PETER ZEIHAN FULL INTERVIEW ABOUT FINLAND VS RUSSIA ?

Peter is a New York Times bestselling author whose first three books — The Accidental Superpower, The Absent Superpower and Disunited Nations — have been recommended by Mitt Romney, Fareed Zakaria and Ian Bremmer. Peter is also a highly sought after public speaker. With a keen eye toward what will drive tomorrow’s headlines, his irreverent approach transforms topics that are normally dense and heavy into accessible, relevant takeaways for audiences of all types.

Hey everybody Peter Zion here coming to you from the slopes of maaa with moia there in the background uh surrounded by volcanic Goo uh was going to go all the way up to the top but apparently the volcano decided to destroy the road so whatever anyway that means you get a

Bonus video uh the big news that’s happening today you’re seeing this on Sunday the 28th uh is that there are presidential elections in Finland and for the first time ever uh they matter so uh since the Ukraine war we haven’t had a lot of electoral contents in

Europe uh in the context of the change security environment this is really the first one that matters uh it matters for more than one reason uh Finland well there’s a term for it finalization the idea that you’re scared of your bigger neighbor so you plot a neutral policy in

Order to make sure that they’re not aggravated and this is the position that Stalin forced upon the fins back at the end of World War II and so presidential elections have always been about the debate of just how friendly can we be to the Russians so that they don’t decide

To invade us and that has been the case now for over a half century and the outgoing president was known as the uh the the Putin Whisperer because she had a tight personal relationship but with the Ukraine war that has changed and Finland is arguably of the of the real countries the sizable

Countries that are assisting the ukrainians the one who has provided the most material support per person as well uh as leading the charge in terms of diplomatic efforts and uh has also jumped on board NATO which is something that they assiduously avoided for the last 70 years in order to not aggravate

The Russians now the presidential contest is a beauty contest about who can be the most anti-russian who will take the strongest position on any type of security issue and so we’re kind of seeing the debate take place in three General Arenas the first is the Ukraine war proper who’s going to promise more

Aid who’s going to be more of a hawk uh the second one has to do with citizenship uh there are a substantial number of dual citizens who are Russian and Finnish citizenship and the debate at the presidential level now is whether or not to revoke their Finnish citizenship if they do not surrender

Their Russian citizenship uh and that that’s important enough as it is uh but it also is carrying out into European foreign policy because Finland is not the country in Europe that has the largest percentage of ethnic Russians among its population that would be ltia with Estonia and Lithuania coming up in

Second and third place so there’s always been a little bit of a quiet human rights debate within Europe about the position of the ethnic Russians in those countries with Finland trying to take the position of the ethnic Russians in order to mify Moscow well that is not

The case anymore uh the debate is whether or not these people should be kicked out whether they should be forced to change languages whether they should lose their European Union citizenship uh the fact that the fins have changed so much in 2 years is just a testament to

Just how brutal the war in Ukraine is and how close it hits a home to countries in these regions uh something to consider if you don’t live in Eastern Europe for anyone else in the world uh the countries from Finland to Estonia to lvia to Poland to Romania to Bulgaria

You know these are the countries who have the most experience in living under Russian rule or fighting the Russians and they’re the ones who have been basically training their military in order to support the ukrainians and the conflict because they know what happens if they don’t anyway uh by the time you

View this the will have opened in Finland and we should have results in a not too distant future as Europe’s Most neutral country becomes its most aggressive oh one more thing for those of you who are not fueled by issues of democracy versus repression and mass rapes and or uh how about illegal

Migrants yeah so the Russians have been flying people in from South Asia in the Middle East and Hing them through the forests of Northern Russia and forcing them through The Finnish border so that really has the fins all cheesed off to for and you can move it wherever you

Want and choose the time and the place of an air and Naval conflict and then Sail on so if you want to knock over a country a super carrier is what you want and we have 12 of them so we and how many super carriers would we have uh

