TFTC: A Bitcoin Podcast - #792: Insurance Companies Are The Next Contagion with Nick Nemeth

Episode Date: September 12, 2026

Nick Nemeth returns to break down the Mark Walter and Guggenheim insurance scandal, exposing how billions in annuity and life insurance policyholder funds funded the Dodgers, Lakers, and F1 team purchases through opaque affiliate paper and shell entities. Marty and Nick dig into systemic risk across the insurance industry, the AI spending bubble, Federal Reserve policy, bond market dynamics, entitlement debt, and Bitcoin's role as a hedge against a fracturing financial system. A deep dive into contagion risk, monetary policy, and where smart money is positioning next. Nick on X: https://x.com/NickNemo17 The Bitcoin Playbook for Commercial Real Estate Owners & Investors: https://www.tftc.io/CRE 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/yHGkvYxdqT Opportunity Cost Extension: https://www.opportunitycost.app/ Shoutout to our sponsors: Block: Cash App: For a limited time, new customers can get $21 added to their balance. Just use code TFTC10 when you sign up, and send at least $5 to a friend in the first two weeks. Terms apply. Bitcoin services by Block, Inc. See the Bitcoin disclosures at cash.app/legal/podcast. Square: Visit http://square.com/go/tftc for up to $200 off eligible Square hardware. Bitkey: Use code TFTC10 for 10% off the new Bitkey. Aven https://www.aven.com/bitcoin CrowdHealth https://www.joincrowdhealth.com/tftc Simple Mining https://www.simplemining.io/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/ Disclosure: Bitcoin services are provided by Block, Inc. Bitcoin services are not licensable activity in all U.S. states and territories, and not all services are available in all states. Bitkey is not available in New York. Block, Inc. operates in New York as Block of Delaware and is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Bitcoin is a non-deposit, non-bank product that is not FDIC insured and involves risk, including monetary loss. For additional information, see the Bitcoin disclosures: https://help.cash.app/btcdisclosures Get up to $200 off Square hardware when you sign up at http://square.com/go/tftc! #squarepartner. Offer expires December 31, 2026 at 11:59 pm PST. Offer for $40 off the cost of one Square Stand, $75 off the cost of one Square Terminal, $100 off the cost of one Square Handheld, or $200 off the cost of one Square Register, excluding applicable taxes. Limited to one discount per product type per seller account. Each code is limited to one redemption per account holder. Valid for new Square customers located in the US only. Offer not valid with guest checkout. Square reserves the right to modify, revoke or cancel the offer at any time. Offer cannot be combined with any other coupon. Void where prohibited, not redeemable for cash, and non-transferable. #squarepartner #blockpartner

You've had a dynamic where money has become freer than free. If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bold case for Bitcoin. If you're not paying attention, you probably should be. Nick, welcome back to the show, sir.

Good to be back, Marty. This is third recording in five months, and this is the third different place that I've been in. We met in person last, but in the new studio now and excited to catch up because a lot has happened since we met in June at Pubkey, particularly around Mark Walter and the the fiasco he's found himself in. And I think we'll get into it. you wrote a piece called the Guggenheim universe that really dives deep into that and the related parties. But before we get into that, I think just setting the stage for any of the audience who may not be familiar with our previous work together, I think really starting with the end user of a lot of these products. So let's put ourselves in the shoes of someone who bought an annuity because

they were done taking risk, buying a premium life insurance policy. What is that? is actually standing between them, that retirement check and a loss right now. So people typically don't understand they have credit risk. At a RAA, they'll say that they do, but they don't understand the risk part of that two-word phrase. So, yeah, they're looking for security. You know, social security isn't enough. Cost of living is high. A lot of boomers have, you know, homes and mortgages.

they want to make sure it's secure so they could pass them off, you know, to their kids, typically. This is not something you can pass off. It's really just for the retirement, but it comes into an equation of retirement and ultimately security. Yeah. And so they completely misunderstand this, number one. And then number two, the people that they think they can trust are misallocating their retirement funds. And I think, again, going back to Mark Walters, what's going on. He sold the Lakers overnight to Josh Kushner and Bob Eager. There's rumors that he's got to offload the Dodgers as well.

I think he's got a big stake in Chelsea across the pond. And I guess let's just walk to that story from your perspective, because I won't rehash it because I think you've been much deeper research than I have. How insane is this? And was there any smoke around Mark Walter before this became obvious? Yeah, I would just say that it's not their fault. They're supposed to be, you know, a system in place to make sure that people are following rules. My view is that the regulators are sleep and the rules are done.

And the framework is awful. And since we last spoke Granado and Prenjol to graduated from Yale, I think, They both went different directions. I think Pryngell is still at Yale. Granados at UT Austin. They wrote this amazing piece that just absolutely lit up the world, really, of insurance. And all of a sudden, I'm like, I write in my own way. I think it's good.

I think it travels. You know, people tell me it does. But they did it in a really concise academic way, talking about how the framework, the incentives, it's all bad. It's all bad in the industry. And if you're thinking about why asset managers want to buy these insurers or make their own, it's because they get fees, right? And in this particular case of Guggenheim, they're using as a piggy bank. When I was on last, I was critical of Athene. I'm still a critical of theme, but just to be honest, you don't see Mark Rowan using it as a personal piggy bank.

Athene is Apollo's firm piggy bank and profit center. and there's a huge difference when it comes to circular transactions and ultimately the law. Well, let's get into that. How was Mark using it as a personal piggyback? Well, I mean, he originally used one to two billion dollars of policyholder funds to buy the Lakers. And the Lakers are worth apparently 10 to 13 billion now. But at the time, he bought it for two, maybe maybe a little bit more. So he funded the Dodgers purchase with the Lakers.

in large part. You're only allowed to use 30% debt according to leak rules. You're only allowed to use 30% of private equity money because they don't really want that money creeping into the game. Instead, he put up $100 million, so less than you would if you were mortgaging a house. And he got the rest of the money from policyholders. And he's done this through F1. He's done this through the Dodgers TV deal, which he negotiated on the side of Guggenheim. And it seems like, allegedly, that it was a precondition for the purchase of the team, which was in distress. These are former owner who went bankrupt.

But that's one example. And I came out with those huge bees where I'm cross-referencing all of these Guggenheim insurers. So if people don't know, Guggenheim is one of the big Assyman. in the world. We're not talking a trillion dollar asset manager. We're talking half a trillion about a dollar asset manager. And they have a lot of SPVs that have single, like names that are just completely made up. And I track them over to the Delaware entity search list. And they're made five days, seven days before. So they're just a pass-through entity. And these are literally the same insurers that you'll see there. The two that are under Walter are Delaware Life and

Clear Spring, but Equitrust and Heritage Trust, it seems like Walter gave originally Magic Johnson money and then potentially their new holding company money in order to buy those. Those also invested in the Dodgers TV deal at least. And Salmons at the bottom was originally and still is a major economic shareholder of Guggenheim. So it's kind of like the reverse. But Guggenheim used to be the full asset manager. They said they're moving away from it. But I just modeled out their book. And it's substantially similar. And these are all related parties. Delaware and Clear Spring were are getting investigated for saying that they're, you know, not affiliated party risk. I mean, a paper, affiliate paper. And so they had to.

for $20 billion, say, oh, actually all of this is affiliated. It's pretty obvious to say that it's affiliated. What's very interesting at this stage is Equitrust still says they have zero affiliate paper and they have the same paper and it's functionally the same ownership. There's also a security benefit as well, which does not, oh, it's at the top. It is the other Dodgers co-owner. So this is a huge sports story and it's getting extremely. popular if you see Pablo Tori on it. In fact, Jeff Pissan, that was the biggest defender of the Dodgers,

is on it. And that sort of ripped the cover off of, okay, affiliate paper, regulators need to wake up. This could be a major issue as people like myself and Granado and Prynjol are talking about the systemic possibly issues here. I think they're definitive, but I want to hedge my language a little bit. What makes something officially an affiliated party or affiliated paper? So there's two buckets for it. If Apollo is underwriting the loan and Athene is taking the paper and Apollo controls the marks, that is affiliate. But this is a different level of affiliate. And I think that should be delineated.

