1
00:00:00,000 --> 00:00:05,680
Mel, can you feel the fall winds blowing into town?

2
00:00:06,940 --> 00:00:09,940
Just ever so slightly down here in North Carolina,

3
00:00:10,100 --> 00:00:12,460
but it is cooling off a little bit.

4
00:00:13,100 --> 00:00:17,120
Here in the Northeast, we've got a nice brisk chill in the morning,

5
00:00:17,120 --> 00:00:18,920
which I welcome.

6
00:00:19,720 --> 00:00:20,720
I like the fall.

7
00:00:21,020 --> 00:00:21,560
It feels good.

8
00:00:22,600 --> 00:00:23,960
But summer's over.

9
00:00:24,220 --> 00:00:25,020
Summer doldrum's over.

10
00:00:25,780 --> 00:00:26,660
Jackson Hole's over.

11
00:00:27,860 --> 00:00:28,720
We caught up.

12
00:00:28,720 --> 00:00:32,240
I believe in July or late June.

13
00:00:33,460 --> 00:00:37,080
And when we last caught up, we said, hey, let's catch up after Labor Day.

14
00:00:37,200 --> 00:00:39,540
Here we are three days after Labor Day.

15
00:00:39,900 --> 00:00:45,820
And it seems like the world is not any less chaotic than it was the last time we talked.

16
00:00:46,680 --> 00:00:47,660
Maybe in a good way.

17
00:00:48,400 --> 00:00:50,780
You've got a lot of thoughts about what's going on.

18
00:00:51,640 --> 00:00:53,680
Well, I do remember the last time we talked.

19
00:00:53,740 --> 00:00:54,660
Let me just check right now.

20
00:00:54,660 --> 00:00:59,280
It's funny because I think like the closing words were, I'm optimistic.

21
00:00:59,620 --> 00:01:01,120
There's a lot of stuff going on.

22
00:01:01,260 --> 00:01:02,780
There's going to be ups and downs.

23
00:01:02,780 --> 00:01:07,160
But when we talk three months later, we're going to have like S&P 100 somewhere around

24
00:01:07,160 --> 00:01:08,480
63, 6400.

25
00:01:08,780 --> 00:01:11,920
And here we are, S&P 6448.

26
00:01:12,160 --> 00:01:17,100
So, I mean, it's like there's so much noise right now.

27
00:01:17,440 --> 00:01:23,080
But like when you step back, there are these major trends, like whether it's fiat debasement,

28
00:01:23,080 --> 00:01:30,620
whatever it is that are just in place. And people are really going nuts about different things or

29
00:01:30,620 --> 00:01:37,800
Fed independence or long ends are crashing and all this stuff. And it's like at the end of the day,

30
00:01:37,980 --> 00:01:42,080
you know, I'll make the prediction again right now. And three months from now, we'll come back

31
00:01:42,080 --> 00:01:49,540
and it'll be, you know, Bitcoin will be like, I've hit 140 and, you know, SPX will be at 6,800. And,

32
00:01:49,540 --> 00:01:55,000
And these longer term trends are going on and there's so much noise, which is interesting,

33
00:01:55,000 --> 00:01:56,480
and you can profit from it.

34
00:01:56,480 --> 00:02:02,740
But at the end of the day, I think there's just this general fiat debasement trade in

35
00:02:02,740 --> 00:02:08,200
place, which is long gold, long Bitcoin, beneficial for equities.

36
00:02:09,240 --> 00:02:14,160
I think the new Fed dynamic that's going on is actually bullish bonds, which is a little

37
00:02:14,160 --> 00:02:15,980
anti-consensus right now.

38
00:02:15,980 --> 00:02:26,700
And I think that we've got a president and an administration that is hell-bent on creating an economic boom come hell or high water.

39
00:02:27,000 --> 00:02:28,460
He wants housing to soar.

40
00:02:28,720 --> 00:02:30,040
He wants lower rates.

41
00:02:30,160 --> 00:02:31,600
He wants higher equities.

42
00:02:31,940 --> 00:02:34,120
And he is going to push, push, push.

43
00:02:34,840 --> 00:02:41,780
And I think a lot of people are raising their hands in the air saying this is all going to collapse.

44
00:02:42,160 --> 00:02:44,260
And I'm not saying that's not impossible.

45
00:02:44,260 --> 00:02:50,980
but my bet is that it's actually going to happen and that you know a year from now we're going to

46
00:02:50,980 --> 00:02:56,240
be at an S&P over 7,000 we're going to be at Bitcoin over 150 we're going to be at gold over

47
00:02:56,240 --> 00:03:03,920
4,000 we're going to have a 10-year with a three handle on it and the economy is going to be booming

48
00:03:03,920 --> 00:03:09,860
and I mean I just that's what I see coming and we can get into all of the details of how that works

49
00:03:09,860 --> 00:03:14,700
out and all the intrigues. And I'm just really excited to be here and talk about it with you

50
00:03:14,700 --> 00:03:19,440
because I love our conversations. And that's generally where I think see things going. So

51
00:03:19,440 --> 00:03:24,320
short term, there's going to be bumps in the road, but long term, I think the trends continue.

52
00:03:25,760 --> 00:03:30,020
Well, I guess let's break it down piece by piece, starting with the Fed. As I mentioned earlier,

53
00:03:30,020 --> 00:03:38,020
we had Jackson Hole a couple of weeks ago. I think it was the first time that we've seen some

54
00:03:38,020 --> 00:03:44,980
dovish comments come out of Jerome Powell's mouth, uh, really moving from focusing on inflation to

55
00:03:44,980 --> 00:03:50,100
focusing, focusing on the jobs market at the same time in parallel behind the scenes, you have

56
00:03:50,100 --> 00:03:58,340
Trump, uh, firing, uh, a fed, uh, a fed governor, uh, because of some mortgage, uh, fraud that may

57
00:03:58,340 --> 00:04:04,400
have been going on. And I think the thesis that you laid out in December of last year,

58
00:04:04,400 --> 00:04:11,480
when we did predictions for 2025, one of which was that you're going to see this sort of merging

59
00:04:11,480 --> 00:04:16,720
of the Treasury and the Fed. And it seems like the moves that have been made, particularly

60
00:04:16,720 --> 00:04:26,360
the saber rattling with Jerome Powell and Donald Trump and then Trump firing this Fed governor

61
00:04:26,360 --> 00:04:32,500
is signaling that this may be happening in real time. Yeah, exactly. And I think,

62
00:04:32,500 --> 00:04:38,280
on net, if you look at the history of the United States, for the most part, we have not had an

63
00:04:38,280 --> 00:04:44,120
independent central bank. It's kind of an anomaly. And multiple times in the 20th century,

64
00:04:44,120 --> 00:04:51,820
we didn't have an independent central bank. For most of the 19th century, the 1800s,

65
00:04:51,820 --> 00:04:58,140
we did not have a central bank at all. So I think people really need to just chill out about this

66
00:04:58,140 --> 00:05:05,480
whole Fed thing. Like it reminds me of almost talking about Jerome Powell, like a Pope or what

67
00:05:05,480 --> 00:05:11,120
I really think he is, is it's more of a Wizard of Oz character. And the Wizard of Oz is an amazing

68
00:05:11,120 --> 00:05:16,180
allegory. I mean, the yellow brick road is the gold standard. In the book, Dorothy doesn't have

69
00:05:16,180 --> 00:05:22,200
ruby slippers. She has silver slippers and the silver slippers get her home. The modern day

70
00:05:22,200 --> 00:05:28,020
equivalent might be Bitcoin. I mean, like, I guess if L. Frank Baum was writing the Wizard of Oz now,

71
00:05:28,140 --> 00:05:35,060
Dorothy would be wearing orange slippers. No doubt about it. That she thinks, you know,

72
00:05:35,560 --> 00:05:41,180
and it wouldn't be a yellow brick road. She'd be following like the emerald brick road,

73
00:05:41,440 --> 00:05:45,720
you know, the dollar. And then she'd get to Oz and then she'd find out that Jerome Powell and

74
00:05:45,720 --> 00:05:48,680
the Federal Reserve governors are all a bunch of crooks behind the curtain.

75
00:05:49,200 --> 00:05:52,640
And I'm not saying Powell's a crook. I mean, don't get me wrong. I'm not trying to impugn

76
00:05:52,640 --> 00:05:57,680
anyone's character. But what I am saying is that there is a massive political, either

77
00:05:57,680 --> 00:06:04,960
conscious or unconscious bias within the Fed. It is an inherently political organization in the same

78
00:06:04,960 --> 00:06:10,560
way that the Supreme Court is an inherently political organization because they are all

79
00:06:10,560 --> 00:06:16,880
political appointees. I mean, if you take a bunch of politicians and you have them appoint people

80
00:06:16,880 --> 00:06:22,240
into important positions, I mean, it's almost like a transformative law of like geometric,

81
00:06:22,240 --> 00:06:27,900
you know, doing proofs like, you know, like you're going to get politics. And I could guarantee you

82
00:06:27,900 --> 00:06:35,660
that if we were in this situation and the data was coming in the way it was and Kamala Harris

83
00:06:35,660 --> 00:06:40,040
was president, I can guarantee you Lisa Cook would be voting for cuts. I could I mean,

84
00:06:40,120 --> 00:06:46,940
there's no question in my mind. And so there is an inherent bias in the Fed. It's never been

85
00:06:46,940 --> 00:06:53,120
independent. It never will be independent. It is under the control ultimately of the treasury.

86
00:06:53,700 --> 00:06:58,640
It always has been. Whenever the US government needs to do something on monetary policy,

87
00:06:58,920 --> 00:07:03,560
they tell the Fed what to do and the Fed does it. This happened in World War II. It happened in the

88
00:07:03,560 --> 00:07:11,760
50s. It's just the way it works. The central bank is a servant of the government. It was created in

89
00:07:11,760 --> 00:07:19,680
1694, William III, Bank of England, we're going to fund a war with France. It's there to serve

90
00:07:19,680 --> 00:07:25,180
the sovereign. That's what it's there for. And at the end of the day, I don't care if it's AOC

91
00:07:25,180 --> 00:07:33,480
or J.D. Vance as president in 2029, they're going to keep pushing rates lower. Elizabeth Warren was

92
00:07:33,480 --> 00:07:38,520
writing letters to Jerome Powell last year saying, you must lower. This is not political. This isn't

93
00:07:38,520 --> 00:07:45,020
about Trump. This is about the U.S. fiscal situation. We cannot afford to keep rates this

94
00:07:45,020 --> 00:07:55,520
high. Our interest expense is blowing up. We were at 132% debt to GDP in 2020, and our interest

95
00:07:55,520 --> 00:08:05,840
expense as a percent of GDP was 1.49%. We reduced our debt to GDP after the COVID GDP drop ended

96
00:08:05,840 --> 00:08:14,220
to 120%. So we dropped debt to GDP by 12%, and interest expense as a percent of GDP more than

97
00:08:14,220 --> 00:08:20,940
doubled from 1.49% to over 3%. In other words, we're raising these interest rates. We have so

98
00:08:20,940 --> 00:08:25,880
much debt. And this is not only for the United States. This is for Europe. This is for Japan.

99
00:08:26,620 --> 00:08:31,280
This is what you're seeing in England. And all of these central bankers, they're going to get

100
00:08:31,280 --> 00:08:35,820
together in Basel, Switzerland at the Bank for International Settlements every two months like

101
00:08:35,820 --> 00:08:41,780
they always do. And they're going to say, we need to keep rates lower for longer. And the bond market

102
00:08:41,780 --> 00:08:49,360
is starting to sniff that out. And I think we recently had perhaps a peak in the long end for

103
00:08:49,360 --> 00:08:56,720
especially the US and maybe, you know, guilts and booms. But I think interest rates are going down.

104
00:08:57,000 --> 00:09:01,140
And like I said, I think we're going to see a three handle on the 10 year. If not by the end

105
00:09:01,140 --> 00:09:07,420
of the year, early next year. And we're going to have gold up, Bitcoin up, stock market up,

106
00:09:07,760 --> 00:09:14,660
bonds up. Like I'm bullish, everything. Well, I think particularly as it pertains to

107
00:09:14,660 --> 00:09:20,480
treasury yields, that is a bit contrarian, but we were chatting for a bit before we hit record.

108
00:09:21,060 --> 00:09:25,280
And I guess let's just dive into the long end of the yield curve. I'll pull up the 10-year yield,

109
00:09:25,280 --> 00:09:29,800
the 30-year yield, and then the chart that you're focused on right now, which is

110
00:09:29,800 --> 00:09:33,360
the December futures contract for the 30 year.

111
00:09:33,460 --> 00:09:40,460
So as you can see here, getting a 2025 10 year began the year around 4.8.

112
00:09:41,360 --> 00:09:45,580
So currently at 4.19 got the 30 year.

113
00:09:46,680 --> 00:09:50,880
The way this is sharing is a bit awkward, but if we go to the 30 year,

114
00:09:50,880 --> 00:10:01,660
we'll see it's right at 4.87 right now peaked at 5.09 in may of this year and then here's the chart

115
00:10:01,660 --> 00:10:09,500
that you really want to look at which is the december futures contract for the 30 year um

116
00:10:09,500 --> 00:10:14,840
and you're saying that despite what's happening on the yield curve of the 30 year the futures

117
00:10:14,840 --> 00:10:22,300
contract is really where the signal is. Yeah. So for people that don't, you know, trade bonds,

118
00:10:22,380 --> 00:10:28,820
right? I don't want to insult any listeners that this is like 101, but there might be some people

119
00:10:28,820 --> 00:10:37,040
listening that don't understand this. So bonds, when bonds rally, what we mean is their price goes

120
00:10:37,040 --> 00:10:41,840
up, which actually means the yield goes down. So that can be a little confusing. So you have to

121
00:10:41,840 --> 00:10:50,080
kind of wrap your head around that. So if yields go up, price goes down. And the way most people

122
00:10:50,080 --> 00:10:57,780
that are active in trading make bets on the bond market is they do it through futures contracts.

123
00:10:57,780 --> 00:11:07,740
And this contract here, ZBZ25, ZB, that means long bond. Z stands for December. That's the month for

124
00:11:07,740 --> 00:11:14,840
expiration, 25 the year. So this is basically the, it's not necessarily the front month,

125
00:11:14,940 --> 00:11:20,900
but it's the active month. So futures traders tend to pick a contract and then that's the one that's

126
00:11:20,900 --> 00:11:25,820
active and that's where the volume is and liquidity. So right now, if you're a trader

127
00:11:25,820 --> 00:11:32,960
and you're trading the long end of US bonds, you're trading ZBZ25. And if you look at this chart,

128
00:11:32,960 --> 00:11:52,540
It is up and to the right. It's got higher highs and higher lows. And this goes back to May, right? So as you might remember, in the beginning of the year, there was this other big freakout and the U.S. was going to have a list trust moment.

129
00:11:52,540 --> 00:12:01,540
At that point in time, this was not the front month contract, but people were already trading the December contract.

130
00:12:02,320 --> 00:12:05,540
And that was when they took this down below 110 to like 109.

