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One of the most powerful companies in the world when it comes to pricing power is,

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you guessed it, Apple. Because people would

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trade their second car in to get their hands on one of these. Like the pricing, this

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is probably worth $30,000 to people, not 1500 bucks. It's

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got so much pricing power in it. And I know that because I

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know that people would literally trade their cars to get this. And I know cars

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cost 30,000. So this is really a $30,000 product, but

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it's not being sold for that. So Apple knows it can incrementally increase

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the prices like this, over and over again to

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combat inflation because they know that people are still going to buy this because it's such a valuable

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commodity to people, right? The same sort of thing. I can see over there in the fridge there's a

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can of Coke in there. Another example of a company that can actually outperform

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inflation is Coca-Cola because Coca-Cola has

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the ability to increase each can by one cent. Over

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8 billion cans consumed daily. Think

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about that. Some huge number of cans consumed daily

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can increase it by one cent. It's almost 2 billion cans of Coke consumed

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daily. So you think if Coke can increase it by a cent, it's

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increasing it by like 2 billion cents a day. Isn't

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that insane? So it's got pricing power, so it can outperform inflation. So

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check this out. Look at what Warren Buffett's doing right now. Look

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at this. He knows that the US dollar is inflating. He

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knows that, and I'm talking about the Australian dollar, but the US dollar is also inflating. He knows this. So

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he's positioned his portfolio into bonds, which

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helps hedge inflation a bit because you're getting 4.5%. He's putting his

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money into oil stocks hedge, and

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he also owns Coca-Cola as a company. His highest

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position is Apple. Think about this. And he's got

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Moody's. So all these companies in his top five or six holdings, which

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takes over most of his portfolio and other private

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companies he owns, he's got pricing power. See his candy. Big,

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big powerful company. He bought that for $25 million many years ago. It's worth

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billions now. And it can increase its candy prices to

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combat inflation because people will still want to buy its product. So he's

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got tremendous hedge in inflationary pressures with his

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holdings and businesses. So, companies can raise prices in

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inflationary times. This happened during the GFC, the

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S&P 500 soared because of rising money supply. Owning an

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index fund, if you've got companies in there like Microsoft, Google,

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Apple, etc., Coca-Cola, they can increase their prices. McDonald's,

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the Big Mac index. When you went to McDonald's recently,

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I bet you were shocked by the price of stuff. Yes, it

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hurts. It used to be you could go to McDonald's at $5.95 for a meal. a

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house to get a meal at McDonald's. It's the

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Big Mac Index. McDonald's is a perfect example of a company and

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a business that can increase its prices. Why? Because it has. So

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if you want to hedge inflation, businesses are a wonderful way to do it.

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That's how I do it. That's how I do it. So I'm excited that

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I own certain companies that are hedged with oil stocks. I'm

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excited that we have businesses that are hedged in products

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and services that people need. Super, super

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effective way to do it, right? So you can either get it through some sort of

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index, you can get it through ownership of businesses, private or

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public. All right, next one. This is the last one. The

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best hedge of all time. We said the best to last.

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This is the best hedge against inflation of all time. It's

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the fastest way to outrun inflation. And unlike

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cash, it can compound very powerfully. So

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check it out. You're going to be thrilled or you're going to be

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disappointed, be the one. Here we go. The best way to

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hedge inflation is to actually increase your skills. The best way to

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hedge inflation is to earn more money. The fastest way to outrun it

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is to earn more. Unlike cash, skills can compound drastically.

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You can end up finding skills that you can totally transform your earning power

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with and your income is the most important thing you can do to enhance

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your wealth. It really is. You can't save your way to wealth. You can do it for a

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period of time but you can't get it down to nothing. So, there's

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an example in, I mean, many examples in the past where there's inflations

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crushed the economy. I know without a doubt that people in that economy

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with skills, sought after skills, were still getting paid a ton of

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money in all sorts of different currencies and or gold and

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or in barter to apply their skills to the economy.

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Okay, so it doesn't, if you've got skills, people will find a

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way to give you something of value to get them. So it doesn't really matter if

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your local currency, like the Australian dollar is completely, you know, getting, It's

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completely collapsed in the last few years in terms of its value, but... I

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know that if I've got skills, I can get paid in gold, I can get

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paid in US dollars, I can get paid in barter. Like if I'm

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good at what I do and people need it, they will find a way to pay me.

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Even if the currency is toilet paper, I know during COVID when there's a lot of toilet paper,

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I could have provided a skill to someone. So Lloyd, I'll pay you in toilet paper. Go,

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give me the toilet paper. It doesn't really matter what it is, your skills are

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inflation proof. And it doesn't matter if the global currency

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is crypto, USD, gold, Bada,

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whatever, your skills transcend all

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of the global currencies, all of them. So the

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most important thing you can do is improve your

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knowledge and skills because they are inflation proof. They will ride inflation way

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up because there's people out there with skills. Think about

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it. Think about Mark Zuckerberg. He's now like the

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top three or four wealthiest people in the world. He's also the youngest in

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that group. Think about the skills that he applied. He

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became a multi, he became worth $100 billion. Do

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you think that outperformed inflation? Yes. Do you think Jeff Bezos outperformed inflation?

