We’re selling off the family silver… again. February 6, 2026

23:49No. I did. Really? Not much. Not much. Don't worry. I didn't do too much. So that CPI figure, which we all agree is too high, is based on these things. What is the proportion of disposable income for a first home buyer on housing? Good. Yes. Right? What's the number? Oh, it's like they don't actually have great numbers on it, but I think it's around 50 % to 60%, which tracks, right? Anyone out there who's just got a mortgage for the first, they're like, oh, my God, I wish it was 50%, right? Now, let's take the same - To the young people, by the way, if you've just taken the - The 30th year of your mortgage, it's tiny.

24:27If you're in the first year of your mortgage, it's massive because the prices have gone up and wages haven't gone up and all that kind of stuff. I looked at for under 40, so it's not even looking at the 22-year-old. These are definitionally the most productive people in society. The people sort of mid-careers are exactly the kind of people that we want to be out there and working and being productive. When you say, let's recalculate that CPI figure, and all I'm going to do, I'm going to keep every weighting the same pro rata. I'm going to proportionally reduce that to lift housing up to 50%, just at the lower end of that estimate.

25:02Again, I could be much worse than this. You get in the latest read, you go from 3.8 % to 4.6 % annual inflation. Now, again, we can argue to a blue in the face as to what weightings we should use. And this is the dilemma that the ABS has, right? I'm not saying that they're wrong. I'm just sort of saying that what all of this discussion does, it's always framed for the average person. And the average person almost is a fiction. Like, even if there is someone whose personal spending habits and basket of goods matches that of the CPI, it might be 3 % of the population. Then you've got this bell curve.

25:39And I actually don't think it's probably a nice even normal distribution. It's probably a bifurcated double hump kind of thing with, you know, the two-speed economy. So what I'm really getting at here is like, you've got, again, on one hand, you've got people that have got lots of assets, not much debt, interest rates go up. Great. I actually get a slightly better return on my cash investments here. It doesn't actually change anything for me whatsoever. And when you look at the spending patterns, that's the demographics. That's the cohort that are spending. Your other people, even before this interest rate rise, who were barely keeping their heads above water, who their personal rate of inflation is four and a half, five odd percent.

26:19And since COVID, you know, prices for you guys have increased by 60 percent or something obscene. And it's like, and we're going to whack you. And again, I know, you know, Michelle's only got the one button. She's only got the one thing that she can do. But you think about the mechanics of what is happening here. We are punishing the very people who can least afford to do it and who are as least responsible for the inflation. Like that is the obscenity here. Correct. And then people look around and go, why are all the populist parties rising to ascend? That's really strange. Why would anyone do that?

26:53It's like, are you that like blind to what's going on here? And again, this is why I always talk about it's the real bane of economics. in that, you know, you've got literally 25 million people out there and we can only talk about the average, not forgetting that the statistical spread around that average is messy and lumpy with a huge variance or a huge standard deviation. And it just, it's, it, and we use the most bluntest of blunt tools to fight it. Now, and ask yourself this, the other, the other issue I always have with this, it's, and I know I've ranted on this before, but it's like, the media talks about it as if it's your fault.

27:34Oh, why are prices off? People are spending too much. It's the consumer. F off. Do you think that the consumption of milk and bread and housing has changed for anyone? Like, no, actually, I always want them. And if I want Powerball tomorrow, I'm not going to start buying five times as much milk or five times as my bread. Like, that is not the reason. Like, that will absolutely be the – sometimes you get this demand pool inflation when everyone's just great and we're spending money like crazy. Absolutely. When we're talking about non-discretionary essential services and when the biggest, most productive part of the population is already having a much worse experience than what the average would dictate.

28:16And we're not going to make you guys, we're going to blame you for it and we're going to punish you for it. Meanwhile, there's a 400-pound gorilla over here called government that's spending like a drunken sailor on the most stupid things or at least in the most ineffective kind of way. It's so insulting and it'd be like this is a massive problem. I don't have an easy answer for it. But we can't even diagnose the problem, right? We can't even see any nuance in the problem. And it's like the entire debate, the entire debate is just always around what the interest rates are going to do with nothing else being discussed.

28:51And how are we ever going to solve it if we can't even identify what the issue is or understand the nuance and the context of all of this stuff? I just throw my arms up in despair. It's a very juvenile conversation that it just... It's frustrating. It's so frustrating. Speaking of research, mate, I didn't do this for this purpose, but I did look at this data the other day. The ABS actually puts out a very limited breakdown of what they call living cost indexes. I wish they would call them indices. It really rubs me up the wrong way they call them indexes because it's just not the appropriate word.

29:22Anyway, certainly living cost indices I'm going to call them if the ABS won't, by household type. Yes. To your point, right? So the total – do they have total here? They don't. So we know inflation is 3.8%. I suspect unless the basket's different, that's still the total. So let's assume that's true. And they do it by individual bargains. It's very broad, right? But over the last 12 months, the highest increase in living costs by the demographic breakup they used, the household type, is aged pensioners, which is up 4.2%. That's exactly what you said because we know from the inflation data, the unavoidable, the so-called non-discretionary spending is actually doing most of the heavy lifting on the inflation data.

30:01And so if you are not buying caviar and sports cars and going out to parties... All my money is on my house and my food and my bills. That's what I spend as a pensioner. 4.2%. Second one, pensioner and beneficiary. Again, so it's kind of part of both. Maybe it's a mixed thing or something, whatever it is. Other government transfer recipient, up 4%. Self-funded retiree, up 3.3%. Employee, up 2.3%. And that's literally because the employees generally have more money overall than the other discretionary income than the others. Again, this is average. Still doesn't allow for, to your point, different age groups and how much to spend on housing.

30:36So, like a 55-year-old CEO and all that. Exactly. And the 22-year-old or 25-year-old with a massive mortgage. But it's just interesting that what it does show is the discretionary nature of spending has – and to some degree, it's kind of what's supposed to happen if you do try and target inflation because you can't reduce your non-discretionary, so you do reduce your discretionary. And those prices should fall faster exactly for that reason. But it doesn't explain the non-discretionary stuff. Correct. The baseline steady, we consume the same amount, rain, hail, or shine. It is not from consumer spending.

31:12It's just not, right? And to your exact point there, that is where, when you tease apart the data, that's where the inflation is coming from. Let me give you another sort of stat here as well. So we've seen in the last, since 2019, so before COVID, we've seen average credit growth of 6.3%, which is why the money supply growth has grown by about 40 % since pre -COVID. So just to unpack that a little bit, like what do you mean? Well, the number of, I know I go on about this, but it's like, I'm just so in Milton Friedman's camp here. Inflation is everywhere and always a monetary phenomenon. We've increased the amount of shekels out there by 40 % since COVID, and we have not increased the amount of stuff that's out there.

