Global Trade This Week – May 17th, 2023
-
Keenan Brugh 0:00
You're watching global trade this week with Pete mento and Doug Draper.
Pete Mento 0:10
Hello, everyone and welcome to Global Trade This week I am Pete mento. And that is not a younger hairier version of dunk that you'll see next to me. This is two weeks in a row that Keenan Brugh has with us. Keenan. Are you trying to take someone's job?
Keenan Brugh 0:30
Throwing throwing elbows, you know, just boxing out and getting the limelight anyway I can whatever else,
Pete Mento 0:36
whatever. Honestly, you know, I mean, whatever you got to do to get yourself on primetime. Yeah, guys did a pretty good job last week. I had a little dig on LinkedIn. I heard about, of course, from all of your fans. kena ufps. Yes. Love it when you're on the show. Don't let it get to your head. But of course, for those of you who don't notice how loud it is where I am, I am at a Panera. And beautiful decorative. Sources tell us that the Wi Fi at Pete's apartment was terrible. So we're recording here today. And Doug is on assignment doing some pretty cool family stuff. So I'll let him talk. We'll let him talk about that.
Unknown Speaker 1:27
Get the recap next week, right?
Pete Mento 1:30
But at least so you get to do. It seems like what
Speaker 1 1:34
I was gonna say at least it sounds like you have pretty good internet quality, even if it's a little loud back there.
Pete Mento 1:40
By yourself a bowl of soup and some Diet Pepsi. You could hang out here for hours.
Unknown Speaker 1:46
Perfect.
Pete Mento 1:47
So why don't you go ahead and kick us off to
Speaker 1 1:49
kick us off here. Last week, Tesla broke ground on a new Texas lithium refinery. And so according to the company, this is going to be the major choke point of the global Evie production industry for wild bow. As more competitors are coming online for Tesla, they're all kind of demanding the same sort of lithium resources, as I was preparing for this topic to I saw that per ton of lithium grade like battery grade lithium material. Over the pandemic, it's skyrocketed from about $10,000 per ton to about 90,000 per ton, and then has come back down. But it's still 150% above where it was before the pandemic. And then so as we're seeing more and more cars and Tesla's growing, other companies are growing, they're all going to be kind of demanding that same infrastructure. And a lot of it so far has been very much based in China. And so this will be kind of a big deal us design US company, US location to refine or that came from the ground or salt brine and turn that into refined battery grade material. So pretty, pretty big, I guess they're going to be trying to build a million electric vehicles by 2025. And this facility will make enough material to make those batteries.
Pete Mento 3:16
Yeah, this is the cippic deal. So whatever you look at any kind of important innovative manufacturing, you'll begin to notice when they become financially stable, that they will seek as much integrated supply chain as possible. So wherever they're able to manage the production of their own raw materials, sourcing of their own raw materials, and innovation for raw materials, these producers are going to try to do it. I mean, Tesla, it's Tesla. I mean, none of this should be surprised that they're going to do everything they can to get their arms around their own supply chain, whether that's, you know, leading with rare earth minerals flatscreens any other innovation and try to keep that within the US? Because I think they themselves, you know, will tell you that they do want to globalize the product, but they also don't want to see it getting in the hands of people who want to steal it. So it was nice to see that it was coming in.
