Marc Faber (Gloom Boom & Doom)
- 00:00:36 What great investors does Marc admire?
- 00:05:20 Why the world’s policy to print money (in Japan, Europe and the US now) is misguided and prohibits innovation?
- 00:13:32 Is the ‘socialist utopia’ upon us? What will happen to inflation? Why do we need a ‘Central Bank’ in the first place?
- 00:23:48 Will we be able to escape the current malaise with exponential technology growth?
- 00:28:45 Is there a ‘revolutionary period’ on the horizon?
- 00:35:01 Will we see a massive bank failure like Lehman Brothers again?
- 00:42:33 How China got so successful relative to the US and Western Europe? Will these powers clash in the foreseeable future?
- 00:53:42 Is America’s influence in the world a positive or negative force? Why it should lead more by example.
Marc Faber is the publisher of the GLOOM BOOM & DOOM report and is a world famous investor known for his ‘contrarian’ investment approach.
You may watch this episode on Youtube – #86 Marc Faber (Gloom Boom & Doom).
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Torsten Jacobi: So Mark, you’re the publisher of the Gloom and Boom and Doom Report and you’re also a world famous investor. I did some studying and you mentioned a couple of years ago probably that some of the investors you really admired, Jesus Christ and Buddha, Mohammed and Francisco Pizzavo. What was the rationale behind that?
Marc Feber: Well, I think I dedicated a book to the religious leaders because I think in general they’ve done more good than bad in the world. And I think it’s very important for people to believe in something and to have morals and the moral compass to be able to make a judgment about what is good and what is bad and what tolerance means and what it doesn’t mean. And so I think that to study religion, even if you don’t believe in what the church says, because the Bible is basically what it is about Christianity and the church then gives it a certain interpretation and has abused it at times. I’m not saying all the time, but at times. And so I think it’s good for people to believe in something and I think it’s bad nowadays that very few people have a religion, believe in something and actually that the government officially wants to erase culture. You understand? I think this is a disastrous path we have engaged upon. And Pizzaro, I admire, because like Columbus and Hernando Cortes and others or Marco Polo, these are people they had courage. I mean, if you you embarked on a trip overseas in those days, I mean, I don’t know whether you’ve ever seen a model of Santa Maria ship Christopher Columbus went on. I mean, it wasn’t a luxury cruise ship with swimming pool on it, and rooms with bathrooms and so forth. I mean, these were very primitive conditions. And they embarked on a trip where they didn’t know where they would go to. They thought they would eventually find something actually in Columbus case, they thought they would find a way to India. But I admire that kind of courage shows of Magellan to have sailed around the world. Interestingly, he was killed as a man with modern weapons. By that time, by an indigenous person in the Philippines with, I think, a bow or whatever. Anyway, that he was killed by a tribe who had had no contact with modern civilizations, unusual. But he chose that a trip at the time in far away countries was very dangerous. There was always danger of a sickness on a ship, a lack of water, of food. And sometimes they were caught by a pandemic and then to land. And you didn’t know where the people you were visiting or meeting were hostile to you or were friendly. I mean, it was totally unknown and you didn’t speak the same language. So I admire that kind of courage. And in the case of Pizarro, if we measure productivity, he went with a very small army to Peru and conquered a whole empire, a thriving empire that was very rich. And with an army that was far larger than his. And he conquered that admittedly with a lot of cruelty. But Incas were also cruel as well as the Aztecs and so forth. So to have conquered so much wealth with so few people is a very high productivity enterprise. And that’s what I admire about the person. Not that he was a particularly nice man. But as your listeners will know, among entrepreneurs, not everybody is a particularly nice person.
Torsten Jacobi: Yeah, judging people’s character is really hard, especially if they are dead for a couple of hundred or a couple of thousand years. And I’m fully with you, the art of taking risks, the art of the entrepreneur who takes a calculated risk and then makes it bad on it and is trying to find a positive outcome for himself or herself, obviously, but also helping society in turn, because then we can judge that return much better. That’s a kind of a lost art. And I feel like what our culture is up to right now is we’ve replaced that with technology, and those amounts of new technology, and kind of a way to comfort us in our little bubble, in our comfort zone. And what we see with the government is basically we prop up this old economy. We keep printing money and we keep increasing the debt. And we hope that one day we come up with this productivity revolution that we saw was all right, that we suddenly see this jump in GDP. But somehow all we do for the last 30 years is print money and hope for the best.
