Mailbag: incl. How is Super fair for young people? May 18, 2025

27:54I'd give the pension to everybody. So every retiree gets the pension. You increase the tax-free threshold by$20 ,000, and you then say every dollar you earn above that is taxed at a marginal rate. Yep. It's very, very simple. Really easy. Yeah. And that way you remove any distortions. You also have to deal with exit tax, which we've already got anyway. So if you die with money in super, your estate paid or your beneficiaries pay tax on that amount of money. Yeah. And you've always got to ask, one of the great litmus tests with any kind of proposal is just say, well, what would you prefer? And ask yourself, would you prefer a situation like that, which is, yes, admittedly not as favourable for you as the current situation now, or that you don't have that money in suit?

28:37Right. You haven't been, you know, like I said, I'm like, yeah, I get it, but it's still vastly superior to the alternate scenario. Like you'll take it, right? Like which hat would you rather wear? I'll take that one. Thank you. Because I'm, again, I always think I'd much rather be someone who is paying a million dollars a year in tax, but earning$10 million a year than someone who pays no tax and doesn't have an income, right? Like, can I pay as much tax as possible? Whatever the regime, because it almost means that like, you know, unless you're going to get really silly, it just means that I'm incredibly wealthy.

29:13So I'll be wealthy and pay a lot of tax rather than poor and not pay any. Thank you. Totally. It's a nice problem to have, isn't it? Yep. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

29:29Matt, I've got a Bitcoin question for you. It's a Bitcoin challenge. I'm going to ask you to take a deep breath. I accept this person's asking in good faith. It's not trying to be difficult. Thanks, Matt. And it's from R. You know if I saw herself or herself as R. I've listened to the podcast for over 10 years and I allot to the wisdom and collective brains trust of the Motley Fool podcast. I have my very first question for Podsky. Maybe it's the name of the pod machine. Podsky the pod machine. I don't like it. We'll see. I followed Andrew's Bitcoin journey and I've listened to many hours of healthy debate and the straw man approach between the two of you.

30:01As Bitcoin's value has grown, I've been increasingly interested in the phenomenon. If Bitcoin were to become as widely used as a dollar in say 10 years time and its price continued to rise, Early investors, or even those who invest today, would have a significant advantage over those unable to invest now. This includes people with no capital or even my kids, for example. A child born five years ago, for instance, would miss out on those gains simply because they weren't around to buy in early. If in the future they earn their first paycheck in Bitcoin, that would be a financial disadvantage compared to those who are fortunate enough to invest earlier.

30:37As far as I can tell, this issue hasn't really existed with traditional fiat currencies like the dollar. Isn't investing in Bitcoin while hoping it becomes a widely used currency, something like a property investor who owns hundreds of houses, hoping real estate itself becomes currency. Would that inherently create an unfair economic advantage for early adopters? What am I missing? How do you square that circle? Looking forward to your thoughts, best R. Yeah, good question. We should take all the money off early Apple investors. They bought Apple stock before I had the opportunity to buy it and they benefited unfairly or insert any number of stocks here.

31:16We should take all the property off the boomers because they bought property early. Except that, as R points out, if Bitcoin becomes money, it's different. There's no feared example of I had all the gold and gold all of a sudden was chosen to be used as money and therefore I had a massive advantage to start with. There was no feared example or equivalent. So you can choose to invest in Apple or not, but you still get paid in dollars. Your paycheck relative to my store of, I mean, if I've saved cash, it's a thing, but cash hasn't grown in value because it's become more valuable. I might have stored up more or accumulated more, but it doesn't become money in the same way.

31:53I get where I was going here. I take your point as well. There's a different thing where if Apple stock became money, then I would agree with you. In this case, he's saying, well, there's an asset over there, which is a separate asset. If we could have it to become money, or the only money or the major money or the predominant money, yeah, you know what I mean. Okay. Become equivalent to fiat in usage. If I had dollars off and dollars became worth something, I'd have a thing. But the dollars I have were already worth something when I bought them. They're worth more now because of, well, arguably worth more.

32:21Inflation and savings and compound returns and stuff. But a dollar is still a dollar should a dollar, purchasing power notwithstanding. Purchasing power is everything though. Like you can't brush that. Purchasing power is the point, right? But it's getting worse rather than better. So it's actually, I'd add to my argument rather than take away from it. So I'm trying to give you that back. Well, that actually teased me up perfectly because it's the old oak tree. The best time to plan it was 50 years. The next best time is today, right? At any point in – so I was very late. Every single person who chooses to adopt this thing is always late, right?

33:00You'll find – you go back – there's great examples online of people who are buying it at$1 ,000 a coin going, oh, I had the chance to buy it when it was$10. is why I'm too late. I'm too late. My cost basis, I think the average is 40K Australian, you know? Yes, that's a humble brag. Yep, deal with it. It's the only asset, by the way, that you get no credit for. Like any other share or asset you buy, you go, oh, well done. With Bitcoin, it goes well. You go, oh, you got lucky. You don't get any credit for it. But I can tell you when I bought it and I bought it over, I continue to save in it. But, you know, when I really started to adopt it, I felt horrendously late.

33:45Like I remember the peak of the 2017 bubble was 20 ,000 US, you know. Yeah, yeah. And so here I am buying it at a premium to the bubble top of, you know, it just felt so expensive. But I don't want to get into the debate of if, you know, So could it? But R is posited that it will happen, right? So let's say it happens. And let's say it is just money. And let's say you're getting paid in that. Well, what do you want? Do you want to get paid in, to your point, a fiat currency who's designed to lose purchasing power every day? Or do you want something that will preserve your purchasing power? At the end point, this just becomes what's called sound money or hard money.

