How to hedge against social collapse

Adam: [00:00:25] Hello and welcome to comedian versus economist. We demystify the world of money and help you get a handle on the bigger picture. And a very special episode today. It is our 100th episode. So incredibly exciting. And to celebrate, we've got a very special guest on the show today. It's my brother Thomas, as always. [00:00:45][20.5]

Thomas: [00:00:46] Yeah. Good day, boys. Hey, guys. [00:00:47][1.1]

Adam: [00:00:50] Welcome, everyone. Yeah, we've pulled out all the stops. The 100th episode. Hopefully you like the format that we've been running with for 100 episodes because we're serving it up again. And it was. It's not even I'm not even convinced, actually, it's the 100th episode. It was it's either today or it was last week or it's next week because anyone who's been listening to the show for a long time will know the maths isn't really a strong suit. [00:01:17][27.3]

Thomas: [00:01:18] It's not statistically different from 100. [00:01:19][1.5]

Adam: [00:01:25] Anyway, we're talking it down. We should be talking it up as it is. Exciting time. I had no idea that way. We had no idea that we'd make it this far. And we started. Big shout out to Equity Mates media for all their assistance. Alec, Bryce, Sasha, the whole crew for making it happen couldn't be. Couldn't, couldn't do it without you. Hundredth episode, big show. Coming up. Let's get stuck into it. Shout out to everyone tuning in from jail. I don't know whether we've got any listeners in jail. We could soon be selling prisons, selling them off. We'll find out what's happening there. We'll be talking turkey again, checking in to see how their prediction of 50% inflation panned out. And good news, microchipping is no longer just for dogs. Find out why you might want to get chipped as well. But first, Thomas, what do you get when you combine wages with data? [00:02:16][51.2]

Speaker 1: [00:02:18] That's right. Wages data. [00:02:19][1.2]

Adam: [00:02:24] Wages data. With that, what do we learn? [00:02:25][1.6]

Thomas: [00:02:27] It was a fizzer. It was like, yeah. [00:02:30][3.2]

Speaker 1: [00:02:31] After all the hype. Yeah, yeah. Oh, well, it was interesting. [00:02:35][4.4]

Thomas: [00:02:36] It was very interesting because it was a freezer. [00:02:38][2.2]

Adam: [00:02:39] All right. [00:02:39][0.2]

Thomas: [00:02:39] We're expecting it to be more of a zinger. Didn't zing it fizzed. [00:02:42][3.2]

Adam: [00:02:43] No. [00:02:43][0.0]

Thomas: [00:02:44] Yeah. So 0.7% in the quarter wage price index in the June quarter and that was lower than expectations. Annual rate stepped up from 2.4 to 2.6 by 2.6 is isn't much is not not not particularly impressive. RBA is looking a little silly again. They've been talking up, you know, the whole rationale for the aggressive rate hikes we've seen was the same. The wages pressure was in the system already. They've got a business liaison programme where they go out and talk to businesses and there's a NAB business survey saying all of this, all those conversations and the surveys were saying that businesses were facing wage pressure, but now doesn't seem like that's the case. Yeah. [00:03:32][47.8]

Speaker 1: [00:03:35] Yeah. [00:03:35][0.0]

Adam: [00:03:36] Yeah. It's been undone again by five basic surveys. [00:03:41][4.8]

Thomas: [00:03:41] So yeah, it's people now saying that, well, maybe we don't need such aggressive rate hikes. We also last week so was a bit of a Labour data week. We got the unemployment, the labour force survey, the unemployment rate. So another 0.1% to 3.4%, which is very, very low, the lowest rate since August 1974. It's been very low for a while. But the interesting thing about this result is that that fall was all due to decreased participation. So people left the labour force and the number of jobs actually fell 40,000 compared to expectations with 25,000. So it was quite a in terms of the jobs numbers that was that was quite that's a reasonably weak result. The monthly jobs data is pretty choppy. Look, you wouldn't want to hang your hat on one month's results, but you put those two together and you've got potentially a labour market that could be turning. It's at these two actually to call and wages pressure that's just absent. This is missing in action. [00:04:46][65.0]

Adam: [00:04:47] So when we say so sorry, when you say wages pressure, you're talking about the pressure to increase wages, more. [00:04:53][6.2]

Thomas: [00:04:53] Wages pressure on the price level on the CPI. So wages feed through into into prices. [00:04:59][5.4]

Adam: [00:05:00] Right. [00:05:00][0.0]

Thomas: [00:05:00] And so wages pressures talks about this wage. [00:05:03][2.3]

Adam: [00:05:03] I hear that. I hear that term. And it just occurred to me as you were talking, that I don't really know what it means. [00:05:08][5.2]