Marc Feber: Yes, I think that the government’s policies are completely misdirected with the help of the central banks. And I mean, people always talk about cancel culture. Of course, I’m against cancel culture if there is any culture, but I would be in favor of cancel central banks. And I would be in favor of cancel economic departments at universities who will actually teach economic sophism. You understand? I think there’s teachings that enhance knowledge in the world and enhance prosperity and progress. And there are cultures that are retroactive, retrogressive, that actually worsen conditions. And I think we’ve embarked with government policies today that have a socialist bias, very strongly socialist bias, and a bias towards less freedom. In other words, I just read this morning in the UK. Okay, people are now allowed relatives, not people. Relatives are now again allowed to hug themselves. Well, I really don’t need the government to tell me where I should hug anyone, whether it’s a family member or a non family member. That’s a personal choice and should not be regulated by the government, not even Stalin regulated that. So I mean, if we put things into perspective, we have gone a pass towards complete self destruction in terms of our freedom. This is self imposed. It’s not imposed by a vicious dictator. And who knows how vicious Stalin was, maybe he wasn’t that vicious in the context of his times. Maybe he was among the 30 shirts, the best shirt for Russia. It was some other dictators that appear to be bad. But anyway, the point is, I will never understand that having been taught for essentially 20 years at school, primary school, secondary school, then university, that democracy is the best system, because it allowed us to live in freedom that we precisely in democracies have introduced regulations that reduce our freedom very significantly. That is for me a mystery. And I think it’s a complete failure of democracy. And I’ve written already for years that democracies are untested. And that probably it’s not a very good system that everybody can vote. Never in history before, in 5000 years of recorded history, has everybody been able to vote? People always say, Oh, the Greeks are already democracies. That’s not true. They had a democracy for the Athenian elites, some people in essence, the citizens, and who fulfilled certain conditions could vote and not everybody same in the last century. In the last, you know, in the, sorry, in the 20th century, a lot of people at the beginning of the century could not vote. And in the 19th century, women couldn’t vote, the blacks couldn’t vote, Switzerland until 1995, not all women could vote. You understand? So a democracy such as we have today, where even illegals, in other words, someone comes to your country, he’s an illegal, he’s not born in your country. He is not the citizen. But he goes and vote is a bizarre thing to happen. And what Stalin already said, I mean, the question is, he’s not who votes, but who counts the votes. That is the issue. Now the US, and this is the, in a way, is a wonderful joke. When you think of it, the advanced countries of the world, including the US, they have commissions that go and observe the voting process in third world countries. They and they themselves don’t know how to count their own votes.
Torsten Jacobi: Yeah. I mean, there’s a lot going on. And I grew up on the other side of the wall. So I grew up in Eastern Germany, right? And what’s striking to me, and for the longest time there, there was a huge popular support for this utopia. So the socialist utopia that came upon in 1918 was still alive in the second world war. And that popular support question is, would it be 90% of the population? What the elections would have shown at that time? Definitely not. What was it, 10%? No, it was probably more. It was maybe somewhere around 30%. So there is, even for some crazy ideas like socialism, there is a huge amount of popular support. And again, if this voting system, and where we are in this voting system, if that’s a great idea, that’s obviously a problem, right? Because we see this from Roman times, is that if you have a wide majority of people who benefit from whatever promises the politician makes, right? We give you a lot of money. We give you free money. We give you a stimulus. We give you tons of unemployment benefits. Why wouldn’t you vote in that person, right? So the question is, how do you deal with productivity and the most productive people in a society when the large majority of people basically can vote in the benefits and don’t never have to work again? And the question, and I think the socialist utopia now is that we’re seeing technology out there. The technology will scale so much. We’ve seen this a bit with Silicon Valley already, that we literally just make it once, and then we can use it billions and billions of times. And we only have to use the software, but there might be hardware, and we’re approaching the same thing with hardware. And maybe we’re going to see this in healthcare. We’re going to see this in housing. There’s our 3D printed housing. There’s prefab housing, relatively cheap. And if we see this rolling out through the economy, I think a lot of people now feel that the socialist utopia in terms of economics is here. We’re not that far away from it.