34:28It's just a money that's not diluted and one that doesn't lose purchasing power. When is that a bad idea to adopt? There are different things, though. I need to pull you up a little bit. It's not a general, is Bitcoin worth doing? He's just saying it isn't one of the implications that it creates meaningful inequality based on adoption time. Doesn't mean it's good or bad. It just means that a consequence is potentially the same. This is why I'm sort of trying to scream it from the rooftops here. There will be a point in the future where everyone will turn around and go, you got lucky and it's not deserved.

34:59and I really push back on that because it's like, screw you. It offends me, in fact, and it's insulting because it always looks easy in retrospect. I did this dumb thing and I got massive reward for it. No, I did a huge amount of research and thinking. I copped so much flack and criticism and derision, you know, and was laughed at. I had to hold this thing as it underwent 30, 40, 50 % drawdowns and volatility that would, you know, make a tech investor weak. I took extraordinary risk. I did an insane amount of work. I built huge amount of conviction and I defied conventional wisdom. And you're going to turn around and just say, I got lucky and I don't deserve it?

35:48No. It's the same for the people who did extremely well. Pick a different local example. I bought Fortescue Metals at$0.10. Now, well done to anyone who held on to that the whole time. You saw something that no one else saw. You took the risk. You did the research. You got the advantage. Here's the other thing. It's not just having to do that, but then once having done that, to resist the temptation to sell. Think of the person who bought Bitcoin at$1 ,000. They had to go, and who still holds today. Someone knocked on their door and said, I'll give you$10 ,000 for it. no 20 000 for it no 30 no you know like at every single point they had to resist the urge to to spend that money in a way and they didn't they they they ultimate marshmallow test they they resisted consumption and that that was that that was the choice that they took and then they got rewarded for it because they they they were an early adopter that's why this is such an incredible opportunity because at a point when it just becomes money, I've got to be careful here, it's already money.

36:55Of course, it's money. When it becomes more widely accepted as a money, you don't have, it won't grow at these rates forever. We're just in the S part of the adoption curve. And that's going to run its course at some point over many decades. And when it's done, it's done. And then you're just left with money, like ubiquitous. And the only growth you'll get is the increase in productivity and purchasing power that just comes with the enhancement of the economy, you won't get these 20 % compound annual gains. In the same way that the best time to hold Apple stock or Nvidia stock or Fortescue stock or Google stock or realestate.com stock was the early days.

37:34That's where the best gains came. Why did the best gains come then? Because that was the point of maximum risk. There's an alternate reality out there where the whole system crashed 10 years into the journey, or it could crash tomorrow, right? And so it's sort of like, why shouldn't the people who take all the risk get all the reward?

37:58It's got to be exactly the kind of person who spent their whole life laughing at it, criticizing it, calling it, you know, a tool for pedophiles and criminals, et cetera, that turn around 10 years later and go, it's not fair. I should have some. Like when you spend every single effort that you could to push back and throw shade on this thing. And now that it turned out in a way that you didn't expect, Now other people have to make you whole. I'm speaking of some, I've got a friend in mind here. Sorry. So I'm not trying to, I'm not trying to project this onto you at all.

38:29But it's right there. It's open. It's voluntary. If you want to do it, you can do it. Is risk in it? Yep, absolutely. And that's why there's such good upside at the moment. If you don't want to take the risk, then don't take the risk. But even if that's the point, even if you completely ignore it and you wait until the year 2070 and then go, okay, fine, this is what I'm being paid in now, you're still using a money that is so vastly just superior to anything else we've ever had. Why wouldn't you do it? I always use the example of the Japanese refusing to use gunpowder for cultural reasons, right?

39:05In the end, they did. And it's not like they went, well, I'm the last country to adopt gunpowder, so there's no point in doing it or I guess I shouldn't do it. But no, it was still a good idea to adopt it. And it will still be a good idea to adopt. In fact, it will all be non-sense. Why wouldn't you adopt it at that point? You can go back to it now. Yeah, exactly. Like you have to adopt it. And yeah, I don't know. I'm going to find a place in between you two. I think it's a real issue. I don't know what proportion of Bitcoin Satoshi has. Do you know the number? I know the number. Oh, he's got a million coins or so.

39:38What's that? 20 million. So 5 % of the, yeah, right, there you go. So, you know, if Bitcoin became the only money or the money of account for the entire world, Satoshi would have 5 % of the world's entire net worth. Yeah. As a result of that. And I think that's a better example because Satoshi is gone, right? Sure, sure. So, Michael Saylor, the CEO of MicroStrategy, they own, oh, I really should know this, but by far the largest amount. So, he will be, he'll make Elon Musk look like a pauper if this goes to a million plus a coin. And so at some point, I think there is, and when that becomes the money, the rather than A, just to be, again, really clear and specific in your point, I think that's a bad outcome.

40:21I don't think distribution of the currency because of its eventual adoption is a good thing for humanity, separate to whether Bitcoin's good. So, again, that's why I want to separate the two thoughts here, right? Because, you know, I'll say speculating. I don't mean speculating pejoratively. so I hope that's okay to use. But the idea of like, when this, like ours example, when this becomes the money, I was smart enough, thoughtful enough, I was born early enough to kind of pick up the money before it was the money. The minted minted these coins and they weren't sure if they're going to use them or not, but I scooped them all up, I took them home and now I own X percent of the world's wealth, right?

