Episode 30: Building a Crypto Empire with Yat Siu - The Network State Podcast

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Yeah, welcome to the Network State Podcast. I'm glad to have you here. Thank you for having me. It's great honour to be here and excited about our conversation. Awesome. And for those people who don't know, just give me, give the quick background. Animoca, you're a large investor, you're gaming, you do all kinds of stuff. Give me the give me yat and yat. Yeah, I'm, I guess the quick snapshot is Animoca today is probably one of the biggest investors in Web3 particularly you could call it in the altcoin segment of think of. So of course we have a lot of Bitcoin as well. We have over 600 portfolio companies to date. We started with gaming. That's what we're known for, but we're in AI and DPN and all sorts of things that L1L twos as well very much believe in this construct of the shared network effect. This why we sort of invest so broadly in SPACe, but we're maybe a little different is that we're not a fund, so we invest out our own balance sheet. Interesting. OK, so. Everything is basically out of

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our own balance sheet and. What did you start as? Tell you what, what what what? Where did the balance sheet come from? Like Google, for example. Google funds, Google ventures out. Of the gaming company Game Company. We still a game. Company, we drive revenue from that and then we were once a small listed company in Australia and you raised capital for some of our first acquisitions like the Sandbox for instance, or investments instead of Axie Infinity. And that took off a lot back in the 2122 sort of I guess NFT, Ethereum peak days, which hopefully will come soon again, at least on the Ethereum side. And we obviously monetize that, continue to invest, you know, and, and with the ecosystem and we believe in that. I think the other thing though, is that we are now also operating in the SPACe. So beyond being an investor because of a balance sheet, we also create yield from the assets we're basically trading and we're also helping companies

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launch their tokens, doing an advisory type business. So it's expanded a lot more from that. And we're like almost 1000 people worldwide. So we're not a small operation in the crypto context. Last year, we had over $300 million of revenue with about $95 million EBITDA operating wise and we're sitting on billions of dollars of mostly Altcon assets and of course the healthy chunk of Bitcoin. Very, very, very impressive. So thank you. You know, one thing that actually I think makes it even more impressive is gaming has always seemed to me to be very hard. And here's my understanding as to why. First is it's like gaming is creative. And so it's kind of like writing a hit novel or like making a hit movie. You, you know, yeah, I'd love to

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order a hit movie on Command, but it's not that easy to do right. And especially even a hit movie that stands the test of time is even harder to do. So you might get a spike for a game and then people get tired of it and it goes away #1 and then #2 it's also very technically hard because people might have patience with a SAS interface and so and so forth. But everything needs to be a, a, a for like an, a, a, a game. And so, you know, this something that one of my friends has talked about, which is the Silicon Valley or the tech way of building user interfaces, which is, you know, HTML, JavaScript, CSS, which has long page load times and so and so forth. Versus the open GL or the, you know, the basically the 3D graphics way. You know, whether it's Unity or it's Unreal, like that way of building interfaces is vastly

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more responsive. It's more rich as an interface. And in theory, there's this enormous gap between how we build business interfaces and this alien technology that's out there, right. And one company that's actually somewhat used that or not somewhat diDeFigma where they did web GL in the browser. And that was a big part of how they were able to do what they were able to do. It's also why it takes such a long time to loaDeFigma sometimes, because they're basically loading a SECond kind of thing within the browser and uses hardware acceleration and so on. So Figma shows what is possible maybe with like gaming. And now of course, I'm talking about AAA desktop games as a sync for mobile games, but mobile games still have the mechanical issues, creative issues that I mentioned. And now you get to AAA gaming in mobile as well, right? Yes, that's right. But I think maybe just to sort of encapsulate, as we were

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obviously still are, sort of, you know, building games. One of the big misunderstandings around games is that you have to have super high quality. It's kind of like saying, hey, a good movie has special effects. It does, but not necessarily right. A good game is actually based on the content. And frankly, one of the big, I guess misnomers is that they treat it like a movie. They say you watch it as an experience or you like it's episodic. And I think it has to do a lot with the history of gaming, you know, which was very episodic in nature. But you know, there's this thing. In the casual gaming, kind of. Thing casual gaming or even even storytelling based games or because you couldn't do multiplayer gaming. No, I mean, it's like you're saying it's an alternative to the episodic storytelling games. With the casual games, you just pick up and just start. Yes, yes, exactly. But what? But what makes gaming so different from something like hit driven in the classic

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construct is that most of the people play games for social reasons, right? As opposed to when you watch a movie, you watch the movie one time and maybe there's a social thing, you go to the cinema together, but the social interaction isn't as bound In gaming. We have this thing called Bartles taxonomy where we basically divide sort of gamers. And it's a it's a crude form, but it's one that we generally follow into the four categories, right? The first category is killers, right? It's like 1%. These are these are the psychopaths basically just play games because they're just like to off people inside a game, right? OK, like, you know, like in the first person shooter, just enjoy that. And then you have the achievers and the adventurers, right? And cheers and adventures are actually the ones who are playing because they like to level up. Cheers, Want to collect all the badges? The adventures? Want to see the whole game experience? It's for the love of the.

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Experience and of course, carry the socializers. Basically social, right? Yeah. And what? Do you call? What do you call? Them, we just called them the people there, social, social socializers, sure. And they are 80% right now. You the perfect example, the exemplified example of this Roblox. When you ask any of the kids or anyone who plays Roblox, do they play Roblox because it's great adventure, because you can kill other people or something or it's for leveling up. They'll tell you it's because their friends are playing it. It's funny, The thing is like as a kid, I definitely played a lot of games and I stopped playing games because you an investment into Final Fantasy umpteen or what have you. I don't know what number they're on 16 or something like that. Whenever. Yeah, yeah. From probably 30 at this point, yeah.

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It's like, it's like a solid 80 hours of like waking time, right? A single player game. That's right, that's right, that's right. But in the multiplayer games, you know, Goldeneye or, you know, obviously I'm dating myself for this late 90s or, you know, Quake, whatever. I started with Paul, so yeah. Yeah, yeah, yeah, sure, sure, sure. So, so the thing about those is, you know, it was fun, but I think one thing I found is there's so many games now that if you Scroll down Steam or something like that, they they kind of all blend into each other or what have you, right. Like there, there was less, you know, back in the 80s. I don't have to be all nostalgia, but in the 80s or 90s it was harder to get a game out, so there was more editorial control over it. That's.

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Also the cost of and the. Cost was hard, right? So you had genuine originals like Zelda, Metroid at the time, Final Fantasy, Dragon Warrior, Castlevania, right? And those were all like, you know, those are still flagship titles today or what have you, right, Even though it took like 10 or 20 years to reboot them or whatever, right. But I think just the sheer crush of titles that are out there, that's why I'm very impressed with how you managed to build a business out of it and a enduring business. I mean, obviously you've gotten into other areas in web and crypto, but like, you know, for example, is Angry Birds still doing well? Well, no, but that's because a Rovio sold itself. OK, build a franchise. But it's like hard to make a repeatable. It's like, oh, I remember that game from like five years ago or

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10 years ago or. Something so I think there's a lot of parallels to when you think about the roots of crypto and gaming because gaming audience is what they do ultimately, they build a brand and become a media company. And when you think about the foundational level of a lot of starting crypto, including even Bitcoin at start, it's tribal of a kind of belief system for us. I see. So let me see if I get your point. You're saying retention in a game is about retention of the social network underpinning the game, correct? Yeah. OK, Zach is a good thesis. And but then what happens is, is that you start off by creating a following and a community. And, you know, with Final Fantasy, for instance, you've got this whole generation of people who grew up with Final Fantasy. Yeah. And they'll keep playing and playing and playing and playing it. Right. It's the franchise value. See, the same in the movie industry. Yeah. But you know, they haven't yet created. And that's more, I think, an

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issue related to Square Enix than the Final Fantasy community in and of itself. To create a social network out of it instead. They do have Farvesi online, I think there's. Reasons, yeah, but that hasn't done that hasn't done good as well. and frankly the social network of these gaming communities have been mostly Co opted in the platform such as Steam. So Steam. Steam That's right, because you're right. Discord right they're the ones who captured it and then they became the agents of distribution for these games you know it's. Interesting actually, as you mentioned that such an obvious point that for a reason that's it's kind of like Uber commoditizing the cars, right. Like, you know, car companies spent so much energy in differentiating a Ford from a you know, this from a that and then the last time you took an Uber or Grab or whatever, do you remember the make of car? No, no, right.

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So that brand, what you remember is you took an Uber or grab or something. Even then, you may not remember Uber or Scrab, but you remember right That's. What TikTok is doing for creators, unfortunately. Too Yes, that's right. So you remember TikTok, but the creator themselves just like channel flipping or what happened, right? That's right. And it's interesting because that's the fix. You always kind of re centralized around something because you can't remember everything. So the fixed point is the TikTok, the Uber, the Steam as opposed to the content, the car or the gaming creator, right? And it's where your prime identity lies, Yeah. So if your ranking is on Steam, then you care about that ranking over time, as opposed to the ranking is only in one game. It may not transfer to another game, and therefore it's not as valuable unless you have a following over generations and it's embedded over time.

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So Final Fantasy has the benefit of being a franchise that's been there since we were kids, right? Right. And so that's something embedded in US for decades. But if you're a new franchise, you really have to understand how to utilize the power of these social networks and how to basically sort of build community constructs from it, which bathing it is no different than launching a token. Right. So it took me a long time to understand this quantitatively, but right, essentially my my view is because people would speak at an abstract level about brand, for example, right? And eventually I was able to articulate a brand is the collection of words and images that are evoked when someone says that phrase. And feelings. And feelings. Great. OK.

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So again, very left brain. Yeah, exactly. You're right. Feelings. You're right. Feelings. You want to know exactly right. Yeah. So that's right. We're not all computational, despite what some people might think I believe. Exactly. That's right. So actually with LMS, you can actually make that very clear today where you could literally type in a string, you know, Coke, Pepsi, you know, something like that, right. And then you can obviously you can pull up sentiment analysis over time. So you can also pull up, give me every word, phrase, image, etcetera, etcetera, that is associated with this person, place, thing, what have you. And then you know, score them for positive or negative sentiment, right? And you can actually realize that actually brand is just about the media you consume. And it's almost like the atomic linkages to other words and

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images that surround it and feelings and so on and so forth, right? And so therefore, like it's interesting to think about like with Disney or Final Fantasy or something like that, that has built brand value over decades. What is different about that, right? What is, well, first is they were able to build it over a period where there was a less competitive media environment. That's one thing. But it is possible certainly to build brands today like, you know, you can in some ways build a brand fashion ever before, Like Brian Johnson has built a brand very quickly, right? Like don't die and so on. Like live forever. YouTube obviously came up like this. TikTok came up like that. But if you look at Vincent on YouTube, is it YouTube or is it the content that you experience on YouTube that actually gave you that impression, right? You're not well.

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What I mean is youtube.com right? tiktok.com. Snapchat yeah, it's not, it's not easy to build these giant multinational, you know, corporations, these these tech platforms. But it's possible to do so, right? And in some ways, it's actually, I think it's easier to do so than to retain an old brand. Right? Like one of the things that's been interesting to me is seeing something like the World Economic Forum radically decline in prestige. Sure, right. It went from something that in the 90s or the 2000s, I was always spoken of with a positive connotation, like an elite connotation in Time magazine or something like that, to something where Time and Newsweek themselves fell off. When's the last time we've readtime.com, Right? Like long time ago, right? and then the things that

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they would praise are now what was interesting to me is the World Economic Forum had its brand attacked by not elite media, not prestige media, but it's an enormous mass like Groundswell, right? But now it's something that it worked in. Go ahead. But it's also related to the distrust institutions, which is basically happened over time, right? That's right. But so because of that, I think it's interesting because things like Final Fantasy or Zeldare kind of outside of that distrusted institutions. Those are games. They're like nostalgic products in some ways. Their brand values going up even as the institutions that existed then go down. So I think the talking about topic of brand, the way we think about brand the power of brands, you know, in the commercial construct, you might call it goodwill, right is you know, as humans, we are guided by emotions and feelings we feel

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and that actually that network effect ultimately say something I love. Yeah, is. The most powerful thing? Right. So when you love and have passion for something, whether it's a green movement, whether it's a cosmetic, whether it's whatever, so to build a brand is the feeling that it evokes in you. And maybe an example I can put is like, you know, do you remember, like what's your favorite childhood food, something that you remember? I don't know. Like what's a good question? I don't. like, you know, like, is it some pudding? Is it some? Pineapple. Pineapple. OK, so when you eat a pineapple today, does it give you that feeling, that emotion, that every day of the child? Yeah. Well, I mean sense and smells and tastes, yes. There's something else that's

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interesting about what you're saying there, because that's also the stuff that you can't put online yet. Yes, right. And it's what makes us human as well, and it's our part of our psyche in psychology. Right. So sights and sounds you can put online, right? So the eyes and the ears, right touch, you know, you've got the haptic stuff. It's like kind of kind of get, you know, it's slow to get there. But you know, Apple just released that movie. That's like a rumble movie. You know what I'm talking? About yes, yes, yes, yeah. And what it is it's it is interesting technically because it's a movie about like cars, you know, Brad Pitt cars driving around, whatever. And it's, you're supposed to hold it and then your thing rumbles when the car moves or something. And I was like, oh, it's a gimmick, right? But it's actually kind of interesting because it's like a third track. You know, when you're editing a video, right?

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You've got the video track, you've got the audio track, and you've got the haptics track, right? And the haptics track starts off as this really kind of kind of dumb thing, which is like the magnitude of the rumble strip, right? But eventually it could be like your omnidirectional treadmill or your massage chair or something like that's actually doing more or maybe your neural link or whatever, eventually, right? But the neural link is hard because sending signals in as hard and making it rumble, I don't know. But coming to your point, the sights and smells, because they're hard to do online are an interesting thing to compliment the online. This why maybe some of the French companies may do well, like the perfume companies, right? Like what is a compliment to the digital is something I think a lot about. Go ahead. Yeah. So I would say when you think about one way to think about it, I don't know how familiar you are thinking about sort of, you

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know, Jung's archetypes. Right. Yeah, yeah, yeah. And the reason why people talk about archetypes this way is and why those always used in storytelling. Jung Jung. Right, Yeah, Jung. Yeah, right. Is because whether it's a hero archetype or whether it's a savior archetype, whatever that type is, it's a story that is so embedded in US and it's things we brought up as from, you know, kids stories to whatever culturally that when you retell the that arc of story, it works, right, yes. And so we keep rebuilding these sort of stories in real life. We make them into these heroes sometimes as well because it's what we're familiar with. And we see this in some of these sort of arches, whether it's a villain arch or whatever arc. And I would say that's again, the feelings that are invoking us and they're deeply embedded within us.