Speaker 1 4:11
Absolutely. Yeah. I was happy to hear that news. And we'll be excited to see how they develop. It
Pete Mento 4:16
didn't happen to see what split part of Texas it was in Corpus Christi. Corpus Christi. That's the first time I ever saw the ocean. I was a little boy, my parents were Corpus Christi scared, Atlanta. Right. Well, it's time for me to go to my first topic, which is, it's time. I hope you've got your salt with that, because you gotta take this one. All right. reports coming out this week of a loosely planned meeting between China's top diplomat and one of our most important White House White House advisors and are solving where they sat down And they talked about a lot of things. I don't know how many weeks it's been since I probably should have googled that. But you know, it's like one of those things where your buddy comes over and throws up on your couch. And you get into a huge argument. It's like, it's been a couple of months. Yeah, come on, let's have a beer. So we had this big meeting, a lot of things were discussed, not the least of which was trade. And when it came to trade, a big portion of that was what are we going to do with regards to what vehicles we're going to do with regards to the current trade war that we're undergoing right now, what can be done between these two, if you want to call the administration's to try to bring peace, some sort of sizable piece? And when can we have a real conversation. So if you've got anything about diplomacy, you know that these are the talks that happen before the talks, before the talks. So this was more of a call to sit down, meeting to sit down and talk about publicly when they're going to have a bigger meeting between the principals. Now who knows what happened, you know, the room where it happens, who knows what happened with behind closed doors, in coffee while sitting in a bar, you know, who knows. And that's where a lot of diplomacy does happen. But this is a great step forward. Now, at the same time, there was apparently a lot of chitter chatter, about China supporting Russia, and their current conflict in Ukraine, and our displeasure for me. Again, I'm gonna give you another metaphor. It's like your buddy who's in relationship with somebody you just don't like, you know, they don't like, you don't care. And then that's kind of where we're at here, we China's going to, I would love to have a dime for every time I've said this show, China's gonna do whatever China wants to do, the China's, China's always got their own best interest in mind. And those best interests usually revolve around the progression of their economy, in the continued progression of their economy to that next state. So that has a lot to do with us, has a lot to do with the West. But there's also a lot to be said for a continued positive financial relationship and energy relationship with Russia. And we can't complain on what China's gonna do with China's
Speaker 1 7:20
first reaction on this is, it's amazing how fast our new cycle is going, where I had almost forgotten about the Chinese spy balloon. That was such a big deal. And it wasn't all that long ago. But you've reminded me and, yeah, it's been interesting lately, with China. You know, I've been hearing a lot. And maybe you've been seeing some of this. They're doing military practices and flights getting closer and closer to Taiwan. You know, you mentioned the trade, the trade war, but the chips act type stuff going on there. Doug, and I last week, we're talking where we don't think it's necessarily in China or America's interest to try to escalate. So we want to come up with some sort of deal. But I agree with you, China's going to be acting as irrational economic agents, where they're probably still going to want to be doing trade stuff in Africa, trade stuff with Russia. And maybe they'll use that as a different chip or negotiating stuff. But they want to work with the US, but they don't want to give the US everything that the US wants. There needs to be that kind of a little bit of negotiation room going on. So interesting. Also, the pre talk before the pre talk before the pre talk, just kind of gauging and setting the frame and what might be on the agenda to be included in the agenda. Interesting times.
Pete Mento 8:35
Mattis. I gave three speeches in three days last week in New York, Dallas, New York and Fort Lauderdale. Right? So this has been giving great speeches on great crowds. And the one in New York, I said, close to the end. You know, we need to stop talking about China. Like they're the little kid in the room when we're talking about. It's like, here's what's best for teen kids. Like, right here. I'm right here. And I'm 30. Right? broccoli, broccoli? You know, it's this sort of attitude that we've had the West have, you just settle down now. And we'll take care of it all tennis like shut up? You know, I mean, and I can understand that. So I think what we need to do, as trade professionals in particular in supply chain professionals, many of whom have spent a lot of time in China, is remember that we're not in a position to dictate to any sovereign government how to manage their economy. And we should respect the fact that we're not positioned nor should to dictate the economy.
Speaker 1 9:41
That's a great point. Yeah. If we tried to go in with that sort of mentality, even if we got a deal, which probably wouldn't happen, it wouldn't last in the long term. You kind of have to treat economic partners blocks countries with some sovereignty and respect and kind of have a foundation going from there. Ideally,
Pete Mento 10:00
Now completely. Alright. Well, that brings us to halftime brought to you by your employer logistics. To learn more about CAP logistics, please do this demo cap logistics.com. They are a fantastic supporter of Doug and I in our endless ramblings, from time to time Keatings, a cogent, very time sensitive and punctuated non rambling points. And we do appreciate them and their continued support. I don't even know how many how long it's been at this point. So thank you so much the focus of capitalism. Archaea, you want to go first for halftime?
