BTC Sessions - Something is About to Happen in Credit Markets (Is Bitcoin Safe?) | Keith Dicker

Episode Date: July 1, 2025

Mentor Sessions Ep.018: Keith Dicker on Bond Market Chaos, Geopolitical Risks, and BitcoinIs the global economy teetering on the edge? You’re not alone in wondering. In this explosive Mentor Sessions episode, we sit down with Keith Dicker, President and Founder of Ice Cap Asset Management and co-host of Canada’s top economic podcast, The Loonie Hour. Keith delivers a jaw-dropping bond market analysis, revealing why it’s a ticking time bomb ready to blow. He dives into how geopolitical risks could rattle markets worldwide and why Bitcoin remains eerily calm amid the storm. From skyrocketing deficits to currency chaos, Keith’s insights are a wake-up call for Bitcoiners. Don’t miss his take on where Bitcoin could head next—watch now!Key Topics:• Bond Market Analysis: Why it’s riskier than ever• Geopolitical Risks: Tensions driving market instability• Currency Dynamics: US dollar strength and global fallout• Bitcoin: Its role in a volatile worldChapters:• 00:00 - IntroductionA teaser on global chaos and Keith Dicker’s expertise sets the stage.• 00:32 - Keith Dicker’s BackgroundIntroducing Keith from Ice Cap Asset Management and The Loonie Hour.• 01:11 - Bond Market OverviewYield curve inversions and capital flows signal trouble ahead.• 03:53 - Historical Bond TrendsFrom the 60s to 80s, how rising rates crushed markets.• 05:12 - Low Rates and QE ImpactDecades of low rates fueled debt and distorted markets.• 10:04 - Current Bond Market RisksWhy today’s upside is 4% and downside is -40%.• 13:26 - Government Deficits ExplodeInterest expenses rival healthcare spending—unsustainable debt looms.• 16:16 - Tail Risks and Credit EventsLiquidity crises and contagion threats emerge.• 19:55 - Geopolitical Tensions RiseMilitary spending and war risks shake the globe.• 25:23 - Currency Crises and US DollarWhy the dollar thrives as others falter.• 41:23 - Bitcoin’s Role and OutlookKeith on Bitcoin’s stability and future in turbulent times.About Keith Dicker:• Website: icecapassetmanagement.com• Podcast: The Loonie Hour: https://thelooniehour.ca/ • Twitter: @IceCapGlobalFREE Bitcoin Book Giveaway: New to Bitcoin? Get Magic Internet Money by Jesse Berger FREE! Click: bitcoinmentororange.com/magic-internet-moneyBOOK Private Sessions with Bitcoin Mentor: Master self-custody, hardware, multisig, Lightning, privacy, and more. Visit bitcoinmentor.ioSubscribe to Mentor Sessions: Don’t miss out! Follow Us on X.com:• BTC Sessions: @BTCsessions• Nathan: @theBTCmentor• Gary: @GaryLeeNYCPrevious Episode: Check out Derek Gaunt on mastering negotiations: https://youtu.be/ASYrUSsia1g Support the Channel: Smash the like button, share with your Bitcoin crew, and subscribe for more!#Bitcoin #BondMarket #GeopoliticalRisks #KeithDicker #LoonieHour #MentorSessions #BitcoinPodcast #Economy #Finance #Investing #BitcoinPodcast #BitcoinEducation #Podcast #Crypto #Cryptocurrency

The likelihood of contagion happening is quite high. I think the world is just going to be on fire coming up because of liquidity, credit events, currency movements, geopolitics. For the bond market today, your upside is probably 4%. And your downside is minus 40. So if this was at a table at Vegas, no one's playing this table. It's empty. Except for all the suckers and patsies, we still think this bond market is safe and secure.

And I think Bitcoin is moving towards... Ever feel like the global economy is going completely off the rails? Yeah, me too. And you are definitely not alone. That's why I brought on someone who's going to help us cut through the noise, macro heavyweight Keith Dicker. This guy is a legend. President, founder, and chief investment officer at Ice Cat Management,

as well as the co-founder and funniest member of Canada's biggest and best economic podcast, The Looney Hour. Trust me, you're going to want to stick around for what he has to say. Keith brings jaw-dropping numbers to reveal by the bond market is a ticking time bomb, unpacks how geopolitical chaos is quietly shaking up markets. And of course, Bitcoin. Why Bitcoin is staying surprisingly calm despite it all, and a hint of where it may be going next.

Going beyond Bitcoin to bring you the skills and insights you need to escape the Fiat matrix, this is Mentor Sessions. Keith, thank you so much for joining me today. Really appreciate you taking the time to sit down and share your insight. I wanted to kick things off kind of talking about the bond market and the credit market in particular. One thing that caught my attention is that it seems like we've been, both the U.S. and Canada, has had this sustained inversion on the yield curve.

which I would have guessed would have resolved itself by now. I'm curious even just broad strokes, what are you seeing in the credit markets? How do you kind of see things progressing? So we manage money for families across Canada as well as down to the US and Europe and Asia and whatnot. So we tend to have a bit of a different view on markets and what's moving them and what isn't.

