Jay Zawatsky: How Debt & Energy Connect

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foreign

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with annuities where every single week I

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welcome a celebrity guest expert that

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can help you maximize chapter two of

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your life listen learn laugh and love

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every minute of the most unique

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Financial podcast on the planet let's

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[Music]

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welcome to fun with annuities I'm your

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host Stan the annuity man America's

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annuity agent licensed in all 50 states

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we have a repeat guest on by popular

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demand I've had him on one time and

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after that one time I never have had

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that many emails wanting him to be back

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on

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and today we're going to really dig in

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I'm just going to get out of the way

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it's one of those things where you just

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you just hand him the ball and let him

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go score the infamous smart J zawatski

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hey Jay how are you I'm doing great Stan

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I hope you're doing well too really am

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and for people that haven't heard Jay is

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this if this is your first time put on

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the seat belt

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grab the tea and coffee because it's

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going to be a good one Jade let's just

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jump right in because

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um we're gonna cover a couple of things

1:19
today big huge topics one of the topics

1:22
is energy but you sent me a great email

1:25
that framed it differently than I've

1:28
ever seen before or read before in

1:31
detail

1:32
and you're going to connect the dots to

1:35
debt and the history of our debt for two

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energy so with that being said Jay go

1:43
for it I want to hear what you've got to

1:44
say certainly thank you Stan uh in order

1:47
to understand where we are now you have

1:51
to understand some history

1:53
so I'd like to lay out as a framing

1:56
device for

1:58
uh interrelated uh historical time

2:03
frames that have resulted in the

2:07
tremendous debt pile with which we find

2:10
ourselves today

2:12
now the actual beginning point is not

2:15
even in the United States it starts in

2:18
1871 with the Ascension of Otto von

2:22
Bismarck to the chancellorship of

2:25
Germany

2:27
Otto was the most powerful man in

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Germany during the uh let's call it the

2:34
fourth quarter of uh the 1800s

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and what Otto von Bismarck did was he

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figured out for the first time in what's

2:45
referred in what we can refer to as the

2:48
Modern Age

2:50
uh that in order to

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secure

2:54
forever support from the masses uh in

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his country

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he had to please them and in order to

3:05
please them

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he created the world's the modern worlds

3:09
first what I refer to as welfare Warfare

3:13
state

3:14
how do you do that well it's actually

3:17
quite simple you give uh the working

3:21
class and the middle class

3:24
freebies uh you give them income

3:27
supports you provide them with uh

3:30
medical uh Services now of course income

3:34
supports and medical services in the

3:36
late 1800s were nothing like what's

3:39
available today but they had the finest

3:42
welfare state uh in the history of

3:46
Europe

3:47
and as a result of that welfare state

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uh he was constantly uh re-elected if

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you will to the chancellorship of

3:58
Germany uh until

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1890 when he retired

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uh and during that period of time he

4:07
also was able to secure the uh ascent

4:11
and support of the ownership class in

4:15
Germany the people who owned the means

4:18
of production

4:21
and so he was able to stay in power and

4:25
he built this incredibly strong German

4:28
Juggernaut now as the years Roll by we

4:32
know what happened it got so strong and

4:34
so uh desirous it resulted in World War

4:38
One

4:39
now speaking of world war one we can now

4:42
move to the United States

4:44
uh and Woodrow Wilson

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Woodrow Wilson was a great admirer of

4:51
the state

4:53
that Otto von Bismarck had created

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he wanted to duplicate it in the United

4:58
States

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and the way he did that was uh passing

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two

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of the most important pieces of

5:07
legislation

5:08
since the Constitution of the United

5:11
States was adopted in 1789.

5:15
and what the first one was was the

5:19
Federal Reserve Act which instituted the

5:23
Federal Reserve

5:24
the second and uh probably worse uh was

5:30
the institution of the 16th Amendment

5:32
which allowed for uh the income tax

5:38
and what uh Wilson did during the first

5:43
few years of his administration

5:45
was to promise that when the income tax

5:48
went into effect

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uh it would only be one percent on what

5:53
he referred to as the Working Man and 20

5:56
on what he referred to as the rich

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man that's been going that I mean you

6:02
saying that I'm thinking man they have

6:04
been using this crap for a long time wow

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so what happened was over a very short

6:10
period of time just a couple of years he

6:13
was able to uh convince Congress which

6:16
was all controlled by his party to raise

6:19
the um

6:21
cost of the insurance excuse me the

6:24
taxes from one percent on The Working

6:27
Man

6:28
to 25 on the Working Man and how how

6:31
long was the span was that for one two

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years from one to 25 in two years that's

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right and then they went from 25 on the

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so-called Rich to 77 percent

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that provided him enough Revenue

6:48
uh to establish

6:50
the uh welfare Warfare state in the

6:54
United States

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uh to the point that when he ran for

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re-election in 1916 he promised

7:03
that he would never have American boys

7:06
and girls go to Europe to fight as they

7:10
called it over there

7:12
he said we will not go to war well as

7:16
soon as re-election was secured

7:18
boom we were in

7:20
and uh it was the American entry into

7:24
World War one that turned the tide

7:26
against uh Germany and the

7:28
austro-hungarian Empire and resulted in

7:32
uh essentially uh

7:36
the power the Treaty of Versailles which

7:39
he negotiated and that and that was such

7:42
a poorly drawn treaty that had ended up

7:44
in World War II 21 years later it didn't

7:47
uh make peace for our in our time or

7:50
peace for all time it wasn't the war to

7:52
end all wars it was massive destruction

7:56
on uh an unprecedented scale that

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resulted in uh the destruction of the

8:03
German State such that they decided that

8:06
they would go with uh hair Hitler uh 10

8:09
years later and we all know how that

8:11
worked out

8:12
so that's really the second historical

8:15
point now the third historical point

8:17
is Franklin Delano Roosevelt uh he took

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the welfare Warfare state that Woodrow

8:24
Wilson had established and literally put

8:28
it on steroids

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uh in order to uh do that he passed all

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kinds of legislation but the most

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important from our point of view today

8:38
was he instituted the social security

8:41
system in 1937.