But affiliate paper typically is manager underwritten, manager controls the mark. and manages the asset. And the delineation, what's the other type of affiliation that you're described? Well, if it's for personal gain, so if I, you know, securitize my substack and put it on an insurer, that would be like extra affiliate. And that's what we're talking about in Delaware Life and Clear Spring examples. Now, for the SPVs, I thought it was really clever putting it into Claude and and chat GPT and being like, what are these names here?

And I got flavors, and it's probably because they wanted to remember what the hell they were chopping these assets up into. And one of them was Chicago Streets, and I call them all the Chicago Street style LLCs. And they're literally the cross streets of Chicago, like, circling. I have an image on there of the Guggenheim headquarters, and I went on Google Maps and made a picture of that. So it's undeniable. And these are crossed all of those different insurers that total up to be bigger than SVB. And I believe the same size as SBB and First Republic and the New York Bank that went under in the regional banking crisis. So that's the scale of it.

And I can talk about, you know, how that's kind of the tip of the iceberg. But it's certainly a big pressing issue. And we're talking about something that, you know, people are talking about, well, did he sell the Dodgers to get out of it? Because Kushner can call his brother Kushner and he can tell his wife and wife can tell dad to drop the charges. And that's certainly possible. In the insurance world, it's been extremely lethargic. And in the last meeting, all of a sudden, everyone decided, hey, we got to pay attention. Well, before we get into the expansion of this and the untangling.

in more depth, just to really break it down to first principles and basics of the mechanics of what people think they're buying on the insurance and annuity side and what Mark Walter and these affiliate shell companies in Guggenheim are doing with that money and what it means when people actually need to get paid out for their annuity or, God forbid, pass away. they need to tap into that life insurance policy. How egregious is the mismanagement of these funds where they typically supposed to be doing and if they're locked up in a sports team or a TV deal,

how is that compared to the liquidity profile of historically the assets that you would invest in? So I'll take it briefly just from the policyholder side. Again, it's either take care of my wife after I pass away or my family because I don't, you know, If I go, they got to make sure they have money or I'm going to take care of my wife and myself in retirement or something like that. You know, the assumptions are, these are insurance companies, insurance companies are

supposed to be safe. Typically, there's not been that many failures of insurance companies. So they don't even think about the credit risk, really. They get a 50-page document. They say, okay, you know, typically there's a salesman that's taking up to 15, 10%, to sell them the policy and is telling them all these. things who the industry has argued is not a fiduciary. So, you know, you can look on the internet and it's really popular in TikTok right now selling insurance. We're talking about people that are

selling a product that they don't understand, but they're not acting as a fiduciary, don't need licenses or anything like that. They might need licenses, but not security licenses. I have to double check that. So they're getting into this like, okay, you're guaranteeing me this money. Good. That's what I want. They're assuming that it's, there's a reasonable framework into making sure that they get the money. They don't even think about it typically. And, you know, sophisticated wealth managers that might have, you know, a thousand accounts, they'll put all of their clients into this because they think it's good.

They've been told it's good. They know there's credit risk because they have licenses, but they don't understand the credit risk. So that's like the buyer of it and how they kind of get sold on this. taking to the other side, the justifications for taking excess risk are these are extremely long liabilities on duration, that they know what they're going to be. They can ultimately make the hurdle and then take profit out in the meantime. And sort of a perverse incentive that nobody will admit is this is like the cheapest capital in the world, right?

If you go to a bank, you're going to have to pay a spread on income. If you sell an annuity at 4.5% that is barely, you know, probably at the time beating the 5 or 10 year, it might not even. That's your hurdle rate. So they're able to take that money and invest it, collect fees off of it in a lot of cases. But in particularly this case, it was use it for personal. gain. And there are examples of this and there are examples of people going to jail. Lindberg is a good example. He's getting sentenced. I think it's 12 or 15 years. But the Walter story,

you know, people know, the Walter name before any of this. And if they don't, they know, you know, the fact that he owns the Dodgers and the Lakers. And if you're a soccer fan, Chelsea, as a F1 fan, the Cadillac team, this guy has come out of nowhere. where when most, you know, he's like richer than Rowan, right? Guggenheim is, you know, I don't want to diminish they are a big asset manager, but the vast majority of their assets are affiliate. So 40% of their revenue is tied to affiliate revenue. And basically it's just been built out of this game plan and playbook of let's, you know,

take advantage of this. And while the regulators are asleep, let's let's do our things. Yeah. So the duration like it makes like for insurance products like something like a sports team on a duration side makes a lot of sense. Long term asset holds its value pretty well in recent decades has been going up over a long enough time horizon. But the liquidity profile is such where it doesn't make sense where it's like hey somebody is claiming it's like you can't clip off chunks of the the Lakers or the Dodgers to pay out people who bought these insurance plans. So that doesn't make sense. But let's dig into the personal gain. Because obviously Walter had to sell a stake in the Lakers. There's rumors he's trying to offload the Dodgers as quickly as possible. That's where I'm trying to like, it's obvious now that he's caught and he's got to get the money back.

But he like he's been personally gaining from taking the pool of liquidity. in these insurance policies and buying the Lakers in his name. But at the end of the day, he's got predators in the form of these people who bought these insurance policies. It's pretty insane when you break it down like that. Yeah, I mean, the Dodgers are probably his best investment of all time. Carvonne has also done well for him. The Lakers was a good, you know, quick clip. Like, those are probably the best investments he's made.

If you look at Eldrich, which is Todd Bowley's asset manager as well as TWG, which is another important part of this, it's Walter's asset manager outside of Guggenheim, as he's the CEO. They got a lot of money and grew assets in 20 and 21 into Superhigh multiples. And some of it's been a win, you know, just like everyone, he probably owns Anthropic and SpaceX, but there's a lot of losers in there. Um, and you know, one thing I hear is like, okay, well, if he used policyholder money to buy the Dodgers, like, what's the problem? And it's the question of all of the opaque fabricated entities that, you know, they're legitimized in Delaware, but there's no business. That's a pass through entity. We can't see what the other side is. Like that's where the, the question to me lies. And then also Sam Bank, Fried, he invested in anthropic. And he, you know, borrowed money and made these investments and he went to jail and I think it's 25 years or something. Like, functionally, it's the same thing in my. Yeah, actually, it's a great analog. It is, I mean, he was taking FTX deposit or Bitcoin investing in Anthropic and trading with it.

