Animal Spirits Podcast - Talk Your Book: The Bull Market in Real Assets

Episode Date: March 2, 2026

On this episode of Animal Spirits: Talk Your Book, ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠��⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Carlson⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ are joined by David Schassler from VanEck to discuss: the case for owning real assets, the gold bull market, how AI is fueling the demand for energy and materials and how the world will look different going forward. Important Disclosures from VanEck: https://www.vaneck.com/us/en/talk-your-book-vaneck-disclosures-march-2026/  Find complete show notes on our blogs... Ben Carlson’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠A Wealth of Common Sense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Michael Batnick’s ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Irrelevant Investor⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Feel free to shoot us an email at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[e-mail]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ with any feedback, questions, recommendations, or ideas for future topics of conversation. Check out the latest in financial blogger fashion at The Compound shop: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://idontshop.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talk Your Book is brought to you by Vanek. Go to Vanek.com to learn more about the Vanek Real Assets E-T-F, ticker racks, R-A-A-A-X. That's vanek.com to learn more. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Riddholt's wealth management. This podcast is for informational purposes only and should not be relied upon. for any investment decisions.

Clients of Bridholz wealth management may maintain positions in the securities discussed in this podcast. This interview reflects the speaker's views as of the recording date and may change without notice. It includes forward-looking statements about markets, economic conditions, and investment strategies that are not guarantees of future results. References to past market performance, asset classes, including gold or commodities, or prior cycles are for illustrative purposes only and do not represent any Van Eck farm. performance. The Vanek Real Assets E-T-F, R-A-A-X, is a diversified fund of funds and does not track or replicate

any single asset class. Welcome to Animal Spirits with Michael and Ben. Michael, one of the things that I think has always irked you and me a little bit about, like, the hard asset crowd, is that it's usually like the bull case for that stuff is like the bare case for everything else, right? This stuff is only going to work because everything else is going to fall apart or the dollar is going to collapse or whatever. We haven't heard many cases being made for, well, what if, like, actual, it's more growth and the need for this stuff and things getting better innovation that is causing this stuff to go up?

I love it. Maybe these things can go hand in hand. Yeah, it's an optimistic take for owning an asset class that is otherwise, well, I don't have real assets or an asset class, but, like, gold, for example, is otherwise held because things might not be going so great, which is certainly part of the story here, but it's more than just that. Yeah, so we talked to David Chasler.

He is the head of multi-asset solutions at Veneck, and he runs the Veneck Real Assets ETAF. And he made this case to us. He said, listen, what if the fact that we have all this innovation going on in AI, there's going to be a huge build-out, there's going to need to be all this energy, and it's going to improve growth because it improves productivity, but to get there, we need to spend a lot of money.

And that's going to cause all these real assets, to be in heavy demand, high demand. So we did kind of get the, and this is something you and I've been wondering about. Like, why are gold and stocks both going up at high double-digit rates for the entire 2020s? How is that possible? It's never happened before. He gives the explanation. So here's our talk with David from Veneck.

David, welcome to the show. Thank you for having me. All right. We're here today to talk about Vannick Real Assets ETF. The ticker is R-A-X. I don't always said double-A. It's R with two A's in case there's any confusion. followed by an X.

And I'm looking at a chart of the total assets under management and nobody really used to care about the CTF. Assets were, you know, going sideways, whatever. And then something happened in the middle of last year. So what is the story with real assets? What we can control from our side is as best as we possibly can, the performance

and the assets follows. So I think the story started years before that. I think the reality is that the world flips upside down post-COVID. We're in a different regime. And the current regime favors diversification. And I want to be clear, I'm not a anti-stock, anti-bond guy. We invest in stocks and bonds, and I run multi-assets across the board. So it's not that we're anti the other assets.

We're just bullish on diversification. And we believe structurally that this environment favors real assets. Let's just define real assets for people who are not familiar with this asset class. what do you consider real assets? Real assets, let's start high level. Resource assets, commodities, raw inputs. So if it's commodities or if it's companies benefiting from the extraction, distribution of commodities,

companies that have operating leverage to commodities. So let's put that as bucket one. Let's put bucket two is assets with embedded scarcity. All real assets have scarcity, none more than gold. Gold is the ultimate store value asset, has out-survived every Fiat monetary. experiment in history, not an accident that we're in a global market right now. So that's real asset number two.

