The mornings global headlines join us again. Welcome to kaiser report Summer Solutions im max kaiser here with Stacy Herbert you know we look at the solutions we love take a deep dive into the issues weve been chatting about all year now today were going to be talking with faneuil would have more also known as an l w of the breakdown pod cast been following him on twitter for a long time listen to his pod cast you know the great thing about this whole new universe of media states is that people who might not get on media get on media and then they run to the top and suddenly theyre like wow these people are awesome and i would put a sale in that camp what do you think well thats the good thing about talking to heterodox thinkers because we dont have to just stick with the orthodox guys that are so boring on all the mainstream cable news channels we have the best guess so you know nothing i want to talk to you about one of the themes that weve presented here on kaiser reports Summer Solutions is that weve kind of were coming out of a few dark ages and that this could be an opportunity for a renaissance 2. 0 and what we saw back in the previous round of sonce coming out of the dark ages and the black plague was that the plague did help bring in the renaissance in that it undermined the authority of the vatican nowadays we see in my opinion the equivalent of the Central Banks are like the vatican there is this like cabal of elites who only know all the secret information about our Financial System our Monetary System and our economics and theyre going to rescue or save everything but theres seems to be like with this pandemic and also with the increasing like collapse of the economy and markets. And then the bailouts and all that sort of stuff that theres an undermining of their authority going on and that this is a moment now where we could have a rebirth i mean absolutely the only addition that i would say is that i dont think that thats just theres not just a single equivalent to the vatican in the sense that theres not just one of 3 thats being undermined i think theres multiple authorities being undermined you have on the one hand i think youre absolutely right to identify that the. The Central Banks have been exposed not as bad by definition or any way just as extremely limited in what they can do and they keep doing the same thing over and over again they ignore and this is the part where gets a little will fold ignore the the role that they have in issues like income inequality right by by virtue of their policies and people are reacting in really interesting ways i think its been very notable how over the course of the pandemic when youve seen the sort of money printer go burm mean its not a big coin twitter thing that is on wall street bad its on it i mean its everywhere right that idea of the fed put translated to the feds going to do whatever to keep the Zombie Companies alive has been manifest far beyond just the twitter sphere into a totally different realms and i think you have a lot of forces combining with that too to make people ask Big Questions and its very rare that you have a situation where people are allowed to ask Big Questions for any suspended piece period of time and there not be major changes that come out on the other side of that or i but on the topic of Central BanksCentral Banks are they basis upon which they monetization of the economy has occurred and it has sucked all the great talent out of the University Says some of whom moved to washington because come quantz and financial engineers and they didnt go into medicine really some charlie. Affairs or social service or to become clergymen they became wall street traders and with the fed we know historically and as an example of an institution that is replicated in other countries around the world there is a natural Interest Rate of about 5 percent and the fed is their remit is to either raise or lower rates around that natural rate as a way to offer. Mitigating. Risk to the economy in case theres a slowdown or things that hyper inflated exciter but what weve seen is that theyve taken rates down to 0 and allowed the continuing air class to buy everything up which is given the rise to the multi 100000000000 are class thats a result of what i think we can describe as a heist this is a heist engineer by the fed and further along put further along by the concealing her class so this is this is pretty shocking disaster in the lot of ways and. First so whats your comment on them would you want to see it that way am i over my over you know dramatize ing something in here and if i buy that but if that is the case that same structurally theres a very little i can be done at this point your thoughts well so theres 2 things in that question you asked one is can anything be done its come to that one second the 1st is whether there is whether this is a heist and i guess what i would say is a couple things 1st of all the feds remit isnt necessarily to keep Interest Rates around a specific level it is to keep the economy stable and more recently to also have low unemployment right the problem is that the only tool they have is this Interest Rate tool or the increasingly exotic forms of q. E. 2 all right and because of that the only mechanism that they have to actually interact with the economy has to do with liquidity injections effectively you know and what happens because of that is that the only people who benefit are the people closest