31:57So, you know, that is - More shekels, same stuff, more shekels per stuff. Yep. It's really easy to understand, you know, unless you're a classically trained economist or a politician or a bureaucrat. Then you still understand it. You just ignore it. You just ignore it, right? I don't know if I - I'm not sure who to defend more, who I feel better or worse about. The people who just don't know any better, I guess they've got an excuse, right? The ones who know better and still do nothing about it, they're the ones I think deserve our special love. Absolute scumbags, right? Well, it is. I mean, it's not some, oh, you're against my preferred economic ideology.

32:31It's like, no, you're hurting, you're directly hurting the lived experience of working, like people who aren't rich, you know, the emergency ward nurse, right? The high school teacher, you know, The people are actually doing real productive, valuable stuff out there. They're the ones that you're going to sort of punish for this. It's more cynical too because they're not punishing them directly. They're just kind of whistling and looking the other way while the RBA puts rates up. Yeah. And they get to say, well, I'm not putting rates up. The RBA is. And they've got to tackle inflation, so they're doing the right thing.

33:00So I know you're being hurt. I couldn't help you if I wanted to. I'm really sorry. And the RBA has to hurt you, so I'm going to have that too. And we have to hurt you. Right, exactly. We have to hurt you for all the caviar and Ferraris that you're buying. It's just like, what? And people are so angry. They're so angry. It depends on the circle that you're in, but it's just like all of the stats beyond the aggregate high-level stats just show that K-shaped economy, that bifurcation, and just the rise of populism is just so, so easily understandable then. And it's like when I have conversations with people, it's either, oh, I totally get it.

33:35That's true. Or what are you talking about? And it depends on their personal situation. I'll pick on my parents, right? They never listen to this. But, you know, in their boomer world, you know, life is great. All their friends are going great. What are you talking about? The cafes are always full. I don't understand what you're talking about. It's all a bit negative. It's like, for you, Dad, for you it's good, okay? You've got to understand there's 25 million people out here and for like literally millions and millions of people, it's not, right? So that's just, and as I say, it's shouldering the blame and pushing the medicine down the throat of those that didn't create it and don't deserve it.

34:12That's the really angry thing. So, anyway, back to my point with credit creation. So, where did all that money come from? It came from credit creation. What do you mean? Banks just issued a lot of loans. They go, okay, okay, cool. What did they issue the loans for? You know what it is? Have a guess. Let's say housing. Yeah, yeah.

34:35Like, for every dollar that we lend to business, you know, I'm not even including personal finance, like people taking out like car loans and that kind of stuff. So if we just look at the mix between home lending and business lending, it's two to one, like all on home lending. So the lion's share, like double the amount of credit. Now, at least when you're providing credit to a business, The idea is that that money will be invested to create jobs, to create more products and services, to grow the economy. And if the return on that investment is greater than the cost of the interest, it is a net benefit to society, even though we have created more money.

35:15And as that money gets paid back, in fact, that money gets taken out of the system. We had a big hard money episode beforehand. hand, but just in that particular sort of narrow lens, it's sort of like, okay. Now, of course, if a company borrows that money and just completely wastes it, then we have sort of added to the money supply and not created any productivity and really limited our ability to pay it back. And we've had to draw from other productive sources to resurface the loan. This is a bad thing. But at least that potential is there. When you put money into residential housing, It doesn't do anything.

35:50I mean, it helps the person who's taken on the obligation to have somewhere to live, but it doesn't create jobs. It doesn't create more widgets. It doesn't create more service. I'm not saying it's inherently a bad thing and that's the only thing that you should borrow for, but you have to understand that when you're creating ridiculous, this isn't like, oh, it's grown by one or 2 % per year, like literally over 6 % per year. In other words, on that run rate, math is that you're basically doubling the money. supply every 10 years, something like that, you know, and we're putting it all into, well, we're putting the majority of it into non-productive assets.

36:28Meanwhile, the government's borrowing like a drunken sailor and also putting it into non-productive uses. And we're all, everyone's going to scratching their head going, geez, productivity's not going anywhere. And wow, where's all this inflation come from? Oh, it's because people are spending too much. It is, I was going to say it's eighth grade intuition and knowledge, but that's doing, it's criticizing the year eights, right? They would know better, I would imagine. And it's just, it infuriates me because again, real people are really hurting and they're just, you know, can you blame people for giving up, right?

37:03I'm probably a little bit closer to it. Having had that rental experience for so long, we've got friends in that space, just like speaking to a friend of one of the kids the other day, single mom, three kids. She's moved, like us, she's moved six times in like the last three. She can't get more than a six-month lease. And she was nearly in tears. It's like, well, it's not just the stress of that. But it costs like$5 ,000,$6 ,000 to move. It was going to move, yeah. Because there's the overlap periods in the rent. There's the removalist fees. There's the bonds I've got to come up with. It's like, I don't have that sitting around.

37:34And then at the same time, she's like, well, okay, I've got no negotiating power as well because there's no rental vacancies. So they can just treat you like dirt. You can move into a black mold infested place with no water heater and no working sink or whatever. It's like we're still going to charge you a fortune. We're going to tell you that they're after a long-term tenant and six months later we're going to massively increase the rent or just kick you out because we want to flip the property. It's like are you kidding me here? Like it's so we've lost our way, mate. We've lost our way so bad.

38:09And unfortunately none of this is going to be fixed. If we just look at the policy actions that have been taken, it's like do you see it getting better through these actions or do you see it getting worse? It's like, I just don't, I don't see how it's, some of the aggregate figures might move back to where we want, but only as a result of incredible pain put on very vulnerable people. And even then, we move inflation from 3.8 % to 2.8%, but don't address housing. We don't address all the other stuff that needs to be addressed as part of that. It's a disgrace. And they've got the ability to macroprudential controls.

38:39You've talked about it before. It's like, oh, we can't do that because of this and housing. It's like, yeah, there's a million things that you could do here, right? I was thinking, I have my preferred option. There's 85 things they could do. Yes. They're doing precisely none of them other than throwing more money at first-time buyers under the guise of affordability. It's a debacle. And by the way, we've given the government a massive whack. The opposition is absolutely no better. In fact, they were going to use housing instead of using first-time buyers' grants. But either way, both of them were in the same story.

39:11Let's keep prices going up and who cares about the kids? We've got a class of political animals. at least there was a time maybe this is rose colored retrospective glasses but they were the statesmen the states people the people who had long-term visions for the country understood that politics required compromise and hard decisions but very much long-term thinking and it's always been a degree of i just want to get re-elected but it feels as though like the current cohort of of federal politics state politicians as well for that matter you know It's just like, I just want to get elected. I will say and do anything that sounds good, that tests good.

