hey everybody peter zion here coming to you from the dc area where i'm about to give a work
presentation in a room without electricity because the power has been out for the last 12 hours
so that's fun uh two things i wanted to talk about today
uh the first is the the nature of the economic system that we're trying to wrestle with right now
the new book is called the end of the world it's just the beginning and that's in many ways
a lot of the tools that we have developed to regulate the economic system most notably
interest rates at the federal bank level we're not sure if they're going to work anymore the whole
idea of interest rates is that you make the cost of borrowing higher so that demand becomes more
expensive so that people and companies do less of it ongoing rate increases will be appropriate
expeditious progress toward higher rates we know we need to have restrictive policy and that's
that's where we're headed the american economy is very strong and well positioned to handle
tighter monetary policy if interest rates go too high too fast it could drive us into a recession
certainly a possibility the other risk though is that we would not manage to restore price
stability and that we would allow this high inflation to get entrenched in our economy
price stability is really the bedrock of the economy we must must restore price stability
and we will the public should believe that we will get inflation back down to two percent over time
we are strongly strongly committed to restoring price stability we do understand that it's it is
the thing that we need so that we can get back to the kind of labor market that we all want
but for that to work you have to have consumption as a primary driver in your economic system
most of the world doesn't have that any longer most of the advanced world hit the point of no
return with their demographic aging back in the 90s and places like germany and italy and japan
now have more people in their 50s and their 40s than the 30s and their 20s and so on now in the
united states it hasn't hit nearly as hard but we still have this huge generation the baby boomers
are retiring and a very small generation the zoomers who are coming into the system
right now in calendar year 2022 that's a shortage of 400 000 workers and by 2034 that number will
have increased to 900 000. this is structural inflation and this is a problem on the supply
side and when you raise the cost of borrowing it doesn't just impact people who are trying to buy a
car or a destroyer it also affects people who are trying to build up industrial plant and productive
capacity and train new workers it's not clear to me whether in places where this demographic
decline is advanced such as germany where interest rates even work anymore because you are capable of
strangling now supply with it and it doesn't do anything to demand because there isn't any
the economic rules of the past may not apply anymore now in the book i call this something
called the end of more the idea that every economic model that we have developed in
the last 500 years whether it's fascism or socialism or communism or capitalism
they were designed for an environment where the pie got a little bit bigger every year largely
because of population growth that's no longer true and so when i look at the problems that the fed
oh yeah lovely sound in the background those are emergency generators fun touch huh when you look
at the problem that the us federal reserve is dealing with right now they would like to
get inflation under control and interest rates are the tool they have but if we're in a world
where the normal relationships between demand and consumption and supply and production are somewhat
out of whack and might not go back it's not clear to me that they can raise interest rates to dampen
demand without also crushing supply because we've never had a significant problem on the
supply side before and because we are now facing the greatest labor inflation in american history
raising interest rates just might not be the right tool and then it comes to the executive branch
and that's a whole other discussion of whether the body administration is up to the challenge
okay so that's the first big topic i'm not sure that the tools apply anymore the second big topic
we made the best seller list we came in number 12 on the nyt best seller list late last night
i'm still trying to calm down but thank you thank you thank you all thank you to everyone who helped
put the book together thank you to everyone who shared it with your friends thank you to everybody
who bought a copy or who says they're going to buy a copy uh this has been a wild ride for the last
four months with the russia war um i feel like i've dropped the ball in so many ways because
there's so much going on i'm doing my best to keep up my team is fantastic but ultimately it's for
the viewers and the readers out there that have made this happen so thank you thank you thank you
okay that's it for me i'm gonna go see if i can find a place with at least one bar of signal to
upload this and i will see you guys next time bye and what is the moment we're in now are we in your
judgment in a moment in which the world order is going to change yes we're changing the world order
okay in 1945 we started the new world water what i mean is over throughout history there's a fight
for control because there's no world court that you go to and plead your case
and so there's a fight for power so there's a war and then the winners come out of that
war and the winners set the rules and so 1945 the united states had 80 percent of the world's money
gold was money at the time it had half the world's gdp it had a monopoly on military power so
the us set the world order that's why the united nations is in new york washington dc has the imf
and the world bank and its currency became the reserve current and its currency became
the reserve currency because of that that set of circumstances okay things evolve things change
okay over history so the three big things that are changing now that haven't occurred in our
lifetime is the amount of debt and money creation which affects the value of money and you could see
it affecting what's going on every day large debt means the printing of money right the large that
puts you puts central bankers in a choice do you pay it back with hard money or do you pay it back
with printed devalued money and if you pay it back with hard money it's hard in other words that's
when you have debt crisis so in all cases they eventually print money and that produces inflation
right so that dynamics the first and that's the place we are at this moment that's the place we
are at this moment and we'll talk about that we'll drill down on that and in a minute the second
the second is um when there's a great internal conflict usually when there's a large wealth and
values gap at the same time as you have a financial problem then you get populism
populism of the left and populism of the right in other words those who feel disenfranchised want
people who are going to fight for them they don't want compromisers they want don't want them to be
in the middle because middle means that they're not fighting for them they want them to have guts
so that you have populace of the left and populist and their positions harden and their
positions harden and there are no compromises that's why we're potentially in a situation that
you could see in one of these elections maybe 2024 that neither excite would accept losing
perhaps we see that that's you see maybe you don't follow the rulings of the supreme court
anyway that's a serious question today serious so these things have not happened in our lifetime
but they happen many times in history so if you look at that you see from those patterns why the
gaps begin become greater and the positions harden and you see the dynamic so that's the second
and the third is the rise of a great power to challenge the existing great power in other words
i i gave you the example have the united states was so dominant in 1945 now it's not
as dominant it is not dominant in other words china and the opposition is as strong as the
united states and its allies and so we have a conflict and there are five kinds of wars
and they start in this order just sequentially typically a trade war a technology war
a geopolitical influence war then you get into a capital on economic warfare which we are now
worth sanctions they always happened in history and then there's a military war
and so you could see that progression happen through time and that creates a template so i like
to look at the template and then plot dots to see how we're transpiring relative to that template
at this time passing zero seven zero four one four zero rtb linking via septum
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