Marc Feber: Well, the enabler of this idea that it’s here are, of course, the central banks, because as you know, nowadays, and this is a huge danger for mankind, nowadays, governments can borrow essentially free of charge, because we had until just recently a large number of countries in Europe that had negative interest rates on their borrowings. And in the US, we had the next to zero interest rate. What this means is that when the government borrows money, there is no immediate negative impact. It doesn’t show up anywhere immediately. And the danger in that free money is, of course, that throughout history, one of the inhibitors of wars, one of the factors that contained wars was money. You needed money to go to war, and you needed a lot of it. And most wars bankrupted the countries in the process. But nowadays, with zero interest rates, you spend a few trillion dollars in the Middle East, in Afghanistan, you spend a few billion dollars manipulating some voting process in Ukraine, and so forth, and so on. It doesn’t show up. It doesn’t hurt anyone. So people with an ill will, and I’m not singling out any country, I think they all do it, they can spend money relatively freely on issues that will long term have a negative impact. And so this has been enabled by essentially free money. And the economic departments that teach MMT, Modern Monetary Theory, that essentially deficits don’t matter, and that the government can borrow endless quantities of money, they will wake up one day very badly, and some of the wake up we are experiencing right now in the sense that stocks are selling off, because the stock market is smelling, something is not quite right. In fact, the bond market smelled it first in the US since last August. Interest rates on 10 and 30 year bonds have more than doubled. This is a huge percentage increase from a low level, but still the percentage increase is huge.
Torsten Jacobi: Yeah, something I never understood, and maybe you can help me figure this out. One thing is, why on earth would someone put money out there in a 10 year bond for a 0.25% interest rate? So that always struck me as crazy when inflation was always forecasted to be somewhere around 2% in the next 10 years, more or less we don’t know what actually comes through. So I never understood, have we given up on a better future that people put so much money into such low yield bonds or other investments? And then on the other hand, why do we need a central bank to sell those rates? I mean, the market is perfectly able to set big interest rates, compendiums out there, for all the different needs and all different kinds of borrowers. Why do we play this game with the Soviet style central bank?
Marc Feber: Yes, the second question I can answer easily. You actually don’t need a central bank, but the central bank was created to print money. And the intention I think looking at the founders of the Federal Reserve and other central banks was to use that money for all kinds of government programs. In other words, to finance an expansion of government at the expense of the private sector. And secondly, to enrich the wealthy at the expense of the lower classes. You understand? Once you can, the old Rothschilds, he said, give me the control of money in a system. And I don’t care who makes the laws, because the money, if you control the quantity of money, that has a huge power over where the money flows to. And to answer yours, so I think there is some viciousness in the establishment of central banks, of course, the central bankers, they will look at you straight in your face. And maybe they believe their own BS, because they will tell you, we are here to stabilize markets. This is not true. Basically, the origin of a central bank was to stabilize the currency exchange rate. And to see to it that the rate of inflation wouldn’t get out of hand, because in the 19th century, we had these bouts of inflation and then deflation and so forth. So price stability was a factor. But the problem is, the central bankers in the 20th century, the central bank in America, the Federal Reserve was formed in 1913. There were enablers of wars and enablers of the government as a percent of the economy in the US growing from 9% of GDP. The economy was 100%, the government 9%. Now it’s more like 40% to 50% in Western countries is the government as a percent of the economy. And I compare the government basically to a cancer grows and grows and grows. And the government is unproductive. Whatever the government does, the private sector actually could do better. It’s like, you had the post office. Why was it possible to have UPS and FedEx come in? Why? Because the post office became so unproductive, it could have been easy for the post office to open rapid and overnight delivery system. But they were not capable to do it because the governments, this is the problematic of a large government. You have second class employees and corrupt employees, I may add, especially the higher you go in government, the more corrupt they become. And peak corruption is concentrated in Washington DC in the case of the US. This we have to say very clearly. Nobody likes to hear it, but that’s the reality of things. And it’s no longer the democracy in the sense that many people have a different voices and vote. We have a uniparty where the Democrats and the Republicans, they sooner or later after some Kabuki theater, and they agree, okay, you spend a trillion dollars on this, but in turn, we can spend a trillion dollars on that. And so it’s basically an agreement between they don’t particularly like each other, certainly not in public. But if you go to high class parties in Washington DC, they all together, all laughing together, all drinking champagne together, and all sleeping together with the same boyfriends and girlfriends and minors.
