TFTC: A Bitcoin Podcast - #599: Trump’s Economic Reset Strategy with Mel Mattison

Episode Date: March 19, 2025

Marty sits down with Mel Mattison to discuss the Trump administrations attempt at a manufactured soft landing. Mel on Twitter: https://x.com/MelMattison1Mel's website: https://www.melmattison.com/ 0:00 - Intro 0:36 - Building homes won't fix real estate 3:34 - Effects of Trump admin on market 8:02 - Bitcoin breaking from NASDAQ 10:14 - Fold & Coinkite 11:52 - Bessent’s hot and cold strategy 18:18 - Playing hardball with Europe 23:24 - Unchained 24:24 - Middle East/Ukraine 33:49 - Remaking the monetary order 39:46 - Phasing out the Fed 47:05 - Sovereign wealth fund makeup 53:13 - Nixing income tax 1:03:03 - Allocation strategy Shoutout to our sponsors: Fold https://tftc.io/fold Coinkite https://coinkite.com 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. When you talk about a Fed just gone nuts, 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. And Jason Calacanis was tweeting about this.

I was quote tweeting him last night about this idea that to fix the housing crisis, we just need to build a million affordable homes to bring the prices down, flood the market with more supply. and i'm saying commenting that the problem i don't think can be fixed by some sort of central planning of expansion of supply by 1 million homes the problem is that people are using real estate as a store of value asset when it really should be a consumption good with some premiums that can exist due to location size aesthetic whatever it may be yeah no i think that's definitely the case i think homes and the s&p 500 are are essentially ponzi's if you if you

really break it down like it's like okay if someone's going to pay more for the it's it's it's not based on the traditional valuation metrics anymore and it's this is this is a big problem i have when i listen to you know people on like cnbc and it's like oh well they're always like trying to justify like some sort of rational valuation metric and then the market shifts and then they're like just changing their whole call like oh well you know nvidia's got this growth earnings and so therefore this is a very fair valuation and then nvidia goes down 30 percent it's like well we knew that their growth was going to have to slow down at some point so so they're always like retrofitting the valuation and i think the reason they're doing that is

because it's not really based on that anymore that when the stock market was the uh kind of place for elites to invest money and they looked at it and they did dcfs and a lot of times they actually did discounted dividend models so a lot of times they they literally looked at it like what is a fair multiple of dividends like for the cash flow and at a certain point um between passive investing and between 401k and this the massive shift between defined benefit plans as the pension system in the united states to define contribution plans and 401k it simply became like a a financial mechanism to to to basically shift wealth into you know the older generations based on what younger people would contribute and it started to really divorce from

valuation fundamentals and and housing did the same thing which is i think what you're saying they they became substitute store of value assets because there wasn't a really good store of value asset and obviously as you and i know bitcoin is designed to be the perfect store value asset and and that's what's slowly taking place as people starting to realize that yeah as i was telling i was in dc last week for the bitcoin policy institute event catered around content sort of putting forth the idea this strategic bitcoin reserve and i was highly encouraged by the amount of senators and representatives that were in the room seriously digesting the content and taking our perspective seriously it seems like things have definitely

shifted with the second trump administration which is why we're catching up because the last time we caught up was right before the new year and you had laid out your ideas for what was going to happen particularly the effects of the incoming trump administration on the markets and so far what you predicted or what you said would happen when Trump got into office has played out almost perfectly in terms of markets crashing, a quick crash, a reset with these tariff policies and other economic policies. And people are running around like the hair is on fire.

But I think if you take a step back and you just approach this analytically and objectively. Um, many people are saying that, that Trump has no idea what he's doing and pointing at the markets as evidence of that. But I think you rightly called at the end of last year that this was probably going to be what they were going to do out of the gate to, to reset things. Yeah. I mean, I'm, I'm getting more bullish every day. I mean, it's like, I, I looked, I looked at it back then and I thought like, there's a lot of stuff being priced in that like is not taking into effect what i would call reality and it's like you know it's like okay we're going to you know decrease inflation to two percent we're gonna make housing

affordable we're going to pump up the stock market we're going to uh get manufacturing back here like the list could go on and on of what was promised and it's like there's no magic wand that can just be waived and this happens the only potential way this happens is through a series of events and that part of that series was going to have to be a interlude of uncertainty of you know is this really going to work is it really going to produce the growth at the end of the light at the end of the tunnel and that during that period of uncertainty i was like there's definitely going to be a sell-off. And I basically said in December, I'm like a 10% to 30% sell-off. And that was a wide range. But if you had to do a point estimate on it, it would have been a 20% sell-off. And I

still think that could be about right, which would give us another from the lows of the S&P, which were around 5,500, could be another 10%. On Bitcoin, I had looked a lot at monthly charts. And I actually, I wrote down some numbers like the monthly close high in 2021 was 61K more or less. The monthly closed low in 2022 was roughly 16K and that's a 44K spread. And if you add that 44 to the previous high of 61, you get 106. And that had been my initial target was around the 106 range. I think we got to like 108 or something like that. And I said, typical thing to happen when you get a move like that is you retrace 50% of it. And the 50% retracement was $83,774 on a monthly

basis. And we literally last month in February closed like within a hundred bucks of it. You You know, like we closed Feb at like 83. I don't know. It was something within 100 or $200 of a 50% retracement of those monthly highs. And my point was that would be a normal retracement on a monthly level. Intermonth, we'll see what we're going to see. And then I think we ramp back up. And what we do is we do another 44K on top of that 106K.

And that's going to get us to 150. And that's my 2025 year end target. I think we could do more than that, but I still think we're looking at 150 Bitcoin by the end of the year. It's a nice humble pump. Many people are calling. I'm not sure if you saw this Josh Mendel character pop out of nowhere. He made the $84,000 on March 14th call. He was within a couple hundred dollars.