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Yes. Do you think Warren Buffett outperformed inflation? Yes. All

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the people I know who are wealthy, a lot of my friends who are worth millions of dollars, how

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did they get there? Did they buy gold? No. Did they buy real

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estate? No, they didn't. They might say they do now to protect their

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wealth, but they didn't get there that way, let me tell you. They all did it through actually

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improving their skills and starting and building their own businesses. That's how

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they did it. So don't, and some people

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have certainly, there's a story of a lady, she just gave

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a billion dollars to a charity. Her husband

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happened to invest with Warren Buffett, that's stocks, that's Berkshire Hathaway, and

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ride that sucker way up to a billion dollars, and of course,

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incredibly powerful hedge, because Warren Buffett in

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the last 60 years created 5.5 million percent return. To

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put that in perspective, the S&P 500, 30,000 percent return. To

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put that in perspective, it way outperformed inflation. Inflation hasn't

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been anywhere close to those two numbers. So stocks and businesses, yes,

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can also outperform it. But for most part, it's businesses

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because of skills. So if you want the ultimate hedge, invest

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in yourself. You are the ultimate hedge. You are the best asset to

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invest in to overcome inflation. So could hyperinflation happen

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in Australia? Could we absolutely destroy the power of

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the Australian dollar? Theoretically, yes. Will

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it happen? Technically, well, technically yes, but theoretically or

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I would say no. It's unlikely because

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we've got a floating exchange rate. We've got an independent reserve

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bank. We've got global trading partners. We've got a ton of resources

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here, deep capital markets. And we do have, despite the

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challenging leadership we have at the minute, that's a whole other episode of what I think about

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that. But we do have the ability to control money supply.

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And we do have hard assets backing. We've got land,

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arable land. We've got farming, commodities. We've got resources, energy,

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hydrocarbons. We're good. But if

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hyperinflation does happen, Like what happened in Germany, what happened in

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Venezuela, what happened in Zimbabwe. In those scenarios, you know what happened?

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People fled back. They just dropped the currency. They went back to other currencies. They

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went back to the US dollar. They went back to gold. That's what happened. The

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economy doesn't die. The paper money is just forgotten. All trust is

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broken and we stop using it. So it's not like you'll just have nothing.

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You will have figured out by then if there's hyperinflation what does work and

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you'll have already gone there. But I can almost guarantee you that if

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you have business skills and you have the ability to pivot and you

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buy businesses and build businesses, there's no amount

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of inflation that can hurt you because you are indestructible because

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you invested in yourself. And of course, one of the other hedges

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that's happening that I haven't really covered here because I don't want to is cryptocurrencies, especially

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Bitcoin. They're like, oh, Bitcoin's a hedge against inflation. Oh,

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my God. Do I have to talk about Bitcoin? It's a code. It's

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a piece of code. And people like, read the Bitcoin standard. How

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much research do you have to do to realize something's valueless? Look,

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people are using crypto and specifically Bitcoin as an inflation hedge.

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But the fact of the matter is this, gold has got thousands of

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years of measurable data against inflation than

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crypto does. It's tangible. Remember, the inflation hedge

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is against tangible assets, right? Things that can

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produce value for the world. Crypto doesn't produce any value.

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How do I know that? Because I went down to the supermarket, With my wife,

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we were doing a checkout and I said to the lady, ìHey, do you take cryptocurrency for

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my groceries?î She went, ìNo.î I was like, ìPfft.î Then I went to my landlord the

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other day, my property manager and he called up and said, ìHey, you owe rent.î Iím like, ìOh, do

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you take Bitcoin?î He goes, ìPfft.î So Iím like, ìOkay.î So

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I rang up my American Express. I got an American Express card, platinum card. Itís a wonderful card,

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lots of points. I rang him up the other day and I had like $100,000 to repay

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on that. I said, ìHey, do you take cryptocurrency? Do you take Bitcoin?î They

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went, ìPfft.î How

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is crypto or Bitcoin a hedge when it's not even valuable?

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I can't use it for anything. At least I

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can sell gold on the open market. I can sell it.

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You can touch it. You feel it. Even though I hate gold, I can at

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least see it's there. You can't see anything with crypto. It's

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just code. Right? There's

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certainly value in the technology of a blockchain. There's certainly value in

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the technology of internet. There's certainly value in technology of AI, LLM

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models. There's value in those for sure, because they speed up things. Yes? But

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I can't see it in crypto. And so it might feel

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like it's a hedge against inflation. By all accounts, if you haven't bought it, it

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looks like it's hedged. But how they measure it? is

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in USD, right? And so if the USD disappeared overnight, so

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would the value of cryptocurrency, right? Because it's really got to be

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valuable in the real world. And that's why I don't think it's the best hedge. So

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I don't hold any of it. I never will hold it. Even if the world adopted

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it as a currency, which I cannot see happening, I would

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still own businesses. I would still, for that matter, if it

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was the right price, own a piece of property. I would still own things

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that are valuable. And I just can't see how it's valuable. This is why I

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don't personally own gold. I don't personally own crypto. I personally own

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things that are valuable to the world. Because I know if push

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came to shove and shit hit the fan, like it did in COVID, did

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people go to crypto? Nah. Did they go to gold? Nah. They went to toilet

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paper. So I'm thinking to myself, wouldn't I

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want to own companies that produce toilet paper? That's a better hedge, right? This

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is where my mind's at. This is how I think. So I know that people got wealthy

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by not owning those assets. I know they got wealthy by building businesses and