Thomas: [00:05:09] I mean, it's an interesting one. Like it said, pressure is like it's it's a normative thing. It sounds bad. There's pressure if you're getting a wage increase, that's that's a nice thing. So it's it's I mean, it's one of the flavours of the of the current story is like the. Business community and the RBA have been trying to talk down wages for the past six months, saying it's a real danger if wages get out of control. But you know, if there's wages pressure in the system, which is other things, like if you get a wage increase, that's bad. If you all get one that's really bad. [00:05:41][32.5]

Speaker 1: [00:05:43] I get. [00:05:43][0.6]

Adam: [00:05:44] Bad. [00:05:44][0.0]

Speaker 1: [00:05:44] Food. Yeah, right. [00:05:46][1.8]

Adam: [00:05:48] Yeah, yeah. [00:05:49][0.5]

Thomas: [00:05:50] Yeah. But at the same time, like, prices are going through the roof, you know, not really the roof, but like there are. Yeah, in a way. And so you put those two together real, real, real wages, which is adjust for inflation. They had the biggest fall on record because inflation so high and real wages and now back at 2012 levels. So your purchasing power is where it was back in 2012 rice on this data. So we're going backwards and it means people are able to buy less. So to argue against wages in that scenario is to argue against people keeping, you know, not even just getting ahead, but just keep keeping up with where they were. [00:06:30][40.0]

Adam: [00:06:30] People will be buying Crocs again if it's 2012, if we increase wages, that is the is the fear the the the wage price spiral. Is that is that why we're so scared of increasing wages? [00:06:45][14.6]

Thomas: [00:06:45] Yeah. Yeah, that's right. That's right. That, that it feeds through into prices which feeds through into more wages, which feeds through into prices. And you get that vicious cycle again. Vicious. [00:06:54][9.0]

Adam: [00:06:55] Vicious. It's because of all the pressure. Yeah. [00:06:58][3.1]

Thomas: [00:07:00] That's the fear. But yeah, it just doesn't seem to be happening and like we, you know, in some places they, they index to, to the CPI for wages. But this is not the case in Australia, in the private sector wages in particular, there's, there's nothing going on. Right. And like and, and that, that 2.6% that comes off the back of 14% of the survey. So 14% of employees got a pay rise in the June quarter, 86% didn't. Wow. Yeah. So you kind of like talk about like wages exploding or the pressure building is there's just no evidence of it. [00:07:35][34.5]

Adam: [00:07:35] Right. So is this going to change what the RBA does then? They're still talking of another 50 basis point rise next meeting or next whenever they get together and. [00:07:46][10.5]

Thomas: [00:07:46] Yeah, I mean, this is this is yeah. This people saying that this is what CBA Commonwealth Bank their economists are saying is saying like there's no need here for the RBA to run hard against wages inflation because it's just not in the in the system. [00:07:58][11.8]

Speaker 1: [00:08:00] Nobody tells the RBA what to do. [00:08:02][1.5]

Adam: [00:08:08] Because if I remember rightly there was a lot of commentary, a lot of experts in the media saying no, definitely get increase rates before 2024. And the RBA was like not definitely, definitely not going to do that and then did so I the concern I've got now is that they've learnt their lesson from their, from their inaction now and people are expecting and even calling for inaction they're going to be like now we got burned last time, we got to do something, we've got to do something. Doing something is better than nothing because what I hear the RBA yeah. [00:08:46][38.2]

Thomas: [00:08:47] Interesting this agency if that I mean based on those results you could you could easily justify a pause now if you wanted to you could say look we've, we've, we've baked in 175 bits already. We can just sit on that and see how things unfold from here, maybe give it a month or two and revisit it. You could you could easily make that case now. I don't think they will. I think they'll probably be. But maybe where we were expecting another 50 basis points next month, we might get 25 maybe. [00:09:15][28.0]

Adam: [00:09:15] But do we get do we get peer pressure from other countries like the US keeps doing it, New Zealand keeps doing it well. Everyone keeps rate raising their interest rates is their peers in some form of economic peer pressure that happens that we go, well, we better as well. Or do we hear any negative impact if we don't and everyone else is? [00:09:36][20.4]

Thomas: [00:09:36] Yeah, it does affect the currency relativity. So look, if Aussie debt is paying less because we're paying, we've got lower interest rates in the US for example, then people will move their money out of Aussie dollar assets into US dollar assets. They want to sell Aussie dollars and buy US dollars and so that'll lower the exchange rate lower and lower the Aussie dollar. But that's actually a good thing for exporters and generally for the economy generally we'd like a lower Aussie dollar. So it's not, it's not a reason to, to hike rates on the way down. It sort of is like, you know, you don't want to be left behind on a rate cycle because that makes your currency appreciate and that's seen as a bad thing. But on the way up, there's not there's not such a pressure to keep pace. [00:10:21][45.3]

