TFTC: A Bitcoin Podcast - #578: The USA Is Losing Its Leverage with Luke Gromen

Episode Date: January 31, 2025

Marty sits down with Luke Gromen to discuss what America needs in order to maintain its foothold in the geopolitical power balance. Luke on Twitter: https://x.com/LukeGromen FFTT: https://fftt-llc.com/ 0:00 - Intro 0:36 - Tariffs 4:30 - DeepSeek 12:09 - Bessent's reset 16:56 - Fold & Bitkey 18:51 - Liquidity crisis and the big print 25:42 - Speculating on a deal with China 29:56 - Unchained 30:57 - Europe is losing 38:24 - Gold price and SBR 45:22 - History of gold’s official price 50:03 - Is the bandaid coming off soon? 55:03 - Bitcoin-backed lending 1:01:41 - There’s hope for cooler heads 1:13:06 - SAB 121 repeal Shoutout to our sponsors: Fold https://foldapp.com/marty/ Bitkey https://bitkey.world/ Unchained https://unchained.com/tftc/ Join the TFTC Movement: Main YT Channel https://www.youtube.com/c/TFTC21/videos Clips YT Channel https://www.youtube.com/channel/UCUQcW3jxfQfEUS8kqR5pJtQ Website https://tftc.io/ Twitter https://twitter.com/tftc21 Instagram https://www.instagram.com/tftc.io/ Nostr https://primal.net/tftc Follow Marty Bent: Twitter https://twitter.com/martybent Nostr https://primal.net/martybent Newsletter https://tftc.io/martys-bent/ Podcast https://www.tftc.io/tag/podcasts/

you've had a dynamic where money's become freer than free if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for bitcoin if you're not paying attention you probably should be very interesting times and uh like i was just saying it seems like we're getting to see a lot of your theses um play out in real time as trump takes over as president here again again but and i think within the last 48 hours too there's this been this talk of terrorists and

I've seen you discuss the topic of tariffs on other shows and whether or not they'd actually be beneficial or counterproductive to Trump's ultimate goals. And I think with what happened with Colombia over the weekend may signal that tariffs are nothing more than a bargaining chip to force people to the table when he wants certain things out of certain countries. And so what was your take on the Columbia and the levying of tariffs and Columbia bending the knee with within 12 hours? You know, I mean, what I saw of it was, you know, they said they weren't going to do it. And then he threatened a whole laundry list of things, not least of which that I thought was the IEPA tariffs, which I don't think a lot of people understand what those are. But those are something signed, I guess, by President Carter. And it's basically, we'll take your treasuries. And I don't think people understand, you know, or we'll place levies or we'll freeze your treasuries or we'll place a levy on them or we'll do something that will make you will not be able to use them.

And, yeah, Colombia said, hey, we'll send jets to get our people back. Uh, their president or prime minister or whatever also sent a pretty wild, uh, uh, tweet. Um, basically, um, I thought it was, uh, I don't know if it was just, uh, sound and fury signifying nothing or just trying to sort of get the last word in. But, you know, what I thought about it is, is I don't think it's going to go as smoothly as a lot of people think, you know, there's sort of a lot of, you know, hurrah, we're finally pushing people around. As I got on, Christine Freeland in Canada said, let's form a coalition of everybody that Trump's going after. The Germans of today announced that

Volkswagen's factories may start to be taken over by the Chinese, their electric car factories. And so I think this may be messier than people think. And with the Columbia situation, I think we just got our second message in three years, the treasuries are no longer safe. If you're a foreigner, why would you ever store your FX reserves and treasuries now? You've had warnings from Iran, from Russia, and now Colombia. So we know, you know, I think it's an interesting move ahead of what is a lot of treasury supply to come here in the first half of the year. You know, we'll see. Ultimately, look, I think it's going to be good for America because if foreigners aren't buying foreign,

If the foreign official sector is not buying these things, then rates are going to go up, and rates can't go much up beyond 5% on 10-year treasuries before things implode. And we know they're not going to let things implode for very long, which means the federal have to buy them or treasury have to buy them. Someone's going to have to print dollars and buy them to cap yields, and that's really good for – it's what has to happen. that's going to weaken the dollar that's going to drive that's going to force gold uh and maybe bitcoin and into more of a neutral reserve asset role um it'll drive nominal growth it'll drive inflation and um you know in the long run that's good but you know we'll see yeah i think that's been pretty clear to me at least with trump presidency number two and the ambitious goals he has particularly on the economic side of things and the way in which he wants to go about it

particularly with high tariffs low income tax and as you've been describing on many of the shows that you've been on that could lead to dollar strength which is counterproductive to his goals ultimately but maybe if his goal is to create a liquidity crisis to rationalize a big print then that's that's what's going to happen and then you have again a crazy weekend there's columbia and then the emergence of deep seek the hottest chick on the ai block and from i've been having a lot of conversations behind the scenes over the last three days and it's a mix of maybe it's a nothing burger too it is probably the biggest thing that's happened in the world of ai in the last three years in the sense that it could destroy a lot of capital overnight a lot

of capital tens of billions hundreds of billions of dollars allocated towards these western ai companies for capex and infrastructure that may ultimately prove to be unnecessary and i think the timing of the deep seek launch and the open sourcing of their models was very interesting considering that trump did this massive uh press uh press meeting with sam altman larry ellison masa uh and then two days later where they said they're going to invest 500 billion over the course of four years. And then two days later, it's like, oh, you're going to invest that much. You don't even need that much. You need six billion. Yeah. You know, it's interesting. People who understand that space better than me that I've talked to, you know,

I said, what is it I've seen everywhere from it's a cruise missile into, you know, to the heart of AI infrastructure to, you know, the Chinese cheated and lied about it. And, you know, their answer was, it's kind of both. You know, on one hand, they didn't spend six million bucks, right? There seems to have been a lot more spent in all likelihood. And it's entirely possible that some of it, according to some people in the industry, that, you know, it could have been, you know, they scraped the web scraper, right? So if OpenAI got a bunch of data from scraping the web and, you know, maybe DeepSeek scraped OpenAI, we'll really know when DeepSeek does their next version that if it's incremental and not scraped then um then i think there'll be sort

of round two of sort of freaking out about this but what those people said was even if all that's true so what the real story is still that somehow the chinese with their collapsing stock market and their collapsing home prices and you know how screwed they all are according to the western media, managed to do this. And it's a very big, it calls into question a lot of narratives about China, as it should, that they were able to come up with something like this. They were able to release something like this. And I think in a major way, reduces U.S. leverage, right? I mean, at the end of the day, we know this exists now. And let's say we don't know that it isn't just a scraped version of OpenAI.