He's calling for $444,000. But I think whether it's 440, that would be incredible. 150 just going up would be would be good because I think it it would validate the long term thesis that Bitcoin is something that's here to say that people should own. And marching towards 150 is a validation of of that thesis, I think. Yeah. And I think I think what what is possibly going to happen and I can't guarantee it, obviously. But I think what we could be seeing is the beginning of a divorce between the Nasdaq and Bitcoin. And I think that's a very important thing to happen.

And for it to begin to break down that strong historical correlation with risk on. And I think, you know, there could be fundamental drivers for it. So we could see, for example, the Nasdaq go down lower, and then we could see some positive announcements of, say, states or, you know, some sovereign in the Middle East saying we're going to put in a Bitcoin reserve. And all of a sudden the market needs to say, OK, Bitcoin is not the Nasdaq. Like in this is I think this is a huge maturity point for Bitcoin. I've I predicted it in one of my I put out a post at the end of 24, like top 10 predictions for 2025. And one of them was that during this year, Bitcoin is going to break its super hyper strong correlation with

the Nasdaq. And I think if it can do that, like that's that's going to be huge and that's going to be a big thing for Bitcoin. And I I think it hasn't done it yet. And, you know, we will see what happens. But, you know, like I said, a lot of the things I predict, they don't happen next week. They take a few months to play out. But hopefully by the summer or the fall, we'll start seeing that Bitcoin is not trading, you know, as a high beta, you know, NASDAQ play. What's up freaks? Do you have a credit card? Are you getting cash back or airline points or points for some other service? Guess what? Those are shit coins. You want to be stacking Bitcoin. I have some groundbreaking news for you. The team at Fold has finally released the Bitcoin

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a lot of the focus was on treasury percent and comments he's made uh in the 12 to 18 months leading up to the 2024 election um obviously we talked about doge and tariffs and the effects that'll have on the policy and then i'm not sure uh or on the economy excuse me i'm not sure if you caught this yesterday but uh treasury secretary percent was on meet the press and He had this one line that signaled to me that essentially confirming the court of your thesis. I know it's coming. Yeah, I mean. Let them eat flat screens.

Let them eat flat screens. The American economy has not let them eat flat screens. And I thought that that line was incredible, not only for how eloquently or not, not even eloquently, how simply it described what the American dream should be. It's not about being able to go out and buy a 80-inch flat screen for $300. It's about being able to pull yourself up from your bootstraps and honestly and earnestly believe that you have the ability to go out there and make something of yourself and climb the economic ladder. And I think that line signals where this administration is thinking from a policy perspective, which is the stock market is not the economy. We really need to reinvigorate the middle class and bring true wealth and productivity back to the American economy. Yeah. I mean, I mean, when we talked last time and you were I was like, OK, the market is probably going to go down and it's not going to look pretty for a while.

And I said, look, you know, they're going to come out there with messaging. You know, they're going to blame the Democrats. They're going to blame, you know, a ridiculously high deficit to GDP spending. they're going to in in in many ways they're going to be right and what what they're trying to do in my opinion is they're trying to thread the needle and save us from a complete financial collapse that if you if we had continued on the path let's just you go into a weird universe where kamala harris won and they just said okay let's just keep doing what we're doing let's keep doing seven, 8% deficit to GDP. Let's keep doing government spending up the wazoo. Let's let,

you know, U.S. debt go from $36 trillion to $45 trillion in the next five or six years. And at the same time, the economy is going to be growing, which is going to do what? It's going to push up the 10-year yield. It's going to put up interest rates, which is going to do what to our net interest expense it's gonna you know balloon out of control and we're essentially gonna head for another great depression like i really felt and i still feel like if if we just would continue on that path that is what what was our uh destiny and i think what they're trying to do and i don't know if they will be successful i want to be clear i think what they're doing is a thread the needle strategy that has a lot of moving parts to it that, you know, things could, you know, go off

the rails. But if they're successful, I think what they're trying to do is they're trying to realign us to a path of sustainability. And it's going to have hot parts of it and cold parts of it. I call it a salsa and sour cream strategy where, you know, if you look at salsa and sour cream, they're usually paired together because there's something called like capsaicin or something within sour cream that dulls the salsa. And so they've got different things where they're like, OK, we're going to fuel the economy by forcing, you know, longer rates down. That's going to drive down mortgage costs eventually. And this is a huge part of it is housing. I think that's going to unlock, you know, people doing second mortgages. And there's over 13 trillion

dollars of equity that Americans have in houses that that can be unleashed. So I think they've got all these salsa components. But right now we're getting a big dollop of sour cream. We're getting tariffs. We're getting, you know, decreases in government spending, which has been juicing the economy for many years. So we're getting a lot of cooling components now. I think the salsa components are waiting in the wings and they're doing it in the right order, which is first you how to cool things down bring down interest rates bring down oil and then you start to unleash all of these like what are in essence inflationary components because what you're doing right now is you're putting in deflationary components i think actually tariffs are deflationary i don't

think they're inflationary at all and so they're introducing deflationary components right now we've also got a massive uh secular deflationary component which is ai so we've got all these deflationary components that we're facing right now, I think that's what the stock market is reading. That's what's driving down 10 year yields. And then what they're going to do is then all of a sudden, in the summer and the fall, I think unleash the salsa and the hot components that are just going to fuel this back to 7000. So that was my prediction. It was like, we're going to come in, we're going to have a 10 to 30% correction, it's going to be V like, and we're going to rebound quickly and we're going to end the year closer to 7,000 on the S&P, 150,000 on

