david looks like david's having trouble here just give us
one second and we'll get started
all right still trying to figure out what's going on with david towel in his uh spaces but in the
interim welcome everybody i think we have a lot to talk about but we would be remissed if we didn't
talk about the biggest news of the day joe biden uh just uh forgave is an interesting word
four point nine billion dollars worth of student debt um the politics of it are probably even more
interesting than uh than anything else but man 73 600 borrowers just got four point nine billion
dollars in student debt it's uh related to the income driven repayment uh plan and public service
loan forgiveness uh we'll talk a lot about this today so i just want to make sure everybody
understands what happened and what's going on and why this is going to be important oh there's david
um i don't know uh hold on should we wait until the middle of the show no screw it this is an
important topic i'm not gonna wait so uh the biden administration uh the relief is a result i'm
using their words of the u.s department of education fixes to its income driven repayment
plan and public service loan forgiveness program according to the u.s secretary of education
megal cardona uh the biden harris administration has worked relentlessly to fix our country's
broken student loan system and address the needless hurdles administrative inaccuracies
that in the past get borrows from getting the student debt forgiveness they deserved
so essentially 1.7 billion of this is going to go to 29 700 borrowers that have been in
income driven repayment plans um uh you know so usually with these income driven repayment plans
after a certain amount of period that has passed they're supposed to actually automatically
forgive the loan but that hasn't always happened um and then
if you have been paying loans for more than a decade which is 43 900 borrowers
they will receive 3.2 billion in loan cancellation so essentially what they're saying is one they're
going to keep true to their promise on the people that actually filled i believe it's 20 year a 20
year term on public service loan forgiveness and if people that have been in the program
for 10 years they will also uh be forgiven so all together we're talking about a significant
portion of people that have been in public service forgiveness loans and getting those
those forgiven for context the biden administration has now cancelled more than 136
billion dollars in student debt for over 3.7 million americans according to the white house
so um people's thoughts on this and and david can you hear us now just want to make sure
yeah i can hear you i don't know if you can hear me yeah i can hear you there we go
we'll get you the co-host invite in a second um but initial thoughts on the biden administration
and now continuing to expand student loan forgiveness they're trying to find different
ways to do it in the election year sure sure so so clearly we're buying votes here
and we're starting with strategically a good move with sympathetic borrowers right these
are people that ought to have either committed their life to public service or have been good
payors of their loans for a considerable period of time and are part of programs
go ahead and um essentially um excuse me uh they they those programs um are for people that
don't earn a lot of money um and so therefore they are these borrowers aren't necessarily
the ones that are going to draw the greatest amount of ire of the public um
and you know i think you know i think it's all mashed up together in the sense that a
biden wants to buy votes b on a policy matter uh the white house believes that the student
loan problem is a real problem in the country that needs to get fixed and this is the only way
without congressional involvement which biden cannot get cannot get support for this is the
only way that biden can go ahead and get this done um and you know i think you know starting
with these folks you know makes a lot of sense um but sure there's there's definitely going
to be people on the other side of this that say hey you know i'm sorry yes they are sympathetic
borrowers yes you know they've made choices but they've made their choices with their eyes wide open
um and so it's you know why are you giving them this gift right this is for some of these people
this is totally unexpected and it's just a gift that the white house is giving to them you know
why don't why don't other people get gifts in the same way um so that that's that's pretty much
the deal the question is is where do we go from here is there going to be an expansion of this
program you know continually beyond this as we roll into november
yeah uh what are people's thoughts i look the one thing i will say is that all administrations
will ask few administrations have been giving their constituents gifts i mean tax cuts is a
are a real gift and nobody got a bigger gift than uh then when the republicans gave away tax cuts
right so and we know that also caused a significant amount of debt uh ppp loans were or were supposed to
be a measure that's helped our country survive uh a once in a lifetime pandemic but it ended up being
a big gift uh and many congress people actually made a ton of money on it so i'm just saying like
gifts all around the question is who are you gifting um and you know as i've said before it
seems uh and by the way in the last 24 hours and people have been watching my twitter i've been
getting a lot of a lot of pushback on on my commentary uh but you know uh in my opinion the
voting block of boomers uh have really focused on gifts for themselves and uh and you know
socialism for themselves and capitalism for everybody else i think this is a good move
i think it's a good political move but more importantly i actually think that this is going
to lead to a better financial environment for young people because they're not going to be a burden by
student loans uh that by the way they've been paying at least for 10 years for the public
student loan forgiveness and 20 years for income driven repayment programs and so i mean
at some point the student loan becomes onerous do we want them to have indentured servitude
is that the plan i mean this is uh it's a it's there is a point at which we have to say okay
well student loans forever is that the plan um and you said people are going into these loans
with eyes wide open yeah 18 year old eyes wide open uh and you know when when we were 18
anybody that was in their 40s seemed like an old person but once you get older you're like man
you know like life is a long time and uh to be still burdened with debt on a decision that
you made when you were 18 david i'm sure you were very responsible when you were 18
but imagine you had to live with a decision i was not i was not i was not responsible when
i was 18 and certainly i could have been swung but at the end of the day um you know that the
sympathy for 18 year olds you know can only go so far again i think this is a sympathetic group
so therefore there won't be much ire for these people but at the same time you can imagine
that the next group they'll be they potentially can't there can be abusers in that group right
this group i don't think is abusive of the system i think they've done everything that they can
but that being said again taxpayers have a right to say look i pay my taxes
you know i don't want to be going ahead and giving charity to these people
you know figure it out i don't i don't really whenever people say the young 18 year old who's
an idiot and we should you know forgive all their decisions because they're a young idiot 18 year old
my my wife taught at a 97 poverty rate school i mean these kids have literally nothing
and a lot of her students you know pour is dirt um we're making decisions to not take loans um
some of these students qualify for a lot of like pretty big loan programs where they could get a
lot of money and a lot of these students no no parental support pour is dirt you know they don't
have like this upbringing where they had this financial education that like someone like me got
and they were making the decision quite simply they understood oh if this is a loan i have to
pay this back that's a lot of money i don't know if i could ever pay that back that's a lot i'm not
going to do it so i i saw a ton of these students with their advisors pushing them to go to college
go to college go to college and these these poor dirt students were saying heck no i can't afford
that that's terrifying i need to you know and so i see these you know under 18 year olds all the time