We're going to know that. Once we know that it's not just a scraped version of OpenAI, and I don't have an opinion one way or another because I'm not in that business enough to know the difference, but let's assume that it's not. If we assume that it's not, when you sit down with allies like Scott Besson to set he's going to do, what what do you have to offer we've suddenly gone from hey we have ai and they don't to uh well you know you know china buys 434 million smartphones we buy 140 million but in we we have ai they have ai and they build 30 million cars and we build 10 million cars but sanction them

and come with us we're the bigger market we're not the bigger market we're not and they're still not even consuming per capita what we are. So it's a really interesting dynamic as it relates to leverage. And then it gets down to, OK, well, come with us or else we're going to, you saw today Trump pulling 20,000 troops out of the EU, allegedly or reportedly. So it starts to get very transactional. It starts to get very confrontational. And so I think it's a big moment from that standpoint of just sort of the, you know, potentially, again, assuming that it's not just scraped, which I don't know for sure one way or another, let's see. It's a big non sequitur to sort of the consensus view of, look, we're dominant in this and the Chinese are light years

behind us. And that might not be true. And if that's not true, then it follows that the U.S. leverage that it thinks it has to push people around around the world as it sits down and says choose us or choose china maybe those conversations get delayed a little because they might not like the answer from from our allies adversaries etc etc now it seems very clear to me that we need to eat some humble pie and it seems like we're getting mixed signals in both good and bad directions from the administration i think scott besent particularly during uh the senate hearings about his um about his approval to become treasury secretary i think his framing of the energy race that we're in was perfect and that's really what it comes down to like if because we've already

sanctioned china in a way with nvidia where we're not allowing them to buy nvidia chips and they can use the the power of the electricity base that they have with older computers to get the same results that we have here in the united states because we are inherently behind in the energy possibly possibly and you know i've seen incredible people say look there's no way they did these with these older chips and what really happened is all that business that nvidia was reporting as going through singapore was actually very high-end cutting-edge chips going into china through Singapore. And in that case, the message is you can't even force your own sanctions anymore in the U.S. So like it's one of two things, neither of which reflect very well on the relative power

of the United States at this moment in time, which is either the Chinese can use their electricity and crappier chips to come up with something better, or the U.S. can't even enforce its sanctions on China. And you say, well, we just need to be tougher under Trump. And like, that's fine. Then we'll get a lot more days like today in the NASDAQ. And after a few more $500 billion market cap losses in NVIDIA and another couple trillion in the NASDAQ, we'll have a recession. Once we have a recession, the deficit will blow out. Deficit blows out. We're going to have a treasury market issue. And now what do you want to do? Because, oh, by the way, Trump has, that's his scoreboard. Stock market going down every day is his scoreboard. And so the scoreboard

is going to say, you suck, you suck, you suck, you're losing, you're losing, you're losing. he doesn't take well to that very well so it's a really interesting dynamic that this introduces in my opinion this whole story um relative to sort of the prevailing zeitgeist going into it and i had a conversation last week with larry lapard on the show and he made a very good point which is these losses on the scoreboard that you were just describing the mark the hit that the market took today there is a window of time is it three months is it six months is it a whole year where you can blame that on the previous administration but after a certain point the onus is going to be on him to produce results and i guess that's the big question

on everybody's mind whether it's deep seek um the energy situation the treasury situation is how do we get out of this morass and going back to scott percent i'm really interested to get your thoughts on him because he's been speaking openly for the better part of a year about wanting to be in a position of power that he's in now so that he can help navigate the u.s through this tumultuous time and help thread the needle to to reset things and get us back on a path towards prosperity yeah you know we wrote a report for clients uh at the beginning of december that that said all three of his three arrows all require a weaker dollar. And so it's fascinating to me, there's been this dynamic of like the dollar is going to go stronger, stronger. And

mechanically, I understand why that is the case in terms of what tariffs would do and what the Fed may do and et cetera. But at the end of the day, Besson's three arrows can't happen without a weaker dollar. And I think there has been a misunderstanding amongst a lot of market participants who've heard Trump say, I want to maintain reserve status of the dollar, heard what Besant was said to say by the headlines, but didn't really read the stories in the Wall Street Journal and FT, which was that, you know, he's in favor of a strong dollar and maintaining reserve dollar system. But what he really said was, I'm in favor of a strong dollar system, but a strong dollar system and a weak dollar are not mutually exclusive.

He said that almost verbatim. And he's further said that he wants to rebalance trade between China and the U.S. That can't happen with a weaker yuan and a stronger dollar. Mechanically, axiomatically, it can't. You need a stronger yuan and a weaker dollar. He said we need China to consume more, the U.S. to produce more. That's weaker dollar, stronger yuan. So then you can get into questions about how to do it. But I ultimately think he understands that you need to move back to some sort of system with a neutral reserve asset around which the yuan rises and the dollar falls. And like I said, there's a lot of ways you can do that. But ultimately, I think he will end up getting the dollar much weaker. I know he wants energy cheaper,

oil in particular, cheaper. I think that's a pipe dream. I hear credible rumblings that the energy secretary knows that's a pipe dream, Chris Wright. And so maybe when Besant says 3 million barrels of oil equivalent growth by the end of Trump's term, you know, oil equivalent might be doing a lot of heavy lifting there. So I don't know what he's including in that in his own mind. Is that, you know, is that liquefied natural gas? Is that NGL, you know, NGLs, natural gas liquids? Is that nuclear power equivalents in terms of barrels of, you know, in terms of BTUs? I don't know. But if he's talking about oil and he's talking about taking oil to 50, oil at 50 and growing oil 3 million barrels a day by the end

those are fundamentally incompatible. That ain't going to happen. And I've been hearing that from numerous different people throughout the shale patches. It's not going to happen. So, you know, is that we're going to annex Canada and count that? I mean, who knows? Maybe, I don't know what they're, you know, there's, like I said, oil equivalent may be doing all the heavy lifting there. So, you know, as I look at Besant's, you know, three arrows, which is get the deficit down, to 3% by the end of the term, 3 million barrels a day. And then I think the other one was 3% real growth is the last one. None of them can happen unless the dollar's a lot weaker, full stop. And then the only question is sort of how do you do that? And then when you look at what he

said about China and what he said about the U.S. in terms of rebalancing and restructuring the system, that too suggests the dollar's got to go down against the yuan. So what's really interesting about all that is that sort of like 180 degrees opposite of where Wall Street consensus is, where investing consensus is, which is like, oh, Besson's in there. It's gonna be strong dollar. And I strongly disagree. What's up, freaks? This is Natty. You don't want to skip because Fold has a great offer for you. Everyone knows about Fold, the app where you can earn the most Bitcoin rewards for everyday purchases. I did this yesterday. Me and my wife, we use Amazon to buy quite a few things. And instead of just putting our credit card into Amazon and buying

