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We have a really unique privilege this week, to say the least, to have someone like Jeffrey Dunlop.
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He s just a genius.
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He s the Von King from Double Line Capital, most of you know his background.
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Jeffrey, I m so thrilled to have you because you re such a straight shooter, and we get so much runaround from people in the financial world these days, and you re calling a spade a spade.
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I mean, we re going to have the first time since World War II where we got greater debt than we have GDP.
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Right.
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We ve taken what, $7 trillion that we re spending right now, and there seems to be no end in sight.
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Every week, I saw today on the way in, I just saw the headline that
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They re talking about another 1.5 trillion on top of the 2.3 trillion for supposedly infrastructure, which as I understand it correctly, about 5% of its infrastructure.
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Yeah.
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Tell us, where do you see this world right now and where are we going and where is this idea of inflation?
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Because we re hearing people
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Talk about it, but so many other people poo-poo it.
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I was in a meeting the other day with 14 people in kind of your category of economics, and there was a mixture about it.
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Some are saying, well, technology is going to take us away from doing this.
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The market s going to heat up, but at the same time, it s not going to get that bad.
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Other people are trying to hire people who are staying home and saying, I make more money working at home in some of these casinos and hotels, for example, that particular industry.
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And he s saying,
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Here it is.
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I look at, I look at, you know, wood is up 273 percent.
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You know, we see oils through the roof.
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We see sugars up 50 percent.
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And people are telling us, don t worry about inflation.
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So the big question is, where do you see us today and how do we get here and how should people adjust or prepare for what s coming?
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I like asking small questions, Jeffrey.
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Wide ranging question.
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Yeah.
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Well, you know, let s just step back a minute and talk about Ben Bernanke when he said, you don t have to worry about deflation because the United States has a printing press and we can drop money from helicopters.
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That was quite a while ago.
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Now that goes back well over a decade.
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When that was stated, it was not surprisingly met with derision and mockery.
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The people thought this was an unthinkable concept.
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Then we started doing it actually back in the global financial crisis, we started sending money to people.
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George W. Bush did that, it wasn t a lot of money.
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It was about $300 or $500 to about 98% of the population.
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The two checks were sent out.
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That didn t have much of an effect, you can t buy much with that.
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Then we had further problems, and we started negative interest rates in Europe and Japan.
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There are still countries that have 10-year yields that are negative.
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Germany is negative about 25 basis points now.
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Then we had a presidential candidate run on universal basic income, Andrew Yang.
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Andrew Yang did quasi-okay in the democratic primary process.
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Now, he s running for mayor of New York, and he s talking about
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He s talking about doing some money giveaways there.
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They re doing money giveaways now on a limited basis in California.
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That seems to be the template that we re using.
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When we think about statistics, over the last 12 months, the United States, Tony, you mentioned $7 trillion.
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That s what the government says they re spending, but they don t really tell you the real amount.
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You ve got to bring in some of the one-time items, such as wars that are deemed to be temporary, even though they ve been going on for
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endless years, things like natural disaster relief, which is always deemed to be a one-off.
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Actually, the last 12 months, the government has spent $8.1 trillion.
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Amazingly, 56% of that $8.1 trillion is debt.
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Incredibly, 56% of the government spending is so-called borrowed money.
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Now, it s being supplied by the Federal Reserve through a lending program, but that s a huge percentage.
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So government spending is actually over 35% of our economy right now.
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So we have something of a collectivized economy that s gaining a further momentum.
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And as you pointed out, we re talking about doing more spending on so-called infrastructure, although I think it s only about 10% infrastructure, if you talk about bridges and roads and things like that.
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So infrastructure has become a buzzword for social programs, which is really just continued money printing.
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Now, one thing that surprises me is that people were ever that surprised at money giveaways when Ben Bernanke brought it up, because we started giving money to people in the Great Society programs over 50 years ago.
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It was a limited amount of money, it was to a limited group of people, but these ideas, once they get going, they go much further than is initially contemplated.
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That s where we are.
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Now, you say there s no inflation, but today, the PPI came up, producer price index, it s the highest reading.
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in 10 years, year over year.