Speaker 1 10:36
Yeah, let's kick this off. I don't know how cogent or not. But it definitely is a topic I could ramble on for a while about. So today talking about AI for the halftime, and specifically the CEO of open AI of chat GPT fame, Sam Altman will be testifying before Congress this week, and so could be a big discussion. And we can take it any parts that seem most interesting and relevant. But this is all within a backdrop of lots of amazing steps in what AI is, especially with these large language models, the base and then the training on top of them what they can do, you know, we've seen from GPT 3.5 to GPT, four went from the 10th percentile of passing the US bar exam to the 90th percentile, right? So not only, you know, automated jobs in the past have, you know, blue collar type things, this is actually going towards highly paid professionals. And what that could all do. So there's backdrop of security concerns people like Elon Musk, who had been involved with initial money for open AI, as well as many others. So high level person from Google recently stepped down citing concerns and safety. And that probably is very legitimate safety things, whether Skynet or a military arms race type things. But there's also been some interesting discussions I've been hearing where some people are thinking that Sam Altman and open AI may be kind of like the last competitor to be a startup getting in where now the big boys, the apples, the Microsoft's the IBM, Google's, they're gonna want to use this cozy relationship with DC to set up a very favorable regulatory regime to prevent new upstarts from getting in maybe enough where they could acquire them, but no one to really challenge their position. And that's also coming as a backdrop there was I think, like an internal leak, something people have been reporting on. So I'm not breaking news here. But a senior senior Google engineer has been claiming an internal discussions about how their company's AI lacks the secret sauce where it's not super defensible at this point, which is why they hadn't released Bard and everything until chat GPT kind of came out with some competition, and they had to keep up because otherwise, people might be going to Bing if things got chat GPT. I don't know if you've played with it yet. But Google's brand new Bard is pretty cool. Bard is awesome. It's able to do Google searches, more up to date information than the GPT train stuff. And so they're competing, but I'm imagining there's also like, is it all just about the safety? We'll probably see that in the headlines, but there's probably also, can we make some sort of regulatory moat where we don't have a technological moat right now.
Pete Mento 13:18
You know, I love Elon Musk, and I'm a nerd. I'm a nerd for the musk. Don't want a Tesla, I don't know if I ever will. But I'm very for the musk. And he came out just railing about you know, AI and really upset about it since having done about it. And they started recently called up Lex Friedman and said, Here's a crap pile of money. Go go, you know, ticket, we've already got kicked to the next level. Like, which one? Is it? Like? Are you worried about the world falling apart because of AI? Or is this really an opportunity? I think that's what's got me so concerned, Kim is up until now. AI, machine learning. And even to a degree quantum computing is either a government backed idea and concept scientifically backed concept. It was not a rocket. And now all these people like musk like Bezos, who handed over to the folks that checks up at just barrels of money. And we're told this is not going to be profit generating enterprise. Without is and they have no ownership. And they feel a little bit duped. So I'm wondering how much of this is? Yes, we're worried about Skynet and the Rise of the Machines and how much is it? You know, I'm working toward about the fact that I get my on the way home. So I'm fascinated by all but then there's the other part of me it's very pragmatic, that has been paying it that he spoke last week to all these law enforcement people when I was in Texas. I said how much you are quantum computing and blank spaces, you know, it's just not something they focus on. And I said, you know, IBM's apparently at Osprey now they weren't Eagle now the new processors on Spraying, then after osprey, it's Condor. And by the time that they get the Condor, they're gonna hit cute. Which means that they'll just shred, shred 120. But in correction, that's the day where they're at a million cubits. And then from there, they go to Flamingo, which is the next. The next chip and Flamingo will be able to work like you can put them in series like we do with chips. You add AI to that, AI right now, it's, it's just, it's just going through the internet. It's like taking screenshots of crap, and then cutting and pasting some something for you. Great, it's incredibly useful. But what happens when we allow it to do not just to see, but
Speaker 1 15:49
it's already, it's already starting. So it's not quite where I think you're thinking a few years in the future. But already, people are spinning up auto JPGs, where you tell it like the end ultimate task, I want an app that rates tequila or whatever it is. And then it's on the cloud. And it has these connections. They're making all sorts of different add ons and things. But the auto part allows it to come up with prompts to then prompt itself to do things and give it a credit card, you give it access to servers that will spin up and do stuff, it'll implement code. It's not perfect yet, but we're getting closer and closer to that point. Where what if it starts making a bunch of money?