Mark Walter doing the same thing with the insured side of things. Now, let's dig into like untangling the mess and the potential domino effect that could fog. I think a few weeks ago or over a month ago. now when he sold the Lakers, people were like, oh, that was weird. I remember waking up one day. I was like, oh, Bob Eager and Josh Kushner and a big part of the Lakers now. It's interesting. And then a couple days passed, it's like, oh, Mark Walter's, Mark Walter did this in a fire sale.

And then the numbers came out. Like, what was it a $40 billion hole or $20 billion hole that he needs to show? So he has to move $20 billion of affiliate paper. That's probably mismarked, right? Like, you know, if you're thinking about it, there's TWG that is, you know, with approval, we'll take five, five or six billion. Regulator has to approve it. But then there's, you know, a lot more.

And then there's what Walter is personally already encumbered. I believe that the Lakers were the most unencumbered, meaning like it wasn't borrowed against to buy something else. So you sell like the one unencumbered thing. You might free something else up in order to help this liquidity picture. as he's got to move money. And he doesn't have that many friends. I mean, sure, every billionaire has a lot of friends.

But if you asked around in New York, these particular Guggenheim guys are not well thought of as businessmen. They're respected in some ways, but definitely have a lot of enemies. So it's the equation of like who's going to bail them out because we are talking about moving a massive amount of assets. And, you know, just to, you know, fill in the, the duration picture. Duration are long unless there's runoffs. And I talked about this last time and the surrenders, meaning if you have an annuity, you might pay a fee, but you can typically get your money back. And the fee is only maybe 5% in year two.

They already paid out the first year to a salesman. So they're losing money when you do that. so it's basically a potential run. What I'm seeing talking to insurers and particularly asset manager backed insurers that do not like what is happening in the industry is everyone is like, we're not making as much money as those guys, but they're taking ridiculous risk. And we just like to bring the competitive dynamic back to reason.

They're saying that surrenders are higher than they expected, even without the reputational risk of like, what is Mark Walter doing with my annuity? So right now, people are noticing that with AI, if, so you, so if you think about it as a fixed payout, if you got an annuity for 3% or 3.5%, now that the five year or 10 year, 10 years approaching 5%. So obviously you're going to want that money back. It's worth it to pay any, you know, 5% fee because, you know, the equivalent treasury would be trading, you know, if it was 3.5% is trading down more today.

In the past, there was a lot of lethargy and there was a lot of inertia there. But today you can just take the agreement, put it into chat and be like, should I get out of this? And chat GPT will be like, well, I can't give you financial advice or whatever it says. But here's the math. And the math is not favorable. These products are built for the unsophisticated unless you're avoiding taxes. Because you just got to think about it. If you're paying out 10% to a salesman, you know, there's a lot of people, a salesman.

I talk to you that are really upset about what I say, but you know, it's just you don't need to, you don't need to, someone doesn't need to be paid to get you into a good investment, right, typically. So that's 10% off the top. Then each year they're clipping 40, 50 basis points. There's operational fees and then they take money out to either dividends, you know, typically even for private equity, it's called dividends, if not balance sheet accrual. So all of that profit is coming out of somewhere where a sophisticated person could just go and get that yield even in the credit markets. But the math gets really bad as rates go up. So as rates have gone up, people have a huge, you know, spread what they could just buy,

you know, the risk-free rate on. It's like, I mean, not that the government debt is much better, but you know it's pretty liquid and there's a big market for it. The problem is it's based in dollars. Yeah. Well, and there's another aspect here, too, particularly for Walter, like bringing this back to his particular predicament is even if he wanted to offload some of his assets, there's potential that those assets could be tied up in some sort of lawsuits. So nobody wants to buy that part. It's like a toxic part of his book. So it has limited

options there as well, correct? Yeah. And even if he moves it, you know, it's like, hey, I stole from you, but I returned it, you know, a week later. That's a not really how the law works. Now, how the law works tends to do with who your friends are. That's definitely a variable in this. And Walter's tried to flirt with the Trump administration. I think once it's broken into sports, I mean, if there's one community that's more rabid than the Bitcoin community, it's probably the sports world. That's a lot of votes. And there's 29 teams that are pissed off of the Dodgers and, you know, the owners are trying to go after the players to accept not being paid too much. And it's like, the reason why the balance is messed up is the

Dodgers. The reason why the Dodgers have messed up the balance is not because we're in a capitalist society where some people have more money than others and there's inequality and, you know, revenue of sports franchises. It's because the money wasn't even his to a large extent, right? It's it's when you're not when you're making decisions with other people's money as a fiduciary you're supposed to be even tighter but in this case and when it's just a piggyback he he's using it to fund his is his hobby hobby assets. I mean you think about the Otani contract loan was that a billion over nine years and delayed payout on the back end as well. So the funny part about that is it's very annuitized right you know technically has to be pre-funded, but I could just be pre-funded by the policyholders. Now, I haven't found that yet.

I'm trying to find that. But the problem is that Delaware does a really good job of, you know, having entities you can't see into. And it's a major problem, I think, in our system, for that as soon as you get into the public domain, like, I don't care what you do with your trust, how you name it. I don't want to see it. But when it comes, policyholders or depositors, when that's the part of it. I want transparency, right? You're playing in the public domain and the transparency on these insurance assets and broadly the world is god-awful.

There's not even an edgar. If, you know, stock people or bond people are typically used to looking at financial statements. You don't even, you have to pay for that on the statutory filing. And, again, there can be a lot of these misnamed or, you know made up name LLCs yeah and lebron looks like he was roped into the so it was a 300 million of his lakers contract was some weird side deal yeah so right before lebron signed with the lakers he got 300 million dollars it's like the timing of this is just you know it's quite interesting and we just had the kawai's story i've been

working with hunter brook and uh chatting with pablo tory in the dms and you know the salary cap like The NBA has a salary cap. The MLB wants a salary cap. If you just allow them to go outside the salary cap, like, there's no point. And credit to the NBA for cracking down on Balmer on that. But on the Lakers side, I think you can make an argument that there's economic value of, you know, getting $300 million loan. On the devil's advocate side, LeBron bonds are probably money-good bonds, right?

But that's what we can see, right? And what I encourage people to think about is what is chopped up for these small investments in things that are named after Amazonian rivers or, you know, Chicago streets like, what even is that? And if you can't answer the question, you have to assign a risk probability to it. Understanding that these products are, you know, if you bought it two years, three years ago, five, 10 years ago in the life insurance policy, you're getting a really bad deal based on what you can alternatively get outside of it today. Yeah. And I mean, that begs a question.

