0:00:00 - 0:00:21 I want to explain some of the background reasons for the economic situation as it presently stands. And I'm gonna use two news articles that both came out today and we're gonna go through those and then I'm gonna hit s some slides, they only have three slides. But the, the moral of the story here is 0:00:21 - 0:00:42 , I wanna encourage you to think about higher order causes for the, for the current conditions. And we'll see this in the discourse in the comments of these news, art articles. But people have a tendency to it, it's almost like that game pin the tail on the donkey. They're looking for a single source 0:00:42 - 0:01:06 cause of their problems. That, that's, that's human nature. We oversimplify things and in this case, it is a single source, but it's not the things that you're going to think that that it is. And if you don't understand what's actually causing the problem, it makes it impossible to find an effective 0:01:05 - 0:01:26 solution. Now, what it does succeed in is helping you feel a little better about things, but it's false hope because you're pinning your hope on a solution that that won't work. And as we get into this. That will all make a lot more sense. So let's start on this article. This is on Fox Business today 0:01:25 - 0:01:47 . It's June 7th today. Not sure when I'm going to post this. Here's the headline, nearly two thirds of middle class Americans say they're struggling financially gasping for air. That, that's a pretty serious headline. Now, I'm not gonna read through the whole article but suffice it to say the prices 0:01:47 - 0:02:09 of things have gone up significantly. Ok. And, and that's usually when there are economic problems, the alarm bells start to sound with people that make uh less money than average. But once it starts hitting the middle class, it, it becomes more prominent and more noticeable. Now, anyone who, who spends 0:02:09 - 0:02:29 money is, is aware that inflation is high and it's much higher than the official number. I'm actually just gonna cruise down to the comments. It's higher than the official number. There's a reason for that. Since the 19 nineties, the US government has adjusted the calculation variables that they use 0:02:29 - 0:02:53 uh to calculate the annual interest increases because it saves them money on cost of living adjustments for social security. And so they've doctored that number. There's a website called Sh Shadows Stas where uh a man has, has preserved the original formula and you can see that that for inflation or 0:02:52 - 0:03:14 unemployment, the real number is, is significantly higher than the posted number. If you use the historic way of measuring it and, and that, that's jarring to see if you've never heard of that before. You should go check it out. But anyone who goes to the grocery store or who pays a mortgage or who buys 0:03:14 - 0:03:33 insurance or any of the various other things that, that people spend money on. You've seen this and you've seen that the inflation rate is much higher than what's being reported and the rate that's being reported is high to begin with. So what's the real story here? I just want to start with the very 0:03:33 - 0:04:05 first. Oh man, if my internet is going to work, this is fun. You're kidding me with bad timing. There we go. We're back. Thanks for your patience. Starlink is failing me this morning. There we go. Ok. So I want to start on the first comment if the internet holds up here. All right, the biggest rise in 0:04:05 - 0:04:23 cost is not food, gas and rent. Now, in all those categories, people have been hurting. It's the effect of those rises on various insurance prices and on auto and housing values which in turn affect the taxes we pay on personal property and real estate. Those cost increases are budget busters that are 0:04:23 - 0:04:40 not on the statistical radar because they're not in the calculation I mentioned and have gone up about 50% in the last couple of years now. Just so, you know, I did not write that comment, but if you've been on this channel, you know, this is exactly what I said would happen. I've said it multiple times 0:04:40 - 0:05:04 , things like food and gas and even rent. Those things are in the forefront of our attention. But what people weren't paying attention to is the fact that property tax is a percentage of the appraised value of your home and that went through the roof and anyone with eyes to see knew that that was gonna 0:05:04 - 0:05:22 happen during COVID because the pattern already started to, to display itself. Now, for some reason, people were foolish enough that they didn't pay attention to it until they got the property tax bill a year or so. After it was very apparent that that was gonna be a problem. I actually wrote to every 0:05:22 - 0:05:48 elected official at every level in my state, uh that, that whose jurisdiction I live in to say this is going to happen. What are you doing about it? And of course, none of them replied to me, but the property tax system is not robust to inflation and it's, it's a, it's a huge huge problem. Just as I 0:05:48 - 0:06:14 said, what happened? There are people today who are paying more on property tax than they are on their actual mortgage. And for people who, who typically are older, but people who have less earnings capacity than they did when they bought their house, that has a significant negative effect. And I warned 0:06:14 - 0:06:34 you about homeowners insurance for years and years and years, financial people said don't pay off your house. It's, it's such a low interest rate. You're better off taking that money and investing it somewhere else. And at the time that was really good advice. But instead of investing it, most people 0:06:33 - 0:06:58 went and spent it on things that aren't assets. So living it up basically, uh maybe getting AAA second mortgage to get an extension on your house or do some sort of remodeling or buy a big fancy truck or get a boat or any of these other crazy things that are consumptive. And as a result, they no longer 0:06:57 - 0:07:18 have that, that money. It wasn't growing at those interest rates, those higher interest rates. And now, yeah, you might still have a 3% interest mortgage. But your homeowners insurance, which is required until that thing's paid off and your property taxes are going through the roof. And so I if you couple 0:07:18 - 0:07:46 this to all these other tendencies we have as a society today, like expanding or retaining a large house as you get older. So as Children leave the nest today, it's very popular for their parents to add on to the house or remodel the house or buy an even bigger house or a second house or a cabin or something 0:07:46 - 0:08:08 . This happens all the time. Now, I, I know a lot of people hear that and they say, I wish I had that problem, but it does happen and it's completely insane because you're at the point where your living co your cost of living are going down significantly because kids eat a lot of food. And at the same 0:08:08 - 0:08:33 time, you're, you're finding new ways to spend even more money. And if that weren't bad enough, you're doing it in ways that latches you into larger outlays in the future because property tax is gonna keep going up. There's, there is no place in this country that I'm aware of where there's an established 0:08:32 - 0:08:55 pattern of cutting back at the local level. Everyone's spending more. And you could bet with various things in play, like increased illegal immigration but also economic problems, local governments respond to this by spending more, not less. I was not shocked but, but I was dismayed to see in my county 0:08:55 - 0:09:15 when COVID was, was playing out and it was very obvious that their revenues were gonna go through the floor revenues. Let's who are we kidding that their taxes, we're going to go through the floor. Did they cut their budgets? No, they expanded them, they should have cut them by, by 50% but instead they 0:09:15 - 0:09:36 increased them. Ok. Anyway, so these costs, you've been warned about them, you probably haven't done much about it. Ok? But if we cruise down the comments, we'll see more here. Um And this, this next comment highlights another point I want to bring up. I'll read it. Inflation during Biden's reign has 0:09:35 - 0:09:57 caused the average American family to lose around $7100 in buy, buying power under Biden prices have risen so much faster in wages that the average family has lost 5800 in real annual income. Ok. Let's tease this apart because there are a few points. Some are much more important than others. But a relatively 0:09:56 - 0:10:21 minor point is that when you get paid more, you also pay more in taxes, you go up tax brackets. But even if you don't, whatever percent of X increases when X is bigger, right? So if, if you're, for whatever reason, if you have a 10% tax rate just to make the numbers easy and you make 100 bucks, that's 0:10:20 - 0:10:46 $10 in tax. If you make 100 