The Debt Crisis Is Already Here | Lyn Alden

17:49Peter McCormack:You could absolutely have a bank failure, but it won't be, generally speaking, the ones that you know the names of.

17:54Lyn Alden:Yeah. I mean, I even had that with Blue Owl was the one that I think Jeff Snyder was talking about. I'd never heard of that before. Like these are things that.

18:00Peter McCormack:And it's a bellwether. It's a canary in the coal mine. There's aren't headlines that are like dismissible. So for example, when people ask you, are you worried about private credit? I'd be like, well, if I was a private credit investor, I'd be worried about private credit. What people are really asking is, can this tank the whole economy? Or can this contagion into the banking system? Those are the parts where my view is not that much, other than what if it's combined with other issues. Like I mentioned, the Strait of Hormuz, if we have an energy crisis that then has all these negative effects.

18:31Peter McCormack:And then on top of that, we have some private credit. Also, things can, of course, pile on to make a really bad outcome. But I don't view it as emanating from private credit per se. It's not truly big enough to be frightening in that sense.

18:44Lyn Alden:That makes sense. I think when we're on stage yesterday, we were talking about the things that do frighten you. And you said when it gets to the issues, it's like straight up hummus is number one, two, and three. Yeah. So obviously the energy crisis being a part of that, but what are the things that you're looking at there that concern you?

18:58Peter McCormack:Well, one is, I mean, 15 to 20 % of global energy production is just offline, or at least can't get to where it has to go and then starts going offline. Some of it's damaged. It's not clear when it's going to reopen. It could, you know, peace talks could break out a week from now. And then after some further weeks, we start getting things coming back online. So either way, it's going to take bare minimum weeks to get flows. But I mean, that could take months or longer. And there's no kind of viable alternatives to get that energy out. And really, energy shortages or food shortages are about the worst case scenario for any economy.

19:39Peter McCormack:And they often even go together because it's not just oil and gas going through the straight. It's also fertilizer inputs. I mean, natural gas is a major fertilizer input. There's also other urea, sulfur, helium. There are things that either for fertilizers or for electronics manufacturing or for even just medical equipment. There's tons of components.

20:04Lyn Alden:So when you talk about oil, food production, medical equipment, electronics, it's everything. it's everything yeah and it's it's it's the it's the foundation it's like you know where the economy is based on upside on pyramid and that little tip is basically raw materials

20:17Peter McCormack:and that's the part that's disrupted because if you have a i mean let's go back to private credit let's say you have a 500 billion dollar hole just shows up in private credit i mean that's that's that's three months of like u.s deficit spending like that's like literally you can snap your fingers and make that problem go away or just it's like it's it's you know we live in a fiat world but when you have molecules that just can't get to where they have to go uh at that scale the fed can't print oil can't print oil and it's not you know like it's funny because the oil analysts i follow um i mean i purposely try to follow the non-sensationalist ones the ones you know there's there's just like any field there are perma bears there are perma bulls you know um so the analysts i follow are not either of those if anything they probably lean more bearish because that seems to In oil, the sensationalist ones are more like, tend to be permaboles.

21:09Peter McCormack:Like, all this is going to go wrong. We're going to get a massive. And they're always like, no, no, it's going to be fine. It's going to be fine. It's going to be fine. Well, this time, all those, like, my closest analysts I follow, they're always like, no, it's fine. They're like, okay, this one's not fine. This is like, this is like DEF CON 5. This is, you know, this is a catastrophe. And everything I track says the same thing.

21:30Lyn Alden:So how does it work? Because all the oil that's coming through the straight-forward moose, generally, I think, is going to South Asia, Southeast Asia. Obviously, it affects the oil price globally, but it doesn't have a direct impact on production in the US, or does it?

21:45Peter McCormack:It doesn't have a direct impact on production in the US. If anything, if prices are higher for longer, it could encourage a little bit of shale oil to come back online, so it could increase our production a little bit, but not 15 million barrels. I mean, it might put, again, another million barrels, not 15. um and the complicated thing is not all oil is the same you know there's lighter crude there's heavier crude and then refiners are set up to refine a certain type of crude yeah that's why even though like a country can produce as much oil as it consumes it might still have to import and export because it might not be producing the right type for its own refineries ironically and that's like the u.s's case like you still have to trade um and so it is true that almost all the what comes out of that straight goes east um but especially the the wealthier ones there can then bid for other sources of oil and and liquefy natural gas in the world uh and that's why these that's why all already i mean it was three weeks into the war gasoline in the u.s was up 30 percent or more um because it is like a global market um some uh energy markets are more fungible than others uh one of the least fungible will be natural gas because transporting it is so cost inexpensive.

22:57Peter McCormack:You either need a pipeline or you need liquefied natural gas, which is a very expensive facility to freeze it, ship it, and then get back into its gaseous form. There's a limited amount of LNG capacity, which means that when there are gas shortages, they last longer than oil price differentials. So for example, when Europe had a gas shortage gas prices in europe were way higher than u.s gas prices and it lasted a very long time and it's i mean that that delta is kind of always there because there's only so much lng capacity that you can use to to arbitrage that whereas oil markets because it's easier to move oil around except for an extreme scenarios like like this or or similar ones uh you can arbitrage spreads easier okay so but the the point is that basically and using like say 22 as an example when europe had a natural gas shortage they're wealthy enough to say okay we'll pay whatever we need to keep the lights on which means that like lng that was like headed toward pakistan would just get outbid and just go to europe and then pakistan can't you know i'm using them as an example they had other issues but that was one of the issues they had that year and so the poorer countries um often just they're the ones that actually end up with the true shortages uh and i think we'll see a similar thing here which is people will look at like taiwan stockpiles or japanese stockpiles it's It's like, well, they're pretty wealthy.

24:21Peter McCormack:They've got a lot of options to bid pretty much whatever they need to, to keep the lights on. It's the developing countries in the world that I think are going to be the hardest hit, including South Asia, including Africa,

24:33Lyn Alden:parts of South America, many parts. I mean, you were saying again on stage yesterday that that's already happening in Egypt, where you spend a bit of time. Are they going into sort of rolling blackouts?

24:43Peter McCormack:Yeah, it's starting to happen, not just in Egypt, but elsewhere. so in Egypt historically because they've had they've had energy issues in the past they like for example they built some ghost cities before they built like a nuclear power plant done it the wrong way around yeah if you're going to at least do the power plant first but anyway so they had electricity shortages but it shows up mostly in the summer months because you're in the desert people use air conditioning so they'd have in summers they'd have rolling brownouts and And what's happening this time is here in the spring, they're already planning to say, okay, cafes are going to have to start shutting down at 9 p.m.