Pete Mento 16:28
No, it's the other side of these kings. Where is chat? GPT? Where's AI and SATCOM? Where's modern AI going to end up being used the most government military uses supply chain in a massive way? Yes, any any type of optimization that you're talking about? It's going to be used in conjunction with artificial intelligence, and quantum computing with virtual reality for experimentation, researching engineering, it's also going to be used in finance. It's going to be used outside stock trades and in high banking. And that's probably what's going to get used first because that's where it can make the most money. Yep. So
Speaker 1 17:05
with that, I've been seeing FinTech and like, you know, being into econ, you know, you're always aware of oh, you could become an actuary work for the insurance companies, I was surprised to see a recent study come out about AI readiness. And number one industry implementing and researching and investing in AI is insurance. But number two is logistics and supply chain even ahead of number three financial services outside of insurance. So AI is impacting logistics, now investments are being made, and we'll probably be seeing more of it in the future.
Pete Mento 17:39
So, you know, the best the best way I can explain this to people, when they asked me why supply chain AI, and I say if you talk to anyone that is an academic about artificial intelligence and machine learning, they'll say to you that it works best now and will for the near term future on fixing a puzzle. Problem solving, taking a bunch of disparate issues and making them all connect, what does that sound like? It sounds like our industry, I think it is going to be used to optimize for purchase sort of payment, all of the all the inputs that go along with it. And I think someone's going to make a lot of money doing it. Unfortunately, it's also going to mean the continued digitization and automation of logistics space, which is just evolution.
Speaker 1 18:26
Absolutely, it will be interesting, interesting space to watch, that's for sure.
Pete Mento 18:30
Well, my halftime is much lighter. About this before I am a sneaker head. I think that's what the kids call them going all the way back to 1984 when I begged my parents to buy me some Jordan ones, and they wouldn't. And I had to save up money to buy my health care, which I never want. Because I just I didn't, didn't want to get screwed up. And I want and I'm not a basketball player. My vertical leap is like a quarter of an inch. It's pathetic. For me, it was all about hip hop. So genius and Nike were a big deal to me. And I love the way that Jordan looks like and I love the way that you know, every the mid all of them have a comma that maybe is old, this URL, this is really into it. And he's he's done an excellent job of buying things off of apps buying things from the first drop to make money off, which unfortunately, has turned me into that person too. So I was excited. Recently, when I saw that there was a movie coming out and Affleck and Matt Damon called the air. It was in theaters for a short amount of time, but it's currently on Prime it's killing it. Everybody's watching and the story is quite simple. It is a dramatization of Nikes work in the complexity and how hard it was to convince the fifth I think he was the fifth round pick up About a third, fifth round pick, I think in the NBA draft that your Michael Jordan to come to Nike. And it's a fascinating story if half of it's true. It's great. You know, the end result is is that Michael Jordan, the best estimate right now is that direct payments from Nike, he makes about a quarter of a billion dollars a year. He was the first he was the first professional athlete with American sneaker companies to negotiate a percentage of the sale of every piece.
Unknown Speaker 20:32
Is that how it works? How percentage of sales so
Pete Mento 20:35
up until then, you got your quarter million you got your $100,000 and that was Michael Jordan's mother said, if he's gonna go out there and sell these, he wants the people who are buying it to know that money is going to buy. And mother knows best. Yeah. He wanted to go to a dentist because just like me in 1980 45, he was really into Run DMC and hip hop culture, and we weren't the the sweatsuits we were D, the shell toes, we lived in Adidas. But the long story short of why I brought this up is the most of the movie is not necessarily congruent with the facts. So if you if you look it up, the guy that apparently convinced Michael to come, was fired. About a couple of years later, he didn't last very long with the company, he and Phil Knight got into it. And he was out. They don't mention that in the film. Michael Jordan to this day, says he doesn't really know that, although in the movie, they make it. He said your mover and shaker. And then they they make another point, which would take a second to Google in passive income. So according is 250 a year, Michael Jordan makes around $400 million a year. Wow, between it being used in commercials and being used in movies, if he moves on whatever, every year, the 250 million he makes is more than he made in his entire basketball. Wow. And when you start to bring in the passive income, he is with the exception of one resource, the highest paid athlete in history. So
Speaker 1 22:17
there's a resource. Yes, yes. There's a lot of money in a racehorse thing. But compared before,
Pete Mento 22:23
after the resource is done racing, of course, it's its genetic material. Right? Yes, is incredibly valuable. So if you look up, like if it's storing patterns, everyone, it's made billions for its. And now the problem with all that is, of course, we're talking about genetically modifying horses. And anyway, my point is, it was an incredible story. It's a fascinating conversation about negotiation, your what you negotiate. And sometimes it takes one person believing in you with that negotiation. The second thing I really wanted to bring up about this movie was dig a little deeper, because what's being told to you in this biopic is not necessarily
Speaker 1 23:10
100% reality? Well, it still sounds very interesting. That I'm also interested in Okay, where does it diverge? What actually happens? Very cool off to check that out. Thanks for the recommendation out
Pete Mento 23:21
there on Amazon Prime, it is streaming free. Right, but he wants to dig it. Alright. What's your next topic?
