ICE Chaos in Minneapolis, Clawdbot Takeover, Why the Dollar is Dropping

January 7th, 37year-old Renee Good was shot to death by an ICE agent. This incident involved Good accelerating her car, which was surrounded by agents at the time. We're still waiting for the final investigation on this one, but apparently three shots, one through the front windshield, perhaps two through the side. Uh, all these details are still being investigated.

Then tragically on January 24th, Alex Prey, also 37, was shot and killed by two border patrol agents, not ICE. Prey was an ICU nurse at the local VA hospital. There's a ton of frame by frame breakdowns available. New York Times and Wall Street Journal did a good job on these.

So, I think maybe it's best for us to focus here on maybe the aftermath of all this and the resolution, but you guys can feel free to chime in on the frame by frame breakdowns if you like. In five parts, Steven Miller tweeted that Freddy was an assassin trying to murder federal agents. A source told Axis that Gnome said, "Everything I've done, I've done at the direction of the president and Stephen, Steven being Steven Miller. Greg Bovino uh has been removed from duty and had his social media accounts turned off.

President Trump has pivoted, evolved and put Tom Hman in charge." Quote, "Tom is tough but fair and will report directly to me," Trump wrote. And uh at the time of this taping, which is on Thursday's uh there was a press conference this morning and here is what Tom Holman said and after 30 seconds we'll go to you Saxs for your reaction to all this. >> No agency organization is perfect. President Trump and I along with others in administration have recognized that certain improvements could and should be made.

That's exactly what I'm doing here. So if we get these agreements in place, that means less agents on the street, more agents in the jail. Matter of fact, I have staff from CBP and from ICE working on a draw down plan. What does that look like based on the cooperation?

>> Sax, your thoughts? >> Well, first let me say the deaths of Renee Good and Alex Petty are regrettable and and tragic. So are the deaths of Lincoln Riley, Joselyn Nungare, Rachel Morren, Victoria Harwell, Ivory Smith, and too many others to mention who are murdered by criminal illegal aliens. And the media won't ever tell you their names.

But President Trump was hired by the American people to do a job, which is to seal the border and deport criminal aliens so that more of these tragedies do not occur in the future. And this is a popular policy. Over 55% of the American people say they want all illegal aliens deported and over 90% want criminal aliens removed. And by criminal aliens, I'm referring to the ones who commit additional crimes after they enter the country illegally.

Now, this policy is working. Uh murders were down 21% last year. It's one of the best years in record. And in most states, the process is smooth and doesn't make national news.

And the reason for that is because local authorities are cooperating with ICE. But Minneapolis has taken a different approach. They've engaged in a campaign of quote massive resistance to federal authorities. So let's talk about what's actually happening there on the ground.

I think the first thing to understand is that what's happening is much more than just protests. And obviously I have no problem with people peacefully protesting and making their opinions known, but that's not what's going on here. These are Antifa style operations designed to thwart the enforcement of federal immigration law. They're highly organized.

They're communicating in encrypted chat groups. They stalk and dox ICE agents. They follow them around town. They surround them at their hotels.

They use their cars to block roads. And they use bullhorns and whistles to alert criminals who are about to be arrested. And remember, ICE is a law enforcement agency. They have warrants to arrest known criminal aliens.

Despite this rhetoric of them being like the Gustapo, they are going after specific named individuals for whom they have warrants to arrest. These are dangerous missions and these agitators are interfering and making these missions even more dangerous. Now, the media has tried to portray good and pretty as simply innocent bystanders or people who were peacefully protesting ICE policies. They weren't.

They were foot soldiers in these Antifa style operations and most importantly they brought deadly weapons to the fight. So Renee Good hit an officer with her SUV which under a Minnesota law signed by Tim Waltz himself in 2020 justifies the use of deadly force by an officer to defend himself. And Alex Prey was even more reckless. I think we've probably all seen the video by now where he sought confrontation with ICE officials.

He was kicking the car. He was in a rage. This wasn't his first time doing this. And any experienced gun owner will tell you that if you're armed and you're dealing with law enforcement, you have to be the world's biggest pacifist because you're putting your life in danger by making them fear that their lives are in danger.

And I think the mainstream media didn't tell people these facts. They just presented highly selective camera angles. They even airbrushed and facetuned Prey to make him appear to be a more, I guess, handsome victim, which is truly sick. Now, in a way, I feel sorry for Good and Pretty because they were the victims of a tinder box that was created in Minnesota by the extreme rhetoric and decisions of Tim Waltz, Jacob Fry, and the political establishment.

The local police in Minneapolis should have been allowed to keep conditions safe on the street by creating a perimeter and keeping protesters away from ICE officers who were executing lawful warrants of arrest. But the police were told not to. And then the agitators stepped in and they took advantage of this sort of vacuum of authority to physically intervene. So I think it was almost inevitable that some sort of tragedy was going to result from this abdication of public safety.

Now why would Walson Frey want to risk such tragedies with their massive resistance? I think there's two reasons for this. This is the last point I want to make. First, they are desperate to change the subject from the billions of dollars of fraud that they allow to occur on their watch.

Remember we had Nick Shirley on the show just a few weeks ago talking about the 8 billion so that was stolen by Somali fraudsters and this campaign of resistance in Minneapolis has done a really good job making everyone forget about that. But I think there's a second and bigger reason that applies and I think it applies to to national Democrats which is they want to thwart mass deportations because illegal immigrants are a vital part of their power base. And you can see this in the 2030 aortionment forecast which just came out. Illegal aliens count towards the census which occurs every decade.

And the census determines the aortionment of congressional seats and electoral votes. And what you see in these maps is that citizens of blue states have been migrating to red states because those blue states are failing. And as a result of that, blue states are expected to lose nine house seats and electoral votes because of the changing population numbers. Illegal aliens in blue states have been propping up those numbers.

And so, for example, in the last election, President Trump would have won an additional nine electoral votes if we had an accurate counting. So, look, this is not about principle. This is bare knuckle politics. The Democrats are playing for keeps.

They don't really care how many innocent Americans get hurt or killed in the process. This is about thwarting a popular policy of deportations and sealing the border which the American people voted for. So don't let the media fool you. >> Freedber Chimath, you want to give your opinion on these two tragic deaths >> or not?

I mean, I don't feel you're obligated to comment on this if you don't want to. >> I'm happy to. Nick, I sent a clip into the chat. >> Deported all immigrants who are here illegally, 55% of the New York Times, Marquette, 64%.

CBS News, 57%. ABC News with a slightly different question, 56%. So, what you're seeing essentially here is a very clear indication that a majority of Americans, in fact, when they're asked this blunt question, which I believe gets at the underlying feelings, do in fact want to deport all immigrants who are here illegally. There's no arguing with these different numbers cuz they're all essentially the same across four different pollsters.

>> I think Sax is right that there's a very very vocal minority. But if we just put that aside, it's important right now to just stick to the facts. Democracy is supposed to be the will of the majority, but also defense and protection for the minority. In this example, the will of the majority is pretty clear.

As the CNN clip just showed, everybody wanted the southern border shut and the northern border shut and a structured path to deal with illegal immigration. David's right that that creates a cascade of second and third order effects that have huge implications with respect to the Democrats and their ability to have and curate power. I don't know whether this is what's motivating them or not. I don't want to speculate on that.

But the conceptual problem and the conceptual desire of Americans is undisputable. I think that's why Donald Trump won. Now I think though we have to explore the tactics. I think the reality is that both of these two deaths were complete and total tragedies and it has created such an upswell that it has the potential to spin out of control.

And if it does that, it risks his ability to continue doing his job and delivering on the conceptual promise that everybody wants. The other thing is that I think that he has otherwise, the president, done an incredible job up until now. The fact that Tom Hman is going there is a really good thing. He was the same person that was awarded a medal by Obama for how he managed Obama's deportation process.

It's time to just get control of the process and dial down the temperature because the structural things that they are doing are correct. There are people here that broke the law. There are criminals that are here illegally. We need to remove them because that is the will of the majority.