40:59It's like, well, it didn't represent the value that you create or even own. You weren't transferring your current wealth into Bitcoin in a one-for-one relationship. It was an intelligent speculation. Again, I mean that not in a big way at all, on a future value of the money. And so I kind of got an unfair advantage. I think that's a fair – I want to say unfair advantage. Everyone's got that advantage. You've got it right now. Yes. What's stopping you? You are stopping you, which is fine. But you can't use the word – I've got to pick you up on it. It's not unfair. It's unfair if I'm saying, no, you're not allowed to buy any Scott.

41:33It's only me. I'm only allowed – and me and my friends are. If you're going, no, I don't want to, then that's not unfair. I don't suspect it's reasonable for a new money to not proportionally represent the money which it replaces. That's where I'm kind of with R. It's a redistribution based on, again, I'll say investment rather than speculation because I really don't mean it negatively. I use the word speculation generally negatively, so I'm even tripping up on my own words. i'm not if you if when when the when the dollar replaced the pound as australia's currency we didn't say to people so we're going to replace the dollar with the pound we've been talking about the dollar for about 10 years we let you buy the dollar earlier now we decided to do it so guess what everyone's everyone's wealth distribution is radically changed by the adoption of your currency we said one pound is worth whatever it was in dollars i don't know the numbers i should and therefore everyone was not not made whole but there was no disadvantage or advantage in in investing in or taking a, I'll say speculation again, because we don't know what's going to happen.

42:32So it's that kind of idea of like, if it does become the money, then it's worth more. There wasn't that change, right? The pounds became the dollars. And I think that's the analogy that I was getting at. That was a point in time. That was a point. It's a bad example because that was a government decree. At this date, this is the money, and this is how you have to pay your taxes. You can go to the bank. You can convert your pounds at this exchange rate. And so this is something that's bootstrapped from zero entirely organically without orchestration or control. So it's a different character and a different beast.

43:03But even if you put that aside, let's play it forward, right? Let's say for the sake of example that I've got 10 million Bitcoin. I own half the supply of Bitcoin, right? Andrew's saying it's hypothetical. I'm not sure it is. I wish I did. I wish I did. Now, this is what will cook the noodle a little bit here because when people call it a hard money or refer to hard money, it means that it's hard to make. And in this case, it's impossible to make more of, right? So I've got all these magic internet tokens. What I've really got is a password in my head. That's what I've really got. Now, if I want to spend it, I have to swap it with someone.

43:49So there's no advantage I have. In order to prosecute the strength that I have, I have to – I'm tripping myself up. The very act of spending it is the act of redistribution. And this is how it redistributes over time and already has. In fact, as we're seeing the current corporate adoption play out, which is just so fascinating, it's just completely amazing to me that it's not any mainstream coverage whatsoever. And it is, and again, there's a lot of good chain analysis data. It's out there just black and white, like the level of, since the ETFs were launched in the US, the number of Fortune 500 companies and companies of every scale that are adopting and just extreme, they've only just come in now.

44:36And where are they getting that from? There's only 3.125 mined every 10 minutes at this point in time. That's going to halve in three and a half years and then it's going to halve again and halve again. So it's all coming from early holders. It's redistributing. You can look at the UTX – I've got to stop using jargon here. You can look at the set of available coins and where are they all coming from? Where's Michael Saylor buying it from? From the early adopters. They're redistributing them. So it kind of – it's a problem that sorts itself out.

45:11And I just – I don't know how else you do it, right? My point is that whether you bought it at a cent or whether you're buying it now at$160 ,000 Australian dollars, you are going to a better form of money. And the best analogy here is consider someone in Turkey who's using a lira. They can switch to US dollars. In fact, anyone who lives there or knows the region knows as soon as you get any money, you either spend it or you switch it into US dollars. Right. Now, are they going, you know what? I'm just going to switch it into US dollars. I'm going to wait for it to go up and then I'm going to switch it back into the local currency.

45:52No, no, no, no. I'm going to the better money, right? And it is a one-way street. I'm never going back to a seashell. I'm never going back to a bale of tobacco because it's demonstrably inferior money. And I choose to stay with the US dollar in my example because it's just vastly superior and that's never going to change. And to sort of say, yeah, but Bob switched his earnings into the US dollar a couple of years before I did. And so I've had to suffer this crippling inflation and debasement of my currency. But he was smart enough or lucky enough to switch you out of, you know, that's not fair.

46:34What's going to be done about it? It's like, well, nothing except maybe you should switch out too because it's a better money. But Bob needs to give me some of his money. I'm like, well, why? I don't understand it. Like it's kind of, and we're at a point, I tend to think now that if you have any, look, there'll be people listening to this go, this is all nonsense because it's never going to happen. Fine. If you're in the camp of, geez, I don't know, but maybe it's got a reasonable chance of doing it, maybe you should act on that. I'm not saying go all in. but maybe you should act on that or maybe you're super high conviction and maybe you should act on that as well but the opportunity there, it's free and open and to the early adopters go the biggest spoils and as is the case for every asset in human history except for fiat though, which is our point so I think both is true, I think this is where actually you raised a different, sorry, go on I think for what it's worth I think both is and can be true I don't think the reality of the redistribution means that Bitcoin is bad or not better or any of those things.

