TFTC: A Bitcoin Podcast - #657: China's Gold War with Mel Mattison

Episode Date: September 6, 2025

Marty sits down with Mel Mattison to discuss his bullish predictions for 2025, the merging of Treasury and Fed policy, China's gold accumulation strategy, and why he believes we're heading toward lower interest rates, higher asset prices, and a potential economic boom despite various geopolitical tensions. Mel on Twitter: https://x.com/MelMattison1 Mel’s website: https://www.melmattison.com/ 0:00 - Intro 0:48 - Summer’s over 4:11 - Fed independence myth 9:58 - December bond futures 15:53 - Rate cuts and job market weakness 22:44 - Bitkey & Unchained 24:04 - Market gains but people suffering 29:52 - China's gold accumulation strategy 36:40 - Obscura & SLNT 38:32 - The west doesn’t understand China 45:35 - Opportunituy Cost 46:20 - China's long term perspective 51:07 - Make the west great again 55:52 - Trump/Fed conflict 1:00:20 - Bessent’s national security role 1:16:11 - Housing emergency and MAGA intervention 1:26:20 - Electricity prices 1:32:22 - Bitcoin volatility suppression STACK SATS hat: https://tftcmerch.io/ Our newsletter: https://www.tftc.io/bitcoin-brief/ TFTC Elite (Ad-free & Discord): https://www.tftc.io/#/portal/signup/ Discord: https://discord.gg/VJ2dABShBz Opportunity Cost Extension: https://www.opportunitycost.app/ Shoutout to our sponsors: Bitkey https://bit.ly/TFTCBitkey20 Unchained https://unchained.com/tftc/ Obscura https://obscura.net/ SLNT https://slnt.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/ Newsletter tftc.io/bitcoin-brief/ 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/

mel can you can you feel the fall winds blowing into town just like ever so slightly down here in north carolina but but it but it is cooling off a little bit here in the northeast we've got a we've got a nice brisk chill in the morning which i uh i welcome i like the fall feels good but summer's over summer doldrums over jackson hole's over we caught up i believe in july or late june and when we last caught up we said hey let's catch up after labor day here we are three days after labor day and it seems like the world is not any less chaotic than it was the last time we talked uh maybe in a good way you've got uh you've got a lot of thoughts about what's going on well i do remember the last time we talked let me just check right now it's funny

because i think like the closing words were i'm optimistic there's a lot of stuff going on there's going to be ups and downs but when we talk three months later we're going to have like s&p 100 somewhere around 63 6400 and here we are s&p 6448 so i mean it's like there's so much noise right now but like when you step back there are these major trends like whether it's fiat the basement whatever it is that are just in place and and people are really going nuts about different things or fed independence or long ends are crashing and all this stuff and it's like at the end of the day you know i'll make the prediction again right now in three months from now will come back and it'll be, you know, Bitcoin will be like I've hit 140 and, you know,

SPX will be at 6,800. And, you know, like these longer term trends are going on and there's so much noise, which is interesting and you can profit from it. But at the end of the day, I think there's just this general fiat debasement trade in place, which is long gold, long Bitcoin, beneficial for equities. I think the new Fed dynamic that's going on is actually bullish bonds, which is a little anti-consensus right now. And I think that we've got a president and an administration that is hell-bent on creating an economic boom, come hell or high water. He wants housing to soar. He wants lower rates. He wants higher equities. And he is going to push, push, push. And I think a lot of people are, you know, raising their hands in the air

saying this is all going to collapse. And I'm not saying that's not impossible, but my bet is that it's actually going to happen. And that, you know, a year from now, we're going to be at an S&P over 7,000. We're going to be at Bitcoin over 150. We're going to be at gold over 4,000. We're going to have a 10 year with a three handle on it. And the economy is going to be booming. And I mean, I just I that's what I see coming. And we can get in all of the details of how that works out and all the intrigues. And I'm I'm just really excited to be here and talk about it with you because I love our conversations. And that's generally where I think see things going. So short term, there's going to be bumps in the road. But long term, I think the trends continue.

Well, I guess let's break it down piece by piece, starting with the Fed. As I mentioned earlier, we had Jackson Hole a couple of weeks ago. I think it was the first time that we've seen some dovish comments come out of Jerome Powell's mouth, really moving from focusing on inflation to focusing on the jobs market. At the same time, in parallel behind the scenes, you have Trump firing a Fed governor because of some mortgage fraud that may have been going on. And I think the thesis that you laid out in December of last year when we did predictions for 2025, one of which was that you're going to see this sort of merging of the Treasury and the Fed. And it seems like the moves that have been made, particularly the saber rattling with Jerome Powell and Donald Trump and then Trump firing this Fed governor is signaling that this may be happening in real time. Yeah, exactly.

And I think, you know, on net, if you look at the history of the United States, for the most part, we have not had an independent central bank. It's kind of an anomaly. and multiple times in the 20th century, we didn't have an independent century bank or central bank for most of the 18th or excuse me, 19th century, the 1800s, we did not have a central bank at all. So I think people really need to just chill out

about this whole Fed thing. Like it reminds me of almost talking about Jerome Powell, like a Pope or what I really think he is, is it's more of a Wizard of Oz character. um and the wizard of oz is an amazing allegory i mean the yellow brick road is the gold standard in the book dorothy doesn't have ruby slippers she has silver slippers and the the silver slippers get her home um the modern day equivalent might be bitcoin i mean like i guess if l frank bomb was writing the wizard of oz now uh dorothy would be wearing orange slippers um no doubt

about it that that she thinks you know that and it wouldn't be a yellow brick road she'd be following like the the emerald brick road you know the dollar and then she'd get to oz and then she'd find out that jerome powell and the federal reserve governors are all a bunch of crooks behind the curtain and i'm not saying powell's a crook i mean don't get me wrong i'm not trying to impugn anyone's character but what i am saying is that there is a massive political either conscious or unconscious bias within the fed it is an inherently political organization in the same way that the Supreme Court is an inherently political organization because they are all political appointees. I mean, if you take a bunch of politicians and you have them appoint people

into important positions, I mean, it's almost like a transformative law of like geometric, you know, doing proofs like, you know, like you're going to get politics. And I could guarantee you that if we were in this situation and the data was coming in the way it was and Kamala Harris was president, I can guarantee you Lisa Cook would be voting for cuts. I mean, there's no question in my mind. And so there is an inherent bias in the Fed. It's never been independent. It never will be independent. It is under the control ultimately of the Treasury. It always has been. Whenever the U.S. government needs to do something on monetary policy, they tell the Fed what to do, and the Fed does it. This happened in World War II. It happened in the 50s. It's just

the way it works. The central bank is a servant of the government. It was created in 1694. William III, Bank of England, we're going to fund a war with France. It's there to serve the sovereign. That's what it's there for. And at the end of the day, I don't care if it's AOC or J.D. Vance as president in 2029. They're going to keep pushing rates lower. Elizabeth Warren was writing letters to Jerome Powell last year saying you must lower. This is not political. This isn't about Trump. This is about the U.S. fiscal situation. We cannot afford to keep rates this high, our interest expense is blowing up. We were at 132% debt to GDP in 2020, and our interest expense as a percent of GDP was 1.49%. We reduced our debt to GDP after the COVID GDP drop ended

to 120%. So we dropped debt to GDP by 12%, and interest expense as a percent of GDP more than doubled from 1.49% to over 3%. In other words, we're raising these interest rates. We have so much debt. And this is not only for the United States. This is for Europe. This is for Japan. This is what you're seeing in England. And all of these central bankers, they're going to get together in Basel, Switzerland at the Bank for International Settlements every two months like they always do. And they're going to say, we need to keep rates lower for longer. And the bond market is starting to sniff that out. And I think we recently had perhaps a peak in the long end for especially the U.S. and maybe, you know, gilts and boons. But I think interest rates are going down.

