Neil Howe: The Fourth Turning Is Now Raging...And It's Gone Global

Summary

Highlights

• Neil Howe explains the global reach of the Fourth Turning period. 🌍
• Societal shifts are synchronizing globally, impacting political orders worldwide. 🌎
• The decline of globalization is reshaping national identities and policies. 📉
• Trump's presidency exemplified Fourth Turning characteristics with its disruptive policies. 💥
• Economic advice includes investing in tangible, real assets and preparing for volatility. 📊

Key Takeaways

• Understanding the cyclical nature of history helps make sense of current upheavals. 🔄
• The Fourth Turning signifies a period of major societal transformation, both in the U.S. and globally. 🌐
• The decline of globalization is giving rise to nationalism and protectionism. 🚧
• Expect economic volatility and the need for strategic investments in real assets. 💹
• Preparedness involves focusing on wealth preservation and absolute returns. 💼

Overview

Chapters

• 00:00 - 00:30: Introduction The chapter titled 'Introduction' discusses how historical patterns show that civilizations and societies experience cycles of boom, bust, and subsequent renewal. This concept, observed initially in the West, has now become a global phenomenon. Adam Tagert, the host of Thoughtful Money, acknowledges this pattern in the current global context.
• 00:30 - 01:00: The Fourth Turning and Global Impact The chapter is focused on the concept of 'The Fourth Turning', a term coined by demographer Neil How. This refers to cyclical patterns of societal change that are predictable in both timing and trajectory. The 'Fourth Turning' is a phase where the current societal status quo collapses, often in a chaotic manner, paving the way for a new order. The chapter also touches upon the Trump administration's first 100 days, which have been marked by significant and some consider disruptive changes.
• 01:00 - 01:30: Trump Administration and Fourth Turning The chapter discusses the attempts by the Trump administration to replace the existing status quo with a new approach both domestically and internationally. It questions whether this constitutes the type of transformative change expected during a 'fourth turning' period as theorized by experts. The chapter features a conversation with Neil, who provides insights into the expected transformations ahead.
• 01:30 - 02:00: Rise of Nationalism The chapter discusses the rise of nationalism and explores current societal upheavals as part of the 'fourth turning.' An interview format is used to delve into themes of historical cycles and the global context, reflecting on how uncertainties and changes are increasingly defining the present era.
• 02:00 - 02:30: Impact of Globalization's Decline The chapter discusses the current global trade tariff war as a manifestation of a larger global trend: the decline of globalization. It explores the idea of reversing globalism and mentions the American perspective, particularly through the lens of Donald Trump's presidency and the slogan 'America First,' highlighting an inward shift in the country's policy.
• 02:30 - 03:00: US Economic and Political Shifts This chapter discusses the emergence of similar political parties around the world, highlighting examples such as Maloney in Italy, Malay in Argentina, Le Pen in France, and the AFD in Germany. It also mentions a situation in Romania where an election was negated after a nationalist candidate won, and a subsequent election led to another nationalist victory.
• 03:00 - 03:30: Court Challenges and Administration Controversies The chapter delves into the transition from a global cooperative order to a more country-focused mentality, highlighting the shift occurring over recent years. This trend has been gaining momentum since the Global Financial Crisis (GFC) nearly 15 years ago. The discussion underscores the economic and political dynamics leading to more nationalistic policies worldwide.
• 03:30 - 04:00: Upcoming Political Decisions Throughout the world, a wave of populist and more authoritarian ethnosentric leaders is on the rise. This trend is not confined to any single country but is observed across various regions including Southern Europe, Eastern Europe, South Asia (notably India under Narendra Modi), East Asia, and increasingly in Latin America. It represents a global and generational shift in political landscapes.
• 04:00 - 04:30: Trump's Approach to Governance This chapter discusses the shift in governance under Trump's leadership, focusing on the decline of globalization since the Global Financial Crisis (GFC). It highlights how the US, historically a cornerstone of globalization post-World War II, is dramatically changing course under Trump's presidency.
• 04:30 - 05:00: Historical Context of Fourth Turnings Globalization has been a contentious topic in the context of Fourth Turnings. Despite its criticisms, it has also provided significant benefits to the United States. Among these benefits is the establishment of a prosperous democratic world order, which has been in America's favor. Furthermore, the status of the U.S. dollar as the world reserve currency has been a significant advantage, paraphrasing a sentiment expressed by a quoted individual, Jizard Dang.
• 05:00 - 05:30: Global Perspective on Fourth Turnings The chapter discusses the concept of 'exorbitant privilege' enjoyed by the United States, which refers to the benefits the country has gained from its dominant position in the global financial system. It highlights a shift in regime that believes this privilege is a bad idea and is moving away from it. The chapter also touches upon the criticism that globalization may have gone too far, particularly by causing rapid de-industrialization in America due to China's rise and integration into the global order.
• 05:30 - 06:00: Collectivism vs. Individualism in Fourth Turnings This chapter explores the themes of collectivism versus individualism, particularly in the context of societal cycles known as Fourth Turnings. It discusses the support for certain agendas that aim to bring back blue-collar jobs to America and to address non-legal immigration issues, reflecting a collective approach to national challenges.
• 06:00 - 06:30: Government Influence on Society The chapter discusses the influence of the Biden administration on society, especially regarding immigration and asylum policies. It highlights the significant asylum backlog, which affects how many individuals can be nominally legalized. Additionally, it touches upon the popularity of certain actions by the administration and contrasts them with more traditionally conservative approaches, such as reducing the size of government and its programs.
• 06:30 - 07:00: Economic Strategies and Market Trends The chapter titled 'Economic Strategies and Market Trends' discusses the uncertainties and chaos surrounding defense strategies. Despite the general Republican inclination towards expanding defense, there are unclear intentions and contradictions regarding the extent of this expansion. The chapter highlights the complexities and uncertainties in defining economic strategies in the context of national defense and market trends.
• 07:00 - 07:30: Potential Future Economic Challenges The chapter discusses potential future economic challenges focusing on the intersection of legal and economic policies. It highlights how various laws, especially those related to tariffs and immigration enforcement by agencies like ICE, are facing legal challenges at different levels of the federal court system, including district courts, appeals courts, and potentially the Supreme Court. The chapter emphasizes the significant impact these legal battles may have on future economic strategies and outcomes.
• 07:30 - 08:00: Historical Patterns of Fourth Turnings This chapter delves into historical patterns known as 'Fourth Turnings,' which signify significant transformative periods in history. The transcript highlights issues related to immigration, and administrative procedures, and outlines concerns about constitutional adherence. Particularly, there's a focus on how executive powers are perceived and exercised in relation to funding programs and navigating around established administrative laws, using the context of the Trump administration as a backdrop. The narrative stresses the importance of understanding constitutional mandates, particularly from Article One, which constitutes a substantial part of the U.S. Constitution, to grasp the scope and limits of presidential power in historical context.
• 08:00 - 08:30: Predicting Fourth Turning Outcomes The chapter "Predicting Fourth Turning Outcomes" touches upon the dynamics between Congress and the President, specifically during Trump's presidency. It highlights a perceived lack of understanding or communication regarding the powers of Congress and the role of the President, which is mainly to execute the decisions that Congress and the executive branch agree upon. This misunderstanding is suggested to be a significant issue that will likely end up being contested in courts, casting a lingering shadow over Trump's administration.
• 08:30 - 09:00: Impact of Leadership on Turnings The chapter discusses the impact of leadership and judicial interpretations on major legislative decisions. The text highlights the role of the U.S. Supreme Court, particularly the influence of Chief Justice John Roberts and other conservative justices affiliated with the Federalist Society, in requiring Congress to make definitive legal decisions. The major questions doctrine is noted as a principle many conservatives believe in, emphasizing that significant questions must be decisively answered by Congress to establish their constitutionality. This points to potential upcoming challenges in governance where the courts might insist on legislative clarity on major issues.