Speaker 1 23:29
There Nice. So next topic is bringing it back from technology to a little bit more logistics and supply chain, a little bit of forecasting. The topic is flatbed demand remaining strong despite housing pullback. So the last couple of years, a lot of flatbed demand has been coming from housing construction when there just wasn't enough. I mean, I'm here in Denver, but all throughout the country, there's been quite a bit of that. Now there is a bigger than expected slowdown in housing. However, that's not been impacting the US and US Mexico flatbed market so much because it's being replaced by an increase in construction for warehouses, large warehouses along Interstate corridors, as well as factories kind of tying back into the Tesla situation. They're not the only ones building some very large factories here in the US. And also Mexico, kind of a piece of the story too, is that the demand is staying strong in the US as well as a lot of flatbed going back and forth between US and Mexico, kind of in what Doug and I were talking last week, and you guys have been talking generally, where there's a little bit of reshaping of supply chains, you know, things that were made just in China and now we're China, a Chinese company in Vietnam, and maybe a Chinese or non Chinese company in Mexico. Kind of like where my Toyota Tacoma was built Japanese company built in Mexico. There's more of those industrial parks being built on the US and Mexico side. And so despite the housing pullback, There's a fair amount of demand for these flatbed assets. And I know we have a lot of customers that need and rely on flatbeds. So it's just one of those things that people should be aware of shippers should be aware of, and try to plan your large projects out ahead of time.
Pete Mento 25:14
That's the important term right there in large projects. So typically, typically, in difficult economies, so whether it's an economic slowdown, or a recession, or depression, you name it. Companies are going to invest in infrastructure, people are going to start to build, it's funny. Most of the major airports and ports were built in really crappy countries. You know, you have bridges built, you'll have bus terminals, well, why it's because money is cheap. And there's lots of labor. And generally things are cheap. And folks just want to keep people working. from a regulatory perspective, it's easier to get things. So you build an economically complicated times. And then you rip up the use of them and economically uncomplicated right now. But it's not cheap. It's actually very expensive to get a hold of a credit instrument with your corporation. So you see yourself Well, if that's the case, what's going on with flatbeds. Like you said, people are moving production all over the place. They're not necessarily getting engaged in large infrastructure. They're, they're moving energy, they're moving from place to place a building warehouses, regardless of the fact that money costs so much, they're still taking the opportunity to build and what is a difficulty complex economy, because they know eventually it will come back. And they want to have the infrastructure, they want to have the assets. And it's one of the places where the logistics industry right now, hopefully, you have seen a lot of softening. We're so excited that like ocean through a couple of percent. flatbed flatbed has been very strong, particularly out of Mexico.
Speaker 1 26:57
Interesting stuff. And my story was mostly based on business and private demand, though there were some reports about a little bit of a government stuff going on, too. So you were describing building in hard times, you're reminding me of, you know, great depression type, large infrastructure type building. So it seems like there may be some government infrastructure stuff going on. I'm not sure what specific projects, roads, energy type stuff is going on there. I was seeing a lot of private but some of the infrastructure bill, which may be clean energy type stuff. Could be a part of that, too.
