00:00There is the loss of confidence in the reserve currency, which drives people to see alternative storeholds of wealth.
00:10So, for example, when there's a debt issue, there are two ways of dealing with debt.
00:18There is hard money, you know, traditionally backed by gold. And when that happened, then there was breakdowns in that
00:29monetary system, devaluation.
00:31So, for example, classically, March 1933, Roosevelt, with the debt problem, was forced to go off the gold standard, printed
00:44a lot of money, devalued the dollar.
00:46And then it moved on. In 1971, we had the same. Nixon did the same thing, went off the gold
00:56standard and devalued and so on.
00:59And the creation of a lot of debt and money means that money goes someplace else.
01:05And it traditionally, both of those cases, it went into stocks, gold and other places.
01:11So money is always the holders of money, which are the holders of bonds.
01:16Bonds are a promise to receive money, a lot of money over a period of time.
01:23It's a very long money position. And when those become unattractive, such as now, let's say, you get zero interest
01:32rate or close to zero interest rate or even a negative interest rate.
01:35And there's a lot of creation of debt and a lot of printing of money that drives that into other
01:44assets.
01:45They may not be another currency if there's not a good currency.
01:49They may be stocks. They may be gold. And they may be another currency.
01:53But it is that kind of time that we're in.
01:57So next year and the year after, no matter what, we're going to have large deficits.
02:04We are going to produce a lot of debt.
02:06And we will monetize that debt. And that debt will have a negative real return.
02:11And therefore, people will borrow in it.
02:13We'll find it more advantageous to borrow in it than own it.
02:16And then they will move to other assets.