Real asset number three, income generating real assets. Real assets that spit off a yield. So those are the three buckets that we're focused on. So the ETF itself is a fund of other ETFs, which I thought was interesting. Why is it done this way? It is a very efficient way to access the different segments. So racks, the real asset ETF, if you think about it very simply, it's a one-stop shop for real asset investing. So if you want exposure of real assets and you want it under one ticker, you can purchase that and basically be done, right?

You can allocate to one slice of this and have a complete and comprehensive allocation of real assets. I would agree with that. And I'm not saying that just because Vanek is paying to be on the show. but I'm looking under the hood. And 23% of the portfolio is in gold, 18%. And this is give or take, okay? And this is as of February 6th for compliance. Commodities, broadly speaking, 18%.

Infrastructure, 11%. Energy income, 8%. Energy, 6%. Natural resources, 4%. clean energy, industrials, global industrials, may I add, materials, uranium, gold miners, utilities like this is,

you guys had a good job. Thank you. Yeah, the idea, if you kind of maybe take a step back a second, the world's changing really quickly. So if you just start to think about the catalyst and what drives it and the composition of the funds assets, we're in a structural new regime. And it's defined by,

it's defined by extreme innovation. Obviously, we're talking about AI and what's the bottleneck need to clear, to make the future reality. Old world assets building out the new world. If you're bullish on AI and you believe that's going to happen, well, then you're bullish on infrastructure. You're bullish on infrastructure development and you're bullish on energy. Because if you don't clear those bottlenecks, that doesn't happen.

And then you're stuck with a very serious question, which is how are we going to pay for it? We're running into this innovation cycle after decades of persistent and perpetual egregious overspending. So we're full to the gills with debt. And now we're in a situation where we're in a global arms race as it relates to AI. So the U.S. is basically in a two-horse race here with China. Losing can't happen, right? If you don't have growth, what else matters? So if you want to be relevant the new world, you need to be competitive in AI. And if you need to be competitive in AI, you need to have the infrastructure to support that. So all roads, we think, lead to real assets as a critical piece of a portfolio. And that doesn't mean you have to be bullish on other segments,

but we think it's an essential component. So how do you come up with the weights in this portfolio? Is this something that shifts around? Do you try to sort of market cap weight it somehow? Like, how do you determine what gets allocated to here? Yeah. So it's a three-step process. So if you start high level, what we do is we use our understanding of these assets. our understanding of history to identify what are the right key real asset segments. So that's step one. Step two, we've run an optimization process. That optimization process is designed to maximize diversification by minimizing volatility.

So we want a very stable framework to perform well independent across the economic regimes. And then step three, we're quantitative by nature. So what we do is we look into the market to understand risks and opportunities. So what we're doing is we lean into momentum. So if something's working really well, that's the market slapping you on the back and saying you're onto something. Alternatively, if you're excited about something and the market perpetually punishes it and there's a lot of volatility, the market's telling you rethink it.

So what we do is we ride momentum. We let our winners get bigger. The positions that aren't performing as well get smaller. And then we will also use mean reversion as well, meaning that if something sells off that we're excited about, we'll dip in a little bit. Alternatively, if something like gold, we're bullish on gold. We've been sellers of gold now for years because we entered this gold bull market at a max allocation. So we're constantly taking chips off, redeploying it throughout the rest of the portfolio. You mentioned a couple of catalysts.

Debt, COVID. I don't have you said the dollar yet, but something is different. Something is clearly different. Real assets, it's not just, it's not just like people are getting interested in the, in the ETF with assets going vertical. I mean, there's a response to the price, but the price is clearly responding to something. There are reasons why people want to own these things that have been left for dead for many years. Like, real assets was not really a part of the conversation. It was all about Mag 7, cloud computing, then it's AI, and then it's a, uh-oh, it's too much spending. Let's maybe own something that is real and you're the solution. So how do you see this story? We're five years into a bull market in real assets. The world changed when we basically

decided to increase the money supply by 42% overnight. Print money, give it out to Americans to spend and we spent. So it kicked off one hell of an inflation cycle. We came out pretty early and said that we were going to get a lot of inflation and it was going to last a long period of time as happens during global periods of inflation. And then that started to continue and continue and continue where you got into the situation where AI came into the fold. And we started building out data centers

and we started thinking about how much more energy we're going to need. You had the big, beautiful bill. The dollar was weaponized against Russia in support of Ukraine. And all these little things continue to happen and happen and happen, which continues to push the world, more towards real asset investing. Do you, so with what's been going on with, say, silver and gold in the last month or so, and especially silver, and you see it, like, go parabolic, and then it gets crushed,

and it seemingly is overtaken by the meme traders or the Reddit people, or whatever you want to say. Does that concern you at all when, like, you see the momentum traders hop on this, or is that just noise to you in the grand scheme of things? I think we start the conversation on gold, and then we morph it over to silver. So gold is doing what we'd expect in gold. We've been very bullish on gold. We've been very vocal on gold. And I think largely what we've said has turned out to be the case.

