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Announcer:                 Broadcasting from Baltimore, Maryland, and all around the world, you're listening to the Stansberry Investor Hour.

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                                    Tune in each Thursday on iTunes, Google Play, and everywhere you find podcasts for the latest episodes of the Stansberry Investor Hour. Sign up for the free show archive at InvestorHour.com. Here's your host, Dan Ferris.

Dan Ferris:                 Hello and welcome to the Stansberry Investor Hour. I'm your host, Dan Ferris. I'm also the editor of Extreme Value, published by Stansberry Research. Today we'll interview author Matt Ridley. You probably know him as the author of lots of great science-oriented books like Genome, The Evolution of Everything, and The Rational Optimist. The mailbag today, however, is the bombshell. It is loaded with controversy. Some listeners implied that I did something fraudulent. One of them told me what I did was shameful. You'll want to stick around for this one. And, as always, I'll start off with my rant. This week I'm going to talk to you a little bit about bitcoin and why I think you should own some, and other assets I think you want to own, and why. All that and more right now on the Stansberry Investor Hour.

                                    Let's talk a little bit about bitcoin. Now, most people who read my newsletter, Extreme Value, know me as a bottom-up value investor who basically picks stocks for a living. When I have one to pick. We don't always pick one every single month like clockwork. It doesn't work that way for us. But that's who Dan Ferris is to his readers. And so when I added bitcoin to the newsletter a couple of months ago, it was kind of like, "Whoa, whoa, whoa, what's going on here?" And of course we've also added different ways to buy physical gold. So we're developing this portfolio that is going beyond the normal value investor stuff. And I think it's important to do that right now.

If you think you're diversified right now because you own some stocks and bonds, I don't think you're diversified. I think you have to have three other assets besides stocks and bonds. You have to have plenty of cash. You have to have silver and gold – and I would emphasize gold actually. But both. I have both, and I encourage you to have both. And you have to have bitcoin I think. Even if it's a small amount. A small amount of bitcoin I think can do amazing things for you. Like if you have a small amount of gold, I don't think the price is going to go up like 100 times. But if you have a small amount of bitcoin, I think that's a possibility. Something like that.

Who knows what it is? I just throw numbers out there and people say, "Well, if it only 80 times, they'll say you were wrong." No. If it goes 80 times, I was right. Because the point is just some huge number: 30, 50, 70, 80, 100, I don't know. Some huge amount way up. So why am I interested in bitcoin? Very simply – because I think it's the hardest currency on earth. Bitcoin is computer code. It's encrypted computer code. It's a cryptocurrency. So it's this electronic cash – it's called a peer-to-peer electronic cash system if you read the original bitcoin paper at Bitcoin.org.

And it's only created at a certain rate and only a certain amount of it will exist many years from now when the last bitcoin is created. After that, no more bitcoin will ever be created. So the rate of creation is programmed in and the rate of inflation, you might say, of the expansion, the amount of currency, is programmed in. It cannot be changed and it cannot be increased at someone's whim, like fill in the blank, every other currency on earth and every other currency that's existed. Like even gold – think of gold or silver. One could conceive a situation in which, for some reason, absolutely enormous sums would be put into gold mining, and all of a sudden there's a lot more gold. That might affect the price. Not really sure how much it would have to be to affect the price.

Or there might be some technology, let's just say, that allows you to get the gold out of seawater, for one example. And there is a fair amount of gold in seawater but you can't get it out, right? It's like pulling the flour out of a baked cake or something at this point. The technology doesn't exist. If it did, there would be a lot of  people trying to do it probably. And there'd be a lot more gold around. bitcoin – this isn't going to happen. There isn't going to be any kind of technological breakthrough that suddenly we're going to be able to create more bitcoin. There isn't going to be any government response to a crisis where we say, "Well, we need 50 times more bitcoin – we need it right now." None of that is going to happen. So that's why I say bitcoin is potentially – or not potentially – it is the hardest currency in existence.

And it's interesting: you see people coming around – some pretty famous, highly credible – well, let's just call them famous, highly credible people like Jamie Dimon. I mean, I don't know if he's highly credible to me but I think he's highly credible to a lot of other folks. And in 2017 he came out – in September 2017 he was speaking at some conference in New York or someplace and he called bitcoin a fraud, and he said, "If any of my employees are caught trading it, they're going to be fired because it's against our rules and it's stupid," he said.

Well, now of course, February 2019, JPMorgan Chase started their own crypto exchange. And now, just recently, within the past few days here, they've extended their banking to bitcoin exchanges, to the Gemini and Coinbase exchanges. Gemini's the one owned by the Winklevie – the Winklevoss brothers, who were early in Facebook – and there was a big controversy, blah blah blah. We don't need to get into that. And Coinbase is the biggest one. And I use Coinbase myself. If you want, you can take your bitcoin and just put it into a hard wallet. You can just basically take it offline. And Coinbase does that with bitcoin too, with their bitcoin. With your bitcoin, I should say [laughs].

So it's pretty cool. If you just look at the attributes of what makes a good currency, this thing is durable because it's protected by cryptography. It's a cryptocurrency. It's protected by computer code that is too complex to hack. And you can protect it by just sort of keeping it on your little device if you want.

So it has this durability quality that people assign to things like gold and silver. Actually silver tarnishes, right? I'm not saying silver's bad money and that you shouldn't own silver. I'm just pointing that out. And bitcoin will never be inflated the way a fiat currency can be and will be inflated. And is being – the U.S. dollar, the world's reserve currency – the world has like three reserve currencies. The No. 1 of course is the U.S. dollar, and then there's the euro and the yen, too. And they can all be printed at will. They can print as much as they want. And the folks in charge of those currencies can do all kinds of things.

Mario Draghi, when he was the president of the European Central Bank, says, "We'll do whatever it takes," meaning shove interest rates into negative territory, or print and buy and print and buy and print and buy, the way they do. They print and they buy bonds, central banks do. And they're in charge of the currency, right? Federal Reserve is in charge of the U.S. currency. And what do they do? Well, they print and they buy and they print and they buy and they print and they buy [laughs]. They print and they buy Treasury bonds and they print and they buy junk bond ETFs and they print and they buy mortgage-backed securities. So, not going to happen with bitcoin. Not going to happen.

