Could vax passports pass muster in Australia? How did El Salvador go with their Bitcoin experiment? Why is Ampol talking about carbon-neutral fossil fuels, and can you build a city for $400bn. All this and more on this week’s CVE.
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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. My name's Adam and we're joined, as always by my little older brother and real life economist, Thomas. Hi Thomas.
Thomas: [00:00:38] Yeah, Adam, how are you doing?
Adam: [00:00:40] Pretty well, thank you. Look, Thomas, big show coming up. Lots happening in the world of finance. Going to be asking you the question, Thomas. Has El Salvador collapsed after moving to Bitcoin? We'll find out how that went. What does it cost to build a whole new city? And why would you cover that a bit later? Also going to ask you, Thomas, is there such a thing as carbon neutral fossil fuel? I don't believe that could be possible, but we'll find out. And Thomas, this is actually something that I wanted to ask Gladys Berejiklian, but unfortunately, she's cancelled her press conferences and she's not even returning my calls. So she cancelled a press conferences on Sunday, said no more, that's it. And then held a press conference on Monday. So but apparently it was a different one. I don't know. This is the worst. This is the worst farewell tour since Fonzi. Anyway, a lot of a lot of talk this week about vaccine passports and whether or not they are a good idea. Thomas, your thoughts on the vaccine passport?
Thomas: [00:01:42] Yeah, I mean, the does a lot seems to hinge on it. And there's in my community here, it's a big, big story blowing up because all the teachers are being forced to get vaccinated to keep their jobs. So that's that's become a very hot button topic. But I did see that I can score a fake vaccination certificate for 200 bucks. So I thought I'd ask you if that's am I getting ripped off or is that a good price?
Adam: [00:02:09] Look, in short, yes, you're
Thomas: [00:02:11] getting ripped off.
Adam: [00:02:12] It's a PDF for Aanestad and there are plenty of PDAF EDS online. But I've been many things. I've had many jobs in the course of my life. I used to be a gate attendant for a tennis club in Darwin. I flipped burgers at McDonald's. But amongst all those things, I've also spent time as an identity and access management specialist. So I've spent a bit of time looking into such things like identity verification, identity validation, that sort of stuff. So to answer your question, yeah, I mean, the been a lot of talk. There's two things. One, one online group came out offering these two hundred dollar forged passports. Lt seems like a good deal, but if you actually looked into it and looked at how much effort they'd be in producing one, anyone with like a PDF editor of some kind would be able to knock one up pretty quick. I'd say it's a done deal, but it's a bit like when do you remember when the government turned off analogue TV? They had a scheme where they gave contractors like something crazy, like 300 dollars to convert someone from analogue to digital. And they just got snapped up and it was literally just going and plugging in a set top box and then way. And they just they just got consulting fees. So if you're too lazy to make your own to make your own vaccination certificate or if you just can't be bothered finding out how, then maybe 200 bucks is okay. If that's if that's for you.
Thomas: [00:03:33] Surely that, like the health of the nation is not hinging on a bunch of PDS?
Adam: [00:03:39] Well, no, they did release an app. All right.
Thomas: [00:03:42] Governments are good at it
Thomas: [00:03:44] and
Adam: [00:03:45] they can do anything with Stuart Roberts is involved.
Thomas: [00:03:47] Is is you know, it's quality.
Adam: [00:03:49] It's top shelf. So they made an app. And the app kind of suffers from the same problem that the PDF does to
Thomas: [00:03:57] see
Adam: [00:03:57] the app. They didn't build in any any sort of what we call third party validation. So it's it does actually pull your data down from a government website. It just doesn't do any checking to to work out whether the the data that it's getting in the site that it's connecting to is actually that of the government. So it just kind of makes a call
Thomas: [00:04:16] out and assumes that whoever
Adam: [00:04:18] replies that and responds to that call
Thomas: [00:04:21] is the government. It doesn't kind of go are you sure you're the government? Because this looks a lot like a kind of dodgy request, really. So that's that's how they view DOGIT up. They get on the
Thomas: [00:04:33] other end of that call.
