For the last four decades, basically since I began my career in Wall Street,
Wall Street has grown wealthier than ever before, and it can continue to grow and do well.
But for the next four years, the Trump agenda is focused on Main Street.
It's Main Street's turn.
It's Main Street's turn to hire workers.
It's Main Street's turn to drive investment. And it's Main Street's turn to
restore the American dream.
Music.
Welcome in to This Week in Bitcoin, episode 53.
My name is chris chris las.com jupiterbroadcasting.com
i could feel it last week as i
was recording i knew this was gonna be a crazy
one with all the tariff stuff just coming out last episode i knew we should
probably wait to talk about it see how things unfold and i think that was the
right move probably like a lot of you this week i have been heads down feeling
like every couple of hours something new has developed since basically I've wrapped.
As I was actually, as I was publishing last week's episode, I was already collecting several clips.
It's been pretty nuts. And the more I started to pay attention and the more
I started to read, first of all, I noticed inconsistencies.
And I also started to appreciate the scope of what's happening here.
So the goals we're going to talk about on the show, for the goals of what I
want to talk about, they're going to be bigger than the trade tariff stuff.
They're going to be part of it.
But I also want to get to why Bitcoin has held so close to the 200-day moving
average during the rest of the world market melting down.
It's really been incredible. And there has been so much hyperbole to sift through
as well. Come on, this is nonsense.
This is all nonsense. What happens is they block our markets.
When we open those markets, our volumes grow.
Our farmers will thrive and the price of groceries will come down.
Let Donald Trump run the global economy. He knows what he's doing.
He's been talking about it for 35 years.
You got to trust Donald Trump in the White House. That's why they put him there.
Let him fix it. I understand. It's broken. Let him fix it.
The president of the United States shouldn't even be fixing or running the U.S.
Economy, let alone the global economy.
I mean, it's just amazing how far everything but Bitcoin has come from a free market.
So I played that clip for context, just so you know, kind of the messaging that
is out there. I think that kind of stuff is a smokescreen and a lot of the talk
around it that's kind of like it. I hope to make that case today, at least.
And I have been impressed with Bitcoin, but I also worry it could be suggesting
something much worse down the road.
I mean, earlier this week, on Monday and Tuesday, the market gave us signs that
it's just on a hair trigger.
On Monday, a random account on X said that, well, we're taking a tariff policy
pause. Just a random account said, we're taking a tariff policy pause. The U.S.
Stock market pumped $3 trillion into stonks in 20 minutes.
They're ready. They were ready. That money was on the sidelines. It was ready.
Then 20 minutes later, news comes out, fake headline, $2.5 trillion wiped,
wiped out like 20 minutes.
Essentially double the Bitcoin market cap wiped out from stonks in like 20 minutes.
Then we saw similar dynamics play out on Tuesday.
Again, we saw the market pump like crazy on the news and then dump.
And then today, we saw the same dynamics play out again, which we'll get into.
During all of this, though, it's causing stress.
Stress on the system, stress on people who are afraid of volatility,
stress on the bankers, the poor bankers.
Deutsche Bank put out a statement today saying, the simultaneous drops in price of all U.S.
Assets, including stocks, dollars, and bonds, well, that's a real problem.
So the head of foreign exchange research at the Deutsche Bank said,
quote, it's very hard to foresee a market dynamics in the coming days.
We are entering uncharted territory in the global financial system.
If recent disruption in the U.S. Treasury market continues, we see no other
option but for the Fed to step in with emergency purchase of U.S.
Treasuries to stabilize the bond market.
Emergency QE could be needed, Deutsche Bank says. Emergency QE,
it's so crazy. It's all out of control.
All right. I get the confusion. I get the confusion.
The numbers don't quite add up. When you start looking at the trade stuff,
the tariff structure, it doesn't make a lot of sense.
What's going on here? Like, you look at some of these numbers,
like, did they come up with this with AI? What happens here?
I'll give you an example. Some of the things that don't make sense so far.
We keep hearing about unfair trade imbalances, but I don't really understand what the hell they mean.
If we're buying a lot of goods from, say, China or wherever,
well, if we don't make goods they want to buy from us, of course there's going
to be an imbalance. I have a similar trade imbalance with my grocery store and my butcher.
We pay China for goods in dollars. China doesn't spend those dollars at home.
They turn those dollars back around into the United States.
They buy dollar-denominated assets like stocks, U.S. treasuries.
They use U.S. dollars to purchase raw materials and commodities,
which does further the dollar system down market.
Is this system great for middle America? Maybe not.
Maybe you're 401k, but outside of that, I think it's probably a net loss.
I think history shows us for about 80% of the country, it's not been fantastic,
but it has been great for the reserve currency and for government's degen spending.
So the stuff around tariffs just doesn't add up.
At a high level, it literally doesn't add up. If you're the reserve currency,
this is the way the situation is going to be.
Then today, right before I went on air, we saw that degen rip behavior again.
And $3 trillion coming slamming into the market.
Rumors were going on that Besson had been recalled to the White House.
What's going on? I then saw markets continuing back to where they were pre-market.
And just in the last couple of moments, the Dow has gone from up about 300 points.
1,500 points with very little explanation as to what's caused this sudden move
other than the canceled meeting Emily just told us about with Besant now being
pulled in by the president to the White House.
A couple of headlines from Trump on the wires about China tariffs.
Megan Casella is in our D.C. bureau. Megan, maybe you can enlighten us with more.
Kelly, we are just sifting through everything that we're seeing in this true
social post, but two major developments.
I'm going to go first that the president says he is authorizing a 90-day pause
and substantially lowering the reciprocal tariff during this period of 10% effective immediately.
There's some fuzzy language here. The upshot is that there's a 90-day pause
in the reciprocal tariff.
What I'm not clear on is whether we go to zero during that time or to back where
we were, or if the 10% tariff remains in place.
Either way, a major step forward.
