Welcome to Motley Fool Money, a very special Sunday morning mailbag edition. Not only that, it's the middle of the long weekend mailbag edition, which is just a little bit sweeter, I reckon. If you're a shipwrecking, you're working, my apologies. If you're not, and look, the financial market's not a holiday.
So, tomorrow is a day off for me, a day off for this man, Andrew Rampage. I mean, Stromien never sleeps. Money never sleeps. It's 24-7 people, so maybe he's going to just keep working right through.
I wouldn't be at all surprised. That's his commitment, his conviction, his work ethic. Stromien doesn't just run itself, doesn't it, Andrew? It doesn't.
But I am a big believer in working smarter, as opposed to working harder. So let's put it in that category. I mean, it's kind of crazy, right? Like, get serious like that.
From the employee's point, he was like, I don't want to give this stuff. I shouldn't. Just deliver. You serve a purpose here.
I need you for something. And if you do that, I don't care how you do it, right? It's a work from home thing. We pay for input and output.
It was mad. I won't mention they were largely corporate. And there was plenty of times, this is years ago, where you would just get your stuff done early, but you'd still hang around for appearances. Because if you left, it's like, well, it's fine.
Why wouldn't I leave? Well, sometimes we've all got to work a little bit harder. It feels like sometimes it's every day. And also, you do realize, I can see other people's screens here.
Most people are just playing solitaire to look busy rather than actually be. Just this misalignment of incentives is just crazy, right? It's like, well, it should just be, wow, he or she is so efficient that they get their work done half the time. I got your upbook, fantastic quality.
I know it's 100%. That person to raise, give them a promotion. Anyway, crazy stuff. Let's move on now to what we're here for, which is to answer some of our listeners' questions.
And to start off, Gordon sends an email. This is one of those ones we've talked about before. So you can kind of just rehash a little bit. Maybe if you can change.
Dear Scott and Rams, Gordon, I tip the hat and bend the proverbial knee. Thank you. I have a proverbial about it, Gordon. I literally need those things to happen.
Video evidence is... Maybe this is your own. We'll see how we go. I have an ethical investing conundrum to pose for the lords of the pop machine.
My question is, you've spoken previously that ethical investing in secondary markets, those companies have already listed on the ASX, is generally not a consideration for yourselves. I'm not sure if that's true for you. I just want to stop there. I don't have...
I couldn't really apply it in a way to make it, but I don't really... Yeah, okay, true, cool. I'll just fill that out a little bit. Where I rail against...
I rail against... There's a lot of things that sort of purport to be ethical, but are anything but, right? So there is a genuine... And the other problem with it is I have is only that it's just subjective.
And so it's not that I would... I invest in a way that aligns with my ethics, and I have no problem with other people doing it. I've got a massive problem with some consultant telling me what is ethical and what isn't, you know, and forcing me to buy some company that's just basically doing greenwashing or some, like, performative nonsense to make themselves look ethical, which I... All of that stuff I'm very much against.
But if I do, personally, invest in a way that helps me sleep at night. I don't really have a lens of such... As I probably wouldn't buy weapons micro, I don't suspect. So you do?
Yeah, I guess I'm just saying more broadly than that. There's probably... There's probably something to do, but not as a... I don't have an ethical investing approach that is considered, although I think I wouldn't invest in companies, but it's a different way.
You don't do it in the framework as is handed on from up high. That's not... This is how you must... This is ethical investing, and therefore, this is how you must do it.
I hate people taking major problems with gambles, but I would buy shares in crown and resort to the right price. I wouldn't do the safe for gun makers. So it's a personal choice. Yeah, yeah.
Anyway, I've got to say, since the IPO funding has already been complete, and all we are doing is moving money from one secondary owner to the next, sure, it might have some indirect impacts from a share price perspective, but it does not have a direct impact on the funding or operations of the business, regardless of the moral sense of standing, such as mining companies or tobacco, for instance. Yes, that's the... I'll push back on that a little bit, too. Yeah.
Well, it does impact it, because it impacts the share price, and the share price impacts the cost of capital. So, for example, let's say that, for whatever reason, the world decided that tobacco companies were totally cool. And I'm not saying... This is always, you know, not always, but very largely a personal thing.
Let's go with a well-trodden example. And as a result of that, it traded much more in line with companies of similar size and profitability. They don't. They traded a very steep discount because of the ethics that are associated with it, which means that if they want to raise money by issuing shares, they get far less bang for their buck, which means it's harder for them to expand and do more of the things that they do.
So it's not... I'm not saying it's a massive factor. I mean, it's the only thing that matters. But it is...
I'm probably being just technically right, which we all know is the best kind of right. Physically right, somebody else. Physically right. It's also a very good way of being right.
Right? And I'm just saying, it does have an impact. We can debate all day long the size of the impact, but it does have an impact, because it impacts the cost of capital. Yeah.
Only if you want to raise money. Most companies do, or at least want that potential too, right? Yeah, I don't know. I think that's a slight longer book.
Can't have the potential too, I will agree. We can obviously do that for sure. Coca-Cola has huge debt and borrowing. Why?
Cash cow. But they haven't raised equity capital. Yeah, I bet you they would. I bet you they would if the share price made it a far more attractive source of funding.
So when you need capital, you go, well, I've got debt or equity, which is a better deal, right? And at a price, if their shares are at P of 4 million, it's like, I'm going to mention my share and raise $1 million. It's like, you know. I just make an argument that it does have an impact if you're in that situation, which is also technically correct.
This is what I'm thinking, though, says Gordon. Would I be comfortable receiving personal financial gain from a business, knowing what's wrong on ethical means, regardless of that direct impact? Where do we draw the line between harm being inevitable? I'm not sure if the, if not asked, then someone else would do it anyway.
Mentality always works here, from a moral standpoint. Let's play the full experiment. Would you be comfortable buying a large stake on the secondary market and a company known for operating blood diamond mines? Now, the items you receive come directly from the bloodied hands of slave labour.
This is technically a secondary sale, and you could put the blood money to use, counteract the negative effects. But does anyone really do that in real life, especially for ASX-listed companies? What if we were outside an investing context? During the sack of Constance, it was 12.04, not my mastermind, so I'll take your view on it.
The view was once that balls were breached. If I didn't start looting, someone else would do it anyway. Why wouldn't I grab a sack and start looting if someone else was going to do it, regardless? Would I be comfortable being that looser?
My answer would be no. So I'll let me hear your thoughts on how you reconcile some of these conundrums and where you might draw that line. Thanks, Gordon. I mean, it is personal.
It's not for me, Gordon, to tell you where you should draw the line, and I don't want anyone telling me where I should draw the line. How do you draw your line, though? How do you think that through? It's hard because you, I think that some of these things, the debate belongs more in the political sphere than the investing sphere.
