In Search of Green Marbles: Raoul Pal on AI, Crypto, the Economy, and Elon’s Mars Plans ft. Jordi Visser and G3

26:00The framework gets frozen in time and it becomes the basis for how they look at everything moving forward for the rest of their careers. Everybody thinks that 1970s is going to happen again and everyone's going to get their payback for the monetary largesse and everyone's going to get the payback for how society has been structured and the economy has been structured. But it's very, very unlikely to happen. This is a good segue to talk about whether or not we are headed into a recession. At first blush, you have different viewpoints on that. But as I thought about it more, I'm not so sure how far apart you are.

26:38But just to kind of kick things off, well, you believe that we are probably headed towards a quote unquote recession? We're there now. And I put a poll on Twitter and had 10 ,000 people answer it. Basically, everybody's laid off staff and everyone said they're seeing slower growth. So I do believe we are in a recession, but I'm in the camp that it's a 1990 style recession, which was a mild recession, a bit of a reset after the overhang of the post-COVID thing. And my forward-looking indicators are already through the other side and the markets are trading that. So the recession was last year in terms of markets.

27:14So I don't really care about it anymore. It's now just a dinner party talking point or screaming at each other on Twitter. But really, the markets had their bear market last year. crypto was down 85 percent and asdaq was down 38 that's proper recession bear markets done done and over for me what about you jordy well see basically then we're in complete agreement because i think that's no fun i think well no no but let's rephrase this we're never going into the question you're asking there is no such thing in my world of recessions anymore and you said this when i interviewed you and i thought it was a really startling talk talk what you mean by that So let's use this.

27:51First of all, is commercial real estate in a recession? Yes. Is housing in a recession? Purchase applications were down 40 percent last year. Existing home sales were down 33 percent. There's no bounce whatsoever. We're airlines in a recession. I mean, I can go through every industry. We've had recessions in almost every industry. And a recession is about overinvesting and then seeing a pullback. So we've already had kind of rolling recessions. But regardless, the reason I say we'll never be in a recession, once the iPhone came out, something really important happened in the world. We use debt, to use your analogy, to scale companies.

28:32We used debt to be able to grow a business. So if you wanted to grow a business in the industrial revolution and you're Ford and you want to sell in Chicago and you want to sell in San Francisco, you had to issue debt. Well, the companies of the prior decade didn't use debt to scale their business. This was the benefit of the virtual world. We got a growth from$100 billion in combined revenue for the seven big companies to now$1.7 trillion. And we didn't have to go out and take debt to fund that combination of VC, but mainly it was by destroying other businesses. So you already broke the relationship.

29:06And remember, if we're talking about population growth or the workforce and debt and those two, well, we already hurt the debt side for corporations. Debt may have grown, but it grew at the government side, not at the household side and not at the corporate side. And I think we broke that without people realizing that, oh, my God, you can scale a business without taking debt in the virtual world, in the digital economy. Well, now we're at the next phase and we're now going to attack the workforce. So now we're going to have an explosion in people, which means this is the final link. So everyone's saying recession by definition is saying job losses.

29:38We've created 2.5 million jobs so far this year. It's not a recession in the terms that people that are forecasting it will happen. But it has been a recession in the same way Raul said. We've seen a pullback. The reason I don't think we'll get a recession is because we're in the exponential age. And if it wasn't for the pandemic, which was it was a decided recession. Everyone stay in your house. And then we printed money. Aside from that, we haven't had anything except the unemployment rate go down since the iPhone came out. It has gone down continuously. So I'll just finish on this and then you can respond to it.

30:08The closer you get to abundance by definition, the further away you get from scarcity. Scarcity is what causes recessions. You overbuild into something. So if you believe that we will be able to create things instantaneously, by definition, we should never be out of balance between supply and demand. And to that point, there was another piece of magic that got invented in 2008, which is quantitative easing. Yep. So people want, and I see this, it's the same kind of inflation's coming back as the 70s. They want their 50, 60 % correction markets. I'm like, it can't ever happen again. much to your point because now capital is abundant because when the central bank prints they're debasing the currency so recessions generally are there's too much leverage and then there's not enough collateral that's what happens but in an environment with quantitative easing the collateral doesn't go down in value because optically it goes up so if you think of the argentinian stock market goes up in a straight line well it's actually not in dollar terms it's actually gone down 90%.