And some people think that these halving events in which the rewards for mining bitcoin into existence are cut every so often are a big deal, and, "Oh, you better buy before the halving." And the price is actually down right now compared to what it was not too long before the recent halving which occurred. So I don't care about any of that. I just think that everybody oughta own some for the same reason I think you oughta own some gold: because what we are going through – this is the why I promised you. Why should you own some gold? Why should you own some bitcoin? Why should you hold cash?

Because here's the way I think this plays out. What just happened, shutting down the global economy, shutting down the U.S. economy, that's a deflationary event, right? It makes a big hole in the world. It lowers people's incomes. It suppresses commerce. It's deflationary, depressionary. Some people say, "Well, this is kind of a depression, isn't it?" Because it's so severe. Thirty million people out of work. I haven't seen anything like it since the Great Depression. So this is a very depressionary type event. And what is happening? Well, the Federal Reserve is printing money and buying securities.

And we've talked about why in the past that has not created big inflation, right? Because it's basically a swap. You print the dollar, you buy back a Treasury bond, so you're unprinting the Treasury bond, and you're not financing anything new. You're not pushing up any asset price. The only thing you're supporting is that Treasury bond price. So it's kind of a swap. But there are more dollars in existence. And when this gets to be a problem is not with the Fed doing QE. It's with the federal government borrowing and borrowing and borrowing to try to stimulate because they've shut down the economy and suppressed real commerce. So that creates a hole. And then they're trying to fill that hole in.

And we mention different numbers. Ray Dalio from Bridgewater says it's a $5 trillion – with a T – income hole in the United States. And outside the United States maybe a $15 trillion total income hole. That's a lot of filling in. It's going to take some doing to cause inflation in that. But I think it can be done. Governments can borrow and borrow and borrow and borrow and spend and spend and spend, and they increase their deficits more and more and more and more. And eventually these huge debts – at the very least they have to be serviced and turned over somehow, right? So it just creates a need for more dollars. And that need for more dollars is there now in terms of that $5-trillion income hole in the U.S., $15 trillion outside the U.S.

And we had a guest on the program, Raoul Pal, talked about – he talks about a $12 trillion outside-the-U.S. in dollar-funded debt. Most countries – they can't print their currency. So they're borrowing in a currency they can't print. Ooh. That's rough. We're borrowing in a currency in the United States that we can print. Yay, us, right? It makes it a lot easier when you can print the currency you're borrowing in. But a lot of people can't do that. A lot of countries, a lot of small countries with limited means otherwise, and not anywhere near the kind of economic power of the countries that do print these reserve currencies, especially the U.S. dollar. So there's a problem there developing.

And what happens probably – probably – is that the U.S. dollar just becomes so strong that it kind of blows itself up. And the analogy here I realized recently may be the end of the gold exchange standard in 1971. Why did Nixon end the gold exchange standard? Well, because people saw the inflation in the United States and they wanted gold. They didn't want U.S. dollars. So they were exchanging their U.S. dollars for U.S. gold. And Nixon said, "Wait a minute. We don't want to do this. We don't want to give our gold away. So guess what? The window's closed. You can't do that anymore. The dollar is just – it's a promise. It's not backed in any way anymore by gold."

And I think now we are priming – the pump is primed via this huge depressive event of shutting down the economy and then the response to it. The pump is becoming primed here for a similar event. And the thing that the gold bugs can't wrap their heads around is that the dollar blows itself up not by weakness but by strength, for the same reason that the U.S. kind of screwed gold up and screwed the dollar up in 1971. Gold was too strong, in other words. So they had to shut it off. Well, the dollar's going to be too strong for a lot of people. All those people who can't print their own dollars. And I think you're going to get this event where the dollar surges greatly in value and becomes this kind of wrecking ball where people who can't print their own dollars are going to see horrendous developments in their own economies because they can't fill in that hole.

And of course the Federal Reserve will see all of this, and it has seen all this and begun to print lots more dollars. So we know that that can go on, and you can print a bunch of them without creating huge inflation but I think you can't print a bunch of them and continue to borrow on the fiscal side without eventually inflation becoming a problem. When does it become a problem? When does this all happen? Hey man, your guess is as good as mine. What do we say around here? Prepare, don't predict. So what I'm doing is I'm not making a prediction – I'm stating a huge risk in the system. You understand the difference, right? If it doesn't happen, hey, great. I hope I'm not right. I hope this isn't the worst thing since the Great Depression-World War II era. I hope it's not that. I fear that it is and there's evidence that it is.

So we're in this position where an investor can no longer afford to just be that 60/40 guy, stocks and bonds, and "I'm diversified because I own plenty of different stocks and I own some bonds and I'm good." I think you have to have plenty of cash. I think you have to have some gold. And I would say plenty of gold. And I think you have to have some bitcoin, too. Because in the future there is bitcoin and it's a well-managed currency. And when I say "in the future," I mean we could easily see a future where bitcoin and gold are kind of side by side.

And I think they both do. I think they both increase dramatically in value in the future, and I don't even think things have to go full-on greater depression Doug Casey's nightmare kind of a thing for bitcoin and gold to increase dramatically in value form here. Maybe just call it $1,700 – what, $3,000... $6,000 gold? Or bitcoin is still below $10,000... $50,000... $100,000 bitcoin? I don't think those are crazy projections. I think you've got to own some.

I think every hundred years or so stuff changes a whole lot. All the reserve currencies always kind of go out of business, right? Eventually there's a regime change. It's happened every time – it's never not happened – where the reserve currency has just gone out of business, right? British pound just went out of business as the world's reserve currency. And the U.S. dollar has been the big up-and-coming world dominator, Coca-Cola currency. That's not going to last forever. And, historically speaking, it may be about the time for us to be really worried about that change.