For example, the slave labor one, right? Like, if slavery is legal, and there are companies taking advantage of that, I can kind of have my little protest vote by not investing in it, but I just would rather that there would be a political solution to it. I would rather our leaders basically say, no, you can't have slaves. You know, I tend to think that...
I think you're not going to be a legal slave one, though. Yeah, I'm just trying to... Yeah, like... Okay, I want to go with that as a specific example.
For me, no. No, I wouldn't do it. I wouldn't do it because I am indirectly increasing, in no matter how small a way, that company's capacity to expand its operations by being a... I want them to win subconsciously.
I'm investing in them. I'm only going to do well as an investor if you do well, and you do well probably involves more exploitation. So it's just sort of like... I just don't want that incentive there for me, and I don't want to play a small role in enabling you to do more.
But that's just me. But I just feel as though the problem is if we're at a point in society where these horrible ills, the only remedy is to rely on the good nature of investing. We have lost our way, right? It's not that these are important discussions, but these are discussions that I think, to a large degree, require a legal and political answer.
I tend to... I've said it a million times in the pod. I like the idea of where government plays a really important role is to set the playing field, and then go, go for it. Here are the rules.
Can't have slaves. Can't send kids down the line. Whatever it is, you can think of a list of whatever we feel is appropriate as a society. But as long as you operate within that framework, throw your boots.
I think that's how I do it. I'll just speak to the fire a little bit. Tobacco is legal. Yeah.
So is there... I don't disagree with you in a sense. I deal with that, though. If legality is relied...
Legality is always required for moralian ethics to exist, and they're incitful from each other, then anything legal is moral, I don't want to. But I just don't want to be reliant on the morals of investors who have incentives in many ways to sort of want these things. It just feels like a poor solution. So we can have that discussion as a community.
It's like, should we just ban tobacco? We've seen how that's worked out in certain fields. We're not banning it, but we're not banning it. We're not banning it.
We're not banning it. We're not banning it. We're not banning it. I shouldn't say too much.
You just divide people. But I'm very strongly in favor of vastly reducing drug laws. Not because I want to see a junkie on every corner, and I think it'd be great if my kids could get easy access to drugs. I said you were fair in another conversation.
I feel as though most things should be evidence-based. So if we can look at data, and people have been gathering a lot of data and doing a lot of analysis on this, it's like, what is the goal here? Forget about the specific goal. The goal is harm minimization.
We want less people dealing in drugs, taking drugs, getting hurt by drugs, family, all the way. Okay, we're all on the same page. Great. Oh, it turns out that we've tried all these ways.
We've tried prohibition, just goes on the ground, creates this huge black market, promotes organized crime, and people still take drugs and actually there's more harm than ever. Or we do these things. We have legalized injection rooms. We decriminalize a lot of this stuff.
We put support mechanisms in place and the level of harm goes down. Now, one is objectively more worthwhile and effective, right? So it's just like, let's do that. Let's do that.
Oh, but it feels wrong. I know. That's what's so interesting about it. It's very counterintuitive.
You made the point off air. It's like, so is investing. Or the intuitive. If you invest purely on your intuition, you're going to lose all your money.
If you fight against all your emotional urges, you'll probably do pretty well, right? Do you want to make money or do you want to do the thing that feels good? So I mean, I think it's a great question. All I would say is this.
My high-level view is if you've got a problem, some of these problems need to be addressed within a different realm. If they are not addressed, to your point, Scott, if they're not addressed there and for whatever reason, there are certain things that are legal, if it doesn't make you comfortable, don't invest in it. No, I think that's right. I want my thoughts to the way I think about it, Gordon.
I will give you a very concrete example. I own shares in Sopats. We are. Sopats owns a pressure of the majority stake or a large minority stake of New Hope Corporation.
They are a coal miner. I hate the fact that we're still burning coal when other options are valid to us to minimize the impact on climate change. I think that climate change is real. I think the scientists are right.
If you don't agree, that's up to you. I wish we would stop burning coal. You're letting me wrong, is that what you're saying? No, I'm just saying.
I have a very clear view based on the available science and the experts that do this into it. The experts usually be worth listening to. These days, everyone's next to the Cornflakes packet and you have to do your own research. You don't.
The scientists get it right. So there you go. I'm just going to show you who's not on board with climate science. I would love New Hope to not mine any more coal.
I would love Australia not mining more coal like you want to burn any more coal. Why have I... If they sold, I would be happier. Why?
Because it would be better. Am I unhappy enough to just not own softpacks as a result? No. So it's complicated, right?
I don't own you have to directly, would I? Probably, yeah. Despite all that. And sometimes you'll be able to keep those two things in your head at the same time.
Even from Ram's point of do I want to decide you're more successful than I've done in the shares? Maybe. Is that making a difference? No.
I mean, to my mind, in the real world, my shareholder has a zero impact. Now, as a group, if we all agree, maybe you start getting somewhere. But the other thing, by the way, is that there's enough private capital out there to fund anything worth funding. And frankly, my idea for the best in part has been, let's say we all say we want a woodside to drill oil.
So I sell my shares to his shares. Who buys them? People don't care. By definition, the passage of share ownership goes from those who care to those who don't give us stuff.
And does that make it more or less likely that woodside can get into more drilling? You know, I don't know. If there's a shortage of capital, right, to your point, if they can't raise equity funding, then yeah, we've got to that point. We know with the banks, for example, guns, timber, and intimes, speaking of controversial.
The banks decide not to do it because of public pressure from consumers. And I've said forever, I think our consumer power is a million times stronger than our investing power for all those reasons. Because someone's going to run the shares that don't buy the company's products or I pressure the company not to do business with someone else who's doing a bad thing. That's where the value comes.
And that's why Nike is cutting down on switch shops. Why not? Because shareholders want it to, not because it wants to be a good corporate system. The CEO is desperately keen on the issue.
I'm sure they would say they are. I'm sure they probably are. But it comes down to people saying, don't deal with Nike because they have. I'm not saying they have now.
In the past, the pressure was don't deal with Nike because they use switch shops. Okay, well, that changed. It didn't change because of the investment side. It changed because of the RAM's point.
The community standards change. And whether it's legislation or pressure, you know, if you buy a white box, whatever it is, that works. To your question about, where do you draw the line? I am not going to say, as I said before, if I knew a company I had shares and I was doing it, I would probably, I would sell the shares.
Okay, so there is a line for all of this. And the question is, and this is the thing, I think we probably shouldn't try to be too black and white, even with ourselves. Just recognise that we're all, you know, flawed in different ways. You know, Woolies sell secrets over the counter.
Do you not buy shares and Woolies? Some of the companies that banks lend money to, you know, doing questionable things with pay their lending. Do you not do that? Every company, other than maybe two or three, you could find a spot.
To the point of, you know, well, hang on, someone's overpays their CEO, and you've got shareholders, you've got charity or something else. Where do you draw that line? And that's the RAM's point. You have to draw your own line and decide where you are comfortable.