131
00:12:06,300 --> 00:12:11,120
And it's currently at 114.27 on my charts.

132
00:12:11,200 --> 00:12:12,220
I just look to the right of mine.

133
00:12:12,700 --> 00:12:17,200
So we've basically gone up, you know, I don't know, called four or five percent.

134
00:12:18,140 --> 00:12:20,900
In bonds, that's not bad, but it's up again.

135
00:12:20,900 --> 00:12:22,100
It's up and to the right.

136
00:12:22,100 --> 00:12:31,960
It's a bullish chart. And so if you look at absolute yields and you say, oh, well, absolute yields, you know, we're approaching the highs around five.

137
00:12:32,960 --> 00:12:44,800
Yes, that's true. But if you look at the way practitioners playing the long bond traded, you know, it's actually the lows were all the way back in May.

138
00:12:44,800 --> 00:12:47,920
and then we hit a low in July.

139
00:12:48,100 --> 00:12:51,200
And then if you actually drew that line,

140
00:12:51,260 --> 00:12:55,140
you drew Marty based on kind of closing prices

141
00:12:55,140 --> 00:12:56,120
instead of intra,

142
00:12:56,940 --> 00:13:00,200
I mean, you'd see like we touched it to the perfection, right?

143
00:13:00,280 --> 00:13:05,200
Like it basically, we tapped right down to where we,

144
00:13:05,260 --> 00:13:06,060
yeah, look at that.

145
00:13:06,240 --> 00:13:06,460
Yeah.

146
00:13:06,760 --> 00:13:08,180
Go down a little bit more.

147
00:13:08,540 --> 00:13:08,780
Yeah.

148
00:13:09,120 --> 00:13:11,180
Like it runs right through those closes,

149
00:13:11,920 --> 00:13:13,920
which are, you know, where those,

150
00:13:13,920 --> 00:13:22,320
sideways lines are. So like on Tuesday, when everybody was flipping out, I literally was on

151
00:13:22,320 --> 00:13:32,220
Twitter and I was buying TLT calls for like 11 cents, 86 calls. These were, I bought like a

152
00:13:32,220 --> 00:13:37,240
hundred in an account. I forgot I bought about it. I forgot, I forgot I bought it. You know,

153
00:13:37,400 --> 00:13:42,280
I spent like a thousand dollars for me. That's not a big play. I'm like, okay, I'm going to,

154
00:13:42,280 --> 00:13:49,840
I'm going to put a thousand bet down on 186 TLT calls for tomorrow expiry, yesterday expiry.

155
00:13:50,520 --> 00:13:57,220
They're up 700% yesterday. I mean, like it was literally like, and I hadn't forgotten about it.

156
00:13:57,260 --> 00:14:00,580
And then I, cause I trade a lot of accounts and I went into this account. I'm like, oh my God,

157
00:14:00,580 --> 00:14:06,000
why is this account up so much? I'm like, oh yeah, I'm up five grand on my TLT calls that I bet a

158
00:14:06,000 --> 00:14:13,740
grand on yesterday. And it's like people were flipping out about bonds. And I'm like, this is

159
00:14:13,740 --> 00:14:19,460
a bullish chart. This is an up and to the right chart. And Lisa Bromowitz and all these people on

160
00:14:19,460 --> 00:14:25,820
Bloomberg, they're like, oh, my God. And guilts are collapsing. And I'm just so sick of these

161
00:14:25,820 --> 00:14:31,040
talking heads on TV getting everything wrong. Tariffs are going to collapse the stock market.

162
00:14:31,600 --> 00:14:33,220
Inflation is going to go out of control.

163
00:14:33,760 --> 00:14:38,940
And the latest thing that I think is starting to fall apart is these people have been pushing

164
00:14:38,940 --> 00:14:41,940
this narrative that there's no problems in the job market.

165
00:14:42,340 --> 00:14:44,220
So this could be a whole nother switch into a different.

166
00:14:44,360 --> 00:14:46,340
I think there are issues in the job market.

167
00:14:46,480 --> 00:14:50,420
I think that the job market is weaker than people realize.

168
00:14:50,740 --> 00:14:51,980
And this is a big deal.

169
00:14:52,340 --> 00:14:56,680
And I think that we are literally not just going to get five or six cuts.

170
00:14:56,680 --> 00:15:04,380
I think we could get as many as 10 cuts in the next 12 months.

171
00:15:07,140 --> 00:15:10,500
Would that be 10, 25 basis point cuts?

172
00:15:10,760 --> 00:15:14,800
So down to a half percent, down to around 2%?

173
00:15:15,160 --> 00:15:15,380
Yeah.

174
00:15:15,580 --> 00:15:16,020
That's that far?

175
00:15:16,580 --> 00:15:16,800
Yeah.

176
00:15:17,800 --> 00:15:28,705
I pulling it up I trying to pull it up right now But initial jobs claims Jobless claims came out today 237 was the print

177
00:15:28,825 --> 00:15:35,665
Expected was 230,000, so more initial jobless claims than expected.

178
00:15:35,925 --> 00:15:41,245
Continuing claims, a bit lower than expected, but what was the other?

179
00:15:41,965 --> 00:15:43,365
ADP private payrolls.

180
00:15:43,405 --> 00:15:46,985
I think this is the big one, the big miss that people were looking at.

181
00:15:46,985 --> 00:15:55,865
uh 54 000 was the print expected was 68 000 the last was 106k so i think this adp private payrolls

182
00:15:55,865 --> 00:16:02,085
is probably more signal that takes out the government jobs um is well below expectations

183
00:16:02,085 --> 00:16:09,165
and well below the last print now before revisions and yesterday what helped drive that bond move i

184
00:16:09,165 --> 00:16:13,825
think a lot of it was technicals i think i think we're going to bounce on the long end anyways

185
00:16:13,825 --> 00:16:19,565
but but a big driver that moved yesterday was the jolts report which showed that for the first time

186
00:16:19,565 --> 00:16:24,905
in the last four years there are more people seeking a job than there are jobs so if people

187
00:16:24,905 --> 00:16:31,365
remember like there is a point during the pandemic the great resignation people could leave get a job

188
00:16:31,365 --> 00:16:38,525
next week 20 percent more that's gone now um we we were at one point i think like two two and a

189
00:16:38,525 --> 00:16:44,625
half times job openings relative to unemployed. Look, there's a table that I'm going to be

190
00:16:44,625 --> 00:16:50,485
watching very carefully in the next unemployment report, which comes out this Friday. It's table

191
00:16:50,485 --> 00:16:56,885
A7 in the BLS report. And what it is, is it breaks down foreign born versus native born workers.

192
00:16:57,085 --> 00:17:03,945
And this has nothing to do with politics or anything like that. I just personally believe

193
00:17:03,945 --> 00:17:11,065
that they're on the foreign born side, there's a lot of noise right now, which is a lot of people

194
00:17:11,065 --> 00:17:17,905
who are pouring across the border, filling those types of jobs that foreign born do,

195
00:17:19,325 --> 00:17:28,045
were flooding the market. And so you had a high, a relatively high unemployment rate of foreign

196
00:17:28,045 --> 00:17:33,365
born. And this is how the BOS breaks it down. If nobody's ever like looked up the PDF report that

197
00:17:33,365 --> 00:17:38,605
the BLS puts out, it's called the Employment Situation Report. They have a table A7, and it

198
00:17:38,605 --> 00:17:43,165
doesn't break down illegal versus legal or anything like that. It breaks down foreign-born versus

199
00:17:43,165 --> 00:17:50,605
native-born. If you look at foreign-born, because the border's been closed, the unemployment rate

200
00:17:50,605 --> 00:17:57,525
has been plummeting on foreign-born. If you look at native-born, the unemployment rate

201
00:17:57,525 --> 00:18:03,845
has been really going up. And those two have been canceling themselves out. And so what you're

202
00:18:03,845 --> 00:18:09,825
seeing when they report the overall unemployment rate is, you know, 4.2, you know, pay no attention

203
00:18:09,825 --> 00:18:14,385
to the man behind the curtain. There's nothing to see here. But the truth of the matter is,

204
00:18:14,385 --> 00:18:20,245
is that I think looking at the native born is the way to look at it because it cancels out all the

205
00:18:20,245 --> 00:18:24,865
noise in the foreign born. It takes away the noise that's going on with visas. It takes away the noise

206
00:18:24,865 --> 00:18:31,585
with immigration. If you want to read on what's the real unemployment report, a rate on Friday,

207
00:18:31,925 --> 00:18:39,145
go to the BLS, pull up the report, scroll down to table A7, look at the native-born unemployment

208
00:18:39,145 --> 00:18:45,005
and see what's happening. And it's going up. It was like 3.8 or something like that, 3.7,

209
00:18:45,685 --> 00:18:50,705
you know, a year or two ago. And now it's like 4.8. Like it's going up significantly.

210
00:18:50,705 --> 00:18:57,565
and we're seeing young people having a harder time get a job and where we're really seeing the

211
00:18:57,565 --> 00:19:03,605
unemployment because they also break down foreign born native born and then they do men versus women

212
00:19:03,605 --> 00:19:10,765
and i i love to focus on native born women because they tend to be more college educated they tend to

213
00:19:10,765 --> 00:19:15,805
be more in non-manufacturing non-construction so they're a better read on the white collar

214
00:19:16,665 --> 00:19:21,245
The unemployment rate of native-born women is skyrocketing in this country.

215
00:19:22,205 --> 00:19:27,785
And so what that's telling me, and you see it in anecdotal data about layoffs and everything

216
00:19:27,785 --> 00:19:29,285
else and AI efficiencies.

217
00:19:30,185 --> 00:19:35,525
Jordy Visser does a great job showing like MAG-7 is like growing revenues and earnings

218
00:19:35,525 --> 00:19:37,705
like crazy and they're not adding any headcount.

219
00:19:37,965 --> 00:19:44,485
Like we have so many deflationary forces going on right now that I think eventually once

220
00:19:44,485 --> 00:19:52,485
Trump gets his Fed board in place, like I said, eight to 10 cuts in the next 12 months. I mean,

221
00:19:52,505 --> 00:19:57,585
I don't think anybody's saying that, but I pride myself on making outrageous calls that come true,

222
00:19:58,025 --> 00:20:04,665
like in December saying emerging markets were going to crush, you know, SPY, EEM was going to

223
00:20:04,665 --> 00:20:10,945
crush SPY. Right now, SPY is up about 10%, emerging markets are up over 20%. You know,

224
00:20:10,945 --> 00:20:14,345
I called for a 15, 20% crash in the first half of the year.

225
00:20:14,485 --> 00:20:17,065
I was going to have a quick rebound to 7,000.

226
00:20:17,265 --> 00:20:20,505
I called for the DXY to crash below 100 very quick.

227
00:20:20,645 --> 00:20:25,405
I mean, every call I've made, and I made this kind of tongue-in-cheek post on Twitter the

228
00:20:25,405 --> 00:20:28,325
other day, calling myself the goat.

229
00:20:28,885 --> 00:20:31,905
I'm the best macro strategist on Twitter.

230
00:20:31,985 --> 00:20:33,505
It was a total kind of joke.

231
00:20:33,705 --> 00:20:38,925
But the point was to say, look, some of these calls are really dang good.

232
00:20:38,925 --> 00:20:45,325
and and not many people know me because I didn't do anything until like a year ago when my book

233
00:20:45,325 --> 00:20:49,945
got published so I'm kind of out of nowhere I don't have like a 10-year history I was never on

234
00:20:49,945 --> 00:20:55,985
social media my whole life I never had a Facebook account Twitter account I mean I I actually hated

235
00:20:55,985 --> 00:21:00,865
social media I didn't want to be a part of it it was like not part of my ethos I was almost a

236
00:21:00,865 --> 00:21:06,545
troglodyte and and and then I I wrote a book and my publisher's like you should get on social media

237
00:21:06,545 --> 00:21:10,665
And now I love coming on podcasts like this and sharing my views.

238
00:21:10,865 --> 00:21:13,045
But all I am, I don't have a research firm.

239
00:21:13,345 --> 00:21:14,845
I don't have clients.

240
00:21:15,185 --> 00:21:16,705
I'm an investor.

241
00:21:16,925 --> 00:21:20,605
Like I invest my own capital that I earned throughout my career.

242
00:21:21,005 --> 00:21:23,945
Being a fintech executive, I'm doing very well.

243
00:21:24,025 --> 00:21:26,025
And I like to share my views and help people.

244
00:21:26,425 --> 00:21:28,585
And I'll tell you, some of these calls are really good.

245
00:21:28,585 --> 00:21:40,765
And what what hurts me a lot is like there's just such this consensus out there that has been leading people astray, telling people markets are collapsing, bonds are collapsing.

246
00:21:41,925 --> 00:21:50,685
You know, the truth of the matter is, is we've been in one of the greatest investment environments of my lifetime to be long.

247
00:21:50,845 --> 00:21:57,945
And a lot of people have been scared because people feed a bunch of, you know, doom and gloom bullshit.

248
00:21:58,585 --> 00:22:07,525
yeah it's uh and it's easy to see how it we touched on this last time we talked to it because

249
00:22:07,525 --> 00:22:11,625
you have what's happening in financial markets and you have the real economy and as you mentioned

250
00:22:11,625 --> 00:22:16,465
with unemployment it seems like many people are hurting and i mean that i'm sure you've seen the

251
00:22:16,465 --> 00:22:21,705
memes of not only the memes tiktok videos of people in their car complaining about grocery

252
00:22:21,705 --> 00:22:28,545
bills uh i think millennials younger millennials gen z coming to the realization that real estate

253
00:22:28,545 --> 00:22:36,145
may be running away from them and i think a lot of those anecdotes and um the anecdotal data points

254
00:22:36,145 --> 00:22:43,265
really drive this this dread and then the overarching emergence of ai uh everybody becoming

255
00:22:43,265 --> 00:22:48,125
fearful that it's coming for their jobs but you mentioned jordy visser quite on the show a couple

256
00:22:48,125 --> 00:22:53,905
months ago too and i think that i think that's something that we just have to deal with as

257
00:22:53,905 --> 00:22:59,885
individuals, as a society, as an economy, is that we are living through this incredible

258
00:22:59,885 --> 00:23:06,045
inflection point in many different ways with the multipolar world becoming more multipolar.

259
00:23:06,045 --> 00:23:11,025
You have that crisis here or that situation here in the United States,

260
00:23:11,265 --> 00:23:21,325
geopolitical strife globally with wars and all that. And then you throw AI in the mix. I think

261
00:23:21,325 --> 00:23:26,265
people are just completely uncertain about what's going to happen in the future,

262
00:23:26,345 --> 00:23:27,345
particularly with their jobs.

263
00:23:27,605 --> 00:23:31,725
And so I guess they have this perceived fear that I'm going to lose my job

264
00:23:31,725 --> 00:23:35,145
and I'm not going to have the ability to buy a house that the market has to tank.

265
00:23:36,425 --> 00:23:40,845
No, I mean, it's look, I mean, there's some people talk about the fourth turning.

266
00:23:41,665 --> 00:23:43,465
People talk about inflection points.