25:24Peter McCormack:A bunch of these kind of limiters, which is all these constraints on the economy, because their natural gas import bill tripled. On a monthly basis, it's tripled. And it's a poor country upon a per capita basis. So they just get out of rate shortages. And we're already seeing, I mean, there are countries in Southeast Asia that are kind of reporting similar things that are saying, you know, we're doing gasoline rationing. And those will just keep getting worse, kind of starting mainly with the poorest countries.

25:56Lyn Alden:So this might be a silly question after everything we've just spoken about. But when I had Luke Grohman on the show recently, he was talking about oil, I think he used the 130 as the benchmark, oil above$130 is basically a catastrophe for the economy. When we were speaking last night, you said you think it can go far north of that. What is the constraint that puts on everything? Why is that such a big issue, aside from just gas prices?

26:20Peter McCormack:Yeah, so if the trade is closed for a prolonged period of time, it can go well above$130. And I don't know. The magic number changes over time just because we keep growing the money supply. So$130 is not the same as$130 barrels 10 years ago. yeah um but generally speaking when you do get to um atypically high levels the problem is that's that's a raw input um and you know that you know when you have let's say private credit contagion that's going to impact funds and things like that people that have the spare capital um gasoline impacts i mean there's consumers that are just you know that they're they're very constrained in terms of their spending in the u.s i mean they people have been suffering from higher food prices uh higher um insurance prices i mean even though some the bulk of the price inflation is behind us but it's still trickling out in these other categories and the last thing they need is gasoline 30 more expensive let alone if it doubles you know if it goes to record highs or something it just there are many uh income in many households in the bottom two-thirds of the income stack that that is that's a kind of a catastrophe if gasoline prices just double um Then you add businesses.

27:33Peter McCormack:So many businesses that are not like software companies, they operate on 10%, 20 % margins. And especially if they're moving things around a lot, I mean, energy is a huge component of that. So just business margins get eaten up by these energy inputs. and then like i mentioned natural gas is a huge input for fertilizer um and so you start to get a situation where farmers uh their input costs have gone up substantially which means they're going to have well one they they run into their own financial issues if if they're if they're if their crop prices don't go up quickly so their inputs are going up but not their x so they're getting squeezed over if that persists of course then the the crop prices go up which means food prices go up which um you know again if you're if you're in the top 10 of a wealthy country you might not even know uh like you might even notice but if you're in most people will notice and especially if you're in a developing country um you'll absolutely notice i mean a large part of what caused the 2011 like arab spring like the uprising in a number of countries uh they were protesting against kind of dictatorial policies but the catalyst was basically high food prices that's what that's kind of the straw that breaks the camel's back if people can't get to work uh if if they can't get the lights on if they can't get air conditioning on that's when you

28:54Lyn Alden:get revolution that's when you get revolution yeah it's scary um you said earlier that you the debt crisis was one of the things that played in or can play into potential wars like this

29:02Peter McCormack:how does that work it works in two ways one is obviously war is expensive so war leads to sovereign debt crises i mean this was true in world war one and world war two uh but then also very indebted sovereigns, especially if you're like the kind of incumbent like hegemon, the empire. Usually you don't kind of give up your borders, your influence, your scale. Usually you try to put that problem somewhere else. You know, if you're a smaller country, maybe higher debt won't make you more belligerent because you don't really have the option too much. But if you're, you know, US or previously Britain or before that and any number of empires, they tend to lash out when they start to have problems.

29:47Peter McCormack:And so they get feisty.

29:49Lyn Alden:So it's classic fourth turning stuff where it just gets more and more volatile.

29:53Peter McCormack:Yeah, it gets more and more volatile until it just kind of finally settles. And of course, like it, you get more on average, you get more polarized politics, you get more populist politics and you just get, yeah, over time you just more extreme decision making compared to times are good, business is normal. It's no, no, we need to make radical changes. And of course, whenever you have big imbalances growing in the economy, it's very easy to misdiagnose where the problems are coming from, who's causing it. Either just subconsciously, most people don't wake up and they're not macro experts and they don't know why a lot of this is happening.

30:32Peter McCormack:They have other jobs and other expertise. So they easily complain the wrong thing. And then politicians also can purposely target a group, an outsider or something and say, this is happening to us. You'll see that a lot in developing countries when they have a currency crisis. They're like, no, it's the outside speculators that are breaking our currency. That's why we need to do capital controls. And it's always, it's some other entity's fault.

30:55Lyn Alden:I mean, that's happening in developed countries too, though. Like it's blaming immigrants for, which like, I'm not saying that we should have completely unfettered migration, but it's a very easy scapegoat when things aren't going great.

31:07Peter McCormack:Well, yeah, I mean, I think it plays into that kind of pattern, that mindset. And I think that another issue is that even some of the immigration policies we see, some of that ties back to the debt and demographics, because it depends on the country. Some of them chose to have looser immigration standards to try to fix their demographics problems. So they would have these bloated entitlement systems that are very expensive. And when they were designed in the middle of the 20th century, it was kind of based on the idea that every generation is going to be bigger than the prior generation. Population is going to keep growing.

31:42Peter McCormack:So you always have plenty of young workers paying in to support the retired workers. But when birth rates slow down and people have fewer kids, you start to get very top-heavy demographics.

31:54Lyn Alden:You'll bring people in.

31:56Peter McCormack:Yeah, you've got major issues. I mean, in the US, I mean, it used to be, you know, when, when social security came into being, it was like over 10 workers per retiree. And then in front of, you know, kind of stayed more at like six workers or five workers or four, it was like inching down. And it gets to the point where it's like three workers for every retiree. And it just becomes more and more imbalanced. And so then policymakers say, well, maybe we shouldn't have a lot of immigrants. What could go wrong? You know, Let's just do all this at once. And then, of course, that has its own ramifications, that has pushback, that leads to the populism.

32:31Peter McCormack:And so you're putting out one problem with potentially another problem. And so these problems don't, they tend to cluster for a reason, unfortunately.

