Hang tight while we fetch the video data and transcripts. This only takes a moment.
Connecting to YouTube player…
Fetching transcript data…
We’ll display the transcript, summary, and all view options as soon as everything loads.
Next steps
Loading transcript tools…
Financial Repression Has Begun… Bitcoin Is The Way Out | Luke Gromen | Market Disruptors | YouTubeToText
YouTube Transcript: Financial Repression Has Begun… Bitcoin Is The Way Out | Luke Gromen
Skip watching entire videos - get the full transcript, search for keywords, and copy with one click.
Share:
Video Transcript
Video Summary
Summary
Core Theme
The global economy faces significant challenges from AI disruption, an aging workforce, and record debt levels, necessitating aggressive government intervention and financial repression, specifically targeting bondholders, as the only viable path forward, despite the inherent risks and potential market revolts.
Mind Map
Click to expand
Click to explore the full interactive mind map • Zoom, pan, and navigate
So we have this situation where AI is
disrupting. We have this aging
workforce. We have uh debt to GDP to
your point uh extremely high over you
know World War II levels and then what
what do we do about it? So we saw Elon
Musk come in with Doge or he's going to
change the world. He left saying okay
there's no hope. We can't cut spending.
We have to grow our way out of it. Scott
Bet said we have to grow our way out of
it. And now it looks like re-industrialization
re-industrialization
drill baby drill pro energy and grow our
way out. Yeah,
>> I was say and that doesn't happen
without a bunch of government
intervention and spend it.
>> You've got you you you're going to have
to run it hot. You're going to have to
you're going toffect effectively have to
either explic explicitly or implicitly
do some form of yield curve control
because otherwise
interest rates are going to rise and
more than offset any of your your your
initiatives. Right? So, we've started to see
see
the government appears to be cognizant
of this, right? We've seen Besson say
it. We've seen Trump say it. We've seen
uh uh uh Musk say it. Um,
and that sounds good,
but they're still not saying the quiet
part out loud, which is who's the sucker
at the card table that's going to hold
the 10-year paper at 4% when we're
growing the economy 10 or 12 nominally
or 15 nominally with, you know, 5% real
and 5 to 10%, you know, inflation. And
there is no private sector sucker at the
table that will do that. that will have
to be regulated into and we fed we've
you know we've been doing some form of
that for going on 10 years in terms of
regulating banks regulating money funds
uh regulating pensions you know Trump uh
Trump's 2018 tax uh cuts provided for a
u a tax incentive for US pensions to buy
more treasuries so they've they've been
doing these kinds of things uh but by
virtue of the fact that debt to GDP is
still higher postco they haven't worked
it's not enough. It's got to be more
aggressive. And so, yeah, I mean, it's
ultimately about significant financial
repression. Right now, we're sort of
still in this bargaining phase of grief
about it that, you know, we can we can
grow our way out of it and we can work
really hard and we don't need to crush
bond holders the real value of their
bonds. And that's just a lie.
Mathematically, it's impossible. So, uh,
but the challenge is like the second
they say that, the bond market's going
to revolt. So they they sort of need to
try to boil the frog slowly
while also moving more quickly because
you know China's moving faster and the
debt continues growing and AI is
accelerating putting more pressure on it
is a an unenviable situation in which
they find themselves and ultimately I
think it's you know we started to see
more volatility in in in you know
certainly gold markets other markets in
recent weeks um I think it's a much more
higher volatility sort of baseline and I
think It's ultimately it's really good
for stocks. It's really good for for
inflation. It's really good for gold.
It's really good for Bitcoin. Uh it's
probably continue to be good for for uh
certainly certain types of real estate
hard assets. And I think it'll be good
for wage earners, but I'm not sure it'll
be good for for sort of white collar. U
you know, I think we're might see a
reversal of what we saw from 2001, you
know, shoot from 1982 to to 2020. Uh I
think the next 40 years might be really
good for on a relative basis certainly
for for wage earners, skilled trades
engineers, etc. You know, even if
they're prompt engineers as it relates,
you know, to to chat GPT and and AIS u
you know, but
running it hot and repressing bonds is
the only way out.
>> So it seems like that is the only option
that they have, at least the only option
that anybody's going to stomach or bear.
Um, but at the same time, it seems like,
well, you mentioned it when we started
that assets are basically at alltime
highs. It seems like Bitcoin hasn't
really been responding like most people
think it would. Gold's kind of stealing
the show. What's your take on that?
