what if the uk is already bankrupt.

come to the acid capitalist summer camp in st barts 2nd to 6th august.

https://hughhendry.com/acid-capital-retreat/

broadcasting from the caribbean as the acid capitalist, i try to make the uk’s sovereign problem legible without the institutional fog. no jargon. no costume. just the one signal that still cuts through the spin: price. i start with a ghost story of imperial infrastructure repurposed into luxury hospitality, then land the argument with brutal ratios that sound like trivia until you see them for what they are: a balance sheet warning.

from there, we invert the whole thing. modern war needs drones and factories more than it needs mass conscription. modern work needs software more than it needs layers of professional glue between capital and labour. when ai makes parts of the middle class optional, it’s not just jobs that move. it’s the uk tax base. the thing that funds pensions, healthcare, and the welfare state. then nato appears for what it increasingly is: a financial arrangement. europe’s long reduced-responsibility model stops looking like morality and starts looking like an expiring discount as the defence invoice rises.

the autopsy moves through gilts, cheap borrowing, and the decades-long loop of surplus capital recycled into british government debt and assets. low gilt yields made big promises look affordable. too much of the money chased property and financial engineering instead of productivity. when global capital gets redirected and the subsidy fades, welfare arithmetic, political constraint, and bond market discipline collide fast. i finish with a tradable lens on scarcity, real estate, city-state jurisdictions, and the prices to watch next: real 10-year gilt yields, the gilt-bund spread, and sterling against the places where capital actually wants to live.

if this changes how you see the uk bond market and the future of the welfare state, subscribe, share it, and leave a review. what price signal are you watching now?

Transcript

born slippy

SPEAKER_00 0:00

C said we know. What on earth am I going to talk about? The show is the acid capitalist. The title The Sovereign Parasite. I am the Acid Capitalist. I'm broadcasting from a rock in the Caribbean. Well you call it the same boss, I call it home. It is late again. And and you know what? The the sea bothering me. The sea is flat. I'm thinking Mercury and silver. For the last 10 days, the wind has dropped, the air pressure is high. And the tropics. Maybe the tropics, like the British electorate. Or maybe the tropics, like the Prime Minister in the United Kingdom, Keir Starmer. Maybe the tropics are holding their breath. Welcome, my brothers and sisters. Take the lights down and join me in the darker hours. Because we need to talk about Britain. The country I left. Was it 10? Was it 11 years ago? 2015. The country that taught me maybe everything I know? Or certainly everything I forgot, which is it. It's a country with a kind of terrible dignified. Is it dignified slowness? I'm not sure it's either dignified and I'm not sure it's gonna prove slow in the days, the weeks, and the months to come. And tonight, tonight, as the acid capitalist, I want to explain why. And I don't want to do that with jargon. I'm certainly not doing it with acronyms. I'm doing it with the one tool that never lies. And we are talking about, my friends, we're talking about price. And tonight we're gonna do three not two, my friends, but three movements. The ghost story, the autopsy, the trade. And by the end of this, I promise, as we listen to Underworld, do you hear it, do you hear it, do you hear it, do you hear it? By the end of this, maybe you'll you won't look at Britain the same way again.

SPEAKER_01 1:58

Hmm.

the old war office is a hotel now

22 ships and 72 admirals in the royal navy.

the inversion.

nato : america carried the gun, europe the cathedral of social democracy

the uk is the sovereign problem.

the welfare trap and 1976 echoes

the part that matters.

why i'm raising my children to leave.