and $50 that's $15 in tax, right? So everything goes up with that and, and people don't usually talk about that, but here's, here is um a bigger problem, much bigger problem. This is a case of pin the tail on the donkey. This is find the single thing that you can blame this 0:10:46 - 0:11:04 on and you're looking at at a very low level of the hierarchy of cause you have to look up. If you really want to figure out what's going on, you can't, you know about half of this comment section wants to blame it on Biden, about half of this comment section wants to blame it on Trump and they both 0:11:03 - 0:11:24 have good reasons for that because both of those people absolutely had an effect on this. No one mentions Congress for some reason, they all had an effect too. The network of effects is a network. It's not one person, it's not even one group of people. And that's what we're getting to in this presentation 0:11:23 - 0:11:49 later. The effects are, it, it's a huge network. It's, it's not just the government, you can't even pin this on just the government. It's bigger than that. Ok? So if you try to pin it on Biden or Trump or Congress or the fed or any government entity or the government as a whole, you can never solve the 0:11:49 - 0:12:06 problem. You'll never even see the problem. You'll just be on this treadmill where you're really angry about things and nothing can ever get better because you're not addressing the actual problem. So we'll get to that and hopefully that's a little tidbit to keep you going here. Let's just scroll through 0:12:05 - 0:12:30 to see. Uh someone correctly says that inflation will get worse. It's absolutely going to get worse. Ok? I, I say that as confidently as I can say anything, I'm never 100% on anything but I'm as close to that as I can get. I did want to point this out too. This person says that in the Carter administration 0:12:29 - 0:12:54 , inflation was around 20%. This person built a house in 1976 and interest rates were at 8.5%. But at the time three year C DS were paying 15%. Now, I would wager that people, let's say under 30 today don't even know what a CD is. Either kind like the music kind or this kind, which is the, the kind you 0:12:54 - 0:13:13 get at a bank, a certificate of deposit. And the reason is because they've never had a reason to use either of them. Now, a bank CD, the purpose of it, you lock up your money for the term of the, you're making a loan to the bank and for the, the number of years that you have it, you could get it for 0:13:13 - 0:13:34 six months or a year or two or three, that interest rate is guaranteed. It was the safest way you could earn interest on your money. Now, um, the reason people stopped using these is because the banks stopped paying a percentage that made any sense. You could put that money on the stock market and make 0:13:34 - 0:13:57 a heck of a lot more or, uh, for what they were offering because you, you're looking at 1% or less than 1% for a CD. It is insane. And the point here is that people bring up that interest rates used to be a lot higher than they are today. Yeah, but the, the interest you could earn was much higher than 0:13:56 - 0:14:22 what you would pay on a mortgage, say. And now we just experienced the delightful automatic reload on the Fox News websites. But I think we're done here. Anyway. My, my point was bringing that up though about the seventies is that, um is that today, interest rates are also very high, but you can't go 0:14:21 - 0:14:43 and earn that much interest on anything else. So, inflation is probably at least 30% per year right now. Again, it depends on what formula you use to calculate that. But you, you're, there's no safe return of 30% per year. There's nowhere you can put your money where you're gonna get that. The S and 0:14:43 - 0:15:03 P 500 is up by a lot this year, but it's super, super volatile, not to say that it's up and down right now. But there are so many things that could crash the market. It's not even funny. I don't know that there's ever been a time where that was more dangerous than it is. Now, that's not to say you shouldn't 0:15:02 - 0:15:22 put your money there. It's just to say that that, that things are dramatically different than they've ever been and not in a good way, they're worse. So, uh, at least in, in, I'm not saying then they've ever, ever been, I'm saying in living memory. So for people alive today, it's never been worse. So 0:15:22 - 0:15:46 , um, the closest thing you've got to, the old fashioned CD from the seventies is with, with the interest rates from the seventies is treasuries. So, t bills and those are sold by the government and they're guaranteed by the government. But even those, there's been a flurry of articles discussing the 0:15:46 - 0:16:06 possibility of the, the government defaulting on those. And so those used to be considered the safest investment you can make not so much anymore. And what interest rates are they paying? I haven't checked lately, but I think it's around 4.5% that doesn't even get close to inflation. Your money will 0:16:05 - 0:16:24 be eaten alive if that's how you're saving it. That's not to say it's not the best that the, let's say the cleanest dirty shirt. But it's, if you, if you don't have any clean shirts, you're gonna wear the one that's least dirty. And that's what that is because you still have a guaranteed loss, a big 0:16:23 - 0:16:44 one and it's a guaranteed loss that you can't write off when you lose money to inflation. There's no way to write that off on your taxes, right? If you lose money on the stock market or on the sale of your home or whatever capital loss there, you, there is a way to recover that that as a tax savings 0:16:43 - 0:17:08 eventually, but let's not get into how broken that is as well. So historically, at least in, in living memory, if you can get an 8% return on a stock market investment that's considered good and that's consistently, that's what it's been. So, um that's the background for all of that and the, the long 0:17:08 - 0:17:31 and short of it is, there's really nothing you can do with your money right now to preserve it against inflation. Nothing that would be considered reasonable by a normal person at least. And we'll get into that towards the end of this presentation. So the next, the next article here, this is from Zero 0:17:31 - 0:17:55 Hedge and it's called Our Crisis of Competence. And this guy Charles Hugh Smith, his, his articles are, are usually pretty good. Um, they're worth thinking about usually. And so I won't read you this one, but he's, he's basically giving bullets on exactly how things are falling apart from the perspective 0:17:54 - 0:18:18 of degrading competence. So all of you have experienced this, how many places have you called? And they've said due to an increase of call volumes, you're gonna be on hold for longer than usual. Consider going to our website and you go to the website and there's absolutely nothing there that relates 0:18:17 - 0:18:39 to what you're looking for and you're gonna be on hold for a really long time if you call back. And it's some of the times the, the result of this call is that they just hang up on you. And I'm sure you've all experienced that. I know I have, it's insanely frustrating and it's just a microcosm of what's 0:18:39 - 0:18:59 going on in many different ways. You know, I'm, I'm from Baltimore originally and that ship hit one of the main bridges there and they said they were giving estimates for how long it would take to repair the thing. And I think some of the estimates for a decade and, uh, originally it took far less time 0:18:58 - 0:19:17 than that to build. Now again, if people go to single source to describe what the problem is and they're looking for a single source solution, they say things like, oh, there's so, there's so many new regulations and that's a problem. Well, that is a problem for sure. That contributes, but it's not the 0:19:17 - 0:19:36 only problem. There are far fewer qualified workers for that sort of work today because we outsource everything to different countries compared to when that bridge was built and um on and on and on. There are all these problems there, there isn't even the, the, it's harder to get the, the metal for the 0:19:36 - 0:20:01 bridge today, not just the workers, but the materials for the same reason and on and on and on. There's a million different problems there. Ok. So you have to look up in the network of causes to actually get to the point. So just to highlight some specific points of this article, one is he says, can 0:20:00 - 0:20:21 we dredge up the wherewithal to be honest, for a change and admit what we can't do. Now, this is a problem for individuals as well as across society is that we're not honest. And that's a really big topic that I can't delve too far into in this video because it's already gonna be longer than I wanted 0:20:21 - 0:20:45 it to be. But the takeaway here is that very few people are honest enough to come up