that were skipping college because they fully comprehended the um the cost of that future
decision so i saw that all the time it was you know it was very obvious to these students these
super poor um not supported kids they got it so if and here's like to add another layer to that
now you're telling them hey too bad you should have taken that because now we're going to forgive
it for certain groups um good you know screw you poor as dirt kid you you could have taken that
money it could have been forgiven and now you're screwed because we're going to forgive it for these
other people that made the decision um you knew was wrong to make for yourself like they just
jumped into it they didn't think about it they got screwed they were in a bad position we're
going to go ahead and forgive that debt but for you poor as dirt kid who made the right decision
or for you military person who went into the military to pay for your college and risked
getting shot or having your ears blown out um you know you guys were morons you should have taken
you should have uh take another loan money that's kind of that's kind of how i see it
yeah justin were you are you against uh the tax cuts that trump put out there um i don't
know exactly which tax cuts you're speaking about but i don't i don't the trillions of
dollars worth of tax cuts that were given to businesses during trump's time i'm not i'm
not generally i'm not generally against hardly any tax cuts uh i don't see refusing to take
money from a person the same as um someone going into debt telling someone else i'll pay back
but people start businesses with this people start businesses with the complete understanding that
they're going to pay taxes correct they knew what they were getting themselves absolutely
so should that gift be just given away when they know that that's an actual cost of doing business
yeah i don't telling someone hey i'm not going to take more money from you isn't a gift that's
that's the government not taking what they probably shouldn't have been taking from the
beginning that being said there's there's a there's a clarification here i'm strongly against
and have a history of being against any special treatment for any income levels so if you're
a rich person getting you know special lower uh you're excusing yourself from certain taxes
and getting loopholes to get out of your taxes i am 100 against that i believe everyone should pay
exactly the same percentage so um yeah i don't i don't like the loopholes or or wealthy people
getting so another question i had the follow-up is if the amount of money that you put into medicare
as growing you know you put in every month you put money into medicare if the amount of money
that you spend as a medicare patient exceeds the amount of money that you put into medicare
should medicare stop paying for you
same thing with social security by the way uh say that again i don't i don't understand how
they're related i'm struggling with finding out how they're related these are related because the
entitlements never live up to what people have contributed to them and the point that i'm
making is these loans specifically that have been removed are ones where people paid into
them for at least a decade for some people two decades and it didn't the amount of money that
they gave back when you take into account the interest was not equal to the amount of money
that they owed so the same thing is happening in medicare where people are putting in money into
medicare and when they turn 65 the cost of managing them is way higher than what they paid in
what they're getting from social security the cost that the amount of money that they put in
was way higher again no i think i see where you're i see the argument there i think that's a reasonable
argument to be had um where i got lost was trying to compare like not taxing people i think that's
obviously a totally different issue but if you want to compare it to if you want to compare it to
like medicare or something like that there's definitely a conversation there there's you
know the funny thing is we keep talking about tax cuts like they're not entitlements but in
reality when you look at the the budget of the u.s government you've taken into account both the
revenue that we're collecting and and i think of tax cuts as again from a business perspective you
think of tax cuts as a discount and we're giving discounts to the rich to the corporations those
corporations are not trickling that down to the american people and i think that that's one of
the big things that nobody is talking about which is ultimately if we there are many different ways
of stimulating the economy this could potentially be aware of some of the economy and that was the goal
of the tax cuts the overall goal at this point needs to be to have more honest conversations
that were giving entitlements to all kinds of people but when it comes to a voting block
that does not you know if if young people started voting uh more effectively we actually
would see a lot more of this because that's what old people have done in this country
they vote incredibly well and i think that has been a huge advantage for them it's it's it's about
voting in my opinion more than anything else hey paul hey don just to give a level set here of
oh you know these we should call forgiveness we just call it uh i mean we're just transferring
the debt to the taxpayers other taxpayers but you know you're right these were totally you
know these are totally legal they were in the programs people have paid for years and they're
getting the you know the the deal that they paid out uh that they expected i think the one
thing to think about is that there's it's about 1.7 trillion dollars of student loan debt u.s you
know securitized and bank you know it's on balance sheets so this is about uh you know it's 0.28
percent which is effectively half a month of amortization of the current debt so this is like
you know it's 4.9 billion it's nothing relative to the total student loan debt and so if this is all
that's done you know it's great but it's not gonna be anything increasingly inflationary or
stimulative it's it's it's a gimme for the you know the million plus you know a couple million
people that are getting it uh but you know i have no problem with because that was the deal this
is the deal i hope those people are doing things that are very necessary for the economy and society
because that was you know that was the i guess they're supposed to be teachers healthcare
military something along those lines to to get this program but you know it is
nothing in the for those people it's a lot but for the you know the the overall student
loan debt it's it's not really going to make any kind of dent in terms of what's out there
is it a uh you know i i know of people that are that definitely could just pay out cash
for their kids and they they they actually took student loans thinking okay maybe they'll do a
some level of forgiveness so people are taking out debt thinking there's going to be this freebie
for everyone and you know it's that's yet to yet to happen so but i have no problem with this
because this was the deal people knew about it uh you know i totally understand your comments about
the tax breaks things like that when you're talking about medicare i mean i think that's
more of an insurance program so there's always going to be people that get out more than they
pay but the overall the average is supposed to be you know like insurance is supposed to
pay out you know everyone's paying for each other it's just there are certain people are
going to use more because of uh their condition so but no i have no problem with this program
but it's an insurance program at the end upside down sorry one thing about the insurance program
oh it's upside down it's completely upside down we got to charge more than we're yeah well
exactly are you okay with charging more for medicare from existing people not from people
because again why am i getting charged more because you've been unhealthy you just have
morning calisthenics for everyone the fourth calisthenics and then i have no problem like we
have to have social programs this is like ridiculous to like think medicare is one of the greatest
programs we've had as a country i am a very big supporter of medicare without medicare
my father would have been on the streets just so you guys know i'm a big supporter of medicare
right when he got sick my point is more about the fact that we keep demonizing any sort of