39:46I will get elected. And like Albo, the dog who caught the car is like, I am PM. Great. Oh, you've got a mandate here to do whatever. You can do whatever you want. The opposition is in a shambles. You can do anything. You're reelected with a larger majority. And what are you doing? Absolutely nothing. Absolutely nothing. Seriously. Anyway. Mate, yeah, I think we've been pretty clear. If you're not frustrated, you don't understand, is my genuine view. I don't mean that critically. I don't know how you can look at this. And if you're defending your side, if you're defending the Libs or you're defending Labor as a result of this conversation, please.

40:23I'd say the same. But have a good look at yourself. If you're going to defend your team rather than actually addressing the issue, please do yourself a favour. Do your kids a favour? Do your neighbours a favour? And actually kind of go, all right, I might be team Liberal, I might be team Liberal, but at least ask your guys to do a better job. Yeah. I mean, don't be a mindless barracker, firstly. But if you can't bring yourself to do that because you're brazen in the house, you've always voted a certain way, okay, you do you. But at least ask your team to do the right thing, right? I mean, we see in football all the time that, you know, footy players get defended from heinous actions because they happen to be on the team I support.

40:56And it's just a nonsense. Please don't do that. Can I do one more thing which we didn't mention in all of that, which is the one, I'll just mention it and we can move on. But the other thing that we are doing to massively stimulate demand at a point where we just don't have the capacity to respond to that is the immigration, right? And it's, again, I have to insert obligatory, you know, it's not a racist thing. It's really not. You know me. I've mentioned before I am absolutely pro-Big Australia. We're all, except for First Nations people, descendant of immigrants. You have to say it because people can take it the wrong way.

41:32But when you don't have any housing availability, when social services are stretched to the extreme, we're facing all of these inflationary pressures and we're just letting the population of Canberra in every year. It's like, can we just, can we catch up a little bit first, right? It just seems like a really obvious own goal. Like if there is one thing you could do that could take some of the pressure off, it would be that. Yeah, I just, it's so incredibly frustrating because we are so polarized as a society. People feel like they have to either be pro-massive immigration or they're supporting the racists.

42:14And just the lack of nuance. That's the only two choices. Right. I tweet about it semi-regularly and I do run a reasonable risk of being a huge of those things. You walk on your shelves when you do, right? Right? And I had someone say, yeah, but immigration's good. I'm like, I know. I've been saying that. feel I'm saying immigration is bad I'm not saying zero immigration like there are there are racist knuckleheads over there who are like I to be fair there are some non-racists who just want a smaller Australia that's okay too that's a reasonable view um I think roughly the same population we have now is probably a good starting point we can work from that up or down as we get the data actually do the policy work rather than just making it up and if we end up with big Australia mate to your point I'm all for it if we if we have a if we have a really worked through version of we can do this without meaningful negative effects on the society infrastructure the economy the environment great i you know i'm not against it i i fear it's very hard to do those things so that's why my instinct is for a less big australia um but but you know like you get the whole oh immigrants good they do good things i know i'm not anti-immigrant just because i think a level of immigration is too high presently it's a number of people thing it's not a it's not a it's not about where the person originates from it it's just it's simply there's this much capacity yeah that can support this much people without adding price pressure.

43:30Let me give you the flip side of it. We talked about, was it last week? We talked about Japan. Japan and China is actually staring this down as well. It's a massive demographic problem, right? So they've traditionally been rather anti-immigration in Japan, but a very significant aging population. The classic stat here that gets at it is they sell more adult diapers than they sell children's nappies, right? Like, okay. Now, and you've got housing is very cheap. There's a lot of spare housing. Of course, right? Because everyone's moving into nursing homes, you know? And it's sort of like inflation would really get you guys out of a lot of inflation, sorry.

44:10Immigration would get you guys out of a lot of trouble. It's a wonderful, beautiful country, good rule of law, low levels of corruption, high standards of all the great things that you would sort of like most people in most jurisdictions in the world would like, you know, cut off their left arm to live in a place that has a standard of living like Japan does. And it would be a wonderful benefit for the country. But again, it comes down to what is appropriate to the situation. I would imagine if we were, again, a country that could think beyond, you know, the next four-year term or whatever, and we had long-term visions and we're building out our infrastructure, we get to a point where it's like, oh gosh, we've got lots of space, We've got lots of capacity.

44:53Let's bring in some, oh, we need more teachers. Brilliant. Here's our choice as a country. Let's pretend we're playing Sims here, right? I can have a baby. I can invest a million dollars in raising that baby between zero and 18. Let's face it, 22 by the time they get the necessary tertiary qualification. Then they can spend the next 10 years figuring out how to do the job properly. And then I've got a productive worker. or I can take someone who's already an adult, who's already fit and healthy, who's already trained and qualified and they can come here and they can be a dentist tomorrow. They can be a plumber tomorrow.

45:31And it's like, what? And they can be a taxpayer tomorrow. They can simulate the economy tomorrow, right? It's just like this is a wonderful, wonderful, wonderful thing. But like anything, any kind of policy, it's got to be fit for purpose and it's got to acknowledge the reality of, you know, conditions on the ground. Like can we do that without really causing some massive disruption elsewhere? At the moment we can't, which is why I think like a lot of people is like we really need to sort of limit intake until we can catch up a little bit here, you know. Go back to the village scenario. There's 100 huts in the village and there's 120 people in the village.

46:10Like what do you think is going to happen? Right. You know, if there's 90 people in the village, Let's let some more people in, right? Or we want more people in the village. Great. Let's build up more huts. Let's build up more aqueducts. Let's build up all the infrastructure and then bring them on in and we will be stronger and better and more diverse and all of those great things. But let's just not do it. Let's not do it when we're already struggling here, you know, and you're making it's fuel on the fire kind of stuff. It's just not hard. It is just not hard unless you don't care. Yeah. Motley Fool Money.

46:42For more, subscribe to the free newsletter at fool.com.au forward slash listener.

46:51But speaking of inflation, we mentioned the gold price last week and the tear that it was on. Yes. And I will mention a little bit later how I personally am the kiss of death. But we communally may have been the kiss of death on the gold and silver prices because we finished the podcast on Thursday. We do air on Friday at 4.30 and then Friday night, our time, Friday day US time. The proverbial hit the proverbial when it comes to both the gold and the silver prices. We saw, I think it was Thursday night anyway, whatever it was, the gold price fell 12 % in a single trading day. That's the biggest fall since the early 1980s.

47:26Call it 45 years. I think it was actually closer to 15%, very top tick to bottom tick. There you go, mate. That was the daily close. And this is a$27 trillion US asset. This isn't a meme. This isn't GameStop, right? Not to be outdone. This is gold. Not to be outdone. silver fell 36%. The biggest fall ever in a single day. And it kind of has to be, right? I can't imagine any fall bigger than that. And I just think, I don't want to spend too much time on it, because we don't need to. We kind of talked about it last week, but we talked about the idea of why the gold price fundamentally might be going up, but also the difference between the fundamentals and the sentiment.