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And so when you build a brand, it's about how we create that feeling. So when you look at, for instance, something like a like, you know, like a, you know what, what, what do you think of Nike as a brand? Well, then they say, you know, just do it right? Well, just do it is like, what the hell are you saying? Just do it right? But it's a feeling of that you can do it and that you can achieve it, right. And when they show a successful athlete running with the shoes, it's not to say that I will actually physically run better. It's the feeling of running faster even if you're not running faster at all. Right. Like, what's really the utility difference between an Adidas shoe, a Nike shoe or an on shoe or whatever shoe that's out there? Frankly, minimal for most of us. Yeah. And yet we choose it because of how it makes us feel. And that's the power of brand. So I think there's there's something to that absolutely. Of course, you know, another thing, there's a Meta rational

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thing where why does somebody buy the product which is advertised, right. Well, in part, if they can afford the money to advertise, they probably have higher production values and attention to detail than the one that doesn't. It's almost like a, you know, it's like a correlate of argument which says if they can pull off this Polish ad, of course there's a much more rational way of explaining it than, you know, I get I'm left framing it or whatever. Yeah, so, but if they have the attention to detail to have a good ad that gets your attention, then they probably have the attention to detail on the physical product itself. Now, that's not always true. In fact, there's a lot of stuff now it. Also depends on what you value, right? Right. So I grew up. It's interesting cuz I grew up in Austria in the 70s, right as

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a child and we never spoke about money because it's a very European thing, Yes. And in fact, if you talk about money, you're like weird, right? And in contrast to something like Dubai or Hong Kong or even Singapore, you know, you could sit at a dinner table and you talk about real estate, you talk about the stock market, so. What are they talking about? In Europe? They talk about food and philosophy. Culture, not necessarily just philosophy, just things that's happening in news. Maybe a little conspiracy theories these days, who knows? But the point is that they don't talk about money because it's not a concert that you share in. And as a result, it's not valued as much because you're not measured in that, in that. Ballpark, it's sort of like an academia where in academia, I just think back to that culture. We talked about papers and we talked about graphs and charts and what have you and. Findings, Knowledge, Research. Finding sellers research.

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These are things that aren't traditionally looked at in a sense of capital, although they are capital too. Yeah, different forms of capital, but you they couldn't measure it in the same way that you measure money. And so I think what money did was it created this way in which we create a quantitative figure to your status, right? So hey, you're a millionaire that gives you a certain status, right? And that is has more meaning in a place say like Hong Kong, for instance, or in the US than might have in Europe. And as a result, you have different people attached to stuff. And you'll see that people are much more thinking about the value of the mission of a brand in some countries versus in others where they might just simply say, well, is it cheaper, right? Or is it better versus this what they're doing for the environment and therefore I'll

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buy that, right? And so there is this sort of this triple bottom line effect that happens depending on your societal sort of circumstance. You saw this in China, for instance, where in China, China was not a good luxury market in the beginning cuz everyone was just basically surviving, right? Yeah, yeah. And then actually when the market improved and the middle class was rising and there was sort of excess money. Suddenly everyone started buying luxury goods, but it wasn't just because of branded advertised marketing. It was a symbol show. They made it. Exactly. It's that symbol show they made it. It was a form of projecting, a form of let's say new found power and I guess way of feeling better about themselves. And then it was became became self reinforcing. Right. Yeah, that's right. I think what's interesting is, you know, when you and I were growing up, basically there was no, I'm not sure about you, but it certainly there was. You might have seen a

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businessman or something like that on TV in the 80s or the 90s, but it was not like thought of as a path that you could. There's no obvious kind of route like, you know, write some code, start a company, get venture. Whatever that may be. Could be code, could be farms, could be whatever. Yeah, I mean, we certainly our parents generation came from a time of true scarcity. Good. So we had to worry about literary food on this table. Yes, that's right. You know, like how how to do that. This not something we care about today. And even in the so-called, let's call it lesser sort of once we're not as well off the notion that you can't put food on the table, for most of them, it's just simply not true anymore. Yeah. I mean, this the thing that people don't get how much the

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world has changed in 50 years. Yeah. And The thing is, I would argue it's changed a lot more in the last few decades than it did for there was a degree of, you know, yeah, yeah. There's a degree of freezing in amber that is now coming uncracked, right, very rAPIdly, like the speed of political change, technological change is accelerating now and it's going to probably accelerate, you know, for a while. And one way to think about that is to be less trivial about it. There's many different kinds of exponentials or, you know, the ramp or playing obviously there's, there's crypto, there's AI, there is actually biotech, which people aren't monitoring as much. That's like the shoe that hasn't dropped like the ABC of AB, right? OK. I bet there's drones and it's a

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major one and more generally robotics and self driving humanoids. That's all real now, right? There's, you know, I think Jordan Peterson observed that just like Tinder alone is this enormous disruption to how humans have interacted. And it's just one of you may not, you know, you may not even think of that as like the number one exponential, but it's like, you know, huge disruption to how humans have interacted over over time. There's that graph that shows like how people met their partners and like Internet just dominates everything, right? I. Remember it was back in back in the 90s when I started, I was meeting people virtually and in real life. Getting together was like a big deal. It was like, yes, Oh my goodness, like I don't know who you are. Let's meet in this restaurant and let's just hang out for the first time. And now it's like.

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Push a button, Yeah. And so I think sometimes when if all the friction is being removed from something, then there's another layer where it gets recentralized and added or whatever, like we were talking about earlier, right? And so like the Internet is sort of liquidated, liquefied, all kinds of previous, you know, one of my views is nothing that wasn't built on the Internet will survive the Internet, right? Because what the Internet does is the Internet increases variance on everything. For example, you go from, you know, being a nine to five salary man to being a billionaire or, you know, like out of work by age or like increase the variance there, right? The Internet takes you from the 30 minute sitcom to the 32nd clip or the, you know, 30

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episode podcast. The Internet takes you from like, you know, an article in a newspaper to 140 character tweet or a giant PDF like Dropbox download whatever, right? So, and the reason it does so is it takes everything that was the mediator, the moderator, the middleman, right? And for good or for I'll, it just eliminates that because it allows people to connect peer-to-peer. It makes it more efficient. Well, more efficient, but it also removes all choke points, all centralization, all moderation. So for example, anybody can now yell at anybody and there's nobody in the middle to break that up, right? But anybody can now trade with anybody and there's no one in the middle to tax it, right? Anybody can now interact with anybody and then the border

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doesn't stop them for good or frail, right? And that means that essentially the entire world which had been bucketed into these countries, you know, like here's a bucket of Chinese people, here's a bucket of, you know, Germans, whatever, right? That after a lot of fighting and being bucketed into these countries, suddenly everybody's teleported into the cloud. It's like you dropped, you can take your MOBA, your mass. You know, you have 8 billion people dropped into a massively online battle arena called, you know, the Internet, right? Chinactually has its own continent over here because they've got the great Firewall, right? So they've got their. People are still able to come in and out basically, but yes. That's right. So basically they are they are the ones who have their own cloud continent over here. But the other 6 billion people on especially the Anglophone Internet are all like directly connected.

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And there's like a large, you know, mountain range that, but almost like the Himalayas that has, you know, China blocked off, right? and then there's like you can move back and forth, but there it's like there's some passage there, right? And so if you think about this, the geography of the cloud is different than the geography of the land. And if you have rivers and oceans and mountain ranges that are sort of the natural boundaries over here, up here, there it's languages and networks and then firewalls, right? And so the issue is that basically when you have the English Internet, you've got Americans, Indians, Europeans, people from all over, and they're all packed into one place digitally. And there's just this absolute mealy and free for all because nobody knows who's in charge or who's in control. Or it's it people are in control

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of the CEOs of the platforms, or is it the government that can regulate them? Or is nobody in control because of cryptocurrency? That order is being worked out now, and I think we're on the end of it. By I mean 20 years, a long time, but like 20-30 years from now I think digital borders and physical borders will coincide. I think it's kind of happened in a. Way, kind of. Well, it's happened. I mean, China in a sense is the forerunner of this. But if you take a look at fences, basically Chinese overseas, right, basically look at population, it's larger than the population of France, right, in terms of quantum and certainly Indians as well, right? They look at sort of the expat communities. I mean there are like you go to Dubai, may as well be India. Right. Yeah, right.

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Exactly 80%, yeah, so. So you can see that kind of transporting out, but what's interesting is that they move and bring with them a specific culture that is sort of part of their national identity. Yeah, that doesn't disappear despite the fact that the global Internet has brought everyone together. And it also allows people to connect with certainterests from those particular societies to combine them together. So I've what I see happening is if you want to call it nationalism or patriotism, there are pockets of this type of patriotism where I grew up in a time where you would describe a kid like me growing up in Austrias like a third culture kid, right? Yeah, right. Well, to me, this concept of third culture kid kind of is thrown out the air because everybody's that, everyone's that because we're. Everybody's Internet. Culture in a culture, we're all connected one way or the other. And so I could be a national of Austria or a national of America, but I could have affinity to someone in China.

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I could have affinity to Chinese culture. You know, I could love Japanese anime and I could suddenly be maybe in some ways even more Japanese, you know, a Japanese person, right? And so that is the part I think that society is struggling with as well, because you have that incredible divergent and you have an incredible diversity within a construct that is hard to manage. And I think part of that is because we don't have the traditional power structures to hold it together. The traditional power structures with education, centralization, your passport, your identity, your travel, right? You know, you, you maybe national anthem, whatever. These are ways in which we try to keep society cohesive. But because of what you described and also mediat large, we've now fragmented that open and now and actually that makes me more bullish on America because if there's one society

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that has managed to be as oh really? Yes, I mean, I understand. You know, we talk. About sure, sure, sure. But about Americas a nation. But when I compare to other nation states, China being the exception because it has more tighter control, is that very few countries can survive this type of mass diversity. And let's call it implosions and creation and destruction of societies and cultures within as America has, because it's done this for hundreds of years. It's kind of like it's it's Genesis and where it's a nation of immigrants, it's built in this foundation versus other places. So America's the only place where you can have this kind of creative destruction and which really upheaves an entire, you know, like like industry, which would completely be not allowed in Europe, would basically be defaulted in many, both places.

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And in many ways, China is responding what's happening to America. Like, for instance, we people talk about Chinas a head of AI, but Chinese being a head of AI is a response to America suddenly leading right in this area. Originally with, you know, with the when OpenAI, because remember, before OpenAI, it was like China with surveillance state and everything has full control over everything. They've got all the data, they're going to lead in AI. Then America came boom with something that was destructive, highly, highly creative, but also highly destructive for many, many industries. And then China had to respond in kind. Right. Yeah. So I, I feel like that's sort of interesting to see. And I think America's probably the only place they can do that, not counting small city states because they're smaller places. Like if you're a population of like 5 million, whatever. So let me let me let me somebody disagree with you and let me explain why. Yeah, it's because I think talk

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about America is a unitary entity today. Like, for example, think about Korea. That's very explicit. It's on the map, we can see it. Does Korea exist? No, North Korea exists. And South Korea exists. But Korea doesn't exist, right? Like if you said what do Koreans do, you get a very different answer for South Koreans and N Koreans, of course. And that historical vision didn't exist, you know, prior to the, you know, 30th parallel, 37 parallel. Sure, right. but now it does. And when I say Americans, I mean the United States more than, say, including Canadians, or I know, yes. But I would say it's the dis United States, yes, right. Like, there's no America. There's only blue America and red America and tech America. And so just like there's no Korea, there's only North Korea and South Korea. We can see that on the map. It's explicit, right? They actually have territory. They have governments, they have

30:36
laws that are incompatible with each other, and they point guns at each other and they hate each other or whatever. Right. Fine. So, you know, I don't know the very latest on creative politics, but, you know, they're still aliens. Yeah, exactly. And. It's not likely to come together anytime soon. No, exactly. That's right. So whereas blue American, red America, they kind of have the separate territories with blue States and red states. And the level to which they're polarized is widening over time where, you know, for example, 4, only 4% of Democrats marry Republicans, right, Right. And so you also have something where they don't vote for Republicans, obviously they don't even socialize with them. Essentially the starting in 2020 with a bunch of Republicans going to Gab and Truth Social and now you had 10s of millions of Democrats going to Blue Sky

31:23
right? And Threads and TikTok, the center has smashed into pieces like Twitter's acquisition was like AI think it was necessary and good that what Elon did. It's like a tower available moment where the old center, even the Internet center where Twitter was the center of the English Internet doesn't exist. You have X and you have Gab and you have truth and you have Farcaster and you have Noster and you have, you know, base and so on. And you have threads and you have blue sky and you have Mastodon and you have TikTok. And so the whole thing has gone just smashed into pieces and the digital succession has already happened, right? Like Blues and Reds have already split apart. The third thing in terms of which Americans can handle the thing that you're saying, they're tech Americans actually had a third group, right? The Internet Americans can ride the lightning, right?