And like I said, I think we're going to see a three handle on the 10 year. It's not by the end of the year, early next year. And we're going to have gold up, Bitcoin up, stock market up, bonds up like i'm bullish everything well i think particularly as it pertains to treasury yields that is a bit contrarian but we were chatting for a bit before we hit record and i guess let's just dive into the long end of the old curve i'll pull up the 10-year yield the 30-year yield and then the chart that you're focused on right now which is the december's futures contract for the 30 year so as you can see here getting a 2025 tenure began the year around 4.8 so currently at 4.19 got the 30 year the way this is sharing is a bit awkward but if we go to the

30 year we'll see it's right at 4.87 right now peaked at 5.09 in may of this year and then here's the chart that you really want to look at which is the december futures contract for the 30 year and you're saying that despite what's happening on the yield curve of the 30 year the futures contract is really where the signal is yeah so for people that don't you know trade bonds right i don't want to insult any listeners that this is like 101 but there might be some people listening that don't understand this. So bonds, when bonds rally, what we mean is their price goes up, which actually means the yield goes down. So that can be a little confusing. So you have to kind of wrap your head around that. So if yields go up, price goes down. And the way most people that are

active in trading make bets on the bond market is they do it through futures contracts. And this contract here, ZBZ25. ZB, that means long bond. Z stands for December. That's the month for expiration, 25 the year. So this is basically the, it's not necessarily the front month, but it's the active month. So futures traders tend to pick a contract and then that's the one that's active and that's where the volume is and liquidity. So right now, if you're a trader and you're trading the long end of U.S. bonds, you're trading ZBZ25. And if you look at this chart, it is up and to the right. It's got higher highs and higher lows. And this goes back to May, right? So as you might remember, in the beginning of the year, there was this other big freakout,

And the U.S. was going to have a Liz Trust moment. At that point in time, this was not the front month contract, but people were already trading the December contract. And that was when they took this down below 110 to like 109. And it's currently at 114.27 on my chart. So I just look to the right of mine. So we've basically gone up, you know, I don't know, call it four or five percent. in bonds that's not bad but it's up again it's up and to the right it's a bullish chart and so if you look at absolute yields and you say oh well absolute yields you know we're

approaching the highs around five yes that's true but if you look at the way practitioners playing the long bond traded um you know it's actually the lows were all the way back in may and then we hit a low in july and then um if you actually drew that line you drew um marty based on kind of closing prices instead of intro intra i mean you'd see like we touched it to the perfection right like like it basically we we tapped right down to where we yeah look at that yeah and go down a little bit more yeah like like it runs right through those closes which are you know where those uh sideways lines are so like on tuesday when everybody was flipping out i literally was on twitter and i was buying tlt calls for like 11 cents 86 calls these were i bought like

100 in an account i forgot i bought about it i forgot i forgot i bought it you know i spent like a thousand dollars for me that's not a big play i'm like okay i'm gonna i'm gonna put a thousand bet down on 186 tlt calls for tomorrow expiry yesterday expiry they're up 700 yesterday i mean like it was literally like and i and i had forgotten about it and then i because i trade a lot of accounts and i went into this account i'm like oh my god why is this account up so much i'm like oh yeah i'm up five grand on my tlt calls that i bet a grand on yesterday and it's like people were flipping out about bonds. And I'm like, this is a bullish chart. This isn't up into the right chart. And Lisa Abramowitz and all these people on Bloomberg, they're like,

oh, my God, and yields are collapsing. And I'm just so sick of these talking heads on TV getting everything wrong. Tariffs are going to collapse the stock market. Inflation is going to go out of control. And the latest thing that I think is starting to fall apart is these people have been pushing this narrative that there's no problems in the job market. But this could be a whole nother switch into a different time. I think there are issues in the job market. I think that the job market is weaker than people realize. And this is a big deal. And I think that we are literally not just going to get five or six cuts. I think we could get as many as 10 cuts in the next 12 months.

would that be 10 25 basis point cuts so down to a half percent down to around two percent yeah that's how far yeah i'm pulling it up i'm trying to pull it up right now but uh initial jobs claims jobless claims came out today 237 000 uh was the print expected was 230 so um more initial jobless claims than expected continuing claims a bit lower than expected but num uh what was the other adp private payrolls i think this is the big one the big mess that people were looking at uh 54 000 was the print expected was 68 000 the last was 106k so i think this adp private payrolls is probably more signal that takes out the government jobs um is well below expectations and well below the last print now this is before revisions

and yesterday what helped drive that bond move i think a lot of it was technicals i think i think we're going to bounce on the long end anyways but but a big driver that moved yesterday was the jolts report which showed that for the first time in the last four years there are more people seeking a job than there are jobs so if people remember like there is a point during the pandemic the great resignation people could leave get a job next week 20 percent more that's gone now um we we were at one point i think like two two and a half times job openings relative to unemployed um look there's a table that i'm going to be watching very carefully in the next unemployment report which comes out this friday it's table a7 in the bls report and what it is

is it breaks down foreign born versus native born workers. And this has nothing to do with politics or anything like that. I just personally believe that they're on the foreign born side. There's a lot of noise right now, which is a lot of people, um, who are pouring across the border, filling those types of jobs that, that, that foreign born do, um, were flooding the market. And so you had a high, a relatively high unemployment rate of foreign born. And this is how the BOS breaks it down. If nobody's ever like looked up the PDF report that the BOS puts out, it's called the employment situation report. Like they have a table A7 and it doesn't break down illegal versus legal or anything like that. Breaks down foreign born versus native born. If you look at foreign

born, because the border has been closed, the unemployment rate has been plummeting on foreign born. If you look at native born, the unemployment rate has been really going up and those two have been canceling themselves out. And so what you're seeing when they report the overall unemployment rate is, you know, 4.2, you know, pay no attention to the man behind the curtain. There's nothing to see here. But the truth of the matter is, is that I think looking at the native born is the way to look at it because it cancels out all the noise in the foreign born. It takes away the noise that's going on with visas. It takes away the noise with immigration. If you want to read on what's the real unemployment report, a rate on Friday, go to the BLS, pull up the report, scroll down to table

A7, look at the native born unemployment and see what's happening. And it's going up. It was like 3.8 or something like that, 3.7, you know, a year or two ago. And now it's like 4.8. Like it's going up significantly. And we're seeing young people having a harder time get a job. And where we're really seeing the unemployment, because they also break down foreign born, native born, and then they do men versus women. And I love to focus on native born women, because they tend to be more college educated. They tend to be more in non-manufacturing, non-construction. So they're a better read on the white collar, the unemployment rate of native-born women is skyrocketing in this country. And so what that's telling me, and you see it in anecdotal data about layoffs and

everything else and AI efficiencies. Jordy Visser does a great job showing like MAG7 is like growing revenues and earnings like crazy, and they're not adding any headcount. Like we have so many deflationary forces going on right now that I think eventually, once Trump gets his Fed board in place, like I said, 8 to 10 cuts in the next 12 months. I mean, I don't think anybody's saying that, but I pride myself on making outrageous calls that come true, like in December saying emerging markets were going to crush SPY, EEM was going to crush SPY. Right now, SPY is up about 10%, emerging markets are up over 20. You know, I called for a 15, 20 percent crash in the first half of the year. I was going to have a quick rebound to 7000. I called for the DXY to crash

below 100 very quick. I mean, every every call I've made and I made this kind of tongue in cheek post on Twitter the other day calling myself the goat. I'm the best. I'm like I'm the best macro strategist on Twitter. It was a total kind of joke. But but the point was to say, look, like some of these calls are really dang good. And, and, and not many people know me because I didn't do anything until like a year ago when my book got published. So I'm kind of out of nowhere. I don't have like a 10 year history. I was never on social media my whole life. I never had a Facebook account, Twitter account. I mean, I, I, I actually hated social media. I didn't want to be a part of it. It was like not part of my ethos. So I was almost a tribalite. And, and,

And then I wrote a book and my publisher's like, you should get on social media. And now I love coming on podcasts like this and sharing my views. But all I am, I don't have a research firm. I don't have clients. I'm an investor. I invest my own capital that I earned throughout my career being a fintech executive. I'm doing very well. And I like to share my views and help people.

