TFTC: A Bitcoin Podcast - Ten31 Timestamp: Gilt Trip

Episode Date: October 5, 2026

Oil flows through the Middle East are back near pre-war levels, but 10 year yields and the MOVE index are telling a different story. 🔗 https://bitcoinproducts.com In this episode: Why Middle East crude flows are back to pre-war levels while diesel and refined products still lag What the US and China statement on Iran and Hormuz tolls signals How the push for a China-free rare earth supply chain is going Why the MOVE index and French bond spreads are blowing out How stablecoins and Treasury bills could change what a dollar is Why Trump's comments on inflation and the debt point toward Bitcoin TIMESTAMPS: 00:00:00 - Back from the Ten31 portfolio retreat 00:00:47 - Middle East crude flows return to pre-war levels 00:03:19 - Diesel and refined products still lagging 00:04:25 - Tanker costs and Hormuz workarounds 00:07:06 - US and China statement on Iran and Hormuz tolls 00:10:41 - Rare earths and the China-free supply chain 00:12:31 - Jamie Dimon calls for industrial policy 00:13:32 - 10 year yield and the MOVE index breakout 00:17:23 - Weak Treasury auctions and Judy Shelton 00:18:08 - France and Germany bond spread blowing out 00:22:08 - White House and the frontier AI labs 00:24:10 - Bessent, Shelton, and the Fed chair picks 00:26:27 - Trump says inflation could pay down the debt 00:27:20 - Stablecoins and demand for short term Treasuries 00:29:44 - How stablecoins could redefine the dollar 00:33:00 - Euro weakness and the Bitcoin to gold ratio SUBSCRIBE › Newsletter (free): https://tftc.io/bitcoin-brief/› YouTube: https://youtube.com/@TFTC?sub_confirmation=1 FOLLOW US › X: https://x.com/tftc21› Nostr: https://primal.net/tftc FOLLOW MARTY › X: https://x.com/MartyBent › Timestamp: https://www.ten31timestamp.com/› John Arnold: https://x.com/JohnArnoldTen31› Ten31: https://ten31.xyz TFTC #MartyBent #Bitcoin #Treasuries #Stablecoins

John Arnold, here we are, Monday morning, back at it. Back at it again. The situation never sleeps except for when we take weeks off for travel convenience. Yeah, it was a good week. We had our 1031 portfolio company retreat in Utah. It was a great week, feeling refreshed after it. Moistrised, unbothered in our lanes. It was a good time.

It was a good time. A lot of productive conversations in Utah this year. With that, we got to get back. And we were saying last week when we were driving from the airport to our undisclosed location in Utah that it was a pretty big bummer that we didn't record that Monday because something we've been covering popped off. And I'll just lead that as a cliffhanger because we'll get to it later, but we'll jump right into it. Talking about one of the recurring themes of the last six months for us, which is the flow of oil, particularly from the Middle East. A lot of people worried that the war in Iran is going to prevent oil flow. You're going to have this diesel crisis and obviously crude and diesel prices have gone up significantly.

But one thing we've been trying to do is get access to the real data behind the scenes. And you have it here in a couple of slides from it looks like this is a Goldman deck or a Morgan Stanley deck. J.P. Morgan. J.P. Morgan. We've got Middle East crude flows, Middle East refinery products flows. And they seem to be up into the right since late March, early April this year. Yeah. I think, I mean, this was the big story last week.

And I think it's kind of a bit of a Roershack test where you can kind of see what you want out of it. You know, the left-hand side is what I think got most of the attention and probably rightly so that basically last week crude flows got back to, you know, roughly pre-war levels, which is kind of, you know, a pretty big narrative violation for a lot of the, you know, the doom posters and the influencers that were trying to convince everyone that, you know, if we didn't get this normalized in a couple weeks, then oil flows would be choked off forever. and the world would immediately plunge into chaos. And obviously there have been significant issues

and especially at kind of the margin of, you know, countries with much less energy security. There have been significant issues, but this chart is just not, I think, definitively not what the consensus narrative would have had you believe on the left-hand side here six months ago. So no doubt pretty significant. And a culmination of kind of the things

that we've been talking about over the last few months where you've gotten these like dribs and drabs of information about the U.S., helping with dark transit, It's different kind of ways, different routes kind of around Oman to avoid the straightoform moves. And that's led to kind of this rough normalization. Now, we'll see if it holds. Things are not out of the woods yet and things are far from kind of normalized, as we can all tell. But I think the left-hand side chart is pretty, it's a good thing to keep in mind every time that you kind of evaluate geopolitically like what's going on.