Outside of Israel right now uh we have smaller carriers outside of Israel right now they’re called Marine Expeditionary units they’re about half the size of a carrier but they also carry 3 to 5,000 Marines on them uh and and so that’s a different sort of awesome military

Platform yeah yeah we have 10 of those wow I saw you excited that so yeah we’ve got 10 we’ve got 10 of the moderate size carriers and we’ve got 12 of the super carriers and I would argue two super carriers that we have are greater more Power Protection capability than the

Entirety of the Chinese Navy two Chinese Navy two just two two of our super carriers we have we have 15 12 and three more in production correct are more powerful than the entire Chinese everything they’ve got the other issue is reach uh all of our ships are blue

Water capable they can go anywhere on the planet 90% of China’s naval fleet can’t go more than a thousand miles from Shore wow and that assumes they’re going very slow in a straight Lane to save fuel if you’re actually combat conditions where you have to duck and

Weave and zigzag most of them can’t even make it 400 miles yeah so let me let me let me understand this 1,000 miles from China so we’re talking about what Harbor or Port would it would would they be would they have their well they don’t have any super carriers they yeah so how

Big’s their Navy 300 300 boats they’ve they’ they’ve got somewhere between 380 and uh 700 or Sor 650 ships based on where you draw the line but most of these ships are like 2,000 t ton Corvettes versus a carry super carryer that’s 100,000 tons yeah none of them

Can reach blue water so how far can they exercise from China uh there’s this line of islands called the first island chain Japan Taiwan the Philippines Indonesia um basically they can’t get past that so the only thing the only threat there is Taiwan then yeah Taiwan the the Chinese

Navy was designed to go after Taiwan and if they decide to do it that will be a really interesting fight the Chinese just playing the odds will probably win um no way to know for sure uh but yeah that’s it and why would they want to win Taiwan because they can’t reach anything

Else or because of the chips prod there there there’s a cultural thing there Chinese reunification uh it is the narrowest part of the first island chain it is closest to the mainland so if they’re going to go anywhere that’s where they’re going to go and if you

Want to think really long term the theory would be if they’re going to break out of the first island chain you do it at Taiwan and then you can project p P the chain with later generations of ships I mean that’s that’s some really optimistic thinking but that’s how it

Would start but you’re not concerned about that I don’t think no because well I mean I’m not going to say I’m not concerned about Taiwan but the rest of it no yeah what what would our reaction to that be and why uh we’d probably have a really interesting conversation in

Washington um the amount of time that it would take us to get a fleet from San Diego to Taiwan even OD is that the conflict would be over by the time we arrived so we would then be in the position of having to do an amphibious assault to dislodge the Chinese which is

A very different picture from a naval fight to prevent the Chinese um If I Were King for a Day in that scenario I wouldn’t even bother with that yeah I just put a handful of Destroyers in the Indian Ocean Basin and cut the energy cord and basically do a

Um a blockade of China 2,000 miles out where they can’t do do anything about it and within 6 months uh the country would collapse because it wouldn’t have any food or energy or exports I mean it would be it would be really easy CH China wouldn’t have any food yeah it

Gets it food from where China is the world’s largest food importer they take everything from the open market they can but more importantly they import 80% of the stuff they need to grow their own food from so I mean you’d be looking at civilizational collapse in under a year

Yeah and and so they don’t want that so you got a bli people start I would assume they don’t want that the government in China has gotten a little weird of late uhuh so so and they import their food from wasn’t Ukraine a big farming uh Ukraine uh was a big Source

In the past the US is currently a big source uhhuh so we export a lot to China yeah a lot of Commodities yes uh so Commodities and Technology yeah so if we weren’t we weren’t exporting Commodities we would have a collapse over here as well though right yeah um one of the

Beautiful things about food is if you don’t have it you die uh which means that it’s the last Market that really crashes if things get strange okay I’ve never heard it put like that you’re you’re not concerned about China also because their their aging population talk about what’s happening there yeah

So two things number one you’ve all heard about the one child policy very real thing for 45 years the Chinese have basically prevented people from having more than two kids at all and in many cases just the one uh Second and far more importantly when a country industrializes they also urbanize