So I'm not saying, if I have made a too broad point in the past and apply that would never matter, then I'll take it back and clarify better. But I think logically and rationally, the impact I as an investor have any ethical sense. Despite RAM's absolutely correct, technical, in the best form of thinking, thoughts, my selling doesn't matter. It just doesn't, right?
And so, if I sell to avoid that stuff, and I realize I have owned the shares, I'm doing it so I can sleep better at night and I'm not going to make any difference. And that's the human, that's the human value, right? So, like, does it actually matter to anybody at all? No.
If I sell my shares to John Smith, I know John owns the shares and John doesn't care about the blood diamonds, so we better or worse off as a society, no different, maybe worse because John actively doesn't care, I can't care. Does it change anything? No. At scale, maybe if it's large enough, maybe if it's important enough, maybe it's enough of an issue, then the fees fall, maybe you can't raise new debt, and maybe that's going to impact some companies sometimes.
So on the edge of the cases, he's absolutely right. I just think the reality of, we feel a certain way, despite the fact that it makes absolutely my opinion, not a united time, but I don't have a real difference. Whether I own shares in WoodSoy or I don't, whether I own shares in New Hope Coil or I don't, whether I own shares in Altria, Philip Morris at the business, no, it doesn't make a difference. I just think it makes us feel better.
That's completely valid, by the way. But even if I didn't own shares in those companies, it wouldn't be because I thought it was going to make a difference. Just because I'm not comfortable going there. And that's different from, my issue with investing, most of your point about the other people around is, people who do it because they think they don't make a difference.
And I think they're kidding themselves and they're being lied to a lot of the time by some fund managers. Hey, well, I was thinking about contributions. I own shares in Australia. I'm just looking at, right now I'm looking at their major findings.
Why? Because I own them because I think people want to invest ethically. Not just that they make a difference. It's not even cynical and hypocritical but I don't think so.
people's, like I say, you're going to have to release something, I don't know, maybe. Yeah, I think it's like shares, right, which do payday lending. I don't even want to put that because I'm just trying to find an example, in fact, there's many examples on here, not for me to sort of inject an ethical judgment on, but one that I know that there would be a reasonable proportion of the population that would say, yes, there is an ethical dimension to that. And this is the problem with it, is that it does require some subjectivity.
What's unethical to some person is completely ethical to another. And I think a lot, it's your point there, sorry, but it's just that you're right. Australian Ethical's genius was calling themselves Australian Ethical. That's what they did, really.
That's why I own shares because I suspect over time all people say I want to invest deeply for reasons I think honestly they feel good. The bit that annoys me is when those sort of businesses, I don't know about Australian Ethical particularly, I'm speaking against my own wealth here if Australian Ethical shares go down, they convey, not Australian Ethical, ethical investors or investing funds in general can convey a sense that you are doing a good thing, you are helping, you are making a difference. And I think that is, if there's a kernel of truth around this point about the education where it doesn't matter, then okay, the vast bulk of it blocks the raise of equity and they're not more ethical than someone else and not having them in the portfolio is not making your ability to do that with Australian Ethical. It's just not.
That's fine. You can do that. I just think when people are sold apart and when they are allowed to believe or encouraged to believe or led to believe that they are making a difference and that's how that's there. The fund management will justify choosing those funds or charging whatever fees.
That's what I have a real issue with. Pepper money is in there as well. G8 education. Oh man, I could go through the list.
Hello to the lawyers of these organisations. Purely illustrative purposes. I don't want a legal fight but I'm sure if I had the resources and time and I cared enough I think I could mount an argument that would stand up and it would be hard to disprove. Let me put this to you, I really do hear what you're saying but I'm going to put your argument to you in a different context which is very much used.
You talk about climate. When climate debate happens in Australia those against any policy that moves us in the direction that I think you would like to see us going in will say, yeah, Australia's only 2% so if we do it it won't make any difference so we shouldn't do anything which is kind of the argument you just gave for whether or not Australia bans coal China's still going to burn coal. So how do you reconcile that? We get an climate policy at some point and a way for investing.
The answer is to my mind if me owning shares if me selling shares with number 2% that's coal being mined by you hope I would sell my shares. So the 2% if there's a genuine reduction in total output which is the 2% equivalent I agree with you by the way people say a lot of times well everyone's 2% get 50% groups together and 100% so let's just screw it up. It's the same as recycling whether or not I chuck my plastic bag just in the red bin instead of the yellow bin they're not going to make any difference I don't suffer I'm not going to do it. But then that goes as a physical change or kind of factual that doesn't happen as a result whether I own new hope coal shares or not doesn't change whether it chooses to ban or not ban coal and burning coal and contributing to fossil fuels so it's the same as I'm small if I had a million new hope coal shares or no new hope I don't think it would change for a second the company's trajectory because they don't need to raise capital they're not going to raise capital it's just not going to you're right in those terms where they have to raise capital it's absolutely the exception I'm 100% agreeing so I'm not disagreeing in the slightest I just think the reality is for 99% of companies on the ASX if you take a view of will you have to raise capital anymore and in fact what to the point the vagaries of share price as I mentioned I'm going to do a spin off now they're not going to the share price in the Superbowl side the last 12 months that just natural volatility is going to be the any impact they have on that if the share price is higher or lower if it's 30% of the time last year or 40% higher is the incrementally impactable yes they've got a capital slightly higher price does it change for a second in the operations higher cost of capital they pay a high interest bill they can raise if they actually can't raise equity to get to that point again this is where the education is right if it's a point of well bugger the equity might be closed to us because our share price is too low then absolutely the investors have won and I have no issue with that I think if you can do that achieve that I think to believe that any other of the edge cases it's going to be a fraction of the ASX if it's a little bit more expensive to raise equity well the bankers win well the shareholders win well something else in the end the company doesn't do less of what it's going to do it's only less of what it's going to do if it can't raise the money and so that is the edge of edge case where I just think it's not meaningfully impactful enough to make it worth it unless you're investing in that one company where your shareholding is or collectively your shareholdings are the deciding factor should we go through a question from Lisa I don't have a question however I would like to claim the title of the most avid woman listener rather simply bend the knee with gratuitous platitudes I'd like to show your other 13 regular listeners how it's done with tangible evidence as a novice share investor I originally started listening to the pod machine in early 2024 whilst renovating a house and I was very quickly hooked on the wealth of information I was learning and the counterbalance to use on many topics Andrew's enlightening yet entertaining rants helped me while away hours of tedious sanding and painting glad you didn't say tedious hours very soon the two weekly podcasts and later three when the stock of the week was published were simply not enough so while waiting for new episodes to come out I started listening in reverse to previous episodes I don't know how that that must feel weird go backwards that's like a world go backwards like a superman fly around the earth and make your time go backwards I love listening to the undertones of the changing economy that speak through your discussions through COVID market dips RBA decisions Andrew never wanted to buy property and later buying a house stop buying selling and rebuying Bitcoin the many timestamp views on stocks and don't at me's it's a bit of a mind-trice jump from the current time to 2021 back again listing in two distinct points in time I listened to 18,025 minutes that's over 300 hours of Motley Fool putting in the top 0.05% of all listeners which says as at the 12th of the 12th of the 25 the year wasn't over when this was released I always love the subtle trolling from Spotify calling you out and the graphic sheet link includes thankfully podcasters love to talk I'm going to get a stretch about us but I can't prove it's not I've since sold the house I was running early 2025 and converted much of the profit from the sales of shares with a small holding of Bitcoin after doing my own research bringing new listeners that are not as familiar as me you haven't mentioned what's strong in it for several weeks now what does it do?
Fool on Lisa crown holder of Motley Fool most prolific woman listener back to 2024-25 that's the question there well thank you Lisa that is really humbling and nice we're an online investment club as you well know Lisa just as well Australia's premier I was thinking about that I don't need to go through the exercise and I very rarely listen back to any of our episodes and if I do it's just to see how much I put my foot in my mouth did I say was that right how did that come out but I'm almost certain that over the time that we've been doing I'm not talking about going back way back to the beginning I'm even sure you can only go back a year or two there'll be things that I've fundamentally changed my view on but I guess I call that out who was it the world is way too complex some old episodes where we were saying you didn't say that before I'd like to wrap that up into a narrative that says I've just evolved and my thinking has deepened I do genuinely hope though that there are not too many things but I hope there are certain things that I look back on in another 10 years time of what we're saying right now that I do cringe a bit because I don't think you're growing otherwise you're learning the world itself is changing and your understanding of the world is hopefully if you're a lifelong learner is always changing as well so I think one it's just a better way of living but two from an investment lens I think that I know I have one about this but I think it's just one of those core skills that you need because dogged stubbornness and you've got to learn from that mistake learn the right mistakes and then apply it again and so if I can sort of frame any pivots and you know I'll put it in that context if possible and give another three four years later there'll be more of them to come so that's for sure are you right that's kind of that you're absolutely right not to give us a rat but the idea of holding somebody I've changed my views over time for exactly the same reasons it's madness to and frankly that's when you stop considering alternatives when you're so sure you're right that's where time to come that's where political teams rather than contested ideas and that kind of garbage so yeah I hope I was wrong a lot in the past based on hopefully I'll tell you a funny story I mentioned you off air I changed my cloud storage before I have a break and I was sort of uploading a bunch of stuff there and I came across some old TV crosses a million years ago and I'd say I couldn't make it 30 seconds in no one because it's always a bit cringy to watch yourself but just the rubbish coming out of my mouth it actually with a little bit of age and hopefully wisdom it's reminded me to be a little bit gentler and understanding of people I think when you see younger because everyone's younger now more and more people are younger and I hear some journal or some financial fund you're saying something well they're 32 cut them some slack let he without sin cast the first rock or in this case let he who has never said something really stupid cast the first insult but yeah I'm still happy with that actually hopefully I don't think I mentioned any names or anything there because they'll recognize hopefully themselves they'll do what I did and they'll look back as an older person and go bad take I'm so glad we were up without social media the first 30 years of my life aren't recording on social media right yes I've got to the kids forever as they say and God knows you're old enough and stupid enough that if you've said something down on the podcast we'll have to own it but the kids deserve a bit of a break I reckon every social media account should be deleted at 25 just for a second you know carry stupid things around after I mean at one point you could at least rely on the sheer volume of data to bury it now you've got AI find everything that Scott said that was dumb from 10 years ago three minutes later his timestamps you know like transcripts I was going to take more than three minutes thanks by the way it was very generous thanks for listening and spending time with this I'm hesitant to ask you Joel's question because we've talked a little about this topic of air and you guys said I don't know what it means so let's do this hi Scott Andrew says Joel first time bending the knee long time bending the knee may the knee always be good Joel my question is a little bit left here but I believe you both have some interesting takes I'm an Australian writing to you from Japan where I have lived for many years I'd love to hear both your takes on the state of this country given its physical challenges you both obviously specialize in a pining about all things Australia but I believe your perspectives on the future of Japan's economy given its fairly unique challenges related to demographics debt currency devaluation and markets would be very informative I own a house with a mortgage I invest in the Japanese US and Australian markets and also Bitcoin I find myself increasingly concerned about what the future holds for my two kids if I choose to stay here and would love to hear your expert economic opinions on how to navigate the future in this country many thanks Joel wow so just this morning this is the first time you and I have spoken in the new year after the pre-records and you say hey what's been on your radar what do you want to talk about and I said to you the Japanese market's actually been on my radar however let's not talk about it because I'm really struggling to wrap my head around it in a way where I feel confident to opine on it other than to observe it shouldn't be but it's pretty niche it's kind of dry but it's kind of like really important so Japan is the third largest economy in the world it's massive right but it's in this really weird situation where they've been running massive deficits forever they've got a situation where the Japanese central bank has been buying what's called yield control they basically print out money and they buy their own bonds half of all Japanese bonds are owned by their own central bank now I'll let that hang there for a minute so what does that mean it just means that the government is printing money to finance its deficit what's fascinating about Japan is that more recently it's starting to rear its head but for the longest time it didn't result in heaps of inflation which is exactly what you would think it would do why is that I don't know this is the thing I'm not sure of it's not going to stop me from you've got a demographic challenge there as well which is naturally deflationary older people sort of spend less you've got a very strong savings culture that's there you've got a very for the longest time very strong industrial base there as well these are all deflationary forces and I'm very much on the record I'm like most mainstream I think deflation is a wonderful thing not fast extreme deflation as a result of economic collapse that's a different thing the natural deflation that results from productivity enhancements and the rest of it I think is a good thing and the deflationary environment would probably be very painful on the way but the concept of the idea of things coming cheap because we're getting better at doing it is a good idea in theory we did recently which sort of talks all of that kind of stuff nevertheless what Joel's probably noticing here is that you have seen the Japanese yields just spike really significantly and the reason is that people who own the debt are selling it and no one's buying it why would you it's always been the most bizarre thing to me because any traditional accepted wisdom is that bonds are the lowest risk form of investment it's really an IRU from a government that is spending far more than it receives is functionally bankrupt but it's okay because I'll just print out the difference if you think that fixes it then you need to think about it a bit harder what's so difficult about it all is that this isn't a hot take people have been talking about this for 20 years and so to me I don't where do I go with this the mass is the mass is the mass something's got to give at some point it just has to because if you pull on that thread for long enough and it gets to the point where it's just sort of like everything is being paid for with things that were just put into existence it breaks the way that we allocate and manage resources and the whole economy collapses at a point but the lesson I think and this one is always to keep in mind is that the market can remain irrational far longer than you can remain solvent is the old saying and that these things you can keep the can down the road for a long time so you can be absolutely right plenty of people we forget the big short makes it sound like Michael Burry was the only person on the planet that saw the problem heaps of people Heaves of people saw it. But some of them saw it three, four, five years out and just got dusted in waiting for the inevitable to happen. And then when the inevitable did happen, it didn't have any impact. So I think what I'm trying to say here is that, Joel, I think Japan is facing some very, very significant challenges.
And I think that there will be a come up at some point. That doesn't mean that it's left as a smoldering wreck. It's just going to be more difficult for people that are there. But I don't know how imminent any of that kind of stuff is.
But for the longest time, the JCB, the Japanese Central Bank, was able to suppress yields and manage all of this. And it feels as though that is starting to unwind a little bit. And then you get what's really interesting. You get the second and third order consequences.
What do you do as a Japanese investor? You invest overseas. In fact, what did Warren Buffett do? You borrowed money in Japan to invest overseas.
Why wouldn't you? Why wouldn't you do that, right? Like I said, it's called a carry trade. It's just like, I'm borrowing it next to nothing.
I can go put it over here in an index and get 9%. It's free money. As yields rise over there, there's less of a drive to that. That doesn't make much sense.
And it might be one thing if we were talking about South Africa or Spain, the world's third largest economy repatriating literally trillions in capital. It has implications far and wide. I'm not smart enough to piece it all together. But it feels like it's very much a sign of the times, I feel, right?
Because when I said to you off there, we equity guys, we live in our own little bubble. But when you draw a pie chart of global assets, the bond market is the girl in the room. It dwarfs property. It dwarfs equity.
It's like bonds, fixed interest, sovereign debt, corporate debt. These things are. This is where most of the world stores their wealth and these IOU promises. So when you get even things on the fringes that are impacting this, there are consequences to that.
We spend a lot of time on Fridays talking about the ills of market manipulation and the rest of it. It's like, well, the world's largest impact, not just all of the world's economies, have been playing a massive game of manipulation at the very base layer of the financial system forever. It feels as though it's a big deal. And I'm very conscious of that.
And it fascinates me. But I also hold the view in my head that, yeah, but you don't want to be right. You don't want to wait until 2043 before you're proven right. Because I'm living in a bunker with a bar of gold.
And my hard drive, my big clean hard wall, gold wall. That seems like a real hollow victory to me. So there's a lot to unpack there. We could spend weeks talking about the Japanese situation, Joel.
Other than to say, yes, I think it is very notable. I just don't know what to do about it other than stay the hell away from these interests. There's no attachment to the bar of gold. That's just me.
It's hard to because... I think it's great. Rest on your mind. Thank you.
And really. You've got to the surface. That's always the problem. The challenge, Joel, for the kids, and this is where there's different perspectives, right?
People tell me all the time, oh, that's so good to Australian US dollars. I don't invest in Australian US dollars. I wouldn't care what the US dollar value in the Australian stock market. It's a maximum difference to me.
I raise that as an example because I'm about to say, when your kids are in Japan, staying in Japan, investing in Japan, all that sort of stuff, you don't have... The impact will be different. You're not going to have the direct currency impact if the currency is moving in another direction. You do have the impact of that in terms of import prices and export prices and stuff.
So you're not going to be immune to it, but it's just a different lens. So if you take it from Australia, that's how I think about Japan, versus if I was a Japanese salaryman working in Japan, they are different. They're just a different thing. Not divorced, but they're in different directions and have different severities for those reasons.
One big example on that. Did you know? I didn't until recently. I'd known that the yen had been devaluing against the USD, but I wasn't aware of the quantum of it.
The yen buys half as many US dollars as it did 20 years ago. So in 2013 and today, it's halved. The currency is halved. And so where does that impact the local worker?
Or is it like anything that Japan imports? That's very much where it hurts, right? So it's sort of like there are real world consequences to it. This is where it depends on where you are.
I will say outright, there are some things that absolutely whack everybody in the economy completely and entirely and permanently. And that stuff is, you know, there's other things which are like, well, if I'm a Japanese exporter, I'm probably not happy about that. If I'm living in Japan and own US dollar donated assets, not only has my shares gone half over that 20-year period, but they also then double again in investing power terms. So I've actually done really, really well.
So it's really, not only is it uncertain, that's the biggest problem, but the effects depend entirely on where you sit in that chain. I'll just be quick on that. It removes any incentive to invest locally on that front, which we can get. So here's the other problem.
You look at the US and say, well, who's in more trouble and buy when? And because currencies are relative. If the US dollar's worth less and the Japanese dollar's worth, the yen's worth less and they're both worth less together, then they're worth the same amount. Which is also quite a mind-blowing thing about that.
It's like, well, I'm putting money, you're putting money, we're both putting money together. So, you know, it's the, it's the, I can't give you an answer, John. What would I say? I would say that I am always in favor of international diversification where you live.
And so when you're a Japanese person investing in Australia, a person investing in Japan, you know, I wouldn't say either of those two directions are the right direction necessarily, that might be, but just be diversified, holding assets out. So this is what we've talked about before, we're not Japan and Australia, but I hope US dollar assets, US dollar, US nominated assets, not US dollars specifically, but for, partly for diversification, partly because I'm going to invest in no years, and partly because I'm doing that. So those are things that are well worth doing to my mind, because it allows me to, you know, naturally hedge against that risk. You know, it actually creates value anyway.
So if this kid's going to go up anyway, and I get some diversification on top of that, that's why I call for free lunch, or as long as you're picking well, you're going to go play. So I would have the kids investing outside Japan, in Japan as well, if you want to, but definitely outside Japan for those reasons. Be able to find international, I'd be able to find the US versus Japanese. And at some point, you know, careful where you think you want to get diversification, if you're only going in one direction, if they're both having the same issues.
I also suspect, I want to be really careful, because no one knows what the future will bring. I suspect that over their lifetime, the concerns around us probably come to fruition at some point, because King Canada for 20 years, 30 years, 40 years, 50 years, at some point you go, well, 60 years, 70 years, 80 years, 90 years, the longer the time frame, the more likely it is that there is some reckoning at some point. That being said, the question really is a relative question of where else would you rather be? And I'm going to have some home country bias here, and I'm going to pretend to myself, because I think it's true, that I'm being as unbiased as I can be, which is, I hate Australia's debt problems, but we've got trifling less debt problems than most of the other world.
So realistically, I feel really, really good about being in Australia, investing in Australia, as well as overseas, because we've all got problems, I've said it a million times, we might be at least in the hospital, we might be in the hospital, we might be in the hospital, but in a relative sense, you know, if there is a reckoning, the size of our reckoning related to most other countries' reckonings is going to be lower, almost by definition, assuming we don't have debt to have control, which we may still, but for now, so I kind of feel good, okay, good about that. I'm sure other individual countries are in civil situations, probably some of the Nordic countries are in the best place, just that I'd rather be in Australia than the US, the UK, Europe, Japan. So I would probably look at that. Do I think someone, I don't know how all your kids are, let's say they're 10, the next 100 years in Japan, is life good?
Probably, I would suspect. I mean, look, think about the last 100 years, right, we had a great depression, we had wars, things will happen over a century. I think trying to prognosticate, it's probably hard, it's hard to do 100 years as it's to 6 months, it's probably easier to 10 or 15 years, or easier, right? And so you kind of go, well, I don't know, I wouldn't be, I wouldn't be too worried.
I think there are worries, there are always in every country, in every domain for every reason, and most of the worries don't come to fruition, as those that do, some are worse than we expect than most aren't, and things that end up getting us. I don't know if I'm negligent or Pollyanna, I suspect you live a good life, enjoy what you're doing, invest and save sensibly. I can't do the best I can do for you, mate. I don't think me trying to predict what the transition might look like is useful.
A, because I'd probably go wrong, and B, if I wasn't, if I was right. Would I suggest you change anything? No, I don't think so. Ramazai, number two, Pollyanna?
No, I mean, that's the most boring advice in the world, but it's always the best advice. No, no, no, I didn't mean it as an insult. You know, live well, spend less than what you earn, invest sensibly. It's like, oh, should I be rotating into commodities while hedging again?
I can't argue that, but it's just an interesting topic to me. I mean, the other thing that I always find fascinating in thinking of Japan is that, maybe younger people don't know this, but they had a bit of a property bubble in the 90s. Yeah, yeah, right? And it got to the point where the Imperial Palace was worth more than California.
The state, that individually is like one of the top 10 largest economies in the world. It was insane. You know that the total value of Japanese property to GDP hit 460%? Now, before you laugh.
What's Australia? 450%. But we're different, we're different. Laws of economics don't apply here.
Totally different. By the way, level of household debt to income reached 100%. Oh my gosh, the height of their property bubble. We're only at 197%.
These aggregate averages, because there's plenty of people going, my debt to income is more than 20 times. So it's sort of like, as I say all the time, I'm just such a big student of history, and I just feel like when you're trying to grapple with economic ideas and that, the world just offers you so many examples of things, and whenever I hear things like, this time it's different, it just makes you cringe a little bit here. And Japan is just, we were talking about it a lot on Friday, it's got so many lessons to teach us, good and bad. They've done some incredible things over there, and they've made mistakes over there as well.
They're veering towards more populism, as I understand it as well, a new election's being called. And get this, right? I mean, this is not surprising at all, right? So because of various sort of pressures that are out there, largely with some of the things that they do need to import, they're going to be cutting various taxes.
It's like, I don't know, I'm all for that. But again, I put that in the context of, you'll have a massive unfunded deficit, that the world is no longer funding, and there can only be mandatory money printing. So it's like, what is fascinating is that you can be in this, you can paint yourself into a corner, or maybe a better analogy is you can dig a hole for yourself, and then the deeper you get, the faster you start to dig, which is also the US, right? And it's just like, it's like watching a car crash in real time, you know, in slow motion.
But very much at the forefront of my mind, just to repeat myself is, yeah, but this is a slow motion car crash, so I don't know if I'm going into the bunker. But I think it's definitely worth paying attention to. It's interesting. The other thing is, let's say you're in the car, you're in the car, you're in the car, you're in the car, you're in the car, you're in the car, you're in the car, you're in the car, and you can leave Japan.
Yeah, but you're still a kilometre down the road, so I'm just going to stay on it for a little bit longer. Hey, it's a hundred metres away, I'll stay on it for a bit longer. I'm in the reverse, I mean, it's going to happen to you in the lift anyway. I guess I'm just playing the other side of that, and it's kind of like, should you stop happening?
Yes, for a policy, but if you've got the Japanese PM, you're like, dude, can we just have a quick chat, because this is not going well. If you're living in Japan, you're like, what do I do? I think that's where I kind of come back to, I don't know how I was a kid, I haven't been investing yet, a job you're investing outside of Japan, which is really, really smart. Again, the US has the same issues, right?
So I'm not saying I think that I'm saving myself for investing in the US necessarily because of this currency from here. But yeah, I only just say, if you're in Japan in 80 years' time, they'll look at whatever comes next, and they'll probably be fine. I think Japan's going back to a, and that means owning assets, it means probably owning foreign dollar, denominated foreign currency, denominated assets just in case companies outside Japanese economy, for exactly the same reasons, do the things, own the assets that give you personally as much protection, resilience as you can. Not to the point of big beans and shotguns, because there's a dilemma, I'm not saying lose money, but I am saying just think about how you're setting your financial life up to make yourself as anti-fragile, or at least as invulnerable as you possibly can.
And for your kids, that means the same thing, right? I'm not saying you decide what you want to do with them, how you want them to help them invest in that kind of stuff, but the best thing you can do for them is give them the resources to weather the storm. And that's not fixing the Japanese problem, and it's actually Japanese having no assets, I'm not saying it's okay, it's a very selfish answer, which is, you know, look after yourself and whatever happens, happens. The thing is, it's going to happen anyway, you've got choice now to either, you're ready for it, or not ready for it, and I think it's incumbent on all of us to do what we can to set our financial lives up so that we are not at the mercy of those events, to the extent we can do it.
I strongly agree. You definitely advocate for the world that you want to see, but absolutely the same, like, you know, if the captain is still steering towards that iceberg, just stand closer to the life raft, you know? And this is why, I'm sorry to bang on about it, this is just why you've got to go absolutely 180 from traditional wisdom, which is, when things get scary, buy bonds. Don't buy bonds.
And I don't even have to talk about the future, right? In the last five years, anyone who had saved their money in Japanese bonds has been wiped, not wiped out, but they have lost huge amounts of money. It's like, whoa, but wait a second, that's a safe haven asset, and I only lose if I sell, you know, if I hold two or two. Nonsense, absolutely nonsense.
You bought an asset, and in the last, like, really, since COVID, maybe about 21, 22, things really started to explode. You've got a chart at the moment, so back in, almost exactly four years ago today, it was yielding 0.167, now it's at 2.27. So you have, what, that you're more than halved. How much time is that?
Is that COVID impacted, though? Is it long enough term to be? I might have seen everything, all of them yield to fail COVID times. No, I'm going back over 25 years.
I was just flat because of all the intervention and management, and then, poosh, and it's just exploiting. So I guess, without getting all too overly technical, my point is, I'm an ordinary, quote, unquote, mom and dad investor. I'm a little bit nervous about the future. Financial advisor is telling me I need to have some fixed interest because that's the lowest form.
That's the lowest risk that I can do. It's a prudent, known way to protect myself and gives me some, you know, diversity away from equity markets. Like, great, but anyone who's followed that advice over the last three years has lost huge amounts of money. Like, you have.
If you need to sell your bond, you're gone, right? And even if you don't, you're only being paid back in printed money. So it is a, this isn't a collapsed, you know, Latin American dictatorship that we're talking about. This is the world's third largest economy.
You know, it is a G20 nation and their sovereign debt has collapsed right in front of our place. It never gets remarked on. And it's like, whoa, that's the safest investment I can make. No, it's not.
And again, to your point, look, I don't think the political world there is any change, but just whatever you do, I can't give advice. But if I could, I would say, do not buy bonds. Do not buy. They are not the safety that they are reported to be.
Yes, the best portfolio assets. You're right, but that's where some of these nonsense go. Oh, diversity means I should have some of this, I should have some of that. So I'm just having it as a bit.
I would just say, don't touch it at all. I'm not talking about shares property. Right, sure, sure, sure. Just having assets that are, in theory, this is actually really great advice in a world of monetary and fiscal restraint and responsibility.
So it makes very sense. We've lived in that world for decades now. I won't kick off another rant. Okay.
Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener. Listen to the question from Gab. Hi, Scott and Ram.
I feel encouraged by answering my previous question, so I'd like to learn another one. It's a voice. I love it when you smart gentlemen discuss monetary policy and I do hope some of the people in power pay attention as you have had some awesome ideas in debate on this topic my idea is to replace all current social benefits programs with a different program based on GST dividends how it would work if it would double the GST from the current 10 to 20% but all the extra 10% would go back to the population as dividends this would apply across all entities with a tax line number GAM would collect the 10% and distribute it equally every month to every TFN what this would do is make GST from those who consume more and give it back to those who consume less I would also remove all GST exemptions while I'm at it can you get your thoughts GAM I'm really careful not to do an e-joke on this because there's a lot in that I've got to think about I was very unsure until Gav said collect the 10% and distribute it equally every month to every TFN so those who consume more pay more and give back to those who consume less which is kind of the welfare system now those who earn more pay more in tax and those who get welfare payments effectively are consuming less so I like the reframing of kind of what the I'm not sure I like the execution I'll make you to a first second thing but what I like is that kind of reframing of what is effectively tax and welfare just done using the GST mechanism and kind of letting the spending or lack thereof be the balancing home yes here's my hesitation is that the implication in the framing there is that all spending is not bad now don't forget that investing for growth is spending there's a lot of spending that happens in the economy where people who are buying stuff to make other stuff in other words they're not directly just consuming they're not just taking from the pie that we collectively bake together so I don't know if I would want to disincentivize I know with GST you can write that so I'm thinking this is complex I'll say this because I'm not going to even if you speak for 10 minutes I'm not going to have a high conviction view on it I'm very much in favour of anything of a simpler system definitely start with it is way too unnecessarily complex I was minging to you I've got to do my taxes I've left it last minute I hate that it's the most painful thing in the world and it just gets in the way of me doing other more productive stuff and I think that's true of all of this so anything that makes things simpler and fairer I think is a good idea so yeah but I'd have to think through it sorry Gav that's a non-answer I said before we should try the universal waste income and those who object to the trial they object to the idea because they don't like it and say I want to try just in case it works I had it so if it works then I just get happy so I think the GSC payback is kind of a universal waste income I don't think we're paying GSC back to tax file numbers generally I don't hate it but it kind of doesn't make any sense to me that you kind of pay to give it into companies or other structures for their own sake by the way maybe you mean a personal TFN rather than a company I don't know I don't know what you do I'd roll out 15 brand new companies tomorrow morning and collect 15 lots of money so I wouldn't do it to TFNs in general because the tax system if the GSC dividend was larger than the cost of registering a company you'd have 84 million companies listed in Australia tomorrow morning so I think you can do it that way you might have other sorts of operational rules or cash flow rules around that I don't know maybe it was on a personal level I mean you're with my UBI which I'm completely fine with would I do it with the GSC though I keep on consuming more and less it's kind of a little bit along with your point around wealth tax or land taxes you can't avoid you're consuming so you're consuming it rather than a higher income or time deductions so is GSC consumption tax a better way to raise it probably yeah it also does mean if you're going to increase the GSC giving the increase back directly means you're not it's not a regressive tax where those are lower incomes who can't afford the increment because they're just by the necessity it's not the ability to make out the difference that would kind of work so I don't hate it from that perspective the one thing I would say probably and it depends on how we structure this stuff but you mentioned unemployment, pension, child support, NDIS even to those four areas have different needs and different things for different people and I don't really know the overlap between for example a pension, NDIS or unemployment, child support or any of those combinations and so at some level if you say I'm a single payment if that payment was less than the payment currently being received by a welfare recipient who needed the money they may be worse off and that might mean we need to rejigate it a little bit I've said before I'd like a universal basic income collected however I don't know how it's collected not that I don't care but the income bit doesn't need to be offset directly by a it doesn't need to come from the same place as the payment so I would also just go UBI trial and largely by self-funding by removing and replacing all those payments removing and replacing the administration and collection compliance functions we've got a lot of paperwork that would be an easy way to fix that I suspect try and fix it but I think I'd start there but I don't mind doing the GSC if that's how we did it make sure UBI allowed for that increase GSC might be the best way to do it with that said yeah I think probably would I do it another way how would I fund UBI no I think I mean I've changed the taxes a lot just because it sucks anyway and I'm simplifying to Ram's point so I don't let it happen because it requires complexity and it requires honest conversations and long conversations and stuff but you wouldn't do just any of this stuff you don't have to be easy to go because it's just two changes maybe they get through whereas my idea of tweaking 85 things might not work it's just too complex so yeah I don't hate it I'd want to do the numbers of what it actually meant for those on welfare I wouldn't do it all TFNs I don't think it's reasonable to do it but I think about personal TFNs individual taxpayers probably make sense eventually replacing child support obviously that's kind of number of kids related so there is again there's some wrinkles there we should be okay with that by the way but it's sort of clever enough shall we ask I don't hate it at all that's such a big topic here's the thing with all of this is that there's plenty of people far more focused and specialised and smarter than us who have talked about this for forever and just Dr. Ken Henry what he thinks about it not even they've paid him to give him his opinion when that happens it's sort of like it feels it's easy to be cynical in terms of these things so yeah I see nothing but added complexity for the tax system I think Henry too it was done it was insured by the Labour government it was then set up by the Labour government set up by the Liberal government set up by the Labour government it's not a political thing of the government didn't like the report they got it didn't but it was just too politically difficult to contemplate so they didn't bother trying so like everyone knows the tax let's real taxes the GST's on the table and there's no reason for it all they're doing is political power again this is where the political politics sucks because the party in power is why are they going to get tagged with it so they don't do it to scare that and the reason they're going to get tagged with it is because the opposition of the day is going to absolutely tag them with it because it's just equal to me so I say you know when the government says we look at the government and say you so and so you should have done it why would you do it you're gutless the answer is because those people over there are going to make merry hell and if the situation was worse we would do the same there and although that's the reality you're talking about proper conversations around that's exactly what we're not talking about so they take off the table because they have to have the guts to do it and they know they're not worried about the electorate they're worried about the opposition who will happily torch good policy just win a couple extra votes and screw things even the GST itself he was in favour of government and he gets in opposition the very idea of that sort of stuff is yeah they can't even do it when they've got very distant and politically unconnected organisations yeah so I just this morning read it in the paper the OECD sort of saying hey Australia you might want to might want to do something about that you know it's causing a problem and what's this thing where Trump is going to override RBA decisions you know maybe you want to think about that kind of stuff no I'm not going to it's like the Japanese conversation right it's just sort of like gosh be vocal in your thoughts but be careful with what you own know what you own and why you own it because I mean these self-interested muppets aren't thinking beyond the next election cycle no and again on both sides they sort of mothers for vote and so they're never going to they're never going to they're going to have good policy and challenge because all I can see is the vote rather than what's good for the country well I said to you again off air it's just like the I don't know if it's irony but it's I don't think that any of these concepts are beyond the average person to understand like you don't need four PhDs in economics to sort of be like it's just like it just takes someone with a bit of guts and probably a bit of charisma to just sort of say hey we're doing this don't buy into the nonsense that the other side is talking wherever the other side happens to be in that particular instance it's just because it doesn't it doesn't make sense we're doing this because it's going to make you better off it doesn't feel that I get it it's very counterintuitive but it's going to make you better off do you want to be better off yeah well that's why we're doing this but they're going to do that and it's going to make you worse off it's going to make you feel like you're better off and it's going to make you worse off and turn it around but they're not unfortunately they just preach to the lowest common denominator they assume that everyone's dumb and incapable of understanding it so we're just going to pitch to the lazy it's lazy and it's cynical and it's depressing there's no way to say I've got three years in the virtual cycle I'll release a range of a platform of policies now and I'll send three years arguing for them and they're so busy trying to avoid the bad stuff and frankly not to get political about it but the major policies are losing primary votes hand over fist both the left and the right at the moment because they're looking at it going well you guys are just having a nest and you're not doing anything to help me and at least that person over there whichever your preferred angle or direction is from the middle they are at least saying nothing and part of the populism Trump's populism is not because he has solutions he's got Christmas cracker answers to the grievances that people have rightly have or reasonably have or perceive they rightly have and so he just says I'm with you you're right this sucks vote for me and I'll do what you think is good back to tariffs I'll make America bring back American jobs they've sold you out I'll look after you well they have something he'll look after me and that's how populism rises because the sensible middle does nothing the same for nothing said nothing does nothing and that's why you end up with the extremes on both sides and at the end of the day the extremes on both sides are kind of looking like each other at some point that's where we end up we're going there we're going there I don't want to mention certain names because it just puts people off politically but there's oh I don't care I'll mention those names one nation is massively on the rise and nothing is gifted to them from the major parties you just don't have anything to stand you just naturally gravitate towards the easy answer it's really really really scary this kind of stuff and I guess we woke up this morning to find out that the coalition's dissolved so if Labour doesn't do something now you have the political if there was ever a moment to stand up with a grand vision and a plan even if it was going to be challenging to push through and to convince people now is the chance to do it they won't we're spending all our time on stupid issues that just completely missed the more broader point and I'll just make the final point political disunity and what's the word for it when the electorate becomes very disenfranchised there's always an economic underpinning for it comfortable prosperous people with lots of opportunities just don't go towards populism we're always in the podcast so I want to unpick that because I've been talking about on Twitter this week and one thing that's fascinating as the human condition is that for all of the truth of what you just said it's remarkable how well off we can be but still perceive that as the economic calamity or whatever in the sense of anyone else in the world would kill to be in our position and yet we are slightly less well off than we were or slightly well off than we thought we would otherwise be and we're ready to throw the toys out of the cot and it's just there's a lot of and again back to the real policy of this there's a lot in that because it's not like in any reasonable perspective you look around and go six and a half of the small seven billion people are worse off than we are and you're telling me I've got to absorb a little bit of pain just to kind of make sure that the future is pretty good no go to hell I'm out or you know housewives are too expensive yes they are inflation is a bit high yes it is they are bad we should fix those things but equally would you rather have that situation in Australia than the situation in the other six in the world no and you're ready to throw the toys out of the cot and again you don't have this conversation a lot and it's keeping both ideas in your head at the same time recognizing we should fix those things that are broken but also finding a way to make sure that we don't miss the stuff that's actually working I find that really fascinating everything's relative particularly economically it's relative it's the economy issue you have a recession where the Australian economy falls by a fraction of a percentage point and you know governments get turfed it's like man so little in any relative sense changed and yet it's fascinating to me it just it underscores the power of of the free market system I mean I've rented many a time we have more of a crony capitalistic system it's all kinds of tomfoolery that goes on there but underneath it all it's sort of like we have created an immense wealth in this country in spite of all of the wrong moves that we have made because it's not a binary thing it's not just black or white it's just that we're the wrong shade of grey we could aspire to more of an ideal it's quite fascinating that relative sense of if you have anyone around the world that has problems they take a little habit and where's it they are well keep talking to the street then because it's awful it's like again I think it is really important for anyone to travel yes I know as a younger person I started some backpacking around Southeast Asia and other places like it just if you want to be patriotic or you want to at least be patriotic but yeah appreciative and recognising how good we've got it is to travel and to remember that when you look at a lot of the lot that people have people's lot around the world it's like it's only there's only some seemingly small changes at the very top of structures that lead to such massive differences back to the Singapore conversation for Friday I said 50 years it was actually less it was like 30-35 years they went from the bottom of the pack to the top of the box just by making some changes these things are powerful when you get them right and you're right we shouldn't complain but I still feel as though things could be better I want to hold both those ideas I want to hold both really really strongly and loudly even though they feel like that contradicts because they're both true one doesn't say it's this so that doesn't matter or it's that so this doesn't matter they're both 100% true 100% important 100% reasonable and we should absolutely hold them both even though they hold the all the magnets together and kind of go I get it and it's natural tension but one doesn't evaluate the other I just think that is just a fascinating observation again I find that idea fascinating yeah me too me too and just I'm looking for whatever small way we can sort of push the conversation some of the thoughts out there because it is as I say they're not that difficult concepts to get your head around or at the very least I think with so many things just a very active contemplation and thinking through them you might not change your mind at the end of it but it's still a very valuable process right and I just wish we would as a nation spend more time on some of these more fundamental kind of considerations Robert rather than just faffing at the edges, which, you know, it is the circus, which is what makes it all so depressing.
Anyway. Let's call it. Enjoy the rest of your weekend. Listen, thank you for spending your time with us.
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