world we do control the financial grid especially since 1971 and you know the fact is that we were very benign dictator as benign controllers in that grid for a very long time until people started having their own ideas about their own individual economic sovereignty and now we punish them it's hard for people to imagine how the dollar can be used as a weapon or weapon izing currency because the invisible and you take it for granted it's like fish in a fish bowl you know throwing a revolt against water right there like they are not even aware of the water they live in water that's surrounded by water they don't consider water their enemy why should they but we live in a world dominated by the u.s. dollar what brought home to me was a story recently in iraq where trump said you know we're going to freeze iraq's assets at the new york fed something like $30000000000.00 worth so no country is sovereign ball countries especially if they do any deals with energy whatsoever all energy is priced in dollars and all those dollars go to the new york fed so they have the ability to turn off or turn on your economy at the will and trump is using

that as a weapon of war that's an act of war so sanctions are an act of war and by cutting somebody off from the new york fed that's an act of war so so we're at war we want from currency war to trade war to hot war these are acts of war if you think of dropping a bomb on a village and killing people is an act of war then so is turning iraqi off from the new york fed we're at war with iraq in a huge huge powerful way right now but again kaiser report has been reporting on this for years we need to we point out the warning signs it takes years to finally happen and it hasn't happened like that it will eventually happen suddenly but it happens slowly at 1st we 1st told you about this in 2009 and we told you this would happen the economist magazine how many years later 010 years 11 years later is agreeing with us but it will eventually be very suddenly that suddenly the u.s. dollar is not the world's reserve currency what that looks like we don't know we. i

can only hypothesize and offer you know basically look at the past look at other empires f. on apart. it's also enabled this headline which is. boasting and lying at which i thought was quite remarkable president trump said quote for the 1st time in decades we're no longer simply concentrating wealth in the hands of the few obviously we've seen the cantillon effect in action we've seen stock markets for example soar since the fed began to reinterview in the markets with q.e. for q.e. forever as mark you sco calls it. the cantillon effect is the dollar this is what the dollar an all feel world has delivered the cantillon effect we have $2100.00 something billionaires owning as much as the rest of the world combined you know that that's a result of fiat's currency whilst a failure of statistics so trump will look at data in aggregate and he'll make

conclusions without looking at how the data was put together and some of other data points that might contradict what he says his conclusions are based on the data that he's looking at his thought that you know the walls concentration is diminishing at this point is of course contra factual it's incomplete discord with facts the walls confident concentration makes the robber baron era in america look tame by comparison it makes the concentration of wealth in ancient empires and look tame by comparison in victorian england we did not see this type of wealth concentration this is the most concentrated wealth ever in history ever even contemplated and so his cognitive dissonance in this regard is necessary for him to keep going on the path is because if he sat down and thought about what he was actually saying he would still would have a nervous breakdown. you know because he has to be he's fueled by his delusions as

well as people in finance are that's why we are at 300 to 400 percent debt to g.d.p. it takes a lot of cognitive dissonance to pile on 100 trillion children. $300.00 trillion dollars with a debt on a nonfunctioning global economy about to get wiped out by ecological holocaust but we have a fiance economy in the united states the financial eyes the conwy driven by the stock market like what mark east coast says about that in terms of the market driving the economy the market is the economy and we have as we said in the last episode we have general electric we have boeing this is the b 2 giant manufacturer and excellence in manufacturing you know with who employ thousands of people now they fired thousands of people over the years and turned it into a financial instrument to the benefit of one guy or you know a few executives what you could say silicon valley used to create great things but now you have just like mark zuckerberg jack dorsey you don't have huge bases of

employees creating like adding wealth to the economy turning raw goods into like amazing devices and manufacturing technology but on top of that you also have you know in terms of the economists saying the demise of the dollar that the dollar will be dead soon is you can see what we're doing to our own future not only have we hollowed out our manufacturing ability and our ability to innovate you see it with how we treat our young which is they are future and yet student loan debt is over $1.00 trillion dollars we've known that we've covered that but new information shows that hardly anyone is paying down their loans so they looked at this data that has been collected and we know there's been a tripling of debts since the financial crisis and terms of student loan debt but nobody is paying it down so they're like it's just. this pile of debt that

a strange feeling this future that they could never come on line they can never participate in this economy because they have this different than the plantation era in america where you had the company store slaves and they were forced to buy and sell their their tight 3rd stipend so that the company store they were never out of debt or. tenant farmers etc so we have a whole generation of slaves this is the new american slave class slavery was outlawed in the constitution i believe as a 13th amendment i could be wrong 26 a moment i don't know well unless we have slavery here in america has been reintroduced as legal slavery today is a little bit different than that i believe it's more like indentured servants there used to be many indentured servants in america what how like you would leave from europe your family your family i know for a fact that some germans left 17 hundreds and they had of borrow money to do it and they become indentured servants whereby they have to pay back all this money in