Adam: [00:10:22] We will. We will. What's. With great anticipation to see what the RBA does next in terms of rate rises. Don't be bullied into it, Phil. So I'm saying. [00:10:31][8.8]

Speaker 1: [00:10:33] That's. [00:10:33][0.0]

Adam: [00:10:34] The message here. The key takeaway, play your own game player. [00:10:37][3.1]

Speaker 1: [00:10:38] You do you believe? [00:10:39][1.0]

Adam: [00:10:42] Alright, Thomas. Michael Berry has bought and sold some stocks. Who is he and why do we care? [00:10:47][5.0]

Thomas: [00:10:47] Yes. Michael Berry is a fund manager. Scion Asset Management is when he heads up it. He's famous. He's he was the central character in the Big Short. Oh yeah the movie about the GFC and yes he, he shorted mortgage backed securities before it was cool before the GFC hit and then when the GFC hit he made a ton of money because he sort of was had that vision to be able to, to get ahead of the curve on the GFC. He's quite a famous character now. [00:11:18][30.8]

Adam: [00:11:19] He's just like he had a hit song in the early 2000 that Annie and like smashed it out of the park. Everyone plays it all the time. Yeah. And he's just trading on that like it pops up all the time now, doesn't he? [00:11:32][13.1]

Thomas: [00:11:32] Well, yeah. [00:11:32][0.2]

Adam: [00:11:33] Whenever something, something is going on, it's like, what does Michael Berry think? [00:11:36][3.1]

Thomas: [00:11:36] Yeah, yeah. People are very interested. [00:11:38][1.6]

Adam: [00:11:38] People just want that big. They want another hit. [00:11:39][1.5]

Thomas: [00:11:40] Yeah, that's true. That's true. I mean, he has you didn't have had a few flops like he was predicting that crypto was going to crash and then that didn't. So people were a bit like off him, but then it did crash. So, you know, maybe now that one, he's also famous for shorting Tesla, which also in hindsight seems like a pretty good bet. [00:12:00][20.5]

Adam: [00:12:01] Does it even now? Oh, depends when is shorter. And I suppose. [00:12:03][2.6]

Thomas: [00:12:03] It depends on who ordered it. Yeah I guess but I so I mean because if. [00:12:06][2.9]

Adam: [00:12:06] We're talking about like November 21, then shorting most stocks was a good a good bet. [00:12:11][4.8]

Thomas: [00:12:12] Sure. Yeah. Is there was like. No, I mean, Tesla was worth more than the entire global auto market combined. That never felt sustainable. No. And I think I mean, it's kind of common sense is not particularly visionary. [00:12:26][14.3]

Adam: [00:12:27] But I mean, I don't want to what can I do? Right, to have it exactly. Set the economic world on fire myself? But but I'm just saying it gets trotted out a fair bit to see what he thinks on things. And he's he just he made that one call which, you know, credit to him. It was a massive title, Big Dog. But yeah. Yeah. Well, what's he up to? It's like saying. [00:12:50][23.7]

Thomas: [00:12:51] What was George Soros ever done? Broke. Broke. The Bank of England wants whatever. [00:12:55][4.7]

Adam: [00:12:57] But you could also say, Where's Milli Vanilli? Now, what I'm saying. [00:13:00][3.3]

Speaker 1: [00:13:03] Is. [00:13:03][0.0]

Adam: [00:13:03] That so many times you can listen to another Milli Vanilli song before you go. You know, I think that was that was they they had their one shot. That was it. [00:13:11][7.1]

Thomas: [00:13:11] Yes. Anyway, but he's still managing money. Money. So he's still out there in the in the market making trades. But in the US you get these regulatory filings which where these funds have to have to declare what they own every quarter. And what we learn is so that in the March quarter he owned a bunch of big stocks, Warner Brothers, Discovery, Meta Alphabet, which is Google here in the mall. He owned a bunch of those and he got rid of them. He sold out of everything. Everything. Everything. Yeah. Doesn't own anything anymore. Except is one group which is the geo group and geo group run private prisons. That's what like that's what they do. Yeah. So he's kind of sold out of, sold out of the American economy in general. Hmm. I don't if he's gone all in, but he's gone heavy into private prisons. [00:14:02][50.6]

Adam: [00:14:02] Is expecting big crime as a result of stock market crashes. [00:14:06][4.2]

Thomas: [00:14:07] Maybe that seems to be the I mean, that's how I read that. But he doesn't. [00:14:12][5.2]

Adam: [00:14:13] They don't they. [00:14:13][0.4]