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I don't think it'll be a banking liquidity crisis per se. I think it'll be, I mean, I suppose it could be. I mean, the fundamental thing to me, it's a fiscal crisis, right? I mean, the big gear we've been watching on that front is U.S. true interest expense as a percent of U.S. federal tax receipts. And any time that number gets close to 100%, the dollar goes up, 10-year yields go up, and everything else goes down except for maybe gold until we have, you know, sort of the big print. So could that be it again? Sure. Especially since as of right now, we're at 111% true interest expense as a percent of receipts. Like U.S. government cannot cover out of receipts, its entitlements and its interest. And we're about

to reprice a bunch of interest higher in the first half of this year. So that I think alone is enough to cause the problem uh and we've been nervous really since i would say probably end of december mid mid end december of hey all right we're now at whatever 100 plus true interest expenses a percent of receipts that's great for the dollar it's good for gold it's good for nothing else and that i think will continue to be the case until they do inject that dollar liquidity whatever that looks like. Now, there's lots of ways mechanically you could do that, not least of which is the Fed cutting rates when they shouldn't be. Because by the way, inflation is picking back up. Growth is picking back up. That's one way you could do it. There's other

things you could do mechanically. But ultimately, the fiscal situation requires a much weaker dollar by the end of this year. And so until they get it there, the beatings are going to continue, i think yeah what do we have to roll over six trillion dollars this year sounds about right i don't know the number off the top of my head but it's a big number yeah now if rates are at this level you imagine that the slope on the uh the curve of interest expense is going to go up dramatically just just surpass defense spending you could see it quickly outpacing? I think a lot of investors have just overcomplicated things, which is to say, I think investing right now is a one decision tree. Maybe there's a tactical view and a strategic

view. So let's break that down. The one question is, do you think the United States will stop trying to be hegemonic because its interest is above its defense budget. And if you think the United States will, for lack of printing dollars that it can print, then by all means, you should be only in cash and reposition your portfolio for a recession, and you should be very defensively positioned. Tactically, that could be the case. To your point, maybe Trump wants to create that for a moment to sort of, you know, kill a chicken to scare the monkeys or to get policies or to set himself up for the big print or whatever that may be. But strategically, and when I say strategically, I mean beyond the next two to three months, I think there's no chance the United States

government says, oh, we're going to cede Eurasia to China and Russia. We're going to cut defense spending to make room for interest. We're going to cut entitlements to make room for interest. there's no chance that's going to happen. And if that's not going to happen, then one way or another, they're going to print the money to pay the interest. And ultimately, that kind of gets back to our overriding theme, which is the U.S. needs a two to three year period of real interest rates that are probably close to negative double digits, maybe negative teens. In other words, nominal GDP growth, 10 to 15 percent above inflation for two to three years. That's how we get out of this? And I don't care how they get it, but that's what's coming. And if you think

that's not coming, then your bet is that the United States is going to allow its interests to force it to cut defense and cut entitlements under Trump. If that's your view, good luck. I don't think that's the view, but I think that's the decision ultimately is, do you think the Trump administration will cut defense and entitlements to make room for interest? And the interest is already bigger. The net interest, forget about gross. Gross is like 60, 70 percent bigger than defense. But net interest is above defense for the first time in at least 65, 70 years, probably all of American history. And as Neil Ferguson said, going back three, 400 years, once your interest goes above your defense, you stop being hegemonic

in a big hurry. And so, you know, are we going to are we going to just say, oh, we're not hegemonic anymore? Darn. Are we going to inject liquidity print dollars? I strongly think we're going to. I would, you know, next two to three months, I have no view. Maybe we let everybody twist in the wind. Who knows? I have no strong view on that. But as I look out to, you know, the next six, nine, 12, 18 months, I think there's almost no chance we don't print the money, inject the liquidity, however we do that. Cap yields, there's a lot of different ways you can do it conceivably. But I think that's what's going to happen. And I think that's really good for growth, inflation, gold, Bitcoin, America, wages, et cetera.

Yeah, well, if you look at the gold price, I didn't check it today, but I remember Friday it was approaching 3,000, had new all-time highs. That's the leading indicator, right? I think even more so than Bitcoin at this point. Yeah, and I think ultimately Bitcoin will separate from the NASDAQ.

I think that'll be, you know, especially if the NASDAQ stuff keeps up, I think that's a surprise coming for a lot of people that are negative on Bitcoin saying, oh, it's just a beta play on NASDAQ. I think if we keep this up for another few weeks in the NASDAQ, I think you'll see Bitcoin separate from NASDAQ, but let's see. But yeah, gold ultimately is telling you. I mean, the fact that it went out Friday at over $2,800 all-time high in dollars in every currency, record in every currency, See, I it's it's it's telling you they're going to cut rates when they, you know, to make room to pay the deficit.

Yeah. Do you do you envision a Bretton Woods 2.0 that's also been floating around in the context of ascent is that he's publicly stated he would be open to a Bretton Woods like agreement where you get to the table and reset everything? Yeah, I think it's very possible. And if it's going to happen, I would say it's probably going to happen in the first half of this year. Because if you're going to do it, it's going to be pretty disruptive and ultimately very good for the US, ultimately very good for growth. So if you're going to do it, you want to do it with sufficient lead time ahead of midterms 2026. And so if you do it in the first half of this year, global growth, US growth will be absolutely humming by the time midterms come around. And so I think if it's going to happen, I think it'll be in the first half of this year. And I think there's a deal to be had. I mean,

Yellen kind of hinted at it. Besson has hinted at it. But it's ultimately around stronger yuan, weaker dollar, higher Chinese consumption, more U.S. production, which is of some of the key themes we've talked about but i think it's all on the it's all uh there to be had will it happen you know who knows but i do think it's possible how would it happen how would you get everybody at the table and make sure that an agreement is reached in which each party is sufficiently happy with the outcome i think there's only two parties that really matter maybe three uh and i think that's u.s china russia um and everyone else would kind of have to go along to get along. And so that makes it easier. I think the deal to be had is

essentially the dollar is weakened. The dollar and yuan are both weakened against gold markedly. The dollar more than the yuan so that the dollar actually falls against the yuan, but they both fall against gold. And then I think you devalue oil relative to gold. In other words, today, gold trades at, or excuse me, yeah, gold trades at about 40 barrels, 38 barrels of oil per ounce. I think the grand deal to be had is oil goes to 100 barrels, or excuse me, gold goes to 100 barrels of oil per ounce. And then, you know, China wants the equivalent, China needs cheaper oil because they import all theirs basically. And the U.S. wants more expensive oil because the U.S. wants to be able to produce more and it's price sensitive. And so