And, yes, Porter Stansberry has talked about this. Gosh, he's been talking about this – I think he may've been talking about this for 10  years or more. And it's that kind of a development. If you were 10 or 20 years early talking about it, you still kind of nailed it because it's so gigantic of a development and changes things so much. So that's, in a nutshell, why I think that today, more than ever, you need to own – you can own your stocks and bonds. But they're a smaller percentage of the overall pie now. And I think you need to own them. I think you should own U.S. stocks and bonds.

I think U.S. is still the absolute No. 1 alternative in equities in the globe today. That's not an especially controversial statement I realize, OK? But you need to own your U.S. stocks and bonds. You need to hold plenty of cash. What do I think is plenty? I think plenty actually starts at around 20%. Probably not 50%. That's probably too much. But 20% and up is the neighborhood I think you should be in.

And what else? Gold and silver. I personally own more – yeah, I do still own more silver than gold. I bought some gold recently, and I'm probably going to buy some more soon here. Just to adjust everything to where I think it needs to be personally in my portfolio. So own silver and gold. Own lots of cash. And hold bitcoin.

How much? Look, it doesn't have to be hardly any. If you've got $1 million – say that's your portfolio and you've got some gold... you've got some cash... you've got whatever, $200,000 in cash – you could own like $10,000 worth of bitcoin, and if it soars in value, if it goes 10 times or 20 times or 500 or 100 or some huge number like that – because it's such a hard, well-managed currency – and things turn out as bad as I'm afraid they might, your bitcoin could really – it could save your whole portfolio, right? Even if you only buy a small amount. Huge optionality. So you get to limit the downside by the amount that you buy, and then you still expose yourself to what I believe – this is my opinion, right? That's all it is – is potentially enormous upside. Buy some bitcoin. Just a little bit is enough. OK?

That's all I'm going to say about that for now. What I really want to do now is talk to Matt Ridley. I've been waiting to talk to this guy and wanting to talk to him. He's a really smart guy and he's written these huge famous scientific books that have – they're kind of a cultural force. Let's talk to him right now.

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Today's guest is Matt Ridley. Matt Ridley's books have sold over a million copies, been translated into 31 languages, and won several awards. His books include The Red Queen, The Origins of Virtue, Genome, Nature via Nurture, Francis Crick, The Rational Optimist, and The Evolution of Everything.  His TED talk, "When Ideas Have Sex," has been viewed more than two million times.  Nice. He writes a weekly column in The Times of London and writes regularly for the Wall Street Journal. Matt Ridley, welcome to the program, sir.

Matt Ridley:                Great to be on the show.

Dan Ferris:                 Well, Matt, I'm curious as to how this career path of yours got started. I always start my interviews that way because I'm always curious as to how someone just came to do the thing that they do. And I think you've shown that you do your thing rather well. How old were you when you first got an inkling of how you'd spend your career?

Matt Ridley:                That's a really good question. I think I was in my mid-20s. So when I was a child I wanted to be a naturalist, and it then became clear that that wasn't a career. And so I then wanted to become a scientist. And I did a PhD in Biology. But I realized I wasn't actually great at the things you need to be good at for science, which is deep focus for a long time. I preferred a much wider focus for – I'm only on the planet once. I wanted to see more of the issues of the world. And then it suddenly dawned on me that I was actually quite good at writing and not very good at mathematics and things like that, but quite good at writing, and that I should try and become a journalist.

And I always wanted, at that stage, to be the kind of person who would write books about science. And actually that's what I've managed to do. I mean, I've done other things along the way to keep body and soul together. I've sat on the boards of businesses. I sit in the House of Lords in the British Parliament now. But it's satisfying my curiosity about the world by writing a book about something and talking to clever people in the process. That's what I get a real kick out of. And I've been very lucky to do it for something like 40 years now.

Dan Ferris:                 So, Matt, I'm going to jump right to it because I just – I can't help myself. Here we sit, you and I on opposite sides of the pond here, as the world shuts down in an attempt to fight this coronavirus, and I'm hoping that the particulars of your work as I've experienced them in some of your books can help us maybe get an understanding or give us something just to help explain what we can expect, what we're going through, how to process it.

                                    I did find in one of your older books from the '90s here called The Origins of Virtue: Human Instincts and the Evolution of Cooperation. And I thought there was a nice little passage in the back about the taboo of hoarding. And of course hoarding has become a bit of an issue here amidst the virus with people hoarding all kinds of things, from hand sanitizer and Clorox wipes to toilet paper and food and so forth. And the way you wrote about it though I thought was very interesting because the hunter/gatherer society you said had a taboo on this, and then once people settled down, there was less taboo on hoarding and it made more sense for some people to sorta keep their stuff to themselves and be a little more selfish. And it made me wonder: what would Matt Ridley say about a crisis in which people tend to hoard?

Matt Ridley:                Well, I think what I was referring to was that in the hunter/gatherer world the hunter is lucky one day and not lucky the next, and if he kills an animal that's too big to eat one day and doesn't share it, then he's in trouble the next day when his friend kills an animal and he doesn't. And so we do seem to have an instinct for particularly exchange. "I've got a bit more than I need of this –  you've got a bit more of what you need than that." It's a very deep human instinct. It runs throughout you. It's not really found in other animals in the same form. And so in that sense, we are sharers. We are exchangers.

But it's true that when we developed agriculture, it was possible for the king or whoever to accumulate a heap of grain in the form of taxes, put it in a store, and give it to his clients who were in his army or his police force or whatever it is to enforce his power. And human beings did that over many centuries: hoarding assets that enabled them to have power over other human beings did happen. But it was always pretty resented.

And I think to some extent what you're seeing today is that when people go out and selfishly accumulate toilet roll, there's a real reaction in terms of this not being the socially responsible thing to do. And I was very interested actually by a tweet by a friend of mine who lives in Southern England today saying, "I just don't recognize this picture of us all hoarding and stealing every toilet roll out of every shop." Not stealing, but grabbing. "Round where I live, this isn't happening. Human nature seems to be nicer here than in the big cities." And I think actually what he's saying there is that the media is going to find the places where hoarding is going to happen and they're going to broadcast it, and that's going to give the impression it's happening everywhere, and as a result, people are going to rush out and do it.