to that right and thats exactly what you talk about with the continuing her class i think whats happening now is that people are realizing that the fed the fed may backstop the markets but the markets dont necessarily offer the average person anything anymore and in fact if anything they have made it more inaccessible to actually participate in the means of getting ahead right weve had a situation happen where the deal that is being handed to regular people is everything is going to be more expensive than it was for your parents but the but the but the bargain is that will give you cheaper credit to buy it which is a terrible deal its an awful deal right like well lets you get farther and farther into debt because the percentage rates are lower and lower and lower but youre going to have to take on more of that debt to participate in any meaningful way and this is where you have all of this inequality happening i think the interesting thing that may be happening right now and its way too early to be anything more than the most very basic level of optimistic about this is that there may. Be open space for a political conversation that isnt the same boring narratives of right and left that are presented to us right now but actually looks at this at Monetary Policy as a structural cause that can actually combine people across right and left and say this is something that we can wrap our heads around it doesnt fall into the same old narratives in is actually addressable and thats something that i think ive been thinking about a lot and frankly testing on my friends on both sides and i think theres more openness there and maybe thats one of the upshot of this moment that were living right right i mean we can kind of discuss further what the remit of the fed is right but to your point the key here is a both left and right are now focusing on the institution as a whole and what role of plays and a lot of these big issues i think that is really important stacey so lets you know wrap some of those issues up into one overriding question and then some solutions to it you mention all the debt and thats been the bargain is like ok all your costs are going up Health Care Costs living costs education costs all that stuff is going up the basic fundamental needs of your life are those costs are going up some of the chinese importing goods ok theyre going down but that has been rising everywhere across all sectors so were right now in 2020 we see that the u. S. Debt to g. D. P. Is 136 percent i believe just in 2005 yes it was 100. 00 it was only 61 percent so its doubled since 2005 but household that is also rising corporate debt is even rising even more paul krugman says its just debt we owe to ourselves so is this debt an issue at all. Well i mean its certainly an issue for for the average american whos whos holding that debt and i think thats what makes again going back to whats potential in this moment i think that the average american who hears that thinks b. S. You know i mean like of course that cant be the case how is it that we live in a system where thats the case for the highest levels of government but not for for me right at in and out what where does the translation happen where all of a sudden debt becomes ok how big do you have to be for that to happen and when people begin to it they realize that theres basically no way to actually ever pay this debt back and so really were in this weird situation where its so strange to see that the solutions that are being presented you know you have on the one hand the m. M. T. Years were kind of pushing this narrative and in a strange way i find them the most arrogant about the place of the u. S. Dollar in the world there is such a an underlying assumption that nothing can change in terms of the global power system and any student of history knows that thats simply not the case right and how bet you know the thing thats crazed is that were living in a moment where the u. S. Really is rewriting the book every day about how far you can push Different Things and the problem is you have exactly basically 2 opinions within that are 2 ways to look at it the one is that well its you know we weve gotten away with it so far so were going to be able to keep getting away with it the 2nd is at some point thats no longer the case and maybe we shouldnt have the vision of a little less hubris about the things that make us look better this is an area of american exceptionalism that could be extremely dangerous the moment that it tips and i you know its theres a 1000000 different statistics a 1000000 different ways you can look at where that Tipping Point is right now we are still living in a world where its not like the rest of the world is presenting a really great alternative but you have for the 1st time these really key geostrategic competitions that are explicitly coming after after the. The way that the world is organized around the u. S. Dollar and basically the whole system the being able to get away with the way that weve structured things is predicated on a continuance of a system which doesnt necessarily serve a lot of folks including i think in this is the new heterodox thought that is starting to come into the conversation maybe it doesnt serve the interests of the u. S. Quite as the way that it used to write it is there a Tipping Point for american exceptionalism and are we at that Tipping Point i mean that the thats a very kind of. Question and Goldman Sachs on the topic