SPEAKER_00 1:59

Before we begin, August the second to August the 6th, the fourth summer acid camp here in St. Borz with me on this beautiful rock. All skill levels. The dumber, the better. You certainly don't need to know anything. You just know where to find me in a small island. Just say, where's the acid capitalist? Just bring a brain that's modestly alive. Come swim, come argue, come watch the sun go down, sip cocktails with people, people who give a damn. I say to people, come as a stranger, leave as a friend. It might change your life. Change mind. Details in the link to the show notes, right? Boom boom boom boom boom boom boom. Let's go. Let's let's do the ghost story. Because I want to start with the picture. I want to start with the old war office in London. The building where Churchill once stood, poring over maps, counting ships, counting aircraft, bodies. The man was dictating time. The old war office is a hotel now. It's called Raffles. Five stars. That's not a military ranking. That's a function of the uh the crispness of the sheets. But it's mostly foreign guests checking in on the floors where an empire used to think, used to breathe, used to expand, used to have relevance. And next door, next door is the Admiralty, the building. And that too is being stripped and repurposed for hospitality. Portsmouth is selling the Citadel, 17th century fortress. Interesting point. You know, like the cannons, they were often like facing the town because the the citizens of of Portsmouth were a little bit of a radical crowd. Anyway, 17th century fortress being sold, another hotel in the making. But they are quirky real estate stories, but more than that, they are balance sheet adjustments. This is the ratio that stopped me cold. Britain has twenty two ships in the Royal Navy and 72 admirals to argue over 22 ships in the Royal Navy. The NHS, the National Health System, carries more administrators than nurses. And the British Army fewer deployable tanks than Belgium did in 1940. Three ratios, my friend, one country. The fractal repeating because the system, the British system, the sovereign system has outgrown its own purpose, and I want to say to you, it's aiding itself to sustain itself. And whilst you think about that, everything I'm about to explain lives in longer form on my substack and my Patreon. Tonight's paper, The Sovereign Parasite, is roughly 5,000 words. What did you do at the weekend? I wrote half a dissertation. It's 20 minutes to read. This will probably take me twice that time. I think those 20 minutes, they might just change, they might tip the balance of how you view the UK and other European bond markets. I would argue, subscribe tonight. Again, the link, like the camp, it's in the show notes. Anyway, there's a grand bargain. Let me take you back to something that once made sense. Because for most of the last century, the nation state, it was genuinely worth the price of of keeping. Defence was definitely cheaper when you just pooled it. Roads, hospitals, schools, cheaper at the scale. Imagine if every town had to defend itself alone, if every family had to carry its own catastrophe risk. Where would we be? That was more expensive than paying taxes and letting the state do it. Clearly a deal was struck, and the deal was struck after the the great loss of humanity after the First World War. The state said, give us your taxes, send us your sons to fight when we need them, and in return, we'll give you rights, universal rights, votes, welfare, pensions, a health system, an education system, a future. Some might say we were promised, I don't know this sounds very Church of England, which is certainly not my denomination, we were promised a new Jerusalem. And for a while it worked, because the deal wasn't, it was never just moral, it was actually fucking practical. The state needed the mass, and so the mass got a claim on the state. But here's where the story changes. I want to call this this is the inversion. Because that deal, the reason that the state and its citizens codependent upon each other, it's quietly and certainly without announcement, but I want to say it's flipped and turned around. Think about war first, and unfortunately we're getting many lucid examples of it from Ukraine and now Iran. War makes my logic sharp. The Americas have just dismantled the Iranian Air Force and Navy without a single soldier on the ground. Drones, AI, precision systems, intelligence that moves faster than any human command structure. And here's the clincher. You don't conscript a drone. You don't like phone Amazon and say, guys, listen, if you get any drones we could borrow for the for the war effort. You don't conscript drones, you make them in a fucking factory. The mass, the bodies, the humanity, the millions of ordinary people the state needed for its industrial wars. And World War I in particular was industrial. Industrial in a scale of tragedy and brutality. But the state no longer requires your sons in the way that it once did. And that's the inversion. Let's bring that logic, that same logic to work. Think about everyone who sits between capital and labour. So now we're in the economic model, the gross domestic product, the GDP of the country. I'm talking about the human paste between capital and labour. I'm talking about the lawyer doing the discovery work, the accountant building the tax model, the analyst