267
00:23:44,025 --> 00:23:44,925
I mean, we're there.

268
00:23:44,925 --> 00:23:52,285
I mean, look, in the 1860s, you had had a run up in essentially wealth inequality.

269
00:23:52,965 --> 00:23:57,725
And you get these situations periodically throughout history.

270
00:23:58,805 --> 00:24:09,825
And frankly, the way a lot of it gets resolved is you cut down on resource demand by killing people, right?

271
00:24:09,825 --> 00:24:14,385
So you have a massive war in Europe and you kill tens of millions of people.

272
00:24:14,585 --> 00:24:18,705
All of a sudden, that intense competition for resources gets a lot easier.

273
00:24:18,865 --> 00:24:22,145
Right. So like this is not what we want to head into.

274
00:24:22,145 --> 00:24:38,085
We don't want to have a situation where just this week we had Xi meeting with Putin, meeting with Kim Jong-un, you know, in China and Modi with India.

275
00:24:38,085 --> 00:24:40,525
Like, like, we don't want to go down that path.

276
00:24:40,585 --> 00:24:45,485
Like, like we've done it too many times as a species where you get one side, you get

277
00:24:45,485 --> 00:24:47,685
the other side, they start getting competitive.

278
00:24:48,365 --> 00:24:53,085
And then the resolution is essentially everybody goes batshit crazy and starts killing each

279
00:24:53,085 --> 00:24:53,365
other.

280
00:24:53,585 --> 00:24:56,105
Like, that's not a good outcome.

281
00:24:56,425 --> 00:24:56,685
Right.

282
00:24:57,165 --> 00:25:00,185
And so I think it's important to talk about it.

283
00:25:00,185 --> 00:25:06,505
And I think social media, I think shows like this, like the population, like it's educated,

284
00:25:06,625 --> 00:25:07,425
it's global.

285
00:25:07,425 --> 00:25:11,325
And I think we have a shot of actually avoiding World War III.

286
00:25:11,825 --> 00:25:14,085
I think some people are like, oh, this is inevitable.

287
00:25:14,745 --> 00:25:19,985
We're going to have like a brick side begin to build up and it's going to be, you know,

288
00:25:19,985 --> 00:25:23,505
the cornerstone will be Russia, India, China, and then there'll be the US.

289
00:25:23,845 --> 00:25:27,045
Eventually, Western Europe will come onto our side because they realize that's where

290
00:25:27,045 --> 00:25:27,805
they need to be.

291
00:25:28,505 --> 00:25:34,125
Like, I really hope that's not the case because in history, it's surprising how stuff actually

292
00:25:34,125 --> 00:25:37,005
like is completely clear to everybody.

293
00:25:37,005 --> 00:25:42,865
Like in the 1930s, it was very clear Japan was building up their military empire.

294
00:25:43,345 --> 00:25:44,525
Germany was building up.

295
00:25:44,765 --> 00:25:47,925
It was very clear, like we were getting ready to head towards something.

296
00:25:48,085 --> 00:25:49,985
And then we went over the cliff.

297
00:25:50,325 --> 00:25:58,885
And I think right now we're in a similar situation where like China is building all these ships and new submarines and there's these new alliances.

298
00:25:58,885 --> 00:26:02,085
And it's like, look, guys, you know, open your eyes.

299
00:26:02,145 --> 00:26:05,505
We're heading towards something here, which is not a pretty picture.

300
00:26:05,505 --> 00:26:10,525
so let's let's figure out a way not to kill each other you know what i mean

301
00:26:10,525 --> 00:26:17,285
yeah i completely know what you mean that's why i wanted to bring this up outside of the

302
00:26:17,285 --> 00:26:22,885
military parade that happened earlier this week i think um

303
00:26:22,885 --> 00:26:30,365
like obviously you have the geopolitics and the kinetic side of things but then going back to the

304
00:26:30,365 --> 00:26:34,365
monetary. That's why, as you're describing that, I want to bring up this chart, which is

305
00:26:34,365 --> 00:26:39,685
what I wrote about last night in my newsletter. And I hadn't seen this chart until yesterday.

306
00:26:39,925 --> 00:26:45,185
It sort of blew my mind. And so what we're looking at is the stock level of gold in China

307
00:26:45,185 --> 00:26:50,085
on warrant. For those who are unfamiliar, what it means to be on warrant, essentially

308
00:26:50,085 --> 00:27:00,125
the PBOC or banks at the behest of the CCP, financial institutions, the BS of the CCP,

309
00:27:00,365 --> 00:27:08,165
have gone to the Shanghai Gold Vaults and basically registered their gold at the Shanghai Gold Exchange

310
00:27:08,165 --> 00:27:17,585
be used as collateral or to provide liquidity to gold markets to make the Shanghai Gold Exchange more prominent in gold markets.

311
00:27:17,785 --> 00:27:21,145
And I'm looking at this saying they're definitely prepping for something.

312
00:27:21,545 --> 00:27:28,525
There's been these, we've all known, I've written about it, and I think people have been observing it for the last 15 years.

313
00:27:28,525 --> 00:27:32,565
China's certainly been building up gold inventories at the PBOC.

314
00:27:33,165 --> 00:27:40,665
And I think what we're seeing now is they're actually putting those inventories to work by registering them at the Shanghai Gold Exchange.

315
00:27:41,085 --> 00:27:41,945
Well, here's the thing.

316
00:27:42,265 --> 00:27:44,605
And forgive me for one second, but.

317
00:27:50,325 --> 00:27:53,005
We have done so many shows.

318
00:27:53,005 --> 00:27:58,305
I've never been a shameless promoter of my book, Quaz.

319
00:27:58,525 --> 00:28:01,285
But this is so apropos.

320
00:28:01,285 --> 00:28:07,925
So what you're showing there is you're showing like around 2,500 kilograms up to like 30 plus, right?

321
00:28:08,305 --> 00:28:08,765
In gold.

322
00:28:10,385 --> 00:28:17,405
In Quaz, this is like part one of the book, All That Glitters, I have an introduction.

323
00:28:18,245 --> 00:28:19,625
And this is what it says.

324
00:28:20,845 --> 00:28:28,025
According to official statistics, the largest holder of gold in the world is the United States at over 8,000 metric tons.

325
00:28:28,525 --> 00:28:39,965
However, according to unofficial calculation, China holds not the 2,000 tons publicly reported, but closer to 32,000 tons.

326
00:28:40,285 --> 00:28:48,005
As of 2007, China has replaced South Africa as the world's largest producer of gold.

327
00:28:48,825 --> 00:28:50,745
I wrote that in 2023.

328
00:28:51,785 --> 00:28:54,085
This was out there in gold circles.

329
00:28:54,085 --> 00:29:00,445
people knew that China had so much more gold than they were reporting.

330
00:29:00,725 --> 00:29:03,425
And they're using the Shanghai exchange.

331
00:29:04,625 --> 00:29:07,225
Like this is what's going on.

332
00:29:07,225 --> 00:29:15,805
Like China, the BRICS, I mean, they've obviously decided that holding U.S. treasuries is not

333
00:29:15,805 --> 00:29:16,805
where they want to be.

334
00:29:17,285 --> 00:29:22,505
Now, I want to counter this because the narrative is like, oh, my God, China doesn't want to

335
00:29:22,505 --> 00:29:23,205
have treasuries.

336
00:29:23,345 --> 00:29:24,045
That's a big problem.

337
00:29:24,085 --> 00:29:38,585
It's not. Foreign holders of treasuries are like this. OK, the United States owns treasuries, mutual funds, own treasuries, pension funds, insurance funds, the Federal Reserve, intergovernmental debt.

338
00:29:38,585 --> 00:29:44,805
if you look at the percentage, the actual percentage of U.S. treasuries are $36, $37 trillion outstanding

339
00:29:44,805 --> 00:29:52,685
that's held by foreign governments, it's 20, 25% tops. The vast majority of U.S. treasuries are held

340
00:29:52,685 --> 00:30:01,205
by U.S. individuals, institutions, the government. Okay. China owns like $700, $800 billion, right?

341
00:30:01,205 --> 00:30:08,105
I mean, the Federal Reserve has rolled off over $2 trillion in treasuries. We could absorb all of

342
00:30:08,105 --> 00:30:13,005
China and Russia's and we could absorb all those treasuries easily. So a lot of people talk about,

343
00:30:13,105 --> 00:30:16,925
oh, well, China's going to sell. And I'll tell you another thing. If you look at the foreign

344
00:30:16,925 --> 00:30:22,245
tick data of who owns treasuries, you see this really big, weird thing, which is like Cayman

345
00:30:22,245 --> 00:30:28,105
Islands own tons of treasury. A lot of people assume two things. One, they think it's hedge

346
00:30:28,105 --> 00:30:34,845
funds that are located there offshore. The other thing they assume is, and I've talked about this

347
00:30:34,845 --> 00:30:41,585
before, is that the Kingdom of Saudi Arabia did not want everybody to know exactly how

348
00:30:41,585 --> 00:30:55,910
much treasuries they held They worried about being deposed And so the King of Saudi Arabia put a lot of his treasuries in the Caymans to essentially keep that shielded should anything happen to his family and they need to go into exile

349
00:30:56,910 --> 00:31:01,570
I think there's a third reason why the Caymans might own a lot of treasuries.

350
00:31:02,030 --> 00:31:05,110
And I think it could be CIA front companies.

351
00:31:05,110 --> 00:31:13,070
You know, in other words, Treasury, like I have a saying, all is fair in love, war and U.S. Treasury management.

352
00:31:13,770 --> 00:31:25,210
So like like I wouldn't be surprised if there's a CIA front as hedge funds in the Caymans that they see treasuries get to a level they don't like and they buy it.

353
00:31:25,690 --> 00:31:28,830
And it's like, you know, this is the CIA.

354
00:31:29,250 --> 00:31:31,510
I mean, I mean, this is the federal government.

355
00:31:31,590 --> 00:31:32,710
This is national security.

356
00:31:32,970 --> 00:31:34,630
So this is all fiat.

357
00:31:34,630 --> 00:31:49,810
This is not gold. There's no way to check it. Like if the president authorized the Department of Defense to do a secret DOD or CIA operation, feed in through front banks, you know, bogus balances on balance sheets.

358
00:31:49,810 --> 00:31:56,090
So it looks like you have the currency in your zeros and ones on the computer and go out and support the treasury market.

359
00:31:56,370 --> 00:31:58,770
Like who's to stop them from doing that?

360
00:31:59,170 --> 00:32:09,810
So, I mean, I think I think there's so much stuff that goes on in finance that when people start predicting that we're heading for a collapse and yields are going to explode.

361
00:32:10,170 --> 00:32:14,690
It's like, don't you think that maybe the CIA might have something to say about yields exploding?

362
00:32:15,110 --> 00:32:16,490
Don't you think that's possible?

363
00:32:16,490 --> 00:32:22,190
Or are you so naive that you think the U.S. government is just going to let the bond market trade freely?

364
00:32:23,490 --> 00:32:23,650
Yeah.

365
00:32:24,750 --> 00:32:27,590
Well, I mean, that's a great point.

366
00:32:28,030 --> 00:32:32,730
And you've got to think the Pentagon's war gaming national security.

367
00:32:32,850 --> 00:32:35,010
Part of that national security is financial security.

368
00:32:35,010 --> 00:32:42,550
like going back to this chart and really pulling on the thread of the sort of fork in the road that

369
00:32:42,550 --> 00:32:48,630
you were describing of we could go towards some very volatile kinetic war economic war whatever

370
00:32:48,630 --> 00:32:55,610
may be or avoid world war three maybe that's what china is doing here just signaling like hey we

371
00:32:55,610 --> 00:33:02,190
have the gold we're going to exert our influence over spot and futures gold markets by registering

372
00:33:02,190 --> 00:33:08,690
our bullion at this Shanghai gold exchange and basically just as like a geopolitical signal,

373
00:33:08,690 --> 00:33:14,850
like, hey, let's get to the table and negotiate like peaceful trade deals or something like that.

374
00:33:14,850 --> 00:33:22,130
Yeah. I mean, I mean, what this is, and I credit guys like Luke Groman for being way ahead on this

375
00:33:22,130 --> 00:33:30,370
is is like China says, OK, to Saudi Arabia, we want to buy gold. You want to buy some of our

376
00:33:30,370 --> 00:33:36,230
we want to buy oil. You want to buy some of our stuff, but they have a closed capital account

377
00:33:36,230 --> 00:33:41,230
on the yuan, their currency. So what they say is what we're going to do is we're going to buy,

378
00:33:41,350 --> 00:33:46,230
let's say, $100 billion worth of oil. We'll send you $100 billion worth of yuan.

379
00:33:47,150 --> 00:33:54,510
Now, over the course of the next year, you might want to buy $60 billion or $60 billion yuan or

380
00:33:54,510 --> 00:34:01,030
whatever from China and you're left with these yuan that you don't want. What you can do is you

381
00:34:01,030 --> 00:34:07,010
can go to the Shanghai Gold Exchange and you can take those yuan and you can get bullion and you

382
00:34:07,010 --> 00:34:13,650
can bring it back to Riyadh. And this is what we did with Saudi Arabia in the 70s. Before 71,

383
00:34:14,370 --> 00:34:22,670
we used to fly jet planes full of gold bullion into Riyadh every month to pay for our oil.

384
00:34:22,670 --> 00:34:25,010
Like the Saudis wanted the gold, right?

385
00:34:25,150 --> 00:34:29,330
And the USD was convertible by foreign central banks at $35 an ounce.

386
00:34:29,510 --> 00:34:31,970
So we used to fly gold into Riyadh.

387
00:34:32,250 --> 00:34:35,110
And now I think the Chinese are flying gold into Riyadh.

388
00:34:35,250 --> 00:34:36,850
They're just not doing it through Beijing.

389
00:34:36,990 --> 00:34:38,650
They're doing it through the Shanghai Gold Exchange.

390
00:34:39,670 --> 00:34:39,810
Yeah.

391
00:34:42,890 --> 00:34:49,590
Yeah, and then you have like, I told you before, my focus has been on China the last couple

392
00:34:49,590 --> 00:34:49,770
days.

393
00:34:49,770 --> 00:34:52,770
I'm actually recording with Peter Alexander tomorrow.

394
00:34:52,770 --> 00:34:59,090
He's been living in China for a few decades and he's a Westerner living in China.

395
00:34:59,250 --> 00:35:12,970
And his, I don't even know it's theory, he's just telling people that the whole perception of China, how it operates and what their ultimate goals are is completely wrong, particularly in Western circles with the pundits.

396
00:35:13,170 --> 00:35:15,350
And so excited for that conversation.

397
00:35:15,350 --> 00:35:17,310
But bringing it back.