We met in June, we were focused on Athene, now Mark Walter, Guggenheim, pulled into the mix. I'm not going to lie, the last few weeks, haven't really been playing close attention, but it seems like that whole part of the saga is falling out of the news. cycle quite a bit. Where do you think things stand? Is the clock ticking for for Walter Guggenheim, these related parties? And then on top of that, it seems like the regulators are trying to in retrospect, be like, okay, let's make sure everything's being reported correctly. And there's some, I guess, revisions being made to the financials that have been released in the past. What's the situation there? I just came

out with an AI piece on where I see the opportunity, co-written by Liam Dalton, one of my good friends, you know, rock star that I talk to on a daily basis about markets. He said something. I think it was his dad that passed this along about shark attacks and how it might nibble your calf and then it swims off and then eventually comes for your leg and, you know, you're lucky if it's just your leg because it's coming back for all of you. That's how I see the episode. and attention in markets. I can say that I think that the attention's there. I think that people are mad,

and I think people are ready for every next story. It's sort of been festering for a long time, and the regulars are awake now. So once the people are upset, then all of a sudden the people that answer to the people start actually waking up. And they've been told this before. I've been yelling it from the rooftop.

Affiliate paper is an issue. A lot of the liquid assets, the allocations to private credit, commercial real estate is a disaster. All of this is a problem. All of this is on their balance sheet. There's many specific examples like permitted practices, which are waivers to not follow the rules. I can talk about the ratings agencies. Systemically, there are massive problems here. and it but they've been there right so the question is do the regulators wake up we're going into

a mid-cycle election there's massive game theory i'm super in the weeds of it so i personally don't feel like the attention's uh falling off i've the biggest most busy august of my life and this week you know uh podcast with you i got the earnings tomorrow morning and then two back-to-back podcast. Like it's, you know, consuming me, you know, because I got to do my, you know, normal stuff. I'm not a perma bear. I'm trying to find opportunities. But at the same time, like, I'm dedicating 60 hours a week to this insurance trade for ultimately no other reason than I believe that it's systemic risk. And it's going to be the story of the end of the cycle. whether that comes in the next three months, six months, or two years is a question.

I think that, you know, I could get granular in figuring out, you know, what would break what, what the transmission mechanisms are. It's a huge process when you're talking about a complex system. But ultimately, if the takeaway of people is like, there is systemic risk, maybe they're buying more Bitcoin. Maybe they're buying more gold. it kind of like speaks to the mindset of like what are we doing with 40 trillion dollars of debt right you see drach and miller talk you've beset going out oh on the house like you know don't fight me on

the end but like brother uh can you focus on the other one which is yields because yields just keep on going higher right so we have the iran war we have just a massive amounts of risk that i've never seen in my life, right? Never. You know, maybe when I was 12, you know, in 2007, 2008. But even COVID, like, it just happened so fast. And then the solution was the solution. I think that the solution here is really hard because the system is malformed and leverage to an extent that is really hard to unwind. And also, for macro people, hard to jawbone if you're the Federal Reserve. We have, you know, rotting at the core of what's going on in my do. So freaks, this rip was brought to you by the motherfucking cash app.

They're back. I've been using cash app for years. Makes it easy to buy, sell, send, receive, top up to stack Bitcoin, top up payments to stat Bitcoin. Automatically DCA, you can get paid in Bitcoin on cash out very easily. They've been integrated the Lightning Network to make payments extremely fast and cheap. They're the all encompassing Bitcoin. I've been using Cash App for almost 10 years now, almost 10 years, a better part of a decade.

I've had my weekly DCA on for many years. You set it and forget it. And when you do that, you don't pay any fees on the buys. Speaking of no fees on buys, if you purchase more than $2,000 on cash app, you're going to pay zero fees on that buy as well. Another really important aspect of the cash app is when you buy Bitcoin and sell one to one you can withdraw on chain or over lightning anytime 24-7 straight to your own node, your hardware wild or your Bikki and on ramp is only as good as it's off ramp.

And this one actually lets you leave. So for a limited time, new customers can get $21 added to their balance. Just use the code TFTC 10 when you sign up and don't forget this part. send at least $5 to a friend in the first two weeks. So freaks, this episode is brought to you by Simple Mining. I'm sure many of you listening to this right now, own Bitcoin, and own it the same way. You go to exchange, you buy it, sweep it to the cold storage, maybe you keep it on the exchange, and you pay full price.

There's a smaller group of business owners, family offices and investors with Sharp CPAs that are quietly getting there as a different way. They own the machines that make it. Here's how it works. You buy the miners at Simple Mining. Simple Mining hosts them, runs them at their facilities in Iowa on industrial power rates. you can never get on your own the bitcoin name mine goes straight from your machine to your wallet two reasons i find this interesting right now the second one is the one that nobody's talking about one is the

economics cheap power this lets you convert your electricity into bitcoin at a discount to spot you're acquiring the asset below the sticker price everyone else pays two and listen closely if you've had a big income you're making a lot of money out there i know a lot of you freaks are making a lot of miners are classified as computer equipment with the big beautiful bill equipment means depreciation while buying buyers can write off the entire purchase in year one it's the same playbook real estate investors have run for decades pointed at Bitcoin. Your CPA will want to see this before the end of the year. And with attractive financing available, you can deploy without selling assets to do it.

This is not a garage operation. Simple mining runs over 40,000 machines, which just ranked the fastest growing company in Iowa on the Inc. 5,000 chart. They put together a valuable resource called the 2026 Bitcoin mining blueprint. It covers the five mistakes investors make when allocating to mining and how to avoid them before deploying capital. You can access it for free at simplemining.io slash TFTC. That's simplemining.io slash tf tc.

Just pulling up a chart to really highlight what you're just saying there. I had a good friend of mine send me this chart, which is global bonds priced in commodities. And if you just look at this, and I'm bringing you up because he said COVID, like, and his, my buddy's comment to me in our text read today was, 2008 started the crisis, COVID, completely killed bond yields. And so if you look at this, it's just like falling, falling off the ledge right now. I think it's important to recognize that anyone that's investing today, besides maybe my grandfather, who's still investing in 95 years old, has only experienced a secular bull market in bonds unless you recognize, I believe, correctly that a new regime shifted in 2020. I guess that is based in commodities.

I mean, huge inflation in 21. But if you look at, you know, bonds, they started selling off in, uh, when the Fed raised rates in 2022. And people think that's like just a retracement. They're always going to go back lower. You know, it's inevitably inflation is going to drop off because it has, right? Like that's just been the story.

And the one phrase that I'm stuck on is, you know, when we were five years old in kindergarten or preschool, we played a game where we sat around in a circle and we were crisscross applesauce. And they said duck, duck, duck. And then it was goose. And all of a sudden, the thing has changed. Today, in the investor's mindset, they're only focused on the duck, right? and they want to point back to the past two times that we were bailed out or the past five times that we were bailed out and it worked. The whole name of the game is figuring out the goose. And my investment thesis is it's okay to be right with the crowd. It is not okay to be wrong with

the crowd. And going against that takes like a significant amount of intellectual disagreeableness in my view. And, you know, sometimes it turns into personal disagreeableness. And my and I can work on that. But it's really hard to go against the grain because otherwise you're a gold bug kook or some Bitcoiners might feel that, right? Yeah, I know what the feelings like. You go away for 10 years if you're saying this is crazy. Well, it's a bull market, you know, Bitcoin did well.

But imagine being a gold buck from 2010 to 2020. Like that's a pretty cranky existence, right? But it doesn't mean that they're wrong. So figuring out, okay, what name of the game are we in? Is it be right with a crowd or get off the boat? That is kind of the question that I think investors should be asking. And, you know, I said this on the last episode we did. Like, cash is the best hedge.