Bitcoin, 4,000 on gold and be set up for basically one of the best economic times we've been set up for. But there's going to be a period and it's going to be substantial and it's not going to be fun in the first half of the year where we go down and people get scared because they don't believe in it. And eventually they will believe in it, but I still don't think they believe in it yet. And that's why I think we probably got further down to go, but we are setting up for a little bit of a bounce here. But I think if we get to a certain point, I'd probably be ready to sell that bounce. But I think we'll probably bottom sometime in May or June, not in March. how would you grade the execution of this salsa and sour cream policy so far it could be better

but i i totally see their point so like like some people are like oh you know trump is being too harsh and he's i think this is the way i guess i could analogize it let's just say you've got one car to sell, you're a car salesman. And if you sell this car, you hit your monthly bogey. So you need the unit sale. But you also want the commission. And let's say you get a commission if you sell that car over $30,000. And you're dealing with a potential buyer. Well, you're going to want to try to sell for $35,000 or $40,000 and hit your commission. But what really matters to you is is hitting that unit sale so you hit your your unit goal and and collect whatever that bonus might be and then on the other end you got a buyer who really needs the car um but on the

same time he wants to save money and so if you go into that negotiation and the guy who needs the car is like oh i really really really need this car i'll do anything for it you know you're being stupid. And the same thing with the salesman. If he's like, oh, I just need to get this sale. I don't even care if I make a commission on it. I just need the sale. And that's Europe or that's China. And then, you know, Trump on the other end is kind of the car buyer, if you will, of these products. And so they're both coming in with a bunch of rhetoric that is not anywhere near how they truly feel on the issue. And so at the end of the day, Europe really needs the sale. They need the units like they can't just give up the american market their their economies will collapse

on the other hand trump as the car buyer and i said this car buyer hypothetical car buyer really needs the car like he he doesn't want to give up the european market either so they're so they're both just jawboning they're they're they're talking their game they're in and this is the that always happens with Trump is like Marco Rubio, little Marco, and they're playing their hands. And now he's his right-hand man in the Secretary of State. It's not like a normal guy in the street where you walk up to the guy in the street and you say something mean and nasty to him and he doesn't want to have anything to do with you. These people are playing hardball. They're playing big stakes and they're not going to let comments or ruffled feathers get in the way of

the deal that's ultimately in their best interest. And so right now, you've got everybody playing hardball, whether it's Canada, Mexico, Europe, they're all talking their game, Trump's playing his hardball, he's all talking. And I knew this was going to come. That's what I said was going to be was basically going to be the cause of the sell off is that for him to get what he wants into place, there's just going to have to be this period where people are basically at each other's throats. And at the end of the day, though, these people, I think, can be counted on to do more or less what's in their interests. And then there are things that are differing interests. I think, for example, Europe has a different interest vis-a-vis Ukraine than America does. So I think,

you know, like, terrorists is one thing where, like, ultimately, we want to keep a trading alliance together. I think on the other hand, there are certain reasons why Europe is more concerned with Russia than the United States is. And so there are areas where we overlap and we're going to eventually come together. I'm pretty confident about that. And then there are other areas where we might diverge and those things will play out how they play out. But as far as the economy is concerned, I think nobody wants to go back to not having the American markets open to them. And ultimately, some sort of solutions will be found out. And once those get found out, once they get resolved, once the rules of the road become clear, and then the salsa

starts getting added on, which I think is things like expanding second home mortgages, government guaranteed, which I think is could be a sovereign wealth fund with Bitcoin, with gold that is then used to kind of leverage up the U.S. balance sheet. Once those things get going and the deregulation, lower oil prices, like once those things then get into place, then the market is going to take a step back and say, whoa, we misread this whole thing. Trump was a master. He played it wonderfully. And I'm not like a Trump sycophant. I don't think he's a perfect guy. And I disagree with him on some issues. I think he's too strong in favor of Israel, for example. But like, I do think that eventually this is going to play out in a good way for the

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there's a guy a well-known professor from university of chicago john mearsheimer He wrote a book called The Israel Lobby, and he's basically spelled out how there's a weird situation between the United States and Israel, which is there's just a very, very powerful lobby of United States citizens who also happen to be Jewish and perhaps even Israeli citizens, dual citizens that are very powerful and that contribute a lot to political campaigns. for congressmen, for senators. And so sometimes the U.S. winds up doing things that are not in the United States' interest, but are in the interest of Israel. And in this, we've seen this escalation over the weekend with the Houthis. And it seems relatively clear that Netanyahu wants to try to, uh, take out Iran, um, possibly just to take out their weapons capability, but he could have broader aspirations. He, he was in charge, I believe back in, uh, 2003, 2004, when we were in Iraq and, and he wanted us to continue after Iraq to go into

Syria and different things like in Israel is in Syria now. So Israel's in Syria. They've got positions in Lebanon like that. This whole Israel thing is probably the biggest wild card in the whole mix. And it's also something that I think is complicated by the fact that there is a very strong lobby on behalf of the state of Israel in the United States, something that, for example, ukraine doesn't have yeah and i think if the history of the 21st century has taught us anything is that meddling in middle east affairs doesn't always work in our best interests and is never as easy as it may seem at the onset i mean syria is a perfect example i think tulsi gabbard did an incredible job of sort of predicting exactly what would happen there if we let the um the rebel

forces take out assad and lo and behold within a few months syria is a complete show with isis taking over and slaughtering religious minorities particularly christians and i i completely agree i think i could see catering to the whims of israel's once in that part of the world could distract us from what we're trying to do at home which i think is extremely admirable worthwhile and where our focus should be is just resetting the American economy to make sure that we don't live in a world where let them eat flat screens is the economic policy here domestically. Yeah, exactly.

And I mean, if you look at, you know, I mentioned something earlier, like just Europe's interests might slightly diverge. I think from the U.S., I think it's easy to think, you know, that Europeans are being silly with wanting to support Ukraine. But I think if you look at European history over the centuries, Western Europe has always wanted the resources of Russia. They've always wanted it. Germany did, even if you go back further, Britain, France. I mean, they looked at the resources that Russia possesses.

And then they had this kind of Western European superiority complex where they just looked down upon Russia and the Slavic peoples, and they've constantly wanted that. And I think when you look at, for example, Germany, and you see that Germany was brought to their knees a little bit by this Ukraine issue, given their dependence upon Russia for oil and natural gas. I think there's almost a legitimate national interest in some of these Western European states to say, we want to be able to control Russia because they are our primary source of oil. And this is not too dissimilar to 1970s, 1980s, when the United States was at its largest point of being a net importer of energy, and we were brought to heel by Saudi Arabia and OPEC doing price controls and boycotts on sending oil to the U.S. And we had the famous oil lines in the United States and only odd number license plates could get oil on this day. And and the United States came out and basically said, like, this cannot go on. And there are recently declassified documents from like Kissinger under Nixon where they were drawing up plans to invade Saudi Arabia because the point was like we cannot be held hostage for oil or energy by the Middle East. And I think in some sense, Western Europe has felt, oh, my gosh, we're being held hostage by Russia.