398
00:35:17,310 --> 00:35:25,890
what's the thrust of how the pundits are wrong um mainly just a misunderstanding of cultural

399
00:35:25,890 --> 00:35:33,730
dynamics like what um what china's ultimate goal is like viewing china as a nation state um sort of

400
00:35:33,730 --> 00:35:38,390
the show notes he sent me is like we're viewing china as a nation state when it's a society and

401
00:35:38,390 --> 00:35:45,870
when you're trying to work within this western mental framework of nation state um sort of

402
00:35:45,870 --> 00:35:53,010
negotiations. It's like, that's not how China abuse things. And I think that's how we end up

403
00:35:53,010 --> 00:35:58,270
in these situations where it seems like we're speaking past each other. Um, yeah, many times.

404
00:35:59,170 --> 00:36:03,730
I agree. And I do think there's a difference in China. I think China,

405
00:36:04,670 --> 00:36:10,130
there is this Western Eastern divide. You know, I majored in philosophy as an undergrad and, you

406
00:36:10,130 --> 00:36:15,310
know, their Western philosophy has a certain thrust to it. And Eastern philosophy is different.

407
00:36:15,310 --> 00:36:23,330
The Eastern mind is different and it's sophisticated in its own way, as is the Western mind.

408
00:36:23,550 --> 00:36:26,010
But it almost has different first principles.

409
00:36:26,670 --> 00:36:31,430
And so sometimes when Western leaders look at China and try to analyze it through their

410
00:36:31,430 --> 00:36:34,410
first principles, they kind of miss the boat because it's a little bit.

411
00:36:34,690 --> 00:36:40,330
A lot of people think the Great Wall of China was built to keep invaders out.

412
00:36:40,510 --> 00:36:42,430
It was built to keep the population in.

413
00:36:42,430 --> 00:36:53,610
So China historically is actually, you know, essentially a fiefdom of dominated groups.

414
00:36:54,190 --> 00:36:57,430
So it's not like one people ethnically.

415
00:36:58,430 --> 00:37:01,430
And everybody knows there's two major languages, you know, Mandarin.

416
00:37:01,730 --> 00:37:11,030
Like essentially there's an elite in China that has dominated different areas and brought them in under their empire.

417
00:37:11,030 --> 00:37:17,550
and historically China has wanted to keep complete dominance over whatever that empire is.

418
00:37:17,990 --> 00:37:22,170
And that was why they built the Great Wall was to say, look, we're really not interested in the

419
00:37:22,170 --> 00:37:28,630
outside world. We want to have complete dominion over these internal groups that we dominate.

420
00:37:29,450 --> 00:37:35,190
And so it is a little bit of a different mindset. It's not kind of like a British empire type

421
00:37:35,190 --> 00:37:40,110
mindset. So I think that'll be a fascinating conversation I'd love to hear. I'm not a China

422
00:37:40,110 --> 00:37:46,250
expert, but I know a little bit about China's history and how that country kind of came to be

423
00:37:46,250 --> 00:37:52,590
and what it is. They also love precious metals, just like India does. And they love silver too.

424
00:37:52,650 --> 00:37:57,550
At one point, silver traded one for one. There's this huge arbitrage, silver gold,

425
00:37:58,090 --> 00:38:05,810
between like the Portuguese and Spanish, Europe, China. Like, you know, they'd mine silver in South

426
00:38:05,810 --> 00:38:13,130
America, ship it to China, get it one for one for gold, move it back to South America and then back

427
00:38:13,130 --> 00:38:18,110
over to Europe. And, you know, precious metals, I mean, they've just been a part of this for so

428
00:38:18,110 --> 00:38:23,990
long. And it's like, I mean, people got to realize like this whole fiat thing, I was born in 75,

429
00:38:24,550 --> 00:38:29,730
like 71 is when we went off of gold, right? Like, so basically you have from like,

430
00:38:30,190 --> 00:38:35,430
long before Jesus Christ existed until a couple of years before I was born, gold and silver.

431
00:38:35,810 --> 00:38:41,970
And then you have this short little period, essentially my lifespan, where gold and silver

432
00:38:41,970 --> 00:38:47,210
aren't money. And what you're seeing is that gold and silver are money again. And that's just

433
00:38:47,210 --> 00:38:52,490
happening. And that's why gold is going to blow out. I saw like somebody on CNBC yesterday showing

434
00:38:52,490 --> 00:38:59,430
a chart, like maybe gold's hitting a peak because the copper gold ratio. Look, gold's going to go

435
00:38:59,430 --> 00:39:03,730
up relative to every other commodity. Gold's going to go up relative to copper. It's going to go up

436
00:39:03,730 --> 00:39:08,030
of the oil. It's going to go up to everything because it's becoming money again. Gold should

437
00:39:08,030 --> 00:39:13,850
be the same as platinum. Gold should be less than platinum. Platinum is a rarer metal. Platinum is,

438
00:39:13,970 --> 00:39:20,370
you know, a higher, denser metal. But gold is the monetary metal. So when people talk about Bitcoin,

439
00:39:20,370 --> 00:39:27,570
and this is where gold and Bitcoin are the exact same, it's about the belief in a sense that this

440
00:39:27,570 --> 00:39:33,690
his money. Because it's not like gold is some special metal. Like platinum, like I said,

441
00:39:33,930 --> 00:39:39,870
it's less abundant in the earth's crust. There's been less platinum ever mined. Platinum is much

442
00:39:39,870 --> 00:39:46,450
more rare than gold, yet it trades at less than half of the value. Most of gold's value

443
00:39:46,450 --> 00:39:55,610
is this monetary premium that people assign to it. Bitcoin is the new gold in that sense,

444
00:39:55,610 --> 00:40:03,950
But gold with a different set of stripes, different drivers of, you know, movements and different things.

445
00:40:04,110 --> 00:40:10,210
It's kind of a next gen gold that, you know, could very well be in place for another thousand years.

446
00:40:10,310 --> 00:40:11,230
I mean, we will see.

447
00:40:11,870 --> 00:40:15,110
But I think that there's only two.

448
00:40:15,390 --> 00:40:18,810
In my opinion, there's only two stores of value right now.

449
00:40:18,930 --> 00:40:20,150
There's gold and there's Bitcoin.

450
00:40:20,690 --> 00:40:21,710
And that's it.

451
00:40:21,710 --> 00:40:23,730
And Ether can make its moves.

452
00:40:23,730 --> 00:40:37,210
And, you know, but Ether ultimately, ultimately, the case for Ether, even that Tom Lee makes, is this is a utilitarian case that Ether is going to drive stuff.

453
00:40:38,150 --> 00:40:41,090
You know, maybe it's Solana drives stuff better.

454
00:40:41,190 --> 00:40:43,010
And then Ether is done.

455
00:40:44,390 --> 00:40:49,730
The beauty of Bitcoin, the beauty of gold is the case is simply that this is money.

456
00:40:50,590 --> 00:40:52,210
This is what is value.

457
00:40:52,210 --> 00:40:58,490
It's not about how can we power the best, quickest transaction mechanisms.

458
00:40:58,670 --> 00:41:04,670
I'd love to see Bitcoin more involved in transaction mechanisms, but that's not what's driving Bitcoin's value.

459
00:41:05,190 --> 00:41:18,830
What's driving Bitcoin's value is it's the first, the ultimate, the decentralized, the cryptocurrency that represents store value in the same way that gold is the precious metal, even though it's less precious than platinum.

460
00:41:18,830 --> 00:41:25,410
even though you know silver is more ubiquitous and easier to transact like all these things are

461
00:41:25,410 --> 00:41:32,070
there to threaten gold but gold is gold bitcoin's bitcoin they're the two stores of value in the long

462
00:41:32,070 --> 00:41:37,770
run like that's where you want to be that's the anchor of my portfolio and then i trade around it

463
00:41:37,770 --> 00:41:46,250
with all these other viewpoints but like nothing's going to change to the fiat debasement narrative

464
00:41:46,250 --> 00:41:52,370
yeah i think something you said there is very prescient something particularly americans

465
00:41:52,370 --> 00:41:59,030
overlook is that china's been around for millennia the united states is a country we're about to have

466
00:41:59,030 --> 00:42:06,870
our 250th birthday next year i think and not that i'm a china expert by any means but

467
00:42:06,870 --> 00:42:14,230
where i can tell their culture as we described is very different and very seeped in like history

468
00:42:14,230 --> 00:42:20,370
dynastic history specifically they think in centuries not quarters like we do over here

469
00:42:20,370 --> 00:42:27,050
in the united states and so your point that china is just reverting to a monetary standard that

470
00:42:27,050 --> 00:42:33,490
existed for most of its existence just makes sense yeah and i mean china i mean they have

471
00:42:33,490 --> 00:42:37,530
what they call the century of humiliation which is essentially where they were dominated by the

472
00:42:37,530 --> 00:42:43,210
british the opium i mean all this stuff they don't want to go back there i think you can look at

473
00:42:43,210 --> 00:42:48,590
Germany and you see how Germany out of all major European countries, they have the lowest debt to

474
00:42:48,590 --> 00:42:54,590
GDP. Like the German people are scarred by the Weimar Republic and the hyperinflation.

475
00:42:54,930 --> 00:43:01,130
The Chinese people are scarred by this humiliation of, you know, being dominated by

476
00:43:01,130 --> 00:43:08,950
some small island off the coast of Europe called Britain. And so they're scarred by that. And their

477
00:43:08,950 --> 00:43:13,550
main thing is like, we're never going to let this happen again. And I actually think that the main

478
00:43:13,550 --> 00:43:19,910
driver of Chinese military buildup is like, they just want to dominate their region. The thing is,

479
00:43:19,910 --> 00:43:30,130
is that the United States does not want China to be an Asian hegemon. Like, after World War II,

480
00:43:30,130 --> 00:43:37,370
we defeated the Japanese, we were the Asian hegemon, just like we were and still are the

481
00:43:37,370 --> 00:43:40,950
European hegemon in charge of it, you know?

482
00:43:41,050 --> 00:43:45,850
And so it took us a while in Europe because we had to overcome the Soviet

483
00:43:45,850 --> 00:43:47,670
Union, but eventually we got there.

484
00:43:47,670 --> 00:43:52,210
And in Asia, we've been the hegemon since 1945, since we dropped the bombs.

485
00:43:52,950 --> 00:43:55,150
So we've been in charge of Asia.

486
00:43:55,450 --> 00:44:01,090
And like, I think ultimately Americans can get comfortable with living in a

487
00:44:01,090 --> 00:44:06,630
peaceful world, having a higher standard of living, but this might be heresy.

488
00:44:06,630 --> 00:44:13,510
like let China be the Asian hegemon, you know, like, like, why do we need to control Asia? Like,

489
00:44:13,890 --> 00:44:17,810
like, why do we need to be the dominant force in the Philippines and Indonesia? Like,

490
00:44:18,130 --> 00:44:24,270
I know there are corporate interests that want that. But me as a personal, as an American,

491
00:44:24,710 --> 00:44:29,770
like, I don't want that. I don't feel I need that. I don't feel I need America to be the Asian

492
00:44:29,770 --> 00:44:34,850
hegemon. And I don't think that there's any threat to the United States from China. I don't think

493
00:44:34,850 --> 00:44:39,830
like Red Dawn is going to happen, right? And then they're going to send over troops and invade,

494
00:44:39,910 --> 00:44:47,550
you know, Tacoma. Like, we've got guns in every house. We've got like 10X nuclear weapons that

495
00:44:47,550 --> 00:44:52,750
China has. Like, we've got an amazing Navy. Like, China's not going to invade and take over the

496
00:44:52,750 --> 00:45:00,670
United States and neither is Russia. So who cares? Let Russia run Europe. What it threatens is the

497
00:45:00,670 --> 00:45:08,190
the corporate elites. And I think like, to me, like, let's focus on America. Let's focus on

498
00:45:08,190 --> 00:45:15,010
the Western Hemisphere. Let's actually bring more of these Latin countries, which Americans seem to

499
00:45:15,010 --> 00:45:19,470
get along great with Latinos. I mean, I never mentioned this before, but personally, I speak

500
00:45:19,470 --> 00:45:26,710
Spanish. My wife is a Colombian immigrant. I love South America. I love Latinos. I love Latin America.

501
00:45:26,710 --> 00:45:36,210
Like, let's just make Western Hemisphere great again and let Russia worry and Britain and Germany and let China deal with Indonesia and Thailand.

502
00:45:36,570 --> 00:45:37,890
I mean, who gives a damn?

503
00:45:38,710 --> 00:45:46,850
Let's build up some Western Hemisphere, like, superpower that we have all the resources.

504
00:45:47,850 --> 00:45:49,350
Europe and Asia are overcrowded.

505
00:45:49,830 --> 00:45:50,930
We've got oil.

506
00:45:51,030 --> 00:45:51,850
We've got gas.

507
00:45:51,910 --> 00:45:53,190
Like, we've got people.

508
00:45:53,350 --> 00:45:56,270
We've got everything that we need here.

509
00:45:56,270 --> 00:46:15,575
Let forget about these old world Let forget about Europe Let forget about Asia And let just make the Americas great again would be my pitch if I was a politician And I would be like you know what I really don care what happens in Europe You know Germany Starmer you guys want to fight Russia Go ahead Ukraine you want to collapse Go ahead

510
00:46:16,115 --> 00:46:23,575
China, like let's give up this American global empire dream because what we can do is we

511
00:46:23,575 --> 00:46:29,835
can make the average life for the average American a lot better if we just focus on

512
00:46:29,835 --> 00:46:33,335
making what we have here work a lot better.

513
00:46:33,335 --> 00:46:40,615
and I don't think that's insane or contrarian at all I think that is what people MAGA specifically

514
00:46:40,615 --> 00:46:46,855
voted for last November I mean that's a make America great again it's like let's focus on

515
00:46:46,855 --> 00:46:52,875
the homeland and making sure that the average American has a higher quality of life because

516
00:46:52,875 --> 00:46:57,455
it's certainly been on the the decline for for many decades now and I don't think that's insane

517
00:46:57,455 --> 00:47:04,335
at all and it's something that i would like to see too like why do we need to be the global hegemon

518
00:47:04,335 --> 00:47:10,135
it seems like in this state it's steve state foreign policy people at the state department

519
00:47:10,135 --> 00:47:17,455
council foreign relations well at the end of the day it comes back to just simple information

520
00:47:17,455 --> 00:47:24,835
systems and scaling like things you just can't you can't organize and coordinate things at that

521
00:47:24,835 --> 00:47:29,455
scale it's literally impossible it's going to collapse in and of itself and it seems like that

522
00:47:29,455 --> 00:47:36,735
may be happening and tying up this conversation on china and put up the uh gold on warrant chart

523
00:47:36,735 --> 00:47:40,715
seems like they're making moves there to assert themselves like hey we have the gold we're going

524
00:47:40,715 --> 00:47:47,715
to use it in in commerce and international trade um through the shanghai gold exchange but then you

525
00:47:47,715 --> 00:47:53,795
have on the tech side like open source ai i think they're signaling over the last year specifically

526
00:47:53,795 --> 00:48:15,635
like, hey, we can compete at the tech level now, too, at the software level with these open source models and really throw a wrench in the American Western sort of AI dominant players plans by launching these open source models that completely work their walled garden closed source models.

527
00:48:15,635 --> 00:48:37,775
And I think one way to read both those things, the gold on war and sort of launching deep seek and investing heavily in tech advancement is, hey, we're here to compete and not necessarily in a nefarious way, but like, let's just build things and cooperate with each other.

