The Rise and Fall of Empires: Jay Martin’s Unveiling of the World’s Historical Cycles at VRIC 2024

In this keynote, Jay delves into the historical patterns of rising and falling empires, drawing connections to today’s global shifts. This insightful analysis uncovers the signs of declining powers and the emergence of new leaders on the world stage. Join us on the Jay Martin Show as we uncover the hidden rhythms of history and what they reveal about our future. Witness how understanding the past is key to interpreting the present and anticipating what’s next in the global arena.

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So once again my name is j Marson I’m the host of this conference for the next two days I also host a podcast called the J Martin Show and when I come up with the uh the agenda when we’re trying to figure out which speakers we want to

Bring on stage and which conversations we want to host there’s a lot of content about 67 different keynote speeches panel discussions and debates Fireside Chats that are going to happen at this conference today and tomorrow I think 140 different company talks it’s a whole lot of stuff right so it really helps if

I have some kind of a a central theme that I can use to guide my decision-making right so I I use this I develop a central theme what’s most important in the world today when it comes to the commodity sector and I use that as my North Star and then we build

All of the agenda content around that theme now this year’s theme is also the name of this morning talk the changing World Order and then obviously how to come out on top now truthfully I should have put a question mark after the changing World Order because far more

Than I want to inform you about the changing world order I want to ask the question are we moving through some kind of a changing World Order and if we are what does that look like what stage are we at and what can we do about it now

The reason I chose this theme this year is because it was without question the most common conversation that I had on my podcast this year we have two conversations every single week and with uh crazy frequency everybody wanted to talk about the potential of us departing the existing World Order and moving

Towards whatever’s next I was also a guest on probably 20 other podcasts and every single time this question came up in different ways right some people want to ask are we entering the sunset years of the American Empire maybe I should Define this what is the world order that

I’m referring to we live in the American World Order right and prior to this was the British World Order prior to that the Dutch World Order prior to that the Spanish prior to that the Portuguese there’s actually been five Global Empires inside of just the last 600

Years which gives us a bit of a hint right at the expeditious nature with which power does rotate around the world so that’s how we got to our nor star this year it came up in conversation far too frequently to be ignored and the implications of this could be really

Really significant right to the pros and the cons if you’re paying attention now topics like this the changing World Order you know the American Empire entering its Sunset years can be subject to a bit a bit of Doom and Gloom narrative right you imagine like oh we’re heading towards

The end of the American Empire and you see imagery of you know Rome and crumbling coliseums and fire and crisis and crash and all this stuff and that’s not my take on this by the way right when I talk about the changing World Order and the potential that we’re

Departing one and heading towards the next I don’t come at it from a doom and gloom perspective I understand why people do and I want to caution you about that right because the Doom and Gloom business is a fantastic business if you’re in it because people are

Always buying what you’re selling but it doesn’t make them right right and we know why this is the case right if it if it bleeds it leads like media knows this I can sell you a scary story far easier than I can sell you a positive one and

We’re not just attracted to the car crash because we’re biologically engineered to be scared of things it’s also just logical if I’m being honest because pessimism sounds like someone’s trying to help you right things are going to get really bad but here’s what you can do about it that sounds helpful whereas

Optimism sounds like like someone’s trying to sell you something the value of this is going to go up and you should buy today nobody wants to be sold but everybody wants to be helped and so we gravitate towards the pessimistic headlines not always in our best interest it doesn’t make them right all

Right but business understands this so we get sold a lot of pessimistic headlines so to depart from that right because I want to understand really what’s happening so I can position myself accordingly and not get sucked into Hyperbole and Sensational headlines I want to depart from the noise

And get to the signal and the only way I can determine to do that is to step back from the daily headlines and look at the past right and if we study history it helps us understand the present and that’s how I approach this and that’s how that’s how I’m going to approach

This this morning in this morning’s talk so real quick you know in the last 600 years we’ve seen the rise of five Empires um we had the Portuguese Empire about 600 years ago they ruled the world with their Maritime currency until the Spanish took over about 500 years ago