• 09:00 - 09:30: Economic and Market Advice The chapter discusses several major impending issues facing the government, particularly the actions planned by Trump. It highlights the immediate need for decisions on international and domestic matters, such as the ultimatum given to Iran with a decision expected by July or August, and the federal debt ceiling, which needs to be addressed by September. This chapter underscores the urgency and importance of these decisions within a specified timeline.
• 09:30 - 10:00: Fourth Turning Impact and Personal Preparation The chapter discusses the impact of the Fourth Turning on politics and personal lives, highlighting the current administration's handling of reconciliation budget resolutions. It compares the process to receiving 'Christmas in September' due to the expected benefits and changes. The administration's approach is seen as shortcircuiting or bypassing traditional legislative procedures through reconciliation or Congressional review.
• 10:00 - 10:30: Advice for Protecting Wealth This chapter discusses the strategic legislative challenges faced in the Senate due to the filibuster rule, which requires a 60-vote majority to pass most legislation. Despite having Republican majorities in both houses of Congress, President Trump faces difficulties implementing his agenda due to the lack of 60 Republicans. It highlights the polarization in American politics, emphasizing the absence of moderates and the stark division between the two parties.
• 10:30 - 11:00: Conclusion and Farewell In the conclusion and farewell chapter, the discussion focuses on the challenges faced by a figure (presumably the President) in executing his plans due to the opposition in Congress. The chapter highlights the obstacles like Byzantine rules and filibuster that prevent the President from implementing his agenda. The President expresses frustration over not being able to carry out the duties he was elected for, as every Democratic vote goes against his plans. He mentions discussions with the majority leader from South Dakota, acknowledging the procedural barriers that hinder his actions.

Neil Howe: The Fourth Turning Is Now Raging...And It's Gone Global Transcription

• 00:00 - 00:30 I would say that the trend in the west certainly and now the rest of the world has been we've seen a synchronization of these turnings right that's where we that's where we are but it's global it's it's now global welcome to thoughtful money I'm its founder and your host Adam Tagert history tells us that civilizations and societies boom bust and then rise a new
• 00:30 - 01:00 to repeat the pattern. A pattern that demographer Neil How says is surprisingly predictable in both its timing and trajectory. How refers to these seasons of societal change as turnings and is famously declared that America is now well into a fourth turning, the bust part of its cycle, where the status quo falls apart, often chaotically, and is replaced by a brand new order. Well, in its first 100 days, the Trump administration has certainly made big and some would say disruptive
• 01:00 - 01:30 or even chaotic strides in its attempt to replace the previous status quo with a new playbook both domestically and internationally. So, is this the kind of textbook forthturning upheaval that how expected? Well, to find out as well as what further transformation he expects ahead, we'll ask the man himself. Neil, thanks so much for joining us today. Hey, Adam, nice to be here. Hey Neil, it is wonderful to have you here. Thank you. Um I've been really looking forward to today's conversation. Um because uh
• 01:30 - 02:00 you know we've interview I've interviewed you over the years. Um I and most of this audience are very familiar with your work along with your partner um about the fourth turning. Um your latest book says that you know we're we're now well in it. And I think if people had any doubts about that um coming into 2025, they don't anymore. Uh we are definitely living through times of upheaval right now. Um I've got so many questions for you, but why don't we
• 02:00 - 02:30 why don't we start in the thick of things. So we've got this massive trade tariff war going on right now. In many ways, this really is indicative of a trend that we're we're seeing across the world, right? where we're seeing the reversal, the end of globalism, globalization, um, and, uh, what Trump would say, the American subsidized world order, right? Um, and, uh, you know, here in America, you know, Trump won, he's got MAGA, America first. We're seeing a lot of
• 02:30 - 03:00 similar um, political parties arise elsewhere around the world. you know whether it's Maloney in Italy, Malay in Argentina, the rise of Le Pen in France or the popularity of AFD in Germany just to name a few even today in Romania um where they they basically uh they they had run an election a a very a nationalist candidate essentially won and they negated the election and then held it again and then the next nationalist candidate won
• 03:00 - 03:30 overwhelmingly. So, is this kind of the the transition that uh uh that you were expecting in this type of uh forth turning, you know, this this whole shift from, hey, we're all going to work together to this globalist world order to nope, it's my country first now. Yeah, I I think that that definitely is a the drift we've been seeing and and frankly, it's been building ever since the GFC, you know, that was uh that was nearly 15 years ago. Um and Adam, we've been seeing this
• 03:30 - 04:00 wave of uh uh populist uh more authoritarian ethnosentric uh heads of state around the world. This is not in any one country. Uh we see it in in southern Europe, Eastern Europe, we see it in South Asia, notably with with India, Narendra, Modi, we see it obviously in East Asia, seeing it increasingly in Latin America. So this is a global trend. This is a global generational trend I should say and uh
• 04:00 - 04:30 it's it's it's what we should expect. It's what we should be anticipating. Um the decline of globalization really started at the end of the GFC and it's now accelerating and now we have the US president sort of the head of the Western Alliance. Right? the the cornerstone of globalization, so to speak, historically, certainly after World War II, is changing course rather dramatically. And you're right, he says
• 04:30 - 05:00 this whole globalization thing is something that uh uh you know, it's a bad deal for the United States. Um obviously the United States has gotten a lot out out of having a uh a prosperous democratic world order if you know if that is one of the things that's gone along with globalization and certainly worked to our favor uh and certainly having the dollar as a world reserve currency has been an enormous uh uh you know to to quote Jizard Dang you
• 05:00 - 05:30 know an exorbitant privilege that the United States has enjoyed for all these years. Uh but we have a regime now in place which thinks it's a bad idea and we're going to turn away from it. Um and I do believe that a lot of people were thinking that globalization went too far. Uh for example in um de-industrializing a lot of America very suddenly with the rise of China and perhaps China should not have been admitted to the global or order you know
• 05:30 - 06:00 when in the manner it was right. Um uh so he has a lot of support uh he has a lot of support for a lot of his agenda I think on the uh the uh uh bringing back uh uh you know bluecollar jobs to America uh rolling back the uh the uh non-legal immigration wave that we've seen uh over the past 15 years especially over the past three years uh
• 06:00 - 06:30 during the Biden administ administration with the with the, you know, rise of the of the the huge asylum backlog, which is basically how many of these people are are are made legal, right, so to speak, nominally legal. But so there's a there's a popularity to a lot of what he's doing. Uh there's also what you might consider a more uh conventional conservative side to this, cutting the size of government, cutting the size of government programs. Um and then there's
• 06:30 - 07:00 some aspects of it really not sure what box to put them in. We don't know what they are. We don't know what he wants to do with defense. I mean, presumably like uh like like many good Republicans, certainly the heads of the armed services committees in both the House and the Senate, he wants to expand defense. Uh how much, we don't know. Uh but there are a lot of contradictions. Uh and there's a lot of chaos surrounding it. Uh one of the chaos uh cha more chaotic elements is of course Adam that uh is a lot of this stuff uh
• 07:00 - 07:30 uh uh transcends the rule of law right practically every element of it is going to confront the the federal courts right so it's either in a district court or appeals court or it's going to the supreme court right now and you can go down the whole string of things the law by which he's actually putting these tariffs into place the law by which he's uh you know rounding up ICE is rounding up and and and you know getting rid of
• 07:30 - 08:00 these immigrants who are in the United States, how he's uh kind of shortcircuiting the administrative procedures act when it comes to you know regulations and so forth. The u the empoundment of funds uh he thinks he can he has the power to just simply stop funding for a program or just scrap an entire program altogether. uh as many people have tried to remind Donald Trump, if you look at the Constitution, roughly twothirds of it is is article one. It's all about
• 08:00 - 08:30 Congress and and somehow no one ever informed Trump that most of the Congress is about the powers of Congress, right? And the president is just supposed to, you know, enact and be the executive of what of what the executive and Congress together. um uh agree on, right? So, all of this is going to hit the courts. And so, this remains a huge uh shadow looming over Trump's presidency, right? What's he
• 08:30 - 09:00 going to do when the courts start giving uh even a John Roberts court, even a John Roberts court filled with federalist society of conservatives is going to say, "No, Mr. President, Congress has to decide important questions." That is the major questions doctrine which almost all of these conservatives believe in. Congress has to actually say something right for this to be constitutional. So that's going to be a huge issue coming down. By the way,