I think you get, you know, $100 per barrel or 100 barrel per oil gold. And the price of oil in the U.S. is 70 and the price of oil in China is the equivalent of 50. And when you sort of shake all that out and then we you know devalue the dollar maybe you know you can work that out that hey that's you know it's a much cheaper dollar relative to yuan through the gold pivot you know or you could even simplify right now you know yuan has devalued against gold in the last 27 months by 65 percent gold in yuan terms is 20,000 yuan if you take the dollar to five thousand dollar gold today, that would be four, right? That would be a yuan dollar of four through the cross rate of gold. 20,000 yuan, $5,000, 20,000 divided by five is four. So yuan would rise from

7.25 where it is today to four, which almost nobody on Wall Street thinks could ever happen, by the way. But that would incent more consumption for China. That would incent more production for the U.S. And it would rebalance things in the way that Besant has noted. And it would happen in a way that it makes Russia happy because they've got a bunch of gold and they got a bunch of oil. OPEC is fine with that because they got a bunch of gold. The Indians got a bunch of gold. So oil got a lot cheaper in gold terms. They're OK. Nobody else really matters. They don't have a say. This rep was brought to you by our great friends at Unchained. As Bitcoin's role

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Americans talk you into doing dumb stuff and keep buying energy, you know, keep your nukes open and buy energy, cheap energy from Russia and euros, and you're fine. That's the winning strategy. And they tried to buy oil from Saddam in euros. We didn't let that happen. We didn't let it happen for long, at least. They wanted to buy gas from Russia in euros. We didn't really let, someone didn't let that happen, right? The Nord Stream 2 pipeline Epstein itself somehow. Oh, how'd that happen? And so some of that is, you know, because their leaders were naive and didn't want to invest in military of their own, or they liked having the American military bases there because they economic stimulus. And they've been just so disappointing in terms of their strategic,

more recently, their strategic dynamics, right? This whole green thing is just silly in terms of, and look, I'm in favor of the environment, blah, blah, blah. End of the day, you can't run an economy if you don't have cheap baseload power, full stop, especially if you're a manufacturing economy. I got 43 solar panels on my roof, but I'm in Ohio. So it's not that different latitude of germany like i love my solar panels they make things a little cheaper would i want to only run no i've also got natural gas main natural natural gas uh and a and a and a backup natural gas powered uh uh generator so like it just is so they've made too many bad decisions to have a seat at the table they have completely given away

their autonomy yeah it's a real shame yeah it is and maybe they'll get it back someday i don't know maybe not but you know the problem is the people that are actually common sense about it are deemed right-wingers right like you look at the economic policies of like afd in germany like they're totally like hey let's stop war let's go back to fossil fuels and buy some you know gas from you know if we maybe from maybe from russia and let's turn the nukes back like you know yet they're deemed nazis right like it's like i'm pretty sure that's not that's not far right it's common sense it seems like the people on the ground are getting pissed off enough that an issue right here could be that's right here but it's a shame and and i think davos world economic forum meeting last

week was pretty illuminating in terms of how that class of your european plutocrats yeah it does seem like they think they've lost i mean there was the one speech where it was explicitly said trump winning this election and people welcoming the executive orders that he's signing is a clear sign that we've been wrong and maybe we should think about that and hopefully they are taking that advice to heart because yeah europe is the in a terrible place right now in terms of global geopolitical spectrum it is and you know it's really interesting because some of what we have done we being the u.s we're in a great power competition with china you know we're in this whatever it is with Russia, I don't know, proxy war, pissing contest, I don't know.

But strategically, one of our biggest allies, in theory, was Europe. And so our strategy over the last eight years has been to basically push Russia toward China, which is a mistake and then to effectively carpet bomb economically carpet bomb europe our biggest ally which is i don't know it's either a mistake or not a mistake right i mean it's it's um you know to the extent it forces their industry to come here then it's not a mistake but then you just got to let them go right then you you don't take them on as a welfare state because then it drags you down right when you when you know if you're barely keeping your head afloat after a shipwreck you don't try to sort of prop up a drowning man you got to let him go because he'll

drown you too and that's the same kind of dynamic so it's a tough situation but yeah they've they sort of made their bed now they gotta lie in it i guess europeans that is yeah no it's very similar to the the inner workings of the european union too you have all these northern economies subsidizing the southern economies which are dragging them down and it's almost reversing now right like the southern ones have taken their medicine and in some ways are starting to subsidize the northern ones and and there are some things they could in theory do um you know you know they could revalue gold they could start buying energy in their own currency and, you know, net settle in gold with, but again, they are so far from that point. They have to

basically make up with Russia. They've got to change certain relationships in the Middle East. And then they still have a competitive problem against China. And that's why I say like they're a drowning man, like, hey, we're going to buy American LNG. Great. That's great. Except it's very expensive. And in the meantime, we've made Russian, not even LNG, it's pipeline gas, right? So it's cheaper by definition. You're never going to get cheaper LNG than pipeline gas, from Russian pipeline gas, unless you're selling it at a huge loss, subsidized by the American taxpayer, than what China's getting from Russia. So China's industry is going to have a permanent advantage against European industry. And the European industry is heavily Northern weighted.

So like, they're in a bad way. And, you know, so it's not surprising to me that you're getting these series of political turnover in Europe and in the UK that you are. But it's, you know, it's like that meme where it's like, you know, you're not wrong, the world is or whatever, right? The guy looking at the mirror, it's like their leaders are like, it's not me it's that all of our people are nazis and extremists like wake up but they haven't woken up yet and so you know the beatings will continue until either you know they're really screwed or until the leaders wake up or they get a leader in there who knows what they're doing well hopefully they wake up spin up the nukes europe it's time uh i think that's their only last-ditch effort

they have to try to leapfrog any perceived competition or get back to a stable base but you mentioned the repricing of gold and that's been a topic over here in the united states particularly as it pertains to the strategic bitcoin reserve bill that cynthia lemus wrote and that's part of that bill it's taking the treasury's gold held at the federal reserve at 42 an ounce repricing it selling some to buy bitcoin what what um what do you think the u.s could do in terms of repricing gold and leveraging that ability to put us in better footing oh i think it's it's right there for the taking it just it's a political courage issue um just writing up the gold from 42 to wherever it is 2800 a day would be i don't uh shoot

probably $600 billion, $700 billion worth of a write-up. And the mechanics of it are, as I understand it, it's Treasury instructs Fed, Fed does it. It amounts to basically using the gold to print money. And it creates a deposit into the Treasury general account that Besson can spend however he sees fit. And so just writing it up to market would take care of $700 billion, dollars we're gonna run a two trillion dollar deficit like it's a huge slug of qe effectively year one right that's that's base case uh if he wanted to be brave and do something really extreme he can he can pick whatever number suits him you know you want to write you want the right you want to write the gold up every four thousand dollars up on the price of gold