And the next kind of doom post headline that you see saying that it's all about to kind of plunge into unmitigated chaos with no route arounds. Right-hand side, I think, gives you a little more of a nuance view. I think left-hand side chart was the foundation for a lot of victory lapping that I saw last week on Twitter, a lot of like, you know, everyone who was opposed to the conflagration in Iran just has TDS and is a complete moron and, you know, was a, it was a beta loser. Right-hand side maybe is a little more nuanced and it's more relevant for the diesel situation. So that's where flows have not gotten nearly back to normal, despite some of the work And so that's, you know, a reason to stay somewhat cautious, at least on the industrial side of things.

Obviously, diesel is a massive input to industrial economy, to shipping logistics, both in the US and everywhere. And if you're trying to, you know, ramp up industrial production as a means of kind of growing your way out of debt, that's not a chart that you really want to see. And, you know, we'll talk about more maybe later in the episode kind of some some workarounds to that that have geopolitically interesting implications. But yeah, something for everyone here, you know, as we start survey what's going on in the Persian Gulf now. Yeah, it looks like refined products are still probably like 40% below normal, pre-war normal.

So climbing back there. And that's another question. I think the last time we met, we were talking about the Venezuelan imports into the Gulf of America. And I think that's still the question on my mind is what the, what is the refinery capacity looking like there now? Have they been spun up? Are they refining a full tilt? And I think to do deeper research on that.

But I think another chart that really highlights something that is. a bit of a wrench in trying to facilitate global trade is the cost that it takes to actually ship. Now that we don't have these pipelines in the street, I think, and people are avoiding particular parts of the world in the oceans. And so that has significantly increased the cost of hiring an oil supertanker as the sort of constriction on getting supply out for many months of the straight of Hermuz. has led to this backup and relatively a relative lack of supply of super tankers that actually move the stuff. Yeah. I mean, it's, you know, it's a crazy chart.

We all should have just bought tankers, the tanker ETF and then chilled this year. But, yeah, I think just it's an interesting one because I think it actually speaks to a lot of the underlying kind of push and pull of what's going on here. Like the, you know, this is happening, as you said, because of all the workarounds that are needed now to move oil out of, out of the Middle East. And right now, I think this is one of the reasons that you're seeing. you know, everyone's kind of complaining, and I think, probably so that you've had this increase in crude flows. We're not really seeing it at the pump yet.

And obviously, there's some level of lag there. But there is an element of, I think I saw, I believe Bob Elliott had an estimate that, you know, this dynamic is adding like $30 to $40 per barrel of cost to actually getting, you know, barrel of oil out of this region and kind of into the hands of final, you know, in consumer. And so you've got this kind of push and pull where the geopolitical leverage, let's say, of the Stratioform moves and. kind of the disruptions being created there are, you know, arguably being, that's being like chiseled away in ways, interesting ways I think we're about to talk about. But at the same time, that's not necessarily flowing through to just like a sudden, you know, relief valve on end user costs, which, you know, creates pain for the average, you know, American at the pump and it creates problems for kind of the inflation picture and treasuries that we'll talk about. So, you know,

it's like kind of this, this ongoing question of kind of who has the relative leverage and for how long, you know, how you can kind of pay, if you're a sufficiently wealthy country, you can kind of just like, eat this cost and deal with it. And hopefully you can just do that for long enough to get the other side to finally cry uncle. And maybe there are some reasons to think that's that's closer than it has ever been. But yeah, I think this is those two charts kind of in conjunction tell a lot of the story here. If I'm looking at this chart, it looks like a 2017 ICO shit coin chart. It looks like the blow off top is here and we'd not be shocked if a material correction to the downside happens relatively soon.