So a couple of weekends ago there was a lot of reports on the television here in the U.K. about people panic-buying toilet rolls, and before you knew where you were, people around here were doing it too. And it's strange the way people follow the herd instinct on things like this. I think we are in such an unprecedented situation. Obviously we've had pandemics in the past and they've been far worse in some ways than this one, ones that killed children as well as old people, for example. And we were much less well set up in terms of modern medical facilities and so on. But I don't think we've ever had one of these pandemics of this significance in a globalized modern world. And it's more than 100 years since the great influenza of 1918. And I really don't think we've seen anything like it.

I'm interested in several things. One is that – I wrote a book called The Rational Optimist saying the world's getting better, not worse, and that may look a bit under strain as a philosophy right now. But actually I think we will eventually get through this and improve the world on the whole. It will be very painful along the way. And it turns out that I underestimated the ability of a virus to turn both very contagious and very dangerous.

I didn't wholly underestimate it. I wrote a book, a very short book in 1999 called The Future of Disease. And in that I discussed the possibility of a pandemic. And I did at least say, rather interestingly, that it would have to be a virus, not a bacterium nor a parasite, because we're good at controlling them. It would almost certainly be respiratory because we spread lots of respiratory viruses every year: colds we call them, or flus. It seems to be – it's by far the easiest method of transmission that we haven't cleaned up. Because we've cleaned up our water supply and so on. And it would probably come from an animal species, jump into our species.

And I even said it'll probably come from bats. And why did I say that? Because a whole bunch of new viruses had already come out of bats in the last 20 years, things like Ebola, Nipah virus. But bats are the only other mammals relatively closely related to us that live in really huge aggregations like we do. They live in cities. They call them roosts but there's a bat roost in Texas with roughly the same population size as Mexico City. So that gives you an idea of where these respiratory viruses are going to be found. They're going to be found in species that do that. You're not going to find respiratory viruses that're threatening to people in tigers, which live on their own, for example.

So I did at least see that if there was going to be a pandemic it would look like this. But I did not expect that it would be capable of getting one step ahead of modern medicine to the degree that it has. And I think the problem is largely because of asymptomatic transmission. It's people passing it on before they even feel sick. I think that's this virus' particularly crucial trait.

Dan Ferris:                 If one were to sit down and design such a thing – I'm not saying someone did, but they could hardly do a better job, could they not?

Matt Ridley:                Yeah.

Dan Ferris:                 With asymptomatic transmission, and most people don't die, etc.

Matt Ridley:                Yes, exactly. And actually there are some very prescient warnings from a paper in 2007 that I've been reading today saying there is a time bomb waiting to go off in the wet wildlife markets of southern China. This was after the SARS epidemic, which had a similar pattern of jumping from palm civets in markets into people, and was also a bat virus originally. In this case it may've come through pangolins in markets. But the point is: live wildlife in markets rubbing shoulders with other wildlife, being slaughtered in front of people – because that's how people like to make sure the food is fresh – is we now realize a very dangerous thing to do. That's where the danger lies. It's nothing to do with our cutting down the rainforest or anything like that. It's these particular markets. And we did nothing about it after SARS, and we should've done. China has now closed those markets.

Dan Ferris:                 Are we confident that they've really done that, Matt?

Matt Ridley:                Well, no. I mean, obviously I can't show it and prove it. But they have passed legislation saying that those kinds of markets must no longer operate, which is at least a step in the right direction. But personally I've gone on the record of saying this: I think the Chinese government does bear some responsibility not only in that respect but also in insisting right up until quite late in January that there was no evidence of human-to-human transmission despite a whistleblower doctor, who now is very sadly dead, saying that there was evidence of human-to-human transmission, and warning other doctors of the risk.

And the World Health Organization on January the 14th tweeted that there was no evidence of human-to-human transmission based on Chinese evidence that they'd received. And that was a big mistake. I think the World Health Organization has to look at what it did in this case as well. So I think there are questions to ask. But that's not to say that we aren't at fault in the West for failing to take precautions during February, the month when it was clear that we were going to be facing a pretty frightening pandemic.

Dan Ferris:                 Yeah. I'll say. You know, an interesting question here that's come up between myself and some folks on Twitter – there's a bit of a debate about: how free do you want to be versus how bad do you want to stop this virus? Is it OK to sort of shut everything down and have the government shut everything down, and does that really make things better? Are we really doing ourselves a favor by doing that? Where do you come down on this issue, Matt? I know you've written quite a bit about the role of government. What does it look like to you?

Matt Ridley:                Yeah. My instincts are liberal, libertarian. I want people to be free to do what they want. I think the only way we've achieved what we have as a civilization is by giving people the freedom to come up with things. It's very much the theme of my next book, How Innovation Works. The subtitle is: And Why it Flourishes in Freedom. Because it turns out you can't direct innovation. You can't plan it. You can't design what we're going to invent next. You have to let people experiment and come up with solutions. And if you do that they will come up with some good solutions, including solutions to pandemics.

But at the same time, I have to admit that, given we don't have a vaccine, given we don't have a cure for this disease, it is what they call non-pharmaceutical interventions, in other words quarantines and curfews, that is going to defeat this, as it did for many centuries in the case of other pandemics. And it's only less than a century ago that quarantines were routine for people with typhoid, people with whooping cough, etc., that you were supposed to close your door and stay at home. And bad luck if you couldn't earn any money and you didn't have enough food and things like that. At least we hopefully will not have that problem on the same scale. But it is very very hard for people.

The problem, you and I know, is that when this is over, will the restrictions, will the authoritarianism, will the central edicts go away? Or will they stay? I mean, Britain introduced food rationing during the Second World War and didn't lift it, didn't remove food rationing until 1954, something like six years after Germany had done so. Why? Because the food rationing bureaucrats said, "Oh, we need food rationing." What they meant was: "I need my job rationing food." And there was a lot of that problem continued.