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36:03Peter McCormack:Combination of inflate and grow your way out. They're never going to default. I mean, almost never. almost, well, any country that can print its own currency will rarely ever default. There are obviously developing countries that owe debt to nominate in dollars. And sometimes they, I mean, the polite word is restructuring. That's kind of the polite word for defaulting. It's not saying you're not going to get it back. It's saying we're going to shift the terms around that you can get it back. And so, yeah, that can default. Same thing with like the Eurozone. you know you can have bail-ins where you know you thought you had money in the bank and now you have less money but maybe you own shares of this now crippled bank like you know much diminished bank so if the if the entity in question can't just unilaterally create its own currency then default is an option just like household debt corporate debt the main difference is that if you're a sovereign that prints its own currency why would you ever do that you they rarely do they almost never uh and so instead they debase their way out of it whenever they you know if they ever have a trouble with a bond auction uh whenever they have a repo spike like 2019 or more recently um they expand the base money supply uh as needed uh and they so it defaults through purchasing power and inflation rather than through a nominal default so in the u.s for example in world war two um i mean it was the dollar was one of the least impaired currencies in the world but even our currency uh you know we had at one point we had 19 inflation but we're doing yield curve controls who are artificially holding treasury yields at 2.5 on the long end shorter on the i mean lower on the short end while inflation is 19 money supply is growing dramatically and so if you were holding currency or bonds crushed you're just crushed you can buy less gold, less house, less food, anything that's kind of scarce, semi-scarce, you're going to get less of it.

38:01Peter McCormack:And over the past, I mean, I talked before about that article, Are We In A Bond Bubble. Literally, starting in from mid-2020 until the next five years, that was the worst five-year stretch for developed world bonds roughly in history, nominally, let alone purchasing power. And that's because we are already in the period where debt matters uh the the debasement's already happening um the reason growing away out of it is a factor is because inflation feels less bad when it's partially offset by productivity growth you know if if um you know if if we double the money supply but we somehow use that money to build a bunch of like power plants and manufacturing facilities and hospitals and we keep prices down for a lot of things it's kind of the mmt's dream then it'll still be inflationary for things we can't print more of, gold or Bitcoin or waterfront property or fine art, for example.

39:00Peter McCormack:But the things you're actively making more of won't feel as inflationary. If you're also benefiting from technological trends like Moore's Law, semiconductors are always getting cheaper, TVs are getting cheaper, computers are getting cheaper, peripherals, offshoring automation. So plastic toys went down like 95 % in price from their peak, and textiles haven't gone anywhere in a long time. When all that's happening, the effects of inflation and debasement are more subtle. You start to see it show up in wealth concentration. Things feel a little harder, but you can't put your finger on it because you're kind of on a treadmill that's semi-balanced.

39:38Peter McCormack:Where it really gets painful is when you have inflation without productivity growth. War is a classic case of that because you're literally building stuff to break other productive things and they're trying to break your productive things uh so for example the closure of the straight of humus and then damage to energy facilities is a negative productivity shock because it's like all that stuff that was working and that was abundant is now less damaged and more expensive to get anywhere um and so policymakers their their kind of optimal scenarios okay we're gonna run it mildly hot and then we're gonna hope that more's law and ai and all these other things can you know let's say you grow money supply at eight percent a year and you've got four percent better technology every year and you know things would be four percent cheaper because of that instead they're only four percent more expensive on average they're like four percent the population will deal with that that's kind of how they will think so it's a combination of inflating and growing a way out.

40:42Lyn Alden:And for the growth side, do you think that that is all kind of pinned on AI now? Is that their real only option?

40:48Peter McCormack:I mean, that's the biggest one by far. I mean, for example, in the 1990s, so over the long arc of time, there's always kind of a delta between money supply growth and average price inflation. And it's because of that productivity amount. And some periods are more productive than others. And it depends on the country. So for example, in the UK, in the late 1800s, money supply and inflation were highly correlated because it was already a developed country. Whereas in the US, we had this like big untouched continent, more or less, plenty of land and, you know, plenty of gold. And so they could actually grow money supply quite a bit and not have it show up in prices because there were just fewer supply constraints.

41:29Peter McCormack:So we had a bigger than normal kind of gap there. There are other periods of time like um uh japan after world war ii i mean they were just most insanely productive kind of civilization for like several decades after that it was like a huge kind of productivity miracle uh australia uh with the rise of china um there was a long stretch where australia had a bigger than normal um money supply uh growth compared to inflation because you were getting all this investment from china and all this demand for of commodities from china yeah um and then in the whole developed world throughout the, especially the 90s and the 2000s, when you had the rise of offshoring, China, and just in general automation, so even domestic automation, they dramatically lowered the cost of manufacturing.

42:17Peter McCormack:And that was disinflationary. And where inflation showed up then was things that were not getting automated. So hospital services, uh education services anything that required other workers in developed countries doing things for you in some way that's the part that wasn't getting offset rather productivity growth so you had kind of pockets of inflation and pockets of disinflation um going forward you know we've already kind of optimized a lot of what we're going to get out of globalization manufacturing automation that sort of stuff uh which means that kind of really the next realm to tackle is to try to make some of those white collar services less expensive more more you know less human labor intensive um and so i do think that ai is you know it's it's kind of the the next major thing where depending on how good that technology can get and how efficient it can be used um that can keep costs down and obviously you know just like how manufacturing automation and offshoring uh had you know there it there were losers and winners from that because in the u.s we had the rust belt for example.

43:23Peter McCormack:The UK is also a part of time has been hollowed out industrially. And so there's losers to it. But from a productivity growth standpoint, AI is kind of the main thing. There's no other clear area, at least to me, where we're going to get it rapidly better at making something other than kind of white collar services.

43:46Lyn Alden:See, this is where I have a couple of worries and I'm hoping you can kind of ease my fears on this because the big question I have is at what cost? Because we are definitely like, I think AI is going to increase productivity massively. I think it's going to replace a ton of white collar jobs, but what happens if that is the case? Because we saw, like you said, in the Rust Belt, when a load of jobs went over, like manufacturing jobs went over to China, essentially, that there was a huge opioid epidemic. It was like the economy of despair, essentially. I think we could see something like that, but instead of it being the blue collar workers in the Rust Belt is going to be the white collar workers on the coast.

44:20Lyn Alden:And then on top of that, that's question one. On top of that, what happens when people start losing jobs to AI? Because I don't think you need a huge proportion of the population to lose their jobs before you start seeing people defaulting on their debt, their mortgages, their car loans, all that stuff. And can this fiat system survive that?

44:39Peter McCormack:Yeah, good question. So starting with the first one um it all depends on how quickly it happens i mean this is this has been a pattern going back really since kind of the the dawn of hydrocarbons so before then population growth was pretty slow technological growth was pretty slow the reason hydrocarbons accelerate everything is because like for example a barrel of oil is is the energy equivalent of thousands of hours of human labor and uh and that's it's just a enormous productivity boost once once we got coal and then especially uh oil and gas um huge effect um and it started like for example we used to be depends on the on the area but you know two-thirds of the population would work in farming or kind of close to farming uh and that's just subsistence farming uh or near subsistence farming was kind of just the baseline.