We've said it before. I mean nature, you know, nature of horse. a vacuum and nature of horror is a vertical chart, just like when the chart spikes, like, you know, there's nothing in the world like a supply response. So, you know, we'll see if that plays out. Yeah. And you're alluding to it, but creative ways to get around this and put pressure and shift leverage and you have some headlines here pertaining to the deal between China and the United States. I'm assuming this was agreed or the rough framework was agreed upon when President G came to the United States a few weeks ago.

And on top of that, you have a U.S. armed twisting campaign is cutting Iran off from the rest of the world. And Iran's top security official warns of dire economic crisis. And so to your point, how long can Iran survive with all these pressures being put on them from many different angles? And it seems like the U.S. is going to China and saying, hey, let's find something we can work on to put the pressure up on Iran. And maybe we'll make some concessions, whether with AI or accepting pandas into the country to make. to make sure that we're happy with us. Yeah, it's critical. So out of the Xi Trump meeting last week, emerged this kind of eight-point statement

from the Chinese. Most of its kind of boilerplate, or you know, talking about recognizing that we reiterate our commitment to having a strong bilateral relationship and we're going to work together on AI and whatever. You know, the one thing that really jumped out from it other than, as Marty Singh, you know, point eight was that the United States

is going to welcome the arrival of two giant pandas, the Atlanta Zoo, which is probably the main takeaway. But beyond that, The two heads of state statement reads, agree that Iran should honor its commitment to not develop nuclear weapons, and no country or institution can be allowed to impose tolls on international waterways. So kind of the two big sticking points in this whole thing, China is at least optically and then publicly kind of endorsing the U.S. viewpoint on,

which I believe is the first in a number of months. I think they've said before, like, you know, different representatives have kind of hinted, like, we, you know, there shouldn't be told. But I think this is the first real official statement kind of leaning in this direction, which is like when you pair that with to your point the you know this walster journal article on basically operation economic outcast and the tolls that it's having on iran domestically and then you know this this bottom bottom right-hand article if you're watching here is actually interestingly from the new york times which is maybe more interesting than the actual content just that the times is

running this headline that's kind of acknowledging that there are these you know meaningful domestic disruptions that you are not playing in iran's favor and are theoretically playing in the Trump administration's favor. You kind of couple that all together, and it's a bad time, right, to be, for your list of allies to be growing thin and for your main kind of, you know, sponsor of Iran as like, you know, if you think of it kind of as like this client state, for the main sponsor of that state to be kind of, you know, pulling back a little bit. We don't have it on here, but, you know, saw some news as well that the Chinese may not be sharing satellite imagery with Iran anymore. You know, you've seen little hints like this over the past,

you know, maybe China's pulling back. I think this is the most definitive statement that we've seen so far that basically China saying, you know, let's cool it here and, you know, shifting the talking the talk track firmly kind of toward the U.S. posture. Yeah. And then on top of that, I mean, if you, if you are a believer in the, uh, the print mine hash perspective of the world and the theory of the world to, in parallel to all this, you have chaos in Europe, you have bond yields blowing out in France and Germany or the spread between France and Germany blowing out.

And I think that, that was, uh, that's a big. points of their thesis is that one of the other parallel sort of leverage points that the Trump administration is playing is to put pressure on on Europe to foot the bill for their part of NATO and to stop manipulating euro dollar markets to expand globalist policies throughout the world. So we'll see what's going on there, but we're moving on and staying on China, though. I think one of the topics that is really underappreciated but extremely important, particularly in the context of reindustrialization here in the United States is our access to rare earth minerals, critical minerals that are pertinent to battery production, magnet production, whatever it may be.

And you have the chart here on the left from the Wall Street Journal, shows that it's moving in the right direction in terms of our ability to acquire and process these rare earth minerals. Yeah. It's a point that we've been on for pretty much this whole year ever since we started kind of thinking through what the administration strategy might be. and ever since you saw kind of the MP Materials deal last year, and a few other deals that the admin has done,

both in the US and kind of with partners abroad. And then the Chinese rare export restrictions late last year, there's obviously a major theme that's underpinning every single relevant kind of technological vector that the two great powers are competing on. And again, I thought the framing was interesting in kind of a mainstream news source that you're seeing. You can see the subtitle there is that the Trump administration's initiative here to create a China-free supply chain is quote unquote starting to work. Now I think maybe that's like a little generous if you

look at this chart here like moving in the right direction but also you know certainly like going to take a few years to even get kind of you know meaningful progress. That said there's there's good detail in article I recommend people read about the amount of kind of partnerships that have been struck around the world to you know kind of like in circle China with you know alternative supply chains so it's early days on this but I think the five to 10 years ago you completely could have said and I think a lot of analysts were correctly saying like the US is in a you know completely is behind the eight ball here and does not have effectively like real sovereignty militarily because they have no plan for controlling these supply chains or reshoring them or having alternatives.