is another trillion dollars right so you know to market is 700 billion from you know from 2800 to 7,000 is another, you know, $5,000, give or take. So that's, you know, every 4,000 is a trillion. So it's one and a quarter, right? So that's 1.25 trillion. So you write it from $42 to 5,000, there's like $2 trillion that you now can do whatever you want with. And if you want to get really aggressive and really position us to compete, you could write it up to 20,000, right up to $20,000. There's about $5 trillion in gain plus the $700 billion in right up from $42 to $2,800. Okay, great. There's $5.7 trillion. You could buy back some huge slug of the treasury market, de-lever the United States debt to GDP from 125% to a much smaller number virtually

overnight. It would be basically the equivalent of straight money printing. And so it's going to be very inflationary, very good for nominal growth, very good for asset markets. And so debt to GDP could easily be taken down to 50% over a weekend, just like that, like it was a Trump meme coin. Voila! And I've asked multiple different Washington lobbyists if my interpretation of the Financial Accounting Manual for Federal Reserve Banks, Section 2.10, is incorrect, is and I've been told by multiple different parties that my interpretation of that is correct that yes all it requires is treasury secretary saying write it up fed does it and the money gets deposited free and clear you're basically creating money supply without an offsetting

increase in debt would they use it to buy bitcoin I don't know why you would like you want to buy bitcoin friggin print the money by bitcoin I don't know why you need to sell I wouldn't sell the gold that's for sure you know this is just creating money using the gold as collateral but i would never sell the gold i don't know why you would do that because look if we do go to world war three ain't nobody taking dollars i don't think yeah i don't think we're going to world war three but look that's a tail risk and during world war ii we didn't even take global reserve currency british pounds when we sold stuff to the brits dollars or gold that's it no one would take our paper in war yeah i guess that's the game theoretic scenario and the incentive scenario

that's been played out by bitcoiners is if you do have this struggle between the u.s china russia and china and russia have this goal or idea to really reset the monetary landscape and use gold as the core asset of that if you were to reprice the gold in the u.s sell it buy bitcoin you could throw a wrench in that by messing up the price of gold but i guess that's pretty risky and as you mentioned well i risk that if you just print the money by bitcoin issue treasuries by bitcoin whatever you could do that you know and you know they you could do that but then what's the next move and i've not heard a lot of bitcoiners talk about this what's next move china and russia would do? Well, it's easy. I now value, Russia just says, all right, I'll just revalue my oil in

Bitcoin terms. And I'll tell you, I'll buy the Bitcoin right back from you, unless you can reduce your usage of my oil world. And the world, practically speaking, would collapse without Russian oil. If you take all Russian oil out of the market, the oil price goes to a price that the world's debt collapses. And that's an economic collapse. So the world would basically have to pay whatever bitcoin price russia set it at ditto china's factories right at the end of the day if we did that we could in theory sort of do it once but ultimately then china goes oh okay well you know we'll just revalue the price of our output relative to bitcoin and we'll just buy it all back you know we'll just we'll buy the bitcoin back from you if that which if that's

what you want to use you know and i think both of them want to go to a neutral reserve asset they've talked about it for years. And so there is a, you know, Putin's on record saying there's no, you can't stop Bitcoin. That might be something he might find interesting to do. It would just be a version of what Sergei Glazyev talked about actually citing Zoltan Pozar a couple of years ago, where Sergei Glazyev, one of Putin's economic advisors said, hey, let's just revalue the price of oil, you know, instead of at the time it was one, one, what was it? A barrel per gram. I think it was a barrel per gram they just said let's just make it two barrels a gram voila we just doubled the price of gold same thing with bitcoin we could do those bitcoin just like oh it's you

know whatever point whatever bit point whatever bitcoin per barrel all right we'll just go 0.3 whatever bitcoin per barrel have a good day now wave it in we'll just buy it right back off you yeah and if you don't like it then we won't sell our oil to you and if we don't buy our oil somewhere in the world you know and the saudis would probably go oh that sounds great why would you know and so there we go yeah i haven't thought of that that would be fascinating and we've been talking about this repricing gold and i think it's important to get back to first principles here because it was gold priced at 42 an ounce and held there for the amount of decades that it has been for this exact reason like is it was it locked in at that price in

beginning with the foresight of a potential need to reprice it in the future the whole being able to just hold gold at the federal reserve at 42 an ounce just it did while it's trading at 2800 that confuses the hell out of me like why is a price there like was it to it's historical yeah so you go back in history for a long time gold was 20 an ounce uh and that was when the dollar was gold backed and then in 33 FDR called in all the gold at 20 and then devalued it to 35 and you couldn't own gold as it started becoming illegal to own gold as an American domestically from 30 from 1933 to 1974. Gold was $35 an ounce as a part of the Bretton Woods deal 45. So it was basically the dollar is valued at $35 an ounce and all the other currencies are

tied to the dollar. And then we sort of did the classic overprinting of dollars relative to our stash of $35 per ounce gold. And so we ended up having to revalue it from 35 to 42. I think that was in 1968 to basically relieve stress on the system because the world was sort of doing the math of, hey, LBJ and Nixon, you're doing all this guns and butter, stupid stuff. Lyndon Johnson Great Society and spending a gazillion dollars in Vietnam. And you don't have the gold. Give us our gold. You take these dollars. And so at first, they devalued the dollar from 35 an ounce to 42 an ounce. And that's where it still sits today. And then there was a choice. And there were serious people who thought we should further devalue the dollar from 42 an ounce to somewhere

between 100 and 150 an ounce to further sort of rebalance that system and keep the dollar on a gold-backed system. But the other proposal was just close the gold window. And that's what they obviously went with. And so the $42 per ounce price is just a legacy or a vestige of that. Now, basically, everybody else in the world marks their gold to market on a quarterly or even monthly basis in their gold reserves. We're basically the only major nation that does it. The EU does it. The Russians do it. The Chinese do it. I think the Indians do it. But sort of a lot of our major counterparties, uh, do that already. And so I don't, I don't know why we haven't, I've heard different discussions around, um, reasons for that. I think they're mostly

dogmatic. Um, you know, I have heard the, the conspiracy theory. I don't know how much or the, the view, I don't even want to call it a conspiracy there because the people who say it, I don't, I don't think are necessarily conspiratorial or minded, but I just, I've never heard it before, which is that because we defaulted, we said we would make you good at $42 an ounce. I've heard it said that if we revalued the gold to market, that would basically put it back on the table and that there are still existing claims on that gold at $42 to the Europeans mostly. And so if we said and that that can probably be fixed, I would suspect, with some sort of deal or just, hey, you know, if you what are you going to do about it? You know, kind of a thing which seems to be the new rules of diplomacy, frighteningly.