That the short answer to your question on the yield curve, a lot of it is just capital flows. So, the example, the capital flows moving in. There's always a demand for treasuries and so forth. That's affecting it. You also have, you know, every two weeks or every month, everyone is contributing to their pension plan or group savings plan, whatever they're involved with. And that also has a steady flow of capital, going into all markets.

Just by default, money flows in. So we'll come back to this in a second, but a lot of people are saying, hey, you know, what's going to cause markets to trade off or correct? You know, you get other noise taking place. But the moment we start to see job losses, so negative numbers in the monthly print, whether it's in the U.S. or Canada or elsewhere, suddenly the flow starts to slow dramatically. And it's like a river, you know, it just changes course of a sudden if you're around something like that. So that's going to have a huge impact on all markets, but including the yield curve.

But let's just talk about, you know, our view on the yield curve. I don't know if you can run on fixed income markets. And a lot of this is all tied in together. Nothing functions or operates in isolation. And so the first thing to think about for everyone listening is that all markets are whether directly or indirectly affected by changes in the 10-year bond yield. And most people know, when the bond yield is going lower, what happens with bond prices? Going up.

Yeah, they're going up, baby. for going up. And what happens when they're going lower? Going down. Yeah, they're going down. I apologize for the noise here. That's going to be called a second. In the 60s, 70s to early 80s, long-term bond yields with a 10-year went from around 5% all the way up to 15 to 20%, depending on which market you read. And when that was happening, it was a grind for financial markets. So during that period, equities were brutal. I think from 66 to 82, using the Dow as a proxy, it averaged about 2% a year, but you're up 60%, down 40%, down 30, up 20, up 15.

It was horrific. So if you ever chat with any old guys, they're around back then, a lot of them just quit investing in the market. The bond market did a bit better on nominal terms, but it was also a grind because long rates are going higher. And, you know, of course, other things were happening. You know, you have the 60s with hippies. You know, you had, you know, the oil embargo.

You know, the dollar came off the gold standard and stuff like that. But overall, riding, overriding everything was this interest rate story. When rates peaked in 1982, then they started going lower in the 80s, the 90s and the oath, and they hit zero. So during that period, when rates were going lower, it was an amazing time. to be alive. So, you know, the stock market will always do its thing. But the bond market, especially if you're long duration, it was one of the best investment experiences on a risk-adjusted basis that you're ever going to see. So we like, I managed money for some farmers across Canada,

and you chat with these old guys and some of them would say, hey, they had a tractor loan at 25% in the early 80s. Wow. And of course, I'll say, hey, how does that work? Yeah. And, you know, they said, hey, it doesn't. You know, they're literally trying to hold to the firm and within rates started going lower. And then when rates are going lower, of a sudden, it's easier to refinance everything all the time. So if you're just saying you're in the mortgage world, so you have a five-year term in Canada or in the US with the Americans,

you know, on a 30 year, for example, you know, every year your mortgage rate or your payment is going lower because you have that, you know, lower rate. Same thing for governments. We're going back into governments in a second as well, because I think they're going to be, it's going to be very interesting what happens in that space. But then every time rates are going lower, Nathan, it enables governments to run larger deficits because at the end of the year when they have to finance that, is that a lower rate than it was at the beginning of the year? And plus, older debt that's maturing that they have to roll over, that's being rolled over at a lower rate as well. So this happened for the 80s, the 90s, and the O's until we hit zero.

And it was 30 years of an amazing experience. And what the industry also figured out during that time frame was that, hey, when you invest in the stock market, whether you know it or realize it or not, you are implicitly agreeing to a performance experience where in any given year, you can be up 50% or down 50%. Of course, no one wants to be down 50%. But when it happens, you say, okay, it happens. But the bond market was different. The bond market, you were always between, say, 5% and 10% return experience. So the industry just combined the two together. That's what they did.

And when they did that, you know, it's really smooth out the volatility for investors. And then when rates hit zero in 0809, of a sudden they set back and they said, well, we cannot let rates go higher again. Because what happens if rates go higher? Yeah. Palm prices are going down. Yep. And we got less coming in.

It's horrible. And if that would have happened back during that period, it would create a lot of solvency problems for a lot of financial institutions. Pension funds would have really been struggling. Politicians would have lost their jobs probably. Good. Nope. No one wants that to happen. No one wants that ever.

Oh, God, no. Yeah, you don't want that to happen, those hardworking folks. So Central Banks, you know, they all cut rates to zero percent or near zero or even negative in Europe and Japan. And then they also did quantitative easing. And, you know, some people call that money printing. It's not technically money printing, but it's in the same spirit, so to speak. Would it be the prevention of money destruction?

