TFTC: A Bitcoin Podcast - #707 The Yen Carry Trade Unwind Could Crash U.S. Markets with Infranomics

Episode Date: January 24, 2026

Marty sits down with Robert of Infranomics to discuss the fragility of the global bond market, Japan's yield curve crisis and its ripple effects on U.S. treasuries, the end of globalization, rising political polarization, and why Bitcoin and gold are the only assets worth holding in a fiscally dominant world. Robert on Twitter: https://x.com/infraa_ 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/4pOv2L4 Unchained https://unchained.com/tftc/ SLNT https://slnt.com/tftc CrowdHealth https://joincrowdhealth.com.tftc Salt of the Earth: https://drinksote.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/

you've had a dynamic where money's become freer than free if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Robert, welcome back to the show, sir. Good to be back. Good to have you back. Like I was telling you, I was binging your channel earlier this morning, playing some catch up. You put out a lot of content, so it's hard to keep up if you don't have enough time in the day. But I think

for this conversation, let's start in Japan. Obviously, that's been a big topic of discussion this week, Japanese yield curve screaming right now. And I think a couple of the videos they put out the last week really dive into it, sort of the nuance of their yield curve where a lot of the debt exists in different durations and in what is actually happening. And I think this was incited, correct me if I'm wrong, from a tax policy. They were going to eliminate a sales tax or something and that sent the yield curve screaming because people were worried they're not gonna be able to to um service their debt yeah food tax um sales tax on food i believe um and yeah that sent long-end rates moving pretty sharply higher i mean we had 35 basis point move

uh in the long-end rate there in a single day so it is basically i mean on par with like the Liz Truss moment over in Great Britain, where their bond market just completely imploded. It was kind of on par with that. It was kind of on par, arguably, with what happened in the U.S. in April with Liberation Day and all that chaos. So it was pretty historic what we saw over there. But for the nuance of, I think, what's important when it comes to Japan that a lot of the people I follow don't seem to talk about is number one, they run a very large current account surplus, four and a half percent of GDP. And they've ran that for a long time. That's part of how they've accumulated so many dollar denominated assets. So they've run a very

large current account. When you look at where the debt is actually being issued, it's very similar to the U.S., where they issue the majority of their debt in notes and bills, so short duration. Five-year and under is definitely a majority. I think five-year and under represents 65-ish percent of the debt. And the 30-year only represents 2%, 3%, 4%, like very low single digits when it comes to the amount of debt that is actually out there. Also, when you look at like the average duration on their debt it's quite long at i think nine ten years so different than the u.s um not quite as long as great britain where their average um duration is is close to 15 years so quite a buffer when it comes to uh kind of you know flexibility i guess you could

say or or resistance to um the fiscal dominant short-term short-term rate volatility that like for example, we're starting to kind of get a picture of here in the US. So large current account surplus, most of the debt is issued in the short end. And then, you know, they basically have a pretty decent buffer when it comes to the duration on their debt. So yeah, when it comes to the ownership of all of their debt, which is definitely high, you know, I hear a lot of people talk about 240 debt to gdp you know the the sky high amount of outstanding debt uh which is totally 100 accurate but when you look at who actually owns all that debt the vast majority well majority uh is the bank of japan themselves so they hold about 50 of the debt meaning that all the interest

payments just get recycled back to the ministry of finance so after operational expense for the bank of japan uh that interest expense just gets recycled back to the ministry of finance they have very low external debt uh to gdp only about 12 of the total debt that is outstanding is owned by foreigners uh so low external debt high you know large current account surplus uh most the debt being issued at the short end of the old curve uh yeah i i don't think that it's necessarily an imminent sign of you know japan completely imploding most of the interest from higher rates again they have that nine-year average duration uh so that's a buffer to kind of short-term fluctuations um much less so than like what we see in the u.s with so much uh issuance in the

front end uh so they have more of a buffer large current account surplus most of the debt is issued in short-term bills uh the bank of japan themselves own 50 of the total outstanding debt and they have a low external debt only about 12 percent of that debt is owned by external uh you know people outside of japan so uh yeah those are all points that you don't necessarily hear a lot of the like macro fin twit type people on x talking about uh but there's not you know there are indications that maybe japan is a little bit more resilient to uh withstanding now look like pension funds banks insurers uh over there in japan you know they're sitting much like it was in the us where we had regional banks sitting on you know tlt basically you know long long duration debt and that that

debt fell 50 percent in in value uh then there was a run on deposits and you know they didn't have enough uh liquidity to come up with it so we had three of the four largest bank failures much like that happened here in the us you know a similar sort of situation could could could come out of japan uh but yeah kind of like broadly speaking in general uh doesn't seem to be you know the end of the world sort of catastrophe i would argue it's even probably worse uh what's going on over there is probably worse for the us um if anything that's exactly what i was going to to segue to because uh earlier this week with more economic forum going on obviously a lot of political rhetoric around greenland specifically markets uh markets took a bit of a dive and many

people were um pointing at the greenland tension saying oh look trump's getting us in trouble and then scott besant came out and said it's not greenland it's the job japanese yield curves exploding um that's why markets are down so he explicitly sort of highlighted the japanese yield curve as uh an input to the the bad uh the bad run that markets had earlier this week it was a six six standard deviation move like it was a six sigma event so yeah it was it was definitely uh major for sure yeah and so why why does this potentially have a more negative consequences for the u.s uh as opposed to japan itself so for a number of reasons so that current account surplus that they've ran for decades 30 years 40 years um that means that they've

accumulated they've become they've been a creditor uh by by definition to the rest of the world uh the u.s being you know the primary beneficiary of that credit um japan used to be before the cayman island uh repo nonsense uh basis trade stuff before that japan was the largest holder of US Treasury debt. And so what could eventually happen is, you know, the part of the reason that so much capital from Japan flowed into US Treasuries was due to the fact that Japan was in the last decade, they had, you know, negative wage growth, they had negative GDP, their economy was contracting, they had deflation. They were, I mean, it was pretty bad. And it didn't, you know, it wasn't a short lived thing that we're talking, you know, 20 years of this sort of, uh, poor

growth. And, you know, in response to that, the bank of Japan, uh, you know, the QE yield curve control, negative interest rate policy, uh, 10 year JGB was only yielding, you know, zero, basically. I mean, uh, there was no yield in Japan, uh, you know, different points at different times had had different rates, but you could basically think of the 10 year JGB as yielding zero. So in order to get yield, what domestic institutions would do, an insurer, pension fund, something like that, is they would sell the yen, buy the dollar. This is part of why the yen has weakened so much. And then that once they had the dollars, they would buy U.S. treasuries. And the difference, the interest rate differential, the difference between yield on a 10-year JGB