Adam: [00:04:34] And I think so the guy who the guy who cracked it, I forget, is Richard Nelson. He's the one where people have been sharing his tweet. So he's he took the Medicare Express out and showed how he could produce what appears to be a valid certificate that says, yes, I'm vaccinated. He said I'm not. He wasn't officially vaccinated. To his credit, he hasn't. He hasn't just spread out. Here's how to crack the app.
Thomas: [00:05:00] Yeah, he he did.
Adam: [00:05:02] He did kind of he just said, look, this is how easy it is. It took me about ten minutes. And it's all to do with validation. So there's nothing that says there's nothing built into the app that that checks to make sure that it's getting the data from the right place. The same problem with the PDA. In a way, there's nothing if you print it off or you show it to someone on your phone, there's nothing in built into it that says. This has come from a legitimate place, and so that's the big difference at that with, say, the EU passports that they've got in. If you want to travel around in the EU, they've got a vaccine passport as well. But that's got a QR code on it. And that's like if you scan the QR code, that then takes you to that, pulls down the data live. It's it's cryptographically set up so that the data is validated, the source is validated. You can't falsify the QR code, but. Hmm, I think I think what it comes down to is a concept we talk about, which is called level of assurance. Right. And ultimately it comes down to how important is it to us as a society that the level of assurance is is really high for this thing. So we could build something right. Use proven. They've got open source software. I don't know why we didn't use it.
Thomas: [00:06:16] Well, now that's good. We'll make our own thanks.
Adam: [00:06:19] And we failed miserably, but they could fix it, right. So they could fix it. But it comes down to to the level of assurance that's required. So when we talk about level of assurance, we're essentially saying, how important is that? That we that the information that we're providing is valid. So if I go into, say, boost use. Right. And I say, you know, like a large boost juice and I go, can I have a name for the order? I say, yes, it's Jesus. And then when they call out Jesus, I say, God bless you and walk away with my juice and everyone's happy. The level of assurance required in that in that environment is very low. It doesn't matter that my name that I gave a fake name and I was wearing a funny dress. It doesn't matter at all. Right, but if you go to something a little bit higher, maybe you're going to buy a ticket to the footy. You need to prove that the ticket is valid. So you scan the ticket on the way in. But again, you know, there are people I know who buy children's tickets to the footy and then use like a PDF editor, which says this is an adult ticket. They are.
Thomas: [00:07:19] So it's a raffle ticket. The machine the
Adam: [00:07:21] machine at the front is just checking. Is it a valid ticket? The machine is not checking. Does it belong to to Adam or does it does it belong to a child or anything like that? It's just saying, yeah, that's a valid ticket you go through. There's no reason for the security to stop you and go, hey, that's something dodgy here. So, you know, again, it's that's a slightly higher level of assurance. You're saying at least the ticket is valid. That's what's important in that scenario. So I think this is where we get to with the with the the vaccine certificate or the vaccine passport. I don't know who's kind of enforcing it. It is kind of easy to forge, but not that easy. So, you know, like people aren't going to be hacking the app. Typically, they're not going to be paying two hundred dollars in most cases. So they kind of we're saying we're making it hard enough. We're creating this barrier.
Thomas: [00:08:10] I don't know, like up here, up here, if if if that hack was easily available, it would spread like wildfire. Right. And I reckon half the population would have a fake certificate within with
Thomas: [00:08:25] half the population. Really. Yeah. Yeah. Maybe I would never touch so. Well yeah.
Thomas: [00:08:32] Like where I am happens to be the anti capital of Australia, like with with children's vaccines is a very low vaccination rate, one of the lowest in the country and a high degree of scepticism
Adam: [00:08:42] ultimately about who's enforcing it anyway. I mean, and you've got to remember, we need an environment that can accommodate people without smartphones, right? We can't have a smartphone is a mandatory thing.
Thomas: [00:08:53] So slippery slope harrumphing, that's where we're going.
Adam: [00:08:57] I mean, maybe that's why they want to put the five G.P.A. in the first place, but it becomes easier for us. You could still you could still add a QR code to the bit of paper that then you could present maybe a driver's licence along with someone valid. But who's going to do that? Like if there's like a six foot five biker walking into a cafe? Is the fifteen year old kid working in the cafe going to be like, yeah, but I don't think your name's really Carroll.