528
00:48:37,775 --> 00:48:43,095
Let us dominate our part of the world or steward our part of the world.

529
00:48:43,215 --> 00:48:44,095
I think that's a better word.

530
00:48:44,215 --> 00:48:48,775
And you guys steward your part of the world and let's engage in trade when it makes sense.

531
00:48:49,735 --> 00:48:50,655
Yeah, no, definitely.

532
00:48:50,815 --> 00:48:58,355
And I think, you know, there was a there's a guy, Brent Johnson, who's known for his like dollar milkshake theory.

533
00:48:59,275 --> 00:49:03,335
And I saw something, you know, he was talking about the other day.

534
00:49:03,335 --> 00:49:10,715
And it's just basically like, you know, we are in the midst of a little bit of a fourth turning.

535
00:49:11,315 --> 00:49:18,175
And I don't think that we need to kind of go over the edge.

536
00:49:18,455 --> 00:49:28,935
But what he said was a lot of people think the fourth turning means we're going to turn the chapter and we're going to break through to something new.

537
00:49:28,935 --> 00:49:33,455
And he said his dark fear is we're going to break through to something worse.

538
00:49:33,715 --> 00:49:36,955
I don't know if it's like a fascism, authoritarianism, whatever.

539
00:49:37,595 --> 00:49:47,175
But essentially, I think we're at a pivotal point where it's like, do we want to essentially

540
00:49:47,175 --> 00:49:55,395
go down a path where America tries with 330 million people to desperately hold on to some

541
00:49:55,395 --> 00:50:02,135
sort of global hegemony over 7 billion that will, in my opinion, and I think this was

542
00:50:02,135 --> 00:50:09,215
Brent's worry, could lead to an authoritarian or basically it was equating the collapse of

543
00:50:09,215 --> 00:50:12,855
the Roman Republic that was then replaced by the Roman Empire, right?

544
00:50:13,175 --> 00:50:18,035
So for people that don't know, like before Julius Caesar, like Roman was a republic,

545
00:50:18,035 --> 00:50:21,635
it was run by the Senate, and eventually it was run by an emperor.

546
00:50:22,195 --> 00:50:24,775
And it lasted for like 400 years, you know?

547
00:50:24,775 --> 00:50:27,095
So as a whole, it wasn't a short time.

548
00:50:28,355 --> 00:50:33,795
And then maybe America could be the republic is falling and we're heading into a period

549
00:50:33,795 --> 00:50:34,355
of empire.

550
00:50:34,755 --> 00:50:37,435
And that's what I think people, the narrative is on the left.

551
00:50:37,535 --> 00:50:38,915
Like Donald Trump's the beginning of this.

552
00:50:38,995 --> 00:50:40,235
I think that's bullshit.

553
00:50:40,335 --> 00:50:41,135
I don't think that's going to happen.

554
00:50:41,595 --> 00:50:44,915
That was the same narrative, by the way, in the 1830s with Andrew Jackson.

555
00:50:45,755 --> 00:50:48,235
Andrew Jackson was the country's first populist president.

556
00:50:48,235 --> 00:50:53,975
He was populist or he's president, seventh president in the 1830s, had a huge fight with

557
00:50:53,975 --> 00:50:57,415
the nation's central bank at the time, which is called the second bank of the United States.

558
00:50:58,275 --> 00:51:03,635
His whole election, everything was dominated by a fight between Andrew Jackson and the central bank.

559
00:51:04,255 --> 00:51:08,155
Andrew Jackson hated the central bank. It was run by a guy named Nicholas Biddle.

560
00:51:09,095 --> 00:51:13,975
Jackson called him Tsar Nicholas because he lorded over interest rates. And Jackson said,

561
00:51:13,975 --> 00:51:18,215
you're keeping interest rates too high. You're killing small business. You need to lower interest

562
00:51:18,215 --> 00:51:24,515
rates and I'm going to get rid of you as a central bank. And because they had a 20 year charter

563
00:51:24,515 --> 00:51:32,795
and that charter was not up until after Jackson's first term. Jackson's main political appointment,

564
00:51:33,355 --> 00:51:39,275
main political enemy was a guy named Henry Clay in the U.S. Senate. Henry Clay said, you know what,

565
00:51:39,275 --> 00:51:45,535
we're going to ruin Jackson. We're going to pass an amendment, a bill that renews the central bank

566
00:51:45,535 --> 00:51:51,815
charter for another 20 years. If Jackson vetoes it, he's going to be dead. The Senate, which was

567
00:51:51,815 --> 00:51:58,115
opposition controlled, as was the House, they pass a bill, new 20-year charter for the central bank.

568
00:51:58,355 --> 00:52:04,715
They send it to Jackson's desk. Jackson vetoed it. Clay thinks, okay, we got him. He just vetoed

569
00:52:04,715 --> 00:52:09,935
the central bank economy. It's going to collapse. We got him. People loved it, right? The people

570
00:52:09,935 --> 00:52:15,495
wanted the central bank gone and the central bank was gone and Jackson was reelected. So these types

571
00:52:15,495 --> 00:52:22,335
of things have happened many times in American history. And ultimately what happened was there

572
00:52:22,335 --> 00:52:28,135
was economic difficulties after Jackson got rid of the second central bank, but state banks took

573
00:52:28,135 --> 00:52:34,615
it up and it became more decentralized. And then we had a boom period. So there was no need to have

574
00:52:34,615 --> 00:52:38,975
a central bank and there is no need to have a central bank. And in any discussion that there's

575
00:52:38,975 --> 00:52:43,595
like, you know, oh, if you don't have an independent central bank, you can't have an efficient economy.

576
00:52:43,595 --> 00:52:46,535
Well, the second largest economy in the world is China.

577
00:52:47,695 --> 00:52:53,855
And by statute in Chinese law, the head of the PBOC reports to Xi Jinping.

578
00:52:54,395 --> 00:52:59,795
So the second largest economy in the world has absolutely no independence.

579
00:53:00,295 --> 00:53:11,975
Anybody that comes on CNBC or Bloomberg and tells you that if you don't have an independent central bank, you're doomed as a national economy is basically full of shit.

580
00:53:11,975 --> 00:53:22,175
the second largest economy in the world is china no independence yeah it is it isn't saying that

581
00:53:22,175 --> 00:53:31,395
that has been sort of psyoped into the mainstream acceptance that you that we need yeah it's just

582
00:53:31,395 --> 00:53:36,875
it's all bs man i listen to it all day and i literally am like these people are nuts like

583
00:53:36,875 --> 00:53:40,295
These people are just, they're such a propaganda machine.

584
00:53:40,835 --> 00:53:41,975
It's ridiculous.

585
00:53:42,495 --> 00:53:45,335
I mean, and I'm not saying they're even doing it consciously.

586
00:53:45,555 --> 00:53:47,395
I'm not here to impugn people's characters.

587
00:53:47,615 --> 00:53:50,595
I think that there is something embedded in the American psyche.

588
00:53:51,135 --> 00:53:54,275
Maybe it's a non-understanding of history.

589
00:53:54,855 --> 00:53:59,855
Maybe people think that the Federal Reserve existed since 1776 and has always been there.

590
00:53:59,915 --> 00:54:02,195
And that's just the way that we need to be.

591
00:54:02,815 --> 00:54:04,995
But we have a history of an evolving.

592
00:54:04,995 --> 00:54:13,935
You know, in the 1970s, we did Humphrey Hawkins, and we literally passed a bill where we told the Fed what to do.

593
00:54:14,375 --> 00:54:18,935
And we said, here's your target, 3% unemployment, 3% inflation.

594
00:54:19,375 --> 00:54:24,595
The only inflation target Congress and the president have ever given to the Fed is 3%.

595
00:54:24,595 --> 00:54:32,055
And within that bill, they said, if they come in conflict and you're struggling to get

596
00:54:32,055 --> 00:54:37,515
unemployment down to 3%, disregard your inflation mandate and focus on employment.

597
00:54:37,755 --> 00:54:39,055
And that was in the bill.

598
00:54:39,275 --> 00:54:45,835
It was the 1978 Economic Growth Act or some name commonly known as Humphrey Hawkins.

599
00:54:46,255 --> 00:54:47,375
People can look at my expos.

600
00:54:47,955 --> 00:54:49,215
That's what Congress said.

601
00:54:49,215 --> 00:54:51,795
3% unemployment, 3% inflation.

602
00:54:51,795 --> 00:54:59,175
if they come in conflict, focus on unemployment. And it was put into law, but the problem was,

603
00:54:59,475 --> 00:55:03,915
was they put a five-year sunset period on it so that that's gone. And then all of a sudden the

604
00:55:03,915 --> 00:55:08,535
Fed says, oh, well, the Bank of New Zealand said 2% is the right inflation target, so we're going

605
00:55:08,535 --> 00:55:13,735
to do that. Well, the last time Congress gave the Fed a mandate, it was 3% unemployment,

606
00:55:13,735 --> 00:55:21,075
3% inflation, come in conflict, go with reducing unemployment. That's what the people have said.

607
00:55:21,075 --> 00:55:26,275
that's democracy it's like time it's a flat circle because it's not explicit there's been no

608
00:55:26,275 --> 00:55:32,235
their congressional act passed to mandate this but i think that implicitly behind the scenes is what

609
00:55:32,235 --> 00:55:37,615
trump has been trying to do too late pal um not worried about inflation more worried about the

610
00:55:37,615 --> 00:55:43,235
job market and then in jackson hole that was a big pivot from pal was sort of explicitly saying

611
00:55:43,235 --> 00:55:47,615
um we're not going to worry about inflation as much as we are employment now

612
00:55:47,615 --> 00:56:07,155
Matt, we need to worry about employment. I mean, what we need to do right now is like, and I think this is going to happen, is unemployment is weakening. We're recording this on Thursday at 10. I have no idea what the employment report is going to be tomorrow morning. It could surprise us all and be 200,000. I don't know.

613
00:56:07,155 --> 00:56:12,635
the longer term trend in the data is there's some weakening in the unemployment, right?

614
00:56:13,235 --> 00:56:19,775
And if you have that weak thing, like you're not going to get systemic inflation. Tariffs are not

615
00:56:19,775 --> 00:56:24,475
inflation. Milton Friedman said inflation is always and everywhere a monetary phenomenon.

616
00:56:25,055 --> 00:56:30,155
You know what tariffs are? They're baking into the price index as a tax. It's like,

617
00:56:30,155 --> 00:56:36,855
how could you think that if a tire costs $100 and then next month that tire actually costs

618
00:56:36,855 --> 00:56:44,935
95, but there's a 15% tax. So it's actually 110 to the consumer that tire prices went up.

619
00:56:45,175 --> 00:56:50,715
That's not inflation. It's a one-time price increase. And these things like CPI and PPI,

620
00:56:51,255 --> 00:56:57,295
they're not inflation reports. It's not consumer price inflation. The name of CPI is consumer price

621
00:56:57,295 --> 00:57:04,735
index. It's an index of prices. And if prices go up because there's a tariff, which is basically

622
00:57:04,735 --> 00:57:10,875
an embedded tax, that's not monetary inflation. I mean, Milton Friedman, no free market economist

623
00:57:10,875 --> 00:57:16,275
is going to tell you that if the United States throws a 15% tax on tires and the price of tires

624
00:57:16,275 --> 00:57:20,635
goes up, we're experiencing inflation. We're experiencing a one-time increase. This is what

625
00:57:20,635 --> 00:57:26,655
Waller says. And all this junk from Powell, which is totally political because literally he comes out

626
00:57:26,655 --> 00:57:33,655
in September last year, cut rate 50 basis points, October, cut rate 25, December, post-election,

627
00:57:33,655 --> 00:57:41,075
we're cutting 25 but here's the message to the market we're done market tanks on december 18th

628
00:57:41,075 --> 00:57:46,335
2024 three percent something like that when powell came out i mean it looks so political

629
00:57:46,335 --> 00:57:52,035
whether it is or not i mean that just looks so political like the elections in november

630
00:57:52,035 --> 00:57:59,855
he cuts 50 in september the next month in october he cuts 25 the next month in december almost to

631
00:57:59,855 --> 00:58:05,175
kind of conceal the fact that he's political. He's like, I'm doing 25, but I'm coming out on

632
00:58:05,175 --> 00:58:12,855
this presser hawkish as hell, market tanks. And he doesn't cut since then. I mean, this discussion

633
00:58:12,855 --> 00:58:19,535
that the Fed is some independent, I mean, I think it's ridiculous. I think Powell, like people look

634
00:58:19,535 --> 00:58:24,655
at him and I understand he looks like your nice grandpa. He looks like he's very focused on things,

635
00:58:24,655 --> 00:58:31,755
but he's just not acting that way. He said last year, I'm data dependent. All the data was coming

636
00:58:31,755 --> 00:58:37,775
in and he's like, I'm going to focus on that. Then all of a sudden Trump gets in office and he's like,

637
00:58:37,895 --> 00:58:43,135
all the data is saying we should cut, but I'm forecasting that we're going to get inflation

638
00:58:43,135 --> 00:58:49,095
in coming months because of tariffs. So therefore I'm not. No, if it wasn't for tariffs, I'd be

639
00:58:49,095 --> 00:58:53,435
cutting. So now all of a sudden I'm not data dependent. Now all of a sudden I'm a great

640
00:58:53,435 --> 00:58:57,795
forecaster. I'm the Wizard of Oz. I know that inflation is coming. Everything's telling me in

641
00:58:57,795 --> 00:59:02,195
the data to cut, but I'm not because I think inflation, it's all bullshit. And people that

642
00:59:02,195 --> 00:59:07,155
want to try to defend Lisa Cook, if she committed mortgage fraud, I'm sorry. I own investment houses.

643
00:59:07,615 --> 00:59:12,875
You know damn well when you get a mortgage, what you're declaring that as. And you know,

644
00:59:13,475 --> 00:59:18,315
you get a much better mortgage, a lower down payment, if you say it's a primary residence.

645
00:59:18,315 --> 00:59:23,815
If she did that two or three times, she needs to be gone and she will be gone.

646
00:59:23,955 --> 00:59:28,135
If Lisa Cook is still on the board of governors a year from now, I mean, I'll shave my head.

647
00:59:29,435 --> 00:59:32,935
Well, whether or not she should be there in the first place was a whole other discussion.

648
00:59:33,215 --> 00:59:43,955
I think the sluice did a lot of digging and it doesn't seem like her resume is as stellar as it may need to be if you're going to be a Federal Reserve board governor.

649
00:59:43,955 --> 00:59:55,255
Well, look, now we start to get into all kinds of other stuff about Biden and what he did and how he literally had lists that were restricted to black women for the Supreme Court, for the federal.

650
00:59:55,255 --> 01:00:12,295
I did this gets in a whole other political stuff. But like, regardless of all that, if she lied on her mortgages and she's literally on the board of governors of the largest bank regulator in the United States and people are saying.

651
01:00:12,295 --> 01:00:19,295
this shouldn't be happening. I mean, she needs to be gone. I mean, there's no question about it.