• 09:00 - 09:30 a lot of these huge issues that are just sitting there, what's Trump going to do about that? And if you want to go into some of the other big issues coming down, Adam, we can just go over them because there's almost a timetable in June. He's gonna have to decide what to do about Iran. He's given an ultimatum to Iran in July or August. He's going to have to decide what to do about the federal debt ceiling, right? That's coming up and no later than September. Uh they're going
• 09:30 - 10:00 to put through that reconciliation budget resolution. And that looks like that could be uh that could be Christmas in the Christmas in September. You know what I mean? We're going to have all kinds of goodies come through that because the Trump administration is sort of shortcircuiting the reconciliation process. What I call the slow nuking of Congress of getting either working through reconciliation or looking working through the Congressional Review
• 10:00 - 10:30 Act to bring more and more items in the 50% majority and getting around the 60 filibuster in the Senate. This is the whole problem, by the way. Why isn't Trump using Congress to get more of his stuff? After all, he's got Cong Republican majorities in both houses. The reason is the the filibuster rule. We now have a country in which there are no moderates, right? You are either on one side or the other. And because he does not have 60 Republicans, every
• 10:30 - 11:00 single Democrat will vote against every single thing he wants to do. Right? So this means he can't do anything with Congress, right? So he would say, you mean the way he would defend himself is I was elected to do stuff. Congress is not going to allow me right now to do stuff with their Byzantine rules. And I talked with, you know, he'll probably say, I talked with uh Thon, you know, who's the majority leader, uh, South Dakota, and he's he's he's told me all this mumbo jumbo about filibuster, and I can't go against. So So I'm going to
• 11:00 - 11:30 start doing anything. I'm going to be the honey badger. You know what I mean? It's going to look ugly. It's going to look really ugly and and and the the headlines will be full, but I'm determined to keep acting. I was elected to act and I'm not going to let excuses keep me from trying to get the job done that I was elected to do. Now, if he's able to get around the filibuster um through these two important ways, one is is by putting stuff into the reconciliation bill that that should is
• 11:30 - 12:00 not normally there or putting something into the uh Congressional Review Act. These are ways in which I I consider to be a kind of a slow nuking of the uh of the filibuster. And I I think we're on the way. I think ultimately the filibuster is a bad idea. Uh particularly in a time like this. You know, there comes a time at which you simply have to let a majority uh govern. Yeah. Have to let a majority govern. Um the one of the most famous uh
• 12:00 - 12:30 passages uh decrying uh filibuster rules was written by Alexander Hamilton. I believe it was Federalist 22. And you can just say how unfair and how um how uh reprehensible it is that you should have a law that enables a minority to prevail over a majority. He said this always leads to incapacity and sclerosis and
• 12:30 - 13:00 dysfunction. He said it should never be allowed to happen. Of course, Alexander Hamilton was very much in favor of energy and government, right? So he wanted government to be able to do what it should do. Um but but I think all these things are coming up. So it's going to lead to a lot more chaos perhaps and a lot more upheaval and we'll see what lies on the other side. We can talk a little bit about u what he wants to do in the budget and tariffs and how how all that is going to whether all that's compatible with it with each other later
• 13:00 - 13:30 on. But uh uh that's another interesting question. All right. So I absolutely want to get into all that. So um great start to this Neil. Um, if I can, let me just ask you a couple of sort of lightning round questions and then we'll get back into the the the meat of the guts here. Um, so first off, uh, you know, Trump as this chaos agent, change agent, this this honeybger, right, who's just trying to find any which way to do what he he needs to do because the
• 13:30 - 14:00 system kind of is thwarting him at every step or wants to thwart him at every step. To me, that feels like classic forth turning, right? You got this sclerotic system and so you get people in there that have to start breaking it down um to to then create a new path for things to actually get done. So, I'm assuming, but I don't want to put words in your mouth. While you might be as transfixed as transfixed as the rest of us on the details and how is this movie going to play out, you're not s I don't think you're surprised by the script in
• 14:00 - 14:30 terms of the way it's unfolding right now. True. No, I'm not surprised at all. No. Okay. You would have expected whether it wasn't Trump himself, somebody like this eventually to get into the system during a fourth turning, right? Yeah. And and it will it will it will knock big things off the the the the China shop shelves and and things will start breaking until you could get a real crisis, right? Um and and at that point, that's when you really reshape
• 14:30 - 15:00 institutions, right? we in in ways which become creative, right, and which point the way toward a new order. Well, we haven't we haven't quite seen that yet, but we will eventually. Okay. And I have a question about that that I'm getting towards. Uh beforehand, um you know, your your book, your original book, The Fourth Turning, took sort of an American centric view, right? Previous for turnings were World War II and the Civil War and the Revolutionary War. Um but it there are echoes in other
• 15:00 - 15:30 other parts of the world his world history. Um you know I deliberately started with this sort of question about globalization getting replaced with this rising nationalism. Um because I just you know we have we have more people than just Americans that watch these videos and I want to convey to to every all of them that that you have to care about this current forth turning and I think for two reasons. Um, if it were American only, you'd still need to care about it because America is the biggest dog on the block and what happens there
• 15:30 - 16:00 is going to affect all of you. But as we said in very early on here, we are this is not an American only phenomenon. We are seeing this in a growing number of countries around the world. So, so this time is the forth turning kind of truly global. Yes. I I actually wrote more about that in the most recent book uh a couple years ago. certainly wrote more about global turnings and global generations and um uh I would say that the trend in
• 16:00 - 16:30 the west certainly and now the rest of the world has been we've seen a synchronization of these turnings right uh the last fourth turning which is really uh uh the great depression and world war II which involved total war or national revolutions in so much of the world right all of Europe including Russia South Asia, I mean India obviously got its independence. I mean, China with there was an enormous crisis and a revolution and in Japan and right I mean
• 16:30 - 17:00 all of this right it was all part of a great forth turning uh and I would say also that in the late 60s7s even into the 1980s in many parts of the world we had a what we call a a second turning an awakening which was youthled rebellions against a very solid order built by World War II veterans and you add it with Indira Gandhi and India. You had it with the the, you know, the
• 17:00 - 17:30 the the uh cultural revolution in China. Just thinking of all those people, right, born after World War II who tried to get rid of 3,000 years of Chinese civilization. By the way, in China now, they're trying to bring all that back. Right now, they have confusion institutes and, you know, it's all about it's all about Han dining and Han cuisine and Han dress. So all the all these boomers, Xiinping's generation who wanted to get rid of it all when they were young, they figured out there was
• 17:30 - 18:00 one real advantage to this Confucian ethic. It said honor the old. So so you know they're all bringing it back. But that is actually the pattern. That's the classic, you know, second turning, fourth turning pattern. and and and we saw it in um and we think of the 60s as an American thing, but it Americans do at least, but it was it was not. I mean, there was the um there was the there was the youth rebellion in
• 18:00 - 18:30 Paris, in Prague, in Berlin. There was the Euroterrorism in Europe. There was it was actually a lot worse in Europe than it was here. You had young people who were, you know, blowing up bombs and stuff. You had the massacre of of of students in Mexico City in Santiago, the disappearances of of young revolutionaries throughout South America. So my point is you had an enormous awakening, right? And this is how we define an awakening is a um um a
• 18:30 - 19:00 youthledd rebellion against a system built by old people that frees up the system, right? Creates a new world of individualism, right? it it it degrades the establishment and creates a new more individualistic order. We're going through in the fourth turning the opposite, right? Is where you have a world of individualism and you're rebuilding much more powerful civic institutions. So this is the the the
• 19:00 - 19:30 second turning and the and the fourth turning, the awakening and the crisis are social dynamics at at the opposite ends of the cycle. You see what I mean? And that's where we that's where we are. But it's global. It's it's now global. Okay. So, let me let me So, okay. So, you've answered my question there. It's now global. Um, help me understand this. So, as I remember from our previous discussions to the point you just made, um, you you during a forth turning, you