The president says that this is because
more than 75 countries have called representatives of the United States.
Negotiations are ongoing, and so he's instituting this 90-day pause in the meantime.
On the other hand, some negative news on China, saying that based on the lack
of respect that China has shown to the world's markets, he's raising the tariff on China to 125%.
That's, of course, up from the 104% that took effect just at midnight,
now going even higher to 125% because he does not like the way China has been retaliating.
Rather than coming to the united states and wanting to negotiate so
two major step forwards here one obviously very good
for the markets you're seeing the markets react to that the other
one on china looking like you know they they don't like the the lack of respect
that they see so we oh so the tariffs are paused for 90 days now what happened
to not blinking what happened to not backing down what happened to not checking
the market well i have an idea i have a theory,
And they kind of tell us in there, you know, so we see $3.5 trillion come back
into the U.S. stock market.
They're pulling back tariffs to 10 percent on everybody but China.
And China, they're doubling down and calling out.
Music.
The president's own words gives us some of the insights that we need.
And one of the things that you've heard probably this week, I definitely have
come across it, is everyone's running around like a chicken with their head cut off.
Well, I think I know why. And the reason is, is they're not zooming out.
And nobody does that better than Ray Dalio, who has been writing about the changing
guard in empires for a bit now. And he was on CNBC.
And I think Ray puts into perspective what's really happening right now. It's not tariffs.
It's something much larger. Bridgewater Associates founder Ray Dalio posting
on LinkedIn and weighing in on tariffs.
He says it's more important to focus on the idea that, quote,
we're seeing a classic breakdown of the major monetary, political and geopolitical orders.
This sort of breakdown occurs only about once in a lifetime.
But they have happened many times in history when similar unsustainable conditions were in place.
Joining us right now first on CNBC is Bridgewater founder Ray Dalio.
And we're thrilled to have you here on a morning when we're still trying to
make sense of what all these tariffs mean, Ray, and frankly,
how all of this plays out.
So to the extent that you can help us with the history, or at least the history
lesson, if you think there are parallels, how does this play out?
Good to see you, Joe. Andrew, Joe, and Becky.
I think that we don't understand how the cycle goes because it comes along about once a lifetime.
But there are orders, you know, there are systems.
And the systems break down for certain reasons, and it creates cycles.
For example, there's a monetary system.
And then there's a debt cycle. And so as a result, we now have,
you know, one man's debts, another man's assets.
And when you build these up and you get to a point where you can't sustain that,
you have a debt issue. We have a debt issue.
We can get into that. But there's a monetary cycle.
There's a internal political order cycle that takes us from one political order
to another political order in which there's then classically great turbulence
between the left and the right.
And because of disorder, particularly in democracies, there's a lot of fighting
because there needs to be cooperation, compromise, and so on.
And we're in the process of changing that order.
In addition, we have the international world order.
International world order began in 1945.
There's a war. You win a war. The dominant powers get to set the rules.
That was a series of multilateralism, things like the United Nations,
World Trade Organization, World Businesses and World That.
And that multilateralism is then breaking down for unilateralism.
So Reyes identified four historical trends that are converging.
The debt cycle, the monetary cycle, i.e.
The reserve currency cycle, the political order cycle, which
we're seeing with the trump and uh fighting with
the democrats and the international world world
order which is sort of forcibly being restructured with the trade negotiations
but you're also seeing it a bit with ukraine the eu and russia for the same
reasons so there are these three orders related to too much debt that is money
second internal order how does our system work.
Who's going to get control of this problem? And then number three,
in addition of the five main forces of five main forces, there's also throughout history, climate.
Acts of nature, droughts, floods, and pandemics have killed more people and toppled more orders.
And then there's also throughout history, man's inventiveness and new technologies,
which is creating this transformative result.
The interactions of these is what's going on. So if we look at tariffs...
Tariffs represent a dealing with the imbalances.
The imbalance means we have a tremendous capital imbalance and a tremendous
trade imbalance, which is unsustainable.
And so that's the backdrop of this. Related to that is also the international conflict.
How do you have dependency, mutual dependency?
How can the United States be a safe country and not manufacture things?
And have to import them for China? Or how can China be safe in terms of having
capital, an American capital?
Those connections are breaking down.
I'd say they have been under stress specifically since the COVID lockdowns,
supply chain issues, and the fact that so many of the United States pharmaceuticals
had to come from China and people recognize the vulnerability that could potentially
cause in a conflict, in another pandemic, et cetera.
That's what he's inferring to there. So that's the essence of the backdrop.
When we get into the tariffs, I'm sure we'll get into it. Well, that's great.
That's a great backdrop to understand the way you're thinking about it contextually.
But let's get let's go straight to the tariffs, which is to say,
how do you think, therefore, they play out?
Is that, you know, given the history that you talk about, is there the political
appeal either here in the U.S. or elsewhere for these tariffs ultimately?
And from an economic perspective, as we're all watching the market today,
it's gotten a little bit better.
But obviously, you know, folks have lost 10 percent.
You know, someone said to me last week, this is like a wealth tax,
except that nobody gets the money in that, you know, 10 percent of a lot of
folks wealth vanished overnight as a function of at least this discussion thus far. So what happens?
Well, mechanistically, it raises costs. Right.
It lowers revenues for companies. I mean, what does it mean for a company?
It means costs are going to go up, revenue is going to go down,
and capital is going to be harder to come by.
And then we're trying to replace manufacturing.
I mean, I agree with the problems, okay, about the fact that we don't manufacture
and that there is a problem with that.
But there's this structural problem of whether we can manufacture.
We have a population that basically 3 million people, 1% of the population,
is incredibly brilliant.
I mean, they go to the best schools, they come out, they make the unicorns,
inventiveness, half of which, by the way, are foreigners.
And at the same time, they are making the unicorns.
At the same time, what we have is 10% of the population around them that's doing very well.