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There s different ways of slicing it, but it came out over 5% in one of the important categories, year over year inflation.
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It s already starting to come.
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You mentioned gasoline prices, which are up by $1 a gallon here in California, that s probably about 35% in the last year.
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Lumber prices are through the roof.
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Real estate prices in many places are absolutely booming.
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One thing that people have to understand is when you go into money giveaways and inflationary programs, it is not even across the economic spectrum.
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There are some categories that get really high inflation, and some categories that do not get very much.
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The ones that get a lot of inflation when you start the money printing, unfortunately, contrary to the intentions of these programs, end up harming the lower classes of society.
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Food prices are going up tremendously.
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Gasoline prices, as I said, are going up tremendously.
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I saw an article on the Bloomberg Newswire today that they re now calling it the K-shaped inflation situation, just like we ve called it the K-shaped economic recovery out of the pandemic depression, if you will, where rich people have actually gotten a lot richer and employment is actually up in the higher wage categories while it remains very depressed in the lower categories.
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There are many instances of money printing through human history, and there are quite a few of them in the 20th century alone.
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And I can t find a single one that just doesn t end with the economic inequality getting much worse and leading to societal stresses that must be addressed.
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So we can go back to the French revolution, if you will, in the days leading up to the French years.
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up to the French Revolution, they went off the gold standard because they had a big debt problem.
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In fact, the magnitude of the debt problem was at the beginning of this process is where ours is today in the United States.
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What ends up happening is the people that were middle class become very poor, and the people that were poor start to starve.
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That s the real insidious aspect of this money printing and leads to very significant problems with food prices and food shortages typically.
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What ends up happening is the people that are in control of the monetary printing and money giveaway levers actually find a way to get rich.
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That hasn t exactly happened yet, according to the French Revolution template, but it is certainly happening.
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There s great awareness that thanks to the tremendous fortunes that have been built through the technology platforms and through the stock market boom that has been aided and abetted by this money printing,
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that we have had much greater wealth inequality, and we have a very big divot in unemployment still.
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The government likes to report these statistics as if we ve largely recovered from the pandemic effects, but we haven t even come close.
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What they re doing, I think, is dividing the economic assistance into new categories like pandemic unemployment benefits and the like, so that the traditional measures
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of economic growth, inflation, and employment don t really map over to what we re doing today because we ve got new categories.
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In actuality, there are over 18 million Americans that are employable, that should be in the labor pool, but they re on some form of government assistance.
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Tony, that s more than 10% of the labor force, quite a bit more than 10% of the labor force, and they re being disincentivized.
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incentivized with these programs of endless checks being written, being incentivized to arrange their lives, essentially, around not working.
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Many people are making more from their checks from the government than they were getting from their jobs if they were at the low end of the economic spectrum.
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Also, what doesn t get nearly enough attention is there are people that are well above the average income level.
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The median household income in the United States is around $65,000.
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These government programs are giving money to people, to families that are making $150,000, double the median household income.
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Amazingly, the most recent stimulus package, and they re getting so frequent that it s hard to keep track of them, but the most recent one actually provides a family with three children under the age of six.
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that s making $150,000 jointly is getting $13,600 from the most recent stimulus package.
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Incredible when you think about that.
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So the money printing and the money giveaways keep climbing the economic income ladder.
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And three days after Joe Biden signed the act that had that $13,600 for the family with that profile, Senator Schumer said,
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Three days, it took three days.
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Senator Schumer said, we need to make these money giveaways in this most recent package permanent, which would mean $13,600 permanently for that family that s double the median household income.
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So this tracks and the historical experience means that we re leading to greater economic inequality.
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The way that you actually address economic inequality would be to stop printing money.
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It wouldn t fix it nearly entirely, but it would at least stop adding gasoline to an already problematic fire that s burning.
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So so tell us where how do people protect in an environment where obviously inflation is going to continue to grow?
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How do they protect?
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How do they benefit from it?
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And what do you think about seeing Janet Yellen reaching out to the G20 and saying, yeah, we re going to support SDR.
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Let s triple its numbers.
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China seems to be pushing in that direction as well.
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Do you see us as a reserve currency going away at some stage in the near future?