45:32Peter McCormack:But when you have hydrocarbons and you have tractors and you have other kind of high-tech equipment, and this is, of course, high-tech a century ago or a century and a half ago, it allows vast majority of farmers to stop farming and to go do other things. They can go be engineers and doctors and accountants and the rest of civilization. So it ends up being that 2 % of the population can feed everyone instead of half the population having to do it. And of course, if that happens in 10 years, you've got a lot of out of, out of employed farmers. But if that happens over a generation or two, it just means that, yeah, it's an adjustment.

46:09Peter McCormack:It means that someone who was, was a farmer's son and was going to be a farmer instead goes to medical school. And it's most people would consider it a good thing. It's kind of like, okay, the next person will be kind of more educated and more able to travel and, and, you know, generally do other things. But if it happens quickly, it can be disruptive. The same thing is generally true. If it takes 20 people on a manufacturing line and you find ways to automate that and make it so you only have two people overseeing bots and fixing them sometimes and fixing edge cases and occasionally calling in a tech expert when you really need something help, that's a good thing.

46:48Peter McCormack:It's obviously bad if it happens in a 10-year stretch for people that can't retool their careers and change everything um so i think ai is no different which is um you know a lot of iterative tasks uh we i we on average we want to spend less time doing those yeah uh now obviously if you make your living from doing those things that's disruptive if it if you know if you'd wake up one day and compared to two years ago your services are just greatly devalued um that's there's no way around it. That's rough. But if it, you know, happens over a longer stretch, it's fine. And then even if it happens over a shorter stretch, there's an inevitability to it, which is you can put kind of artificial constraints on it, but it's just, it's like a jobs program at that point.

47:35Peter McCormack:It's like, we have a cheaper way of doing things, but we have to kind of slow it down on purpose. Yeah. But the genie's out of the bottle. Genie's out of the bottle. Yeah. Pandora's box is opened. And, you know, I think, I still think there's we don't know for sure how quickly this is going like i i'm an ai bull but not like the super bullish kind like there are people that you'll see people kind of talk in their own book like oh in 18 months it's going to make all jobs useless or kind of easy and like not really i it's it's it's you know it's there's obviously a lot of things that require conscious thought um and there are a lot of things that can be iterated on and of course the longer you look out in more, you know, you never want a short kind of multi-decade human productivity.

48:20Peter McCormack:But on five year, 10 year timeframes, there are, you know, they're not magic.

48:24Lyn Alden:Yeah. I'm, I don't think this is like an 18 month thing, but I could definitely see it happening in a decade. And that could also be too quick. And I think we saw in COVID when people were losing their jobs and they were like retrained as a computer programmer and now computer programmers are completely getting disrupted. and like i i find it hard to believe or hard to imagine the future where you know your 50 year old accountant or lawyer has to retrain to do become a plumber like that that seems like a

48:50Peter McCormack:crazy timeline yeah i don't think that happened i think um so your second question was how can this potentially impact uh like credit cycles and things like that i mean basically i i so we've been under a two-speed economy for a while that's one of the kind of the um risk factors when you have fiscal dominance. So in the US, for example, if you're an older American, you're on the receiving side of Social Security and health care. Obviously, there are richer older Americans, there are poorer older Americans, but on average, older Americans are richer and they're the recipient of bigger deficits.

49:21Peter McCormack:In addition, if someone works in defense, and that's where a lot of our money is going, people on the receiving side of the deficits are generally doing well. Those that own assets that are getting inflated by all the deficit spending are generally doing well. whereas those who are not on the receiving side are generally the ones that are more struggling. And I think that AI is going to be, it's going to actually probably add fuel to that fire, which if someone is an earlier adopter of AI and is using AI to be more competitive than their peers or their competitors, then they'll probably view it as a good thing.

49:55Peter McCormack:If someone just wanted their status quo and they start getting disrupted by AI, I think it's going to be a rough time. and i think i mean kind of like how we see in the us and other places you'll see wealthy people and a few blocks away you'll see like tent cities like i i do think that there's that risk is going to keep happening which is that there are some people that it just everything everything kind of aligns and there are other people that just can't find an avenue to to get a handle of things um because they might have they might have expense they might have done an educational path and taken all the student debt, and then their income is now sharply reduced because of AI.

50:38Lyn Alden:See, this is like, again, getting back to the debt cycle, this is where I see it as an inevitability that we have UBI at some point. Because the social unrest, if we did have the rich suburbs next to tent cities, will be insane. And like you say, this is when revolutions happen. And so surely to kind of stem any of that, they're going to do something

50:57Peter McCormack:like ubi i i think there's a good chance i mean um yeah you could have like a robot tax you know basically like so yeah yeah um i think on a long enough timeline that could become more commonplace um and i mean isn't there are a con like japan is an economy that's very interesting because uh they they have the worst demographics issues roughly in the world i mean other ones are now kind of catching up but they've had the long-term bad demographics really aging population aging population uh now i mentioned before how some of these things tend to cascade into other issues they've actually managed to mostly avoid the cascading problem uh so they were highly productive for a long time so they had huge trade surplus uh which then turned into a current account surplus because they would you know they take all their capital and then they they buy bonds and equity and commodity deposits and all these assets around the world so they're getting interest in dividend income from the rest of the world um so they've kind of set up a financial fortress even though they have a high sovereign debt in their own currency.

51:58Peter McCormack:They also have tons of assets.

52:00Lyn Alden:So this is why they could have such high debt without really seeing inflation.

52:03Peter McCormack:Yeah, that's why they're an outlier. And then in addition,

52:09Peter McCormack:the early adopters of automation, they were kind of known for automation and robotics and things like that. And then they also have a very kind of harmonious society. And they didn't fall into the pattern of saying, well, let's fix our demographics issues, by dramatically increasing our immigration. And so they said, we're going to just tank this issue. They also did things like, I mean, even though they're older than the average American or the average Brit, they spend way less money per capita on healthcare and yet live longer. So there's social aspects there. There's also how they structure their healthcare system.

52:46Peter McCormack:They've had very little military spending for a long time. So they're running, on average, pretty substantial deficits, It's not as big as people think, but they've been running fairly large deficits, but actually go back to the people. Their deficits are just going into healthcare, going into kind of well-being. And it's not, I mean, obviously Japan has a, it's known for workaholicism, not very productive corporate sector in terms of like how many hours worked versus output. When you look at like quality of life or happiness ratings, they did not to be near the top, like say some of the Nordic countries are.

53:22Peter McCormack:Those two seem very aligned.

53:24Lyn Alden:Yeah.