Now we just need to find a way of doing it that creates some freedom to operate for all of law enforcement so that these tragedies stop. That's my two cents. >> Okay. Freedberg, would you like to comment on this or pass?

I >> I'll comment. Can I just ask you to react to what Sach said? Do you agree or disagree with his point about the Democrats needing to remove people because they do count in the census and they increase the seats in the House. >> Elon's talked about this a whole bunch as well that the immigration is being done to boost the voter roles.

I don't know enough about the census specifically because that occurs x number of years and uh if it's accurate at all. So I'll leave that aside and do some research on it. In terms of importing people for votes, this uh strategy does not make a lot of logical sense. And so many workingclass people voted Trump into office and so many specifically uh Hispanic people, Mexican people are all voting for Trump now because he's a populist and he appeals to to that group.

So whatever if Biden and the Democrats were doing that for that reason, that makes no sense. And also those people would have to become citizens in order to vote and that's a 20 30year process. So, you know, they'd be playing an incredibly long game uh on that front >> unless there is cheating in the voting. >> Yeah.

>> And we've talked about that as well here. >> For example, if there's no voter ID, you know, >> you know, the Heritage Foundation, I think David, you worked there at some point, right? Did an internship. >> That uh organization, that think tank has done tremendous research into this.

They have a database. I think they've collected now 3,000 cases of voter fraud over a 40-year period. So really the whole concept of voter forward being able to tilt a presidential election is just ridiculous and has not been proven. I think Trump filed about 50 or 60 lawsuits and lost all 50 of them.

So there's there's no credence to that. Uh but you know I have a couple of thoughts broader on what we've seen and I do actually agree with you David. There should be voter ID everywhere. I I don't think anybody should be able to vote without a driver's license.

If you can't or ID if you can't take the time to get ID why should you vote? It doesn't make a lot of sense right. >> Why do you think that's such a push on the other side though Jal? Like what's the motivation for not having IDs?

>> The stated >> if it's not about getting people to vote that aren't allowed to vote. >> The stated reason, which I don't believe, is that it's more democratic and you want to get as many people to vote as possible. So, but I don't agree with that. I think everybody should have ID.

>> Yeah. Like you got to have ID to buy a beer, right? So, >> yeah. I mean, to get on a plane to I mean, even to ride a train, like you need an ID.

I don't I don't understand. >> I think the answer speaks for itself. I mean, uh, to me it's obvious the reason why you prohibit, by the way, it's not just saying you can vote without an ID. They actually prohibit the people administering the polls from checking.

There's only one reason to do that. You want to allow cheating, obviously. And one of the things that Doge found was that there were lots of illegal aliens being added to the social security roles. Now, they weren't necessarily collecting social security, but in a lot of >> they were actually paying into it.

So, it was quite the opposite. My point is that when you get an SSN number, in a lot of states, all you have to do is check a box when you get a driver's license, which they also give to illegal aliens in order to be added to the voter roles. >> So, they are finding illegal aliens on voter roles. But look, regardless of where you are on cheating in elections, the census just counts total population and then they aortion house seats and electoral votes based on total population, including illegal aliens.

And there is data on this. Trump would have won the last election by an additional nine electoral votes if these changes had been made before the last election in 72. >> Do you think uh >> so just to put a pin on that point? It's really important because what it means is that a future Republican would not need to somehow crack the Democrats blue wall of Pennsylvania, Michigan, and Wisconsin.

Right? So nine electoral votes is a lot and it does put the presidency that much further out of reach for future Democratic candidates. It provides a powerful incentive and it's again it's not just the electoral votes. It's also these House seats.

California would have lost House seats. I think it was like four if this had been recognized because again there's been a huge migration. Jake, you know this better than anybody since you're one of the people who've left. The state is so badly mismanaged that people have been fleeing blue states in droves.

And the fact that you've got illegal aliens then replacing that population mass that effect and allows these blue states to maintain their level of representation in the house. That is a huge incentive. >> Freeberg, do you support the use of ICE agents DHS to go into these cities and do you think they were too violent? And do you agree with that strategy that Trump's now seems like pulling back?

>> I mean, I know the answer. We talked about it on private chat. Yeah. >> Okay.

I'll be very matter of fact. >> Yeah. >> Neither of these people should be dead. It's sad that it happened.

>> Who's to blame? >> Neither of these people should have been doing what they were doing. Federal law enforcement agents should not wear masks. They should identify themselves when asked.

Ideally, they wear body cams like local law enforcement does. I like body cams. I actually like watching videos of police wearing body cams on YouTube and Tik Tok. I think it's a very important way to hold law enforcement accountable to their work.

There may be reasons why federal law enforcement can't do that. If they're undercover and whatnot, they shouldn't have to identify themselves, but I think those are important ground rules. I think that federal law enforcement should have warrant or probable cause. They should not be allowed to randomly ask people for papers.

I don't agree with that. If that's what they're doing, and I'm not saying that that's what I agents are doing. >> No, no, that's what they were doing. That's all been proven.

>> I don't know that. I don't know if that's been proven. >> Wearing masks, not identifying themselves. >> That's not what I'm talking about.

Hold on a second. Hold on a second. There have been a lot of claims made that they're going around quote rounding people up asking for ID and papers. I don't know if that's true.

I have personally not been convinced of that. You may have seen something else, but I've not been convinced of that. But if that is what they're doing, there is no probable cause and there's no warrant attached to that. That should not be allowed.

I think the mechanism for fixing that, the mechanism for addressing that is number one to go to federal courts and file injunctions, which is actively happening through the legal process. And there's a due process that then would take place that would determine whether these agents are following the law and doing things by the rule of law or are not. And if they're not, injunctions will be imposed and they can't do what they're doing. Short of that, no one should take it into their own hands to obstruct law enforcement, federal or local law enforcement.

I think that that is wrong. I don't think that individuals that disagree with a law or disagree with the actions of law enforcement officers should obstruct their actions. The correct path is number one to protest peacefully, number two to go to the courts and file injunctions, and number three to change the law. To go to your local, >> vote for someone and change the law.

I think it's totally okay for protesters to not like the law. There's a million laws and regulations and other that I fundamentally disagree with, but those don't give me the right to impose myself physically in the driveway with a car blocking law enforcement from doing their job. If law enforcement was arresting a non-ilgal immigrant murderer and someone did that, would people be up in arms? It's because people disagree with the law.

And if you disagree with the law, you've got to change the law. And that's okay. Now, right now, it is the case that it is the law that if someone came here without going through the immigration process as defined by the law, then they are technically here illegally. That is the law.

That's what it is. And so, there is a course or a path or a point of view on how do you enforce that law and that is what people are having disagreements over. And again, file injunctions if you don't like the methods, change the law if you don't like the law. My personal view on immigration, just so I can wrap this all up, I don't see how we're going to do this in a humane and just way of removing people from this country who have been here for a period of time and have paid taxes and have been good contributors to this country.

I don't know how you're going to do it. I don't know how you're going to do it without inciting a civil war. So I think the compromise has to be that there has to be a path to permanent residency and eventually citizenship for individuals who have been in the United States for some period of time who have followed other laws who have paid taxes and who have not taken advantage of public services that they are not supposed to use. With those conditions met there should be some path otherwise we're going to have civil war.

I think that separate to this there's a bigger point to be made and Ray Dalio has made this and I will restate it and you guys can roll your eyes at this but I think that there's a deep emotional driver to all of this. People look at this and they get incited. They get activated emotionally. Everyone I speak to is activated emotionally over this issue and we have to ask ourselves the important question of why are people activated so emotionally right now?

What is going on? What is the fundamental root cause of this? What is the fundamental root cause of this prediction model that Ray Dalio has talked about saying that there's a 35 to 40% chance of a civil war in the United States based on predictions that he made in 2020. And it is rooted fundamentally in the fact that everyone to some degree feels some amount of oppression right now.

And this is a manifestation of that oppressed feeling. That oppression comes from the fact that the world is racing ahead and people are not a part of it. that people feel like they're being left behind and they see victims of that world and they want to act. And I think we need to pay attention to that and be very cognizant of it because I think fundamentally it is an inevitability that there will be a civil war if we don't recognize it and address it and find some paths of compromise to solve these problems.

