RWH062: Bubble Warning w/ Jim Grant | We Study Billionaires - The Investor’s Podcast Network

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Hi, everyone.

I'm delighted to be back with you again on the RicherWiserHappier podcast.

Today's episode is an important, timely and extremely thought-provoking conversation with Jim Grant.

Jim, who's a cult figure in elite investment circles, is the renowned founder and editor of Grant's Interest Rate Observer, a biweekly publication.

These days it costs the best part of 2000 a year for a subscription, so it's not cheap, but it's widely recognized as an invaluable source of unconventional insights for sophisticated investors.

Nassim Taleb, who's not an easy man to impress, has written that Jim Grant thinks outside the box.

Please read him.

Listen to him.

David Swenson, who ran Yale University's endowment with huge success for decades, once remarked that Grant's interest rate observer is on the must-read list of every serious student of markets.

One reason for Jim's stellar reputation is that he draws deeply on his knowledge of financial history to issue early warnings about brewing storms that many investors fail to recognize until it's too late.

He's never been afraid to point out the wretched excesses of Wall Street, those moments when speculative fads get out of hand and when unscrupulous investment firms are selling dross that's dangerous to the financial health of careless or credulous investors.

In 1999, for example, at the height of the dot-com bubble, Jim warned that it was one of the most perilous periods in investment history and that America was dangling by a thread financially speaking.

A few years later, he was one of the mortgage securities that led to catastrophe in the global financial crisis of 2008-9.

In the years after the financial crisis, he presciently warned that the Federal Reserve's monetary policies would inevitably spark runaway inflation.

So what's Jim saying today?

Well, as you're about to hear, he argues quite forcefully that prudent investors would be wise to exercise considerable caution at the moment, given the heightened risks and speculative behavior that he's observing.

As Jim sees it at this point in October 2025, there are many unsettling symptoms of euphoria recklessness, folly and corruption in financial markets these days, all of which he sees as potential warning signs of what he calls a major market top.

Now, the reality is I have no idea if Jim's right, and he's not sure either.

After all, markets are inherently unpredictable, and it's also more or less impossible to get the timing right, even if you're smart enough or lucky enough to predict a major shift in market sentiment.

This reminds me of a discussion I had with Howard Marks in chapter three of my book Richer Wiser Happier.

Howard told me, I don't even think about the timing.

In the investment business, it's very hard to do the right thing, he said, and it's impossible to do the right thing at the right time.

That said, I think it's well worth listening when someone as shrewd and seasoned as Jim Grant warns that we should be treading with extra care.

At the very least, it's worth asking yourself if you're overexposed to risks that you can't afford to be taking.

As Howard Marks said to me, it's not about selling everything and suddenly going to cash.

It's more about preparing for an uncertain future.

For example, if you have too much debt or leverage, or if too much of your money is tied up in speculative assets that might be dangerously overvalued.

For battle-hardened survivors like Jim Manhoward.

I think one of the great lessons of financial history is that reckless excess and overconfidence is eventually punished.

So it's important not to get too carried away during outbreaks of what seem to be irrational exuberance.

On an entirely different note, I also wanted to take this opportunity to let you know that I'm launching a new Richer Wiser, Happier Masterclass on November 21st.

This is a chance to study directly with me over the course of a year as part of a very small group that's capped at a maximum of 20 people.

We'll meet once a month over Zoom and also at a couple of unique in-person events.

Last year, the Masterclass drew an incredibly accomplished group of 20 people from, I think, seven different countries, including some very successful hedge fund managers, wealth advisors, asset allocators, managers of single family offices, CEOs and entrepreneurs.

The people who've signed up for the new masterclass are equally impressive, and we only have a few spots left.

His email address is Kyle, that's K-Y-L-E, at theinvestorspodcast.com.

The masterclass is designed specifically for people who are serious investors and passionate learners, and who are really looking to build lives that are truly richer, wiser and happier.

So if that sounds like you, I'd love to hear from you and would be thrilled to have the opportunity to study with you over the coming year.

And now back to the show.

You're listening to the Richer Wiser Happier podcast, where your host, William Green, interviews the world's greatest investors and explores how to win in markets and life.

Hi, folks.

I'm absolutely thrilled to welcome back the great Jim Grant to the RicherWiser Happier podcast.

Jim, as you all know, is a brilliant financial historian and a wonderful writer and speaker, and also the editor of Grant's Interest Rate Observer, which he founded 42 or so years ago.

And it's a must-read publication for the most sophisticated and well-heeled professional investors, probably because it's so expensive, but also because it's so good.

Cheap at the price.

Exactly.

Every time I think about getting my subscription, you put up the price again and I blanch again.

But I'm finally going to stop.

That's the business plan.

It's very wise, but it's a wonderful publication.

For an aspirational subscriber, we have many of them.

Well, thank you so much for joining us again, Jim.

It's a real pleasure to see you.

Well, it's a delight to be here.

Thank you.

And well, as Charlie Munger would say, he said, well, it's a delight to be anywhere.

You know, he was just glad still to be around for as long as he was.

So anyway, I'm happy to be with you.

And I attended your wonderful annual fall conference yesterday.

I know.

I was so happy.

I was very pleased to see your familiar and shining and welcoming and purging face in the audience.

Oh, it was great.

For people who don't know, this is a very glamorous affair.

Plaza Hotel in New York City, and it attracts many of the smartest and wisest people in the investment world, not only as speakers, but actually as audience members.

And you said just before we started that you wanted to tell a story about something that came up at the end of the conference.

Tell us.

I have no idea what this is about.

I hope about the indiscreet.

What is journalism for? except indiscretion with me.

Exactly, yeah.

So this comes from David Rosenthal, who was a speaker at the conference.

And David was the number four hire at NVIDIA.

And how is that for a credential life?

He's an extraordinarily gifted computer scientist.

I can't imagine what computer science is not gifted in many departments of mental acuity.

But David is a standout, even in that formidable crowd.

Anyway, this story has to do with... a kind of reunion of founding employees of NVIDIA.

And I guess what's fair to me is that it takes place at an ethnic restaurant.

I'm not sure what city.

I can't remember.

I call it a Salvadorian cooking restaurant.

And there's big tables full of NVIDIA employees then and now.

And Chen Senguang, the story CEO, gets up and says, you know, I'm pretty good at fundraising.

And what I want you to do, ladies and gentlemen, is empty your wallets and give me your cash.

So they complied.

It's well, one might in the presence of my ex-CEO and one's colleague.

So I'm CEO Jetson.

Collects all this money.

And interestingly, for a Silicon Valley crowd, it's people carrying a lot of cash.

And so he has a big, big wad of bills.

And he walks over to the proprietor of this not four-star restaurant.

And he said we're here, know a little bit about how difficult the way to start a business.

I want you to take this delightful wow, isn't that something that's really nice?

Yeah.

Shouldn't we all do that once in our lives?

We should.

I mean for me.

The moment you mentioned David Rosenthal, what comes to mind to me is he gave a presentation that I think I only understood about one in five words because it was deeply technical.

But what did you make of it that he was?

He seemed to be dismantling the idea that Bitcoin was as safe. and private, as people imagine.

And he's obviously a very gifted computer scientist who has many patents.

And, as he put it, not only was he the fourth employee at NVIDIA, but actually, given that there were three co-founders, he was actually the first hire.

So this is a very smart guy.

And he was saying that basically, as I understand it, that once we get further along with quantum computing I think he said there about 20, 20 of the Bitcoins out there are sort of lost or unclaimed, that people have lost their keys or they're in trash piles or whatever, and that a quantum computer might be able to actually relatively quickly figure out how to claim for oneself that missing crypto.

What did you make of that?

This is way above my pay grade.

That's exactly the message, I think.

As you say, it was deeply technical, certainly over my head in many places.

But he was...

He was attacking the pretensions, the technologically sophisticated who contended in death that Bitcoin was useful and safe and somehow inured from infiltration by the likes of the Kabane.

Quater computers.

He seems to try to explode that.

Check out the region.

And I think there's a link to this on his blog, which I'll try to remember to include on the show notes for this episode so that people can actually track this down.

Something much more accessible.

I bet this is up on our blog.

I don't know.

There's a talk that David Rosenthal gave to a class at Stanford University in electrical engineering in 2021.

He was filling in for a professor.

It's the most elusive attack on Facebook.

I read it.

I thought to myself, why isn't this fraud trading at zero?

It did not go to zero.

So maybe people know something that even David doesn't know about the coin.

But I thought he made a very good set of close arguments.

He winds up and says rarely, if ever, in the annals of technology have the champions of breakthrough technology gone to such pains to not use it.

So he was questioning the utility of it.

You kind of had to be there for that one.

And not only did you have to be there, you had to understand much more of the technical issues that I do.

But in your summary, it was most amazing.

This is a very familiar feeling to me in the financial and technology world that I'm with people who are much smarter than I am.

And I sort of I'm picking up crumbs as they fall from the table.

I don't think smart is I think smart.

I think familiar or trained or something, but no doubt every field has its vocabulary.

We are all humbled in the presence of astronomers, for example.

While we're at it, we should close this subject of cryptocurrencies, because this wasn't in any way where I was intending to go at the start of our conversation.

But since we're here, I'll ride this horse that we're on.

You spoke at the conference of the pretense of things that are not money posing as such.

And it's fair to say if people listen to our last interview on podcast three years ago, we talked about crypto in some depth.

And Bitcoin now, I think, is around $116,000 per coin as we speak, despite a recent sell-off.

You've written quite a lot about crypto.

As you call it, a crypto besotted Wall Street.

That's driven up valuations so that there's now, I think, more than 4 trillion in aggregate value of all cryptocurrencies.

And I read on Bloomberg the other day that Bitcoin ETFs now manage more than 142 billion and that even Vanguard is now weighing the possibility of allowing its 50 million or so clients to trade crypto ETFs, whether it's Bitcoin or Ether or whatever.