Torsten Jacobi: Oh, we hope not. We hope not. I think we all agree that the research allocation, capital allocation in the public sector is what we’ve learned from the history of capitalism and socialism, and public entity is always worse than a public entity. So I think we all agree on this. And I think it’s kind of, it’s a long term process, right? This cancer issue described and has been growing over so long, we’re kind of used to a relatively large state in the US, but it’s still relatively small compared to Europe where it’s 60, 70% if you go to Sweden or Norway. How do we fix this mess? Do you think there will be a public consensus that we actually go down to a 10% way? And I think this is where we all agree. We don’t want zero state, we want a small state, and maybe 10% is the right number, somewhere around there. Can we find a public consensus? I don’t see it. I live in San Francisco, here the consensus is more like 90% state. And that’s not what I think, and that’s not what I would love to do. But what do we, what can we do to get out of this mess? Can we see productivity rising so much that actually our income or GDP grows so much in the public sector or stays more stagnant? Is that the future of what we can do in the next 30 years?
Marc Feber: No, I think the likely future is that we’ll move into a state. If you read books about how totalitarian regimes come about, it usually comes about when people are very confused and they kind of throw up their hands and say, all we wish is we had a strong leader. And then, you know, you have a strong leader that comes in, and he may not be the most pleasant character. And in some cases, he’s very good. And in most cases, he isn’t very good. But this is an outcome that is not unlikely. And I still need to answer a question about the central banks, you know, whether you need them. Milton Friedman, he said very clearly, you actually don’t need these central bankers. All you need to do is to have a computer increase the quantity of money at the rate of nominal GDP, in essence, you know, so you don’t need someone to manipulate the markets up and manipulate markets down. Nowadays, as you know, because the financial markets have become such a large percentage of GDP. In other words, we compare two economies. One economy is like the economy of the 60s, 70s, 50s. The economy is 100%. And the financial market equities say are 25%. And bonds are maybe 25%. So the financial market as a percent of the economy is 50%. Nowadays, because of all the money printing, the financial market is maybe three, four, 500% of the economy. So you understand, when the financial market is 25% or 30% or 50% of the economy, it’s the economy that has an influence on the financial market. But when the financial market is 500% of the real economy, it’s the financial market that has an influence on the real economy. And that’s why nowadays, central bankers are no longer stabilizing markets, but they’re manipulating markets upwards. Because if they don’t go upwards, but downwards, the economy is badly affected. That’s what they’re scared of. And that’s why the whole system is rigged. But the central bankers will of course never admit any mistakes. In fact, in a democracy, no leader will ever stand up and say we made a mistake. But this is the weakness of a democracy because they all protect each other. And the bureaucrats, they all want to keep their jobs. Or in some cases, they don’t care because they get the pensions anyway, whether they’re kicked out or not. So the lack of accountability, of responsibility in a democracy is endless. Whereas if you’re a feudal, or if you’re the king, first of all, at the time of the Romans and say Alexander the Great, he was at the front line of battles. He risked his life every time. And he risked getting shot, or that his horse was killed. And so of course, that’s happened to Alexander the Great in a battle. And the leaders, the Roman emperor, sometimes were at the front line of their legions. But the Americans and the Europeans, they sit in a bunker. The moment they hear a shot, they run down in a bunker and tremble. They have no courage whatsoever. They’re cowards, all of them. All of them. But it’s easy to tell someone, look, send a drone and bomb a few buildings in Syria, or Iraq, or Yemen, or Libya, because they have nothing to lose. And the one who sends the drone, he has nothing to lose either. He’s not hurt.
Torsten Jacobi: Yeah, we call it specialization, right? So that’s a nice euphemism for this. And I agree with you. These things have changed materially, and they shifted around risk taking in our society. When you look forward, and do you think this all comes crashing down when we go through a revolutionary period, you know, I grew up in Germany, it has a revolution every 60, 70 years, had it for a long time, and everything goes to zero, right? Switzerland is much more stable. But everything goes to zero, the currency goes to zero, everyone loses their job, and then it’s being rebuilt. And it comes up pretty decently afterwards, after this crazy period. And the question is, will we see something like this on a global level that we go through a revolutionary period? We basically, we devalue the currency by 80, 90% if you start from scratch. Is that what you anticipate during your lifetime? Or will we find another way out? Maybe lots of inflation.