and a 10-year U.S. Treasury at the peak was 4%, meaning you got 4% more yield in U.S. Treasury and a 10-year U.S. Treasury than you did in a 10-year JGB. Not only that, but the dollar was strengthening versus the yen. So you're picking up extra carry there. And so that trade is kind of like what the yen carry trade generally was, you know, borrowing yen at basically free, you know, zero interest rates, sell the yen to buy the dollar to buy U.S. treasuries to pick up yield. They would also go into, you know, U.S. stocks, MAG7, you know, tech stocks were another beneficiary of this sort of yen carry trade. And so what could happen is with higher rates in japan some of that money could look at the higher rates in japan and go well you know i got

zero percent you know five years ago ten years ago but now there's yield finally um i'm gonna bring some of that money back home well the order of operations would be the exact opposite of what putting on a yen carry trade sort of uh thing would be which is sell the u.s treasury downward pressure on the bond upward pressure on the yield and then sell the dollar to buy the yen so there is going to be an equilibrium point um japan was kind of like a beach ball that was held underwater the yen carry trade and low rates qe old curve control nurp all of that was a large marginal driver of liquidity and so now that that's kind of that beach ball's been let uh above water um you know it's going to drag rates higher all over the world uh in the us i i see as probably being

um you know the the most affected in that sort of thing yeah it's rather interesting especially considering uh trump's move a couple weeks ago to prevent institutional investors from buying uh single-family real estate and then on top of that announcing a 200 billion dollar mortgage bond buying spree and attempt to bring down mortgage rates and rather quickly this japanese six sigma event happens and sort of throws a wrench in that plan and so the reason to bring that up it just seems like things are chaotic you mentioned beach ball underwater finally released we'll find equilibrium somewhere and that's the question i have in my mind is does anybody who's quote unquote in control or behind behind the helm of economic policy monetary policy

understand where that equilibrium is? I don't think so. I personally think the yen weakening here, obviously, with populist prime minister. Look, it was one thing to have Abenomics where you have super dovish, easy money, easy fiscal policy, easy monetary policy. That's one thing when you're in the last decades. It's a whole other thing when inflation is 3%, wage growth is three percent or so uh you know when your economy finally gets some heat in it it's a totally different thing to have super dovish monetary and fiscal policy so the long end of the old curve is indicating that right like that if you're going to continue this uber dovish monetary and fiscal policy with heat in the economy finally then we're going to demand a higher rate especially out you

know at at the long at the long end so uh yeah i think that you know eventually maybe bank of japan uh hikes um right now very low odds that they hike here in a couple days um i think the odds i think that's mispriced i think there is a chance given what is going on with the yen uh kind of approaching that like 159 level on dollar yen um and what just happened at the long end of yield curve uh you know this is besant was pushing maybe a month ago two months ago was pushing the bank of japan to hike rates and the reason he was doing that was for exactly what we're talking about which is you know he he comes from a you know macro back uh background uh with you know soros and drunken miller and some of the greats and he recognizes that you know uh the long end

of the yield curve if it gets too out of control over there could cause major issues over here And so he was pushing the Bank of Japan to hike interest rates. I think this is like a month or two ago where he was making kind of unusual comments for Treasury Secretary to make about a foreign monetary decision, monetary policy decision. So I think that there's a chance that they hike rates here at this next meeting. Definitely this year, we're going to see Bank of Japan hikes. I think that'll help stabilize the yen. And I think that also it'll help stabilize long end rates, which are moving higher in response to kind of too loose monetary and fiscal policy. Well, if they start hiking rates, they'd be one of the only developed countries to be

a hiking cycle you know maybe that gets a bit into the yen uh hopefully you would hope it would calm down the long end which is worried about inflation and worried about kind of fiscal concerns uh so i think that it would be a step in the right direction but yeah like dollar yen the the the purchasing power parity like fair fundamental value is 110 115 on dollar yen last i checked according to the imf so you know there's um there's there's room for it to appreciate for sure just on a fundamental basis um and yeah where that equilibrium point is no one really knows it certainly dragged rates higher not just in the us but all over the world i mean great britain france germany um you know their long end rates look even worse than the us um you know we're

we're kind of brushing up against like that 490 level on on the 30 year but um yeah great britain's even worse so you know as japanese rates move higher eventually you know that's gonna drag all rates higher and uh currencies you know we could see significant volatility in in the fx market i think this year um and yeah eventually there's an equilibrium point where it all calms down i haven't heard anyone that's able to uh give a level or you know say exactly where that's going to be but there but there is always an equilibrium point there's always a release valve um you know they kind of had the choice to like let the currency go or let the bond market go and it appears they've kind of let the bond market go um but you know they've also talked about

currency intervention so uh yeah if we get if we get one of those or if we get a bank of japan hike i think you could see you know the yen start to appreciate quite rapidly and it's not expected by the market at least the bankage band hike um in at this next meeting so you know just like we saw in summer 2024 the all this kind of stuff can cause uh significant volatility for risk assets like we saw with the nasdaq and s&p 500 last year or 2024 suffrakes health care open enrollment has started it will roll through the end of january opt out of traditional health insurance which doesn't care about you. It's impersonal. It's expensive. They deny an increasing amount of claims. Premiums are going up. You don't have to live this way. You can opt out. I opted out

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them to pick up a BitKey. Go to bitkey.world, use the key TFTC20 at checkout for 20% off your order. That's bitkey.world, code TFTC20. And how do you think the U.S. is positioned relatively in terms of particularly in terms of the sort of tectonic economic policy changes we've made over the last year with tariffs, reshoring, the deficit falling significantly? is is the in your mind the economic policy decisions made over the last 12 months set the us up to weather a yield storm if you will or are we are we exposed right now yeah so i think one of the most under discussed um data points that's come in recently when it comes to that when it comes to economic data is the trade deficit so the trade deficit shrank to the lowest level going all the way back to 2009 and the third lowest reading going back all the way to 2001 which was when

china was admitted into the world trade organization the china shock so the other way of saying that you know we've gone from i think it was at its peak in april 140 billion dollar per month trade deficit we've gone from 140 billion dollars of worth of dollar exports to the rest of the world exporting of the dollar uh to now 39 billion i think it came in at uh so yeah the amount of dollars that the us is now exporting to the rest of the world um is is dramatically reduced compared to what it was the current account uh last i checked over the prior four quarters right now is running at about 1.3 trillion dollars but that's going to shrink if as the trade deficit starts to get reflected in the current account data. So yeah, that is a pretty stunning reversal