The one thing I think we need to also look at is whether or not we were doing enough medical innovation before this. If we'd been seriously apprised of the risk of a pandemic, we should perhaps have allowed vaccine development and other medical issues to be more free to experiment, more free to look into things. There is a tremendous amount of red tape that has been swept away in the last three or four weeks, in the USA but also in the United Kingdom, about developing drugs, about developing tests, about developing vaccines. And you have to ask yourself: if we didn't need those rules now, then why did we need them before?

Dan Ferris:                 Yes. And you and I both know, Matt, that many people will read the situation exactly opposite, won't they? They'll say, "Why wasn't the government putting people on this and why weren't we spending more government money, more tax dollars trying to find solutions and vaccines and whatever it would've taken to have on hand before such a thing happened?"

Matt Ridley:                It is true that you can make a case for market failure in this area. In other words, that big pharmaceutical companies do not spend as much money on vaccines as they do on drugs because vaccines are wickedly difficult things to develop with relatively low success rates, and when they do get developed, they usually come in just too late, just when the epidemic's gone away.

So, for example, the Ebola vaccine was developed during the 2014 outbreak. But by the time it came in, Ebola had largely gone away. It's come back again more recently. But it's very difficult to make money out of vaccines for emerging diseases like this. So in that sense, it does make sense for people like the Gates Foundation and the Wellcome Trust to put money into a collaboration for epidemic-preparedness innovation. Not public money but charitable money. Which they did in 2017. And it's probably a good thing in this pandemic that we have such a thing. But it would've been nice if they'd done it 10 years earlier.

                                    Oh, one more point on that if I may. I don't know about you, but I'm someone who thinks that we are overreacting to climate change. We're spending too much money on a problem that is relatively less important than some others. And that's a very unfashionable view. It's very difficult to express it without being accused of crimes against humanity and things like that. But I feel this crisis has vindicated that view, in the sense that so much of our effort has gone into saying that climate change is by far the greatest problem that humanity faces in this century, and we've just had a sharp reminder that it's not, that there are much more urgent threats to humanity and that they've been under-resourced in recent years.

Dan Ferris:                 Agreed. They are arguing in Washington, D.C., about the contents of a bill that is designed, if passed, to help relieve some of the suffering from the virus, and yet the Democratic side of the aisle is arguing for all kinds of environmental rules to be put into this same bill rather than focus on the problem at hand.

Matt Ridley:                There's a slightly parallel issue here, which is that our emergency bill went through the House of Commons but the Liberal Democrat party has put down an amendment to the bill demanding that as part of our preparedness to deal with this epidemic we put on a hold the question of leaving the European Union formally – well, we've left it formally but leaving it legally at the end of this year. Some people just can't stop talking about their obsessions. In our case it's Brexit. In your case – well, in our case it's climate change too.

We've enacted in the U.K. a net-zero target for 2050, which could cost us trillions and trillions of pounds. We're currently being hit by a pandemic that is probably going to cost us a trillion pounds. So it'd make sense for us to cancel the net zero commitment and say, "When this is over, we would like to generate electricity as cheaply as possible, acquire our energy as reliably as possible, and worry less about – and not force people to give up gas heating for their homes and things like that." So I do hope that kind of common sense prevails but I have no great confidence that we won't just go straight back to the same old arguments all over again.

In fact, the argument will be made that: "See? These crises are about to come on us. And this pandemic is just a dry run for what'll happen when global warming gets going." Which I think is nonsense because one is an exponential problem that takes off very rapidly and the other is a non-exponential problem that takes decades to get going, in which you adapt to it.

Dan Ferris:                 And, Matt, you've actually addressed this aspect of very successful societies, haven't you? Where we do very well when we all get together and cooperate but we have this little issue that we become quite tribal. And I feel like as a society, maybe the U.K., Europe, the United States has become so successful that it has felt that it can afford to be so tribal. And yet I think we've found the absurd case here with people literally arguing over a problem that may or may not hurt a few people 50 or 100 years from now, cause trillions of dollars to maybe fix it, and they're arguing about that as people literally drop dead all around the world. It's absurd.

Matt Ridley:                You do put it well. And the tribal nature of human beings is something that intrigues me. Because I think it's when arguments go binary, black or white, red or green, or red or blue in the case of your political parties – when they become binary, when they become us and them, that they get particularly nasty. And it is very striking how polarized the political world is today compared with 30 or 40 years ago. And I have to say I didn't see that coming. That is to say, I thought the Internet would usher in a golden age of mutual understanding in which we would all see each other's point of view. Hasn't quite worked out like that, has it? [Laughs].

Dan Ferris:                 No [laughs].

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Matt Ridley:                I'm a bit of a technological  _____ about this. Because I think these communications technologies leave their imprint on political debates. So, for example, the development of printing in the 1500s essentially led to the Reformation, led to the polarization of the church into Protestant and Catholic, led to a lot of religious wars, but also led to a great flowering of culture and civilization. I think radio had a similar effect in the early 20th century. And you can trace the rise of the dictators in many countries to their use of radio. It had a sort of polarizing effect. People either were for one side or another. Funnily enough, television didn't really have that effect. It was much more of a medium that insisted everybody thought the same thing.

And when I was first living in Washington in the mid-1980s, it was not a very politically polarized time. You couldn't really tell a Southern Democrat from a Northern Republican. In fact, the latter might be slightly to the left of the former. That's not the case now and it's not the case in my country either, nor in many other countries. So I think we have yet to work out what social media has done to the discourse. It's not all bad. I mean, I think it's wonderful that we live in an age where we've disintermediated the media – we don't rely on the CBS, ABC, and NBC to tell us what to think. I think there are good things to come out of it. But it's taking a little getting used to as a global civilization.

Dan Ferris:                 Yes. And I think – correct me if I'm wrong, but I think it was in The Rational Optimist that you wrote about how people behave in a crisis. You were writing about World War II in England and everyone came together, rich and poor, and all political views, all walks of life. They all came together. They were all joined as one throughout the war effort. And I feel as though – this to me, the coronavirus, is the biggest thing that's happened since World War II. And we are seeing some people – it seems to bring out the best and worst of humanity, I have to say. Your point from the book was very well-taken: that people get together in hard times. But also the other side comes out too when people get desperate and they start looting and robbing and doing things. So, overall maybe I'm hopeful. Maybe you've left me a bit hopeful. But I'm concerned as well. Can you give me some directly there? Which way should I go here? [Laughs].