writing the research note that I never read. The consultant building the deck that I never presented, never had a never had a deck. The compliance officer that that told me off. Do you know I hired my my first compliance officer I made him the trader? Anyway, the fucking administrators, the list goes on and on and on. All of it, all of that expensive, educated, middle class human machinery, that's being repriced from necessity to overhead. It's a model that costs the competing model. My arguments exist on the perpendicular. When you're inside looking outside, when you're outside looking inside. So what I mean is all of it, all of that expensive, educated middle class human machinery, the repricing is what concerns me. Because you see, you know, I know, a model that costs twenty dollars a month is doing what all of those people were paid hundreds of thousands of British pounds to do. The middle is not being murdered. Worse, it's being made optional. Here's the trap the state finds itself in. It's revenue, I mean the taxes that fund everything that the Labour government, the Conservative government reform. Those taxes largely come from that middle class glue. And that middle class glue is being sucked or hollowed out by the same technology. The state can't control this technology and it doesn't fully understand this technology. So the technology of drones, of AI, of robotics that's taking the mass of humanity out of war is also the same technology that's taking the middle class out of the tax system. And that's potentially catastrophic because government promises do not shrink pensions. They don't get cheaper because the tax base moves to Monaco. Hospitals don't cost less because the memo is written by an AI program. Debt service doesn't care that the graduate graduates have been automated. The state is listing, not because of a single knockout punch, but because the cost structure of the sovereign no longer clears because there are cheaper alternatives to the state. I want to talk about NATO for a second because it's very, very parallel and related. And there's a version of this story at the European level that no one no one in the polite newspapers wants to say out loud. See, NATO was never just a military alliance. If you look deeper, like everything, it was a financial arrangement. For sure America carried the gun. America for sure paid the defence. And Europe, freed from the considerable cost of defence, Europe built something extraordinary, something it's very proud of. It built the welfare state, it built the pension, it built the public health system, whole post war social democratic cathedral. It's found not in America. America's duff. It's found in Europe. But Europe rented its security from America and it booked the savings as as virtue. You don't think this is coming from some crank on a podcast without with rum, a gun, gold, and a grudge. I have none of that. This is in the literature. It's polite. This institution was peer-reviewed literature. I had the pleasure of reading the 2026 Florence Report, which is published through the European University Institute. It's not my kind of place. It uses words like framework, structural adjustments, never raises its voice, never calls a spade a fucking spade. But you know what? It called NATO Europe's reduced responsibility model. Not a bug. Not an oversight, but the operating system. In plain sight. Europe did not build its civilization despite America carrying the gun. It built it because America was carrying the gun. The welfare, the pensions, the regulation, the moral vanity, the whole cathedral rested on the fact that someone else was absorbing the violence and handing Europe the bill. Gigantic discount. The Europeans knew. The institution knew. And the most damning thing is how quietly they said it. Reduced responsibility model. That's the sound of 70 years of free riding being summarized in three words by the people who benefited most. It's the politest possible language before the invoice, before the bill. The bill has arrived and the rent is rising. America spent$20 trillion more on the defense than all the other NATO members combined over the last 50 years. Combined. Remember, 50 years coincides with the peace dividend. And in the current United States administration, it's decided that the bill is coming home. Football ain't coming home, but the bill, the bill, the invoice is coming home. This is not ideology. This is not isolationism. This is the largest sovereign on planet Earth presenting Europe with a long overdue invoice. Ammunition has a price. Energy security has a price, Germany. And telling voters that the welfare state and the war state are now the same invoice, that has a price too, and that's the price that the Labour government is going to be subject to later this week when the UK goes to some regional polls, regional elections. And when those prices land on the European balance sheet, the sovereign European balance sheet, Europe no longer looks moral or sophisticated or inevitable. Europe begins to look like a financial arbitrage that's closed. I'm a finance kind of guy, and I've got to say that the mark to market on that closure is not going to be gentle. Let's do movement two. I want to talk about the autopsy. I want to talk about how Britain built a state it can't afford. Now to do so, I'm gonna have to speak about the specific mechanism