And I'll tell you, some of these calls are really good. And what what hurts me a lot is like there's just such this consensus out there that has been leading people astray, telling people markets are collapsing, bonds are collapsing. You know, the truth of the matter is, is we've been in one of the greatest investment environments of my lifetime to be long. And a lot of people have been scared because people feed a bunch of, you know, doom and gloom bullshit. um yeah it's uh and it's easy to see how it we touched on this last time we talked to it because you have what's happening in financial markets and you have the real economy and as you mentioned with unemployment it seems like many people are hurting and i mean that i'm sure you've seen it the memes of nearly the memes tiktok videos of people in their car complaining about grocery

bills uh i think millennials younger millennials gen z coming to the realization that real estate may be running away from them and i think a lot of those anecdotes and um the anecdotal data points really drive this this dread and then the overarching emergence of ai everybody becoming fearful that it's coming for their jobs but you mentioned geordie visser white on the show a couple months ago too and i think that i think that's something that we just have to deal with as individuals as society as an economy is that we are living through this incredible inflection point in many different ways with the multipolar world becoming more multipolar you have that crisis here or that situation here in the united states uh geopolitical strife globally with wars

and all that and then um you throw ai in the mix i think people are just completely uncertain about what's going to to happen in the future particularly with their jobs and so i guess they have this perceived fear that i'm going to lose my job and i'm not going to have the ability to buy a house that the market has to tank yeah i mean it's look i mean there's some people talk about the fourth turning uh people talk about inflection points i mean we're there i mean i I mean, look, in the 1860s, you had had a run up in essentially wealth inequality and you you get these situations periodically throughout history. And frankly, the way a lot of it gets resolved is you cut down on resource demand by killing people. Right. So you have a massive war in Europe and you kill tens of millions of people.

all of a sudden that intense competition for resources gets a lot easier right so like this is not what we want to head into we we don't want to have a situation where just this week we had g meeting with putin meeting with kim jong-un um you know in china and modi um with india like like we don't want to go down that path. Like, like we've done it too many times as a species where you get one side, you get the other side, they start getting competitive. And then the resolution is essentially everybody goes batshit crazy and starts killing each other. Like that's not a good outcome. Right. And, and so I think it's important to talk about it. And I think social media, I think shows like this, like the population, like it's educated, it's global. And, and I think we

have a shot of actually avoiding World War Three. I think some people are like, oh, this is inevitable. We're going to have like a brick side begin to build up and it's going to be, you know, the cornerstone will be Russia, India, China, and then there'll be the U.S. Eventually, Western Europe will come onto our side because they realize that's where they need to be. Like, I really hope that's not the case, because in history, it's surprising how stuff actually like is completely clear to everybody. Like in the 1930s, it was very clear Japan was building up their military empire. Germany was building up. Like it was very clear, like we were getting ready to head towards something. And then we went over the cliff. And I think right now we're in a

similar situation where like China is building all these ships and new submarines and there's these new alliances. And it's like, look, guys, you know, open your eyes. We're heading towards something here which is not a pretty picture so let's let's figure out a way not to kill each other you know what i mean yeah i completely know what you mean that's why i wanted to bring this up outside of the military parade that happened earlier this week i think um like obviously you have the geopolitics and the kinetic side of things but then going back to the monetary that's why as you're describing that you want to bring up this chart which is what i wrote about last night in my newsletter and i hadn't seen this chart until yesterday it sort of blew

my mind and so what we're looking at is uh the stock level of gold in china on warrant for those who are unfamiliar what it means to be unwarranted essentially um the pboc or banks at the behest of the ccp uh financial institutions the bs of the ccp have gone to the shanghai gold vaults and basically registered their gold at the shanghai gold exchange be used as collateral or to provide liquidity to gold markets to make the shanghai gold exchange more prominent in gold markets and i'm looking at this saying they're definitely prepping for something there's been these you know we've all known i've written about it and i think people have been observing it for the last 15 years china's certainly been building up gold inventories at the pboc and i think what

we're seeing now is they're actually putting those inventories to work by registering them at the shanghai gold exchange well here's the thing and forgive me for one second but we have done so many shows i've never been a shameless promoter of my book quaz but this is so apropos so what what are you what you're showing there is you're showing like around 2500 kilograms up to like 30 plus right in gold in quads um this is like part one of the book all day glitters i have an introduction and this is what it says according to official statistics the largest holder of gold in the world is the united states at over 8 000 metric tons However, according to unofficial calculation, China holds not the 2,000 tons publicly reported, but closer to 32,000 tons.

As of 2007, China has replaced South Africa as the world's largest producer of gold. I wrote that in 2023. This was out there in gold circles. people knew that china had so much more gold than they were reporting and they're using the shanghai exchange um like this is what's going on like like china uh the bricks i mean they've obviously decided that holding u.s treasuries is not where they want to be now i want to counter this because the narrative is is like oh my god china doesn't want to have treasuries that's a big problem. It's not. Foreign holders of treasuries are like this, okay? The United

States owns treasuries. Mutual funds own treasuries. Pension funds, insurance funds, the Federal Reserve, intergovernmental debt. If you look at the percentage, the actual percentage of U.S. treasuries are 36, 37 trillion, outstanding, that's held by foreign governments, it's 20, 25 percent tops. The vast majority of U.S. treasuries are held by U.S. individuals, institutions, the government. OK, China owns like seven, eight hundred billion. Right. I mean, the Federal Reserve has rolled off over two trillion in treasuries and like like like we could absorb all of all of China and Russia's and we could absorb all those treasuries easily. So a lot of people talk about, oh, well, China is going to. And I'll tell you another thing. If you look

at the foreign tick data of who owns treasuries, you see this really big, weird thing, which is like Cayman Islands own tons of treasury. A lot of people assume two things. One, they think it's hedge funds that are located there offshore. The other thing they assume is, and I've talked about this before, is that the Kingdom of Saudi Arabia did not want everybody to know exactly how much treasuries they held. They worried about being deposed. And so the king of Saudi Arabia put a lot of his treasuries in the Caymans to essentially keep that shielded should anything happen to his family and they need to go into exile. I think there's a third reason why the Caymans might own a lot of treasuries. And I think it could be CIA front companies. In other words,

treasury like i have a saying all is fair in love war and u.s treasury management so like like i wouldn't be surprised if there's this a cia front as hedge funds in the caymans that they see treasuries get to a level they don't like and they buy it and it's like you know this is the cia i mean i mean this is the federal government this is national security so this is all fiat this is not gold there's no way to check it like if the president authorized the department of defense to do a secret dod or cia operation um feed in through front banks you know bogus balances on balance sheets so it looks like you have the currency in your zeros and ones on the computer and go out and support the treasury market like who's to stop them from doing that so i mean i i

I think there's so much stuff that goes on in finance that when people start predicting that we're heading for a collapse and yields are going to explode, it's like, don't you think that maybe the CIA might have something to say about yields exploding? Don't you think that's possible? Or are you so naive that you think the U.S. government is just going to let the bond market trade freely? Well, I mean, that's a great point, because you've got to think the Pentagon's war gaming national security part of that national security is financial security like going back to this

chart and really pulling on the thread of the sort of fork in the road that you were describing of we could go towards some very volatile kinetic war economic war whatever may be or avoid world war three maybe that's what china is doing here just saying like hey we have the gold we're going to exert our influence over spot and futures gold markets by registering our bullion at this shanghai gold exchange and basically just as like a geopolitical signal like hey let's get to the table and negotiate like peaceful trade deals or something like that yeah i mean i mean what this is and and i i credit uh guys like luke groman for being way ahead on this is is like china says okay to Saudi Arabia. We want to buy oil. You want to buy some of our stuff. But they have a

closed capital account on the yuan, their currency. So what they say is what we're going to do is we're going to buy, let's say, $100 billion worth of oil. We'll send you $100 billion worth of yuan. Now, over the course of the next year, you might want to buy $60 billion or 60 billion yuan or whatever, from China. And you're left with these yuan that you don't want. What you can do is you can go to the Shanghai Gold Exchange and you can take those yuan and you can get bullion and you can bring it back to Riyadh. And this is what we did with Saudi Arabia in the 70s. Before 71, we used to fly, you know, jet planes full of gold bullion into Riyadh every month, you know, to pay for our oil like the saudis wanted the gold right and the usd was convertible by foreign