Thomas: [00:14:13] Don't have to explain themselves in these regulatory filings. It's just like this, the things but there seems to be like that's how I would interpret it. Maybe it's a bit of a Ray Dalio class conflict is coming kind of story, but like, you know, if you thought that the economy was going to going to tank and poverty was going to rise and then crime would rise with that, then a prison operator might be, you know, is might be your hedge against social collapse. [00:14:41][28.0]

Adam: [00:14:42] Maybe it's time to listen. I mean, the last one was a big call on the collapse of, uh, you know, the housing market. Um, this could be the collapse of society could be like maybe this is, is second album sophomore effort. [00:14:58][15.5]

Thomas: [00:14:58] I mean, it is like he's, he's sort of famous for being a nerdy quant. So like how he sort of like cracked the GFC stories and they looked at what was the mortgages that were actually backing the mortgage backed securities which no one else had bothered to do, and then looked at them and just realised that they were trash just based on the numbers and that they were all trash and that there was no way that this game could keep. Topping itself up. All right. So it's interesting, like when you look at, say, like going long prisons seems to be there seems to be a statement of belief in how society is going to play out. Hmm. You know, I mean, like, it's certain like there's it's not it's not a sort of a mathematical certainty that crime is going to rise in any scenario. You know what I mean? Like it's for society to collapse and for crime to explode. There's a lot of factors that need to come into play. There's a lot of politics that's going to come into play. So it's not you're not just backing that out of the numbers. [00:15:58][59.5]

Adam: [00:15:58] It could also be a play for it could also be a play for a return to domestic manufacturing production. And if you're buying a prison, you're getting some very loyal, very cheap labour. Like you've got a good solid moat there. No one can come in and pinch your staff. I got a lot of space. Thank you. I can build all sorts of stuff. Maybe he's. Maybe this is a manufacturing play. [00:16:29][30.3]

Thomas: [00:16:29] Yeah. Build back better. [00:16:30][0.9]

Speaker 1: [00:16:31] Yeah. [00:16:31][0.0]

Thomas: [00:16:33] Yeah. Yeah, maybe. But, I mean, to me, it's like, what are the numbers like knowing that he's such a numbers guy? Like, it makes me wonder, like, what are the numbers that he's seeing or looking at that make him think that this is how it's going to play out? Hmm. Yeah. I don't know. This is all pretty interesting. [00:16:48][15.2]

Adam: [00:16:49] And so. So this is true. So the most prisons at the moment are government owned and that be fair. Yeah. [00:16:55][5.9]

Thomas: [00:16:56] Yeah. Yeah. [00:16:56][0.4]

Adam: [00:16:56] Yeah. And so he's. He's borrowing to privately run prisons. [00:17:01][4.8]

Thomas: [00:17:02] Yeah. Yeah. [00:17:03][0.8]

Adam: [00:17:03] Is that is that a trend? Like, is the government selling off more and more prisons or are these people just building their own? [00:17:09][6.0]

Thomas: [00:17:10] Yeah, I think I think that was sort of more commissioned or sort of put out to tender for new prisons. [00:17:14][4.2]

Adam: [00:17:15] Right. [00:17:15][0.0]

Thomas: [00:17:15] I haven't heard of like privatising existing prisons. I haven't heard of that happening, but I'm not totally sure. [00:17:21][5.5]

Adam: [00:17:21] Privatised privatisation is not always all it's cracked up to be. No. You know, if we look at today the transport and energy sectors. [00:17:29][8.0]

Speaker 1: [00:17:30] Qantas, Australia. [00:17:31][0.8]

Adam: [00:17:35] I mean, you talk to someone from Transurban and they're very happy with privatisation, but well. [00:17:39][4.1]

Thomas: [00:17:39] Yeah, Transurban's shareholders are very happy with privatisation. [00:17:41][2.4]

Adam: [00:17:43] That's right. [00:17:43][0.2]

Thomas: [00:17:43] Consumers not as much. [00:17:44][1.0]

Adam: [00:17:47] Where do they fit ethically? Private prisons, are they? [00:17:49][2.1]

Thomas: [00:17:49] I think they're pretty dodge. I mean, that's the other thing about Barry getting into into this one is that they're not an ethical play. They're not certainly not in an ESG ETF. [00:17:59][9.5]

Speaker 1: [00:18:00] I don't think. [00:18:00][0.5]

Adam: [00:18:02] Getting screened out. Yeah. [00:18:04][1.6]

Thomas: [00:18:04] I mean, you had that story a few years ago where two judges got caught and went to prison because they were taking money from Middle and mid-Atlantic Youth Services Corp, which is a private prison. So it was taking money from them to check a whole bunch of kids in jail for stealing DVDs and sort of small, petty crime stuff. And they were just like, yep, off you go to jail and then taking a kickback effectively from the jail. So I super god. [00:18:33][29.2]