So silver typically, so silver has the same embedded scarcity as gold. It's a smaller market. It's easier to move around. And it also has industrial utility. And then industrial utility, which really favors the electrification of the world and everything else where we're going to, right? So we get the silver story. But if you take a step back, gold follows silver, not vice versa.

and I think you have to kind of go back to the original root cause here, which is the embedded scarcity, and start to think about the debt problem and start to think about the world needing a neutral reserve asset. And once you get there, you can start to think about where are we in the gold bull market? And if you look at other previous gold bull markets, the 1970s, gold was up around 500%.

We had a very long, healthy, consistent gold bull market in the early 2000s. Gold was up around 600%. And if I look at this gold bull market, and I defined it when it really started to take off in 2022, you know, we're up around 200%. We think that there's a lot more room to go here. And I want to really emphasize one thing that I think gets missed. The size of the gold market relative to the size of just the global equity market,

it's a lot smaller. The financial markets have expanded rapidly relative to the stock of gold. So what we're saying is that this global market will probably be more intense than the ones of the previous times, more volatile. You're going to see lots of corrections. and I think prices that go a lot higher than people expect. Even though prices have already gotten higher than a lot of people expected? We're not that far into this gold bull market.

You have to think to yourself, what are the catalysts that are driving it? Why is this happening? So we're not that deep into it. I think that I don't love how fast prices ran up. I don't think that that's great. I think that that makes people nervous. So if you're an allocator sitting on the side, you see a move that quick, you're going to be a little bit hesitant. But the reality is a lot of people talk about

gold, but not a lot of people own it. People are missing out on this trade, and the structural catalysts are still in place. So we think this is going to continue. Is it going to pause for a little bit? Contract a little bit more? Probably, you're going to see a lot of corrections. If you look at the previous corrections, if you look at the previous global markets, you'll see in the 1970s in the 2000s, there was five corrections of 10% or more. We've had now two percent, two corrections of five of 10% or more in the current gold bull market. What we're saying is gold's acting like gold in a gold bull market. Yeah, it is. You mentioned the weaponizing the dollar on the Ukraine war, and that was, I think, a big thing that set this off is all these other countries saying, hey,

we need to hold something, some hard assets that can't be taken away from us with the push of a button. So we're trying to wrap our heads around. How much of the gold bull market so far has just been central banks buying it up? And like, is there a risk of them hitting the pause button? And that being a problem. Like, how much would you, I know it's hard to attribute something like that completely, but how much is it just central banks buying up as much gold as they can? I think you've got to go back to the root cause of this originally. The underlying thesis originally was that debt matters and deficits matter, that you can't structurally overspend forever. And I think what's unfortunate is that people become grounded in their own reality. And people have known a world where the U.S.

can print and spend as much as it wants without consequences. And the, and, and, and, and, you know, And the long-term history of civilizations points otherwise. So it was really just a matter of how long we can do this until we can't. Once that cycle kicks off, there's a lot of unfortunate things that happen along with it. Political discourse, which is clearly what we're getting. Distrust in media, which is clearly what we're getting. Rising interest rates, right? Clearly what we're getting.

This is all related to the same cycle. So when we look at this, I think you pointed out to some different catalyst tied to the original thesis. But I think that they're all interrelated, as well as, as well as independence, right? Countries need an independent store value asset. They need a neutral reserve asset. How much of the infrastructure story is part of this versus just the buildout for the AI stuff? The first phase of this was the scarcities. The scarcities weren't compute.