652
01:00:19,295 --> 01:00:22,695
And I'll tell you what, if she's not gone, and we'll see what the courts say,

653
01:00:23,755 --> 01:00:27,175
you know, they make this point that if Powell doesn't do something about it,

654
01:00:27,275 --> 01:00:31,715
that he could be fired for cause. And I think that there's a part of the Trump administration,

655
01:00:32,435 --> 01:00:38,275
this is another kind of contrarian view. There's a part of the Trump administration that wants to

656
01:00:38,275 --> 01:00:44,415
ruin Fed independence, that wants to just expose them as this big political organization because

657
01:00:44,415 --> 01:00:49,855
they don't want to deal with them anymore. Other people have talked about this too, Darius Dale,

658
01:00:50,995 --> 01:00:55,135
Brent Johnson, like emerging of Fed and Treasury. I've been talking about it for over a year.

659
01:00:55,555 --> 01:01:00,475
Like this is the ultimate goal. This is going back to the wartime footing because in my mind,

660
01:01:00,575 --> 01:01:07,175
Trump sees us on a wartime footing. He sees us on a wartime footing with China. It's in my book

661
01:01:07,175 --> 01:01:10,175
I say it's not a cold war, it's a gold war.

662
01:01:10,175 --> 01:01:17,175
And I think that we're on this wartime footing economically with the other major powers.

663
01:01:17,175 --> 01:01:28,175
And I think any time in history where they're talking about Abraham Lincoln, George Washington, Ulysses S. Grant, FDR, Democrat, Republican, Whig, whatever,

664
01:01:28,175 --> 01:01:34,155
when presidents feel they're in a wartime footing and national defense is at stake, they will do whatever is necessary.

665
01:01:34,200 --> 01:01:46,920
Andrew Jackson, when he was fighting the central bank, the Supreme Court came out against it and said, Andrew Jackson's response, well, the Supreme Court has ruled. Let them see if they can enforce it.

666
01:01:46,920 --> 01:02:05,220
And so this is the history in the United States. The executive has immense power. This is what Steve Bannon talks about, where we're heading towards a constitutional crisis, because there is an element in the MAGA party that truly believes the executive has immense power.

667
01:02:05,220 --> 01:02:10,460
The executive is the only person in the Constitution that is named.

668
01:02:10,600 --> 01:02:12,000
The president is the executive.

669
01:02:13,020 --> 01:02:14,180
And Lincoln did this.

670
01:02:14,260 --> 01:02:15,480
All these other presidents did it.

671
01:02:16,100 --> 01:02:21,960
And so there's a lot of American historical precedent for incredible presidential power.

672
01:02:22,500 --> 01:02:26,640
And a lot of people feel Trump is looking to push these boundaries.

673
01:02:27,060 --> 01:02:29,260
And they're going to be national garden cities.

674
01:02:29,700 --> 01:02:31,440
And this is what we talked about a year ago.

675
01:02:31,440 --> 01:02:34,900
I said markets are not going to like everything that Trump does.

676
01:02:35,220 --> 01:02:38,760
I said, Trump's going to be more extreme than markets realize.

677
01:02:39,580 --> 01:02:44,540
And so just to bring this all back to the markets, I do think that there's potential

678
01:02:44,540 --> 01:02:50,020
for volatility and big drops and that the Trump administration could pull some stuff

679
01:02:50,020 --> 01:02:53,160
that people think they wouldn't dare.

680
01:02:53,440 --> 01:02:54,880
And I think they will dare.

681
01:02:54,880 --> 01:02:58,640
Like, I think there's some crazy stuff these guys could pull in the next three years.

682
01:02:59,700 --> 01:03:02,540
What are a couple examples or one example?

683
01:03:03,000 --> 01:03:04,720
Well, OK.

684
01:03:05,220 --> 01:03:08,500
maybe things don't work out the way they want Lisa Cook,

685
01:03:08,720 --> 01:03:10,020
he goes after Jerome Powell.

686
01:03:11,320 --> 01:03:15,020
Maybe with the National Guard in Chicago,

687
01:03:16,020 --> 01:03:19,060
he starts having pushback on that

688
01:03:19,060 --> 01:03:23,060
and starts deploying the military in a larger way nationwide.

689
01:03:24,060 --> 01:03:28,140
When it comes to terrorists, we've seen him go big,

690
01:03:28,140 --> 01:03:29,740
but then back off.

691
01:03:29,740 --> 01:03:52,820
I think on the side of the Federal Reserve and the essentially the monetary control, if he makes an attack at Jerome Powell, perhaps purposely, even before his term is up, because Jerome Powell holds a Trump card and Trump doesn't like that.

692
01:03:53,540 --> 01:03:57,740
Jerome Powell's Trump card is that his term as governor is not up until 2028.

693
01:03:57,740 --> 01:04:14,680
And so Jerome Powell can threaten Trump and say, if you keep pushing so hard against the Federal Reserve, I'm not going to resign when my term is governed as chair is up and you're not going to be able to replace me.

694
01:04:14,960 --> 01:04:19,220
And there's only one other Federal Reserve chairman.

695
01:04:20,440 --> 01:04:23,640
Who did not resign after his term.

696
01:04:23,740 --> 01:04:26,060
So what happens is, is people get appointed governors.

697
01:04:26,060 --> 01:04:32,060
then they get appointed chair. Their chair terms end before their governor terms. Governor terms

698
01:04:32,060 --> 01:04:38,760
are 14 years. They're long terms. And so Powell's term as a governor goes until 2028, to like the

699
01:04:38,760 --> 01:04:45,520
end of the Trump presidency. So he doesn't have to leave the board of governors in May. He could

700
01:04:45,520 --> 01:04:52,720
say, I'm going to stay. And this could turn into a huge fight where basically Trump says,

701
01:04:52,720 --> 01:04:58,040
okay, Jerome, you want to stay? I'm going to fire you from the Board of Governors because you let

702
01:04:58,040 --> 01:05:03,780
Lisa Cook continue to have access to the Eccles building. And that was my point. The only other

703
01:05:03,780 --> 01:05:10,980
Fed chairman who stayed on as governor after he lost his chairmanship was Eccles, which is the

704
01:05:10,980 --> 01:05:17,880
name of the headquarters building that is in the news these days regarding the Federal Reserve.

705
01:05:18,120 --> 01:05:22,000
So I think we could have like really like out and out dogfights at the Federal Reserve,

706
01:05:22,000 --> 01:05:28,960
like governors back and forth, fights over presidents, like just turn it into a clown show

707
01:05:28,960 --> 01:05:35,260
and essentially ruin the reputation. And this is, I think, Mohammed Al-Aryan's point where he says,

708
01:05:35,320 --> 01:05:40,260
Jerome, just resign. Because if you keep trying to fight Trump, he's not going to back down.

709
01:05:40,420 --> 01:05:44,320
And what you're going to wind up doing is you're actually going to be wind up destroying the Fed's

710
01:05:44,320 --> 01:05:50,020
integrity. There were people that know Mohammed Al-Aryan, famous analyst. He basically came out

711
01:05:50,020 --> 01:05:54,200
and said, Jerome Powell, you should resign because if you keep trying to, you know, stay

712
01:05:54,200 --> 01:05:58,260
independent and fight Trump, like you're only going to degrade the Fed's independence.

713
01:05:58,700 --> 01:06:02,060
And I think a part of the Trump administration wants to degrade Fed independence.

714
01:06:04,140 --> 01:06:05,620
Yeah, I think that's pretty obvious.

715
01:06:06,360 --> 01:06:10,780
And one person we haven't mentioned yet, but we should probably touch on is Scott Bessent.

716
01:06:11,020 --> 01:06:11,560
What do you think?

717
01:06:13,020 --> 01:06:13,840
He's the key.

718
01:06:14,100 --> 01:06:14,500
He's the key.

719
01:06:14,960 --> 01:06:15,740
Yeah, he's the key.

720
01:06:16,240 --> 01:06:17,780
I mean, it was three months ago.

721
01:06:17,820 --> 01:06:19,440
I said, come with the hour, come with the man.

722
01:06:19,440 --> 01:06:27,200
I said Scott Besson is and he totally took over from Lutnik and Navarro on the tariff stuff and Trump really trusts him.

723
01:06:27,820 --> 01:06:33,460
I think Trump would love to appoint him as Fed chair, but I think he wants to stay in Treasury.

724
01:06:34,060 --> 01:06:42,140
I think there's even a small chance that he appoints him as Fed chair, but does not remove him from Treasury, which would be the true merge.

725
01:06:42,140 --> 01:06:57,360
Right. Like like let's say that this gets so crazy between the battle between the administration, like an Andrew Jackson type battle, like it was between Tsar Nicholas Biddle at the Second Bank of the United States.

726
01:06:57,360 --> 01:07:04,000
And they called him King Andrew. So it was the same stuff where where the the opposition called the president a king.

727
01:07:04,000 --> 01:07:06,340
They called him King Andrew, Andrew Jackson.

728
01:07:06,500 --> 01:07:13,300
So if we get back into that type of a situation, an 1830s type situation, yeah, I mean, Besson

729
01:07:13,300 --> 01:07:22,100
is, to me, he has this unique ability to be firm with kind of MAGA policies, but not

730
01:07:22,100 --> 01:07:28,140
come off as a jerk, not come off as insensitive, not come off as bombastic.

731
01:07:28,300 --> 01:07:33,040
I think a lot of Trump's lieutenants, the mistake they make is they think that if they

732
01:07:33,040 --> 01:07:38,080
act like Trump, Trump will respect them. I don't think Trump wants people to act like Trump. I

733
01:07:38,080 --> 01:07:43,520
think Trump wants people to get results. Besant gets results. Navarro and Lutnik come out there

734
01:07:43,520 --> 01:07:48,100
and they talk bombastically like Trump does, but they don't get results. They just hurt the matter.

735
01:07:48,780 --> 01:07:54,020
Besant comes out there. He's very considered. He's well thought. He understands markets.

736
01:07:54,720 --> 01:08:01,220
And he's running the show. So Besant is extremely important. And I think the Treasury

737
01:08:01,220 --> 01:08:06,200
is with the treasury buyback programs are increasing.

738
01:08:06,920 --> 01:08:08,740
The treasury has control over the dollar.

739
01:08:09,460 --> 01:08:12,960
They have different funds available to them explicitly.

740
01:08:13,840 --> 01:08:16,940
They might have hidden funds in the Caymans,

741
01:08:17,120 --> 01:08:18,300
as we talked about earlier.

742
01:08:18,980 --> 01:08:21,140
I think the treasury is going to continue

743
01:08:21,140 --> 01:08:22,220
to exert their influence

744
01:08:22,220 --> 01:08:24,480
because one last thing,

745
01:08:24,660 --> 01:08:25,480
and I know I'm rambling a little,

746
01:08:25,540 --> 01:08:27,820
but I remember seeing a Scott Besson interview

747
01:08:27,820 --> 01:08:30,580
right after he got sworn in with Brett Baer.

748
01:08:30,580 --> 01:08:31,700
He was on Fox News.

749
01:08:32,240 --> 01:08:35,400
Brad Bear was at the Office of the Treasury.

750
01:08:35,920 --> 01:08:44,780
And Scott Besson said, you know, one thing I'm really surprised at as Treasury Secretary is how much this role involves national security.

751
01:08:45,880 --> 01:08:55,740
And so there is a huge, and again, Luke Ruhmann, I mentioned, there's a huge national security component to everything this administration is doing.

752
01:08:55,740 --> 01:09:03,400
And that's why I honestly believe, like I said earlier, I don't care if it's J.D. Vance or AOC or whoever is president in 2029.

753
01:09:03,760 --> 01:09:11,080
They're going to continue these policies, low interest rates, keep interest expense down, tariffs.

754
01:09:11,640 --> 01:09:17,300
Like this is all being driven by the national security fiscal situation.

755
01:09:17,480 --> 01:09:28,283
And everybody trying to put this political spin on it And I think it the same thing where Biden comes into office and doesn get rid of the Trump tariffs on China And it going to be the same thing

756
01:09:28,363 --> 01:09:34,103
If a Democrat comes into office in 2029, you think they're going to be trying to appoint governors that want to raise rates?

757
01:09:35,443 --> 01:09:38,943
Yeah. Oh, yeah. I just became president. Let's raise interest rates.

758
01:09:39,202 --> 01:09:39,943
No, that's not.

759
01:09:39,943 --> 01:09:49,202
Yeah. And it seems like. Like digging into percent, too, it seems like he's perfectly suited for the role, considering.

760
01:09:50,202 --> 01:10:00,182
Things happening outside the U.S. to I think positioning the United States versus China, Russia and getting into these trade negotiations,

761
01:10:01,403 --> 01:10:08,782
getting his getting pulling his sleeves up and getting his hands dirty with the trade negotiations directly is is really important.

762
01:10:09,943 --> 01:10:11,042
He's really impressive.

763
01:10:12,222 --> 01:10:20,262
That's basically all I'll say about that is I think I'm not big on politics.

764
01:10:20,423 --> 01:10:25,162
I don't like intervention in markets from the Fed or the Treasury specifically,

765
01:10:25,403 --> 01:10:28,243
but you're handed a shit sandwich and you've got to deal with it.

766
01:10:28,262 --> 01:10:32,642
And I think he's the right man to deal with these particular problems that we're facing.

767
01:10:33,702 --> 01:10:33,882
Yeah.

768
01:10:34,102 --> 01:10:37,423
And none of the comments that I've made, I don't think this whole time,

769
01:10:37,423 --> 01:10:42,762
are really like what I think should happen or like in my ideal world.

770
01:10:43,063 --> 01:10:46,303
Like all I'm trying to do is like paint the picture of what I see happening.

771
01:10:46,523 --> 01:10:46,762
Right.

772
01:10:47,243 --> 01:10:51,602
And, you know, this happens to me on Twitter sometimes is where I'll post like,

773
01:10:52,122 --> 01:10:53,782
oh, I think they're going to keep rates down.

774
01:10:53,782 --> 01:10:58,882
And people are like, well, that's great that you want that to juice your portfolio by 2%.

775
01:10:58,882 --> 01:11:02,823
I'm not posting that I think they're going to keep rates down because I want them to,

776
01:11:03,162 --> 01:11:04,962
hey, that might happen, which would be great.

777
01:11:04,962 --> 01:11:09,803
what I'm trying to do is just express my opinion on what I see happening, right? It's like,

778
01:11:10,183 --> 01:11:15,063
here's what I see happening. I see an administration hellbent on controlling every aspect

779
01:11:15,063 --> 01:11:21,243
of this economy, creating a massive boom ahead of the 2026 elections. I think the Federal Reserve

780
01:11:21,243 --> 01:11:26,222
is not out of bounds. I think all this stuff is going on. That's what I see happening. I'm not

781
01:11:26,222 --> 01:11:33,102
saying, you know, I'm cheering it on. I'm not raising the pom-poms, like let's destroy the Fed.

782
01:11:33,102 --> 01:11:38,622
I'm just trying to paint the picture of what I see happening, you know, and where I see things going.