for what it implies when it comes to the dollar, when it comes to Triffin's dilemma, which Triffin's dilemma, at the end of the day, you got to eventually, you're going to have to pick between domestic needs and international obligation of being the reserve currency issuer. That's Triffin's dilemma. And it appears that they've picked domestic needs, reindustrialization and tariffs and uh you know maga they've chosen that over international obligation of being the reserve currency issuer and i think that all the trade tensions that we've seen that you mentioned with the eu and greenland and all this kind of thing i think it's it's you know indicating that the us is uh uh you know stepping away from that sort of uh obligation that we had for decades uh to run

ever larger trade deficits to get the dollars out to the rest of the world that's the mechanism by what you get dollars to other countries it's by running a large trade deficit um i think that they've chosen i think that there's been a clear like regime shift when it comes to um you know what what role the us would like to play i think that we've so thoroughly hollowed out our industrial base we've so thoroughly become reliant on our adversary at worst our enemy for critical components go into our defense systems, our weapons systems. We can't even make enough artillery and missiles and interceptors to protect our own homeland. We rely on our enemy for about 85% of active pharmaceutical ingredients to keep our people alive. So yeah, I think that things got

a little bit too stretched. And I think that this administration, at least, is choosing the domestic needs over the international obligation of being the reserve currency issuer. And I think that the gold market is waking up to that. You see the gold price just going parabolic, but you don't really hear it being discussed when it comes to the real implications, what that really means, not just for gold, not just for Bitcoin, but kind of broadly speaking. I mean, that is a once in a generation sort of reordering of the monetary order and global trading order. So, yeah, I think that's really significant to have President Trump say, you know, trade deficit is going to zero.

Our trade balance, we're going to run balanced trade because what that means is we are not going to export you dollars anymore. And what's interesting is the dollar hasn't really rallied on that news. you would expect if dollar milkshake theory was correct, you would expect there to be the short squeeze in the dollar. But we didn't see that you would also expect a bid into the dollar with the Greenland EU, you know, tariff geopolitical tension, you would expect a bid into US treasuries and into the dollar, we saw the exact opposite, we saw, you know, selling of the dollar selling of treasuries and selling of US equities. So yeah, that's, that's a that's an important signpost. didn't it just pop up you know recently this has been apparent going all the way back to like early

2020 or early last year now you could see indications of that where you know in risk-off sort of uh environments you'd not see the dollar get bid or u.s treasuries per se you would see the swiss franc the euro and the yen uh were taking the place already before liberation day even came around and before cnbc woke up to this it was already happening so i think that there's a recognition that uh you know if you look at the the fx holding fx reserves when it comes to gold versus u.s treasuries gold is already overtaken u.s treasuries um so you know i think that there's some pretty important monumental uh shifts going on under the surface it's not an overnight thing you know we're not going to wake up tomorrow and the dollar is just not used by anyone in global

trade uh and it's worthless toilet paper where it doesn't happen overnight you know these things take a long period of time to play out but um yeah i i think that the us is vulnerable uh given the fact that we've let ourselves uh fall on the other side of triffin's dilemma for so long right where we prioritized international needs the the needs of people outside of the us um we prioritize that you know we both parties uh chose globalism over nationalism and caring about uh domestic you know needs first and foremost and the consequence of that is our net international investment position accumulated up to negative 95 percent of gdp i think at the peak right now i think it's about negative 90 percent of gdp which is still historic in the history of the world uh that that you we

haven't seen that sort of that that negative of a net international investment position which You know, on a gross basis, foreigners own about 65 trillion of U.S. dollar denominated assets. So we're incredibly vulnerable with that with that negative nip, 90 percent of GDP. We're very vulnerable to that, you know, shifting back to the U.S. and prioritizing, you know, domestic needs over international. You know, we're very vulnerable to upsetting the rest of the world who owns a huge amount of U.S. treasuries, U.S. equities, real estate. Right. We could see another version of early April where, you know, you basically had the reserve currency in the very early stage of a balance of payments crisis for that first kind of five days. uh you know if you if you saw concerted dumping of dollar denominated assets it could put us in a very very tough position one that generally you only see in emerging markets so um yeah i would

say you know it's going to be difficult to balance uh to to try to extricate ourselves from triffin's dilemma without uh so thoroughly you know angering the rest of the world that we get ourselves into that sort of situation again it's going to be really delicate uh to try to balance that looks like with greenland maybe we dodged a bullet maybe there's a deal maybe everything's good uh who knows uh too early to tell but yeah we're we're definitely vulnerable i mean arguably you know you look at japan going back to japan their interest expense as a share of gdp is only like 1.4%, 1.5%. You look at US, it's like 3.94%. So yeah, the fiscal situation going on in the US, yeah, trade deficit might be coming in. But the fiscal, it's improved for sure. It's come from

7% GDP to 6%. So we have seen some improvement in the fiscal deficit, but interest expense right now is growing at about 15% to 16% year over year. And so they got to get that down. Otherwise, the deficit, there's going to be continued pressure there. Social Security, Medicare, Medicaid, and Defense still eats up a huge portion of the budget. So you can't really cut discretionary items and easily address the fiscal deficit. And the reason that's important is that we've relied on the rest of the world to buy our debt. And if you're balancing trade and the trade deficit is shrinking to the degree that it is, but your fiscal deficit is shrinking, but much less quickly, then what that is essentially saying is that you're relying on other buyers of your

debt, right? Instead of foreigners who were buying your debt, recycling trade deficits into your debt. Instead of that, now you're going to have to rely on your domestic institutions and individuals to absorb all that, you know, $1.7 trillion of new U.S. Treasury debt issued every year. Yeah, a lot to respond to there. But it's funny, as you mentioned, we got to balance this. The art of politic and threading the needle. And I thought this week, it's funny because I think we both understand the sort of structural, the lack of structural integrity behind the system because of all the debt that's been built up over years. But you look at what happened in Davos this week and letting it come out first, like globalism has failed. We're expressing a lot of what you just described.