Matt Ridley:                Well, it's going to be very interesting to see, isn't it? I mean, a week or two into lockdown – we're in pretty well lockdown from today in the U.K. We have to stay at home. Police can stop us if we don't. A week or two in it might be fine. But if that's still going on into the summer then I think it's going to get very difficult and people are going to get very frustrated. And I think you saw that in World War II. We had the so called "Blitz Spirit" when Hitler blitzed London in 1940. On the whole, everybody rallied round and put up with it.

And I don't know if morale improved, but morale held up surprisingly well. Hitler thought he would demoralize the British public and that didn't happen. And the king and queen were still in London and they were visiting bomb sites and things. So it sort of worked. And it created a sort of national myth that is probably our most treasured sort of national moment, if you like, as a country, 1940s, standing alone against Hitler. So much so we've probably gone on about it rather too much. There was a very good film about it the other day, wasn't there, with Gary Oldman as Hitler. So it'll be interesting to see whether that can be achieved this time.

On the whole, I'm relatively optimistic. I think if you give human beings a challenge, you can say, "Look, we do have to pull together on this one." In this country we had a very interesting period when we appeared to be lagging behind other European countries in the measures we were taking. That is to say, we were being more voluntary about it. We were advising people to do things. We were not closing schools because we didn't want health workers to have to stay at home to look after their kids. We wanted them to get to hospitals. And we said, "Kids are not really that dangerously exposed in this epidemic. So it's almost better that they're at school."

We have now closed schools as well. But we were deliberately taking a sort of step-by-step approach because we didn't want people to have to shut down their lives too early and then find it seemed to be a waste of time and they get bored just when we need them to be ready for it. And there was a lot of criticism of the government: "Please bring in more draconian measures," from some people. Then there were other people at the other extreme saying, "This is ridiculous. We're going to tank the economy just because there's a bad flu floating around." And I've got friends who have both those views. But on the whole what we managed to do was carry people with us. And I think Boris Johnson has done a very good job of, inch by inch, getting people used to the fact that life is going to be very different for many months and possibly years, and we have to get through this as one, and we have to support each other.

And the important thing I think is that people are seen to be part of the common effort. So even if you are in a position to do something slightly more enjoyable than other people, it's probably not wise to do so.

Dan Ferris:                 You know, Matt, I think that a lot of people are not doing what they ought to do. Just a quick little story. My office where I'm talking to you from right now in my home in Washington State on the West Coast overlooks my driveway. And as I sat working this morning, a plumber's truck pulled into the driveway and they knocked on the door. They had the wrong house. But I was shocked. I was shocked that people would let a plumber into the house. Who knows where he's been? He could've been to 10 other homes and contracted the thing twice over or something.

Matt Ridley:                Well, we were very shocked at the weekend because people were going outside a lot because they'd been told the fresh air is better. So the television news interviewed people using exercise bars in a park, pull-ups and things. And they were right next to each other and they were all swapping and sharing the bars. And the TV interviewer said to one of these guys, "Don't you think that's not in the spirit of what we should be doing? You could be getting the virus." And he says, "No, no. It's even better because I'm in the fresh air." So I'm afraid, much as you and I would like people to immediately get the point and voluntarily do everything, I think in a completely unprecedented situation like this where you've got to go right against human nature and force yourself to give up all sorts of things that you think are perfectly normal, I'm afraid we do have to be a bit more draconian to achieve it.

Dan Ferris:                 I am also a libertarian-leaning fellow like yourself, and it rankles me to think this way. More often I would like to quote a fellow named Elbert Hubbard who said, "Grown men don't need leaders." But it is in times like these that so-called strong leaders can appear, at any rate, to move the situation forward and get everybody sort of rowing in the same direction. I'm not sure how I feel about it though. I'm really mixed.

Matt Ridley:                I agree. You know, I have a section in my last book, The Evolution of Everything, in which I very much come down on the side of those who don't believe in the strong-man theory of history, that a strong man appears and changes the world. I think Napoleon is a product of the French Revolution rather than a cause of the French Republic, if you see what I mean. I think it's inevitable that someone would emerge from World War II as a hero on the scale of Churchill, and someone else as a villain of the scale of Hitler, even if neither of those two, with their particular characteristics, had lived.

Obviously I don't take that to extreme. And there are examples – I think Reagan and Thatcher and Gorbachev deserve credit for bringing the Cold War to an end more peacefully and perhaps quicker than it would otherwise have done. But I don't think the Soviet Union could've lasted an awful lot longer, whatever happened. Its own economic and political contradictions were too great. And particularly when it comes to the process of discovery and invention, it's amazing how dispensable great men are.

So if Darwin doesn't discover evolution by natural selection in 1859, Alfred Russel Wallace does. And he did. Without Darwin's knowledge, as it were. Even Einstein came up with his theory of special relativity, which is way ahead of the way anyone else is thinking. But if you look closely, Hendrik Lorentz would've got there eventually. Wouldn't be that many more years before he'd come up with the same idea. So there's no idea you could get to the end of the 1870s without somebody inventing the light bulb, whether it's Edison or Swan or Lodygin or one of the other people who did. There's no way you could get through the 1990s without search engines becoming an incredibly important part of the Internet. And Sergey Brin and Larry Page get a lot of the credit for inventing the best search engines but it would've been invented by somebody if they hadn't lived.

So I'm very interested in this idea that we tend to deify great leaders and put them on a pedestal and say that they've done a good job when in fact quite a lot of the time they are result of what happened, not the cause of what happened. Or there's an inevitability about them. That's a bit unfair on important political leaders. And we will see, over the next year or two, whether Boris Johnson, who's written a biography of Winston Churchill and is a great admirer of Winston Churchill, ends up _____ a bit like him. He's doing a perfectly good job so far as far as I'm concerned. He's a friend of mine. I think he's a very talented and interesting man. But we'll see if he ends up in that kind of category.