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What s your view of that?
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Near future, probably not, but ultimately, yes.
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One of the things that is very important to watch in terms of the value of the dollar versus other currencies, probably one of the strongest correlations is the direction magnitude of our twin deficits.
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Obviously, our budget deficit is exploding.
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They say that the budget deficit for the last 12 months is 16.5% of GDP, as if that isn t bad enough.
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But again, they don t include these off-budget items.
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So in actuality, 2021 could well have a 22% true deficit as a percentage of GDP.
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I think that to protect, especially on the dollar, the dollar, not only is the budget deficit exploding and there seems to be absolutely no wherewithal to put the brakes on that at all, but also one of the things that doesn t get a lot of attention is that who s benefiting
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from all of our money giveaways in terms of the global economy.
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It s our trading partners, in particular, China.
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China s the strongest economy in the world.
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A lot of goods are coming in from China and Southeast Asia, thanks to the spending that is promoted by these money giveaways.
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Not only is our budget deficit exploding, but our trade deficit, which was reasonably stable for quite a few years,
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is going up at a fairly alarming rate.
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When you put the two together, the twin deficit, budget deficit plus trade deficit is rising with a velocity that is virtually unprecedented, which suggests that the dollar is doomed, particularly if these policies continue, which is the base case into the future.
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Meanwhile, a couple of things are happening relative to China and the reserve currency status.
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When I started in this business back in the 80s, a long time ago, there were these warnings that the social security system was going to go insolvent.
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It sounded like it was way out in the future, that social security system would be insolvent like 2080 or something in 100 years.
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Of course, as we ve increased our profligacy, the predictions of when social security is going to be insolvent keep being brought forward.
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First, it was 2050, and then it was 2040, and then it was 2030.
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Now, I think you re talking like 2025, the way things are going.
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Meanwhile, not unrelated to that, although the connection isn t direct, the predictions of when China would surpass the United States in GDP have similarly been brought forward about the same magnitude.
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It was supposed to be 2040, 2030.
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Now, we re talking about 2028.
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is the prediction now of when China will have a larger GDP than the United States.
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Plus, they have massive savings, and they ve been building their gold reserves and the like, and divesting from dollars.
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Foreigners are not buying our treasury bonds anymore.
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They stopped on a net basis a long time ago, and they ve been liquidating and accelerating rate.
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These are all signs that China is in the ascendancy, whereas the United States is in decline.
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Unfortunately, those policies seem to be well embedded.
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in the structure.
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How do you protect yourself?
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Well, it was interesting, the previous speaker, he talked about the concept of a portfolio diversified across sectors, 25% cash, 25% of physical stuff like gold, 25% stocks.
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I actually had the same exact construct going for the past 18 months or so, except I also had, for a while, 25% long term government bonds, as much as I do not like them.
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There was about a year and a half ago, I would say, and even a year ago, I felt there was enough risk of a deflationary collapse that you would need to potentially have assets that would protect you for that.
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As we ve moved forward into the present moment, my view of a deflationary collapse is getting
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is getting much less, I think the case for it is getting a lot less convincing.
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At this juncture, I think you would want 25% in something like real estate, I like 25%.
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I used to say gold, I would actually go with some amount in Bitcoin.
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The reason isn t that I m a big Bitcoin fanatic, it s that I think it s an insurance policy.
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I think there s enough uncertainty in the world.
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that potentially, you could have an insurance policy with Bitcoin.
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I m not going to be one of these 25% Bitcoin people, but I think I don t see anything wrong with having 5% Bitcoin as an insurance policy, and then 25% in stocks, which can go up.
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We ve had inflation increasing, commodity prices have been rising very sharply.
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in the past nine months or so, but stocks can go up.
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You can add a zero to stocks.
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Now, stocks are very overvalued in the United States versus history, incredibly overvalued.
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If you look at most metrics like Dr. Shiller s CAPE ratio is on the moon, all kinds of enterprise value, most of the metrics you would use, you can look at about 25 of them for let s just say the S&P 500 are in the top percentile
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of overvaluation versus history.
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Now, in spite of the fact that it s so overvalued, bonds are even more overvalued.