with solutions for the problems that we face. That's probably not something you've thought about before. And you should start by asking if you're honest enough. How many problems do you have in your life? Whose causes 0:20:44 - 0:21:07 are evident beyond your action? How many problems are you ignoring in your life or dealing with in a way that you know, is insufficient? I bet the list is pretty long. If you're normal in any way, the list is probably pretty long. What about in your family? So move the scope from yourself to your family 0:21:07 - 0:21:31 . Are there? How honest are you about the the need for change in your family? Whether it's with a specific individual in your family, your spouse, your child, maybe your parent or the family as a whole. Is there a piece of the family culture that is deficient in some way that needs to change? And, and 0:21:30 - 0:21:55 if you don't have those two scopes lined up the way they should be, it's very unlikely that you're the kind of person that could look out into society and have any confidence that you could do anything to improve things beyond the way they are. So that's an issue. The number of people who have the courage 0:21:54 - 0:22:24 , honesty and wisdom to actually generate solutions for the problems we face is extremely small. And if that weren't bad enough, one of the problems with society today is that we've lost the cultural foundation of believing that these people exist, believing that they're better than most people and believing 0:22:23 - 0:22:51 that we should give them power and money to fix things. And most of the time they don't want the money. But if we actively shut them down, which is what society does, then they'll never get into the place to fix the problems. Right. So, again, this is an enormous topic but just, just touching on it ever 0:22:51 - 0:23:15 so briefly, this starts in public schools. If you read the history of public schools is gonna sound conspiratorial, I promise it's not John Taylor Gatto G att O look up his book, An Underground History of Public Education or American Education maybe. Um If you, if you look at that book and you read it 0:23:15 - 0:00:00 , which it's he gave it away for free, you can get it for free online PDF. It's, it's a documentary history of how public schools came into being their purpose from the outset and is very much in play today is to prevent individuals from being self starting um autonomous, critically thinking people, 0:00:00 - 0:24:12 public schools were created to create factory workers and uh pliable populace and they're effective at that, right? So from the outset the kinds of dynamic people who are highly intelligent and brave enough to see and fix the problems we face today, they are shut down from day one when they report to 0:24:11 - 0:24:36 kindergarten. And that's, that's the very beginning is it's, it's far from the end, but society will fight and fight and fight these people. They are the least likely to have any kind of power in society today. So that's, that is very much a facet of the real problem which we're about to get to, which 0:24:36 - 0:24:58 is complexity. OK. This is the other point I wanted to highlight from this article, he talks about something he calls the supremacy of process over results. Now this is gonna sound wordy. And after I read this, I'm gonna break it down and it'll seem really simple. The system incentivizes and rewards 0:24:57 - 0:25:19 uh following process no matter how senseless inefficient or wasteful that process has become. Now anyone that's worked in or with government knows that this is the case, ok? But this is bled out into many other systems. It's certainly the case in the universities and now more and more private businesses 0:25:18 - 0:25:42 are like this and not coincidentally, the the percentage of muck that has leaked out into the private sector has traced the increase in regulations because that's kind of like if you remember the Borg on Star Trek, you know, it's this virus that comes out of the government and infects private businesses 0:25:41 - 0:26:03 when there are these stupid regulations that you have to comply with and you have no idea how bad they are until you start a business. And all of a sudden you realize that each of these regulations is like an additional set of ankle chains and you're supposed to run at full speed while they're on your 0:26:03 - 0:26:25 feet. It makes it enormously difficult to do anything and it's getting worse through time. He continues. Those who have mastered narrative control. Ie look how wonderfully we're following procedures and avoidance of accountability for actual results are advanced. And those who chafe at the rank and sensibility 0:26:24 - 0:26:45 of overregulation and processes that prioritize stakeholders input to the point that nothing gets done are sent to, to bureaucratic Siberia or quit in disgust. That is absolutely the case. Now, let me give you a few examples of this and then we'll get to the slides which again, there are only a few but 0:26:44 - 0:27:08 please stay for that. It's culminating. All right, let's put this into plain English. What, what are some ana some examples of this? What about virtue signaling? Does virtue signaling uh place the process at a higher value than the results? It absolutely does. You're talking about what you wish were 0:27:08 - 0:27:31 true and then rewarding people for how loudly they, they scream that right. That is absolutely narrative control. Look how wonderfully we're following procedures. It's absolutely avoidance of accountability. Look at COVID to the to date, we still haven't done anything to the people that pushed the vaccines 0:27:30 - 0:27:53 that pushed the masks or that who still do both of those things. There are people who still do both of those things that are in positions of government authority or private sector credibility. It's insane. There is no connection to the actual results. There's a, there's a, an acronym, I can't remember 0:27:53 - 0:28:16 what the exact acronym is, but it's something like a system is what it does, not what it purports to do, but what it actually does, you have to evaluate the, the, the worth of something based on its actual outcomes, not its intent. It's true of people, it's true of ideas. It's true of systems. It's certainly 0:28:16 - 0:28:35 true of businesses if you were an investor and someone said, hey, I've had this business for five years and I want you to invest a billion dollars into it. And I think that that billion dollars is worth 1% of the company. You'd say, well, what do you have, what have you sold to customers? And you say 0:28:35 - 0:28:53 , oh, nothing. We've actually just lost billions of dollars. Ok? Do you have a product? No, we're getting there. But we really think that we will have a product and it will be worth a lot of money when we get there. Do you have anything to show for it? No, we've just spent a lot of money trying. Are 0:28:53 - 0:29:15 you going to invest in that company? Of course, not unless you're a moron, right? So, but this is how we act very differently in life because we support the people who were dead wrong on things again and again and again, and we never go back and reward the people that were right. How many people who 0:29:15 - 0:29:36 were railroaded during COVID? Because they said what turned out to be true, have been rewarded? How many have been re reinstated in their place? At least that's, that's at a minimum who are, who are doing as well as they were when they told the truth that no one wanted to hear and, and if this system 0:29:36 - 0:30:02 were just in any way, we'd be promoting those people to even greater responsibility, paying them even more, et cetera. This is a huge problem. So, what does that have anything to do with complexity? Well, it has to do with how much power technology places into the hands of people who lack the wisdom 0:30:02 - 0:30:26 to wield it. This is a very uncomfortable point to make in modern society and the reason should be obvious because it's true. Right. It, this is exactly why it's hard to hear because normal people today really believe that they can do anything that anyone else can do, even though they're swatted in the 0:30:26 - 0:30:46 face every day with examples that that's not the case, even though almost everything good in their life came from the sacrifices of people that were more virtuous than them, whether they're living or long since dead. It doesn't matter that everyone still thinks that they're the one who can do anything 0:30:45 - 0:31:09 and that no one can do it way better than them. Ok? A and to this day. I mean, there's a person who watches this channel who through his comments, I can see he's, he's not happy about the fact that I continue to say things like if you got the COVID shot, you, you failed the test and you should reduce 0:31:08 - 0:31:28 the confidence you have in your ability to see what you ought to be doing and obviously judging what other people should be