Marc Feber: Well, I think if you live in the present, you can see yourself in the 1960s, until 1971, the official price of gold was $35. Now it’s around 1800 pounds. You can see bitcoins, you know, the initial price of bitcoins, I don’t know, was $100 or less. And now it’s close to $60,000. And they are now close to $2 trillion worth of cryptocurrencies and so forth. So if we measure the price of goods and services and stocks and bonds in the world and compare them to bitcoins, then I have to say paper money has already collapsed. Now among different asset classes, the depreciation has been irregular. Let’s assume we have to give a ranking of worst to best investment going forward, or say over the next 10, 20 years, I’d say cash is probably in the long run the worst investment because the central banks are unlikely to increase interest rates much. They prefer inflation and they don’t care about the lives of the little people. They couldn’t care less. They wouldn’t even know how little people live, how poor people live, because they don’t mix in that group of people. They go to the office in a chauffeur driven limousine. They have their staff that will buy the groceries for them and so forth and so on. They live the life of the elites of a bureaucracy. You understand this? Like the bureaucracy in Russia lived quite well. The hierarchy, not the lower bureaucrats, but they made money through corruption, but the higher bureaucracy lived well. That is happening now. My sense is that cash being the worst investment, I think bonds will follow soon. In other words, I’m not ruling out that near term treasury bonds could rally because they oversold now. They’ve dropped a lot since last August and they could rally somewhat. But in the long run, the money printing will take care of bonds being a bad investment. And then among the best investments are things that have a rarity aspect. In other words, bitcoins would be something you cannot multiply, but you can multiply the quantity of cryptocurrency. So that can become very large. Like you cannot multiply the number of Picasso’s or of Rembrandt’s or of Van Gogh’s sense of what but you can multiply the quantity of artists. And so they have competing artists with the established debt artists. So there is always a supply issue somewhere. But I would also imagine that food will become a subject and water. And the dumb people had believed in solving climate change. They’ll be surprised how expensive it will be. You understand? To become essentially carbon dioxide free will use much more carbon dioxide than was expected and pollute the earth even more. And so there might be energy shortages and then prices will go up. And I would say real estate, as we’ve seen in the last 12 months in the countryside, remote the further away from the socialist centers, San Francisco, New York, Baltimore, and so forth, further away from these centers, the better the real estate, the closer to the socialist communist regimes, the less desirable real estate will be. But if you are the neighbor of AOC or another socialist, you’ll be okay. Because what is good for other people is not good for their leaders. So the leaders will be tax free or the area where the leaders live will be tax exempt.
Torsten Jacobi: Yeah, there is this law. I forgot who branded it. As close as you are to the money printing press, it will work out for you. So if you’re as close as you are to the Fed, you will still be fine as further away you are in trouble. And I’m just curious, do you feel like there’s a couple of those LTCM or Lehman brothers coming for us? We see this with ARK a little bit now, but do you think we see this massive blow out of a fund or maybe a bank? Do you think Goldman Sachs will be in trouble or they’re going to be fine?
Marc Feber: Well, as you know, Goldman has in theory been in trouble on numerous occasions, but they always survive. They are never in real trouble because they have the right connections. Yeah, they are the Federal Reserve or they tell the Federal Reserve what to do. That certainly appears, right? I wouldn’t worry about Goldman Sachs. The stock price will go up and it will go down, but I wouldn’t worry about them going bust. Before they go bust, the US government will be bust. Yeah, you understand? Yeah. And you have again some kind of a third right, but I wouldn’t worry about that. But I think we have to understand that the leverage in society today is at the highest level ever. In other words, household debt, mortgage debt, margin debt, debt that is used to speculate on everything. You can get the loan for everything and archaeologists, they got loans. They had equity of 20 billion and outstanding liabilities of 100, so the leverage was something five to one. When you have that kind of leverage, it doesn’t take much for you to be pushed to the wall. Yeah, that’s certainly a huge issue out there. I would say, yeah, for sure. A lot of more will come to the surface. If the market drops more than 10%, you will see the first bodies floating up. Financial market. We hope not. But yeah, I mean, this is the reality. You hope not. But I want to tell you something. Either we accept the fact that the capitalistic system is the best system. And if we look at the 5000 years of history, never before have people in the world had such a low poverty rate as they have now. Poverty rates have come down everywhere, even in countries that mismanage poverty like the US, it’s still come down. And this is due to the capitalistic system. That Milton Friedman clearly identified no other system where it was a feudal system or royal system or a theocracy like they had in Egypt, or communism or socialism or whatever it is. It never brought up the masses to relative prosperity to a high standard of living. Just think of it. You can go into a shop, you buy a can of Coca Cola, and you’re very poor. Someone may have given you the can of Coca Cola. And here, you drink the same drink as Warren Buffett and Donald Trump, and maybe the pope of Italy, I don’t know. I hope not. It’s not healthy. This is the… In society in the Middle Ages, the feudals were eating very different food than the poor people. They were drinking different water than the poor people. So I’m just saying that when people talk about inequality, I agree with you that the rich are super rich and the masses have lagged behind in this asset bubble that money printing creates. But still, it’s a better system, the capitalistic system, than socialism by far.