We're beholden to supply chains outside of our borders when it comes to health care, defense, like we need to fix that. percent comes out um shits on gavin newsom and basically says yes we're america first come work with us go baby go then trump obviously gave his two-hour speech which really was just a flaming a roast of globalism and its effects over the last five decades and signaling to that crowd in davos america is going a different way you can come with us or not um and as an american citizen I think we've had this conversation a couple of times now on this show about the silent depression and because of the hollowing out of the manufacturing base and Triffin's dilemmas effect on United States citizens over five decades. And I looked at what happened this week and I was like, yes, we need to get this message out there. It is time to make this phase shift.

uh but it's funny it's like depending on your perspective or do you want to continue the globalist agenda and keep going down that path or do you want to really pack it in and be america first and revitalize america's industrial base and domestic economy it's like you're watching two different movies the reactions to all these speeches at davos this week were polar opposites depending on what lens you were looking at this through and i think that's a big question like many countries are actually going to be inspired by the um the sort of posture that this administration is taking in the united states and say hey this is actually a good idea and i think that the narrative part of it and the sort of buy-in from a critical mass of foreign nations

is going to be critical to land this plane yeah i mean japan already has they takeichi was not at all expected to win uh it was quite quite the shock um and so japan's definitely going the kind of populist nationalist route uh kier starmer i think it was um out of the uk made comments this is i don't know a year ago maybe uh about globalization failing the the median grit um and so you're starting to see a recognition that um globalization really look it worked great for certain people uh the problem was those certain people were the top one percent right it was a small share of the overall population the vast majority of the people uh didn't really benefit look you got to buy cheap uh bluetooth speaker on on alibaba right but your good paying

middle class job that didn't need a high school diploma uh is gone you know and your country and your, your, your state, your city is completely hollowed out and called the rust belt because everything is a bucket of rust. Uh, you know, your, your deaths of despair, triple the rate that they were during the great depression. You're, you know, addicted to fentanyl. Uh, so yeah, I, I think that, uh, I think that it's pretty clear that the, the MAGA right, uh, which is not conservative is not old school Republican. It is not real. You could call it right wing, I guess, but it's definitely not like Republican. It's the opposite of the Republicans back in the 90s, early 2000s, who were the prime advocate of globalization because it was going to boost

corporate profits and make them all rich and therefore boost corporate profits. You boost stock market valuations and who owns all the equities, the top 10% own 92% of equities. So, yeah, like it's kind of an inversion that we've seen. I kind of suspect that we might see here in the U.S. a return from our left back to what they used to be during the 90s and 2000s speaking out against globalization. We could even see kind of momentum start to or continue to build in kind of much more the nationalist populist sort of direction, because, I mean, it was, you know, the left back in the in the 90s that protested, you know, the World Trade Organization in Seattle, Battle of Seattle, the IMF, I believe it was in Miami. right like all those huge protests they were all like global anti-globalization they were all coming from the left wing at the time and the democrats at the time uh i mean there's like endless comments from schumer pelosi uh i remember dennis kucinich was like you know one one of them that i remember you know all the bernie bernie sanders they were all talking about globalization

it's going to suppress blue collar wages uh it's going to widen wealth inequality it's going to hollow out our industrial base, all things that happen. So, you know, like my question has always been like, why aren't they taking a victory lap? You know, like you, it's such a layout, a layup to, to, to take a victory lap on that because they were right. They were a hundred percent right in what ended up happening. And I would encourage people to go look up, you know, some of those comments, which are, you know, public you would think that they might return to that. And if we get a return to that then i think it's a durable trend i think it the the damage so-called is already done i think the trend is all you know i think the the entropy has been built and um the

critical mass has been achieved and i think the pendulum is going to to to swing i've been saying i think you know peak globalization we've already reached it um you know and and i still i still stand by that so i think that whether it's uh you know the right wing continuing uh with this kind of anti-globalist push or whether the left starts to kind of you know reinvigorate um what they used to believe um not sure if anything changed or they just you know you know have to criticize the other party kind of thing uh but yeah i i could see it you know even gaining momentum here in the us uh if if if you know we see in 2028 you know the pendulum swing to the other side uh we might even see a more concerted effort to reverse some of the kind of ill effects of globalization and

um i think that that's a you know pretty critical signpost um when it comes to you know the the impact that that's going to have on kind of the monetary order how trade is settled neutral reserve assets right does how bitcoin kind of fits into all that um so yeah i think i think it it i think it's the critical mass has already been achieved but i think it could we can even gain momentum if you see a resurgence of kind of what the left used to believe not too long ago there are cracks in the foundations of your money governments around the world are managing record debt the same way they always have by debasing their currencies and the effects are already showing up across markets in his report the debasement trade james lavish explains why the

shift is reshaping portfolios why gold tends to act first and why bitcoin often follows as the implications become clearer on january 28th james joins unchained live for the age of debasement a presentation and q a expanding on that research and exploring what this environment means for long-term investors if the playbook no longer explains what you're seeing this event helps put the pieces together register now and get early access to the report at unchained.com tftc that's unchained.com tftc sup freaks this report was brought to you by good friends at silent silent creates everyday faraday gear that protects your hardware we're in bitcoin we have a lot of hardware that we need to secure your wallet emits signals that can leave you vulnerable you

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special operations approved. It has free shipping as well. So go check it out. We'll get to Bitcoin gold and the monetary order in a bit, but I completely agree. And I would actually be i would welcome that with open arms if we can get some obscene sort of uh bringing back uh bringing both parties back from the polar uh ends of the spectrum towards the middle to really rally around american dominance and domestic economic policy um but i mean bringing back to the deficit and one thing i would worry about if even if the democrats were to get more moderate and begin becoming more nationalist to an extent is the spending, the federal programs, particularly Medicaid, Medicare.

And I think that's a topic I want to cover with you is obviously we have this problem. We have all this spending. We have this interest expense on the debt going up. We have to manage that. But as we've come to know over the last year and more specifically over the last two months, the federal spending is wrought with fraud. potentially 50% or more of federal spending is being, um, being, it's being laid bare that a lot of it is overt fraud. Um, and so that's my question. Like, is it possible? And I talked

about this with dark side earlier this week. Is it, is it possible to like have an actual doge come in and cut spending without collapsing the system? Like, does this fraud, um, just sort of heroin that's being injected into the system because it needs it to sustain itself yeah i mean um i i agree that you know spending five billion dollars on a elmo program sesame street program for iraqi children it's kind of like not the best use of taxpayer dollars totally agree with that i like you know cutting waste fraud and abuse but i always point out that like you know just because just because one person might ascribe that descriptor that adjective to it um on an economic you know pure purely removing uh politics and and just purely looking at it from an economic

standpoint you know one man's fraud is another man's income so uh someone on the other end of that fraud is getting however much money if it's half of of the deficit or half of spending uh that's a lot of money and and those people have mortgages they have car loans they have um you know they go out to the movies they buy groceries um all that kind of stuff so yeah you start cutting too much um and you get you know a contraction of gdp if we were to balance a budget overnight like with a magic wand and just wave that magic wand and we have a a perfectly balanced fiscal budget, it would result in a GDP contraction worse than 2020, worse than 2008. So yeah, it would be great to cut a lot of spending. The problem is we have become so