Speaker 1: [00:18:34] Oh. [00:18:34][0.0]

Adam: [00:18:36] Yeah. If they're private, though, then they stand a chance of going bankrupt. Which. Which I don't know. What happens in that scenario is like if you if you happen to be housed at a bankrupt prison, do they just go right or this will just let it go through? We can't keep you anymore. [00:18:53][17.6]

Speaker 1: [00:18:54] You're afraid. [00:18:54][0.5]

Adam: [00:18:56] But why don't we take a break there, grab a quick word from this week, sponsor, and be back with more comedian versus economist right after this. Welcome back here on Canadian versus Economist. You can send us an email, if you like, at Equity Mates dot com or via the website Equity Mates dot com forward slash CV. You can also find us on Instagram and Facebook at CV Podcast. Thomas. The last time we looked at Turkey, the country, not the bird, they were predicting 50% inflation and they were sitting of 48 for a memory. Had they go? Had things work out? Yeah. [00:19:32][35.7]

Thomas: [00:19:33] A bit of a miss. Yeah. We should last. We checked in on in mid-February, they say inflation had come in at 48% annual, which is fine. [00:19:41][8.6]

Adam: [00:19:42] That's where you want it to be. Not people are freaking out in Australia because we're we're getting up near eight. [00:19:48][5.9]

Speaker 1: [00:19:49] Yeah. [00:19:49][0.0]

Adam: [00:19:49] Yeah. So yeah. [00:19:50][0.6]

Thomas: [00:19:50] Inflation to go to 48% on a tear away. The Finance Ministry said they expected inflation to hold under 50%. Didn't happen in the end. It just came in last week at 80%. [00:20:01][10.4]

Adam: [00:20:01] 80%. [00:20:01][0.0]

Thomas: [00:20:03] 80% here. And that's that's just the official numbers and a lot of private economists who are saying the numbers are wrong, it's actually much worse. Right. Turkey right now. Yeah. What does that do for a country? [00:20:14][11.3]

Adam: [00:20:15] 80% inflation alleged. [00:20:17][2.1]

Thomas: [00:20:21] Yeah, nothing good. Nothing good. I mean, wages are growing like the manufacturing index. The wages are up 30% there, but so their real wages are falling. 50% was not quite work like that. But yeah, they're falling so that's not good. It's yeah, it's things are getting more and more expensive. Hmm. The interesting thing when we checked in last time is that President Erdogan, who's kind of on his way to being a dictator of sorts, like I don't think he's been around for I know it must be like 20 years or something. And I think he's I think he's kind of properly entrenched himself in the in the presidency. Yeah. He's he's been fighting against raising rates. So, you know, RBA's raising rates to head off inflation here they're actually cutting rates. So Turkey cut interest rates last week from 14% to 13%. That's quite high, but they're on the way down to about 17, 18%. You know, six months ago or something. Right. That's the first move since December. But yeah, they're they're on the way down. As was saying last time, his strategy is to cut rates into into this sort of inflation. The central bank fought him on that for a while, but then he just fired the Turkish fuel low and 33 times they've been through three central bank chiefs in three years. Really? And he's finally found one. He's he's just going to toe the line and do what he says. And so, yeah, they're cutting cutting interest rates, but not working. No, not yet. Anyway. [00:21:54][92.8]

Adam: [00:21:54] What's the thinking? They're cutting rates to fight inflation. What's the hope? Is it hope? Is it just. [00:22:00][5.5]

Thomas: [00:22:00] The. Yeah, there's a bit of hope. I mean, there was a sort of case where China did this kind of successfully in the early 2000, where you stimulate your export sector, you cut rates, you crash the currency, and that stimulates the sick you export sector and then you export sector pulls your economy out of trouble is sort of the idea the first link in that change worked. Cutting interest rates has trashed the Turkish lira, right? The lira is this nailed. [00:22:32][31.1]

Adam: [00:22:32] It now has to have my grand flan. Yeah. Yeah. [00:22:36][4.2]

Thomas: [00:22:37] On the nose on that one. The lira. Lira was worth six times more than it is now back in 2017. Right. So like just to put that in context, like if the Aussie dollar's worth $0.66 now, it's like talking about the Aussie dollar going to $0.11. Yeah. Well, us. Yeah, that's pretty crazy. So that word they did trashed, trashed the lira. But it hasn't, it hasn't sort of caused the economy to soar or to get them out of their inflation mess. Yeah. So still in a bit of trouble. [00:23:09][32.9]

Adam: [00:23:10] How did he get everyone to go along with this, with this sort of story you mentioned he is becoming a dictator. He was elected in at some point, wasn't he? [00:23:20][9.7]