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The Internet Americans, maybe that's 5 or 10% they can, they're, you know, they're born in the, in the chaos, right? Because startups are chaos, right? So they can ride the curves all the way up and that's fine. And that's a Malou that we know, right? Those are the people who are developing AI. They are developing. But let me ask you a question. What is America minus the Internet? Well, what is America minus the Internet? Yes. Right. Like is it successful? No. No, but I think, but I also think that in some interesting way the Internet needed America at start, Yes, it's sort of causes of pushed it forward and everyone had to adopt it because of America. Totally, totally. But I'd say his analogy, the Internet is to Americas America was to Britain. OK, so Britain obviously does America owe a debt to Britain? Of course it owes a debt to

32:55
Britain many ways, so many countless ways. It's culture was a fork of Britain. Yeah, right. And. Still maintain the English language self maintained. Language, exactly, all kinds of things. And they have a sympathy for Britain. They're not anti Britain, right? But they're 10X the scale of Britain. They're more progressive and more libertarian, more right. And the Internet is to America's, America's to Britain. Yeah, where it's like 10 XA scale. But dangling. But do you think America is not going to be America? Maybe America might not be America in the physical sense, but I think Americas the idea. Well, that's what the Internet is exactly, right? So, so basically what MAGand, and, and you know what was happening now in the US is MAGA has China envy. So they don't admit, right? Like basically I'll show you 2 graphs, right? OK, let's see it all. Right. This graph OK, shows. So let's let me just back for a

33:41
SECond. Imagine not a two faction model of blue red or America China, but A4 faction model of blue America, red America China and the Internet, OK, This first graph shows that in the year 2010, right? Essentially Google and Facebook disrupted legacy media, right? Yeah, they were at yeah, they were at 60 billion, some in revenue even to the mid 2000s. And they plummeted to like 16 billion revenue like a 75% drop in like 4 years, 5-6 years, right? And, and the Internet went vertical. So the Internet disrupted Blue America right? Around 2010, OK, At the same time, in a different theater of this giant social war here you see China disrupting US manufacturing and the colors are reversed. But basically, sure, this

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China disrupting red America. Yeah, right. So red America, in the same time that blue America is losing to Internet, red America is losing to China. OK, And the response to this, you've heard the saying maybe sometimes like, you know, go woke, go broke, right? But actually what happened was go broke, go woke, right? Right. First blue America lost all this money, then they politically radicalized the consequence and they starteDeFighting A2 front war where there's the anti tech tech clash, which started in 2013. And then there was the obviously the wokeness, which was an attack on red America because their pie was shrinking and they wanted to take back the pies from these two guys. You know, the red and Internet factions that taking their pie away, right? Red America felt the exact same feeling because they were under attack from China economic

35:16
attacks. So they felt right. And so they responded with Trump and Trump was both a fight against blue America and the trade war was versus China, right? So you actually have a bar brawl with the Internet, blue America, red America in China and the Internet in China in the mid twenty 10s were sort of taken aback because the Internet thought of themselves as Democrats and China thought of themselves as basically working collaboratively with the US manufacturing because all those CE OS who had missed moved the stuff overseas or whatever, right. And there was a trade partners and they were working hard for them to grinding. And the Internet in China were taken aback in the mid twenty 10s by all of this. and at first they took huge hits, right. Like the Internet, like all the way, you know, all the censorship, all of the attacks and CEOs and stuff over the, you know, SECond-half of the 20

36:02
tens, like Travis Kalanick, you know, getting pushed out of Uber, all that kind of stuff. And it didn't make as much headlines in the in the Anglophone world. But the trade war was a huge thing in China, right? Lots of companies had their IPOs crushed. All kinds of crazy things happened. And but then what happened after 20/20/21 is the tide turned. And then the Internet after 2022 really went on offense. China went on offense, OK. And now China started shipping cars and they flipped everybody worldwide, say basically they they took all these hits, then they figured it out and now only 15% of the revenue comes from the US. And they just went to a complete new gear after 2022, similar to the Internet had taken all these hits and they figured out a new gear. Elon acquired Twitter and we're, you know, we pushed with all in and all all of these kinds of

36:47
things, you know, with the like pirate wires, all the tech media, but really more of a basicness among tech just pushing in and actually, OK, you're fighting, we're going to fight, right? And in fighting, actually there was a victory, right Where like the internet's victory of blue America is kind of obvious at this point. China's victory of red America is obvious in China or anybody's looking at graphs, right? And yet there's still a rearguard action, right? What Trump is doing with the tariffs is actually mirrored by what Blue America is doing with less fanfare. Blue America has, for example, all these unions and media corporations that are anti AI. They're trying both to maintain a protectionist thing and protect what money they have against this Internet in China kind of wave. But the problem is that all

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media is going to be AI and all money is going to crypto. So the, the last strongholds of blue will will fall and all manufacturing is going robots and all military is going drones. And that's where China's totally dominant. And it's kind of like written. America is trying something there. And there's, there's I think it'll be something that comes out of that, right? They're, they're at least more productive. Blue America is just purely defensive. There's at least some attempt by like the tech guys, which is different than the Reds by the way, But there's, there's some, you know, there's some overlap between tech and the right over here to try to build like, you know, American dynamism and so on and so forth. Nevertheless, that is not price competitive on global markets with Chinese manufacturing because of this sheer scale of what China is. Yeah, right.

38:17
Expertise that have built over time, yeah. There's like 1.4 billion Chinese people and 77 million megas and China's export to every country in the world. And China's has the insane price competitiveness required to make a profit in Nigeriand Brazil and all these kinds of places. So they've got all their numbers completely dialed in. And really, the physical world is made in China and the digital world is made in the Internet, right? And when you see this, my analogy is to Europe in the early 1900s OK, so Europe in the early 1900s was the central of the world, right? You had Britain, you had England, you know, you had France and Germany. And this where culture was. All the Nobel Prizes were there, all the kind of stuff. And you get these barbarian powers on either side, America and Russia. And then what happened was these were the ones that had the growth rate, right? They were the biggest populations. And you know, they're they're they're Barbarians and somebody they weren't considered the

39:02
central culture. They had some things going for them, but they were always down rated relative to obviously it's Europe, right? What happened was Europe essentially, you know, after a lot of fighting inwardly collapsed. It went to socialism, Nationalist. Hitting wars the. Militating wars, exactly internal wars. And it ended up being literally split down the middle between America and Russia, between American capitalism and Soviet communism, right. And I think that's happening again today, where in the early 2000s, America was the central of the world, and after winning the Cold War, basically it was just the center of everything, and Democrats and Republicans and nobody really. Fights no more need to unite against. Yeah, exactly. So they just started fighting each other even more aggressively. And then the two barbarian powers on the other side were the Internet in China. And these are the growth rates, right?

39:48
Billions of users, you know, like the growth rate of China. I don't have to tell you the last, of course. Yeah, it's insane, right? But in a sense, they're both invisible to an American. The internet's intangible and China's overseas. So these growth rates, as crazy as they are, were also invisible, right? They were far away in some sense, right? Like I have to still, even today, persuade people of how important the Internet is or how big Chinese manufacturing is. It's simply not part of the. That they're thinking about. Well, they, they can only perceive it through graphs and charts, right? Like you and I have been part of enough tech companies and see enough projects that we viscerally understand. Actually, though, even a lot of tech guys don't understand the sheer scale of what the Internet is until you're at like a giant tech conference where you've materialized all those people into the physical world, right? Like, you know, we, we see a number on the screen, but you don't perceive Like there's this

40:35
great post by visualizing crowd sizes, right? Like this like 50 people. This 100. This 15250. This comes a point where it's hard to perceive at that point. Well, that's The thing is like 10,000 people in one place is like a stadium, right, 20,000? It also feels impersonal, right? Because what happens is that you can't. Yeah. And you can't relate to the dynamic? Sometimes, yeah. Yes, here's my point. This what 180,000 people looks like, right? So I have like 1.1 million followers on X, right. So that's about 5-6 X this number. So I sometimes before I go to tweet, visualize like going to the center of the star spangled, the center of see, you know. Star Balaji. No, kind of like that. Kind of like that. Like the NFL, you say?

41:22
Right, So there, you know, before someone gives the national anthem at the center of a giant sports event, there's like 20,000 people. And if you've got one note off, everybody hears it, right? So when you before you go to tweet you, when you actually see this, you're like, oh, that's what 180,000 views means. It literally means that, right? And with Twitter, you know, or X you, if you refresh it, you will actually see the page view count. Grow up. And you're like, wow, That means actually there's one of the very few scenes in movies that have depicted this. In the Social Network movie, there is a scene at the beginning with Facemash where it actually shows a bunch of people all looking at the same screen but in different rooms, right? You don't perceive that as an individual because you need to have simultaneous cameras in like hundreds, thousands of different rooms to see all these people refreshing the phone at the same time.

42:10
If you actually saw the clip of 180,000 people seeing the tweet and some guy is like, you know, after a workout and somebody's on a plane, someone's in the desert and so on and so forth. Just that alone is an interesting premise for, for like a maybe a short clip. Maybe I should do that. The point is the Internet, despite its enormous scale, is invisible in a sense. And China, despite its enormous scale, is invisible in a sense, right? See, barbarian powers have been growing. And then in my view, what's going to happen is, you know, the enemy of enemy is a friend, right? And so I'm seeing the Democrats will eventually side with Chinese communists. That's why Newsom has gone to China and said, you know, Gavin Newsom, of course. Yeah. Yeah. So he went, he went to China and met with XI and he said he wants to be China's long term stable and strong partner. I don't know if you saw that right. Wow, I didn't see that. Yeah, here.

42:56
That's insane. I mean, so I'm obviously not at the heart of American politics. Yeah. This idea that Newsom is actually doing this would be quite surprising to me. Yeah. Well, yeah, so here is basically this was the whole thing in Xinhua. Welcome. More nuisance to come, right? And so? How much of this Xinhua saying it versus actually? But this his quote. Yes, he's willing to be China's long term, stable and strong partner. OK. I mean, a lot of people might just say that, but would they actually mean it? You know, politics is sometimes, well, you know. I know, I know, but. Basically in the room. It's true. It's true, it's true. But basically, so Newsom welcomed GI also out to San Francisco. He cleaned up the streets for him. And so it's, if you remember that, right. Yeah. So that this was the other part of it. He had had a whole visit. Because The thing is GI could

43:41
sort of recognize Newsom as also being the governor of a large state that becomes the president is a path that GI could recognize as similar to him. This meeting happened in 2023 where people thought Newsom could become president, you know, because there's going to be a jump ball. After Biden stepped down, everybody knew Biden was going to step down. The fine thing about it is it wasn't a Biden conspiracy theories, Biden conspiracy theories. The reason is different factions, the Democrat Party thought each of them would win the hot swap, right? Like, was it going to be Michelle Obama? You know, Right, right. So Newsom probably thought he was going to win the hot swap. He took a whole meeting right after the thing, but it went to column. OK, what's my point? Point is Newsom also Tim Walz has basically said China should intervene on the Iran thing, right? In many ways I can, I can share a bunch of graphs, but essentially Democrats are much more sympathetic to China than Republicans are, right?

44:26
Just like Republicans are more sympathetic to Russia historically than than than reverse, right. So I think, you know, Democrats will end up aligning with Chinese communists because if they don't have DC, they need XI. That's how that's how Newsom is going to think about it. I I would not be surprised to see them essentially not enforce the tariffs on in, in Oregon, in Washington and California, the West Coast states, if the tariffs really contribute to inflation, they may simply not enforce them, especially if because the China tariffs keep getting suspended, suspended. But who knows, they might go, they might go real, right. If they did, there's a possibility for a left populism where they just don't enforce the tariffs and then they invite a confrontation that or whatever, right. So I think it's very possible, right? That's the kind of thing which is federal versus state who has control, right? OK. And this similar by the way,

45:12
to the Federal versus state on the border, but in reverse. These are now the Democrats want the packages to come in and as opposed to Republicans wanting people to stay out, right? OK. Then the other side of that is, you know, Republicans in the Internet, right? And this something which is one way to think about this from 2020 to 2025 especially or 2024, Democrats really did fight China pretty hard, right? But then eventually they're now in the can't beat them, join them mode. And I think by 20-30 they will link up with them completely. But don't you think that politically at least, the impression we have? AnDeFirst of all, I'm all for more collaboration between countries. Yeah, because I actually think more confrontation is bad. And I also think it's inevitable right in the way I would also argue that the more the US can integrate and work with China and vice versa, it becomes more

45:58
Co interdependence you. Know yes, but the US doesn't exist like they say red America and blue America have different. Foreign policies different form, yeah, I understand there's but just generally speaking because when I think when when there's jobs and there's money of. Course, of course, yes, broad level, I agree. Broad level. Broad level we. Should we should get there, But I think for the time being, I don't see at least externally from the lens being in Hong Kong and by extension in Chinas well that we view neither Democrat or Republicans as being pro China like that. That sounds, I know that sounds to me as you know, that's a bipartisan thing, which is a bit of a shame. But I think it is one of those challenges and I think China is responding at the moment politically, including in the area of crypto regulations like with the stablecoin Hong Kong, with the HKMand so on. Basically, it's a response to

46:43
Americas a whole, not specifically to MAGamerica, but I think generally speaking to just how do we make sure that we protect what we have and, and totally? Totally. But I'd say that, well, we're in a time of transition where like the tectonic plates are moving, but there's a number of reasons where like Democrats I think will link up with Chinese Communists, right. and for one, The thing is that go ahead. No, I, I mean, I'm not as familiar with that, so obviously it's hard for me to comment, but this idea that an American faction in this case would actually side with China to me sounds like as a country sounds almost sounds as big as when people were saying Trump is siding with Russia. Or Trump with Elon? Yes, Trump with Elon.

47:28
Basically like new SMG is as big a realignment as Trump and Elon. Remember early anyway. Well, yeah. That's right. So exactly, but basically so like remember Elon Trump was like, oh, Elon should get on his knees and beg whatever the first administration then obviously they were the bestest friends ever for like 2 years, three years and now they're out again, unfortunately right. So but that was something we. Should call politics. Well, it's politics, politics, but it's actually it reminds me of World War 2 and like how the Nazis and the Soviets were actually allied at beginning to invade Poland together. And then the Soviets and the Americans were allied to beat the Nazis and the Soviets and the Americans split the Germans East and West Germany, right? And you know the so basically all three factions existed, right? Germany plus Russiagainst

48:13
everybody, Russia plus America against Germany, and then half the Germans and Americans and half the Germans and Russians against each other, right? So all three permutations happened, right? And my view is Democrats aligned with Chinese communists and Republicans become Bitcoin maximus. So that's the other piece of it, right? Like we're still in the middle of this transition. So, but what you're then saying is, is that America will essentially no longer be? It's not a. Country. Well, yeah, country. Country is a geography. Well, with borders and a governors and so on, Yeah, yeah. But to me, I guess you know, a country is I guess if it's representative by its people, right, you can 11 could say that what is those people? Does it, Are we saying it's two Americas or are we saying it's still one America under 1 hub? Because the whole I guess federal construct allows for I

49:00
guess different opinions and ideas and structures to exist within a common federal structure, whereas the states themselves are different. Doesn't mean that states have more freedoms as a result. There's different ways you can break down, right? And it's possible that it's like the fault of the USSR where these administrative boundaries for like the so and so Socialist Republic actually suddenly became real, right? And suddenly Jiu Jinx stands like, OK, I'm a country, right? So those like fake administrative boundaries became real and, you know, because they were just something that everybody could agree existed beforehand, right? So it's possible because you saw this during COVID, actually, there were hard borders between like Rhode Island New York or whatever, right? Like, you know, people were not able to just go back and forth because, you know, they're COVID borders. It was Rhode Island, New York. It was like. Yeah, but, you know, the collapse of the Soviet Union was