48:04And that in the short term, in both directions, sentiment is really all that matters. Over the long term, you work out whether the sentiment was right or wrong. And that's kind of – now, the price has jumped back up again since Friday. You mentioned it to be off air, and it's kind of back towards where it was before the last really big drive up. Do you know where we are? Go on. We are now back at levels we haven't seen since the 24th of January. No. Whoa. 16 days. Okay. Yeah. And it's just – I just want to mention it, mate, largely because, not that we were right, although we were, about the sentiment bit, just as a reminder that even if the fundamentals – maybe they're not.

48:40Maybe the market is horribly overreacting anyway. Or maybe it's not. I don't think so. I said that last week. When you see a price of any asset go almost vertical on any reasonable chart, this is not trading advice. It's not investing advice. It's just we see this sort of stuff happen. Either there is something fundamentally breaking in real time, as in like in hours, not real time as in days and weeks and years. So they're breaking in real time or the market is getting carried away. because again, I've said many times, the price of gold, it was not going to go up. I mean, the size of the increase over, it was 29 % in, no, sorry, 22 % in 29 days as of the 29th of January was the stat a week or so ago.

49:22That doesn't happen unless something is fundamentally breaking or the lemmings are running in a particular direction or running together as a herd, you know, from one side of the ship to the other. That's kind of the only time you get that sort of number over an extended period. One day movement sometimes, But again, I'm not saying it should have fallen. I'm not saying it shouldn't have risen. I'm not saying it should have risen or shouldn't have fallen. I'm just saying outright, just please be careful. Don't chase momentum. Don't FOMO buy. Don't chase momentum. Correct. If your thesis is, whether it's gold, property, equity, it's going up, I want to buy because I feel as I'm missing out, then that's a bad, whatever it is.

49:59Everyone else is buying, the price is moving. Yeah. If it's like, I really like this asset for various reasons, it happens to have gone up and I'm buying. That's a totally different story. And the price is still attractive too, by the way. And this price is still attractive. You don't like the asset, but yeah, exactly. How do you figure out the price is attractive? If you can't answer that question, don't buy. That's the other thing here. It's like, oh, but how do I know? Yeah, it's hard. Welcome to investing, right? And you'll never know for sure. Yeah, but otherwise you're investing purely on hope.

50:28And when you invest on hope, you tend to blow things up. So a couple of things. Gold is still 60 % up for the year. Yeah. Whether it's Amazon stock or gold or games. So, would you say for the year over the last 12 months or for this year? 12 months, not year to date. Sorry. That's all right. But a big, still great, still well up for this year. So, whenever you have these stocks, assets, whatever, going to the moon, the first thing to acknowledge is that this is normal. You're right. Things don't just go straight up in a parabola and never correct along the way. It's actually healthy for that to happen.

51:03So it's sort of like, this isn't, people can make their own minds if they're bullish or bearish on gold, as we're talking about it. But it's sort of like, I think both sides sort of chip their hand too much when they use these movements to go, aha, I was right. And like, well, are we there? I don't know. I mean, like, it could be double what it is a year from today or it could be half what it is today. Like, either way, a big one day fall says nothing in either direction, right? It talks about what sentiment's doing. It's all it tells you. Nothing about the fundamentals, nothing about the future.

51:37Yep. And I think that to me, even if you just focus on that dimension, that is still what's so interesting about it, that sentiment for something that is so deep and liquid and widely held, it's just sort of like, why? Why is everyone thinking this way, right? Like it's just, I think it's absolutely fascinating. And the other thing I would just say in terms of silver is that silver was always, I think I said this last week, was always destined to not maintain it. It's trying to catch a bit on what they call the debasement trade, but silver has failed as a currency a thousand times over throughout history for a very good reason.

52:14There's just a lot of it and there's a very easy supply-side response when this happens. And it's also muddied by the fact it's actually got huge amounts of industrial usage from solar panels to a whole bunch of different things, dentistry. It's in all kinds of things. And that actually makes it less valuable as a sort of a monetary good. So these kinds of things have played out again and again. I'll just reiterate, if you want to play the debasement trade, fill your boots, do what you want to do. Silver's not the vehicle to play for that. And even if you're right, expect this, expect more of this kind of stuff.

52:50Move it. Exactly. Exactly. Mate, speaking of the kiss of death, I want to check in just quickly just to just rub my own nose in my own. Yeah, we can't avoid it. Sorry, everyone. Yeah, and I don't think I can do it for any detail. Poor old Bitcoin. I say poor old Bitcoin. I really meant poor old me because I'm going to go back to, I think it was the 6th of October when I bought. When did I buy a company? No, I don't know. I bought$114 ,000 was the US dollar price. Now down to$72 ,646.93 US cents. As I speak and as we have this conversation. 40 % is it? I don't know. I'm not going to do the math.

53:25lowest point for at least a year based on the chart I'm looking at now and looks at lowest point since about November 2024. So that's kind of there or thereabouts. What is interesting, mate, and this is just, speaking of sentiment, I thought this was really interesting because, again, I think we overlay Bitcoin and only, not to talk about Bitcoin necessarily, but to talk about another version of the silver and gold conversation we just had because I think it's useful. Same macro thesis for a lot of people. And fundamentally reasonably so because there is no more Bitcoin being made. There is a little bit more gold being mined.

53:58But either way, I mean, people argue that one's better than the other. And I don't really want to get into that conversation other than to say they're at least analogous, if not perfectly analogous. And yet you see the gold price soar and the Bitcoin price crash. And it's worth - Very quickly, I just had a great meme during the week. It was showing that a very despondent looking person. It's like when your macro thesis plays out exactly, but the world buys the wrong asset. So that's kind of it, right? So that's exactly – that's why I wanted to particularly – other than just to laugh at myself for buying it at a high price and getting smashed.

54:36At least Bitcoin is a small part of my portfolio now. It hasn't heard if it falls any further. Me too. But I think mathematically – so think about what happened. As you said, the macro realities is the same for both those assets, for gold over Bitcoin. There is more money, no more, not meaningfully more, amounts of either of the two. No more Bitcoin, unless someone's being mined, but it can't be more than a certain amount. I guess it's kind of like gold on the ground to some degree, but let's not torture the analogy. At some point, the reality is the play was more money, same amount of asset, therefore per asset dollars should go up.

55:09We talked about that. Shekels divided by stuff. That's exactly what we're talking about here when it comes to gold and Bitcoin. What's fascinating is the sentiment of those people trading those assets. It's just been entirely different. Yeah. And despite the fact that in theory, if they were both mature assets, and this is kind of what I'm going to get to in a second, they should go the same way for exactly the same reasons. Same with property, right? In fact, you'd argue that Bitcoin should do better because it's also got the adoption force behind it as well. That's a good point, right? Sorry, I'm saying if it was mature, though.