>> Okay, I'm done. >> Uh, superb. >> So, it ship it. Episode done.

I mean, >> let's go home. >> So, yeah, I'm strongly in agreement with you. the police should um not be interfered with. I said that here and I said it on Twitter.

You should stay home if you can't peacefully protest and also agree with you strongly. The police uh should be trained to deescalate, wear body cameras, not wear masks, be trained properly, all that stuff. But I I want to make three points here. And the first is, you know, President Trump has surrounded himself with a lot of really competent people, yourself included, David Rubio, Bessant, Lutnik, Kushner.

We had a lot of them here. my pal Chris Wright, but he's also surrounded himself with very inexperienced sick offense that he picked based on their loyalty to him and that group needs to go because that group is sinking his second term. I'll put on that list Steven Miller, Christy Gnome, Cash Patel, and Pam Bondi. Uh these folks have been a disaster for Trump.

They're not qualified to be in the positions they're in, and they have caused a lot of chaos. And back in August, I explained exactly how unpopular these, you know, ICE actions were. And I implored people, hey, stay home if you cannot be peaceful. If you want to record people, that's fine.

But I predicted as well that somebody's going to get killed. And that these agents were acting just without training. They were not deescalating. And they were in fact provoking a lot of this which I think was part of the concept that Steven Miller had was to provoke these kind of reactions.

Nick, you can pull up my first chart. You remember back in October was talking about Trump's sinking approval rating back when these ICE issues were happening. The Epstein files weren't being released. Then in November, I brought this up again.

Trump's uh net approval rating hit 13%. And then same chart coming up now. He's uh 18%. What's And you know, a lot of people like to use this term taco.

Trump always chicken out chickens out. I don't like when people use that because I think they're trying to goat him on. I think he needs to react to these plummeting ratings here. If you could play the Tillis quote, Nick, >> if I were in her position, I can't think of any point in pride over the last year.

She's got to make her own decision or the president does. But she has taken this administration into the ground on an issue that we should own. We should own the issue of border security and immigration. But they have destroyed that for Republicans.

Something that got the president elected. They have destroyed it through their incompetence. David Miller is in the same boat. this guy after doing the stupid comments he made about Greenland getting the president in a difficult circumstance is one of the people that came out publicly and said that this guy was a terrorist before he had even talked with anybody on the ground and that's clearly not the case now.

So I mean it's just I mean Steven Miller never fails to live up to my expectations of incompetence. >> And here's Marowski uh with a similar opinion another Republican. >> Senator, do you have faith in Christine Noam as DHS secretary? I I've already made a statement on that.

>> Oh, I I wasn't there for it. >> Yeah, I I said that I've lost confidence in her. >> Do you think that President Trump should remove her from the position? Do you think she should resign?

>> Obviously, up to the president. Um I think we would be we would be better served with leadership. >> At the end of the day, Americans don't like to see this violence. They don't like cruelty.

They don't like chaos. The reason Trump lost to Biden, who's not a very strong candidate, is because of the general chaos people felt with the immigrant ban the last time and people do want to see the border closed and that has had a great effect I think on the country and I think that's fantastic and he should take a victory lap for that. But leadership starts at the top. President Trump put Steven Miller in charge of all this.

Uh I think he's a bad actor. I think these people who he hired were picked strictly to do lawfare and to do this kind of sadistic violent behavior to feed a MAGA base that's not going to keep Trump in office and in fact going to cause him to lose the second uh to lose the midterms. So the easy solution which I brought up here over and over again is if you want to stop having people come into this country, you have to look at why they're coming to this country. They're coming to this country because they want to have a better life.

That's why they're coming here. And that's why they'll pay a coyote 10 or 20 or $30,000 and risk their own safety coming across that border where many people die and abused and are abused. So if you want to stop this, all you have to do is go to the business owners and find them. And if they keep hiring illegal aliens, you keep finding them and you put them in jail.

But you don't see Steven Miller doing that. Why? Well, because a lot of those businesses are the voters who put Trump in office. They're Republicans.

Yeah. Sure, there's Democrat owned business owners as well, but you can solve this whole problem without sending mass agents in to beat the out of people, to be violent, to provoke these kind of reactions. And that doesn't absolve people driving their cars into the police. That's horrible and it's a terrible tragedy.

And these people, as I've said three or four times, uh should not go out and protest. But you could solve this. If there are no job opportunities for illegal aliens, they will stop coming here. finally agree with your point strongly, Freedberg, that we should be compassionate to the people who have been here 10, 20 years and paid their taxes.

I've said this here many times. They should be given a path. America is a country built by immigrants for immigrants, including the three of you, my bestie immigrants. >> And we all came here illegally or our parents did >> and we didn't seek into the country.

>> Yeah, absolutely. >> Now, you kind of gave this diet trial. I don't know why you've picked Steven Miller as the vessel of your hatred. It's like you've >> No, it's not hatred.

I based on >> There's been a transference. There's been a transference of your >> trans just based on his TDS to Steven Miller derangement syndrome or something like that. >> If he if his actions were if his actions were kind and compassionate >> if if his if he was compassionate towards immigrants and uh recognize the importance of immigrants to this American story, I would be fine with it. It's just based on his behavior.

David, I don't have TDS. You can name call all you want. I'm just basing it on your behavior. >> You've decided to do this ad homonym against him.

And look, the big picture is that threat is basing it on their I'm basing it on their qualifications. >> You're not really presenting You're not really presenting evidence. You're showing what other people think. You're showing polling and then what a few senators think.

So basically, you're trying to build a Hold on. You're Hold on. Let me finish my point. You're basically trying to build a case against him by using the opinions and declarations of other people rather than actually presenting evidence and building that case other than just a name call and say that he's not compassionate.

The big picture is that I would say that Steven Miller has been more correct about immigration than you have been over the last several years. For years, you were denying that we had an open border problem, did you not? >> No. No.

for one year when the spike went up I said let's get the data on this because it doesn't make sense that it would triple year-over-year and then we found out that it was in fact and with the new information I changed my opinion and said yeah this is obviously happening that was literally what happened >> well I don't know I mean during the buying years I remember we had a bunch of debates about this and you were saying >> my position was let's see the data cuz the data if you look I I I played this chart on the podcast many times we showed like the last four years and then there was a spike and I said this doesn't make any sense How did this spike happen? It's just my opinion. You don't have to have a you can have a difference of opinion. >> Let me go back to the origin of the chaos in Minnesota.

You don't see this happening in other states. And I just want to point out one of the major reasons why. So in other states, you know, take your pick. When you have an illegal alien and they get arrested, they get handed over to ICE or Border Patrol for deportation.

That's what's happening in Minnesota. the politicians have given an instruction not to do that. So, literally, you have criminals, people who've been arrested. There's a case that was just um posted today of an illegal alien in Minneapolis who killed an innocent mother and severely injured two others backto back in uh drunk driving crashes.

He did not have a valid driver's license, did not have insurance. He was arrested for vehicular homicide. ICE asked him to be turned over to them and the authorities in Minneapolis refused to do that and they eventually released him. So that puts ICE in the position of having to go out and find these guys and arrest them.

That's how all these operations started. And you make it sound like these guys are the Gestapo and they just randomly round people up. That's not what's happening. They have arrest warrants with the names of specific people that they're going after.

There are arrest warrants, but there were also Steven Miller told them to just go round people up at specific locations. So, >> there is that as well. And they've been trying to hit numbers that they just can't possibly hit. You have to ask yourself >> why didn't we have you have to ask yourself, I think, Sax, why didn't we have this kind of violence and unmarked people, breaking people's rights under Obama who did far more?

>> I'll tell you why. You want to know why? Because Obama said that we should deport. Ultimately, our nation, like all nations, has the right and obligation to control its borders and set laws for residency and citizenship.