• 19:30 - 20:00 get this um tightening of top- down control. Um, one because the the change agent and governments are trying to impose the their new framework on things, but also you get a you get a pull for it from the populace. The populace demands more of government to sort of solve the the big intractable problems. I'm correct on that, right? Yeah. Yeah. Okay. So, so let me let me just get this question in which is maybe I'm thinking about this erroneously, but um you you might almost think of that as
• 20:00 - 20:30 more collectivist, right? Hey, we're all in this together. we want the government to kind of tell us what to do, we'll all do it. Um, but if you look at at least what's happening right now with, you know, with with the MAGA movement, it really is all about kind of blowing up a lot of the progressive liberal, you know, uh, whether it's DEI, whether it's support programs, whether it's open borders and bring everybody in. It it feels almost more like a de a disassembling of collectivist structures
• 20:30 - 21:00 as opposed to an imposition of more collectivism. Well, depends how you look at it. Um, you know, the new White House wants to enforce a diversity of viewpoints in universities. Enforce a diversity of viewpoints. What does that sound like to you? When is the last time government actually intervened in monitoring viewpoints in a university? I mean, just think about that, Adam. We've never The government's never really interfered at
• 21:00 - 21:30 all with what universities do. We let academics kind of do what they do and and and govern themselves. This is new, you have to admit. Uh it is and I'm just trying to think what the administration would say of that was they would say well look it was a it was a you know a viewpoint that we don't think is it was a collectivist viewpoint that we don't think is helpful to the country and we just don't want to fund that. Right? So they're saying you
• 21:30 - 22:00 can teach it we're just not going to give you state funds to teach it. Right. you when you start stripping people of their of their tax deductibility, that means you're actually redefining them as something other than a university. Yeah, that is true. That that's a pretty institution killing threat, right? Y um and and I I guess I would say um a lot of these things, for instance, you're going to monitor trade. I mean, the old idea was what was Adam Smith all about, right? Free trade. Just let people do
• 22:00 - 22:30 what they want to do, right? Well, now you're going to have an industrial policy. Within the whole idea of a tariff regime is the whole idea implicitly of an industrial policy. You want a leader, a cappo with real power who's going to look after bluecollar America, make sure they all have jobs, not going to leave it to the marketplace, right? I I think undeniably this is a much more centralized administration, right? someone who's going to protect you,
• 22:30 - 23:00 going to shelter you, going to look after you. I mean, if some leader says that they're going to do that for you, presumably there's going to be a lot more top- down power. I I I see that uh absolutely is coming out of this, right? Uh and I think you're right, by the way, about the rising generation believing that uh it's the system that's going to save them. Uh I think one of the most interesting things about millennials is that they're all investing in um in target date funds.
• 23:00 - 23:30 They're basically all just, you know, they're all investing in the entire market, right? Yeah. Uh because they're convinced that if if they invest in any little, you know, niche uh actively uh uh invested fund and that thing goes down, I don't know, filled with maybe some companies out of there in the Russell 2000, no one's going to care if they go bankrupt, right? But if they're invested like everybody else in the home market, someone will have to back them up. I mean, it's beautiful, right? I
• 23:30 - 24:00 mean, if they go down 30%. Well, the Fed and the Treasury, everyone's going to be there, right? Yeah. I'm just curious, is that is that a proactive choice or is that just what we've trained the market to? Well, I I think it's I I think it's very much in the sensibility of the millennial generation to believe that. First of all, you know, they believe in community so that it it avoids the problem of being richer or poorer than your friends. You all go up or down together. Yeah. Which is very different because Gen Xers when they were in their 20s and
• 24:00 - 24:30 30s, their attitude was only a few of us are going to survive. I want to be on that one thing that's above, you know, in other words, with Gen Xers, the lifeboats all headed out in different directions, right? Knowing that only a few of them are still going to be afloat. with millennials, they're tying the lifeboats together together. That that's a great analogy. Okay. So, okay. So, um and I I can see that. So, you know, I I think you can definitely say this administration
• 24:30 - 25:00 um has a much uh clearer sense of the framework that it's trying to build or rebuild the country in and it is going to be very firm in terms of how it imposes that framework. I you know I would say and and this this isn't necessarily in contradiction to what you're saying parts of that framework are things like deregulation and tax cuts and stuff like that that are aren't like heavy-handed you know traditional sort of like collectivist uh programs
• 25:00 - 25:30 but but but the framework I can see is is rigid and and you know Trump is looking to impose it and I think more of his followers want him to impose it. Um Trump, you know, calls all this together the golden the new golden age. That's what I'm trying to bring bring around, right? And this is, you know, let's let's grow the let's secure our national security, right? Through defense and through better trade deals and stuff like that. Let's stimulate the economy through better trade deals, through tax
• 25:30 - 26:00 cuts, through deregulation, through rebuilding our manufacturing base, getting more foreign capital invested here. Um it wants to uh you know reduce the size of government and government spending rep privatize the economy as uh uh Bessant would say. So is all of that together that kind of plan for a golden age. Could that golden age be the first turning that emerges from all this? Well, a golden age is is a first turning. But of course whether or not
• 26:00 - 26:30 Trump secures it and when that will come about totally up for grabs. I I'm not saying it it's going to be. But could it be is it a contender to be a first turning here? No, because I don't even think the timing is right. I mean, the first turning is something that's going to happen, at least in my reckoning, something in the 2030s, right? And and I don't see we're close to that. I there's some huge contradictions in what you just laid out, Adam. I mean, for example, he wants there to be no trade
• 26:30 - 27:00 deficit, but he wants everyone to invest in America. H how's that gonna work? Yeah. How are you going to get capital inflows with us having a net exports over import? I mean, you know what I mean? It doesn't work. That's not that that's that's not how flows work. In fact, I would say one of the biggest problems that's going to come up, I think, this year is is one fundamental contradiction, and that is that uh it's it's not necessarily a
• 27:00 - 27:30 contradiction. It's something that just simply hasn't been thought through I think in the Trump administration and that is if you are going to shut down trade flows that means by of necessity you're shutting down credit flows right so you're shutting down capital flows well what are the capital flows currently right there are huge amounts of foreign lending coming into the United States to sustain our completely abysmally low national savings rate and
• 27:30 - 28:00 the fact that we're running a 6% of GDP deficit at the peak of the business cycle. If we go into a next recession, that's going to go up into the double digits. Completely unsustainable, Adam. So, my point is is that the only reason it's affordable at all, why we can run these deficits is we're getting all this foreign credit, which is the flip side of our trade deficit. You see where this is going, Adam? If you start clamping down on the trade flows, you clamp down
• 28:00 - 28:30 on the inflows of credit. And at the same time, if you're blowing up the deficit, what does that do to real interest rates? What does that do to the 10ear? We saw that, you remember, on liberation day. Do you remember that? We saw the 30-year and the 10year suddenly spike upward. And the dollar has been going down. And I think this is the problem that people have to come to grips with that if you really want an America to be a net
• 28:30 - 29:00 exporter and a huge investor in domestic industries, we need a hugely higher savings rate than we currently have. And the first step you need to do that is to close the federal deficit. Right? And unfortunately, that's not what Trump is going to be doing. is going to be blowing it out. I don't know if you've seen the recent discussions on the budget resolution and the reconciliation bill. They wanted the excuse to actually blow that thing out, right? We're going
• 29:00 - 29:30 to be we're going to be cutting taxes, investing more in defense, and who knows what little little bits of corner bits and pieces we'll be able to cut from Medicaid. You know what I mean? Not much. Right. Right. So, so this is to me a contradiction. You cannot eliminate the you cannot eliminate trade and therefore credit flows from the American economy while running up the
• 29:30 - 30:00 deficit like that. We will literally have nothing left to invest in capital spending in America. And for the first time in a long time, we could be really talking about crowding out and capital shortages, right? And we have not talked about that a long time in America. Why? Because we've been running huge trade deficits. We've all foreign capital. So, you get where I'm coming from, Adam. The the and and and let me just add this one point. As long as as as Donald Trump and