Because all the industrial and manufacturing jobs are in cities well when you’re on a farm kids are free labor you have a bunch when you’re in a city kids are in expense you only have one or two well since Nixon went to China China has been through the most

Rapid urbanization process in human history and so they’ve gone from having on average seven kids to on average less than one in less than 40 years well you play that forward and there aren’t enough people underage 50 in China to even theoretically repopulate anymore this is now by far the fastest aging

Society in human history and if the data that they have released of late is correct they have seen their birth rate drop by more in the last five years six years uh than what happened to the Jews of Europe during the Holocaust so that and that’s assuming that the data that

They usually lie about to make themselves look better is correct the reality is probably a lot worse uh and so assuming nothing else goes wrong we’re looking at a national collapse in under a decade because of a lack of people a national collapse of China in a decade yeah that assumes no military

Conflict that they can’t win no trade dispute that they can’t win nothing that looks like a trade war no problems with the agricultural system no Financial bubble pops you know everything else goes perfectly we’re looking at 10 years yeah so is that explain then why they were building cities counting that as

GDP and then collapsing those cities and buildings because nobody moved into them I think somebody found that there was no electrical uh being being expended after the buildout so therefore no population somebody tapped into that three four five years ago it’s so much worse than that okay so two things um number one

The Chinese have a very different Financial system than us uh for us if you want to start a business buy a house buy a car whatever you you take out loan and there’s collateral and if you don’t pay down your debts as you go you lose

The collateral uh for us a finance money is a is an economic good and is treated as such uh in China the state controls that space you got the big State Banks uh the government restricts what the people can put their money into in order to keep it at the services of the

Government and they expand their money supply by it depends on the month but somewhere between two and six times per month what we do and you know when you think of about all the financial lust that we have thrown out there in the last 20 years and think that the Chinese

Have done a factor of three to or two to six more than that gives you an idea of just the scale of how broken this is but if you have a bottomless supply of 0% Capital you can build a lot and that is the Chinese industrial boom of the last

40 years it’s basically the Enron model applied to the real world now if you are a citizen in China and you’re living in this environment and the government is preventing you from investing in mutual funds or stocks or foreign stuff you have very limited places where you can

Go real estate is one of the few places you can put your money so you basically get together with your friends pull your capital and you go and you buy a condo and then a couple of years later when you all have a little bit more money you

Go and you buy another condo but it’s a different group of friends probably so it’s kind of like ABS in Reverse I think I think I’m getting your Co yeah sorry it’s nasty goes through these wires uh and so the real estate industry specifically the condo construction

Industry uh has become the number one source of savings for the Chinese population because it’s one of the few things they’re allowed but then you have to play that against Chinese cultural norms like you know fun if someone lives in a condo it ruins the fun for someone else so most of

These condos have never had any occupants it’s not because there aren’t enough Chinese although there aren’t it’s because it’s cultural preferences so you have this entire asset class that according to the Shanghai Academy of Science is probably so huge now that there are enough spare never lived in

Condos in the country to house somewhere between an extra 1.5 and three billion people so more spare housing in China than the rest of the planet combined by like a factor of four wait wait say say that again 1.5 to3 billion unused condos that have never had anyone in them and

That is more spare housing wow in one country than the rest of the planet combined by a factor of four so it’s probably only worth 10 cents on the dollar yeah and that’s assuming it was built right and it wasn’t built out of tofu in the right

Location now yeah exactly and do you believe that we have a housing shortage in America as opposed to of course yeah we we haven’t built sufficient housing since the subprime crash uhhuh okay well I want to talk about that too so you’re saying China is a zero threat to America

Yeah the threat is from the collapse what does it look like when it breaks down how does that affect us uh this isn’t the Soviet Union there’s no Globe spanning Empire in the traditional sense but they are a major economic power and if they were to vanish tomorrow the

Industrial plant that $35 trillion of sunk cost of industrial plant that’s not going to be working anymore so it’s a race between the United States and the rest of the world and the Chinese about who can build out the parts that we think we’re going to need before they go