Thomas: [00:09:24] What about like Light said, the teachers is a condition. It's becoming a condition of employment that they're vaccinated like. So presumably the school then needs to sign off or see see something? Well, what are they just checking it? They're not just checking a piece of paper and a printout. Right. This is some kind of central record for this thing. Oh, well,
Adam: [00:09:41] yeah, it's in it's on the government register. And so they're going to have to they're going to have to fix it. But what I'm saying there's no it doesn't I don't think it's a foolproof solution. But I think if we're trying to if we think we could get it to be a foolproof solution, that's probably that's probably unrealistic as well. Well, maybe not unrealistic. There's been a lot of investment. Yeah.
Thomas: [00:10:00] Like, are you saying that there's a technological barrier to something like a vaccine passport? Because that's that's where that's where like a lot of people obviously, and this has been the whole agenda all along. It's about introducing vaccine, passport and then backfilling with all sorts of other vaccines as well.
Adam: [00:10:15] No, I don't think there's a technological barrier to making it work. It could be it could be made to work. It's working in the EU. The EU passport works. You've also got federal police at the airport and airport security who are enforcing it. You're not relying on on businesses to have people within the business kind of, you know, enforcing I mean, a different story. When you if you make it part of the employment, are you going to go? Well, we can check that in the same way that you have to provide your tax file. No details. You know, you could forge tax file number if you wanted to, but eventually that's probably going to catch up with you and show me the technological barriers and the I guess the question is, how much effort do we go into? I noticed that the UK has has just back flipped on it. They were going to do it as well. And then what's his name? Boris Johnson. He's come out and gone. This is we're taking this off the table. It's not it's not worth the effort. There are a lot of people, you know, complaining that the infringes on people's rights. I know a lot of people that that are not don't even, you know, QR code checking. They still fill out the form or just don't do it at all because that's their belief. I don't I don't agree with it. I think we should be Kiwako checking in everywhere we go, but I think we should be getting vaccinated as well. I'm not looking to pay 200 bucks for a Deep Dive. So yeah, people are always going to try and work for this generation that's putting this forward is the same generation that literally like faked IDs to go and buy alcohol at the.
Thomas: [00:11:50] So, you know, we're like we're no stranger to this.
Adam: [00:11:53] But now I think the technical barrier is could be overcome. That's fine. I just I do question how easy it is to enforce if we do get on that path. Um, but is it is it the ticket to to opening up like is that from an economic standpoint? I guess that's they're saying it's a condition. Yeah.
Thomas: [00:12:11] Still pushing. I mean, the the barrier seems to come down every every week, you know, two or three weeks ago we're talking about 80 to 85 percent of the population. Now it's 70 per cent in New South Wales, it's 70 percent of the adult population. Yeah. So it's like it's not like
Thomas: [00:12:27] I was like with the the vaccine waiting period between the first
Adam: [00:12:31] and second by initially started
Thomas: [00:12:33] out like 12 weeks ago. And if fell into
Adam: [00:12:38] a bit into the pandemic or into the lockdown Dollars, it sounded like a lot. It sounded to me a lot like politicians decided that maybe they didn't need to wait that long. Yeah, health advice changed
Thomas: [00:12:50] to Miss
Adam: [00:12:51] Tamez. So I don't know. Lots to be on. I think they could do a better job of that. Mind you, they could they could definitely fix that. And it wouldn't be hard like it. It's you know, there's not a lot of work that needs to be done to add that validation. But I think even if you do fix it is still you're still relying on a 15 year old cafe worker to enforce them.
Thomas: [00:13:10] So obviously, obviously, crypto is probably the solution. Here is a block chain solution is what I'm hearing.