Torsten Jacobi: Yeah, I think that’s somewhat clear to most people. But I think what they don’t realize is the amount of freedom that’s needed, right? So the debate is about how much freedom is allowed, how much coercion do we have to avoid, how much coercion is correct? When you said that earlier, we now tell people who do hard and where to wear masks, and we get them very specific instructions because the idea is that utopia will make up for it. And that’s obviously a big bet, and it might turn out to be not useful. We kind of can predict this already, but I think the masses out there, they really believe in this utopia again, as they did 100 years ago.
Marc Faber: What I actually wanted to say is that if you believe that capitalism is the best solution, it is not the optimal solution. As people that advocated capitalism like Schumpeter identified, it’s not ideal. Because in capitalism, you have a lot of failures. You understand? You have first an auto boom in 1910 to 1920. Of the 280 automobile manufacturers in the US at the beginning, maybe 10 survived. So failure and losses is necessary to clean the system, to have the efficient companies move ahead. And the debt companies, the zombies go out of business. In the last 10 years, post great financial crisis, they didn’t seize the opportunity. They kept the zombie companies alive. And you have today, this is amazing, the triple C companies. These are the lowest quality companies. They have now the lowest yield in history. The lowest yield in history, never before was their yield so low on the bonds, their issues. And that is unusual. But is this because the market perceives, oh, I’m going to go bust. The Fed will bail me out. I’m going to lose my job. The Fed or the treasury in that case will send me a check so I can live. I can actually live better by receiving that government check than by going to work. But every such intervention then leads to distortions at the labor market. You can read it everywhere. The labor market in the US is badly distorted. The many jobs open, but nobody takes them because then they lose their benefits.
Yeah, you could say that they’re not paying enough, which is the whole debate. So if you’re not paying enough, then obviously you won’t get filled. Or you can’t pay enough because your business is profitable enough. And that’s another problem. When you look at what the United States is taking, do you think we’re being influenced a bit by China? Because China is in our theory, right? It shouldn’t have come that far. There’s this great capitalist underbelly and it sits, then we have this communist regime sitting on top of it. And I think what a lot of people, and I see this in Africa, when you go to Africa, a lot of countries say, well, we can do what China that did. So we stay in our communist little command and control center and then we allow a little bit of capitalism and we will be fine. Do you think that the whole world is becoming more Chinese? That’s kind of my argument, because we see the Chinese model works. Why? We don’t really know, but it does seem to work the last few years. It works a lot and well, because the Chinese model is far removed from socialism, communism. It is a one party system. But within the party, there is a democracy. In fact, it is a meritocracy. You only get to the top if you’re good. That’s why if you would put together the top leading politicians in the US into one room and in another room, you would put the 20 top Chinese politicians and you would test them for intelligence and knowledge. I can tell you that there’d be a huge difference, a huge difference. The Chinese do not have a perfect democracy. Actually, I think it’s a better democracy because not everybody can vote. So only some people with education can vote. In fact, there are 100 million members in the Communist Party in China. So it’s a fairly representative group, but it’s only around 10% of the population. The rest cannot vote. Only the members of that party can actually vote. No. I mean, everyone can vote, but the votes are made up, right? No. Only the Communist Party members have a vote. Okay. I didn’t know that. In local elections, other people have also voted in local elections. But basically, the party runs the political side. Now, on the economic front today, people are very free. They can change jobs. They can go from A to B and so forth. And you can build a factory in China much faster than in the US. They recently built the largest dam, water dam for power generation in China in the world. That’s the largest in the world. And I think they accomplished it in something like two years ahead of schedule. Try to do anything in the US or in Western Europe. There are so many objections to it by all types of groups, including the Greens. The Greens are people that will throw their empty cans on the street and go and give speeches about how the world has to become clean. Yeah. Well, of course, I can tell you that in Asia, in Asia, we don’t have really democracies. We have some sort of democracy, but it’s not really a full functioning