And that's definitively moving in the opposite direction now. And I thought to that point on the right hand side of the slide, you know, just highlighting this article from of all people, Jamie Diamond, you know, most important banker in the world outside of maybe Kevin Warsh, basically taking to the Wall Street Journal to write an op-ed saying the US needs to do more explicit industrial policy, including subsidized loans, tax rules, export credits, new immigration policies, direct government investment and development finance initiatives, et cetera, into all these critical industries. Now, he's talking to his own book here a little bit because J.P. Morgan has famously committed to billions of dollars of financing and work on all these deals and they stand it to benefit

from being the leader of this massive shift in kind of finance policy in the U.S. But in any case, you've got one of the most important American businessman out there right now, very aligned with with this idea and beating this drum that we've been highlighting over the last year plus. So you can kind of clearly see the direction of travel here. It all comes back to that same kind of great game. Yeah. And bringing back to the US and what I was alluding to at the top of the show, which is the chart that we've been hawking for many, many months now is the US 10-year treasury yield

juxtapose to the move index, which looks at the volatility in the yield movements. And we've been saying it's been relatively suppressed, considering that yields have been drifting higher. In the last couple of weeks, they haven't been drifting. They've been running higher. And the move index popped while we were away for the last two weeks and reached levels not seen since the tariff tantrum of 2025. Yeah, so there's a great old Western,

if you're into Westerns called Shenandoah, starring Jimmy Stewart in his later years. And it's about like the lead up to the Civil War and he's in the Shandoah Valley with his family. and like, you know, the, you know, the union and the Confederacy are fighting and coming to blows, and more and more battles are kind of popping up around where they live. And the whole time he's saying, like, you know, it doesn't concern us. It doesn't concern us. He wants to be neutral. He just wants to, like, work his farm or his ranch or

whatever and kind of be left alone. And then finally, like, midway through the movie, like, the turning point is his, like, youngest son, I think, gets like kidnapped, I believe, by Confederates. And the, you know, camera zooms in on him, you know, pushes in or whatever to close up. And he's like, now it concerns us. And it's like, this is, that's what I thought of when I, like, like when I saw this chart, right? You've got all this noise, you know, with, with rates and people freaking out about one thing or another. And, you know, obviously that's relevant to one degree or another. But when you see move, you know, finally rip out of this range from like the 60s to the 80s down up into, you know, the 110s plus.

That's when you say, okay, now, now this is concerned. This is interesting. And I think especially so with these two, these couple headlines that I've got on the slide. This is all happening, you know, rates getting to 5.3 percent. So 20 year highs, move blowing out. That's all happening in the same week. that you had a Fed governor John Williams I don't know if he's a governor he's vice chair of the FMC I guess that makes him a governor I can't totally

remember who sits in what seat but in any case leading light of the Fed you know it comes out and says well there's no need for urgency for on you know any rate hiking cycle and I believe you had one other governor come out and say the same thing last week and you also had PCE come in which is allegedly you know the fed's preferred inflation gauge personal consultant expenditure that that came out ex-food and energy you know lighter than expected by quite a bit and yet you still had this move, right? You still had, it really didn't do anything for yields. Like, I think maybe, you know, when when the PC headline hit, you know, you knee jerk down like

five biffs, but then pretty much gave it all back in the same session and, you know, move, close the week on kind of local, local highs. So, you know, all that is to say like we've been, you know, we could be, we could be, you could be forgiven for thinking that we're, you know, we're idiot Americans and we're saying rah-rah US over these last few slides and look how our great everything's going for the US and, you know, trust the plan. It's all in hand. Like, we've been. saying it this whole year, but like, this is the constraint, right? This is the thing that the U.S. has to watch and dance around. And I think thus far, you know, I think you have to give Besson and Coe some credit for having danced around it reasonably well enough to keep the whole thing going.