sort of entitlements but then we don't actually have a conversation about the ones that we have
that are now set in stone social security is incredible it saves families from extreme
poverty yes i hate on boomers all the time but i hate on the rich ones that are entitled and
nimbies right but there are a lot of poor elderly that would literally be without shelter
and food if there was not a social security program and without healthcare without medicare
we need these things but then as soon as we talk about young people it's like well young people
can work it's like yeah but they are an indentured servitude these people and i'll
go to robert right after this these people that have been forgiven just as a reminder by the way
i'm giving you guys the context because today a lot of people will hate on this
they will say that hey he's buying boats which again all politicians buy votes with entitlements
just as a heads up but but you know these people specifically that have been forgiven today
are people that have paid into student loans for at least a decade and for some two decades
right and like paul was saying more than uh about 23 600 of them have been in public student loan
forgiveness that means that they worked in either rural areas they worked as social workers
they worked in non-profit and there's it's a little bit different but we will hear people
demonize this and say that biden is just buying votes yeah we should subsidize those rate those
things we should subsidize the things you just mentioned like that really a really quick note on
this and when we were talking about this issue before the supreme court overturned it the first
time i think i don't that's that's one of the exact things i said is if we're going to talk
about loan forgiveness for student loans it needs to we need to discuss people in public service
because there are because those programs already exist i know friends who went to well actually
that poor school right the 97 poverty rate school they went to that school where other
which was i mean at this school um i remember one friend told me um hey i heard the news that
there was a gun brought to this school and i'm and i just told them yeah that's that's
called the tuesday because it happened all the time so the teachers thought it was hilarious
but these teachers would not have probably you know if we're honest these teachers probably
wouldn't have picked this school had there not been all these loan forgiveness programs so i think
that is a very very reasonable conversation to be had around student loan debt for sure
so so i want to get robert to weigh in here one other point is the problem with biden's
policies is not that he's forgiving student loans in my opinion it's that he's not holding these
colleges accountable we should either have them covered the cost of school with their endowments
exactly exactly or remove their tax exemption status they are not non-profits they are
machines robert your thoughts yeah just to um first of all thanks for having me on guys
but to set the stage for what i'm about to say i am uh libertarian i guess to the core very
anti-state in many of my views and i just want to be clear that this is not a gift
from the white house the state funds itself exclusively through extortion which is taxation
and inflation so i presume that the debts that are being forgiven are from the department of
education which would be the state us government buying these debts from private creditors uh
typically with printed money or if not printed money money that was taxed so money that the us
government did not earn so you know if someone this is not a gift if someone puts you at gunpoint
and tells you to give them money and then they take that money and they go and pay off someone's
college debts is that a gift i mean no they redirected the stolen funds to pay off a
previously uh agreed upon deal which was you know someone borrowed money to go to college
now we could go into the details of like how egregious student loans are like i myself took
on a student loan at 18 years old you sign a big number you're not exactly responsible
we're aware of what you're doing at that time i agree there's some predatory lending practices
there but i don't agree that you should be able to go out and extort money from other taxpayers to
pay off other people's debts and so what i think this is is just another stepping stone on the
death of toward the death of democracy there's this great quote um like i said that a democracy
cannot exist as a permanent form of government it can only exist until the voters discover that
they can vote themselves at large s from the public treasury and you know that it's a it's a
step towards dictatorship over time because again these debts that are being forgiven are being
forgiven by the u.s government they purchase them from private lenders with printed money
so the gift is actually debt monetization right this just monetize this is debt private debts
being paid for with money the printed money is theft from savers so everyone that has
u.s dollars in a checking account or savings account they have been they are being plundered
their purchasing power is being plundered to pay off these debts so if and another thing is if
these student loan deaths were just treated as all other debts and they were dischargeable in
bankruptcy this would not be a publicity stunt for the president to go out and buy votes
which is all this really is frankly and the last point on the social programs social security
listen it's a bankrupt program to say that people are being saved by it like otherwise
they would be in poverty or they wouldn't be able to have these things you're saying that
the victims of that program right that they're being social security is being funded through
taxation and inflation which hurts typically paid for through printed money which hurts the most
economically vulnerable the most so it's the people that are being hurt by the funding of
social security that are then quote unquote benefiting from social security okay so this is a
very insidious cycle and if you guys just get into political views of this you're not going to see
the root problem the root problem is the money printing it is the taxation you know we are in
the system that we're in and i think that this is one of the challenges i've always kind of
struggled with the libertarian mindset which is like do you think that the answer is just burn
it all down because that's like what mille is doing right and america uh we're not going to
do that so you know the reason why you can do that is because they've had uh you know 250 or something
like that uh over like the last few years in terms of inflation my point uh going back is so just
so i can understand your views and then we're going to move on robert just yes or no questions
do you think that we should have medicare no do you think we should have social security no
okay good to know uh and that's it's important to look you're so consistent i fucking love that
because it's like at least you're clear you're not like uh there's a lot of people that will like
kind of sit on both sides of it and it's like okay i disagree with you obviously but that's okay
that's what i love having you on now uh i will definitely invite you because i do like having
that kind of a view yeah look this is and this is based on an economic principle right and
we could get into the weeds about it but mises would say that all government spending is a
misallocation of capital so what that means is that money is not being spent in accordance with the
plans and preferences of individual market actors because someone's being coerced in that transaction
every time you have coercion you're disincentivizing production so producers aren't keeping what they
earn so they're not incentivized to produce and you're also rewarding coercion right so
you're incentivizing people to coerce so it it it's absolutely corrosive corrosive to the entire
economic system and what i will say is that without having some sort of social safety net programs
we will be we will be in chaos like most third world countries so again we can have a agree
to disagree moment here because that's like a much more yeah deeper conversation saying capitalism
is that social safety net the yeah it depends on the in the elasticity of good and the asymmetry
of intro we can have this conversation separately but like for example anyways i'm not going to
keep going down because this is one that is like a much longer conversation i do want to hear from
our other speakers matthew your thoughts on the conversation especially student loans