47:39I think that's where it can have benefits and it can have drawbacks and that's okay. So my personal take is the stuff you posited as the positives are absolutely right. One of the social drawbacks is a redistribution of wealth in a way that maybe isn't what you would design if you had the choice. I think both those things can be true. Because I do think, I think because it's a money rather than an asset, because money is, yes, it's a store of value to some degree, but we're really talking about a transactional token in whatever form, digital or plastic or paper. I think both can be true. And I think we can, personally, I think it's okay to say, I don't think there's a better option.

48:18I think Bitcoin is still better. I acknowledge that Michael Saylor is going to make a squillion dollars and the person with cash in their pocket who keeps the cash for 20 years is going to be worse off. That's going to happen. And that I don't think is a good thing, but I also don't think it necessarily means that Bitcoin isn't worth doing or that's negative or it can't be adopted or it should be stopped or any of that sort of stuff. And I think we can live in that gray of there are some wonderful advantages which are worth it. There are also some disadvantages which suck for some people. That's like everything else in life.

48:44There are winners. That's just the reality. It's not perfect but it's better than what we have. That's where I'd, not because I'm trying to appease, I just think that's the right approach. I do, by the way, the other thing I think rams right on and I think you are wrong on if I can say that is we have that kind of now, we use it with kids who aren't born yet. There are assets being created. I've talked a lot about intergenerational inequality. There are kids who will be born today to parents with$10 million and kids born to parents with not much money but their own house and kids born to renters.

49:17And those three kids will have very, very different outcomes based on the world they're born into and their ability to either have or accumulate money either from scratch or with something else behind it. So you're right in terms of the redistribution in my view, but I also think the not born yet ones is always the case because we're all born with nothing other than you know lucky or unlucky parentage and lucky or unlucky skills that that do determine where we end up with where we end up in life that's not about the rise of individual money per se but it absolutely is the amount of money you have and so you might be born into money or not born into money that's not so different to the impact of bitcoin if and when it continues to ground value.

49:54Yeah. You made the point that I was just about to make it. You made it better than I was going to. So that is just so crucial. I mean, my great, great, great grandchildren who aren't yet even born yet, if they are born into a world of sound, neutral money, that fills my heart with joy and optimism. The starting point here is that people assume that what we've got now is good and even and fair. Is it? Is it fair? Do you think that Rupert Murdoch is on the same playing field as you? Do you think Elon Musk is in? Do you think that these guys get a better or worse cost of capital than you get? Do you think these people have more ability to transact in assets and in jurisdictions that you, like, it's not fair at the moment.

50:47The great thing about Bitcoin is that you can be a peasant in rural Africa or you can be a billionaire in Manhattan and you can both use it for the same cost, right? And whether you're buying one Satoshi or a trillion US dollars worth of Satoshis, you've both got the ability to do that at the same sort of cost. It is the most egalitarian, fair kind of thing that is out there. And for people to go, oh, but it might be unfair for anyone who chooses to dismiss it. I just reject it on so many levels. It's always a better, it's always a step up for you. Whenever you, whenever you choose to do it. And you're moving away from a system that is grossly, grossly unfair.

51:29And this is, I say this as an Australian who enjoys a wonderfully stable monetary and fiscal system relative to the world. You've got to remember there are 6 billion people on this planet. There's 170 different sovereign currencies that are out there. The average life of a currency is about 20 years. Because once you get outside of the yen, the euro, the US, the Canadian, the Aussie dollar, a handful of others, literally 90 % of these currencies are effective theft mechanisms from the poor to the rich. And that's not hyperbolic or in any, like that is the literal kind of truth. And if you don't know or understand that, I just really encourage you to go to some other places and talk to people there and ask, why is it that they've got rolls of$100 bills stuffed in the wall?

52:18US dollars. Yeah. Why? Oh, they're not patriotic? No, they're being constantly stolen from in a very sneaky, indirect way because it's just the best analogy I've come up with here. I think share people get it. We've all got shares in a company. There's a hundred shares out there. Scott, you're a founder. I'm a founder. We're going to give 50 each, but behind your back, I'm going to give myself 10 extra shares every year. And if you want to say to them, and if I can go to you, don't worry, I'm not stealing from you. You've still got the same number of shares. Yeah. Sorry. Yeah. Like, no, I'm stealing from you.

52:52I am absent. And that is, that is what happens today. I'm sorry. I'm getting really worked up, but it's like, it really, it really, it really invigorates me, I suppose to, to sort of make the point here, because it's just, if anyone takes a cold, hard, logical, objective look at the current system, it is so grossly, grossly unfair. and to push back against something that at least nothing is guaranteed, but at least has the promise of being egalitarian and fair without all the funny buggery stuff, you know? Why is it that a billionaire hedge fund manager gets bailed out after engineering the worst financial collapse since the Great Depression that happened in our recent life?

53:33That doesn't happen under a sound money standard. We're advocating for maintaining that. And the people who built their fortunes on this unfair system, that they should be able to port it across at any time they want without any penalty. Like, just think about it for a second and think about what you're asking for. And if there's any – oh, shut up in one second. If there is anything that is – again, there's a lot of – we've got a big audience, I'm proud to say. You're out there going, it's all bubkers, then fine. Don't do it. That's the great thing about a voluntary system. But if you are out there going, geez, I don't know, well, then I would say at the very least, spend a bit of time educating yourself on it.