But in theory, it's possible that if we went from 42 to 7 to 2800, the Europeans had it would have a legal claim in the international venue to say, hey, we'll take it. That, you know, the French will say, hey, we'll take a bunch at 42, thank you. And the Germans will say, we'll take ours at 42 and so on and so forth. Whoever else we may owe under those old claims from 1971. I don't know if that's true or not. I'm operating as if it's not true, but that could be part of the reason why we haven't. Yeah. Yeah, it's fascinating.

It's just always been odd to me. It's like it's trading at this level and yet we market at a way lower level. i'm wondering if it's just this poker chip we've been waiting to to pull out for a time like now which gets it's very that's that's probably a better that's my base case with something like that there's just basically been some dogma and then save it till you need it yeah and i mean i are you it seems like based off of everything we've discussed over the last hour i think times can get very volatile in the near to medium term but the volatility is likely necessary to reset things and get on a better footing because i feel like we're reaching the rip the band-aid

moment and it's time to confront the systemic issues that exist in the sovereign debt markets in the global financial system and let's call a spade a spade figure it out and move on. Yeah, I think we're getting there. I think Trump's going to be a catalyst toward that. There's always been only one fix. There are three fixes, I guess. One of three fixes is a better way of saying it. You can default, say we're not paying it, write it all down. Practically speaking, that's not possible because all that sovereign debt's the collateral of the banking system. So the banking system would collapse and that's not good. Okay, So default, nominal default is not an option. The next option is productivity miracle.

It would have to be a productivity miracle that arrives neither too fast or too slow because if it's so good that it creates unemployment, then that also is going to crash the system because unemployed people don't pay their mortgages, they don't pay their car loans, etc. Banks collapse that way too. So it has to be a Goldilocks productivity miracle. I don't see anything on the horizon that fits that actually arriving at just the right amount of time because the debt is so high. The debt was lower. A lot of what we're seeing, I think, could be a Goldilocks productivity miracle. And then the final option is repress it, inflate it away, which is essentially you're going to need two, three years of 10 to 20 percent, negative 10 to 20 percent real rates

one way or another. You can do it all at once in a number of different ways. Yield curve control, revalue gold you can do you know there's a whole bunch of things you can do but ultimately they all involve and require a two to three year period of significantly negative real interest rates and that would especially if married with a transition to the system to a neutral reserve asset system where treasury bonds are no longer the primary reserve asset, but rather gold, Bitcoin, something like gold or Bitcoin is, which is another way of saying gold or Bitcoin, because I don't think there's anything like those two to do the job. Then, you know, and that could be how you do the negative real interest rate. There's a whole

lot of ways to do it. But one way, shape or form, you've got to get negative 10 to 20 percent real rates for two to three years. And I think that's really the only way out of this thing. And we've gone through this period of five stages of grief around it, you know, denial, anger, bargaining, you know depression acceptance and you know i i think we are out of the denial stage you know the denial stage was probably a couple three years ago as it related to the global sovereign debt bubble bursting i hear lots of people talking about that now almost everybody i hear says okay yeah it's a problem uh there's still sort of the you know somewhere between the anger you know and the bargaining side of it right at the anger of like oh you're anti-american luke or you're a

Panda hugger, all this stuff I hear, which, you know, those people could piss off. I don't care. The, you know, there's still some people in the anger stage. And now we're in sort of the bargaining stage. Well, maybe we can sort of, you know, like maybe Besson can keep a strong dollar and keep the system as is and keep oil at 70 and bring our manufacturing back and put tariffs on and it'll all be fine. And you're like, well, no, no, that's the bargaining stage. You know, the depression stage, I think, is still on the come, which is like, oh, God, like, and then there'll be acceptance, which is, hey, price of gold is a lot bigger. Price of Bitcoin is a lot bigger.

Inflation's been higher for two to three years and rates have been not that high. And wages in America are soaring and GDP is soaring. And, you know, my my treasury bond portfolio, which used to buy me a house, now buys me a car and like, huh. But at least my stocks are up a bunch and that'll be the acceptance phase. And then we'll be in sort of a new golden era of growth and debt to GDP will be a lot lower. And, you know, I think that's my base case is it works out in a really good way for the whole world in that way. you know china's has to grow more on their own consumption and and we have to produce more of our own you know more of our our own production we have to produce more of our own consumption

chinese need to buy more of their own production that's a world that can work but there are fat tail risks that that goes horribly something goes horribly wrong between the world we're in now and that world but that's that's how i'm thinking about it yeah no i think that makes a lot of sense it's just go with the path of least resistance may create inflation or whatever but we're not going to overtly default that would be geopolitically unpalatable um goldilocks increase in productivity seems like we missed the ability to do that let's just bite the bullet go with route three and i think particularly here in the united states and i do like the way trump has been positioning things as it pertains to bitcoin and the people that he's placing

in positions of power you just let the private sector figure out the recapitalization of of whether it's the banking system or the credit system and we're beginning to see that somewhat naturally you're beginning to see dual collateralized commercial real estate products which are using the building and bitcoin as collateral what micro strategy is doing to basically pull dollars into the convertible debt market and get that market access to better collateral in bitcoin which has held a micro strategies balance sheet the trend of private small businesses and even public businesses adding bitcoin as a treasury asset you're beginning to see this natural recapitalization of personal and business balance

sheets with bitcoin and if that you go route three and you just buy time for enough people to do that you could wake up on the back end of this and be like all right we somewhat manufactured a soft landing by letting Bitcoin proliferate and people choose it as a treasury asset. Yeah, there's like Bitcoin, it can absolutely play a role a number of different ways, right? I mean, you can do it with, you know, a Bitcoin sweetener, you can do with gold too. But right, like if, you know, one way to lower treasury costs, look, you offer a 2% yielding 30 year treasury with, you know, of the $1,000 face, you know, $50 worth of Bitcoin valued where it is today, $100 worth of Bitcoin valued where it is today.

$50 or $100 worth of gold valued where it is today. I might buy that bond, right? You could do something like that. Or, you know, that's a more subtle way of doing what we talked about before, which is just revalue the gold and buy back a block of treasuries. But, yeah, you're absolutely seeing it in the private sector. And ultimately, you know, I think it's a very, you know, free market way of doing it, right? Ultimately, the people that own a lot of Bitcoin today, I think, are going to be rewarded for that over the next two to three years, probably pretty handsomely. And as they do that, their balance sheets will be in a position to do some of that recap.

