0:01 So we have this situation where AI is
0:03 disrupting. We have this aging
0:05 workforce. We have uh debt to GDP to
0:07 your point uh extremely high over you
0:10 know World War II levels and then what
0:12 what do we do about it? So we saw Elon
0:14 Musk come in with Doge or he's going to
0:17 change the world. He left saying okay
0:19 there's no hope. We can't cut spending.
0:20 We have to grow our way out of it. Scott
0:22 Bet said we have to grow our way out of
0:24 it. And now it looks like re-industrialization
0:26 re-industrialization
0:29 drill baby drill pro energy and grow our
0:30 way out. Yeah,
0:31 >> I was say and that doesn't happen
0:33 without a bunch of government
0:35 intervention and spend it.
0:36 >> You've got you you you're going to have
0:39 to run it hot. You're going to have to
0:42 you're going toffect effectively have to
0:44 either explic explicitly or implicitly
0:46 do some form of yield curve control
0:48 because otherwise
0:50 interest rates are going to rise and
0:52 more than offset any of your your your
0:54 initiatives. Right? So, we've started to see
0:56 see
0:58 the government appears to be cognizant
1:00 of this, right? We've seen Besson say
1:02 it. We've seen Trump say it. We've seen
1:06 uh uh uh Musk say it. Um,
1:09 and that sounds good,
1:11 but they're still not saying the quiet
1:14 part out loud, which is who's the sucker
1:16 at the card table that's going to hold
1:19 the 10-year paper at 4% when we're
1:21 growing the economy 10 or 12 nominally
1:24 or 15 nominally with, you know, 5% real
1:28 and 5 to 10%, you know, inflation. And
1:30 there is no private sector sucker at the
1:32 table that will do that. that will have
1:35 to be regulated into and we fed we've
1:37 you know we've been doing some form of
1:39 that for going on 10 years in terms of
1:42 regulating banks regulating money funds
1:44 uh regulating pensions you know Trump uh
1:48 Trump's 2018 tax uh cuts provided for a
1:52 u a tax incentive for US pensions to buy
1:53 more treasuries so they've they've been
1:57 doing these kinds of things uh but by
1:58 virtue of the fact that debt to GDP is
2:01 still higher postco they haven't worked
2:02 it's not enough. It's got to be more
2:06 aggressive. And so, yeah, I mean, it's
2:08 ultimately about significant financial
2:09 repression. Right now, we're sort of
2:11 still in this bargaining phase of grief
2:13 about it that, you know, we can we can
2:15 grow our way out of it and we can work
2:17 really hard and we don't need to crush
2:19 bond holders the real value of their
2:20 bonds. And that's just a lie.
2:24 Mathematically, it's impossible. So, uh,
2:25 but the challenge is like the second
2:28 they say that, the bond market's going
2:30 to revolt. So they they sort of need to
2:33 try to boil the frog slowly
2:35 while also moving more quickly because
2:37 you know China's moving faster and the
2:39 debt continues growing and AI is
2:41 accelerating putting more pressure on it
2:44 is a an unenviable situation in which
2:46 they find themselves and ultimately I
2:48 think it's you know we started to see
2:50 more volatility in in in you know
2:52 certainly gold markets other markets in
2:55 recent weeks um I think it's a much more
2:58 higher volatility sort of baseline and I
3:00 think It's ultimately it's really good
3:02 for stocks. It's really good for for
3:03 inflation. It's really good for gold.
3:05 It's really good for Bitcoin. Uh it's
3:07 probably continue to be good for for uh
3:09 certainly certain types of real estate
3:11 hard assets. And I think it'll be good
3:13 for wage earners, but I'm not sure it'll
3:15 be good for for sort of white collar. U
3:16 you know, I think we're might see a
3:19 reversal of what we saw from 2001, you
3:24 know, shoot from 1982 to to 2020. Uh I
3:26 think the next 40 years might be really
3:28 good for on a relative basis certainly
3:30 for for wage earners, skilled trades
3:32 engineers, etc. You know, even if
3:34 they're prompt engineers as it relates,
3:38 you know, to to chat GPT and and AIS u
3:40 you know, but
3:42 running it hot and repressing bonds is
3:43 the only way out.
3:45 >> So it seems like that is the only option
3:47 that they have, at least the only option
3:49 that anybody's going to stomach or bear.
3:52 Um, but at the same time, it seems like,
3:54 well, you mentioned it when we started
3:55 that assets are basically at alltime
3:58 highs. It seems like Bitcoin hasn't
3:59 really been responding like most people
4:01 think it would. Gold's kind of stealing
4:04 the show. What's your take on that?