Away but don’t we get most of our vaccines and medicines aren’t they produced there or manufactured there or no the vaccines are domestic anything that’s biological or high tech is going to be here in Europe or Japan um there are some exceptions but very very few uh

The the the drug exposure issue is that when you’ve got a chemical drug especially if it’s been around for decades and it’s really really cheap like all those $4 prescriptions that excuse me you can get a Walmart most of those are India and China uh now there

Was a conversation during Co that we were going to bring all that back because if we were to build them here instead of a penny a pill it would cost like 1.2 pennies a pill um but that would have required presidential action from the Trump Administration and he went to play golf

And so it never happened that’s funny man okay so one act of Congress or a really aggressive executive action from the president and that can be fixed in less than six months and so should we be doing those things here I think that would be a really good idea that person that that

That specific step yeah that’s that’s lwh hanging fruit we should do that quick so why not I mean why aren’t we doing it in Mexico what you said Mexico is almost as is is they they’re better labor force I know you said there’s not enough of them but seems like we’re

Worried about them coming up here I want to talk about migration a second I think you’re going to tell me it’s not the Mexicans coming yeah it’s definitely not the Mexicans yeah so why are we not meaning on Mexico even more even though they’re our number one trading partner

You can only do so much so fast so one of the things to remember about the United States is one of the perks of a l Fair capitalist system is that government planning kind of sucks it’s designed to where it’s designed to let the cap the uh private Market decide

What happens and so the Biden Administration is the first Administration that we have had since World War II that is trying to build an industrial policy and while I as an economist can look at what they’re doing like oh they did that wrong and they did

That wrong and that was stupid for a first try it’s not bad and one of the things that’s we have an advantage of here is Joe Biden I mean when you have a presidents that’s 1.4 billion years old he remembers industrial planning from the last time around because he was around

For it yeah uh so I mean is he a great president no but he’s a president with a sense of context that we’ve not had for a long time and that’s actually coming in kind of useful right now you like you like him better than Trump well that’s a

Low bar but yeah you who would you vote for tomorrow between Biden and Trump yeah oh I’d definitely vote for Biden between those two I mean I’d rather have another Choice like I think we all would but uh if that’s my choice that’s how I would go uhhuh okay um so so okay

China’s not a threat if China’s not a threat why and then let me just tie Russia off with why why are Putin and China associating right now or is that just more propaganda you know they’re associating it’s an alliance of convenience they hate each other more than they hate us

Um when I say China is not a threat I don’t think it’s a long-term strategic threat that doesn’t mean there aren’t things in the relationship that require an active hand and there doesn’t mean that the Chinese can’t hurt us uh but they are not going to be around long

Enough and I’m far more concerned about the impact of their decline than of their rise uh when when a country dies weird things happen and we should spend at least 2% of our effort in C in China and preparing for what happens the next day we failed to do that for the Soviet

Union and we are still cleaning up that mess uh Russia’s different um China if they decided to go on a military spree they can’t achieve anything there’s no place that they can go to get access to the resources and the markets that they need they need Global access as

Guaranteed by the US and a military conf is just going to hasten their demise Russia’s different Russia isn’t concerned with economic development in the same way their people are inerd to misery and the problem in uh Russia isn’t Naval access it’s land access there there’s a limited

Number of places where other powers can access the Russian heartlands and if the Russians can forward position troops in those spots they can prevent any theoretical Invasion from happening and that’s what the Ukraine war is all about is getting to those spots the two that are closest are in Romania and Poland so

It’s not that Ukraine’s the end of the story it’s just the next chapter this is the ninth posts Soviet War that the Russians have instigated not the first and it won’t be the last if they win uh and the next wave will involve NATO and

It will involve us oh wow so the goal here is to prevent the Russians from ever leaving Ukraine because if they do leave Ukraine and they get to the Polish B and we get a direct fight between NATO and what has proven to be a completely incompetent Russian Force they’re going