8:43
now what you must remember about the

8:45
social security system is that

8:48
when it was first instituted there were

8:52
40 plus workers I think the exact number

8:54
was 42. 42 people paying into the system

8:58
for each person taking out of the system

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so it was like imagine a 200 pound man

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um if 40 guys are carrying a 200 pound

9:09
man it's five pounds apiece it's easy to

9:12
do

9:12
but over the course of time oh and you

9:15
also must remember that the age at which

9:17
people lived in those days the average

9:20
age for a man who died at 59 and woman

9:23
62. so if you had to get to 65 in order

9:26
to collect Social Security that's why

9:28
there were so few recipients because

9:30
most people had died before they could

9:32
collect or if they started to collect

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they didn't collect for long so a lot

9:36
was coming in and hardly anything was

9:39
going out But as time went by

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more categories of Social Security

9:45
recipients were created

9:47
and uh fewer and fewer and fewer workers

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paid into the system

9:54
so today

9:55
we have 2.7 workers paying into the

10:00
system

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for each person taking out

10:03
and because life spans are so much

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longer on average today than they were

10:08
then practically 20 years more both for

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males and females

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you collect a lot longer

10:15
so as a result

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our system is according to the trustees

10:20
of the social security system will be

10:23
unable to pay full benefits by

10:27
2034. now that doesn't mean it won't pay

10:30
any benefits that's a lie that a lot of

10:32
people tell you right but they will only

10:34
be able to pay out what comes in by

10:38
workers which today's projection is

10:41
roughly uh 72 percent

10:44
so you're not going to be getting the

10:48
full Social Security amount unless there

10:51
are major changes made in the system to

10:53
Buck it up like they did in 1986 uh when

10:57
Reagan was uh in office

11:00
so that's uh oh and the other thing we

11:02
must uh uh make sure everybody remembers

11:06
is that the other significant thing that

11:09
FDR did was he

11:11
um

11:12
confiscated all of the privately held

11:15
gold in the United States other than

11:16
jewelry and once he did that it took him

11:19
five minutes how did he do that

11:22
well uh he sent out uh notices to all

11:25
bankers and of course it was an

11:27
executive order and anytime you went to

11:30
your bank in order to get into your so

11:33
uh your security box your uh your safety

11:36
box

11:37
uh at the bank uh they sent an IRS agent

11:41
in there to see if you had any gold and

11:43
of course some people complied

11:45
voluntarily in other people they just

11:47
had to look in the box and take the gold

11:49
and the last time I was on I told you

11:51
the story about my grandfather uh who uh

11:55
was accompanied to his box by the bank

11:57
manager and the uh Internal Revenue

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Service agent who confiscated his 10 uh