• 30:00 - 30:30 and you know, I I congratulate him for this is willing to brookke nearterm pain for long-term gain, which I think is a lotable idea, right? And he said that recently, "Ah, maybe uh maybe they won't have 20 dolls for Christmas next year. Maybe only two dolls, you know, two dolls versus 30." Yeah. You know, someone was doing a recent Soprano taping it, we'll call him two doll Donnie, you know. Anyway, or Donnie two
• 30:30 - 31:00 doll, you know. Anyway, but but my point is, as long as we're willing to do that, why don't you spend the pain on cutting the deficit and and the Republicans would hugely back you on that, right? He would have no problem getting his entire party to vote for that agenda. You see what I mean? But instead, it's kind of he's trying to work one side on the trade and another side on the deficit. It It's not going to go down well
• 31:00 - 31:30 together. Um uh Adam and uh uh I think pretty soon they're going to they're going to see this. I I mentioned earlier on this show uh that bit about Christmas in September. That's what they're planning for. Why why do I call it Christmas? Huge tax cuts and a lot of spending increases. And um uh now if we're in recession by then, well then you might say, "Well, some of that might be good economic
• 31:30 - 32:00 policy, but sooner or later, Adam, we need to get off of this course we're on when it comes to national savings. It it will kill us." Okay. So, um super interesting and important. Um and there's sort of a micro point and a macro point here I want to underscore. U maybe I'll I'll do the macro one first, which is um you said you really don't expect the first turning the the model of the first turning to really become clear. We'll
• 32:00 - 32:30 say by the 2030s. Early 2030s is when we expect the fourth turning to begin. Sometime around that. I'm just quoting my own book here. Yep. Yep. Okay. Um and I guess I mean that's I guess that's not super far in the future, right? We're talking five plus years at this point in time. Um but but sort of history would say it's a little too early for something to emerge yet here. So history also suggests we need some sort of conflict, right? We need
• 32:30 - 33:00 something that that would really ensure that people actually reshape institutions for a reason. All right? And and and and public mobilization. Now, it's interesting whether or not that could occur in response to an economic crisis. Typically, historically, it's occurred because it's, you know, it's been kinetic, right? Yeah. It's been kinetic conflict. But look, Adam, we haven't talked about some of the darker outcomes. I mean, what if Trump has a huge confrontation
• 33:00 - 33:30 of the Supreme Court? He doesn't Andrew Jackson. He just basically says, "Well, you know, uh, you know, John Roberts has made his decision. Let him enforce it. Let him enforce it." Yeah. So, if he does that, what are the Democrats going to do? I can envision a scenario where the Democrats will say, "Well, wait a second. We're not doing anything through Congress." Um, and you've just basically said we're going to rule without the courts. Why are we even sitting here in this institution, right? We're going to
• 33:30 - 34:00 all start meeting up in Lake Placid, New York or something. You know what I mean? You see where I'm going with this? I do. And and and and and and by the way, I think if the Democratic start do that, they would actually get a lot more respect from Americans than they do currently when they just sit there doing nothing. At least they'll have a backbone. They'll show that they're doing something, right? They'll show that they're in opposition. But you see where this is going, right, Adam? Yeah. So, let let me ask you this. So, uh I I
• 34:00 - 34:30 I totally get that that scenario. Um I I imagine you don't get the type of mobilization of change for a forth turning until the majority of the populace feels the pain and and responds to it. Right. So um whether it's that scenario or any others kind of the general question I have for you is is right now what what what do you see as the biggest contenders for that pain that's going to cause the mobilization? You know is it a we get into war with
• 34:30 - 35:00 China? Is it is it that the Democrats I mean if for the Democrats to mobilize against the the Trump administration if if Trump kind of goes king Trump like you're saying there's got to be some big enough pain for the majority of Americans to say all right time for me to to stop doing what I'm normally doing and grab my pitchfork. Yeah. Well, you know, um yeah, what if I I like uh going King Trump. Yeah, that's an interesting way to put it. and and let let's say that happens in the middle
• 35:00 - 35:30 of a recession. So maybe people aren't too happy about the way things are going, right? Okay. So So that's one scenario. And I think another scenario would be uh would be external. Uh and we see a whole bunch of things in the in the world right now. I I already mentioned the the Iran ultimatum. We have India and Pakistan sitting there somehow just recently came up last week. Uh and and obviously China, which looks
• 35:30 - 36:00 in increasingly like it's not going to be invasion, it's going to be a strangulation. You know what I mean? It's going to be some sort of embargo or or or or I don't know. China will start inspecting all the ships coming in and out to Taiwan as sort of, you know, a slow strangulation and try to avoid that coming to a see what Trump will do. You know what I mean? Yeah. Um these things are all very dangerous. One thing I point out looking at the history of
• 36:00 - 36:30 forth turnings is this question of where you go domestic or or or or you know internal or external is decided actually very late in the fourth turning. This is actually not something that's easy to predict. Uh as indeed it was with the Great Depression, World War II. We we Great Depression as you may know was a period of enormous uh internal polarization uh in the United States. I mean half of
• 36:30 - 37:00 America thought that we living in the fascist decade. The other half thought we were living in the the the communist decade. No one believed there was any future for sort of liberal capitalism. We had uh violent labor strikes in in in 1936 37. Um, and people thought this nation was coming apart. They thought FD, many people thought FDR was playing as a dictator. And if you would ask most Americans on the street in
• 37:00 - 37:30 1938, as as late as 1938 or 1939, uh, if there's a big crisis in the future, what would it be? They probably would have said, well, if there's a big crisis, probably going to be, you know, right versus left in America. you know the possible front against yeah but of course it turned out to be something very different right uh the rise of fascism the defeat of France the battle of Britain and then suddenly everything changed right America started became the arsenal of democracy and eventually
• 37:30 - 38:00 Pearl Harbor and all the rest of it it's amazing how profoundly isolationist we were as a country right up until that point right how hard that would have been to anticipate that shift for press and and do you feel likely and by by the way I bring that up it seems newly relevant because one of the most popular uh Republicans at that time was was Charles Lindberg who was head of the one of the heads of the America first committee which the budget the budget
• 38:00 - 38:30 resolution that now sitting there the reconciliation resolution is called the American first budget resolution. So this is how history literally comes back. You see what I mean? I I do. And so I I kind of almost take from what you're saying is like look, don't even don't even try to get too fancy about trying to figure out what's going to be the thing that really, you know, brings us to the the unwinding of the fourth turning because we it's probably anybody's guess
• 38:30 - 39:00 right now. Yeah. But but you do see how the potential energy is there. That's the thing, right? It's like you you see how all the pieces are potentially in place. You just don't yet know what the catalyst is going to be to unleash that energy, right? And we don't know whether it's going to be focused inward an implosion or outward and explosion, right? Or some com or some combination, right? We've had we've had four turnings that were some combination of internal and external at the same time. You know, you
• 39:00 - 39:30 think about it. The American Revolution, was that an external conflict of the American colonies against Parliament and and King George or was it internal? Actually, most of the killings in the American colonies were American patriots killing American Tories. You know what I mean? That's right. There was a huge amount of internal violence, particularly in the South, which was mostly Americans killing Americans, but it was also somewhat. You see what I mean? I do. Look looking at for turnings actually is
• 39:30 - 40:00 fascinating because you begin to see they all have both internal and external conflict dimensions. Okay. So all right I'm I'm I'm trying to rejigger the the questions here because uh I want to go for like three more hours and obviously we can't. So let me let me get back to the micro and then I want to get into the sort of so what right which is with you know with what we know essentially these building pressures um and what we know we don't know right which is we
• 40:00 - 40:30 just don't know what the catalyst is going to be and how this is going to manifest when it really goes big um you know what can people be doing today to to minimize their vulnerability to it but let's hold off on that just for a few seconds so on the micro side I I kind of detect from you um Neil a a general sense of skepticism that the the new Trump administration is going to succeed in the way that at least they are telling us right now with the current set of policies because you see
• 40:30 - 41:00 several of those policies kind of at odds with each other. Yes, I do. And um you know history will have a way of working that out. I I think you know you know Hegel I should quote Hegel here that great you know 19th century German idealist but he used to talk about the cunning of history and he says these these figures like Napoleon and Caesar and so on they they unleashed things that had to be unleashed but they didn't know what they were unleashing.