democracy. But please tell me, where does it fully function? But anyway, in Asia, at least, we don’t have socialism yet. In fact, in every country that went through socialism, whether it’s Russia or East Germany or Hungary or Poland, they will never again in their lives want socialism because they had such a bad experience with it. It’s not very popular for a long time. I think it’s popular for a certain time, and then it really drops. And I think the East and Germany saw it as most Eastern European countries saw it in the early 70s. The system was basically bankrupt, but it took 20 years to get rid of it. So the authoritarian regimes are difficult to get rid of. Do you think there’s going to be a struggle with China and the Western world? And China will come out of this ahead in the sense of we all think of a cold war, but it might be more robotic hot war that’s going on. But do you think China has a long term competitive advantage because of what you just said? You feel like they are the more democratic model right now at least seems to work better. Well, let’s put it this way. I think China and a lot of Asian countries have already come out better than they were before. I mean, if you look, I arrived in Asia in 1973. There was one prosperous place at the time, and that was Japan, and other places, countries, Taiwan, South Korea, Hong Kong, Singapore, Malaysia, Indonesia, Thailand world still very poor. And today, the richest place in the world is probably Singapore, and Taiwan, South Korea have a very high GDP per capita, as does Hong Kong. We never had a democracy in the past, don’t have a democracy yet. And Singapore had a benevolent kind of a dictator that they said it’s a democracy, but it wasn’t really the democracy. But, you know, he was a good leader. But because he was a good leader, he got criticized for 30 years by the American politicians that he was the dictator, and so forth, that there was no freedom in Singapore. When in fact, there was much more freedom in Singapore than anywhere else in the world. But among certain strict rules, but within those rules, there was plenty of freedom. That’s why the place did so well. But the point is, you know, you ask, will China come ahead? Well, it has already come ahead. When you look at GDP per capita in China over the last 30 years, and in America, where it’s more stagnated than in China, it’s gone up a lot. And you have in China today, cities with a wonderful infrastructure, that function, you know, and you can walk around the street, nobody will attack you. Same for Japan. Freedom demands some responsibility. And if you have members of society that want to don’t have the morals and don’t want to assume the responsibility, the freedom brings you should not be in that society. They should be sent back. Sent back where? Well, what do you mean? I mean, like, where they came? Yeah, either you accept the fact that freedom demands some discipline, some morals that you don’t hit your neighbor over the head. If he’s in a weak position, that if there is a fire, or if there is an actual disaster that you don’t go and loot all shops, that is required that democracy and freedom functions. And if that is not the case, you need to impose very strict dictatorial measures to protect your own citizens. Yeah, I mean, you know, our rate of imprisonment is very high. I don’t know if you can add much to it, but the U.S. is very high, but it’s not high enough apparently. I don’t know about that. I mean, there’s obviously that’s a whole different debate. That’s a difficult debate to make. I don’t know, we have time to get into this. When obviously the rate of violent crimes is enormous in the U.S. compared to wherever you look in the industrialized world. But I also think that the rate of freedom that you can feel in the streets in the U.S. is unmatched to anywhere I’m going. When I go to China, I don’t feel freedom. I feel the opposite of this. I feel it’s a wonderful infrastructure, as you say, 100% correct, but there’s no service businesses. There’s no drawing of life from what I can observe, and I might be biased, that might 100% be true. And there is no quite frankly, more than a billion Chinese feel differently about this. And if you’re in Asia, you have 1.3 billion Indians, I think they feel quite free in that country. And you have a billion million and so forth. So I think that you may be biased. I think you can feel very free anywhere. It’s actually funny. When I’m in the U.S., I don’t feel very free at all. If I want to smoke somewhere, I can’t smoke here. I can’t smoke that there. I talk to you all the time. If you look at the girl, then she argues with you and then then. Yeah, yeah, no, you can absolutely make that argument. I think this is a bias that some people have against China because they’ve been brainwashed against the Chinese and the Asians. And they have been especially brainwashed by the Americans about their own freedom. I mean, that they don’t believe. I just can’t understand that intelligent Americans can go around the world and still tell the world, well, we