yeah good morning um from a student loan perspective i i have to say that like as not a beneficiary
of this program i don't have a problem with it but i think like to your point donish it's a much
bigger indictment of the college issue and the fact that this is essentially you know paying
paying for for debt forgiveness and and proliferating inflation from a from a
university standpoint and i think it's just a really a really big problem that's going to
continue they can just keep charging more and more higher tuitions knowing that eventually
these things are going to get paid one benefit that i do want to talk about that i think it's
it's just a positive spin on this in some sense is the fact that they close out these accounts
means that these people now have a paid off debt which is great for their credit so now
you've got an ability for people to go out get loans at lower rates maybe get down payments for
houses and things like that so paying student loans uh is is actually a really beneficial thing
for people there are things like good debt and i i know that we don't want people to be indentured
servants and certainly that's not something that i think we should be doing but it is important to
point out that there is a beneficial piece to this in a longer term sense that now they have
some additional benefit to their credit which is you know just a long-term benefit for them
yeah and and again as a reminder the student that uh that has been uh has been forgiven i just put up
the tweet in the nest again um was uh it's for people that have been paying their their loans
for uh public service loan forgiveness programs 43,900 people and about 29,700 people were in
the income driven plan payment plans so they were correcting what seemed to be a poor execution of
existing plans uh jay you had your hand up but i think you put it back down did you have a thought
on the student loan forgiveness uh and biden uh forgiving biden's administration forgiving these
student loans i think you put your hand down because because you have to step away uh so
you know outside of that uh were there any other final comments on this just want to give
everybody a chance to to weigh in if not i'm going to move on to the the Davos and India and
what they're doing it's kind of fascinating what's happening just just the last thought on
this do we know if it's beyond getting sued and blocked at this point um i think i think
it's going to be again i don't it just depends on if somebody uh if somebody challenged right
okay so there's there's still a runway here where it could be sued or there could be some
dispute or something in congress possibly the the difference here is according to uh
according to the administration they're actually just correcting an error that has not been corrected
by the department of education in the past so they're saying it's student loan forgiveness
but what they're actually saying is hey these people have been in public student loan forgiveness
programs and they just haven't those have not been enforced correctly and so now we're enforcing
it that's the that's what they're saying i bet you it's beyond that i bet you that especially with
the income-driven repayment program and they're probably just in their testing the system to see
okay where where is the line so we'll see if this goes yeah but you know to be fair to be fair
to the white house like if that's if that's pretty much accurate and we made these very
specific guarantees that it'll be repaid in this period and didn't do it um shame on us
and good for the white house right if that's the agreement we made
it's freaking crazy that we wouldn't actually honor an agreement we made
the u.s wouldn't honor an agreement that we've made are you wait in it wait in the next week
to hear operation donna i would guarantee the taxpayers paying for these this debt
forgiveness did not agree to this i would guarantee that uh the ones that to say again
sorry just well if they did if they did through their elected representatives in congress exactly
right yeah but they did not regretfully anyone that's holding u.s dollars so there's 4.5 billion
holders of u.s dollars worldwide this is being paid for through printed money they're the ones
paying for this they did not vote for this by definition right there's 330 million people in the
u.s 4.5 billion users of dollars worldwide this is yeah but dollar holders don't don't vote
not all of them vote right like the people that but i'm saying they're paying for it so the people
paying for it did not agree to it sure that's what i'm saying yeah i agree that fine but they
also didn't agree to like anything so that that's the point which is like that they agreed to
transact in the u.s dollar and that's the problem and that will continue it's a lack of skin in
the game sure but the the entire system is the system that we're in right now and i think
i want to be careful because you know this is i will say you sound like a bitcoin maxi and it's
like it's the same thing over and over which is like okay sounds good but but like we're still
living in ancient rome the population was 400 000 people 320 000 were slaves and that sounded
good and you could just say that was the system we were in then too but you know we have to talk
about these things as they actually work in economic reality if we're going to do anything
about it so you can paint me however you want but i'm just trying to call it i'll see it sure
uh so okay we're gonna move on i do want to talk a little bit more about um a little bit more about
the uh what's happening in Davos right now i was talking about mille mille went up he is now
quote unquote the superstar uh of speeches uh but you know i'm very interested to see kind of
what actually comes of it and i think right now argentina is still a a very interesting use case
because one of the things that happened there was they their pendulum swung so far into corruption
and to socialism and what he calls collectivism and then on the other side we're seeing two
countries have very different presentations in Davos one is india and the other is china imf comes out
in Davos and says china is in deep deep trouble because of their real estate industry and because
of uh their you know covid lockdowns led to uh issues with saving people didn't want to spend
money anymore they couldn't stimulate the economy uh their real estate industry is in deep deep
trouble and the structure of their industry which is primarily products driven like making
and manufacturing products is now in deep trouble because there's been an uncoupling occurring
and boy were they right if you look at the china all the indicators out of china who always lie
always lie about their their data even they can't lie anymore they either stop reporting data
or they the data is coming out and their stock market is is close to all-time lows
india on the other hand is ascendant by the way before i move on from china
according to cnbc uh china has the most representatives at davos ever
this year so they are out there they're trying to court these companies to come back to china they're
trying to court these companies to do business in china it's very interesting to see that on the
other hand india seems to be the darling of davos uh people are courting india and there's there
was data released today that india has a very rapidly expanding middle class of people that are
buying not only goods but also services so similar to the united states where we are both a goods and
a services economy uh now much more services economy india is not just a goods economy it
is a goods and services economy which makes it more sustainable uh so very interesting in davos to
see india come out i'm gonna be putting up some tweets actually about specific things that india
is announcing at indavos but david your thoughts on what's happening with china right now in india
china this sort of it seems like they are gonna and by the way they are bordering countries
people don't know that but they border each other so this seems like it could become
a real rivalry which i'm very interested to see what happens david your thoughts
yeah so um you know let me get to india in china in a second on india in china you know i'm i think
as smart as the average american bear on these things um i'm not chinese i'm not india never
lived in those countries never particularly heavily transacted let me go back to argentina
for a second though you know as you know danish i don't know how much the audience
recalls you know i i served as the ceo publicly traded oil and gas company based in argentina