And no matter how decent they are, no matter their reasons. The 11 million who broke these laws should be held accountable. >> I'm saying he was able to do it without sending masked agents in to beat the >> No, the Democratic party changed. That's what happened 15 years ago.

the position that Obama Can I just talking about the policing? You ask me a question. Why wasn't the policeing? Why didn't this happen under Obama?

Let me tell you the reason why the policing happen years ago. The Democrat party was still somewhat rational on this issue and it was basically a bipartisan position to support deportations of illegal aliens and not to have an open border. The Democrat party changed their point of view on this issue. Now, >> that's not what I'm talking about policing.

>> Let me finish my point. Tom Hman has said over and over again, we don't want to go out on the street. It's dangerous. They don't want to be put in this position.

ICSE has an incredibly dangerous job to do. Border Patrol has an incredibly dangerous job to do. By the way, the reason why they wear masks is because they're getting doxed by these groups who are organizing with each other on signal and they're being followed around. They're being stalked.

They're being chased to their hotels and these guys follow them around. They block their cars by um interposing vehicles. They're interfering in in official operations. They're interfering with arrest and they're getting in physical altercations with them.

This is very dangerous for eyes. They don't want to be in this position. But the reason why all of this is happening is because Tim Waltz and Jacob Fry and the rest of these guys, Lieutenant Governor, they are saying, "Do not cooperate with ICE. Do not cooperate with the border patrol." Telling local authorities in Minnesota, when you arrest an illegal alien, do not turn them over to ICE.

It's better to release them. These people are such anti-ICE zealots that they would rather release a killer onto the street than keep them in jail where they can be turned over to ICE. And that's the whole reason why they don't want to keep them in jail is because that would create a central repository, if you will, for ICE to go collect all these illegal aliens. Last year there was something like 470 convicts, okay?

Illegal aliens, criminals. And I'm not talking about that their crime wasn't breaking into the country. I'm talking about subsequent crimes that were released in Minnesota so they they cannot be rounded up by ICE and deported. These people are zealots and that is the source of the problem.

And then on top of that, you've got rhetoric by people like Tim Walls and the lieutenant governor calling ICE and Border Patrol agents who are just trying to do their jobs the Gestapo and Nazis and riing people up. And I think that people like Alex Pretty or Renee Good, they're victims of this type of rhetoric. These are left-wing activists who are in this leftwing echo chamber and they're baronating in all this rhetoric that's portraying law enforcement officials as Nazis and they're embibing this constantly to the point where they're full of rage and anger. You see that video of Alex Pretty attacking Border Patrol.

This is two weeks before he gets killed. He's kicking the car. He's like foaming at the mouth. He's in some sort of rage.

This is someone who's emotionally disturbed and he's got a a gun on his waistband, which look, every gun owner knows that you have to be exceedingly careful if you are carrying a weapon and then you are dealing with law enforcement. The last thing you want to do is go out looking for an altercation with them, which is what he did. And by the way, I think it's completely tragic that the two of them were killed. I don't want to see that happen.

But again, they are victims of this political environment, this chaos that's being whipped up by the elected officials in Minnesota. This would not be happening if they simply turned over the illegal aliens in their custody to ICE and Border Patrol, which is all that they're asking for. >> I've said on this podcast like many times, but none of you will respond to it. Why are they doing this instead of just finding the business owners?

Wouldn't that be a better policy? And you're in the White House, you're around these people. Why don't you tell them why don't we do that? Why don't we just give fines to business owners who hire illegals and stop the incentive to come here?

>> How do you know that they hired illegals? How would you know that? And if you know that, then you know the individual. >> It's super simple.

You would just go do uh a little investigation. You go to the car wash, you videotape it like any other detective or any other federal agent or a local police officer would, and then you track those people down. You very quietly go pick one or two of them up on the way home. You ask them for their papers or you go to the owner and say, "Hey, we have these six people.

Here's their pictures. Here's the pictures of the six people. Show us their papers. Show us their social security number." That's all you have to do.

Freeberg, >> here's my here's my here's my proposal. Okay, Jacob, you may have a point there, Jacob. You may have a point, but I'm not sure >> that it's good enough in the case of an illegal alien who's already been in this country committing crimes. Okay.

Yeah. So, if you have if you hold on, if you have a drunk driver >> who has killed people through drunk driving and they're they're captured, I think they should be turned over and deported immediately. >> But if you want to do big numbers, like big numbers, you could just go to a farm, you could go to a car wash, you could go to a restaurant, you take pictures of everybody coming in and out for their shift, you go to the business owner and say, "We have these people. They can you show us their uh paychecks and their pay stubs?" >> All right.

So, we'll agree to disagree on some of this and uh we'll agree that this is a tragedy and that we need leadership to calm these things down. Uh and we need to agree on a very reasonable immigration policy which is not what we have right now in my opinion. All right. Claudebot has gone viral overnight.

I have been claed. I have been one claude. I am all in on this. Um this is an open-source project created by a gentleman named Peter Steinberger.

He's an Austrian developer and entrepreneur. So, what is it? It's uh basically an open-source personal assistant. Uh think like Siri or maybe Jarvis.

Have any of you guys used it yet? Has anybody installed it yet? >> I did. I spent 15 minutes and I saved 15% on my car insurance.

>> Are you joking? Sure. You installed it and then asked it to go. >> You know what's so funny, Nick?

I posted this. The number of people that didn't understand that that was a joke. >> No, I understand it's a joke. Yeah, >> I know you did.

Yeah. Yeah. >> But there was a bunch of people that were like, "Really? How did you do it?

Can I do it?" And then some people were like, "Wait, only 15%." And other people were like, "Wait, you set it up yourself. You didn't have somebody help you." >> This is the great This is This is literally the greatest thing ever. Have you installed it yet, Freedberg? >> No, I don't want to give >> Okay.

>> an open source tool access to all my emails and messages. >> Have you done it yet? >> No, because I'm concerned about the security issues. But I want to I want to do it, but I'm concerned about the security.

>> I've spent the last 72 hours doing this. I'm going to explain to you what we did at the company. It's mind-blowing. Okay, so it is basically think like an open- source Siri or Jarvis, right?

You get into an interface and you can talk to a virtual assistant and it does things for you just like chat GPT or XAI might. But the way it works is you kind of load a virtual machine if you know what that is or you can put it on your Mac Mini. You run this like a server. Then you start authenticating it with your services.

So, Gmail, Notion, Slack, WhatsApp, maybe even your password manager. Super dangerous. Nobody like Claude or XAI or Microsoft would ever allow you to do this because it's so dangerous, obviously. >> But we did this and we put it to work.

Here's what we did. I created a virtual podcast producer and we made this persona and we created a new Gmail account, Sachs, a new notion account, a new WhatsApp account, everything. We created like basically an a virtual employee. We put it together and we made it the producer for my new This Week in AI podcast.

There's a little plug in there for it. So, we had it start doing research on guests. So, we said, "Hey, research guests, right?" just like you can do in an LLM. Then we connected it to um the existing feeds like the podcast feeds and the database of like people we've had on the show and like who's booked.

Then we said make a CRM Sachs for all potential guests and suggest other guests and it vibe coded a CRM for itself. >> Can you show this? >> I said hey do some research on this. Right.

So then we start a thread with it with the actual producer Oliver who's working on this. So I said, "Do this guest research." It did all this guest research. Now, this is as good as like Nick or Lisa would do at a first pass, but it did it instantly. And then I made a prompt for it to like, and I was using this prompt, by the way, David, when we were in Davos for our guests.

And so this like gets the company's name, the founder information, you know, look for their competitors, all the stuff that a producer would do over a day or two. Do a timeline, give suggested questions, etc. So I teach it this. So, here's producer X and it says, "Got it.

That's what uh that's a great guest research." And I said, "Okay, do the guest research on this person." It comes back with that. And it gave me its media appearances, all the stuff I would want to do for research. Then I said, "Um, uh, I think this would be >> You're interacting with it like an agent." So, how is it different than an agent? >> Watch.