53:25Peter McCormack:But they've avoided a lot of the crises that you'd otherwise expect when you're 15 years. I mean, they're further into fiscal dominance than any other country. And that just kind of shows that, yeah, it's a combination of debasement and then trying to keep the wheels on the card in terms of productivity growth. I mean, they've managed their energy policy pretty well. They haven't made any crazy decisions around energy. um so i mean yeah the the things can be softened when there's a social contract in place and people kind of feel part of a nation that they're not just being that it's not like one side is just kind of screwing over another side um but yeah i guess if things get more automated um certainly from the left side of politics you're going to get more and more calls for ubi and it'll probably be more and more enticing to a larger share of the population should some of these ai technologies keep taking off as the bulls expect.

54:18Lyn Alden:Yeah.

54:18Peter McCormack:And then what does that do to the debt crisis?

54:21Lyn Alden:Because we've had debt cycles in the past. You've talked a lot about the 40s and comparing now to the 40s. Is there a chance this is the last debt cycle? Like, could this be the one that actually breaks the fiat system?

54:34Peter McCormack:I think it could. I mean, well, the funny thing is the fiat system as we know it only goes back to the 70s. I think if we go back a little further, we can say it kind of goes back to the dawn of the telecommunications age um because and i talked about slot and broken money yeah which is for most of human history like information couldn't really go faster than humans could get somewhere so by by foot by horses by ships the fastest you could do is like you know birds or like fires in the night or something that's not high bandwidth so so you've really you were kind of constrained once we had the telegraph so it was invented in say the 1830s it wasn't widely deployed like cross cross ocean until like the 1860s um you started to be able to to share fairly high bandwidth information around the world by the time it wasn't until the early 1900s you were going across the pacific um and at that point you could do transactions in at the speed of light but not settlements settlements how do you do irreversible value transfer while you ship gold and you audit and ensure the gold and and you know it's a whole expensive lengthy process and that delta that mismatch between fast transactions and slow settlements was like a godsend to the banks and the central banks and said oh you need a middleman it centralizes all the money it centralizes all the money it's like it's a massive tailwind for the money centralizers before it's not that banks didn't exist before then it's not even that central banks didn't exist before then in some cases it's that their services are more optional because you can still just hand a coin to someone.

56:10Peter McCormack:But when commerce is happening globally and most money's slow, it's those intermediaries that have all the power. And so from the dawn of the telegraph until the dawn of Bitcoin, there was no fast settlement. And so Bitcoin gets developed. And then even then, of course, it's worth nothing. It has no network effect. It's a novelty. So even for the first, say, decade of its life, it wasn't moving the needle at all. Even today, now it's increasingly part of the conversation, but it's still a small asset in the grand scheme of things. But basically, I would say that we've reached the height of fiat currency in the sense that we've been in this period of time where there was no alternative between fast transactions and slow settlements.

57:00Peter McCormack:And now we have alternatives. And then while fiat currencies enjoyed that kind of monopoly on what works, they broke all their ledgers. They bloated their entitlement systems. They built kind of social insurance with the idea that every generation is going to be as bigger, bigger than the prior one. And all those things are kind of coming home to roost. So I do think that one, I think this cycle will last a lot longer than people think. I mean, that's part of why I use Nothing Stops His Train. There's two sides of it. One is no matter all these attempts that are going to try to reduce the deficit spending, they're almost all going to fail.

57:36Peter McCormack:So people were really excited about Doge. I was like, nope, here's why. Didn't even move the needle. So on one side, it's bearish, but it's also saying, it's also the wheels are going to be on the cart longer than you think, just because I think this is going to be a very stretched out cycle. So how long do people think it's going to last? And how long do you think it's going to last? I mean, there were people that thought the global financial crisis was going to break it all. There were people that thought COVID was going to break it all. there then there are people that every crisis they when when the regional bank crisis happens like this is it and you know it's always you know it's it's always like next year or next you know five years um i mean i i there's only so far you can look out because like literally you can have political structures be entirely different in say the 2040s yeah you know so i i look out something like a decade um in the u.s for example that's when our social security uh trust fund uh technically the surplus runs out we've got something like a three trillion surplus in there just from prior overpayments that's now in draining mode because we're very top heavy um and then either congress has to kind of say well all retires are now going to get you know 80 cents on the dollar or 75 cents on the dollar or we're going to print the difference that's kind of which one that won't be probably yeah that's that actually requires a decision at that point because it's kind of a separate pool of money.

58:57Peter McCormack:So it'd be interesting to monitor. And I mean, the political discourse around that time is going to be like lit. And so, but I think I look mostly into the 2030s and say nothing really seems like it's going to slow this down at any time in that investable timeframe. You look out further than that and you get the science fiction. Yeah. So science fiction, we will get onto that.

59:22Lyn Alden:So if this is going to take longer, what should people be doing now to protect themselves through this well one i mean for

59:30Peter McCormack:people that have the luxury it's making sure you're living in a spot that you're comfortable with uh either either in terms of the political structures the social structures um you know all the things that you somewhat can control on average wealthier people have more optionality there than than people that are lower on the income stack um trying to make sure either your job is ai resistant or that you're using ai uh that you're not just kind of ignoring the trend that you're you're you're trying to to use the tools to be as as competitive as you can be yeah um for a long i mean owning where possible scarce assets and trying to avoid bubbles uh because even scarce assets can have five ten years of price declines if they were bit up into a manic bubble is this gold that you're really talking about here um i i so i think gold was overbought um i hesitate to call it a bubble because if if we do have a long-term popping of like the whole sovereign debt crisis gold has to get pretty insane numbers to like truly have like a 10-year loss like a lost decade um but i mean gold had a lost decade really after 2011 it got bit up to high levels um and i think it's obviously taking your breather now for a period of time but i think I mean, for example, I use Costco stock as an example.

1:00:51Peter McCormack:It's like people look at it as like the most bulletproof company in the world. It's one of the few companies where like employees generally like it, customers like it, and investors like it. Usually you only get one or two out of the three. Somehow they, you know. It's the trifecta. It's the trifecta. A lot of it probably rests on the hot dog. But Costco trades like 50 times earnings. Crazy. For a, you know, 40 plus year old blue chip retailer. they trade it they trade it yeah that's like tech stock valuations tech stock valuations um so nothing stops that from one day going down to 25 times earnings which is still actually rich that's still premium multiple um and it doesn't have to happen all at once a really good example is in the late 90s we think of it as the tech bubble but for example walmart was trading 50 times earnings coca-cola is trading 50 times earnings they had very good growth in the in the 90s and over like the next 10 15 years their stock prices basically just went sideways um you know sideways can be up up 20 down 30 up you know it's not literally sideways but it was a chop solidation chop solidation for like 10 15 years while their earnings would double or triple until literally through time they'd be trading at 20 something times earnings and that could absolutely happen to stocks today that look like costco um or like a couple years ago i mean recently we've had selfs in the mag 7 you know these high quality companies that some some in some cases people were paying really high multiples for um their fundamentals are still doing fine in many cases but but you know especially with capex and ai um they've been running into frictions so the point of all that is whether it's whether it's gold whether it's high quality real estate whether it's high quality equities those are generally things you want to own obviously bitcoin as well and just you just want to be careful of your enthusiasm when you're buying it you know you want to you don't when when it's just all over social media when it's at a strictly high valuation that's when you generally want to have a pause and say okay even though there's money printing can this thing still have five or ten years of being dead money um but other you So basically buying scarce assets at reasonable prices, trying to manage your location if possible, trying to make sure on the right side of trends where possible.