55:38So that's why. Okay, sure. So what's the difference? And we'll talk about tech in a minute, but tech is being absolutely smashed. And I've said for ages, and I think you agree, mate. I'm pretty sure we've agreed on air, but I don't want to put words in your mouth. Now, Bitcoin acts like a tech stock in the short to medium term. Now, in the long term, the price has gone up a lot and a lot more than tech. So I'm not trying to cast any aspersions on the asset itself or even its price. But the behavior of those who are likely at this point to be the marginal traders of Bitcoin is different to those who are likely to be the marginal traders of gold.

56:09And that is Bitcoin is seen as a riskier asset in quotes. And I mean that in the academic sense, which is not the way we choose to use it, which is, oh, man, what it goes, I'm going to make a fortune. People aren't buying gold to make a fortune. Risk on, they call it. Right? They're buying gold to try and protect themselves against a debasement of the currency, and that will mean in dollar terms it goes up. But they're kind of not doing it to try and make a speculative gain, for the most part. For the most part. Some might be. Some definitely. Right. A lot of the marginal traders of Bitcoin, so marginal and traders, as opposed to owners or believers or any of that sort of stuff, are doing it because, well, Bitcoin's going up, to your point about, you know, don't buy just because it's going up.

56:42What happens if you bought Bitcoin when it was going up? It starts going down, and you're like, huh, well, I'm out there. I don't own this for any fundamental reason. I'm just, I don't want to lose any more money, so I'm selling. And worse if you bought it on extreme leverage, which a lot of people got. So we've also seen a massive deleveraging since October as well. So a lot of, you had an asset that went to the moon, right? It went for like, prior to sort of like Trump to, what did it get? 126 US. It was such a huge thing. And you had all of this leverage, right? I mean, to the system. And then when it falls, it's not like, oh, wait it out.

57:13No, margin call. You've got to sell. and then you get like a, you get a liquidation cascade on top of it. I think part of that happened to exaggerated gold's fall recently too. Because again, you've got, yes, you've got that. I mean, this is interesting. This is what markets are so fascinating. You've got one person that's like, I'm buying this to put in a bunker somewhere. There's another one, some dude on Wall Street full of cocaine saying, no, I'm buying this because in the next 10 minutes it's going up and I want to do it. Some other schmuck, yeah. A hundred to one leverage, you know. Yeah, yeah, yeah.

57:38It's like, well, who's driving the markets? Like actually you all are and that's why it's so hard to sort of tease apart. Actually, I think why I wanted to show that was just because sentiment drives both. And they're driving them both in different directions, even though fundamentally those who buy both assets with the fundamentals have a similar thesis. They're choosing different assets. Yeah, right. And the gold bugs are stoked because they're like, oh, see, I was right. You've got to let them have their time in the sun, don't they? They have been calling this for 40 years. So I think a lot of people are like, don't get crusty.

58:08Yeah, totally. They have been in the shadows for so long. It's like, let them have their time in the sun, right? But the point is, neither is necessarily going to continue to be the case. Oh, yeah, sure. Bitcoin might fall for$40 ,000. Gold might go to$10 ,000. Yep. The reverse might happen tomorrow. Yep. It's just a reminder of why, as you say, I love that line about the macro. The macro that we're saying, oh, obviously the macro is wrong. Obviously, that's why gold's up. Yeah. Why isn't it happening on Bitcoin? Obviously, the macro is wrong because Bitcoin's down. Well, why isn't gold down? And the answer is, it's just sentiment.

58:38I know I'm banging on about it, but it's really – that's okay. Let's leave Bitcoin and gold aside. Let's go back to shares, which is our daily job. That's what happens with shares as well. Sentiment will drive – no matter what's happening with the fundamentals, sentiment will drive prices of any asset in the short term, particularly where there are marginal buyers who are taking – extreme is the wrong word – but are setting prices based on their own circumstances and preferences rather than representative of the – if no people hold Bitcoin for the permission and one wants to sell it for$10 ,000 tomorrow morning, it gets sold for$10 ,000.

59:10Yep. And so the marginal buyer sets the price. And it's not good or bad. It just is what it is. By the way, great opportunity if you're a gold bug and you want to sell or you're a Bitcoin buyer and you want to buy or vice versa. You've got plenty of opportunity to do that because the market's giving you that choice. That's the great thing about the market. But you've got to put up with the volatility. You've got to put up with the sentiment. You've got to frankly have some summit churning days and nights because that's just how prices work. I think this is the hard truth I said to my brother was if you're worried, you bought it for the wrong reason.

59:39You bought it because I was enthusiastic and you saw the price going up and that's why you bought it. But forget Bitcoin. It's the same with any share. I mean, we've been doing this for decades. It's always the same. It's like those who know what they own and why they own it, if you like the asset and you think you're bullish on it long term, you should relish the chance for a cheaper price. I know everyone says it's a very Buffett kind of thing and everyone nods along when it's not uncomfortable to not nod along. Yeah, that's right. You know, but it's just sort of like, I think it's, if you find yourself in that situation now with that, it's a really good opportunity to say, well, why am I worried?

1:00:18What has changed in my thesis? You know, misery loves company, right? So I would be, I said to you off air, I'd be really worried if like everything was pumping and Bitcoin wasn't. It's like, what if I, I would feel as though at the very least, It's an encouragement to revisit the thesis because I've clearly got something wrong here. But then you go, and I'm not going to, look, the markets are a really rich vein of picking the bit of evidence you want to support the claim that you want to make. Because there's thousands of stocks out there, right? But even when you look at some of the very, very, very largest, most profitable, most deeply motored, most strong balance sheet, most high recurring revenue companies, tech companies or SaaS companies in particular on the ASX and even in places like the US and that.

1:01:08I mean, we talked about it a few weeks ago. TechOne down 40. Great business. One of the best businesses in Australia. They do enterprise grade software for councils and governments. Brilliant. Cash spewing business. Brilliant. down 45%. ProMedic, so more than Bitcoin. ProMedica is down 52%, down more than Bitcoin. WiseTech down 60%, down more than Bitcoin. REA Group down about the same, realestate.com down the same amount and car sales down the same amount, zero down 40%. Atlassian down 65%, Netflix down 40%, Oracle down 55%. So my one point is, it's not just me, it's not just me. It's okay. It's a broader thing.

1:01:50It's a broader pattern. But also of all the so what's and the lessons that you've done such a great job of articulating applies to these things as well. And where Bitcoin is really interesting in all of this is that, and again, in the bubble that I live in, it's funny because you see the comments come out. It's sort of like, bro, this is like the 18th time this has happened in the last 10 years. Like, this doesn't guarantee anything, by the way. So you can look at past patterns and infer future direction, which I think can be misleading. But what you can say is it's like bootstrapped from zero to a near$2 trillion US dollar asset.