31:10That's debasement of currency. So this debasement of currency optically never allows the collateral to go bust. So you will see it again very soon. The banking system needs to be re-collateralized again because of the commercial real estate and other issues. And what will happen, it will end up on the Fed balance sheet again, and the collateral will be made whole again. So you can't have the 50 % crash. Yes, you can have it in some parts of the sector. the growth at the end of technology, that was down 70%. That's normal, but you can't have the value of overall collateral. And we will see it very soon with the bond market.

31:46Now, the bond market was allowed to fall. We've had the largest fall since 1791 or whatever the number was. But the reality is, is because they changed the rules on the banks, they didn't have to mark to market. Obviously, if they've marked to market, every single bank in the world is bust, every insurance company, everybody. But again, we will see that this will end up on the central bank balance sheet. So therefore, it can't make these drawn out, protracted, evil, nasty recessions in the same way. What you're saying is basically the whole world should watch more cowbell that Saturday Night Live skit, because and what's the name of the guy who wants more cowbell?

32:22Christopher Watkins. He's basically the Fed. Yeah, he just needs more cowbell anytime things go off the rail. In the same way, what you're saying is, in your view, the Fed has essentially and other central banks will have essentially sought to it that we will never have those types of painful cycles. Jordi's point's really, really important. And I hadn't really thought that through that in a world of excess abundance, not even just abundance, scarcity is what causes the Austrian business cycle. And yes, we've just gone through that with a pandemic because there was a scarcity because we were shut up and then there was not enough production.

32:59We had an imbalance for a period of time. So an imbalance for a period of time, fine, that creates recessions. But yeah, that's something really interesting in the fact that I guess the only places left where there is scarcity is still in energy. We haven't solved that. But I think that's what the Europeans and everybody are trying to do with the kind of green drive is, yes, it helps obviously the plant and everything else. But the moment you can get off oil as the main form of energy, you can actually drive down the cost because then it digitized. Everything gets digitized, goes to zero in cost.

33:31So I think that is, then if you do that, it's almost impossible to have a recession. Yeah. And again, if you take San Francisco, you take New York City, they're both in recessions. Like the problem is for people who are forecasting recession, and this is the garbage in, garbage out. And I'm writing a paper on this because the data of the 1970s and the 1980s and the 1990s, before the Internet started, to me, is garbage. It's not a relevant data point. And everyone who's saying there'll be inflation, there'll be a recession. We've had three recessions during my role started during a recession. I started just after one.

34:08I've seen three recessions. One started after 9-11. It was kind of it was going on before, but the revisions came after. So 9-11 really was a game changer for the economy. The great financial crisis. We decided to let Lehman go and we paid the consequences for that. And out of that was born the ability of stopping Silicon Valley Bank. the fastest run on a bank ever, digital. Everyone got scared to death. That's like not even talked about at all. And if you go back to March, every single podcast was on that phenomenon. And then you had the pandemic. So I just don't know what event can happen. But the thing that has changed is, and this is what's going to happen.

34:46I have said to people when I go out and speak, we will have more bankruptcies over the next five years than any time in this country's history. And the reason will be, and we're on pace this year for one of the largest in history is because we have rates at a level that is above nominal GDP for the first time since before the internet started, which means if you're a company that has depended on debt, nominal GDP is gonna grow up four to 5 % again, but now Fed funds rate's gonna be up at five and change for the foreseeable future. So that will, to use the Austrian economics, that on one side from Hayek will hurt businesses and knock them out.

35:19But then at the same time, you have Schumpeter with creative destruction and AI will be the other force. But out of these business failures and these bankruptcies will be a massive birth of business formations, which will be little tiny companies, which will take bits and pieces from all of these companies. And I know we're going to get into some conversation on Tesla where I think we agree, but where the story is this merging and Raul is probably at the forefront of this, connecting the digital world to the robotic world is a really important inflection point. The iPhone was the first part of hardware.

35:55This is a major time now to combine robotics and artificial intelligence. And over the next 10 years, the same way you look back and wish you had thought of the iPhone that way, it is the merging of those two. I want to talk about Dojo and Tesla, but while I have you both on the economy, I just want to cover off crypto. Rare is it that I'm in a room with two people and I'm the least bullish of the three of us on crypto. Raul, you've talked about we're in crypto spring or we're soon going to be in crypto spring. Jordy has written several papers on crypto and has been a bull pretty much since we've known each other.