central banks at 35 an ounce so we used to fly gold into riyadh and now i think the chinese are flying gold into riyadh they're not they're just not doing it through beijing they're doing it through the shanghai gold exchange yeah yeah and then and then you had like i told you before my uh my focus has been on china the last couple days i'm actually recording with peter alexander tomorrow has been living in china for for a few decades and has a he's a westerner living in china and has his i don't even know it's theory he's just telling people that you know the the whole perception of china how it operates and what their ultimate goals are is completely wrong particularly in western circles with the pundits and so excited for that conversation but

bringing it back what's the rest of how the pundits are wrong um mainly just a misunderstanding of cultural dynamics like what um what china's ultimate goal is like viewing china as a nation state um sort of the show notes he sent me is like we're viewing china as a nation state when it's a society and when you're trying to work within this western mental framework of nation state um sort of negotiations it's like that's not how china abuse things and i think that's how we end up in these situations where it seems like we're speaking past each other um yeah many times that's smart i i agree and i do think there's a difference in china i think china there is this western eastern divide you know i majored in philosophy

as an undergrad and you know their western philosophy has a certain thrust to it and Eastern philosophy is different. The Eastern mind is different. And it's sophisticated in its own way, as is the Western mind. But it almost has different first principles. And so sometimes when Western leaders look at China and try to analyze it through their first principles, they kind of miss the boat because it's a little bit... A lot of people think the Great Wall of China was built to keep invaders out. It was built to keep the population in. So China historically is actually, um, you know, essentially a, a fiefdom of dominated groups. Um, so it's not like one people ethnically and everybody knows there's two major languages, you know, Mandarin, like

Essentially, there's an elite in China that has dominated different areas and brought them in under their empire. And historically, China has wanted to keep complete dominance over whatever that empire is. And that was why they built the Great Wall, was to say, look, we're really not interested in the outside world. We want to have complete dominion over these internal groups that we dominate. And so it is a little bit of a different mindset. It's not kind of like a British Empire type mindset. So I think that'll be a fascinating conversation. I'd love to hear.

I'm not a China expert, but I know a little bit about Chinese history and how that country kind of came to be and what it is. They also love precious metals, just like India does. And they love silver, too. At one point, silver traded one for one. there's this huge arbitrage silver gold um between like the portuguese and spanish europe china like you know they'd mine silver in south america ship it to china get it one for one for gold move it back to south america and then back over to europe and um you know precious metals i mean

they've just been a part of this for so long and it's like i mean people got to realize like this whole fiat thing i was born in 75 like 71 is when we went off of gold right like so basically you have from like long before jesus christ existed until a couple years before i was born gold and silver and then you have this short little period um essentially my lifespan where gold and silver aren't money and and what you're seeing is that gold and silver are money again and and that's just happening. And that's why gold is going to blow out. I saw like somebody on CNBC yesterday showing a chart, like maybe gold's hitting a peak because the copper gold ratio. Look, gold's going to go up relative to every other commodity. Gold's going to go up relative to copper. It's going to

go up relative to oil. It's going to go up to everything because it's becoming money again. Gold should be the same as platinum. Gold should be less than platinum. Platinum is a rarer metal. platinum is you know a higher denser metal um but gold is the monetary metal so when people talk about bitcoin and this is where gold and bitcoin are the exact same it's about the belief in a sense that this is money because it's not like gold is some special metal like platinum like i said it's less abundant in the earth's crust there's been less platinum ever mined platinum is much more rare than gold, yet it trades at less than half of the value. Most of gold's value is this monetary premium that people assign to it. Bitcoin is the new gold in that sense,

a gold with a different set of stripes, different drivers of, you know, movements and different things. It's kind of a next gen gold that, you know, could very well be in place for another thousand years. I mean, we will see. But I think that there's only two. In my opinion, there's only two stores of value right now. There's gold and there's Bitcoin. And that's it. And Ether can make its moves. And, you know, but Ether ultimately, ultimately, the case for Ether, even that Tom Lee makes is this is a utilitarian case that ether is going to drive stuff you know maybe it's solana drive stuff better and then eth is is is done the beauty of bitcoin the beauty of gold is the case is simply that this is money this is what is value it's not about how can we power the best

quickest transaction mechanisms i'd love to see bitcoin more involved in transaction mechanisms But that's not what's driving Bitcoin's value. What's driving Bitcoin's value is it's the first, the ultimate, the decentralized, the cryptocurrency that represents store of value in the same way that gold is the precious metal, even though it's less precious than platinum, even though, you know, silver is more ubiquitous and easier to transact. like all these things are there to threaten gold but gold is gold bitcoin's bitcoin they are the two stores of value in the long run like that's where you want to be that's the anchor in my portfolio and then i trade around it with all these other viewpoints but like nothing's going to change to the fiat debasement narrative yeah i think something you said there is very prescient something particularly americans overlook is that china's been around for millennia the united

states is a country we're about to have our 250th birthday next year like and not that i'm a china expert by any means but where i can tell their culture as we described is very different and very seeped in like history dynastic history specifically they think in centuries not quarters like we do over here in the United States. And so your point that China is just reverting to a monetary standard that existed for most of its existence just makes sense. Yeah. And I mean, China, I mean, they have what they call the century of humiliation, which is essentially where they were dominated by the British, the opium. I mean, all this stuff, they don't want to go back there. I think you can look at Germany and you see how Germany,

out of all major European countries, they have the lowest debt to GDP. Like the German people are scarred by the Weimar Republic and the hyperinflation. The Chinese people are scarred by this humiliation of, you know, being dominated by some small island off the coast of Europe called Britain. And so they're scarred by that. And their main thing is like, we're never going to let this happen again and i actually think that the main driver of chinese military build-up is like they just want to dominate their region the thing is is that the united states does not want china to be an asian hegemon like after world war ii we defeated the japanese we were the asian hegemon just like we were and still are the european hegemon um in charge of it you know and

and so it took us a while in europe because we had to overcome the soviet union but eventually we got there and in asia we've been the hegemon since 1945 since we dropped the bombs so we've been in charge of asia and and like i i think ultimately americans can get comfortable with living in a peaceful world having a higher standard of living but this might be heresy like let china be the asian hegemon you know like like why do we need to control asia like like why do we need to be the dominant force in the philippines and indonesia like i know there are corporate interests that want that but me as a personal as an american like i don't want that i don't feel I need that. I don't feel I need America to be the Asian hegemon. And I don't think that there's

any threat to the United States from China. I don't think like Red Dawn is going to happen, right? And then they're going to send over troops and invade, you know, Tacoma. Like, like we've got guns in every house. We've got like 10x nuclear weapons that China has. Like we've got an amazing Navy. Like China's not going to invade and take over the United States and neither is Russia. So who cares? Let Russia run Europe. Let they, what it threatens is the corporate elites. And I think like, to me, like, let's focus on America. Let's focus on the Western hemisphere. Let's, let's actually bring more of these Latin countries, which Americans seem to get along great with Latinos. I mean, I never mentioned this before, but personally, I speak