The 60% of the population has below a sixth grade reading level.
And it's tough to be productive. So when we agree with the problem,
too much debt, Secretary Benes and others agree, we should get it down to 3%.
We have to get the budget deficits down to 3% of GDP.
But what are you going to do because you still don't have a workforce that would
be ready to take on that work, at least right now?
So this is essentially the White House trying to skate to a future that we wouldn't
be ready for even if they pulled it off.
It it it really is hard to fully wrap your head around and you know now so here
we are right now 3.5 trillion back into the stock market with the 90-day pause
and everybody's just going to pretend like we're back to normal now.
I can't unsee what i have seen i don't think things are going back.
It's on the White House where I saw it, whitehouse.gov. I mean,
I'm still searching for the words to really fully explain how surprised I am
something like this is posted on the White House website.
It's written by the CEA chairman, Steve Moran. He was at the Hudson Institute
event of some sort. I don't know the event because I got this from the White House, not the event.
And it's remarkable. Here's just a quote from it, a small one.
On the financial side, the reserve function of the dollar has caused persistent
currency distortions and contributed, along with other countries' unfair barriers
to trade, to unsustainable trade deficits.
These trade deficits have decimated our manufacturing sector and many working-class
families and their communities to facilitate non-Americans trading with each other.
They're saying, right there, what the CEA chairman is saying,
and what is posted on the White House website,
is that the reserve function of the dollar has caused persistent currency distortions
and combined with other countries' unfair trade practices decimated the working
class, quote, their families and their communities,
and quote, the manufacturing sector.
This is the United States White House saying this about the United States dollar,
which is the reserve currency of the world, and they're saying that reserve
currency status is leading to an unfair burden.
In fact, in here, they talk about how the rest of the world needs to share the burden.
We can still have the biggest defense, but people need to pay their fair share, they say.
This is a remarkable statement coming from the White House. I don't know if
it reflects greater White House thinking, if it's just tradition to put these
statements on here, but it's something I would never have thought I would have
seen on the White House in my lifetime.
And it goes to what is really, despite the actual words being used,
it goes to what the messaging is that is being received by the rest of the world.
Something Jack Mahler's got in his podcast, Money Matters, recently.
It's okay. If you're going to tell other countries, no more surplus,
take your money and go home, their money is in NVIDIA.
Their money is in our debt. They're going to dump treasuries.
They're going to sell our stock market.
Who's going to buy it? Who's going to replace the bidder that was China,
that was the Middle East, that was Russia, that was Europe? Who's going to replace that.
And if you listen, it's the Federal Reserve and it's the U.S. banking system.
The amount of money that they're going to have to print in order to make up
for the realignment of global trade. And when the White House comes out and
starts self-admitting that the U.S.
Dollar positions us unfairly to operate in a deficit and have global trade,
if you want to be the world reserve currency, you have to operate in a deficit.
Your job is to give the rest of the world your currency and import debt and real stuff.
So if you don't like that setup, then you don't want to be the world reserve
currency. It's just plain and simple.
So when people say we're moving towards a neutral reserve asset,
things like gold are valuable. Things like Bitcoin are valuable. Why?
It's obvious because no one wants to be the world reserve currency.
No one wants to operate into deficit.
No one wants to de-industrialize. No one wants to eliminate their middle class.
No one wants to disadvantage the poor.
Nobody wants to over-financialize. Nobody wants any of these things.
That's what Donald Trump is saying.
Music.
So what are we talking about here? Some long play?
To take the dollar out of reserve status? I don't think so.
But I do think the people around Trump that are now working on this problem
have been thinking about this for a long time.
This is a clip of Scott Besant before the election, before he was Treasury Secretary,
before he even knew he was nominated or on the list.
This was Scott at a banking event. I think as an economic historian and someone
who's been in markets for 40 years, you know, I actually think I'm starting to look like it now.
It is, you know, I think we're also at a unique moment geopolitically.
And I could see in the next few years that we are going to have to have some
kind of a grand global economic reordering.
There's something on the equivalent of a new Bretton Woods, or if you want to
go back, like something back to the Steele agreements or the Treaty of Versailles.
There's a very good chance that we are going to have to have that over the next four years.
And I'd like to be a part of it. I've studied this.
I think it's kind of a unique skill set. And perhaps a moment in history and an opportunity.
That is a fascinating clip when you think about what we've been going through
for the last few weeks. Now, the Trump administration claims they've had nearly 75.
The number changes constantly, but nearly 75 countries reach out to them to try to negotiate deals.
And so part of the 90-day pause is so that way they have time to review and
create a bespoke deal with each country.
That sounds horrible. That sounds tedious.
That sounds complicated and intricate. It sounds bureaucratic.
It sounds big government.
And it sounds like something that a future administration would want to dismantle
to simply simplify to make things understandable.
Is that really what they're doing? Are they going to take 90 days and create bespoke deals?
Or are they going to take this coalition of 70 or so, create a great deal,
and essentially all work against China? China, a new alliance against China,
perhaps a new understanding when it comes to gold as well.
And we'll get to that. Because before we get to gold, I want to talk about the
bonds, because some of the previous theories was the cheap debt theory,
one that I brought up on the show.
Put it out there as a possibility, and it could still be in play.
But if it is part of the plan, it has backfired. In just the last three days,
the 10-year note yield has surged 60 basis points, while the S&P fell dramatically.
So that's the largest three-day increase since 1982 and one of the largest divergences
of the bond yield and the S&P in history.
So this plan to get the yields down, it isn't working. In fact,
it's having the opposite effect. It's making the debt more expensive right now.
All right, so why don't we stay in the markets and your money?
Because as bonds go, so go stocks.
And you may not be paying as close of attention, but bonds, they've had huge
move the last few days with a nearly half percent move in 10-year yields in just the last 24 hours.
And folks, for bonds, that's a massive move.
Let's talk more about this and more with Rick Santelli in Chicago.