that built modern Britain. Because Britain the United Kingdom, it didn't just inherit a sovereign problem. I'm focusing on the UK because the UK specialized in the sovereign problem. Here's how I think the money worked. And I'm gonna make this simple. So for decades, Germany, China, Japan, South Korea, Singapore, Taiwan, Edal, they were running enormous trade surpluses. That means they sold way more to us than they bought from us. They were building all these factories, not for the domestic demand, because domestic demand, they were kind of suppressing people's wages. So like you're kind of suppressing and keeping down people's wages. Wages went up, don't get me wrong. But productivity was going up way greater, and economic logic and fairness would dictate that you should pay the Chinese worker more. That did not happen. And so there was a need for a donor country to buy the exports that the suppressed wages of the mercantilist country could not afford to sustain. And the the deal, and there's a deal between two sovereigns. The deal is you buy up our manufacturing surplus, and all that money that you're gonna send to us, that's a surplus, that's a trade surplus. And it's gonna go somewhere. It's gonna come straight back at you. Straight back at us. We get the money. And Britain was like, I kind of like the sound of that. Britain said, Send your capital flows here. We have a stable, world renowned legal system. We've got deep-ish financial markets, we've got old institutions that look trustworthy. And so the surplus capital of the world flowed into Britain. Not Britain alone, Australia, New Zealand, Canada, and of course, the daddy of them all, the deep liquid markets, the the rule of contract law, the rule of law, America. But surplus capital flowed into Britain and it bought British government debt, it bought guilts at macroeconomic circles. We call this purchase of the guilt, we call that collateral. Because these guilts have the look and the feel of an American treasury bond. And damn, you see, we've we've lived in a monetary system these last forty, fifty years, when when treasuries treasuries are the real deal. Treasuries are the gold of a bygone era, like the base money, and the accumulation of base money of treasuries and guilts and German boons and Japanese JGBs into a huge foreign exchange reserve held by the likes of China, that becomes their moat. It becomes their security for a rainy day. It makes them almost impregnable. That's why the mercantilists voted for it, the donors of the capital. But the deal for the host countries like the United Kingdom is a bit harder. I mean, sometimes I feel like it was a bung. You know, the French call that a pot demand, like a bribe. You see, because so much foreign money was chasing British debt. That the the interest rate, the guilt yields, were couponed about by the price of the yield that Britain had to pay on its government debt. The cost of the government's money, when it was so much in demand, the cost stayed very, very low. Really fucking low. Which meant Britain could could borrow cheaply. Not for days, not for weeks, not for months, for decades. And spent far beyond what it was actually producing, actually earning. So the NHS, the benefit system, the public sector wage bill, the pensions obligation. None of it, nada was funded by British output. It was funded by the willingness of foreign surplus capital to keep lending to the United Kingdom at rates made artificially cheap by a machine that was running over overseas. All of this podcast tonight rests on Britain did not earn its state. Britain borrowed it at subsidised rates, at rates risen by someone else on their continent. So what looked like welfare settlement built on British values and British taxation? In actual fact it was a credit arrangement underwritten by Chinese import suppression and German wage restraint. The British sovereign was living inside someone else's industrial policy. We're mistaking it for social democracy. But here's the thing, where did the money actually go? Did it go into factories, into research, into building things, into deepening productive capacity in the United Kingdom? I think you know the answer. No. It went into property, into financial engineering, into asset prices. You see, money is like the selfish gene. It seeks its continuation. It wants to perpetuate itself to eternity. It just loves inflation. And British asset markets, like asset markets elsewhere, they offered this in droves. And capital loved it. London thrived. Those gleaming global extraordinary buildings if you were inside them, the Gherkin, the whatever. At the same time the North hollowed Wales. Wales hollowed. I mean who cares? Scotland hollowed. I mean we we care, we care. The North, Wales, Scotland, they hollowed. The productive regions became in the language in the language of others, they were bypassed entirely. The state growing fat on suppressed borrowing costs. Mistaking the foreign capital inflow for his own virtue. It wasn't a mirror. If it was a mirror, it was a black mirror. The message was wrong. The message was the state seemed invincible. Except now the machine the machine is breaking. Why? Because America under Trump is no longer passively absorbing the surplus created by the mercantiless nations like China. Trump said, and I support this, he said, enough is enough. Like trees are not meant