54:16There are so many resources out there. There have never been more resources today than there was even like a few years ago. And then come to your own conclusion. And here's the interesting thing. Talking about Michael Steyl, he makes the point. He's like, you'll never meet anyone who spent 100 hours studying it who isn't like hyper bullish. do you do you suspect that might be a little bit of um is there a bit of stockholm syndrome when you get that deep is it at some points like if you if you spend 100 hours and that's all you do i i say that i'm not i shouldn't have been raising because i don't sound being critical i i dare anyone spend 100 hours studying anything and not actually start to lean towards it at that point it's kind of but something is if all you listen to is your own echo chamber whichever echo chamber you choose shares let's be honest like i don't spend any time talking about to bond investors right so i'm all about shares all the time i don't know i i'm sure that's true i'm I'm not sure whether it's genuine cause and effect or whether it's just the human nature of 200 hours doing anything.

55:05You're probably going to, you're going to have your mind changed by the process. I reckon I could do 100 hours on the flat earth theory. Could you really though? You know, I think so. And I reckon I could confidently put you on a debating stage and say, argue the merits of share investing. And you could do so from first principles and rigorous, you know, logic and rationale. even though you may have that entrenched bias because you can just say, well, here are the facts, right? And you'd be right to do that. So there is always that risk. But again, I don't want to tell people what to think. You've got to come to your own conclusion.

55:48I don't ever care if someone doesn't Bitcoin. Don't be, I don't care. But what sticks in my craw is people who have spent zero time thinking about it, who like to opine and talk about how ridiculous it is without even having even looked at it. It's just like you and me getting on the podcast. Someone writes it and goes, oh, what do you think about stock X, Y, and Z? And, you know, we just spend all this time talking about how terrible it is and you shouldn't touch it and it's a scam. And it's like, well, it's a completely ill-informed view. If you want to do the work and then have the debate, let's have at it.

56:25If you just want to have bad faith arguments because it just doesn't gel with your worldview, it's just so disingenuous. And that's the thing that you find out there. It's the Peter Schiff's of the world. It's the, I don't know, there's a whole bunch of naysayers that are sort of out there. It's just sort of like really bad faith arguments. And then when their arguments are completely and utterly and thoroughly debunked, they still go, yeah, but nah. And I was like, well, that's on you. But you're really at a point. I'd like to think there is an objective truth that exists somewhere out there in the universe for all kinds of things.

57:00And it's our job to try and sort of get as close to it as we can. But if you're whatever the topic is, if you're just going to be la, la, la with hands in the ears, it's just sort of like you're not even worth engaging with in my mind. Because what's the point? There's no sequence of words. There's no argument. There's no rationale that I can present that will change your mind. and therefore it's not worth the debate. Yeah. Anyway, I'm obviously pretty passionate about it. We can tell. You obviously had some pretty significant debates in the past, obviously, which are coming out. I have a question for you.

57:34And it doesn't have a big one, but I am curious. If there could be a solution that would allow a digital currency to be everything Bitcoin is, but not, and again, I know it's inherent in the system, so I'm just asking you to suspend that for a second. Would it not be better to be able to replace a fiat currency in a dollar-for-dollar, like-for-like system rather than have a system that required an accumulator to make that speculation what final adoption might look like? Oh, yeah, hell yeah. So if we could say right now we are going to port everyone on Earth's net wealth in US dollar terms or whatever the standard is, and we're going to put that into Bitcoin, would that be a good thing?

58:20Yep. It would propel humanity forward to a new golden age of prosperity because we're going to get rid of all the funny fiat games that we kind of play. But you've already said it, but I'll make the point. It's like saying, if the tooth fairy came down, well, yeah, then that would be great. And adoption is required by mining. what's built up in the whole thing is I think that's what I was kind of getting at and I think you're getting at the point of sure but it is what it is and the returns versus the whatever so that works cool but let's finish with a question I might actually jump to questioning here for a second

59:06okay Matt I got a question from Paul is that you skipping over the next three Bitcoin questions? No, no, it's actually, Paul's question is a great question, but it's asking about how we go about, well, we use the checklist and how we find great companies. I'm looking at the time and thinking that's a half hour, 40 minute conversation. Actually, we did a pre-record on that too, didn't we? We did, but some specific questions, so I thought we'd do that, but yes. So Matt, we'll ask Matt's question, said, hi, Scott and Andrew, long time listener, first time emailer. Just want to say I'm a religious user of the pod machine.

59:36Every episode is like a dose of caffeine mixed with insight and the occasional top-tier rant. He put religious in italics too, mate, which makes me think that we maybe should have, maybe we should pass to Scott and you could be Reverend Andrew. Is that? I can always say something. Can I go Pope? Oh, Pope. What name would you take as your Popish name? Oh, yeah, you have to do that. I don't know. One of the Ninja Turtles, perhaps. Pope Donatello. I like it. just in case we offended any Catholics, we're not seriously having a go at you, which is fun. All right. But you do make it easy, Catholics.

1:00:14Sorry. Sorry. What you can't see is my head just dropped into the desk. Oh, dear. Well, there you go. The only benefit, I suppose, is we're becoming a more atheist country, so there's fewer Catholics who are... There's 18 % of Australia is Catholic. There you go, 18 % of our... I like those odds. I like those odds. Not that you would get it from the recent coverage of the latest Pope. Oh, man, we love it. We love a carnival. Same as the royal family stuff, isn't it? Late in the podcast, you're on a tangent. But it's all bread and circuses. You mentioned it's kind of that, right? Just don't care.