Pete Mento 27:31
Yeah, absolutely. All right. Well, I get to close a shot this week. And I get to do it with a real head scratcher. I think we've talked about making the point we have. So you know, there was this one time where my daughter who says a lot of dumb things, said to me, Dad, if we owe this other country's money, you know, why don't we just say to him coming to think we owe you money, come and take it. You could tell she's definitely a great granddaughter. So it's like, well, you want your money to get it. Right. Forget it. I said, Okay. That's not how the world works. And you said, Well, you complain all the time about inflation, we should stop printing all this money. Why don't we just pretty much money and pay your own bills with it? Go your room until you understand. talked on the show before about this concept of minting a coin from Platinum. And saying it's a trillion dollar coin and just putting it back and using it to then take that recovered currency of that liquidity and use that to pay down cost rather than continuing to raise the debt ceiling. And it's one of those things like talking about aliens or Bigfoot like Yeah, sure. Well, now, you've got Congressman, you've got senators, you had people at the Fed talking about it. I mean, you had Janet Yellen chat about it. And I thought, if I've been micro dosing mushrooms and not realizing what is going on here, people are serious. Keenan, are we really going to mint the coin?
Speaker 1 29:10
We might be I am in the same boat as you were, it was something that it was more of like a fun thought experiment. What would be the repercussions? How would this work? And slowly it's turned into like, well, we could maybe do this. You know, it really depends on optics. That's one of these things I find fascinating about economics, where it is a science and there is external reality going on that could be described by different models or math formulas. However, it's also a social thing. So whether or not we try it or whether or not it works has a lot to do in my mind about how strong have confidence you could rally behind why we're doing it, the benefits, how it's going to go in the future. If it's done in a way where it undermines confidence, then And, you know, to your daughter's point, you know, hey, come and get it. Yes, we do have a large military, but then you kind of like break trust and confidence and all these things, and then you don't have access to international investors money at the same low interest rate that we have been enjoying, which is important for us to continue otherwise, we might not be able to afford it. And so it really depends on, you know, if the political side is so bad in Congress that they can't raise the debt ceiling, is he gonna be able to muster the confidence? I don't know that Joe Biden can speak eloquently enough or muster that global confidence to do it. But they're talking about it more so realistically than I've ever heard in the past.
Pete Mento 30:38
I don't even know if it's legal.
Unknown Speaker 30:40
It might not be.
Pete Mento 30:42
I don't know what the process. Apparently the Feds just told me to do it. So does the President just you know, have the extra cup of coffee one day and say, You know what the hell, let's just, let's just make a coin. Screw it. You know, you talked about economics. You sit in your coursework, as an undergraduate or graduate student. And you hear the following phrase all the time, except rationality in this except that the players are all rational actors are all rational, and that any externalities in the income are rational. Nothing is rational about the world around us. If you've ever been in a relationship, ever been a parent, ever had employees irrationalities all around us, you know, that eventually you get to go work on a PhD in your teaching classes. And you have to keep saying to people in these courses, we're, we're assuming rationality here, like, I think you're turning them into little idiots. You know, in economics, you made a great point, we were talking about making the coin and having an effect. We're not thinking about all your rational things, that people will begin to consider that what if every other country in the world just starts doing
Unknown Speaker 31:54
great boy,
Pete Mento 31:55
what if everyone else is like, you know what, I make my own money, too. So here's my gift CONOPS. From you know, whatever country it is, and I just made a trillion. You're welcome. But let's just stop there. I don't know if anything is. But the fact that this has gone from, like you said, a thought experiment amongst dateless nerds to something that Congress and Senate is talking about is fascinating.
Speaker 1 32:19
is So we may be hearing more of this, because daarmee coming up in that conversation here pretty soon, like June or the date, June 1. Yeah,
Pete Mento 32:30
we've only had a couple of weeks. And they're freaking out. Because the right wingers are, are fired up to hold this thing hostage. So you're President Biden's tariff. Now, I realized that all conversations about economics are based on fantasy. So for me, I'm okay with all the irrationality because, you know, it's like my daughter running into my room and saying there's a monster under my bed. I know, there's no monster because I know there aren't any monsters. Just like how I know that the economy's on based on. See, you're gonna get us taken off YouTube. But basically, it's nothing but all of us agreeing on certain criteria, holding sacred, and then not going over those lines. With $1 I can use it to buy things. But if all of a sudden we all decide to blades of grass or currency or hogs, I can start buying, you know, like, like Diet Pepsi and my, my bowl of soup for hugs, if that's what you decide. So yeah, man, it's, it's madness. And I kind of hope that they do it, just because I like to watch things. You know, I have, I have safety deposit boxes for bars of silver and gold to get this to happen.