doing. And he gets pretty chafed at that. But it, it's, it's just, it's a fact, I'm sorry, you made the wrong call and if you don't adjust your confidence downward after that and 0:31:28 - 0:31:50 increase your, your, your, the credibility, you bestow to those who got it right? You're not a rational person. It's, it's that simple now, you're not alone because most people are irrational today very much. So, it's obviously it's not a continuum, but no one likes to hear this and that's why they don't 0:31:49 - 0:32:07 get better because they refuse to listen. If you, if you live your life this way, you get much wiser much faster, right? Because you're looking towards those who know better than you and you're learning from them. But step one is to recognize that there's a difference, right? And if you never get to 0:32:07 - 0:32:30 that point, you never learn. What's another example of this narrative control? Look how wonderfully we're following procedures and avoidance of accountability for actual results. What about gender ideology? Whether that's feminism, which has been around for the since the sixties or all the different 0:32:30 - 0:32:57 flavors of things that have come since then? What are the actual results? Are people happier? Do people have more meaning in life? Are they more stable or are they less of all those things? Folks, many folks have complained about the feminization of society and um that's kind of a metaphorical use of 0:32:56 - 0:33:25 the word, obviously, uh an archetypal use of the word if you will, there are masculine and feminine attributes. Well, do you think that in society at large or in um romantic relationships will say whether it's dating or marriage in specific? Do you think that there is narrative control and avoidance 0:33:24 - 0:33:47 of accountability for actual results? That's absolutely the case. You're not allowed to speak the truth on these things. If you do, you will be punished, but not because you're wrong. It's because people don't want to hear it. And if you point to actual results, you will be punished. There is no accountability 0:33:46 - 0:34:10 . Ok? Even though those kinds of people love to use the word, they've redefined it just like they have a whole lot of other words to mean what they want it to mean instead of what the dictionary says? All right. With all of that, you could keep going on that for a long time. Let's switch to this. Now 0:34:09 - 0:34:40 , I'm struggling to see where the recording window is. But I think, let's see, that's probably as close as I can get it. So I'm sorry if there's a little band at the top there. So complexity and entropy are very large topics. I'm gonna break this down as simply as I can and as laser focused on to the 0:34:39 - 0:35:08 ideas that we've talked about as it can look at this cycle here. This is what's happening right before your eyes. Even if you've never noticed it before. Think of society as a living organism. Uh It's a system and it's growing, ok? You can oversimplify this and think about bacteria on a Petri dish. There 0:35:07 - 0:35:37 is a fixed amount of resources and there is a growing organism on this plate. Ok? We are the organism and earth is the plate. The system must grow in order to preserve surplus against increased cost. What does that mean? A again, you could take this as specific as you want to, we could talk about endless 0:35:36 - 0:36:04 examples of this. If, if you just base this, if you limit it to the discussion of food, maybe, maybe that's a good way to do that as people uh reproduce and the population increases, you need to grow more food to feed them, right? And what to God that it were that simple because as you get more food 0:36:03 - 0:36:31 and the farms get bigger and more land is under tillage, you start to get more diseases, you get fungus in the crops, you get birds eating the crops, you get mice, eating the crops, all these there are viruses that happen in the crops and all these things happen and they grow as a function of how much 0:36:31 - 0:36:53 food you're growing. Ok. Then there are all the consequences that come from the people the more. Uh, if you actually this specific example, if you want a wonderful book, it, I really recommend reading it. It's Called Against the Grain. I have no idea how I heard about this book or why I read it in the 0:36:53 - 0:37:16 first place. But what an amazing book. It's nonfiction, but it's in, it's very entertaining. Not in a funny way, but it's, it's engaging and you'd be shocked how many problems in society stem back to agriculture and, and I'll leave it at that. It's, it's a must read against the Grain and it's a very 0:37:15 - 0:37:42 accessible book. Uh I had my 12 year old son read it recently and he really liked it. He actually asked for his own copy. So that, that'll tell you about that anyway. So as the system grows, the overhead of the system grows, ok. Now, that's this part, the, the cost to maintain that system will increase 0:37:41 - 0:38:07 . But as it increases, you go back to the beginning because if the overhead increases the resources you're bringing in to address that overhead also have to increase. And this is a race case, not race, like the color of our skin race is in running a race like uh the, the arms race in the Cold War it's 0:38:07 - 0:38:25 like that we've got two things competing with each other and when one increases, the other has to increase, to overcome it. Here's, here's another simple example. If you have a con a small construction company and you have, it's just, you, there's a certain amount of overhead that's right on. You, you 0:38:25 - 0:38:44 have to have tools, you have to have a truck, but let's say that you wanna make more money. Well, you have to get bigger jobs. If you get bigger jobs, you have to hire more people and all those people are gonna increase your payroll burden, not just the money but the actual mechanics of doing the accounting 0:38:43 - 0:39:03 and running payroll and the cost of doing. So you have to get trucks for all those people. You, you might have to have a different business structure because maybe an LLC is too hard to run at that point and on and on and on, then you have to get two crews, then you have to get three crews. You see how 0:39:02 - 0:39:24 this, this is just a cycle and it just keeps going. Now, let's double down on that because it's a, a nice clear example of what we're aiming for. So why do we bother at all if it's just this cycle? Well, the hope is that you can outgrow the overhead. So if you, if you start a business, let's say it's 0:39:24 - 0:39:44 a tech company and it's gonna cost you $2 million to bring a product to market from nothing to, to market is $2 million. Your hope is that you're gonna be bringing in, let's say $2 million a year after that. So, that's worth it. Right. Well, depending on what your maintenance costs are. Yeah, it's worth 0:39:44 - 0:40:12 it. So, if it's 10 million that's even better. What if it's $2000 a year? Well, that's not worth it. That business is gonna die. right? So people bother with this because they think that they can outrun the overhead growth and sometimes they can, but it turns out that all the cases in which they can 0:40:11 - 0:40:39 tend to be time limited and they are tightly coupled to um, a resource availability that's limited in ways that no one pays attention to. So what do I mean by this? Let's go back to the construction company example, let's say that you've got, you've, you've plussed up the size of your company because 0:40:39 - 0:40:58 demand is just through the roof. And what you're finding is yes, overhead increases dramatically as you hire every additional crew. And also the quality of the employees goes down because they're sparse and you have to hire all of them because you really need them and on and on and on. Right. So the 0:40:58 - 0:41:19 overheads growing very quickly, it's, it's, it's more quick than you'd expect from each additional higher. So the overhead added by the first hire is much less than the overhead added by the 10th hire, let's say. Right. So it's growing very quickly, but it's a roaring market and you're finding you're 0:41:19 - 0:41:39 able to increase your prices that you charge faster than your overhead is growing. Incidentally, this is one way in which construction people get burned hard. I'll, I'll tell you in a minute. So you're, you're charging faster than your overhead costs are growing the, the way people get burned. I'll just 0:41:39 - 0:42:03 tell you now, as a side note is they don't increase their prices as fast as the customer is willing to pay. As a, as a, a laborer or a labor oriented business. You need to scale your, your charges as fast as the customer will support what they do instead is they're looking backwards and saying, well 0:42:02 - 0:42:21 , I can't increase my price more than X percent of what I charged last year. And that's irrelevant. You have to charge as much as people will pay in that business. And the reason