To fling some nukes very very quickly and so if we are in that situation we’re going to find out two things real quick number one how well does our missile defense work and number two are Russian nukes maintained as badly as everything else in the Russian military I would

Rather not have that come to Jesus meeting um I would rather have the military conflict never go be Beyond Ukraine and that’s why supporting Ukraine is so important and everyone who is in power in the Democratic side of things understands that and everyone who is not part of Maga in the Republican

Side of things understands that the problem is is that Ukraine and Taiwan and Israel have now all gotten wrapped up in domestic political wrangling in the United States and it’s just unfortunate but we will get through this I just hope we can do so without having a massive

Strategic defeat that risks a nuclear exchange uh you know one Miracle at a time when when do you get when do you have enough of funding other people’s problems and I think you’re going to say well it’s our problem too but like well leaving it leaving aside that it’s our

Problem too uh look at the price tag for Ukraine me about 70 almost 80% of the stuff that we have sent are our decommissioned military assets things that we considered too low Tech to even transfer to our other allies we were going to just blow them up yeah but but

But it’s a fifth of a trillion dollars so so you’re saying it wasn’t really money it’s just equipment if you look at what we paid for it yes it’s a fifth of a trillion dollars but it was actually going to cost us money to dispose of it

So the ukrainians are actually doing us a budgetary solid come on man that’s that’s no seriously goam if I did that that economics somebody would say hey you you just did the the Louisiana tricker Rick we’re the equivalent of giving them an old Commodore 64 okay so we’re not

Helping saying we’re not we’re not actually helping them we’re giving no we’re helping them hugely because what the Russians have is worse uhhuh yeah when this conflict started Ukraine functionally didn’t have a military at all now they have what they call petting zoo military why do we put a value on it

At all why don’t we just say hey we didn’t really we just gave them some Goods that we needed to get rid of and it’s not worth a trillion dollar or that’s a that’s a question for the folks at the Congressional budget office they put a dollar value on everything now

There is Cash we about 10% of what we’re giving is ammo which we have another use for obviously and about 20% of it is development assistance but the Europeans give a lot more of that than we do okay now also yeah go ahead let’s say it’s

All real cash and it really has been a quarter of a trillion dollars yeah rebuilding Atlanta would cost a lot more than that rebuilding what Atlanta or Chicago or Baltimore but we’re not we’re not rebuilding our cities man no no no no no no you’re missing the point here

If we get into a direct fight with the Russians in Poland they will throw City flat named nukes uhhuh are you say we have to prevent are you saying that Russia you believe in my lifetime and yours we will see Russian nukes in the air if the war moves Beyond Ukraine absolutely

Uhhuh yeah we’re we’re fighting this war the cheap way right now so you’re okay so how long’s this war go on then give me that prediction ah I wish I had an answer for you and anyone who thinks they can answer that conf if you if you were going to say a

Number what would it be well you see the problem is the Russians have proven so incompetent the ukrainians have proven so good over and over and over again that everyone’s assessments are wrong uh if I was to guess we have to do this until such time as the governing system

In Moscow cracks now one of the things that Putin did in his rise to power in the 2000s is he systematically removed any Potential Threat to his person and his click from the entire system and all that is left are his old cadres from the Cold War who were part of the

Intelligence apparatus that’s only about 125 people now so unlike Iran where the political Elite is 10,000 people and unlike China where it’s just X in a cage you can imagine a scenario where a bad flu season takes out the Russian government so basically we there’s no

Plan to kill them because if there was they’d probably hit that big button but we’re in a situation you know where all of these guys are over 60 yeah and just mortality for the Russian Health uh is pretty high I I don’t mean to suggest

That this is going to be over next week but we’re not talking about decades here we have to hold the line until the Russian ability to make political decisions falls apart as has happened multiple times in Russian history is it is it real to you that that Putin would

Line up tanks for three weeks on the border and not have had some communication with Biden that hey I’m about to go in there the understanding that I have is that uh Putin made the mistaken belief that as the United States pulled out of Afghanistan that it was going to be