Okay, we're getting to it. So, then I said, um, producer X, email Alex and let him know that I want to have him on this weekend in AI. CC me and CC Oliver. And it says, uh, I couldn't verify the email, but I'm going to try this one.

And it wrote this email. It sent the email. Then after it sent it, >> did he respond? >> So here's the email to the guest.

>> Oh my god. >> Hey, Alexis wanted me to reach out. He'd love to have you on this weekend to discuss ExoLabs, your work on distributed inference on the recent he like did this like little thing. Let me know if you'd be interested.

>> So then >> it's crazy. He says, >> this guy says, "Sounds great. I'll be in touch." >> Then I said, "Here's what I want you to do. I want you," and we created a group called replicants.

So now we've made five replicants at the company. And today is like replicant day or replicant week. So I told it every time you do work for me in the replicant room, say what you did and then also put it on your calendar. So now it's putting on its calendar what it did in timestamps.

So he said I did some guest research here and then yesterday I did this booking report and that I'm doing this AI around it that I'm doing this >> and then I set up a and then producer lawn had it set up a ticker because we did this email ticker and did all that work >> and the crazy thing is you can start talking to it directly so I can have a direct conversation with producer X and it learns and now it knows everything. So we started one to be an SDR and then we are giving it access to our CRM there. But it built its own CRM, David. It's building its own SAS tools to solve its problems.

Every time you add it to something, it gets smarter. So now we've we're making a LinkedIn for this persona. >> The LinkedIn is going to start adding people. People don't know that these aren't humans.

>> Yeah, >> it's insane. >> All right, let me give you a few thoughts. So, I was paying close attention to the whole Claudebot freakout, you know, over the weekend. And, you know, again, I wanted to set it up really badly, but I was too afraid of the security issues to do it, but I was watching everyone else do it.

And look, I think the takeaways for me are number one that this will be the year of the rise of the personal AI assistant. Until now, AI has mainly come in the form factor of a chatbot and it's been used as a research tool. Some people have >> search. Yeah, >> it's better search.

There's kind of this niche case of, you know, fantasy chat bots where people actually like somehow talking to a chatbot, but really it's about better web search and it's about research. Now, we're moving to a completely different form factor, which is again this AI assistant that's an agent that can do things for you and it's going to get better and better at doing different tasks for you. Everyone's going to have this amazing AI agent. Now, you know who who is the beneficiary of this market opportunity?

I mean there's obviously going to be some startups like the guy who's doing Claudebot which I guess he renamed it was it moldbot or >> it's called Maltbot now because Claude got upset >> right so in any event it's Maltbot now but I think it's a tremendous opportunity for Google because the question is who has your data Google has all my email my calendar my documents which is exactly the stuff that I would want to integrate with Cloudbot if I believed it was safe obviously I've already made the determination that Google is safe because they already have all my data so I think Google is in a tremendous position to offer a personal AI assistant that's connected with your email and calendar for those of us who are using G Suite and so on. Obviously, there'll be opportunities for other companies as well, but I think this is going to be such a big product that it may become the dominant form factor of AI, meaning more popular than the the sort of researchoriented chatbot. Speaking from the policy point of view, I think it's going to change the policy debate around AI because so much of the policy debate over AI is about fighting the last set of battles around social media >> question and answer modality. >> It's sort of treating AI as like a form of social media.

I mean, I hear policy makers say all the time, what are you going to do to protect kids against predators? And it's like, well, wait, what predators are you talking about? This is not social media, right? I mean, I understand if you want to protect kids against, I don't know, a fantasy chatbot that's recommending they do bad things, but it's just it's very different, right?

This is just a completely different modality. And I think that the rise of agents will make that clear that we're dealing with something that's not social media. Maybe there's some analogies to the previous set of policy battles that were fought over social media, but I think it's quite different. So, I think Claudebot is a breakthrough.

I think it's a really interesting proof of concept and we'll also have to see exactly who who the big winners are here. >> I think what's interesting is that if I said to you, hey, there's going to be an AI personal assistant. You would have some point of view in your mind on what that means. It's like, oh, it can, you know, change my calendar, tell me about my travel, read my email for me, summarize that that kind of stuff.

But what I think people don't realize, it's almost like the first time you use FSD in your Tesla or the first time you used an iPhone, you realize that it's so much more that it widens the aperture of what's possible that it's not just the assistant in the way that you might otherwise be thinking about it, but it's like this super worker. And the super worker, like to Jal's point, it it does both scheduling, calendaring, ideation, knowledge work, creates new code, creates CRM tools, books your travel, it does everything. And then if you start thinking about having an army of super workers, you're like, "Oh my god, what's possible?" And now think about what Elon's doing. Yesterday, Elon shut down the Model S and Model X production lines in Fremont.

>> And by the way, you know, a year ago, I'd never owned a Tesla. And I was so blown away with FSD that in the last week, we bought two more Model X's. So now everyone in my family, we're all on Tesla because the experience is so good. But they're shutting down the Model S, Model X lines to make Optimus.

So if you've got the same thing that Jal's talking about and experiencing, but you've actually got it in physical form in addition to digital form, that's the future where everyone has a super workforce and you put two optimists in your garage and they build and run a business for you and then everyone becomes an entrepreneur. >> What was my prediction, Jason? What of my prediction? >> Oh, that they would merge all these companies and then this week >> it's happening.

>> It's happening apparently. Um or I shouldn't say it's happening. We don't know it's happening, but beep >> boop. Between this and my copper prediction, >> I'm about to retire.

>> You know, copper's up 26% in a month. >> What is that? Is an annualized. >> Check this out.

S >> I we invited somebody from Craft Ventures on and I forgot who's from Craft Ventures who's going to be on this week in AI. So, I said, "Can you tell me who's doing it?" And it said, "Oh, I couldn't find it." I said, "Oh, it's in the notion database." So, it goes and it found it. Oh, Mike Robinson from Craft Ventures is on February 24th. And then there's also Brian from Craft or whatever.

And he was on a different liquidity round table. And I said, "Hey, can you email Mike and I want to do a pre-show call with him?" Guessed his email, sent it. I said, "C Heidi, I haven't given him an access to my stuff." And it said, "Oh, do you want to get his top three times, all this stuff?" It's crazy what's going on here, folks. I would say out of 50 hours a producer does a week, this does 40 of them.

And of what an SDR does, this does 95%. This is going to be crazy because it keeps learning. Now, your API bill is going to be nuts. The first day we did this, we hit like a $100.

I think it's going to be like $1,000 a day in API calls. So, my team's like, "Hey, this is a lot of API calls because people are going crazy inside Slack and making all of these agents." >> Good news, Kimmy 2.5. Yeah. >> Uh we are ordering Mac um studios, the really powerful studios with like max memory on and they're putting Kimmy.

Is that the new open source one? >> Yeah, we're putting Kimmy on them. We're going to have free free for and then it according to people online like 95% of all these queries can be done for free with Kimmy. >> You'll save 90%.

>> It's crazy. >> It's really crazy. >> This is independent by the way of whatever LLM you want to use. You can swap out LLMs.

You could route it to different LLMs. You can do whatever you want with it. I tried to have it create Reddit accounts for me. Like, I want a Reddit account to go do research.

And it's like, I can't do that. It's against the term of service. I don't think people understand how important this Kimmy K2.5 moment is. >> Wait, what is Kimmy K2?

>> Just to set some context, right? So, I think the last few years we've all kind of lived in a world of what I would call blackbox AI, meaning you go to your favorite chatbot, basically, you put in a prompt and you press enter, right? And all of those things go to proprietary models and they're excellent. OpenAI has some, Anthropic has some, Google has some, and they all give you back an answer.

Super powerful. But the important thing that we don't know to care about right now is that all of that stuff is gated. What does that mean? You don't own the keys.

You don't own the blueprints. You have no idea what's actually going on. And what Claudebot demonstrated this week is you're one terms of service update away from everything breaking, right? Because at one point, Anthropic didn't like what was going on and they said, "No, this is not allowed." So, we've talked about this battle between open source and closed source.