1:00:48Someone dressing up in a fancy get-up and they're on TV wall-to-wall for hours. Oh, man. Anyway. It's hard to imagine. Oh, no, I'm going to get myself in hot water. So Matt says, honestly, speaking of which, honestly, the way you can pivot from dividend stocks to geopolitical soapboxes, and maybe religious commentary, gives versatility a whole new meaning. It's like listening to the finance version of a late night comedy panel with better takes on inflation. I am going to find a way to get that into our marketing, Matt. Everyone's been very nice, but if I can say, someone says it's like listening to the finance version of a late night comedy panel with better takes on inflation, that's about as good as it gets.

1:01:25Love that. Now for my question. After all, very well worth it. I've been pondering the idea of Australia taking a more, let's say creative, trade approach against the US. Not out of malice, just as a hypothetical power move. For example, I want 100 % tariff on Tesla imports. Let's make Elon really work for our market. Tearing up the AUKUS agreement and spending the money elsewhere. Maybe Swedish submarines and a few cases of IKEA meatballs. No lithium exports to the US unless they refine it in Australia instead of shipping it offshore for processing. If we're supplying the world's EV revolution, we should at least get some jobs out of it.

1:02:03I'd love to hear your thoughts on whether there's any economic or strategic merit in these kinds of approaches, or if it's just asking for trouble with a side of irony. Keep up the great work and never stop the rants. Cheers, Matt. I don't know. You want to go first? Let's go first. It's a lovely dream, Matt. It's the sort of thing after four beers that we could absolutely go to town with, I suspect. By the way, we do this podcast sober for anyone who's wondering. If that disappoints you or impresses you, then knock yourselves out. I'm not sure which way to take it, really. It's just one of those things.

1:02:37So, look, let's start at the very beginning. Here's the problem. And I'm not sure if you're mostly kidding or half kidding or half serious or entirely serious. Either is cool, by the way. The hardest part is the implication. The hardest part is what does the US do as a response? And that's kind of the big one for me, right, is we don't, you could say, let's really, you know, stick it to Elon, and I have some sympathy for that idea. But what happens when you do that? What does Donald Trump say? Well, if you're going to do that to me, I'm going to do this to you. And it's kind of like the China-US problem.

1:03:14You know, we saw China and the US deal with their issues largely by just whacking each other harder. Now, in the last week, we've seen it come back, and that's lovely, like really happy to see that having come back and things are much, much better than they would have been otherwise from that perspective. So could we? Yes. There's two ways to think about the tariff stuff. The first is to really kind of take the hairy chested fight back kind of approach. The other one is to say, well, it kind of sucks. We'll have to take our lumps. Let's make it as least bad as possible. And that least bad thing is really what I'm, I guess I'm focusing on.

1:03:50We probably should think about and that is just that idea of if you it feels it feels weak to say we'll just cop whatever whatever given right and that's that's understandable i've probably made this point before and if i have i apologize for doing it again um you can say let's have let's have the let's have the fight let's stick it to them let's not take a step backwards let's show strength let's be our own people do all that sort of stuff and i love that thought you know at some sort of deeply moral level that's the right approach thing is if you're the kindergarten kid and the school bully the year six bully takes your lunch money and you decide to fight him and hit you back and hit you harder and you throw a small punch it hits you again harder at some point the smartest approach to stop punching right just walk away run away do whatever you can and that doesn't feel very macho doesn't feel very manly doesn't feel very moral or responsible doesn't it feels like we're kind of being cowards a little bit but there's just a that's just the reality of of business right so could we could we do those things yes uh if we did them trump because he's Trump with an ego the size of, you know, whatever, is going to say, well, if you did it, I'm going to do it back to you, then I'm going to win this one because I want to win.

1:04:54That's what I'm all about. I'm all about winning. We're probably better to accept that Trump's going to do what he's going to do and try and manufacture the least possible damage rather than the other way around. Yeah, honestly, that's what I do. It's way far, far, far from being reasonable or approachable or okay or acceptable or any of those things. It just is, the thing it is, is in a very real world example, just the least worst outcome from doing that. And least worst means we end up with the best possible outcome for us personally. Because again, think about we do this, the Yanks say, okay, well now you've got 100 % tariffs on your exports.

1:05:27So, okay, now that goes, all right, now we've got 1 ,000 % tariff on Tesla imports. What's more important to us? Or what's more important? Do the Yanks care about Tesla imports? Do we care more about the things we send overseas? And at the end of the day, they're going to make that decision. And if we're paying more tariffs on their stuff, it costs us more. We sell less stuff because they put tariffs on us. We say, well, we stood up to them. Yeah, we're still poorer for it. So I kind of think, you know, we shouldn't accept it. We shouldn't say it's okay. But I think we owe it to ourselves. Our government owes it to us to give us the least worst outcome we can generate.

1:05:59And I suspect that's probably just copying it sweet, finding other markets for our products, minimizing the pain until Trump leaves the White House and then trying to start again. Your thoughts, Ryan? So apologies, my internet dropped out midway through your answer. So if I repeat anything here, just let me know. But the short answer is I'm a free trade maximalist. I just really think that, you know, trade is an act of mutual beneficial transaction. You know, both parties are doing it because they want to do it. Right. And I just don't get what's the problem with that. Yes, people love to invoke fringe, you know, edge cases.

1:06:39And yes, look, but if there is like in 99.99 % of the time, this is the better way to go. And here's a couple of examples where you might want to think about a different approach. That's not a reason to change the whole system, right? And start doing blanket tariffs because it's a very slippery slope. And yes, there are security implications and strategic implications. And for those things, they probably deserve some kind of special attention. I don't know. That's a very nuanced kind of debate. But just as a starting point, I just think why on earth would I stop someone wanting to buy something from overseas who wants to do that and get in the way because someone from overseas wants to sell us something and we want to buy?