12:05
one ounce gold coins and paid him out

12:07
twenty dollars uh per coin 200 which was

12:12
the official price of gold at the time

12:14
now the Scandal here

12:16
is that as soon as five months was over

12:19
and uh FDR had collected

12:23
261 million ounces of gold it was the

12:26
largest horde of gold ever held by any

12:29
one entity at any time in human

12:31
existence 261 million ounces

12:34
uh FDR then said okay well now we're

12:38
going to raise the official price of

12:39
gold to 35 so if you were forced to give

12:42
it up at 20 and now suddenly it's worth

12:45
35 that's a 70 not 17

12:50
7-070 where did they take that where was

12:53
it held well it was held mostly at the

12:57
Federal Reserve Bank of New York and

12:59
some was put into Fort Knox

13:02
uh but most of the gold uh was taken to

13:05
the Federal Reserve Bank down in the

13:07
bowels of the bank deep underground in

13:10
Manhattan did they melt it down

13:12
uh I think they weren't in bar format

13:15
yeah they a lot of it was converted to

13:18
bars now if you look at the Gold that's

13:21
theoretically at Fort Knox and I say

13:23
theoretically because there's never been

13:24
an audit of that gold and there's hasn't

13:27
been an audit of the Federal Reserve

13:29
gold either there's a lot of uh talk in

13:32
uh gold circles that a lot of that gold

13:36
has been either sold or hypothecated out

13:39
we don't know one of the things that

13:42
there are some Senators who are in the

13:44
U.S Senate today uh Rand Paul for

13:47
example who wants to audit the fed and

13:50
one of the things he wants to audit is

13:52
to make sure that they actually have the

13:54
goal that's on the books of the United

13:56
States

13:57
but that's sort of a side issue at this

13:58
point

13:59
uh okay now let's fast and of course

14:02
World War II came and after World War II

14:04
the United States uh the industrial

14:07
might of the United States won that war

14:09
along with the unbelievable sacrifice

14:12
that the Russian people made you know on

14:14
the Eastern front uh Germany just

14:17
couldn't stand up to uh you know the

14:20
pincer movements of all of our

14:22
industrial might and our generals like

14:25
Patton in uh Western Europe and of

14:28
course Stalin and his boys just

14:31
destroyed uh the Germans on the Eastern

14:33
front uh and then after the you know

14:36
that was over we dropped some bombs in

14:38
Japan and they gave up and then the

14:40
United States was the Colossus we were

14:43
the only player left standing and as a

14:46
result of that uh we were able to

14:49
dictate certain terms one of those terms

14:51
was

14:52
uh an agreement as to world currency

14:57
uh and we refer to that as the

15:00
um

15:01
I I forget the name for a second but

15:02
it'll come to me uh it was held at a at

15:06
a resort in New Hampshire

15:08
uh and what emerged from that Resort in

15:12
New Hampshire was an agreement that the

15:15
United States dollar would be held as

15:18
the reserve currencies for uh the

15:22
Western Powers meaning all of Europe uh

15:25
Japan uh the United States all that

15:29
post-war the only people who didn't

15:30
participate in it was the Soviet Union

15:32
they had their own system and their

15:34
satellites uh but the US dollar would be

15:39
backed by gold

15:40
so in effect U.S had the gold

15:44
it uh every dollar was backed by gold

15:47
and therefore all of the reserves of all

15:50
of the Western countries were also

15:53
essentially on the gold standard

15:55
now that

15:57
um agreement

15:58
uh was abused by the next character in

16:02
our story that character is Lyndon

16:05
Baines Johnson

16:06
became president upon Nick's excuse me

16:09
Kennedy's assassination and he was a

16:12
very Progressive to use the term that's

16:14
in Vogue today individual he wanted to

16:17
do two things both part of the welfare

16:20
Warfare state

16:22
and by the way I should digress for a

16:24
moment

16:25
when Eisenhower was leaving the office

16:29
of president in uh 1960.