to grow to the sky. The Chinese trade surplus was not meant to grow every single year. There was meant to be at like a point of equilibrium, of disequilibrium, like there was meant to be a cycle that would prevail. America began to recognise there was no exorbitant privilege. There was no gain to be had from being the consumer of last resort. This was an arrangement that was leading rapidly to the United States and these other noble, old, open countries like the United Kingdom, becoming serfdoms of mercantilist nations. So instead America stepped in and said, We want foreign capital, but we want it on our terms. We want to redirect it into our country, not into American asset markets, but into American factories, producing more American workers with higher wages, greater American infrastructure, and of course AI the great race to control tomorrow. And that matters hugely for the United Kingdom. Because the flow, the flow that kept British borrowing costs cheap, is being redirected. The deal's being renegotiated. Samson, America Samson, is growing his fucking hair again. Growing some much needed balls and standing up for the little guy. Now America has the scale to make a difference. The UK country built with promises built at subsidized rates and the subsidies being withdrawn? Whilst the promises remain? Ooh, that is not a good situation. A solution. So what is the British government doing about this? I mean, America's is spending. It's got four hyperscalers. Four private companies alone spending almost a trillion dollars. It'll be a trillion dollars next year. That's four private companies. I doubt the UK has a trillion dollars to spend. Instead, the great minds of the civil service and the political class, they've got a vision for the city of London. And I'm reading directly here from the top of my head. The Labour Party, the Chancellor, they want to reinvigorate risk taking, promote innovation, attract more global banking and finance. Attract more global banking and finance. Read that again and again. In the middle of the biggest repricing of the economic system in like a hundred years, Britain's answer is to become a better receptacle for the capital that's already leaving. I mean, are they fucking serious? UK administrators are spending all of their time polishing the petri dish, deepening the depend dependency precisely as the dependency is being withdrawn by the valiant attempts of the US to insist on equilibrium and world trade. I mean, the old joke was that insanity is doing the same thing and expecting a different result. But Britain has improved on the joke. It keeps doing the same thing and expecting the old result from a world that no longer supplies the input. The UK does not suffer, undoubtedly, alone from this. But let's discuss the welfare trap. You know, I'm talking about the capital. It's not quite in flight mode yet, but it's not coming in in the manner that it once did. The revenue. But the promises are still intact. Let's discuss welfare arithmetic. In the United Kingdom, it's called disability and sickness benefits. And they're spending 81 billion pounds a year. I mean, the UK is what is that? Is that 120, 130 billion dollars? UK everything today is just seems tiny and and and who cares with regard to when you compare it to the size of the United States. But the United Kingdom is spending 81 billion pounds, 130 billion dollars a year. And that is one and a half times the size of the entire defense budget. One and a half times the cost of defending the country. And they're spending that money so that citizens don't have to work in that country. Or put it another way, the state is spending almost$100 billion annually managing incapacity while trying while trying to build an AI superpower with sums that by comparison look like chicken shit. I mean, literally like a couple of hundred million spread over years. So they're spending a hundred billion a year, growing into a hundred billion a year. On incapacity, and maybe a hundred million spread over the next six years. Last year when they tried to cut five billion from that, eighty-one billion number, one hundred and twenty, I'm not playing darts, but one hundred and twenty of the government's uh MPs, ministers of parliament, they rebelled, they killed the plan. So here's the trap in in its full terrible clarity. The state cannot cut the political cost. I mean they've got an enormous political majority, and they can't cut the insanity. The political cost is presently deemed to be greater than the borrowing cost. But it can only keep borrowing if the bond market keeps buying. And the bond market will only keep buying if the foreign capital from the mercantilist keeps flowing, and then over here you've got the biggest sovereign, and you've got crazy Trump saying, I'm not having it. I want that flow and I want it that flow in the United States. Systems change when someone breaks for cover. Like the UK in the early 1930s was the thankfully it was the rogue. I don't mean rogue in it in any pejorative manner, but the UK was the rogue state when it put its hands up and said the gold standard, nah. And kind of like that's what happened with Trump. He said a perpetual trade surplus system that favours China. Nah, we're out. The biggest sovereign became rogue and the funding of the British incapacity benefit system is becoming precarious. And you know, as I know, that