Thomas: [00:13:17] Yes, exactly right. That's exactly what it needs. Well, speaking of blockchain
Adam: [00:13:24] and El Salvador, the country has gone live. They are now live, live, live with Bitcoin as their currency. So, yeah,
Thomas: [00:13:32] that made made Bitcoin legal tender, legal
Adam: [00:13:35] tender. So they haven't replaced their currency, have they. They work on in the US Dollars
Thomas: [00:13:39] they they they actually replace their currency in 2001 and just. Right. We're just going to we're just going to start using US dollars. Now Celebi they've been what they called dollar rising. They Dollars rise back in 2001 and have been using the US dollar since then. But now they've just made Bitcoin legal tender. So yeah, the government's rolled out the digital wallet given they called it Chivo Zevo, which is slang for Cool Kevo.
Adam: [00:14:07] I think it might be Kevo.
Thomas: [00:14:08] Is it right? Hmm.
Thomas: [00:14:10] Yeah, right now the people
Thomas: [00:14:15] in this segment is mispronouncing a lot of Spanish words,
Thomas: [00:14:20] but they're giving every
Thomas: [00:14:21] citizen thirty dollars in Bitcoin for everyone who
Thomas: [00:14:23] signs up. I don't think I've ever heard very Dollars in Bitcoin. Bitcoin tanked fifteen percent on the day they were alive. It was like so
Adam: [00:14:34] apparently everyone they gave everyone thirty dollars worth of Bitcoin in the Kevo Wallet. And that was meant to be spent in stores using your Kevo Wallet. But it wasn't too long before people worked out they could just transfer it to another digital cryptocurrency and then just take it out in cash or into another digital wallet. So. So I don't think that you couldn't withdraw from your Kevo Wallet as cash.
Thomas: [00:14:58] It was. No, no, no, no. You no, they've got a whole bunch of ATMs, whole network of ATMs of credit where you can go and there's free conversion from Bitcoin into US dollars.
Adam: [00:15:07] Yeah, but I think the initial thirty dollar that they gave them somehow was you couldn't you couldn't take it out at the ATM.
Thomas: [00:15:15] Okay. Right. Right.
Adam: [00:15:16] So they just went out, move it to my other bitcoin
Thomas: [00:15:19] wallet and withdraw this cash. But it was fired because by the. I withdrew,
Adam: [00:15:24] it was only worth 19 Dollars, so how's it going? I mean, you know,
Thomas: [00:15:31] not really, no. I'll be honest, I haven't Googled it.
Thomas: [00:15:33] It seems to have worked. I'm glad we added this to the segment list. This is going really well so far.
Thomas: [00:15:40] I mean, the interesting thing, so, like, they've set it up, it's become legal tender and they sort of want to create some move towards it. But sort of like a lot of the criticism in the press has been like all these silly El Salvadorians trying to create a church, trying to turn Bitcoin into a live currency when it's it's not stable, it's too volatile. You can't use it as a day to day store of value. And I think that that's that's reasonably true. But it's not what the key problem that that they were trying to solve. The key problem is that they have a huge remittance inflow so that like lots of something like 20 percent of the population lives in America and they spend six billion dollars back home every year, 66 million to 23 percent of its GDP is coming back through with through so-called remittances, people sending money back and they pay a huge amount of fees on on that, like we through Western Union and all the other characters. Apparently the president, you piccalilli
Thomas: [00:16:41] keep going native.
Thomas: [00:16:44] Yeah. Yeah. Apparently he reckons it's cost it cost them 400 million dollars a year in commissions. And so with Bitcoin, obviously one of the key selling points is it's a zero fee transactions. Yeah. And so it's going to help help people get money more easily and more cheaply and save some money. Yeah. Seventy seven percent of the population gets some sort of remittance from overseas,
Adam: [00:17:04] 70 percent, apparently.
Thomas: [00:17:06] That's what I read.
Adam: [00:17:07] Yeah, well, that's incredible. So, I mean, that's a lot of money then that someone like Western Union or who's the other one? MoneyGram. Yes. That's a lot of money they're going to miss out on. They must be worried. Surely this is the tip of the iceberg for for international transfers. Like if we're whether whether other countries adopt crypto currencies as legal tender or not, once people work out, they can transfer money around the world and pay next to nothing in fees, then doesn't that just pretty much wipe out Western Unions? Whole business?