That's always the way that I kind of frame. it up is that QE wasn't adding additional currency units, but it was preventing the destruction from defaulting loans of essentially happening. So it's keeping the like the outstanding currency higher. Yeah. I don't think it was that depth. There's not much depth to the thought behind it. It was really to suppress the global yield curve.

Because remember if remember 60s, rates are going higher, it sucked. And then 80s, 90s, rates are going lower. it's awesome, you know, and you know, plus during that time, you know, China and India entered, you know, the WTO. The internet was literally created, you know, a lot of younger people don't realize that then, but it did happen. So that was happening in as well, but the overriding theme by all central bankers, because they all chat with each other all the time, was that we can't let rates go higher. So they suppressed the global yield curve for over a decade. And that did a lot of things, of course, it completely suppressed or suppressed price discovery on the yield curve.

So what was the bond market really worth? No one knows because you weren't allowed rates to get to a normal period where the price would be discovered. And because every other market is priced off the yield curve, it was sort of one of these, okay, what do we do here? And then, of course, there's lots of stimulus coming on. So you had that monetary stimulus happening. And then that was overlaid with fiscal.

By the way, I know I'm lecturing. So just no, no, go. You're going to bear with it. Yeah. But obviously, you had all this fiscal stimulus from all over the world. Because the idea was, yeah, we're in a really difficult spot here. Let's try to, like the Europeans said, let's try to grow our way out of this bad loan portfolio crisis that the European banks have. The Americans did the opposite who said, we're just going to buy it.

from the banks into this tarp program and then let the banks slowly heal themselves that way by getting free money. And of course, that also helped governments bore more money. They could run bigger deficits. Was there a recession? Nope, because it wasn't allowed to happen. And so that continued, of course, for a full decade. So now we have 40 years with rates never going higher. Pandemic hit, all kinds of stimulus coming on tap. And then it was really in 2022, that's when sort of the risk genie came out of the bottle. And that's what makes your world now very interesting.

And what I mean by that, in 2022, you know, equities did their thing. They're down 20% or more. But the bond market was down anywhere from minus 10 to minus 35%. Yeah. And this is the market, which the industry will tell you it has low risk. It's for the most conservative investors in the world.

You want to sleep well at night. And so if you're down 10%, I'd say a 2% yield at the time, it takes five years to recapture that loss with income. You know, if you're down 30% more, you know, it's hellish. And that happened because long-term rates went from 1% to 4% using the US as a proxy. And as we all know, when rates go higher like that on the long end of the curve, it's bad stuff.

So back to your first question. The bond market. Again, this is our view. So people don't take this as, you know, Keith, Keith said this is what's going to happen. But the industry's expectation for the bond market, it's based on a period that will not happen again. It's over this previous 40-year period that we had where rates were always going lower. Fixed income strategies, you could let the yield as well as you made money on duration. People move into some spread products when we should have had recessions to eliminate excesses in all markets after 2008-9.

That wasn't allowed to happen. And it's all been accumulating to this point where we are now. So here, here's your show stopper for the day. You know, whereas the equity market, you're always going to be up 50 or down 50%. In our view, it's not guaranteed. But for the bond market today, your upside is probably 4%. And your downside is minus 40. Like, that's what could happen here.

And so if this was at a table at Vegas, no one's playing this table. It's empty, except for all the suckers and patsies, we still think. this bond market is safe and secure. So with that sort of in place, we're now starting to see as well that government deficits, they continue to get bigger every year because they would always spend more money than they're collecting with our taxes. But now suddenly, you know, because inflation is insane, but they're spending even more, and now it's taking more and more tax revenues that's allocated just to pay the interest expense on debt. And because next year, the deficit is even bigger and rates are higher than beginning of the year.

And previous debt that's maturing has a higher rate. Sorry, previous debt has a lower rate than the current rate. It means the deficits get bigger. So in Canada, for example, in Ottawa right now, it's about $50 billion is allocated to interest expense on our federal debt. And they're spending about $50 billion on health care back to the provinces. So they're spending the exact same amount on interest expense as they are on health care. Interest expense is not a product. It's not a productive investment of your capital or your tax revenue use.

And because now this is increasing at an exponential rate, because rates are going higher, deficits are bigger, in older debt has to get rolled over at a higher rate. The only way out of this for governments right now, but the easy way they can take losses, that's not going to happen. That's not going to happen. Central banks won't let that happen either. Or they're going to try to grow the economy faster than what this exponential increase is happening.