And you could call that, you know, a series of tacos or whatever. But the reality is a lot of the strategic objectives in the physical world seem to be moving in the direction that they want. So now it's a question of what's the next, what's the next mechanism needed to kind of get this back under control and make sure it doesn't, you know, create excessive squirreliness in the bond market. Yeah. I mean, and that's, I think that's one of the big questions is what's driving this. And again, I think we'll go to the next slide here. Is it what's going on with everything in Iran and the debt situation or are we beginning

to see the effects of other bond markets and their relative weakness leak into the US? Because, I mean, if you look at some of the auctions from the Treasury in the last couple weeks, they've been pretty lackluster and suboptimal, if you all. I mean, many people teetering on the edge of going, being as confident as saying that a lot of the auctions had failed in the last few weeks looking at different durations. But that gets into a, before we get to the European spreads here, which I mentioned earlier, I think another thing, another interesting thing at the Treasury, they brought in Judy Shelton, who is a very vocal sound money advocate. And a lot of the commentary I've been reading over the last week is that Bessent really doesn't care about the long end

of the yield curve as much as people want him to because he's trying to move everything to the short end and then potentially recapitalized long end by doing something like a gold back bond or maybe a bit bond, if you will. So he's trying to force everything to the front end, the yield curve. We don't have to dive too much into that, but what are your thoughts here to Sheldon? Well, you're giving away the alpha, dude. We got a couple slides and then we got some Shelton posting that we're going to do. Okay, okay.

I'm sorry. I missed that. I missed that in my first read-through, but let's focus on Europe now in these spreads. Well, no, I mean, I think it's all tied together. And like, I would almost, to your original comment, I think kind of reverse the causality where the U.S. has real problems and the rest of the world has kind of worse problems. So when the U.S., you know, kind of sneezes, the rest of the world gets a cold. And I think you're seeing that, you know, clearly here with what's going on in the European bond markets over the last few weeks. And, you know, you mentioned mine print hash earlier. Matt Dynes, Matt Dynes, to his credit has been all over kind of the Europeans over. over the last year and kind of what the dead market looks like there relative to the U.S. And I think, you know, as it relates to what's driving on this, like a bunch of things and some of some of the very obvious. Another like more general macro thing is just like there's very clearly now this push for,

we've talked about it. We talked about last week, like you see US PMIs ripping for the first time. And a long time, you know, if there really is going to be this push for massive AHAI build out, massive industrial reshoring, you're going to have sudden meaningful strain on supply chains that are not really prepared, you know, for. from a real resource perspective to operate in the way that you want to operate at the speed you want to operate. And so that's like, that's literally creating just like real financing costs for things or like going up. That's a problem for the US, but it's a much bigger problem for

the Europeans who, you know, are not basically not net producers of of anything except for regulations and compliance laws. And, you know, are sitting with, you know, France has, I believe, 120% or 125% debt, or 125% debt to GDP, not US debt to GP. And it has a lot of demographic issues that are, you know, widespread across Europe and I'll just leave it at that. But the interesting thing on this chart that is notable. I mean, a couple of things. So the French spread to German boons, which are kind of like the benchmark best, best bond in Europe, you know, most stable government with a real kind of manufacturing capacity to some extent in Germany. When you look at that spread of that benchmark, you know, it's now at 67 BIPs as of this was over the weekend relative to in kind of the Greek death spiral that got up to 59.

So it's already higher than that one was despite the fact that like Greece should be like a way more marginal economy And the other piece is that the when compared to the kind of late 2011 sovereign debt crisis in Europe France did get higher relative to the German boomed at you know hundred four Bips so not quite there yet But that happened in 106 trading days and this one has happened in just 23 trading days So kind of the point on move you don't just care about kind of absolute level you also care about kind of speed of travel and here you have like scary absolutely levels and scary speed of travel. And I think this is, you know, all gets back to what we're saying that Europe is kind of the sick man of the world, relatively speaking. And, you know, I think you've seen, I don't think it's entirely to your point, to the to the deigns point, the law point,