Thomas: [00:17:35] But I reckon it does. I reckon it does. I reckon that is the that is the disruption that that Bitcoin is providing. And it's sort of like it's like a lot of services now, like the one of the trends is demonetisation. So there's a bunch of these dematerialisation. So we went from c.D to online music. So the product dematerialised and then from there you go into demonetisation. So then the product becomes free and it's like part of a subscription offer. You don't actually pay for the thing anymore. You there's some other way of interacting fees. So yeah. So it's just demonetisation coming for transfers and bitcoin is driving the way. But I think because the technology's there, it will become I don't know, there's still but there's still a lot of like so the World Bank and. Well one of the things that. So Moody's downgraded El Salvador's credit worthiness and saying that it's open them up because like. No, you know, your customer regulations are now impossible. So that potentially puts lumps El Salvador into a bunch of rogue states like North Korea and Iran and things where there where the US government has sanctions on them because they don't trust that they're not funding terrorism and things like that because they just don't know where where the money's flowing.
Adam: [00:18:48] So but I think isn't isn't the Kevo Waller isn't that a government built thing? So I think that was one of the things about the Kevo Wallet was it's built by the government. So even though the cryptocurrency, it's still like a centralised bank of sorts for Bitcoin. Right? I think. And that's that's one of the the tools that stop them kind of taking the money out as cash. As soon as they were given it, they had to transfer it to another wallet first.
Thomas: [00:19:13] So then so they don't actually have the keys to their own bitcoin.
Adam: [00:19:16] It's held by. I don't I don't know.
Thomas: [00:19:20] Right. We're out of a debris
Thomas: [00:19:21] game already so far. And I see this show. So what we've done is grab the lifeguard's attention. Oh, you're the expert. What do they want now? No, I think that's
Adam: [00:19:37] I think that was one of the criticisms was that the Kevo Wallet is like government owned. And because the president came out when it when it launched President Trickily or whatever his name is, he came out and there was issues with the rollout of the wallet. And he was like, yeah, it's bloody Apple and Google. My God, I haven't managed it well at all.
Thomas: [00:20:00] I'm like, well, I don't know of any guy on the Australian government's management of Covid app. So but I don't know I'm not sure that that I would
Adam: [00:20:13] write El Salvador Government's app developers
Thomas: [00:20:17] to scale out of that compared like any better than Apple and Google could manage. So. We'll see, but they will promise you that we'll do a little bit more
Adam: [00:20:27] research on this perhaps, and see if we can get some answers for you next week or better still, why don't you send us an email if you know more about this, CVE at Equity Mates dot com or head over the website, Equity Mates, dot com forward slash CVE or tell us we're wrong on Instagram at CVE podcast. You'll also find us on Facebook at CB podcast. Let's pause there. Go and do some research and be right back with more comedian versus economist after this. Welcome back here on comedian versus economist and Thomas, what is this I'm hearing about carbon neutral fossil fuels?
Thomas: [00:21:09] Yeah, well, this is a this is a pilot project that Ampoules launched recently, and they're offering business customers carbon neutral petrol and diesel. But it's not actually in the petrol. It's doing it through offsets. So customers pay a bit extra, more, and then they plant some trees and do some carbon offsetting
Adam: [00:21:28] projects, plant some trees in the hole in the ground they're dug out
Thomas: [00:21:31] to get the oil. They need solution,
Thomas: [00:21:35] but they're doing it on the full supply chain. So it's it's the production consumption, the distribution, the full gamut. So, yeah. And the way the way they're saying that there's a market need because a lot of companies are committing to go carbon neutral, but they don't have, you know, electric vehicles or the the sort of the infrastructure, particularly around transport, is not there to support that transition. So they're sort of like this bridging solution where they can go carbon neutral by purchasing carbon neutral petrol and diesel.
Adam: [00:22:04] They're also rolling out a lot of EV charging stations online. Well, yeah.