And the Spanish ruled the world until about 400 years ago at the end of the 30 Years War when they fell they went essentially bankrupt fighting Wars all over the world which typically happens at the end of an Empire and the Dutch took over and the Dutch Gilder became

The world Reserve currency until 200 years ago at the end of the Anglo Dutch Wars again you know multi-regional War bankrupted the Dutch Empire and the British and the pound sterling took over you know the sun would never set on the British Empire and eventually the sun

Set on the British Empire and America really affirmed their power of course at the end of World War II again you know huge War Empire collapses new Empire takes over so what can we learn from this like number one power does rotate very expeditiously number two often an

Empire comes to its end as a consequence of fighting too many wars in too many places but if we go deeper into this we’ll find out that that’s not conclusive evid evidence of where we might be in this cycle of power and so here’s a fun exercise if we review in

Detail the previous four Empires and ask the question are there consistent markers every single time during the sunset years of these Empires that tell us right we are now in Decline is there a a story that is repeated it turns out there is diving into the the the key

Behaviors and activities inside of these Empires is like watch in the same movie on repeat again and again and again which is super super helpful because that allows us to look at these previous four find out what was going on during their declining years and then ask

Ourselves the question how much of that is present today in our world and get a bit more clarity right on where we might be at this moment where are we right in history so there’s three main red flag activities that we see during the declining years of all the empire as we

Discussed and many more before that and the first is financial insolvency or financial instability right we have an Empire who becomes overextended essentially spending more than they’re earning they have military obligations all over the world they have a wealthy population that Demands a lot so they’re subsidizing living

Expenses and uh and they become less productive because that’s what happens when you get wealthy right so they start spending more than they’re earning and they can continue this for a certain amount of time until eventually they have to start printing more money to cover their losses so money expansion is

The first big red flag that we see at the sunset during the sunset years of every Empire now this won’t be news to most of you in this room but what happens when you expand the money supply right you you devalue the currency you print more currency that currency is worth less but

As a consequence the things that you can’t print like land maybe precious metals and businesses those things go up in value and so there’s this this disparity that exists now typically the people that own those things the land the precious metals the businesses it’s generally the more affluent end of the

Population and so they get wealthier right but everybody else who’s just earning and holding and spending in currency they’re getting poor right relative to those who own the stuff and this is fundamentally how wealth disparity is created because every year we go further down this path we create

More money we devalue it further the gap between the halves and the have knots increases and eventually people begin to despair because the house that they couldn’t afford last year is now less affordable this year as the currency they’re holding is worth less the asset’s the same it’s the paper that’s

Changed and as a consequence of most people not really diving into monetary policy I mean it’s designed to be complex right is people don’t understand why this is occurring but they’re angry because they’re not living the life that they thought they would they’re not living the dream they heard about right

A generation ago they don’t know why and when you’re upset and you don’t know who you’re upset at you’ll find an enemy every single time and so this is when red flag activity number one being money expansion leads to Red Flag activity number two which is internal conflict

People begin fighting and arguing over whose fault all of this is that their life isn’t materializing the way they thought it would civil unrest people can’t agree on anything anymore small issues become big issues everything becomes polarized now a nation could function this way for a really long time in this

State of relative dysfunction until the third red flag emerges and that’s an external competitor you need somebody else who can stand up and challenge the dysfunctional Empire and send a signal to the world that says that’s not going so well I don’t think we can trust them anymore come do business business with

Us we’ve got a better way and until that external competitor arrives you can maintain this disorder for a very very long time now in history it’s rarely ever one country that rises up to challenge the existing Empire almost every single time it’s a collection like a Syndicate of smaller countries who are

Able to park their ideological differences aside in order to unite against the global superpower so think about even World War II right Soviet and American soldiers fighting shoulder-to-shoulder ideologically opposite but United in their fight and once that fight was over those ideological differences boiled right to the surface right away and we

Found ourselves in the Cold War a lot of people would argue that today that’s the bricks or the bricks plus Nations right who are rising up creating new trading blocks and presenting this challenge to the American World Order I think you can make a pretty good case

That all three of these red flags are kind of present in today’s world some more than others right but you can make a case couldn’t you so what does that mean right first of all I open this talk by warning you not to take Doom and Gloom punted seriously