Spanish. My wife is a Colombian immigrant. I love South America. I love Latinos. I love Latin America. Like, let's just make Western Hemisphere great again and let Russia worry and Britain and Germany and let China deal with Indonesia and Thailand. I mean, who gives a damn? Let's build up some Western Hemisphere like superpower that we have all the resources. Europe and Asia are overcrowded. We've got oil, we've got gas, like we've got people, we've got, we've got everything that we need here. Let's forget about these old world. Let's forget about Europe. Let's forget about Asia. And let's just make the Americas great again, would be my pitch. If I was a politician, I would just be like, you know what? I really don't care what happens in Europe. You

know, Germany, Starmer, you guys want to fight Russia, go ahead. Ukraine, you want to collapse, go ahead china like let's give up this american global empire dream because what we can do is we can make the average life for the average average american a lot better if we just focus on making what we have here work a lot better and i don't think that's insane or contrarian at all i think that is what people mega specifically voted for last november i mean that's a make america right again it's like let's focus on the homeland and making sure that the average american has a higher quality of life because it's certainly been on the the decline for for many decades now and i don't think that's insane at all and it's something that i would like to see too like why

do we need to be the global hegemon and it seems like in this state it's deep state foreign policy people at the state department council foreign relations well at the end of the day it comes back to just simple information systems and scaling like things you just can't you can't organize and coordinate things at that scale it's literally impossible it's going to collapse in it of itself and it seems like that may be happening and tying up this conversation on china and put up the uh gold on warren chart seems like they're making moves there to assert themselves like hey we have the gold we're going to use it in in commerce and international trade through the shanghai gold exchange but then you have on the tech side like open source ai i think

they're signaling over the last year specifically like hey we can compete at the tech level now too at the software level with these open source models and really throw a wrench in the american western sort of ai dominant players uh plans by launching these open source models that completely work their walled garden low source models and i think one way to read both those things the gold on warrant and sort of launching deep seek and investing heavily in in tech advancement is hey we're we're here to compete and not necessarily in a in a nefarious way but like let's just build things and cooperate with each other let us dominate our part of the world or um steward our part of the world i think that's a better word and you guys steward your part of

the world and let's engage in trade when it makes sense yeah no definitely and i think you know, there was a, there's a guy, Brent Johnson, who's known for his like dollar milkshake theory. And I saw something, you know, he was talking about the other day, and it's just basically like, you know, we are in the midst of a little bit of a, of a fourth turning. And I don't think that we need to kind of go over the edge. But what he said was a lot of people think the fourth turning means we're going to turn the chapter and we're going to break through to something new. And he said his dark fear is we're going to break through to something worse. I don't know if it's like a fascism, authoritarianism, whatever. But

essentially, I think we're at a pivotal point where it's like, do we want to essentially go down a path where america tries with 330 million people to desperately hold on to some sort of global hegemony over 7 billion that will in my opinion i think this was brent's worry was could lead to an authoritarian or basically he was equating the collapse of the roman republic that was then replaced by the roman empire right so for people they don't know like Before Julius Caesar, like Roman was a republic, it was run by the Senate, and eventually it was run by an emperor. And it lasted for like 400 years, you know, so it was a whole, it wasn't a short time.

And then maybe America could be the republic is falling and we're heading into a period of empire. And that's what I think people, the narrative is on the left, like Donald Trump's the beginning of this. I think that's bullshit. I don't think that's going to happen. That was the same narrative, by the way, in the 1830s with Andrew Jackson. Andrew Jackson was the country's first populist president.

He was populist or his president, seventh president in the 1830s, had a huge fight with the nation's central bank at the time, which is called the Second Bank of the United States. His whole election, everything was dominated by a fight between Andrew Jackson and the central bank. Andrew Jackson hated the central bank. It was run by a guy named Nicholas Biddle. Jackson called him Tsar Nicholas because he lorded over interest rates. And Jackson said, you're keeping interest rates too high.

you're killing small business. You need to lower interest rates. And I'm going to get rid of you as a central bank. And because they had a 20-year charter. And that charter was not up until after Jackson's first term. Jackson's main political appointment, main political enemy was a guy named Henry Clay in the U.S. Senate. Henry Clay said, you know what? We're going to ruin Jackson. we're going to pass an amendment, a bill that renews the central bank charter for another 20 years. If Jackson vetoes it, he's going to be dead. The Senate, which was opposition controlled as was the house, they pass a bill, new 20 year charter for the central bank. They send it to Jackson's desk. Jackson vetoed is it. Clay thinks, okay, we got him. He just vetoed the central bank

economy is going to collapse. We got them. People loved it, right? The people wanted the central bank gone and the central bank was gone and Jackson was reelected. So these types of things have happened many times in American history. And ultimately what happened was there was economic difficulties after Jackson got rid of the second central bank, but state banks took it up and it became more decentralized. And then we had a boom period. So there was no need to have a central bank. And there is no need to have a central bank. And in any discussion that there's like, you know, oh, if you don't have an independent central bank, you can't have an efficient economy. Well, the second largest economy in the world is China. And by statute in Chinese law,

the head of the PBOC reports to Xi Jinping. So the second largest economy in the world has absolutely no independence. So anybody that comes on CNBC or Bloomberg and tells you that if you don't have an independent central bank you're doomed as a national economy is basically full of shit the second largest economy in the world is china no independence yeah it is it isn't saying that that has been sort of psyoped into the mainstream acceptance that you that we need Yeah, it's just it's all BS, man. I listen to it all day and I literally am like these people are nuts. Like these people are just there's such a propaganda machine. It's it's ridiculous. I mean, and I'm not saying they're even doing it consciously. I'm not here to impugn people's characters. I think that there is something embedded in the American psyche. Maybe it's a non understanding of history. Maybe people think that the Federal Reserve existed since 1776 and it's always been there. And that's just the way that we need to be.

But we have a history of an evolving. You know, in the 1970s, we did Humphrey Hawkins and we literally passed a bill where we told we told the Fed what to do. And we said, here's your target. Three percent unemployment, three percent inflation. The only inflation target Congress and the president have ever given to the Fed is three percent. And within that bill, they said, if they come in conflict and you're struggling to get unemployment down to three percent, disregard your inflation mandate and focus on employment.

And that was in the bill. It was the 1978 Economic Growth Act or some name commonly known as Humphrey Hawkins. People can look at my expos. That's what Congress said. Three percent unemployment, 3% inflation. If they come in conflict, focus on unemployment. And it was put into law. But the problem was, was they put a five-year sunset period on it. So that's gone. And then all of a sudden, the Fed says, oh, well, the Bank of New Zealand said 2% is the right inflation target. So we're going to do that. Well, the last time Congress gave the Fed a mandate, it was 3% unemployment, 3% inflation, come in conflict, go with reducing unemployment. That's what the people have said.

That's democracy. It's like time. It's a flat circle because it's not explicit. There's been no congressional act passed to mandate this. But I think that implicitly behind the scenes is what Trump has been trying to do. Too late, pal. Not worried about inflation. More worried about the job market.

And then in Jackson Hole, that was a big pivot from Powell was sort of explicitly saying we're not going to worry about inflation as much as we are employment now. Matt, we need to worry about employment. I mean, what we need to do right now is like, and I think this is going to happen, is unemployment is weakening. We're recording this on Thursday at 10 o'clock. I have no idea what the employment report is going to be tomorrow morning. It could surprise us all and be 200,000. I don't know. The longer term trend in the data is there's some weakening in the unemployment, right?

And if you have that weak thing, like you're not going to get systemic inflation. Tariffs are not inflation. Milton Friedman said inflation is always and everywhere a monetary phenomenon. You know what tariffs are? They're baking into the price index as a tax. It's like, how could you think that if a tire costs $100 and then next month that tire actually costs 95, but there's a 15% tax. So it's actually 110 to the consumer that tire prices went up. That's not inflation. It's a one-time price increase. And these things like CPI and PPI,

they're not inflation reports. It's not consumer price inflation. The name of CPI is consumer price index. It's an index of prices. And if prices go up because there's a tariff, which is basically an embedded tax, that's not monetary inflation. I mean, Milton Friedman, no free market economist is going to tell you that if the United States throws a 15% tax on tires and the price of tires goes up, we're experiencing inflation. We're experiencing a one-time increase. This is what Waller says. And all this junk from Powell, which is totally political because literally he comes out in September last year, cut rate 50 basis points. October, cut rate 25. December, post-election, we're cutting 25 but here's the message to the market we're done market tanks on december 18th

2024 three percent something like that when powell came out i mean it looks so political whether it is or not i mean that just looks so political like the elections in november he cuts 50 in september the next month in october he cuts 25 the next month in december almost to kind of conceal the fact that he's political. He's like, I'm doing 25, but I'm coming out on this presser, hawkish as hell, market tanks. And he doesn't cut since then. I mean, this discussion that the Fed is some independent, I mean, I think it's ridiculous. I think Powell, like people look at him and I understand he looks like your nice grandpa. He looks like he's very focused on things, but he's just not acting that way. He said last year, I'm data dependent.