order to escape and actually build their own wealth they were tricks to make sure that you never got to pay it down this is like that in fact. tesla you know he also in space x. and he just proposed something similar is that you know when we go to mars it's going to be too expensive for ordinary people so we'll just give them a loan and that they'll pay it back by working and before like that's indentured servitude so yes this does prevent household formation and all the other stuff moody's says that only 3 percent is being paid down per year nobody is being taken be in and forced and taken from their home and thrown into the university and told that they have to work and pay this debt you know it's more of a thing like like what i'm saying back in the early 707 people were coming from europe to here they were sold a dream they go to america and that's where you'll make your wealth borrow this money and will get you there and you'll have to work for years and years to pay off this low. own but that's the sort of thing that you're seeing there but they are

being pushed off grid because the debt is non-recourse and once you're off grid you lose health care and you lose housing so now you're essentially homeless living in a ditch somewhere you know. well frontrunning is we'll be covering this and an episode and many of the candidates for the democratic nomination are talking about ways to get rid of this that and interestingly donald trump is also discussing the option of using a law whereby the executive himself the president can just wipe away this debt i think it was under eisenhower or did during world war 2 that this was introduced that they could wipe out those that in the stroke of a pen because all that debt is owed to they sort of how could have barack obama kind of wiped out the debt and to 38 but instead he wiped out the creditors day he saved wall street at the expense of the american economy trump can do the opposite he can bail out the debtors that spend the throughout history there's always been debt jubilees the debtors are bailed out not the creditors the creditors know what

they're getting into you don't bel out the guy who made the faulty loan a bailout the victim of a faulty loan certainly they are talking about that we'll see if that happens absent a buyout young people's debt to offer a new start the city of amsterdam is taking over the deaths of his young adults as part of a drive to liberate people who are struggling to get into work or education the growth in borrowing among young dutch adults a trend echoed elsewhere in europe including the u.k. is said to be standing in the way of them joining the marketplace or completing higher education courses again this is an idea that's spreading obviously as the boomers die off you know the debt jubilees used to happen when a new ruler came into power and realize that they had their economy was shrinking because of debts owed to the old power structure so if you're the new leader of these new world you know you don't want to pay off the debts of the boomers you want these new people to have a flourish and they are economy to boom right in france or it could be a parasite mera ferrous when they come into power they forget all parking tickets. ok about that all right we're going to take a break and when we come back much more coming your way.

during the great depression which i'm old enough to remember there was and most of my family were unemployed working class other wasn't it was bed you know much worse subjectively than today but there was an expectation that things were going to get better. of there was a real sense of hopefulness there isn't today today's america was shaped by the turn principles of concentration of wealth and power. reduced democracy attack solo doubt engineer elections manufacture consent and other principle holds according to no on chomsky one set of rules for the rich opposite.

that's what happens when you put her into the hands of a narrow sector of will switch will is dedicated to increasing power for chills just as you'd expect one of the most influential intellectuals of our time speaks about the modern civilization of america. join me every thursday on the alex salmond's show and i'll be speaking to guest of the world of politics small business i'm show business i'll see that. what politicians do something. they put themselves on the line and they get accepted or rejected. so when you want to be president. or somehow want to. have to go right to the press that's what the 43 of them all can't be good. i'm

interested always in the waters about how. this should. welcome back to the kaiser report i'm asking as are time to return to our conversation with mark hughes morgan creek capital in morgan creek capital digital welcome back thanks again for having me here it's great all right i love to pick your brain your veteran of the street as they say and got a lot of interesting insights into how the markets work in the economy works of course being a money manager you are all was concerned or focused on alpha you've got to you know generate returns for a investors and to this effect on this story you've been saying now for

a few years really the 1st in your industry that you can get alpha with bitcoin absolutely and that is i think the phrase you use is just get the one percent get off 0 get offers 00 write one percent be great 23 would be better but hash tag get off 0 and you've done some work where if you have even one percent of the institutional portfolio in bitcoin over the past 5 years you're out of your performance would be outperforming just about everybody was incredibly if you took one percent of all the endowments in foundations 5 years ago and 6700000000 out of 670000000000 to that one percent half percent from stocks absent from bonds instead of making 7.2 percent which is what they made they would've made $9220.00 basis points better too on $7.00 is a lot of alpha right but here's the thing had it gone to 0 which was a non-zero probability not non-zero had it going to 0 you would be 7 that's a 10 to one upside down side capture where the most asymmetric assets i've ever