I think everybody, I was joking with our team that every time we said the word
whipsaw yesterday, somebody had to put a dollar in a jar so we could buy some
beer later or whatever it is.
But yesterday, honestly, the pond yields, they moved around like a stock.
Absolutely. Absolutely. The stock market and interest rates are moving like
commodities, like a corn market on a hot day in July.
Like a meme coin. I mean, I've never in my life had the 10-year yield real-time chart up on my screen.
It's something. So if the plan was to deflate the market a bit,
drive everybody into bonds, and bring the yield down to get access to cheap
debt, well, as of right now, that plan is a total failure.
And you see, I was trying to get to this last week. We didn't have a complete picture yet.
But I think some of the long-term goals here of the Trump administration,
they are in the best interest of the United States, which is who they should be working for.
But instead of using the carrot, Trump went with a stick.
And I think the order of operations really mattered in how you execute something
like this. And they kind of just did all of it at once.
And Besant was on with Fox Biz. And you can hear there is a three-step plan.
And I don't think they should have started with tariffs. If we think about President
Trump's agenda, tariffs came first.
Now we're going to get tax done. We are pushing for deregulation.
And the deregulation, unfortunately, takes longer to kick in.
But I tell you, when it does, it's going to be powerful. I love this because
the regulation is just something they can vaguely quantify, right?
Taxes, you know what the tax amounts are going to be.
You can do the budget calculations. You can get the numbers,
right? Same with the tariffs eventually.
But regulation, that could be a trillion dollars of future potential over the
next five years, right? I mean, who knows?
You can say anything. So that's, but it's, that's the three-step plan.
Tariffs, taxes, deregulation, which I think Doge is also in that deregulation
category. So there's some government efficiency in there too.
The deregulation should have begun first.
Then the taxes, right? If we actually were going to see benefits from deregulation,
first 100 days you go crazy with the deregulation, and towards the end of the
100 days you get the tax cuts.
You get the old trunk, the old tax cuts extended, and you get the new like no
tax on tips, Social Security, overtime, those things that they're talking about.
You get that stuff passed, so the American consumer is feeling a little bit
more money in their pocket. Then you start rolling out tariffs.
Maybe you start with these 70 or so folks who you could send out messaging to
and tell them it's a serious matter.
You're going to have 90 days while we sort out these regulations and efficiencies and tax breaks.
Then you begin the process of tariffs.
They didn't do it in that order. They didn't prepare the farmland before they
wanted to start growing the corn.
They just had a dirty field and they just threw the corn seeds in there and
started watering them with too much water. I mean, that's a bad analogy.
But I'm trying to tell you that if you listen to Besson here,
they didn't necessarily have to do it in the order they did,
and the results may have been more successful. And the deregulation,
unfortunately, takes longer to kick in.
But I tell you, when it does, it's going to be powerful.
And part of the deregulation in the banking industry will be changing what's
called the supplementary leverage ratio, which will allow banks to buy more
treasuries without a big capital charge.
So, you know, I would expect that we have created a new buyer for treasury securities
or a larger, more durable buyer.
Did you catch that? Besson is saying the plan is to go back to the way that things were in 2020.
Let the banks buy treasuries right along with the Fed, which is another form
of quantitative easing. Only it wouldn't be just the Fed.
It'd be the banking industry along with the Fed.
So Besant gets more buyers for his debt, and then he gets to pitch the whole thing as deregulation.
That's, I mean, that's going to work. That's going to work. I mean,
I don't know if it's a good idea.
I'd love to know your thoughts, but it's definitely going to do what he wants
in the short term. You're going to have more buyers.
And if things get really bad and the bond yields continue to rip upwards and
the cost of debt starts to get ridiculous,
well, Luke Groman thinks that there may be a Hail Mary play to really drive
those yields down could already be in conversation, even though it's been denied by Besson.
Senator Lemus with the revaluing gold or revaluing gold certificates.
Look, they could create now with gold this morning as we sit here, 3,150.
Now, you're probably close to $850 billion that would get deposited directly
into the TGA, with which Besant could do whatever he wants within some constraints,
I suppose, which is an oxymoron. But he could certainly buy back debt.
It reduces versus duration issuance by $850 billion.
So paradoxically, for a long time, people said, oh, if the US revalued gold,
treasury yields would spike.
No, they wouldn't. They'd collapse. You want to get the 10-year treasury yield down?
Talk up gold. Walk gold up. You're not going to issue any debt.
And if you don't have to issue any debt, every year there's 400 to,
I don't know, this is a guesstimate.
Every year, there's probably 400 to 500, maybe $600 billion of just mindless
duration buying in treasuries.
They have to buy. And it's pensions and insurers, right?
So they're going to buy 400 to 600 billion. And maybe it's 300,
maybe it's seven. I don't, I don't know.
But it's a decent chunk of money. And the point is, is that if you get duration
issuance plus foreign selling of duration below that number,
treasury yields are going to fall.
Almost regardless of what's happening with inflation and all this other crap.
So, yeah, you could revalue gold. You could walk or the gold certificates and
you could significantly reduce treasury issuance, get yields down.
That can work in this way. That just buys you time, though. That buys you a year or two.
I'll note that Luke so far has nailed the call on the bond yields.
He said they'd be going up as this went on, and he nailed it.
So that would be fascinating right there. If they were to revalue the gold certificates,
drive bond yields down, and then potentially buy Bitcoin, too,
which is part of Lemus' plan, and then put that on the balance sheet.
That would really be a wild outcome of all of this if we got to this point eventually.
I think there would be signs. I think if they were going to make such a move
like that in the gold market, there would have to be unilateral agreement,
perhaps with these 70 or so folks that they seem to be negotiating with.
Music.
Let's talk about what impacts us,
which are really the second-order and third-order effects of all of this.
Price changes, products on hold, and a job market that needs to absorb hundreds
of thousands of government staffers that have been laid off.