And Jack Bogle, the founder of Vanguard, had famously warned investors to avoid Bitcoin like the plague.

I'm just wondering what you make of what we're seeing here.

Is this just standard top-of-the-cycle recklessness and folly?

You've been following this world of finance for quite a long time.

When you look at this phenomenon, what does it mean?

Well, one is forever humbled by the ways and wiles of the market.

You know, I still don't understand what people see in it.

Maybe this is a divide of some kind of limbic system divide that people say, oh, yes, bitcoins.

I want some of that.

For the price of a house, what is it?

Can you see it?

No, no.

What's it?

Now, what are you going to use it for?

Well, it's going to appreciate.

No, I see.

What's its functionality?

Well, I'm not so sure about that, Brian.

It has done well, hasn't it?

Yeah.

So I'm no longer on certain cable TV stations that I used to be on.

I humor myself, right?

I try to what?

I try to comfort myself by saying it's not age.

It's not the over-familiarity with the arguments that fall from my lips.

No, it is my anti-MAGA Republican, you know, country-flag Republican mind and grants.

And it is also the last words that I spoke on this particular cable channel when asked about Bitcoin.

I said, the most efficient price is zero.

And my God, this administration is all in on crypto.

I said...

It's the scamiest thing the connection between Bitcoin and the Bitcoin promoters and the president and his family and these coins.

And it began before his inauguration.

He had issued this Trump coin and it was kind of a rug pull thing and lost a lot of money.

I think it's shocking and contemptible.

But these cryptos are being heavily promoted by the administration, both overtly and indirectly, by the regulatory approach it has taken for them.

As to Wall Street no, it's a monkey.

See monkey do, especially when that monkey is moving upward and to the right of a stock chart.

And, you know, Bitcoin's genesis was in... which is a pseudonymous, pseudonymous, right?

Yeah.

Yes.

So then you can go and procure, you know, whatever you wanted to, whether it was drugs or surface-to-air missiles or something a little bit more.

Or yes, if you were living in a benighted country that didn't allow you to take money out, you could take your money out through Bitcoin.

But in any case, it was off the grid and outside the pale of conventional Wall Street.

Now, look, Vanguard, for Pete's sake, you know, it's right down the middle of the fairway.

So in the establishment, which could not abide it, could be stacked.

Oh, God.

Yeah, Bitcoin, it's a thing.

Let's start the next ETF show.

So I still think the most efficient price of Bitcoin is zero.

Well, that's good.

So now that we've very efficiently offended half our audience in the first 10 minutes, either politically or financially, we can be much better.

Let's get the other half.

So by the time we come around to talking about your book in an hour or so, nobody will be left except for my mother.

Well, they should buy the book.

They should buy the book, right?

I bought the book and I very much enjoyed it.

Although I have to say it's 400 and something pages long and I'm about 20 pages from the end.

So I'm ashamed that I didn't quite finish it last night.

I'm not going to tell you how I wound up.

Did it all end happily?

So like most of history.

So anyway, we'll get to the book later.

I found yesterday at the conference, your conference.

It was a fascinating day and also a slightly unsettling day.

And what struck me, I think, was the divergence between the current mood of euphoria in the markets and the acute skepticism and wariness in the room among your speakers, who are a savvy, battle-hardened bunch.

And so, for example, there was a credit investor named Victor Kozler, who manages something like 22 billion, who said markets are very bubbly and there are lots of problems under the surface.

So, for example, he said there are entire areas of private equity that are in deep trouble and lots of companies within private equity that are defaulting on their debt and going bankrupt.

Can you give us a sense, for people who weren't at the conference, of the mood there and what it reflects about the financial environment today?

Because Yeah, I'll be happy to do that.

First of all, you have to, for the listeners, you have to understand that this is.

You know it was a self-selected group of people and grants made its living while it was only two volumes and some.

But yet you know we're we're we're yes, but people on gee whiz world are, are.

People say we're always bearish.

That's not actually true, but we're almost invariably skeptical.

Doubting Thomasism, this is a market of predulity and skepticism.

Yeah, conformity, actually.

You know, people, nothing succeeds like success anywhere, but especially at Wall Street.

People.

I think it was George Soros himself said that when you see a bubble, just jump on it.

Get there early.

And, you know, you will get it in time.

No, just I'll tell you when you'll know.

But there are so many ways to make money on Wall Street.

I happen to have cultivated a following that is innately skeptical.

And so there's some fear of that line and link.

People walk out of these conferences, oh, my God, what can I get tomorrow morning?

Yeah, I felt I should go in fetal position in the bathroom at lunchtime.

It's a good, fair mix of people.

For example, even within credit organizations.

And you've mentioned, you know, Victor Koestler.

And there was a guy named Jonathan Lewinson, a diameter and capital manager, who rather said well, things aren't so bad.

Look at this.

Those things are much better than you'd think by looking at a few soft spots.

So there was always disagreement, and John Hughes talked about investing in great companies and not selling.

It's a fair... That speaks to the...

There's a variety of ways in which people of different sensibilities and different intellectual terms or different terms of mind can find a place under the big tent of investing.

It's kind of nice in that way, isn't it?

Yeah.

And we had an innate copicar.

We had the pure specimen of the bear.

And to me, it's a very fetching buy in the set.

He was a perfect example of an avatar of the sell first, buy later approach to securities trading and investment.

He exhibited the rueful humor of someone who was prepared to be wrong about 90% of the time. in anticipation of being magnificently and all by himself, magnificently right, six or eight or ten percent of the time.

Yeah, he said something lovely about how you asked him impertinently, in the way that only a journalist can.

Why do you do this?

You know, sort of an existential question about being a short seller.

When you're right, it's so delicious.

It just made me think.

You know, I mean some people really, they're so smart and they make life very, very difficult for themselves by picking a particularly hard way to play the game of investing.

Yeah, he's chosen the highest degree of difficulty.

And there aren't many left.

I mean, these markets run over the skeptical mind.

He said, have you read the documents?

What's the valuation?

It's going up.

That's the valuation.

So yeah, Nate has said his talk had to do with private equity and with AI and all the privates, private credit.

You think you'd be a sergeant when you start a corporate.

No, it's all privates.

And he pointed out it was a magnificent tour de force, a tour of the horizon of what's wrong in finance, having to do with the structure of things, with the underlying fragility of debt and with the consequences of all those years of suppressed rates of interest which, of course, interests me.

I'm still sore that interest rates were not a thing for so many years.

The publication is called Grant's Interest Rate Observer.

If you can't see them...

It's not good for business.

So I'm still nursing a grudge against the Fed for that.

But now you have your 15 minutes.

So all is well for you and Nate.

He also pointed out I mean I think it was in his talk one of the most striking things that was a recurring theme that I think is relevant to a fair number of our listeners is that we should be deeply skeptical of the world of private equity as they try to democratize it.

And I think it was Nate Kovacar said that in finance, whenever you hear the word democratizing, hide your wallet.

And he said, it's like Chanel marketing itself to Walmart.

Can you talk about that?

Because that seems like a really beautiful example of sort of This ebullient time where Wall Street is dreaming up new and better ways to separate us from our money.

Well, the hypocrisy is delicious, as Nate to foot it knows.

The private equity people at first did everything.

Their shoes were bespoke.

Their suits, magnificent.

Their membership's extensive.

They would deal with the institutional world and not all of that.

And lo and behold, Interest rates did not remain at or near zero after 2021.

And the valuations that were acceptable in regime of like nothing.

Interest rates suddenly became very precarious.

Indeed, those valuations went away at a time when the race began to normalize.

So these companies, these private equity companies of 20-something thousand people, were capitalized for prosperity and were meaningfully capitalized for a regime of very, very easy money.

So suddenly, instead of paying, let's say, 3 interest on their debt, they were now paying 8 or 10 or 12.

It's a difference.

And so what to do?

Well, the investors, they're not just... well-to-do endowments.

Well, the endowments were among the elite institutions to which the private equity people sold.

So they would go around to mimicking the famous Yale University model of Yeah.

David Swenson.

Yeah.

David, uh and uh and uh to these uh uh Dallas colleges.

What have you and uh saying?

You know um, Yale did this and what it did was to carve out a very big niche in its portfolio for venture capital and private equity.

And you won't be susceptible to adverse marks that reflect the unreasoned volatility of public markets.

Rather, the The marks that we give you are virtually correct.

And marks, meaning mark to mark it or not.

So, not.

Not marks as in the sense of a Ponzi scheme where you've identified marks.

Yes, yes.

I did ask Nate about Ponzi schemes and he said that the term seemed a little bit, seemed unnecessarily brutal for us.

Yeah. sophisticated audit.

So private equity sold overwhelmingly to such institutions.

And now such institutions having budgeted for return of their capital or finding that it's not being returned?

Nor are the dividends or the interim payments they'd expected quite up to snuff.

So they are being pressed by their But the presidents of colleges, the Elie Massenary Institution Museum, which we had to.

Where exactly is the money we need for the draw this year?

Draw on the endowment funds.

And they're hard pressed to count the money.

So some of them are turning to the secondary market for shares in these private equity companies.

And they're getting peeled off and sold like you sell a used car.

And it's not what the buyers originally counted on.

So private equity, I think that Nate demonstrated, is in trouble.

And it's in trouble because it has neglected to honestly value its assets as interest rates began and now it's stuck with assets that are being carried at unreasonably high prices.

And the assets are not returning the cash that the investors need.

So what to do?

So they really go, I know.

Well, the dear public.

Oh, the dear public.

So I took a long time to get to this.

So this is where democratization comes in.

Shouldn't the little guy have a piece of this marvelous asset class, private credit, private equity?

Credit, by the way, is a word that has none of the overtones of debt.