the real yield on the British guilt is already moving higher. And it's not noise is not a fucking tantrum. The guilt market knows. The pound knows. It knows what every fucker with a Gulf Stream knew first. It's beginning to price the withdrawal of the mercantilist subsidy on the welfare state. So let's go back fifty years, more than fifty years, nineteen seventy six, when Britain went to the IMF, when Britain was brought to its knees, hat in hand, the pound in free fall credit exhausted. I say the pound in free fall, pound today is trade weighted, not terribly far away from that exact spot. Not quite, we're 135, and like you'd be talking about another 35%. That's a big deal. That's a devaluation. But in 1976, the British Prime Minister and a Labour Prime Minister, so the same as the political colours presently in number 10, Downing Street, the Prime Minister stood before his party and he told them, You cannot spend your way out of a recession. From the most unlikeliest source, Labour Conference Party, we heard one of the most honest speeches in British history, and it destroyed his government. Today, in 2026, the path of the debt, we call it the trajectory, the current account deficit, the thinning tax base, the structural element to the deficits that no budget dares to seek remedy for. The political paralysis of a government with a massive majority. They cannot find the will to cut a single one single protected line. They couldn't find it within them to cut one line. I hear 1976, not perfectly, but enough to keep the question worth pricing. A government elected with one of the largest majorities in modern British history is facing a collapse in popular support that no that has no modern precedent. This is not midterm blues. This is a population concluding faster than any polling model that the British sovereign state is no longer. Final section. The ghost story, the autopsy, the part that matters. Because markets don't pay you for understanding the decline, they pay you for knowing what comes next. And scarcity is bad. Here's the world we're moving into. The digital economy is building an abundance machine. Globally. I'm talking about intelligence, code, content, everything replicating it near zero marginal cost. Everything that can be copied will become cheap. Which means capital is hunting the things that cannot be copied. Rock coastline island jurisdiction Saint Bards. So island in the Caribbean. Guess what? It cannot be printed by a central bank. It can't be approved by a planning committee. In fact, the planning committees are trying to make it tougher and tougher to build a house here. A friend was staying with me last week at Blanc Blue. He was here to buy a property. He saw one listed at 31 million dollars. I am the intel here and I know that the owner of that property purchased it during COVID. I think I think he closed it in 2022. Nobody calls that a bubble. Because nobody serious believes that supply can respond. It's not speculation, it's inventory scarcity being repriced against a world where everything else is becoming abundant and cheap. Barr says many things, but it's not lifestyle. Well there is lifestyle. It's my short position on the sovereign expressed in rock and coastline. When I left in 2015, I I reckon the best London properties traded Paris. They traded one for one with what you could buy on the island. I say that ratio has moved. I say it's moved in favour of St. Bar's. The premium you pay here is not for sunshine. It's for the absence of what's happening elsewhere. And I include France. London's the mirror image. The real estate desks won't say it loudly, but the flow tells you everything. Sellers everywhere, buyers then. Except at the very apex where a single house. I actually knew I kinda know the guy, a guy, a guy I've met in the same bars, a hedge fund guy. Just bought a single house, cleared it, I think£235 million.£235 million. That's n that's that's not the housing market. That's a trophy. That's status storage. That's the price itself becoming the moat. But below that level, London, London's exposed. Tax, regulation, politics. The war on the the non-DOM thinning retreating, receding buyer base. Lawyers, accountants, consultants, the entire professional loo that the city built. The city was built to employ these people. They're being hollowed out by a large language model that costs twenty dollars a month. The middle of the London market is not collapsing because buyers ran out of money. It's collapsing because buyers ran out of patients with the bozos running the country. Wealth taxes is coming. Government sensing the bleed will will reach inward. Wealth taxes, one-off levies, administrative friction dressed up as of course dressed up as fairness. California already rehearsing the script. I mean Stalmer will be replaced, and he'll be replaced by someone with rater slogans. He or she will be cheered to the rafters. It won't work because the constraint has shifted. The people you need to tax are the ones most able to leave. They're already leaving quietly, efficiently, following the price. When the British Chancellor will it still be the lady? When she finally tables a wealth tax, somewhere over the Atlantic, a man in a private jet with a coffee and a passport will read the headline on his phone, sip his coffee. He ain't coming back. There's a new geography that's already visible. You