4:07 >> Yeah, I think it's, you know, I'm of I'm
4:09 of a couple different minds. I I my base
4:11 case is that we've we've seen this
4:12 pattern where, you know, sort of gold
4:14 goes and then Bitcoin goes and then gold
4:15 goes and then Bitcoin goes in the last
4:17 few years. And I think it's it's maybe
4:19 it's maybe that. I also think part of it is
4:21 is
4:23 uh particularly amongst shorter term
4:26 traders uh Bitcoin has traded with
4:28 NASDAQ increasingly in the short term
4:30 and you know the NASDAQ for a number of
4:32 different reasons has kind of been
4:35 rangebound through much of the summer um
4:37 and I think there are some secular
4:39 there's reasons to be potentially
4:41 secularly concerned with the NASDAQ or
4:42 certain high-flying parts of it right
4:45 you know can China win in AI right right
4:46 now if you someone showed me an AI
4:48 leaderboard the other day someone in
4:49 that world and and you know they said
4:51 hey for what it's worth this is based on
4:52 what are supposed to be objective
4:56 metrics you know top 10 AI platforms
4:57 half of them are Chinese half of them
4:59 American right so like you're spending
5:00 hundreds of billions of dollars in
5:02 capital in in this country to to build
5:04 that out
5:06 what happens if China does to AI in the
5:09 NASDAQ what what it's done to sort of
5:11 every other industry in the US that has
5:14 attempted to do that to
5:16 you know I I suspect some concerns
5:17 around that some concerns around the
5:20 capital intensity etc. uh are weighing
5:23 on the NASDAQ um you know some of uh the
5:26 the the trade war has as well. Well, so
5:28 I I think in the short run some of of
5:30 what is holding Bitcoin back has just
5:32 been that you know that short-term view
5:34 that well Bitcoin is just NASDAQ you
5:37 know you know high beta version of
5:40 NASDAQ up or down and so if NASDAQs are
5:41 not ripping there's no reason for me to
5:43 get involved in Bitcoin and you know
5:44 there's something to that over time of
5:47 course if you go back 5 years 10 years
5:49 you know they are still very they rhyme
5:52 but Bitcoin has crushed NASDAQ right so
5:53 and I still think that'll be the case
5:54 but I think those are kind of you know
5:56 and I guess I would layer One last one,
5:59 which is, you know, we're to the end of
6:01 the four-year cycle on Bitcoin, right?
6:02 So, you know, four years ago was end of
6:05 21. We sort of had that last little blip
6:06 up into the 60,000 range. And then, you
6:09 know, 2022 was sort of, you know,
6:10 kicking the kicking the crotch after
6:12 kicking the crotch for Bitcoin holders.
6:17 And 2017 into 2018, same thing. 2013,
6:20 2014, same thing. So, I think there's a
6:21 lot of people that are very cognizant of
6:23 that and are skeptical that it's
6:25 different this time. And I think there's
6:27 I think that's a reasonable uh you know
6:31 a reasonable uh uh view. So I think sort
6:32 of the combination of all those three
6:36 things um are probably you know
6:39 uh drivers to to the reason why Bitcoin
6:42 doesn't seem to be responding. Um, you
6:44 know, let's see. I'm still seeing, you
6:46 know, I would feel a lot worse about
6:48 Bitcoin sort of being rangebound if I
6:51 was seeing people telling me, you know,
6:53 what I'm saying, which is like they're
6:54 going to have to repress this thing so much,
6:56 much,
6:58 you know, and and you know, there's no
6:59 way they're going to be able to win
7:01 against China without running this thing
7:03 super hot. I'm not seeing that. I'm
7:04 still seeing a lot of bargaining and
7:06 wishful thinking and sort of, you know,
7:08 idea machine as one of my friends calls
7:09 it, right? Hey, it's like, well, we'll
7:10 just, you know, we're going to we're
7:11 going to mine all our mines. It's like,
7:12 okay, great. Where are you going to get
7:14 the turbons? Um, we don't know. Well,
7:16 the lead time in turbines is 3 years.
7:17 Okay. Well, how about the permitting?
7:18 Well, we're going to get that. You know,
7:20 that's normally four to five years. Oh.
7:22 Uh, well, okay. Well, we're going to
7:23 build a railard into those mountains.
7:25 Great. Where are we getting the steel?
7:26 Where are we getting the welders? Where
7:28 are we getting the engineers? Are we
7:29 going to take them off the AI programs?
7:30 Are we going to leave them on the A
7:33 program and bring in foreigners that you
7:36 just closed the border on? Like so
7:38 there's a lot of like the idea how to do
7:40 it. That part's easy. There's an
7:42 executional side that is being sort of
7:46 you know smoothed over by Washington and
7:47 Wall Street that I would sort of
7:49 summarize as you know other than that
7:50 how was the play Mrs. Lincoln, right? Like,
7:51 Like, >> right,
7:52 >> right,
7:53 >> you know, other than the fact your
7:54 husband was assassinated at the play,
7:56 >> how was it? You know,
7:58 >> that's the whole freaking thing, right?
7:59 That's, you know, if you can't execute
8:01 and put this order of operations together,
8:02 together,
8:04 >> you know, so let's see. Let's see how
8:06 that plays out when when it comes out.
8:07 And I think it is a win when it comes
8:08 out that this isn't going to get fixed
8:10 in a year or two or three years or four
8:11 years that this is, hey, we're going to
8:14 need to do 10 years of really aggressive
8:16 investing in inflation. You know, look,
8:18 if Bitcoin's down or doesn't do anything
8:19 on that, that's probably going to force
8:21 a rethink on my part and a lot of
8:23 people's parts, but until I see people
8:25 telling me that,
8:28 you know, I I'm I I remain bullish.