And because they weren't able to have success with that during the last decade, from 2010 to 2020, it's highly unlikely they're going to have success with it during a period where all economies are slowing. Interest rates are going higher. everyone's unhappy. They want to go to war for some reason. They think it's good. And so we are into this sort of coordinated risk experience where the probability of something significant happening is quite high in our view. Are you still delaying taking self-custody of your Bitcoin? Do you feel secure in your current Bitcoin setup? If something were to happen to you, would your stack make it to your loved ones? At Bitcoin Mentor, we've helped thousands of people level up their Bitcoin

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Is there anything in particular that you think is something that's worth paying attention to? Would it be just geopolitical tensions? And even one of the things that caught my attention that I was thinking about where you're going there as well, too, is that I don't think there is any way for them to get off of this. And if I think about bond rates, particularly in like the long end of the curve as a combination of like risk, growth expectations and inflation expectations, it almost feels like the bond market's calling the government's bluff that there's no way you can grow your way out of this. But they don't expect that. Yeah. Yeah. I always laugh when people say,

or they're going to grow the way out of the, you know, the debt or inflated the way, for example. And, you know, I call BS on it because, again, if they couldn't do it with a decade of zero rates, how are they going to do it now with rates are a lot higher? And growth is slowing. So in terms of a tail end risk or tail risk that could develop, I think it could come from any specific,

economy or country. And it's probably going to be a liquidity crisis or a credit event. It won't be a stock market event. The stock market will react to it, of course. But it's going to be a credit event. And what should happen in that environment is that we already know how central banks are going to react. So if you look at what happened with the Brits,

I think it was three years ago. Remember they had their credit? The guilt market, yeah. Yeah, the guilt market, yeah. Don't feel guilty about it. But it doesn't matter if it happened to the Canadians or the Americans or Germans, French. It's irrelevant. What we know will happen as a reaction, the central banks are absolutely going to run in

and do QE to bail out the government bond market. And they have to. I always laugh on, you know, when you get the talking head pundits like what you and I are doing. And people say, well, you know, the Fed should do this or the Bank of Canada should do that. It's kind of irrelevant to what you and I feel they should do. Instead, it's way more important to know what are they going to do. We can disagree with that, but hey, we know what we're going to do. So the central banks are always going to bail out the government bond market.

Because if the government bond market fails, the government fund market fails, the government and fails, commercial banks collapse because the regulatory capital has to be in government debt. They get penalized for holding corporate debt. They have to hold more of it, as an example. So if you know that's going to happen, then we know the risk will shift away then from the government bond market and they go into credit markets. Investment grade, high yield, emerging market debt, for example, but the one market that we feel is going to create some uncomfortable moments will be private credit. Interesting.

Yeah, and the reason for that, because there's no liquidity in it, by definition. If you want to get your money out, if everything is fine, yeah, they'll give you liquidity. But the moment things become uncomfortable, they're going to gate it, going to close the door, you cannot get your money out. It's already happened now with a handful of credit funds over the last year anyway. starting to see that. And there's a lot of dynamics, of course, taking place, you know, public versus private credit markets. You know, the supply is shifting towards one market over the other. But if we do go down to this sort of credit, liquidity event, maybe it's triggered, you know,

by a major country growing a lot slower job losses, maybe it's a geopolitical event. It doesn't matter what causes it or where. The likelihood of contagion. happening is quite high. We're Canadian, of course, up here. We just don't want Canada be number one of the G7 with this kind of event. You want to be last. But if it did happen, for example, the European guys, it's likely going to hit Canada very, very quickly as well.

So in that event, I would suspect that any kind of a credit spread product that you're in or market, to matter if it's investment grade or high yield or private credit, that's probably going to, you want to see credit stretches blow out because there won't be any liquidity there, because risk can't get expressed with sovereign debt because central banks are saying, not on our watch is not happening here. So of course, if that happens to say credit markets come down, because remember when in 2022, when the long end of the curve went higher and, you know, 10 year or, you know, TLT, that kind of a market, you know, had a nuke minus 3% or plus credit spreads didn't budge during that year.

They were solid. Yeah, that's crazy. So we get a period now where long rates can fire plus you get the credit spreads blowing out. That will happen again. And it's also going to create one of the best buying opportunities of our lifetime, which is not the stock market, you know, or something else. It's a credit market.

So we get, you know, we're kind of nerdy in that we like to look at that space. And we're not invested in it because we feel, you know, why would we? It's an asymmetrical risk return opportunity right now. Again, your upside is limited and your downsides are enormous. We suspect that we'll flip at some point. And we'll get on again then for another call. And it's just going to be one of these magical times, you know, to like another thing that, you know, I like to say, do you know how you make five times your money in the bond market?

How? You buy the bonds for 20 cents on the dollar. Yeah, okay. I don't know if we go to 20 cents. Maybe it's 60 or something, but that's the kind of, and if that's happening, of course, you know, from an economic perspective, there's job losses. Yeah. And that's going to create some uncomfortable moments.

But everything is set up for this to happen because the whole world has been relying more and more on debt financing at lower, lower rates all the time. And we've clearly hit this, you know, the trough. Now we're going higher. you mentioned Bretton Woods. I know recently everything you agreed to during that period or error. It's either it's over or it's become highly ineffective. It doesn't work anymore. Like IMF, for example, who can they bail out today?