36:33A good friend of mine, a fellow in Nairobi, Wilford O'Darrow, was eager to get your perspective on the next bull run. And his question is, in a de-dollarizing world, perhaps Bitcoin might be the best way to play crypto. But in a world where the liquidity cycle is once again reigning supreme, maybe Ethereum or Solana would be the best way. So if you would, could you both speak about the best way from your vantage points to play crypto, assuming, you know, someone listens to you and say, yes, I agree with Raul and Jordy. Risk assets have a good pathway in front of them. So I'm going to reframe all of this.

37:22Oh, thanks. Kind of in line with how Jordy, do you want to take over the podcast? I'm looking for a replacement. Hey, hey, what's going on here? Everybody knows him. So I think Jordi raised an important point about in a digital world, we have different things. What we have now is digital economies. So digital economies, there's the crypto economy is the largest digital economy because it has its own currency. It's kind of a nation state. And you have multiple nation states within it of which, you know, Ethereum would be one, Solano would be the other. So it's really interesting. That has gone through a recession by all measures.

38:00it's gone through a recession because the scarcity in that space was capital. So capital dried up. So CryptoSpring is when liquidity comes back into that economy, you're getting FDI, which is, if you think of the Bitcoin ETF as potential FDI, it comes into this new economy, it gets recycled, it generates economic boom and productivity and all of the stuff. So the world is very different now. So we're basically like Jordan and I early in our careers, we'll be talking about what emerging markets we thought were interesting. These are emerging markets, and we're trying to choose between them. So in that world, there are different nation states, and they have different roles.

38:41So Bitcoin, it's kind of more like Switzerland. It kind of is less exciting because it does what it does on the tin, and it's done it forever, and it's well done. Ethereum is a bit more like the United States. Everybody's building on everything. There's a lot of activity going on, et cetera. And Solana is something like South Korea. It's like a mini-me of what's happening in the United States, but it's different and it's fast growing and there's interesting ideas and stuff like that. So that's how I think about these things. And then I look at network adoption models and what I see is over time, Metcalfe's law lowers the returns over time just because of adoption saturation.

39:22So Bitcoin will do out of a full bull cycle or economic cycle in crypto land. Bitcoin will likely do less well than Ethereum because more people are building on it, which is Metcalfe's law. And Solana is earlier in its cycle. And they're just about to introduce, I don't know if you've gone down the rabbit hole yet, but Fire Dancer, the Jump Trading have developed, which is a validator on Solana. Sounds complicated, but it's basically new Solana. Solana is the fastest blockchain in the world at 65 ,000 TPS. It's usable for social media. Twitter runs about 25 ,000 TPS transactions per second. The jump trading guys using Solana have got blockchain running at 1.2 million.

40:04Okay, so this is a... So infinite throughput, essentially. Basically infinite throughput. It's fast enough to use high-frequency trading for exchanges, which is really, really low latency, massive throughput stuff. That's what it's been built for. So, okay, is that going to see adoption and mean that Solana's an accelerant in this cycle versus the others? Probably. But, you know, it's again the exponentiality of even TPS speeds is happening. And that means more people can use it. People say, well, I don't really know what that means. It basically means that all social media can now go on blockchain.

40:39So then you don't get the issue of censorship or governments taking it over or whatever it may be. Or you can own your own data, which is not a massive thing. The only thing we're missing, I think, in blockchain technology is file size. So you can't put video yet, but that will come as well. So then everything goes on the blockchain. I mean, it's the way that all value gets transacted, moves and stored in the digital world. It's just not there yet. So for the Wilfords and others who are eager to get your vantage point, it sounds like Solana and Ethereum are a more aggressive, interesting way to play crypto.

41:12Yes, but Bitcoin will do fine too. The crypto economy will grow. All of these will do fine. and then it's a matter of nuance about asset allocation and maximization of returns. And the only thing I'm going to add, because I didn't realize this, the great thing Raul spends, and we were talking about this beforehand, just the two of us learn from talking with other people because it connects dots. And one of the things I said before we started this was, I'm going to be able to ping pong off the things you're saying. And one of the things I think people should really pay attention to in listening to this podcast, so far, the amount of dollars that has driven the crypto world, to me, has been very much driven by the same thing that drove the VC boom that happened.