And and so they have this almost almost legitimate. I don't I don't want to, like, give a blessing to it, but it's an almost legitimate national interest of like we need we can't let Russia be so independent with their huge nuclear arsenal. And if we can weaken them in any way, that's a real big benefit to us. But that completely diverges from the United States interest, which is if we really, you know, become aggressive against Russia, we drive them more into the arms of China. And if Russia and China are together and then also Russia has been developing a lot of strong allegiances with India because India needs Russian oil, you know, that puts us in a negative spot. And so I think there's a legitimate this could be like a second concern. So, number one, there's there's a divergence between U.S. interests and Israeli interests. And then, too, there's a divergence between U.S. interests and European, Western European interests.

And so what the United States is really, I think, needs to do is extricate itself a little bit from being a, you know, protective uncle to Europe. And I think Trump's willing to do that. I think he also needs to do that to Israel. But I think that's more difficult to do because of the strong lobbying controls and positions that are there with Israel. I completely agree. I think as it pertains to Western Europe specifically, I think it's easier to sort of cut ties and say, hey, we're not the productive, protective uncle anymore because of what's happening socially and politically over there in terms of their aversion, it seems, these days to Western liberal values of freedom of speech and secure borders, which weren't values here until recently. But I think it's much easier from the Western Europe perspective to be like, hey, you guys are going a little nuts right now. Well, we need to get things in order at home to make sure that we're on stable footing.

And so if you guys want to go about this, you're going to have to go it alone. I think the argument is made significantly stronger when you consider the amount of money that's been sent that way for for the war in Ukraine over the last five years or three years. uh so there yeah when it comes to israel they do have a lobbying stronghold and and obviously it is a hyper vitriolic topic that um that that brings about a lot of a lot of blowback if you try to approach it but i think if you if you just state politic it and just don't bring religion or ethnicity into it and just label it as state actors interacting with each other it's like hey um i don't want to get dragged into more middle eastern wars it hasn't worked out for us it's not in our best interest and there's no reason to because there's actually a propensity for a

number of powerful middle eastern states to strongly ally themselves with the united states so you know countries like saudi arabia which feel threatened by iran are really like like itching to just you know solidify partnerships with the united states and actually even even with Israel. And it's it's just not a good situation. And so these are the big things that I think are worries on the market, things that could get in the way. But I think at the end of the day, these will be navigated through. I think they've always been navigated through. And I think really, when you look at things like tariffs, you know, I think they're they're really being thrown out there as like a reason for the market to sell off or what have you. I don't I

I don't think it really is about tariffs. I think what Trump is trying to do with, you know, reinstituting manufacturing in the U.S. is a complete realigning of the global monetary order. The post-1971 monetary order where the United States prints treasuries, people sell their goods cheaply into the United States, the U.S. exports treasuries, those treasuries float around the world as currency for the world. I think that system is breaking down. And that's one of the reasons why you're seeing things like the German stock market do well this year is because people like China, which have historically sold in the United States, taken those dollars. And yes, some of those dollars they bought U.S. treasuries, but a lot of those dollars got sent into U.S. real estate and also the U.S. stock market and saying, OK, maybe we're not going to sell as much into the United States anymore. Therefore, we can't buy as much U.S. assets anymore. Therefore, let's buy European assets. And this is one of the fundamental drivers of the break between Bitcoin and Nasdaq is Bitcoin is not a U.S. asset.

Right now, China does have restrictions on Bitcoin. However, their citizens and given the nature of Bitcoin are still able to own it. And they're and they're doing that in large numbers. They're also buying gold, another neutral asset. And so this break from, for example, the Chinese buying the Nasdaq, buying NVIDIA, is part of what's going on here. And I don't think it's necessarily because of tariffs. I think it's more of a broader change in the monetary order, which has simply been U.S. print more treasuries, increase our national debt, supply the world with dollars, dollar cents, cheap goods. Once the BRICS nations basically said, you know, we don't want to play that game anymore, then I think the United States, especially I think Besson understands this, like that is no longer a sustainable path for the next, let's say, five to 10 years.

It might have been sustainable for another two or three years, but eventually it was going to hit a roadblock and it wasn't going to work anymore. And so we're getting this complete reordering. And in this intermediate period where people are like, OK, the traditional buyers of Nasdaq, U.S. real estate, Bitcoin, they're now buying other assets that causes a dislocation that causes a price drop. But what will happen is that people will then begin to realize, OK, for every one of those buyers, there's going to be another new buyer, which is, OK, United States citizens, for example, are going to have higher real wages. They're going to be a larger manufacturing group, which is going to cause reinvestment. So instead of foreign direct investment from China buying U.S. real estate, it's going to be companies wanting to put up data centers, or it's going to be, like I said, a rejiggering

of the Fannie Mae, Freddie Mac system that unleashes second mortgages that lead to Home Depot and low stock going up. And then there's going to be certain, probably, incentives for first-time homebuyers. I think they're going to be putting in certain things like like government cap mortgages, like things that we just really have not seen. These are things that are outside of the Overton window, things that we thought, you know, we wouldn't see. And that if they were done, let's say in January, would have just caused inflation and the stock market to spike so high it would have led to a collapse. But once we cool things off a little bit, once we do that sour cream, then they're going to come in with the salsa ideas and they're going to be things like, OK, guess what? We're doing a government backed Fannie and Freddie home loan for first time homebuyers that is capped at three and a half percent.