So all of the models that that have been winning, the blackbox models are closed source models. But open source is important because it's transparent. It gives everybody their own sovereignty whether you're a company and frankly really more importantly whether you're a country. It gives you control of your own speed.

It gives you a lot of execution control. You can audit the weights of the models. It allows you to host it on your own hardware. And the most important thing is the data never leaves your control.

So that's why open source was really important, but it was always kind of like an underdog and it wasn't particularly good. So this week you wake up, you go to the office and Kim K 2.5 is important. So this is why it's so important because it was incredibly profound. It's a trillion parameter mixture of expert model.

When you farm out work, the proprietary models keep that agentic layer kind of secret. Kimmy Cape 2.5 was like okay look here's this thing called agent swarm it's a technology that we built that's also now public and it allows you to create all you know 100 sub aents and what that allows you to do is basically solve any complicated multi-step problem in parallel so I think this is the moment now if I had to make a prediction I think there is the clear shot across the bow of closed source and I think open source can Why? >> Because when Kimmy K2.5 is accessible, >> it democratizes something this trillion parameter reasoning >> that right now you could not otherwise get. Now you can do vision to code, you can do massive context windows.

It's really unbelievable and it's available to everybody. >> And to just build on it, you're exactly correct and I think it's a very big deal. You can run it. This is the other thing.

What What have the two limiting factors been here? >> I'm not a big fan of like these locally hosted models. I think it's all and janky. It's all like kids mucking around.

>> I think running these things locally are stupid and janky. >> The whole point of open source is to go and take them into these huge data centers is to use nextgen silicon. And we talked about this last week or the week before where again post Grock what I think will happen is you're going to see an explosion of decode silicon. If you take these next generation systems and you marry them to open source you're going to cut the cost of AI by 90%.

And when you do that you know Jason your bill is going to be 10 bucks a day. >> Yeah. >> And you're just not going to stop. Here's the interesting thing for me like back to this like running it like there are now people who figured out how to daisy chain the Mac studios.

So people are you can see there's two stack there. People are starting to stack these. This is commodity hardware running open source. The there's two advantages to this one.

We have control of all the data. We have it on our own hardware. We can run it infinitely. And these things are only getting better.

the M5 chips coming to these Mac studios and if you want more power you stack it up and then the open source models are getting easier. So what's going to happen is 90% or 95% of our jobs are going to go to this local hardware will control it. We don't have to worry about our information going up to Samman I canled I canled all of my OpenAI accounts. $25,000 gone.

It's a matter of time until the big model makers create an incremental revenue stream for guys like you, Jason, to license back all your prompt and response data. And you'll probably make enough to pay for the all the costs of hosting and running these models. Anyways, >> yeah. Anyway, I this is like feels like >> it's a very big moment.

>> It's a big mo it feels like a very big moment. And then, you know, let alone if when do you think freeberg we get it on here? When do we get it on our phones? when we'll be running Kimmy.

>> We're not even talking about a lot of the architectural changes that are happening that we've talked about in the past. There papers that indicate we could probably go down by 70 to 100x in terms of compute need in how the the model actually runs. So yeah, ultimately these things end up on the on the iPhone running locally and you don't need to go to the cloud. By the way, just having our nation's AIS are on the line here, I think this has a dramatic effect.

If you play all of these paps out on the way a lot of these states have written their idiotic legislation where those those legislative approaches encompass strictly the view of AI being a chatbot interface run by a single company running a model in a data center. And if all of the models end up running locally on machines in open source, different contexts, different use cases, all of like we said from the beginning, all of the idiotic, dumbass takes by legislators on what they think they need to regulate and how go out the window or they create a lot of confusion on what's actually going on in the real world and it puts us at risk. I strongly endorse the effort by those in the administration to pass a federal AI preeemption law that avoids all of this nonsense in the states and the local governments. And I think that this evolution of AI from being centrally hosted in data centers by closed models through chatbot interfaces.

All of those layers break. You start to recognize very quickly why you need to have federal preeemption on this stuff because people get way too ahead of it and it's going to limit innovation. >> Yeah. Did you just Well, obviously I agree I agree with that.

And again, just to build on that point, you can't underestimate how much the policy debate in Washington has indexed on a single use case. >> That's what I'm saying. >> Which was a niche fantasy chatbot application, >> right? >> Yeah.

That's all that people know. Yeah. That's all they know. >> That turned into horror stories.

I mean, legit horror stories. But >> again, that is just not the predominant use of AI. And it's certainly not going to be in a year. >> One way to think about it is imagine if the internet came out and the only thing that happened on the internet for the first three years was like pornography websites and like just like and then people are like, "Okay, we got to regulate the internet." And it's like, "Hold on a second.

This is an idiotic use case. Perhaps we should take a zoom out and think about what the internet could enable and all of the other use cases." And legislation needs to be crafted with a bigger view. And perhaps it's a little too early to make those judgment calls. >> Yeah.

You got to wonder what impact this is going to have on the valuations of these companies. I mean, if you can run this stuff locally on your own hardware, you can bracket or put it in a virtual machine and open source wins, it's going to change the economics of everything. And the people I'm talking to in startups, which is where you always see the most efficient use of technology, they're all using Kimmy and what was the other? >> Let me ask you a question about that actually, Chimoth.

So Kimmy K2 powerful model but it is a Chinese model or at least it originates in China obviously once it's open source people can fork it and make their own but does that concern you particularly around the use case of coding because what if there was a secret prompt in the model >> zero day attack or something >> well it's like something built into the model that's secret that could inject corrupted code and you know so much code's now being written by these models in such volume that I mean humans in the beginning were checking it all. But now even the founder of Cloudbot said he he doesn't even check all the code because he can't personally supervise all of it. So as AI coding becomes a bigger and bigger percentage. Right now it's probably what like 50%.

As it goes to 99% no one's even checking it. You have to really worry about prompt injections. >> Exactly. >> Code injections.

>> I think you're bringing up an important point. Right now we overly rely on eval to tell us how good a model is and I don't think we've developed a standard to I mean the the big model companies do it internally but the safety teams who are responsible for red teaming these models don't really work as a broad coalition. Everybody has their own version of what they do to make sure that their own models are good and performant. I think that there's an opportunity because somebody has to be able to take an open source model.

Let's just say you're France and you're like, "Wow, where am I in this whole AI race? I'm nowhere. We have a bunch of applications that we want to develop and we need our own sovereign AI stack." And so, okay, we'll take Kimmy K 2.5. What do they do to your point Sachs to get complete assurance that that model is reliable and safe under all weather conditions?

Honestly, the answer is I don't know what they would do right now. But that's the opportunity because somebody has to be able to say, "Okay, look, we're going to sandbox it in the following way. We're going to run it under all these race conditions. We're going to get to all these corner cases so that we can tell you that it's actually good to go and then you can use it." But how long will that take?

And then by that time, are we on Kimmy K3? And then what is France supposed to do? I don't know. So these are complicated questions.

But yeah, we do need an entire reimagining of how you red team some of these open source models, obviously. >> And there's open source models being made here in the US too, by the way. >> Exactly. No, no.

Meta is doing them. >> Wherever it comes from, >> you're going to need AI models to look for corrupted code and to do the security eval. And there's going to have to be continuous monitoring. The good thing about open source is that when one person discovers a bug or a flaw or whatever, they share it with the community and then it gets patched globally.

>> The the other problem with open source though right now is you can't really fork it and make it your own. Why? Because there's so much investment by Moonshot. That's the company that makes Kim K2 in that example that you'll have so much drift in one version your fork will be worthless.

So why would you do it? So again, it goes back to sachs. We have to be able to say okay Moonshot will provide Kimmy K2 and every update thereafter but now we need to stress test it and we need to redte team it and we need to be able to say that this thing is bulletproof and right now there is no clean way of going to a third party vendor to do that in a quick reliable cycle and that's a business opportunity for somebody just speaking of the business opportunity I think there are a number of American >> AI companies that are working on open source models it is a gap that we have >> so and that is an opportunity I mean, look, if you're running critical infrastructure, I don't think you want to be using a Chinese model, period, on that critical infrastructure. >> I think if you can get it validated by an American company that's trustworthy, then it's no longer really a Chinese model.