49:45
essentially one that the Soviet Union simply couldn't sustain itself anymore. Yeah, I think in, I think the interdependence and relationships that you have because the one difference about a communist planned economy, and that's only because of the fact that when I grew up in Europe at the time, I witnessed that to some extent is that planned economies have centers. Because essentially there's a there's a country that's dictating what you do, where you do, how you do it, right. So this place makes cold. That place is this. COVID checkpoints. So COVID checkpoints targeting state residents. Yeah. So I understand the restrictions in the borders, right? But I'm saying like, see, Rhode Island pulls over New Yorkers to keep the virus at Bay, right? Yeah. So the point being that basically did the virus correspond to like what state

50:30
you lived in? No, it didn't, right? No, but that was the existing administrative boundary that people could coordinate on. And even if it was completely uncorrelated with the virus or what have you, they established borders on that basis. And I look at just like 2008 was in a sense, a dress rehearsal for 20/20/2020 was a dress rehearsal for 2030. Yeah, although I so I would disagree with you with that, but I understand the construct and the reason why I disagree is that because when you look at what happened to the fault, the users are Yeah, the planned economy construct of it yes, basically 4, the sort of made the breakup somewhat easier I would say because you didn't have true interdependence because there was no decentralized economy, OK, that existed inside USSR versus America, which is because of its nature, yes, it's very international global as well, but there's many more ties in

51:15
OK, connections between them. Sorry, good. For sure you're saying. Yeah. So what I'm saying is that while you know politically and so ideologically that could be parts that definitely would fall apart in America, we can see this right now. I think the business construct and the transactional elements of doing business together is what ties it together. Basically, inter American trade won't fall apart. OK, I disagree with that too. OK, OK, here's why. I think it took me a while to articulate this, but yeah, a deep point for me. Is that Keynesianism is communism but for wimps? OK, let me explain what I mean. Keynesianism. So if you've seen the graph where it shows like the US dollars value. Follow up, right, Yeah. So that means that Keynesianism actually does seize 100% of the wealth of the country over top. It does seize 100% of the wealth of the country over time, but it

52:06
doesn't go door to door with guys with guns like communism does, right? So it's able to do it invisibly. Like when you when you issue another trillion dollars or whatever, it dilutes everybody down invisibly, every dollar holder down. But you don't have to go door to door, right? See what happened in the Soviet Union is they had to actually have, you know, like Lennon send his crazy guys to every house. They would kick in the door, they'd kill the father, they'd rape the mother, they'd take the son off to the gulag and they they'd collectivize the farm. That's what like collectivization meant. The same thing happened with mounds. So that's what communism meant and Keynesianism quote innovative on that by stealing all this wealth, but by essentially diluting people down when when you're running a cap table, for example, you're highly sensitive to dilution

52:51
a cap table, right? Like you're watching every point percentage ownership, right, Because you actually can see the denominator, but there isn't a well agreed upon denominator for how many dollars exists. The whole point of MMM, naughty and M1 and M2 and so on is to make it, you know, complicated and abstract. How many dollars are, Who knows? Let's do another trillion. Right, but Keynesianism doesn't violate the construct of property rights in the same way. Well, it does because. On money, but not on assets. Yeah, but yeah. But The thing is you're, you're basically you're still seizing the assets, right. Well, actually we're doing you're. Seizing the money, but the assets are yours. Well, therefore the assets do inflate because of the fact that more money is put into the system. And I think the other thing on Keynesianism just, you know, independent of Keynesianism, obviously, you know this there's obviously a philosophical construct as well, which I think

53:37
is interesting, is that the politicians haven't been. And just to clear, I'm not a Keynesian. Yeah, Maximus on Keynesianism, I'm just saying that politicians have gone addicted to the idea of money basically. Yeah, money printing to QE without actually doing the fiscal discipline of. OK, now that it's there, let's go and pull back, right? Because really Keynesianism was trying to sort of. And I think to me, the innovation of Keynesianism was around understanding that when you put essentially. Adding liquidity to our worker. Yes. and to generate that sort of activity, I think is what what was powerful there. I want to show you something. Yeah, please, because it pulls the pieces together. OK, so this a piece from 2010 how to spend 1.25 trillion, OK. And these are two people at like

54:23
the New York Fed, right? And it says the Fed decided to buy 1.25 trillion in mortgage-backed bonds. So this the connection between currency and assets. Because you print the currency, they can buy the assets. But they're doing this to protect essentially a base of people. But I understand. Well, what they're actually in my view they're they diluted down at all Americans and the world to prop up the banks, right? Like like the money? Like is it this? Is. But the problem of the banks was to basically ensure the safety of the state and essentially to make sure that. There's an argument for that, right? But, and I can and, and we'll come back to that argument, right? But let me just at least say what they actually did right. So somebody actually go buy all these mortgages. So how'd they do it right? This was this really interesting thing.

55:09
It's possible I was buying the mortgage on my own house says this guy. And then they came very, very close to Target. They told they were $0.61 short. They bought one trillion, $249,909,909,909.39 right. the Fed was able to spend so much money so quickly because of the unique power can create money out of thin air. OK, but here's the thing about this right like there's like several. This an unusually clear statement of what the actual U.S. government is, which is like communism where they can just seize any asset by printing money, right? Like 'cause they're buying the mortgage. It is centrally planned, right? 1.25 There's no, there's no Max tax, right? There might be a minimum wage, but there's no Max tax. This 1.25 trillion, just to think about what that means, that's $1000 iPhone for a billion people in China.

55:56
But they did end up, they bought it, but then ultimately over time, they basically sort of sold it back, so to speak, was it but. Yeah, sure. OK, so, so. Well, actually, they haven't actually completely offloaded all their Astros. There, but they have offloaded I guess the. Point is, the government seized it. I mean like if. But why did they seize it? They seized it to rescue it rather than to seize it as as a means of control, which I think is the difference between. The two OK, OK, but there's two different. Well, OK, first of all, you're, you're agreeing that they had good intentions, right? I would say if you actually go to what caused the mortgage crisis in the 1st place, it was the government forcing many banks to extend mortgages to people who couldn't afford it, right? The, the red, you know, like anti redlining stuff. They forced mortgages onto black people, Hispanic people and so on. And in fact, actually even NYT

56:41
admitted this. Like NYT Bush era. I don't think it's also but they also. Ownership fueled housing bubble. So this a both a Bush and a Clinton thing. There's someone called the CRA community reinvestment. The thing is, if you trace it back, the government forced the banks to make these mortgages. Then when it crashed the economy, they said, oh, we're coming in to save it. And what happens is the state causes the problem. It's like, it's like a firefighter who's also an arsonist, OK, They caused the blaze and it's a blazing and everybody's confused about what caused the blaze. The firefighter comes in, you know, sprays like this. And then they increase the firefighter budget as well, right? So like when you actually track back, why do they have to save the world? Because they destroyed the

57:27
world, right? And the net effect of it at like a Meta Organism level was upward redistribution of wealth, right? That's to say they printed the money, they diluted down everybody else and they bit up the banks and they bit up these mortgages now who got diluted down? So I'll show you another graph which is this. Yeah, unfortunately, inflation hurts still hurts the weakest of any because there. And if that's what? You're trying to point to exactly. I'll show you this really amazing graph this from. Let me see if I can share the screen here. So we got it recorded. So did Republicans pay for 2008? OK, so let me just show you this graphic. Let me explain it what it is. OK, So there's actually an animated version of it too. OK, But let me zoom. Yeah, this good. All right, So what is this graphic? This shows each dot there is a

58:14
county, OK. And gosh, silly thing. Yeah. So each dot there is a county, right? And this the GDP of that county. This a poor County Down here and a rich county up here, right? OK, so and the Blues are Democrat voting counties and the Reds are Republican voting counties. Sorry, assume they don't flip sides at this point, right? So in the year 2008, this solid line over there, that envelope over there, you can see that the blue envelope and the red envelope are roughly the same. But by 2018 you can see that all the richest districts are blue. But we can see this already in the when you look at like right now, people look at the Blues as the party of the elite as

59:00
opposed to the party. but that happened from 2008 to 2018, right? It happened in that 10 year window where roughly Democrat counties and Republican counties were at parody to suddenly Blues pulling way ahead like this, right? And how they pull way ahead like this. I argue it's because that was the time at the bomb administration. All the printed money was being allocated. And where did it go? It went mostly to blue connected States and institutions. So it went to banks in New York. It went to DC. And how much of that would you say is related to the growing tech wealth that happened during that? Period. A small slice of it. Right, so it's not a big slice. It's a big slice like all VC is like ten billion, 20 billion a year or something like that, right. So relative to like. All the people who ended up

59:45
working at Google, $1,000,000 packages and that kind of stuff, yes. But what happened was a small, small slice of the like, there's a trillion for the mortgage-backed SECurities, 1A small slice of that, like less than 1% made its way through the rivulets into a productive SECtor of the economy, which is the tech economy and just a relatively small amount of money on that, you know, very fertile field went Bush like this, right? And so that led to the growth of tech, right? But another piece of it was the crash led to huge price pressure. So it also led to the growth of China, right? And so China and the Internet both were the strongest, the most supple, resilient, where they were the ones who were actually able to benefit from this, even if they didn't weren't next to the money printer directly. Right. OK. So then one of the things that

60:31
happened is it wasn't cost free, that inflation was exported, for example, to the Middle East, helped trigger the Arab Spring. Those countries were just in chaos, civil war and so and so forth. In a sense, they paid for the bailouts, right? These countries got diluted down, their food prices got spiked, they got pushed in civil war. They're shooting each other. Why? Because they got printed down. Now The thing is, there's no blockchain, so it's hard to prove this. I can only show sure series of events, right? Series of events, some assumptions, but basically the theory around it. I understand there's theory, right? So basically if the food price spikes helped, you know why those prices spike then? Because the inflation was exported, right? And these countries were already near the border of you. Know survival one of the reasons why countries like Chinare very sensitive to food prices and management. I mean, I think one of the best

61:16
examples of a super stable society, despite the fact that economically on a global parity, wealth probably has suffered a lot is Japan, right? And one of the fascinating the other last time you were in Japan. But you know, when you go to like, you know, slightly a little bit out of Tokyo, but even within Tokyo, I'm always fascinated how I can basically buy, you know, all those vending machines for the same amount of yen. This the same drink that I could pay for like say 20 years ago, The same price. Right. Yeah, yeah, it's it's kind of like the. I mean, they were the masters of QE if you think about it right. Yeah, well, so are they masters? It's funny. So. Or at least, maybe they've. Done it for a long time. They've done it for a long time and I think they went through, but again, I I come down to the thinking of why did they do it? And they tried to keep the cohesion and stability of a nation together. So let me counter argue on that. OK, OK, so I, I, I I want to bounce a ball back part. Yeah.

62:05
So my view is as follows. And Japan was actually doing really well against America in the 80s, right? And but America had actually see at a certain point, you know, you can rise to a certain point within the system, but then you have to become the system, right? And so Japan was rising to a certain point in the system, and it hit a ceiling where it's getting too big for its britches and becoming so successful that the US was, you know, there's rising and there's all this anti. Japanese. And then the US government actually, it did kill the Japanese economy with the Plazaccords, right? And So what that was, was something where Japan was forced to not use it's yen to buy up valuable factories and stuff in the US. It had to buy, you know, treasuries. So right #1 and #2 is actually interestingly, a lot of IP was transferred from Japan to America.

62:53
It's in reverse from how people think about it, right? And there are other kinds of things as well. But fundamentally what that did is it just blocked the rise of Japan Inc and re subjugated them. Because The thing is Japan and Europe, right? They are in Canada. These until very recently are US colonies, right? They don't have they, they have AUS military base there, right? There's no Japanese military. Base of course, and this this a post war, post war construct. That's right. So. So when we, you know, some people say, oh, China will get, you know, we stop Japan's rise, so America will stop China's rise, I can point to that's not the same. Absolutely. It's not the same. and I can actually point to one article that shows it to anybody, you know. Yeah. and the other thing of course is that, you know, during that time, obviously, I mean Japan's, you know, dependent on American SECurity. So there's a different, there's a different relationship between

63:39
that versus eggs what you see in China. Exactly. So when push comes to shove, the US had root over Japan but do not have root over China. And one way of proving that is like killing CIA informants. China crippled US spying operations. So that shows that's something that China could do that Japan could never ever do, right. Japan could never kill AUS spy, right. And what that means is if they can't kill AUS spy, they can never have any communications that are genuinely encrypted and genuinely like, you know, seen as as private or whatever in their country, right? China can actually have communications that are private within their country. But how does that relate to the fact that Japan was in QE? Well, I'll come to that in a SECond. OK. So, well, actually the Japan, there's like there's many complicated things about China. I can't say I understand every

64:27
single piece here. I don't speak Japanese, but they were essentially forced to buy treasuries and print as a way of crippling their economy. And this something where Japan Inc, their export machine was broken. They were not allowed to export. This why like Sony, Mitsubishi, all these things that were so amazing just suddenly just kind of fell off a Cliff, right? Robert Lighthizer, other guys, trade representatives essentially restricted Japan. There's a guy, my gosh, I think Michael Hudson and so on, who writes about this. And my view is that when they didn't have the export growth anymore, they had to do the fake growth of QE. Right now that whole thing is breaking because you see Japanese yields just going zooming like this. They're they're seeing that, you know, QE for, for that was there for. Well, they also have their

65:13
democracy time bomb. They have demographic, they have a lot. This century, I think Japan becomes a Chinese colony. So history is running in reverse. So last century China became, you know, this century Japan becomes a Chinese colony where Chinese people will be able to go into Japan, buy lots of property relatively cheaply. And just like Indians are now buying a lot of property in reverse, right. And because a lot of things are happening with history in reverse, like I can show a boomerang U curve kind of curve from any different phenomena. My point is basically that the Japanese, you're right, have preserved some degree of stability in their society because they have homogeneity of culture, language, people and so forth. And if you are so they're not going to meltdown in the same way America is. America has, you know, 300 million guns, more guns than people.

65:58
People are crazed on every dimension. There's gender and racial and ethnic and political and even now age polarization because the young don't want to pay for the old for Social SECurity and so on and so forth. So that's just going to meltdown, right? Like I, I, I really disagree with you that or, but or not really. I'd say my biggest point of disagreement is you're correctly seeing tech America and tech America can ride the lightning, but most of America is not Tech America and they are not rising with the Internet and they're not rising with China. And you don't think Tech America will try to save the America because I do think there's a degree of so because. Because they already just did. They just did. And actually, Elon posted did my best. But. You saw that post? Yeah, but Ding did my best versus I'm giving up completely our two different things. Well, he did no. Well, what does it mean to quote

66:43
save America? Can you save Britain? Like you actually put it like this, the, you know, the American Empire, right, which was actually something that there's a great book called Tomorrow the World, Steven Wertheim that actually talks about this. That was something that was consciously built because how is it there's a McDonald's everywhere? How is it there's, you know, like, you know, 750 military bases, U.S. military bases globally. How is it that the dollars, the reserve currency everywhere? How is it that U.S. media is ubiquitous? You can't, you don't become global number one by accident, right? This like it's hard. You know how hard it is to become number one in any industry or in anything, right? You just don't become global number one in so many different categories back. So with having the UN and in New York and you know, all these people educated at Harvard, like there's 20 heads of state educated at Kennedy School of Government alone, right?