The scarcities were in energy. So you've seen Navidia to the moon, nuclear. We're stocks to the moon, but then it's going to broaden, right? So we've seen huge cap-x, which has contributed meaningfully to GDP growth from the build-out of the data centers. But now how are we going to power it and how are we going to move that energy? Our view is really simple. The big, beautiful bill was an appetizer for the spending bills that will come up in the future

to keep us competitive in this global AI arms race. energy is a key part of that story. And then you want to layer on top of that onshoreing, right, or reshoring, excuse me. Reshoring is effectively, what we're doing is we're dismantling global trade, where we're going to build now, right, we're going to build in the future, what already exists now for more expensive. So what we're talking about here is a decade plus long cap X cycle that's going to drive the need for critical minerals, metals, infrastructure development, a lot of

more energy. And I just want to push a little bit more on this energy threat. We're not just talking about the energy that the technology uses. If AI does what a lot of people believe it will do, including us, it's going to drive productivity. That productivity is going to drive global growth that is going to materially increase the quality of lives for millions and millions of people. When it does that, people are going to require a lot more energy, right? Rich people consume more energy than poor people. And we're talking about rising living standards here. We're talking a world that needs a lot more energy, not just for the technology, but for the outcome of the technology. It's interesting because when I think about like a gold boom, I don't generally think of

prosperity. But the story that you just painted sounds pretty positive for humanity. I view this as a positive story. I really do. I don't like to get into the term inflation because it's kind of like a, it's a trigger word for a lot of people. People have a lot of strong views on inflate. Yeah, Ben, Ben, cover your ears. Ben's very sensitive to the eye word. No, you're right, it's true. It gets people angry. It gets people upset. It really does. In 2020, we came out early and we told people that we were going to get a lot of inflation. It was going to last a long time. And it was going to change, it was going to change asset allocation.

Assets within a bad scarcity were going to perform. And we were going to be in this different regime. And people got upset. And the reason why they got upset was really simple. We came in and told people they were going to get something that they historically haven't gotten. We were telling them that they were going to get something very, very different. The easiest story to tell people is tell them. that tomorrow's going to look like today. But if I tell you that tomorrow's going to look nothing like today, you're going to get a lot of resistance with that. Well, you're right, because I've looked at this, and Michael and I have looked at the data on this. If you look at the

decades, stocks and gold usually going the opposite direction. Like the 70s was really good for gold and bad for stocks. 80s and 90s great for stocks, not great for gold. 2000s, great for gold, bad for stocks. And then this is the first decade in the 2020s where gold and stocks are both doing well, right? They're both doing really good. So I guess my question is, is the, because you're looking at it from a government perspective for spending, and that makes sense to me for it being like this longer-term macro issue. But like, I guess is the risk to your thesis on the AI front just that these companies have just, they keep pushing out more and more CAPEX and eventually the stock market is going to slap their wrist and say, no, we're not going to take this anymore

until you show quicker ROI. If that ROI doesn't come to fruition, and then they pull their cap-x back, is that a risk for you that the technology companies all say, all right, we've over-extended here, we have to pull back, our investors aren't liking this anymore. Is that a risk? Yeah, maybe I could explain it this way. So the way that we describe AI is in three phases. The first in the build, and we're still obviously in that section. Phase two is adopt. Phase three is automate.

Phase two is clearly what you're seeing now. We're companies that come out and they talk about big spending and potentially getting paid back five years from now. They get punished. But companies that are actually incorporating this technology to immediately drive productivity, right? and giving you a direction on global growth, get rewarded. We think that that's where we clearly get to really quickly.

But we do think the adoption is going to be faster than people expect. We think that this AI cycle will be quicker than people expect, right? AI is a general purpose technology. It's going to change the world. It's very different from other general purpose technologies, though. Other general purpose technologies were designed to improve human being productivity. If you think about what AI is, it's designed to mimic and approve upon the human effectively replace. Once you combine that with automation, you're talking about mass scale

disruption that's going to drive productivity. It's going to happen fast than people expect, and it's going to be more profound than people expect. But at the end of the day, all roads are leading to more productivity, more global growth. It doesn't mean you're not going to get hiccups, though. I think what you're laying out is, I think so many people for the last, call it 18 to 24 months, have been preparing for what does it look like when the AI bubble bursts, right? And it does seem like in the last three months that has shifted a little bit to like when we see Claude come out and all this stuff and software stocks get get hammered. And I think people are now starting to price in a scenario of, well, what if the AI bubble isn't bursting? What if it really

is just this immaculate handoff from capax and spend into actual productivity? And so I think that's probably you're right. The scenario you're painting is when not a lot of people have considered actually. I think everyone assumed, okay, we've seen the history of the dot com bubble and the railroad bubble and all those other capbacks, and it's going to burst just like they all did. Everyone who's read a history book could see that. But you're saying, well, what if it doesn't? I am saying that's probably not going to go in a straight line. That's going to get bumpier than people.