You know, I know we hate the dollar. You know, Bitcoin could potentially be a great, it's not a security. So I can say it's, I think it's a good allocation. but these liabilities, these credit cards, these mortgages, you know, I think people should be delivering their personal balance sheets and ideally stacking up six months at least of expenses and you could put it in the high yield account or something like that. You know, having a Bitcoin allocation, gold allocation, although gold maybe, you know, maybe you tread water. If you put a 5% allocation to gold, you might think like when gold goes up 30,000.

30% per year you're winning. But it's really just kind of supposed to maintain wealth, right? That's the idea of gold over millennia. And not everyone can own gold. Not everyone can own Bitcoin. If everyone had $1,000 in Bitcoin, what would the price of Bitcoin be, right? Be much higher. And to correct myself earlier, my buddy said, COVID stimulus broke the bond bubble, the Iran, the Iran war sealed its fate, but not completely agree. It's, uh, yeah, the Iran war. is like the worst decision any administration has ever met. Because there was like an opportunity I saw where I was like maybe the administration's right. Maybe we can grow our way out of this.

But you jack up commodities. You're crushing over time. It's not like an immediate, but you're crushing over time, you know, look at mortgages, the household budget, the real economy. And how are oil prices going to go back down? Are we just like it just I don't see it happening. Yeah. And then I mean, talk about draw your way out. I think a lot of that is hinging on the AI build out in that landing the plane.

And this was a bit disconcerting from Ramp. They've been doing these. This is the second in their AI state of the market report. But this chart right here on the far left, the top 1% of enterprise AI spend. has fallen for the first time in quite a few quarters, I think. So since December 25, who knows if that's seasonal summer doldrums, but... Probably a little bit having to do with the fact that it was August. Yeah.

But I mean, that trend continues, I think that's what a lot of people have been saying, as long as these AI spends and gains and intelligence are up to the right, the party's still on. So this is something I'm watching closely to see if there is some turbulence there. I'm not bearish on the technology, but what we have to understand is there's so much debt associated with this buildup. And a lot of it's ending up on the insurers, right? And we're talking about the same thing, right? Where is the easiest money? Oh, well, insurers oftentimes, a lot is off balance sheet.

If you look at Metis balance sheet, the economics is tough because you have memory. price is going so high, you have 90% gross margins on memory nearly HBM. NVIDIA is still at 75%. To beat that hurdle, the technology has to be better than amazing. Right. It has to be better than maybe Millennium Prize solving. It has to be we need nuclear energy and probably fusion to come within the next two years. And we also need this to permeate every.

economy in the world fast because ultimately I see the ability in an American economy that is 35 trillion dollars of GDP per year approximately maybe it's 33 or whatever two-thirds of services. Services broadly is where you want to look for okay well what kind of economic activity could be captured and optimized and productivity increased through AI like a trillion dollars of revenue $2 trillion of revenue, it seems feasible and seems possible, but based on the cost and the depreciation schedules and the fact that you have not just Nvidia that's trying to justify that revenue, you have Amazon, you have Google, you have meta, you have Anthropic, you have OpenAI, you know, Apple seem to mostly stay out of it, but you have Microsoft.

You have a lot of market cap going for the same opportunity. the risk reward doesn't seem like we're talking about better than a maze. Could it work? I'm undecided on the ROI, right? Even on the credit side, I'm not the most pessimistic on the credit side. I'd rather own the equity because if it works, you're only clipping a coupon when it comes to credit. You know, I want to own the equity if it works. But in that grand picture, understanding that we have a 5% cost of capital nearly for the government,

that's compounding at $40 trillion every year. A lot of that's rolling off and being refinanced higher from lower levels before. You have the corporate sector. Same things happening there. This AI build is compound interest. You have emerging markets as well. You have Europe that's a total disaster. You have Japan and South Korea that are some of the lowest birth rates in the world.

South Korea and Japan, you know, South Korea, on the memory side, but Japan has a lot of industrial companies and they're more productive than Europe, that's for sure. But if nobody is being born and hasn't been born for the past 20 years, the economic picture on the macro side gets really ugly. And then, you know, the hopium is like you have robots and robots come in and do all the work and we're all old and fat and the robots take care of us. That doesn't seem super fun to me. It seems like sort of, a dystopian world. The economy that I focused on is the human economy, and that is in almost any outcome

going to experience a massive amounts of pain, and I think better to address it sooner than later, especially as you're looking at the capital being distributed over the past, since 2008, the wealth inequality to use a socialist term. It's legit and it's real. When it comes to AI, it's like the same thing on steroids. You know, do you redistribute that through a socialist policy to the masses? I mean, that might be what gets elected. Like, that's totally an outcome.

Does that go well? Probably not. There's bad studies on UBI, and I think UBI would be the best way that we would do it. All right, freaks, you know, I don't take sponsor money from products I wouldn't use myself. So listen up. The Avan Bitcoin Visa card is one of the most interesting things I've seen in the Bitcoin lending space in a long time.

Here's the deal. You can get a line of credit up to a million dollars, backed by your Bitcoin without selling a single SAT. No games, no annual fees, no minimum draws. And your Bitcoin is custody by Bitco, one of the most trusted names in digital asset security. Avan never lends it out. There's no re-hypublication. You stay in control.

You can lock in a fixed rate for up to 10 years. 10 years, that's 10 times longer the most lenders out there. We go interest only for up to five years. Rates started 8.99% APR. For a product that lets you keep your stack and still access liquidity, it's hard to beat. On top of this, that's what, you also get 2% unlimited cash back every time you use the card. Spend Fiat, keep your Bitcoin, that's the whole game. If you've been stacking for years and you need liquidity without triggering a taxable event,

this is worth a serious look. Go to Aven.com slash Bitcoin. That's A-V-E-N.com slash Bitcoin. Check it out. Freaks, look at me. I'm glowing. I've got like an Angels halo going around me. You know why that is?

I feel good. I feel taken care of. I feel blessed, healthy, happy. And that is because I'm a crowd health member. My family and I have been crowd health members for five years now, literally this month. Five years ago, we joined crowd health. We've had two babies. We've had multiple health events and we're never going back to health insurance.

Crowd Health is crowdfunded health care. So you sign up for crowd health. You pay a monthly fee. You help out with other people's bills. And it's significantly cheaper than health insurance. We were on COBRA. It's a family of three when I left my last job before I went full time to TFTC, went on the crowd health now as a family of five we pay I believe $700 a month it's significantly cheaper they're

going to negotiate prices lower for you they've consistently negotiated health care prices as much as 50 60 80 percent in many cases they help out with babies you have a pregnancy you pay the first $3,000 and the crowd covers the rest if you have a regular health event you pay $500 and the crowd pays the rest go to join crowdhealth.com sign up today use a code tfTC opt out of health and I'm on insured baby and I love it. Use the code TFTC at join crowdhealth.com. You'll get $99 a month for the first three months that you're on the crowd health platform in the community.

Bikwinners, you found sovereign money. Now find sovereign health and sovereign healthcare. Yeah, I mean, really is not straight up UBI, but it has been encouraging to see those, particularly on the data center build outside of the AI expansion become privy to this. social dynamic that you just described and begin to promise municipalities like, hey, they're going to pay a ton in property taxes and, um, and sale income tax,

whatever many sales tax. And then we'll also like reinvest in these communities. So there's one, I think it was a Western Pennsylvania that came out and now instead they're going to get $10,000 to every city. Great. The poorest, the poorest state in the world. Yeah. I mean in the United States.