67:28
Becoming the center of the global empire was something where in 19391940, when Britain was on the ropes, until that point, America had been fine with the British having an empire, right? Because it's expensive to run an empire, all this kind of stuff, right? So they had wisdom, like, we're just going to build up our strength, not run an empire. But then they realized, wait a SECond, if we don't run an empire, they thought at the time the Nazis could choke them off in terms of trade. And then later is the Soviets. And they're like, well, if America doesn't build an empire of democratic capitalism, the Nazis or the Communists will, and that'll be bad for the whole world, which was true, right? So there's almost a we're forced into it position, right? And so they actually decided, all right, we need to take up the imperial burden. And they started playing to win, right? And all kinds of institutions, for example, FDR set up, the UN is something where nominally every country gets a vote, but

68:15
the SECurity Council actually has a veto and it's in New York, so they can bug the entire UN headquarters. So the US actually had the veto over the veto over the veto, right. Many kinds of things like that. All these poster institutions that were set up that had the US at the center were how the global American empire was, was set up and the US taxed the whole world. The business model of the US was the dollar, because anytime anybody's using either the dollar directly overseas or U.S. financial asset usually needed the dollar to buy into that and so on. So that was their mechanism where global dollar inflation is global taxation. The whole world pays tribute to America, that whole business. This model is now reaching end of life because the main 2 competitors to USD are CCP and BTC, right? China and the Internet. Right.

69:00
But I guess that's why they're trying to push stablecoins the way that they are. Right. So it's interesting because this something where so let's talk stablecoins, right. So a new bill is being passed in the genius. Yeah, and you know, obviously I was very, you know, like I, I know a lot of stablecoins. It's. Also interesting that Hong Kong also passes actually a month before, right? Yes, Which is you? Know, so that's interesting. So tell me about that. Go ahead. Yeah. So, so before the Genius Act actually came out, and it's actually one that we're quite involved in, our ledge code, which is the equivalent of our parliament basically passed the Hong Kong stablecoin bill, allowing the HKMA, which is a central bank, to basically start issuing sort of stablecoin licenses starting from August 1st. So the applications are going to start basically next week, right? And so it's a little bit of a head, right? But, but this was already in the works for a while. And in fact, we ourselves, together with Standard Chartered

69:46
and Homeland Telecom are part of three companies that have been involved in a sandbox essentially trial period for stablecoin. And of course, you know, what's also interesting is China's response to it was that they're looking what's happening in the US and they recognize that since it's not China, it's going to start buying all these T-bills and it's going to be stablecoins. And they also realized that the dollar Hegel money, the stable one strategy is around extending dollar Hegel money. And so what's, you know, basically the response to this one. And Hong Kong has always been the financial Center for China for this type of stuff. Frankly, one of the reasons why the US is, you know, I'm not sure if you, if you remember this, but during the time of the protests, Hong Kong basically lost its special status with the US on account of, you know, freedom and so on. But really, I, I think the, the undertone was really around

70:33
choking off essentially ideally 1 of China's main financial strongholds, which is Hong Kong, right? But anyway, China itself also, what's interesting to me is around that time, a lot of people thought China was just going to say, OK, Hong Kong's going to be the fishing village now and we're just going to build up Shenzhen, right? But interestingly, China decided to like sort of rebuild. Hong Kong, in fact, double down on it, Yeah, and it's because Hong Kong is necessary. So tell me about that, because that's an angle that was interesting. Well, OK, so the reason, the model for so this really important because Hong Kong plays its role because it has laws and rules that are not all the same as in China, right? And it's actually also one country. Two systems. The one country, 2 systems, it's also the way which global trade can match. So if you're European or American for that matter, you'd

71:18
much rather work on something that's based on English common law rather than basically that's based on Chinese law. It's also English as the official legal language as well, which is the trade and frankly, the Internet, right? So Hong Kong plays an incredibly important role for this, right? And if you think about sort of even, especially now, right, if you think about it, you could say a lot of people were saying, well, there's a shipping port, which is probably true, and Guangzhou is going to be bigger. Yeah. And it's just literally across the border. But when it comes to legal contracting and rights, and also all the, all the wealthy Chinese people actually want to live in Hong Kong and send their kids to Hong Kong schools, right, while they work in China. So Hong Kong has a special sort of role around that. And I think China recognizes it's important. You know, what's interesting is

72:05
I also understand that they use Macau in a similar way. It's much smaller, but they use it not just for the gambling, but it's actually a Lucifone like Brazil and all the Portugues, especially Brazil, which China is an important relationship with the Portuguese speaking Lucifund countries have the forum with China in Macau. Yeah. So that is for Portuguese what Hong Kong is for English or. Something yeah, I think the big thing I think this where I think a lot of people in the West misunderstand China, at least from our perspectives, is that China's number one agenda is of course they want to have they want to have power, but they need stability in that country. They're most worried about what happens. So what's the reason that if you think about where is particularly American media politics poking Hong Kong and Xinjiang, right And what is the

72:51
thing about those two places different about the rest of China? Well, Hong Kong is in particularly a, you could call it multicultural. It's more more like, say Westernized, so can appear a little bit of a weak spot, although at this point I would say it's it's very much sort of cleared up. And then Xinjiang, which is basically 99% Muslim, right? And it's homogeneous Muslim. So if you want to poke the bear somewhere, this would seem to be its weakest spot, right? And so all of the stuff that you see in mediand discussion around that is actually really trying to sort of find ways to sort of feel poke. Yeah, poke, right. And, and just to close this thought, the important thing for China is harmony within it's own country. Everything is built around it. So, so the one thing that would not happen in America, for instance, is that, you know, when, when, when she talked about common prosperity, right?

73:37
One of the things that he took down was private tutoring, right? So, so, so from a Western perspective, you're like, you just killed an entire industry. That's bad, you know, and this the risk of, you know, centralization. But he did it. Or they did it because they realized that this type of tutoring was only available to the wealthy. It was creating a much more bifurcated society. Yeah, but they re establish. It though, yeah, but not in the same construct, right? And more importantly, also they wanted to equalize education. Also, they were very worried about the wealth inequality because it was the instability that they were more worried about what's happening in China than specifically the dynamics around the. World, right, right. So The thing is, you ultimately have to judge something by the outcome, right? And if you see Chinese cities and Chinese streets, they're

74:23
beautiful and clean and they're aesthetically really amazing and so on and so forth. So that there's obviously some huge success there for, you know, a billion people. There are manufacturing powers, other countries that complain about overproduction. You can't like it's something where, oh what, they're making it too fast and too cheap or whatever. It's like you have to get good, right? So there's a lot of things that China's done where you just have to respect it and you have to like look at all the graphs and so on. I would say that my view is China might be good for the most, but the Internet is good for the best. So. And so the reason is, I don't disagree with that. Yeah. Because also the construct of this pendulum shift between sort of, let's call it freedom and you can call absolute freedom of

75:08
form of anarchy and then safety and SECurity and then to the trade of our safety and SECurity. American anarchy and Chinese. Control, right? There's something in between. And there are people who prefer one or the other. So you will see people in China, and this I think where the West often couldn't understand why do you like this? Because I would never accept to live in this type of environment, but the safety and stability of not having to worry about possibly getting shot. In the street? Yeah, exactly. What that kind of stuff, of course, and the fact that, yes, there is much more surveillance, but at the same time, you know, you have much more SECurity, right? And some people say I want surveillance, but I don't want it quite that way. So maybe Hong Kong is a better compromise, some other place, whatever. So there'll be lots of things that are going to compromise. Exactly. Yeah. So, but there is a penalty you can't have, you can't have this idea that you have complete absolute safety without the fact that you have also high degree of surveillance and.

75:54
Control, yes, that's right. Well, well, so I think the question is you're absolutely right that those are two points on extremely on the spectrum. And I think you're also right that many Democrats are going to opt for Chinese control, like I said, basically in the 20th century. The one thing that's not very well understood is. Maybe, But do you think it's because they don't really understand it? So for instance, one thing that I've noticed so much to yeah, shock is, you know, the conversations around, you know, the populism of Marx that is emerging in, in, in, in the American dialogue. As well. There's actually, I should be, I should be clear. There's the Luigi, left, right, which is just violent anarchists. Yeah, I actually put it like this. You know, many Democrats have replaced GODOGOV like, they've like, the state has become their God, right? And so because of that, like when they lost control of the

76:40
American state to Trump the SECond time, that shattered Democrats faith in what they thought of as democracy in the American state. Because all of their rituals, everything is organized around the American state, handing out money to Democrat NGOs or funding to Democrats or professors at universities or gives leaks to Democrats or journalists like the state is their central organizing principle. Like Democrats ran this ad a while back, which is government is the only thing we all belong to, right? Literally as that's the sharing kind of thing for them, right? So replace GOVGODGOV, right? And this similar by the way, Carl Schmidt has written the book called Political Theology. Or you know when the Soviet Union failed they called it the God that failed, right? The point is these state based ideologies are a replacement for

77:25
God in many ways. Many different kinds of factions have have talked about that. OK, so their God just died. What is the answer? 1 answer is some of the left, some of the Democrats go to the Luigi left, violent anarchism. They believe in nothing, kill everyone, and other factions are basically like, OK, well, what is the most powerful state today? If we don't have DC, then we have XI. So I'll just fold into China. And the way of thinking about that is think about Venezuela or lots of these other countries that have melted down. They are basically propped up with Chinese support, right? And one way to think about it is China is the monkey's paw opposite of the neocons and neoliberals. China will trade with kleptocratic Venezuela or meritocratic Singapore. It'll trade with Christian Orthodox Russia or, you know, fundamentalist Iran, right? China doesn't care what that country does internally so long

78:13
as that country doesn't quote interfere in China's internal affaIRS. This the exact opposite of the neo con or neo Lib who wants to bomb every country into democracy, right? But it's not like the exact opposite isn't necessarily good because the problem is China's developed a surveillance stack. And you know, whole set like 1.4 billion Chinese people are very smart and they're really clever and they work around all kinds of things. You know, the mountains are high emperors far away. It's a very, very clever, especially southern Chinese people in, in, in capitalism and entrepreneur, right. And so historically, the balance necessity by necessity. Southern Chinese were the perSECuted ones. That's right. That's right. And so, so, you know, historically that balance was a very pragmatic balance. We didn't say that law has limited the state. It said practical realities limit the state. Yes, they have total root

79:00
control, but they don't have the ability to surveil everything at all times. They can monitor. So I can just do what I want. You know, the state can do it as well, right? Fine. Very, very practical balance of power as opposed to the European balance of all that laws and quoting things. OK, fine. Which has its own merits, which is different. My, my view is that stack which is being developed in China, if it can kind of lock down China, it can absolutely lock down Venezuela. It can lock down every kind of country because it was debugged on 1.4 billion Chinese, one of the smartest, like hardest working, you know, like most entrepreneurial cultures around at that scale, it'll work to lock down just about any country, right? And that's a stack that they're selling. And in fact, when, when countries are buying weapons or or SECurity stuff, they actually buy the missiles and stuff from America because they're pointed out, but they buy the SECurity stack stuff from China because it's pointed in right. But I mean, so now to be clear,

79:47
I'm, I'm, I'm saying this in a beyond good and evil. Sure, right. Like I'm just observing, you know, because I think, let me, let me also argue your point for a SECond. Yeah, the, the dumb V1, let's say V1V2V3, the dumb V1 American way of thinking about China or a lot of people is like the Chinese Communist Party and you know, and they, they actually think they're still Maoist or they're still poor it's all slavery. There's actually much more capitalist than. Most yes, exactly. That's right. So so they they have a just a really weird outing. Part of it is there's been very few depictions of what Chinactually is in American media. I think it was. Haven't been to China? Well. That's right. That's what I mean. China's invisible, if you like. Yeah, right. Exactly. And so the only non Western society that I've seen that's being depicted as prosperous

80:32
recently was Singapore and Crazy Rich Asians, right. And that's the exception that proves the rule, right? Because Singapore is still kind of within the Western camp or we're happy, right. But because of that, and the reason is Hollywood didn't want to make movies that show other people overseas having a good time and leveling up because of course that would be, you know, they'll not do well in their screening, in their focus group testing who want to see Chinese people doing well. If you're an American, they're envious or mad or OK, fine. So because of that, though, they have just a huge unreality. The V1 view of China, like they want to conquer the world and so on. When China's been very insular historically that's like dumb. OK, then the V2 view, however, let me quote it to say why I disagree with it. The V2 view is someone like, let's say Arno Bertrand or what have you on Twitter. If you've seen his post or you know, he's like a or Carl Za or something like that, they'll make an argument, which is as follows.