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Government bonds are even more overvalued.
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With the inflation rate above the bond yield from T-bills out to the 30-year Treasury, and a Federal Reserve that seems to applaud the inflation rate being above yields and making statements constantly that they re unperturbed about the moderate rising rates it s already having, that they re completely unperturbed
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about inflation going above 3%, which is going to do on the CPI year over year in just a few months, we re going to be over 3%.
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It might be temporary.
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That s what the Fed s talking about, because there s a base effect.
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When you come off of a depressionary economic collapse like we had in the second quarter of last year, you get a very low base effect.
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A lot of things can look very strong year
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We ll see if the inflation continues.
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When you look at the yield on bonds, you compare it to the yield on stocks, it s the inversion of the PE, what you get is that as overvalued as stocks are on traditional stock market measures, they re actually below average in terms of their valuation versus history versus Treasury bonds, just say the 10-year Treasury.
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As overvalued stocks look on equity metrics,
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Bonds are actually, they actually look better than median relative to bonds, stocks do.
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Now, having said that, I would think the US stock market is not a very strong investment for stock markets.
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I think you re going to be much better off in foreign stocks.
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For 10 years, you were far better off in the S&P 500 than virtually any other stock market in the world.
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The United States outperformed non-US markets by about 300%, incredibly, a triple the return.
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And one thing that, uh, when you have extended trends, a lot of times people say, well, this is really extreme, but I always like to wait and see that that trend, if it s really persistent and virulent, uh, starts to lose momentum.
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And that has absolutely happened.
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The United States market is not really outperforming the other world markets anymore.
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If you go back to about two or three years now, uh, the markets have been acting largely similarly, even Europe.
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has been keeping up with the United States over the past year or so.
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And Europe had been a real failing, a failed project there for a while, and still looks like there s some issues as to whether they re really going to keep it together.
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But emerging markets, not doing well in the last few weeks, but emerging markets have stopped underperforming.
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So the trend of the US outperforming is no longer convincing.
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These other markets are at least keeping pace.
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My view is that when the dollar really does begin to fall in earnest, and it has fallen, but only by about 10% since June of last year, when it really starts to fall, it s quite clear that the foreign stock markets for dollar-based investors will be far more rewarding, because you will own an appreciating currency versus what your consumptions is denominated as.
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I think you should own foreign stocks, finally getting to that protection question again.
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Foreign stocks, I really like Asia, primarily, because I think the ascendancy of China has clearly spread out to Southeast Asia.
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That, for me, is the stock market to own.
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You get a little bit of Bitcoin, a little bit of gold, a little bit of real estate, cash, I used to like because I thought opportunity would come.
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At this point, cash is probably a little bit better than it was a year ago, but I think I used to say 25% cash, now I say 10.
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Moving more into the real world, commodities look good to me too.
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It s hard for most people to buy commodities, but there are ETFs and there are mutual funds that invest in commodities for you.
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You really have to start thinking seriously.
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about where we re going with all of this money printing, because if history is any sort of a guide, you need to preserve your purchasing power.
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Now, meanwhile, we re talking about wealth taxes.
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Now, I understand the motivation for wealth taxes.
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There are a lot of wealthy people that aren t paying much in tax.
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That s a real problem.
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And that s been the case for years.
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I remember the 2012 election.
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Mitt Romney was running, and he actually turned over his tax return.
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And if memory serves, he paid a 14%
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income tax rate.
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I made about as much money as Mitt Romney did in 2012, and I was paying 50% nearly.
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There s something screwed up when you ve got people that have exactly the same economic circumstance, and one is paying basically triple the tax rate as somebody else.
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Yes, the tax code is one huge boondoggle.
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It s incredibly Byzantine, but I think it needs a total overhaul, not just partial overhauls where you just throw on a wealth tax because certain people
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aren t really paying the rate because there s shelters or there s corporate structures, et cetera, carried interest pass-throughs, all this stuff.
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I think that I understand the motivation for wealth tax, envy and economic need with the budget deficit being such a disaster, but I just think it complicates it because you re starting with a rotten
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The trunk of the tree is already rotten.