41:54And meaning that the market cap at some point has to grow dramatically. But for the market cap to grow dramatically, meaning the ecosystem or the crypto economy, as he calls it, to grow, that's going to come from the masses. It's not going to come from big hedge fund people. It's not going to come from people leaving Goldman Sachs and moving into that world. The phase one, Absolutely, that makes sense. But since I don't believe the VC world will be able to use the Web 2.0 playbook, the Web 3.0 playbook comes with the rise of the many. So in the argument where the destruction of older established businesses, the physical economy, the wealth that was created, I've always said it.

42:31I said it on the interview we did together. authenticity and ownership in the fiat system is going to be under attack from the AI world. AI is also going to attack established businesses, including the big seven. I don't agree with the fact that they will be the winners of the AI world. They might be for the next two years, but the ability to start up a business without debt and without people means the people that are in trouble are the ones that have debt or have people by definition. Also, really interesting thing is I started looking at this millennial cohort and how they invest. And it's fascinating because what they've done is they've done what they're told because they've been a good cohort because they like earning their badges and they go to university and they get their certificates and all of that.

43:12So they all have their 401ks, which is what's made passive investing outperform everything because the sheer numbers of people just saying, I don't understand, don't trust the system. We're just going to buy 401k in passive. But the other thing they did was 2020, they became financialized. They realized that their futures were screwed and their expected future return was not as high as their parents and that they couldn't afford a house and et cetera. So they became more risk taking. So with their discretionary income, they became risk takers. And that's the rise of Robin Hood, which was technology investing and now options investing on technology.

43:45So it's pretty racy stuff and crypto. And then I started going through, and this was a fascinating thing for me. And I don't think most people realize this. I started going through online brokerages and the size of the active users. So Interactive Brokers, which is like the smart person's brokerage platform, 5 million users, 300 ,000 daily active users. It's minuscule. Schwab, TD Ameritrade, Fidelity, they're all in the 2 to 4 million daily active users or weekly active users, whichever the metric was, monthly active users. Most of their accounts are just the 401k, RAA-style boomer accounts, and it's not being used by young people at all.

44:27So Robinhood is 24 million accounts, of which 12 million are active, right? Staggering, 50 % active users. And that's in this market because that was in their last quarterly report. Coinbase has 108 million customers, of which currently 9 million are active because we're in a crypto bear market. And I was at Coinbase yesterday speaking to a bunch of the senior people there. and we were just talking through the stat it's like well once crypto normalizes in volume i we're not in crypto recession we're coming we're in spring once we get to normal crypto growth markets that number is 45 million and as the space is growing at 200 a year that number goes to 100 million very fast that is this groundswell of people coming into this ecosystem ignore the big money they will follow but the little guy gets a chance to front run the institutions for the first time in history, which is because VC is the opposite.

45:26The average 35-year-old cannot get into VC. They just don't have the money to do it. So they're shut out of the highest part of the return cycle. It angers people. The crypto is the inverse pyramid. So they get into the early VC stage returns in massive numbers. I mean, 100, you know, 9 million people, 50 million people, 100 million people. That's that. The other thing just about the crypto economy that's fascinating. We've gone through a recession, yet the population grew by 42 % last year. So the number of active wallets grew 42 % when the market fell 80%. If that's not a signal, I've never seen it.

46:06And if you want one more, I'm going to give you one more, just so people can really look at this this way. If you wanted to pick a point, next year we know is going to be a volatile year with the US election to start off with. But if you really wanted a number, what are we just north of a trillion dollars in the market cap right now of crypto yeah i think we're about to pass that in terms of the interest payments for the united states debt right now yeah so these numbers are the crypto markets just not priced properly for the size of the u.s government debt totally agree it's an advertisement for crypto if you could i would love for you both to speak about crypto and the connection to ai and why these two technologies really should be viewed holistically?

46:48So if you have a robot, let's call it a car, or a fridge, or a toaster, or whatever you want, and you have AI in it, all it needs is a payment system. Crypto is the payment system for all of this. All of these technologies, that's why I call it the exponential age, these are all, they're not different things. They're not parallel paths. They're all convergent. And we're hitting that point where already in space, so in space, they're already creating too much data in space. So they're starting server farms. In space. In space. And because there is no sovereignty in space, there needs to be a payment system.