81:19
They'll say, and some of them are Chinese nationalists, some of them are just really alienated Westerners. But they say something like for the last 40 years, China has not invaded any country. They've built up Africa while America's blown up to the Middle East. They had a peaceful rise. They brought all these people out of poverty. They built all these amazing cities. They've just, you know, been playing defense. They didn't start the trade war. There's playing defense. And what is their great crime to ship lots of stuff cheap. Wow, that's so bad. And, you know, they just don't want the same anarchy in their country like that the US has brought everywhere else. So that's why they don't want American influence and China should be able to develop in its own way without alien Western and software and so on, and even blocking social media. We'll look at what social media has done to the West. Maybe they made the right decision and so on, so forth. This the steel man of the V2 right now. The V3 would be granting V1 and V2 for a SECond and say, OK, so now what happens when like, you know, the exports really rise

82:08
even further, right? So you have a Chinese self driving car or phone or drone or center everywhere, right? Well, all of those things have essentially like when you sell a Chinese chair, it's decentralized, there's no software connecting it back. But when you sell any kind of IoT enabled, AI enabled device, it can be shut down, controlled, surveilled, whatever by a central server. It's got a string, a digital string attached to it, right? And the interpretation of what interferes in China's internal affaIRS rises as Chinese trade just absolutely dominates. And there's not just a Chinese chair or a desk or a table, but it's a Chinese car and a drone and a phone. They essentially have root control not just over China, but the whole world. Like the exporting of goods carries with it software. That's, that's like the big

82:55
thing, right? So it gives root control because payments are in WeChat and so on and so forth. So it starts extending that sphere in many, many places. That's one. The SECond thing is also that the stack that they're selling to governments, they are recognizing the government as legit. Go ahead. No, no, I appreciate that. I think to me, I think the I would let's take the Western and Asian lens perspective. You know, I think the Western lens is much more conflict oriented. Yes, by. Culture, of course. And so they take the lens of everything must be a conflict, yes, but when you do business in Asia, in your country. Is win win is possible? Yeah, but also the whole perspective at. Least this century. Last century is crazy, yes. OK, but last century was also subject to, I mean, at the end of the day, it was invasions and colonizations and so forth. And also when you think about

83:41
sort of China's takeover, even the Qing dynasty, technically they were invaders from the north right there. The, there is a root culture, I would say in Asian culture and in very Chinese culture, which, you know, I, I hesitate to say it's peaceful, but it's about order. Maybe it's the right word order. That's right. And so the whole confusion sort of values, what system that basically generations follow. And there's something deeply embedded, absolutely, which when you think about the history of Europe, which in a way it was Europe and colonizers that came to America, their history was much more violent by necessity, right? I mean, you had the Taiping Rebellion, you had a lot of crazy wars, you had warlord error, you had all kinds of things. Happen yes but the Taiping rebellion I mean that also was initiated in by Christianity yes exactly by external forces sure sure right sure and of course you know China had to sort of you know basically three Kingdom wars and

84:28
that kind of stuff so so so China went through those absolutely debilitating wars much earlier and as a result this fear of disharmony and this fear of absolutely absolutely embedded in its food culture which. I think to different shape in the West, but as a result, and I think this the pro and the con is this confrontational culture also allows you to do business in a confrontational way and yet not take it as personal. Yes, which here for instance, in Asia, if you're confrontational in business, you're actually personal as well, right? Yeah, yeah, yeah. You know the whole face thing, right, right. So there are dimensions that are different that are deeply embedded culturally. And this, by the way, also why I think that I think the Chinese way works within China. Yeah. But I don't know that it exports super well to America because

85:13
the, you know, you can't. I think it's very difficult to sort of remove a cultural DNA. I mean, Mao has tried it with the Cultural Revolution, and he has completely failed. Yes, he's did it, unfortunately. Right. Yeah. Yeah. Well, so to that point, the way I kind of think about that is many like, you know, great civilizations have a deep culture thing which they actually take seriously. So for America, everybody unironically believes in freedom. Other countries like think, you know, they think it's like fake or they they roll their eyes. But Americans unironically bring absolutely. And the Chinese, I think unironically believe in harmony like this. So for a certain kind of American. Passes down family to family. That's right. Exactly. So for a certain kind of American, they would say, oh, harmony. Oh, Aaron's all brainwashed. And no, the Chinese actually mean harmony.

85:59
Like people actually cooperating, singing unison, working together, you know, and there's like that game. There's a collective spirit which can be viewed negatively and positive. Yes, exactly. That's right. So now the downside of it is everybody's working together in the wrong direction, lemmings off a Cliff or whatever, right? The good side of it is the whole, you know, thing comes together and you can build this. And I would argue the Chinese antidote has been education. Interesting. Go. Ahead So you know how maybe people used to have this parallel around India and China back in the 60s and 70s. And then especially with the Cultural Revolution, everyone basically thought of China being set back. But if you look at the economic charts, even during the Cultural Revolution and with, you know, Mao's purges and so on, China continued to rise in terms of economics. It wasn't that the miracle of China just happened in the Deng Xiaoping came in and just happened in the 70s.

86:44
What happened it was already the underpinning was there because Chinese were more educated on mass than Indias a parallel. Well, India has always been a more elite focused country and also. the, the, the, the caste system, as well as the fact that India was much more fragmented in terms of language as it was in China. Frankly speaking, you know, it's like predominantly Han Chinese. I I think, I think it's go. Ahead but the but the main differentiated between the two was that one was broadly getting more and more educated and was already starting at a higher educated level which meant that the balance of power may appear to be not as sort of brainwashed and as hey let's all go this direction because we're all just lemmings because actually Chinese people don't operate this way because of their education and so you'll. Find during the Cultural Revolution and during the great like for 30 years they did have a bad.

87:30
I mean, it was, it was purges and stuff like this and elites got killed. But you had you had a lot of the education levels didn't decline as a result, right? Well, so literacy is always. So literacy continue to increase. And if you look at the charts, which I don't have on hand, yeah, you'll, you'll notice that Chinese literacy and education continue to rise even during the Cultural Revolution, which is interesting. Yeah, so, so, So first of all, The thing is my view is there's many, many things, unless you understand what China does really well, OK, you can't, you know, so and I think so I would, I would probably argue with you more about like I really do think Deng Xiaoping taking over from Mao was a discontinuous event, like of course, and throwing the king of the foreign. Yeah, exactly. Right, right. So I don't think China, you know, like Mao's succession was like Hogwell thing.

88:15
I'm probably mispronouncing that right. And he was he was basically like a communist and whatever like a real communist and dung he was purged 3 times because he's a capitalist rotor. I want to take it to the right, but leaving that aside for now on the India point, you know, my view is China play, I've said this before, basically China plays perhaps the world's best home game, but India plays a very strong awake game, right? So Indians abroad do well because all of that complexity and diversity in language stuff at home means that they are more comfortable. OK, quickly getting the lay of land. OK, so this this and this that, right? And so they're very complementary set of skills where so in some ways the Chinese are the new Germans and Indians are like the new Israelis or the new Jewish

89:02
community, right. Like that's one way macro of thinking about it. Let me. Give the analysis, although the Chinese diaspora isn't doing too badly either, of course. Of course, that's right. India at home. India at home is rising. But it's like India is like A10 abroad and like a 7 at home and China is like a 10 at home and like A7 abroad, very roughly something like that, right? And. But it was reversed before. Oh, was it Go? Ahead, the reason why is that a lot of the growth that also happened in China was, you know, what we described as sea turtles. Yeah, the ones going back to. China coming back to China right, that's right. and that's actually also a very strong indicator about where a country's going when people are coming back. Coming back, right. Yes. By the way, that's also why we're so bullish in places like Saudi Arabia, because Saudi is seeing the same effect where people used to leave and now they're all coming back. Totally. Educator brought Hunt says something. And I actually think, by the

89:47
way, I think Indians are going to have a very tough time over the next 10 years because I think being the global swing vote and so on. Now, like, for example, both the US and Chinare funding Pakistan. Yes. You know, like even though the US and China fight 100 things, they cooperate in Pakistan to beat up India, right? And you know, like basically being in both bricks, but also in the Quad, like India's had it both ways. And so India's got a strategic both India and Indians, the global diasporare going to have a they're going to have to basically prove themselves over the next 10 years the way that China proved itself for the last 10 years. But I think of China is a state, Indians are a network, like in the sense of China's, you know, a physical location with borders and so on and so forth. And 97% of people of Han Chinese descent are underneath that. You know, the nation, the state, the network are one vertically

90:34
integrated whole like Apple, you know, like vertically integrated where you've got a great firewall, the Chinese language apps, you've got the party state, and you've got the people and the 5000 years of, you know, culture, right? That's like 1 vertically rated thing. And the diaspora is only like 2 or 3%, whereas Indiactually didn't even exist as a country until recently, right? India is actually more like the EU, where like the difference between a Thummel and a Gujarati is the biggest difference between a Spaniard and a fin, right? And so it's actually India is the most unified it's ever been in its history. And it's actually doing surprisingly well in some ways. Like, for example, in many graphs, China's far and away #1 like on steel or nuclear, right? Then if you take China out of the graph, India is actually a distant but real #2 right? And I'm not saying India catches China, but I am saying that India is actually much stronger

91:19
relative to the West than anybody realizes. I agree with that. And so like insofar as like the Anglophone world is having kind of a redistribution of power, right? Like the capital move from London to DCI think it's moving from DC to the Internet means are much larger percentage of the Internet than they are of America, right? And even more than London, right. So the Anglophone world is kind of where when I say like China versus the Internet, you know, versus doesn't always mean, you know, you could say China and the Internet, right? And I don't think it's going to be as it's not going to be tank for tank and plane for plane like like the Americans and the Soviets. The European model is confrontational. In fact, I think to balance China. And why do I say balance China, right? Let me let me bring it back to a different example. Let's take 1991. the US had just won the Cold War, right?

92:04
It's completely dominant, right? But it turned out that total victory was actually arguably bad for it, right? Because over the next 30 years, with no balance in the world, it didn't just invade Iraq or no. Common ideology to attack, so to speak. Yeah, exactly. There's no balance. There's no so. So what happened was first they fought each other #1 #2 is they blow up all these countries #3 they printed all this money #4 somehow over 30 years, they, they squandered the most advantageous position in human history. They squandered it really, really fast. Right. And what, what happened was actually having a completely unlimited power to go and blow up everything and print everything and so on and so forth. It turned out to be bad for them. It's like somebody who inherited billions of dollars, like we were talking earlier about, like you just mentioned the, the phrase generational wealth,

92:49
which we will hear. I'm not even sure that exists or is even good when it does exist. Because if people, you know, this movie, for example, called Born Rich about like a kid who inherits a Johnson and Johnson fortune. And what happens is they become almost like a communist because for them, wealth and effort, we're not connected. Yeah, they they didn't earn it as it. Were they didn't earn it right, they inherited it. It is luck of the draw for them right. So then they feel really guilty about that and so they start to spend their money on like, you know, communism, you know, type stuff and in thereby actually pull up the ladder for others, right, because they kind of destroy market creation processes, but they do that to absolve their guilt, but come back to generation. Well, point point is the lack of a balance for America, For example, think about West Germany versus Germany, which

93:36
you know very well, right? During the Cold War, America built up West Germany and in general with its flaws, the American SECtors were better than the Soviet SECtors, for example. Question. No question, right? No question. Or like South Korea versus but. That's the difference about state planned economies versus true. True, true. but South Korea versus North Korea, West Germany versus Germany, you know, even Chile versus Cuba, every place where the capitalist and communist variety. OK, fine. Now, though, what happened was by degrees the US went from being essentially like the conservative power of capitalist power, whatever in the world, to becoming the anarchist power, just destabilizing countries in the name of democracy. Sometimes the name of capitalist is often named Iraqi, blowing them up, right. And like, there's a flip that's happened where, you know, America, I think, is now on the global left and China and Russiare on the nationalist, right,

94:23
Right. Like basically for over 30 years, I actually have this figure, this figure in the book, right? This actually a really, this what I call the global flippening. This as of three years ago. And we're in the middle of social war. So things are moving very fast. It's like, you know, borders stay static. And then in a war, they move fluidly, very quickly. So we're kind of like that. But in 1988, OK, the USSR was firmly on the economic last Warsaw Pact, PRC, etcetera, right? Then you have, let's say Switzerland is neutral, OK, because they actually did trade. And then you have Reagan's America, the economic right and EU, NATO over here, right? OK. And India was socialist, China was in migration. It was like 10 years post, you know, dung, right? But it's hiding its strength, biting its time and so on, right? And then by 2022 you have woke America is the farthest left culturally and you have

95:11
nationalist Russiand China, I would argue on the cultural right and then let Eastern Europe and India, Israel kind of over here, Bitcoin, Ethereum, you can argue are the new Switzerland, right? And then Western Europe is like, you know, the center left, right. So this an economic left versus economic right. This cultural right versus cultural left, right. And you know, to establish this, I showed a bunch of almost like inequalities over here, right? Like you know, for example, you know, each one way of putting it is for each position this, I've got a citation there and I've got another one that shows that who's to who's right? Who's to who's left, right. So for example, you know the detailed argument, right? So here say. America, I mean, so you're

95:56
talking about specifically about woke America. I can see that. Or specifically, yes, left side of America. Well, what about the right side of? America Well, so that's a good question. That's right. So the interesting thing is the right side of America, I think, in this time of chaos, in churn, will actually eventually end up on the global left. And let me explain why. The reason is you can go libertarian enough that you're anarchist. But the global left does if you are truly. Left, there's different versions of left and right. OK, insofar as you identify. So American anarchy, right? There's both the left and the right version of that. And the left version of it is BLM, which is we are all equal. And the right version is, let's call it extreme Bitcoin maximalism. You ain't the boss of me, right? OK. And what both of those mean is nobody's in charge.

96:41
We are all equal means completely flat. Yeah, you ain't the boss of me means nobody's in charge. Again, completely flat, Right. And this BLM, and this Jan 6th. OK? So when you think about what that means on the street, it means swarming mobs, chaos, assault rifles, you know, everybody yelling at each other, no established hierarchy. And nobody wants to fold into anybody, right? Trump is like the last leader and opera him la deluge like after after MAGA maximalism, after orange man, orange coin. You have something where you have a bunch of basically Bitcoin, you know, Bitcoin warlords, whatever you want to call it, right? And you just have a bunch of leaders who. Warring States, go ahead. No, no, I was. It's.

97:26
Warlord era, right? It's like warlord era in China, right. The war or the Warring States. Yeah, exactly. That's right. So actually those are two different periods, but yes, yeah. So the, The thing is that people don't want to, they, they have taken one piece of American culture, which is leadership and so on and so forth, but they just don't understand the concept. They don't understand harmony or whatever. You know, they understand, you know, they understand the concept of organizing. One way of putting this individually alpha is collectively beta, right? Like if you I understand why Andrew Tate and so on exist, right? I actually think he himself is smart enough that a lot of what he says is like a persona, OK? But don't you think he says it also because he identifies the fact that men have become more disenfranchised, so he's just pandering to that audience. Totally, totally.