It's going to get bumpy. And that's fine, right? That's the path of markets. There's going to be winners. There's going to be losers. And guess what? The winners have not yet been crowned. And the winners may not actually be in existence right now.

So it's going to be different than people expect. But what we are saying is that we do believe that technology is going to work. We don't believe that it's overhyped, and we do think it's going to happen faster than a lot of people expect. If you think about, just think about the Internet and go back, you know, go back 20 years and think about how different your life is now. It would be hard to fathom 20 years ago how different your life would be now. But because it happens slowly over time, it dripped on you, dripped on you, dripped on you, dripped on you. We accepted it. We accepted it. We're saying that happens a lot faster this time.

And when it happens a lot faster, it's time, it's going to be way more disruptive. That's the difference. Technology compounds on top of each other. Let's bring it back to real assets. If you want to make money in this regime, you've got to clear the bottlenecks. The most obvious bottleneck right now is the critical infrastructure needed to facilitate and build this and energize it. Full stop. That's why real assets are largely running.

And you've got to realize when we go back to this fund, think about it this way. Two-thirds of our real assets are growth-oriented real assets. Old world building the new world. one-third of them are how are we going to pay for it? And what we're saying is that if you run into a scenario like this and you're full to the gills on debt, well, it's got to come from somewhere. We do think we're going to grow faster.

Yes, I get that. But off the back of a lot of CAP-X. And regardless of what Scott Besson's saying and love him, think he's a brilliant person, we don't think, you know, this is an 18, 24-month cycle here. We think that this is going to be an extended, extended duration cycle as it relates to CAPEX investment need to build this out. We don't build things fast in this country. That's not going to change overnight. It's not going to happen. And guess what?

The bill always comes in a lot higher than we expect, right? You get the bid and then you get the bill at the end. The work orders, you know, the work change orders kind of pile up. Don't, don't ask about the plumber in my house last week. Unbelievable. All right. In terms of portfolio construction, what does that look like? Is this actively managed? Like, where does the 4% and natural resources come from, not that specifically, but you know what I mean. Yeah, so this is what we're trying to do. We are trying to create the most stable mix of real assets possible.

We believe that we can borrow from each discipline of investing, right, to create the best of reproduct. I said originally we're quantitatively driven investors, but we've been talking about macro now for the last 15 minutes. So we're taking macro-thematic drivers. We're taking fundamental understandings of the assets. We're taking quantitative portfolio construction discipline, quantitative risk management discipline,

putting all that together into one unified approach. That's the idea here. So when we think about what are the right real assets, that's quantitatively driven, what responds to inflation, what assets actually pay you to be there. So that's phase one, that's step one of the process. Step two is quantitatively driven. Maximize the participation by minimizing,

by targeting the lowest-fowl portfolio, which merely just means we're going to own a lot of gold. Real assets that have a strong correlation to each other, we're going to take that into account, and we're going to build the most stable mix of assets possible. So we're 20-something minutes into this conversation about real assets, and we haven't even spoken about the dollar. Where do you all fall on the de-dollarization story that's out there?

Because, yeah, the dollar's weakening, but it's like, I don't know, it's not like crashing or anything. How do you parse that out? I think about that differently. I don't think about, I think about purchasing power. How do you know money's broken? Money is broken because every time you reach into your pocket to spend, you buy less and less and less.

I don't, I'm not thinking about how much the dollar buys me versus the euro, etc. This is a fiat currency issue. When you, we've got, it's really about abundance versus scarcity. We're in a period of fiat abundance that benefits assets with embedded scarcity. If I take any individual asset class and I start to measure it in units of scarcity, i.e. units of gold, the performance of stocks, clearly not as attractive. Bonds, you've barely made any money regardless. Now you're down a lot, right? So think about the world in units of excess, fiat excess versus units of scarcity, which is units of gold. And that's the way we're thinking about

asset allocation right now. But if I'm going to push back on the inflation piece, we had the huge spike in early 2020, 2021. And now we've been sub 3% for the past 18 months or so. So inflation has kind of gone back to historical norms. I know it's higher than it was in the 2010s, but that was low because of the great financial crisis. So this is not anywhere near inflation like we saw in the 70s. And it seems to have kind of petered out across the globe as well. So if inflation is not as high as people think, just because gold's going up, that doesn't mean that inflation is crazy out of control right now. We had the one-time... bump, but now it's kind of settled back into the long-term inflation rate.