And I just outlaid a case that’s kind of Doom and gloomy so I want to say a few things first of all what have we learned that five Empires inside of 600 years have come and gone or at least come right yet the quality our life over that

Same time period which direction has it gone it’s just gone up and to the right the uh the length of time we’re living is up infant mortality is down access to clean water and medicine is up violent crime is down Global poverty is down I mean generation over generation on a

Global scale despite the heavy rotation of power Our Lives keep getting better so first of all you know step back it’s okay we’re going to be just fine uh as we go through these C CES but secondly you know if if we can look at the declining years of these Empires and

Find those flags those similar activities that are present every single time and give us some context on where we’re at today then maybe we can study the emergent years of those same Empires and find similar Behavior did they all do the same thing on the rise up because

They all did the same thing on the way down so maybe the movie plays on both sides and yeah turns out it does watching The Rise of an Empire again and again and again is like watching the same movie on repeat again and again and again now why this is important is

Because personally I want to emulate the behaviors of the Empire on the way up not the behaviors of the Empire on the way down and we can do this so what do we see when we look at the emerging Empire how does a nation go from you know poverty and obscurity to

National superpower I mean it’s crazy I think that only 250 years ago the United States was more or less the third world country clinging to the edge of the Atlantic Ocean I mean really you know 250 years is not that long uh to have gained the global influence and domestic

Affluence that they have so what happens right what are the initial seeds that we see every single time as a nation begins to emerge and and the first thing that we see every single time is alignment in values the nation becomes aligned and it doesn’t matter so much what they’re

Aligned on it can be cultural it can be uh political or religious it matters less what they’re aligned about it just matters that they’re aligned and they’re agreeing because if they are it just means it’s going to be less infighting right less civil unrest that stalls the

The rise of so many emergent Nations is the infighting and the inability to agree on which direction the nation should go but this alignment has to go all the way to the top right because you need governance that supports that if you have a nation who’s aligned in their

Values they’re more likely to cooperate and therefore be productive but you need governance that incentivizes productivity if you have a great population but governance that’s corrupt and oppressive again you’re stalling out growth right away so the alignment has to go from the bottom all the way to the

Top and if it does then the population gets productive and productivity builds wealth and that’s how they get started now the next thing that happens in every single one of these Empires is that they take that wealth and they reinvest it in education and education becomes the pillar that allows one

Generation to improve upon the one before it hyper hypercritical build your competitive Advantage by getting better right they invest in education and the better educated public builds more Innovation into their economy and they start building better stuff right and they’re building better stuff they attract the attention of the global

Market and they begin taking part in global trade and entering right the World Trade system now this is like it’s like the funnest part of Empires to study is the Innovation years because countries come up with the coolest stuff and the Dutch are worth spending just a

Minute on so the Dutch Empire this is the Golden Age of Conquest right and Maritime trade uh when countries would set out to sea explore new lands meet new people take their stuff and come home right crude description but not inaccurate I might I might mentioned

That maybe not much has changed on that front but because of the industry at the time the technology of notes was of course ships right whoever had the fastest most capable ships could get overseas do trade deals or Conquest bring stuff back fast right bring Goods

Back to the country so whoever had the fastest most capable ships won and the Dutch had the best ships in the world but it wasn’t necessarily the ships themselves that’s the interesting part it’s the the way they had the ships built so Conquest is like horribly expensive right and super super risky

You’re sending these boats overseas for you don’t know how long many won’t come back because the seas are dangerous there’s Pirates there’s disease all kinds of reasons that ship may never come home and uh when they do come home it’s not a guarantee they’ll have any

Goods on it right trade deal could have gone South could have found nothing who knows and those that do come back may have been gone for years at a time lots of cash outlay here right to finance these expeditions you got to buy or

Build a ship or a fleet of ships you got to hire a crew you got to stock the boat for you don’t know how long with supplies and there’s no guarantee any of it’s coming back it’s a hugely risky bet and as a result it’s like a really small

Percentage of people that were willing to finance these expirations right a few select wealthy merchants and sometimes the government and that was it that was the access to Capital that they had and that limited the amount of World Trade and Conquest they could accomplish until the Dutch came up with the world’s first