• 41:00 - 41:30 You know what I mean? Mhm. It it's as though they the cunning of history is that these people play an absolutely indispensable role, but where history goes was not really in something they entirely understood. And I and I think Trump is can be legitimately seen as that kind of figure, a necessary figure, right? And will unleash something is in the process of unleashing something pretty primal. Uh where it goes though, I don't think
• 41:30 - 42:00 even Trump understands. And and to his credit, I think Trump often doesn't even claim to understand it. Uh you know, when you look back at I think one of the best guides to to thinking about how Trump operates was his original art of the deal, which was back in the 1980s, right? And he basically talked about he says, "I usually have 13 balls in the air at the same time. Most of them I know will fail. I just see which ones work." I mean, here's a guy who's disarmingly honest about how his mind functions. He
• 42:00 - 42:30 just tries to open a lot of doors, bangs on them, see which ones will open. I think we saw that same thing recently with Voteir Zalinski in Ukraine. We banged on that door a little bit and said, "Ah, well, you know, probably we're not going to have the kind of peace I thought." So, I don't know. Let's do a deal. And that way then, you know, a deal on on minerals, right? that way. Ukraine is partly ours and maybe now we'll defend it. You know what I mean? I mean, kind of willing to
• 42:30 - 43:00 go anyway that things happen. You know, sort of that's the way the balls turned out on that one. Now, let me move on to Iran. Yeah. And I think that sounds actually quite fair from what we've we've observed. Yeah. And and you know, coming from the business world and you and I, you know, guessing like it's not that different from the VC model. I mean, we've seen lots of analogies of that. you you you try everything. Um and and in a way, you know, this is a famous, you know, quote by Winston Churchill. Um you know, Americans almost always do the
• 43:00 - 43:30 right thing after they've exhausted all the alternatives. And you have to say that Donald Trump is busy exhausting a lot of alternatives, right? Yeah. Um so, all right. So but but to to the point I made which is you know I I it sounds like your counsel to the general person would be don't expect uh don't expect this current roll out of
• 43:30 - 44:00 of the new golden era you know policy suite um to end up where we're kind of being sold it's likely to you just think there's a too many conflicts in there and and b too many too many unknowns and and see the the guy who's running it. You know, it's all going to come down to which two or three of the balls land well versus the 10 others that okay, forget those. And and but I will say this, the world will not be the same after Trump. Uh you know what I mean?
• 44:00 - 44:30 The a lot of these things he's pushing toward toward toward barriers, toward walls. I mean, we are going to be a more protected economy. We are going to be more Ataric to use an economist word, right? Less trade. um there's going to be and and and as a consequence less capital inflow. Now that may be necessary as a condition to get our fiscal house in order. Maybe we first thing we need to do is wean ourselves off foreign credit inflows so that we are compelled to actually do something
• 44:30 - 45:00 about our budget. You see what I mean? This is this is the cunning of history Adam. In other words, you work yourself into a position where suddenly you have to tackle issues that that earlier you hadn't tackled. But I do believe this new world, this this more protected America, this with with greater barriers both to labor and to trade and therefore to credit as well is going to be a lasting shift and it will redefine America uh both its sense of itself and its role in the world. So, you know,
• 45:00 - 45:30 when I think about the fourth turning and I hear you talk about it to me, it reminds me a lot of plate tectonics, which is like these are just the the shift the shifting of these major forces and they are going to happen, right? And everybody else is just sort of figuring out how to play their role at the time that these these shifts are happening. And so, you know, a guy like a Trump, to use your words, um he he's just the guy there that let the shift happen. But but you know
• 45:30 - 46:00 and the these these shifts happen of course the the potential energy builds up and then you have a an earthquake or a volcano you know suddenly things move. In other words, it's a punctuated equilibrium, right? There there's no change and then suddenly boom, things shift quickly, right? They shift, right? And to your point like like you you made a comment that somebody has to unleash that force, right? And so Trump's just the guy right now who's unleashing these current set of forces here in the world right now, right? But if it weren't him,
• 46:00 - 46:30 it would have been somebody else because those forces would build up to the point where they would have to unleash, right? So history I think you know makes the leaders we have uh you know to answer the old question are are are leaders born or made I think leaders are made you know and history requires them ultimately they realize they only have certain options and those are the options they have those are the options
• 46:30 - 47:00 they play. Uh some some some presidents to the end of their term always complain that they never had a crisis. I mean Bill Clinton used to do that. Oh my god. That you know what happened in the 1990s? Almost nothing. You know what I mean? Uh except just before well the end of the cold war just before Bill Clinton became president. But the point is he always used to complain. I never really could do much. you know, we never had a real crisis uh about, you know, Mono Monica Lewinsky was there, right? The biggest crisis.
• 47:00 - 47:30 Exactly. Um but my my point is is that is that is that other generations uh excuse me, other leaders are are very unprepossessing when they come in. I mean, FDR uh everyone considered him to be kind of a second rate, you know, second rate intellect. He certainly wasn't an econ he didn't understand anything about the economy unlike Herbert Hoover was a was a virtual you know I mean Herbert Hoover was a very impressive guy um uh FDR's uh
• 47:30 - 48:00 you know second cousin Teddy Roosevelt everyone knew he was a dynamo he was he he wrote books he he I mean he was larger than life right no one really had much of an impression many of the impressions were pretty were were were were not very good of of of FDR and his capacities, but he but he grew in response to the crisis that he faced and
• 48:00 - 48:30 um it was certainly history that made him right. I think you could say the same thing for Abraham Lincoln. I mean, Abraham Lincoln's entire leadership experience consisted of a very unsuccessful one term in the House of Representatives as a wig who protested feebly and in vain against the Mexican-American War. And that was kind of it. I think otherwise his entire executive experience was running a a two a two-man lawyer, you know, law office.