I don't think it's unintentional, right, to put the Europeans in this position. And if you're trying to, there's the euro dollar piece, which is huge, but also like if you're trying to create kind of a decoupling and force a decision, but, you know, for the entire world to, you know, maybe throw in with the US or throwing with China and the Chinese sphere, you know, one way to do that would be to put significant stress on a market like this and kind of see where the chip shake out and where people kind of want to throw in. And so I think you've seen maybe some indications of that with, you know, this past week where Macron was suddenly out there talking about how China has, you know, decimated or massacred Europe's industrial base with all these like unfair subsidies and export dumping. And,

you know, we need to completely reshape that and it's totally unfair. You know, suddenly sounding like Trump out of nowhere. So I think you're seeing the signposts that this is not not outside the realm of what the administration is is kind of looking for and not necessarily like a random disassociated thing. Yeah. It'll be interesting to see how it all plays out. Dines and Luongo.

I've been pretty dead on. I have had them on TFTC many times over the last couple of years. I'm actually catching up with with Tom Longo on Wednesday. Very interested to see what his perspective is that should be out front or Saturday for those who want to get the distilled thesis there. But moving on, AI, big part of this. And I think the administration, the Trump administration, particularly at the executive level, has been frame-mogging the frontier labs and the data center doomers over the last

couple of weeks. They're not, the Trump administration put their flag in the sand and said, no, we're not, we're not decelerating. And we're not going to give you the regulatory moats that you guys want, which has been, if I'm speaking objectively, it's been pretty. pretty refreshing to see. Yeah, look, I mean, you get, I don't have the video on here or the photo on here, but this all comes from the White House super intelligence, a joint committee event or whatever it is, they called it. It's now super intelligence. It's not artificial intelligence. So says the, so says the big man.

So I guess that's what we're going with. They all, you know, Trump and every relevant AI leader got together in D.C. to sign an agreement basically saying, you know, we can, we can figure out ways to advance and accelerate AI safely, but we are definitely accelerating. And, you can see this in the Mike Johnson quote, that, you know, it's all a sci-op, a Chinese sci-op to slow us down. So we're not going to do that. And, you know, the same week, Trump did a time interview, which we'll definitely talk about here in a second.

But one of the things that came out of it was that, you know, wouldn't be opposed to an intel-like stake in the labs, which I think they themselves have allegedly floated in the past. So, you know, ongoing kind of uniting of potentially the government and the frontier labs and and AI infrastructure in general, which if you're taking our thesis at heart at face value, then that's not something I think would ultimately be totally surprising to see. Then you also have the Pope come out and say, hey, these things are not conscious. They don't have souls.

Very important. That's a whole thing. We're going to people need to build a metaphysical framework. There's going to be a lot of reading that needs to get done. Maybe we'll do a side episode on consciousness and the nature of the human soul. we'll get deep on Thomas Aquinas. Exactly. Moving on, I alluded to it earlier.

I just sort of jumped the gun here. But talking about inflation, dissent, Fed Chair picks, and Judy Shelton joining the Treasury. What's your take on all this? Yeah, I mean, look, it's all, all these three things are interesting, right? The Besson comes out and says, well, you know,

the Fed needs to keep an open mind on inflation before getting to, getting too frisky with interest. rates because we're going to have all these productivity gains from from AI and deregulation can drive all this growth. And then, you know, at the same time, hires David Zervos from from Jeffries, who famously when he was when his name was being thrown around in the Fed share sweepstakes was known to be someone who was advocating for aggressive interest rate cuts and, you know, financial repression and kind of the whole playbook of Grow Baby Grow. And at the same time, the Treasury brings on

Judy Shelton, who has been, as you said, kind of an advocate of 50-year treasuries, kind of with a gold backing component, you know, at the same time, the same week. Interestingly, I don't really think the Shelton one was like heavily. You've seen it on Twitter, but it's not gotten really a lot of airplay in mainstream news. Like, I'm, it was in, it was in Deal Book. The New York Times is kind of financial blog and a few other sources. So, you know, reasonably certain that it's real. But it hasn't gotten like a, you know, the CNBC article or a big profile or anything yet,

which is interesting in and of itself. You know, I don't really know what they're going to do. I think that there are a lot of different ways that this could go, as we've kind of alluded to. But I just think, like, all of these things collectively and then the comments that we'll talk about on the next page, you know, from Trump are just seem to be pointing kind of exactly in the direction that you kind of would have thought as, you know, an advocate of hard money. if you've been also paying attention to the way that, you know, Besson has talked about, let's say, stable coins and the yield curve and, you know, the priority on, you know, outgrowing the debt, et cetera. It all just kind of points in, you know, the same direction.

