RUSH TRANSCRIPT Tucker in ░░░░░░░░ to having a lot ░░░░░░░░ wise and prescient thoughts ░░░░░░░░ artificial intelligence Elon Musk ░░░░░░░░ also one of the ░░░░░░░░ s most successful businessman ░░░░░░░░ runs Tesla and spacex ░░░░░░░░ now Twitter Wait a ░░░░░░░░ there seems to be ░░░░░░░░ international banks crisis as ░░░░░░░░ as inflation let s ░░░░░░░░ Elon Musk what he ░░░░░░░░ about that so we ░░░░░░░░ And here s what ░░░░░░░░ said Tucker so you ░░░░░░░░ seeing a couple regional ░░░░░░░░ collapses Yeah Tucker and ░░░░░░░░ ve been told that ░░░░░░░░ not a big deal ░░░░░░░░ these are isolated and ░░░░░░░░ one collapsed for specific ░░░░░░░░ it s not systemic ░░░░░░░░ any sense What s ░░░░░░░░ sense of the stability ░░░░░░░░ the American banking system ░░░░░░░░ it s actually at ░░░░░░░░ point a global banking ░░░░░░░░ problem Tucker yes it ░░░░░░░░ So you know we ░░░░░░░░ a situation here where ░░░░░░░░ s not merely it ░░░░░░░░ not the canary in ░░░░░░░░ coal mine has died ░░░░░░░░ the minors are starting ░░░░░░░░ die too Silicon Valley ░░░░░░░░ collapsing overnight is one ░░░░░░░░ of a big canary ░░░░░░░░ s more of a ░░░░░░░░ not like some small ░░░░░░░░ thing I think there ░░░░░░░░ a serious danger with ░░░░░░░░ global banking system There ░░░░░░░░ a strong argument that ░░░░░░░░ if you were to ░░░░░░░░ market the portfolios of ░░░░░░░░ banks the loans and ░░░░░░░░ not that the entire ░░░░░░░░ industry would have negative ░░░░░░░░ Tucker it feels that ░░░░░░░░ Yes So if you ░░░░░░░░ at say commercial real ░░░░░░░░ like offices and what ░░░░░░░░ the whole work from ░░░░░░░░ thing has substantially reduced ░░░░░░░░ usage in cities around ░░░░░░░░ world And you know ░░░░░░░░ think San Francisco s ░░░░░░░░ 40 San Francisco s ░░░░░░░░ an extreme example but ░░░░░░░░ think it s like ░░░░░░░░ vacancy Even New York ░░░░░░░░ I think almost all ░░░░░░░░ at this point have ░░░░░░░░ vacancies of commercial real ░░░░░░░░ So commercial real estate ░░░░░░░░ to be something that ░░░░░░░░ a grade a asset ░░░░░░░░ if a bank had ░░░░░░░░ real estate holdings those ░░░░░░░░ be considered the highest ░░░░░░░░ Tucker sure Some of ░░░░░░░░ safest you know assets ░░░░░░░░ could have Now that ░░░░░░░░ not the case anymore ░░░░░░░░ company after another is ░░░░░░░░ their leases or not ░░░░░░░░ their leases Or if ░░░░░░░░ go bankrupt there s ░░░░░░░░ for the bank who ░░░░░░░░ that real estate to ░░░░░░░░ after because you know ░░░░░░░░ were a previously strong ░░░░░░░░ now dead what do ░░░░░░░░ go after at that ░░░░░░░░ So we really haven ░░░░░░░░ seen the commercial real ░░░░░░░░ shoe drop That s ░░░░░░░░ like an and anvil ░░░░░░░░ a shoe So the ░░░░░░░░ we ve seen so ░░░░░░░░ hasn t even it ░░░░░░░░ only slightly real estate ░░░░░░░░ degradation But that will ░░░░░░░░ a very serious thing ░░░░░░░░ this year in my ░░░░░░░░ I think if we ░░░░░░░░ which we re likely ░░░░░░░░ see a drop in ░░░░░░░░ prices because the interest ░░░░░░░░ are too high and ░░░░░░░░ most people when buying ░░░░░░░░ house they look a ░░░░░░░░ monthly payment Tucker of ░░░░░░░░ 30 year mortgages the ░░░░░░░░ majority is interest So ░░░░░░░░ the Fed rate