All the data was coming in and he's like, I'm going to focus on that. Then all of a sudden Trump gets in office and he's like, all the data is saying we should cut, but I'm forecasting that we're going to get inflation in coming months because of tariffs. So therefore I'm not. No, if it wasn't for tariffs, I'd be cutting. So now all of a sudden I'm not data dependent. Now all of a sudden I'm a great forecaster.

I'm the wizard of Oz. I know that inflation is coming. Everything's telling me in the data to cut, but I'm not because I think inflation. It's all bullshit. And people that want to try to defend Lisa Cook, if she committed mortgage fraud, I'm sorry. I own investment houses. You know damn well when you get a mortgage what you're declaring that as.

And you know you get a much better mortgage, a lower down payment, if you say it's a primary residence. If she did that two or three times, she needs to be gone. And she will be gone. And if Lisa Cook is still on the board of governors a year from now, I mean, I'll shave my head. Well, whether or not she should be there in the first place is a whole other discussion, I think. The salutes did a lot of digging and it doesn't seem like her resume is as stellar as it may need to be if you're going to be a Federal Reserve board governor. Well, look, now we start to get into all kinds of other stuff about Biden and what he did and how he literally had lists that were restricted to black women for the Supreme Court, for the federal.

This gets into a whole other political stuff. But regardless of all of that, if she lied on her mortgages and she's literally on the board of governors of the largest bank regulator in the United States and people are saying this shouldn't be happening, I mean, she needs to be gone. I mean, there's no question about it. And I'll tell you what, if she's not gone and we'll see what the courts say, you know, they make this point that if Powell doesn't do something about it, that he could be fired for cause. And I think that there's a part of the Trump administration that this is another kind of contrarian view. There's a part of the Trump administration that wants to ruin Fed independence, that wants to just expose them as this big political organization because they don't want to deal with them anymore. Other people have talked about this, too. Darius Dale, Bren Johnson, like emerging of Fed and Treasury.

I've been talking about it for over a year. Like this is the ultimate goal. This is going back to the wartime footing, because in my mind, Trump sees us on a wartime footing. He sees us on a wartime footing with China. It's in my book clause, I say it's not a Cold War, it's a gold war. And I think that we're on this wartime footing economically with the other major powers, and I think any time in history where they're talking about Abraham Lincoln, George Washington, Ulysses S. Grant, FDR, Democrat, Republican, Whig, whatever, when presidents feel they're in a wartime footing and national defense is at stake, they will do whatever is necessary. Andrew Jackson, when he was fighting the central bank, the Supreme Court came out against it and said – Andrew Jackson's response, well, the Supreme Court has ruled.

Let them see if they can enforce it. And so this is the history in the United States. The executive has immense power. This is what Steve Bannon talks about, where we're heading towards a constitutional crisis, because there is an element in the MAGA party that truly believes the executive has immense power. The executive is the only person in the Constitution that is named. The president is the executive. And Lincoln did this. All these other presidents did it.

And so there's a lot of American historical precedent for incredible presidential power. And a lot of people feel Trump is looking to push these boundaries, and they're going to be national garden cities. And this is what we talked about a year ago. I said, markets are not going to like everything that Trump does. I said, Trump's going to be more extreme than markets realize. And so just to bring this all back to the markets, I do think that there's potential for volatility and big drops, and that the Trump administration could pull some stuff

that people think they wouldn't dare and i think they will dare like like i think there's some crazy stuff these guys could pull in the next three years what are a couple examples or one example well okay maybe things don't work out the way they wanted lisa cook he goes after jerome powell um maybe with the national guard in chicago he starts having you know push back on that and starts deploying the military in a larger way nationwide. When it comes to terrorists, we've seen him go big, but then back off. I think on the side of the Federal Reserve and essentially the monetary control, if he makes an attack at Jerome Powell, perhaps purposely even before his term is up because jerome powell holds a trump card

and trump doesn't like that jerome powell's trump card is that his term as governor is not up until 2028 and so jerome powell can threaten trump and say if you keep pushing so hard against the Federal Reserve. I'm not going to resign when my term as chair is up, and you're not going to be able to replace me. And there's only one other Federal Reserve chairman who did not resign after his term. So what happens is people get appointed governors, then they get appointed chair. Their chair terms end before their governor terms. Governor terms are 14 years. They're long terms. And so Powell's term as a governor goes until 2028 to like the end of the Trump presidency. So he doesn't have to leave the Board of Governors in May. He could say, I'm going to stay. And this

could turn into a huge fight where basically Trump says, OK, Jerome, you want to stay? I'm going to fire you from the Board of Governors because you let Lisa Cook continue to have access to the Eccles building. And that was my point. The only other Fed chairman who stayed on as governor after he lost his chairmanship was Eccles, which is the name of the headquarters building that is in the news these days regarding the Federal Reserve. So I think we could have like really like out and out dogfights at the Federal Reserve, like governors back and forth, fights over presidents, like just turn it into a clown show and essentially ruin the reputation. And this is, I think, Mohamed El-Erian's point where he says, Jerome, just resign.

Because if you keep trying to fight Trump, he's not going to back down. And what you're going to wind up doing is you're actually going to wind up destroying the Fed's integrity. There were people that know Mohamed El-Erian, famous analyst. He basically came out and said, Jerome Powell, you should resign because if you keep trying to, you know, stay independent and fight Trump, like you're only going to degrade the Fed's independence. And I think a part of the Trump administration wants to degrade Fed independence. Yeah, I think that's pretty obvious. And one person we haven't mentioned yet, but we should probably touch on is Scott Bassett. What do you think? He's the key. He's the key. Yeah, he's the key. I mean, it was three months ago. I said,

come at the hour, come with the man. I said, Scott Besson is, and he totally took over from Lutnik and Navarro on the tariff stuff. And Trump really trusts him. I think Trump would love to appoint him as Fed chair, but I think he wants to stay in Treasury. I think there's even a small chance that he appoints him as Fed chair, but does not remove him from Treasury, which would be the true merge, right? Like, let's say that this gets so crazy between the battle between the administration, like an Andrew Jackson type battle, like it was between Tsar Nicholas Biddle at the Second Bank of the United States, and they called him King Andrew. So it was the same stuff where the opposition called the president a king, they called him King Andrew, Andrew Jackson. So

So if we get back into that type of a situation, an 1830s type situation, yeah, I mean, Besson is, to me, he has this unique ability to be firm with kind of MAGA policies, but not come off as a jerk, not come off as insensitive, not come off as bombastic. I think a lot of Trump's lieutenants, the mistake they make is they think that if they act like Trump, Trump will respect them. I don't think Trump wants people to act like Trump. I think Trump wants people to get results. Besson gets results. Navarro and Lutnik come out there and they talk bombastically like Trump does, but they don't get results. They just hurt the matter. Besson comes out there. He's very considered. He's well thought. He understands markets. And he's running the show. So Besson is extremely important. And I think the Treasury is, you know, with the Treasury buyback programs, are increasing. The Treasury has control over the dollar. They have different funds available to

them explicitly. They might have hidden funds in the Caymans, as we talked about earlier. I think the Treasury is going to continue to exert their influence. Because one last thing, and I know I'm rambling a little, but I remember seeing a Scott Besson interview right after he got sworn in with brett bear he was on fox news brett bear was at the uh uh office of the treasury and in in scott benson said you know one thing i'm really surprised at as treasury secretary is how much this role involves national security and so they there is a huge and again luke roman i mentioned there's a huge national security component everything this this administration is doing. And that's why I honestly believe, like I said earlier, I don't care if it's J.D. Vance or

AOC or whoever is president in 2029, they're going to continue these policies, low interest rates, keep interest expense down, tariffs. Like this is all being driven by the national security fiscal situation. And everybody's trying to put this political spin on it. And I think it's the same thing where biden comes into office and doesn't get rid of the trump tariffs on china and it's going to be the same thing if a democrat comes into office in 2029 you think they're going to be trying to appoint governors that want to raise rates i mean yeah oh yeah i just became president let's raise interest rates no that's not that and it seems like like digging into percent too it seems like he's perfectly suited for the role considering things happening outside the u.s too

i think positioning the united states versus china russia um and getting into these trade negotiations um getting his getting pulling his sleeves up and getting his hands dirty with the trade negotiations directly is is really important um he's really impressive it's basically all all i'll say about that is like i think i'm not big on politics i don't I don't like intervention in markets from the Fed or the Treasury specifically. But, you know, you're handed a shit sandwich and you got to deal with it. And I think he's the right man to deal with these particular problems that we that we're facing. Yeah. And none of the comments that I've made, I don't think this whole time are really like what I think should happen or like in my ideal world.