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So we ve got to get a new tree.
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So how do you think about Jeffrey?
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How do you think about protecting your assets, which are sizable in an environment like this, or what do you do?
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Are you, do people move to another country, but we re living in a world where, you know, the world is taking on these set value systems for the most part.
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What s what s your, how do you look at protecting yourself in a world that seems insane in this area where the math doesn t add up?
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Well, I think you need to, in my case, I m at the worst possible position in California.
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I got the highest tax rate and we re talking about a wealth tax.
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I have been working to have an escape hatch from California as a starting point.
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One that is self-sustaining, I like significant land holdings that
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have the ability for food, water.
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I m not one of these nutty survivalist people, but you get to the point where like I said, Bitcoin is an insurance policy.
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A few percentage points could really come in handy under a certain future.
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Well, I think the same way about farmland.
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I think the same way about good hunting property.
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It tends to be remote also.
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And people talk about doing asset allocation changes.
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People talk about doing lifestyle changes, but they don t execute them.
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They think about thinking about them.
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There was a great newsletter writer.
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He passed away about several years ago now.
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He wrote a newsletter for over 50 years.
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His name was Richard Russell.
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And he was out of La Jolla, California, a really interesting guy.
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I read his newsletter religiously for a few decades.
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He wrote an essay about action, investments.
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The most important thing is acting, not just thinking about it and staying at 60% stocks and 40% bonds, and just thinking that it s all going to be okay.
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At some point, you have to act.
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I would say the way you protect yourself, this sounds really sophomoric almost, but it s pregnant with meaning.
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You have to act.
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I actually have to do something about it.
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I m an escrow on 1,000 acre property, I m not going to say where it is, but right now, and that was the culmination of a year s work of research and effort and planning.
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It s amazing how what I learned through that process, I m not alone.
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It was shocking how many of these properties, I looked at ranches at first, I saw it on the ranch idea, but I looked at it at first.
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I basically gave up A, because I didn t really want to become a rancher, but B, it was a waste of time.
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I would find an attractive property and I d call up the broker.
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Usually, you call up a high end real estate broker and they call you back.
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They have an alert, they call you back in 20 seconds.
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They wouldn t call me back for days.
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I m thinking, what s going on here?
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They call up, they say, I m sorry, I m swamped.
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I m like 18 hours a day on the phone.
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I ve never seen anything like this.
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I said, well, I like this property here.
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They go, oh, that s under contract.
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Oh, well, how about this one?
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Oh, yeah, well, there s three people, they re getting close to the end of the negotiation.
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I m just a daylight dollar short on that concept.
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So there s tremendous movement that s going on.
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There s a lot going on underneath the surface in people trying to make sense of the curveballs that are being thrown at them.
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Where in the world is there still opportunity and freedom and perhaps a secure financial system?
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Is there such a thing anymore when the world is so interconnected?
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If someone lives outside the U.S.
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or wants to move outside the U.S., I m sure you ve thought about it, I would assume, where in the world is that opportunity still?
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I m afraid that, unfortunately, this chapter in history is leading to, there could well be no great place to hide.
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I m mindful of Janet Yellen, you mentioned her earlier.
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She wants a global tax.
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Now, that s a really disturbing sign, because one of the ways that, as bad as our taxation system is, one of the things that keeps it from getting totally out of control, at least other countries have lower tax rates.
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It s a little bit of a competition that goes on.
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There s lower tax areas.
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Donald Trump lowered our corporate tax rate to 21%, making us competitive.
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If we raise it back up to 28%, then we re not going to be competitive.
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What do you do?
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Well, you try to encourage the rest of the world to have a minimum tax too.
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I don t think we re at a spot right now in terms of our global position to be dictating what other countries should be doing.
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Certainly, China s not going
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I just don t think we re in that position, but it s always troubling once the dialogue starts, and they re not even kidding about it.
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Is there anywhere to hide?
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I don t know.
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I think for the time being, you just want an escape hatch.
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For me, I m still okay with the United States.
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People tell me that New Zealand s a good choice.
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I haven t researched it, but I m also told they re getting a little bit less accommodated because too many people.
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are trying to find that as an outlet.