16:34
he had a very famous speech and he said

16:36
Beware the military industrial complex

16:39
because he could see that after World

16:41
War II uh the defense contractors and

16:45
their Toadies in the Congress and in the

16:47
Senate who always backed them uh were

16:51
becoming more powerful than the rest of

16:53
society is that the Genesis of that

16:56
phrase yes okay that was Eisenhower the

16:59
military industrial complex

17:02
um so a few years later

17:04
LBJ ascends to the presidency not

17:07
elected as president but vice president

17:10
ascending to the throne there and he

17:13
decides that we're going to have What's

17:15
called the Great Society and at the same

17:17
time he says we're going to uh really

17:21
ramp up the war in Vietnam satisfying

17:25
the military-industrial complex and also

17:28
welding uh working people to his

17:34
political party just like Otto von

17:37
Bismarck had done just like Woodrow

17:39
Wilson did just like FDR and now we had

17:44
not only Social Security and the income

17:47
tax he grafted onto that system which he

17:51
called the Great Society

17:54
um Medicare Medicaid and food stamps

17:57
among others

17:59
and what that did was create a scenario

18:03
whereby

18:05
the original

18:07
expected amount that would be spent on

18:10
Medicare for example uh Johnson said it

18:13
would never ever ever be more than 50

18:16
billion dollars a year

18:19
well last year according to my uh notes

18:24
uh we spent uh

18:27
792 million a billion with a B 792

18:32
billion dollars

18:34
net cost of Medicare it was actually

18:37
almost a trillion but when you net out

18:39
uh the state's portion of Medicare uh at

18:44
the federal level it was 792 billion

18:47
dollars

18:48
so the what was supposed to never be 50

18:51
was now 792 and some might say oh yes

18:54
but there's been inflation since then

18:56
not that rate of inflation yeah that's

18:58
that's that's crazy yeah and then the

19:01
same thing with Medicaid Medicaid costs

19:03
uh

19:05
about 560 billion dollars last year so

19:08
between the two

19:10
you can see those are entitlement

19:12
programs you don't have to you don't

19:14
have to do anything to get them other

19:16
than participate in the system

19:18
but at this point in time

19:21
uh for example uh Social Security and

19:23
Medicare

19:25
you could take out much more from both

19:28
systems than you ever pay in including

19:30
any interest that you might have earned

19:31
I mean I did an analysis of how much in

19:35
my working life I have paid into both

19:37
Medicare and Social Security now I've

19:41
been collecting uh since night since I

19:44
was 66 I'm 68 uh how old am I 68 now

19:49
and if I'm if I stay on the current

19:51
trajectory of uh medical costs and

19:56
Social Security receipts I will take out

19:59
substantially more from the system

20:02
then I ever paid in including interest

20:06
on the system well a system like that is

20:09
called a Ponzi scheme

20:12
because if everybody's taking out more

20:14
than they put in and suddenly the number

20:16
of workers is going down and down and

20:19
down and by the way in a few years it

20:20
won't be 2.7 anymore it'll be 2.3

20:23
now I personally believe that one of the

20:26
reasons why uh there's so much

20:29
immigration both legal and illegal is

20:31
that they want more workers to come in

20:34
to start taking uh you know paying into

20:38
the system

20:39
uh you know there are many ways to skin

20:43
that cat and that's the uh the skinning

20:45
mechanism that the uh the government has

20:48
chosen at least for the time being

20:50
uh they're not counting the other social

20:52
costs that uh May accrue from that or

20:56
are accruing but that's for another

20:58
discussion

21:00
okay so that brings us to uh the end of

21:02
LBJ

21:04
then uh

21:07
the bottom line here is that our debt

21:11
uh which was minuscule in 1968 minuscule

21:18
today it's 31 and a half trillion

21:20
dollars on the books

21:23
and if you go to uh

21:25
uh any number of uh counters on the

21:28
internet like

21:29
usdebtclock.org you can see in real time

21:33
uh all of the debt that's been

21:35
accumulated and continues to accumulate

21:37
and those those counters spin so fast

21:39
you can't even see the thousands right

21:42
uh you know it's just hilarious how how

21:45
fast it moves but not so hilarious if

21:49
you're a grandchild of uh someone who's

21:53
68 like I got some grandchildren they're

21:56
going to end up paying for it yep one

21:58
way or another

22:00
and uh these other things so I can't I

22:05
can't wait to hear how is this then

22:08
dovetailing into the energy part okay I

22:11
got one more point to make it now we can

22:13
get to the energy

22:15
um the unfunded liabilities

22:17
uh what I just described to you was 31.5

22:20
trillion what we call on the books right

22:23
the unfunded liabilities the gap for

22:26
Medicare Medicaid Social Security and

22:29
government pensions

22:30
present value

22:32
not total nominal dollars but present

22:35
value is 93 trillion so if you add to 31

22:41
to the 93 and then compare that divide

22:45
that by the GDP

22:48
we owe right now

22:51
400 percent of GDP now put that on your

22:55
family scale if you owed four times what

22:58
you can earn in a year

23:00
um

23:01
and you owned nothing to back it it's

23:05
not like you went out and borrowed to

23:08
buy an incredibly productive business or

23:12
a large piece of real estate that has

23:15
tenant uh income being generated none of

23:18
that this is just money that's been

23:20
taken in for current consumption they

23:24
pay the money out Social Security they

23:25
pay doctors and nurses on Medicaid and

23:28
Medicare but there's no uh roads and

23:31
bridges being built uh there's nothing

23:34
being uh generated for the future that

23:37
can create future service potential and

23:40
future cash flows to the government

23:42
that's the problem that's bad debt good

23:46
debt is the kind of debt you take on to

23:48
buy important piece of equipment for a

23:51
business so that you can generate more

23:53
cash flow to pay it back and then make

23:55
profits and pay taxes on those profits

23:57
and pay uh your employees ever more

24:00
money that's called productive

24:02
our debt is completely unproductive so

24:05
when someone like Nancy Pelosi used to

24:07
say oh every dollar of debt we take on

24:10
improves the economy well she's reading

24:13
from 1968 or 1948 when we took on a

24:18
dollar of debt in the early 50s it

24:21
actually grew the economy by six to

24:23
seven dollars currently for every new

24:27
dollar of debt we take on we only get 50

24:30
cents of economic growth so that's a

24:33
negative benefit

24:35
and that's where we are so now how is

24:38
this related to energy well

24:41
energy is the most important

24:47
uh concept

24:49
in the world and it's the most important

24:53