• 48:30 - 49:00 That was it. and yet suddenly he's thrust into the presidency and look at how he did, right? Um anyway, that's my point. And but I think that anyone who espouses as I do a fundamentally uh uh cyclical notion of of social moods and of generations and how they push social moods forward, right? generational aging and how that pushes social moods forward. Almost has to believe that
• 49:00 - 49:30 leaders serve more as a catalytic function than as a as a sort of an independent force in moving off in their own direction. Right. Right. Right. They they they're catalysts, but in many ways they react to the forces of history. They don't drive them. Exactly. Yeah. and and and to the extreme part of that and I don't know if you would you would totally agree with this but it's it's almost like in many cases they just don't have a choice right that the given the forces of the moment that they it
• 49:30 - 50:00 turns out they can only make the one choice that that history remembers them for I think I think also to to to Donald Trump's credit some leaders see the future better than others and I think one of the things that's most impressive about Donald Trump when you consider his career is that He saw the future better than the leaders of either party when it came to this long-term this long-term move against
• 50:00 - 50:30 globalization. um and the the uh and as well as this uh uh long-term move toward populism and and the populization that was going to that was going to occur in the Republican party and how the Republican party it's it its great opportunity was to steal the working class from the Democratic party even if it had to give up professionals along the way. And third, this longer term move toward um uh conservative values,
• 50:30 - 51:00 which I think you're seeing uh is something that he was convinced that would happen, right? He was convinced that history was headed the these ways and and history has headed that way. So I think in in that sense, I mean, how was it that we ended up today with the Donald Trump president rather than this being, you know, Jeb Bush's second term or something like, you know
• 51:00 - 51:30 what I mean? I mean, how did history look back in 2016? And what how how would people have figured on Donald Trump's long-term odds versus a lot of other people? And you can see how from that perspective uh he he showed a lot of precience and I think the ability to look forward is is another thing that really helps uh leader negotiate these these turnings. Okay. Yeah. And that I mean that's a great point which is you know back in
• 51:30 - 52:00 2016 a lot of the nationalism and sort of you know revival of conservative values both in the west and in the east as you were saying earlier with China. um it was not as clear then as it is now. So yeah, he was definitely a real early adopter if you can say. Um, all right. So, Neil, um, you know, if the folks who are watching here, I think they're both finding this super fascinating, but my guess is there's a little bit of an unease in their gut because they're take if they're taking the same things away
• 52:00 - 52:30 that I'm taking from you, which is kind of like, hey, as disruptive as things have gotten this year, as chaotic as some people might think things have gotten, I think you would say, hey folks, you ain't seen nothing yet. Um, and because we don't know how this is going to manifest in the end, and to your point, it may very well be something that we can't even really identify or imagine at the moment, there's a real sense of unease and vulnerability around that. Um, and and look, to a certain extent, we're all
• 52:30 - 53:00 just going to have to wait to see how this script plays out and react to it. But let's focus more sort of economically. Um, where do you think if you had to take your best guess right now, where do you think things are going to happen head economically, market-wise, and is there are there any sort of trends or behaviors that people could adopt now that will make them a little less vulnerable to the future disruption that's going to happen? Yeah, you you know there a lot of things we could say about that. uh you know one of them is um I I certainly believe as a
• 53:00 - 53:30 long-term trend over the next 10 years inflation is to worry about right inflation in a crisis is not a problem it's a solution uh it is a it's a way of sharing burdens and it's very important to understand that if we ever have to mobilize if we have have to start consuming less and investing more either paying back our debts or paying for defense or doing all the other things net exports or whatever
• 53:30 - 54:00 we have to do. Inflation is a way of equalizing burdens. What do you do? You take away from creditors. Anyone who's anyone who's purchased a nominal bond. So I would say this this tells you to the kinds of assets to stay away from those that are you know fixed income securities. I think history suggests is a bad bet. Um I would also say um volatility is going to be continually
• 54:00 - 54:30 underrated moving forward and that gives the opportunity for certain kinds of um you know tail hedging strategies you know certain kinds of straddles. I think the the idea of sudden huge moves in the market that we've certainly seen recently, right, both on the downside and the upside is something that if you if you know that the the VEX as high as it is could actually be underestimating the volatility over the next six or you know three or six months that actually gives you an idea of of trades you can
• 54:30 - 55:00 make, right? I mean certainly I was telling people if you think of you remember when we were back at like 12 the V was at 12 and I said my god I mean if just imagine it was like a dead animal you could poke it all day long and it wouldn't go anywhere. Exactly. But imagine if you had done a a a threemon or six months put you know at at you know 20% off the off the market price in the on the spy. I mean just imagine what you would have done. I mean
• 55:00 - 55:30 you would have an enormous return and my point is is that we're entering a period like this where those kinds of returns are possible. Uh and I also think this is a longer subject but I also think the the very um composition of our economy will shift and that has huge implications for what kind of equities to invest in. I think you have to think more about you know less um uh discretionary consumption um and uh a lot more investing
• 55:30 - 56:00 particularly you know for instance you're mobilizing for conflict just think of all the manufacturing right think of all the defense ETFs have done superbly over the past three or four years Adam and and that trend is not stopped that's going to continue right yeah so defense infrastructure I would imagine you you put energy in there and materials. Materials of all kinds. I mean, materials always are huge in Fourth Turnings because everyone's building stuff. Remember there's a fourth turning. We rebuild the public
• 56:00 - 56:30 world. We're actually building things. This is Peter Teal's vision. You remember that? Yeah. Instead of just instead of just characters, we actually will be building those actual things that will take us places, right? So, this is that this is moving from the fourth turning and eventually into the first turning is actually building a new world out of real things. Um this is a very different focus than the experienced economy uh that we've been spending most of the last 20 years in when it comes to
• 56:30 - 57:00 equities. Okay. And and um back to energy but but building things. So I mean will do you see AI as sort of being a critical front on the national security side here going forward. Meaning the country that wins AI will have a huge leg up on everybody else and you need energy to feed the AI. Look, AI is important, but it may be overpriced. You know what I mean? Because everyone's been on AI. And I think people are on AI more because of the whole discretionary economy side.
• 57:00 - 57:30 You know, all the ways it'll make our lives easier. It'll choose all our entertainment for us and choose our vacations and um and and AI will be important. It's just I'm not sure it's priced at a point that it makes sense to invest in separately. I think I think individual AI you know uh companies although some of them particularly some of the defense related AI companies are so astronomical in price you know you know some of the companies I'm talking about I do I do so
• 57:30 - 58:00 so that that's more of a judgment call because they those companies tend to be very expensive that that's where you get uh price is what you pay value is what you get you you might be paying such a high price today that that even given the opportunity the value is not good right now, right? But there are a lot of other things. Uh, for instance, if we have a if we have a a real uh crisis which involves some kind of public mobilization, remember that in any kind of major power conflict, the United
• 58:00 - 58:30 States will not be protected as it has been in past wars. You know what I mean? Uh, you know, there are ways in which we our life here can be affected. you know, whether through this, you know, cyber wars or or or god knows EMPs or, you know, satellite attack. I mean, who knows what might actually happen, right? So, in other words, um we may we may face problems here at here at home. Um and and I think that that's
• 58:30 - 59:00 something very few Americans think about. Uh although I must say that the the the the billionaire class thinks about them because they all have bunkers set up in the Celty Islands, right? So it's amazing to me that uh so many people don't discount that possibility, but I always wonder why, you know, uh everyone from, you know, Bill Gates to Oprah Winfrey are building these enormous underground caverns out in other places of the world.