And, you know, these are things that are not outside of the realm of possibility under a Trump administration and that can just totally stoke this demand. and start driving this internal virtuous circle of demand that's going to replace this external virtuous circle of demand that has existed for decades. So we're essentially transferring the entire flow of capital from plan A, which was, again, U.S. print dollars, go out, dollars come back, recycle back into the U.S. to buy U.S. assets, to dollars are going to begin to be printed within the United States for recirculation within the United States. And I think there will be some inflationary impacts to that. And that's what I think is also going to be beneficial for gold, Bitcoin and the stock market. But it's not going to begin to occur until probably the summer

or fall of this year. And once people start to see, OK, this is what's going on, then I think there's going to be a mad rush and we're going to have a ridiculous uh you know climb and that that's how i can easily get to my 150 bitcoin by end of the year target how does the fed play into this do they need to play ball particularly for that that mortgage idea it seems like rates would have to be lower the fed funds rate at least to justify it yeah i i think part of the Trump administration is to neuter the Fed. It's to take the Federal Reserve out of the picture, that the Federal Reserve is an anachronism. It is a holdover from the days of the gold standard. The Federal Reserve existed in 1913 because there was a point where the government needed

gold to back its currency. And the only way you could get gold is you go to rich people. And the only way you could access those rich people was to go through banks. And so the Federal Reserve was created as a go-between between the wealthy and the government. And this is the initial creation of the Bank of England, 1694, William III. He had basically borrowed money from wealthy people. He could not pay it back. He was involved in a war with France. And he went to these wealthy people and said, I need to borrow more money because I'm involved with the war with France.

and the wealthy people said we weren't we're not going to lend you any money king william because you're not good for it but what we will do is if you give us a charter and this was the charter of the bank of england in 1694 if you give us a charter to print paper money we will collect paper money or collect gold and silver from the population take it into the bank of england issue them paper notes give you that gold and silver at interest so basically what it was was take money from the people at no interest and then loan it to the sovereign at interest that's that is the basis of a central bank this is the the basis of a central bank from the beginning of time it is to fund the government uh through the people's money while bankers and rich people

collect interest rates. And it was necessary because money had been based on gold. Once we left the gold standard, and this has not completely sunk into people yet, is that there's no need for a Federal Reserve. And the United States could issue United States notes. They could do whatever they want. And I think when Besson talks about, he says, reprivatization of the economy. And when they talk about, we're going to utilize the asset side of the balance sheet of the United States. I think these are comments that are hinting at the taking away of power from the Federal Reserve. So what they're going to do is they're going to bring monetary policy into the United States Department of the Treasury. And let's say, for example, they set up a sovereign wealth fund

And Bitcoin is in it. Gold is in it. Cash flows from oil and lease contracts are in it. You know, maybe they'll they might take some of their massive real estate holdings and start selling those off to private companies, renting them out to federal agencies and then those federal agencies pay rent and comes into the sovereign wealth fund for cash flow. So there's all kinds of ways that they can manipulate this treasury balance sheet, the sovereign wealth fund balance sheet, to essentially bring in assets. And then what they can do is they can start monetizing that in a way that in the past only the Federal Reserve has been able to do. It's always the Federal Reserve balance sheet. Like people talk about, oh, well, they increased the Federal Reserve balance sheet. And so what what they're going to do is they're going to be like, OK, we're going to take the sovereign wealth fund and we're going to use this collateral to buy 10 year treasuries or we're going to issue, you know, the quote unquote Mar-a-Lago accords that have been talked about.

We're going to issue a 50 year treasury bond with zero coupon backed by gold, you know, which would be hold in this sovereign wealth fund. So I think there's going to be ways that they are literally going to strip away Powell from the Federal Reserve. And they're not doing it yet because they know they cannot control Powell. And I don't think they want a public fight with Powell because they know they can replace him a year from now and he'll be gone. And they'll have somebody in there that's going to play ball. So, this plays into, for example, the gold revaluation. So, the U.S. gold on the Treasury's balance sheet is valued at $42.22 an ounce. This is based on Nixon in 73, revalued it to that level, according to different laws. And this is I actually went in and I researched all these laws. It's like the Gold Reserve Act of 1934. There was another big thing that allowed the president to revalue gold. Part of the AAA, the Agricultural Adjustment Act of 1933. There's a specific clause in there known as the Thomas Amendment.

At the time, it was called the Inflation Amendment because it was the legal mechanism that allowed roosevelt to revalue gold from 20 to 35 an ounce so there are all of these legal and and you know the trump administration loves to do it they've just been using the alien uh enemies act of 1793 like they love pulling this stuff out of the woodwork and i think they're going to be pulling out the agricultural adjustment act of 1933 and the gold reserve act of 1934 and they're going to be revaluing gold to $3,000 an ounce. They're going to get an $800 billion injection from the Federal Reserve, debt-free, interest-free. That's essentially QE. That's massive QE. That's money printing. And so they're going to take over the monetary policy. And there are hiccups in that.

So a lot of people really quick is just so people know is they've talked about this, but I don't know if they've actually researched the legal precedents of it. So that Thomas Amendment in the Agricultural Adjustment Act that allows the president to revalue gold, it limits him of revaluing it at 50 percent of the value, which would mean at forty two dollars, you could only revalue it up to like 60. But it doesn't necessarily say like how many times he can do it or whatever. So I think there's going to be ways that that they can do it. But it's not so simple as just, OK, one day Trump's going to announce gold 3000. I don't think he has the authority to do that, given the laws. But I do think that there's going to be a path to do this. And this is going to – this is the retaking control of money from the bankers and bringing it back to the people. This is the same thing that Andrew Jackson did when he got rid of the second central bank of the United States. I think that this – the era of central banking dominance is coming to an end. That's a good thing, I think.