Incapable of operating anywhere in the world the reason why I say that was stupid is because you basically took what had been a albatross around the American neck for 20 years and removed it which meant that the United States all of a sudden was free to operate

Anywhere in the world but that’s one of the downsides of having such a vertically concentrated government is one person can to make a bad decision and it it ripples out and and based on getting rid of equipment then you think just leaving leaving $8 billion wor the goodies in

Afghanistan was a smart thing to do oh anything that I mean getting this is going to sound awful getting out of Afghanistan for only8 billion was a bargain uh we probably should have left Afghanistan 15 years ago and the reason we didn’t is no one wanted to be

Responsible for the political mess that happened the day we left we always knew it was going to be a mess and that’s why Obama didn’t leave and that’s why Trump didn’t leave and Biden decided I mean say what you will about the dude he knows how to pull off a scab yeah yeah

And and then so what did we spend in Afghanistan a couple trillion dollars uh the entire war on terror I think it was about two and a half trillion but yeah over half of that would have been off gu to you to you is that real money or is

That just stuff that that was real money okay that I mean that was pay for first world soldiers to do fourth world drudgery work that was that was a waste yeah what would you have done if you were the the king okay of America and I said look man you cannot

Spend the 2 trillion over there what would you have done with that 2 trillion for America well in the aftermath of 911 we had to do something we had to go in we had to get Obama or excuse me we had to get Osama Bin Laden and we had to

Knock over Taliban you said it I didn’t yeah my bad sorry um those goals were all achieved 15 years ago uhhuh so the day that Osama Bin Laden was killed esally since he was killed in Pakistan um I would have started a broadscale withdrawal from everything and we’re going to let’s say

We’re going to still what I would have done with the money you’re still going to spend the two trillion I’m like bro we got we got to spend this two trillion oh well if we have to spend it what would you spend it on in America uh I

Would have done Obamacare the right way and actually had healthc care reform as opposed to healthcare payment reform what would that have cost uh that would have cost less than $2 trillion okay so you still have let’s say you still have a a trillion and a half left over oh um

Broadband access on the national basis uh for everybody yeah single best way to help somebody move into the next economic tier of their life the follow on growth for that’s huge okay you still got a billion three a trillion three left over oh well

This this is a great day get you a new car uh let’s see um I would build a multimodal transport system from California and Texas down all the way to Mexico City so that the Mexicans that’s five billion 10 billion dollar 10 billion that that’s his jump change that’s like candy for everyone

You still got a a trillion 280 like you you got you got trillions of dollars to get rid of to get rid of I this is a great problem um look we got we’re short 4 million homes in America we have another 40 million just my little real estate

Mind another 40 million unwanted undesirable nobody wants to move into them homes and we have what 75 million baby boomers that are going to freaking clock out here in a little bit first they’re going to retire and want to go on cruises and the next thing I do

They’re going to do is die and nobody wants their homes they’re 8ft ceilings popcorn uh old air condition system shag rugs from you know 30 years ago their kids you don’t use government to funding to build homes you use Government funding to shape the regulatory environment and to

Provide the VA you got 1.3 trillion yeah I know what what I’m saying is if you build some sort of credit system somewhat similar to the VA so that uh vets can purchase homes in a little bit more easy terms do something a little bit like that the problem with

That is it starts to sound a little bit like subprime in Freddy Mack and Fanny May and the first time we did that it didn’t turn out very well remember the US sucks at industrial planning right so the best way that the Federal Government Can shape that environment unfortunately

Is regulation and from a government point of view regulation is free so what do you do that’s why I like infrastructure because infrastructure generates the economic growth that allows the rest of this to happen on its own yeah talk talk to me about you the demographic the Aging population China

When you say that I start thinking about America’s aging population what does that affect over the next 25 years as people my age start to retire and then it’s very real uh at their Peak there were 75 million baby boomers we’re still a little bit above 70 and on average