of the dollar it come as come out and said it believes that the dollars days are numbered so in terms of the dollar being World Reserve currency Goldman Sachs saying that looks like the end is near how would this factor into things. I mean it has a it has a huge avocation and you know i think that the debates around the dollar are really interesting and also extremely extremely important you have on the one hand the folks who are focused on the narrative strength of the dollar in some ways right that goldman article that you referred to that came out as part of the gold report was kind of trying to make sense of why a gold has had such a rise and in particular why its not just the standard folks who are kind of re upping their allocations of gold but is in fact institutions were getting more and more skeptical of treasuries and saying maybe part of what used to be the Government Debt role in our portfolio should in fact be this other thing because theres skepticism around the dollar you have folks on the other side who are really focused on the fundamentals and basically the kind of euro dollar and shadow Banking System and just how much of the dollar denominated debt in the world is outside the purview of the u. S. Those folks are more skeptical of things like the feds a belated actually influence the monetary supply they see the dollars strength as predicated not on any sort of narrative but on the fundamentals i can appreciate both points of view but i always worry when we underestimate narratives when it comes to markets markets or alternately machines that make sense of narratives and fundamentals and some confusing combination and at any given moment they can move very quickly between one or the other and in fact they are in some ways competition for narratives that when there are people always were going to have a benefit for the dollar to come down and some of those powers include some of the most powerful actors in the world right now so i think being dismissive of narrative shifts and a shift in the over chin window on whether the dollar can be or should be the worlds reserve currency would be a mistake right well very well said well were going to take a break and when we come back more with nothing on what im more of the breakdown pod cast dont go away. So what weve got to do is identify the threats that we have its crazy. Let it be an arms race. Spanning Dramatic Development only. I dont see how you will be successful very. Tall. Hooper joe you know they have so being you. Just cant you know. Its. Just. For. Life with. Things that might be seen as weakness in this masculine world but they still demonstrate incredible strength of spirit. Choose. For. Welcome back to the kaiser report summer solution. With max and stacey and were talking to nathaniel what a more hes got the breakdown podcast i get it now he breaks stuff down im getting the benefit of his breakdown right now this guys on the money now in the previous segment the thing you know we were talking about narratives and markets and you know how to sometimes theyre insane sometimes they break when they break it can happen really quickly and you know markets are very efficient as you say theyre a machine if you will they take in all the information they have price discovery going on in the sea of price and you can kind of figure out what all the opinions are thats what theyre supposed to be doing thats the beauty of them but sometimes narratives take control and markets get way out of whack and in the case of the u. S. Dollar it might be the case where the narrative is taking the dollar in a place that is not reflective of reality and that when reality asserts itself were going to see a huge kind of move in the dollar versus some of these other currencies or not but i think its good to kind of point out that these 2 things dont always go together stays yet nothing i want to turn to a little bit like a about what were discussing in terms of narrative and one of the things that is really emerging is this conflict between the United States and china secretary of state pompei o called said that china he accused them of economic blitzkrieg but how much of it is really china and how much is actually the structure of the global fiats system whereby the dollar is the reserve currency yes it is an exorbitant privilege and some ways for some people but it does undermine our ability to manufacture and produce wealth so what do you think about that statement. Well so i mean i think that it is almost regardless of what you think about the conflict i think it is the defining economic conflicts of our times even if you dont view it as as inherently or by definition adversarial inherently in some ways it is going to inevitably be such an important conflict just based on the size of these economies i think its important to remember that the way that the the world has organized itself was not random we made a concerted push to bring china into the World Trade Organization and to basically aid the way that the world shifted to have such low priced manufacturing of things in china right there would be no matter what even if we hadnt done that certain sort of power dynamic that probably china would start to bristle against as they reasserted themselves in the world that comes from the exorbitant privilege of the u. S. Dollar at the center of the worlds reserve currency system but it wasnt like there was just some economic inevitability of manufacturing of always moving to china and supply chains we decided those were specific decisions and i think one of the things thats most noticeable about the time that were living through now is that you go back 10 years and the bit was the American Business class big corporates basically that were the most sort of the last defenders of china right they were the ones who were saying look you know like look at how many people its brought out of poverty this has been a great experiment and and thats not happening anymore there is a major shift and i think this is one of the most significant forces going on right now to reach shore things to bring them back home and youve youve talked about that or youve seen this being talked about for a while but the virus has supercharged it right japan when they did their 1st round of post code rebuilding put in billions of dollars of incentives for Japanese Companies to come home right japan is in many ways the most worried about china outside of the u. S. They are beating down the door of the u. S. Saying they need to provide an economic counterweight particularly when it comes to things like the new. A nice Central Bank Digital currency thats being tested but you see it in the u. S. Now to right there is youre starting to see this massive conversation and i think its going to be supercharged by the vaccine hundreds of how we redesign supply chains for National Security not just economic interest so theres so much it involved in the u. S. China relationship i think the dollar is a part of it and you know the reality is that china from a narrative standpoint really has to tell the story that the yuan is is a good reserve currency because as it relates to an actual percentage of the worlds reserves its not right its a distant distantly behind the euro and the u. S. Dollar right while there is a perfect example of narratives meets markets right so for years that the narrative was theres a symbiotic relationship between the u. S. And china they send us really cheap goods on and we can get widescreen t. V. s for really cheap and clothes really cheap and then we just send them their jobs and its really a great relationship and it will never break it will never be disturbed because its so beneficial for everybody and then suddenly come it happens and the entire narrative is ripped to shreds and markets assert themselves and theyre being on shore and you know the troop presence saying and the case of tick tock that they they need to sell their tech tock you know there are all these crazy market reactions so thats a good example that now it was recently reported that 75 percent of americans are making more on their hands on Employment Benefits than they did working your thoughts on this and what does it tell you about the structure of our economy nathaniel. Well theres theres a lot of different arguments around this you have the folks who say that unEmployment Benefits are supposed to set the floor for prices and that this is a natural reset and and i think that thats one perspective theres another set of people who think that weve created a kind of perverse incentive by doing things backwards and reactionary and i think that the 1st conversation is a good one to have we should be every 4 years as part of elections having a larger structural conversation about what the social contract should look like what unemployment should be like that should be a perpetual conversation that people are having because we live in a society with other people and we get to decide whats the right in the wrong approach however what we are doing is policy by reaction we were slow to react to covert 1000 as a serious threat we deny deny deny deny deny and ourselves in a situation where we had to do big stupid overarching things and thats what were dealing with now and were going to get into ours the same situation again right theres a battle now about should we extend these benefits for a week or 2 weeks or whatever because republicans or democrats cant get together to figure out what they actually want and the i think that the theres a kind of a broad point in a short term point a short term point has to do with just how poorly equipped to deal with dynamic situations are our system is right now and you know theres a lot of reasons we could diagnose that but its its depressing to see the 2nd point which is maybe a little bit longer term and is something that i think should be a part of the debate about u. B. I. And you know any of these concepts that are coming down the pipe is what it looks like to is there any actual realistic way to implement any of these systems while avoiding political capture in some way because you kind of have a scenario now where no one feels like they can argue that no extension of benefits is the right approach or anything like that because it is just the expectation that you know people want their money so i think. Were in a very complicated moment as it relates to the relationship between government and citizens because i think citizens rightly feel like they havent the represented so they might as well get their stupid check and thats a dangerous spot to be it and speaking of complicated moments weve posited here on kaiser report that not only are we at a 4th turning so we see the eggs of the baby boomers who lived in a generation they were the 1st in a Global Pyramid scheme and they did well off of it but now we have this generation z. And its a radical 4th turning and their mindset is