1:07:23Like, who is hurting here? I don't understand what's the negative thing. You might say, oh, but there's an Australian producer that's hurting because no one's buying their stuff. It's like, but so by pointing a proverbial gun at someone's head and saying, you can only buy this thing that you don't want, is the solution to a problem? Who's benefiting there? It seems like we are changing the rules to pander to one special vested interest, which hardly seems fair. It just seems like a nonsense to me, all of it. Get the hell out of the way. Let people trade. It's a good thing. But that being said, Trump is already putting these things in place.

1:08:05So how do we as a country respond? We do nothing. We diplomatically try as best we can to mitigate that or to encourage him to sort of walk it back. But yeah, as you say, I'm not saying you roll over and just, you know, take it as it comes. Sometimes you've got to punch the bully back, but more often than not, we're just going to cause ourselves more pain. that's the problem it's like yeah do i feel better it's like yeah we we stuck it to them okay woo uh oh i've got less stuff everything's more expensive uh it's a real pyrrhic vitri and and you've got to play the bigger game some sometimes it's best just to walk away from the bully you know um or sometimes strategically sometimes it's better to give the bully some of your lunch money right it's not great i'm not saying it's an ideal outcome but if in trying to rectify the problem you're still left with no lunch money and a broken nose it's like well that's kind of you know people really strongly disagree with this but i think they disagree with it primarily for the pride reasons and that's exactly it mate honestly you know and i get it like we want to think we're important i think we're big and we want to you know punch above our weight in the world stage and all those things because it makes us feel good yeah but the reality is we're a country of 27 million people uh the yanks got 350 million people the world's largest to kind of be by miles, 15 times our size.

1:09:29Mine isn't right. There are cities that are bigger than us. Right. In the US. And so you kind of, yeah. I think you're, you know, I think, yeah, we're in a furious agreement, mate, which is just, it sucks. It shouldn't be the case. Free or freer, trade should be the priority. Trump is an idiot for doing anything differently. But this is the world we're in. The only question we've got to ask ourselves is what's the least worst way we get out of this? Because you can't make tariffs go away from him because it's not going to happen. He's shown with China what's going to happen if you're trying to escalate it.

1:09:54Do you want to escalate it? Probably not. So that's the position you find yourself in. And that's the biggest challenge, I think, in terms of how we make this one work. Yeah, you know, I'd love it to be true. It would make me very happy to put higher tariffs on Teslas just because I'm sometimes, very occasionally, not very often, sometimes a spiteful person. And I think what Trump was doing, you know, having one of his closest advisors, we'd feel better about it, right? I think that's kind of the point of the question. You're kind of saying, hey, what if we just did it? um mate you're saying you know what why don't we just make some make some really really specific points AUKUS is hard AUKUS is hard because it's a defense relationship and I've said before I'm pretty sure on a past podcast um maybe in a um maybe maybe in a pre-record probably in a past one I I find defense impossible to give an opinion on because the future is the future and I'll give this example before but before World War II I thought we spent too much money on defense and then World War II broke out.

1:10:50We realized we weren't spending enough money on defense. Are we spending too much on defense at the moment? Not enough? I don't know. No one knows. You can't know. It's almost by definition, right? And even the agreement, do we need the subs? Probably not. Is it worth being part of a broader US-UK defense alliance? And if the cost is a few subs we may not need, is that worth it? Again, I don't know. It's literally impossible to know. And I feel like I'm being, I've got opinions on everything, right? So I'm not ducking this one at all. There's just no way to know the future in any sense. but especially in defense um it's like insurance i've said before it's it's a stupid waste of money until the very day you need it and then it's the cheapest thing you've ever spent money on so would i tear up orcas i don't know i'd probably try and renegotiate it i think um i'd probably try and reduce or eliminate the subs i know that's the whole point of it but i i think i want to keep the alliance um i think we're better with it than without it but i think there's it's hard to know what the right amount of money is to spend and what what the ticket to the dance if we hadn't done the deal are we inside or outside the tent do we want the us uk operating without us um we're pretty isolated down here if someone decides to wander over the horizon um do i want a couple of you know very very because we're small do i want big tough scary you know large um well-resourced friends yeah i really kind of do now maybe it should be china and indonesia rather than the uk and the us we can have our geopolitical conversations about that but i kind of like being part of a major defense alliance where we can rely on some people to come and help us if things get get a bit tough so yeah i don't know i don't know that that's my that's my orchestra on the lithium thing people want to want to process stuff on shore and i get it but the reality is if other people can process it offshore better and cheaper and more profitably and we get to benefit from that because we get more value for it and we buy the things they make cheaper can we make cars here yes the reality is we mine steel we want iron uh we send overseas they make in a steel they make the steel in the cars they send the cars back to us and that's cheaper than if we had to buy make the steel and buy the cars and make the cars ourselves here so what do you do you make a few jobs here yes do you have to buy 75 000 holden commodores to do it probably is that worth it or do i have uh cheaper cars which gives importers some work and then the money i save the 35 000 i save because i buy a 45 000 camry instead i spend in 158 different shops employing a lot of retail shop assistants manufacturers and other product manufacturers And I think that's where it's, again, think about things that are binary, right?