Half of them have already retired that means that they’ve liquidated a lot of their more uh aggressive retirement savings plans and gone into a lot more boring things like cash and tea bills and that singular effect so far has tripled the cost of capital in the United States when you say triple the

Cost of capital when you when you when you how do you define capital uh all sources of Capital Access so that’s everything from the bond market and the stock market to T bills to the mortgage rates just on the whole average the whole thing out tripling tripling the cost

Of borrowing borrowing raising Capital uh yeah includes bank loans everything okay so that that means you’re saying higher interest rates forever uh interest rates is one of those vectors and certainly an important one but it’s definitely not the only one uhhuh and forever is a very long time

Yeah but okay 25 years so I’d say 15 50 yeah5 we we have to wait for another large generation to be in their 50s because that when you’re 55 to 65 right that’s where most private Capital generation happens and the Millennials will be in that period uh when we hit

About 2035 to 2040 yeah so all we have to do is wait until then where where where does the money go like the money doesn’t disappear when I die uh well the boomers are going to spend all of it so it probably you think you think they’ll spend it okay number

One we’re living longer so the boomers are going to use more as they move into retirement number two they’re drawing down pensions in healthcare because Obama uh Obamacare made Healthcare incredibly expensive and so we now have our largest generation ever drawing the highest health bills in their life at

The same time they’re no longer paying taxes and they’re drawing down their pensions so the capital suck into the Boomer space is massive and they’re no longer contributing because they’ve liquidated all their aggressive Investments are you concerned about the the pensions in America oh absolutely I mean I’m as about pensions in almost

Everywhere in the world but yes in America too are you concerned about the the Pension funds as much as you are the banks much more I’m not worried about the banks right now more the more you’re worried about the big Pension funds like cpers I I’m worried about every single

Pension fund on in the country whether it’s state or federal or private I am not worried about the banks at the moment yeah uh we have some of the lowest delinquency rates that we have ever seen in history and even the places where we’ve seen things shoot up

Disturbingly at rate we’re still not up to the 40-year average so it’s not that there’s no risk on The Horizon I’m saying that we have every financial crisis we have ever had has been about asset quality and at the moment that’s not a problem interesting uh so you’re more worried about Pension

Funds n names give me some names of a big pension funding oh sorry I didn’t study for this part of the test I am unaware of a pension fund anywhere in the country that I think is in good shape okay okay none so you were talking about this this is what firemen

Policemen teachers depend on government workers are definitely the ones are probably a little bit more concerning because people have over promised okay and a lot of those Pension funds are heavily invested in the commercial real estate sector and I think office space is going to of all of the property sectors in the

United States the one that I am worried about is office space uhhuh yeah there’s about a trillion and a half dollars wor the office debt out there there’s another that low I thought it was a lot higher for some didn’t study for this part of

The test no that’s fine it could be two trillion there’s another there’s another trillion s coming due in multif family in the next 36 months I’m not so worried about that one uhhuh here let let me explain why okay so the Millennials are finally having kids and the boomers are moving into

Retirement spaces for both of those categories families starting out and people looking to move in together for old folks homes multif family looks more or less okay for me it’s not that there’s not stress there’s always going to be some degree of stress but the demographic factors that are driving how

We live seem to support that space that’s not how it works with office space uh the Boomers loved their offices they felt it was a cultural requirement and they’re now retiring and they were the largest generation ever the Next Generation in is Gen X they are the second smallest generation ever and they

Hate the office and they’re now becoming the decision makers and there’s few were of them so you have a lower commitment and a lower participation rate not interested in the asset class at all the new generation coming in from below the Zoomers are the smallest generation we’ve ever had they are antisocial they

Are the quintessential gig worker they never want to come into a general working environment so you’ve got the largest generation ever moving out the new decision makers don’t like this space and the new workers there aren’t enough of them anyway and they won’t come in anyway so that tells me that

Office space overall is overbuilt by at least oneir uhhuh a third yeah so when these loans come due you’re just going to have landlords to just hand the keys to the banks and if that building can be repurposed great if not uh oh yeah yeah