are the exceptional country. We’re the good country. We can teach you something good. We can do something. We are here to help you. We are in Syria to help you. We’re in Afghanistan to help you. They are everywhere to make money and to cause disturbance for no other reason. Yeah, well, you believe America is the good. We have a democracy that functions. One time we have the Democrats and once the Republicans and they all take the right decisions for us. And also, they are responsible for the world. They will look to it that the world is in a good shape. Well, good luck to all of you who believe that. Yeah, well, there’s a lot of truth to what you just said. America definitely deserves a lot of criticism. What I see though, and I’ve been to pretty much any country on the planet, I see there is certain places that have the surprising amounts of joins, surprising amounts of irrespective of their economic development. They can see a lot of, I always say it’s obviously anecdotal evidence. You see the join people’s eyes and you see this a lot in Africa. And you see this in surprising places and others where you expect it. It’s very hard to find. But America has certainly failed in a lot of places to deliver a model that actually rolls out that scales and is adoptable. They fail everywhere, everywhere. Maybe, I don’t know. What do you think of the development of Western Europe after the Second World War? That seems to be the American model and seems to have worked pretty well. They probably would have done better in Europe without the involvement of the Americans in the first place because the Americans came essentially after the Russians had defeated the Germans in the Battle of Stalingrad. That was the beginning of the end. And the Americans came in very late. And after that, the Americans, because of their presence in Europe, engineered the Cold War, which was very unpleasant for many people in Europe and didn’t help at all. But I’m not here to give you a history lesson about the involvement of the Americans. I think you should go once and travel in the Middle East and ask a little bit around the Arab nations what the benefit has been of the Americans dropping bombs in Iraq, in Syria, in Libya, in Yemen, and elsewhere. And selling weapons instead of these countries having peace among each other. They all had to buy American weapons to essentially fight a war that didn’t exist among themselves, but was largely created by the US. But I always say to the US, go on dreaming. You will wake up one day, fortunately. Yeah, there is. And I can tell you one thing while the US is with its democracy and political correctness and everything is destroying itself. During that time, other countries have advanced a lot in the world, believe me. And that will obviously lead to tensions. And when it comes to a war, everybody will suffer. And the result will be that China will have more influence in the end. And the US will have to retreat from its overseas completely useless military bases. That might be a good thing. That might be a good thing if that happens. It’s a really wonderful arc to where we started. I feel like the US, parts of the US and we are split in the middle. We have these dreams about we go to Iraq, we install a democracy and it didn’t turn out that way. But it is a bit of a religious fervor. It’s this part of the self fulfilling prophecy of the Old Testament. If you make yourself a better person and if this distributes through society, maybe everyone becomes a better person. That’s a potential outcome. And I think part of America really believes it. It’s this dream we think of a better future. Does it always happen? Or that’s a big debate, probably and only in so few cases. But isn’t that the better way to go through life? Isn’t that the way what religion teaches us, especially the Old Testament, we got to come up with this better future first. We have to persuade people out there. And if they join our ranks, then obviously they should be voluntarily. That’s a good thing. This is how we should believe. Well, I think the way to do it is to live by example and not like some people in Washington tell people what to do and they themselves live like kings. But anyway, I want to close this discussion about the US because I want to leave the people that live with their illusions to live their illusions and to continue to enjoy it. And I see that at the same time, a lot of people in the world have a lot of freedom and gained a lot of freedom, and that they achieved a high level of prosperity from the depths of communism and socialism and threats by the US and continuous threats. And that will end probably not so well. But anyway, here we are. Well, all I can say is, I mean, this is such a big debate. I’d love to get the chance again to talk about that. Maybe I’ll prepare a little better next time. But thank you so much for coming on the show. I really appreciate it. And thanks for your frank opinion. This is awesome. Thank you so much. It was a wonderful conversation. Bye bye. Take care. Until next time. Bye bye. Take it easy.