Dan Ferris:                 We certainly will. We'll see a lot of things that we don't even fathom today, won't we?

Matt Ridley:                That's certainly true. You said a moment ago this is the biggest event since World War II. And I think you're probably right. But it's interesting to recall just how big a crack in the world 9/11 felt at the time. And we all went around saying the world would never be the same again. And the world is not the same obviously, but it did revert to normality, to a slightly depressing extent. I mean, it felt to me like Islamist terrorism had finally made itself completely unacceptable, only for 10 or 12 years later people to be still making excuses for it in some parts of the world. So I felt disappointed in a way by how little 9/11 changed the world in some ways. It obviously led to foreign policy and military mistakes as well on the part of the West.

                                    I suspect, after this, to some extent life will – that normal service will resume to a frustrating extent in some ways. But also mistakes will be made in recovering the world after it. And, again, that might relate to the point about being too authoritarian in the aftermath.

Dan Ferris:                 That is the way these episodes tend to go, isn't it? In the aftermath, we adopt those so-called temporary measures and they become all too permanent.

Matt Ridley:                Yes. It's a real problem.

Dan Ferris:                 It might even make one be rationally pessimistic, wouldn't it, Matt? [Laughs]. To turn a phrase.

Matt Ridley:                Let me just go back then as to why I'm a rational optimist, briefly. Because it is worth recounting. You know, we're facing a terrible pandemic today. I wrote a book 10 years ago called The Rational Optimist saying, "The world's getting better, not worse." And in every single year since then whenever I've given a talk about it, I've had to say, "Despite X, the world is still getting better. Despite the great financial crisis, despite the eurozone crisis, despite the Ebola epidemic, despite the war in Syria, despite the war in Ukraine, despite Libya." There's always been a despite.

And actually I've been right to say despite. Because in terms of the amount of people killed in wars, in terms of the number of people living in poverty, in terms of child mortality, in terms of infectious diseases – until now – the world has improved dramatically in the 2010s. And it's done so particularly for poor people. It's become wealthier, healthier, happier, cleverer, cleaner, kinder, freer, more peaceful, and more equal. So it has been a miraculously good 10  years. And, more to the point, it's been a miraculously good 200 years.

I mean, the statistic that I think should blow us all away is that when I was born, more than half the world, nearly two thirds of the world, lived in extreme poverty, on $1.90 a day in 2009 dollars. Two thirds of the world lived like that. Today it's about 8%. In fact, it's less than 8% of the world lives like that. That is quite extraordinary. No generation has ever lived through a change like that: lifting people out of extreme poverty at the rate of 180,000 per day over the last 50 years. We're doing something right. And it's amazing how, despite the wars, despite the epidemics, despite the economic crises, despite the environmental problems, we can improve human life.

And, by the way, we can clean up the environment. I mean, we're now reforesting the globe, net. We've reduced the footprint of agriculture so much that we're feeding 7 billion people from a smaller acreage than we fed 3 million from, etc., etc. So there're a lot of environmental indicators going in the right way too: air quality, water quality, etc. The amount of oil spilled in the ocean, down by 90% in my lifetime.

And a lot of this will continue despite the pandemic. And even if the pandemic is a lot worse than we fear, there will continue to – and let's face it: the way we're going to solve this is with innovation. We're going to innovate by producing a vaccine, a cure, or excellent tests that enable us to trace contact better and isolate people. And within a year or two we will have made it very hard for people to die of this disease. I'm confident. It's just a matter of how horrible it'll be for the families who have to bury loved ones over the next year and a half. And it is going to be a lot of people. And it reinforces the need for innovation, invention, discovery to advance as rapidly as possible. I mean, at least we live in an age where we can read the genome of the virus almost instantaneously. We can understand its mechanism. We can begin to design drugs to combat it. A lot of that wasn't possible even 20, 30 years ago.

Dan Ferris:                 So, Matt, we've actually come to the end of our time. And my last question for every guest is always the same: if you could leave our listener with just one thought, what might it be? But I almost feel as though you may have answered it. Have you?

Matt Ridley:                [Laughs]. Yes. I'm not saying: don't worry, be happy. I'm saying: don't despair, be ambitious. A counsel of despair is always the wrong way to approach any crisis. And in this pandemic, if we're ambitious, if we're confident, if we're calm, then we can save a great many lives and look back on this as a triumphant defeat of a very dangerous foe rather than an absolute disaster.

Dan Ferris:                 Hear, hear. Excellent. Thank you. All right, Matt. Thanks so much. And take care of yourself up there in the North of England.

Matt Ridley:                Good luck to you too. All the best.

Dan Ferris:                 Well, hopefully that message kind of lifts you up. It lifted me up a little bit. We can get through this. It's just a question of how bad it will be between now and then. And I don't think there's much more to say than that. Let's move on and take a look at what's in the mailbag today.

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The mailbag is where you and I get to have an honest conversation each week about investing or whatever is on your mind. Just send your comments, questions, and politely worded criticisms to [email protected]. I read every word of every e-mail you send and I respond to as many as possible. Before we get started I want to give special thanks to TJ for writing a very long, thoughtful e-mail explaining the situation in the meat processing industry, which we've been talking about for a couple weeks here. It's too long and I didn't even want to excerpt it because there's a lot of important parts to it. But I just wanted to thank him for that. And he was explaining to me how it works and why we're in the shape that we're in.

So, now, let's get to it. This week the mailbag was overwhelmed with one topic, and that topic is people calling me and Bill Browder a fraud and the whole thing a big scandal just to have him on the program at all. And I'll just read you a clip. I won't quote these people because – I don't know. I think they're being a little too inflammatory. But one person said, "Bill Browder is a ruthless criminal mafiosi at best. Send your propaganda elsewhere and remove me from your mailing list." By the way, done. You're off. Then somebody said, "Why the heck are you publishing such an article? This is total propaganda. Bill Browder's a crook. Have you been to Russia? What a bunch of BS. Makes me questions Stansberry's research and ethics. Extremely disappointed and disgusted."