Thomas: [00:23:20] Yeah, yeah, yeah. It's still technically a democracy, I think. I mean, I don't know the ins and outs of Turkish politics too much, but it's still a democracy. But he's been in there a long time. [00:23:29][9.5]

Adam: [00:23:30] So. Well, okay, let me rephrase that then. How how is the Turkish people feeling about what's going on? I was happy about inflation, but they're not. Are they rioting in the streets yet? [00:23:40][10.0]

Thomas: [00:23:40] Oh, I don't think so. I mean, he sort of sold in a couple of lines, like one is that inflation is coming from an international conspiracy to turn the mess over Turkey. Right. And so Turkey's Turkey's really interesting as it sits between the east and the west. So it's got sort of Europe on one side and Russia and China on the other and. Like in all the world wars, it's sort of become like it's quite hotly contested and everyone wants to cut it up and take it over. That's in the Turkish psyche. And talk of like international conspiracies trying to overthrow Turkey play well. [00:24:19][38.2]

Adam: [00:24:19] Right. [00:24:19][0.0]

Thomas: [00:24:20] So he's sort of gone with that angle saying like, you see, it's the trashing, the lira and the inflation. That's all Americans and the Dutch and the English trashing things. So that's part of it. The other the other thing he does is he talks about so in Islam, use what they call usury like, which is lending money for return is prohibited. It's not it's not like it's not okay. And so you're saying like he's not going to he sort of talks about people who are calling for interest rates to rise. He talks about them in sort of religious terms about and the people calling for a return to usury and all the evils that go along with that. But it's quite in the Koran. I think it says if you if you lend someone money and charge them interest, you're going you're not going to heaven. Also, if you take money from someone and let them charge you interest, you're not going to heaven. Also, if you're a witness to the transaction. [00:25:14][53.3]

Adam: [00:25:14] Transaction. [00:25:14][0.0]

Thomas: [00:25:15] Fees. So on your side and the witness, you're not going to heaven either. [00:25:18][3.2]

Adam: [00:25:19] Right. Hmm. Keep it down and enjoy your 80% inflation. All right, Thomas, finally on this show, you've got a story about someone who's decided to microchip themselves. Why? [00:25:34][14.2]

Thomas: [00:25:34] Yeah, this is on. This is on Business Insider during the week. Mm hmm. Yeah. This guy has had the keys to his Tesla implanted in his hand. Oh, Tesla. [00:25:44][10.2]

Adam: [00:25:45] Owner. [00:25:45][0.0]

Speaker 1: [00:25:46] Yeah. [00:25:46][0.0]

Thomas: [00:25:49] Yeah. But he's. He's part of a beta testing group for Veeva Key, which is a biotech company. They're selling crypto bionic identity. [00:25:57][8.0]

Adam: [00:25:58] Who? Yes. Yeah, that's right. Now that now that the the hype died down around cryptocurrency and NFT blockchain, this is the next frontier of crypto. [00:26:11][12.6]

Thomas: [00:26:11] Yet crypto buy and it doesn't it has meme meme stock really doesn't it. [00:26:15][4.0]

Adam: [00:26:15] Crypto bionic identity. Right. So is it. He's put a microchip in his hand so that he can unlock his Tesla. [00:26:23][7.3]

Thomas: [00:26:24] Yeah. [00:26:24][0.0]

Adam: [00:26:24] Yeah, I did see the photo. He sent me the photo and I couldn't help but notice that he was also wearing a smartwatch. [00:26:31][6.6]

Speaker 1: [00:26:34] Yeah, yeah, yeah. [00:26:34][0.6]

Thomas: [00:26:36] Orica owns Google Glass. [00:26:37][1.0]

Adam: [00:26:38] So like is this going to be like a mega trendy thing? Is this the future of people planting things inside their body? I don't really see the advantage of this over like a smartwatch. Like I can pay for things with my watch now. Yeah. It's not a it's not a leap to just use that same thing to open your Tesla. You really didn't want to carry. I don't even know how you started, how to get into a Tesla, some sort of proximity swap thing. Obviously, you could put it in your hand. So. [00:27:09][31.8]

Thomas: [00:27:10] But, I mean, someone could steal your watch theoretically. Hmm. You never took it off. I was going to steal your hand. [00:27:16][6.3]

Speaker 1: [00:27:17] I hope. No, but. [00:27:21][4.3]

Thomas: [00:27:22] Yeah, I mean, that's. That's the danger, right? If someone really wants your car. Hmm. I'd just, like, hack off your. [00:27:27][4.8]

Adam: [00:27:27] Hands, but I don't. I don't know where it ends. Like. Like I got lots of cards, right? I got one for gym work from. I'll take this if I ever run out of running the digits. [00:27:36][9.1]

Speaker 1: [00:27:38] Oh, I guess, yeah. Yeah. [00:27:41][3.0]