concept that will ever exist in the

24:55
world because without energy nothing

24:58
happens the only way to ever pay off the

25:03
debt

25:04
or even begin to pay the interest on the

25:06
debt

25:08
without defaulting on it one way or the

25:10
other

25:11
is to improve productivity

25:14
and the only way to improve productivity

25:17
meaning squeezing more juice out of the

25:19
same bunch of grapes getting each hour

25:22
you pay your employees more productive

25:25
so that you can generate more profits

25:28
pay taxes give

25:30
um increases in pay to your employees

25:32
the only way to do that is to increase

25:34
productivity but productivity United

25:37
States is declining so we have

25:41
debt growing productivity declining and

25:45
we have inflation which has been filling

25:47
in the Gap that's where inflation comes

25:49
from it's the gap between productivity

25:52
increase uh and the rest so if we don't

25:57
want inflation to fill in the Gap we

25:59
have to figure out how to increase the

26:02
amount of energy and the affordability

26:04
of energy those are the two things that

26:08
must happen in order for us to begin to

26:11
undo the debt pile and not have our

26:14
children and grandchildren essentially

26:16
be debt slaves to the holders of the

26:20
yeah but undoing the debt power also

26:22
involves Washington not spending as much

26:26
uh of course

26:28
um now the difference between

26:30
uh not spending if you're spending on

26:33
the right things

26:35
and those things result in higher tax

26:38
revenues

26:39
then net spending is okay that's good

26:42
spending and if you're taking on debt to

26:45
do it that's okay like we said earlier

26:47
if you're buying an important piece of

26:49
equipment for your business and it's

26:51
going to make your working people more

26:54
productive than you you buy that you you

26:57
borrow that money and you buy that piece

26:58
of equipment but we're not doing that so

27:01
when we say lower spending yeah we we

27:05
destroy ourselves with military spending

27:08
because what are we doing

27:09
we're we're creating bombs to blow up or

27:14
hopefully we'll never have to use them

27:15
but once it's in a new nuclear weapon or

27:18
in a new Battleship that we never used

27:20
then we're not getting any benefit from

27:24
that now some would argue well the

27:26
world's at peace but nobody else is

27:29
contributing to our costs you know

27:32
Europe doesn't contribute to our cost we

27:36
put our umbrella over them they benefit

27:39
they pay it instead of paying now you

27:42
know we're in if you if you broke down

27:44
energy and and you're breaking down a

27:46
couple other ways but the two things

27:48
that I want to talk hear your expertise

27:51
on is obviously fossil fuel which

27:53
everyone some people hate and some

27:56
people love and then green energy that

27:59
whole argument how is that how is that

28:02
dovetailing into the debt okay

28:06
the only way to pay off or pay down the

28:09
debt as I said is to get more productive

28:11
the only way to get more productive is

28:13
to increase the availability and

28:16
affordability of energy there is no

28:20
increasingly affordable energy and the

28:23
amount of energy on the planet per

28:25
person is not increasing it's actually

28:28
declining so we're going the wrong way

28:30
on it fossil fuels are becoming scarcer

28:34
now that doesn't mean they're going to

28:36
run out next week or next year or even

28:37
in two decades but they're getting

28:40
harder to replace look at it this way

28:43
look at what's called the energy return

28:46
on energy invested

28:49
e-r-e-o-i when we first discovered oil

28:52
we could generate 100 barrels of new oil

28:55
by expending the energy in one barrel of

28:58
oil today we only can find four barrels

29:03
of oil

29:04
with the expenditure of energy in a

29:06
single barrel so we had tremendous

29:09
energy leverage a hundred years ago and

29:13
we're having very declining energy

29:15
leverage today but we hear about these

29:18
these oil fields in in the Middle East

29:21
and oilfields and F and Alaska and all

29:25
of this stuff and we're led to believe

29:27
depending on what Newsela you're

29:30
watching is that there's infinite amount

29:33
of reserves and fossil fuels available

29:35
we just don't have the gumption or

29:36
political fortitude to go get it is that

29:39
true or false It's a combination

29:42
the the total amount of recoverable oil

29:45
in the world

29:47
is roughly equal to the amount of oil

29:50
we've already taken out of the world

29:52
so we've already used up half of it but

29:54
the half we've used up has been the what

29:57
I call the easy oil the oil that was

30:00
generated when we had one barrel of oil

30:02
could find a hundred or one for the

30:05
non-fracking oil right well that's an

30:09
example

30:10
um you know the oil from Saudi Arabia is

30:12
only 965 feet below the desert in order

30:15
to get a barrel of oil uh out of the

30:18
Gulf of Mexico look what the Deep

30:20
Horizon had to do they had to drill 18

30:23
000 feet down including 10 000 feet into

30:26
the crust of the earth to find the oil

30:30
965 feet is that what you said yeah it's

30:33
only it's it's roughly a thousand feet

30:35
under the desert wow now one of the

30:38
things you have to remember about Saudi

30:39
Arabia is that they have one giant oil

30:43
field in that country it's called the

30:44
gawar

30:46
and the guar started producing in 1965

30:50
in earnest

30:54
um and at that time they said they had

30:56
uh I forget the exact number but it was

31:00
in the billions and billions and

31:01
billions of barrels of oil

31:04
well the Saudi oil Ministry today when

31:08
they're asked how much oil is left in

31:11
the guar they'll give you the same

31:13
number well you can't have the same

31:15
number

31:16
if we've been taking it out for 50 plus

31:20
years

31:21
uh and one of the ways that they're

31:24
using to be able to keep their uh

31:27
pumping going their production is

31:29
they're sucking in seawater from the

31:31
Persian Gulf and using it to uh get

31:34
underneath so if the guar was this thick

31:37
he's holding his hands he's holding his

31:39
hand about six inches apart for the

31:41
people on the podcast right and now it's

31:44
maybe two inches apart

31:46
because the rest of it is sea water

31:48
underneath with the oil sitting on top

31:51
now the same thing is true not

31:53
necessarily the same methodology but

31:55
there's a giant field in Mexico it's

31:57
called the chanterelle field that's

31:59
almost uh 80 depleted

32:03
now most let me stop you Jay you're a

32:06
president I just voted for you I'm vice

32:08
president of course just in case

32:09
something happens to you but you're a

32:11
president

32:13
um boy would that be a fun ticket anyway

32:16
um

32:16
what do you do

32:18
what do you do right now to solve the