kind of strung out on that drug that, yeah, it's difficult to do quickly without collapsing the system. And once you start talking about a GDP contraction, well, the deficit goes up during a recession during an economic contraction so now you know we go from a six percent deficit to a 14 or 15 percent deficit and you know what what is how does the bond market reply to in the face of that sort of you know increase in in supply in bond supply uh yields might go up um and this went from being kind of a kooky you know theory to now like even jeffrey gunlock and some pretty well-respected people are talking about the fact that yields might go up in the next recession and then you're talking about a debt doom loop so yeah i think it's difficult to i think it's difficult

to extricate ourselves from the the two kind of dueling uh conundrums that we've gotten ourselves into both on the kind of current account side with the trade deficit but also on the fiscal side both of them are kind of difficult to to fix overnight uh and difficult to fix without tolerating some economic pain um so yeah i could uh you know if if there was a way to balance the budget um it would be pretty ugly um we would have to tolerate a significant amount of pain uh for you know in the short term but like i fall into the camp that okay so so what right like recession is part of the normal business cycle we've basically like outlawed recessions well you know just like a fire is necessary for a forest to regrow uh you know in a healthy way

uh you need a rinse of leverage and malinvestment needs to be flushed out and we need to have um you know the moral hazard that has been imposed uh over the past i don't know 20 years uh is pretty incredible uh and i think it's led to some second and third order effects in our society that are pretty pretty um negative so yeah i think it'd be good you know the problem is politically how do you get elected on hey i'm going to bring pain um you know people kind of always bring this up i i make the point that the twin deficit the only thing we can accumulate as a twin deficit nation is debt well that's not sustainable uh especially when you rely on uh creditors overseas to uh to finance that that's not sustainable the only thing you can accumulate is debt uh is is just blatantly

unsustainable but the problem becomes you know like when you tell someone the us over consumes uh as a as a you know by nature of running a twin deficit when you tell them well the us over consumes we by definition in the aggregate over consume uh they look at you like well you're you're saying you know communist you're saying something no different than mao zedong you know uh and it's it's just it's just economic reality it you know it's just math like uh we have to address the fact that the us over consumes the way that we are allowed to over consume is through debt the accumulation of debt whether you know in the aggregate that is the only way the us is able to run a sustained twin deficit of the size that we've been able to now the reserve currency status

kind of you know helped bolster that ability uh but as that fades so will our ability to over consume and a lot of that over consumption is unearned over consumption with the fraud as well which yeah it is this conundrum we find ourselves in trying to grapple with this and obviously percent was in there like go baby go grow baby grow i think that's his mindset is like we just need to get productivity up to a point and i don't know if this is his expressed opinion but let's get people let's re-industrialize let's get the domestic economy back up and running let's get a lot of growth in the real economy not the fraudulent sort of fiscal dominated side of the economy and then maybe at some point in the future when things are stable and we're on a good growth

trajectory we begin to peel off the the fraud waste and abuse by by cutting the budget in certain areas yeah and we we have really high productivity i mean q2 came in uh really really hot at 3.3 uh the expectation for q2 uh productivity was 2.3 2.4 so q2 came in quite hot no one really talked about it then q3 came in even hotter um i mean we're we're looking at like 4.9 percent productivity now the problem is who benefits from that we know that real wages diverge from real product uh from productivity um you know back in the early 1970s with uh nixon shock so you know high productivity is great from if you're the government and you're talking about you know fiscal health and sustainability, productivity gains are great for them. But the question

becomes, you know, who actually benefits from all these productivity gains. And I think that that could set up, you know, quite a significant societal and political issue over the next decade as AI and robot, you know, not just AI, but eventually robotics, as all these kind of productivity enhancements come, we know from history, we know from the data that those productivity benefits don't flow to the median american they flow the top one percent they flow to corporates uh and equity holders of those corporates who are all the top one percent top ten percent so yeah like you could get into a situation and a lot of people are kind of talking about this you know the meme of like you know you have four years to accumulate as much capital

before you're in the permanent underclass sort of kind of meme well there's a you know there's a real chance that there's some truth to that um and you know does it lead to ubi what does it look like i'm not really sure but i do think that it'll be one of the major uh turning points when it comes to political and societal kind of turning points will be this productivity boom but then the people getting even more upset as productivity is going up you're going to have people getting more and more and more unhappy uh and eventually that'll have to come to a head and resolve somehow i'm not sure how it will but uh that that's i think a theme these productivity gains are great for the government and they're great for kind of debt sustainability and fiscal solvency and all that

kind of thing uh but they could be setting up an even more dangerous situation when it comes you thinking of it politically uh and societally because we already know the median americans already crushed uh and you know the the middle class if you're under 30 is gone there is no middle class if you're under 30 so uh and don't own a home already so i think that that's probably a theme maybe productivity continues to come in hot maybe they extricate themselves from the debt uh situation through those productivity gains which are legitimately coming in quite hot uh but then you might be setting up arguably an even worse situation which is the people are going to get to a breaking point and i you know i don't want to see that near do i and i've been

saying this last few weeks on on shows that i've been doing and some talking head videos but i think the productivity gains need to be paired with the hard currency like if you're going to have insane productivity gains that accrue predominantly to the top 10 top 1 percent whatever it may be i mean you have to throw the lower classes of bone by at least using hard money that they can work a menial job make a um a modest wage but have the the fruits of their labor saved in a currency that could increase in purchasing power over time yeah i mean you know home prices in gold terms are basically at an all-time low um so the whole housing affordability story i think is a major one and once you once you look

once you realize that the issue is not that homes are overvalued if anything homes are are cheap in real terms uh the the issue is the purchasing power of the dollar and the fact that the denominator that we've used our whole lives is failing as i've been saying for a couple years now the denominator is failing yeah for decades we didn't have to worry about the denominator like you would in argentina right you go to argentina lebanon turkey they they worry about the denominator they spend you know half their day trying to set up a carry trade and right figure out how to address the fact that their denominator is is melting at a at a rapid rate um but we haven't needed to do that here in the u.s and i think that the past five years people are waking

up to to that reality um and you know this this is kind of the gold and silver story eventually you would hope that some of that flows into bitcoin um eventually but we've underperformed gold by a lot um like for example like summer 2021 this is kind of the the way i think of it the framework i use that luke romans also mentioned in the summer 2021 you have bitcoin at like 35k and in ounces of gold it was 18 ounces of gold per bitcoin well now we're at 90k in dollar terms and we're at 18 ounces of gold for bitcoin so like i really want to see that start to pick up um you know the fact that we've held even with gold is not about you know it's it's not an indictment right you're not if we were holding even in dollar terms that would be an

