The Exchanges

Q But the other things, like the overproduction of the economy, tightening interest rates, the war debt, Like, all of this stuff was just commingled, and nobody fully understands that. Can you maybe give folks a precise representation of the setup, the setup?

A So let's just go back, even let's go back to 1919, because actually I think that's a critical year. So prior to 19 19 in America, people did not really borrow money. It was like a moral sin to, to, to get credit, but people didn't do it. In 1919, General Motors says, you know what, we're gonna start lending people money so that you can buy a car. And that was actually like a major inflection point in America, because then Sears Roebuck clocks what's going on and says, okay, we're gonna do this too for appliances. And then a guy named Charlie Mitchell, who ran a bank called National City, which becomes Citigroup, says, you know what, we can do this for stocks. So we, you know, And, and all of a sudden brokerage houses are opening up, you know, on the corners of streets the way we see Starbucks today. It's like literally like that. And you could go into one of these places and you could put a buck down and they would literally loan you 10 dollars Off of your dollar. I mean, that's how insane things were. And at the time.

AI assessment note: “let's go back to 1919, because actually I think that's a critical year.”

Q And, and who, and who was everyone else? Were these Factory workers, because we're kind of on the heels of a big industrial build out. So like, was it the fact folks were, had savings for the first time? Like, where's this coming from?

A Well, so what's really happening is you have a lot of folks who are coming from the, from farms, frankly, and moving to the big cities for the first time. That's a huge part of what's happening. So most of the trading, I should say, is happening in the big cities. It's not happening, you know, out, out in small towns. It's happening in big cities for the most part. But, but that whole sort of scenario Once they're in the big city and they're seeing that there's sort of this wealthy group of people, talk about inequality, this wealthy group of people, and they want in on the action. And also, by the way, the people at the top, meaning the bankers and investors and entrepreneurs are like, we think there's this big opportunity to open this up for the little guy or the ordinary investor. We think this is like a huge opportunity. There's a guy named John Raskob, who's sort of like the Elon Musk of his era. Um, he actually ran General Motors, created the credit program there, then becomes Hugely wealthy. Then gets into politics, by the way, and to building the Empire State Building. But he was trying to create almost like the first mutual fund because he thought that people should be able to get in on the action the way he did. That was like his whole conceit, and he talked about it pretty openly. There was a famous article called, Everyone Ought to be Rich. Uh, that was his line. Ev…

AI assessment note: “you have a lot of folks who are coming from the, from farms, frankly”

Q And then something comes in and fills the void. Is that, is that kind of the mechanic?

A I think something fills the void and all of a sudden you now have the opportunity because this, The bank or the brokerage houses are going to lend you all this money, and it's not just radio being the communication device, it's really the media. So the other thing that was happening during this period, so Time Magazine starts in 1923, Forbes, 1917. All of a sudden, Charlie Mitchell, the CEOs, are now on the cover of magazines the way Babe Ruth and Charles Lindbergh had been on the cover. Sort of the shift in how people even thought about business. Uh, none of these guys were You know, famous before the 19 twenties, but they became famous and everybody wanted, everybody wanted to be them.

AI assessment note: “I think something fills the void and all of a sudden you now have the opportunity”

Q Andrew, as you look at markets today, just to come back to the modern era, I don't want to ask you the, the simple, like draw the parallels, but are, are we in, and I've heard you ask this question a lot lately, like, are we in a monetary bubble? Are we in an inflationary bubble? Are we in a speculative bubble? Are we in no bubble?

A So I'm assuming we're in some bubble and we just don't know when it's going to pop of some sort. And by the way, we don't know how big it's going to pop either. You don't, it doesn't have to be 1929. It could be 1999. It could be 2008. It could be smaller than that. I, I don't know. Do I think that there's leverage? I mean, you guys talk about this AI investment phenomenon that's taking place right now. And for the most part, the big corporations are spending real cash. So it's not, that's not leveraged, but you look at a lot of the Real estate plays, the energy plays that sort of on the periphery of this, there's a lot of leverage there. I think the credit, the private credit world, we don't really know where all the leverage lies right now. Now, I don't think that any of that is as leveraged as what we were talking about, this like 10 to one situation in 1929, or maybe, or even like the subprime situation in 2008. But I don't know, at some point you start to look at some of these, you know, like the NVIDIA open eye deal or the AMD deal. And there is a little bit of a circular kind of, Thing going on there, uh, for now. And I just don't know where, but that could be, we could still be years, we could still be years away from this. And by the way, it could work out on the other end.

AI assessment note: “So I'm assuming we're in some bubble and we just don't know when”

Q Do you buy into Ray Dalio's points of view that were at the end of an empire, end of a cycle?

A I hope we're not. I hope we're not. You, you, look, I think, I think you look at a lot of the things going on right now just with how much debt we have. I, I sort of look at the Neil Ferguson view of the world, which maybe lines up pretty directly with, uh, with Dahlia, which is that when you get, uh, you know, GDP, if you start to look at, like, defense spending as a percentage of GDP, there is this point at which, at least historically, you have, like, a real problem, um, and that sort of has set, It created the end of the empire. I think that happens in his view of the world in like 19, in two, 2040. So maybe there's still time to turn it around. I don't know what you, what about you?

AI assessment note: “I hope we're not. I hope we're not. You, you, look, I think”

Q Do you think it's a coincidence, Andrew, that now you're, you're publishing this book in 20, 25, but Like how does it feel like you're really similar to you? Like way too similar where you can almost map one to one those boundary conditions then in some version of that today? Like is that, is that what you feel?

A Like a little bit, but not, I will say that wasn't my intent. Like when I got involved in this, I just wanted to retell the story and figure out who these guys were. I, I ended up after that crazy vacation with my wife, I ended up going to the Baker library. I happened to be giving a speech at Harvard and I walk in there. And I had some time, and I asked the librarian, I said, can I see these boxes? There's a guy, Thomas Lamont, who ran JP Morgan at the time. And I said, can I look inside these boxes? And inside the boxes, his secretary is keeping transcripts of his phone calls with Hoover and Roosevelt. Like, by the way, same way, like everybody's probably talking to Trump or Trump today. And I'm like, oh my God, I haven't seen it. And you're seeing the conversation. And I thought, okay, if you could use those transcripts in an actual story, and then you could figure out, I didn't know if other transcripts existed for all the other characters.

AI assessment note: “Like a little bit, but not, I will say that wasn't my intent.”

Q gold at 4000 bucks an ounce. We're seeing the dollar basket trade down. I think one of the worst years we've ever seen this year. Uh, does that ultimately translate into a higher index on the stock market because the dollar is worth less? I mean, should, you know, could this actually be more of a monetary or fiscal kind of problem than it is a speculative kind of problem?

A Well, so you would think it would be, but then explain, so yes, I think like the traditional, the classic economists would say this, you know, these things should not be happening at the same time. Meaning look at the price of equities, look at the price of gold, look at the price of, you know, US treasuries right now. It doesn't, At least classically, it shouldn't, shouldn't line up the way it's lining up right now. So I, I just don't know. I would have thought that the investor class would have wanted to charge us a higher premium for our bonds these days for a whole bunch of reasons, but they don't. Uh, maybe that's just like life is relative and other countries are, you know, not doing as well. And so we're still the, the, the prettiest girl at the dance.

AI assessment note: “At least classically, it shouldn't, shouldn't line up the way it's lining up right now.”