Oh, maybe beat by Mississippi. Like I'm glad that if a data. Center goes into West Virginia, the data center can afford to balance out this state, we're talking about a whole country and we're talking about a whole world, right? There's not, that's not how economics work. If it did, we should all be communist, right? You need to have economic activity that's natural and spurs more economic activity. And the idea that it's all going to come from AI and all jobs are going to be solved except

maybe entertainment like that's not a good picture in my view no it's interesting i had a conversation with michael evry from rabo bank last week we talked a lot about yields and like what what is happening right now he made a very good point it was like financialization at this particular inflection point is way less important than physical stuff like you need to get the commodities and so i think the market is realizing going back to the yields priced in commodities chart that I brought up earlier. I think that's expressing that very acutely, which is people saying, hey, US treasuries, you've been good to us for, for, you were good to us for four decades,

but now we're in this sort of forth turning inflection point, whatever the hell you want to call it. And we need the stuff to build out new economies to be productive in in the 21st century. And I think that chart perfectly expresses that. And like to play devil's advocate too on the job front, I had a discussion with John Arnold as a partner of mine at 1031. We do a weekly show on Mondays, and we were just talking about if you look at blue-collar wages are beginning to creep up. And so there is a bit of lag effect to a lot of the economic policies that the Trump administration has set forth over the last two years. And they're on top of, like just putting the devil's advocate, can they thread a needle immigration to, like what was a net negative 2.9 million?

immigrants of the first 18 months of the Trump administration, it's like, okay, maybe housing and rents can come down and that opens up jobs for blue-collar. Americans who were competing with those immigrants who have since left the country, like the question is, is directionally correct, but is the impact enough to land the plane and create this productivity growth boom? Yeah, I mean, economists talk in long runs. the blue wages creeping up in the long view of where home prices have gone and where real wages have gone over a long period of time. Like if they go up half a percentage point, like, what are we talking about? Right. And then the question is how long, like, blue, if I were telling somebody that wants to, you know,

start a family, doesn't have, you know, massive, you know, doesn't want to own a hundred foot yacht, like go towards that. That's going to last the longest. But, you know, I think the real bull case is that robotics ultimately brings the efficiency, physical AI that gets us out of this whole on growth that Dorcas, your peer says, you know, it's going to double GDP every year, 50% every year. You could talk to Kathy Wood on her estimates. That doesn't happen while blue collar jobs are, you know, still around, right? So, you know, you can't have it all. You know, that's one outcome.

One thing I would think about on the physical side is what's happened with Iran and the straighter or moose. And then again, trying to like expand this, right? Crushing the Iranian economy for over a decade, probably five decades. They're left so far behind. They do have resources and access to a choke point. They're going to experience pain if they choke the point. but they're willing to do that because they're used to being poor.

If you were to apply that to Brazil, like let's say Brazil sides, we're not going to sell copper anymore or, you know, whatever grain facility, whatever. The price is now, you know, the price of the brick is going up to use the wire terms. All of a sudden, their price, you know, they're not price takers anymore. That's how you see sort of an inflection in commodity prices. at the same time it could happen where people are selling treasuries and don't really want to do with the dollar anymore. All of a sudden, you know, blue collar is going to need a 20% plus yearly increase in their wages in order to just tread water. And that's a scary equation.

Now, the alternative. Now, let's talk about the alternative. There's a massive de leverage it, right? Home prices crash. Stock prices, crash. Bond prices, probably crash initially. Then there's a huge flight to quality in terms of treasuries and super high quality corporates.

That's extremely painful. You know, everyone thinks that's the worst thing in the world. But there's only two ways to get out in an over-leveraged system. Either the equity goes up or the debt goes down, right? And the debt can go down by defaults. And by, you know, devaluation is another way, but, you know, that's kind of just like inflation. So if we're talking about inflation, it's either inflating out.

That's one outcome. It happened in World War II. High inflation makes, you know, it's going to crush the bond market, honestly. Yields are going to go up, you know, 12%. You can build the equity in the system that takes earnings based on real economic activity. that has to be widely distributed for society to take it, or you just have a de-leveraging of the system, and bonds just go down.

So I guess three outcomes, I would pick the de-leveraging based on the odds that I see today. Wise man once said we need to end boomer communism. Yeah. Yeah, I forgot. It's the midterm season. I got to start campaigning more. Yeah.

Well, I mean, I really like the track that we, we've gone down over the last 20 minutes, but bringing it back to the insurance world. And again, focus on the regulators and what they're doing. I wanted to bring it up earlier, but forgot to like, again, regulator in leagues being asleep at the wheel. I mean, we had another example of egregious for bending of the rules with Matt Ishpia, the Phoenix Suns, where he used basically his stock portfolio of United, what is it, wholesale mortgage. to basically get a margin loan to buy the Phoenix Suns and the women's team. And then the price of the stock fell like 90% over the last three years.

And so he's getting margin called. And so like you're not supposed to be able to buy these teams with that much debt. No, but what he did was he ended up gambling on rates going down because he was like, rates are going to go down. Well, the mortgage company did. Yeah. The whole company did, not just him personally. Yeah, yeah.

I know, but he was using that as collateral. J.B. Morgan, I think, had had the lean to that to lend towards. But yeah, you're supposed to only have 30%. There's also ubiquity. Both of these are Hunterbrook stories to give credit where it's due. And ubiquity sent him drones, or not drones, but like some communication stuff to Moscow. The NBA teams are quite quite the picture. Josh Harris at the 76ers. I mean, the finance, like, finance, I'm a finance guy. The financialization of an economy is supposed to just grease this kids. If it is financial engineering, there's really no value at, right?

You're supposed to make interchange, lower, transactions, easier, access to capital markets, higher, you know, essentially more efficiency to, you know, connecting buyers. to seller, lender to lend to debtor, to borrower. It's gone so far past that. And if that was a good thing, Europe would be doing amazing. But it's not. That doesn't lead to growth. And that is the problem. It leads to more leverage. And over the course of a really long bull market, this is piling into a bunch of different pockets. The federal balance sheets, one, the corporate world, the private credit and shadow banking sphere. It just, it fills pockets.

It's like, you know, when the Titanic's going down, the water goes into every room, right? The one that I'm looking at, very specifically, is insurance because I think, you know, if incentives determine the outcomes, that's where the incentives are the worst out of any industry, including banking.

Well, I'm going to bring up this chart and piggybacking on that, I mean, you have this here, the Contagion Path of Delaware Life and Clear Spring fall or fail. You said the shark bit the calf out there making its turn, coming back for the body. Is this one of those situations in your mind? So this is just a small little contagion, right? This is a contagion amongst one group, and this is just the Guggenheim insurers. You know, they're not, they don't have all have Guggenheim labeled on it, but that's what they are. And it's Delaware Life and Clear Spring, the Walter entities that with Gainbridge go down and what the effect is on other insurers. Salmon's group, not so bad, but Equitrust and Heritage, which are under Amistad group, formerly owned by Magic Johnson, who, you know, Magic Johnson, who, you know, Magic Johnson, and didn't make that much money in the NBA, right?

How does he, you know, become an owner of the Dodgers or the Lakers? Well, it's through insurance. And those two entities go down as well. If you're looking at the total amount of assets and the high-risk component, you're talking about like Silicon Valley. Now, did Silicon Valley take down the system? No. But what I'm saying is that this is just the tip of the iceberg.

And you have, you don't have the FDIC, you know, it's, it's, it's not as bad, too, as Silicon Valley Bank, just owning, you know, low yielding, long duration treasuries that are hard to, that are easy, super easy to offload. You're talking about liquid assets. You're talking about private credit. You're talking about, you know, commercial real estate. as a TWG, and I'm using a lot of entities, and I hate when people do this to me, but the Walter Asset Manager and the Bowley Asset Manager, Eldridge, they've gotten into everything.

Commercial real estate is huge on the Eldridge balance sheet, and I've been tracking that onto the banks, and I see it on the banks, and all of a sudden I'm looking at the values of the properties and trying to do comps on it, and the banks take the first lien in real estate these days, their capital charge is lower for that. That's just typically where they lend to real estate now. And they get the mezzanine from insurers or from asset managers, real estate firms. Even the first liens value, like the total debt out in the first lien, the properties and you know, cases I've found is way below that. You're looking at stories of Brookfield and KKR and they are selling for pennies on the dollar.

you know, commercial, commercial real estate office buildings and cities that were supposed to do well. And quite frankly, nobody wants to work in the office still to this day. And we don't really have the population growth. Yeah. So what should people be looking at as we round up Q3 heading to Q4 here? I think that the AI trade is kind of like holding this entire economy together. If that doesn't do well, I think that there's very little chance. that anything else, there's enough animal spirits to hold that in. I would look where rates are

going, higher or even same level for longer, oil, all of the macro stuff. And then, you know, follow me on insurance. I'll be on it. As if the insurance companies start to go, like, you know, I have a game plan for that. I don't mean like sell everything right now. You know, if I'm not giving financial advice, asset classes I would avoid would be real estate. It would be broadly, you know, high risk credit. If you want to have treasuries, like do you? You know, you're just taking dollar risk there really in duration if you get out further. But, you know, duration. Duration is what it is. It's a problem when you have a liquidity problem. And then, you know if you're going to take risks i still think the best answer is uh equity i think you know

bitcoin has its allocation but be very strategic because if you're buying the s and p um i don't know i like it's just 500 companies then i don't feel great about a lot of them no it goes back to like did somebody just called goose because thinking about like dissent earlier today raise the buyback to six billion it was previously double from two to four only a couple of weeks ago you had that whole back and forth maybe not the back and forth but you had drunken miller come out and call them out and say hey it's the fiscal side unless you fix that it really doesn't matter what you do on the margins with yields but to your point but if you fix the fiscal side the economy goes into a recession yeah well that's i mean that's

like dan if you don't then going back to the big question has goose just been called and even if yields explode even higher than they have already, if the market begins to turn and the Treasury and the Fed step in, say we're going to do whatever it takes at all costs. Does that even matter? I think because everybody just called bullshit. Druck and Miller's is the goat at, you know, being right when, you know, with the crowd and not being wrong with the crowd.

He's right, right? Something there is going to be push comes to shove, even if we haven't felt it in our investing lifetimes. there's going to be a time where you actually have to choose between the bond and the dollar, the bonds and the dollar, the treasury, the yields in the dollar. When, you know, the fiscal equation, you know, will be reset if it's not chosen, it will happen. The entitlements that we have on a present value basis, Drac and Miller status, it's $140 trillion or $240 trillion. dollars what we promise is it's not happening right um so at some point we need to experience pain

i'm on the same side as him for i think a different way to the to the problem um but it's much better to deal with these pains take you know recently i think i said this on the first episode a recession is not the worst thing in the world right what is the worst thing in the world is is is a collapsing system and until then uh you know for the boomer communism point, you know, we're servicing the old and jeopardization of the on. Yeah. I mean, we discussed this like in New York when we're in person. Like these, these things are cleansing mechanisms for sessions. Like they're necessary. That's free market. That's risk. You're going to take risk. Some people taking risk are going to fail. You need to let them fail.

And we've lived in an economy that is structurally not allowed a lot of waste and zombie companies to fail. And yeah, it's going to be painful, particularly in the short to medium term. But in the long term, it's completely necessary. And to the point about entitlements and tying it back to the demographic issues that you were alluding to earlier, yeah, I think off balance sheet debt on the federal government side is like 220, probably like $240 trillion. Now, it was $220 this time last year. I bet that balloon's faster than the Treasury debt. If I were to, if I were to guess, knowing for certain. That is an unfathomable number.

Every year our politicians vote to increase the entitlements and, you know, Republican or Democrats, you know, at least the Democrats say they're going to do it. Well, the demographics don't support it, whether or not, like, you want to squint say we can grow our way out of this with growth and bringing yields down. It's like, I don't see it. Like, you're not going to have enough young people to pay into it to pay back because the money is not there in the first place. Yeah, imagine that. Like, this is the Bissette, you know.

I was happy about Bessent. I'm so pissed off at him. He wants yields to go down while growth goes up. So how does that happen? Inflation goes down. What's happening to commodity prices? Well, they're not helping because they got into a war with era. Right.

And you also have an aging demographic that is inflationary. as you have people leave the supply side and go strictly to the demand side in retirement and demand the labor of young people to take care of them at nursing homes or whatever. That is taking it out of what the supply is going to taking care of old people. You know, you might have a college girl. She graduates. She becomes a nurse. Alternatively, it could be more productive for something that you're doing an economic,

activity that's servicing somebody that's also producing in the economy versus just, you know, spending down their last tendees. It's not yet. Demographics are certainly not good. And it's really funny because you see the anthropic commentary for the past couple of days. Not like the engineer who's saying it's going to kill us all. It's going to kill us all. You want to know what the easiest.

He's like, oh, but we can't, we can't slow down. I don't think is that opening I will win. The prisoner's the limit. I mean, and say this, but basically you're saying the prisoner's the limit as such. We all have to keep going forward. Okay. But want to know it would slow everyone down?

A recession. Yeah. A recession. And AI is not going away. Like, it's here. But you want to slow things down? You think it's getting too hot and heavy? Well, what's the answer?

Your IPO fails. Funding dries up. All of a sudden, that affects everyone. And then we, you know, slow down, like the development of AI will naturally slow down. The fact that we're avoiding these economic cycles, which people give a lot of pain to John Maynard Keynes, you know, the original economist of, you know, intervention during down cycles. I discussed this before. You've got, you got some hot cane stakes in there. Yeah, he didn't say you avoid cycles.

He would have never said that. If he was alive today, he would be like, you guys are ridiculous. What are you doing? I, you know, he's, he's the most undervalued economist. And he's also witty as hell, if you read his writing. But, yeah, I mean, like, we've just gotten so far into this, like, it's almost like, you know, we all think we're special, the economy's special forces operator that wakes up and takes medaphanal. And, you know, it's on like all these performance enhancing drugs to. you know, do 48-hour missions without sleep. Like, that's what we're trying to do economically.

