make your own conclusion. Get out of
• 1:43:33
  Speaker 2: the most dangerous part and do it now. Don't wait
• 1:43:38
  Speaker 2: for help because no help is coming. Large enterprises almost
• 1:43:45
  Speaker 2: never get the big turning points because they can't take
• 1:43:49
  Speaker 2: the career risk involved. And every big corporation needs a
• 1:43:53
  Speaker 2: leader who has political skills. And the central political skill
• 1:43:58
  Speaker 2: in life turns out to be never be wrong on
• 1:44:01
  Speaker 2: your own. This is, again, Keynes. You know, you can
• 1:44:05
  Speaker 2: be wrong in company. You can jump off the cliff together.
• 1:44:08
  Speaker 2: You will never lose your job because of that. But
• 1:44:11
  Speaker 2: if you do anything on your own, sooner or later,
• 1:44:14
  Speaker 2: you will get it wrong. And quote, you will not
• 1:44:16
  Speaker 2: receive much mercy.
• 1:44:19
  Speaker 1: Jeremy, thank you so much. Thank you for all that
• 1:44:22
  Speaker 1: you do. You traverse so many subjects. It's absolutely fascinating.
• 1:44:25
  Speaker 1: And you've made me think about so many things. I've
• 1:44:28
  Speaker 1: actually written down a bunch of ideas. You saw me
• 1:44:29
  Speaker 1: taking some photos then. Those are actually ideas that I
• 1:44:32
  Speaker 1: want to remember.
• 1:44:33
  Speaker 2: That's what I do. Screenshot city.
• 1:44:35
  Speaker 1: Yeah. So I took those writing things down you were saying,
• 1:44:37
  Speaker 1: and then I was like, I need to remember that
• 1:44:38
  Speaker 1: later for a bunch of things, businesses, friends, family, et cetera.
• 1:44:41
  Speaker 1: I think that's a testament to how broad and curious
• 1:44:46
  Speaker 1: and wise you are.
• 1:44:47
  Speaker 2: Going back to question one or two, the billionaire bit,
• 1:44:51
  Speaker 2: sometime around the end of this year, we will actually
• 1:44:53
  Speaker 2: have written checks for a billion dollars to the climate
• 1:44:57
  Speaker 2: change world.
• 1:44:58
  Speaker 1: It's a wonderful thing. And there's, you know, in this
• 1:45:00
  Speaker 1: particular moment in time, because of the politics, climate change
• 1:45:02
  Speaker 1: is a subject that's falling off the radar.
• 1:45:04
  Speaker 2: It is.
• 1:45:05
  Speaker 1: It's being mentioned less in earnings calls.
• 1:45:07
  Speaker 2: But this year will be so disgustingly hot from now on,
• 1:45:10
  Speaker 2: I suspect.
• 1:45:11
  Speaker 1: Disgustingly hot.
• 1:45:12
  Speaker 2: Hot. We could have from now on the hottest 12
• 1:45:15
  Speaker 2: months from now to this time next year that we
• 1:45:17
  Speaker 2: have ever had in history. Here, there and everywhere.
• 1:45:21
  Speaker 1: Well, I'm glad we've got voices like yours. lending their
• 1:45:24
  Speaker 1: ideas and wisdom to these conversations. And it's been an
• 1:45:26
  Speaker 1: honour and a privilege to speak to you. Your book,
• 1:45:28
  Speaker 1: The Making of a Palmer Bear, I'm going to link
• 1:45:30
  Speaker 1: it below for everyone to buy it themselves. Jeremy, thank you.
• 1:45:34
  Speaker 1: YouTube have this new crazy algorithm where they know exactly
• 1:45:37
  Speaker 1: what video you would like to watch next based on
• 1:45:40
  Speaker 1: AI and all of your viewing behaviour. And the algorithm
• 1:45:43
  Speaker 1: says that this video is the perfect video for you.
• 1:45:46
  Speaker 1: It's different for everybody looking right now. Check this video out.
• 1:45:49
  Speaker 1: I bet you, you might love it.