And, finally, "Tragic that Dan and Stansberry would give this fraud a platform. He is a criminal who stole from Russia. His entire story is a cover for his crime. How is that missed by you guys? First time I'm deeply disappointed in your ability to vet guests. Shameful."

And what they're all referring to, and the mistake all these people are making, is: they're referring to a film called The Magnitsky Act that was made by a Russian filmmaker by the name of  Andrei Nekrasov. So, Andrei's film starts out telling Bill Browder's story, and he represents that he was telling Bill Browder's story and partway through it he just found all these inconsistencies. And I will say this: I did not see the film before I interviewed Bill Browder. So you can tell me, "Hey, Dan, you screwed up. You should've seen this thing." And, you know what? I'll agree with you. I wish I had seen it. I would've asked Bill a couple of pointed questions. And there's all kinds of stuff in the film.

I think one of the problems of the film is that it leans very heavily on official Russian documents, official government documents, to make its points. I mean, I don't know [laughing]. Look, you're talking to somebody who has been ____ by the federal government. I won't discuss the matter. It's long settled. But all I'll tell you is that every question they asked me, they were trying to force words into my mouth and trying to get me to misrepresent the situation, and I didn't do it. And I wound up not being a witness. But I thought, "If you can do that in the United States, what's Russia like?" So this whole idea that the official Russian documents tell a different story – you make up your own mind. See this movie. You can see it on Reelhouse.org. And I paid $5 and saw the film on Reelhouse.org.

There are some discrepancies. There are things that I'd want to ask Browder if I could get him back. I mean, I don't know if we'll do that or not. But there are some discrepancies. Like the whole idea that the Russian government raided his office in Moscow to get the stamps and seals and articles of association so that they could steal $232 million from the government – it sounded really good. But things happen in a different order, or there's a timeline that makes things look different than what was represented in Bill's book and in his interview with us. So there's that: there's this different timeline. And there're different people involved.

And the issue is raised in the film of Sergei Magnitsky, the guy who was killed in prison, who Bill Browder – he said, "That's my lawyer. He was killed in prison because he testified against these Russians who stole our companies and used them to get this fraudulent tax refund of $232 million from the government. There's evidence that suggests that Magnitsky or Browder's people had to be involved in the transfer of these companies to these other folks. Again, it's all official Russian documents. What do you believe?

And there's also some nice editing in the film, right? So it's edited – there's an interview with Browder in his London office with the filmmaker, this guy Andrei, and at one point Browder kind of gets to a lawyering-up mode. He said, "I think you're going to have to talk to our lawyers because I don't really remember all this stuff." And it makes it looks like it happens at a very suspicious moment. And then there's some other testimony of Browder's before the government where they show just little tiny clips. His answers are like, "I don't really remember. I don't know. I don't remember. We didn't do that. I relied on this particular source." Blah blah blah. And so, in other words, you can put together a film that paints a bad picture. Is it true? I don't know? Are the Russian documents accurate or were they fabricated as Browder and Magnitsky suggest at a couple of points in the film? I don't know [laughs].

Do I believe that Russia is run by oligarchs who steal things? Uh-huh. Do I believe Magnitsky went to jail? Uh-huh. Was he allowed to die in jail or was he beat up in jail? That's a controversy too. And there's also a controversy: was he a lawyer or an accountant? He was a tax advisor working for a Russian-based law firm, Firestone Duncan. A law firm with an office in Moscow. So call him a lawyer or call him an accountant, whatever you want to. I know that everybody who works for my lawyer is called my lawyer, even if they're not a lawyer. I believe the guy died in prison. I believe he was horribly neglected. There's evidence that during his 11 months – the first 8 months he was treated OK. He was not mistreated. But the last three months he was allowed to die in prison.

So you tell me: if he was your kid and all this happened to him, would you be quibbling about whether or not he was beaten to death or allowed to die in prison? I don't know if I would. So there are differences in the stories. And rather than get into the weeds with it, read Red Notice by Bill Browder. You will enjoy reading the book. It is very exciting. It is a page-turner. And it's not hugely long so you'll get through it quickly. And then go watch this film called The Magnitsky Act: Behind the Scenes. And you tell me. You make up your own mind.

But I'll tell you this: the folks who wrote in and suggested that, "No, no, no, don't buy Bill Browder's story hook, line, and sinker –  buy this other guy's story hook, line, and sinker" – that can't be right. However, more thoughtful readers wrote in like Humphrey H. and said, "I suggest you look more closely into Bill Browder's operations in Russia." Hey, great. A more thoughtful reader wrote in and he said, "I spent eight years in Russia at the time of the Browder-Magnitsky scandal." And then it's a rather long e-mail. He goes on and he said – he basically paints a picture of Browder as being naïve for believing that you could deal with these people and that they weren't extremely corrupt. And this is the guy who says he spent eight years in Russia. And I'm willing to bet none of the other folks spent eight years in Russia who are calling me a fraud and saying I'm shameful and all this other garbage.

Read the book. Watch the film. You tell me what you think. That's all I have to say about that for now. And that's another episode of the Stansberry Investor Hour. I hope you enjoyed it as much as I did. Do me a favor: subscribe to the show on iTunes, Google Play, or wherever you listen to podcasts. And while you're there, help us grow with a rate and a review. Like us. Rate us. Review us. Tell people you think we're cool if you think we're cool. You can also follow us on Facebook and Instagram. Our handle is @InvestorHour on those two platforms, OK?

And if you have a guest suggestion for me, send me a note at [email protected]. I always want your suggestions about who we can interview. Till next week, I'm Dan Ferris. Thanks for listening.

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Announcer:                 Thank you for listening to this episode of the Stansberry Investor Hour. To access today's notes and receive notice of upcoming episodes, go to InvestorHour.com and enter your e-mail. Have a question for Dan? Send him an e-mail: [email protected].

This broadcast is for entertainment purposes only and should not be considered personalized investment advice. Trading stocks and all other financial instruments involves risk. You should not make any investment decision based solely on what you hear. Stansberry Investor Hour is produced by Stansberry Research and is copyrighted by the Stansberry Radio Network.

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