Chinese contributed some really great ideas and now there's a branch that you can use. I think it's just hard to ignore how good this stuff is now. >> It feels like this was a turning point this week. Okay, I want to get to one more important story.

But dollar has dropped as gold and silver and copper have ripped. Dollar index is down 10% in the last year. Hit its lowest level in four years on Tuesday. Trump was asked if the dollar declined too much.

His quote, "No, I think it's great." Wall Street thinks Trump wants a weaker dollar to boost US manufacturing and exports. Obviously, we have a weaker dollar. That means the stuff from the US is cheaper. Foreign stuff becomes more expensive.

Uh and um we have a situation here, Freeberg, that you've talked about. Money printing has increased to $2.5 trillion a year. Trump wants to print an additional 500 billion more. That would bring us close to 3 trillion uh for the military and uh money has poured into gold and silver which have way outperformed the S&P.

Shout out Vinnie Lingham. Freeberg, your thoughts on dollar devaluation and what we're seeing? Yeah. So, people talk about the market going up, but I'll use an analogy.

If you live on an island and there's two huts on the island and there's a bunch of shells that people are using for trade, each house is going to be worth a certain number of shells. And then if people went and found a whole bunch of more shells, the price per house would go up in number of shells. But there's just more shells in in the supply. And effectively, you've inflated everything.

And that's effectively what's gone on with the US fiscal condition. We've talked about this many times, but I think it's always worth a rehash. In a democracy like we have for the past 250 years, without adequate constitutional constraints, it has always been the case that over time spending goes up. Government spending goes up.

And this is because in a democracy, people ask for their government to do more every year. And as they ask for their government to do more every year, the government agents who are elected say, "Okay, here you go." And they spend more. Eventually, when the borrowing capacity gets unlocked, which is what happened in the United States when we went off the gold standard, you borrow like crazy. You print money to to fund those borrowing costs and you use that fundamentally to drive the next voting cycle, which is to give people more and more of what they want.

But eventually, the bill comes to you and in the United States, the bill is coming to you. Let's start by looking at the money supply chart. This is the M2 money supply chart, showing the rapid rise in dollars in supply as a function of the central bank of the United States. the Federal Reserve making loans to banks ultimately to fund federal spending.

I mean really an extraordinary number. And if you look at the M2 money supply chart going back to 1960, and you can see postcoid we were hoping that we would have resolved and sort of reduced the money supply by some amount but co really created this accelerating mechanism and you know we're back on track in the last couple of years to increasing the money supply. And so over time the the US dollar gets devalued as there are simply more dollars in the market and US treasuries gets challenged. So if we take a look here around the world central banks have decided that they no longer want to hold US treasuries.

And so this is the value of gold versus treasuries in central banks in their inventory. So we are now seeing that for the first time in history or >> no no hold on that's not accurate. It's not like they're selling. This line just shows it's stable per se, right?

It's more that the incremental buying is in real assets. >> Yeah. But this dollar the dollar value is also adjusted. So fundamentally I mean one way to think about this is the relative value of central bank holdings around the world.

We now see gold eclipsing US treasuries. So now gold is a larger share of the holdings. Yeah. So now gold is the largest share of the holdings of central banks.

If you look at the next chart which is just over the past year as JCL pointed out this is the dollar index. So it's the dollar against a basket of foreign currencies has declined you know from a index of about call it 109 down to 96 today. This chart actually looks at so what is the US stock market trading at and instead of trading it in US dollars what if you just looked at the US stock market the total value in ounces of gold. And so if we had the gold standard still and if we functionally converted stock market value from dollars back into gold, you can see that the stock market in the United States over the past years, so this is about seven and a half years going back to the pre-COVID era, is actually down, down pretty substantively from the pre-COVID era.

So stock markets are fundamentally down. Everyone's cheering, clapping, bouncing up and down. Stock markets are up. Stock markets are up.

And I'm going to tell you why this is important in a minute. Uh, and everyone's, you know, jumping up and down saying, "Great, the stock market's up." The stock market's up in dollar denominated terms. But if you look at the stock market relative to gold, it's actually down. And the sell-off is not just in the stock market relative to gold, but you can actually look importantly at the metric that we all should care the most about, which is US Treasury yield.

So, this is the 30-year. So, the 30-year yield is now at 4.9%. The average US government's cost to borrow today is 3.3%. So if we end up needing to roll all of the US government debt, assuming we take on no new debt, which we know is not the case, $39 trillion of debt outstanding, the federal government level today, and it had to get refinanced at this rate, we would have an incremental annual cost to service the debt, just the interest on the existing debt, of roughly $700 billion a year.

incremental cost to service existing debt as interest rates climb from 3.3 to 5%. And so fundamentally, this is about 70% of the current defense budget. It's about 10% of the overall federal budget. It's a significant percentage of US GDP, about 3% of US GDP.

It's a substantial number and it creates the spiraling problem that we're in. Now, I just want to make one final point. So, there's this dolorization moment. It's always worth having a reflection on it, but I just want to tie it back to Minnesota, Donald Trump, and socialism.

And I think it's important for us to just highlight that if you own assets like we do, the four of us, we own stocks, we own real estate, we own other assets. As the dollar devalues and everything inflates in value, our asset prices go up and we get wealthier and wealthier and wealthier. The majority of Americans do not own assets. They are net asset negative.

As a result, they live off of income and they do not benefit from the ddollarization like asset holders do. And this is what is ultimately fueling populism in the United States. And the populism in the United States is what is driving socialism. And the response to those behaviors is what Donald Trump elected to some degree.

and the response to the Donald Trump actions is what's driving the civil unrest in Minnesota and other places. And I fundamentally believe that much of the unrest, the civil unrest, and ultimately this divide in this country is driven by the fact that ddollarization because of excess government spending ultimately leads a majority of people in this country to feeling oppressed and left behind because they're seeing a few people in the country accelerate their net worth like all of us here. And there's no way for them to catch up because they don't actually own assets. So, I'll be I'll I'll be honest with you guys and make a confession.

I was kind of at I was at the gym this morning on the treadmill. >> You were at the gym. >> Yeah. And while I was there, I was actually thinking about the wealth tax stuff that's going on in California.

And I I wonder if it may be an inevitability in order to keep the United States from going into civil war. I mean that very wholeheartedly. Like I just don't know if there's a way of solving this fiscal problem without a functional redistribution of wealth. And the question is can you do it violently or nonviolently?

And if there's a nonviolent path, I think that's probably the preferable path. >> Did you ever think about do you ever think about violently picking up some of those weights? We can leave that that in or take it out. >> The problem with that is look, you know, where this California wealth tax is going, right?

It's not going to the quote unquote people. It's going to these special interests who've been looting the state for decades. >> Audit everything before you raise taxes. It's very simple, folks.

Audit everything. >> I mean, if the money is going to waste, foreign abuse, and special interest, then how do you solve the divide problem? I mean, I guess the ones that the special interests are capable of organizing are able to extract, but doesn't actually solve the problem. In fact, everything gets worse because >> yeah, >> those government special interests generally rig the system in their favor in a way that actually raises the cost for everybody.

>> So you look at California, everything's performing worse. >> Can we pour one out for David Freeberg's favorite government program? >> Free beer. >> Free homeless for 55 homeless people suffering from the shakes.

And they spent $6 million on it, but it's over. 6 million a year. 6 million a year for 60 bo hobos to get beer because they had the shakes. The dream is over.

The dream is over. Freeberg. No more free beer. >> By the way, I think Sax's point is the right point, which is the resolution to this isn't a fair and reasonable redistribution of assets.

It's fundamentally a moment of extraordinary theft. When there's this massive movement of capital like this through a centralized system like the government, there's no free market transition of capital and as a result you end up most seeing a large percentage of it go into into theft back into the hands of a few who were really good at capturing that money as it comes out of the government's coffers. That's a good point. >> You've diagnosed this many times.