I didn't say that inflation was driving it. I guess how do you, how do you, how do you, so run that back a little bit. So last year, we did not have a spike in inflation, but you had the best performance of gold. I'm not saying that we need runaway inflation for these assets perform. Not saying that at all. What we are saying is that during periods of financial excess assets within- So you're talking more about government spending than inflation? Correct. Correct. Correct. That makes it. sense. You're right, because when inflation spliked, I don't think gold had a great year in 2021

or 2022 either, right? It didn't like go crazy. And it's not historically, it hasn't necessarily been just an inflation hedge. So there's a narrative. I used to explain this to people with it. So I'll say it now. I haven't said it in a while. So this is what, if you would have met me in 2020, this is what I would have said.

And you could fact check everything that I'm saying. So in 2020, this was the narrative. Gold will do well in the beginning of an inflation boom, it will do well, but not great, waiting until we're about five years in. But commodities will respond immediately. So oil prices don't sit around

waiting for asking, is inflation going to be a problem? It responds immediately to supply demand imbalances. Gold sales is a problem. Now, if you don't realize you have a problem, then you're not going to seek it out as a store of value asset. So how do we end up in this regime

where the hottest selling item at Costco was gold bullion? How did that happen? over time, people denied that inflation was going to happen in the beginning, right? And then once it happened, right, they were told, don't worry about it, it's going to be mild. And then once it became extreme, they were said, they were told, well, don't worry about Uncle Sam's got your back. We're going to fix this problem for you. And now people are sitting around dealing with these consequences of this.

And now people want to protect themselves. They want to protect their families. They want to protect their clients. You don't necessarily need runaway inflation, but you do look at the debt. You worry about where's and how are we going to facilitate? and actually pay for these deficits going forward, and you want to protect yourself. And then globally, right, globally,

if you just think about what's happening overseas, countries want to protect themselves from the dollar. So if you saw it, if you're China and you saw what we did to Russia, you're going to be hesitant to hold the U.S. assets as reserve assets. If you're an ally, it was fine because you're like, all right, well, listen, if we're on the same side of the United States, that's cool because they're not going to do it to us. And then we got to this trade war.

And then maybe take Greenland, right? And then we go on and on, the U.S. became the source of volatility. We lost our, we lost the ability to be trusted as the neutral reserve asset, as that neutral, neutral custodia. And with that, people have to protect themselves. You think about it's the old adage of, fool me one shame on me, or fill me one shame on you, pull me twice shame on me. That's a situation. If you hold the U.S. dollar as a reserve asset, as a foreign country, you have to say yourself,

I need to protect myself. And that's what you're seeing. So you're seeing central banks globally continue to de-dollar us. And as former President Bush said, fool me twice. Can't get fooled again. That was an all-timer. What a banger. All right, David, last question from me.

Did you all consider crypto as a real asset or is that like hard? Like, that's not a real asset. We put it in it originally. It was a revolt against us. We took it out. That's the right choice. Wait, so like your investors were bolted or what? What was the pushback?

I'm curious. Not even price-wise. It is, in my opinion, there is a distinction between these real assets and crypto or Bitcoin or whatever. I'm an asset allocator. So if you give me an asset that's historically top-performing asset with a differentiator versus return profile, I like that. That gets me excited.

That's why I get excited about gold. That's why I get excited about real assets because I look for assets with unique return drivers that are highly differentiated. So that generally makes me excited. You can tell a story, and I think that the story makes sense how Bitcoin, specifically Bitcoin, we're not talking about other digital assets, how Bitcoin is an alternative to gold because of the embedded scarcity. And it fits very cleanly into the world which we're going to, which is a digital world

that favors transparency and it favors efficiency. So I get that. The problem is that not a lot of people see the world the same way. And you don't want to force your views on other people, right? So our thinking is really simple. If you buy racks, there's no digital assets there. If you want digital assets, pair it. But we're not going to force that view on anybody else.

And I think that that's a right decision. I agree with you. All right, David, for people that want to learn more about racks and Vanek and all your offerings, where do we send them? Vanek.com. Okay. Well done. Thank you for coming on.

Thank you, sir. Pleasure. Okay. Thank you to Vanek. Remember, check out Vanek.com to learn more about the Venet Real Assets, CTF and then email us, Animal Spirits at the compound news.com.