for three years so i know and before that i was a big investor for a bunch of years
an unfortunate part of my professional career i must say but nevertheless um you know mille
is putting on a show um and certainly you know touting the libertarian position you know very
hard uh but what's going on in the country while he's in dagos i mean the place is inflamed
uh inflation is nowhere near under control um it's going to get worse that's the prediction
and it needs to get worse before it can get better and he's got a whole swath of his economy
that is not with him used to living off of the government's you know handouts uh employment by
the government and so forth that are now planning to go on strike and the country will grind to a
halt he does not have a whole host of workers scabs that are going to go ahead and take over
for all these unionized people in his country um and so you know he may have the greatest of
intentions it may sound phenomenal on a stage uh but argentina is simply you know a project
it's a good bit of theater at this point uh it could get really really bad um certainly the imf
has nothing but the ability to support this because argentina is the largest borrower from
the imf and now their leader is taking this position i mean imf cannot possibly say well
we're not on board they have no choice it's like when you know you have a bank and your biggest
borrower says you know this is what i'm doing as a bank you're screwed you're you're now the
borrower the tables have turned uh and so the imf has no choice but to go and support milay and
pray hard that whatever his agenda is it succeeds um but i think you know whatever milay says
on one stage is very very far a reality from what's going on in the country at least at this point
in terms of the day to day um so that's where i am on that it's very interesting it's interesting
to watch it'll be an interesting test case for lots of different things but to be honest with
you right now the place is an absolute absolute mess mess i mean the only thing that it's good for
is for tourists right all of us that don't live in argentina head on down there your dollars and
other currencies go very very very far in that country um and so therefore that's what you should
be doing vis-a-vis argentina vis-a-vis china and india certainly you know that the battling of
second place in the world the united states is important um you know i think china has always
believed and continues to believe that they will eventually usurp the united states in many ways as
the first place power in the world economic and otherwise um they're clearly under stress right now
they'll try to mask it they won't own up to it um they'll do whatever they can to go ahead and
buy people support at the same time you know india may make good choices and they may have
you know a population that is more organized more supportive of of leadership than leadership
in china and that may go a far way to bringing india to go ahead and and you know eventually
i don't think tomorrow but eventually maybe taking the place of china we'll have to wait and see if
it's certainly you know i'm interested in keeping my eyes out on developments there
and see how things go it's certainly not a foregone conclusion yet who's going to be the winner in that
agreed i mean i have to say the thing that surprised me the most about the ascension of india
was the united states secretary of state blinkin in davo saying the words india is an extraordinary
success story a remarkable achievement of pm modi surprising because uh you know modi is is is
definitely an india first type uh pm and he is not without controversy there's obviously controversy
around how muslims in that country are being treated by the ruling class and significant amount
of issues on human rights but yet again we have to pick the lesser of two evils is the wrong word
but you know of two uh two bad teams one is china one is india and looks like america has chosen
uh piodar your thoughts obviously you know way more about geopolitics than i than i have forgotten
or the other way around but uh you know i just wanted to get your thoughts on uh
what your where your thoughts are on india at davos and sort of this india china rivalry
that's beginning piodar you gotta unmute thanks dude sorry it's sticky yeah i mean look it's
it's it's really major last year was a really it was like you know india's year and it was
absolutely not china's year it was couldn't be more the opposite i think with all the information
that was coming out about them uh just on argentina very quickly i mean havie is pushing some very
interesting policies he's definitely trying to live up to his anarcho capitalist um uh self-prescribed
title and the thing is though that it leads quite nicely into the china relationship because
china's given out i think over 220 plus billion dollars worth of swap lines um to different
countries through the bri and one of the biggest customer or client states has been argentina
they've had to review their debt relationship with china about eight times in about nine years
so those two have a mutually unbeneficial relationship now with china facing its own
uh issues um towards china and india more specifically though um what i found really
interesting is that investors have really begun to favor india over china because of china's
over interventions into uh into areas like um uh the public sector and private sector i mean
for example sovereign wealth funds and the public pension schemes are backing china sorry india more
than china um and this has only been i think um reinforced by the indians wanting to to
really capitalize on their technological relationship with the us um there was also
an article i saw in roytas just this morning uh that said that india could actually ease
investment curbs with china if their border stays calm for india it's very much about
their sovereignty and the protection of this of their of their borders and because of that
clash three or four years ago um they have this heightened security now and security at
least i think in that part of the world always uh precedes uh economic activity so i think we're
definitely seeing a power shift between these two and modie is i think loved by so many indians but
also just the global south he's really really coming to symbolize the sort of uh non-aligned
movement in this multi-polar world we seem to be increasingly entering and the well the two poles
of the us and china bicker india's really finding its its way as a third option uh and a leader in
that so yeah um i i think davos is just an illustration of india's uh attraction for many
businesses and leaders uh and just a continuation of what we saw in the g20 bricks and uh and so on
thanks yeah uh uh uh j your thoughts hey uh so you know i definitely support a lot of what uh has been
said so far i mean india just like every other country has had its own problems right over the
last 10 years you know everyone looks at and said oh it's it's so obvious um and the demographics are
obvious and you know the country is doing phenomenally um and obviously the diplomatic
relations between the u.s have improved um even though india still imports a lot of its
you know military equipment just because of you know transportation costs um from russia but you
know over the last 10 years you know india's you know gone through demonetization you know
it's gone through a shadow banking crisis it's gone through high oil prices um you know with a
per capita gdp of 4500 uh dollar equivalent but you know the gdp of india this year you know is
supposed to be something like 7.2 percent it's one of the fastest growing large economies in the
world and it makes sense you know to ally with the u.s i mean already you think of a company
like apple with 80 of its supply chain even though it's not a you know chinese company
they're working with but it's on physically in mainland china you know moving some of that
to places like india vietnam cambodia malaysia makes a lot of sense um and you know the interesting
you know a couple under other interesting things to note is that you know there's 62 million people
in in india that are in the digital economy um you know that is you know massive it's grown 2.4
times um you know the the rate from you know where it was from 2000 2015 from 2015 to now
and it will continue i think it'll continue to grow um at a rapid pace as the middle class
and the education system you know continues to improve um and you know their tax you know their
their you know taxable income continues to rise and you know their infrastructure is getting better