is what I'm about to tell you because there comes a point where that starts to recede. And when it does, you get eaten alive 0:42:20 - 0:42:39 and you'll delay in firing your people because you're not sure how long that's gonna last. And you, you're obviously you have loyalty to your people and everything else, but you get eaten alive on the overhead because the price the customer is willing to pay comes down. Do you wanna stay very close to 0:42:39 - 0:42:59 that? On both sides? You want to charge as much as they'll pay and then you absolutely have to downsize very quickly when that turns around. Ok. And it does, construction is always boom and bust. It always is. Sometimes the cycles are short, sometimes they're long. And the people that do well in construction 0:42:58 - 0:43:21 , they find a way to extract the most value when things are busy and they divert that, that surplus into longer term, more stable revenue sources. Like they buy rentals. Right. They, if they're home builders, they'll build houses just to rent, not to sell. If they're um, I, I, if they're not, they might 0:43:21 - 0:43:39 buy an existing house and remodel it and rent it out or don't remodel it and rent it out. And so they, they navigate that well and the people, you know, who have done that have done very well and made a lot of money and people who don't do that usually go out of business or they're just scraping by even 0:43:38 - 0:44:02 though they have years where they're on the books personally making um hundreds of thousands a year. But it doesn't matter because they are down years where they lose tons of money. So anyway, this is the cycle and that's an example of it. So now this is a little area of the screen, but these little 0:44:01 - 0:44:28 axioms are worth their weight in something way more valuable than gold. I don't know what that would be. The more complex the system, the more likely changes are to occur? Ok. So if you look at society today, how quickly are things changing? They're changing faster than they ever have. Why? Because complexity 0:44:27 - 0:44:51 is higher than it's ever been. Now, what are those changes? They could be positive. But if you know anything about complex systems, like if you look at DNA, the likelihood of a positive mutation is far lower than the likelihood of a, of a negative mutation. And the more complicated the thing is the more 0:44:51 - 0:45:19 that is true. So our society is more complex than it's ever been, which means that changes are less likely to be positive than ever. The ones that are positive usually don't last very long. They'll last, they'll tend to last less time than ever before. So if you're older, you might remember the rise 0:45:18 - 0:45:46 of certain blue chip so-called companies, most of which are still around today, although they're not considered particularly successful today. When's the last time a blue chip company was founded? And how has that rate decreased over time? It's traced the increase of complexity in reverse. So it's much 0:45:46 - 0:46:11 harder to establish a successful company today because most changes are negative, right? And even if you do odds are, it's not gonna last very long. OK. Now, you can apply this to the to the micro level. If you have a business, maybe you discover some new product line or there's some change you've made 0:46:11 - 0:46:35 that's obviously positive. Don't bank on it. Continuing. That's the difference today. All right, the cycle happens faster today. The other change that that could happen, it's not just limited to new problems arising, which is a big one, but it's also the problems you thought you had solved will reveal 0:46:35 - 0:47:03 themselves to suddenly be unsolved again. Because the solutions you were using for that problem, which, which were sufficient before are suddenly insufficient. So that happens all the time. All right, I went over that beyond the increase in the likelihood of changes to, to be negative. There's also this 0:47:02 - 0:47:36 , this increase in the amount of harm those changes cause. So the changes are more likely to be much worse than before. And I already talked about how the solutions that do arise will be less helpful and also more short lived than they were before. And so the pattern that emerges from this is that progress 0:47:35 - 0:48:02 becomes geometrically more difficult to achieve and sustain as complexity increases. That's the takeaway. All right. Now, by going through all these listed properties, there are more in detail. What I've done is I I've given you bread crumbs from which you can extract specific advice for your situation 0:48:01 - 0:48:24 . All of these things fly in the face of human nature, we want to assume things are going to continue exactly as they are. That's called normalcy bias. We want to assume that whatever changes might happen will be minor and that their effects will be positive. And all of those things are dead wrong as 0:48:23 - 0:48:52 the complexity increases, they become more incorrect. Right. So one piece of advice I would give you is to look at longer time scales when you're trying to predict the future. Don't just look at a recent past, whether that's, you know, three years, five years, 10 years, a decade, your lifetime or the 0:48:52 - 0:49:17 lifetime of the people who you have met. Right. So maybe the oldest person you ever met was your great grandpa or something. Don't just look at how things were during that time. Look back more, look back longer, look at historic averages. Don't buy into this lie that humans are better now than they've 0:49:17 - 0:49:49 ever been on a moral or mental level. It's not true in either case. And there's plenty of evidence to show that, ok, we have the difference is this thing called the industrial revolution. The difference is that today we still have coal and oil and gas. Now there are artificial actions that are being 0:49:49 - 0:50:18 taken to reduce how much access we have to those things and to increase their cost artificially. But even without those interventions, the availability of those resources has been and will continue to decrease and the cost of them will continue to increase. So as that does, there will be a um I don't 0:50:18 - 0:50:49 wanna say sudden but a rapid reversion to how things used to be. And the problem is that we've lost the skills and willpower that people back then had now, willpower can be recovered quickly. Those who refuse to obtain it won't last very long. And that solves that problem. But the skills take generations 0:50:48 - 0:51:17 to acquire and make widespread, a few clever and determined people could recover a lot of them relatively quickly. But in order for this to be something that where most people know what they need to survive, that takes generations. And again, uh I, I don't know how else to say this people will die if 0:51:17 - 0:51:39 they don't get with the program and that accelerates the adoption of the skills. So if you look at longer time scales, here are some things that I, I've told you some of these before, I'm reiterating, but maybe you haven't heard some of these. You're not going if you, I'm 40 today, I have zero hope of 0:51:39 - 0:52:08 having any of these things at some point before I die. I am fully confident that these things will not exist if I die at a normal old age. Ok. So let's call that 70 or 80. Let's go with 40 years. I, I am highly confident that 40 years from now, none of these things will be available. What are these things 0:52:07 - 0:52:34 ? Things like this is not an exhaustive list. One stop shopping like Walmart, you go to Walmart, you can buy all your groceries, all your cheap stuff from China. You need a new couch, it's all there. You don't have to be that old to remember in the nineties when that didn't exist right now again, one 0:52:34 - 0:52:58 theme of complexity is when it rips back, when there is a collapse, that's what we're talking about is a collapse. When it rips back, it's not like the prior thing is immediately recoverable when Walmart goes out of business or ceases to be Walmart for all intents and purposes because they no longer 0:52:57 - 0:53:19 do this or that or they do things a different way or it costs way more than it did or whatever. Ok. When that happens, it's not like there are dozens of mom and pop shops at the local downtown waiting in the wings to come back as they were in the nineties. Those places don't exist anymore. The people 0:53:19 - 0:53:42 are dead and, um, the people that might replace them lack the capital to do so the supply chains are gone because that cascades back. It's not just the storefronts that are gone. It's all the people that used to supply them because everyone has adjusted to this new way. This just in time delivery and 0:53:41 - 0:54:05 Walmart has these huge warehouses and whatever else and network of trucks driving this stuff around. Um, and even if all those things were in place, which they're not, where are the people who are willing to work those jobs for what those folks got paid adjusted for inflation. So back in the day, the 0:54:04 - 0:54:26 reason Walmart got popular is because the mom and pop places charged more Walmart had huge volumes, comparatively enormous volumes. And so they could get by on a fraction of the markup that the mom and pop places could. So when it reverts back, it's not gonna be all of a sudden, people are willing to 0:54:26 - 0:54:48 pay tons more for the stuff that they've been buying, they're gonna buy far less because they can't afford it. And, uh, the, the wages available are going to be those same razor thin margins. And if you wanna see what that's like, go to a third world country and you're going to see little corner stores 0:54:48 - 0:55:10 set up where all those people did was drive to the metro center on a bus, buy up a bunch of junk and then come back to their house where they have a storefront and they're selling things on thin margins because they didn't really add any value. The only value add is, is convenience, right? And, um, people 0:55:10 - 0:55:26 can't afford to pay much. So they're just making a tiny, little bit of extra money for their time. In fact, a lot of those stores aren't even manned. There's a bell or something where you hit the bell when you come in the store or when you open the door bell rings and whatever the person is doing in 0:55:26 - 0:55:52 their house, they have to come out and man the store. So something like that would be a positive AAA better than I'm imagining outcome there. That's, that's better than I imagine it will be online shopping. What about that? Well, um, that, that depends on so many things. It's another function of complexity 0:55:52 - 0:56:16 . Things get tightly coupled. So a certain condition is dependent on a whole bunch of stuff. Staying the same. I don't know if you have any idea how sensitive online shopping is to change. Right. So, um, as I told you what happened years before it did, you're seeing shipping trucks, uh, being raided 0:56:16 - 0:56:42 by robbers, whether that's mail people or Ups fedex people or the actual tractor trailers or rail cars. I've seen articles showing all of that where gangs of thugs are, are robbing these things that were traditionally considered safe and safe means cheap. It means inexpensive. And so guess what happens 0:56:42 - 0:57:03 when there's greater loss in the supply chain to get it to your house? Guess what happens when there are more porch pirates? Well, the cost of online shopping goes higher and at some point people stop delivering to problem areas. Do you see this problem? This is one of the issues with, with uh mortgage 0:57:02 - 0:57:32 insurance, home insurance, home insurers are paying much higher costs in some places than others because the the incidence of uh some kind of emergency is higher. So maybe that's hurricanes in Florida or forest fires in California. And so a lot of insurers just has stopped covering homes in these places 0:57:32 - 0:58:00 and then the people left there have to pay whatever rate the remaining providers charge and often it's 50 or 100% higher than they were paying before all of a sudden and it's 50 or 100% of a high number because those, those policies aren't cheap to begin with. All right. So what happens when online shopping 0:58:00 - 0:58:27 goes out the door? Well, uh, again, none of these changes have to happen all of a sudden. So it, it, the pattern I keep telling you is it's a ramp with spikes. So there's some sudden changes and there's some gradual changes and it's a mix. That's how collapse happens. It's a, it's a false idea to think 0:58:26 - 0:58:47 that it has to be everything all at once. Now. It's a comforting idea as bizarre as that sounds because our minds really struggled to deal with change at all. And when we have to think about it, we like to think about it as an all at once because it's easier to deal with emotionally to think. Well, you 0:58:47 - 0:59:05 know, our country hasn't been invaded right now, but if we ever went to war there would be a sudden invasion, we'd all be put in camps or killed. And why is it comforting to think that I know that sounds bizarre. But trust me, your, your go to is gonna be to deny that it's ever possible and violently 0:59:04 - 0:00:00 attack anyone that suggests otherwise. And then the next thing that you'll, you'll be most likely to believe in is that it's gonna be an all at once. Universal thing. The reason you want to go to that is because there's nothing you can do about it. We hate uncertainty and so we like to think of, oh, 0:00:00 - 0:59:49 it's all rosy right now and perfect and then it's gonna be, if it's not that it's gonna be absolutely abysmal. And there's no in between and it happens instantly because we're weak and we don't want to go through the thoughts and emotional um challenges of thinking about what would I do in this vast 0:59:49 - 1:00:15 array of potential, difficult circumstances that are long term. They don't happen all at once. You know, I, if you look and I'm not saying that were our country to be invaded. It would be so nice is when the Nazis occupied France. But for most of the French population, that wasn't really too much of 1:00:15 - 1:00:37 a big deal. All things considered, right. They still went to work, they still went home, they still had a relative amount of peace. There wasn't shooting in the streets every day and there weren't grabbing random people. Now, obviously, the Germans did that for certain groups and in some places more 1:00:36 - 1:01:06 than others, but occupied France wasn't that bad. Right. Well, um that was a multiyear situation and there were big disruptions for some people and you just had to deal with that and, and it will not be that nice by any measure if and when it happens here. But the point is, is, it's a much longer thing 1:01:06 - 1:01:21 to wrap your head around. It's not easy to do. So. Don't think, don't fall into the trap of saying like, oh, well, it's just gonna keep being how it is or better until all of a sudden it's all gone. And I don't have to worry about that because I'll just wanna die anyway. When that happens. You have to 1:01:21 - 0:00:00 prepare yourself mentally. That's the most important thing. It's, it's even more important than, than water, which if you run out of that over three days you're dead. So the mental preparation is very important. What about cars? I've been telling you for a long time. This idea that we all, you know, 0:00:00 - 1:02:06 uh uh uh a married couple's got at least two cars and they can hop into one anytime they want and drive anywhere they want. And it's so inexpensive that you can afford to drive 45 minutes to take your daughter to gymnastics three times a week. That is going away quickly, quickly and again, is it a single 1:02:05 - 1:02:32 source cause? No, it's complexity filter that down in some of the, some of the causes for this could be spikes in the price of, of fuel. It could be spikes in the price of maintenance could be spikes in the price of buying a vehicle. It could be prices that increase in the insurance. And I've told you 1:02:32 - 1:02:52 about all these things and we've seen all of them happen. Every single one of those has happened. It's gonna get worse. Every single one of those will get worse. There are a lot of people beyond complexity which is enough to do it. Ok. There are a lot of people who don't want you to have a car and they 1:02:52 - 1:03:13 have power and they are doing things to make that a reality. And then there are also unintended consequences like admitting tens of millions of illegal aliens into the country who tend to drive cars without insurance, which will absolutely increase your insurance rates. That uninsured motorist part of 1:03:13 - 1:03:37 your policy, it's going up fast and there are tons of people buying electric vehicles and those tend to get totaled much, uh, with much more minor uh accidents than internal combustion vehicles. And that increases your rates. Ok. And then the cost to repair your car has gone up astronomically because 1:03:37 - 1:04:00 mechanics are inflating their prices too to stay with the currency. So all these things are interrelated and the, this, this is a great example of the difference between gradual and all of a sudden because in many cases, a normal person won't find out how much car prices have gone up until they have 1:04:00 - 1:04:18 to buy one because they're not paying attention. And they think that, that, I don't know Honda Accord that they've had for 10 years, they're gonna be able to go replace it with the same type of vehicle for round about the same price they paid for the other one new. And the truth is, it's two or three 1:04:17 - 1:04:42 times that now and they're not ready for that. And then the used cars have increased as well. And so then they might go look at used cars because you can't afford a new one and, and, you know, now they're saddled with the maintenance costs of a used car and even that has gone through the roof. Ok. Now 1:04:42 - 1:05:08 , we can keep marching through these things. We can talk about single family housing. That's something that, that people take for granted. Yeah, of course, you're gonna be able to own a home. That's not a historic thing if you go back far enough in time. Uh, most people had multiple adults. Uh, let me 1:05:08 - 1:05:38 back up most homeowners. When we were in an agrarian society, most homeowners had multiple adults living on their farms full time and working the land for them. So the minority of people owned their own farm and those people tended to be a little older. So, so it was a very, very normal thing for young 1:05:38 - 1:06:00 people, young men to go work on someone else's farm for a few years. That was a very normal thing in the 18 hundreds. And, um, they came to a point where they had enough money saved up where they could go clear land and build their own tiny, tiny little cabin, tiny cabin. It's smaller than most bedrooms 1:06:00 - 1:06:25 are today. That's the historic norm. And so we'll revert towards that as time goes on. And you're already seeing this, I, I told you it would happened smaller homes, much, much smaller homes. You've seen them pop up everywhere. Ok. Also people are building entire neighborhoods that are just rentals and 1:06:24 - 1:06:45 , um, a lot of people are gonna get caught in that trap. I see a lot of people talking online about how it makes more sense to rent and you should just never own a home. You should just rent a house because only an idiot would buy a house. Well, they're in for, for rude awakening. What as the rent costs 1:06:45 - 1:07:06 continue to go through the roof and availability drops already. It's the case. Uh So I live outside of Missoula but I know it's a case that in Missoula uh apartments for rent will have many, many applications. And on obviously, only one of them is selected, there are a lot of people who can't find a 1:07:06 - 1:07:32 place to live in Missoula and I'm sure thats the case in a lot of other cities. So people will end up having to combine in into multi family housing. And I'm not saying like a duplex where each unit is occupied by one family. I mean, you're going to see generational living. So you already see that with 1:07:32 - 1:07:55 millennials and gen Z living with their parents way longer than is normal, but you're gonna see even three generations living in a house and you're also gonna see a bunch of single people or people, uh couples without kids, you're going to see a bunch of just friends moving in together into houses. And 1:07:55 - 1:08:18 I'm surprised I haven't heard anything about mortgages that are written around that around multiple adults who are not married. So, um I expect to see something like that pop up. All right, retirement, retirement is not a normal thing. So remember what we were saying? With complexity in this cycle, there's 1:08:18 - 1:08:41 no magical part where you're, you're good and what you've done already will, will continue to grow against the increased cost passively. There's no part of that cycle where it's like that. So any situation where you, you see that as an exception against the, the rule, it's fleeting, it's temporary, it's 1:08:41 - 1:09:07 not gonna last. It's a blip. What we know is modern retirement didn't exist before. Say the 19 thirties, you worked your land until you keeled over and died or you became completely dependent on your kids. That's a scary thought for old people today, I'd say for boomers, uh however old they might be 1:09:06 - 1:09:24 because they thought their whole lives that they were just gonna be independent till they keeled over and died and everything was just gonna keep getting better every day until they died and they're extraordinarily resistant to recognizing their dependence on their kids. And an increasing number of people 1:09:24 - 1:09:51 don't have kids or they only have one kid and or their kids don't like them. They're going to end up in, uh, old age homes that are, are already not nice places to be, but are going to become very much worse places to be as the value of the dollar continues to evaporate. Ok. And, and, uh, people who 1:09:51 - 1:10:12 have, they believe saved for their retirement, they're going to see the value of their plans just evaporating, going up in smoke because it can't keep up with inflation and it's just gonna get worse. So that's something to think about and get out in front of, uh, I'm not saying go back to work, but maybe 1:10:12 - 1:10:30 that's what you need to do, but downsize your house, make the changes. Now, make amends with your kids. Start being nice to them or if, if you raise them to be jerks, um, I don't know, make friends with younger people who you didn't sire because, uh, you're, you're going to be in a position where you 1:10:30 - 1:10:54 need people to take care of you. And increasingly, and, um, this, this, I'm going to be independent until the day I die. Stuff is gonna go out the door because you will reach an age where you can no longer find work or, or do work to pay your bills and, um, you won't be able to pay other people to take 1:10:54 - 1:11:13 care of you. So, what about grocery stores? That's another oddity that we've become so accustomed to. People don't even know how to grow a garden, let alone preserve food. It's an immense undertaking. You have no idea. It's so sad to see people say, like, well, if it ever came to that I, I just, you 1:11:13 - 1:11:33 know, I'd, I'd, uh, take a shovel and dig up my yard and start planting stuff. They don't even have seeds. Right. So, it's funny because it's like you're planning for certain pillars of society to crumble, but you still think you're gonna be able to go to the store and buy some seeds. But on top of that 1:11:33 - 1:12:00 , it takes years of expensive experiments to learn how to do this in the places you live. OK. And it's a lot of work to build up the soil. It's a lot of work right? To learn about pests and rodents and how to control those, let alone to get to places where you can do those things without relying on things 1:11:59 - 1:12:20 that you buy on at the store that aren't gonna be there when you need them. Then pharmaceuticals. That's a fun one. So many people are prescribed all sorts of things from doctors that they rely on either physically or mentally and the uh emotionally and the fact is that that those things aren't gonna 1:12:19 - 1:12:47 be around either. And so you can start to make changes to these and things not mentioned so that you're more robust for the changes as they occur. Now, the big picture here is simple, get to a place where you have more surplus, surprise requires surplus. And the beauty of that is you can make the adjustment 1:12:46 - 0:00:00 at any scale. Right. So, it's the old example, if you're living, check to check, don't worry about being independently wealthy. Get to the point where you're saving $10 a month. Right. It's a tiny little thing. You can quickly enumerate how you can spend $10 less than you are and then go from there. 0:00:00 - 1:13:31 Right. You can scale it from there. So, what's that principle applied to these things that we've talked about? Well, financially, financially, just spend less. And if you would like, you can also look at ways of earning more and some people are in a place where they can't do anything about that, they're 1:13:30 - 1:13:49 earning more because they're constrained by, basically, by, by people that rely upon them. Uh, and some people even who don't have people relying on them are already maxed out. And I don't mean because, oh, I only have one job and, but it's just so hard and I know, I don't mean that, I mean, there's 1:13:49 - 1:14:13 physically no way that you can work more hours a day than you do. Then you start looking at, could I do something differently and get paid more? Uh, I came across an individual not too long ago who works a job that, that is very convenient to where they live and is doing something that's not very uncomfortable 1:14:12 - 1:14:35 to do. And the pay is abysmal and just by driving a couple extra minutes and doing something they're a little less comfortable with. That's completely legal. I'm not saying start cooking meth or walking the streets, but uh just getting another job, uh, they could make twice what they make just like that 1:14:35 - 1:14:58 with just a little extra inconvenience. Right. So there are things that can be done. How does this apply to non financial things? Well, all the stuff we talked about and many things besides, you can move towards a place where either you've mitigated the need for these things now or you're in a place 1:14:58 - 1:15:17 where you could adjust to a sudden change more readily, right? So if you're planning on retiring, there are changes you could make where you're not so reliant on that. If, if you and your spouse had each have a car, are there things that can be done where if you needed to, you could just use one car 1:15:17 - 1:15:45 ? Um Are, are you in a place where you can be less reliant on grocery stores and on and on and on? There's a lot of things that aren't on that list obviously, but the point it, it comes back to surplus, scaling back from needing everything we have today. That's the point. So what about those are small 1:15:44 - 1:16:06 scale interventions? You can scale them. But the the idea is you aim to have greater surplus than you do about mid scale interventions. Um You can identify things in your life that maybe don't add as much value as you, as you thought, things that you're just doing to keep up with the Joneses, so to speak 1:16:06 - 1:16:26 . Um, and, and that's probably not the best phrase to describe what I'm talking about because I'm not just saying like having a, a nicer car than you need or, I don't know, going on vacations three times a year or whatever to keep up appearances. What I mean is, how do you spend your resources in ways 1:16:26 - 1:16:49 that don't add the value that you're looking for by doing it? Um I mentioned hopping in the car three times a week to take your daughter to gymnastics. If you ask yourself why you're doing that and then you ask yourself what else you could do to produce those outcomes. I bet you could come up with something 1:16:49 - 1:17:15 better than that. It turns out there's massive waste in the way we run our lives today. It's, we do so many things that don't produce what they would have to, to make them worthwhile and it's so dumb and there are so many examples of this. OK. So try to identify those things and wean yourself off of 1:17:15 - 1:17:37 them. Now, if you're actually getting the value out of it, it's a different story. But I, I think you should look twice at that cause I think there are very few cases where that's the case and you're going to find that the things that do provide the value, they're on an on ramp to a place where you're 1:17:37 - 1:18:03 getting much more out of that where you're going to be much more ready for way, the way that things used to be. So, so what's an example of this, that, that is probably getting more to the large interventions? Um Years ago when I had two full time jobs and I was making a lot of money. I was thinking 1:18:03 - 1:18:26 about ways that I could use that money to help others short and long term. And one of the things that I decided would actually be quite necessary in my specific situation was to get a tractor. Now, I don't have tons of land. I have five acres. Uh It's a pretty small plot as far as things go. Um But the 1:18:26 - 1:18:49 soil is terribly rocky and I was planting a fruit orchard and doing a whole bunch of other things like running water lines and, and uh I was looking at the cost of renting a back hoe to do those sorts of things. And at the same time, I have a shared driveway with an elderly lady who, and it's quite long 1:18:48 - 1:19:15 who um had been handling the snow removal, which is a AAA serious problem where I live. And she decided unilaterally to sell her truck that she was using to plow the road. And so I, I was looking at the need to do that. Um And the cost of paying someone to do that. Um So any anyway, there's more fine 1:19:14 - 1:19:37 print there, but I ended up in a position where it made total sense for me to buy a tractor, which was a huge expense. So, um with that tractor, what I've been doing for over the last few years is slowly converting the land into higher productivity. And a lot of this comes down to just taking rocks out 1:19:37 - 1:20:02 of the ground, uh which we have a very impressive wall of rocks on the one side of the property that just keeps growing because of this. So this is an example of using modern surplus to get yourself better positioned for when it no longer exists because I absolutely would never um take out all these 1:20:02 - 1:20:26 rocks by hand, it would be far less work to walk to a place that had less stony soil, right? But if we're here and being here fits all these other constraints that we're under right now, then maybe that's something I could do. Now I share that is an illustrative example, realizing fully that it applies 1:20:25 - 1:20:50 to so few people in specifics. It is a good segue to the large interventions. But I hope that you get the point and you can apply it to your own situation by modifying the details to to get to the principle, right? So what do I mean by large interventions? Look there, there are, there are many things 1:20:49 - 1:21:11 you can do at a small scale to make massive improvements to your life as you do all those things and you run that list dry, you're going to find that what remains has a massively higher cost than the stuff you already did. The cost to benefit ratio will be very different. That's a function of complexity 1:21:11 - 1:21:39 . The harder you push into into improvement, the faster the cost increases relative to the benefit. Ok, large interventions. If you run out of all the small scale things you can do, you're going to find that for the next increment of improvement, it's going to require huge investments. Ok? And most people 1:21:39 - 1:22:03 are not going to be willing to make those now for better or for worse. That's just the facts. What you absolutely don't want to do is fool yourself into thinking that you can do things that are moderately expensive and get something out of that that's worthwhile. Once you're in that place where you've 1:22:03 - 1:22:27 exhausted the small scale interventions, you've gone into a bunch of the mid scale ones, don't think that you can get large results from small prices. So what do I mean by this? There are so many people who think, you know, they're in a suburb or a city, mostly suburbs and they say, well, I have two 1:22:27 - 1:22:50 or three years of long term food storage in my basement. I'm fine. If the bottom drops out of society, you should try fasting for three days. I had a friend who recently fasted for three days for the first time and I'm saying no calories, I'm not talking about going without water. So he fasted for three 1:22:50 - 1:23:09 days and he, he, he, this is a guy with a lot of willpower. He does some things in his life that are harder than what most people do. And he said this is the hardest thing I've ever done, which I was surprised to hear and then his next comment was, and I totally see how quickly things are gonna fall 1:23:09 - 1:23:29 apart when people don't have reliable food. And he's right. And, and you see, there are examples where food sources were suddenly cut off. It takes about three days for people to lose their minds and start acting like animals. Right? If you think that being in a suburb that having three years of food 1:23:29 - 1:23:53 storage is gonna help you in any kind of societal downturn, you are smoking crack. Ok. Will it help you if you lose your job or you know what, whatever happens that's local to your family? Yeah, absolutely. It'll help, you know, will it help you if you ever have to feed some pigs or chickens? Yeah, it'll 1:23:52 - 1:24:14 help. They love old wheat. Right? They don't care that it's 30 years old. But is it gonna help help you if the local supermarket shuts down? No. Is it gonna help you if the power goes out? No, because within three days your little neighborhood is gonna be mad, Max. Ok? And there's gonna be marauding 1:24:13 - 1:24:33 people and even your neighbor Joe, who's a super nice guy, you know, he might be busting through your window at night to kill you and your family and steal your food. Thats human nature. People, you can't see how someone really is until they're in the environment that would require be required for the 1:24:33 - 1:25:00 test and people act very differently when they're not in secure and safe environments and stressless. You think, you think modern life is hard, it's easy mode. OK? It's still easy mode. So when, when you get to the point where you've got some surplus, you've chopped away at your life and weaned yourself 1:25:00 - 1:25:22 off of the modern stuff as much as you can in ways that make sense. I'm not saying like abandon your Levi's jeans and, and uh buy yourself a horse and ride that to work instead, I'm not saying that that's silly, right? But I'm saying get rid of the stuff that, that doesn't actually provide the value 1:25:22 - 1:25:45 and use the things that you have while you have them to increase your long term situation. Once you've exhausted all of that, what remains is to move to a place that you want to be when things fall apart. And that is the next step. Because if you don't live in a place like that, all the other things 1:25:44 - 1:26:05 you might do don't matter in the event that you need them, they won't matter. I hope that makes sense. All right. That's it. Uh This is a long video. So if you made it this far, I appreciate your patience. But I hope that it's um I hope that it's clear why we had to trace through all these things in 1:26:05 - 1:26:09 such high detail. So until next time, take care.