Adam: [00:27:42] This. This new chip can be linked to multiple services, but if you're got to have one for each, then if a. [00:27:49][7.2]

Thomas: [00:27:49] Gym door's trying all your fingers. [00:27:51][1.3]

Adam: [00:27:53] Balancing on one leg, trying to hold your foot up. [00:27:55][2.4]

Speaker 1: [00:27:55] Because that's the. [00:27:56][0.5]

Adam: [00:27:56] Only place you had room for a chip. Like, we've got bionic authentication already. Biometric authentication. So using your fingerprint or your face, like a face ID type scenario would seem to be a much less, much less intrusive way of logging in. That's effectively what it is. You're authenticating the account. [00:28:16][19.6]

Thomas: [00:28:16] Yeah, but you think you could, like do way like, you know, you pay pay with everything on your phone now. You just do away with the phone. You don't even need the phone as pay for everything. So you don't even need to remember to carry anything out the door. You know, you've got you've got access to your funds. True. Yeah. And I think I think this is the way it's going. Like, I remember when Apple Pay first came out and everyone started paying for things with their phones. I had a lot of friends who had a lot of reservations about that, and I did as well as like, Oh, this feels a bit of a slippery slope towards Big Brother, but it was just so convenient. Yeah. The economy. Yeah, I guess, is just hope the big brother reality's not coming. Is it going to go is. Oh, and I think, I think this is the same story. Like, I think and like I think it's just going at once it once it gets up and going improves its usefulness. I think this convenience dominates everything within the human psyche. [00:29:14][58.0]

Adam: [00:29:15] Yeah. Oh, that didn't look like like the, the, the video he's got. I sort of contort his wrist to get it in the right spot. Yeah. So that needs to be serious. He shouldn't have to do that. It is just TV that you've just bought for, you know, 100,000. You see, it shouldn't require contortion of your wrist. Yeah. Just start the car. [00:29:38][22.8]

Thomas: [00:29:39] It didn't. It didn't look cool, didn't it? Did coup. And remember, that's what killed the Segway, right? You're like, you remember the story of the Segway? It was like it was the best it was the hottest secret when it was being developed because everyone bit bizarre and everyone was funding it in like 2000 to 3003 and everyone was like trying to guess what it was and people thought it was a hoverboard and. Right. And you had this thing where everyone who got on a road and was just fell in love with it and thought, this this thing's going to the moon. But then people started riding it around and everything. Oh, they look. Everyone who rides it looks like a dork. And so the thing flopped. Like they had massive factories geared up ready to pump out millions of Segways. The guy who invented it called up Stephen's Tilburg because his mate, he was directing the minority report. [00:30:28][49.2]

Adam: [00:30:28] Yeah. [00:30:28][0.0]

Thomas: [00:30:29] And said, if you're doing a movie about the future, you got to have Segways in. They're going to everyone's going to have be riding Segways. Hmm. But they just weren't cool enough. And that's what I think. Like, you're looking at him, like, bend his wrist round and he's trying to wave it over the door to try and open. It just looks stupid. And that's it. That kills it. [00:30:47][18.2]

Adam: [00:30:48] Obviously, you can't do it yourself at home, but you could just about because I saw that you don't even have to go to a doctor to get this done. You go to your local tattoo parlour. Oh, yeah. He's enjoying. Not sure I want my crypto bionic identity to be. [00:31:03][15.4]

Speaker 1: [00:31:04] Installed. [00:31:04][0.0]

Adam: [00:31:05] By the same guy dishing out Southern. [00:31:06][1.4]

Speaker 1: [00:31:07] Cross Tattoo. You see. [00:31:09][2.3]

Adam: [00:31:09] Tatties get misspelled all the time and instead of unlocking your Tesla, just put your in contact with Telstra. [00:31:15][5.4]

Speaker 1: [00:31:16] So yeah, yeah. [00:31:21][4.6]

Adam: [00:31:22] Yeah. Call centre. Uh, tell you what would be handy next time you get so drunk you pass out in a park or something invasively for your owners to find. You can't just scan your. Have you lost a son? Did I say you went out last night? Uh, yeah. Yeah, I would say. I guess it's going to be it's going to be tough to sell the car on the secondary market as well. Oh, no. Oh, you know. [00:31:51][29.1]

Thomas: [00:31:51] No, it's surely just reprogramming it. [00:31:53][2.1]

Speaker 1: [00:31:53] Isn't that nice? What if you. [00:31:57][3.4]

Adam: [00:31:57] And Lindsay got a. [00:31:57][0.8]

Speaker 1: [00:31:58] $700. [00:31:58][0.0]