I mean, look, Texas and Florida do a better job for their population collecting half as much in taxes per capita as California does. And having no income tax or capital gains tax, >> that's because if you commit fraud here, we put you in a firing squad. That's how it works. Right to the firing squad.

We're going to go to the range. Let's go to the Come by Sachs. Come by the ranch. I have a shooting range.

>> Matt Matt Mayan entered the California guminatorial race. He's running for governor. >> He's running California. >> Yeah.

>> Uh what does it mean? Who is he? Explain to the audience why this is important. >> Well, he's the mayor of San Jose.

>> Chats are on fire. >> Yeah. He's much more of a moderate and he's not a union captured candidate. >> Oh, here's your poly.

>> Yeah, here's poly market. So, Matt Mayan announced this morning very late entry to the gubernatorial race. Katie Porter is kind of the, you know, the output of the Democratic machine. Tommy Styer is the billionaire climate change advocate.

But Swallwell, you know, the congressman from the east, >> hasn't met a virtue. He doesn't want a signal. >> He's literally like Christmas lights blinking. >> Tom St.

>> Well, look, if if if Maym, is that the right way to pronounce his name? >> Yeah. Matt Mayan. >> Matt Mayan.

California has a jungle primary, right? So, everyone's running at the same time. There's no separate lanes for Democrats or Republicans. If he ends up top two, let's say it's him and Swallwell, I think he'll win because all the Republicans will vote for him.

They'll go for the more centrist candidate. >> We had a political strategist over for dinner. There's a version where the top two people could be both Republicans actually right now. Current course and speed, the top two vote getters are trending to be both Republican.

>> Yeah. >> I like the Karen. The Karen's the most entertaining. She's the one who said, "Get out of my shot." That's the one.

>> Katy Porter. >> The get out of my shot one. >> Yeah. She's tumbling.

She's tumbling. Yeah, she's not doing well. She's coming down in the she's not likable and she seems and I think everyone sees right through her as being, you know, effectively captured by California institutions, >> but Maym and Swallwell much more independent, but I think it's going to be a battle between the two of them. >> Just to go back to your point, Jamas, so what's interesting is there are two Republicans running for governor of California.

Chad Biano, who's a sheriff, and then Steve >> Steve Hilton, >> who's a political commentator, used to be on Fox News. They're both at about 15%. Which actually puts them in the lead or close to the lead because the field's so fragmented right now. Exactly.

The problem that they have is so I guess if the field stayed permanently fragmented, yes, they could be in the >> Could you imagine the melting mines? >> Yeah. But that's not going to happen as much as I would like it to because the Democratic field's going to coalesce and if it doesn't coales the the party machine will get together and they'll tell a bunch of people to drop out and get real >> and they'll they'll basically shift it. So the problem with the Republicans is and it actually be better if there was one Republican instead of two because they need to be at like 30%.

Right. >> Right. >> But you know they're each going to get 15%. They they have more of a ceiling is what I'm trying to say.

Right. >> Yeah. That's true. That is true.

>> Yeah. It's only the final two that make it into the general. So, if the rest of the Dems literally stay equal and there's five Dems that are at like 5 to 10% each, you could end up seeing the two Republicans in the top two spots. >> I don't think that's going to happen.

I don't think you're going to end up with five Dems at at 10%. I think what could happen though actually is it's probably better that you have two Republicans rather than one because the disaster would be let's say you end up with Swallwell and one of the Republicans in the runoff, then Swallwell definitely wins. That's what always happens, right? >> The best chance for Matt Mayan is that it's him versus either a Democrat or a Republican actually.

>> And then if he's up against a Democrat, a more liberal Democrat like Swallwell, the Republicans will support Maym and he'll win. And if he's up against a Republican, then he'll also win because all the Democrats will support him. And remember, this is like a plus 20 or 30 blue state. So, >> and by the way, he is such a good guy.

He's been such an effective mayor of San Jose. you know, he cleared up homelessness. I mean, his polic actual work running something stands out amongst the rest of these folks. So, I think he's got a real shot, Sachs, at moving up real fast, even though he's coming.

>> Well, yeah. Look, if he plays his cards right, he could win. I mean, look, I think there is a a path here for California restoration. You get someone like Matt Mayan as governor, maybe Rick Caruso takes another shot at running for mayor in LA.

>> I think everyone recognizes that. >> Get in the game. >> I think everyone recognizes that Karen Bass has been a disaster. She, you know, aided and abetted the >> burning down of the Palisades.

And then if you defeat the wealth tax so that the >> Wait, did Trump take over, >> you could have a path? >> Did Trump just take over the rebuild in Pacific Palisades with an executive order? Did I see that in my feed? >> He did.

Yeah. Well, you know, there's been a very small number of permits granted. I mean, how long has it been like 18 months now? >> Sound >> Wait, so Sax, would you move back if there was a great restoration in California?

I feel like somehow it's just not going to happen. You know, it's like >> it's over. Not in our lifetime. >> I feel like the fact that you're telling me that Ma May is this great candidate and, you know, the whole tech world's going to get behind him.

I'm sure that's true. And then somehow I think it's the reason he's going to lose and I think, you know, we'll end up with Swallwell, who I think >> you're so jaded, Sax. I think that somehow >> well Swall is considered to be kind of a lightweight and a pretty dim bulb. >> Friend of the pond, Eric Swall, come back anytime.

Who interviewed him with me? >> Jim, was that you? Did you interview him with me? >> Yeah, I did.

Yeah, you did. Yeah. Yeah. Yeah.

>> Yeah. >> I mean, just manifestly not up to the challenges that are going to beset California in the coming years. You need someone really stellar to clean things up after the fiscal insanity of the Newsome years. >> Well, look, I'll restate this on the show very clearly.

California has a trillion dollar fiscal cliff coming up because of the pension obligations. I don't know if you guys know this. I'll make this one point very important to know. They once tried to change the benefits, the pension benefits, and they lost a court case.

And so there's precedent in California state court that you cannot change pension benefits on the date that someone was hired. You can never change their future benefits. Really important to know. So all of the benefits that have been given to every California public employee up to this day or that they've been promised, they are promised for life and you're not allowed to take them out and they cannot be disposed of except for some form of bankruptcy.

And there is no mechanism by which the state can declare bankruptcy. So fundamentally and functionally, there are two ways that California can be saved. Number one, you pass an amendment to the Constitution to fix this pension liability problem. And number two is the state has the ability to declare bankruptcy.

Everything else is all about how long are you keeping the state alive for. >> Well, I I I support that that change to bankruptcy law. I just think it'll be hard to get. But, you know, we could try.

And look, if you had a governor of California come to the federal government and say, "We would like this," then there's a much higher chance of it happening. But actually, I think one question I think one question >> for you to ask in evaluating this is what does Gavin Newsome want? Because obviously he's running for president in 2028, you know, who would he like to replace him as governor? You know, and obviously he doesn't want a Republican because that'd be a rebuke.

You know, does he want Swall? Does he want someone who will appear even weaker and stupider than him? or does he want someone like Maym who will be appearing >> to clean up the state? I think he might want the idiot >> although it's a it's a tough it's a tough tough choice for him.

>> She'll just scream. I like >> Well, here's the thing is he also doesn't want the state to fall apart while he's running for president cuz he might be blamed for that too. >> So, does he want someone like Compton like Maym who's criticized him because Maym has criticized Newsome on things like homelessness, right? >> So, Gavin is super thin skin.

>> They can get past that. >> I don't know. But Gavin is super thin skinned, so I'm sure he resents that. So probably the machine gets behind Swallwell, even though it probably means a train wreck for the state.

But we'll see. >> Yeah, that's doesn't seem like a good idea. Yeah, I think he would want. >> But this is a big opportunity for tech to flex his political muscles to see.

>> Yeah, let's see. Let's see. >> Let's see if they can do it. Let's see if they can do it.

>> It's not just tech. It's anyone that doesn't want an establishment governor. And I think that includes Hollywood. It includes agriculture.

It includes large swats of the state's economy. So, let's see what happens. >> All right, everybody. The AllIn event series continues.

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