I think all I'm trying to do is like paint the picture of what I see happening. Right. And, you know, this happens to me on Twitter sometimes is where I'll post like, oh, I think they're going to keep rates down. And people are like, well, that's great that you want that to juice your portfolio by 2% and say, I'm not posting that. I think they're going to keep rates down because I want them to, hey, that might happen, which would be great. What I'm trying to do is just express my opinion on what I see happening, right?

It's like, here's what I see happening. I see an administration hellbent on controlling every aspect of this economy, creating a massive boom ahead of the 2026 elections. I think the Federal Reserve is not out of bounds. I think all this stuff is going on. That's what I see happening. I'm not saying, you know, I'm cheering it on. I'm not raising the pom-poms, like, let's destroy the Fed. I'm just trying to paint the picture of what I see happening, you know, and where I see things going.

Yeah. And you were tweeting about it yesterday. Probably something we should touch on as well as obviously glossed over it earlier in the conversation. But the housing market seems to be top of mind for everybody, the administration, American citizens. And you were tweeting, it seems like Bill Polte has been sort of cryptically sending messages to the market that something may happen this fall as it pertains to the housing market and the Trump administration's influence over it. What do you think is happening there? yeah i mean housing is huge housing is like 16 20 percent of gdp like directly or indirectly um there is more untapped home equity right now and people can argue and say all these prices

shouldn't be where they are but the facts are the facts like a bank's gonna send out an appraiser and they're gonna look at a house they're gonna say this house is a million they're gonna say you owe 300 grand on your mortgage they're gonna say you have 700 equity they're gonna say we can refinance you and cash you out like there's so much money that could pour into this economy juice this economy if rates were lower and then there's also this big dissatisfaction with people that don't own homes that want access so i think one way or another i've talked about this months ago like i don't know what they're going to do i wouldn't be surprised if they came up with something called like a maga mortgage where they're like we're going to like they've been

talking about declaring a housing emergency and now what we're going to do is it's a housing emergency we want to get first-time homebuyers in you know you see a lot of people talk about how the the home builders are doing well because they're able to buy down mortgages we might get like a federal government like buying down mortgages like trying to get people into homes we could get people um you know uh they've talked about getting rid of capital gains on sales which would help people to be more open to selling their homes. Um, because if you own a home and it's an investment property, there's no deduction, right? I mean, if you bought a home for 200 grand and it's worth 500 grand and it's an investment property and you go to sell it now, you got a

300 grand gain. It's only your primary residence that gets an exclusion. And there's a lot of people that, you know, bought their homes for 150 and now they're worth 800 and they're past the exclusion, even if they're married couples. So there's a lot of people, it's not only the high mortgage rates that they sell, but they're going to get a huge tax bill, right? And so the federal government's going to figure out a way around this. There was a post by this guy, Santrini, he's kind of a guy on X, talking about ways that the GSEs, which Bill Pulte is the chairman of the board of, could figure out ways to start buying MBS, which is essentially be the the treasury the uh the housing authority doing qe you know and and

buying mortgage-backed securities um to keep rates down because there is this really big spread an unprecedented spread between like the 10-year and the 30-year mortgage and normally those are pretty close because you know it's a 30-year mortgage but there's prepayment so the duration of a 30-year MBS is similar to a duration of a 10-year. So those yields should be pretty similar because they're both government guaranteed and there's a big spread. I mean, we're at 4.2 or so about on the 10-year and the mortgages are like 200 basis points higher. Like that's a huge spread. That's not the normal spread. So I think they're going to get the mortgage spread down. They're going to get rates down. And I think people are going to, there's going to be somebody next year

gets a 4% mortgage. Yeah. I mean, I think it's happening. Like people have said those days are gone. And I'm not saying it's 4.0. I'm saying a four handle by the end of next year, there's going to be an ability. It might just be limited to first time home buyers with a income amount or whatever FHA, but people are going to start getting mortgages with four handles again next year. And this is going to unlock housing. And this is a huge amount of equity. And this is part of this boom that this president is trying to force through hell or high water. And I think people that bet against it, you know, I saw Darius Dale say, look, you want to argue against this on the golf course or at your cocktails, that's fine, but don't argue against it with your portfolio,

right? Like, I mean, if you want to just stand against all of this and stand against the treasury and the supreme court which is right leaning and you want to stand against all of it and say it's all wrong and ideologically i'm opposed to it and therefore i'm going to place these bets in my portfolios aligned with this ideological view i mean be my guest i think you're going to get slaughtered yeah that's why i love talking to you and bring back sober now i find myself drifting in and out of doomerism optimism mainly optimism um i think you have to be optimistic too and it's just about positioning yourself correctly and i think you mentioned it bitcoin gold um are are going to be the winners in all this because as they attempt to really

open up the markets and and let people or enable people to buy houses and stoke the economy there will be probably some um what's the word i'm looking for stimulus involved in one way or another some money printing involved in one way or another and inflation may have to go higher but i guess the hope is that real wages go up and you fix the job market to a certain extent where people aren't as perturbed by increase in prices as they were under the administration the golden in age, Marty. I mean, why not? Like, why not, man? I actually remember the 1980s. I remember well, Reagan was my president as a kid. And I'm telling you, this country was not in a good place in the late 1970s. This country was depressed. This country felt we were getting killed by the

Japanese. This country felt the Soviets were going to take us over. This was the era of Rocky III. and they had the robotic guys that were going to kill us and like somehow we got through it and i'm not saying it's because we're americans and we're the best and everything like that but like have a little faith in us like like like maybe we could do like a lot of people they just want to talk about how amazing china is and or something and it's like i don't know man i mean we've we've done pretty well and it's like have a little faith like like maybe this could all work If all these people on the left that hate Donald Trump would just stop trying to fight him every step of the way so goddamn much, and if Donald Trump would stop being so antagonistic, and I

don't think he needs to be, and he hurts himself. I'm not a Trump sycophant. He makes mistakes. I'll give an example. I think that we had a chance for Canada to come to a right-leaning prime minister. And by him hammering on Trudeau and calling them the 51st state, I think he drove the Canadian populace insane. And they put in, you know, a Trudeau 2.0. Yeah, yeah, exactly. And I think he ruins it. Like, I think Trump makes mistakes. He's a human being. He has this like, he's wired a certain way. And one of those things he's wired for is not to like, put his pride in his back pocket i remember one time i was like 11 years old i was on the south side of chicago and like i was doing something and some like young kid came up to me and i was doing it and

like i was almost going to get in a fight with somebody and the kid said don't do it with those guys man sometimes you got to put your pride in the back pocket and i didn't get in a fight and for some reason i've always remembered that my whole life is like sometimes you got to put your pride in the back all right trump doesn't have that in his dna trump doesn't know how to put his pride in his back pocket sometimes for his own good and he gets himself into trouble sometimes we could probably have canada with that conservative guy that was almost winning before trump yeah i mean that would make us so much stronger like he makes mistakes i mean his family is involved in crypto in many ways i mean i'm sure that's one of his biggest mistakes it's

shady dealings there. I mean, like, like I'm not here to, a lot of people think I'm like a MAGA, like Trump is God, but no, no, no, no, no, no, not at all. Like Trump, his family, what he does is personality. Look, he's a leader we got. I think he's a better leader than Kamala would have been for sure. But he's not a saint and he's not perfect. And, and, you know, let's root him on. Let's hope he wins. Let's not be like most of these people on the media that literally want to see the economy collapse and the u.s fail just so they can point the finger and say see we told you not to vote that guy as president yeah it is crazy that we've come this far as a country it goes both ways too i mean when biden was president uh some people were doing the same