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It s troubling, but we will get to, I think, a lot of volatility, a lot of problems in the next several years.
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I think we will then have truly a moment that we decide that we need to restructure.
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This is a long term problem that s been going on and history is replete
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with examples, and there have been many philosophers that have thought about why these things happen, and one of them was Karl Marx.
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Now, Karl Marx was not a communist.
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They overtook his ideas, and he actually, late in life, said, if this is what communism is, I m not a communist.
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He was really a political philosopher, and he wrote brilliant essays about how there s basically a productive economy, we ll call it the means of production,
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It can have tremendous innovation, the telegraph, railroad, radio, television, internet, social media, they can have amazing advances in very compressed timeframes.
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It shakes things up a lot in terms of what s being produced and how, but then there s also the property relations, as Karl Marx calls them, and that s the society s organization.
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That s how do we split things up?
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Who benefits from the rewards of the means of production?
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How do we tax?
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How do we organize government and all this stuff?
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And unfortunately, while the means of production can be revolutionary in terms of the way they change, the property relations are by design almost calcified because the people who benefit from the property relations don t want them to change.
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It s tough to change them anyway, because it s difficult to undo all these societal compacts, but they don t want them to change because the people with the wealth and the influence, not surprisingly, want to keep it.
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As the pressure builds on reorganizing the property relations, the powers that have the most ability to affect that change resist it.
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They do exactly the opposite of what would help to make it a more peaceful transition.
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Ultimately, the tension between the radically evolving means of production and the calcified property relations becomes so big that you just have to blow it all up and start with a system that is more in line with the newly evolved or revolutionized means of production.
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I think that s where we are.
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There s a great book.
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that was written in 1990s, mid 1990s by a man named Neil Howe, and he spoke of all this.
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I ve become friends with the guy.
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When I met with him for the first time, it was probably 10 years ago now, we talked about his book, The Fourth Turning, and he predicted the global financial crisis in that book.
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He predicted that there would be a global financial crisis based upon demographics alone.
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He s a leading topographer.
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He predicted it would be in the middle of the OOs.
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Now, that s pretty good.
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He talks in terms of four turnings.
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The first turning is the new system, and it leads to tremendous harmony, belief in institutions, and a platform for a terrific society and growth.
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It s just like Karl Marx, as you go through the evolution, you get to the fourth turning, where the system just isn t working anymore, and it has to be reinvented.
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I really deeply believe that that s where we are.
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In 2016, famously before the primaries even started, said at the Barron s Roundtable that Donald Trump would win the election.
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He was 1,001 odds in the betting market at that time.
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Then I said, when he won in 2016, I said, if you think this election is weird, 2016, wait till 2020.
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I think I was right with that prediction, because that was a pretty weird election.
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I m going to double down on that.
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If you think 2020 was weird,
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You ain t seen nothing yet.
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The economy, this is really important, Tony, the economy is not out of the recession yet.
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I know that we ve had huge growth based upon government spending for a couple of quarters, but I ve got a different way of looking at the economy than what they teach in high school.
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They say a recession s over when you have two quarters of positive economic growth.
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I don t think that s right.
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I think the recession s over when you go to a new high.
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You take out the old high in economic growth.
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We still have about a trillion dollars.
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of GDP that needs to be made up before we get back to where we were pre-pandemic.
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The economic growth that we have is completely bogus, of course.
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It s just demand that s going to our trading partners.
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I think where the risk lies in the near term is that as these stimulus programs have become relatively common, I think people are going to have a difficult time taking them away.
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I think that people who are relying upon this government money have been getting it enough times and for enough length of time that they probably won t be able to easily adjust if those programs disappear.
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In a certain sense, I think that we re on our way to a universal basic income and wealth tax.
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Maybe it s by diabolical design, or maybe it s just a consequence, an unseen consequence of what we ve been doing.
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We ve exploded the budget deficit so much with these money giveaways, and there seems to be no end in sight.
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There s another couple trillion staring us, barreling down the tracks coming right for us, and that creates this massive deficit.
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at some point, people said, well, we ve got to do something about this deficit.
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We ve got to take the money from the people that have the money.