783
01:11:39,443 --> 01:11:41,002
Yeah. And you were tweeting about it yesterday.

784
01:11:41,382 --> 01:11:43,722
Probably something we should touch on as well as obviously.

785
01:11:45,262 --> 01:11:51,722
Glossed over it earlier in the conversation, but the housing market seems to be top of mind for everybody, the administration, American citizens.

786
01:11:51,722 --> 01:12:00,743
and you were tweeting, it seems like Bill Pulte has been sort of friptically sending messages to

787
01:12:00,743 --> 01:12:05,683
the market that something may happen. This falls or pertains to the housing market and

788
01:12:05,683 --> 01:12:09,923
the Trump administration's influence over it. What do you think's happening there?

789
01:12:10,702 --> 01:12:17,722
Yeah. I mean, housing is huge. Housing is like 16, 20% of GDP, like directly or indirectly.

790
01:12:17,722 --> 01:12:25,702
there is more untapped home equity right now. And people can argue and say, oh, these prices

791
01:12:25,702 --> 01:12:30,122
shouldn't be where they are. But the facts are the facts. Like a bank's going to send out an

792
01:12:30,122 --> 01:12:33,183
appraiser and they're going to look at a house. They're going to say this house is a million.

793
01:12:33,443 --> 01:12:37,303
They're going to say you owe 300 grand on your mortgage. They're going to say you have 700

794
01:12:37,303 --> 01:12:42,882
equity. They're going to say we can refinance you and cash you out. Like there's so much money

795
01:12:42,882 --> 01:12:48,243
that could pour into this economy, juice this economy, if rates were lower.

796
01:12:48,642 --> 01:12:53,842
And then there's also this big dissatisfaction with people that don't own homes, that want access.

797
01:12:54,102 --> 01:12:58,762
So I think one way or another, I've talked about this months ago.

798
01:12:58,842 --> 01:13:00,243
Like, I don't know what they're going to do.

799
01:13:00,542 --> 01:13:04,183
I wouldn't be surprised if they came up with something called like a MAGA mortgage,

800
01:13:04,183 --> 01:13:10,282
where they're like, we're going to, like, they've been talking about declaring a housing emergency.

801
01:13:10,282 --> 01:13:13,002
And now what we're going to do is it's a housing emergency.

802
01:13:13,142 --> 01:13:14,863
We want to get first time homebuyers in.

803
01:13:15,202 --> 01:13:20,262
You know, you see a lot of people talk about how the homebuilders are doing well because

804
01:13:20,262 --> 01:13:21,622
they're able to buy down mortgages.

805
01:13:21,803 --> 01:13:26,142
We might get like a federal government, like buying down mortgages, like trying to get

806
01:13:26,142 --> 01:13:27,023
people into homes.

807
01:13:27,282 --> 01:13:33,842
We could get people, you know, they've talked about getting rid of capital gains on sales,

808
01:13:33,842 --> 01:13:38,063
which would help people to be more open to selling their homes.

809
01:13:38,063 --> 01:13:43,722
because if you own a home and it's an investment property, there's no deduction, right? I mean,

810
01:13:43,823 --> 01:13:48,683
if you bought a home for 200 grand and it's worth 500 grand and it's an investment property and you

811
01:13:48,683 --> 01:13:53,803
go to sell it now, you got a 300 grand gain. It's only your primary residence that gets an exclusion.

812
01:13:53,803 --> 01:14:00,282
And there's a lot of people that bought their homes for 150 and now they're worth 800 and

813
01:14:00,282 --> 01:14:04,502
they're past the exclusion, even if they're married couples. So there's a lot of people,

814
01:14:04,502 --> 01:14:08,483
it's not only the high mortgage rates that they sell, but they're going to get a huge tax bill.

815
01:14:08,803 --> 01:14:13,683
Right. And so the federal government is going to figure out a way around this. There was a post by

816
01:14:13,683 --> 01:14:20,582
this guy, Centrini. He's kind of a guy on X talking about ways that the GSEs, which Bill Pulte

817
01:14:20,582 --> 01:14:26,262
is the chairman of the board of, like could figure out ways to start buying MBS, which is essentially

818
01:14:26,262 --> 01:14:35,842
be the treasury, the housing authority doing QE, you know, and buying mortgage-backed securities

819
01:14:35,842 --> 01:14:41,403
to keep rates down. Because there is this really big spread, an unprecedented spread

820
01:14:41,403 --> 01:14:47,602
between like the 10-year and the 30-year mortgage. And normally those are pretty close because,

821
01:14:47,823 --> 01:14:53,262
you know, it's a 30-year mortgage, but there's prepayment. So the duration of a 30-year MBS is

822
01:14:53,262 --> 01:14:56,962
similar to a duration of a 10 year. So those yields should be pretty similar because they're

823
01:14:56,962 --> 01:15:02,782
both government guaranteed. And there's a big spread. I mean, we're at 4.2 or so about on the

824
01:15:02,782 --> 01:15:07,762
10 year and a mortgages are like 200 basis points higher. Like that's a huge spread. That's not the

825
01:15:07,762 --> 01:15:12,823
normal spread. So I think they're going to get the mortgage spread down. They're going to get rates

826
01:15:12,823 --> 01:15:18,002
down. And I think people are going to, there's going to be somebody next year who gets a 4%

827
01:15:18,002 --> 01:15:24,382
mortgage. Yeah. I mean, I think it's happening. Like people have said those days are gone.

828
01:15:25,523 --> 01:15:30,903
And I'm not saying it's 4.0. I'm saying a four handle by the end of next year, there's going to

829
01:15:30,903 --> 01:15:37,962
be an ability. It might just be limited to first time home buyers with a income amount or whatever,

830
01:15:38,142 --> 01:15:43,142
FHA. But people are going to start getting mortgages with four handles again next year.

831
01:15:43,142 --> 01:16:05,803
And this is going to unlock housing. And this is a huge amount of equity. And this is part of this boom that this president is trying to force through hell or high water. And I think people that bet against it, you know, I saw Darius Dale say, look, you want to argue against this on the golf course or at your cocktails, that's fine, but don't argue against it with your portfolio, right?

832
01:16:05,803 --> 01:16:18,762
Like, I mean, if you want to just stand against all of this and stand against the Treasury and the Supreme Court, which is right leaning and you want to stand against all of it and say it's all wrong and ideologically I'm opposed to it.

833
01:16:18,762 --> 01:16:24,342
And therefore, I'm going to place these bets in my portfolios aligned with this ideological view.

834
01:16:24,502 --> 01:16:25,382
I mean, be my guest.

835
01:16:25,462 --> 01:16:26,762
I think you're going to get slaughtered.

836
01:16:28,042 --> 01:16:28,483
Yeah.

837
01:16:29,502 --> 01:16:30,722
That's why I love talking to you.

838
01:16:31,403 --> 01:16:32,563
Bring back sober analysis.

839
01:16:32,563 --> 01:16:37,403
I find myself drifting in and out of doomerism, optimism, mainly optimism.

840
01:16:37,823 --> 01:16:39,502
I think you have to be optimistic, too.

841
01:16:40,122 --> 01:16:43,923
And it's just about positioning yourself correctly.

842
01:16:43,923 --> 01:16:45,762
And I think you mentioned it.

843
01:16:46,142 --> 01:17:02,542
Bitcoin, gold are going to be the winners in all this, because as they attempt to really open up the markets and and let people or enable people to buy houses and stoke the economy.

844
01:17:02,563 --> 01:17:04,662
I mean, there will be probably some.

845
01:17:06,443 --> 01:17:16,385
What the word I looking for Stimulus involved in one way or another some money printing involved in one way or another And inflation may have to go higher but I guess the hope is that

846
01:17:16,385 --> 01:17:23,185
real wages go up and you fix the job market to a certain extent where people aren't as perturbed

847
01:17:23,185 --> 01:17:29,405
by increasing prices as they were under the mine administration. The golden age, Marty. I mean,

848
01:17:29,405 --> 01:17:30,205
Why not?

849
01:17:30,305 --> 01:17:31,725
Like, why not, man?

850
01:17:32,185 --> 01:17:34,365
I actually remember the 1980s.

851
01:17:34,465 --> 01:17:37,705
I remember, well, Reagan was my president as a kid.

852
01:17:38,325 --> 01:17:42,805
And I'm telling you, this country was not in a good place in the late 1970s.

853
01:17:43,145 --> 01:17:44,985
This country was depressed.

854
01:17:45,725 --> 01:17:48,405
This country felt we were getting killed by the Japanese.

855
01:17:49,425 --> 01:17:52,605
This country felt the Soviets were going to take us over.

856
01:17:53,265 --> 01:17:54,985
This was the era of Rocky III.

857
01:17:55,645 --> 01:17:58,825
And they had the robotic guys that were going to kill us.

858
01:17:58,825 --> 01:18:03,765
and like somehow we got through it and i'm not saying it's because we're americans and we're

859
01:18:03,765 --> 01:18:08,785
the best and everything like that but like have a little faith in us like like like maybe we could

860
01:18:08,785 --> 01:18:12,425
do like a lot of people they just want to talk about how amazing china is and or something and

861
01:18:12,425 --> 01:18:18,885
it's like i don't know man i mean we've we've done pretty well and it's like have a little faith like

862
01:18:18,885 --> 01:18:24,385
like maybe this could all work like if all these people on the left that hate donald trump would

863
01:18:24,385 --> 01:18:30,985
just stop trying to fight him every step of the way so goddamn much. And if Donald Trump would

864
01:18:30,985 --> 01:18:36,645
stop being so antagonistic, and I don't think he needs to be, and he hurts himself. I'm not a Trump

865
01:18:36,645 --> 01:18:43,745
sycophant. He makes mistakes. I'll give an example. I think that we had a chance for Canada to come to

866
01:18:43,745 --> 01:18:50,465
a right-leaning prime minister. And by him hammering on Trudeau and calling them the 51st

867
01:18:50,465 --> 01:18:57,325
state, I think he drove the Canadian populace insane and they put in a, you know, a Trudeau

868
01:18:57,325 --> 01:18:58,665
2.0.

869
01:18:59,005 --> 01:19:00,005
Yeah, yeah, exactly.

870
01:19:00,145 --> 01:19:01,365
And I think he ruins it.

871
01:19:01,505 --> 01:19:03,365
Like, I think Trump makes mistakes.

872
01:19:03,425 --> 01:19:04,345
He's a human being.

873
01:19:04,345 --> 01:19:07,805
He has this, like, he's wired a certain way.

874
01:19:08,005 --> 01:19:12,645
And one of those things he's wired for is not to, like, put his pride in his back pocket.

875
01:19:12,785 --> 01:19:14,645
I remember one time I was, like, 11 years old.

876
01:19:14,705 --> 01:19:15,925
I was on the South Side of Chicago.

877
01:19:15,925 --> 01:19:22,285
and like I was doing something and some like young kid came up to me and I was doing it and

878
01:19:22,285 --> 01:19:26,325
like I was almost going to get into a fight with somebody and the kid said don't do it with those

879
01:19:26,325 --> 01:19:30,105
guys man sometimes you got to put your pride in the back pocket and I didn't get in a fight

880
01:19:30,105 --> 01:19:34,885
and for some reason I've always remembered that my whole life is like sometimes you got to put

881
01:19:34,885 --> 01:19:39,685
your pride in the back Trump doesn't have that in his DNA Trump doesn't know how to put his pride

882
01:19:39,685 --> 01:19:44,745
in his back pocket sometimes for his own good and he gets himself into trouble sometimes we could

883
01:19:44,745 --> 01:19:54,445
probably have canada with that conservative guy that was almost winning before trump yeah i mean

884
01:19:54,445 --> 01:20:00,145
that would make us so much stronger like he makes mistakes i mean his family is involved in crypto

885
01:20:00,145 --> 01:20:05,525
in many ways i mean i'm sure that's one of his biggest mistakes it's shady dealings there i mean

886
01:20:05,525 --> 01:20:11,125
like like i'm not here to a lot of people think i'm like a maga like trump is god but no no no no

887
01:20:11,125 --> 01:20:11,885
No, no, no, not at all.

888
01:20:12,345 --> 01:20:17,285
Like Trump, his family, what he does, his personality.

889
01:20:17,705 --> 01:20:19,265
Look, he's a leader we got.

890
01:20:19,465 --> 01:20:23,745
I think he's a better leader than Kamala would have been for sure.

891
01:20:24,245 --> 01:20:26,705
But he's not a saint and he's not perfect.

892
01:20:26,965 --> 01:20:29,085
And, you know, let's root him on.

893
01:20:29,225 --> 01:20:30,285
Let's hope he wins.

894
01:20:30,585 --> 01:20:34,865
Let's not be like most of these people on the media that literally want to see the economy

895
01:20:34,865 --> 01:20:39,225
collapse and the U.S. fail just so they can point the finger and say, see, we told you

896
01:20:39,225 --> 01:20:40,625
not to vote that guy as president.

897
01:20:41,125 --> 01:20:46,905
Yeah, it is crazy that we've come this far as a country.

898
01:20:47,245 --> 01:20:49,085
It goes both ways, too.

899
01:20:49,405 --> 01:20:54,905
I mean, when Biden was president, people were doing the same thing on the right, hoping that he would fail.

900
01:20:56,505 --> 01:20:57,245
Not me.

901
01:20:57,445 --> 01:20:58,185
I was bullish.

902
01:20:58,485 --> 01:21:00,205
I'm like, his fiscal spending's good.

903
01:21:00,345 --> 01:21:01,585
Like, market's good.

904
01:21:01,685 --> 01:21:02,665
Like, we're not collapsing.

905
01:21:02,825 --> 01:21:04,685
Like, yeah, people let their politics.

906
01:21:04,985 --> 01:21:07,745
Sorry to interrupt you, but that's the point about my analysis.

907
01:21:07,905 --> 01:21:09,205
I'm not political about it.

908
01:21:09,205 --> 01:21:14,705
I wasn't like, oh, we're doomed because of, you know, leftist policies in 2023.

909
01:21:15,425 --> 01:21:18,805
And I'm not being like, you know, we're doomed now because of Trump.

910
01:21:19,545 --> 01:21:19,685
Yeah.

911
01:21:20,245 --> 01:21:21,665
I'm just looking for one last chart.

912
01:21:21,665 --> 01:21:25,685
I want to get your thoughts on just trying to steel man.

913
01:21:26,405 --> 01:21:29,245
Our arguments here during this conversation today.

914
01:21:30,525 --> 01:21:31,545
Is there.

915
01:21:33,085 --> 01:21:37,385
What are like the biggest potential hiccups that could see?