98:12
So he's, he's playing a character in many ways, right. So he's, he is smart enough. I think that he, I mean, his father's a chess master and so it's but his audience doesn't get the joke, right. His audience doesn't get the joke. and, and maybe he means somebody says, you know, I'm not, I'm not defending, but one way of thinking about it is like Andrew Peterson is like Jordan Andrew Tate is like Jordan Peterson with tats. OK, why? Jordan Peterson gave advice to young men to kind of clean your room so on and so forth. And that was like the old culture where in Western culture, hard work was valued and you're a valued member of the society and so on and so forth. And then lots of young men found that just didn't work. And they were just basically there being a nice guy. They were taken advantage of. So they went to the Andrew

98:57
Tatish, you know, all tats and like FU guttural, you know, the most, you know, insane form of ultra masculinity out there, right? The problem is that being alpha in this way, individually alpha is collectively beta because that those that means those men can't cooperate, right? By contrast, the quote more beta men who are, let's say, working on a ship in China or in Asia or something like that. They're actually collectively alpha because it can build strength together, right? Say beta. By the way, I'm not, I'm trying to say the stereotype of like Chinese, Indian men being beta, but I'm saying the, the, the cooperative. Like the problem is male male cooperation is characterized as beta in the West, right? And I understand how it got there, but it's bad because now you have women, men, everybody's fighting each other on different

99:45
axes. Nobody's in charge. This what I mean by American anarchy, like for example, with Bitcoin maximalism. But there's Go. Ahead. Yeah, but what do you call American? So what you might describe as I guess American hierarchy, I mean more positively, isn't that American individuality and exceptionalism? Well, they will you in the same way that you had communism in the mid 20th century and it had all kinds of nice words on it, right? But the substance of it was just a disorganized, like a terrible society, right? Actually, I should say it was the presence of a malevolent state, right? American anarchy is the malign absence of a functional state. So, so like as every institution melts down, like the FBI melts down, like Delaware melts down, right? You know, Delaware's everybody's

100:31
got note. California melts down at the point that Elon's gotten out. You have, you know, every single day you see another fight where it's like, I don't know, like, like there's a DoD thing. Yeah, but some general is fired right over. There, yeah. And I guess it's, and you could also argue around all the conspiracy theories that are being sort of put forward as well, and people listening to them, believing them and all that. So I get that right. This the end of the Soviet Union. Basically the end of the Soviet Union. Once they stop believing in communism, they believed in anything. But I would say that there is one route that I I do appreciate and often you can disagree on. That is, I do think the one thing that makes America difference amongst almost any other country is this idea that on the individuality and the celebration of that individual, which causes this anarchy and causes things because you start over COVID with the masks. It's like it's my right. It's I got to do this worse in China or Japan.

101:16
It's like, well, we all got to do it because it's for the collective goods, so to speak. But I would also say, and this goes down more, I guess more deeply rooted and maybe my perspective on, I think humans are generally tuned more for good than for bad, As in we care about our societies. Maybe we don't care about all of America, maybe we care about red America more than blue America or MAGA, whatever. However, we're still something that we want to attach ourselves to. And there's a common thread that eventually we will agree to because we want to be as social creatures, want to be attached to society rather than to be something where we're truly just individual beasts, as it were. Right. Yeah. And in some cases, that's reinforced by education in the States. So, you know, like China is an example of that. And one side of the extreme, which is very different from something inside North Korea or

102:03
it's basically just like literally ripped into your. Yeah, of course, of course. So forget that. And, you know, like, I think what you're describing to me is, but, you know, back in days of the 16th, 17th century, there were many constructs of how society should operate, run. And you had sort of the Hobbesian view, right, which is basically talking about how, you know, men are generally selfish and bad and evil. And therefore we need state control to put it together and control it because it's going to be chaotic versus I think the one construct that maybe most of us more in the West degree, the locking perspective, which is that. Yeah, we have some elements that are selfish and some of the problem with it, but by and large, most people want to be helpful and kind and supportive. And we need to, you know, be involved in a way where we

102:49
support that construct but not basically sort of, you know, control it as it were, Right. And I think just to close that thought, when we talk about a future of decentralization, we talk about a future work through code and what you describe as a network state and so on expands on. Wouldn't we be able to say that we can then actually celebrate individuality, much more so, but in the construct of common rules and code laws as it were, that we can agree on and do good things because we prefer to do good things rather than necessarily sort of really just fight each other all the time? So here's my view. My view is on there's absolutely like, you know, capitalism versus communism is not interesting in the sense of like even the communists are capitalists, right? But yeah, that's right.

103:34
That's right. So but individual versus group is always interesting because there's a balance of between the individual and the group. What are your responsibilities? What are your freedoms and so on. Rights. I'd say 3 or 4 things are responsible. You saiDeFirst is I think for you and me and for people in tech and so on, when we talk about individual liberty or freedom or something like that, we are also balancing that implicitly with responsibility that say you're not going to go and curse and yell in public, You're not going to be drunk in public. There's this degree of like an on board governor there where it is ordered liberty, right? Like because you take care of yourself, then you can have more freedom, right? The problem is that there is a low IQ version of I can do whatever I want. You can't tell me what to do F

104:22
you you know I'm it's a free country, you know blah blah. Or like we are all equal burn everything down. There's like really insane versions of this that do not have any onboard controller right? That do not have self governance that manifest in drug addiction or like extreme levels of obesity or, you know, out of wedlock births or you know, like setting fires, riots, setting way was on fire, you know, or just generally being disordered even on acts and like yelling for people to die. And so, so that is a symptom of, see, the problem is we have a language to describe an excess of centralized control right in, in the anglophoral, because that's communism, that's fascism. We don't have a language to describe the other extreme, which is anarchy, right?

105:07
Or I mean, there's a word anarchy, but it's, it's something where actually, in a sense, what is the Western left constantly afraid of? Fascism, fascism, fascism. What is the Western right afraid of? Communism, communism, communism, right. And so they will push so far away from centralization that they'll go to the anarchistic form of decentralization, where there's anarcho communism, anarcho capitalism. And of the two, I'll take anarcho capitalism because at least there's like some order. But it's like Mad Max, right? And I can show you. And when I say that by the way, I know. Yeah, it might sound. No, it's fascinating just because it's interesting. It's just that I. Think that there's a failure mode the other way is what I'm saying. And it's moving in that failure mode. And let me just show you some visuals, because I've got

105:52
visuals in my head, but I want to show you what I mean when I say this, right? So, sure. I mean, OK, I've been to this future of San Francisco. I get it. Yeah, that's. Right. So like for example. But I think of San Francisco more as as a state that's as a place that's that's breaking down where social cohesion again, well, but let. Me show you. Let me show you what it was actually at. This the level that it's at. OK, so here's a video in San Francisco. This like basically a year. And it's not just just a giant mob. All school cars are running in circles. Then here, watch this. They're setting them on fire. OK, this just straight up Black Mirror Mad Max in the real world. See, black murder is about like a dystopian future. And all the sci-fi stuff presupposes that the future is bad. But the present was OK, right? And here it's actually the

106:39
reverse. It's a present that's bad. And look at this. These are just like animals basically, right? They have none of them are arrested the police fighting cars on fire. Obviously that can lead to I mean the reason fire is bad is it spreads right. So this look at this, these, these. You know what? Where is this? By the way, this not like some random location. This in front of the Ferry building, right? Thisn't this not like some place that's known to be a hellhole. This happening in one of the most expensive places in SF, right? And the police doing absolutely nothing is like a signal that the immune system of society doesn't work. And let me show you another one ready. Here's another one. Here is. But are we, are we not at risk of highlighting? Well, prefer I agree with you,

107:32
this this terrible, but are we not at risk of highlighting the sort of exceptions to the rule? Because while it's true that there's a lot of problems in San Francisco, it is not that 90% of the population is doing right. Here's Susan, right here's who's. It. Mall that's that's the only people exactly. I'm right here. This guy's obviously queuing for his. Life, he's seen it before yeah. Now what's up There's something on his car and it's fully caring for his life So look, watch what happens watch what happens this is a large bomb of people.

108:22
This hundreds of people, right? So watch, watch that show. We'll see you there. No Watch this start. This the. Fasting. OK, this World War Z. This 28 days later. The fast zombies are running after him with this beautiful building and this well. Landscaped. Manicured thing, right? That was the old civilization that built that and this the new anti civilization that has risen and you see the mopeds

109:09
coming. That is to treat Mad Men. OK, Yeah. Do you know what scene is then? Yeah. No, this like Minneapolis. This kind of thing is happening all over America. It's not even like did this guy do anything? He didn't do anything. He was I don't even hear it was really Ghazi. There's some these are insane people and there's a lot of people enough to take on the street have no police. It can happen here in America. What's 1 do with that flag? They have more made people like here as it's feel and stuff. I don't. Know of course not what it is, but that's the point, because this. Is not expecting anywhere. This something that happens so. Much. Where's the police, I guess. Where's the police? They've been abolished, defunded. Remember that? Like, you know one of the things.

109:54
That took me a long time again. This obvious, but it's just the level of property that the, the billions, trillions, whatever in property that the police force protects in a city is like their pay is a tiny fraction of what that is worth, right? So obviously they're they have to do it for the honor, for the sake of protecting their community, for the praise of their community. You know, women love a man in uniform. It's supposed to be something where people are like, you know, thank you for your service for the military, but also like having that respect is actually a big part of what they deserve because it's a dangerous and difficult job. And the whole insane, abolish the police, defund the police kind of thing took away a lot of that status. And the police were suddenly characterizing people as a bad guy. So a lot of the guys who were

110:39
good guys laughed. And others just like, you know what, take care of yourself, you know? Right. So that's like, if they're not going to be praised for stopping bad guys, let the bad guy, you know, go, go take care of yourself, idiots. You know, that's how a lot of policemen feel, right? And so, I mean, the tragic thing would be that. And I guess I, I try to be hopeful here. Yeah, but the tragic. Thing would be that if you give up on a place right and then you leave that is the decline of the state for sure. True right but America was founded by people who gave up on a place and left right in the 1600's the. Puritans gave up on England left. The Cavaliers gave up on England left. 1848 revolutions, 1848, the German Americans gave up on Germany left. Did the Irish Americans, did they betray Ireland? There's more Irish people outside Ireland than they were there.

111:24
Absolutely. Yeah. So like every major group that came to the US basically essentially made the decision that their home country was had too many problems. The end later, obviously, Jewish people during the Holocaust, church, Iranians after the Iranian revolution, Korean people after the Korean War, Vietnamese people in Vietnam War, like Indians to escape socialism. Chinese people, like, you know, during Maoism, every major group, you know, came to America because there was something busted, destroyed, wrecked, ruined in their home country. Or they just couldn't fix it in time practically, because not everybody can like be like, OK, I'm going to ascend to becoming president and so on, right? The best decision for them was to vote with their feet and leave, Right. Yeah. And now I think another piece of this actually. Sorry. Go, go. You say something. I was going to say. Yeah, Yeah. You know, No, I mean, I think, I think the point I'm trying to make is, is that.

112:10
As far as long as it's going to be people in the SPACe that want to make it work, right? There is something worth fighting for. And so my, my, my sense is, is that America's worth fighting for. I'm not American, just be clear, right? But I think there is something that there is, there's something to lose that is more precious than just your. The values are worth fighting for, absolutely. Yeah. But it's meaning and so I do think that the. Ideand the place as it is. People fighting for it, whether this someone like an Elon or a series of people like this, I think people will come together if the police, state police fails as it is right now. I do think, you know, humans have this powerful way of reorganizing and reforming and it will look differently to your point, but they'll come together to make it work, right? And I think you see this in history. One, when things fall, they come back slightly differently, but

112:55
they will they will they will form and shape themselves in a way that again, brings it back down to the right sense of safety and SECurity that people. That's right. So this like what I mean. So I think the way I think about it is. Like you can think of it, the Internet is either AV3 or even V5. You have Greece, Rome, Britain, America, the Internet, right and for example, Bitcoin represents American values, but it's also it's really Internet values, right yes and so because global, because it's decentralized, right, the Internet is more America than. America and MAGA is trying. To be more China than China, right? Like in the sense of MAGA has China envy. They want to be a manufacturing power, they want to be a military power. They want they're even obsessed with Taiwan, right? All these kinds of things are things that nobody ever cared

113:42
about America until basically 2015 when Trump, like because red America was losing to China, MAGA had China envy. And nobody admits this, right? Like basically the Democrats also have China envy, right? Because they want to have that level of control and so on and so forth. And China just does it more competently. China's a much better China than blue. Americans are very similar, by the way, to the 80s with the USSR when they lost confidence in their own system and Gorbachev started copying America. Glasnost, perestroika were American concepts that were brought into the Soviet context. And it didn't work also because they weren't ready for it. They weren't ready for it, you know, it's basically the cart before the horse. They're trying to ideological reform. Before the manufacturing reform. Right, All that kind of stuff. So the whole thing melted down, right? And basically Gorbachev, you know, lost confidence in the communist system and tried to do things in a different way.

114:30
He's trying to copy America, and the Soviet Union was a much worse America than America later. Now Putin has rebooted the whole thing as a Russian nationalist project that took 30 years. And you know, like it's more successful than it was in the 90s. Maybe it's going to win this war in Ukraine. Who the heck knows what's going on for years and years and years. OK, so or, or, or he loses or it's some crazy stalemate that's been going for way longer than anybody expected. Fine. So I think that in, in, you know, trying to like China will always be a better China than than than MAGA, right. And, and because China is of course, it's just comfortable in its own skin. All this stuff like industrial policy that manga is trying to do, it's also got decades and decades of build up and experiences. You can't just replicate that overnight. Yeah, exactly. Like they want to make they want

115:15
to replicate your head, Sir, but there is one, of course. Thing that is different is around applications of AI right? Sure, but even yeah, go ahead. And the reason why I think it was interesting is I do think that the way that AI. Is forming and developing in China under. More of a state control environment because of safety and SECurity and so on, is going to have a different flavour than it has in America. And I do think it's the physical world. Yes, Sir. And, and also I think in America the application of individual AI will form differently than it will in China for that reason, right? Both of them would have their own forms of it. And maybe, you know, is the application of AI and by extension crypto and tokenization of that type of stuff not going to be perhaps that answer? And in terms of helping sort of reshape society, right? Because I feel like, you know, to your point about it's difficult for someone to

116:02
compete, but you know, in the classic labour construct. But when you talk about what's happening in AI on the creative side and what's happening with the AI, the tools available to you, actually, it opens up entirely new frontiers. And it's true people will get left out, but it's also true that. In. A place like America, you can be disruptive about this, which won't be allowed in China in quite the same way. So I, I, I again, I, I don't mean just tech people, sorry, but I just to say that I actually think because of AI. You're going to have. Much more extensions of that human creativity extend throughout people who are not technical, meaning that we're going to have totally much more amortization. And therefore, you know, someone in the Midwest could actually have an application of use in the so-called technology world that it would never had that otherwise. Yeah, but I'd say my, my mean, I