Yeah. No one important, you know, really. So it's, you know, this whole setup, it's incredibly interesting and exciting from an insensitive perspective. Well, it's all, yeah, it's definitely. exciting from an insensitive perspective because a lot people are going to lose their jobs and a lot of their what they think is their savings as well too. And so kind of teasing that a little bit, I'm curious your thoughts to them. So if the government is going to have to step in, fiscal spending is going to continue to increase over time, the government is going to have to step in and essentially monetize the debt, buy up the sovereign debt. I'm wondering how you think that plays perhaps into hard assets in particular. So I kind of, I don't have you seen like Brent Johnson's view on the dollar milkshake theory. I kind of think that he does have a good argument there. And I could foresee something like both Bitcoin. and gold and USD all rising together as other fiat currencies struggle. Yeah, I agree with you, Nathan. Absolutely.

And I mean, in terms of like monetizing the debt, they don't see it that way, the central banks, for example, they just see it as, hey, we, you know, of course they are monetizing the debt. So in Canada, for example, during COVID, I think it was 92% of all debt issuance back then was purchased by the Bank of Canada. Yeah. Yeah. If that's, yeah.

I mean, they failed. They didn't get 100%. Yeah. So yeah, you know, again, I don't want, you know, the listeners and viewers to think, yeah, they did monetize. They absolutely did monetize that. The main goal, though, is to make sure there's still liquidity in that world so governments can then spend it, you know, and they can't control what's spending.

A spending is for, if you look at Canadian productivity data, it's horrible. Yeah. Yeah. If you look at the percentage of the economy that the government is relative to the private sector, the government share has been increasing year after year after year over the last 10 years. I think I saw 21.6% of like employment is public sector employment in Canada, which like more than one out of five that seems unbelievably, well, wasteful and inefficient and going to cause a lot of problems.

Is it that high really? Yeah, it's been going up ever since, I think 2019 was kind of the bottom there with COVID. Yeah, it's tough, right? And like with productivity, you know, I have a lot of friends. You know, they work with the government in different capacities. And, you know, sometimes you hear me, you know, drone on about productivity from government workers isn't good. And they say, I work hard. And I say, yeah, I know doubt you work hard.

But for every dollar that goes into your salary, the multiplier effect into the economy, it's much lower than the dollar that goes into their private sector to create a job. The multiplier effect is higher. And, you know, we just happen to reach. So with Brighton Woods, it's an 80-year cycle that's over. Then we're at the end of a 40-plus year cycle with rates, you know, peaking in 82 and then coming down. We have this debt cycle that's been deep going because it's, I don't know how they're going to, if they stop spending, the economy collapses.

Yep. Right, that happens. So then by default, you know, we talked about the deficits that they are taking place for Canadians as well as the Americans, you know, the big beautiful budget and all that and the Europeans. Now everyone in NATO wants to spend 5% of their budget on military, right? You know, they refuse to do 2% five years ago. They wouldn't do that.

Now it's under up to 5. But I suspect all major governments, are going to come out with a fiscal bazooka. That's what I would call it later this year. Maybe it would be very dramatic if they all did it in the same day. That's a great way to goose the market. They won't be that coordinated with it. But we should expect enormous deficits coming out,

which means more government ordering, more government involvement. with investing or spending in our economies. Some of it will be good. Some it won't be very good. But it's just going to continue to push us towards this point in time where something will break or snap. And when that happens, some part of markets should do very well.

You mentioned some of them earlier. And I think that's going to create a lot of opportunity. No, I agree. I imagine it'd probably be like a correlation event too where everything's down and that's your chance to get in there and scoop something up. For me, that'd be Bitcoin, just lots and lots of Bitcoin. I'm curious your thoughts. I'm curious your thoughts on how do I phrase this up. So I think there'll be continued tensions both culturally and kind of like across the U.S. and across Canada, within the country as well, too. I would imagine if they're going to come out and do a major fiscal spending, that money is ultimately going to flow into assets. And you get that further kind of economic divide between people who own. their home and have savings and have companies and things of this nature too, which would further escalate what would you call it resentment and kind of issues in that sort of sense. Combined that with, I think our population is only growing at like 2% right now. And I'm curious on this too.

If it almost looked to me like we almost had like a human QE in Canada that we were just bringing in more people in order to prop up the economy and try and get additional growth by just literally bringing in more labor supply. And that seems to be going a reverse trend right now. I'm curious if you have any sort of framework or ideas of. how tensions within countries might continue to escalate as a result of this. And if that might even be a boiling over a point, there might be an issue there. The example for me, I'm in Alberta.

If the economy gets worse, I think that further adds to the Alberta independence kind of sentiment that we see growing here. Yeah, I have my condo lined up to buy in Canmore, by the way. Good. It's beautiful. You're going to love it. Oh, my God. I have a lot of love for Alberta. Absolutely.

