Emergency Episode: Why This Financial Crisis Is Worse Than 2008 | Balaji Srinivasan Pt 2 (Fan Fav)

Tom Bilyeu (0:00)

What is up, guys? We are continuing with part two of this incredible three-part episode with Balaji Srinivasan. If you don't know him, this guy is guaranteed to stretch the limits of your thinking. He is an incredible thinker, an incredible entrepreneur, and one of the brightest minds talking in economics today. And in this episode, we're exploring the growing political divide, China's influence, and the far-reaching impact of the potential economic instability coming. He thinks it's gonna be worse in 2008 It's bananas. One of the things that we tackle is, are we witnessing the emergence of a new global superpower while the American empire fails? Or is this just the tip of an even far larger iceberg? Stay tuned for more and make sure you're subscribed to Impact Theory on Amazon Music so you do not miss the upcoming finale of this mind-blowing episode with Bala J. Srinivasan. Part three of This Bad Boy is coming up, so go subscribe right now. I'm Tom Bilyeu, and welcome to Impact Theory. Before we move on, I think this is very important. So Chamath, Holly Hopatia, Polly Hopatia, sorry.

So I don't want to misrepresent his views, but he is, I think he's incredibly bright. And he has said many times, and Chamath forgive me if I'm getting your idea wrong here, but basically that the debt to GDP ratio is a big nothing burger. And everybody gets their panties in a twist, that number gets bigger, and we've got multiples of GDP and debt. And he's like, nothing's ever going to happen. It doesn't matter. There is no upper bound.

What do you say to that? Is there a breaking point or can we actually just keep printing money basically forever?

Balaji Srinivasan (1:45)

Well, Chamath is a colleague and co-investor, and I've been on All in a Bit, and I think we have a cordial relationship. Chamath has also said put 1% of your assets in Bitcoin just in case, because if everything else goes to zero, then they can't dilute that. So if you asked him, I don't know where he is at numerically on that, but he probably, I don't know if he'd say, there's 100% probability of no devaluation. He's a fiscated investor, he probably hedges. So that's a first counter argument. Many people, I mean, it's a point about not seeing something in one's life. I mean, let me make the point in some of different way.

Most of the 20th century, most people in the 20th century saw an economic apocalypse of some kind. It was communism in Russia, in Eastern Europe, in Vietnam, in Korea, in Cuba, right? It was Islamic fundamentalism in, for example, Iran. That was also asset seizures happened there. That's actually why a lot of Persian people made their way to LA., a lot of entrepreneurial class, their assets were seized in that revolution.

There was socialism in India. There was currency devaluations in Latin America, all the kleptocracies and, you know, like Argentina was once a rich country and it became poor in part because of these kind of currency crises.

And certainly there, you know, even even the UK had huge problems after World War II to pay for all of that. And so the, you know, I think there are three countries, Dalia talked about this, there's only three countries that compounded through the 20th century without an economic apocalypse. And those were the US, Canada and Australia. And so you have this interesting combination of three facts. First, economic apocalypse is actually fairly common. Second, economic apocalypse is uncommon for Americans. And third, economic apocalypse is uncommon in American media. And instead, the one thing that we are aware of is, you know, the potential for genocide on racial terms, right? That is definitely a threat. That's something you should be aware of, right?

But actually most of the conflict in the 20th century was not on the basis of just race, on the basis of class, right?

Tom Bilyeu (4:10)

Do you think Americans have to worry about that?

Balaji Srinivasan (4:13)

I do think so, yes. And the reason I think so is, if you're not like immunized against something, I mean, in many ways, I think this century is seeing sort of a flipping, okay? Where, or flipping, where those countries that were on the capitalist right in 1991 and the communist left in 1991 have essentially shifted sides, where now they're on the cultural left and cultural right.

And one of the consequences is all the countries that had suffered through socialism, communism, and so on in the 20th century, even if they still call themselves communist, like Vietnam or China, they're done with that in a sense. Like, you know, they're not, I mean, there's bad things that, you know, the CCP is doing, but they aren't like fully abolishing capitalism and going back to Maoism. That would make them too poor.