32:21
debt energy

32:23
conundrum and connection

32:25
well the first thing you have to do is

32:27
educate people on why it's important

32:29
that our Focus be not on uh welfare

32:33
Warfare state but on energy dominance

32:36
and good luck that's like showing

32:38
paintings to blind people let's just say

32:40
you can't

32:41
I can trust you that that would work

32:43
because everybody would make money

32:46
everybody in the welfare Warfare state

32:49
would make money because there are ways

32:52
to convert our Energy System

32:55
to A system that will please everybody

32:58
how is that tell us how you're going to

33:00
do it president zawatski

33:02
um we're going to adopt What's called

33:04
the hydrogen economy

33:06
now hydrogen is what fuels the sun now

33:11
I'm not talking about nuclear power up

33:13
in up in the sun hydrogen is converted

33:15
to helium and it is an exothermic

33:17
reaction and we get light and heat and

33:20
it you know keeps us warm and keeps us

33:22
light I'm not I'm not suggesting nuclear

33:24
power too many people are opposed to

33:26
nuclear power a lot of people talk about

33:28
nuclear fusion eventually that's not

33:31
going to happen anytime in the next 40

33:33
to 60 years I agree but we have a

33:35
technology

33:37
um that exists right now and we have all

33:40
of the delivery Technologies necessary

33:42
to convert all of our fossil fuel use

33:47
and we use fossil fuels obviously for

33:49
transportation and we use it for heating

33:52
and we use it for electricity production

33:55
uh most of the fossil fuel we use today

33:58
is natural gas uh a lot of it is oil for

34:03
transportation and then we use a lot of

34:05
coal for uh generating electricity

34:08
you're saying you said hydrogen right

34:10
yes I'm just letting you know what we

34:11
currently use

34:13
most of the electricity most of the mode

34:16
of power in the country uh come from one

34:19
or the other of the following

34:21
now very little bit of it comes from uh

34:24
Renewables you know wind and solar

34:27
or biomass but there is a completely

34:31
different technology and we already have

34:33
it

34:34
and it's called the electrolysis of

34:38
water

34:39
water is made of two elements hydrogen

34:42
and oxygen H2O sure and if you generate

34:46
uh electricity let's say there's a giant

34:50
wind turbine and it's making electricity

34:54
if you take that electric current and

34:57
put it into a bucket of water

35:00
at the anode and the cathode

35:02
each gas comes up at one of them the

35:05
hydrogen at the other the oxygen you

35:08
collect that hydrogen and hydrogen Burns

35:12
just like natural gas what is natural

35:15
gas it's one carbon surrounded by four

35:18
hydrogens CH4 methane hydrogen has no

35:22
carbon which means that if you burn

35:25
hydrogen and all burning is is rapid

35:28
oxidation

35:30
when hydrogen is combined with oxygen

35:33
it's an exothermic reaction in fact we

35:36
have a name for it

35:37
called Rocket Fuel we know it works it

35:41
can create a tremendous amount of power

35:44
well if you burn the hydrogen instead of

35:48
methane in a gas-fired electric utility

35:53
plant you will be able to generate just

35:56
as much heat which will generate just as

35:59
much steam okay considerates the

36:01
electricity but why aren't we doing that

36:04
you're telling me it's it's there it's a

36:07
it's a because nobody has figured out

36:10
except for me

36:13
how to generate sufficient amount of

36:17
electric power

36:19
totally without carbon

36:22
to uh have enough hydrogen to supply all

36:28
of the transportation

36:30
Heating and electricity needs so how do

36:33
we do that President zawaski without you

36:36
getting shot by the conspiracy theorists

36:38
and people that you're allegedly taking

36:40
money from well actually I'm not taking

36:42
money from them I know that I said

36:44
allegedly right well let me tell you who

36:46
would participate in this

36:49
we have to create a Consortium of

36:52
participants the same Consortium that

36:55
now exists to promote and use fossil

36:58
fuels

37:00
who are they they're the oil companies

37:02
they are the pipeline companies they are

37:05
the utility companies

37:07
if you were to go to them and show them

37:10
on paper

37:12
present to them

37:13
a snake checked model

37:17
of how this works and we're going to

37:20
create uh I've got to interrupt you I

37:22
mean you're you're smart as heck but you

37:25
can't be the only one that's thought of

37:27
this

37:28
uh there are a number of players who are

37:33
beginning to make investments in what

37:36
are called Blue hydrogen blue hydrogen

37:39
is made of natural gas and then they

37:43
capture the carbon and sequester it

37:46
underground we have a lot of CH4 a lot

37:49
of methane for example there's a company

37:51
called eqt it's the largest gas uh

37:57
production company in the eastern United

38:00
States they operate in the uh Marcellus

38:03
Shale in Pennsylvania West Virginia and

38:06
East uh Eastern Ohio

38:08
uh and it's the most prolific producing

38:12
of gas right now the most prolific

38:14
producing asset of gas right now they

38:17
are taking a portion of their gas and

38:19
they're converting it to uh hydrogen

38:22
through the blue hydrogen method means

38:24
that they heat up the CH4 and uh they

38:29
take the CO2 created they sequester it

38:32
and then they have a stream of hydrogen

38:34
and that stream of hydrogen can be used

38:36
currently mostly in steel making so so

38:39
getting back into the lane of of debt

38:42
and energy is

38:44
what you're saying is not be not be a

38:47
better fossil fuel producer is to

38:49
completely flip and pivot and go to a

38:52
different direction which will then make

38:54
energy cost less which will then make

38:57
everyone more productive which will then

38:59
lessen the debt if we can keep our

39:02
politicians from spending the excess

39:04
right in a nutshell what you just said

39:07
is true but it's not an off or on

39:09
natural gas is cleaner than coal natural

39:13
gas can also be converted to Fuels for

39:17
Motive Power you can make gasoline and

39:20
diesel fuel and jet fuel out of natural

39:23
gas we have a lot of it we have maybe a

39:27
hundred years supply of natural gas

39:29
uh in the United States let's spend a

39:33
little bit of time on why this isn't

39:37
why is why are most of my podcast

39:39
listeners going huh that makes sense why

39:41
aren't we doing it why are we doing it

39:43
who's who's in because there's nobody

39:46
who is spearheading it and it will cost

39:49
trillions of dollars because you have to

39:52
find a spot in the United States where

39:57
there is enough wind and enough water

40:00
because what are the two things you need

40:02
to make electricity from water you need

40:06
wind power to turn the turbines which

40:08
create the electricity and enough fresh

40:11