And ultimately, maybe they can do that for a 10-year period and then they retire. We literally are trying to do this broadly as not, you know, the most insane people, you know, to creme, villa creme of people that push themselves to the limits. We're trying to do that to the entire economy, globally, every economy, whether France wants to work in August or not, we're all leveraging up and trying to avoid economic cycles. And what do you see? You see over time, the people that have ration and reason typically you get crowded out. And you were talking about the patient capital last time, right? Mm-hmm. You look, you, patient capital dies. And there is a, there's a significant need for clear

out in the leveraging that we haven't gotten since 2008. 2020 was a flash in the plan. Yeah. Cainz believed in cycles, but the Austrian view would be that he exacerbates them the both ends with this policy. I agree with that. But yeah, the difference. Your point, he would say there are cycles and we would, he would acknowledge that what's

happening right now is an attempt to prevent something from happening. He would have vehemently said that you could not avoid economic cycles. he would have said that you can make them easier through fiscal response, right? You can pick up government spending during a down cycle. Austrians would say, that's unnatural. You shouldn't do that. Like, that's where the debate is, right? Instead, we're like, what if we just never sleep?

What if we just try that? Like, why? We get more hours. We, like, if you live 90 years, but you never sleep. That's like having 30 years more life. Just, why don't we just do that? I mean, we haven't even touched on China either. If you talk about demographic problems and they're never sleep race with the U.S. right now.

It is very interesting. It is. Sorry. I think China doesn't want to play the AI game. Why say that? Because I think they would be happy just, I'm operating their first. factories and keeping power and, you know, like they're good at that. The fact that they have to play AI is only because we're playing AI, right?

So yes, if they see the advantage to kind of cut ahead of us in AI because they know it's inevitable. But if G. J. Ping had a button where he was like AI's gone forever, I think you'd press it. That actually wouldn't shock me either. Yeah. AGI's here, though.

We won the race. The models are getting great. Jensen said so. Jensen said AGI is here, I believe. Jensen said so. He didn't wake up a loser. He wears a leather jacket. Nick, it is always a pleasure, sir.

What, I mean, I feel like we just gave some final thoughts, but anything we didn't touch on, any parting thoughts for the audience here. No, I'm excited to see how crypto it does. You know, I would love, you know, a nasty couple months so that it bottoms out when everyone knows about it bottoms out. It's probably not going to happen that way. But I'm definitely getting more constructive on Bitcoin. Looking good right now, 77 down a little bit today.

It's doing that thing. It's doing that thing, but it does. It's where it lulls you, uh, lulls you to sleep. It'll go sideways for a couple months, then either we're up. We just need a flash crash. Sailor gets liquidated. Then we can rebuild. He's not going to get liquidated.

That's the, yeah. No, maybe an X cycle. Maybe he brings his liquidation price up to 50 grand and thinks there's no way it can break the lows of this one. I don't know. I do think, you know, our conversations on that, people saying, you know, know, oh, well, you know, they're nitpicking our last podcast, the end of the last podcast. And my criticism of Saylor and this sort of digital credit strategy and the leveraging of Bitcoin in a way that's, you know, engineering and bullshit made by chat GPT, they think like

I'm bearish on Bitcoin and like, you know, we were talking about the game theory. And, you know, I like having conversations where it's like I learned. something. And you're talking about the A6 and the difference between GPUs and what China's got and what they don't got. Like, I was just learning there. I don't pretend to know, you know, everything about everything. I think that it's a bad force over the next cycle. I would like, as I said, I would love to see the torch be taking from, you know, Bitcoin engineering to, you know, meme coin, Trump coin, like, whatever. Like, did you buy laptop? Did you buy a laptop? No, I didn't.

Went to $200 billion. I'm like $300,000 of liquidity. What are we doing? Okay. Thank you, Honert Rider. Another good lesson and whatnot to do. The next cycle I would like to see cleaner. The last one was successful.

Well, I think we've talked about this before. This is what I'm investing behind at the fund. There's a lot of what we're talking about is leverage, right? But bad collateral, bad results. Bitcoin introduced the, collateral packages, dual collateralizing credit with Bitcoin. And I know you, I think actually, now I'm recalling, I think the first time I brought this up, you were, you were a bit bearish on the concept.

But I do think pairing Bitcoin with traditional credit structures, creating these uncorrelated assets with different idiosyncratic risk profiles makes a lot of sense, particularly if it's longer durations, anything from five to 10 to 50 15 years. I think if we begin recapping the terrible debt that exists, particularly in the private markets, I don't think it's going to come to government anytime soon with Bitcoin in long duration. I think that is how you can do, I don't want to say manufacturer soft landing, but that is how you begin to get better structures in place. You can invent value. You can only maintain value through Bitcoin unless you're building

off a bit and developing in the Lightning Network. That's a very much. my view. But I do think that, you know, if you just took a 10-year and offered, you know, a pocket of gold, that functionally acts as a tips, which follows inflation as long as Bitcoin is an inflation edge, which over the past cycle, it's not been based on, you know, just the way it's traded. It's more of direct, it's more responsive to liquidity right now. I do think that changes. That's why I'm bullish, amongst other reasons. But, you know, making new financial products and instruments and, you know, new ways of doing things is not inherently bad. I just think that it needs to be assessed. And also what, you know, we were talking about

tether offline yet last time and, you know, would love to have another conversation another time about that. But the idea of this, the stable coin stuff, potentially attaching some Bitcoin to real estate, which is, you know, real estate debt maybe. That's real estate's also technically supposed to be an inflation edge. So maybe that's not the right pair. But I think that there's novel solutions and it makes sense. And just as, you know, if you're considering a personal balance sheet and saying Bitcoin's a good allocation, that that could also apply to financial products.

But I don't think that's the solution. and ultimately I think people like Michael Staler are going to take advantage of that 100 out of 100 times. And really I would like to see more building in the blockchain and creating a system that is better than the status quo, not just better on a risk-reward ratio to current allocations, but like functionally the financial system. I would like to see it actually permeate corporate balance sheets and not just micro-strategy. Let's plan to do this. Let's flip the, flip the, flip the,

the relationship here. I come on your show and you ask me all the questions about Bitcoin and these different structures. Let's do it. Okay. I got many thoughts on this. So your audience has to go to my YouTube and you'll be episode four because I got episode three lined up.

The, uh, the second one, uh, where is that guy from Beck in America or who? I don't know, you know, yeah, he was. at a bank before, but he's not, he's debt serious on substack. And he was a differing view on software and private credit. And I love having conversations that aren't, you know, us teaming up on the same idea. It's not very intellectually stimulating. No, I agree. I call it like 20 minutes of that. I made some time later that was a really good conversation. You go out the glasses. Asnar. His name's Asnar, but he goes by debt serious. Yeah. That's great. Well, we'll do this again keep crushing on the front lines sir and i'm sure we'll talk between now and then sounds good marty

always good to be on all right peace of 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 support you're to the show and if you can leave a rating on the podcasting platforms that goes a long way. Last but not least, if you want to get these episodes a day early and add free, make sure you download the Fountain podcasting app and go to Fountain.fm to find that $5 a month, get you every episode a day early, ad free, helps the show, gives you incredible value.

So please consider subscribing via Fountain as well. Thank you for your time. And until next time. Okay.