indictment of bitcoin uh holding even with with gold over those four years five years not necessarily that horrible of a thing uh but yeah i i my bet is that the young people especially who are much more kind of digitally native here in the u.s uh you know the the young people i know they all know what bitcoin is they you know they know about gold but the vast majority of them don't hold any gold you know they're not going out to buy gold bullion so i think that you know i think i'm still very bullish bitcoin uh but you know i think that if we're gonna if if we as bitcoiners kind of our whole premise is the denominator is breaking the denominator being the dollar, and there's issues there with denominating your life in fiat, well, then we

need to stop talking about the Bitcoin price in dollar terms. We need to start talking about it in gold terms. And I think that that's going to be important. But whether or not we go to a hard money standard, I think it's pretty unlikely. But I do think that increasingly over the next decade you will see uh average americans kind of wake up to these issues that we've been talking you know some bitcoin has been talking about for uh 15 years or whatever um i do think that there's kind of a growing appetite the problem is you know most you know that the median americans got less than a thousand dollars in savings right like the people i know are working three jobs living paycheck to paycheck they don't have a thousand dollars a month to put into bitcoin so that's

kind of another issue that we have is uh you know maybe maybe people would like to save and hard money gold bitcoin whatever uh but you know if you're working three three jobs and living paycheck to paycheck are you gonna contribute anything meaningful um i think that's another another issue i'm very bullish bitcoin i've been buying here in the 80s when everyone else is gigabarish so here's a bitcoin and gold chart here's the hopium for people looking at a looking at a rebound here from uh from the lows and this chart actually doesn't look bad uh if you ask me yeah i um you know the the the part of me that is way more allocated to bitcoin rather than gold i do have gold i kind of wish it was more but uh you know that part of me is like looking at the

bitcoin gold performance over the past couple years and like uh you know it's not great but if i remove my kind of you know very very long uh very high conviction bet of bitcoin my personal position if i remove that from the equation look at it just as a trader i look at that as a reversal for for a contrarian trade right um you could put a pair trade you know short short gold long bitcoin uh for a reversal there because yeah it has been stretched i mean if you look over the past 12 months it's it's just plummeted relative to gold that's painful for bitcoin holders like like me and a lot of a lot of folks but uh just remember that like that is not usually how markets operate right they things don't go up or down forever um and contrarian trading is a thing for

reason you know so uh reversals happen they happen when you least expect them uh most often and you know who knows what kind of catalyst we can get i mean i think that growth is looking pretty good like in the aggregate for for the us economy for 2026 i think you have a fiscal impulse coming from the one big beautiful bill and probably future uh you know additional fiscal impulse from populist measures you know stimmy checks or something uh due to the midterms um i think that i think that global growth is you know picking up uh and i think that you know on the fiscal side uh we're not we're not seeing a dramatic fiscal contraction by any means um you have productivity you know quite decent uh tech has been underperforming going back to late october and bitcoin trades off

you know the nasdaq unfortunately but yeah all those trends i think uh you know especially in a run a hot environment where they're trying to get negative real rates uh i think that you know i i've been buying here um in in the 80s and in kind of low 90s i've been buying here um i think that over the next year i think that we could uh now whether or not we outperform gold you know that that might be a different equation but gold's had a significant run already uh gold generally front runs you know monetary easing we have the fed printing you know 50 billion 60 billion a month that's going to probably go up over the over the year um and you know negative real rates on the horizon uh you have you have trump talking about you know uh trump and letnick talking about the

fed funds being hundreds of basis points too high so we're gonna get negative real rates that's going to be incredibly bullish for assets in general but probably you know asset scarce uh kind of debasement trade sort sort of assets like gold and uh bitcoin so i yeah i'm i'm i'm bullish you know it it it it's legitimately you know like a bit of pain that i know a lot of people uh in bitcoin land are looking at gold looking at silver uh and you know feeling quite a bit of uh fomo or pain from that but um but yeah i'm i'm bullish bitcoin is there a chance that we get some sort of black swan uh out of nowhere right because by definition you can't foresee one happening uh 100 there's always that risk there's always the risk of a economic contraction some

sort of financial crisis uh causes you know kind of a a var shock uh sort of phenomenon but generally like i'm i'm pretty bullish for the next uh definitely for the next five to ten years i think it all comes down to time horizon right a lot of people uh have a short time horizon a high time preference and i think that you know the more that you can zoom out and look at the longer trends look at the mega trend um i think that the better you'll do completely agree and speaking of mega trends and taking a sort of step back from the individual's balance sheet getting into hard assets to preserve purchasing power in terms of the monetary order and the reshuffling which we've discussed obviously percent coming in before trump was even elected was talking about it i think the

national security strategy that was released and all the speeches that were given this week davos particularly point to the fact like hey we're shifting things pretty tectonically uh in terms of geopolitical and by extension the monetary order how do you think that looks uh on the other side of of whatever's happening right now i think it's very bullish for gold and eventually very bullish for bitcoin i think that you know unfortunately the market um you know looks at bitcoin generally you know overall in the aggregate uh looks at bitcoin as a you know 3x nasdaq uh you know tech tech stock beta um but you know i think that over the next five years ten years uh you talk about like gold becoming the the major neutral reserve asset um i think that like

Like as a net settlement layer, gold can work, but there's, you know, downside to it. You have to worry about storage. You have to worry about transport there. You know, gold is not perfect. Gold has been centuries old money, you know, and it, it, it, it fulfills a particular purpose. Well, I like gold. I own it. I'm bullish gold.

I would add on any dips, but, but yeah, I think that Bitcoin, the properties that you need uh bitcoin fulfills those properties better than gold it's more verifiable it's more transportable it's more divisible um i would argue it's more secure so yeah i think that uh you know of course without the whole uh quantum discussion it's a whole other whole other thing but but generally you know it's very secure it uses what like one percent of the global uh electricity uh the network right so uh yeah i think that i think that bitcoin has a place and i think that the market will wake up uh to the fact that it's not a 3x nasdaq you know it's a it's a scarce uh asset that that anyone can own that's uncensorable that's decentralized you know

so long as you're talking real bitcoin and i think that yeah i think that uh you know it might take a year might take two might take three but i think that in a shifting kind of global monetary regime where you go from the u.s treasury being the primary reserve asset to uh gold um i think that bitcoin eventually will start to to to take a place if i had to bet uh i would i would venture to bet that like some major nation states have already started mining um if i had to bet so i think it's already happening i don't think yeah i mean russia's talked about venezuela historically been doing in bhutan not a major nation state but they're doing it ethiopia is in the game argentina is talking about it i think it's there yeah yeah and i think that adoption will will it might again

it might take some time though uh because when you talk about you know the shift from us treasury to gold uh you're talking a once in a generation you know 70-year sort of trend reversing it's not going to happen overnight uh and for bitcoin smaller asset class newer asset class for bitcoin to start to benefit from that will take time on top of that if that makes sense so i think that as long as people are patient um i don't see any reason you know so long as you know certain issues can can be addressed and the market uh is able to feel reassured uh with particular risks um you know the one that everyone's talking about being quantum uh but you know other any other risk right the the security uh budget and all that kind of stuff as long as like the general market starts