916
01:21:37,385 --> 01:21:43,365
yeah there are there are big hiccups yeah and one i'm just gonna pull up this chart while um

917
01:21:43,365 --> 01:21:46,785
while we bring up this part of the conversation because this is something i read about the other

918
01:21:46,785 --> 01:21:54,825
night too and it does tie into inflation but i think it's even more important than inflation

919
01:21:54,825 --> 01:21:59,405
broadly but it's like electricity prices in the united states if you're looking at average

920
01:21:59,405 --> 01:22:05,165
kilowatt per hour i don't know why this is zoomed in so much but um yeah maybe

921
01:22:05,165 --> 01:22:12,125
if you look at this chart it's just i mean electricity energy is the base input of everything

922
01:22:12,125 --> 01:22:19,705
we do in the economy and i knew electricity prices were um elevated but if you look at

923
01:22:19,705 --> 01:22:24,825
sort of what's happening this trend here it's not looking great it looks like we're

924
01:22:24,825 --> 01:22:30,485
going up into the right like do you see energy as a sector specifically being

925
01:22:30,485 --> 01:22:37,705
a potential hurdle that needs to be overcome. Yeah, definitely. No, that's the perfect chart

926
01:22:37,705 --> 01:22:47,445
to pull up because that's the problem. You know, energy drives inflation. I think in the pre-AI world,

927
01:22:47,845 --> 01:22:54,265
the key factor for energy was looking at oil. I think in the AI world, the key factor for looking

928
01:22:54,265 --> 01:23:00,665
at inflation as driven by energy is to look at electricity per kilowatt hour, just like you're

929
01:23:00,665 --> 01:23:06,985
showing. And this is inflationary. This is not like tariffs. This isn't a one-time price increase

930
01:23:06,985 --> 01:23:13,925
based on a tax. This is the input for everything is starting to go up, right? Because if you need

931
01:23:13,925 --> 01:23:20,825
to spend more to heat or cool your retail stores, to run your manufacturing plants, to power your

932
01:23:20,825 --> 01:23:27,485
factories, if everything is going up because of like, so this is massive. I mean, I'm bullish on

933
01:23:27,485 --> 01:23:36,485
copper. I'm bullish on what we need to do to build out this grid and we need to do it. And I actually

934
01:23:36,485 --> 01:23:41,525
think Trump is starting to backstep a little bit away from his anti-solar. I think he's anti-wind

935
01:23:41,525 --> 01:23:46,025
all the way because wind really is kind of the worst, but I think he's going to come back into

936
01:23:46,025 --> 01:23:51,745
solar a little bit, because you've got to look at what China does. They did the roadmap, right?

937
01:23:51,925 --> 01:24:00,145
Huge solar, huge coal fields, nuclear, like we need to do it all, right? Maybe wind's not part

938
01:24:00,145 --> 01:24:09,625
of it because it's just not very efficient, but solar, coal, nuclear, we need to get the grid up.

939
01:24:09,785 --> 01:24:15,945
And that's the AI constraint. That's the big constraint. And I think, I mean, I think eventually

940
01:24:15,945 --> 01:24:20,905
what's going to happen is there's going to be a very separate pricing for residential customers

941
01:24:20,905 --> 01:24:25,525
and commercial customers on electricity, but that's still going to be inflationary. And,

942
01:24:25,625 --> 01:24:31,525
and so, you know, we need to develop the grid. I mean, that, that, that's, that's a huge bump.

943
01:24:31,525 --> 01:24:39,585
Um, I think other bumps on the road are that this AI thing, you know, hits the labor market a little

944
01:24:39,585 --> 01:24:43,305
strong and that it starts to feed into itself.

945
01:24:43,725 --> 01:24:49,985
And, you know, we see weakness in the labor market that makes people think my job's not

946
01:24:49,985 --> 01:24:50,525
safe.

947
01:24:50,625 --> 01:24:52,965
Therefore, I need to pull back on spending.

948
01:24:52,965 --> 01:25:06,948
And we know we have a 70 percent you know consumer driven economy Maybe that trip to you know hike in the Sierras or you know up to Boston for the weekend I going to pull back on that because I don want to spend

949
01:25:06,948 --> 01:25:11,467
that money because I'm worried about my job. So I do, I do think we're going to probably see

950
01:25:11,467 --> 01:25:15,987
some weakness in the labor market, but I don't think it's going to fall off the cliff. I think

951
01:25:15,987 --> 01:25:23,108
that's a threat. Electricity is a threat. But generally speaking, I think that these are bumps

952
01:25:23,108 --> 01:25:28,568
on the road. And I don't think that they're going to collapse the overall narrative. Like

953
01:25:28,568 --> 01:25:33,807
if at some point I turn truly bullish, I'll say I'm truly bullish. I think, hey, man, we've peaked.

954
01:25:34,547 --> 01:25:40,387
Get out of risk assets. I just I just think that these are going to be obstacles that

955
01:25:40,387 --> 01:25:44,328
could spring out of nowhere. And all of a sudden you get a three, four percent

956
01:25:44,328 --> 01:25:50,487
decline in equities. You get a 10 percent drop in Bitcoin. You get a 10 percent drop in gold.

957
01:25:50,487 --> 01:25:51,568
and it just happens.

958
01:25:51,767 --> 01:25:53,688
And you're like, what the hell just happened?

959
01:25:54,028 --> 01:25:56,307
And then the longer term trend continues.

960
01:25:56,487 --> 01:25:59,288
So like we closed out the call last quarter

961
01:25:59,288 --> 01:26:01,127
and I said, we'll be back in three months

962
01:26:01,127 --> 01:26:05,788
and we'll probably be at SPX 6364, 100.

963
01:26:05,948 --> 01:26:07,667
And right now we're at 6466.

964
01:26:08,387 --> 01:26:09,747
I'm going to drop back and say,

965
01:26:09,807 --> 01:26:11,288
we'll probably have this call in December

966
01:26:11,288 --> 01:26:13,487
and we'll be somewhere 68, 6900,

967
01:26:14,368 --> 01:26:15,987
knocking on 7,000.

968
01:26:15,987 --> 01:26:19,227
And I think Bitcoin had a really good August.

969
01:26:19,227 --> 01:26:24,267
I think a lot of people thought it wasn't, but it made a higher high.

970
01:26:24,407 --> 01:26:25,927
It made a higher low.

971
01:26:26,087 --> 01:26:28,767
It never broke below the July low.

972
01:26:28,907 --> 01:26:30,167
It held in there.

973
01:26:30,347 --> 01:26:32,267
I think September is going to be good.

974
01:26:32,547 --> 01:26:38,788
And all year, my original, you know, forecast I made in December was we hit 150 by year end.

975
01:26:39,148 --> 01:26:45,047
I wasn't like, you know, some crazy guy saying, you know, we're going to hit 500 grand this year.

976
01:26:45,087 --> 01:26:46,387
And maybe, well, who knows?

977
01:26:46,387 --> 01:26:56,227
But I've been steadfast with that 150, which is simply based on we hit 66 high in 2021 on a monthly close.

978
01:26:56,387 --> 01:26:58,368
We dropped down to about 16.

979
01:26:58,847 --> 01:27:01,247
There's like a $44,000 differential.

980
01:27:02,448 --> 01:27:03,788
You added 44.

981
01:27:04,747 --> 01:27:05,087
I don't know.

982
01:27:05,127 --> 01:27:05,427
Excuse me.

983
01:27:05,507 --> 01:27:09,148
62 was the monthly close and high in 2021.

984
01:27:09,968 --> 01:27:13,788
62 plus 44 took you to 106,000.

985
01:27:13,788 --> 01:27:25,427
106 was my initial target um uh last year we hit 108 we dropped back you add another 44 000 to that

986
01:27:25,427 --> 01:27:33,887
106 you get 150 like i think 150 is the next stop on bitcoin and um you know the the potential is

987
01:27:33,887 --> 01:27:39,688
unlimited but let's get to 150 first and and then i'll talk about a new price target but you know

988
01:27:39,688 --> 01:27:44,648
that's been my end of year price target and i still think we're easily going to hit 150 by uh

989
01:27:44,648 --> 01:27:55,627
by new years that might be you're very accurate with your calls and it seemed like i mean this

990
01:27:55,627 --> 01:28:01,387
is somebody's been around bitcoin for 12 years um definitely could see it getting crazy this fall

991
01:28:01,387 --> 01:28:07,827
but it does seem like we're in a different regime with the emergence of the etfs bitcoin treasury

992
01:28:07,827 --> 01:28:15,068
replays and things seem much more um controlled in terms of volatility suppression i was i was

993
01:28:15,068 --> 01:28:19,028
looking at bitcoin futures versus platinum futures platinum futures have higher volatility now than

994
01:28:19,028 --> 01:28:29,847
bitcoin so you know bitcoin is becoming um a sorry to say it a trad fi security instrument

995
01:28:29,847 --> 01:28:36,968
and it's getting trad five all and that that's just what's happening like it's it's ng you but

996
01:28:36,968 --> 01:28:42,208
But it's no longer like a bunch of people with their own wallets.

997
01:28:42,347 --> 01:28:46,648
Like you got options, you got futures, you got Ibit, you got the ETFs.

998
01:28:47,028 --> 01:28:48,747
All of this is volatility suppressing.

999
01:28:48,987 --> 01:28:53,227
And it's also return suppressing because there's a relationship between volatility and return.

1000
01:28:53,347 --> 01:28:57,788
If you think like, oh, people, oh, yeah, Bitcoin is going to go up 100% every year.

1001
01:28:58,747 --> 01:28:59,288
You know, no.

1002
01:28:59,288 --> 01:29:10,708
To me, when Bitcoin was 100 or less and I'm calling for it to be 150 by the end of the year and I'm like a 50% increase, I mean, that's massive.

1003
01:29:10,847 --> 01:29:11,387
That's huge.

1004
01:29:11,927 --> 01:29:17,688
Anybody that's disappointed in Bitcoin this year, I think just needs to reset what Bitcoin has become.

1005
01:29:18,407 --> 01:29:21,727
And you don't have to like it, but it is what it is.

1006
01:29:21,987 --> 01:29:25,868
Bitcoin is becoming a part of the financial infrastructure of the United States.

1007
01:29:26,407 --> 01:29:29,547
Bitcoin is going to be key to this whole Trump administration plan.

1008
01:29:30,288 --> 01:29:34,827
Part of what has happened is when you get these interest rates low by the Federal Reserve,

1009
01:29:35,047 --> 01:29:37,087
you create financial asset inflation.

1010
01:29:37,747 --> 01:29:41,827
And what's happened is that asset inflation has flowed into stocks and homes.

1011
01:29:42,407 --> 01:29:46,927
The problem with that is that stocks should have some sort of relative valuation to cash

1012
01:29:46,927 --> 01:29:49,227
flow and homes need to be affordable.

1013
01:29:50,047 --> 01:29:51,968
Gold and Bitcoin don't need to be affordable.

1014
01:29:52,767 --> 01:29:59,747
Gold and Bitcoin, because they're not used in the real economy to build houses, that's a feature, not a bug.

1015
01:29:59,747 --> 01:30:11,068
They can go to whatever price is necessary to be the release valve for the financial asset inflation that's coming from these hyper lower rates that I think are going to be put in place.

1016
01:30:11,227 --> 01:30:17,407
So I think that gold and Bitcoin are going to be the premier assets for the next decade.

1017
01:30:17,608 --> 01:30:21,487
Bitcoin is going to outperform gold over the next decade on a percentage basis.

1018
01:30:21,487 --> 01:30:26,667
with a bit more volatility, but they're both going to be doing exceptional.

1019
01:30:27,108 --> 01:30:29,347
And the stock market is going to do well too.

1020
01:30:29,648 --> 01:30:32,727
And this is what Bitcoin is.

1021
01:30:32,827 --> 01:30:33,807
I mean, they've talked about it.

1022
01:30:33,847 --> 01:30:38,507
It was either Trump or Besson who talked about Bitcoin's going to help us keep control of

1023
01:30:38,507 --> 01:30:38,927
inflation.

1024
01:30:39,267 --> 01:30:40,827
There's something that they talked about.

1025
01:30:41,347 --> 01:30:42,987
They know what Bitcoin's going to do.

1026
01:30:43,587 --> 01:30:45,347
Bitcoin's going to absorb wealth.

1027
01:30:45,448 --> 01:30:50,468
It's going to suck it up so that it doesn't all have to go into housing and stocks and

1028
01:30:50,468 --> 01:30:55,667
and drive those things to ridiculous levels so bitcoin's going to be the inflation release valve

1029
01:30:55,667 --> 01:31:04,108
and you know i i i just think you know for short periods of time utilitarian coins like ether or

1030
01:31:04,108 --> 01:31:08,987
solana can have their moments but in the long run there's only two stores of value in the world

1031
01:31:08,987 --> 01:31:16,648
right now and it's bitcoin and gold yeah this was an incredible conversation december let's let's

1032
01:31:16,648 --> 01:31:22,267
prep here maybe we do mid to late december maybe between christmas and new year's we do our 2026

1033
01:31:22,267 --> 01:31:28,587
predictions oh that's gonna be a fun one yeah i i want to really think about that one and maybe

1034
01:31:28,587 --> 01:31:35,047
we could come on and do do the whole thing and talk about what i got right what i got wrong with

1035
01:31:35,047 --> 01:31:40,648
2025 and what i see coming for 2026 and do a do a show something like that what do you think

1036
01:31:40,648 --> 01:31:44,347
Yeah, do a little retrospective and then a forward looking.

1037
01:31:45,507 --> 01:31:46,028
Yeah.

1038
01:31:46,288 --> 01:31:48,887
First half retrospective, second half.

1039
01:31:49,208 --> 01:31:49,968
What's coming next?

1040
01:31:50,208 --> 01:31:50,568
I like that.

1041
01:31:50,907 --> 01:31:51,907
Quick retrospective.

1042
01:31:51,987 --> 01:31:56,188
Just take a look what I got wrong, why I think I got it wrong, which could be informative.

1043
01:31:56,487 --> 01:31:58,948
And then more importantly, like what's coming.

1044
01:32:00,028 --> 01:32:00,368
Awesome.

1045
01:32:00,368 --> 01:32:01,547
Well, I can't wait for that.

1046
01:32:01,987 --> 01:32:02,188
Yeah.

1047
01:32:02,487 --> 01:32:03,807
I'm going to enjoy my fall.

1048
01:32:04,528 --> 01:32:06,068
Enjoy Christmas, Thanksgiving.

1049
01:32:06,688 --> 01:32:10,468
But then very much looking forward to the end of the year discussion, Mel.

1050
01:32:10,648 --> 01:32:17,148
yeah me too man i love our conversations i think because we've been doing them every quarter like

1051
01:32:17,148 --> 01:32:22,847
it's building on it and if there are listeners who like this there's one about every three months you

1052
01:32:22,847 --> 01:32:28,148
can go back and and see where we're coming from so uh really appreciate it thanks for having yeah

1053
01:32:28,148 --> 01:32:34,068
as we're building up the receipts now it's uh you can go you can go check the receipts freaks

1054
01:32:34,068 --> 01:32:35,108
they're out there.

1055
01:32:35,827 --> 01:32:38,407
We'll be back in December for a retrospective

1056
01:32:38,407 --> 01:32:39,788
on 2025 and

1057
01:32:39,788 --> 01:32:42,087
I look forward to 2026.

1058
01:32:42,208 --> 01:32:43,987
Mel, I hope you enjoy your day, sir.

1059
01:32:45,068 --> 01:32:46,688
Peace and love, freaks.