47:27So they're already using crypto rails and that's being explored in how to do that. So that is the rise of robots paying robots for activity or AI paying AI for activity. So these things are foundational layers. I don't think of AI as an applications layer. It's the foundational layer. Energy and AI are really foundational layers. And I would put crypto as a foundational layer above that. It's the applications layer of value on top. And since I've already talked about crypto, I'm just going to say three simple words or three simple phrases. the need for authenticity has gone parabolic because of artificial intelligence.

48:05So that gets you back in this. The Hollywood writer's strike and this battle between labor and management is also a big story. And I wouldn't say management. So I don't think of this as strikes. I think of this as the middleman because that was not a strike against anything more than, hey, we're the content providers. We deserve more of what we do. And I think NFTs and royalties and smart contracts will enable that to go. And I've written many, many papers on this at this point. So I think that's going to happen more and more. And then finally, and this is the simplistic thing, I believe AI, as I said, lowers the barriers to entry because you can start up a business and get it going so quickly because you don't need debt or people, which means it's a form of decentralization.

48:52And this is the rise of decentralization, which means it has to benefit the many. So when Raul talks about even in a bear market, they're still opening more digital wallets and it's still a growth thing. That's what people are going to have to follow. And remember, you're going to hear the same thing on Ozempic. The numbers are staggering in terms of the growth rate and the growth rate of digital wallet relative to everything going on is representation of the demographic shift. It's representation of so many things. But one of the things is it's the rise of the many. And I'll just keep saying this.

49:23The rise of the many is one of the things that happens with AI. It enables small people to do great things very quickly. And you can see that just with the plugins. And a lot of that money is going to go into the crypto economy. Also, another point to riff on what Jordi was saying is we're bringing new robot people, robot is AI or robot, you know, what I'm saying is technological people into the global economy. And so now we need to authenticate who is one of those people and who is a human. And blockchain technology allows the authentication of this. So the first instance of it is we are most likely going to break this country over the election because of deep fakes.

50:07Because AI is infinitely scalable deep video fakes of anybody saying anything. You will not know anything that is true and what's not true. So you think the election is going to be a mess because of this? Yes. And I think the, like the banks were fined out of 2008, ongoing for the next decade, I think the big tech companies are going to get fined and fined for hundreds of billions of dollars. And I've spoken to them all about it and they understand the risk. I'm like, you need to authenticate who is human here. And sorry, a blue checkmark on Twitter is just not going to do it. You need a tokenized, whether it's a zero knowledge proof, way of having digital identity.

50:44And it's now a societal urgency. but we're not going to get there. So we are going to create so much mistrust that nobody's going to be able to trust anything anymore. And sovereign nation states will play that game because that's the typical propaganda way of breaking apart a country is break down all trust. So that is going to happen. And people are kind of incentivized, even the political parties are incentivized to do it. And AI will do it. And so eventually I think we need authentication for both the AI content and what is human. And that's okay, they can coexist, but you just need to know who you're dealing with.

51:22Now, that creates a whole bunch of societal stuff down the track. Do you have any hope for WorldCoin, the Sam Altman project or anything like that to fix the identity challenge? I don't think so. For me, but I don't know. For me, I really, I spoke to everybody at Amazon, Google, Microsoft, and a couple of the others, Instagram and I'm like guys this is going to happen and it's going to end up on your shoulders they get it and I said listen all we need to do is accept a common standard that I can log in with my token on Amazon that's equally applicable to Apple and they were like yes we understand we can't get the businesses to do it they just won't do it they just won't cooperate so it's going to have to a common standard to a common standard so it's you know people won't like to hear this but it's going to come from government is the only way.

52:12And I think the CBDC digital wallets will be also digital identity. It reminds me of, you remember what it was like at Goldman Sachs to cross over to the fixed income areas, an equity person, and get them to do a trade for you on your, like the divisional problems. And this is where decentralization becomes really important. Now you're talking about it with the big five. And I think that's going to be one of the issues with AI when people think that they're going to dominate. Are they going to get out in front and start running around? and they have a quote unquote technological moat around them.