• 59:00 - 59:30 So, you know, they they they're preparing for something. So, that obviously registers somewhere on their on their frequency distribution of outcomes, right? So, so so you would then be long personal resilience heading into this future, you know, uh put put in a victory garden, you know, get to know your neighbors a little bit more, work on your social capital, that type of stuff. Absolutely. And in fact, I'm I'm uh currently writing a book on that. That's my next book sort of on what to do right this new period. So, Oh, really? Well, that'll be that'll be out
• 59:30 - 60:00 next year that says Simon and Chester, just like my last book. So, all right. Well, I'm I'm I'm gonna send you um probably you already have the same ideas in your head, but I will send you the book that uh that I co-authored gosh about 10 years ago, which was very much on that topic. So, if there's any any even little seeds of there you can steal, please do. Please. Yes. Um all right. So given given the fact that that um you know we may be be physically building this world of tomorrow um I
• 60:00 - 60:30 imagine that commodities might be something you think are are worth holding in the space especially because you also think inflation is going to be big. Yeah both on the inflation end and on the actual you know holding you know goods goods rather than services. Yes, I I think and and how to invest in commodities, that's a whole another discussion. There many various ways you can do it. At the very least, um you know, historically futures have done much better than spot and also you
• 60:30 - 61:00 need to have a a very wide index because that you you have just tremendous volatility drag on a single commodity. So those are some basic rules, Adam. And and and uh but as a as a class of things. Yes. Okay. Um yes. So folks, do your own homework. Um you know, if you're not experienced investing in the space, find a expert who is and and learn from them. Um I would imagine while it's a commodity, it's a little bit different because it's got monetary purposes, but gold I would think you
• 61:00 - 61:30 would think would be good in this type of future as well. As as ever. As ever. And we'll see. I mean, we'll see that that the dollar hasn't been looking very good, right? And that's that whole problem of what the rest of the world is going to think about investing in America. Uh but but uh gold as u just like defense ETFs, right, has done very well as we've been moving into this uh new era, this new era of liberation. Uh and u it will it will probably continue
• 61:30 - 62:00 to do well. Now, let me just say these are all longer term trends, Adam. There is a possibility that this year we could be moving into a recession. Absolutely. And if that happens, you're going to have to judge these medium to long-term trends with the possibility that short term we may go into something where, you know, holding bonds temporarily might be good, right? Interest rates would go down. In other words, some of these things may reverse a little bit
• 62:00 - 62:30 near-term. not so much the sectoral shift of America but but some of these financial particularly in the area of interest rates. You you may actually find it for example if your idea to take advantage of uh rising inflation, rising real rates um is to go out and you know short a bunch of uh 10-year bond indexes later this year might not be a good time to do that. You see what I mean? So I I do. Um, and so a couple
• 62:30 - 63:00 things. First off, it's obvious to the viewers, but none of what you're saying is personal financial advice for people. So, obviously, folks, do your homework, work with an adviser. Secondly, you're kind of giving us, you know, the the the shopping list that you think will do well over the next 5 10 years as we go through the fourth turning into the first. Um, obviously, there's going to be, you know, lots of wiggles and waggles along the way there. Um, and so yeah, so you know, folks, uh, on any given day, don't hold Neil to any of
• 63:00 - 63:30 this stuff. He's he's he's talking with a long arc, you know, judge it judge it a decade from now. Um, and yeah, I mean, we we didn't really have too much chance to get into the dangers of recession, but I'm going to I'm going to guess you're you're going to say it's certainly a non-trivial risk here. um both for some of the reasons you've already flagged around some of the inconsistencies that you see in the Trump policy roll out, but I could make the argument and I think you would agree with me that that even before the election in November, we could have talked about a recession this year just
• 63:30 - 64:00 from the sins of the past catching up with us. Correct. Yeah. Well, you know, look, I mean, last year and a half, I mean, we had an inverted yield curve. We had we had uh the US was tighter than the rest of the world. I mean, I I I I I have been doing a indicator show, you know, and I go over these every month and and we had so many long-term recession indicators that were up over most of, you know, late 2023, 2024,
• 64:00 - 64:30 going into 2025, right? So, it's almost as though we're kind of we were overdue already before Trump. That's my point. Um and uh and and and you look at the you you you look at the yield curve, you know, uh uh 90day, 10 year still still inverted. You know, we're still flirting with going from an inversion rack back to sort of, you know, back to normal, which is almost this typically a sign that you're actually in a recession,
• 64:30 - 65:00 right? So my I guess my point is also you're you're um you're suddenly stopping all the inflow of foreign labor, right? So I think the impact on on employment is going to be huge because we now know over the past two years the biggest contribution to employment growth was foreignb born. Right. Right. And sorry to interrupt but just to put a quick clarification there. We're stopping the inflow of illegal foreignb born labor. There is still foreign labor coming into the country but it is a small fraction of what the
• 65:00 - 65:30 total volumes were when you add in the legal system. Yes. So the CPS actually ask a question every month on their you know on their where they track unemployment and everything else they they ask are you born in the United States? So that is very simple. So we have actually been able to track that. Well, the the foreignb born growth rose hugely, you know, those postcoid uh you know, two years, two and a half years and and that was uh responsible for more
• 65:30 - 66:00 than half of all US employment growth. Uh you're right. I mean, some of that growth, certainly in in in just absolute terms, is legal, but a large share of that was um the vast majority. And I think I think the May jobs number was the first jobs report in I don't know how many years where we actually saw um a decrease in jobs by foreignb born workers and an increase in domestic born work. It was like the first time we've
• 66:00 - 66:30 seen an increase in jobs of domestic born workers in a long time. So you know clearly shutting the the border was the catalyst for that. Yeah. All right. All right. Well, look, Neil, um, like I said, I could go easily for another two or three hours, but hopefully we scratched folks's itch enough because Neil, after about three months of you not being on this program, the emails start fast and furious. When are you getting Neil on next? When are you getting Neil on next? And there's always so much to to try to boil down to in just the hour that we have. But I think
• 66:30 - 67:00 you've done a great job today. So, thank you. Um, I'll reach back out to your assistant and try to get you back on another quarter or two. I will just say though, if there's something that happens that changes the calculus for you materially, you know, a tectonic shift that that you know, the next tectonic shift or whatever, and you've got some insight that you want to get out into the world, I know you've got your own platforms, but if you want to amplify it by coming on here, you've got a blank check to come on here anytime, you know, you want to call audible. That's great. Thank Thank you, Adam.
• 67:00 - 67:30 I've always enjoyed your show. It's uh and I've I I've always uh I learned a lot from your questions. So, thank you. No, you're such a good guy. Well, look, the most important question is for folks that want to follow you and your work between now and the next time you're on this channel. Where should they go? Well, I do a uh a weekly podcast on demography unplugged. So, it's a Substack. So, it's just uh you know, Google Demography Unplugged and uh you got it. All right. So, I will um I will
• 67:30 - 68:00 um put the URL to the Substack up here on the screen when I edit it. Um Neil, so folks know where to go. I'll also put the link in the description below the video. You're also on X as well, right? I am. And uh that's just how generation. All right. Great. And I'll put that up on the screen, too. Um all right. Well, look, folks, if you've um been as thrilled to have Neil on this program as I have, um please let him know that by hitting the like button, then clicking on the subscribe button below, as well as that little bell icon right next to
• 68:00 - 68:30 it. Um, very importantly, if you want to try to prepare your portfolio for the road ahead, as Neil has has described it to us as best he can right now, um, you know, if you if you don't already have a great track record as a, um, successful DIY investor through tumultuous times like it sounds like we're going to be going through for the next several years, highly recommend most people then work on, you know, building that type, constructing that type of portfolio with the benefit of a good professional financial advisor's advice.
• 68:30 - 69:00 particularly from an adviser who takes into account all the macro issues that that Neil has talked about here. Um, if you don't have one who's already doing that for you, consider talking to one of the ones that Thoughtful Money endorses. These are the firms you see with me on this channel week after week. To schedule one of those free consultations, just fill out the short form at thoughtfulmoney.com. Only takes you a couple seconds to fill out the form. These consultations are totally free. There's no commitment to work with the firms. It's just a service that they offer. Um, Neil, um, I know it's hard to
• 69:00 - 69:30 sort of put a nice bow on something as big as a forth turning, but are there any bits of parting counsel that you would have for the folks watching this video? Most of whom we do have some professional investors that watch, but most of whom are just regular people who are just trying to protect their family's economic and and I mean, I guess in the foreturning, uh, just their family's general well-being uh, through what's likely to happen ahead. I my only advice would be when you talk to financial professionals
• 69:30 - 70:00 um pay most attention to those that talk a lot about absolute return and don't get sidetracked in looking at the relative return to other indexes. Right? If people talk about relative return, they probably, you know, lashed and bound themselves, right, to the S&P 500. And you don't want to be at the mercy of where that goes. You see what I mean? I absolutely do. You you constantly hear people saying, well, you know, I'm I do,
• 70:00 - 70:30 you know, I got an information ratio or I do this much better than, you know, this index. Well, what if all the indexes don't do very well, right? So, this is a space I'm in now, Adam. Yeah. You really need to think about someone who's into wealth preservation and someone who's into guaranteeing you some sort of positive absolute return. You have to be able to persuade someone that if things go bad, you're going to do better than just investing in tea bills, right? Yep. A and presumably in this
• 70:30 - 71:00 type of era, um risk management, um intelligently using hedges, things like that. So, so prioritizing a bit more of first take no losses, right? Yeah. Yeah. Yeah. Totally. And and and how to do that as an art and and um obviously something you can't sum up in a few seconds, but but I guess my advice is simply in judging the overall come on of a financial advisor. That's that's kind of where I'm coming from. All
• 71:00 - 71:30 right. Well, very wise words, Neil. Thanks so much. Um like I said, look forward to having you back on later this year to give us an update then. Um but uh just speaking for not just my viewers but everybody that follows your work, thank you for chronicling all this. Um you give us a framework that that helps us make sense of the chaos and uh and while it is a little scary that things are likely to get worse given how your framework's constructed. Uh it's on the way to a better new order and you give us that light at the end of the tunnel.
• 71:30 - 72:00 So thank you. Thank you for having me on, Adam. All right, Neil and everybody else. Thanks so much for watching.