And I think there, again, are a lot of incarnations on what could be done here and what all of these different kind of red crumbs could mean. But I'll tell you this, it does not make me bearish on Bitcoin. Not in the lease bit. Not in the lease bit. Let's get to Trump's comments pertaining to how inflation can pay down the debt very rapidly. And so to piggyback off of what you just said, this headline from last week, I think, is a glaring alarm bill. Go get as much Bitcoin as you can because they're going to, they're going to go for debasement over defaulting on the debt. And then going back to what I was saying earlier, and I do have sort of a set up for you to elaborate on it.

But stable coin issuers have a growing appetite for Treasury security. So Genius has passed all the rules that genius that come with genius beginning to be implemented. And it's it like stable coins are here. And it seems like they're going to be an integral part of the US financial system, the global financial system moving forward, whether or not you agree with that or like that is a completely separate question. We'll talk about that before I ask you the question that I have, which is going to be an explanatory. Like explain that like a five question thoughts on Trump's inflation comments. Yeah, I mean, he's not wrong, right?

Like, technically, he's, he's correct. And generally, that's kind of been how that's been the playbook. You know, you've seen it. We've talked about it before, like the World War II analog of a thing. What it requires is a, as Beston said, maybe a Fed that keeps an open mind or a treasury that kind of meaningfully reasserts control over the dollar system in one way or another. But I think he's not wrong, but he's also telling you to your point that you, you, effectively giving you advice for how to shift your portfolio allocation if you really take them at face value.

I think maybe even the more interesting thing in these comments is, you know, this bottom quote, you know, there are other means to pay off the debt. I don't want to tell you what those means are, but you can do it through other means, which is like classic, you know, Trumpian comment. But I think that that maybe bleeds into the stable coin piece that you were alluding to. Yeah. I mean, I think Bessent himself has come out and said that he sees demand for stable coins or the market cap are stable coins growing to three to five trillion by 2030.

They're looking to grease the skids to make that possible with laws and rulemaking. That is not as accelerating forward. And like I mentioned earlier, I mean, when you combine that with the long end of the curve auctions, the longer duration auctions, like sort of being lackluster in recent weeks, bring Judy Shelton in. And as we have, know if you've been following this. I mean, you wrote an incredible piece on it and more pertaining to which blockchain will win. But I think on state, when it comes to stable coins, it's very well known that they can only hold short term bills essentially. And so if you're going to have a bunch of debt being rolled over in the next few years, trillions of debt and you've increased the skids for

stable coins, one would assume if that market's going to grow from 500 billion to 3 to 5 trillion, And a lot of the demand for the curve is going to be pushed to the front end because of stable and they're, I think, depending on stable coins to drive the demand for the front end there. And so might explain it like on five. Question is, if you believe in the thesis, that the cent is actively trying to push things to the front end of the yield curve so that you can then rejigger the long end with gold back bonds or bit bonds, whatever it may be. What does that process look like? Yeah, I mean, I think it's, you know, I wish that we were in the rooms to really know this for sure. But I think at a really high level, like the way that, and I believe I'm borrowing this metaphor from from Dines, if not him, than somebody else.

But if you go back like a hundred plus years, the nation, like before the, before the advent of the Fed in like the back half the 19th century, the way that a dollar was defined was not as, you know, a liability of an unbacked liability. of the Federal Reserve, right? It held some kind of collateral and generally, you know, it was issued by, I could be issued by a private bank or the Treasury, but there was some sort of collateral behind it. And I think if we, if you imagine like the metaphor would be the in Indiana Jones Temple of Doom when he's swapping out, you know, the famous scene of he's swapping out the little golden idol and putting like a, you know, a weighted bag on the same spot so that, you know, it won't trigger like a booby trap. I think we are in flight of a version of that right now with the dollar and the definition of like what a dollar even is. You know, is it an unbacked kind of liability of the Federal Reserve that's redeemable for nothing?

Or is it a collateralized liability of some issuer collateralized by potentially an asset like a U.S. