Joseph Gradante (00:00.398)

Welcome ladies and gents to another episode of Orwellian Optics brought to you by Allio Capital. I'm your host, Chief Executive Officer Joseph Gradante and I'm here with our Chief Investment Officer AJ Giannone. AJ I want to introduce yourself.

AJ (00:14.766)

Thanks, Joseph. My name is AxJ Janoni, Chief Investment Officer here at Alio. And I'm really excited to have another great episode of discussion with you guys about the debate, about some of the key policy issues we heard from last night. And I'm joined here with my co -host Chris Morgan, Chief Operating Officer. Chris, what do we got today?

Chris (00:31.655)

Yeah, hey everybody. Good to be here. Really excited about today. We got a good one. Let's kick it off with a debate. Joseph, what'd think?

Joseph Gradante (00:39.822)

Yeah, you know, it was really interesting being a 90s kid, seeing the Democrats brag about the endorsement of Dick Cheney. That was the most shocking thing to me because I know younger people don't understand that, people above the age of 35, it's just, I'm curious. think back of...

growing up in Manhattan and a lot of the limousine liberals I know, like how would they explain that? And I would just love to have a conversation with them. For those that don't know, Dick Cheney is the former Darth Vader of the United States. This is a man that decided to go in and have people basically killed so that he can give his company the contracts to rebuild it. And not to get off topic about the issues with Trump and Dick Cheney, but that's what I found most shocking.

And it's not just Dick Cheney, you have Paul Ryan, have Mitt Romney, John McCain staffers. And you know, we've talked previously about the Neocons, and how essentially, for a long time in this country, you had the illusion of choice, but there was no choice. And that's why living standards have declined so precipitously, right? It was basically heads we win, tails you lose.

And so with that, AJ, what were your thoughts? I mean, there's a lot of substantive stuff to talk about in terms of Trump's miscues and obviously the moderators there. It was three against one, but yeah, what were your thoughts overall?

AJ (02:07.66)

Yeah, you know, I kind of had the same initial reaction, know, like Captain Halliburton getting called out by the Democrats for being an endorsement, I guess. mean, you know, for better or worse, I think we can all agree with with Jon Stewart when he says fuck off to Dick Cheney. Like, you know, the the absolute, you know, yeah, exactly. Like you got a guy who

Chris (02:25.033)

Pure evil.

AJ (02:32.012)

literally threw away every ounce of moral fiber he had to enrich himself at the expense of billions of dollars of American, trillions of dollars of American taxpayer money and thousands of American lives. And that's the guy that you're touting out as a ringing endorsement of your party and your policies. Like, you got to be kidding me, man. It's just absolute insanity. like off the bat, that's the biggest key takeaway is like, you've got this coalition of effectively

neocons, former Republicans, quote unquote Democrats, like all kind of rallying around this policy platform that is in effect just a continuation of the same key themes that drove us into those two wars in Iraq and Afghanistan, like this old school, know, warmongering, big business, corporatist, globalist agenda of like, how do we enrich the ownership class at the expense

of the quality of life and the prosperity of the American people. And it's just like, it's hard to look at that and be anything but frustrated.

Chris (03:37.926)

It's,

Joseph Gradante (03:37.996)

Both sides have been rancid for so long, which is why there is basically no middle class anymore in this country, right? And so it just kind of reaffirms and underscores what we were talking about in the last episode and the first episode of the fact that basically since you had H .W. Bush getting in on the Reagan ticket, after that, you know,

You have Clinton, I I remember the Ross Perot, Bill Clinton, George H .W. Bush debate, and Ross Perot is saying he's the only one making sense, and he's basically saying, yeah, if you enrich the few, if you turn millionaires into billionaires and you outsource all of production, you are outsourcing the wealth of the country, and you are reducing the living standards of the aggregate, which is essentially, if you want to think about it allegorically, a snake -eating

itself right because eventually it's gonna come back around to take the whole country down and this is how you know I go back to the the old statement that good times create weak men and hard times create strong men and You that's exactly what you know our prosperity and our reign as sole superpower led to and I think as you know The name of the podcast is our well -aided optics, right? So we're trying to get you to see through the smog if you will of what's really going on here and again it goes back to I think

I feel bad, not to get into the same topic, but for younger people that don't know, that don't understand that vantage point. But AJ, what do you have?

AJ (05:13.26)

Yeah, no, mean, that's the key thing is like, it's easy to be distracted and it's easy to be maybe persuaded by talking points or themes that you think really resonate with you emotionally. But at the end of the day, what I was looking for going into that debate was a certain amount of clarity and some real guidance in terms of policies that these, like what was going to come out of this in terms of directly applicable benefits for the American.

people. And, you know, I think I was left fairly disappointed because at the end of the day, it devolved into the same kind of bait and switch name calling, you know, let's just promise people money. And there's no real substance behind any of it. mean, you know, if you look at the core issue here is that, you know, America needs to create things. It needs to be innovative. It needs to produce things in order to be prosperous and for that wealth effect to propagate throughout.

Chris (05:47.43)

Mm -hmm.

Chris (05:55.431)

Thank

AJ (06:12.556)

the middle class and the working class and all throughout every strata of the American economy. And I saw almost none of that last night. I saw, you know, a handful of policy proposals being touted with very little detail and very little substance behind how they'd be paid for. And realistically, you know, as a investment company, one of the key themes that I always find a way to tie everything back to is how each policy or each

specific implementation of a policy is going to affect the national deficit. Because at the end of the day, that's a bill that's being rung up on our behalf by our politicians and by our elected leaders, who at some level we will have to pay for. And if it's not us directly, it'll be our children or grandchildren. With that said, this bill is getting extremely large and extremely expensive extremely quickly. So

Chris (07:00.572)

Mm.

AJ (07:08.684)

When I say grandchildren, maybe that's even being hyperbolic. We could be a few years away from an issue similar to what the UK experienced just a few short years ago in regard to their fixed income prices causing issues around their pension insurance industry and prompting politicians to have to act. When I see all these free money handouts being thrown around as effectively

incentives to get people on board a particular party's platform. It's just very disappointing and it's alarming because it's in effect, you're selling out your future in exchange for a little bit of extra benefit today. And that's really the last thing we need when we're trying to build a robust and strong economy for the long haul.

Joseph Gradante (07:59.864)

Yeah, you know, I... Go ahead, Chris.

Chris (07:59.975)

Yeah, it's short sighted and it proves that people don't understand economics and they don't understand policy and how all of that works. And as we think about that, AJ, as we think about that first time homebuyer incentive, why does it have to come from the taxpayers? What could the government do to incentivize the private sector to make it easier for her first time homebuyers to buy a home?

AJ (08:25.774)

Yeah, that's a great question, Chris. And you're 100 % right. I mean, handing out $25 ,000 to first -time home buyers is the absolute textbook definition of a directly inflationary policy proposal if there ever was one. You're handing people money to go purchase a good of which there is a limited supply, and it will almost assuredly directly correlate into $25 ,000 increases in prices of homes that first -time home buyers are purchasing. Now,

You think, okay, fine, this helps out that handful of people who are directly receiving that benefit. But it also helps out boomers and senior citizens who own these homes. It helps out banks in terms of new mortgage originations. And in particular, it actually hurts and excludes key demographics who may not be that well off or prosperous, but don't necessarily qualify for that specific implementation of a benefit.

If you ask me, they're missing the forest for the trees here. The issue is the lack of supply of affordable and accessible starter homes. So if you want to actually incentivize that, then you have to start on the supply side and not the demand side. By promoting specific tax credits and policy benefits to construction companies and home builders to build the types of homes that first -time home buyers

would like to move into. And if you do that, you can do it in a way that isn't necessarily directly inflationary and may in fact be deflationary to the home market in particular, specific to the low end, which is where these folks need the most help. So that's an area where, you know, when you look at things from a headline, you might say, this is a policy I agree with, you know, first time home buyers need help. Let's, you know, hand them $25 ,000 in down payment assistance. But when you look under the surface a little bit, you can see that

It's really a temporary Band -Aid style solution to a more deep and insidious problem. And if you don't think about these things in that way, you come up with maybe a suboptimal solution. But Joseph, what do you think?

Joseph Gradante (10:38.712)

You know, it reminds me of, you know, people complain about the cost of higher education, right? And people don't look at how we got there. You know, they talk about all this debt forgiveness. There is no debt forgiveness. You're essentially just passing that burden onto a different group of taxpayers. But, you know, to the issue with first -time home buyers, if you compare, because...

We are in this era of data science. We should not be using ideologies to conform policy. We need to look at the data. if you want to look at the cost of higher education, the reason why it got so high is because the government was guaranteeing loans. So the schools just kept raising the cost, raising the cost, knowing that the loans were guaranteed. And it's the same thing. If you just automatically throw $25 ,000 into the demand side, the cost is just going

to go up by $25 ,000. And when you look at the fact that rates are going down at the same time, and then the Trump tax cuts are expiring, you know, this is all potentially inflationary. And I don't really...

buy that they don't understand it because this has been going on for a while now and I think when you look at who their donors are and you look at the great reset, mean, you will own nothing, right? And be happy what we talked about last time. So, you know, to me, I think this is the goal really is to just put things so out of reach for people and to really take our debt over the line so that we are basically forced into global governance. And I know I've connected a lot of dots there, but I just want to re

emphasize this point that both sides work for the donor class, right? And that's what you can take away from this based on the fact that she's touting the support of the Neocons. And why? Because the Cokes, Soros, Schwab, these are the people that have been funding both sides of aisle for a long time.

Joseph Gradante (12:39.682)

Globalization, right? It's really, it's helped other wealthy nations get on parity with the US. But the fact that we're not investing into education and training is leading to a lack of innovation in cutting edge sectors. And the only way that we're gonna raise the living standards is like you said, is raising production. So all these emotional appeals on policy, it's actually scary to me. And I know, you know, it's too

2020 -2024, but you know, it's 1984 right and then I'm referring to the book 1984 George Orwell because you know up is down and down is up and left is right I mean what we saw last night this ambush By the moderators, I mean David they were fact -checking Trump on anything he said and a lot of it wasn't even Related it was just on things that he said that are totally subjective. Yeah, it was

attacking and then saying okay Kamala what do you you know how bad is Trump essentially right and just allowing them to just tackle on this guy where if they had been fact -checking Kamala Harris this whole time I think the optics of the debate would be differently but I do think coming away you know that small group of independents is gonna come away thinking you know that that she looked better or looked more you know presidential and it's just really Orwellian and unfortunate that you know that we're at this state.

AJ (14:08.546)

Yeah, that's the biggest issue to me is that, you know, if it had simply been a comparison of policies, you know, it's a much different story that we're talking about today. Unfortunately, it's too easy to turn, you know, into this kind of circus act of barbs and jabs and, you know, kind of just getting under people's skin. And it really showed, I think, last night in a really negative way in which

Like you said, mean, you can throw out a bunch of free money policy proposals, throw a couple hand grenades in there, and suddenly, you you're the leading candidate in a presidential election in the most powerful country in the world. Like, where's the substance? You know, and there are substantive arguments that were made. But at the end of the day, you know, the way that we pay for all of these things has to come from productivity and capital formation.

and all of the things that are American in a capitalistic sense to generating wealth and innovation and productivity are really being ignored at the expense of the theater aspect of this.

Joseph Gradante (15:20.75)

And it's so unfortunate, because you go back to 2016, it's like they were saying things like, Donald Trump's going to eliminate the Constitution. And if Trump gets elected, it's going to be the end of the world. And it's like, we already saw a Trump presidency. And this is what I mean, and that's Orwellian. We saw this prosperous, great economy, real wages going up. The border was secure. Less fentanyl was coming over.

Chris (15:20.839)

Yeah.

Joseph Gradante (15:47.234)

You know, countries around the world took us seriously again. I mean, you didn't see Kim Jong -un meeting with Joe Biden, right? But he came and he met Donald Trump. I can promise you he's not going to meet with Kamala Harris. In fact, I think Vladimir Putin and Xi Jinping are going to be popping a bottle of champagne if Kamala Harris gets elected. And that's what's so sad as Americans is that watching our political leaders turn to debauchery. And Trump is culpable in all this as well, because I mean, he didn't have to take the bait.

one of the best debaters for two weeks. And he's talking about, you know, people, whether or not they leave his rally, like, who cares? And it's like, dude, like, you have jail time on the line here, like, if you don't get elected. Like, you know, like, you would think he'd be maximally incentivized, but, you know, and I think, AJ, you you brought up a good point when we were talking about this yesterday, you know, the fact that you just got to accept that that guy's not a politician. And I hope that's the case, that people can, you know, read through the lines here and say, okay, Trump is what he is.

Chris (16:31.132)

you

Joseph Gradante (16:47.296)

But he's exponentially better for the country I mean you just look at what happened the markets today right because they're potentially pricing in a Harris election and knowing that we're gonna see a downturn if Harris gets elected but yeah, I think what you said yesterday, know about you know, Trump was very eloquent and You know, I'm just curious of you know, you're a very substantive guy of what you thought of that, you know for lack of a better word Maury povich Jerry Springer is debate that we got last night. I mean it was absolutely absurd

absurd and embarrassing. It's embarrassing for our country.

AJ (17:20.248)

Well, yeah, I mean, the only thing missing from that was they didn't pull out any DNA tests and we don't know who the father is. you know, other than that, we had the full, you know, lineup going on. And to your point, I mean, it's just the fact of the matter that Trump, you know, as a person and as a character just comes with a certain element of baggage. But I think as a voting citizen, you have to make a determination. You know, do you care about

Joseph Gradante (17:25.911)

You

AJ (17:50.114)

the policies that will effectuate economic innovation and prosperity? Or do you care about fighting for table scraps from the politicians table and what they hand out to you in this particular election cycle at the expense of perhaps your children and grandchildren's future? And to me, it's that simple. There's an element of maybe lack of palatability.

that I think turns a lot of people who would otherwise be okay with Trump's policies off. And that's a decision for people to make on their own, but they should do it from a position of being fully informed and from being cognizant of the choice that they're making and not necessarily by tuning into a debate for 15 minutes and just making a decision based off the fact that they hear they're gonna get some free money and, that's good enough for me.

Joseph Gradante (18:50.124)

Yeah, I think it goes back to the old adage, you give a man a fish, you feed him for a day. Teach a man the fish, you feed him for life, right? And people just don't understand that. They don't understand economics. And I think, you know, that's why we're doing this podcast, hopefully, because without an informed citizenry, we don't have a shot. mean, Kennedy talked about this. Washington talked about this. It is essential for our republic to have a free press.

Chris (18:50.173)

Yeah.

Joseph Gradante (19:15.022)

corporate media, know, ABC hosting that debate, that is not free press. In fact, the producer on ABC of that debate is the person responsible for hooking Kamala Harris and her husband up. I mean, talk about, you know, lopsided objectives there and, you know, culpability. I'm almost seeing like she had these questions in advance because they were so well rehearsed and we don't have any evidence of that. But my point is, is that, you know, people can not

not trust corporate media. I was so depressed last night after watching the debate. I went out to get a lemonade and some macaroni and cheese in a local market here in Vail. And I seen Kamala Harris's face on the cover of Time Magazine and some other magazine. And it's like, what? Like, what? This is a woman who like, you know, sat on evidence, a sculpatory evidence to keep people in prison so they can serve private corporations. Another gentleman that she had prosecuted who was on death row, she tried to sit on

His exculpatory evidence, right? I mean, it's pretty clear that she's a sociopath But if most people are working two or three jobs to keep up with the cost of living and they're not paying attention And you don't have the time to do the research. It's easy It's easy for this corporatocracy to create an illusion right an illusion that a lot of people will subscribe to because they're not gonna go beyond that but where the free press exists, you know in this day and age is Online it's people like Eric Weinstein, right? It's people like Jimmy Dore

And I'm not going to say there aren't some people in corporate media, I like Larry Kudlow, Charles Payne.

You know, even on CNN, Jake Tapper, I thought he did a great job with the first debate, because some people, you know, they have integrity as journalists. But what we saw last night was just debauchery. And unfortunately, I do feel like that small group of independents is likely to be swayed here. I mean, we're not swayed, right? But again, know, Chris has a degree in policy and economics. I have degrees in political science and economics. AJ is a CFA. I mean, we've spent our lives, you know, really devoted to these sub

Joseph Gradante (21:22.929)

Most people don't want to even hear about these subjects until it's a couple of weeks to the election. And they'll make their decisions based on a few short clips that they see on corporate media of who the right candidate is. And even scarier, based on what they hear at corporate media. And I think this is why there's such a big movement for censorship. I think...

You know, I don't know. I don't know what the answer is here. I don't know if we need a second American Revolution. And I don't mean a violent revolution, but just on the war of ideas. You know, I think people like, like I said, like Russell Brand and Matt Taibbi, they're taking on these issues and trying to inform people, but I just don't know how much the message is getting out there and how much that's moving the needle. what do you think about that, Chris?

Chris (22:10.875)

Yeah, it's really hard for people to understand how these big policy decisions and macro events affect them on a personal level or on their individual portfolio level. But and we didn't get much substance of policy last night, but we did get something we can compare to. Right. We've read both of these books before. We saw a Trump presidency and we have seen what the neocons do. And we've got the good sense that they will be supporting the Harris presidency.

which will include an interventionalist foreign policy. They're gonna spend a lot more money. They're gonna bomb a lot more countries all in the name of profit. how does something like that, AJ, this increased government spending, the Department of Defense jacking up spending, how does that affect things like commodities prices or individual parts of people's portfolios at home?

AJ (23:05.548)

Yeah, I mean, it's hugely impactful, Chris, and I appreciate you bringing that issue up because at the end of the day, this is what we're here for. We're trying to help people build portfolios that take a top -down and global perspective. And when you take that perspective, you see how all these things are related. in that regard, you look back to a specific example that I like to highlight, which was the start of the war in Ukraine when Russia first invaded. And you saw a really

unique and troubling issue in the fact that food production, specifically grain production in the Ukraine, was immediately disrupted, causing spikes in grain commodity prices throughout the globe, both on the financial instrument side in terms of commodities futures and on the spot market. And that's one specific financial instrument.

But that has issues that permeate out like ripples in a pond to other areas of the economy. That's A, it's inflationary in the sense that food, inputs to food prices, shipping costs, insurance costs, all kinds of related costs are now substantially higher in events like that. know, conversely, you know, there's an element of this that, you know, they'll point to as, you know, a mechanism for reduced costs. And that is ensuring the safety

and ability for the merchant Flessil fleets to navigate the trade routes throughout the world to enable the export of American goods to foreign markets at cheap prices and at efficient profit margins. So, you know, there's two sides to the coin, but you have to look at these things on a per case basis and make a determination for yourself how it affects your portfolio individually. As an example, again,

you know, if you have a portfolio that is tilted towards commodities prices, then maybe you're going to be paying a little bit more close attention to areas where those commodities are produced, that you want to be a little bit more aware of potential disruptions in those areas to be able to capitalize on opportunities or to play defense in the event of, you know, particular, particularly acute issues to supply disruptions or to overproduction or oversupply issues. So,

AJ (25:19.746)

You know, in that regard, it's really a multifaceted question, but it all ties back under that umbrella of this is exactly how, you know, your role as an American citizen and your vote plays a critical impact in the outcomes that are available to you and the options that are available to you as an investor in pursuit of growing your wealth and securing your financial future. So it's really critical that you pay extremely close attention to these issues.

and find a way to kind of incorporate these things, both into your vote and into your portfolio. But Joseph, I mean, how do you feel about this?

Joseph Gradante (25:57.56)

Yeah, I just think that we gotta tie it all together for people. That's what our goal is here at Alio Capital. We can't control the outcome. All we can do as individuals is vote, right? But great change also brings great opportunity. And so if you can kinda get an idea of which things are gonna go directionally, top down, you can really position yourself to take advantage of that. And that's really what we're about, right? That's what we do. That's our bread and butter. We're macro strategists, and that's how we build our portfolios.

because there is a change in global order going on and unfortunately, know, empires, they do decline and, you know, I mean, I'm a big fan of Ray Dalio obviously and he talks about this a lot, you know, but...

It's pretty clear by most metrics. And on the next podcast, we're going to go deeper into these metrics and what some of the eight determinants are that you really assess where a nation is at in terms of its cyclicality, the rise and the fall, and how that impacts...

the debt cycle and particularly different assets in your portfolio. right now, mean, the debt is just massive, know, both the public debt, the private debt, and it's, you know, I think a lot of companies, the issue is, that they are...

you know, their content is very nascent. They're not looking at things historically. mean, yes, throughout the 20th century, right, the US, it's like things just went straight up. But prior to that, that's not how it was because there's a lot of cyclicality in empires, right, and which nations are gonna be at the top and which nations are gonna fall. And so on the next episode, we are gonna go deeper into these issues and really tie these issues to your portfolio and explain what assets might you

Joseph Gradante (27:48.384)

better in a Trump presidency and what assets might do better in a Harris presidency and we gotta cut this part out. I'm gonna have to cut that last part out there. Yeah. Wait, where do you guys want to go? Now that we were cut out for a second? Because you got all this recorded, right Chris? I just don't know where we're at time wise and I'm getting low battery that's why I just fucked up there. I just got a low battery signal on my computer. Where are we at time wise? How long has this been? That's why I didn't want to go. So we got to get to 35.

Chris (27:56.999)

And that's what makes us, that's what makes us. That's right, here let me mark this.

Chris (28:05.139)

Yeah.

Chris (28:13.161)

28.

Joseph Gradante (28:18.774)

So these last seven minutes, what do you...

Chris (28:20.649)

I was gonna say something like that's what we're doing different is we're preparing portfolios for any environment. And then I was gonna ask AJ what he thought of the current market. What are we looking at right now, AJ?

Joseph Gradante (28:32.674)

Well, I wanna do that in the next episode. It's a huge thing, and that's why Adrian said don't bring up the, I was gonna bring up the Dallio chart, but I think it's, you we don't have enough time to do that.

AJ (28:38.988)

Yeah.

Chris (28:41.705)

Could we do like a?

AJ (28:42.21)

We can just keep talking about the debt. Honestly, if you just want to...

Joseph Gradante (28:45.592)

Do you know the exact numbers for the debt? Because I'd rather go back to that part and say, you know, this is what the public debt is, this is what the private debt is, and use that as a catalyst, like, to kind of go out of this episode, but tee up the next episode so that we can kind of...

Chris (28:58.313)

35 trillion.

AJ (28:58.316)

Yeah. So I can make the point specifically about how much our debt is and how much we're paying in interest and how it's unsustainable. And the fact that effectively, historically, both parties have contributed to that because they find it easier to basically sell out people's futures than it is to address hard questions and hard problems. So

Joseph Gradante (29:22.23)

Yeah. So what part, where are we gonna cut back to in terms of where I was? I know what to say and then I'll kick it over to you. Chris, do you know where I was? Like I said to public, do we wanna go right before that or go right after that?

Chris (29:23.379)

We get the illusion of choice.

Chris (29:35.667)

will go, reintroduce the public debt. I can't remember what you said right before that, but.

Joseph Gradante (29:40.494)

I know what I say. Yeah, so I'll say, you know, it's pretty substantial when you look at the public and private debt, you realize that it's unsustainable and AJ actually, and I'll say, AJ, you probably have those numbers. you know, that's what I'll say. Just, yeah, let's go back to that part and I'll say, ready to go 54321. Yeah.

Chris (29:57.757)

Okay, cool. Ready?

AJ (29:59.463)

Wait, wait. Just give me sec to pull everything up here, because I'm going have to just...

Joseph Gradante (30:07.618)

But let's go like four more minutes and then I'll start closing it out because it might, my computer might die. In fact, it's moving slower than you're ready.

Chris (30:12.401)

Okay.

If it dies AJ and I'll close it out. Mainly AJ.

AJ (30:17.304)

Yeah, we'll go.

Joseph Gradante (30:18.894)

Well, my video's already not going, guys, because it's too slow. We're going to have to reshoot this last seven minutes. Fuck. Five minutes. OK, and they can cut out. They'll just cut out. Yeah. Go 5, 4, 3, 2, 1, and I'll be really quick.

AJ (30:27.704)

No, just hand it over to me real quick and then we'll just say like, with that said, like, what do you think?

Chris (30:30.183)

Yeah. Yeah. All right. Cool. Five, four, three.

Joseph Gradante (30:40.706)

You know, it really comes down to the debt. It's just the public and private debt in this country is unsustainable. And at some point that bubble is going to burst and that's when things are really going to get nasty. AJ, do you have those specific numbers?

AJ (30:53.806)

Yeah, I mean, right now, it's actually astounding. We're looking at just a hair over 35 trillion of national debt. And, you know, that's trillion with a T, folks. So, you know, from the perspective of what that means for every single American, that's over $104 ,000 of debt that every American owes. Now, I mean, that's a massive amount of money for people to effectively be saddled with. And that's, you know, from the point that your child is born.

Chris (31:03.389)

Hmm. Hmm.

AJ (31:22.434)

that's already how much they're effectively in the hole. Now, this is really a consequence of decades of direct intervention in fiscal markets by successive administrations and being unwilling to do the hard things and to provide answers to the hard questions that Americans deserve. Every time that we are presented with a choice,

of being able to rein in the deficit and to make meaningful strides towards mitigating some of these more tangibly negative impacts of this massive debt, we choose the easy way out as a society. And what that results in is exactly what we have today, where the Treasury is basically forced to issue trillions of new debt on an annual basis and roll over trillions of outstanding debt at increasingly high interest rates.

because of the inflation that's been really so pervasive over the last few years. So, we're presented with a situation where the interest costs on servicing this debt is an increasing and rapidly increasing part of our annual budget each year. And if this continues for much longer, we're gonna be put into a really tough position from a fiscal policy perspective and from a monetary policy perspective, which are really the two areas with which we...

uses lenses to evaluate markets as investment professionals. And from the perspective of what does this mean for you, it's very acutely going to be felt in terms of fixed income yields. So in addition to that, you have the issue of that this debt is effectively crowding out money that would otherwise go to innovation.

If you're a large institutional investment manager or a firm or a pension fund or a sovereign wealth fund and you have marginal dollars to invest, you have the choice between investing those dollars into basically financing productive enterprise in areas like venture capital and private equity or buying treasuries. And as this debt load continues to spiral and an increasing volume of treasuries continues to hit the market,

AJ (33:41.022)

yields on those treasuries are going to continue to go up. And what that means is that each marginal dollar is increasingly attracted to effectively financing things that we've already used and push those dollars away from investing in our future. So we're in effect paying for the fiscal mismanagement of our past by leveraging and selling away.

innovation that is necessary to secure our future as a nation. And that's a really critical issue that no one has addressed in a way that is really productive or even in a way that would technically be possible. Everyone's answer so far, at least to me, has involved just kind of extending and pretending that this problem doesn't exist and hoping that it doesn't blow up as an issue acutely during their particular administration. So

Chris, to me, the key issue is where do we go from here? And is there anything that you think is an open question in terms of the debt that investors should be thinking about as they position their portfolios?

Chris (34:52.731)

when it comes to choosing which candidate will present the best policies to take care of the debt, to rein in government spending, it's almost like we have the illusion of choice, especially with a two party system. Each party wants to keep spending. There's no incentive to stop spending or to reduce the debt. So my answer is we need a like Joseph said, some sort of revolution from the bottom up. We need.

another party to come in, we need an educated electorate to come in and say, hey, these policies are not working for us anymore, and they never have, and we want something different. So when we say choice, it is that illusion.

Joseph Gradante (35:31.308)

wanna jump in there just because, you know.

That's what it's going to come to, right? If Trump doesn't get elected. That's where we're at. And there's a lot of things that I think, you know, Trump, he had all this momentum, you know, going into the debate, right? The endorsement of RFK Jr., the endorsement of Tulsi Gabbard, the assassination attempt. I mean, it's pretty obvious he's the better choice, but I just don't have a lot of confidence in the electorate, right? Because Trump, I mean, between tariffs, deregulation, cutting taxes, he is incentivizing productivity and growth, right?

And so but I'm not very confident right now that he is going to get elected and so and if that is the case It's right because by the next election he's gonna be too old and who's gonna pick up that mantle And so it is gonna come have to come from the bottom up There's gonna have to be and it already is this alliance of eclectic, you know, very, you know people like Eric Weinstein and David Rubin and Russell Brand and Tucker Carlson These guys don't Andrew Yang. In fact underneath my vest and wearing an Andrew Yang shirt these

People don't agree on anything, but these are some of the brightest minds that we have today in policy. And, you know, we're just going to have to, you know, use independent media and actual free press, right? Which is, you know, what you get online. That's what you get when you look for independent podcasts, right? That don't have the corporate media sponsorship that you see on TV. And I think really, you know, that's that's the reality of it. Elon Musk, you know, is a lot like the modern

day Benjamin Franklin in the fact that you know he's this brilliant guy and what he's done for our democracy and our Republic by buying that it's just it's unprecedented it really is unprecedented you know you know here's an article real quick I just want to pull it up by Robert Reich and

Joseph Gradante (37:26.626)

And it's talking about Elon Musk, who's out of control, how we rein him in. And they essentially want to use different national governments to threaten him with the rest. And it's just amazing that they're willing to pursue tyranny, these so -called liberals. Because when you look at who's funding the Harris campaign, we talked about people like Soros and Schwab and all these big billionaire donors. mean, the fact is Democrats outrace Republicans four to one.

And here, you didn't see them going after Jack Dorsey when he owned Twitter, but because Ian Mosk is promoting free speech and a free press, that is a threat to entrenched power. They're pursuing censorship. You look at what's going on in Scotland. And so it's going to take people really rallying around Ian Mosk to secure that better future that you speak to, AJ. But.

You know, this has been another episode of Rewelian Optics. Next time, folks, we're going to really delve into the eight determinants that Ray Dalio covers in principles for dealing with the change in global order, why nations succeed and fail. And we're going to look at that and connect some of that.

to really, you know, this election and what you're looking at in your portfolio and show you different charts and kind of what we're thinking from a top -down approach of how we would approach a Trump presidency versus a Harris presidency. So join us for that. us out on YouTube, Spotify, Apple, wherever you get your podcasts. And this has been another episode of Reveille in Optics. Peace, love, see you next time.

AJ (39:07.093)

folks.

Chris (39:07.827)

Thanks everybody.