I think a lot of that’ll just be bought at a much cheaper price and it’s still cash flows and somebody will fill it up over time oh yeah 100% if you if you don’t need if if Aren’t Enough workers and if the workers who do exist don’t

Want to come in do you need all that space well they’ll come they’ll come in when when you give them a culture in a in an environment that they want to we we have a thousand employees they want people want to come in work here Le less

Than 20% of our Workforce are mostly Millennials because the Millennials love the the water cooler are they mostly Millennials I don’t know what average person here probably 25 26 years old so right technically Millennials but on the young side yeah millennial they want to make money dude people that

Work here want to make money they want to make money they they they want to make money most people work because they want to make money they don’t just work CZ just CZ yeah well I’m just saying what I’m saying is that the new generation coming

Up from below is much smaller yeah and they don’t want to come in at all yeah but you would agree I think that the major institutions the Facebooks the Googles the apples all the banks all said man remote is the way to go and we’re gonna let our people work

From home it was a [ __ ] massive failure they’ve all now admitted it it did not work productivity went down they did not build the team the culture skill set went that like every major metric right and if I agree with you on everything not sure I do but let’s say I

Do yeah I’m saying the numbers aren’t there the number of worker physical butts to put in seats don’t exist to maintain office space and what we’ve been used to for the last 40 years yeah remember you still you still could not as smart as you are you still could not

Figure out how to get rid of $1.3 trillion so let me ask you what are the things I should run for Congress and get some prog get some uh get some experience in that space What are what are the things I’m going to ask you a number of things you’re not worried

About okay you you are or you’re not worried about are you worried about real estate prices in America for the ne over the next 10 years uh in residential because of the shortage I’m more concerned about what that means for livability um in commercial I think

We’re going to see a huge I I I just want to because you’re going to have 75 million baby boomers leave their they’re going to die in their homes and their kids are going to be like hey sell it I don’t want it yeah I hear you but the

Thing is the the the Millennials are a large generation who are going to need the space and so whether that means a tear down and rebuild or uh an an adaptation of what’s there the demand is going to be there okay okay uh you you you obviously H uh you think housing

Prices go going over the next 10 or 15 20 years up or down up okay banking are you concerned about banking we’ve had three bank failures in my lifetime we never had three without having 300 uh the three that failed last year you’re talking signature and Silicon Valley those guys

Very different business model uh these were the Silicon Valley Banks they didn’t work off of loans they worked off of deposits so when a startup gets money from Venture Capital it comes as a big chunk and they put that Chunk in a bank and what these three Banks did is they

Then invested that chunk into long-dated Securities so when anything happened to the yield curve their entire business model collapsed and all the depositors tried to pull everything out so what it we saw was not a banking failure it was a very specific model that faced a

Stress point and that is now gone but you know every every Bank participated in this no no no they didn’t uh it was just the folks who were servicing the startups in Silicon Valley and now that’s mostly being handled by believe JP Morgan Chase and so it’s a much more traditional

Model uh I I will never tell people to not watch the banks like a hawk because that is always a stress point but we’ve just come out of 25 years of really really cheap Capital delinquency rates are low and I think the bigger threat is that people are kind of stuck in their

Homes right now because either half of them are paid off and why would you take out an 8% mortgage or the other half are below a 4% mortgage so why would you take out yeah a mortgage so while that’s going on nobody wants to build new housing and we already have record low

Housing stock so that clears out a lot of that popcorn ceiling stuff over time that you were concerned about and you suggested earlier that we have a housing shortage here because of 2008 n and 10 all housing stopped yeah you open probably been building about a third to a half of what

We should have been every year for 15 years now right so what do you think happens in this cycle cuz we’re getting ready to go to a major correction housing will stop construction will stop construction loans are coming due you’re going to have failed projects all over

The place so until we have a reset of expectations based on Capital which is going to take more than a year I think you’re absolutely right and then we’re going to have such a shortage we’re going to have no choice but to build but it’s going to be at a much higher cost

With less labor and less capital and that means inflation so is affordable housing