1:03:08Lyn Alden:So there's obviously, I'm sure a lot of the people listening are psychos like me that are just basically 100 % Bitcoin. But for an average portfolio, how heavily would you weight Bitcoin in it?

1:03:19Peter McCormack:So for a lot of people, they have like zero, 1%. So I mean, I say, well, I think zero is the wrong number. yeah i you know that's that's kind of my kind of baseline is like there's a lot of numbers that can make sense zero is not really one of them i think uh so it starts by getting off zero um i i think five percent is reasonable i mean it's funny if you look at portfolios um gold has been underweighted in portfolios for a long time despite a lot of evidence showing how useful it is for portfolios especially replacing some of the bond component so my view is always have more gold than like the baseline which is almost nothing in a typical kind of managed portfolio and with bitcoin i mean i was early to put say five or ten percent in um now in my personal like holdings it's i i hold cold storage bitcoin uh you know i i do venture in in bitcoin um so for me it's obviously much higher than that five to ten percent especially if you go through a couple cycles you don't really sell you just buy it just becomes higher it becomes higher um but the way i kind of look at it as like, I think 5 % can make a lot of sense.

1:04:24Peter McCormack:And then as someone, you know, if they, if they do a podcast circuit and, you know, listen to like your show and other shows and they read the books and they, you know, they spend a, you know, 500 hours in the space. I mean, then they know maybe they want, they might want to dial that number up, but they're the ones that know when to do that. Not, not me telling them that they want to do that.

1:04:42Lyn Alden:Yeah, that's fair. And last question on this before we move on to some other stuff. And we've spoken in the past and you said your base case was that we were going to have money printing, but it was going to be sort of gradual money printing that was sort of aligned with GDP growth. Does this war in Iran change that?

1:04:57Peter McCormack:The short answer is potentially. So I started pointing out the gradual print scenario. I mean, in my research service over the past couple of years, I've been kind of aiming that roughly in this 2025 period, we would have had it. And that was actually the Fed's own projections roughly too. It was one of the few times I agreed with the Fed because a lot of it was just kind of pretty like unavoidable math. um and so when we got to late 2025 uh we started to get that gradual print scenario it started kicking in December uh so actually a few months into the gradual print now in spring of 2026. um so Iran war aside that's the baseline is that they're growing the in the US they're growing the base money supply um roughly in line so that it's a pretty standard percent of GDP um and they're not trying to do that to stimulate they're trying to do that to keep fractures or bank lending just the wheels just kick the can down the road indefinitely um the war in iran it doesn't immediately threaten that but if it stays closed for months and you start to get if gasoline in the u.s doubles and other countries just i mean like you know like egypt starts to shut off at 9 p.m every night and the philippines gas rationing and europe you know is freaking out if it's just across the board, if there's economic turmoil, you could start seeing, on average, rising U.S.

1:06:20Peter McCormack:deficits. And then the central bank, you know, it can run into liquidity issues. And they have to kind of up their expected rate of money supply growth to kind of keep the treasury market functioning, to keep the interbank lending market functioning. And then it comes down to, will a highly polarized Congress agree on a stimulus, especially for a war we began right that's tricky it's like oh hey your gasoline prices are high uh because we initiated a war um but we here's a gasoline stimmy you know yes uh that's good looking at that through congress um and so there are certain like kind of binary decisions at that point that i'm not going to try to predict what even because not even being tabled in congress yet really yeah but But the first step is to just, if asset prices struggle, if consumers struggle, if the economy struggles, all of that impacts tax receipts, and that starts to widen the deficits, you start to inch out of a potential gradual print scenario.

1:07:21Peter McCormack:But I don't think we're there yet.

1:07:23Lyn Alden:Very interesting. Can we do something a bit different?

1:07:26Peter McCormack:Sure.

1:07:26Lyn Alden:Because we've done, I don't know, on what Bitcoin did, you must have been on 25 times or something crazy like that. And I don't think we've ever really talked about you. It's always about macro. And when we were at dinner last night, you've got a pretty crazy story. Everyone knows you as one of the best macro analysts in the world, but you came from very little. Can you talk about your childhood?

1:07:48Peter McCormack:I mean, it's a lot. Yeah, I think there's a couple of podcasts where it's come up, but he has not used something I kind of talk about a ton. I mean, I was homeless for a few years as a kid and then grew up in a trailer park is kind of the short of it.

1:08:02Lyn Alden:How old were you when you were homeless? Roughly four to seven.

1:08:06Peter McCormack:That's crazy.

1:08:07Lyn Alden:Give or take. And so you were on this, were you living literally on the street when you were homeless?

1:08:12Peter McCormack:So it started out, first we were living with my aunt. Then we left and we were living in a homeless shelter and a couple of different homeless shelters. Then we lived in a motel, like a cheap motel. And then at the last stretch, we were living in a car. And like we would, for example, to bathe, we would sneak into a public restroom and crack a dawn before anyone's there and clean ourselves off. So not quite like street street, like not like, but if you're in a car, it wasn't like a camper. It was like a sedan. Like, so yeah, living in a sedan.

1:08:48Lyn Alden:Whenever you like look back at your childhood, like I had a great childhood, very privileged. But I think you always look back on it and you remember this good times. Are there any parts you look back on that fondly?

1:09:02Peter McCormack:um well some like when we were in the homeless shelters especially because we were we were in two different states the the first phase of it wasn't that bad it wasn't a very crowded shelter there were other kids there um and so it didn't feel that normal from a kid's perspective you can like kids don't need a ton if they feel safe and did you feel safe i did feel safe that's the thing i felt safe uh at that time um wasn't like actively it wasn't didn't never got to the point where i didn't have enough to eat right so it wasn't like third world poverty it was like developed world homelessness um and not the most extreme kind um but that it didn't yeah it was it was it was totally certainly workable i think the bigger issue was conflict between my parents that's the part that a kid gets kind of tuned in ton not not necessarily the physical stuff Once we kind of got into the motel and then the, especially the car, that's when it becomes a lot less, even for a kid, a lot less fun.