they're getting higher revenues from tax collections um and they're plugging loopholes
in their fiscal gaps so they'll actually be able to withstand you know oil shocks in the future
better than they have you know in the last 20 years you know india was one of the countries
that was very very sensitive to oil shocks it will still be sensitive um but you know the the
country is starting to um to generate you know incomes high enough so that they'll have you
know a surplus to address those issues and it's driven by you know this this high growth rate
that i i think will continue um for the next several years as household formation um continues
to improve you know the number of automobiles in the country continues to increase the number
of home appliances continues to increase you know already you know you go to india and you know
you'll have rickshaw drivers right owning owning smartphones you know the the quality of life in
the country the improvement has just been absolutely phenomenal and unfortunately you know
the equity market i was just looking at indian ipo yesterday and like it was like 15 times
over subscribed um you know the equity market just on fire it's difficult um you know to allocate
after such a run but you know people are looking past that i mean they're coal companies in india
that trade at 10 times because of the growth just the just the raw growth um but i i do
think it makes a lot of sense for the u.s to ally it's it's you know one of the best stories
globally um yeah i think as pieter was saying you know i do think argentina's is entering
interesting as well i think you know venezuela is also kind of interesting in a longer term
if they can turn things around but india i think is one of the most interesting emerging market
stories you know we've been we've participated in a couple indian names there's one tech name
that trades at a 50% discounts dual listed in india and the u.s um you know we've also
looked at some latin latam names as em is done relatively well ex china because of the declining
dollar um but you know this is a very interesting topic pieter sorry i think you have your hand raised
yeah pieter no uh no not at all i i think a lot of great points i just wanted to add that
i mean i think the statistic is that under modie's bjp they have managed to lift over 25 of the
working class into sort of lower to middle income uh in only 10 years and at that rate you know
you'll see a massive massive form of new money coming in i mean i'm here in london at the moment
and there's so much you know incoming business and just india also as a export it's indians are
feeling very proud you've got you know a lot of indian um people from indian origins taking
in positions of power you know we've got one in the in the uh down in street in the uk um so i
think that that plays into it as well and boosts that sort of um confidence in in the markets as
well and just business of india out outwards the other thing i just wanted to mention actually
is also just strategically speaking the because of what's happening in china with its internal
domestic uh situation they're unable to leverage their foreign policy as much and that's benefiting
india because a lot a lot of indian policymakers felt the chinese were trying to undertake what's
known as the pearl necklace strategy which was to utilize sort of bangladesh pakistan and
Sri Lanka as a sort of to constrain indian maritime shipping um over the past few years and the bri
basically but because of the uh as i say internal issues that's beginning to to loosen and the
indians are exploiting that quite quite nicely so i really think the balance of power is uh is
shifting quite a lot in the southeast uh south asian eight region thanks yeah the one thing i will
say is uh i was you know one thing that we're struggling with as as the united states is seems
like there are no issues stepped away maybe first i would actually like to shift david uh micro yeah
i can't hear him uh yeah they david can't hear me but maybe we'll have him go down and come
back up uh but what i was going to say is you know the one thing that we're struggling
with as a country is trying to balance uh you know the fact that a lot of these countries do
good things and bad things and we try to have quote unquote moral superiority but like you know the
human rights violations occurring in india are are atrocious but we're not saying anything about it
in fact lincoln actually even said well we're talking to them about it but at the same time
said that hey it's an extraordinary story so it's this um you know of course we are not without uh
you know uh red hands ourselves but i'm saying that ultimately it is interesting that we're saying
oh china's bad india is good but i mean india is doing some pretty bad things too so
it is interesting that we're going to struggle our hate for china seems to be uh greater than
our love for human rights which is uh not not so surprising i guess doing your thoughts
well yeah yeah uh good morning well the well well just to well yeah just to um echo some
your comments there um yeah the the the response in regards to the politics of india is rather mooted
uh you know compared to china you know considering that this is more of a right wing more of an
authoritarian government at least from the uh perspective of of the u.s but it is interesting
the way that uh india has um has progressed over the years here so they're really focused
on mainly um just their digital and their digital infrastructure as well as growth and manufacture
also cutting regulations and red tape i think that's an important um move that they made as
well they've cut about 1500 uh different laws that were repealed and this is some of the
after effects of well just the colonial system that they had previously which has opened up
a lot of opportunity for businesses while i you know their equity markets have been fantastic
as some of the speakers have been saying they're they're up about 18 versus some of the agencies
um cutting out of china which are down about 11 for the year so uh in some respects they're in a
bit of an inflection point of where china was years ago so you know when you're looking at
just the way that they're presenting themselves they really are starting to especially with
davos here they really are starting to promote their different regions so they're telegram their
time on then so we see a lot of a lot of comparisons here to say Shenzhen and some of the other areas
in china which are known for hubs of manufacturing so um you know and in some ways at least with
some of the people i've been speaking with over the last um few years here there has been a
look for alternatives to china in terms of manufacturing in terms of economic growth so
there have been different candidates over the years if people recall so even you know places
like indonesia and at least etiopia before there was um uh you know uh the military problems that
are there uh with violence so people that have been looking for alternatives here and i think
obviously this has been punctuated by the issues with russian ukraine where i you know you want to
partner with a with a country that um has better diplomatic relations with you in a place
that you can foster some economic growth absolutely by the way if if we usually don't
talk that much politics uh unless it affects uh finances but if you are very interested in
politics across the board um you know mario's team is posted up in the nest uh link to the
newsletter and to the telegram channel please do join and and keep in touch with everything
that's going on in real time uh but you know kind of going back to what this means for you as a
consumer and you as an investor i will say and this is not financial advice but if i'm looking
at the world right now china seems incredibly uncertain and chinese investments seem incredibly
uncertain and i would probably unless you're an expert i would probably be careful before
you make any bets in china now the other side of it is a lot of other people have felt this way for
a very long time and so maybe it's already been priced in uh and there's opportunities
for growth from there but i'd be very careful about that india on the other hand seems to
be on the way up and so india by the way it's very rare to see indian companies as potential
companies to invest in but there are a lot of younger companies that have risen very very
quickly and they're not just based on selling goods and services to other countries they're