52:43I think people are going to think that for a while until the revenue doesn't show up. And I think to your point, there should be some kind of agreement and the government's going to have to get involved at some point. But I think this authenticity thing, and now that we're speaking about it, the election next year coming at a time when the interest payments on the debt are so high and inflation is still a thing that people care about and the migrant crisis and everything going on in the country, it just argues so much for next year being a really important year for the crypto economy. But in particular, if you believe that AI is going to accelerate, which I do, and I think you do too, and that next year is going to even have more amazing things getting announced constantly, it's probably a big year for crypto.

53:26Yeah. And because also election years, they tend to be more cowbell, more stimulus because you want to appease the people to win the votes, right? That's cutting interest rates to pay the interest payments because they have to. getting rid of QT and maybe moving to QE to monetize the debt payments, which is what they've been doing over time, and then fiscal stimulus. That is like the perfect trifecta for crypto. Before we leave AI, I did want to ask you, Raoul, about a very interesting interview you did recently with Beth Kindig, I believe I pronounced your name right. And you spoke passionately about dojo yeah for our audience many of whom may not be familiar can you just give us an overview of what dojo is and why you're so interested in it so tesla i think is the most misunderstood probably the most important company on earth right now because what they're doing is exactly as we're talking about here they are putting together the robot with the ai but they're doing it in really clever ways.

54:28So that is a Tesla car. The AI, they just took the leap from machine learning, which was a bunch of programmers saying, you stop at a red light. This is what a red light looks like. You do this, right? That's machine learning. And they changed it around and basically did a video version of an LLM, a VLM. And what they said is, we'll ingest all of the video content from 5 million Teslas on the road and see how humans thrive and just let it learn. Okay, this is game-changing. Now, it has been done before. They didn't invent the technology, but they've got more scale and more video than any other company on Earth.

55:01The only thing they needed was Dojo, which was a supercomputer to process it. The one thing they're still missing is the data storage. That's a big problem for everybody. People haven't heard or thought about this yet. We just can't store this amount of data, and Elon actually mentioned it. So they've got a supercomputer that is going to be the fastest in the world with all of the GPUs. So they've got what they need to go to battle, which is GPUs. That is the primary resource in this new economy. They have more robots on the road than anybody else. They have a new technology, which is this VLM idea or LVM, whatever it is.

55:33And so now you've got these smart robots. So there's no surprise that they build a humanoid robot because now you can train it in exactly the same way. And again, people don't understand. If you look at the images from the guy in the suit dancing on stage in 2021 to 2022 showing a full working robot to 2023 showing a robot with dexterity, and they've only just started using the video training technology, these humanoid robots are going to get exponential as well. And even Elon says, I think this is bigger than the cars. So what you've got is these machines that learn in their own free state to operate within the physical world that we live in.

56:13So are you referring to autonomous operators of vehicles as the first application of this? Or are you speaking even more broadly about the ability of robots? Yeah, it's a much bigger thing than this. What this is, is the ability for machines to live in our world in an autonomous way. That is what Tesla is building. And the reason they're building it is to get to Mars. And I know this is going to be ridiculous, but I've gone down this deep rabbit hole. Elon is actually going back to first principles. about going to Mars. The hardest thing of going to Mars is obviously getting there. The other thing, actually the biggest thing, is financing it.

56:50So you break it all down to how he's financed it. If you think about SpaceX, you know, Starlink is genius. When I use Starlink in Little Cayman, it's a game changer. So that cash flow positive plus the rockets plus the government things allows them to build the biggest rocket in the world that gets them to Mars. When you get to Mars, well, what do you put on Mars? Well, you need vehicles. Well, there's no fuel, so you need solar. You need workers. And the other thing you need to do is because the mass surface is not conducive to humanity to live on, you need to go underground. So that's what the Boring Company is.

57:21And if you look at the size of the Boring Company, capsules are exactly the same size as the Starship rocket. So the Boring Company is not about a tunnel from... No, none of it is. It's all first order thinking. Everything is a component part to this one mission, which he stands a high probability of doing. And so if you think about it, so then you've got the cyber truck, the cyber truck trained with the ability to not use a fossil fuel so you can put it into space. They've already put a car into space, right? You put the cyber truck on the surface of Mars. It's made for it. It uses solar to power itself and it drives itself without humans.