1:10:03Lyn Alden:And is this why you got into MMA? Was it like an idea of defending yourself while you were living in these places?

1:10:10Peter McCormack:That might've been part of it. I think it's actually contributed to why I got into investing. Because from my, when I went to go, so all that homelessness, I was living with my mother. It got so bad that I went to go live with my elderly father um and in his trailer um and from that point on i was like a super saver like if i got christmas money or i got easter money or i um got allowance i would save it i even got into precious metal collecting like literally as a kid no right yeah little little uh silver coins and eventually like little like um one tenth ounce or up to like a half ounce gold coin this is back when gold was only like three dollars an ounce um so i would i was like a little of a coin collector i i could have told you about inflation back then no way yeah i was just whatever

1:10:56Lyn Alden:reason did you keep any of those coins as like a momentum from from then i held them until 2011

1:11:02Peter McCormack:it was the only time i ever sold physical precious metal because it was like a bubble um so i actually sold my precious metal collection then i eventually rebuilt it much larger but um yeah for years i had uh coins and then i got into when i was a teenager got into equity investing i think a lot of that was because i went through this period of instability Um, so I, I think the pendulum for me, you know, like how people in the great depression to use a more extreme example, like you'll have like a great, like, especially in the U S we'll have like a grandparent that like saves their rubber bands where like never, this never throws anything out is super economical because they lived through the great depression or they were a kid through the great depression.

1:11:39Peter McCormack:So it's kind of got imprinted on them. Waste not, want not. Exactly. Yeah. So I never developed that tendency, but I did develop like a high savings tendency from literally childhood. I think in part because I was used to chaos and wanted less chaos.

1:11:53Lyn Alden:And so how do you go from there to, you know, going through college, college is expensive in America. Like what happened there?

1:12:00Peter McCormack:So my dad helped with the first year of college. After that it was, it was all student debt and part-time jobs. So I had to work my way through college, which is, I mean, it's especially if you're doing an engineering program. I mean, they're not, they're not easy. So it's like, uh like i was envious of the kids they could just you know they just it was all covered for them they had no debt yeah uh for me it always kind of felt like i was on a timeline i always had to you know try to find time for it but yeah i was working my way through college graduated got a job had uh 50 000 in debt which i mean today is probably the equivalent of like 90 000 in debt yeah um like it was equivalent to like basically a full year's gross pay but of course when you factor in your own expenses and everything, that takes many, many years to pay off.

1:12:47Peter McCormack:So then I just, over time, gradually paid off the student loans while continuing to invest and just kind of snowballed.

1:12:53Lyn Alden:So as someone who was investing from really young, why did you not go into that as a field? Why did you choose to go into engineering?

1:12:59Peter McCormack:I was torn. When I came down to university, I was like either finance or engineering. I had always, in school, I'd always been interested in kind of the math and science classes. and for whatever reason it was kind of arbitrary to pick engineering but then i over time i found out that my heart was in finance like for example there were like other kids and other other students in university they'd already been like building circuits and stuff in like high school and i was like oh you're like a real engineer like i like i'm just showing up like so i never was like a hardcore like super engineer um when i eventually graduated uh i eventually um you know like for me it was the com it was engineering like we were building aircraft simulators but from the beginning i kind of realized i want to do a hybrid approach i want to be an engineer but i would eventually want to get like say maybe a master's in business and then be like a manager of engineers or managing the finances of like an engine so the kind of hybrid technical decision and kind of more business that that hybrid so i said okay i'm a decent engineer but i'm not the type of engineer that's like clearly born to be an engineer okay they're just absolute psychos and i'm like i'm good but i'm not like a psycho uh but like i was the kid that was like watching like i could when i was like eight i could tell you what the nikai was you know and like what the price level was of the nikai because i would watch the financial section of news i was like that i was like that i was like that kind of psycho so i was like okay clear that i have to get more into finance so in my engineering job i I gradually transitioned it toward managing engineers and running the finances of the engineering facility, making kind of big technical financial decisions while I was writing about investing in the early kind of blogging days of the internet.

1:14:50Peter McCormack:And I had like a little blog about stocks and I eventually sold it to a larger publisher. And then at some point I started lynnaldon.com and it just grew so big, I had to leave my engineering work. Why do you think there's such a crossover between Bitcoin and engineers?

1:15:06Lyn Alden:Like Michael Sayles is an engineer. You are. Checkmate. I'm sure there's a ton of others that I can't think of. But there seems to be a real crossover there.

1:15:12Peter McCormack:I mean, I think because Bitcoin is a hybrid of finance and tech. I mean, in order to assess it, you have to have at least a decent understanding of its tech. I know if you're, because I mean, if you're comparing, one is, can this thing even work? Two, okay, now there's thousands of altcoins and they're all claiming to be the next Bitcoin are better than bitcoin or they fix you know bitcoin's too slow we have to yeah so you have to build a set okay what are the trade-offs then uh how do network effects and protocols historically develop uh what what you know what are what are these other coins sacrificing to be quote unquote faster more programmable and all this um that requires some degree of technical knowledge um so it's inherently multi-discipline field so engineers that also like finance is kind of the perfect background to find Bitcoin and sort of appreciate it.

1:16:03Peter McCormack:And I think I'm right in saying you first started writing about Bitcoin in like 2017. Is that right? That was the first article. Yeah.

1:16:09Lyn Alden:But you weren't really all in Bitcoin in a sense until maybe 2020, 2021. Is that right?

1:16:15Peter McCormack:It was the 2019, 2020 period. Yeah. So I wrote about in 2017. And by that point, I was convinced on the fundamentals. I still might, I had two main hangups at the time. One was um i wasn't sure that the network effects would be strong enough so that okay there's bitcoin that was also when bitcoin cash was and i hadn't done like a thousand hours on that uh ethereum was was really big and i was like i don't know five years from now what the market share how fractured the market share is going to be with all the different coins um so that was number one and number two i was like okay in in late 2017 i mean these are this is a bubble you know might not be the end of the world bubble but this is i mean this is a very euphoric pricing so i was like not gonna i was like interesting tech not gonna touch it but what i did was that in in so before that i had watched prior cycles i saw like the i knew someone who mined it in 2010 and i was like oh that's neat it's super cool but i i don't know i think i was like i i was always like i should look more into that i was never like dismissive i was like oh that's neat i should look more into that i just don't and then cycle comes and goes and then it was like the 2013 kind of cycle and I was like, oh, it's like the cool libertarian money.

1:17:23That's, you know, I hope they do well.