>> Yeah, I think it's, you know, I'm of I'm
of a couple different minds. I I my base
case is that we've we've seen this
pattern where, you know, sort of gold
goes and then Bitcoin goes and then gold
goes and then Bitcoin goes in the last
few years. And I think it's it's maybe
it's maybe that. I also think part of it is
is
uh particularly amongst shorter term
traders uh Bitcoin has traded with
NASDAQ increasingly in the short term
and you know the NASDAQ for a number of
different reasons has kind of been
rangebound through much of the summer um
and I think there are some secular
there's reasons to be potentially
secularly concerned with the NASDAQ or
certain high-flying parts of it right
you know can China win in AI right right
now if you someone showed me an AI
leaderboard the other day someone in
that world and and you know they said
hey for what it's worth this is based on
what are supposed to be objective
metrics you know top 10 AI platforms
half of them are Chinese half of them
American right so like you're spending
hundreds of billions of dollars in
capital in in this country to to build
that out
what happens if China does to AI in the
NASDAQ what what it's done to sort of
every other industry in the US that has
attempted to do that to
you know I I suspect some concerns
around that some concerns around the
capital intensity etc. uh are weighing
on the NASDAQ um you know some of uh the
the the trade war has as well. Well, so
I I think in the short run some of of
what is holding Bitcoin back has just
been that you know that short-term view
that well Bitcoin is just NASDAQ you
know you know high beta version of
NASDAQ up or down and so if NASDAQs are
not ripping there's no reason for me to
get involved in Bitcoin and you know
there's something to that over time of
course if you go back 5 years 10 years
you know they are still very they rhyme
but Bitcoin has crushed NASDAQ right so
and I still think that'll be the case
but I think those are kind of you know
and I guess I would layer One last one,
which is, you know, we're to the end of
the four-year cycle on Bitcoin, right?
So, you know, four years ago was end of
21. We sort of had that last little blip
up into the 60,000 range. And then, you
know, 2022 was sort of, you know,
kicking the kicking the crotch after
kicking the crotch for Bitcoin holders.
And 2017 into 2018, same thing. 2013,
2014, same thing. So, I think there's a
lot of people that are very cognizant of
that and are skeptical that it's
different this time. And I think there's
I think that's a reasonable uh you know
a reasonable uh uh view. So I think sort
of the combination of all those three
things um are probably you know
uh drivers to to the reason why Bitcoin
doesn't seem to be responding. Um, you
know, let's see. I'm still seeing, you
know, I would feel a lot worse about
Bitcoin sort of being rangebound if I
was seeing people telling me, you know,
what I'm saying, which is like they're
going to have to repress this thing so much,
much,
you know, and and you know, there's no
way they're going to be able to win
against China without running this thing
super hot. I'm not seeing that. I'm
still seeing a lot of bargaining and
wishful thinking and sort of, you know,
idea machine as one of my friends calls
it, right? Hey, it's like, well, we'll
just, you know, we're going to we're
going to mine all our mines. It's like,
okay, great. Where are you going to get
the turbons? Um, we don't know. Well,
the lead time in turbines is 3 years.
Okay. Well, how about the permitting?
Well, we're going to get that. You know,
that's normally four to five years. Oh.
Uh, well, okay. Well, we're going to
build a railard into those mountains.
Great. Where are we getting the steel?
Where are we getting the welders? Where
are we getting the engineers? Are we
going to take them off the AI programs?
Are we going to leave them on the A
program and bring in foreigners that you
just closed the border on? Like so
there's a lot of like the idea how to do
it. That part's easy. There's an
executional side that is being sort of
you know smoothed over by Washington and
Wall Street that I would sort of
summarize as you know other than that
how was the play Mrs. Lincoln, right? Like,
Like, >> right,
>> right,
>> you know, other than the fact your
husband was assassinated at the play,
>> how was it? You know,
>> that's the whole freaking thing, right?
That's, you know, if you can't execute
and put this order of operations together,
together,
>> you know, so let's see. Let's see how
that plays out when when it comes out.
And I think it is a win when it comes
out that this isn't going to get fixed
in a year or two or three years or four
years that this is, hey, we're going to
need to do 10 years of really aggressive
investing in inflation. You know, look,
if Bitcoin's down or doesn't do anything
on that, that's probably going to force
a rethink on my part and a lot of
people's parts, but until I see people
telling me that,
you know, I I'm I I remain bullish.