Adam: [00:32:00] Duck down, as you said? Sure. Who just doesn't make a small incision? You'll be on your way. Gosh. Yeah. Now I'm probably just getting old and out of touch, but I think. I think with wearables and phones and all that stuff, I think I'm I'm fine with all that. But maybe you're right. I think it needs to be. It just needs to work better. That's all it needs. Yeah. Like when I approach my car, it should just unlock cause it detects the. The journey implanted in my forehead. [00:32:27][27.8]

Speaker 1: [00:32:29] Yeah. [00:32:29][0.0]

Adam: [00:32:31] Hey, before we finish, we got a quick listener email that we'd love to get to. Matthew. Send us an email at Equity Mates dot com. He wrote us a really big, long question, but then he did us the solid of shortening it into a small question that we could read. [00:32:47][15.5]

Thomas: [00:32:47] So to respect Matthew. [00:32:48][1.3]

Adam: [00:32:50] Basically he's asking would changing the GST be a fairer way to manage the economy rather than messing with the RBA interest rate and bankrupting unlucky individuals who bought a home at the wrong time, moving it more and more of our money into the pockets of finances and related leeches. Scathing. So yeah, basically. Thomas, can we, can we change the GST rather than messing with interest rate? [00:33:14][23.9]

Thomas: [00:33:15] I mean, this is sort of theoretically possible, not as is as you saying, it does get to the same point. The sort of the problems with that is that one in Australia like state revenue is tied to the GST take. So missing with the GST would sort of mess up the way the states are funded to some extent. I think it's not great about the GST is it's quite a regressive tax. So because it's a tax on consumption, poorer people tend to have a higher marginal propensity to consume from their income, so more of their income goes towards basic spending. Whereas if you're wealthier, more of your income goes towards savings and investments. So it means that more of your budget proportionally, if you're a poor person, goes on the GST than it does if you're a richer person. So it's it's it's a regressive tax as opposed to a progressive tax like our income tax systems progressive. Because the more you earn, the more you pay, the less you earn, the less you pay. That's progressive, the opposite of that's regressive. And the GST is regressive. It's not a great tax to be fiddling with as a policy lever. And like you, yeah. If, if you did have to jack up rates, that would disproportionately affect poorer people. It's not clear that interest rates are regressive, but clearly they're progressive either. And I don't know, we don't intend to talk about that too much. Particularly like I mean, my is probably more progressive in the sense that the people who really notice at a house are people who own houses. [00:34:44][89.8]

Adam: [00:34:45] Hmm. [00:34:45][0.0]

Thomas: [00:34:46] Whereas it doesn't immediately impact renters directly. So maybe in that sense, it's. It's a bit more progressive. Hmm. Yeah. So in theory, you could, but, you know, logistically very tricky. And, and then yet and politically very tricky as well. Like if one of the, one of the nice things like you've got the independence of the RBA allows you to increase rates like you know, you have high inflation and everyone's struggling and everyone's budgets are getting pressured and having a terrible time if you're the government because like I know you were having a hard time, but we're going to make it worse by write in by raising the GST, you know that very hard to sell that and very easy to to camp out if you're in the opposition to campaign against it and say, oh no, we don't actually need the GST rate hike. [00:35:35][48.7]

Adam: [00:35:35] They're pretty good at selling bad news. Like the interest rate rises are just bad news for just about everybody. [00:35:42][6.3]

Thomas: [00:35:42] Yeah, but, but, but it's hands off, you know, the government says like, oh, well, it's unlucky. I wish there was something we could do, but it's out of our hands. Good. It's. [00:35:52][9.2]

Speaker 1: [00:35:52] Feel free to do it. Yeah. [00:35:54][2.0]

Thomas: [00:35:56] We'll trot through that again. [00:35:56][0.8]

Adam: [00:36:00] Oh, there you go. Well, hopefully that's that does make sense to me. So hopefully that makes sense to you as well. Matt, thank you so much for your question and that'll do it for now. That's a wrap for this week for our 100th episode. Thank you so much for listening through all 100 episodes. Don't forget if you are new to the show. We did do a economics 101 as part of our very first what was it, top nine episodes. Seven episodes, I remember it was a power number. You told me. [00:36:28][28.0]

Thomas: [00:36:28] Oh, right, right. I think it was nine. [00:36:30][1.4]

Adam: [00:36:31] Yeah, I remember. It was a while ago. 100 episodes ago. How could we possibly remember? So yeah, thank you for coming on this journey with us. We really do appreciate all the support. And don't forget, Finn Fest is happening October 15th. Head to Equity Mates dot com forward slash finn fest. Thomas and I will both be there looking very much forward to it. Cannot wait to get over it and see everyone over at Finn Fest. That's it for now. We will talk to you again next week. [00:36:31][0.0]

[2000.7]