Speaker 1 33:49
So with that, yeah, my first question that always comes to my mind, is this good for Bitcoin? Perhaps it could be where there's an artificial limit on what it goes up, but then bring into your topic earlier, eventually, some of these quantum powered computers might be able to break the Sha 256 type stuff. So I don't know bitcoins gonna be around as long as gold will be around.
Pete Mento 34:11
What happens out of that kingdom becomes a great like, like y2k of finance, when we get really close to QA. And someone says, We have to rewrite the code of Bitcoin, like, what do you do? Because you'll crash wallets like that. You'll
Speaker 1 34:29
Yeah, I mean, in the past, they have to do with these kind of consensus things of Hey, someone submitted this idea people might get and get all the nodes to agree, but that does get trickier when there's a lot more money at stake. Like in the future. We're getting closer. Maybe some people want it not to work. I don't know I don't know may not, may not last as long as gold, but it could do well here in the short term. Maybe at risk of going another a little bit long. On something along the related of the trillion dollar coin that I was seeing people talk about recently is why don't we the US pull our gold out of Fort Knox Treasury fed deposits, and then redeposit it at a higher amount. Supposedly, it's only valued at like $42 an ounce, currently, but it's obviously like $2,000 announced. And so we couldn't get a bunch that way. wouldn't have any printing of through a coin. But maybe there's some other options. Or maybe they just don't want people looking at gold or realizing how the US dollars lost 98 plus percent of its value, it gets gold, I don't know,
Pete Mento 35:37
do all that math man. Think about how many people are going to just realize, again, the ridiculous notion of how the global economy works, which is one. And then second of all, what that would mean for oil prices, if the US did that you have a deflationary pressure crisis, which would be bad for banks, and bad for all kinds of people that are invested in it, which is bad for politicians who need that money in order to continue to run so. But it is an interesting idea. A very, very interesting idea that will probably be less impacted than out of thin air. You know, so, I, I would be shocked by me, but you can get I just bought this we can get a 10 ounce bar gold for 90 bucks or $200 or so for sorry, Knuckles. And, you know, gold is that? What is it?
Unknown Speaker 36:34
Roughly 2000 Let's look it up.
Pete Mento 36:36
So, to bring this up is that silver still is very volatile. depends a lot on the global economy. Gold is volatile, but it's not so volatile that it just drops in value. It just doesn't happen. So having some as part of your portfolio is smart in the physical world in my opinion. I don't I don't trust anybody. So you have a physical gold box and bag which is smart. Yep. But this this would if you were to do that, take the gold and put it back in. Oh, oh my god. First of all, I would have to put together my own Ocean's 11. Just imagine that 1 trillion coins? So yes, you do have to deposit with the treasurer. So it's gonna be like, because apparently it's real money for a time. You know,
Speaker 1 37:41
it's worth nine tenths of the law. But when there's only one item, the provenance might be under heavy scrutiny.
Pete Mento 37:48
The budget ex Navy Seals and a bunch of dudes from the side is rolling up in Humvees just you know to be the greatest movie ever. Why aren't we writing I
Unknown Speaker 37:59
would love to watch that absolutely.
Pete Mento 38:03
Special that you had done right? The Treasury decides to make the one $1 trillion coin and then we put together the greatest proof ever steal it. Hold it ransom
Speaker 1 38:14
can't wait. Stay tuned, coming to a theater near you or Netflix near you. 2020 for the coin
Pete Mento 38:22
cap logistics production.
Unknown Speaker 38:24
Perfect.
Pete Mento 38:26
All right. Well, it was great talking to Keenan as always gonna kick us out.
Speaker 1 38:31
Well, thank you everyone for joining us for another edition of global trade this week. And I hope you all have learned something new had some interesting thoughts and laughs and have a great rest of your week. Thanks again. Pete. Really enjoyed it as always, and have a good one yourself.
Pete Mento 38:47
You too, buddy. See you next week. Duck bye bye