You know, you're essentially talking about a transfer of purchasing power from bondholders to treasury holders, or from bondholders, treasury holders to Bitcoin holders, excuse me. And that's nature healing. That's efficient markets. So, yeah, the way you laid that out makes perfect sense. And obviously, there's a lot of different, like you were saying, different financial ways to structure that that I think make a lot of sense that can be used to recollateralize different systems. I wrote a report a month and a half ago kind of highlighting it really surprised me that the Treasury Borrowing Advisory Committee, or TBAC, which is like a consortium of the biggest too-big-to-fail banks that advise Treasury, they wrote a supplement to their

quarterly TBAC report looking into how crypto and digital assets can support the Treasury market. I mean, to me, that was a huge, mind-blowing moment. and of course the key dynamic was here's the market cap of total of crypto and of course most of that's bitcoin which is what i spend my time focus on and here's the underlying growth in stable coins to support the growth in the aggregate market cap and here's the growth and market share of u.s treasury t-bills as a percent of those stable coin assets and so the treasury and tbac are looking at that dynamic it's not a big leap to say look they can regulate

stable coins into saying you got a hold for every dollar and you know market cap you need to have in in crypto you need to have 20 of it in treasury t-bills and let's just use bitcoin because again it's the only one i focus on it's it so let once you get to there you know think about what i just said, the fundamental problem of the Treasury, the fundamental solution is we need to financially repress bondholders, right? We need negative real rates. Well, the problem is you can't find a sucker at the card table, private balance sheet, willing to take a negative 5% or negative 10% yield on their bond, right? And in this case, you could. If Tether holds 0% yielding T-bills and Bitcoin is allowed to go, I'm going to pick a big number for around easy math, but let's say Bitcoin's

allowed to go to 500,000 a coin or is bid to 500,000 a coin. 20 million coins, that's a $10 trillion market cap. 20% of that's in Tether, which has been the historical ratio, roughly. That's $2 trillion. And they've got to hold all their reserves in T-bills. It's $2 trillion of T-bill demand by Bitcoin going to $500,000. Great. Beautiful. Now, the next year, send it to a million. There's another $2 trillion in T-bills. And it's T-bills at zero. Now, is Tether angry that they're only getting zero from the US government? No, they're happy as pigs in crap because the price of Bitcoin is going up and they're catching feet, right? It all works. Bitcoin holders are happy to be the implicit holders of those T-bills at zero within the

stablecoins because they're getting paid on the appreciation of their Bitcoin. And so it's a way of devaluing the dollar and financially repressing somebody in big ways without it ever being called a big devaluation of the dollar and without it ever being called financial repression of somebody. I mean, you can find a lot of balance sheet that way in an ongoing basis without, I think, really calling into question the dollar system in any real way and you can wake up in two three years and if you do the right things on spending etc with a pretty reasonable sovereign balance sheet yeah and hopefully at that point too everybody from the geopolitical perspective cooler heads prevail because we have to whether it's ai or the embracing of of energy and

unleashing that it seems like we're all able to figure out how to put the guns down and be happy with the debt situation and make sure nobody's getting screwed over and feed bitcoin into the system get back to a place where things aren't as heated as they are today you don't have all this warmongering and saber-rattling you know they just build stuff yeah it's either gold or bitcoin or both sir that they're the gordian you know they cut the gordian knot that we're in right which is the united states cannot afford its debt without negative real rates we will mathematically default if our rates go below nominal growth that's problem one right so that's it's a matter of national security. The Russians are saying it's a matter of national security for

us to not store our, excuse me, our surpluses in your paper, America, because you need negative real rates. Well, if we sell oil for negative real rate paper, we're going to wake up and our pile of paper isn't going to be, you know, at some point our oil fields will roll over and then we're going to need to use your paper, America, to go back and buy oil back that we sold. We'll be buying back oil much more expensive because we've been, you've been inflating, right? That's what negative real rates is. You've been inflating and now our paper is worth a lot less or is worthless relative to oil and other things we need. And that's a matter of national security for us. So that's two untenables. And then you factor in a third untenable with China, who's saying, look, we're

making stuff and selling it to you and you're sending us dollars and we can't afford to store those dollars in negative real rate paper. And so they've been doing a wise thing, which is buying stocks, buying ports, buying mines, buying oil fields, buying gold, buying sort of anything that's going to go up as the Americans inflate and leaving the Americans to buy their own negative real rate paper, primarily the boomers and the banks and the Fed. But the problem is, is that then slows down our economy. It's basically a tax, right? When your own people buy negative real rate debt, that means they're getting poorer on a real basis every year and their disposable income is shrinking.

And so that then keeps this vicious cycle of stronger dollar and more treasury selling higher rates, this breakdown in the system. And the way you cut this Gordian knot, there's two ways, right? You go to World War and you duke it out and you see who's left standing. Or you all agree this is untenable. Nuclear war is probably a bad idea. You know, if you want to do a proxy war first to see if people are really as tough as they are, and I think that might be part of what Ukraine was about, and the Russians have acquitted themselves very well relative to NATO. In fact, they've massively outproduced us.

Then you've got to find something to devalue against. You basically have to devalue the sovereign debt against. You have to move to a neutral reserve asset so that the creditors can get settled in something that maintains real purchasing power and then redeploy that into other countries. And it turns it from a vicious cycle of trying to steal money from each other with negative real rate debt as a settlement asset to paying each other by a virtuous cycle of trade of, hey, yeah, I'm going to sell my oil here. And then you're going to send me your currency. I'm going to buy Bitcoin or I'm going to buy gold. And as we inflate, because we have to, because we have these off balance sheet obligations, then, you know, the value of our gold or Bitcoin is going to go up and I'm going to buy more from you here and I'm going to invest more with you here. And it all can work in a virtuous way.

So I hope there's an understanding of that. There seems to be an understanding of that. The reality is, is that like we've tried the sort of gentle financial repression, this whole let's just take four or five percent to three percent from bondholders over five or eight years and we'll deliver that way. we tried that it didn't work and so to me the biggest variant perception out there right now is is i hear this so much like i don't want to buy gold or bitcoin buy gold or bitcoin when it's really obvious they're gonna have to do it it's like it's really obvious they're gonna have to do this now and you think you have time and you might not like you know to me the biggest message of the trump coin thing of last weekend and the melania coin that thing went up 12 000 percent

in 12 hours. There's a real chance. That's the frigging playbook of like, well, I'll buy gold. I don't need gold if they're going to use gold. I'll just buy gold once it's obvious they're going to revalue it. OK. What if they do it on Friday night like they did with Trump coin? And you wake up and gold's up 1,000% by the time you're up on Saturday morning. What are you going to do? You're going to sell your bonds and buy gold on Saturday? Nope. Sunday? nope and oh by the way on sunday or you know who knows maybe maybe they you know maybe they don't let you do that by monday morning you know sunday night open in asia i don't know but that's the fact that we're so far gone it almost has to happen on you know over a weekend over a week