And so I'm in Nova Scotia. We are the highest taxed province. Oh, yeah. Yeah, it's unbelievable. Yeah, so keep the door open for me. I promise. Yeah, we'll go there. So with that question, Nathan, so first of all, the Canadian economy has only been growing on an aggregate level because of the population growth and debt growth.

So it's taken more and more people and more and more death to produce the exact same dollar of GDP. So that in itself, that is a definition of declining productivity. If you're into that, you know, wonky world of economics. The Canadian population growth story, we've now gone to zero in Q1. Is it that low now? I thought it was like just sub 2%. No. There's a lot of confusion out about that over the last couple of weeks.

And we're basically at zero right now. And the Bank of Canada, they are overstating the population growth. And once they get a better idea what it's going to be like, this is an anchor for the economy. So that's why we feel like the fiscal bazooka is going to be even bigger. Yeah. Like in Canada, you know, what's their deficit now? Nobody knows. Yeah, they haven't had a budget for over a year.

It's insane. And, you know, they talk about, you know, we're going to track all this foreign investment to come in for the energy sector and everything. You know, I say, that's bullshit. I mean, if you are an investor, the first thing you ask to see, I want to see the books. Show me your balance sheet, you know, especially show me your income statement, you know, who created it, you know? Or is there an order that involved and everything? So, you know, government will always spend stupid money. but the private sector, we don't like to lose money.

That's not what we're in the business of doing. So if you're trying to decide right now to allocate, say, $500 million to the Alberta energy sector or $500 to an equivalent opportunity in the U.S., I would imagine the U.S. is giving that money right now, nine or the ten times. Because there's so much confusion in Canada, what's going to be accepted, what isn't, and stuff like that. So if you go down that road, there's no population growth and the economy is slowing, that that's absolutely going to create resentment amongst different demographic groups in Canada, especially the big cities as well.

But of course, you know, the oldest playbook, the only trick in the book is that when you have a domestic challenge, you'll always find an external enemy to blame. Yeah. So for our election, of course, who was the external enemy? It was Trump, which I got to say, like that was beyond frustrating. I thought after everything that had happened during COVID and after the fact that we may have been coming up on to, what would I call it? I think it was Professor St. Aja, the pitchfork moment. Like I thought that Canadians must have been fed up at this point. But you're right.

As soon as they gave him Trump as a target, they'd forgotten everything that was happened and they were all, you know, elbows up, buddy. We got to go after the big, mean, orange man. It was, you know, it is what it is. And in some ways, you have to respect the liberal party in Canada for having the best campaign strategy. Really, the only one they can come up with to win. And then you had the conservatives, you know, either they didn't anticipate it or they didn't react fast enough. But, you know, they were trying to campaign on what I would call the real issues. The real issue wasn't Canada becoming a partner.

the U.S. There was never a challenge whatsoever. But hey, that's where we are now with it. But it is a good example that when you have a challenge domestically, just find an external enemy to claim. And then that brings us to the whole geopolitical world. And, you know, seemingly, you know, politicians, they all want to go to war. And I think before any government, you know, votes or agrees to go to war,

They should have to go to the front line on day one. Yep. See what it's like, you know. Because I have a son. I said, I said, hey, by the way, if there's a war, you are not signing up for any of this stuff. He said, don't worry, Dad. No chance that's going to happen. But there will be a lot of families that will go.

So now if countries are now increasing their, I guess, investment or budget towards NATO with a 5%. So for Canada, it's $150 billion a year that we'll be spending. And I bet you right now it's probably 10. It's minuscule, you know. And a lot of that is going to go, hey, not only is it like trying to, you know, build new boats or equipment and stuff like that on the technology side. They want people, want people to do this. and you get some people who can't young people they can't find a job and you know they get recruited on the street yeah you know free education and stuff a lot of people will go into that and that's how

you you know sort of replenish in the war machine but canada's going to do it all of europe is doing it the americans everyone else so it's i don't like where this is headed because it's it doesn't mean it has to happen but if everyone is spending more money on a war machine, they're going to want to use this machine. And anyways, it's not going to be a very pleasant experience. I don't have to worry.

I'm old and slow. Drying and death and everything. But you look fit and strong. You need to hide out there. I was going to say, I'm throwing a couple more pounds and make it so that I am not eligible anymore. No, I agree. I notice your bat is kind of tweaking you.