1:17:25Peter McCormack:And it's kind of, yeah, I didn't follow up on it. But in 2017, when we had that kind of third, it was like my third kind of awareness, I was like, I'm not going to just forget about it this time. So then I was correct and it did have a big correction. It did do a long stretch of underperforming most other assets. But I watched the block size war play out. I kind of kept thinking about how to analyze, how to value it. And so by 2019, I started to get pretty convinced. And I was kind of like, but what's a good entry? And then COVID happened. And I was like, well, that's my entry. So I mean, that's a pretty good entry.

1:18:01Peter McCormack:That's still my proudest buy.

1:18:02Lyn Alden:I think it was March 9th, 2020. That's good. I got it in April.

1:18:07Peter McCormack:So it hit the bottom and it's coming back up. And because I had a long stretch of history of kind of investing in precious metals, I mean, silver had a big drop. Gold had a big drop, a smaller drop than silver. but silver was like a really brutal and a Bitcoin is behaving just like them. So when they kind of the V shape happened, I was like, I see, like I could sell it where this was going to go. So I got in pretty heavily in April and afterward.

1:18:30Lyn Alden:When you see your friends from the engineering days, are they weirded out that you're this like macro superstar now?

1:18:37Peter McCormack:I don't think so. I mean, I, you know, I think they, you always see people, you know, the same way. And also we're, we're in kind of a bubble. Like, you know, they, It's funny to them that they can see me on YouTube everywhere and like crazy number of followers on social media and stuff. But we're, you know, people outside of our niche, you know, we're like little micro celebrities, you know.

1:19:00Lyn Alden:I think you're kind of outside the niche, though. You're in multiple niches, at least.

1:19:04Peter McCormack:Multiple, but yeah, I mean, I think they find it interesting.

1:19:07Lyn Alden:But yeah, it doesn't, you know, it's just nice catching up with them. And when did sci-fi come into this? Oh, yeah. We've got to plug the new book. Plug the new book, sci-fi. The Stolgard incident. I wrote a sci-fi book. I told you I've started reading this, but I need to read it when I'm not going to bed so I can actually concentrate.

1:19:25Peter McCormack:Yeah, it's not one of those light beach reads. No. It's pretty dark.

1:19:31Peter McCormack:I've long been interested in the kind of fiction. The story idea for that, it's been in my head for well over a decade. But I was like, when am I possibly going to find time? Because I was like, work in engineering while also on the side writing about investing and then eventually that took off then i was like then i was adding i got into venture investing with ego death capital um i sit on boards of companies like when am i possibly going to find time to write um but in 2024 i wanted to just kind of improve work-life balance a little bit um and then also just because of um uh just kind of logistics i had a little bit more time in the evenings for a period of time as I finally was like, you know what?

1:20:13Peter McCormack:I'm actually going to write the thing that's been distracting in my head for quite a while.

1:20:17Lyn Alden:Did you use AI at all to write it? Nope.

1:20:20Peter McCormack:All your hard work, that's the way. Just me. I used AI as like a research assistant. So I would like, for example, VR, virtual reality is in there or gene editing or like how good will batteries look in 50 years, right? Like I have an engineering background, but I mean, it's a multi-discipline thing. so i would say like okay what is like here's my conception of vr in the 2070s like what do you think of this and the ai would you know give me its analysis or or like how energy dense could batteries be in the 2070s and what type of batteries are they likely to be um or here's this laser design does this make sense so it was like a useful it's kind of a second search engine or a research assistant um sometimes i'd also i would give it a chapter and be like what do you think of these characters?

1:21:10Peter McCormack:Do an analysis of this chapter or something like that. Almost like a beta reader. Or I would say, do you see any, proofread this? Do you see any obvious errors? I still gave it to human editors, but it's like... The less time editors have to find periods and misspellings, the more time they can focus on substance.

1:21:33Lyn Alden:I was excited to read this book anyway, but we were at dinner the other night with Eric Herzman, and I was going down my Matthew Pines conspiracy crazy shit. And every time I mentioned something, you were like, read the book. So I'm very excited now. Um, I say on behalf of everyone is really annoying that you can just do everything.

1:21:49Peter McCormack:I can't do everything.

1:21:51Lyn Alden:Like how do you just pump out what I'm sure is an incredible sci-fi book? How long did it take you?

1:21:55Peter McCormack:So actually the funny thing with both this and broken money is the actual writing process was very quick because with broken money, um, um i had been thinking about doing a book for a while but books are super tedious nobody should really write books for money if you work in finance like books are not where money is not a good investment not a good investment um so my my strategy was don't write a book unless you feel like you have to uh and when broken money like the pillars the core concepts is built in my head so much the book was there and it became more distracting not to write it okay like i had to just get it out so by the time i actually go to write it it took six months to write it and another six months of polishing it and literally within a year broken money's out and it's it's rather polished 500 page finance book but it's based on years of research but the actual process was actually surprisingly quick and i was i was so passionate about it that it was like just hours and hours of like late night just grinding and it just kind of came together very quickly like a fire hose and this was kind of the same way which was the first draft was little over two months uh to write a 400 plus page book um i added a couple more chapters in like the month or two after that uh but then actually that took a longer refining process than even broken money um because fiction is not my expertise um so that went through like broken money and went through fewer rounds of editing and fewer beta readers because i was more sure of it from the beginning this was like writing exactly in my area of knowledge um so other than a handful of people seeing it i just knew to go out and just kind of people would people would experience it the way i experienced it whereas this one because it's fiction i was like i have to get more eyes on this i have to go through more iterations i have to have editors that can make sure that my prose is like in line with with genre conventions and things like that so it was a shorter writing period but then a very like a year plus long revision period which one was more enjoyable to write actually equal they both both of them the what they had in common was that they both consumed me when i was writing them they like i wanted to get other work done so that i could like work on my book that night for both cases.

1:24:16Lyn Alden:So if anyone is interested, what's the premise? How do we hook people in?

1:24:21Peter McCormack:The premise is near future. And it's not a just open world, but it's kind of like our world further along into like surveillance and AI.

1:24:30Lyn Alden:It's like a Black Mirror episode.

1:24:32Peter McCormack:Yeah, kind of. It's a Black Mirror episode, but it's action oriented because basically what happens is a terrorist with strange abilities starts kind of doing a series of violent attacks. And this investigator tries to figure out why she's doing it and to find and stop her. And there's a rabbit hole that they go down.

1:24:51Lyn Alden:I love it. I've started the book. I've got a long flight coming up. So hopefully I can get through a big chunk of it. But go and check out the Stolgard incident. Buy it. Thank you, Lin. You're awesome. This has been fun. Anywhere else you want to send anyone apart from the book?

1:25:06Peter McCormack:People can go to linaldon.com. But yeah, I think they know where to find you.

1:25:09Lyn Alden:They need to buy the book. They know where to find you. Thank you, Lin.

1:25:20you