116:48
agree a lot of what you just said, except I'd say. Internet first, as you see from America first, right, Because not just someone in the Midwest, someone in the Middle East, someone in South America. So, right, And only 4% of the world is American, 96% is not American, right? But isn't actually America ultimately the physical manifestation of what you just described earlier in terms of the nation of every, well, people? Came in so so I think the V3 will be network states right? Like essentially. The, the physical US doesn't have a logic to it anymore because you've got people who are communists and nationalists and technologists and so on all living next to each other that don't share their values, right? Like basically it used to be, or the whole nation state concept was this, this implicit premise that if you live near somebody, you share their values. Therefore you could agree on

117:34
laws and those laws would be enforced at in a geographical way. Right now, people can live in an apartment building and they completely disagree with each other on everything. They don't know each other. They're 30 feet away, one above or below or whatever. They wouldn't recognize each other on the street. They would like completely different content and now with the Internet they have complete different system of laws. 1 is on this blockchain, the other is on another blockchain, right? So the entire concept of law being enforced geographically resides implicitly on culture being uniform geographically. When that breaks and fractalizes as it is in America, you don't have that now. But China does have uniformity of culture and geography because they have the firewall. They, they kind of took the hit to do that vertical integration,

118:20
right, Those digital borders that they've built the great Firewall. I think especially in the age of drones, nobody can script something easily on China's territory because they have this right? Like they, they have the ability to block basically. And this the thing, like they, they kind of made this claim that they, if they can inspect physical packets coming across the border, they can inspect digital package. And there's actually, you know, again, I will still be on the side of the free Internet, but to make the case for that, and I'll give the case for the free entry in a SECond. But to make the case for that, that concept of digital borders as opposed to censorship is an interesting way of thinking about it, since it's actually true in the age of robots. and you know, you don't want to allow someone to just connect and script a drone and blow something up like the Ukrainians did in Russia, right? OK, so China's actually, they

119:06
took the hit and they took the PR hit and they actually have something where they have a communications layer and a social layer in Korea did something similar. Oh, really? Interesting. I know this. Yeah. So I mean, notice how Google doesn't exist in Korea. Yeah. Neighbor. Exactly it. Says old neighbor and the way the map. Systems run. They didn't do it in quite the Chinese way, in the sense that you could still. Access Google. In Korea, but all of the domestic sort of ecosystems and, and frankly utilities and all that type of stuff really could only be accessed in Korea, in Korea by Korean companies. Huh. So for instance, Google Maps does not work in Korea. Really. Yeah. So you have to use neighbor. Or you have to account maps, right? And it's sort of a different level of protectionism. But as a result, Korea now has a very strong native industry, yes, that doesn't exist elsewhere in similar or actually

119:52
larger size countries because they've essentially been digitally colonized. Yes. So totally understand the perspective. That's great. Exactly right. And I think Indialso has, it has Reliance Geo, it has kind of its own things and. So it has some degree of sovereignty on that versus those, right. So this concept of network versus state is actually like the capitalism, communism kind of thing of this century. It's centralization, decentralization, right? Because the network is capitalism, the state is communism. Or like when you actually say those are loaded terms, you're showing, right? Yes, exactly. The network is individual and the state is I think. Maybe you can summarize it as. I mean it's. Decentralization, but it's ultimately down to. Getting one layer lower into your property rights. Yeah. and as I think you were saying earlier, and I completely

120:38
agree, there's many different valuable intermediates. Between these, right, Singapore and Dubai make different trade-offs, but they're both valuable places and it's useful to visit them, right? And there could be 50 different kinds of network states, 1000 different kinds of network states, each of the million people that make different trade-offs between the individual and the collective. And where, where I come to is you preserve democracy, you preserve choice by allowing people to choose between these locations, right? You go from the two party system to the thousand city system. And so you can pick because actually one of the things that's happening in the US is at the state level, they're becoming one party states. California's been a one party state for 15 years, right? That's why they've got the $100 billion change norm. So California's a one party state. In response, Florida's becoming a one party Republican state, right? And, and, and obviously China's

121:24
a one party state. So the actual choice is between states not within them, but the ultimate state ultimately for all of them in order to preserve the ability for the state to. Survive they do need to have access to military of some ah OK let me talk about this right so my view on I think Americans are you know and I've shown previous. Graphs in different podcasts. But like, you know, if you look at shipbuilding, yes, China's 200X American shipbuilding, so, so on stat after stat, the current SECretary of Defense has said China's hypersonic sequencing, all these aircraft carriers, our whole power projection platform is aircraft carriers and the ability to project power that way strategically around the globe. And yeah, we have a nuclear triad and all of that, but a big part of it. And if you know 15 hypersonic missiles can take out our 10 aircraft carriers in the 1st 20 minutes of a conflict, what does

122:10
that look like? Former SECretary of Navy's admitted one Chinese shipyard can build more than all your shipyards combined. They have 13 shipyards. In some cases their shipyard has more capacity. 1 shipyard has more capacity than all of our shipyards combined. CEO of Raytheon has said you can't decouple from China. So while we talk about pulling supply chain out of China, resourcing out of China, I would tell you it's very impractical. We've been de risking for a couple of years, making sure that we have SECond sources for critical componentry. But unlike Russia, where we pulled out two weeks after the invasion last year, we shut down our factories, we pulled our people out and we completely cut off any contact with our Russian customers. You can't do that with China. Too big, too important and too necessary.

122:55
There's AUS military study by an entity called Gavini that showed that the US military is made in China, that like the Tomahawk, the JM, they go back to the Chinese suppliers. So in many ways, the entire concept of the US military being prepared to fight China is all completely fake. It's just basically something where it's like defense spending or what have you. It's like a defense budget thing. But in an actual fight it would, it's just a, it's like a, it's completely fake, right? the US military cannot fight China. And so once that's actually priced in, then you actually realize, OK, the Chinese drone Armada is the most powerful physical force in the world, right? And I and I'm describing something that doesn't fully exist yet, but it will, right? The Chinese drone Armada where the sky is blackened by like, you know, this crazy kind of things, right? Against that, I think you can't

123:42
fight it directly. The entire American model is wrong. You need something more like Gandhi and non violence. You need the agility of the Internet. You need to have decentralization. You need to have, you know, essentially be everywhere and nowhere. You need a completely different strategy to balance the Chinese drone Armada then the tank for tank plane for plane model, which MAGA still invested in and they're just wrong about. They just don't have the manufacturing group. They certainly don't have the price competitiveness right. So Gandhian non violence is, you know, as that capital moves, you know, from Greece to Rome to Britain to America to the Internet. New cultures influence it, right? Like British culture had a lot going for it. But the American fusion, you know, all these different European strains and African Americans and various immigrants like added more strength to it

124:27
and such that even British culture, as powerful as it was, you know, actually now looks up to American culture and American culture looks up to Internet culture there, you know, in a sense, you know how like France. Oh, go ahead. So, so, So what I wanted to add to this that so I agree with you in terms of, you know, when it comes. To although I do think neither side wants a war because it's going to be so destructive on each side it's just not worth it because obviously there's going to be a lot of internal issues that develop from it and one and when it comes to that I think China will will definitely have a much harder time weathering it than America. You think so? I think so really so yeah, because interesting because because I think the harmony of of China on wars is it's one of the reasons why I think it's is that this the one child policy and they don't just demographic

125:12
issues. Well, they don't have a flow of they, they, you know. You don't get this. Just not that obvious. For immigration to take place in China, right? Just for cultural issues as well. It's also one of they have visas in Hong Kong though, although they do. Yeah, yeah, right. It's like 8 billion people, so sure. So it's one of the reasons why I know a lot of people in the US are saying is. China is going to invade Taiwan. They're treating it like the next to Ukraine. I vehemently disagree with that perspective, primarily because I don't think first of all, she is not Putin. The 2 are entirely different right? It's not like sort of that sort of acting in a vacuum. I think they're much, much smarter about this. And the SECond thing also is that Russia shows China what not to do that too. Have you heard you know that proper? Obviously, like with the collapse of. The Soviet Union, Russia, you know, Mod yes, the ideological is supposed to economics first. They keep showing China what not exactly what not to do, but also again sort of China inside first

125:58
in terms of making. Sure that you have harmony and creating a war even that's external is not fruitful for internal harmony whatsoever right so I don't so so I think I don't think China would be an initiator of a war regardless and I think America doesn't want 1 so I think that's one perspective but the SECond one is really when I talk about the Internet and as you're going in class yes exactly sure when I when what I was trying to say is that we. Will still need. Some form of protection because we're still physical beings, yes, at the end of the day, whether it's police or this or something like this. And I think the common bond will be the fact that we need to have some some form of social cohesion and SECurity totally. And we'll come together whether this government network state

126:43
as you say. And I think enough of them will then share around those values and come together because of that. Absolutely agree with this. And that's why I think these cloud communities can have leaders that can materialize in the physical world. And now people are once again geographically and ideologically aligned. And what I would say, I hear your point about America currently split and all that kind of stuff, but if there. Is one place today and maybe the place will be somewhere else. Although it's hard to imagine if there's one place today that's still, despite all the struggles internally can still exist with this divide. It is still America in comparison to other places. You couldn't. China wouldn't survive some of this, Europe wouldn't survive something like this, right? I think America it's struggling. Do not get me wrong, I agree with you completely, but if there's one country that has an ability to potentially deal with it, I do think it's America

127:28
because of it's history. So why are we? Well, but, but I understand what you're saying. Yeah, Yeah, I think. I think it's kind of like saying the sun will never sit in the British Empire, but the British. Empire. You know that used to be a saying, right? But the you. Know and it was true for its history for hundreds of years. The sun never sit in the British Empire, right? But the British Empire was not an idea. It was more so than anything before. Because it will actually like. This. Yes, one last thing right so common law and the Magna Carta, yeah was a crucial thing that made the father of property rights. Exactly, that's right, exactly so So Britain was closer to an idea than. Any other? European country, right? It was more abstracted out. That's why it was also Naval power. It's a combination of geography,

128:14
the ideas there and then America. I just want at one point. Also, I think the English language is also part of that. Yes, because the English language is such a fluid. Language and I think broadly a much more optimistic. So I grew up speaking German, right? Because it's my mother tongue, because I'm good in Europe and German is an incredibly precise language. You don't have this joke about unless you put the verb at the end of the synthetized, the entire paragraph you just said makes no sense, right? So it's partially true because of that position, but it also makes for a nation of people more precise and frankly more sort of half glass, sort of empty as half as full perspective. And I find that in the English language, you have the ability to be much more nuanced and you can be more, let's say, packaged. And maybe it's more political as well.

128:59
And as a result, we can phrase things much more positively and optimistically than German as an example. Yeah. It's, it's it's I think it adds to that flavor. Yeah. I mean, people have, there's a, oh gosh, there's a Spanish writer who made. This point he's like. There's like a Latin. And German version of every word. So like, you know, or like for you've you've there's chicken, but there's are like a beef, but there's mud in and you know, you have the short German word for something and you have the longer Latin word for it. So there's a lot of variety and you can mix these up and, you know, Regal is different from, you know, royal, that kind of stuff, right. Anyway, so you're right. But so that's why I do think English is the language of the Internet. And you know, in a sense this we're call it interaction balance, whatever of this 21st

129:45
century. And again, it's in a sense EUR Asian communism versus Anglospheric capitalism, right? So except the EUR Asian communism I'd actually put on the right this time, and the Anglopher capitalism I put on the left because the Internet is sort of the more anarchic kind of capitalism freedom, you know, and so on and so forth. Whereas China's more ordered kind of communism and more nationalistic, right And so it's almost like the world has these certain confirmations and again, the capital move from Moscow to Beijing of EUR Asian communism, right. But it's still a land power fundamentally. Yes, yeah. What you what, what I'm kind of hearing is you're saying, you're saying sort of just to back to the point about sort of the, the. Sort of the British Empire is that the British Empire itself obviously is no longer what it used to be, clearly, but the ideas of the people in the British Empire, right.

130:32
Have have have have basically migrated into America. Yes, right. I mean, sort of Locke didn't have success in politically in the UK as much as it influenced what happened in America. That's right. Yeah. but now America's like 20% WASP or something like that, right. So like it wasn't like that before, though. It was like. Before, that's right, yes, so, but the torch got passed and think of it as like software. Versus hardware right the. Software, the values and the hardware is the people. And you can have, you know, when the software and hardware are fully aligned, everything's great, right? But you can also have cultures pass on just like algebra came from the Middle East or what have you, or zero came from India or gunpowder from China. There's cultural things that can spread, right? Even independent of the people. And then vice versa, right? People can have totally different, their software can be

131:19
wiped and you can have N Koreans and S Koreans with totally different software on very similar hardware, so to speak, right? And the way I think about it is the Constitution came after English common law, then only scaled to America. But the blockchain scales to the Internet. Yes, Right. Yes. So all the values of America, which I think we both value free speech, free markets, you know, privacy, sovereignty, rights, everything. Yes. All of those are guaranteed by encryption and by the Internet, not by American courts. Right, Like Delaware doesn't. Yes, Delaware doesn't protect your property rights, but the blockchain does. Go ahead. But there is a consensus. That comes from the agreement we have with the society and some, and I guess we probably both agree that the consensus of proof is enough rather than necessarily needing a state to

132:04
enforce it, so to speak, right, because if someone well, let's see Bitcoin. So the thing to your point about in the military like Bitcoin has gotten to a trillion without violence, yes has has no has no armies. Has no, but it's only different. But what What if someone steals your Bitcoin? You still need someone to try to enforce to return it well, so. The thing is that yes but does it mean? That's what I mean, right? But, but, but. But like can you get a return? I mean, Bitcoin depth is kind. Of irreversible right? It's very difficult, like if. A Brazilian takes it from someone in Turkey like for better or for worse, code is law, right? So you have, and of course you could instead store it non BTC, but some other thing where there's a, there's a digital reset and there's System Administrator and centralized and you could have USTC freeze it and reverse it and so on. And those things have arisen

132:50
because people do want that, but they also have a balance like here's the amount that's totally with me, but it can also be stolen. Here's the amount that was centralized custodian and it could be reversed. But I don't think the police are really that helpful. They're like somewhat helpful. Maybe at times it's a really big theft and so on. But most of them, they're not helpful. So without a system of enforcement, I think while most can be careful about it, it does I think. It does create a scenario where people are going to be more like for, for a certain subset. Again, it's not the majority, but a small subset sees opportunities. Yes, yes, yes, that's right. So that's why that's like that's like network versus state, right? This like total network. But then some police are the total state. And then if you go far enough this direction, they don't want crypto exist at all, right? So that balance is I think this century. Exactly, exactly. And then we have to go to the pendulum shift.

133:35
But OK, but why don't we wrap for these? OK, good, right. Let's ask you some. Of them. OK, good. Alright, I'll see you soon. Thank you.