seen in my career so the idea that 10 years from now we won't look back and say as a fiduciary of a pension funds are a well family office you had to have exposure to this asset is crazy so you have to get there generate alpha that's the name of the game and that people looking at you know would say this guy looks like a guy that i would see a group. bankers are money managers hotel at the plaza are some upscale joint talking about. stuff i was involved. but inside is this cypherpunk they even braced yes now i read a lot of other institutional players are starting to kick the tires on because i think very sober it's a grace greyscale in new york now they have their best year ever they added hundreds of billions of dollars millions of $100.00 billions in assets so they're

getting big now they're no longer a novelty they've got some great s.t.c. approval now they're registered they're trading so this this message on the institutional level is getting across so what what is it that what is it about bitcoin that your brother and in this industry don't get so many things so what do they not get so the 1st thing they don't get is that we're talking about a technology evolution they still think of it is some scam or some scheme as opposed to truly an evolution of technology i mean all big coin is is a use case an application of block chain technology ok to religion technology it's a beautiful use case and i think it will be one of the lift or use cases that last for decades and centuries but people don't understand that block chain is simply an operating system just like dos was an operating system or t.c.p. ip was an operating system or i was in the android operating systems so when we

have the internet of everything when everything's connected we're going to need these digital currencies these digital payment systems these digital payment rails and i think bitcoin will be the base layer just like we have the internet stack of protocols we have t.c.p. ip we have we have s.m.t.p. we have f.t.p. . dot the same thing's going to happen in blocks in technology and then because it will be at the base. level of that stack protocols so what i think my whether in don't get is that investing in technology investing in innovation has always been the path to long term out look at the best investors in the world they overweight innovation and health and get out of let's talk about let's like i say in the business when you're doing sell selling on the business you know there's a sight of knocking down the objections right so let's let's knock down one of the objections here which is that there are a lot of these crypto coins out there why is because better so let me start this off. right now if you look at the group of proof of your coins so much because one

is and these are they really only credible crit group in the in the segment because it is 83 percent of the mining rewards or let's call it the hatchery of all the competition power and that's growing yes the dominance is growing dramat dominance is growing so when you talk about these other coins particularly the counterfeit coins that have been in their name for centuries and they also plagiarize yet as well as right now. the bitcoin cash money managers. pure plagiarism that is awesome thank you thank you every week. that point right there peter schiff makes this point often that there are so many of these coins of course he's never looked at these in a serious way obviously because he lost his password any blames bitcoin that's like i lost my gold coin in my pocket so i'm blaming gold you're blaming gold right now let me know not me or yeah ok so that can you speak on that

a little bit you're the expert on this the whole idea of there can be unlimited competitors is just silly right 1st of all to your point proofer work is the only viable group and that's what crypto currencies are right you have a decentralized system you have hash rate you have miners you have a system that that takes blushing technology it has a use case to have this decentralized store of value or me. in exchange there's only about a dozen or so of those coins the rest of these other coins are tokens they're fine but really what they are is crowd sourced venture capital they're preceded stage and seed stays deals in technology that may or may not work down the thing about that 99 percent preceded stage deals go 0 so it should be no surprise that all of these tokens these utility tokens many of them go to 0 the ones that don't go to 0 could be 100 baggers or are more they could be fantastic and some of them may

emerge but they don't fit into the same category as a big coin or as a theory a more as dash from an arrow or where there's actual use cases so that's just a misunderstanding of the basic technology as i said earlier the problem is most people are missing this is technology it's not some thing it's not some ponzi scheme it's not some i'm taking your money to pay off stacy it's actually a technology that you can invest in and capitalism or a lot of people you know they equate this with the dot com era and the dot com era the protocol the web was established on top or applications actually in the bitcoin era the protocol is the application the protocol is the thing right i mean if you could have bought stock in equity participant or bought shares and the concept of email you pack. them to you if you own s.m.t.p. to be a very rich you would want to. definitely want to write so how is it going to have that opportunity here owning a piece of the protocol said honestly timorously invented the world wide web he

took t.c.p. ip which vint cerf and a bunch of others created 904 took until 1901 to write the 1st web page today we have billions of web pages but he wrote the 1st one so he invented the row web not al gore right so he's not a rich guy he does fund the harvard profs he's actually got a new because new botching start that could be interesting but he should be. really really wealthy but to your point the applications guys the zox setter became the really rich guys in the big coin era i think the protocols your point will make a lot of i think eventually d.m. apps indy 5 and other things will make money too but the protocols are going to the for those out there like ray dahlia or peter schiff for roubini or krigsman they can watch us up as and increase their knowledge about bitcoin by 10000 percent but they'd have to take time out to watch and here's the problem the haters they don't ever spend the time to really understand it charlie monger says it's like trading

in harvested dead baby brains they don't have charlie what you talking about but he spent no time on it because it's not in his interest to spend time because 47 percent of berkshire hathaway is in financial services which will be disrupted are being disrupted by these protocols and by the development cycle because it's your point made earlier in a previous up of the market is driving the economy not the other way around those who are successful the market become demagogues yes and so a charlie munger is seen as the voice of god oh yes in this economy in america anyway our religion is wall street we pay lip service to the other religions as long as their prosperity based look at the some of these other relations if they're now based on prosperity yes it's like buy more dow stock so there's they're being underwritten by wall street not him and the be underwritten by wall street but the requirement is that then you contribute back to the kleptocrats at the top