thing on the on the right hoping that he would fail um yeah not me i was bullish i'm like his fiscal spending's good like market's good like we're not collapsing like yeah people let their politics sorry to interrupt you but but but that's the point about my analysis i'm not political about it i wasn't like oh we're doomed because of you know leftist policies in 2023 and i'm not being like you know we're doomed now because of trump yeah i'm just looking for one last chart i want to get your thoughts on just trying to steel man our arguments here during this conversation today um is there what are like the biggest potential hiccups that you could see yeah there are there are big hiccups yeah and one i'm just going to pull up this chart while um

while we bring up this part of the conversation because this is something i read about the other night too and it does tie into inflation but i think it's even more important than inflation broadly but it's like electricity prices in the united states if you're looking at average kilowatt per hour i don't know why this is zoomed in so much but um maybe if you look at this chart it's just i mean electricity energy is the base input of everything we do in the economy and i knew electricity prices were um elevated but if you look at sort of what's happening this trend here it's not looking great it looks like we're going up into the right like do you see energy as a sector specifically being a potential hurdle that needs to be overcome

yeah yeah definitely no that's the perfect chart to pull up because that's the problem um you know uh energy drives inflation um i think in the pre-ai world the key factor for energy was looking at oil. I think in the AI world, the key factor for looking at inflation as driven by energy is to look at electricity per kilowatt hour, just like you're showing. And this is inflationary. This is not like tariffs. This isn't a one-time price increase based on a tax. This is the input for everything is starting to go up, right? Because if you need to spend more to heat or cool your retail stores, to run your manufacturing plants, to power your factories, if everything is going up because of like, so this is massive. I mean, I'm bullish on copper. I'm bullish on

what we need to do to build out this grid. And we need to do it. And I actually think Trump is starting to backstep a little bit away from his anti-solar. I think he's anti-wind all the way because wind really is kind of the worst but i think he's gonna come back into solar a little bit um because you've got to look at what china does they did the roadmap right huge solar huge coal fields uh new like we we need to do it all right um maybe wind's not not part of it because it's just not very efficient but solar uh coal nuclear um we need to get the grid up and that's that's the ai constraint that's the big constraint and then i think i mean i think eventually what's going to happen is there's going to be a very separate pricing for residential customers and

commercial customers on electricity but that's still going to be inflationary and and so you know we need to develop the grid i mean that that that's that's a huge bump um i think other bumps on the road are that this AI thing, you know, hits the labor market a little strong and that it, it starts to feed into itself. And, you know, we see weakness in the labor market that makes people think my job's not safe. Therefore I need to pull back on spending. And we know we have a 70%, you know, consumer driven economy, maybe that trip to, you know, hike in the Sierras or, you know up to boston for the weekend i'm going to pull back on that because i don't want to spend that money because i'm worried about my job so i do i do think we're going to probably see some

weakness in the labor market but i don't think it's going to fall off the cliff i think that's a threat electricity is a threat um but generally speaking i think that these are bumps on the road and i don't think that they're going to collapse the overall narrative like if at some point i turn truly bullish i'll say i'm truly bullish i think hey man we've peaked get out of risk assets um i just i just think that these are going to be obstacles that could spring out of nowhere and all of a sudden you get a three four percent decline in equities you get a ten percent drop in bitcoin you get a ten percent drop in gold and it just happens and you're like what the hell just happened and then the longer term trend continues so like we closed out the call last

quarter and i said we'll be back in three months and we'll probably be at uh spx 63 6400 and right now we're at 64 66 i'm going to drop back and say we'll probably have this call in december and we'll be somewhere 68 6900 you know knocking on 7 000 and i think bitcoin had a really good august i think a lot of people thought it wasn't but it made a higher high it made a higher low it never broke below the july low it held in there i think september is going to be good and all year my original you know forecast i made in december was we hit 150 by year end i wasn't like you know some crazy guy saying you know we're going to hit 500 grand this year and maybe well who knows but i've been steadfast with that 150 which is simply based on we hit 66 high in 2021 on a

monthly close we dropped down to about 16 there's like a 44 000 differential you added 44 i don't know excuse me 62 was the monthly close and high in in in 2021 62 plus 44 you know took you to 106 000 106 was my initial target um uh last year we hit 108 we dropped back you add another 44 000 to that 106 you get 150 like i i think 150 is the next stop on bitcoin and um you know the the potential is unlimited but let's get to 150 first and and then i'll talk about a new price target but you know that's been my end of year price target and i still think we're easily going to hit 150 by uh by new year's it might be the year very accurate with your calls and it seemed like i mean this is somebody's

been around bitcoin for 12 years um definitely could see it getting crazy this fall but it does seem like we're in a different regime with the emergence of the etfs bitcoin treasury plays and things seem much more um controlled in terms of volatility suppression i was i was looking at bitcoin futures versus platinum futures platinum futures have higher volatility now than bitcoin so you know bitcoin is becoming um a sorry to say it a trad fi security instrument and it's getting trad five all and that that's just what's happening like it's it's ng you but it's it's it's no longer like a bunch of people with their own wallets do it like you got options you got futures you got ibit you got the etfs all of this is volatility suppressing and it's also return suppressing

because there's a relationship between volatility and return now if you think like oh people oh oh, yeah, Bitcoin is going to go up 100% every year. You know, no, like to me, when Bitcoin was, you know, 100 or less, and I'm calling for it to be 150 by the end of the year, and I'm like 50% increase. I mean, that's massive. That's huge. Like anybody that's disappointed in Bitcoin this year,

I think just needs to reset what Bitcoin has become. And you don't have to like it, but it is what it is. Like Bitcoin is becoming a part of the financial infrastructure of the United States. Bitcoin is going to be key to this whole Trump administration plan. Part of what has happened is when you get these interest rates low by the Federal Reserve, you create financial asset inflation. And what's happened is that asset inflation has flowed into stocks and homes. The problem with that is that stocks should have some sort of relative valuation to cash flow and homes need to be affordable. Gold and Bitcoin don't need to

be affordable. Gold and Bitcoin, because they're not used in the real economy to build houses, that's a feature, not a bug. They can go to whatever price is necessary to be the release valve for the financial asset inflation that's coming from these hyper lower rates that I think are going to be put in place. So I think that gold and Bitcoin are going to be the premier assets for the next decade. Bitcoin is going to outperform gold over the next decade on a percentage basis with a bit more volatility, but they're both going to be doing exceptional and the stock market is going to do well too. And like, this is what Bitcoin is. I mean, they've talked about it. It was either Trump or Besson who talked about like,

Bitcoin's going to help us keep control of inflation. There's something that they talked about. Like they know what Bitcoin is going to do. Bitcoin is going to absorb wealth. It's going to suck it up so that it doesn't all have to go into housing and stocks and drive those things to ridiculous levels. So Bitcoin is going to be the inflation release valve. And I just think for short periods of time, utilitarian coins like Ether or Solana can have their moments. But in the long run, there's only two stores of value in the world right now, and it's Bitcoin and gold yeah this was an incredible conversation december let's let's prep here maybe we do mid to late december maybe between christmas and new year's we do our 2026 predictions oh that's gonna

be a fun one yeah i want to really think about that one and maybe we could come on and do that do the whole thing and talk about what i got right what i got wrong with 2025 and what i see coming for 2026 and do a do a show something like that what do you think yeah we'll do a little retrospective and then uh a forward looking yeah first half retrospective second half what's coming next i like that quick retrospective just just take a look what i got wrong why i think i got it wrong which could be informative and then more importantly like what's coming awesome well i can't wait for that yeah i'm gonna enjoy my fall for christmas thanksgiving but then uh very much looking forward to the end of the year discussion mouth yeah me too man i love our conversations i

think because we've been doing them every quarter like it's building on it and if there are listeners who like this there's one about every three months you can go back and and see where we're coming from so uh really appreciate it thanks for having yeah as we're building up the receipts now that's uh you can go you can go check the receipts freaks they're out there we'll be back in december for a retrospective on 2025 and i look forward to 2026 mel i hope you enjoy your day sir yeah peace and love freaks