57:59Anything that requires manual dexterity, you've got the Optimus robot to do. So you can build a base on Mars without humans having to do it first before it's habitable. I know this is crazy talk, but if you read his book, the breadcrumbs are all there all the way through in everything. Even when he talked about Cybertruck, people say, can you use it on Mars? He said, yes, of course you can. You know, the boring company, can you use this for borrowing on Mars? It's like, yes, of course you can. So this whole thing that he's doing with Tesla is gigantic. sake. I bought three cars in the last 11 years.

58:32They've all been Teslas. Yeah, me too. So we're on the same page. We've had one though. I can't go back. I don't, when I rent cars, I rent Teslas. It doesn't really matter. But I think the most important point and where I agree is the learning side. So everyone will talk about the fact, well, GM and Ford and we've got Cruz and we've got Waymo and all these autonomic. If you have a smarter car, because it's a very complex thing to drive a car as a human being. And so if all of a sudden the traffic lights aren't working, well, how do we determine what's going to go? You can have as much sensor data as you want, but the multi-modality side of being able to use video to look around and then have a supercomputer to take all of that through an LLM, it became very obvious to me that he is speeding up the process of having incredibly smart hardware.

59:21I don't believe the big, whatever you want to say, everyone X Tesla. So take all of them, Google, Amazon. Tesla seems to be the one that would be the leader of those companies as the inflection point of AI combining with hardware. So that gets into the robotic thing. And I think people are missing that point. That's where I think we are. That's fascinating. And gentlemen, I just have to say this conversation has flown by. I don't think I would be offending either one of you when I say both of you can really talk. And I've learned my lesson, which is to schedule for a greater period of time for the next time we have you back on, Ralph, hopefully in the spring.

1:00:00Yeah, I'd love to. Thank you. We have you on record now. I do want to end with just one note based upon everything that we are watching unfold in the Middle East. As two seasoned traders who have seen many macro shocks and events that get all sorts of blaring headlines and there's terrible loss of life and the like. for the investor thinking about how to respond to this. Can you just leave us with some advice as to how they should think about it? I learned a lesson, which is never trade geopolitics. Firstly, you have no information. You literally know about 5 % of what is known by others. So I don't like to trade geopolitics.

1:00:45But if I think about it in probabilistic terms, and again, just not talking about the horrific situation going on. But from an investment standpoint, is if this does not escalate to Iran and Saudi Arabia, it is a non-economic event. If it escalates, of which nobody wants that to be the case, in my view, so I give it a 10 % probability. If it doesn't escalate, it's a non-economic event. If it escalates, it's a major economic event because of oil markets, and we still have that issue. Yeah. And I'll just, I think he said the important words, and we've both been involved in more geopolitical events that we can possibly remember.

1:01:24And I completely agree. You do not trade geopolitics. You watch the news and you see the horrific photos and videos and everything, and it immediately brings you to a dark place because you can go there on the anxiety curve and go into some forecast of how bad things are going to be, but that's usually not what happens. From this particular one, last year we had Russia invade Ukraine. Oil prices were$40 higher than they were within 10 days. The Fed was just embarking on tightening. We had nominal GDP up at close to 15%. We're in a completely different situation. If oil prices don't go markedly higher, then I'm going to agree with Raul on the impact.

1:02:07I'm sure there's going to be more escalation. I'm sure this won't go away for some time. And it's all ahead of a presidential election. But I think the first rule is don't trade geopolitics and focus on, is this going to have an impact on the economy? Is this going to have an impact on the way business leaders make decisions? And as of now, that's not going to happen the same way last year with Russia-Ukraine. There wasn't a big impact outside of what happened in Europe. And also, to go back to a point you made earlier, be very careful what you read, what you see, what you hear online. you will see stories that iran is doing this saudi's doing this china's doing this russia's doing that don't believe anything until you can fully verify it because this environment is exactly the environment where people want to garner fear and misinformation and anger because anger and fear is high now so to ramp that up is very attractive to many players so just be super careful in how you deal with online.

1:03:07Just don't do the internet thing, which is believe everything because you've just seen it. Just don't believe anything until you check it. Be mindful of the clicks. Raul, thank you for your wisdom, for offering so many wonderful green marbles. When you come back, Jordi and I will pledge to try and pronounce your name correctly. Well, you both pronounce it differently, which is perfect for me. We're going to invite his mother here. Right, to yell at him, mate. She's Dutch. So that doesn't help either. Thank you so much. Thanks, guys. Loved it. Thanks. What's up, revolutionaries? Thanks for tuning in.

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