A great thing. A great thing. A great thing. Going back to your explanation, am I understanding it correctly, specifically the sovereign wealth fund sort of returning the U.S., maybe not to a pure gold-backed currency system, but the sovereign wealth fund itself will be built up of neutral assets and cash flows that the incoming monetary system will be based off of, at least here in the U.S. internally. Yeah. Well, so still very bullish on gold and Bitcoin, because I think one inflationary system is going to be replaced by another inflationary system. So we're still going to maintain a fiat system, but the control is no longer going to be in an independent central bank that is essentially beholden to the city banks and JP Morgans of the world. So, you know, if you look at, you know, who owns the Federal Reserve branches, if you go, OK, not the FOMC, which is the Open Market Committee. But if you look at the Federal Reserve Bank of New York or the Federal Reserve Bank of Chicago and you say, who owns those banks? Those are corporations that are owned by J.P. Morgan, Citigroup, Morgan Stanley. This is this is public knowledge. the Federal Reserve, in fact, I think it was in 2017, someone had sent a FOIA request to the

Federal Reserve Bank of New York and said, who are your shareholders? What's the cap table? And surprisingly, they actually answered the letter. And they said, number one, we are not a government agency and we're not under FOIA and we're under no obligation to release this information. But in the interest of transparency, we're going to tell you. And the top two shareholders were JP Morgan and Citibank. That's who owns the Federal Reserve of New York. So what's happening is that these large banking institutions, which have essentially milked the American people for over 100 years, since 1913, and the founding of the Federal Reserve the same year that the income tax came in, they are now being pushed to the side as secondary institutions.

Now, I'm not saying that means their stocks are going to go to zero and JP Morgan and Morgan Stanley aren't going to make money. They're going to make money. But I think that the days of someone like a Powell being unilaterally in charge of U.S. monetary policy are going to be over and it's going to be brought more into the Treasury. And this is a whole set of concerns with that. Because once the treasury gets a hold of it, you get the political bias to print money and do this. And so that becomes very inflationary.

And I still think at the end of the day, we're heading for a massive inflationary spike that once we get through this, you know, tumult that we're going through right now. Now, some of the companies, if you look at the stock market that are going to, in my opinion, do the best coming out of this are going to be things like industrials, materials, commodity companies, not necessarily oil, because I think energy is being purposefully kept down. So I'm not bullish on something like the XLE or the energy sector ETF, but something like a FCX, like a Freeport-McNuran, which is a copper and gold producer. Like, I think these are going to be like companies that might do better on a percentage basis than an NVIDIA or an Apple starting in, say, June and this year until June or December of 2026, because these commodities are now becoming the basis of the monetary system, which is what they should be.

The basis of the monetary system should not be a fiat currency that can be printed at whim. It should be commodities, and it should be oil, it should be gas. And then if you want a neutral asset that can act as an arbiter between all of these countries as they try to manipulate their currencies and play trade wars. You want a neutral asset. Historically, that neutral asset has been gold. But Bitcoin can also serve as that neutral asset as well. And I think when we talked last time, I talked about a world where both Bitcoin and gold begin serving this neutral monetary asset thing. You talked about maybe

it could, why doesn't it go to just one or the other? And I tended to think that there are certain reasons why certain foreign central banks prefer gold. They feel maybe Bitcoin is a little US dominated, different things, and that that's why gold would be a big part of it. But then I also felt Bitcoin will be a big part of it as well as the digital assets economy. Tokenization is going to explode you've got sacks the cryptos are like as assets as securities as everything starts getting traded on the blockchain and people say wow digital assets are you know the future then they're going to say what's the ultimate digital asset store value that's going to be bitcoin bitcoin is going to become part of institutional portfolios it already is and so

it's it's very bullish for bitcoin and gold and i think there's room for both and that's you know my opinion. I know some people have different opinions, but my opinion is that both Bitcoin and gold can serve as neutral monetary assets. It seems to be playing out too. You just look at how much gold Russia and China have accumulated over the course of this century. It makes sense that you would want a natural reserve asset hedge against Bitcoin in case it does become u.s dominant but i do think russia and china certainly have good exposure definitely not public about it but i would be shocked if they didn't have massive exposure to bitcoin as well and you mentioned something um in passing about the introduction of the income tax around 1913

too obviously that has been a big meme for trump this shift from internal revenue service to external revenue service do you do you think the pot and obviously last week letnick was on the media trail, basically saying we're going to eliminate income taxes for individuals making less than $150,000 a year. Do you think there is real momentum behind this idea of eliminating income taxes in the United States and this threshold of $150,000 is simply a first step in that direction? Yeah, I mean, I really do. I think they can do it. I don't think there's any reason why they can't do it. And I think that it will be a net positive. And here's why. There are a lot of people in this country who don't work because of income taxes. So, I mean,

if you go and you get a job and you make 50, $60,000 a year, and the government takes 20,000 of that, and you're left with $40,000. And if you went on benefits, you could collect more or less, let's call it twenty five or thirty thousand dollars and you say i just worked the whole year for ten thousand dollars then then you've got a bunch of people that are not stupid and they're doing that mental calculus and they're saying if i can just get myself down to living on snap benefits and living in section eight housing and not paying any taxes and in and because of inflation, that level is much higher than most people would think. Like a lot of people might think, oh, as long as you're making 30 grand, you're better off working. No, no, no, no, no.

Given the safety net, you need to make 60, $70,000 a year before it makes any sense for you to take a job. Otherwise you're probably, and not only that, but because of the gig economy, because they can say, okay, you know what? I'm going to make nothing, but my wife, I'm going to, you know, use your driver's license, or I'm going to use my brother-in-law's driver's license, and I'm going to go drive Uber. And, you know, there are so many ways to rig the system so that it doesn't make sense for you to work and pay in at under a hundred grand. Like it totally makes sense to cut out taxes under 100 grand maybe 150 is a little high right now but in coming years it'll it'll eventually get there so i i think what it is is it's like we need to motivate people to take

full-time jobs and we need that because we're going to need to fill full-time jobs i had some data here i had run the other day this was uh i had gone back to the december 2019 bls payroll report to look at jobs broken down between foreign-born and native-born, which is how the BLS breaks it down, and compare it to from December 2019, which was the last month before COVID really hit under Trump, and then December 2024 under Biden. And I looked and it was native born 2019, 131,281,000 jobs in 2024. So five years later, native born jobs were 130,565,000 for a net loss of 716,000 jobs. So between 2019 and 2024, the number of native-born Americans holding a job in this country