completely different i dont understand it all i can say we also have the 3 cities trap these are epic moments in history as well theres like 12 or 13 big ones and where add another one of those and we have what i see as the end of the dark ages of a possibly around a science so what do you think of it does that explain like this transition all these weird big movements colliding explain that sort of like Event Horizon moment that weve seen the speed get a fixation and all sort of sense economic sense whether its you see robin hood app people piling into Bankruptcy Companies you see negative Interest Rates you see negative prices on oil can you tie all of those together. Sure its actually kind of a boring answer i think so all of the generational theory i think is really really valuable and important but really what it comes down to for me and this is so boring because its such an obvious answer is the internet this is a thing that has totally fast forwarded the rate of sofa social evolution in a way that is radically uncomfortable for human beings and and these forces that have been unleashed right like the fact that you had you know the a few weeks ago all of these big c. E. O. s from Big Tech Companies hauled before congress and it was a joke right i mean these guys all they had to do is not laugh in the faces of these congressmen and women as they scored their political points to bring home to their constituents to look tough because then the next day they reported earnings that make Everything Else in the stock market look stupid right i mean these institutions are so much more powerful than any human institutions weve seen its just insane and thats not anyones fault its not its just a factor of what it looks like to create massive sort of Network Effects at scale and we have not been able to deal with it and i think that if you look at a lot of these generational differences they have to do with people who have grown up inside that versus lived through the transition versus had to come into it later in life and thats not universally applicable obviously all of those different groups are more complex than that but we dont know how to live in an internet world and right now it looks like its going to kill us and so thats really i think at core what were trying to figure out. You are a big color and because inner is kind of like an extension of the internet well and a couple lets talk about it where do you fall on the big question versus goal debate thats my 1st question. I mean i dont have any issue with gold that they think the queens going to be much more appealing make sense gold to a different generation i you know my formative years were spent thinking i was going to do post conflict resolution stuff and thing i was going to work with refugees so they call in to me offers a whole hell of a lot of benefits over gold when youre talking about people who are fleeing borders and want to keep their wealth in the context of a political regime thats after them so it already had some points in my column just on that stamp point ok and the 2nd question about bitcoin weve mentioned that Goldman Sachs says the dollars coming to the end will decline play a role in a post dollar world or is it just going to be gold. Oh at big big plays a role in a world where the dollar remains where people are trying to escape their local regimes and dont want something as as waffly as the dollar as it might get but the going to be even more relevant in a post on a world i cant see a scenario where you have competition real meaningful competition around what the reserve currency is supposed to be that the one thing that is truly credible and is outside the realm of a state is it a major player right well said well stacy were at the end of Summer Solutions i thought we got some good ones that was a fantastic series this year the fail in a more thanks for being on Summer Solutions thanks for having me well thats going to for this edition of kaiser apart Summer Solutions stay say try to catch us on twitter its kaiser report and the last time. In the troubled 19 seventies a group of killers rampage through parts of Northern Ireland that was coordinated loyalists attacks on the catholic population tens of thousands are forced to flee their homes come up with straight can put these attacks was a p. R. You see the Police Actually took part in the attacks so instead of presenting they were active participants in the burning of coal streets in belfast. More than a 100 innocent civilians were. As the review can seniors and we found out more i was surprised about the extent undertaker into which the inclusion was im told in some of those cases the killers were delayed to be named. And were getting i think it went to the very very top i think it is. The water where politicians you know on the go ahead. Join me every thursday on the alex salmond show and ill be speaking to guest of the world of politics sports business im showbusiness ill see you then. Has changed Many American lives and pharmaceutical companies have a miraculous solution. Based drugs the people who are chronic pain patients and believe that their prescription is working for them in the remedy be certain to do no price that they pay closer dependency an addiction to opiates a long term use that really isnt scientifically justified and ill study actually suggested that the long term effects may not just be absence of benefit but actually that they might be causing long term