to become assured uh that that those risks are yeah this is my thought so like yeah you gold gold will not last forever as as this uh primary reserve asset due to exactly that well and that's like i'm just i wanted to pull this up because we're talking about obviously quantum is the big fud of uh fud de jour if you will about bitcoin and i thought grubel's tweet here was i mean just to put things in the context and this i think this is objectively true there's more progress instantiating gold molecules out of thin air than there is for quantum computers being able to attack bitcoin well the higher the higher that gold goes the more of an incentive there is to find out how to do that yeah how to print gold yeah um yeah and i completely agree i didn't

adding to some of your points there i've written about this and talked about the last couple weeks too like it i the fact that people are butthurt about gold and silver having banner years and bitcoin being relatively flat to down it's just mind-boggling because we had a 8x between november 2022 and October of last year and between 2009 and up until 2024 uh Bitcoin was having all those gains gold and silver bugs were sitting on the sidelines we were um making fun of them so like the fact that they have one banner year performance which is well deserved the thesis I think is pretty sound and they're being rewarded for that it's like you can't get butthurt like you said it's a long-term game and it's objective like there's a familiarity with gold as a reserve

asset going back millennia and there's a structure a structural aspect to it too where bitcoin's only at a 1.85 trillion dollar market cap like if you wanted to rotate funds and rotate flows out of assets that you deem risky particularly government bonds and into a hard asset like structurally like gold and silver just easier to do that without a ton of slippage yeah yeah and this is where the upside would come with bitcoin and part of why you know i'm young i have you know a lot to catch up um in terms of where i want to be in terms of kind of like wealth or net worth or you know whatever so you know i'm willing to take more risk but that's where the upside comes from is uh the fact that it is a much newer uh younger smaller asset class um and i you know i just in

the past three years bitcoin's up 320 percent and if you go back just to when the etfs were approved we're up you know three 280 290 percent basically uh so yeah like i i i think that perspective is important um because uh yeah like it's easy to get stuck in the drawdown but uh and and and and focus on that um but 100 120 since etf um yeah it's easy to get you know upset we were at all-time highs you know just uh what a quarter ago basically um and it's easy to feel the pain of a 30 drawdown i think that if we had this 30 drawdown but gold and silver we're going we're going nowhere i think the sentiment on like twitter would be much different i think that it's mainly the fact that you pair the two of them where you have a 30 drawdown from an all-time

high that we literally like just hit um you pair that with the fact that gold and silver are going parabolic i think that two of them combined is what make is making sentiment so bad but um but yeah i like when sentiment's really bad that that's the best time to buy something uh generally you're going to get a pretty pretty you know gnarly reversal so completely agree and to your point about younger generations getting bitcoin and simply being able to access it easier i actually uh i've been giving a bitcoin 101 presentation and uh at a local high school i mean i moved back to philadelphia recently so it's local to me now but i was doing it remotely for last two years and i gave the presentation yesterday and the the amount of good questions

i got after and the amount of sort of enthusiasm in the room was palpable a number of kids one kid raised his hand and asked can i get a i have a job with a direct deposit am i able to direct deposit that in the bitcoin like if so what apps should i use i was like yeah you can do that with strike cash app fold whatever and so like i thought to your point that's actually one of the other questions i got from um one of the kids was uh why uh why don't you think bitcoin adoption's been uh been as strong as as many would like it to be and i said it because you guys don't have enough money yet because i think yeah once once you're in the job market you're making money if you get a job hopefully you do you're a smart gentleman here uh i was in all boys school um you'll you'll

get bitcoin it's gonna be much easier for you to spin up a bitcoin wallet and receive and send bitcoin as opposed to a bank account and i think you're more tech savvy and this is something that's native to the internet which is native to your to your life you've never lived without the internet and i think just naturally your generation will will um will connect with a native digital currency yeah and and the sentiment will shift on a dime like if we you know just just envision a rally back to like i don't know 105 uh on bitcoin like the sentiment will come back you know people will be super bullish oh now we're going to 300k like you know these things um you know are are uh they shift on a dime and and it doesn't take much to get people bullish again um my my worry is like

when it comes to the younger generations and you know people my age it's like you know if we're falling further and further behind how much how much of a of a decision uh a dynamic is being made where you know people are thinking to themselves well you know bitcoin could double right from here maybe it goes to 160 maybe it does a 3x um but you know i need a 20x because the further the longer that it goes uh longer time goes on the more ground i have to make up especially in kind of the environment i see coming over the next couple years um with negative real rates and and fiscal dominance so yeah there's like kind of a concern i have a bit where you know i worry that there might be even more gambling even more risk taking and that bitcoin is gonna not be able to be seen

the way that it was in the early days where there was huge upside and um you know early adopters were rewarded handsomely uh that sort of thing right so i like i see the rise of gambling and calci and uh you know i figured because i talk about this stuff all the time i needed to uh set up a calci account and like do it have some experience so i did and i was like you can bet in an afternoon and 12x your money like you know what i mean it's wild and so you have that where can 12x your money in an afternoon uh you know you got zoomers that are so far behind uh for example to buy a home how much are they going to that's my concern uh as as the young fall further and further behind uh you know how much is the risk appetite gonna grow beyond what bitcoin seems to

provide that that's i think another concern uh that to to be wary of you know uh i i don't do that um i mean i trade but it's like one percent of my total net worth and any profits i basically just put back into bitcoin um but yeah that that that risk taking i think is gonna be uh increasing as kind of financial nihilism grows the other thing i would say too when it comes to like a potential catalyst that is positive for bitcoin is like not to be political but what we're seeing in the u.s starting to develop is kind of like scary um in terms of a potential for some really ugly sort of political dynamics uh and violence here in the u.s domestically that's characteristic of a fourth turning well some kind of violence right either international or domestic um but

yeah i'm kind of like coming around to this view that the risk of a domestic conflict here in the u.s is growing significantly faster by the day than i thought it would how did you know when you're talking about a world where people are maybe not able to cross state lines maybe uh you know there's people that look at what might start to happen and start to flee the country and all those sorts of things you look at like well what is the single best way to store wealth in that sort of environment my opinion is bitcoin by a long shot like you can't if you have any you know any any decent amount of of wealth can't even do it in gold you know um so because you would be fleeing through you know maybe check but i mean i'm not trying to be doomer but like you know it