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In a weird way, we ve put the cart before the horse.
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We did do a wealth tax to do universal basic income.
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We did universal basic income, I think, to side our way into stronger support for wealth tax, but I still don t think it s a strong puller, but it might get to a
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to a majority opinion.
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Thank you for that.
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Even before the spending, one of the concerns I ve had, and I ve talked to multiple presidents of the United States, last time was with Obama, was saying, listen, we have this technology, the wealth gap, partially, is it not being driven by technology because labor is worth less than capital at this stage?
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And you re seeing this transformation that s happening with AI, with robotics, with algorithms.
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And we used to think, oh, that s just going to be blue-collar jobs.
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But if you look at the manufacturing industry, obviously, we ve seen that happen.
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But you re seeing in the service industry, because you look around, I was saying to the president, I said, and to each of them, I said, there were 5 million jobs that were lost during the Great Recession.
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And there s 5 million Uber drivers, taxi drivers, and truck drivers.
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If you took one technology, all you took was self-driving trucks and cars.
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And when is it going to happen?
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Three years?
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Five years?
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Ten years?
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Certainly within ten years.
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What company is going to pay someone to work eight hours a day who complains and give them health benefits when they can have a truck that drives 24 hours a day and they can write it down?
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You look at this, and then you and I both know in your industry, right, you know, we ve seen the quants and what s happened there, I ve seen these giant hedge funds, the number of people cut by a half or two thirds in some cases.
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So guys making a million dollars a year, it s not a blue collar worker, the whole world s being transformed by it.
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So the answer I keep hearing is UBI, UBI, but you and I know enough about humans that
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No matter how much you give them, it s not enough.
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Plus, we need meaning.
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We don t just need money.
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We need meaning, something that we feel like our life matters, right?
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And so all these answers of UBI, I just don t buy it.
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And I m just curious, what do you think happens in that scenario?
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Because you look at, we used to be, what, 80% farmers.
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And yes, we went from 80% to 4% or 3% farmers, and we feed the whole world.
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But that was over 100 years.
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The curve on this, as you and I both know, is like that.
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So to me, before all the spending, that was my biggest concern.
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It s like now s the time to retrain these truck drivers, show people how to be productive.
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No one is doing that.
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I m curious what your view is about the disruption of technology to labor and what has created this wealth gap.
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Is it really technology or policy?
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What s your view?
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What s the solution in your mind?
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You ve said it already.
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I m certain that technology is at the center of
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of a lot of these issues that you re bringing up.
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One thing that was a benefit from all of this robotics and technology and stuff is it really kept inflation away.
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Certainly, wage inflation, that ended up turning into a problem.
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In essence, this explains part of the Trump phenomenon.
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But yes, if you limit, once you get self-driving vehicles, it s a massive unemployment problem.
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There are states... Right.
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And it s one that is not really, you know, science fiction anymore.
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You see these things driving around.
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Years ago, like five years ago, I did a speech at a big conference in Boston, and I saw this Google car, and they had a guy in it, but it was driving itself.
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It was driving down the highway there in Boston.
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There are states in the union that 75% of the jobs are drivers.
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This is a massive problem.
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Now, one of the things that, and wealth inequality clearly driven by technology, we have massive
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monopolies that have been aided and abetted by the structure of the government.
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We also, but you mentioned retraining or focusing on training.
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That is just amen to that because we have such a broken educational system in this country.
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And it s so sad that we couldn t get into a time machine and go back 15 years and restart evolving our educational system.
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because people don t have trade schools, they aren t being trained skills.
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I don t know what it s like in other parts of the country, but here in Southern California, if your dishwasher breaks down, and you call up a repairman, a guy shows up, every time it s a Russian guy, and they have PhDs and stuff.
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They re incredibly trained in basic work.
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And our educational system has gotten so screwed up because we ve got this idea that a BA in, I don t know, culture studies or something is somehow the American dream.
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And these people get out, they have debt, and the system is designed to facilitate higher tuitions through the student loan programs that are basically issued by the government.
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And people are coming out with
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basically no skills.
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I mean, I had, I had a receptionist that went to Harvard, you know, a few years back.
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It s just, it s just amazing.
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So that s all part of the restructuring of society.
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We need to get also, I love this idea that the American public now pulls very strongly that they think funding, public funding for schools should follow the student.
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It shouldn t be that because of what geography you re in, what zip code you re in, you get so much funding for the public school.
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The funding should be choice.
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Charter schools have grossly superior outcomes from public schools, particularly in the inner cities.
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It s criminal that these people don t have any educational opportunity.
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One of the consequences of our welfare system that is so troubling to me and our expansion of it,
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is likely to make it more troubling, is we basically made a pact that was possibly well-intentioned back in the 60s, but the pact was, if you re an inner city kid, well, or you re an inner city person, well, yeah, there s no opportunity for you.
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Here s an old couch from the Salvation Army, and here s a six pack of Pabst Blue Ribbon.
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Sit on the couch, drink your Pabst Blue Ribbon, be happy and shut up.
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You re not going to have any opportunity and your children aren t going to have any opportunity either.
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baton passing of lack of opportunity based upon some of the ways society is structured.
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We need to change that.
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And I like the fact that the American people now seems to get it.
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They seem to get that there s something sort of wrong with the government-controlled public education system that is not fair at all.
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Schools are not equal at all.
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If you re going to have publicly funded education, schools in the inner cities should receive as much money per child as schools elsewhere, and they should have a quality education.
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You can tell that I really am passionate about this, but it s one of the ways that we need to solve these problems.
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Well, also the school system now, at least the university systems, has seemed to created this, you know, one of the challenges I perceive we have, and I don t know if you agree, is we have a capitalist society and we don t, we teach people to be consumers, not to be capitalists.
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They don t have a perception.
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I need to find a way to add value.
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I should just have not equal opportunity, but equal outcomes.
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Who can disagree with equal educational opportunity?
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I can t see anybody who could disagree with that except elitists who closed down public schools and
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send their own child to a high-end private school that s never been closed.
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I mean, it would be nice if there was enough education of the electorate, people realized that there got, I m sure politicians have always been of a certain ilk, and there s probably all kinds of hypocrisy through history of politicians, but this gets people s goat pretty badly that, you know,
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Do as I say, not as I do.
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But if we could somehow agree on one major issue that could make a difference, and I think it s education, particularly public education is being handled, it would at least give us a common goal.
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We have a common goal, we have common problems, we have commonality, and we will get there.
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It s just a question of how bad the tension has to get.
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before we realize that we re better off together than we are fighting each other.
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So would it be, it s an oversimplification and generalization, but I ve always said, would the optimism be in you that what always follows winter is spring and that we re in the midst of winter, it s pretty dark,
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It can be pretty intense.
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No one knows for sure what that s going to look like.
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But as the fourth turning shows, then we come into this new system with a new level of trust or connection once we go through the hell.
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Is that is that what gives you optimism?
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Is the the the future is better than the present because the present is hitting a threshold.
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It s always darkest before the dawn.
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Yes.
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Yes.
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So we re on the you and I are on the same page in there.
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And I interviewed those guys.
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He had a partner back in those days who since passed.
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There were two authors of The Fourth Turning.
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I interviewed them in 1993, so I ve known about them and shared with people for almost three decades, so we re both equal fans in that area.
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You ve been so wonderful with your time, and thank you.
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This has been a very stimulating and disturbing, which is important, because without being disturbed, people just keep doing the same shit, as you said.
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They think about it, they talk about it.
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The action, as you said, is probably as simple as that is, and maybe the most important part of the conversation for everybody here.
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And not many people are waiting for the perfect guy
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As you and I both know, there is no such thing.
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You know, we ve talked here about investments, that if you know everything about the investment, the opportunity is already gone, right?
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And so that s what people are looking.
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We have to use imperfect information to make the best decisions we can and hopefully diversify enough to make things work.
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Jeffrey, you ve been amazing.
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You ve been so generous with your time.
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Blessings to you and thank you for all you ve given us.
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Of course, Tony.
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The Tony Robbins Podcast is directed by Tony Robbins and produced by the Tony Robbins team.
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Copyright Robbins Research International.