8:29 >> Well, to your point about it sort of
8:31 trading with NASDAQ and looking at it
8:32 sort of like the speculative play. I
8:34 mean, JP Morgan came out a few weeks ago
8:36 and called it the debasement trade,
8:38 talking about gold and Bitcoin being at
8:41 the this the safe haven from debasement.
8:43 So rather than sort of people looking at
8:45 more speculative, it seems like
8:47 mainstream or tradi is coming around to
8:48 it being more of that safe haven athlete.
8:49 athlete.
8:50 >> Yeah, I think that's right. And you
8:53 know, I I think it's an important sort
8:55 of signpost as as I like to call them
8:58 along the way of, you know, we've gone
9:00 from from from traditional finance
9:02 saying it's, you know, whatever rat
9:04 poison and then, you know, whatever they
9:06 want to call it, uh, a Ponzi, what have
9:08 you. Now it's part of the debasement
9:11 trade. I I think that's a huge that's a
9:13 huge step. Um I don't think it's far
9:15 enough cuz I think ultimately where we are
9:16 are
9:17 >> there's no debasement trade. This is a
9:19 debasement trend. We are into fiscal
9:22 dominance. The Fed is running its first
9:24 quasi fiscal deficit which is just a
9:26 fancy way of saying operating loss in
9:29 its 110 year history. Once Brazil
9:30 started running quasi fiscal deficits,
9:32 once Argentina started running quasi
9:34 fiscal deficits, gold and Bitcoin went
9:37 from sell the RIP, you know, debasement
9:40 trades to buy the dips, debasement
9:42 trends. And
9:45 >> I think that's sort of uh where we are
9:46 where there's still this view is like
9:47 okay well I'm going to have to get out
9:50 and at some point and you know sell
9:53 Bitcoin sell gold for dollars and yeah
9:57 for a trade sure but like really you
9:58 want to sell gold and Bitcoin for
10:00 dollars as we're talking like into this
10:03 setup like
10:06 why like you it makes no sense to me and
10:07 so I think that's still on the come
10:08 people will come to that
10:10 >> I think of the the book When Money Dies
10:13 And they talk about how people sold all
10:14 their assets for dollars because they
10:16 were at all-time highs and at the end
10:17 they burned the the money in the
10:19 fireplace that was worth less than the
10:22 wood was. And so it's like you escape
10:23 one system into the next. It's not a
10:26 trade. It's like you're you're leaving
10:28 one the next. Um but you mentioned that
10:30 the only real way out is through
10:32 financial repression. Um stealing from
10:34 bond holders. The I think the largest
10:36 market in the world is fixed income.
10:38 over 300 trillion about 145 trillion of
10:41 that it's fixed or securitized tradable
10:43 on fixed income you have the demographic
10:45 so we have this aging population that
10:47 needs that income how much have you
10:49 looked into what Michael Sailor is doing
10:51 with the preferred strike strike stride
10:54 and now specifically stretch by taking
10:56 Bitcoin and stripping the volatility off
10:58 of it and offering that digital credit
11:00 that yield off of the digital asset
11:03 >> I've not looked into it a lot um you
11:05 know I should that kind of thing would
11:08 make a lot of sense if you can sort of
11:11 you know engineer that into um
11:12 um
11:15 an instrument that would be very good
11:19 for Bitcoin demand uh obviously and
11:22 would help people in that position right
11:25 where you know because yeah they've
11:28 you've got retirees who own a
11:30 disproportionate percentage of those 300
11:31 billion or 300 trillion excuse me or
11:33 whatever in bonds and you know the other
11:35 side of that is is you know here in the
11:38 US alone, they're the ones owed $120
11:39 trillion in social security, Medicare,
11:42 Medicaid, right? So, it is you're making
11:44 the, you know, repressing them is making
11:46 the people who owe the money, and yes,
11:47 they've paid into it, but they haven't
11:49 paid in enough for what they're taking
11:50 out, otherwise it wouldn't be blowing
11:52 up. You know, it's basically a tax
11:53 increase on the people who are, you
11:56 know, who are using the goods. The
11:58 challenge is that you know if they have
12:00 to start selling stocks to pay for that
12:02 you know the stocks de facto back the
12:05 treasury market through the government
12:07 receipt and the consumer spending. So
12:09 like you can't have them sell down
12:11 stocks to help fund that. You've got to
12:13 keep all assets up or else the whole
12:15 thing comes unwound. But yeah in theory
12:16 something like that would help. I just
12:18 haven't dug into it uh as much.
12:20 >> Yeah. I mean we have a big problem as
12:22 you said and they're guaranteed to lose
12:23 money to be liquidated and so they're
12:25 going to have to find an alternative.
12:27 Um, so anyway, it's worth it's worth
12:28 doing some digging into that. I think
12:30 it's pretty interesting.
12:31 >> Hey, if you like this short conversation
12:33 I just had, you're gonna love the full
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