water to convert into a stream of

40:13
hydrogen gas the rest is just details

40:16
because then you can compress that gas

40:18
put it on liquid hydrogen carrier ships

40:22
like liquid natural gas ships and bring

40:25
them to the coast feed them into the

40:27
woodlands with the environmental wackos

40:29
go nuts on this or would they embrace it

40:31
well if you're not what's the current

40:34
green religion CO2 right

40:36
well if your power source is green

40:40
meaning turbines

40:42
wind power and the fuel that you're

40:46
creating from water

40:48
only turns back into water with not a

40:52
single drop of carbon dioxide created

40:55
they would become supporters of this

41:01
why isn't the exons of the world

41:04
pivoting to this or are they just living

41:06
quarter to quarter on stock prices and

41:09
just staying in their Lane is is there a

41:12
reason that no one is pivoted to this

41:14
because this is you know again

41:18
it's common sense you you're bringing it

41:21
out but you're not the first person to

41:22
probably think of it I'm trying to

41:24
figure out why

41:25
because if it's if it's profitable then

41:28
people are going to go there if people

41:29
can make money people are going to go

41:31
there they could care less times it's a

41:33
long lead time it's a 10-year to 20 year

41:36
process I think you just I think you

41:39
just answered the question

41:41
right there we have the we have the

41:43
attention span in this country of a gnat

41:47
um you know crisis has a way of changing

41:49
people's Focus we are in crisis that is

41:53
true crisis and if let me tell you what

41:56
it would take to do this

41:58
I have a model but it's not as

42:01
sophisticated enough to generate uh

42:04
people wanting to throw billions of

42:07
dollars at it I've got to get people at

42:10
MIT or Stanford or California Institute

42:13
of Technology to create the mathematical

42:16
model for this but I know one thing for

42:18
sure that every piece of this energy

42:22
transition is extant it exists

42:26
technology we don't have to invent

42:27
anything new

42:29
I guess we just have to commit the

42:31
capital and commit the time is what

42:33
you're saying bring them together and

42:35
then you have to have one

42:38
glistening public face to the entire

42:42
thing to be the person why hasn't other

42:46
countries another you know America's

42:48
America but why hasn't other countries

42:50
thought of doing this or done this or

42:53
are they doing this there is one country

42:56
in the world who has already begun this

43:00
process

43:01
it's called Germany and the cut and the

43:04
company there who's doing it is Siemens

43:06
they have established in the North Sea

43:09
which is very windy you see you have to

43:13
you have to locate these turbines in a

43:15
place where there's forever wind and

43:17
forever water well the North Sea uh has

43:20
forever wind except it doesn't have

43:22
fresh water

43:24
so they have to go through the step of

43:27
desalinating the water first and then

43:29
running it through their electrolysis

43:31
machines so they have already uh built a

43:36
demonstration product uh project in the

43:38
North Sea it's very small

43:40
uh and there are other people around the

43:43
world who are um converting wind into

43:46
hydrogen but on a small scale

43:49
uh what we need to do in this country is

43:52
to establish a demonstration project

43:54
which shows from beginning throughput to

43:58
the end

43:59
once we do that and people can measure

44:01
it and see that it works then it's just

44:03
a matter of scaling it up remember the

44:06
first are people who uh drilled for oil

44:10
everybody laughed at them say what are

44:12
you going to do with that there's no use

44:13
for that and for a long time there

44:16
wasn't much use for oil what what

44:18
happens when it what happens if we don't

44:20
do this

44:21
Venezuela

44:25
one word answer we become Venezuela

44:28
because how are we going to service the

44:32
debt particularly now that interest

44:34
rates have gone literally from 0.25

44:37
right to a terminal rate of five percent

44:40
if you look at the two-year note yields

44:42
today it's inverted yeah it's crazy yeah

44:45
I know so as every

44:47
a dollar of uh excuse me one additional

44:50
one percent increase in the rates

44:52
uh cost the federal government billions

44:56
and billions of dollars in interest and

44:59
interest payments are non-productive but

45:01
do we do we have the 10 to 20 am I I'm

45:04
assuming your answer we don't have a

45:05
choice but 10 to 20 years to to to Pivot

45:09
is that enough time

45:11
if we set our minds to it in 2023 by

45:16
2033 we will begin to have a sufficient

45:21
amount of hydrogen produced distributed

45:24
and used so that uh it the whole system

45:29
can be converted over and that and the

45:33
nice thing about this is it requires no

45:36
subsidies how do you get the media on

45:39
board because you and I both know they

45:40
could drive that train or drive it off

45:42
the track like I said earlier we have to

45:44
have one glistening personality who is

45:47
I'm busy Jay come on I'm Stan the

45:50
annuity man and I can't it can't I don't

45:52
want to you're not young enough we need

45:55
to find something come on who's younger

45:57
and prettier even than you okay what

46:00
what the heck yeah I do have a face for

46:02
radio there's no doubt so what you're

46:04
saying to me is we need a young Tom

46:07
Cruise to push this

46:09
or Brad Pitt or a combination thereof

46:12
well the problem with either one of

46:14
those is that I don't necessarily think

46:16
that they could answer technical

46:18
questions I'm going on I'm no I know

46:21
that I'm just I'm going on right if you

46:24
could get somebody from a female with

46:27
female two now I'm not being sexist

46:29
hello and I I have actually a candidate

46:31
for that is it you no no no that's a

46:35
great hat he has a save America hat with

46:38
save comma America who are you thinking

46:41
uh I believe that the perfect person to

46:44
do this who's proven herself to be

46:46
incredibly Savvy and great in front of a

46:49
camera because it was her job for 25

46:52
years

46:53
Perry link

46:55
you've lost your mind they would destroy

46:58
her

47:00
um the media I could care less about her

47:02
politics I'm telling you that's damaged

47:04
goods I thought you were going to come

47:06
to me with movies who's the I don't know

47:09
I don't keep a movie stars who's the

47:11
most attractive movie star period of

47:14
female or male that's who you pick well

47:17
they don't have the uh the brain power

47:19
to be able to answer questions

47:22
so you're looking for the perfect person

47:24
Jay come on now

47:26
well that's what you're going to need to

47:28
be the front person for this

47:30
uh once you get the right front person

47:33
uh and the videos started

47:36
[Music]