went down by 716,000. If you look at foreign-born, in December of 2019, that number is 27,223. And then you go to 2024, it's 30,729,000 for an increase of 3,509,000. So between 2019 and 2024, we created over three and a half million jobs for foreign born individuals, and we lost 716,000 jobs for native born individuals. And that is BLS numbers. That's not me. I mean, these numbers are probably even light. so in other words we created millions upon millions of jobs for foreign-born people under the biden administration and we lost 716 000 jobs for americans and the last thing i'll add is the increase in unemployment because this is key at at the end of trump there are only 863 000 foreign-born people in the country on unemployment by the end of biden it was over four and a half

million and so we we created a whole of these jobs for foreign born but we skyrocketed the unemployment payrolls for uh foreign born and american borns didn't get anything they now there was a slight decrease in the four in the native born uh working age population a slight decrease like 300 000 so because of baby boomers retiring you know the baseline didn't increase but i mean it's ridiculous it's ridiculous and this is what we did and last thing i'll add this is the uh the uh monthly treasury statement which the which the treasury department puts out a nice picture alexander hamilton on there i mean in february this came out a couple days ago we ran a deficit in february of 307 billion dollars and we had total tax receipts of 296

billion meaning we we spent over 600 billion dollars last month and we only took in 296 and we're at 1 trillion 147 billion dollar deficit so far this fiscal year which is a 40 increase from last year so these things just cannot continue we cannot keep printing money ad infinitum, running up deficits, providing jobs for foreign born individuals, as they explode our unemployment. I mean, that's what's been going on. So he's trying to stop this. And that's obviously going to cause some dislocations in equity markets, which have been used to, you know, I've seen figures as high as 150,000 per illegal immigrant, as far as stimulus to the economy when you factor in all the government support um over a 12-month period um so it you

know this is this is this is what we have to deal with i mean it's reality yeah i would love to overlay the foreign-born additional jobs with remittance numbers as well because that's another thing that you have to face of a lot of these people are taking jobs away from native uh united state citizens you would hope that they're at least spending the money within the country but i would not be surprised if remittance remittance numbers went up commensurately with that that growth as well which would signal that they're making money here and sending it abroad which they absolutely are they absolutely are and and besson said this on i think it was face the nation or another interview he said we're going to see real wage increases for american workers and i

think the use of real wage increases is key because that doesn't necessarily mean we're not we're going back to 2% inflation anytime soon. It just means that wages are going to increase more. And had under the Biden administration, the border been closed, even though I think we would have suffered inflation because of what we did during COVID, I think real wages would have kept up with it. But because of this, because of flooding the market with millions and millions of foreign born workers, wages did not keep up with inflation. And so that's really the big problem i mean if you look at it at the end of the day if you're 35 years old you got two kids you're forty thousand dollars in credit card debt you owe ten thousand twenty thousand dollars on a

car and you've got a job the best thing that can happen to you is high inflation but your wages go up even more because that high inflation is going to bring down the real value of your car debt of your credit card debt. The worst thing that can happen to you is low inflation with wages that don't even meet that because then the real value of your debt stays the same and your real wages don't go up. So if Trump wants to really help out his base, and I think this messaging isn't there yet, but eventually it's going to come, we're going to have 3% to 5% inflation, but wages are going to go up four to six or seven percent and so you're going to have real wage increases inflation this is going to inflate the stock market it's going to inflate bitcoin it's going

to inflate gold and it's going to you know my ridiculous prediction was like end of the trump administration we're at s&p 15 000 because i think we need to inflate our way out of this mess and that's also not only going to help Trump's base who's in debt, but it's going to help the United States government, which is obviously $36 trillion in debt. So we need to inflate away the dollar, kill the bondholders. And, you know, that is just uber bullish for Bitcoin and gold. Yeah. So in terms of capital deployment at the end of last year, you said you were heavy in the cash and you predicted that we'd have this tumult to start the Trump administration after a period of time we'd begin to recover as you're saying today later this summer or fall

um so with that in mind how how's your allocation strategy been are you buying as as the market falls are you holding waiting for a dropout to come in in size or what um how are you approaching this well i'm i'm looking for certain signals i i think we've seen signals in the very short term that we could be due for a nice balance. So we're recording this on St. Paddy's Day. This week, we have the Federal Reserve meeting on Wednesday. We have VIX options expiration. We have quarterly options expiration coming up next week

at the end of the first quarter. So I think there's some volatility to be had heading into this April 2nd event. And that that could present sometime between now and say April 2nd could present a period where it's time for me to start deploying some of that cash. I haven't yet. So I've still held on to it. I've still thought there's further to the downside, but I don't want to get too cute about it because then the market can get away. So I've been saying to myself, if we see the S&P hit 15% down, I need to put like a third of that

money to work. If we go down to 20%, I'll still have another third. If we go down even further, I'll have another third. If 15% is the low, then I probably need to start putting some money in at 10% because I don't want to wait for it to go up. But I need to see what's happening as these things occur. So for me, I'm very careful around this April 2nd timeline. And it happens to coincide with the end of the quarter and the other thing about the end of the quarter is we saw at the end of 2024 last week of december we saw a big sell-off and this has to do with like repos and there are weird things that happen so like european banks have different rules than american banks so certain european banks need to have certain amounts of uh liquidity only at the end of a

quarter. Like they get looked at by the regulator. What are your balances that, you know, March 31st? And so you see liquidity a lot of times recently getting drained from the system around end of quarters. And that happens to coincide with this April 2nd. So, you know, this is a short term call and those can always be wrong. So take it with a grain of salt. But I'm thinking we're probably looking for like a $5,500 to $5,000, somewhere below $5,500 in the S&P around the first week of April, last week of March, that will be a point where it's like, even if it stinks from hell to high water, I just have to hold my nose and put some money in because now it's going to be down like 15% and it just is going to make sense to do it. I think with Bitcoin, I've been

you know like i said keeping an eye on that my read on that was 83 774 as a as a monthly close when it gets below that i think it's a good point to go into it i've been playing it uh short term um because i think we still have to get through this transition period before we get a longer term holding period. So I'm not like deploying huge amounts into it yet. Gold, that I think we had a breakout last week. So I've been heavy into gold. On my work, we had a Fibonacci level at $2,968 on the futures contract. We broke above it last week. I think we're heading to $3,100 on gold in the next week or two, could definitely push up beyond that. So I think that all these things are starting to come into place.