actually successful by selling goods and services to their own people they have a much more self-sustaining
economy which means that they are a little bit more shielded like jay was saying from a lot of
these shocks that come from external pressures uh he was mentioning oil but even other pressures
like decoupling it's just easier for them to uh for them to be sustainable over the long run
so i would recommend not as financial advice but to start looking into india's emerging economy
starting to understand that because india you know people were talking about the rising tiger
uh you know it seems like that rising tiger is asleep again which is china and we're seeing
another rising tiger the rising bengal tiger which is much much more impactful and and you
know it's going to be interesting to see which parts of the economy are taken over by them they
are making incredible strides in ai more than i think anybody was expecting i think you know
obviously they've been in tech for a long time they've been largely in tech support in other areas
and being services uh and and developer services but now we're seeing them sort of be leaders in
ai and i think that will be a very interesting as ai is the next movement i think it'll be very
interesting to see how it all shakes out uh piotr your thoughts and then jay go ahead piotr
thanks dude yeah no very quickly i mean it's what i think uh one of the previous speakers saying right
we are seeing a major shift an active conceded effort by the u.s to uh shift away from too
much reliance on china this whole small yard high fence thing i mentioned yesterday europe's
own version of de-risking uh when macron went out there with monday lane in march april last year
so you know a lot of advanced economies are definitely wanting to shift away and and to
do more of this friend shoring this near shoring to put it on amongst countries and and you know
a few countries i really encourage people in the audience to to watch out for indonesia
they've got an election but they're growing very well uh they're growing by about five percent i
think meant to be this year and they've had a very strong last year as well um vietnam is
doing very well biden's visit there after the g20 was very positive and vietnam seen as a major
major alternative to to china um whilst sort of still being near china if that makes sense
so still sort of uh got access to good resources and stuff and then um uh one other in the region
uh thailand is doing is doing quite well despite the rocky political environment it is still on
and up uh so just the southeast asia quarter excluding china itself is uh is looking very
good uh not to mention of course india so you know just watch this area as we move into the
into the next quarter and and beyond uh i think you're really going to see an uptake amongst
businesses and hopefully if the maritime shipping sort of thing calms down a bit but um yeah just a
few countries i think people should keep in mind from a financial standpoint absolutely jay your
thoughts yeah absolutely just following on that you know one really interesting stat that people
should take away from this is that you know just look at the number of people that are filing
taxes in india you know for many years you know less than 10 percent of the union population
you know was filing their taxes because you know more than half the country just lived in
abject poverty um so for example in in the fiscal year 14 you know about you know less than 50
million people filed their taxes in india and you know as of last year we got close to 100
million people um which is just you know i know it's still a small percentage of the indian
population but you know we're getting close to you know that 10 mark and i think it'll only
go up from there um and you know one of the reasons why india was so sensitive to external
factors was you know they didn't have enough tax revenue right and government revenues to
build infrastructure to protect themselves from from price shocks um but you know they're becoming
more and more self-sustaining and i think that that itself i think is underappreciated
by the street everyone knows about the um you know everyone knows about the growth potential
everyone knows about demographics but you know i think if you if you dig a little bit deeper
you know there's a huge you know brand new investing class there's a you know there's
a new class that you know is going to be and you looked at you look at real estate prices
real estate prices after a drop in india you know have skyrocketed back over the last two years
and capital markets activity is at all-time highs so you know this new middle class in india is
going to be just like just like what china did for like luxury brands in certain sectors this new
middle class in india is going to be a powerhouse over the next you know 20 30 years and then
finally on a contrarian you know the contrarian side of me you know being a value guy you know
i do think that there you know there potentially could be some value in china the major risks
obviously are this growth slow down um and they're you know they're they're definitely
lying about the numbers their growth is probably lower than five percent and you know
due to the real estate issues demographic issues you know earning population peaking in 2018
and the real estate you know buildings that are completely empty everyone knows about that now
but there are companies in china you know big e-commerce companies that are now trading at
you know three times ebita right we just did you know deep dive model on alibaba it doesn't mean
that it you know it can't go to 50 before it goes back up till 100 but you know three times
ebita is you know how you know us us coal companies trade um you know so it's pricing in some pretty
bad data you know with like you know a hundred billion of cash on the balance sheet and several
equity investments um that are not even figured into my my ebita valuation so you're looking at
a company that trades at like seven times forward earnings that is actually growing this year
despite a slowing chinese economy so there are a lot of companies like that you know that could
potentially be cheap in in their tech sector like pdd or jd um that are you know avoid the names like
neo that are burning cash but as long as you're looking at companies that generate a lot of cash
that are trading at i think 24 year low multiples or 23 year low multiples um you know having a
very small allocation one percent two percent you know they actually could outperform the
u.s market over the next two three years also on a contrarian point of view patrick you have a
different point of view than what we there's been a lot of love for india but i'm here i'm looking
your your tweet up in the nest and there's some caution go ahead well yeah look it depends the the
love or the hate short term long term when i hear people talk it's it's like it's what comes to
mind the news and stuff like that but what i have now on that chart is india gdp divided by china
gdp so indian gdp versus china gdp but these are yearly closes guys and it goes all the way
back to 1960 and for years decades they just went sideways india and china they just oscillated
within a range the dots six five to one and for a small period of time china india was was equal the
economy the gdp with china but in 1994 you had a clear breakdown from from that pattern that
was going sideways since 1960s and then for 30 for three decades it went down down down down down
look the downwards momentum seems to be slowing down but this could just be a sideways consolidation
and maybe a further breakdown but the narrative will be the bullish narrative for india to surpass
china will be will have a higher chance of being correct once you cross above dot 21 and i don't
even know we might need many years to bounce around to see where the clear breakout line is
but it's it's been downhill for forever for india versus china china and right now it's
went up a little bit but if there's no clear uptrend like nobody could call a multi-decade uptrend in
favor of india right now at this stage it just that's not where the momentum is there yeah a
lot of it you could say is being is being priced into the market so you know i would agree with
the sentiment stocks in india are very expensive so if you're looking at it you know pick your
spots and don't go all in by any means i love that caution uh peter your thoughts on this
i've actually just got a quick question for patrick because that's really interesting and i i
wasn't really that i mean i focus more largely on the macro and how it plays into the geo