1:13:15Lithium onshore, offshore, job in lithium processing, no job in lithium processing, seems really seductive. The money I spend on higher prices because we do it ourselves here is I can't spend somewhere else on some other business who's also trying to just get by. A hairdresser, a physiotherapist, a leather goods manufacturer, whatever, right? Those things, that money can only be spent once. spent most efficiently, manufacturers, creates the most jobs in the market. Your thoughts on AUKUS and lithium, Matt? Oh, man, they're huge topics. Huge topics. I think you can't even talk about AUKUS without a broader context of what we actually want.

1:13:56I think to think that we should be investing in anything that allows us to project power beyond our borders is pure hubris because of our size, the economy, the size of our people, and what are we wanting to do with that power? Like, I don't know, are we invading Indonesia? Or what's, you know, I don't get it. New Zealand's in trouble, mate. They still don't have an air force. Yeah, watch out, Kiwis. But should, Israel's a good example. I'm going to be careful with what I say here. but I think what you want to do is really put your investment into defence and deterrence as best you can. The echidna strategy I've heard it called here.

1:14:43What's it called? The echidna strategy. You just roll yourself into a ball and you've got spikes on the outside. Hell yeah, because we can do that. An echidna is just a great example. I hadn't heard that before because it can fend off a much bigger animal, right? And it's like, honestly, if I was going to say the country's name, but everyone knows the country. we're going to roll over the horizon right it's like let's be real just for a second again put your patriotism to us like we've got nothing we're not you know it's David and Goliath it's absolutely nothing in terms of you know pound for pound what we could what we could you know meet in some neutral battleground and and and fight we could do incredible things with some very sophisticated sort of military, missile technology, drone technology, submersible technology, mine technology, which aren't great for projecting power, but are really, really wonderful in terms of defense.

1:15:38And what it does is it gives you a real asymmetric advantage there. It's like, look, we don't have the number of aircraft carriers that you do. We never will. But I tell you what, you want to sail one anywhere near our waters, and it's going to cost you a lot, right? It's really going to cost you a lot and we can do it. It's like how drones are being shown to be so incredibly effective in Ukraine. Like they're super, super cheap. They're taking down tanks. How much does a drone cost to produce versus how much is a tank? We need to be thinking much smarter about a military capacity rather than the stupid stuff that comes out of Canberra, you know, where people are talking about tanks.

1:16:14And, you know, we might as well be trying to enlist pikemen and crossbow people, right? Like it's just that I'm like, you've got to find. I think we need a kinder breeding program from the sound of it. That's just, as I said, this is a big topic and I've got some strong thoughts on it. But I think what we want to do is we just want to make sure that any would-be invader is given serious pause for thought. Yeah. That's the best we can do and that's fine. And in fact, we can go a long way on that. And even better still, we can make just the thought of invasion like really unpalatable because we're just such a valuable trade partner.

1:16:52Yeah, totally. Alliances? Yeah, I mean, yeah, I love, obviously it's good to have friends, right? And it's good to have big, powerful friends. Absolutely. But I don't, I always hate being the unthinking lapdog of a superpower. Yeah, right. The US is doing, okay, we're doing it too. What? Does anyone still think in the year 2025 that sending our men and women over to Afghanistan or Iraq was a good idea? I don't. I think that was a really dumb idea. Did we have any – we just did it because the US asked us to. And it's just like friends – are we friends or are we lackeys? So if we want to talk about being allies, let's be allies.

1:17:42Yeah. But if you want someone who's just going to say how high when you tell us to jump, then no. No, I don't. If that's the relation, that is not a healthy relationship on the personal level and on the country and on the state level. And it strikes me as while I am first to say that it's a very important alliance we have with our friends in the US and even in the UK and Europe is great. I have to do everything. I want to be friends with everyone, right? I'll be friends with any country that wants to be friends with it. I think that's a pretty good idea, all things considered. But don't expect me just to follow your lead blindly when you decide to go on some stupid half thought adventure into some other part of the world where all you're going to do.

1:18:27You know, I think Afghanistan was expected, projected to have cost us. When I say us, I mean the US and the West collectively, something like$20 trillion, which is a number so vast that it's hard to get your head around. And what did we get out of that? A lot of people lost their lives. I don't know what else. Is the world a safe? Do you feel safer now than you felt back then? I don't know, right? We often talk about in this podcast return on investment, right? That's probably the worst investment. What could have been achieved with that$20 trillion? I tell you what, I reckon if we were to spend that money in making good infrastructure investments in places like Afghanistan.

1:19:18It's hard to get radicals, people who are radically against you who want to strap bombs to their vest and blow themselves up to people who are like doing incredible good for you and helping you, right? It's much easier to do it when you've got absolutely no hope in your life and nothing to live for and half your family's been blown up and you've got a grudge. That's a different story. So we just need to be a lot smarter with this stuff and I'm just babbling at this point. We'll have the Only Full Defence podcast coming up shortly. But in the meantime, I think we've probably taken up enough of our listeners' valuable weekend time or Thursday morning time when you're listening to this podcast, as we always like to say.

1:19:55Will you come back on Friday? Yes, hell yeah. Thank you for the great questions. Info at fool.com.au. If you're still here by now, we've offended the Defence Hawks, the Catholics and pretty much everybody else. So for the three people still listening, who have probably fallen asleep listening to this podcast and aren't really even here, thanks for listening and full on. Cheers. The Motley Fool and people appearing in this program may have positions in the companies mentioned. General advice only. Please speak to your financial professional to understand how it may pertain to your situation. Subscribe to the free newsletter at fool.com.au forward slash listener.

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