The talk of a recession is way up.
It's funny, I'm always chatting with my wife because she has a medical practice,
and she sees lots of people every day, lots of clients. And a lot of them are
coming in for stress and anxiety about the economy.
And I've always been a fan of the rolling recession theory.
We've talked about it before on the show. And I've also heard Kathy Wood from
ARK Invest put it into pretty good terms.
And she had an update this last week about her theory on if we're about to enter
a recession or if we're really actually seeing the end of a rolling recession.
If we do end up with two back-to-back negative quarters,
many investors might fear that, oh, no, this is the beginning of a recession,
and recessions usually last quite a long time.
That's why it's so important to identify what this is.
It's actually the end of a rolling
recession. Now, what has kept the GDP numbers up in the last few years?
High-end consumer and government spending. And both of those are about to change.
So we think that we'll have, and in fact, they're in the process of changing as I speak.
So I think that it will be the end of the rolling recession and we'll have a
clean slate to move into the future with what we believe could be a very strong
productivity driven recovery and then expansion. All right.
So she thinks we're actually going to see for a bit the transition out of a
rolling recession and long term.
We'll see a productivity boom. She's not the only one that's talking long term
boom either. Your boy with the
plan Besson also thinks things are going to look good in a little while.
The you know, the market expecting a sharp slowdown in economic activity, sir.
Well maria i i think what the ceo may have alluded
to and i've said it in the past that the manufacturing sector
under the previous administration was in
a recession so what what we are doing
is what i call reprivatizing the economy you
know 80 of the job creation was either
government jobs or government adjacent which is education
and health care and you know this massive
amount of government borrowing so we are also getting
the deficit under control right sizing the
federal workforce and then on the other side we
are they are going to relever the private sector through smart safe and sound
bank deregulation and then you know as the ceo said they can come out of recession
because the i expect that long-term interest rates should come down as we get
the budget under control,
inflation under control, energy prices come down, and then the private sector
will have room to grow. Yeah, that's the plan, I suppose.
So that would be, I guess, very beneficial for people to listen to this show
and people out in the real economy, not just Wall Street, if it's true.
And if this rolling recession theory that's been hitting different sectors works out.
And, you know, there's a lot to actually pull off here. In fact,
I was going to ask you, what would success actually look like?
How would we know the Trump administration has achieved their goals?
Because I think one thing, even though the tariffs have been paused...
It feels like things will never quite be the same again. No other president
would be willing to do what I'm doing or to even go through it.
Now, I don't mind going through it because I see a beautiful picture at the end.
A beautiful picture at the end. For more on what that picture might in fact
look like, I want to bring in Justin Wolfers.
He is a professor of public policy and economics at the University of Michigan.
It's great to have you with it. Justice, you wrote an op-ed for The New York
Times. You know what it says, but my audience does it, so let me go through it a little bit.
Quote, your life will never be the same after these tariffs.
You wrote also, these tariffs are going to hurt a lot. By my calculations,
this round of tariffs may be 50 times as painful as the ones Donald Trump instituted
in his first term. Simple question, why?
I don't know where he gets this 50 times more painful. How do you measure the
pain of the previous one and then assign a score to that than to say this one's
50x more? That's just ridiculous.
But I do agree things will probably never be the same again.
So how do we measure success?
It seems like a 1 in 100 shot that they pull all of this off without creating
some kind of massive economic fallout.
So how will we measure this success? I'd love it if you boosted in with your thoughts on that.
And I want to say, I am just so damn proud of Bitcoin. Part of me is just floored
how well Bitcoin has held up around its 200-day moving average price.
In the past years, say like with the COVID lockdown crash, Bitcoin front runs it.
Bitcoin's the first thing. It's the canary in the coal mine.
It goes harder and faster than the stock market.
But in this last week, on days when the stock market lost trillions of dollars,
Bitcoin lost a couple thousand.
That's amazing. Of course,
The media's never happy. Donald Trump promised to be the Bitcoin president,
but where's the upside for crypto?
This is Sectors Up Close, and we're talking cryptocurrency.
Bitcoin hit a 2025 low on Monday, sliding alongside equities,
even though President Trump had promised favourable policies that would make
the US the crypto capital of the planet.
So what's happened to the optimism around cryptocurrency?
Well, Andrew... Okay, the reason why I'm really playing this clip is because
this clip is actually a lot more bullish than you realize.
She's about to bring on the Digital Assets Managing Director of S&P Global Ratings.
S&P Global Ratings is the largest credit ratings agency in the world.
The type of folks that never used to spend a minute talking or thinking about Bitcoin.
And now they're on these types of shows answering questions about Bitcoin.
So I just want to listen to a little bit of his perspective.
Because it is almost historical in itself that it's just somebody coming from
S&P and they're commenting on Bitcoin in a positive way, which I'll let you
hear now. Cryptocurrency.
Well, Andrew O'Neill is Digital Assets Managing Director at S&P Global Ratings.
Andrew, cryptocurrency was intended as a departure from the traditional financial
system, but isn't it moving a lot like any other risky asset at the moment?
Well, Elena, thank you for having me. I think you're referring to price movements
in the last few days, few weeks.
Certainly, we've seen a trend where markets have moved to a risk-off paradigm in recent days.
And clearly, crypto has joined other asset class in that movement.
I think when we come back to why crypto could be an asset that behaves differently,
a lot of the assumptions behind that are things that are still developing.
May, over a number of years, become true. But I would also highlight that then
among crypto assets themselves, that there are significant differences.
And when we're talking about that,
Asset that may behave differently, that may be a hedge against currency debasement,
for example, that may be uncorrelated to stocks.
We're primarily focused on Bitcoin. Yeah. We're focused on its characteristics
as an alternate form of money.
We're primarily focused on Bitcoin and its characteristics as an alternative form of money.
We're focused on the fact that it's decentralized, that it's geopolitically neutral. Oh, yes.