stop pretending you can see it. Miami, Dubai, Singapore, handful of alpine villages. Is it Aspen? Is it Vale? St. Barnes Argentina, maybe Argentina. If Mele holds the line, God I pray for his soul. He needs great security. These aren't vacation destinations, they're working prototypes of the next form of sovereignty. Sovereignty in the future is no longer a country. It's a cluster, it's a city state. It's a fiscal microclimate, a place where capital and people can can land without friction. Call it many things, but for me the elite exit is not moral failure. It's the price discovery mechanism for what state services are actually worth, run in real time by the people with the means to vote with their feet. The very large landed estates of ancient Rome. Now portfolios of jurisdictions, Miami, Dubai, Singapore. And I lament for that. Do I lament? I don't know. I note it the lament comes more from the fact that I have children in the United Kingdom. Stepping into an age where the old map is being handed to them with full confidence by people who still believe it works. I I thought it worked. I got two kids about to leave university. When they started, I still believed in it. Study this, qualify for that, climb here, the system will meet you halfway. I believed it. It worked for me, but Britain was drawing on a creditor arrangement with the Chinese that I confused with the social contract for do gooding. The credential, the university credentials become a delay mechanism. It's become an extended year out, an extended gap. If there's a ladder it's no longer connected to anything that pays. And again, the non state has cost effective answers. My kids are gonna stay in a five-star hotel in Malaysia in the month of August at an AI camp with kids, hungry kids from all over the world. Kids being taught how to put a presentation stack together, how to talk to private equity, how to raise money. Imagine that. Do you know how much that cost? A fucking grand. So the conversation changes, whether you're ready for it or not. It's not what you study, it's what are you building. Not how do you enter the system, but how do you rule around it? How do you smash right through the damn thing? Right, I gotta end this thing somewhere. The paper on Substack has a trade, but I'll let you find that out. Let me conclude. Britain built promises at subsidized interest rates. The cost of money was way below market for decades. And that subsidy is being withdrawn whilst the promises of the state remain. I'd watch three things. I'd watch the guilt boon spread. I'd watch real ten year guilt yields. I'd watch sterling against the jurisdictions where British capital wants to live. Switzerland, look at the the the the the British rate against the the Swiss franc. Those prices will tell you more than than the budget. They'll tell you more than the city strategy, more than another speech about growth and risk taking from politicians who've never taken any risk in their life. And I repeat, I repeat, I repeat, trades are not prophecy. Trades are the balance sheet consequences of the sovereign settlement. The sovereign is no longer a relevant organization. And I'd belong the sovereign trying to reprice itself. And I'd be short the sovereign still polishing the Petri dish. Mind the gap, as they say, when you're going underground. We should end with the jam. I fucking love Paul Wehr. I love that song Underground. But I'm not. I'm not because I'm still here in St. Bars. The sea is still flat behind me. The moon has shifted to the other side of the hillside. And somewhere in a treasury basement in London, someone is writing a press release, someone's preparing another speech about growth and innovation. The host country, the United Kingdom, is going to wake up the day after tomorrow, the day after the elections. And it's going to try and act normal. It's not normal. It hasn't been normal for 40 or 50 years. I am Hugh Hendry. I'm the acid capitalist. This has been long. Broadcasting from a rock, the Caribbean, and I love you all to bits, and I thank you for spending more time with me this week. I always say miser and hugs and kisses and and remember happy people make smarter decisions. And talking which again, August 2nd to the 6th of summer camp, here in St. Paul's. Come, swim, argue. Put the right we'll put the world to rights over something gold. And the substack, the full written version of everything you've just heard is is it's it's there, people subscribe. Long forms, citations, trade notes. Thinking that doesn't fit in this microphone. I promise you the price will be there in the morning. The price is the only honest thing in a crooked world. So before you go to sleep tonight, lock the doors, dim the lights. Because I've decided to send you all to commentary. It had to be the sound of a country going sideways. Unemployment, unrest, dread. One of the greatest bass lines ever committed to music. It had to be the specials, it had to be ghost time. Musically, this thing is bizarre and yet brilliant. Maybe that's what the tombstone of the United Kingdom sort of looks like. Bizarre and yet brilliant. His sky slowed down. It's amazing, amazing trombone. Ghostly flute line is the big bass. Doesn't just describe purpose decaying, it's just like looking through.

SPEAKER_01 44:00

Bobamente you sort of sell this face Don't touch your father this country like that.