economics and stuff but that's really so patrick from what from what you're seeing how does this
because china for comparison has very lopsided economic growth internally the you know rural
areas in the west are well it's yeah i think we can appreciate just how lopsided it is what's that
what's the situation in india what's the internal economic levels like is it is it worse similar
do you think that that could play out better than china in the short medium term or well
those questions are great and i could have answered those with two other charts because
first when i do a racial chart people have to notice a racial chart that could be going down
against india but it could be both their gdp's could be going up it's just that china is gdp
could be going up faster and the inverse is also possible that racial could be going down
but both the indian and chinese gdp could be going down it's just that india is going down
faster so the next to answer your question what i would have to do is a ta chart on the exact
indian gdp see if it's bottoming if it's breaking out if it's accelerating and then you could have
some chart defined macroeconomics i could tell you okay india's ready to go it's uh it's breaking on
its own chart then we could see china do the same exercise on china and then we could see i know
china's uh breaking down and then it could help you add evidence to figure out if that big racial
chart of india versus china if it will have a better chance of going upwards so those are the
next two charts to do whenever somebody shows your racial chart guys the first reflect your
second reflex is do individual charts for each the numerator and the denominator so i guess that's
your take though because i mentioned it i think before you joined but india's modie's government
has helped to bring about 25 percent of indians out of out of um poverty right out of relative
poverty um in 10 years uh do you know the rate that the chinese have managed to do that or it
doesn't really make a difference in the longer run for the aggregate economy i i don't that that's as
a chart trader as all that is noise because you you're considering that element but maybe somebody
else is considering another element and then maybe there's elements that's uh aggregated together
that are driving the actual gdp right there could be purchasing power destruction because
that was a non-inflation adjusted gdp chart um there's a whole bunch of different elements
that go in there you have to look at the the money supply rate of change to to really so instead of
trying to look at the individual parts that could be driving the gdp right now from a bird's-eye
view i just look at i'm just looking at the gdp see how it's reacting versus china's but then
after that we could start breaking it down but um i wouldn't i would never go on and say oh
that's the element that's going to drive it that's dangerous because that element could still be
active but let's say there's another element that's overriding that element and it's moving the
gdp in the opposite direction of that smaller element you see what i'm saying it's like people
are sometimes they look at small parts but and they assume that small part is the part that's
driving the whole show but what i've learned is it's often not what i think is moving the
price it's something totally different it's essentially a confirmation bias like you see things
moving or and you start correlating and then you start telling yourself that this is why that's
happening you can't usually isn't yeah you can't do that that's a big mistake yeah go ahead i'm sorry
go ahead patrick i was gonna make a joke if you do that you're kicked off the space forever can
never come back that's right uh you know i i did want to end with something that's a little bit
closer to my day job and things something that i know a lot more about and i wanted to close with
this so you know we've been hearing a lot about cannabis and deregulation of cannabis in the
united states uh if we still had the libertarian on stage he would say we should never have regulated
any drugs ever uh that sounds great uh in theory but it's actually quite difficult in practice
uh you know one of the things that we have seen is that cannabis has become not just
a great driver of growth for states but also one of the most common causes of psychosis in young people
uh as we have deregulated we have seen thc uh rates skyrocket within the same amount so
you're getting more milligrams of thc in in a certain amount of uh of edibles or a certain
amount of product and it's gotten to the point where it's big we're now starting to see a real
crisis and the crisis is that now uh chances of developing schizophrenia or bipolar disorder
and this is specifically after drug-induced psychosis cannabis is leading now you're gonna
see if you go if you if you live in med twitter or in the medical twitter or if you live in the
world where we're talking about this quite a lot this is kind of getting a lot of play
what is not getting play is something that doctors aren't talking about which is uh you
know uh iatrogenic or physician uh uh uh physician causes of psychosis and what i mean by that is the
number two on that which is amphetamines because cannabis while we want to say that young people
are getting access to it they're still getting access to it uh you know in their teens you're
not seeing seven eight nine-year-olds routinely smoking weed and it's not legal for them to do
so but you know what is common is being prescribed at a very early age with mixed amphetamines adderall
uh uh ridlin and other uh stimulants and if you look at that list amphetamines are not super far behind
and i think as you know as we continue to battle with our mental health crisis by the way one
part of it that people think is happening which is not true is that a lot of people assume that
our mental health crisis is being driven by us by depression depression of course is one of the
most common causes it always has been but one part that people are not talking about is psychosis
of the psychotic type or schizophrenia form or psychotic uh presentation of mental health crisis
is the second most common crisis in this mental health increase that we've seen in this country
and we're not talking about what's going on it is that people are turning to drugs it is that people
are turning to their psychiatrists they're turning to their uh physicians and their physicians are
prescribing them medications that can cause some of these issues i know i'm speaking as a physician
right now and i know that i'm saying something negative about my colleagues but i have to caution
that if we if if most parents knew that of the different drugs that are out there amphetamines
that are given to like four and five-year-old children seven-year-old children on average
are the second most common cause of drug is induced psychosis i bet you 99 percent of parents
who say don't you fucking give that to my kid and yet we're not talking about it kids all over
the country are obsessed with Adderall and we are giving it away at very early ages and i think
that i hope the pendulum will swing back because uh this is a real crisis i've said it before and
i think other physicians not just me have said that the difference between the opioid crisis and
this new amphetamine crisis is that opioid gets you to dysfunction quickly amphetamines take their
time and so it will be a slow moving car crash and so we may never see you know uh people get
caught for this but i'm telling you that the same thing is happening in amphetamines that occurred
and you can start thinking about your own lives and people you know that you know especially if
you know somebody that's been on these drugs their dosages are going higher and higher and higher
and especially when they start as kids it becomes a bigger and bigger problem so i wanted to put
it out there Dwayne i know you have your hand up but i do have to end the wrap up the show i was
going to say i want to make sure that people recognize this and just be careful out there
of course ADHD is a thing but we have many different therapies for it and you just don't
throw pills at it and of course mix amphetamines are one part of the solution uh Adderall is one
part of the solution but we just have to be very careful since now we have data showing that is
the second most common cause of drug-induced psychosis with that we will talk about this
tomorrow if people are interested but with that i want to say goodbye we'll see you all
at 8 a.m eastern thanks everybody