1:02:33And it's had that many drawdowns, massive 80 % drawdowns along the way. If you were to panic at every single time, it was the worst thing to do. And I've made the point before where that's true of Apple, it's true of Berkshire. You know, it's true of all of these kinds of things. It's only a problem if there's something that's fundamentally changed. What has been resurfaced a bit recently with some of these pullbacks in tech and elsewhere is that wonderful Charlie Munger quip where he's just like, you know, if you can't stomach a 50 % drawdown multiple times in your investment career, you do not deserve to be an investor in common stocks and you deserve the very ordinary returns you're going to get.

1:03:07Like he just slaps you across the face with that. And I love it because it's so succinct. And it's just like he's not trying to do the grandfatherly molly coddling of Buffett here. And I love it because I think sometimes all of us, we need that slap in the face to kind of go, well, what did you expect? Did you think that you were going to buy a basket of shares or whatever it happened to be? And only from that point it was only going to go up. It was never going to have any corrections or pullbacks along the way. I mean, this does not work this way. And if that's your expectation, A, you're going to be unpleasantly surprised, and B, when that happens, you're going to panic.

1:03:51And so more often than not, you're probably going to make a loss. I'll give you my favorite example of this, which I mentioned recently, so I'll do it quickly, which is Peter Lynch's Magellan fund outperformed the market, doubled the performance of the market over a 25-year period, something stonkingly good. Most of the investors in his fund lost money. And they lost money because they only put it in when the fund had a good year and they panicked when it had a bad year. And if they'd just done nothing, they would have made absolute fortune. And that story gets repeated again and again and again.

1:04:21And it's why Buffett says, you don't have to be smart, but you do need to have emotional resilience. That is his superpower. Yeah, he's super smart as well, right? Obviously, if you've got an IQ of 12, you're going to struggle no matter how emotionally strong you happen to be. But you don't need to be Einstein level sort of intelligence for this. So I always cringe a bit when I make this point because it sounds like cope. It sounds like what you would say to ego protective reasons. And I've made the argument on stocks that never came back, right? So you've got to be careful with it. But it doesn't mean that it's not true.

1:05:02So I would just, yes, it sucks. Not my first radio. I'll make this final point before we move on from Bitcoin. And prior to October when we were at the moon, on our way to the moon, I was getting a lot from my friends, oh, you're so lucky. Oh, it's easy for you. You bought it. You know, it just made me bristle. It was like the story is that when I bought, I watched it drop from my first – and I'm not talking about a little tinkering. I'm like I actually took a reasonable allocation. I watched it go from that to 50 % down. And then it took me like almost two years to get above break even. and yeah.

1:05:41And the Dark Knight of the Soul wrote that for two years. Right? And it's just like, but that was the Bitcoin journey, but that was also the ProMedicus journey. Oh, yeah. That was also the, you know, any of my stuff. Tesla spent five years going absolutely nowhere before taking off. Right. For five years, people said, not going to work, not going to work terrible. And by the way, it might not have worked out either. I'm not saying it was necessarily always going to work. My point is that you had to, to get those gains, you had to live through five years of absolutely nothing going on with the stock until it finally took off and then you're going to get some numpty go oh you were lucky we we have to tax you on something to be like it was like you you almost you you contributed nothing to society and look at all the unfair riches that you have it's like no it is these opportunities are right there in plain sight for anyone who cares to take to take advantage of it now we don't know what's going to happen with bitcoin could go to zero right i'm not just saying that it could go to zero like any asset could absolutely go to zero.

1:06:37So you're naive if you think that's not the potential. But if we assume that it doesn't, and that in, let's say it's 200 ,000 US in five years, just to make up a number. And who is the person who's going to benefit from that? The person who you had to wade into all of this fear, all of this uncertainty, you had to buy. The moment you buy, do you think you're going to pick the bottom? Of course not. So it's going to fall down further. And then it's going to stay there for a long, long time. And you're going to come out. So So these are why these gains are earned. They are very much earned. And those that have the ability to sort of look ahead, take action when it's against the crowd, you're calmly walking in one direction when a screaming mob is running away, screaming blue motor in the other.

1:07:22Yep. And then sleepless night after sleepless night. This is to the victor go the spoils, right? And to be victorious in this game, wherever the asset class it is, you have to be able to have that independent thought to stick to your convictions, you know, to test your convictions. You've got to have good support for you. You have to be right. So you have to acknowledge when a thesis is absolutely broken. But if you can stick to your convictions and do the calm, rational thing when everyone else is done, you will be really successful. But don't think that I'm going to be able to have my cake and eat it too, that I can buy all these stocks.

1:07:57I'll never have a sleepless night. I'll never stomach volatility. It's only up and to the right forever, I don't know what to tell you. This is not for you, is what I'm going to tell you. Go back to a cash account or an ING savings account. And good luck with that. Because that's all you can do. Correct. Let's finish off with, we've been sticking to the government today and I can do it again because I just want to and not because I want to because of what I think they are or who I think they are, but because of what they've done or are going to do. Okay. This one is an announcement during the week that the government's going to sell$1.8 billion worth of defence land.

1:08:35Victoria Barracks and Sydney, for those who know it, other defence establishments around the country. And in theory, all lovely ideas. Public space and housing and affordable housing and all sorts of cool stuff that's supposedly going to be done with that money. And I would like to hear your thoughts, mate, because I have a very strong view on this one. I'm happy to hear yours. And it kind of goes back to my sovereign wealth fund idea. we are going to take this asset that we collectively own we're going to flog it off hopefully some sort of decent price but don't be surprised if we don't get full value from it it won't be full market price, it never is and then we're going to take that money and spend it on trinkets we are going to sell the family silver for a knees up and I just look, I wouldn't sell those assets anyway I think we have insufficient amounts of I mean, Victoria Bank's the middle of the city.

1:09:27Turn to something public. Make a public park, a newspaper, do whatever you want with it, right? But to reduce the amount of public space, to do so and then take that money and blow it on trinkets and, you know, short-term spending, which then have nothing to show for it. And develop a bargain basement price so they can make a fortune off it, yeah. And leave nothing of that inherited wealth. I can say, I'm a several. Our great-great-grandparents put this aside for our communal use. We're going to flog it off and spend the money. It is literally selling the family. Imagine if you're on a farm, right, and you're a third, fourth-generation farmer.

1:10:08And then the fourth-generation says, I'm just going to sell off bits of the paddocks down the back. Every time I'm going to sell part of the paddock. And, oh, you're going to save the money? No. You're going to put it aside for long-term, for posterity? No. You're going to invest it in something else? No. No, I'm going to go on spend on beer. By the way, speaking of spending on beer, the same week the government announced they're going to freeze the excise on beer because, you know, nothing buys votes like not putting the price of a schooner up by a cent apart. Cynical bastards. I know, right?