is ░░░░░░░░ you have a high ░░░░░░░░ interest rate effectively the ░░░░░░░░ you can pay for ░░░░░░░░ house drops because now ░░░░░░░░ have to pay more ░░░░░░░░ which means that if ░░░░░░░░ ve got a fixed ░░░░░░░░ payment you can now ░░░░░░░░ to buy a house ░░░░░░░░ less money It effectively ░░░░░░░░ the prices of houses ░░░░░░░░ yes This is the ░░░░░░░░ of thing that tends ░░░░░░░░ accelerate So then you ░░░░░░░░ get negative equity in ░░░░░░░░ home market as well ░░░░░░░░ so if banks end ░░░░░░░░ having loan losses in ░░░░░░░░ their commercial and well ░░░░░░░░ re definitely going to ░░░░░░░░ loan losses in their ░░░░░░░░ portfolio but in their ░░░░░░░░ portfolio this is a ░░░░░░░░ situation There is a ░░░░░░░░ to mitigate the magnitude ░░░░░░░░ the damage here which ░░░░░░░░ for the Fed to ░░░░░░░░ the rate But they ░░░░░░░░ the rate again Now ░░░░░░░░ I recall correctly which ░░░░░░░░ you know important caveat ░░░░░░░░ think the last time ░░░░░░░░ feds raised rates going ░░░░░░░░ a recession was 1929 ░░░░░░░░ what happened then Yeah ░░░░░░░░ Great Depression Tucker the ░░░░░░░░ and I m telling ░░░░░░░░ nothing you don t ░░░░░░░░ but the concern is ░░░░░░░░ the Fed drops rates ░░░░░░░░ then inflation accelerates and ░░░░░░░░ can t do that ░░░░░░░░ an election year So ░░░░░░░░ is going to happen ░░░░░░░░ matter what If you ░░░░░░░░ the money supply you ░░░░░░░░ inflation Tucker right So ░░░░░░░░ s no there s ░░░░░░░░ some magical cure for ░░░░░░░░ rid of inflation except ░░░░░░░░ the productivity the output ░░░░░░░░ goods and services So ░░░░░░░░ like what is money ░░░░░░░░ ve got these sort ░░░░░░░░ it s basically numbers ░░░░░░░░ a database that come ░░░░░░░░ with some total Then ░░░░░░░░ have the output of ░░░░░░░░ and services of the ░░░░░░░░ As long as the ░░░░░░░░ of money to ratio ░░░░░░░░ goods and services stays ░░░░░░░░ that stays constant you ░░░░░░░░ no inflation If you ░░░░░░░░ more money if you ░░░░░░░░ money to the system ░░░░░░░░ than you increase goods ░░░░░░░░ services then you have ░░░░░░░░ So all of these ░░░░░░░░ sort of stimulus bills ░░░░░░░░ not paid for They ░░░░░░░░ generated more currency more ░░░░░░░░ know more money was ░░░░░░░░ because the federal government ░░░░░░░░ checks never the checks ░░░░░░░░ pass you know unless ░░░░░░░░ hit a debt limit ░░░░░░░░ there s probably going ░░░░░░░░ be debt limit crisis ░░░░░░░░ this year But provided ░░░░░░░░ haven t hit the ░░░░░░░░ limit unlike state govs ░░░░░░░░ city governments they can ░░░░░░░░ issue more money and ░░░░░░░░ s what they did ░░░░░░░░ the old saying goes ░░░░░░░░ s no free lunch ░░░░░░░░ if you could just ░░░░░░░░ cue massive amounts of ░░░░░░░░ Why Don t We ░░░░░░░░ take out a loan ░░░░░░░░ make everyone a trillion ░░░░░░░░ They tried that in ░░░░░░░░ how did that work ░░░░░░░░ Tucker they had the ░░░░░░░░ animals Right not good ░░░░░░░░ s no free lunch ░░░░░░░░ s no way to ░░░░░░░░ money and not have ░░░░░░░░ Tucker now you can ░░░░░░░░ why they vilify him ░░░░░░░░ would be nice to ░░░░░░░░ leaders that smart Elon ░░░░░░░░ has spent a lot ░░░░░░░░ his life staring out ░░░░░░░░ space now he has ░░░░░░░░ world’s biggest