You're not able to. I just can't get comfortable here. new chair. It feels very forth-turning-esque vibes, right? It feels very fourth turning that we're coming into something. It could be geopolitical, no idea. It could be just a major credit crisis, but something's going to happen. And even kind of on that note as well, too, and then I promise I'll buggy about Bitcoin, because I have to do that and I want to get your thoughts on it. But do you foresee, not necessarily the sovereign debt side, but I know they're closely interlinked, do you foresee any currency crisis anywhere in the world? So do you see, and specifically where

would that be? Because I wonder, I feel like Canada and the U.S. are going to further deviate. Like, I think they're going, it looks like they're doing a little bit better right now. It looks like Powell's been able to hold rates higher. I do think we have some cuts on the horizon. I wonder if he's just kind of kind of write it out to the end of his term. So he can just say, I did it. No one thought I could do it and get out. And the next guy was just rapid cut. But I'm wondering if you see any currency issues around the world. And one thing that caught my attention recently was actually the Swiss Frank. Because they've gone back down to zero, but their currency appears to be at an all-time high. high, which I are at least really close to their all-time high.

And that seemed like a weird signal to me. So with the Swiss rank, the Swiss that we would call this, people have to realize Switzerland is not the same country that it used to be. Because it used to be this place where, you know, you can not hide your money, but reallocate your money so that it was kept. Offuse case. Yeah, it was confidential. And of course, they gave all that up to Americans, maybe.

15 years ago, 10 years ago now almost. The economy, they are a net exporter. So it means they always have foreign currency coming in, which means they don't have to issue a lot of debt. So the supply of Swiss franc government debt is not very big. So if you want to buy Swiss francs, you are in effect buying the Swiss debt. Just like if you want to buy US dollar,

You might think you go to your bank, they give you US dollars, you know, but that's, you need, you know, it's really the debt market that you're looking at. The Swiss franc is really, it moves as a proxy with euro. And because the Swiss, they are an exporter, they want the currency to be, you know, somewhat weaker. They're lowering rates to offset any rate cuts by the ECB. Yeah. That's why they're close to zero. others saying, okay, you want to buy our currency, you can, but you're not going to get paid on it. So I wouldn't put a, for us, we love the currency world.

I think it's amazing. It's all capital flows. I wouldn't put a lot of weight on what's happening in sort of Switzerland as an example. But when it comes to the currency world, so back where we mentioned earlier that, you know, you get QE forever, but of central banks, they bailouts out some that, you know, risk has to get expressed somewhere. foreign capital that is liquid and it's mobile they can move around it will always run away from trouble so whereas the industry tells you something bad happens oh yeah hang in their pal you know for a long run and you'll be fine you know sucker you know that's what they'll say to you uh you know they're really

wealthy guys were smart they run away from trouble i don't i don't need to fight this this monster and when they do that they need to find some market that that's really deep and liquid. Something where you can park $500 million, $5 billion, $50 billion, right? That's the kind of capital flows there come. And there's only one market that's big enough in the world to absorb that kind of capital. And that's the U.S. dollar, which is the Treasury market. So you and I, we can park $50 billion in the U.S. market, you know, while we're chatting here and Sapt new we could sell it again. We're not going to move the price, more or less. You can't do that in Canada. You can't do it in Britain.

You know, definitely not Japan or China, you name it. So when we get one of these events taking place where it's, oh, wow, this doesn't look very comfortable. It's not guaranteed, but the probability of the U.S. dollar catching bid and going straight up is very high. So when it comes to the currency world, when things are bad in general, the dollar does very well. and then you look, hey, who isn't doing well?

You know, they just should be like dominoes one after the other. Of course, you know, one of the greatest short opportunities that will come in our lifetime will be the U.S. dollar. Interesting. But at that point, using the DXY as a proxy, you know, it could be at 150 at that point. Yeah. So everyone in the world is saying, hey, do you have dollars? I want dollars. So everyone wants dollars.

And that's when you know, okay, it's now the dollar's turn to have. your moment. So it's not that the US looks, you know, it doesn't look very good on an isolated financial perspective. It looks horrible. But it's a completely different debt market, completely different currency, the US, Euro dollar intertwined with it and so forth. So, you know, for us, we expect to make money on the currency side on the dollar during one of these events. And it was not a long, you know, it's not something that's going to last forever. But the other currencies for once there are more risk in the beginning. Interesting. I guess at that point, every other central bank would be knocking on the door, begging the Fed to try and push the dollar down because of all their dollar-denominated

debt outstanding. First of all, I mean, the swap lines will be open. I mean, that's for certain. You know, I suspect at some point soon, I mean, if the Americans are using tariffs as a, as an economic weapon, you're literally counting the days until they figure out, hey, the swap lines are also a weapon. Europe, you're not going to play ball with us. we're going to remove you from swap line lineup. You're gone. You know, and then you see how fast, you know, they will get in mind. So it's really interesting where it's had it.

Very cool. I know that I want to be respectful of your time. I did want to get a couple more things in if I can. First and foremost, I want to ask, what are your kind of views and your outlook for Bitcoin? How do you think about it, if at all? And I'm wondering also, I found it very interesting over the recent geopolitical tensions that the price didn't move nearly as much as I would have expected. And I wonder if because it's a 24-hour market, but it's not very liquid, like it's smaller compared to something like the treasury market or the real estate market, if there's, if you find any signal in those move in those like Sunday night price up and down movements.