And we're starting to see adoption in that sense of that narrative of investment
appearing among institutional investors, among public sector investors,
among national governments. Imagine.
Oh, I love that it's decentralized. Non-government nature is finally being appreciated
as a value and not a risk by these people.
That is such a shift of the Overton window. Oh, it makes me so happy to hear that.
You know, not great audio, not a great host for sure. I think also we should
all be very proud of Bitcoin, but we should be braced.
Really, it would take just another dramatic leg down in the market that happens
at an inconvenient time for Bitcoin to take a hit.
Right. The thing is, Wall Street got really, really close to the sell what you
can, not what you want stage. We just avoided that with this pause.
And when that happens, when they have to sell what they can,
it triggers all kinds of sell offs. And if it happens on the weekends and the
banks are closed, Bitcoin can be one of the only options if you need a lot of liquidity.
So just bear that in mind. We are still in a little bit extra risky price season right now.
This 90-day pause is probably going to relieve that pressure for a while.
But if something else were to develop...
Could turn pretty quickly. So I'm not declaring risky time over yet.
I am curious to see how the price action behaves with this pause.
As I record right now, we're still down. But you know, I would imagine as the
news starts to percolate out there, it'll start coming up because it was breaking
just as I went on the air. So let me know what you think.
Send in your thesis on how we would measure success and what a successful outcome
might look like, I suppose, because I don't know if it's really been defined.
Music.
All right, coming up, your boosts, some updates, a couple final clips of the week.
I want to thank everybody who supports the show by doing just
what you do if you're stacking sats on river use our link
support the show if you're using the bitcoin well because you
go self-custody all the way every day that's the bitcoin wells
whole mo link to that in the show notes
you're ready to spend your sats maybe with a gift card over lightning
pew pew use the bitcoin company link to that
that's what i use now if you want to stack sats when you're
buying stuff if you're paying bills if
you need a debit card that kind of thing the fold card is where it's at people
loving our community i've got one and then salt lending helps you get access
to your bitcoin value without having to sell it they do also have a couple of
nice options if the price gets a little crazy including stable coin stabilization
something to look into there all those links are in the show notes.
You can just support the show by doing what you do. Those are our affiliate
links, and I appreciate it very much.
Music.
We got some great boosts into the show this week. Thank you,
everybody who sends those in.
Let's start with our baller booster this week, who is Mr. Adam Curry,
the podfather. Hey, rich lobster!
Coming in with 50,000 tasty, tasty sets. This is a tasty burger.
And he says, 50K for saying giga bullish.
You know, I felt so stupid the moment I said that.
And now I'm pretty glad I said that. Did you buy that from a certified vendor?
Should I just like slip it into every episode?
Nice to hear from you, Podfather. Thanks for the value.
OBL918 comes in with 23,456 sats. Okay.
Boy, they are doing a lot with mayo these days. And it's just a boosty McBoosterson.
Thank you. Appreciate that.
That's pretty funny. Next caller. A-Train comes in with two,
nope, I'm sorry, 20,000 sats. This is the way.
Ad-free boost. You got it, buddy. You keep boosting, and I'm going to keep it
going as long as I can, ad-free. That's where I've come down right now.
It's not 100% commitment, but as long as I can make it work,
I'm going to. You're doing a good job. You know what I mean? That's how I feel.
Hey, the Muso's here with 5,000 sats. You said boost. I was going to boost about
the low network activity, but I think you covered that pretty good last episode.
Instead, I'd like to encourage those running a node to support the development of software they use.
I, for one, am supporting AlbiHub and plan to support the NixBitcoin developers as well.
Both accept Lightning payments and NixBitcoin accepts on-chain,
if that's your preference.
Whoa, the muso. I did not know NixBitcoin accepted Lightning payments.
I would like a link or something because I will forget about that after this
episode. But I think I'd like to
put him into the splits for a couple of episodes or something, you know?
Help support the project. I love Nick's Bitcoin. I think it's the best way to
have a real appliance level Bitcoin node. Appliance level, you know?
That, Musa, great. Thank you. Let me know how it goes, okay?
Fun will now commence. Just maybe follow up and let me know how to do that.
Adversary 17 is back with 15,000 sats. Oh my God, this drawer is filled with
fruit loops. And Adversaries says, My guess on why the Layer 1 transactions
have been low is maybe due to Lightning getting increasingly adopted.
When I send you sats and a boost, I've already made the transaction between
my node and someone else's, so Layer 1 doesn't see a change.
Could also be that people are stacking, there's no need to move anything around.
I think you got a couple theories going in here. I could see that with zapping
and things like that, some of the activity has gone to Lightning.
Definitely could see some of that. But I think some of it's the ETFs too, right?
People are buying and selling inside these ETFs, which as far as the blockchain
is concerned, is almost like a layer too.
And then I think it's the other thing you said. People be stacking and they're
not moving them right now. They're not moving.
People are not interested in really transacting or selling their Bitcoin when it's worth less.
People expect it to be over 100,000. So they're sitting on it and they're waiting.
They're hodling, which is what a lot of good Bitcoiners do.
Good thinking. Thank you, Adversaries. Nice to hear from you. Appreciate you.
Mix comes in with 10,000 sats. Just pump the brakes right there.
And he says, thanks. Thank you. Appreciate it. User 54 is here with 4,444 sats,
which I was trying to debate right there.
I'm going to say it's a McDuck. This old duck still got it. It could be an Aflac,
but I'm going to say it's a McDuck. Things are looking up for old McDuck.
And he just says something, something quack. There you go.
Ace Ackerman is here with a row of ducks as well. Hey, boost. Thank you.
And Clarkian is here with 10,000 sats.
Hey, thank you, sir. It's pretty funny.
Next caller. Hey, no, give him something better. He deserves something better than that.
That's not possible. Nothing can do that. Yeah, the random button's not always so great.