1:10:38So literally spending it on beer, not the whole amount. They think you're an idiot, dear listener. What's the other interpretation? They think that you're an idiot. And here's why it sucks and why it's really worth thinking about, right? Because when the government says, we've got land we're not using much of. Military's got it. They're not using much of it. So it's not being used much. It's underutilized. So you're thinking, oh, that's bad. So what we're going to do is we're going to sell up the housing. Oh, we need more housing. That's a good idea. Okay. So firstly, you've just mentioned immigration earlier, mate.

1:11:13So we're selling defense land and using the money for nothing. So just put that aside for a second. So we can build houses for the people we're bringing into the country. that we could just not bring into the country and not need the housing. Yes, that's what we're doing. Okay. And then once that housing is built, we're still going to let more people in the country, right? Yes. So we're going to have even more housing even when you've done that. Yes. So you've created a problem. You've fixed, in air quotes, the problem by flogging this thing off for probably something close to$2 billion in total.

1:11:43Then you've wasted all that money anyway. You've put people in those houses. So you've solved the problem for six months, 80 months, maybe if you're lucky. And then 80 months later, we're back in the same situation we are right now. Yes. but we haven't got any more assets to sell. Well, no, we've already sold the assets and we've spent the money on other stuff. Yeah, yeah, we did. So how the hell are things actually any better, let alone where they really are, which is meaningfully worse? And it is just an absolute nonsense, mate. I just, our willingness to flog off the family sorber, it's the best example, best, you know, for a knees up, for a folly, for the trinkets, whatever analogy suits your particular preference.

1:12:16I know they're old fashioned terms. I've got to come up with something new. The cool kids will help me. I just it isn't it is I can't imagine a scenario in which it's even slightly defensible other than desperation underutilized housing you know 1.8 billion dollars they all sound good things that's why they're treating you like mugs because they kind of use the soundbites and everyone goes yeah of course that would make sense yes of course we should do that and yet I've said I mean can you imagine at any point pick your favourite landmark green space in your capital city or your town Imagine if a government 20, 30, 50, 100, 150 years ago said, nah, we'll just flog it off to John.

1:12:53You can build a house on that. A house? A house? You mean a mega two-bedroom apartment complex? Well, 150 years ago, it might have been a house. Not fire retardant. Right? And so Centennial Park in New South Wales, in Sydney. Botanic Gardens. Beautiful, yeah. Some of the park lands in Perth. Kings Park. Someone just said, oh, we can use that for housing instead. Let's just do that. Central Park in New York, right? That's a great example. It is just a nonsense. And it drives me so crazy, mate, that I don't know what the libs would have done. I don't care. Just the short-term stupidity of this stuff, that somehow it makes sense to sell public land in particular and green space in particular, particularly in the CBDs or in urban areas.

1:13:38Sell some in the Simpson Desert if you want. Right, knock yourself out. Yeah, right. I just got nothing to say. I mean, look, I 100 % agree. 100 % agree. So the current federal government deficit is close enough to$37 billion. So what are we going to get for this? Yep. 1.8 is the best guess. 1.8. Okay, so it's like weeing into the wind. 5 % of that. For starters, right? 5 % of the yearly deficit. We've got to permanently give up that asset, access to that space. Yep. For 5 % of one year's budget debt. Come on, people. Well, now, look, I'm not opposed to selling it in theory if. There's a lot of ifs here.

1:14:17So if we don't have the use case for it anymore, right? I don't know the detail behind it. I assume that they just don't need the barracks anymore if we want to talk about them. Okay, well, you should sell something that you're not using, right? Or convert it to a different use under government ownership. Or convert it to a different use, yep. Parkland? Be us? Absolutely, yeah. So either use it better. Okay. If you are going to sell it, then two things need to happen. First, you need to understand that this is a one-time shot. So get the best price you can. And I mean really get the best price you can.

1:14:53And hold that for as long as you need to to get that best price. Don't rush. You've got all the cards here. Yep. So get a really great price for it. Okay. I'm all about capital efficiency and capital management. You've got an asset on your balance sheet. It's not being underutilized. There's no alternate use. You should sell it. Sell it for the best price you can. First condition. Second condition, what are you going to spend the proceeds on? Oh, we're going to do it to build, I don't know, I'll give a hackneyed example of a snowy hydro kind of something that's going to last for 200 years and will pay itself back in the first 10 and will just be an absolute boon for wealth creation after it's like, I'm on board.

1:15:30Sell it. Sell it tomorrow. Like this is brilliant. You should definitely do that. But to sell it and probably not get a great price, and probably just use it for short-term spending measures. Oh, and because everyone in the country is an idiot, we're going to try and butter them up with some slightly cheaper beer for a year before we roll the excise back on top of it. Like it's really frustrating. It also points, I think, to a far bigger problem. Why are they doing it? It's the same reason why capital, we won't have time to talk about it today, but capital gains tax is on the table again. Tax reform is on the table.

1:16:06Of course it is. And it's all in the$37 billion deficit issue. We have to get the house in order, and it's not going to be brought in order through any fiscal discipline. So we're going to do the things that desperate governments do. What do the desperate governments do? They sell the family jewels, and they ramp up their tax collection efforts. And again, there'll be some people out there just narrowly and myopically just hear certain trigger words and go, oh, so you're saying that people shouldn't pay taxes? No. Very happy. We need taxes. We need to fund the social services that we have. Yep.

1:16:39But it's more about, again, what are you going to, if you're going to take all this money from people, what are you going to spend it on, right? If you're just spending it on really dumb stuff and not getting, you know, and just screwing the thumbnail tighter and tighter and tighter, it just doesn't lead to a good place, man. It just doesn't. I told you, I was, the book I was reading last week on 1931 in Germany and stuff, and they just, you know, The Great Depression really was a sovereign debt crisis at its root. It wasn't a 1929 Wall Street crash. And one of the big problems that they had was that there was actually, there were actually people were just not paying their tax after a certain point.

1:17:21They couldn't afford the reparations. They were already screwed. You know, and it just, all of these things, all of the things that the German government did and the Romans did and every great civilization in history did at a point was they sought short-term fixes to long-term structural problems. And here's the thing. It works for a time. And our human experience and our human lifespans, our human experience of time, you know, it feels like, oh, well, I remember a few years ago, everyone was talking about the sky falling and it didn't happen. See, I guess it worked. And it's kind of like it's only after like a while that you find yourself bottom of this hole.

1:17:59It's like, oh, how do we get out of this? and all we reach for is the usual solutions, quote unquote, that got us in this problem in the first place. So my prediction is very much that we'll see more public assets being sold off. We'll see all kinds of tax grabs to try and fix the problem. We'll do everything except look in the mirror and face some hard decisions. Yes. And again, I'll point out this is another little bit of a bugbear, but it's why I don't want to name names, get in trouble and have fights on Twitter, but there's certain people out there that sort of they'll go, wow, but look, unemployment's really low and GDP is this.