Thomas: [00:22:09] Yeah, they go they're going hard. They've got in May, they launched the decarbonisation initiative and they're calling it. And there's a bunch of stuff in that. So they're moving into green hydrogen and batteries. They're investing 100 million in future energy projects help achieve a goal to reach net operational emissions, zero net operational emissions by 2040, 100 million, five to 10 percent of the total investment. So you're on track, committed to use 40 percent renewable energy by 2025 and 50 per cent by 2030. Oh, and and they've just rolled out. They actually they just want to grant and they're rolling out fast charging electric vehicle stations through the through their sites, 100 sites across the company's network. They've got a seven million dollar grant for that, which is about a third of the total cost. So they
Adam: [00:22:54] could they can power them by using generators run on carbon neutral
Thomas: [00:22:58] fuel. Yeah, I think it's a sign of the times that you have essentially a fossil fuel company, a company built on, you know, selling petrol, is leading the way, is seeing the writing on the wall and they're trying to get ahead of the curve. And, yeah, pushing pushing on with this stuff and creating that that bridging solution for companies that are ready to go carbon neutral have sort of sold that to their investors and their customers and but need to be able to deliver on it. So I think I feel like the space is moving quite quickly and there's my sense that's moving relatively quickly and it's being driven by business and business is is dragging the government along behind it.
Adam: [00:23:34] It's very confusing, though. So impose a petrol company. They're now selling electricity. The electricity companies like AGL and Origin are now selling
Thomas: [00:23:45] broadband because presumably there's no electricity. I don't know why everyone is just
Adam: [00:23:53] we're just going to end up with a world where everyone's selling everything out. We just companies are just going to struggle, just going to try and become big. And so everything.
Thomas: [00:24:01] No, it's it's the social social website, maximalism. Everything becomes the social media network at some point. [00:24:08][7.0]
Adam: [00:24:08] Well, talking about building things and big things. Don't don't drink and podcast kids. There's an economist, Thomas, right up your alley and economist Henry George is talking about building a new city.
Thomas: [00:24:21] No, he's not. You're right. That completely wrong. Billionaire law is. Yeah, it is an ex Wal-Mart executive. He's got a vision for a five million new city.
Thomas: [00:24:36] He wants to build a city somewhere in the desert, effectively what sounds like an eco city somewhere in somewhere in the desert. He's pitching it. He wants to have the diversity of New York, the social services of Stockholm and the what was the other one? Cleanliness of Tokyo. That's right. So, yeah, it's going to is eco friendly architecture, sustainable energy production, drought resistant water systems, a 15 minute city design to people can get everywhere within fifteen minutes and fossil fuel powered cars are going to be banned, apparently. Mm.
Adam: [00:25:07] Wow. That sounds amazing.
Thomas: [00:25:09] Sounds like won or Nevada. They don't know yet though.
Thomas: [00:25:15] Uh oh. But uh
Thomas: [00:25:18] yeah. So at the moment it's a dream. He needs to raise it. It'll have a population of five million. It's going to cost 400 billion probably you know at a minimum.
Adam: [00:25:29] Yeah. 100 billion. S.A.S. seems reasonable. I like that's in today's order to build a city that has five million people with all those things.
Thomas: [00:25:37] It's pretty cheap, we think. But that's kind of Sydney, right? Like you just build another Sydney for four hundred billion. Seems pretty reasonable.
Adam: [00:25:43] Yeah. Which begs the question, what's wrong with Sydney Covid aside? But there's nothing wrong with the city itself.
Thomas: [00:25:49] Well, it's not a fifteen minute city by any stretch. It doesn't have eco friendly architecture, has a lot of fossil fuel cars walking around. And last time I looked,
Adam: [00:25:57] I find that you reach a certain. In life, anyway, where you just end up living in a 15 minute environment, because I think I get on the train and go to work. I don't really, really count that as transportation
Thomas: [00:26:11] planners do, because I'm not do because I'm not doing anything.
Adam: [00:26:16] I'm just sitting there, like listening to a podcast or reading a book doesn't really count.
Thomas: [00:26:21] Adelaide is a 15 minute city. You can get anywhere in Adelaide in 15 minutes.
Adam: [00:26:25] Yeah, but but what I'm saying is I don't really get beyond that, beyond going to work. I don't really go out of my environment. I don't, you know, like on the surf club and my friends live around here, you know, kids go to school here. I'm driving kids to sport and stuff all around the local area. So yeah. Yeah, maybe that's just maybe I reckon in Oregon, maybe once you have kids, maybe that's just a lie, then they're going to get older and they're going to have like they're going to be playing sport and you know.