Ever publicly traded company of course this is the Dutch East India Company traded on the world’s first Stock Exchange and for the first time ever what this allowed is that anybody could now participate in financing these Expeditions now a couple things happen here right the the captains of these

Ships now have access to a massive pool of capital means they can build ships a lot faster they can build more ships they can depart more frequently right cash does these things and they had access to more cash than ever before but in addition it reduced the risk that any

One investor had to Bear because it wasn’t you know four wealthy merchants financing this trip it was a thousand Dutch citizens spreading that risk out and so if things went South it was less likely that somebody got wiped out now this worked so well that at the

Height of the Dutch Empire the Dutch East India Company one company one company accounted for a full third of the entire world’s global trade it’s crazy when you look at Holland on a map you’re like how on Earth did this little country and one company inside of that

Little country account for a full third of the world’s global trade then when I talk about reinvesting the New Wealth into education the Dutch crushed that and at their Peak 8% of the world’s universities were based in the Netherlands 12% of books published globally were published in the Netherlands again tiny little country

You’d never suspect I would have never suspected now another Innovation that really boosted the success of the Dutch East India Company was a special deal that they struck with the Dutch government so they approached the Dutch government and were able to uh they were granted their own private military that

Would chaperone them on their trade exped Expeditions so obviously this helps right you show up at the negotiating table and it’s just me I’m going to get a certain deal but I show up at the negotiating table and it’s me plus 12 guys with AK-47s I’m probably

Going to get a better deal right so having the military escort really really helped but this marriage of military and Industry sanctioned by the government is the first modern example that we have of the military industrial complex worked very very well so well that obviously the British replicated this with the

British East India Company and it’s very alive today in both America and in China okay so getting back to our cycle right productivity builds wealth wealth is reinvested in education um education breeds better Innovation better Innovation builds a more competitive economy a more competitive economy gives us access to

Global trade now we can do business everywhere and that brings in more wealth so now we’re highly profitable we’re no longer the the poverty stricken country we used to be and this brings new demands namely for security right we have wealth now that needs to be protected we have trade routes now those

Need to be defended and so this is the stage of Empire where you see every single time aggressive investment into the military and what happens as a consequence of that you have a profitable entity because of their percentage of global trade and now they’re safe because they just built a

Massive military now a profitable and safe entity is a fantastic investment opportunity and so now they start attracting capital from the rest of the world right for the first time ever everyone’s taken notice and this all sounds really really good what’s what’s not to like right the economy is growing

They’re gaining respect and Trust money is coming flooding back in but here is where the devil’s in the details for the first time ever our emerging nation has access to something they’ve never had access to before debt right and debt is a incredibly seductive the creep of debt because it allows you

To grow faster than your organic productivity would normally and very few people are able to uh reject that possibility so as the living standards increase right people start demanding more stuff because the country is wealthier and everybody feels like they deserve more the generations that used

To work super hard in the old days and remember where they came from they’re long gone the generation that’s alive today in this Empire they’ve known nothing but wealth right back then they were poor and they knew they were poor and today they’re rich and they know

They’re rich and so they want nicer stuff I mean we don’t want a nice car do we we want we want a nicer car than the one that we have and that’s going to cost more money so we want to earn more money as we’re rising up right in terms

Of global status so the people start asking for higher wages it’s logical right they’re rich now they deserve more money but everybody wants more money including the owners of corporations and the shareholders and they start looking at the wage creep in their country they used to have cheap labor the labor is

Not cheap anymore because the country is not poor anymore they start looking at their margins and every single time what we see is the uh the executives essentially say I wonder if we can get our products made somewhere cheaper and our crafty Dutch friends looked across the North Sea to that funny little

Island and said here’s an idea why don’t we have our ships designed here in the Netherlands but let’s have them built over there using cheap British labor and just like that they export the productive engine that made them rich in the first place now this is great for

Business because margins go back up and shareholders makeing more money but a bunch of people just lost jobs and therefore the leverage to ask for higher earnings because there’s less jobs for every person right people aren’t happy they get a little bit upset about this right and the government wants to keep