47:38
because Barack Obama is the per is is

47:40
the is the personality

47:43
that when is he when he was young that

47:46
could have could have pulled that off I

47:48
mean I didn't vote for him but I mean I

47:50
think he's a nice person and he's that

47:52
he's that

47:53
figure that is everyone kind of

47:56
gravitated to on both sides some people

47:59
hated him but you and I both know he

48:01
could have pulled that off right right

48:03
but not anymore he's too old uh you

48:05
you're going to need somebody who is

48:07
available today who's going to be able

48:09
to be the face of this for the next 10

48:11
to 15 years

48:13
and it's going to be and stay

48:14
disciplined Jay I mean

48:16
I like the idea obviously but you know

48:19
there's so many hurdles Consortium

48:22
smart attractive questing answering

48:26
politicians you ask me how are we going

48:28
to save America and the only way to save

48:30
America is to re-energize America and

48:32
the only way to do it is with hydrogen

48:34
because it solves all the problems that

48:36
we have

48:37
it those who believe in man-made global

48:40
warming because of carbon dioxide will

48:42
say oh that doesn't create any carbon

48:44
dioxide that's a good idea it's just

48:47
water back to water and other people

48:49
will say it's done without subsidies so

48:52
it's not costing the taxpayer anything

48:55
and it's going to say to people who want

48:57
to invest in it Pension funds will

48:59
invest in it people who buy stock in

49:02
that's true all of these energy

49:04
companies I mean when you see the upside

49:06
benefit think about how much do we spend

49:08
on fossil fuel coal and all the rest

49:11
today I know every year

49:14
foreign

49:19
excited Jay until we

49:22
we came up with a point that we need a a

49:25
young vibrant very high IQ so so we need

49:29
to we need to be trolling the top

49:32
universities for a model male or female

49:35
that can do this right

49:38
330 million people in America I think we

49:42
could line them up and pick the top

49:44
thousand and then have screen tests for

49:46
all of them I mean that's the least of

49:49
our problem finding the right person oh

49:51
my gosh that's the hardest part oh I

49:53
don't think so at all convincing

49:56
hard-nosed business people to get in the

49:59
game that's the hardest part that's true

50:01
that's like that's like showing payments

50:04
to blind people there though that's

50:05
tough to get them off go but I I do

50:07
think this conversation is important

50:09
because

50:11
we can't keep just doing what we're

50:14
doing

50:15
you know we can't keep thinking you know

50:18
it's going to be okay

50:19
you know I can't you know as a as as a

50:22
father of of two 20-somethings I can't

50:25
say well it's their problem you know at

50:28
some point in time like you said chaos

50:30
will motivate

50:32
um I just don't know what kind of chaos

50:35
it will take to motivated us I guess I

50:38
don't know if people just heard you say

50:39
when I said what's going to happen you

50:41
said Argentina I'm not sure people get

50:43
that Venezuela Argentina I'm sorry I'm

50:46
sorry Venezuela I Venezuela no no I'm

50:49
sorry my apologies

50:52
my apologies to Argentina I was I was

50:55
thinking soccer I'm sorry

50:57
um Venezuela when you answered Venezuela

51:01
I'm not sure many people went oh man

51:04
that's horrific I don't think they get

51:05
that either oh I'd be surprised if uh

51:08
more than 60 70 didn't understand it

51:12
people know what's going on in Venezuela

51:14
they absolutely do and you do know that

51:17
60 of the public has less than 400 in

51:20
the checking account right I think it's

51:22
actually higher than that now now okay I

51:24
was being not I was being nice so you're

51:25
telling me that those people who are

51:28
trying to make it happen and live day to

51:30
day look at Venezuela and go man I have

51:32
we don't turn into that yeah I think

51:34
they are because yeah I think people in

51:38
today's world even though it's getting

51:40
hard they start to listen more

51:44
when you are hurting you want to know

51:47
why am I hurting why am I getting a

51:52
three percent raise but my groceries of

51:55
course costing me 13 more

51:58
why am I having to delay my retirement

52:03
for an extra three years there's going

52:05
to be a reason so when people want to

52:08
know why they then tune into

52:11
they hear about the debt pile they hear

52:15
about uh they know what the cost of

52:18
gasoline and heating oil is you know at

52:21
the pump and when they uh come and bring

52:23
the big truck and fill your tank up with

52:25
heating oil they know what their utility

52:27
bills are yeah and they know that they

52:30
haven't had a real after inflation raise

52:34
in 22 months you have more faith in the

52:38
country I'm just an old southern

52:40
curmudgeon uh and the country caring and

52:44
or understanding the complexities of

52:47
this of what you're saying it's not

52:48
complex but it is self-interest

52:52
when people realize that there is a way

52:55
out of the morass and somebody can

52:58
present it in bite-sized chunks and say

53:01
first we do a then we do B then we do c

53:03
they'll say oh that's good let's try

53:07
that

53:08
and you've got to get the Senate you got

53:10
to get the you know how you got to get

53:12
the media

53:14
the media will do whatever you know is

53:17
in Vogue at the time if they see people

53:20
flocking to something that's green and

53:23
will rebuild the country even they will

53:26
get on board with it

53:29
if they don't if you're right Stan then

53:33
make plans to move to Uruguay in the

53:35
next six months Uruguay why Uruguay why

53:38
not Argentina because we've ruled out

53:40
Venezuela right well Uruguay is uh one

53:44
country probably the only country in the

53:46
world that uh is almost isolated both

53:51
from imports and exports they imp they

53:54
only import 10 and they export 10 they

53:57
produce all their own food they produce

53:59
most of their you know small

54:01
manufactured items the only thing they

54:03
bring in are cars and TVs things like

54:05
that as long as they have a live very

54:07
good live music scene Jay I'm there

54:09
because I gotta hear my electric guitars

54:11
and and maybe I'll bring my band down

54:13
there to uh in Uruguay is a big you know

54:18
Capital City there you go well Jay it's

54:22
always fun this isn't the last time

54:23
you're going to be here I can't wait to

54:25
because Jay this is a great now I'll

54:27
close with this and I appreciate

54:28
everybody joining us on the podcast and

54:30
and fun with the annuities YouTube

54:32
platform but JL sent me things and say I

54:35
think this might be interesting and I

54:37
can't wait to see his next ones that

54:39
he'll send me because his brain is on

54:42
overdrive and that's why I love him

54:43
that's reason the people love him I

54:45
guarantee you just are gonna walk away

54:47
from this podcast going wow wow I mean

54:50
this is a wow moment but that's the

54:53
reason we bring Jay on so for everyone

54:55
out there hey by the way Jay last thing

54:58
I do I forgot to do this the mic drop

55:01
bike drop moment

55:03
j54321 go

55:06
uh everything I've said to you today

55:08
Stan

55:09
um leads to one simple conclusion for

55:12
those who are in retirement about to

55:15
retire or trying to spell retirement as

55:18
Stan the annuity man always says and

55:21
because of the uncertainty you have to

55:24
use the barbell approach to protect

55:27
yourself your purchasing power and your

55:30
current income we went over it last time

55:32
they can go back and look at the

55:33
previous thing on the barbell approach

55:35
but the most important component of the

55:39
cash side of that is getting three to

55:43
five year migas at this point because

55:46
they're going to be able to lock in what

55:48
do they at now stand five plus yeah they

55:51
sure are okay now that's not meeting the

55:55
rate of uh inflation necessarily but it

55:58
ain't zero it's not a bank account and

56:01
it's not subject to the fdic's potential

56:04
demise if there is a problem

56:06
uh so next to treasuries migas are the

56:09
best thing because the insurance

56:10
companies are better capitalized than

56:13
the banks are

56:14
so mine might drop moment for you you

56:16
said is and you know like I said last

56:19
time

56:20
I got nothing to do with that industry

56:22
you didn't even know I was gonna say

56:25
that but I've done a study of this and I

56:27
believe that to be true I've got a new

56:30
commercial for Jay it's that old beer

56:32
commercial Jay zawatski keep thinking my

56:35
friends keep thinking there you go Jason

56:38
Watsky this is one of the smartest dudes

56:41
on the planet and I appreciate you being

56:42
here I appreciate every single person

56:44
listening to all the on with with us on

56:48
the podcast platforms and the YouTube

56:49
channel fun with annuities I'll see you

56:51
next time

56:52
foreign

56:56
[Music]