. hey i think we differ a little bit on one stock tesla oh ok you're thinking it's overblown and value yeah but look let me give you my point here quickly because you're comparing it to volkswagen 40 got to compare it to apple. great mosque sells cars like jobs sells hardware and phones and software back in the day apple compared tesla compared to apple's cheap compared a volkswagen it's expensive but that's not you know comparative all trying and i'm almost there and here we could talk about it more it's a car right i travel a lot i'm in the airport are do you i park my car next to this one tesla time it gathers more dust than data we have or phone or him all the time it's not like phones it's a car hard in fact you'd make cars and they have a low margin remember that people who are not so enthusiastic about the smartphone when it came out like why do i need all these additions i just have my phone i just

want to talk to my grandma what i do and all these apps i don't need all the stuff is crazy drives economy how much time you think i actually spend in my car yeah but once the car on the phone merge and you have your car is offering all kinds of services that are going to be our 4 percent of the time it sits idle without me in it ok 96 percent fair enough oh i don't want to spend time in that become people can go back and forth on this on line most will probably agree with you i wonder if i've got an issue up there with the economist magazine recently devoted an entire issue basically bashing the dollar they believe that the weaponization of the dollar through sanctions is going to kill it in other words when the u.s. gets involved in swift censoring the swift system and when they do sanctions and all of the it goes to the new york fed iraq all their oil thing business goes through the new york fed so the trump says we're going to shut down your business in new york fed iraq yeah right so now the world the saying we need an alternative to the dollar words that going we've been on this path for decades we've always

weaponized the dollar in the united states what's really interesting is if we said we were going to starve children people get really out of it happy about that because people would be involved if we said. they were going to say censor or sanction iran nobody thinks about that but people don't get food because they can't sell their oil to put food on the table so we're starving children as opposed to say shooting iraq soso iran being so branding but it's also really back to tesla. point taken but here's the thing. weaponize ing a currency can really only be done by the global reserve currency or reserve currency were reserve currency has historically been possessed by the country with the most powerful navy was portugal than spain than france than the u.k. than the united states china has figured out that the next war will be fought with chips not ships it'll be

a cyber war we're already seeing elements of that with iran hacking and things like that so are you seeing that as the way things are going to happen is they're going to win the race to the digital national currency additional room and b. that will displace the u.s. dollar hedge money and world reserve currency dominance and now nativity again partially by gold backed partially by go but ultimately be quite interest too so big question will be held by central banks it will establish a not the a world reserve currency status and it will be part of the system and you can't sanction a country if the alternative is they can transfer their bowl of ours or their you know whatever into because it's on confiscated income scale them in vegas for them confiscate will conference. i need to be there you know he's here young to be turkey out of there young turks in the glow he does most of the speaking engagements i get he's the younger better looking version of mark so don't be so

modest you're a good man but you're probably sure well thanks for being on the kaiser report thanks for having a great year with you all right not going to do it for this edition of the kaiser report with me max kaiser and stacy herbert like to thank our guest mark morgan creek capital if you want to reach us on twitter it's kaiser report until next time by elf. and i need another one of the highest democratic way to go through a food. bank itself mukti about. closing this way got $2.00 so hard not to think i'm a bit disappointed this move but the look of a power and i'm going to start then if. this is the only thing that we do is

music because everybody fights in his way. through our you can move the feet all found this bill frist woody allen you have all the ability to put the payment on the. what i think is this is the funds that is a constant. through . all my uncle the kids think compensate the boy tonight but a. simple proof that they can.

move on with said i didn't get showed up to move this because of i'm listening to the going to be a good show mr certainly must. not so much for speaking with my sons it is 872 plus a 1000000 years. i'm going to fulfill the repeated purposes of politics to the people and tom i think you know we've all pots be. pretty.

pretty there bertha now you want to 1st correct that. no. ball being cut. i can link up my yacht. with all of what might. be done to be on the. ground right now ok.

so it looks exactly like a capital city and yet it's here in the village on the outskirts of east jerusalem we visit an arab neighborhood crime to behind a concrete security barrier in east jerusalem time to ponder the possible future capital of a palestinian state. we're going to wave goodbye. something from the european parliament as british army peace with the last curtain call. good evening and welcome.