The peace so this is when they step in with all kind kind of assistance and back in Rome this was the grain Dole today it’s any number of of welfare systems that we have but it’s the same story it’s the same thing the government wants to keep the peace business is good

So they step in to take care of their people and the problem with this eventually becomes that the nation’s not as productive as it used to be they exported that productive engine to somebody else somebody else has it now so they’re spending more on increased military demands increased living

Standards at home and they took all that debts and interest payments have to be made and suddenly our Rising Empire is feeling a little bit squeezed but don’t worry they control the world resered currency and they can just print more and they do and no nation in history that’s controlled the world Reserve

Currency has resisted that Temptation so we’re now expanding the money supply increased in the wealth Gap and we’re back to our Sunset years of the Empire but that funny little Island across the North Sea productivity is fueling wealth that productive engine that existed in the in the Netherlands they’ve got it now and

They’re reinvesting that wealth and education they’re building ships for the Dutch the best ships in the world so they got really good at building ships and this this was the seeds for what would eventually become the greatest Navy that the world had ever seen and the cycle begins back where it started

Again and again and again so what can we take away from this it’s the same movie that plays over and over again and at the book ends of it there’s two things on one side it’s productivity builds wealth and on the other side its debt fuels decline now this matters to me

Because I can make this super personal I want to emancipate myself from the cycles of Empire I want the J Martin Empire to be on the way up and we can all mimic these behaviors inside our personal activities and let me give you a a silly example let’s imagine the J Martin

Empire and what do we know about the red flags the red flag activities during the declining years we see Financial instability we see civil unrest and we see an external competitor so The The J Martin Empire is doing pretty well today got a beautiful wife I have three kids

We do reasonably well financially but imagine tomorrow I stop working hard I’m done but I keep spending like I always have very quickly I find myself in financial distress right red flag number one I’m in financial distress and that’s maybe fine as long as my wife and I are

Still getting along despite our money problems right we carry on but if we start blaming each other for these problems and saying it’s your fault no it’s your fault and fighting over everything and little issues become big issues because we just can’t agree then suddenly we got two red flags right we

Have financial distress and we have internal conflict and even that we can maintain for a decent amount of time until that external competitor shows up The Savvy handsome gentleman at my wife’s work who makes the offer of Civility and stability that is just too hard to refuse and suddenly the J Martin

Empire is in a lot of trouble now look it’s a silly example I get it but I use it because it makes it real and it demonstrates that these things impact us at the micro level as well which is great news because that means we can just stay conscious of those behaviors

During the declining years and emulate those behaviors on the ascent so what do we know about the ascent what should we be doing about this right we know at the beginning of an Empire stage they’re aligned in their values why is this important because it prevents us from being sucked into every

Petty argument that we may see surrounding us and there is no shortage of that right now but they are time wasting distractions that pull us off course if we are solid in our values we know who we are and where we’re going and we’re going to stay the course right

We’re going to go the right direction very very very important may sound simple hyper hypercritical number two hard work simple it’s boring time tested works really really well because productivity builds wealth often it’s the simplest stuff that work the best and number three education meaning we we improve our

Competitive Advantage we continue to increase our earning potential by bettering our skills going to conferences like this learning right improving now you may be like Jay this is the junior mining conference I came for stock tips like what do you what do you spitting this out us for but I lay

This groundwork because this is how I think about my portfolio and how I digest this industry how I think about macro I boil things down to the simplest form that I can because I think we’re foolish to think that the complex strategy is what’s needed it’s the

Simple one that often wins I study history because helps me understand the present I don’t even try to predict the future right but if in history I can find those tried and tested processes that have worked countless times that’s what I know I have to do and if I do

That it doesn’t matter if the world order is changing it doesn’t matter what’s happening at a macro level because the J Martin Empire is going to be all right okay I’m really excited to get this conference started I like to set the tone because that’s how I think about

Things and I’m going to be hosting a lot of conversations up here that are going to get kind of complex right and so it’s important to be able to step back and get perspective I like thinking about the world that way okay are you guys ready should we start the show all [Applause]

Right