Clarkian says, unfortunately, I'm one of the few states that salt lending does
not yet service, which is Alabama.
But I am able to use Lend. They have higher rates, but it's still a very cool
unlock to live off of Bitcoin without having to sell it.
Assuming the Bitcoin kegger is consistently higher than the rate,
just roll over the loan after 12 months and reclaim some of the Bitcoin. Very nice.
That's interesting. Lend is, I think, unavailable in my state,
Washington, where salt is.
There are those types of things. Probably comes down to like money transmitter
licenses and other things like that.
I always appreciate hearing experiences with other platforms.
So if you ever have any updates you want to share about Len Clarkian, please do send it in.
And I agree, as long as you've got the collateral to cover a dip,
you know, you just you need to be a little dip aware right now.
You need to be extra dip aware.
And as long as you're extra dip aware, you'll be all right.
You know, if you've got a way to ACH some money in there or whatever they do to cover, you're OK.
Or if you've got additional coins, you can commit or if you could just close
the loan. You know, those are things just to consider if you're a little dip concerned.
I'd say be dip aware at this point. You know what I mean? And I'd love to hear
your experiences. Thank you for the boost.
Oppie 1984 is here with 4,000 sets.
B-O-O-S-T. Just another boost. It sure is. And I appreciate it.
Thanks, Oppie. It's great to hear from you.
Moon Knight's here with 1, 2, 3, 4, 5 sets.
So the culmination is 1, 2, 3, 4, 5. Now is a great time to set up PeerSwap
on your Lightning node for unfairly cheap liquid swaps.
I did a 34-sat swap on one of my channels. Fees are low, so take advantage.
Great advice. Great advice.
When the fees are low, that's a great time to set up channels or do some swapping.
PeerSwap, I'll give a plus one on my recommendation too. PeerSwap for Lightning.
This is a great time to set up some channels.
Make sure you've got a channel to AQIN. Get some big ones in there because the fees are cheap.
And then later when they go up, you feel like a king. You're like,
I set that up for nothing.
It feels great. That's a great tip. Great boost. Thank you, Moon Knight. Appreciate it.
Nakamoto 6102 is here with 7,000 sats.
I've missed a couple of shows, so here's a couple more boosts. Thanks for the value.
Well, thank you. Appreciate you, and thanks for catching up,
Nakamoto. It's nice to hear from you.
That's all the boosts above 2,000 sats, but I did want to pull up SickBlackCat.
He came in under the 2,000-sat cutoff.
He says, I found Fountain on a whim, and I was trying to see what Hive and some
of the other infrastructure was actually being used for. That's a part of Podping.
That's why I came across this show. As an American veteran, it means a lot to
me, especially only being six years after transitioning.
This is the only thing that has made me feel like I'm part of something bigger.
And Chris is a big reason why I not only enjoy this movement,
but honestly feel well-informed and confident in taking the orange pill. How awesome is that?
Through reading about technology and finding Fountain, finding the show,
he's discovering Bitcoin and he's discovering a community.
I love that. Thank you, everybody who does boost in.
It means the world. This is a value for value show. It means I put it out there, everything for free.
And if you get value out of the analysis or what make you think,
or if it helps you with your stack or whatever it might be, send some value back via a boost.
And if it's above 2000 stats, I'll read the message on the air too.
Fountain FM is probably your best way, easiest way to do it,
but there's so many great ways.
A lot of people in our community take the time to set up AlbiHub and then you've
got a world of options available to you and lots of available apps over at podcastapps.com.
So you'd really, you just, you got to pick your path there, but there's some
good ones like a Saturday and
it's some of the most rewarding and educational work you'll do as well.
So I know I'm selling it pretty hard there, but I really love it.
And then you also will be running a node.
You could be boosted and running a node all from your own self-hosted infrastructure.
But if you ain't got time for that, Fountain does all the hosting for you.
And that's why I say Fountain FM is kind of the easiest way to go.
Let's wrap it up. Thank you, everybody. Those of you who stream sats,
we had 38 streamers. I really appreciate you.
Collectively, you did a great lift this week, 50,358 sats from you sat streamers.
When you combine that with our boosters, the show stacked a grand total of 218,702 sats this week.
Not a barn burner, but level completed, and we are satisfied with the results, right? I think so.
Thank you, everybody. I mean, I would love, I would really love it if you got
value out of this episode,
because what I tried to do this week was take all of the hours of reading everything
and listening to everybody and entertaining every possible conspiracy theory, practical theory,
applied theory, and just distilling down the bits that I think are actual signal.
And this could have been a five-hour episode. And the value I'm trying to bring
is something that is actually listenable and sharp enough that you get the big,
big movements of what's happening here and how ultimately, of course,
it's going to be huge for Bitcoin.
Music.
We have some updates. We have big updates. First up, the U.S.
Justice Department has ended its crypto enforcement and regulation by prosecution program.
The DOJ has announced that the U.S.
Attorney's Office will now be taking the lead for digital asset cases instead of the DOJ. The U.S.
Department of Justice has officially disbanded the National Cryptocurrency Enforcement
Unit, a move signaling significant shift in federal policy towards crypto regulation.
In a memo titled, quote, Ending Regulation by Prosecution, that was actually the title of the memo,
Deputy Attorney General Todd Blanche emphasized that the DOJ is no longer to
act as a crypto regulator, which aligns with President Trump's January executive
order seeking regulatory clarity for digital assets.
The NCET, which was this division, was formed in 2021 under President Biden,
and it was involved in high-profile cases like those against the Tornado Cash
developers and the Samurai Wallet developers that I've covered here on the show,
as well as investigations in North Korean laundering and others.
Now, the DOJ directs prosecutors to stop targeting crypto exchanges and privacy
tools like mixers, tumblers or offline self-custody wallets for end users and
also to stop looking for accidental violations.
Instead, prosecutors are instructed to focus on individuals who are actively harming investors.