it could get pretty ugly here in the u.s um and and what what is the single best way to transport your wealth that you know memorize 12 words and no one knows you know they're not searching you and finding gold bars and you're not you know so i think that's another thing that i've been thinking about more and more recently seeing what's going on just kind of in the societal pulse i guess uh and i know that the internet's not you know real life and stuff but you're seeing all these sort of escalating tensions out of minnesota with insurrection act and um you know kind of some of the scenes coming out of there are a little sketchy and kind of concerning so yeah like it's uh it yeah you know in a world where you might not feel super safe to walk

around your neighborhood because your political views that's a different america than we've grown up in um you know i live in la and uh you know envisioning a world where you know you have to watch what you what clothing items you wear uh you know for fear of a mob of you know into people attacking you uh for perceived political opinions um i mean we're seeing all that kind of stuff that it's characteristic of a fourth turning it was kind of predicted it would happen but like it's kind of scary when you really take a couple steps back and look at how that picture is looking like it's developing and yeah in in my opinion that could be you know in a positive way at least a bullish uh indicator for for bitcoin um because yeah you know i'm kind of putting myself in that

thinking that through uh over the next 10 years right preparing for a possible situation where these sorts of things start to happen and the the asset i keep coming back to is bitcoin that that is that's what i want to own in a world of kind of you know especially when you talk about even if it doesn't get violent even if it's just kind of hyper political you know pendulum swinging back and forth to extreme to extreme um well they can't seize bitcoin on the blockchain right like if you envision you know a socialist uh taking power and going full-blown socialist they can't they can seize your stocks they can seize your house i don't think they would but they could definitely see stock they could definitely seize bonds um and if you own gold in the wrong way not

self-custody buried in your backyard they could seize that too what can't they seize like the only thing they can't seize is 12 words out of your head so you know i think i think you know thinking about that sort of thing uh it's ugly and it's not what we want for our country but when it comes to potential bullish catalysts for for bitcoin it's one that i'm kind of increasingly coming around to if that makes sense yeah i mean i was reading something this morning about a hospital in new york city that refused to operate on plainclothes nypd officers because they thought they were ice agents and yeah i mean you're getting to that point where you're um absconding the the hypocriticos because of your political views which is not a good social um environment

to be living in yeah it's pretty ugly out there um like again you know internet's not real life and we we see some of the most extreme stuff um right on the internet and hopefully we can avoid you know domestic violence you know violence within within the domestic uh politics but um but i don't know i see seeing the way things are developing and seeing how like deranged people are uh when it comes to politics nowadays like you know the it's just it's concerning you know it like i'm starting to think like i want to you know buy a house want to start family um you know i'm thinking about like okay well i need to figure out like where to to live right where you live could determine whether or not you live or die like over the next decade and

that's a scary thought um there's huge consequence to you know you have to look at the fiscal health of the city you're going to live in you have to look at the fiscal health of the state because as much as we talk about the fiscal health of the feds like california here you know they're they're about to go into like a fiscal crisis within the next couple years if nothing improves they're trying to tax their way out of it like the uk but we know that doesn't work um you know tax revenue as a shared gdp plummeted uh over the past couple quarters in the uk you had you know historic amount of wealth flee uh so you can't tax your way out right so like you're trying to think okay well cities are you know they have these huge pension funds that are underfunded the state you know a

a lot of like blue States mainly have these enormous, uh, state budget deficits. So you have to like, you have to worry about that. And then you have to worry about like the, you know, geographics of, you know, God forbid there's ever a potential conflict within our country. Like, where do you want to be all that sort of thing? Like my parents never had to think about any of that, you know? Um, but I think that if, if we're being honest with ourselves, like these are conversations that i think you know a lot of people are going to have to have over the next decade because i don't see political polarization and all that kind of vitriol and just derangement uh i don't i don't see it getting better you know and and then you come to the

next logical question which is how do these people code like how do you coexist with people like that you know and like all these nasty uh sort of um uh you know implications from that and yeah like it's just all ugly you know and and i think about when it comes to assets when it comes to like financial markets it's not good for equities to to go into a world of increasing populism increasing political polarization and potential you know full-blown socialism uh and and you look even with maga we're nationalizing you know the the federal government's nationalizing uh companies right even maga is not free market capitalism and that's you know you're suspending buybacks right you're you're you're capping salaries uh at the defense company yeah capping credit card

rate all this stuff right so it's like do i want to own equities when they're talking about like a windfall tax on the mag 7 to fund electricity you know power generation so like i don't know equities just for a number of reasons don't look good uh bonds certainly don't look good on that windfall taxes like we fought this battle in bitcoin mining um in the united states two years ago when they they i forget it was the epa or whatever sent out the survey to basically identify energy source to try to to try to tax them more and it's like oh interesting and we're doing this now yeah like what what do you want to own in a world that looks like that um where you have. And look, I'll point out that the last time we really had like a massive impulse when it comes

to like fiscal spending and populism back from 1965 to 1982, the S&P 500 collapsed 92% in gold terms. So yeah, in dollar terms, you went nowhere. In dollar terms, you got back all the dollars you were owed. But in gold terms, you lost 92% of the real value that you had in equity exposure. So I think that those sorts of things, you know, and again, you know, what we see the government and this is the like free market party, right? This is the conservatives or whatever you want to call it, right? That's doing it. What is it going to look like when it's president AOC? You know, it's going to be even worse. and like ask ask yourself well do you really want to own equities in that sort of landscape um where it's all centralized and uh you know yeah there's a number of issues i see with equities where i don't want to store my wealth in them of course bonds like you know bonds could not be worse when it comes to the way i see things over the next 10 years uh and really kind of the only thing

i keep coming back to is like gold silver and bitcoin i bought i was buying a lot of gold and over in 22 23 24 and i plan to hold that i would like to add some a little bit you know i'm still heavily and uh primarily vast majorities in bitcoin but uh but those are the only two assets that really when i take like 10 steps back and look at the political setup the societal setup the fiscal setup the international kind of global trade setup it's pretty clear that like the only thing i'm like super bullish on is gold some degree silver and and and definitely bitcoin definitely bitcoin at 89 000 per dollars per bitcoin i'm definitely bullish uh here me as well and i want to be respectful of your time because i know you got to run here but i really

appreciate you taking the time this morning to catch up it was as always incredibly intellectually stimulating and a high signal so thank you for the work that you're doing sir yeah thank you appreciate that um we'll have to do it again soon we should keep on this cadence once a quarter catching up yeah absolutely it's always a good time all right peace and love freaks thank you for listening to this episode of tftc if you've made it this far i imagine you got some value out of the episode if so please share it far and wide with your friends and family we're looking to get the word out there also wherever you're listening whether that's youtube apple spotify make sure you like and subscribe to the show and if you can leave a rating on the

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