Is this the part where I say buy Bitcoin now? That's exactly it. If I could get that a few times, that would be wonderful. You're not going to flip that out and put it on there. You know, we're pretty pragmatic about all markets, including that world. So the interesting things with that market is becoming more liquid by the day and bigger by the day. So that's positive. It's attracting a lot of attention.

And it's moving away from just being retail investors to more institutional. So that's great. So we invest in a probably six different markets we invest in. We look at markets. What is the core? how is it moving during a crisis moment and what is it more correlated to? And correlations are not constant. They're always going to be moving up and down and maybe things can change tomorrow.

It will affect the correlations for a long time. But really, the market has been moving in line with tech stocks with the NASDAQ. If you overlay one over the other, you have that there. So really, that market, it's a market that has high volatility. And it has a lower correlation to maybe broad equities and other markets. So you can get some benefits from that with it. But at this point in time, so we just have the, you know, whatever you want to call the Israeli-Iranian war, whatever we want to call that. It was definitely war, of course.

But which market did really well during that? Where did the money flow into? And it was gold and the dollar in oil. Yep. Right? That's what happened. Since, of course, it's, you know. What's this Wednesday?

It's resolved, apparently. I don't think it is. We'll see. Yeah. Yeah, give it a few hours and it won't be resolved. And then we'll see that reverse. But that's what you want to look at. So for any more, like for example, for gold for a long time, you know, people say,

oh, it's there to protect you against inflation and stuff. And that's wrong. That's not true at all. Because, you know, gold was basically flat for about 20 years almost. And yeah, inflation was moving. And of course, inflation is also measured with real assets as well. But gold will protect you when you have conflict, where crazy things happening around the world.

And I think Bitcoin is moving towards that, but we just saw that it's not quite there yet. And I think a lot of it is the liquidity side of it as well. So if you have an allocation to that market as well as your equities, and you know, equity start going down and your lever, like, oh boy, I need to reduce my leverage, you know, by default, we're selling this as well. Remember, everything is connected here in the world. So again, like we're not lovers or haters of any market. You should always like or dislike a market.

And I love how that market is growing into an opportunity from a risk perspective. But I wouldn't view it as something you buy and hold forever. And that's it. If you do, just make sure that the allocation that you're making, it makes sense with the rest of your portfolio that you have. That's the way that we view all markets. So, again, I think there's going to be a lot of rock and rule coming up. And if you like that market and it comes off because of liquidity, you know, maybe that's an opportunity for it to add even more to it. If you can scrounge up more money elsewhere, you know, when you're doing it.

But I think the world is just going to be on fire coming up. because of liquidity, credit events, currency movements, geopolitics, and all this stuff is happening. And the main expectation we have is that is with the bond market and, you know, the most, the most conservative, you know, risk adverse investors in the world, they're likely sitting on a strategy that's a lot riskier and is not. conservative than what they've been told or will expect and they're the ones that will have an uncomfortable moment whereas you know you're in bitcoin or you're in you know equities or something else hey you're in that world right you're going to go up or down you know 10 20 percent it's these other guys and you know chances are there your parents and stuff so unless you want

your parents moving in with you or maybe you're already living with them you know it's going to have some weird dynamics coming up agreed keith i can i'm going to just squeeze in one more quick question. I'm just curious if you have any thoughts on the recent passing of the Genius Act in the U.S. as it returns to U.S. stable coins. And the reason I bring it up is it seems to me like that's another potential buyer for U.S. debt in particular. They've got these companies that are buying up short-duration bonds and then basically selling casino tokens for a U.S. dollar, that it's opening up the world to more of a, it's opening up like the world's small retail audience to basically getting to buying more

T-bills, and it feels like another way to continue kind of kicking that can down the road. I've wondered if this fits into your framework at all or if you have any thoughts on that. Yeah, I don't know, a lot of thoughts. You know, I'm an expert on a lot of things. That isn't one of them, but it is something that we're following closely. And so that's not like you share with you on that side. Perfect. That sounds good.

Well, with that, I look forward to seeing you in Canmore when you eventually move your way out here. And I hope you have one for the way. Do you go to Canmore very often? I will be out in Banff this weekend. I'm like 30 minutes from it. I'm, or 40 minutes if I'm driving the speed limit. I'm just west of Calgary here.

It is a nice part of Canada. Absolutely. Before I let you go, where can everybody follow your work, find you, check out your stuff. Give me all that good, all the good links.

Yeah, yeah. So the great stuff is on X. It's at Ice Cap Global. Our company is Ice Cap Asset Management. And I also, I'm the co-host of one of Canada's most successful macroeconomic podcast called The Looney Hour.

You can find us as well in that world. If you enjoyed this episode with Keith Dicker, please do like, share, and subscribe, and check out the previous episode with Derek Gantt on mastering negotiations.