It's going to be getting very interesting. But I think with the tariffs, the Fed meeting, the absence expiration, the VIX expiration, all coming up, the quarter end, and all the wonky stuff that happens around quarter end, that we're we're getting close to a to a point um to start putting money into work and that doesn't mean we can't still go down a little bit more in april but like this is a like not like i said don't try to get too cute like like you know so far so good you sold when it was 6100 like get some back in if it goes down to 5 000 and then if you're wrong you know and it goes down further put some more in so that's where i'm at i'm i'm looking and i have a feeling like we're getting ready for a

first deployment of this cash haul in the next week or two awesome yeah it'll be interesting to see historically bitcoin has sort of been the leading indicator alarm bell where it dumps first and then recovers first as well before before markets ultimately tank um it'll be interesting to see if that move to the mid 70s last week or a couple weeks ago was that or if it's just a tremor before a bigger drop down yeah well i mean they want to do it i mean they had besanon and tax on uh fox this weekend um i think they're they've got a game plan uh cynthia loomis put it out in a podcast about a month ago she said number one they're going to try to get the genius act passed, which is the stablecoin bill. Then they're going to try to get regulatory clarity

on digital assets, who's under SEC, who's under CFTC, commodity versus security type questions. And then they're going to talk about exactly what's happening with the Bitcoin strategic reserve. And I think that lines up nicely with Besant talking about with Ludnick that they're going to get the sovereign wealth fund stood up within 12 months. And that was like back in January. So around the end of the year. So I think we've got a game plan. A, wait for the stable coin bill to be passed. B, wait for some regulatory clarity. If that happens sometime in the summer, like, you know, we're setting the stage for then C, which is sovereign wealth fund, which is going to be Bitcoin. And I think, frankly, I like I'm not even really that concerned about the sovereign wealth fund. There were a lot of people in 1971 when the U.S. went off the gold, said, you know what, gold's going to plummet. And it skyrocketed. So I think Bitcoin stands on its own merits.

You know, I don't think it needs a sovereign wealth fund to be, you know, what it is. I think that if it happens, it could be a short term catalyst. but i think at the end of the day what bitcoin is as as everybody gets more comfortable the world is getting more comfortable with digital assets they're getting comfortable with tokenization once securities get tokenized the dollar gets tokenized stable coins get um legitimate uh uh regulatory backing once all of this stuff starts to happen people will start to see digital assets as real money and then they'll start to say well what is the goal of digital assets and obviously that's Bitcoin. And people will begin to say, okay, this is digital gold. This is what it's

purported to be by Satoshi. This is why it's called mining. This is why, you know, it was created, you know, a peer-to-peer cashless payment system, yes, but also a store of value. And so I think all of that's going to happen. And I think the peer-to-peer cashless is coming too. I think with Nuster and different, you know, elements that are being put into place to be layered onto lightning so that we can get to a place where people don't need Visa or MasterCard or the US government or anybody. And once people realize the power of that, then the potential is exponential. And I've always told people, I don't know what's going to do better over the next 12 months on a percentage basis, gold or Bitcoin. I feel pretty dang confident Bitcoin's

going to do a lot better than gold on a percentage basis over the next five or 10 years. So that's where i'm at with gold bitcoin stocks everything i'm very bullish but i'm just not ready to pull the trigger at this point in time but i'm getting close it's great to know and uh should we just do this quarterly now maybe we meet up at the uh middle of q2 to see see where things are that would be perfect i would love to do it and and and see if we're we're hitting we're tracking um i appreciate coming on and love these conversations so thank you marty thank you mel it's uh it's always fun with you because i think you out of everybody that i speak with in in terms of macro and markets on this show you have the most unique perspective and

um that's one thing we're trying to do here moving forward we actually have an idea for an app that we want to spin up is um tracking predictions that are made on the show and um and and letting people know who's, who's actually been right. And so far the last, the first two episodes, I think your call has been spot on. So thank you. Yeah. I think the first one I came on, I said, S and P 6,000 by end of the year. Next one I came on, I said, we're ready for a dump in the first half. And I, and I'm not trying to blow my whistle, but you know what? It's funny because I do have, you know, people want to follow me, Mel Madison one on Twitter. I only have like two or 3000 followers. And like, people are like, Mel, I don't understand why don't people

follow you on Twitter. Like you have some of the best stuff. Like you're amazing. And it's like, honestly, I don't really try. Like I'm out here doing my own thing. I love investing. I had a 20 plus year career, startups, financial services, Duke MBA, you know, made my money, quote unquote. And I do my thing and I just put it out there. So I'm not, I don't always do the slickest things. I don't have really nice, like 10 post threads and stuff, but like there are nuggets in there. So if you want to get some of these nuggets when they come across, follow me at Mel Madison one or check out my website, Mel Madison dot com. Or I wrote a book, too, called Quaz.

It's kind of a financial thriller about corrupt central banks that people might find interesting has to do with the blockchain as well. So, I mean, that's what I do. And I love just coming out here and talking about this stuff. And if I think if I ever really got serious about trying to market myself, maybe I could do well. But it's just not what I do. I just love coming out, talking, sharing my views and having these types of conversations.

Well, thank you for doing it. Thank you for coming on the show. And we'll link to all that in the show notes. Mel, go enjoy your St. Paddy's Day. You too, Marty. Thank you. All right. Peace and love, freaks.