Ongoing investigations and policies that don't align with this new approach
are to be closed or rescinded immediately.
I just think in other times, news like that would have been giga bullish.
All right. Then in the, you know, background of that news, Phoenix Wallet is
available again in the United States.
They write on X, we are, we welcome the, quote, ending regulation by prosecution
memo by the USDAG, Department of Justice. and the clarity it provides for the
developers and operators of Bitcoin software.
This is consistent with Executive Order 1478 that recognized the importance
of protecting and promoting the ability of individual citizens and private sector
entities alike to develop, deploy software, and transact with others and to
maintain self-custody.
We are happy to make our products available again in the United States.
You know, I wonder, would Albie consider custodial lightning services again?
I'm not saying we need them necessarily, but it definitely had an impact on the adoption for Boos.
I can imagine it had an impact on the adoption of Noster as well.
And it would seem that the enforcement by prosecution that I believe probably
scared them out of self-custody services may no longer be a threat.
And there will be a market opportunity for that type of service.
And their API still works great, it'd be fantastic to have that as a companion
to AlbiHub. I don't know. What do you guys think?
Music.
All right. I got two final clips of the week, which I shouldn't do.
I should only have one. I should only have one.
But there is a method to my badness here. Besant has been the star of this week's show.
And there's a reason why. My sense after following all of these guys around
Trump and listening to all of their statements is Besant is the one with his
head around the big problems.
He's the one that's been thinking about this for years.
So I thought he gets one last play and this one's a goodie.
Now, for some context, because I haven't been implicitly clear about this,
this man is the current U.S. Treasury Secretary.
This is the guy that replaced Janet Yellen.
The man is deeply involved in reshaping global trade at the moment.
And he said this about Bitcoin last week. So, like...
It was unclear whether we were going to exempt gold from tariffs, which I believe we have.
So there was a big move out of vaults in Switzerland, out of vaults in London to get it into New York.
And look, there are a lot of different stores of value over time.
Bitcoin is becoming a store of value. Gold has historically been a store of value.
This is a really ginormous deal. I'm going to play it again,
and then I'll let it play out.
Over time, Bitcoin's becoming a store of value. Gold has historically been a store of value.
I think what's interesting is where do we see the gold demand coming from?
A huge amount is from China. Yes. Where, as I said, they're in the middle of
an economic recession slash depression.
People don't trust the Chinese currency because they have capital controls.
There are 1.4 billion Chinese who all want to get their money out,
and they won't let them. They will let them buy gold.
And Bitcoin. And Bitcoin. One of the stories that came out today is that it
is confirmed by VanEck that Russia and China have been settling some of their trade in Bitcoin.
Confirmed to be settling trade in Bitcoin. It's probably nothing.
Probably, probably nothing. And then to really wrap us up, I thought we should
go with some classic Bitcoiner thinking.
This is one of my favorite safe screeds on inflation and just reminds us why
hard money is really so important.
And I love a good safe rent. The average fiat currency or total fiat currency
supply increases at around 14% per year.
So you go from 2% to 14%. Well, 14% means you lose 50% in five years.
So if you put that fiat, your average fiat paper, you put it under your mattress
or under the floorboard and you wait five years, it's lost half of its value.
It can buy you half of what it could buy you when you put it there.
So let's say you have enough money to buy a house, but you don't want to buy a house now.
So you put the money under your floorboard.
Five years later, that money will buy you half the house that you wanted.
So what that means is that our ability to provide for the future is massively
compromised. and that just makes the future more uncertain.
And as the future is more uncertain, we discount the future heavier.
And I think this is an extremely powerful way of understanding all the bad things
or many of the bad things that have happened in the 20th century.
People's time preference has risen and this is really the reversal of the process of civilization.
And that's why the subtitle of the book is not really just hyperbole.
It really is an alternative to human civilization.
Fiat is a way of just getting everybody to become a dead slave with no potential
for thinking for the future and therefore little prospect for...
Civilization little prospects for investing in the future for
wanting to provide for the world wanting
to provide a better life for the world for your future
self and so everybody's just constantly becoming more
and more high time preference becoming more and more present oriented
and so you see this reflected in families you
see it reflecting in people you know they spend their youth playing around
and enjoying essentially eternal adolescence because it isn't
as pressing to provide for your future because a you
don't have a very reliable way of providing for your future and
b the reason you don't have a way of reliably providing
for your future is because your money is screwed and the reason your
money is screwed is that the government is able to take your money
so therefore the government can provide for you for your future so instead of
working for your own future you know instead of investing in your own family
you just go and do what all 20th century people do which is vote harder and
you think that you know if i just vote harder then my government is going to
give me all the things that i want.
Music.
Let's take a look at the state of the network as i get out of here i'm wrapping up at blockite,
891,682. Bitcoin price in U.S. dollar right now is 82,180.
That's not too bad. All right. Sats per dollar, 1,217.
We're down 4.6% on our seven day, and we're still down 24.7% from the all-time
high, which was now 79 days ago on January 19th, 2025. 109,160.
Fee rate right now That was also very low. Two sats of eBite.
Good time to go up on a channel. And the reachable nodes on the network, 22,031.
You think we could get that to 35?
I think you could. I think you could. Hash rates cooking.
Bitcoin network is doing just fine.
Music.
Links to what I talked about at thisweekinbitcoin.show. My goal is not to get
distracted by all the drama and emotion, and there's a lot of it this week,
but to really focus on the signal.
So let me know how I did with a boost and also boost in with what you'd like
to hear from the show if I missed something.
And then, last but not least, as you're going out the door, I'd like you to enjoy a little music.
Last week, our track got to number one on the podcast value index charts.
Awesome to see. And so this week, I'm doing something I've never done before.
I previewed this song on my other podcast, The Launch.
It's a new track from a great band, and I just think it needs some exposure,
and I think you're going to love it. It is.
Music.