Thomas: [00:26:52] Yeah, yeah, yeah. Who knows. So the thing
Thomas: [00:26:57] the interesting thing that I, that I notice is that they're going to have a community endowment which will create shared ownership of the land. So it sounds a little bit like we have a structure here called a community community land trust. So you can have something like an eco village or some kind of concept like that where people own the individual dwellings or they rent dwellings from the from the community. But the land itself is always owned by the community and is never sold off. So you don't have this sort of freehold title kind of concept.
Adam: [00:27:26] Right. You just you own the house, but not. Yeah.
Thomas: [00:27:29] Yeah. And and that's where this American economist, Henry George comes in. Yeah.
Adam: [00:27:34] Right around the turn
Thomas: [00:27:35] of the
Thomas: [00:27:36] turn of the 20th century, he was quite famous. And he's essentially saying that everything comes back to land, all economic value is derived from the land, has its roots in the land, and we don't want to be privatising that because the land is a communal asset. It's owned by the Commonwealth, whatever it is by the collective. And we shouldn't be letting we just go run off and do whatever they want with it. We should keep keep hold of it. If one of the ideas and the the sort of interim step of that is he suggested replacing all taxation with land taxation.
Adam: [00:28:10] So yeah. So you just pay a tax to have some land, but you never, you never own it. And then they use that tax to, to pay for all the things. So there's no other taxes, no other income tax.
Thomas: [00:28:20] There's no I think I think I think in a Yeah. An ultimate vision of that. The interesting twist here is that Monopoly was built around George's principles. So was trying to. Yeah, it was. And the the women who make who came up with it. I forget a name now, but she was trying to demonstrate how the ownership of land ultimately creates monopolies and entrenches power. And you need to T- to sort of deconstruct monopolies. You need to get into land and democratise land. That was and the monopoly, the board game was a teaching tool to demonstrate that principle.
Adam: [00:29:00] Tended to be capitalist
Thomas: [00:29:03] tool, though. Is it OK, you're going to crush everybody else? No, no, no. That's the point. Yeah.
Adam: [00:29:07] This it doesn't sound very social at all.
Thomas: [00:29:09] We've got the whole point
Adam: [00:29:10] of Monopoly is to just smash everyone else and drive everyone out.
Thomas: [00:29:13] That's the capitalist game, right? Well, that was that was her point. That was her point. Like saying that the way the rules of monopoly are set up, which is the way the rules of the economy are set up, is that that's what happens. It just naturally creates monopolies. You need to you need to actively intervene to stop monopoly monopolies and entrenched power accumulating in smaller and smaller number of hands. You need to actively engage to stop that happening. Otherwise, the rules themselves will just naturally create those kind of outcomes. A monopoly was a sort of like a teaching tool to say, look, everyone do it. See, OK, now there's one person with all the power and all the money
Thomas: [00:29:50] and he's now he's building a city forever. Nevada, forget your roots in Reno. Mark. The thing that
Adam: [00:30:00] worried me, though, is he said it would allow residents to participate in the decision making and budgeting process of the city.
Thomas: [00:30:08] Is this guy for real? Has he read Facebook lately, logged on to the Reddit city before 500 GameStop stores? Yeah, but I
Thomas: [00:30:19] mean, that's that's democracy, right?
Thomas: [00:30:21] That's to participate in
Thomas: [00:30:24] decision making, in budgeting. That's that's the democratic process.
Adam: [00:30:28] You lost my budgeting. Oh, no,
Thomas: [00:30:29] I don't want to be involved. Let's get some accountants
Adam: [00:30:34] in paying them to do the budgeting. Oh, gosh. I think we've nearly made it to the end. I don't know how we've done it tonight. But before I go, we did have some listener e-mail coming that I wanted to run this one past year. Rob wrote to us, send us an email, as you can, to see at Equity Mates dot com. Just wondering if you guys would consider talking about this property developer, China ever Grundy and its broader impact on. The Chinese global housing market, Chinese, sorry. [00:31:01][27.3]
Thomas: [00:31:02] Yeah, I didn't mean to do some research into this.