It's kind of the same thing, private debt. meaning not publicly traded, so not publicly marketed.

And you can see it in the in the unwavering line of capital appreciation, because these funds and these assets are delivered to investors supposedly.

Anyways, they market it to the public as a safe and non-ulcer-inducing alternatives to sometimes tumultuous public markets.

And Nate correctly says, I think that this is not a sign of the benevolence of the promoters, but rather a sign of their increasing desperation.

I think it was also interesting that he said that they have this reputation for being super sophisticated.

And obviously, in some cases, they really are super sophisticated.

But he said, when you look at the record of many private equity firms, they've shown, as he put it, maximum aggression at periods of maximum risk.

And so he said, really they have a tremendous record of momentum chasing.

And so for me it was kind of a reminder that often we fall for the illusion that the smart money is incredibly smart and way smarter than us and is going to protect us from turmoil that can come.

Yes well um, in the audience was my friend emmanuel dermot.

Emmanuel dermot is a bell labs caliber physicist who made a career change to wall street and became a renowned practitioner of a quantitative uh fast.

He called them quants, of course.

And he worked at Goldman Sachs for a time and other such high-ranked institutions and Wall Street rate tables.

And he You wrote a book called My Life as a Quad, a great memoir.

Never mind my book by David Emanuel Derman's book I think it was published in 2003 or 2004.

My Life as a Quad.

Anyway, at one point...

Emmanuel harks back to the long-term capital management affair in 1997, I think, 1998, 1997.

It was the now fable, then frightening collapse of China, of a hedge fund that was run literally by Nobel laureates.

So in his memoir Emanuel Dershowitz, he was on a call with other Goldman Sachs people talking with the principals after the, After the blow occurred, and he said he was startled and deeply impressed by the depth of sophistication on the part of these so-called failed authors.

Luchel, Europe's long-term capital manager.

And they knew much more and asked much better questions about valuation and the composition of the assets and the hedge technique than did the Goldman Sachs traders who were trying to value this stuff.

And Emmanuel takes away from this that You know, sheer metal power, sheer metal acuity is not invariably the road directions you have.

It's not necessarily the equipment that gets you where you want to go.

I don't think he used the word humbling because he was...

But it gave him pause for thought.

A lot of times, I think a lot of times on Wall Street, that simple common sense.

You know I don't get it.

Tell me again.

So you're telling me that you put all these sub-investment-grade mortgage tranches together, slapping together?

And at once, that's a 40th percentile of the staff have been transmogrified into AAA securities.

Is that where I'm... Can you...

Again, this time more slowly.

You've written a lot about artificial intelligence in grants.

Obviously, this is one of the things that's been driving the euphoria in the market.

And you've talked about the insatiable enthusiasm for anything related to AI.

And I was looking at one of the the daily newsletters that you send out from grants the other day.

Almost daily grants.

Yeah.

And it was talking about how Amazon Microsoft Alphabet Google Meta, Oracle and Corweave will splash out 382 billion in capital expenditures this year.

By Citigroup's count up, more than 50 from 2024 and triple that seen in 2023.

And you said that the Magnificent Seven now accounts for 31 of the SP 500's total capital spending, up from 19 at the end of 2019.

And you point out that there are these firms like OpenAI and Anthropic that have raised billions of dollars every few months and are now valued at hundreds of billions.

And so you wrote this piece in July about the check writing contest within the world of AI, where everyone is basically racing to invest as much as quickly as possible.

And I just was wondering, As a battle-hardened investor, an observer of craziness as you are When you look at this excitement, how reminiscent is it of previous booms, whether it's the railroad bubble that ended in disaster in 1873 or the dot-com bubble that ended in disaster in 2001, or is this really different this time?

Can you put in... in some context, what we're seeing here?

I think what we are seeing is the promise of a marvelous technology with human characteristics.

And those human characteristics happen to have to do with falling out of line and doing what others do.

And if possible, doing more of it higher, faster, and louder.

And this reminds me a lot of the fiber optics contest.

Act writing contest of the late 1990s.

How much of the stuff you put in the ground isn't demand for?

Well, there will be.

They will be.

Or the, as you say, late 1800s railroad building contests, as it were, the Czech writing contest to the Jaguar track, parallel track to your competitor, but still the contest is worth it.

We'll beat that.

So there's a lot of redundant capital investment then.

And these things end invariably with a panic and a crash.

I think that's the model for now.

Another point that David made.

David Rosenthal made this problem with the capital investment model may not be so much in its size, but rather in the demonstrated fact so far that people are not willing to pay for the product of that investment.

So, with extraordinary sums being laid out for Data centers, these buildings that are, in case I think Mattis keep building something the size of Manhattan Island.

Well and good, except are you going to get paid for it?

Little people.

College students go away in the late spring and they'll come back into a fall, and when they go away, the demand for AI goes way down, because who else has such a deeply persistent need for plagiarism?

They have to plagiarize papers to get through the year.

So the demand for AI falls off markedly and measurably come the springtime.

So I hear myself saying, I'm kind of saying, I get a horse in 1903.

It's cars.

They stink.

Look at the tires blow up all the time.

Steamboats explode and kill hundreds every fiscal quarter in 1840s.

But you know, I'm not even talking so much about the technology as the very human response to great technologies and the promise thereof.

And don't forget, this is still a promise.

And I think the question, what comes next?

Is it the realization of the promise with the payday, or is it the crash that precedes The realization and the payday.

I perfectly understand that stuff is going to do wonders for somebody.

But for the time being, people seem not to be willing to pay for what the producers of these large language marvels are laying out to achieve them and to compete in others achieving them.

So I'm all in on the comparisons to the bus of yesteryear.

I think that's the model for now.

Let's take a quick break and hear from today's sponsors.

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All right, back to the show.

There was a lovely quote that I don't know if I had heard before that.

Your friend Pierre Lassonde, who's a very successful gold bug, quoted from Voltaire, where he said history never repeats itself.

Man always does.

And I thought that was quite revealing about what happens with these deals, right?

Like the tendency at certain times in cycles for people to get carried away.

And you had someone, I think at your other conference, the credit conference earlier in the year, who was saying exactly the same sort of thing, that basically, At times like this, there's just this sort of fear of missing out.

I think it was Michael Gatto, who's head of direct lending at Silverpoint Capital.

He said, when there's a lot of capital and the emotion is greed and there's fear of missing out, bad deals get done.

Similarly, when there is a lack of capital and the emotion is fear, great deals get done.

I think this is one of those areas where It's not like we can say what's going to happen with AI and all of this spending, but there's a sort of familiarity to the pattern of human behavior here.

Is that fair to say?

I think, yes, I think it is.

When Pierre said...

History doesn't repeat.

He's not going to say, but it rhymes.

Don't say that.

Not again.

So Pierre had Voltaire's twist on this.

I guess, no, maybe Mark Twain had the twist on.

Maybe Mark Twain never said it.

I don't know.

I suspect Voltaire didn't say it either.

Whenever you are writing a book, you look back and you check the origin of these quotes and you discover, very inconveniently, that nobody said what we claim they said.

He should have said it.

Yes.

If Voltaire had been smarter, this is what he would have said.

And more cynical.

Exactly.

It's impossible.

Exactly.

So...

So, assuming that AI has been driving a lot of the euphoria in the current US stock market, there is ample reason to be a little wary of what we're seeing in the US market.

And you've reported recently in your newsletter.

40 times its cyclically adjusted price to earnings ratio.

And back in the fall of 2021, it was at 38.6 times.

And you said that that means it's the richest reading in history after the dot-com bubble, when it was 442 back in 1999.

Can you put it in context when you look at the market at the moment, when you look at US stocks?

You know this isn't a prediction of what we think is going to happen, but can you give us a sense of why it's wiser to proceed with caution than with our foot, you know, as heavily on the gas pedal as possible?

Yeah, well, you know, it's everyone has to be in.

And evaluations show that.

But apropos, there are many ways to make money.

We heard from John Humes, who is a renowned compounder of capital.

So we concentrate portfolio on capital companies that embody the versions he thinks are that dispositively define a great investment with barriers to entry and with capital allocation and with management quality and the like, and He holds them through thick and thin and he's done marvelously through all manner of thins right.

And that's about a broad buffets counselors too.

I think it's entirely prudent not to pay attention to what I am now saying or talking about.

These macro things come and go.

If long-term America's great, it's going to be great.

But say you, hypothetically, you're a gentleman of a certain age.

And you own a lot of stocks and you might want to pay a little bit more attention to the signs of excess.

And they are at every hand.

Every hand.

Valuation sentiment, the incidence of unmistakable corrupt promotion, the swaggering of newly empowered through wealth people who know only one thing, which is that markets only go up.

And it's all here, the whole theater of a Now, because the major financial markets top is on the stage, the theater is open and the pageant of top making scenery and actors and script, all that is in play.

Now, the question of timing.

Does it have to end now?

No.

Does it have to end in two years?

No, it does not.

But then it will.

There are a lot of legends of people who got out in timing 1929.

I wrote a book about one of them, bernard and luke uh, who's a great specter.

He's a subject of my first book, way back when i'd be like 40, 40 more, and uh uh, the war of the legends come down to the years that were sold on the e of the crash in 1929.

Nope, he did not and i had the stock market.

I had the his records to prove it.

But what he did do was take the measure of things in 1930 and get out salvaging I forgot now like 60 or 70 of its capital in a cycle that would denude the buy and hold investor by up to 95 or so of its capital.

And that took 20 years to wear off.

That cycle's down.

It's high in 1929.

We captured its high in 1954.

To put that in context, that was the year the Giants were in the World Series.

It was a most extraordinary event.

Now, it was dividends or counted that market came back before then.

If you just look at the Dow, it was 20, I guess that's 25 years, right?

25, 19, 29, 1954.

And my mentor and boss at Barron's, Robert M Blyberg, was a kid, he was a depression child and he had quite vivid memories of the crash and its aftermath and was very, very cautious in 1954.

What he did not say in 1954 was oh, there was a great marketsman, very good instincts, and I went back and read his stuff in 1954.

What he did not say was we are on the eve of one of the greatest eras of American prosperity and investment success that you won't be able to believe.

It's all in front of us.

There will be bumps in the road, but consider that, put away those memories of the bad old days.

They are not humane.

So, but yes, I think that this is a major topic in formation.

I'm with Nate Copicar.

I'm with others.

I'm with myself.

I don't need anybody else to help me along with this.

But Nate did such a good job in exposing the underside of things with credit and private markets.

So it will come unstuck.

And you'll have me on the show, William.

And I am not going to gloat at all.

You know why?

Because I have been around the block.

And the important thing is to recall at moments like those we're able to expect in solace, is that just recall how full of beans you were, and they'd run up to the moment of crowning success.

Just remember that.

It's a very difficult game, right?

I was listening to an interview that david tepper who i've never interviewed before, but he's obviously very smart, very successful guy he had done on cnbc, when he said we're having a really good year and i'm so miserable because i still own the market and i can't stand that.

I own the market But he said I'm not ever fighting this Fed with all these expectations of interest rate cuts coming before the end of the year.

And he said, you've got to stay for some of the party because the punch bowl is still there.

They haven't taken it away yet.

So how do you... It's an approach.

He is a consummate successful speculator.

I remember watching him on CNBC and...

2010.

Bernard Ben S Bernard PhD wrote a piece in the Washington Post saying we are going to institute QE and this will infuse the net worths of the people who have equities and America will be growing again because the stock market will be rising again.

That was essentially the argument.

I remember David Tempore.

I remember he was sitting on the set of the CBC.

It was a chair.

He was going like this and nervous and going back and forth like this.

And he was exactly explaining how this was going to happen.

And it happened exactly as he said it would.

And so, you know, he's someone to pay attention to.

I think if he were listening to it he'd probably say I'm miserable because I know full well all the odds are against much more of this except.

He's also in the business of not getting off the train prematurely.

That's FOMO, because he's rather too sophisticated for that.

Although I dare say, as a human being, he's not immune entirely from it.

But he knows also that things go on so much longer than you would think they would.

Or if you're a moralist, you should.

You happen to be a moralist.

You should.

So he is getting on the shed, as I often bet against the Fed.

I can't stand this attitude.

Don't fight the Fed.

I've made my life throwing left hard jabs and left hooks to the Fed and occasional overhang right at the Fed.

And they never hit back except sometimes I feel the blow.

Yeah.

People will be shocked if I don't ask you very briefly about the Fed.

We talked at great length about it last time on the podcast and your lack of tremendous enthusiasm for the way the Fed is run.

But if you could just give us a sense of how you expect the Fed to handle what's really a very challenging economic situation at a really important juncture with, I think, Chairman Jay Powell's term expires in May 2026.

And you interviewed Kevin Walsh yesterday, who served on the Board of Governors of the Fed until 2011 and who a lot of people are saying could be Jay Powell's replacement.

Obviously, there are a lot of demands for the Fed to lower interest rates and the like.

And When you look at this institution and its position at this very interesting juncture, what do you see?

What should we be thinking about?

I think we ought to be looking at administration's attempt to to conquer it, to subjugate it and to institute its own regime of ultra-low interest rates at the Fed.

Having conquered it, I think.

Stephen I. Moran is the advanced praetorian guard of MAGA of the Fed.

He came under question by Elizabeth Warren on the Senate Banking Committee, who will bring his fitness forward about a unique position of chairman of the Council of Economic Advisers and governor of the Federal Reserve Board.

She said to him, tell me, Mr. Wood, did Donald Trump lose the 2020 election?

He answered, the Senate confirmed Joe Biden as the winner of the election.

We know that, Mr. Wood.

Did Donald Trump lose the election?

The Senate confirmed the AISA.

So it's the robotic response to me is a little bit concerning.

You know, the people around Trump are saying, Mr. President.

You had your golf cart-sized bottom kicked in 2020.

May we please move on?

I dare say no one at all is saying that to him now.

But they also say Mr Morantone, the Bureau of Labor Statistics, did they fake these numbers to make the president look bad?

The quality of the federal economic data has been declining for some, yes, yes, yes.

Did they intentionally, the quality of that, like that?

So it would not be a shock to me that the precedents we use on interest rates, which everyone knows, the more the better in 2000, whatever it was 2013, this late teens.

His line was well, the Swiss have negative and the Japanese have negative anomalies.

Why can't we have negative?

Why are we paying anything?

What's wrong with less than zero?

He still thinks that.

And so...

If he manages to bring his own people in for Bay, I think we can look for much lower money market interest rates and a much weaker dollar market. and a much steeper yield curve, meaning that longer-dated interest rates, longer-term yields, bonds, mortgages will be much higher than short-dated money market instruments like T-bills.

So I think that what MAGA believes, well, you might be right.

I gave up certitude a long time ago, but it may not sound like that.

But there is great hope for AI, great hope for transformation of American productivity.

Not after the crash that has typically occurred with excess exuberance and investment, but before.

So next year, year after?

No, there's going to be a crash first and you'll be sorry.

You ever heard the phrase AI?

That's how sorry a badass can be.

Yeah, that's fine.

But there's hopes for a productivity revolution such that this country should handle much lower interest rates, much more dynamic, as they use the word credit market, where people can access the credit market and find affordable mortgages.

The housing market's going to take up after this long.

Some people can't afford to move.

That'll change.

They paint a wonderful picture of what life might be like after the president finds his people and blasts them at the Fed.

And as Donald Trump himself often says, we'll see.

Or we'll know more in four years.

So while we're busy worrying everyone that we haven't already alienated...

Let's talk about government debt, which also was a major recurring theme at the conference yesterday.

Pierre Lassonde, the gold investor we mentioned before, pointed out that the world is drowning in debt, as he put it.

And he talked about the fact that there's this overstretched fiscal situation not only in the US, but China, the UK, France and elsewhere.

And he had some amazing statistics.

He said that the total global debt has risen from $16 trillion in 1980 to $314 trillion. in 2024.

And likewise he said that US federal debt has risen from 1 trillion in 1980 to 37 trillion in 2024.

You've also pointed out in grants.

You said nothing puts the fiat money era in starker relief than the fact that it took the US 222 years to borrow what the efforts of Presidents Biden and Trump achieved in not quite eight years.

I mean, we can be equal opportunity in blaming different parties for the history of recklessness.

Give us a very practical economics lesson for people like me who don't understand this stuff.

You've argued for a while that the fiscal deficit's unsustainable.

Can you give us a sense of What's causing the problem?

What's likely to happen?

And, most important perhaps, what the implications are for long-term investors like our listeners and viewers here.

Let's take the contrary argument first, which I have to deal with.

Very few people think about it.

There was a time when the contrary argument was upper in the minds, uppermost minds.

And that argument held basically that, yes, debt is a thing.

But so is the income that the debt produces.

And for every debtor who may be worried about overindulgence, there is a creditor who is more than happy to buy those ions.

And in the case of a country such as the United States, whose currency is sought after and accepted worldwide.

There's no limit to what you can borrow.

And that particular line of reasoning has held up to this function left in this very moment.

I mean so recently speaking, the government I guess is still shut down, was supposed to be shut down.

But, you know, the world hasn't ended.

The world still seems kind of cocaine with our shenanigans and our debt, and that's because of it.

They, like the dollar, established the world's reserve currency, meaning the currency that enjoys the Coca-Cola brand quality brand name, and people accept it as good money, even though they weren't sure what was behind it.

Was it just the promise of the government or is it something?

Okay.

So that's the argument against concern, against anxiety and worry, right?

So the argument for concern is that King, the burden of interest and the weight of issuance will exhaust even the friends of this country and the friends of its dollars.

I'm also a friend of both domestic and foreign.

And you have seen signs of this already.

You've seen in 2019 and 20, saw little bubbly anti-bubble eruptions concerning...

The market's willingness to accept.

What you saw in 2019 and 20 was discontinuity in the supposed deepest of all world security markets.

2019, it concerned the money market, short-ended money market, short-ended interest rates.

Because suddenly there was a crisis about the funding market for our debt, meaning access to short-dated loans with which to buy bonds.

That was in the fall of 2019.

And in 2020...

There was a fright scare in around March and April concerning the world's tolerance for buying more of our longer-dated securities, like the 10-year and 20- and the 30-year bonds.

And that happened to deal with the pandemic and with the Treasury's evident plans to borrow a lot of money.

And the Fed's expressed intention to buy a lot of bonds with money that didn't exist until it was ready to print it.

So those were kind of amber lights.

So the question really is what is the ultimate demand for US securities at these rates of interest?

Another question, are they marketable at any rate?

So if the United States today was going to sell treasuries, a 10-year note, not at 4-something, not at 418 41, but rather at 10 wow, that would be a little bit of all right right, or 12?

But consider the, also, this is not isolated to the sovereign debt.

Consider also the private debts that have been accumulated.

And to be sure, private bonds that are received the interest on those debts, right?

There's a two-sided argument, pro and con.

But the US economy, as resilient as it famously is, has been rendered much less so rather vulnerable by the years of near 0 interest rates that precipitated and encouraged the deal-making in private equity and elsewhere, these aforementioned 20-odd thousand, more than 20000 companies that are now trying to find their footing at a time of interest rates they can't quite handle.

So what happens if the world loses its taste for American securities owing to the shambolic nature of the administration, if I may so characterize it?

And If a freshman, for example, comes back at unscripted fellowship and the Fed kept lower rates in good faith but rather must consider raising them?

How would higher interest rates play in this world of financial fragility?

At least some of us see it.

So that's a kind of an attempt at an overview of what's wrong with too much debt.

Part of it is the American brand in dollars and debt being corroded and debased by overdoing it, by over-issuance.

And then there's the question of whether, in the event of say, an unexpected inflation, whether the private sector is going to be badly damaged by the need of the field to post higher interest rates.

So the reason that people like clean balance sheets is it affords the borrower, the wealthy borrower, the future bar with flexibility.

That's why companies with clean balance sheets get the imprimatur of AAA or AA.

But that's clean balance sheet, that's good.

It's good.

And because That company can opportunistically invest when the times are difficult.

But when the times are difficult in this country the government famously, most of its construct of the welfare state must borrow much, much more.

We are borrowing heavily in a time of crisis of a 4 plus rate of unemployment long thought to be full employment.

And we were borrowing at a time of roaring markets And if a GDP that is rising, according to the Atlanta Fed, at a rate close to 4 annualized wow, we need a 6 or 7 deficit to make things work.

That doesn't sound like a well-managed public financial operation, a NASA operation.

So these are latent problems now, as I say.

I say, just look at the screen.

The bond market's kind of okay.

Credit spreads, meaning the premium of private borrowing costs over public ones is near an all-time modern.

All-time low meaning no anxiety about private debts.

So the arguments against heavy borrowing... must be made rather defensively with time being.

But I have no This thing.

I'm pretty confident.

I think that too much debt argument will prevail.

It will ruin much of our mismanagement of the public credit and of so much private credit.

I wanted to talk a bit more about inflation and I was, I was reading a back issue of grants from earlier in 2024, where you connected inflation, basically the flaws in human nature. and use this as an argument for why we can expect a future of more inflation in what you've described as inflation nation America, that is.

And you quoted a German economist called Wilhelm Röpke, if I'm pronouncing it right.

And I wanted to read a little bit of what he wrote in the 1950s, because you've said you wrote.

Has anyone said it better?

And so I'm going to read a few sentences from him.

So he wrote This in the 50s about inflation as the way a national economy reacts.

To quote, a tendency towards excess in every sphere and all circles draw bigger checks on the national economy than it can honor.

And then he said, people want to invest more than savings permit.

They demand wages higher than the growth of productivity justifies.

They want more imports than exports can earn.

And above all, the government, which should know better economy, higher and higher.

Thus there is a riot of claims and an insufficiency of goods produced to meet them.

And then he talks about the impact that this tendency in human nature has on money, And he writes this very elegantly.

He says.

Just as there are organs in the human body in which, if consistently abused, ailments slowly but surely accumulate, eventually taking their revenge, so the national economy has its own, equally sensitive organ, becomes feeble and ceases to resist.

And it is this enfeeblement which we call inflation, a dilation of money, so to speak, a managerial disease of the national economy.

Can you unpack that a little bit?

No, I cannot unpack it.

It's like, can you unpack the Declaration of Independence?

Or Lincoln's second inaugural address.

All I can say is amen.

I mean, it's just... I think the way Rick puts this elsewhere is it's an overstraining of things.

It's an overstraining.

And I think what you...

What you can read and impute in his writing is that some of what he was saying is that It's the way things worked under the gold standard.

When there was this oversharing, money would leave the country.

Gold being money would leave the country.

And because paper money was unacceptable in the world but acceptable within the boundaries of the nation that could print it, The departure of gold was a deflating force.

You know, you were losing the monetary base.

You were losing the capacity to issue bonds, credit debt loans, credit debt, and that was how the body politic began to protest.

Now, in this age, you have a reserve currency country in America, meaning it's the kingpin, monetary kingpin, and they're is to date no real hard limit on how much it can do.

There are some softer limits than the ones to which ripka, i think, was referring uh.

One is the uh James, the domestic protests against too high rate of inflation.

But, you know, the Fed is capable of defying that away.

It's just got this press to digitation, this magician stuff.

So now they are saying that that uh, 28 percent is a little bit of.

Always it's quite fine.

So we're gonna be vigilant, we'll also go to get away from this.

Yeah, so not.

So you watch, it's three percent, it's going to be a little bit less fine, but we just we've got this, you know.

And certainly donald trump is going to say uh, I'm not sure he's going to use the word transient, but I think he might say it's going to be the old way.

AI will wipe it from the slate.

But what a beautiful succession of sentences you wrote describing what I think is exactly the almost exactly this dynamics of inflation.

And notice as well that um inflation under a paper money system that the dollar never regains the purchasing power it loses to inflation.

Now, William McChesney Martin, the longest-serving Fed chairman, said that in 1957.

And the dollar never regains the purchasing power it loses to inflation.

In times past, there would be prices would go up and then go down.

So one of the things that I think helped Donald Trump get elected in 2024 was that People saw inflation, even when the rate of inflation declined.

Well, they should because the prices they saw, not the prices they knew in 2019 and 20.

So the economy was saying confusingly the rate of inflation was what people saw with their very eyes in the supermarket.

I don't care what they're saying.

Look at this.

Look at the price of what was the exorcist for a time.

One of the interesting features about the present day and the Shed's concern or lack thereof.

All right. is the price of gold, which is kind of knocking on the door of $4,000 an ounce.

And so it was $35 until 19... It was $20.67 from basically Alexander Hamilton.

There's some option down here.

Until...

1933 and there was 35 dollars in notes, again with some wiggles until 1971.

There was some cut loops being cut off the gold standard, what remained of the gold standard, and it was free to flows being.

But now it's just kind of gone, bonkers.

And people are just as worried as our friend David is about his stocks.

Why?

What's driving it?

And is it priced, as it is, only to disappoint its many somewhat bruised and calloused followers by collapsing as it did in 2011?

In 2011, the price got to $1,900 and something dollars an ounce.

And what followed the next three or four or five years was a return to my $1,200 an ounce.

And we collapsed in gold mining shares upwards of 90% in some of them, 95%.

Whew.

So everything's kind of out of whack, right?

The credit spreads are out of whack.

Gold seems even for the gold people who love it and love it is unfortunately the word.

For many of us it's a seductive asset.

It's not just any little asset.

You know, it's not boom handles.

You fall in love with it. or not.

It was like Bitcoin or something, fall in love with it or not.

And you've had a long love affair with this.

I mean, you bought it in January 1980, I think, your first Krugerrand for, what, $850?

I don't mean to brag, but I happen to have invented it.

Okay.

Nice job.

So you're a few thousand years old.

Good job.

Well, I don't know what it looks to see if it was, I think, 2300 years old.

I wear that, shall we say, not pinpoint-timed purchase uniform as a badge of honor or at least of constructive humiliation to.

I don't need to remind myself that there could be others who might have mistakenly, in their ignorance, fastened the guru title on merely a gold price.

So it's a.

The early sign of the conference showed this very well it did.

Gold moves in cycles and it can go sideways or down for 15 years, and then He puts it down to an over-issuance of the public debt and the questions about the public brand.

And then it just takes off like a stuck pig.

It startles everyone.

As it is two hours now, I think he makes fans.

It's a curious kind of bull market.

Public participation is still rather muted.

There are signs of it growing.

But there isn't the frenzy we saw in Bitcoin in 2020, for example, or common stocks today.

But you've been pushing gold for many years, right, in this sort of very contrarian way.

And now that it's hit... touting, hawking, peddling.

Now that it's hit 3900 an ounce this week and it's up, what a good 40 this year.

It must be very uncomfortable for you as a uh um, someone who is always a skeptic.

Now, now you're looking at and thinking we have a speculative bubble in gold.

Or is the run-up justified given the backdrop of all?

I look i, i was uh, I happen to be in the presence of one of the great speculators of our age in the springtime.

And I said to him, this is closing in on 3,000.

I've lost track of one.

It just cleared some high hurdle.

And I said, you think gold's a bubble?

He said, of course it's a bubble.

Is it justified by what we on Wall Street are pleased to call the fundamentals.

And this is where you construct these great.

You know these metal.

I'm trying to say you build these.

You know the scenario for yourself about what's causing it.

I remember very well in 2011 that the SP just downgraded the goal.

Sorry, had downgraded the treasury from AAA to AA.

And, by the way, lived to rule that for the next 10 or 15 years because the authorities went after them big time for having done.

I mean you have the temerity to do that.

And the precious gold had been in the mid-1500s for a while.

And I thought, well, now...

The world is catching on to the joke and the world will demand of this country a reform in the finances, which will entail some role for gold in the monetary system.

And gold will find its place at a higher price.

I'm not sure we actually use the phrase permanent high plateau, but that's what a gold standard is.

It's literally a permanent plateau.

It's not necessarily high or low, but $20.67 for 135 years is a high plateau or it's a plateau.

$35 for decades was a plateau.

So that was some of the thinking among the thought leaders of the gold world.

It turns out that there was not any such thing as a worldwide permanent condemnation of our messy fisc, nor was there any intention upon the authorities of bringing gold back into the world of America's monetary system.

America has read out gold from its monetary shares, starting in 1976 under Treasury Secretary Bill Sons.

Absolutely.

We're having to return our back on it.

No more gold, period.

And the IMF or And the treasury gold is.

It might as well be scrap metal that is housed under guard, to be sure, and they're in Fort Knox and elsewhere.

But no more gold.

So you can build these air castles.

Of narrative.

You have to be careful.

I mean.

My current.

So if I were to have.

One.

What could insist.

Administration that seems.

Unlikely will prove to be successful.

In.

Taking over the central bank and imposing its interesting theories of money market interest rates on the dollar and on the world.

This is the dollar.

It's one plank of this cash flow.

And another would be the proclivity of the neutral journey to borrow much more than it takes in and the Congress to allow that.

And for the fiscal dilemmas you talked about, but never acted upon, it's another one.

And the...

So that would be enough to convince the upside and still in front of us.

But my, you can't be sure.

And if you have too much of this stuff, You have a restless night's sleep, but you don't want to miss all the upside.

That's what makes this line of work so interesting.

There's no firm ass.

There's no certitude.

There can't be.

People In fact, they have.

You know one thing about them, or two things about them.

I know they're not very old.

I know they have not really had the invaluable educational experience of having their face ripped off during a bear market.

There's two things you know about them, or one of the two.

Let's take a quick break and hear from today's sponsors.

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All right, back to the show.

I always remember Bill Miller many, many years ago saying to me, there is no certainty.

It's all probabilities.

It's very unsettling.

And so I mean just in terms of Well, you know, in terms of just being a prudent investor, to position ourselves and this is before we turn to your book, which I want to talk about next to position ourselves sort of prudently, given the backdrop.

You don't much like bonds.

You said basically, in 2021 we entered a 40-year.

Well, after a 40-year bull market, we've entered a long period of bear market.

I own some bonds personally.

My wife and I do because no one's getting any younger.

And I dearly love Colbert.

You'll notice that he has decided one thing only.

It pays no interest. which is also one of its great virtues.

It's being... It's money.

It's not... It's simple.

It's money.

The world regards that way.

So, bonds.

So, I own some kind of...

Not the ones you think of, as it's a fund that ingests in special situations that yield rather more than the ones that trade in public markets.

And it's risky, but risk is well managed.

So that's part of our lives, at least the spot for it.

I intend to work my whole life.

I don't have any intention of retiring, but approvals would dictate that there's some reasonably assured income outside of Social Security.

So that's that.

So that's my codicil and my anti-bomb stance.

I own some of them.

And I saw yesterday at the conference and talked to briefly the great Paul Isaac, who we talked about last time you were on the podcast, who you'd invested with many years.

So I'm assuming you still have some exposure to the stock market through people like Paul.

Oh, yes, I do.

I do.

And he's coming into his own.

All these stocks that stood still are heaped lower and lower.

Of course, in the past five or 10 years, they're coming into their bonus.

It seems to be a By way of preface, it's a deep value with Nestor.

They work for special situations that he feels are protected both in the downside, and that they're pushing the downside.

And this would have to do with the quality of the balance sheet, of the earning stream of, of the price to afford subprotection.

It's been beaten down and ignored sufficiently by Wall Street.

There's some subprotection that's very obscuring.

It's not going to be a part of the implementation. kind of portfolios that will be liquidated.

They will pay a price during the liquidation because it's traded somewhere.

And this has to do with a company, some banks in, for example, Europe.

It has to do with medical device companies in this country that are kind of on the cusp, that have been neglected because they once failed at something.

I'm not sure if special situations is a better term description of some of his investing style than value, but he looks for opportunities that will not necessarily be borne aloft by a great rush into MAG7.

And they have been uh left behind so he was uh suffered by comparison with that but he's saying wow it's starting to work yeah it's brilliant unless what is happening now is every last dog is is finding its uh It's adopter of the pound.

That's like every...

Like the pandemic dogs, even the most improbable beasts get let out of the town.

So let's hope that he's not listening to this and thinking you're describing him as a three-legged pandemic hound.

It's not like you're going to cash and crawling up in fetal position in the corner.

So this isn't you advising everyone to panic and cash out.

It's just saying, be more conscious of the risks that you're mindlessly taking.

Or take them thoughtfully, even though, I mean...

It's well and good to anticipate your peace of mind, come the liquidation.

But, you know, it's like, you know, everyone's got a plan until it gets hit, like Tyson line.

I never underestimate how sweaty our palms are going to be.

These liquidations can seem upending.

They typically don't.

I think also, sorry to interrupt you, Jim, it's also about this...

I was listening to Grant's Current Yield podcast and you were talking about how we're in the age of decadent finance.

And so part of it is about being wary of having stuff sold to you that's kind of marginal and speculative at a time when we should be being more prudent.

And there was a lovely line you said, we at Grants take a rather moralistic view sometimes.

Instead of credit being man's confidence in man, in this day and age of decadent finance, it now demands man's confidence in the sagacity of his lawyer.

What you are saying is You know you can't just be trusting at a point like this, where all of the most rapacious cunning people come out to try to sell you stuff that is not, And all, of course, rapacious and cunning people have done very well by their rapacity and by their guile.

Markets, when allowed to function properly, go down as well as up.

And the down portion serves any number of functions, one of which is to skim the bad actors off of the stage, you know, just to flick them away.

But what happens when the shed with every good intention, I'm sure lends its arm and strength to prolonging cycles and forestalling bear markets and to pumping up the GDP so that?

We never have to endure this kind of experience again.

So bad conduct goes uncorrected, unchastised.

Mr. Martin is the best.

It's the best disciplinarian, never mind all these only lessons that you could read.

I mean to reflect on Warren Buffett he is a great coiner of phrases or Charlie Bunker, but nothing succeeds like having your head handed to you as a learning tool.

And this bar image in the case of the bar, or a delicensing in the case of financial advisors.

Just to get some of these people out where they ought to be, which is like I don't know.

Work for the Fed.

I don't know whether they'd go after this, but get them out of the markets, where they have lingered too long and they're going to get too many people in trouble.

So that's my moralistic argument.

Let's turn to your lovely book Friends Until the End, which is a double biography of these two magnificent 18th century orators, Edmund Burke and Charles James Fox.

And it's set against the backdrop of three great events, I guess.

So Britain's loss of the American colonies, rapacious exploitation of India by the East India Company, the great dominant monopoly of its time, and also the French Revolution.

It would be great if we could chat for half an hour about the book and the lessons therein.

Early in the book, at the end of the preface, in writing about Burke and Fox, you say I love them for what they said and the way they said it, for what they believed and for what they did.

Can you give us a sense of why you so greatly admire these two figures, who are in many ways giants but also have been widely forgotten by many people, although Burke obviously is an important figure in the world of conservatism still?

For me, at least, a great oratory is like music.

I read it as I listen to like a third movement of Brahms's Third Symphony, which I happen to love.

So um, i i'm gonna.

May i read you a little something?

I would love that.

Yeah, this is um.

This is um burke's panegyric uh to his friend fox and the band that prefaced this.

That is that um to bring the uh, the British East India Company, uh to heal to, to to curtail the most abusive practices of its, of its agents in India.

Edmund Berg and Charles Lash together drafted uh, a bill to revise the governance of this monopoly that is the biggest company in the world, sir.

And uh Fox, who was a front man for this in the House of Commons of Great Britain, bore a lot of abuse because if the bill went through he would command a great deal of power in nominating functionaries to serve on the new governance commissions.

So he had all this power awaiting him if only the bill would get through.

So they questioned his motives, but he has put to hazard his EU's security.

It's interesting how even the strongly popular, the best of the people, the best of the people have never seen.

This is the mode that all heroes have tried to be thought in.

He has produced and will use for us at all moments.

He will remember the obstacle as a necessary ingredient in the composition of all true glory.

He will remember that it was not only in the Roman customs, but as in the nature and constitution of things, that calumny and abuse are essential parts of triumph.

Now, is that not a wonderful read?

So, that speaks to the first point I tried to make there, what they said, how they said it.

So, well... seasoned with quotations from both Bork and Fox.

They're both magnificent speakers and they both came into their prime after stenographers were at least semi-legally allowed for the House of Commons to take close notes.

They couldn't get all of it.

It's like catching a bird with a wing.

They would write and scribble it on the shorthand of their own creation.

But witnesses to Bach's.

There was an amazing line from Boswell in your book, the biographer of the great Dr Johnson, where he said watching book, if I get this right, it was something like being in this orchard where he could just pluck these apples at will like so fast.

And I think one of the amazing things about their oratory was both of them, they...

They were so brilliant and so quick speaking and quick thinking that they could be quoting Virgil and Horace and they would be quoting in Latin, from memory.

I mean, I think there's a bit in the book where Pitt suddenly quotes Scipio in Latin from memory about some old guy who's insulted him.

I think that's part of what's so amazing about the rhetoric, the oratory that they use.

Well, yes.

At one point, I'm not sure how much this is documented, but supposedly...

Lord Norris, who was the prime minister during much of the time of the book, was in the House of Commons, as was Burke.

And Burke was lacing into the government on Lord North.

And North happened to be... sleeping during this.

Supposedly, and Brooke then quoted something about him, but Norris heard and misquoted something about him.

And he awakened, corrected him, and then fainted and returned to sleep.

I had an amazing history teacher, a legendary history teacher, at Eton, which is where Charles Fox went, and Pitt.

This guy called Michael Kidson, who now, if he was still alive, would be banned from teaching because he would say such incredibly inappropriate things, but he was wonderfully articulate.

And he would always say, they were giants in those days.

And you get that sense not only from the quality of the rhetoric, of the actual use of language and hyperbole and just you know, all from memory and all off the well, a lot of it off the cuff.

Anyway, they wouldn't deign to look at their notes and, you know, Burke could speak for 11 hours.

It was a very bad form to speak for a script.

Yeah.

So amazing.

But then also, and I think this is probably what you were about to get to.

It's not just that.

It's the moral courage that they demonstrated.

I mean, if you could talk a bit about that, because that certainly comes through, particularly with Burke, like this sense of his humanity and his moral courage and his compassion.

And there's a point where he says that he has one rule for himself, which is to act as the representative of the people who had no power.

Can you talk about that?

Because I think that's the other thing, where you feel not only that you're uplifted by reading the quality of their language, but also the quality of Burke's morality and decency.

He was the most.

He was a difficult person personally so many occasions, you know but he was also, most of the times, incredibly generous and courageous in the causes.

He would take up, for example, one.

Two guys were caught making love.

And, of course, it was crime, serious crime.

And they were hauled before the bailiff and sentenced to death.

By the time in the stocks you put your head and your arms and wrists and would stand before all the worst people around and they would toss stuff at your head.

Sometimes merely vegetables, other times rocks.

And these two male lovers suffered rocks.

One of them was killed in the stocks.

One of them was named, I'm not sure if he died, didn't die.

But Burke took up their cause in the House of Commons.

And, And of course you can imagine a ridicule came down his head for this, and all the knowing leers one member or two of the other.

On the other side of the House of Commons, the government leers at this man who must have had both curious motives for taking up the cause of these two reprobates, these two offenders against the laws of God and nature.

But Burke persistently, and he had a newspaper libel him, and he sued the newspaper.

You want a modest symbolic settlement, which he gave away as a gift or something.

That's one example.

There was a wonderful example too, where I think you write about this poet Crabbe, who's at the end of his tether and he comes as a total stranger to Burke.

And Burke not only reads his poetry, but helps him revise it, gets it published.

I mean, totally transforms this guy's life, this total stranger.

And Krebs is literally hungry and destitute sometimes.

You know, sleeping on the embankment, this is where and pulls himself together enough to knock on the door of Edmund Burke and Burke takes him in.

As you say, I came to view Burke as a kind of a next door neighbor to a saint, a secular saint, a friend and neighbor.

Amity Shlaes, who I've read the book, said you know, Birkin's crazy and not crazy.

So that comes across as a, As he aged and his poetry became, if not more, not florid exactly, but more complex and more heavily decorated with Shakespeare and Milton and the Latin poets.

The younger crowd, younger people came in.

And he became rather an old number.

He had been working.

And he would be greeted by coughs.

I'm sorry, both of them speak.

He would be greeted by coughs.

He would be recognized coughing by the young folk.

And he came to be noticed at dinner bell.

Because when he rose, they left.

I went to the House of Commons.

I guess cafeteria was not quite right, but they went to get themselves a dinner and One of my favorite things from him is that there's a I mean you were talking about his willingness to take unpopular positions.

And there's a beautiful thing similarly, where he was often accused of being Catholic because he was a great defender of the Catholics.

There's something where he responds and the Catholics were obviously tremendously persecuted at the time and it says and if Burke went on on account of such sentiments, people call me a Roman Catholic it will give me not the smallest degree of disturbance.

They do me too much honor, who aggregate me as a member to any one of those respectable societies which compose the body of Christianity.

Wherever they choose to place me, I am sure to be found in extraordinary good company.

It's beautiful, right?

It brings tears to my eyes.

That was Bergen's best, and his best was fantastic.

Anyway, what they believed.

So what did they believe?

So these guys, Burke and Fox, were in the opposition their whole careers, basically.

Each one had a short time in government in the ministry, which meant they drew no money from the House of Commons or unpaid.

So they scrambled around for money.

Sometimes it's rather gamey speculations and Caribbean land deals, of course, unsuccessful.

So as members of the opposition, what did they believe?

They believed that the king was overstepping in his balance and that he had gone too far.

The king was going too far because he was a tyrant.

And they did what they could to stymie the king, but the king went on stymieing them.

So the two of them believed the following in the following uh episodes of their careers together, they believed the following so, in what led the american revolution, they were both allied with George Washington and his feeble, ragtag army and the ideals of evolution against the heavy hand of Lord Martha and King George III.

Now Edmund Burke was welcomed the affection of the American people, but would would squash them if they had presumed to achieve power over England.

He was not a friend of a risen and powerful American state, but he believed that Congress would divide and dismiss over taxation.

But Cox, as was his kind of understanding.

I unchained what he wore George Washington's colors around London.

They said carousings and gambling at Brooks's Club, buff and blue.

And what did you know?

Some people mistook his enthusiasm for cause with treachery.

So that was America.

They both were quite stalwart efforts.

After George Washington's rout of the Battle of Long Island, let us stand by our friends in their adversity as well as mandate in their prosperity, never abandoning people who stand for the principles of the glorious revolution of 16th century in this country, but always support them in those ideals.

So that was one episode.

The second one had to do with an overbearing, corrupt and a quite cruel regime at times quite cruel regime of the East India Company in India.

And this shows Burke and his dogmatic And a semi-crazy side involved the trial of Warren Hastings, who was a leader of the East India Company.

And I'm not sure whether Warren Hastings was quite as guilty as everything else.

But the trial lasted for eight years.

And by the end of it, only Edmund Burke was interested in pursuing the case against him.

And again, my friend Abbott calls this lawfare law.

So that shows a dogmatism of Burke and how he could seemingly be un-self-aware moment on the East India Company because, as you write in the book, it was as well hated and well envied as any modern day technology giant.

And so this was the world's largest business.

And so Hastings, who you mentioned, was the governor general who got impeached.

Can you talk a little bit about the misdeeds and the wars and the cruelties and the scandals and the plundering of money from India?

I mean it's kind of amazing, because we talk about business now and the nefarious things that we've been saying Wall Street has done.

There's a level of brutality and corruption to what they were doing that's quite astounding.

Well, all you have to know about?

See behind you William, a portrait of Charlie Maverick and, I guess, Warren Buffett, yeah.

Charlie Maverick is fond of saying, show me the incentive, I'll show you the outcome.

And so the East India Company would send firm.

Lads of 16, 17, 18, and 20.

Scarcely shaving.

And they would be very ill-paid.

They would be ill-paid.

And they were to make their way in the company by setting up shops for themselves and by conducting their own business as a sideline.

Actually, the side hustle became their focus and their main day job.

And so instead of enriching your employer, they enrich themselves.

And that's one thing to know about incentives.

The other was the East India Company was itself a sovereign.

It had its own arm, and it had its own merchant fleet, and its own navy.

And what would a profiteering company do with its own military power in search of profits?

It wouldn't wage wars, right?

Well, maybe the equivalent is Musk having Starlink, and maybe he's the person with the power that they had.

Yeah, well, maybe that's coming.

But knowing those two things, you can imagine what liberties the agents of the East India Company took, the servants of the East India Company took on their own behalf, as opposed to that interest of their stockholders and indeed the interest of the sovereign that gave them the monopoly.

So they ravaged the country and I know you probably have a favorite episode of their misgovernance, but it was pretty steady and pretty heavy-handed.

Well, Clive was amazing.

Clive of India.

And I used to.

When I was living in Belgravia in London, I would pass this gorgeous house.

That would say, you know, Clive of India lived here.

And you'd think, oh, this must have been some noble guy.

And it's like Ben, you read your book and you realize no, they were just pillaging left, right and center and then would uh, having plundered jewels and stuff, they would come home with just millions and millions of dollars and and and buy themselves, you know respectability, not respectability, they would buy themselves seats in parlor.

Yeah yeah, power.

I think social respectability was.

I'm not sure anyone had enough of that, but Clive of India was the avatar of the eternal mogul.

Yeah.

They turned their... their... their...

My favorite bit that you write well.

Actually this is Burke that you quote on the East India Company talks about these young men boys almost.

Without society and without sympathy with the natives.

They have no more social habits with the people than if they still resided in England, nor indeed any species of intercourse but that which is necessary to making a sudden fortune with a view to a remote settlement.

Animated with all the avarice of age and all the impetuosity of youth.

They roll in one after another, wave after wave, and there is nothing before the natives but an endless, hopeless prospect of new flights of birds of prey and passage, with appetite continually renewing for a food that is continually wasting.

And just that image of these new flights of birds of prey coming in to rip off these poor natives, plundering their wealth.

It's just an amazing piece of writing and rhetoric.

Now you see where I wrote the book.

Yeah.

So I think the book I mean, in some ways it almost tells me as much about you as it tells me about Burke and Fox, because it seems like it's just infused with your love of language and writing and scholarship, is that?

So then comes the trial at Warren Hastings, the Governor General of India, as you noted, impeached.

It was tried off and on, mostly off, I guess, but still over the course of eight years.

And this is a picture of the House of Lords.

And he finally gets off.

And it's just remarkable.

Okay, but there's more of that side of work in the death scene.

And we're coming up to that now with the French Revolution.

And this is where these two friends parted company.

It was quite irreparable.

To Fox the French Revolution was the best, the greatest thing that ever happened in the history of the world.

Tossing off and throwing off the chains of the tyranny of the French crown and of the miserable system of of aristocracy and the suppression of the lives of the people.

He thought it was marvelous.

And, okay, there was Fox.

And Burke saw this.

He saw chaos.

He saw, uh the destruction of civil society being so that um, structure of things, that the, uh the order of society by social rank, very important to him.

But uh family, uh privilege, all this stuff which to him was the fabric of the functional and prosperous.

All this would be destroyed.

The church would be destroyed.

Religion would itself be trampled underfoot.

And much of that indeed did come to pass with the terror.

And Fox was rather chagrined by the terror he could imagine in Wall Street terms.

He said, I'm really bullish on this.

And then the most terrible things that happened to the company it goes broken and everyone's revealed to be not only a They have gender against the laws of the country, the rules of the SEC, but also criminals of most horrible sort.

So that's the kind of the Wall Street analog to the call that he made after the fall of Bastille.

But still, Fox clung to his view that this was a glorious moment in the history of man.

And, of course, he had many compares in this.

A lot of romantic generation coming up, cheering him on, and he'd cheer them on.

Okay, so that's that.

But Burke was equally unmovable in his view of not only the net evil of this but also the grossing of it.

He didn't see much that would come out of it except...

Except the end of France.

So what about the friendship?

Well, it came to a tearful end in the House of Commons.

And it was a debate over something having nothing to do with France, and Burke went on about the French Revolution.

Fox said, you know, you can't... This is not germane.

You can't... And Fox folded back to Burke some of his thoughts on the American Revolution.

And Fox and Burke went... over the incivility of having his own words quoted back to him.

That, to him, was a heinous crime against the unwritten rules of the house and more especially against the unwritten rules of friendship.

And he said, our friendship is at an end.

And Fox, down breaking into tears, said, no, it's not.

It's a lose.

So that was that.

And a little time passed, and yeah.

And Burke's son tragically precedes him and predeceases him.

And Burke falls ill and falls broke.

Both of them are broke.

Both are whole lives.

You know, Fox lives from bankruptcy to bankruptcy and Burke is broke again.

And that does nothing to lift his spirits.

And, um, And as Brooke lay dying, Fox reaches out to his wife, Mary, and writes her, may I come and see my friend?

And she consults with her husband, and they know.

She writes back to Fox, no doubt, that word for war is certainly in the spirit of history time.

A very stiff reply that Mr Burke must adhere to the views of the public known so well and that he would fear from them.

It would be a great hurt to the community and they couldn't do it.

So three guys worked on this and Fox lived a long time afterwards, many years in declining health himself and declining health well-earned, by the way.

So we're glorious and lived.

And somebody comes around to ask Fox if he would not like to contribute to a fund.

It's going to be interesting.

In collection to raise a monument to the great Edinburgh.

No, I can't pretend to a spirit of forgiveness such that I could do this without thinking of where I can pretend.

I can't.

See, that was that.

And so the book closes, with Fox having finally succeeded in putting over a law outlawing the slave trade in Britain.

That was what he wanted most of all.

And there's a statue of Fox uh, depicting uh uh uh uh uh uh uh uh uh uh uh uh uh uh, uh uh.

So I say that the fox is an enduring monument in marble and that Burke's collected items are a marble of another kind.

One of the things Jim, that was so striking to me is both both Fox and Buck were incredibly admirable and gifted in so many ways.

And yet they were both absurdly bad with money.

And you you talk both both of them lived in debt.

Both of them died broke.

But I think Fox was kind of extraordinary.

Can you talk a little and his father was absurdly rich.

So it was quite impressive what he managed to achieve.

Well, he comes from an interesting line, financially speaking.

His grandfather, Sir Stephen Fox, was a paymaster of the fortunes, which meant very briefly that...

You got to invest the money that was entrusted to you for the payment of the troops until that money was needed by the king to discharge those debts.

So you could...

What do you think was it?

And you got to keep the profits, whether it was interest on the investing team or government securities or profits from dealing on college stocks.

So that was Sir Stephen Fox and Fox's own father who came to know as Lord Holland. got the same gig.

And he became fabulous and rich.

People couldn't believe what he did with that money.

He just, and he formed the profits. to his addicted gambler.

Fox would play night and day at his club, Brooks' club.

He played games with dice and cards.

And he was a horse player, rather better at that than cards and dice, but he lost quite literally fortunes at gambling.

He lost 900 pounds on a single game of billiards, you write, at a time when that was real money.

But I mean, I think you write that in 1776, he had 140,000 pounds of gambling debts.

I mean, that's many millions in today's money, right?

Yes, and it did not speak well of his moral character.

People would say, how can you sleep at night?

All I want you to do is, the question is, how can my creditors sleep at night?

And it's so amazing.

He would go out sort of drinking all night, sleeping with prostitutes, sleeping with his mistress.

And then he would come into the House of Parliament and give an amazing speech.

And I think there's a wonderful bit where Horace Walpole listens to a speech that he's just given after basically being out drinking and carousing all night.

And he's like, this is just total genius what he could do.

Yeah, yeah.

So he was...

You know, people were astounded by it, but also they recognized that he was basically just a big sponge.

He borrowed from his friends, borrowed from everybody.

His father died despairing. of the debts that he had accumulated and what it did to his estate.

He still kept feeding on money.

Burke was different entirely.

He brought a lovely estate, Began's Field.

And it was, as so many lovely estates are, it was a money pit.

He didn't make any more money at farming than most people do today.

He was a student of scientific agriculture, but think of the productivity that he had or didn't have.

Now this place lost money.

So he could, by hitching some oxen ahead of Of course, it's in plowing.

Better chance.

You could plow one acre a day.

Now today, a mechanized farmer not so very accommodating, Tilly New York farm can do 21 acres a day mechanized plowing.

So 20-fold, 20-fold appreciation in plowing.

So Burke was sad.

Burke had two jobs.

He was a privateer.

He was a devil.

He was a gentleman farmer.

Actually, more than a gentleman.

He was a hands-on farmer.

A scientific one at that.

Who was the right equipment?

Oxen?

Because most horses could plow all of one acre a day.

Upstate New York, we can do 21 acres a day with milk machinery.

So not much productivity growth there.

And so the price never paid for itself.

It was mortgage.

So he was perennially in debt, and to his political mentor, Lord Rockingham, and with all the insecurity that entails.

And so, at length, Burke became a member of Brooks's club as well, as Fox was towards the end of his life.

Huh.

Oh, God.

So that was the state of his exchequer.

And both of them lived, I think that never suffered in his lifetime the indignity of bankruptcy.

More than once, Fox's furniture was out on the sidewalk.

The debt collectors came and just took his stuff.

And once he was...

After a night of proxies, after immense losses, one of his friends came to him concerned about what this might do to him.

Would he take matters into his own hands with a pistol alone in the dead of night?

No.

So he came.

And there was Fox randomly reading some great Latin poet.

And his friend said, what are you doing?

And Fox said, well, what do you think I ought to do?

I've lost every shilling.

There was a serenity in the face of ruin that will amaze the readers of, I hope, this book.

In fact, I want to share one last story about Fox's death.

So he fell in love. with a courtesan.

This is my mistake.

Not ever sure whether it was a Mr. or Mrs. But they had a genuine love affair And at length, during one of the breaks in the Pollyanna horse, Fox takes his then-wife, who were leaving her at length, takes her to France.

And they sit down with a Talleyrand, French diplomat.

And Talleyrand, too, had married a courtesan.

And the two ladies sat next to each other on the banquet and they shared very interesting observations about people they had known.

Let you go, Jim.

One last question.

You spent so much of your time studying history and I wondered if it gives you a sense that life happens. improved that we've that we've survived these terrible periods in the past you know whether it's um the french revolution or or civil wars and the like and does it give you a sense that even in our strange and difficult moment now that that we sort of muddle through after all like is there a Does your study of history kind of give you optimism or pessimism about the future?

A little bit of both.

Hence to the material side of life.

It is onward and upward.

Nothing like it's ever been seen.

And we would not be having this discussion except for advances in medicine.

That wouldn't be very interlocutory.

You'd have to get somebody else.

So, you know, the marvels with which we live are just astounding.

This little thing I have in my pocket, which I forgot to put out in airplane mode.

It has the entire canon of world knowledge.

It does.

And so people think, I say, yeah.

What about the next edition of Apple?

Whatever it is?

You know you get jaded about these things.

You get jaded about.

I find myself complaining about the pills I have to take to ward off the next round of disease and rank in gratitude.

So in so many ways, Things have never been better and we should thank our looking stars and live what we do.

In other respects, it's back to living in rags in the forest.

And with respect to public oratory, going back to grunting and groaning.

Where have they conducted business before the perfection of writing and the arts of literacy?

Can you compare what comes out of today's House of Commons, as well as, of course Truth Social, or the House of Representatives, or the dignified Senate?

I mean, just lay your head down and not watch television, do something else.

So it's mixed.

So all of the intellectual energy of Burke and Fox's time for a certain class of people was in literary pursuit.

There's a great American financier called Albert Gallagher He was the Treasury Secretary.

He was a near successor to Alexander Hamilton.

I think there was one or two between the two of them.

But Hamilton was Treasury Secretary under Jefferson and Madison.

And then he was a diplomat who helped to settle the War of 1812 when he came back as a banker.

Then at length he retired.

And the gravestone talks about...

But the business of that and literary pursuits.

I go over to the churchyard from time to time and and read his great story Gallatin and said think about him.

And you can tell what I had in my memory in the past 50 or so years.

I can't remember exactly the phrasing, but it's marvelous.

And so if you're a lover of the oratory language, it will be... disappointed to not to have lived in some other time but otherwise just when you go never mind the dramatic diseases of late life or common not not dramatic commonplace diseases of late life just go a trip to the dentist just thank your lucky stars you know But it's pretty great on balance.

Pretty great.

I'm glad to be here.

On that note Jim, it's been such a delight and I'm so happy to have got to spend this time with you.

It's.

One of the great pleasures of having a podcast is that it gives me an excuse to hang out with you.

You're awfully kind, and what a pleasure it is to be in your company.

But my biography was mainly about people whose company I wanted to speak in.

So I like your company too, William.

Thank you.

That's lovely to hear.

And I loved coming to the conference yesterday.

So now I'm planning to become a regular.

I'm looking forward to it.

Thanks so much.

Lovely chatting with you.

Okay, William.

Happy days.

Thank you.

And never miss out on episodes.

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[Navigating Financial Euphoria and Market Fragility: A Conversation with Jim Grant]-[RWH062: Bubble Warning w/ Jim Grant]

📋 Summary

Navigating Financial Euphoria and Market Fragility

The Anatomy of a Market Top

The Mirage of Private Equity and Credit

The "Decadent Finance" of Fiat Money

Lessons from History: Burke and Fox

Conclusion: The Prudent Path

🎯Key Sentences

📝Key Phrases

📖 Transcript

[Navigating Financial Euphoria and Market Fragility: A Conversation with Jim Grant]-[RWH062: Bubble Warning w/ Jim Grant]

📋 Summary

Navigating Financial Euphoria and Market Fragility

The Anatomy of a Market Top

The Mirage of Private Equity and Credit

The "Decadent Finance" of Fiat Money

Lessons from History: Burke and Fox

Conclusion: The Prudent Path

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🎯Key Sentences

📝Key Phrases

📖 Transcript

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