over a month something very compressed and the more i see the more conviction i have that that's that's one way or another, whatever reserve asset is the asset, I still think it'd probably be gold. But what I've seen in the last six months with Trump, you know, I would have said it was a tiny fraction of a percent of a chance it was Bitcoin. Like that tail's getting fatter, a lot fatter for me in the last six months that Bitcoin could have a real role in some way, shape or form in this way based on the actions of this administration. But one way or another, I think it's gonna be a very compressed period of time yeah i agree it has to be and it is funny that you um connected that friday night trump trump coin launch maybe that was just a testing on the waters like see i mean

i don't think they have that much you know but i do think it's instructive like you know you know i have friends that that grew up in ukraine and you know they're american citizens now and they tell me a story about you know the mid to late 90s and they said look you know we were the richest family in the village my dad was a doctor we had enough in the bank to buy five cars and they closed the banks on a Friday night and they reopened them a week or two later and we took the money out it was the same money we got every dime back and we bought groceries for the month with the amount of money that used to buy five cars happens all the time like the Americans are the only people in the world who don't think this kind of thing can happen and it's only because

it's been 100, 120, 130 years since it's happened anywhere in America. But this stuff happens all the time. Happens all the time. And look, I'm not saying you should live your life assuming it's going to happen. But if you're living your life assuming it'll never happen, I think that's folly. And that's why, at the very least, I think everybody should own a little bit of gold, a little bit of Bitcoin, and then you don't have to worry about this kind of thing. because you'll be more than compensated. But the setup we're seeing increasingly, when you remove the impossible,

whatever remains, however improbable, must be the truth. It's the old Sherlock Holmes. That's where we are. Once you remove what is impossible, it's like, okay, well, we've run down the SPR a whole bunch and then we've run down the reverse repo a whole bunch and we've run down TGA and, you know, we're already at 111% true interest expense. And,

you know, we've already gone to war and it didn't go well in Ukraine. You know, NATO's getting outproduced four to one by the NATO Secretary General's own admission. The Chinese have not tipped over with the dollar wrecking ball. In fact, the U.S. banks, the U.S. Treasury market have broken repeatedly before China has broken. Like, we've tried all this stuff. What's left? Do it quick. Do it over a weekend. Sign a deal. yeah asset holders win u.s wins inflation wins gold wins bitcoin wins um you know china gets what they want out of the deal and like we move on and ultimately if you know we can avoid a serious confrontation we all win uh that should be the goal but i just really the more this goes

on the more i think it's likely to be relatively compressed and i don't think people think that that's even possible no and and every indication from trump i think he gets it i mean he's explicitly said the price of bitcoin will be a kpi of his administration and i think maybe not him but at least people surrounding him in this new administration have to recognize that individual holders of bitcoin per capita are the u.s is winning that kpi and oh that's interesting i didn't know that uh yeah i believe that's it was the case at some point in the last five years i imagine it still is but just think about the um um i'm thinking about my company started here And I think the U.S., for the first 16 years, U.S. citizens have participated pretty materially in Bitcoin and accumulating it and its appreciation.

And if you were to do something overnight, like the collateral damage would not be as bad if as many Americans didn't own as much Bitcoin as we did. So you could totally see it playing out. yeah you could just i mean yeah there's been signals i think even you know when putin says no one can stop bitcoin i took that as a signal of sorts right of like hey like we'll be all right with that and how much time are we going to waste just not recognizing the elephant in the room confronting the problem like i can't wait for the cyber relief when it's band-aids ripped off everything happens it's like all right we've confronted the boogeyman uh recognize that this was not sustainable now we're going to move on and it feels like we're closer you're seeing

real real world conversations about that and you know it's interesting with the one thing you know about doing it via bitcoin is that it would be much more in my opinion a lot of times bitcoin gets dinged for oh look at the distribution of holdings and what have you whatever but a lot of sort of legacy institutions can't hold it because the vol is so great right The volatility is so high, they simply can't hold it, which is a separate discussion. But the point being that there's a lot, I think, a lot more individuals. It would be a really much better, it would recap more individual balance sheets per capita than simply, hey, you know, you revalued it and a bunch of, you know, Wall Street asset holders got rich on it. I don't think that's the case with Bitcoin, right?

So I think I think it's a much more democratic or much more it would do it would recap a lot of individual balance sheets in a way that, you know, that would be helpful. Yeah. No. And last thing on this topic, but the rescinding of SAB 121 last week by the SEC, maybe that's to pave the way to. Yeah, it's interesting. I looked into that today. I saw Preston talking about it and I was like, yeah, you know, I read up on what that was. yeah that's um it's very possible yeah it certainly certainly can't hurt right it's certainly it's interesting that they're that they're doing that yeah it creates an avenue for the banks to get access to this collateral asset um whether or not they're able to um to actually uh not not blow it like block fire celsius or ftx did is another question but um you can envision the scenario which they're allowed to hold bitcoin on behalf of customers

and on their balance sheets, and they have proper risk management and don't lend it out to degenerate gamblers and are able actually to keep it where it could be better for everybody involved. Yeah, that would make sense to me. Yeah. Luke, it's always a pleasure, sir. Thank you so much for taking some time on this Monday afternoon to sit down. Is there anything top of mind we didn't touch on

that you think people should be aware of? No, I think it's very much in a state of flux. So it'll be, I think it'll be really interesting to see the next several weeks how they play out because it does, you know, next two, three weeks, next two, three months, I have very little visibility on how things are going. I'm sort of in the position of a poker player, right? And I'm, you know, I got the cards I'm holding and I know what I have in my hand and I'm looking at what's been flopped so far. And it's like, I need to see a couple more cards before I get aggressive. I mean, I feel like I think I know how this game is going to end by the end of this year. But for the next two, three months, I need to see a few more cards.

And, you know, let's see, because there's a lot of things in a state of flux and there's some very strong, strongly held opinions about how they're going to go. And I'm not sure how those that those opinions and how things actually go are going to match up in the next two to three months. yeah yeah i think we have one month of honeymoon period post inauguration and then then things start to get real so yeah then they're gonna have to start you know and and that's where things will start to get much more interesting like we said right when you know best and start sitting down said oh you have to go to go with us and cut off the chinese like uh they buy five four times more stuff than you from us what do you got like well how about some f-16s you know how about an f-35 right and it's like you know well you can only have so many f-35s if you're

if your people want smartphones right so we'll we'll see how those negotiations go among other things well we'll watch it all play out and hopefully um we'll catch up at some point q2 and uh see where things are landing yeah perfect all right luke thank you have a great night thank you my friend you do the same all right peace and love freaks Thank you.