Thomas: [00:31:06] Great. Here we are again. Yes, as very strong for this
Thomas: [00:31:13] is as I understand it, every they build houses.
Thomas: [00:31:18] So people are talking
Thomas: [00:31:20] about every granda. I don't even know if that's how you pronounce it. Might be evergreen. I've got no idea. Being the next the Lehman Brothers, the Chinese, Lehman Brothers. So they they're pretty pretty much going bankrupt, it seems. So they are they are China's biggest developer. They build the most units in China. They're very big. They have they have things everywhere, everywhere. But they're going bankrupt and at the point of collapse. And yet their bonds are selling at like 25 cents to the dollar or something. I think even lower than that. Yeah. And so sort of people, they're trying to they're trying to fire sale all their assets and trying to pull pull something out of the hat to stop from going under. But they have all these they have debts to their suppliers. They have all these contracts with people who have paid deposits for houses. They have finance arrangements with banks. So if they go under, there's a potential for what they call contagion that that that it's going to bring a lot of other people down with them, creates a bit of a Titanic like sinkhole that then sucks in everything after it. And you're already starting to see that with the other developers in China that now. So the bond markets and and the banks are going sour on the whole sector, like saying, well, if ever, ever grun, they can go under. How how how steady are the rest of these these characters? And so it's and for the moment, the Chinese government seems a bit happy to let let the shakeout continue. And they're not they're not don't seem to be actively stepping in to to bail bail out of a grand day or bail out the creditors. They're kind of happy. And because they is part of the reason everybody got into trouble was that China was trying to rein in credit growth and everyone ended up on the wrong side of that. Yeah. So there doesn't seem to be any government support coming. So, yeah, the whole sector looks a bit wobbly and then that has implications. One of them is that there's rumours that Teather, you know, like the US in crypto land or some of the assets which no one's really sure where their assets are, but something they might own a lot of commercial paper from above ground. So that might sort of put pressure on TEATHER. Yeah, and the Chinese construction industry accounts for like 60 percent of all seaborne iron ore trade. So it's like it could be a massive hit to iron ore demand. Iron ore, iron ore prices are actually tanking right now on the back of this and amongst other things. Right? Yeah. So it has the potential to be some people are saying the next Lehman Brothers and this could be kind of the trigger for great global fight, another global financial crisis of some sort. Mm hmm. That's it. I mean, I don't want to sound too alarmist because there is always something like that around. You can like at any point in time. Yeah. You can always point to something like if that keeps going really bad and gets worse, that could bring down the whole global financial system. There's always something like that, although most people think that we kind of it'll be a bumpy but soft landing. The Chinese government will kind of step in to limit the contagion somewhat. But yeah, but it's a risk. And so it's a big unknown.
Adam: [00:34:29] So load up on crypto.
Thomas: [00:34:31] Well, not us. Not not Teather in that in that case.
Adam: [00:34:35] No, no, no, no. =
Thomas: [00:34:36] I'll diversify, obviously. Yeah. It gets a little bit of. Yeah. Get out of this. I think of the
Adam: [00:34:45] uh very good. Ah we should wrap it up there. Thank you for staying with us through that episode. It was a bumpy ride. We really appreciate you taking the time out of your day to tune in. If you'd like more more mispronunciations and
Thomas: [00:34:57] ill informed commentary, then please, please check back
Adam: [00:35:01] in with us again next week. We promise that we will do so much better research for next week. How about in the meantime, though, why don't you check out some of the other great podcast from Equity Mates Media Get Started Investing feed Equity Mates Investing podcast. You're in good company and if you haven't checked it out yet, there's a new podcast from Equity Mates media called Talk Money to Me, and it's really good. I had to listen to their episode, the Order Pad episode the other day, and it's a really sweet buyer recommendations and some good some actual research involved in those buy recommendations. So if you're into that sort of thing, that makes you give that a listen. Thanks once again for tuning. And we really do appreciate it. And we'll talk to you next time on Comedian versus Economist.