>> Well, to your point about it sort of
trading with NASDAQ and looking at it
sort of like the speculative play. I
mean, JP Morgan came out a few weeks ago
and called it the debasement trade,
talking about gold and Bitcoin being at
the this the safe haven from debasement.
So rather than sort of people looking at
more speculative, it seems like
mainstream or tradi is coming around to
it being more of that safe haven athlete.
athlete.
>> Yeah, I think that's right. And you
know, I I think it's an important sort
of signpost as as I like to call them
along the way of, you know, we've gone
from from from traditional finance
saying it's, you know, whatever rat
poison and then, you know, whatever they
want to call it, uh, a Ponzi, what have
you. Now it's part of the debasement
trade. I I think that's a huge that's a
huge step. Um I don't think it's far
enough cuz I think ultimately where we are
are
>> there's no debasement trade. This is a
debasement trend. We are into fiscal
dominance. The Fed is running its first
quasi fiscal deficit which is just a
fancy way of saying operating loss in
its 110 year history. Once Brazil
started running quasi fiscal deficits,
once Argentina started running quasi
fiscal deficits, gold and Bitcoin went
from sell the RIP, you know, debasement
trades to buy the dips, debasement
trends. And
>> I think that's sort of uh where we are
where there's still this view is like
okay well I'm going to have to get out
and at some point and you know sell
Bitcoin sell gold for dollars and yeah
for a trade sure but like really you
want to sell gold and Bitcoin for
dollars as we're talking like into this
setup like
why like you it makes no sense to me and
so I think that's still on the come
people will come to that
>> I think of the the book When Money Dies
And they talk about how people sold all
their assets for dollars because they
were at all-time highs and at the end
they burned the the money in the
fireplace that was worth less than the
wood was. And so it's like you escape
one system into the next. It's not a
trade. It's like you're you're leaving
one the next. Um but you mentioned that
the only real way out is through
financial repression. Um stealing from
bond holders. The I think the largest
market in the world is fixed income.
over 300 trillion about 145 trillion of
that it's fixed or securitized tradable
on fixed income you have the demographic
so we have this aging population that
needs that income how much have you
looked into what Michael Sailor is doing
with the preferred strike strike stride
and now specifically stretch by taking
Bitcoin and stripping the volatility off
of it and offering that digital credit
that yield off of the digital asset
>> I've not looked into it a lot um you
know I should that kind of thing would
make a lot of sense if you can sort of
you know engineer that into um
um
an instrument that would be very good
for Bitcoin demand uh obviously and
would help people in that position right
where you know because yeah they've
you've got retirees who own a
disproportionate percentage of those 300
billion or 300 trillion excuse me or
whatever in bonds and you know the other
side of that is is you know here in the
US alone, they're the ones owed $120
trillion in social security, Medicare,
Medicaid, right? So, it is you're making
the, you know, repressing them is making
the people who owe the money, and yes,
they've paid into it, but they haven't
paid in enough for what they're taking
out, otherwise it wouldn't be blowing
up. You know, it's basically a tax
increase on the people who are, you
know, who are using the goods. The
challenge is that you know if they have
to start selling stocks to pay for that
you know the stocks de facto back the
treasury market through the government
receipt and the consumer spending. So
like you can't have them sell down
stocks to help fund that. You've got to
keep all assets up or else the whole
thing comes unwound. But yeah in theory
something like that would help. I just
haven't dug into it uh as much.
>> Yeah. I mean we have a big problem as
you said and they're guaranteed to lose
money to be liquidated and so they're
going to have to find an alternative.
Um, so anyway, it's worth it's worth
doing some digging into that. I think
it's pretty interesting.
>> Hey, if you like this short conversation
I just had, you're gonna love the full
length conversation. Don't miss it. You
can go ahead and click right over here
Click on any text or timestamp to jump to that moment in the video
Share:
Most transcripts ready in under 5 seconds
One-Click Copy125+ LanguagesSearch ContentJump to Timestamps
Paste YouTube URL
Enter any YouTube video link to get the full transcript
Transcript Extraction Form
Most transcripts ready in under 5 seconds
Get Our Chrome Extension
Get transcripts instantly without leaving YouTube. Install our Chrome extension for one-click access to any video's transcript directly on the watch page.