1:18:36And they'll point to these stupid high-level figures that of course hide all of this kind of stuff, right? I mean, you ask why is immigration pumping because it's great for GDP. Right. Right? That's why. Except for the last nine quarters of negative GDP per capita, how do you paper over that? You just bring more people in. And it helps house prices go up, which generally helps a lot of people as well. So again, it's so cynical. and it's just like this is why I tend to really not pay a huge amount of attention to these kind of metrics and certainly don't put the weight on it that other people do because all of the stuff that we're talking about does not get considered within all of this.

1:19:13It's like us trying to analyse a company on the ASX and all we look at is its earnings per share, which is a great thing to look at. Not even earnings per share, earnings, total earnings. Yes, actually, much better. Thank you. No, no, keep going though because you're right. But even with that, right, earnings per share or earnings, Like, Greg, I absolutely should be the nub of your focus. But don't just look at that. You're going to miss all of the complexity, all of the nuance. Where do the earnings come from? What drives the earnings? You know, these are the things that matter. I'm like, what happened to happen last year is informative.

1:19:45And the trend before that was absolutely informative. But in a vacuum, it's nigh on and useless, I would sort of say. And that's how we run our economy. How do you reduce earnings? Well, you sell more shares. So, I've got – and you go and buy something. Okay, well, then I've got less of it, but you're saying you've got more earnings. That sucks. How do you use earnings per share? Which sounds better. Well, you're taking a truckload of debt. Yep. So, you made this business a whole lot more risky just so you can see you've increased earnings per share. I sell the assets as well because I could sell the office block in the factory and just release it back.

1:20:16What are the selling lease back? It's a very common strategy, by the way, because you're a lazy balance sheet. You know, and it's sort of like all of it juices things for a time, but it just doesn't end up well. You make overpriced takeovers. You waste company cash. I mean, there's lots of ways you can get a headline number to go up if that's what you can get people to focus on. Yeah. And if that sounds bad from a company perspective, it absolutely is. And if we're doing it as a country to ourselves. Yes. Like, you know, this is – and I said cynical before. It's absolutely cynical, but it's worse because it's actually destructively cynical.

1:20:46Yeah. There's one thing to say, I'm going to pretend to you so I can get ahead. And that would be bad enough. Bad enough. I'm going to hurt you so I can get ahead. Yeah. That is just despicable. It's atrocious. And whether it's a company or a country, it's like, what do you want to do here? You want to make sure that you've got a very strong balance sheet, which is just another fancy way of saying, I just want to have a lot of good quality assets and not too much debts, right? Because those countries and those corporations that have that, I wouldn't say bulletproof, but they're wearing five Kevlar vests, right?

1:21:21It's always a better situation to be in. They also take the earnings that they are producing and they reinvest a significant portion of that into future productivity and future infrastructure. They make investments where it's like we elect to defer gratification. We can have more circuses, more gladiatorial fights. We could eat more cake and we can entertain the masses much more or we can not do that and we can build an aqueduct and a highway between Nice and Rome. You know, we can do all of these kinds of things which have, which pay themselves back a thousand times over. And it's sort of like, this isn't even, I don't think like an interesting interpretation of the facts.

1:22:07I think like anyone who's ever looked at this reaches the same conclusion. Be prudent, save for a rainy day, because you don't know what the future is going to bring, whether it's an asteroid or a pandemic or a global war or something. You know, probably not good to live paycheck to paycheck if you're going to avoid it when the times of goods put a bit of money aside. And not just money, make some investments for the long term that are going to build the capital stock and capital base of your society that's going to allow for your citizens to be far more prosperous and wealthy, not in a monetary sense, but in a quality of life kind of sense.

1:22:41And we're doing the opposite. We're doing the opposite, man. And it just, there's only one, this is, I mean, back to the debasement trade, right? It's why it's such a good trade. I think it's a very long term, trade's not the right thing, but it's like, unless we see a reversal in these kinds of thinking, in terms of our fiscal stance, in terms of our monetary management, then the math just leads you into one inescapable conclusion. The world's not going to end. The world will have some kind of a reset as it has had many times before. A lot of people will get crushed. Usually the most disadvantaged and vulnerable people will get absolutely crushed along the way and we'll be back.

1:23:16I'm sure humanity is bigger and better and stronger in 50 years' time. But we're going to shoot ourselves in the foot. We're going to make a lot of unnecessary pain. And it's when push comes to shove. When promises start to break, which is what most of these, whether you're talking about various certain assets, bonds or whatever, when promises start to break, you get this cascade through. It gets very, very, very messy. And I just feel as though this is a good time listening to an investing podcast, not to go to ground in a bunker because by the time you're right, you might really regret that.

1:23:52But as I had a conversation with someone recently, it's not about you can't time macro. Don't try and do that. That's dumb. Even if you're really negative, and I've just painted a really negative picture, right? You don't do that. But what you do do is, again, quote Charlie Munger, tell me where I'm going to die so I don't go there. Yeah. Just avoid the leverage stuff. Avoid anything with significant counterparty risk that relies on the good faith and confidence of the other person on the other side of that trade. And it will be far less unpleasant for you if and when these things continue to further unravel.

1:24:29Absolutely.

1:24:35On one hand, it's really tempting to kind of like... And you're right. If the government's not looking after the country, look after yourself is the answer. It's just a miserable place to have to be. You want to look after yourself, of course you do, but it would be nice if we could actually do both, have the country actually doing the right thing at the same time as we could look after ourselves. It's just to have to make that trade, to literally look each other in the face like, well, you're screwed, dude, so I'm going to have to look after me. If that's out of our national policy, we're doing something very, very wrong.

1:25:03One final point here. Even if you are a stupidly short-sighted, selfish, cynical politician, still do the right thing because you've been doing the wrong thing and you're still losing, right? Like One Nation is massively on the ascent here, right? So you are – Labor and definitely the liberals have lost ground. So you're doing the cynical thing and you're still losing as a consequence of it, right? It doesn't work. It doesn't work in the long term. Again, you get your short-term sugar hits. But if you don't change your ways, you're losing either way. So you get to a point where it's just like, just do the right thing, especially when you've got a very strong mandate and a very, you know, as the current government does, they're in a very strong position to make some big sweeping changes if they wanted to.

1:25:53And do it for the long-term survival of your own party. Self-interest again, yeah, exactly. Mad. All right. Yeah, I think we're probably done. We'll try and be happier on Sunday. What do you reckon? I mean, yeah, we should probably just force ourselves to focus on some good news stories, right? At least we'll ask us their questions. Hopefully we'll find them. Yeah, that's good. Let's do that next week. Let's do that next week. Yes, other than we also have a responsibility to hold people accountable, not just pretend they aren't doing bad things. So it's a fine balance. We will do our best to find it next week, but on Sunday we will answer your questions instead.

1:26:29Jonas, I'm sure Ram, you'll be back, won't you? Of course I will, dude. Of course. Of course. Until then, fool on. Cheers.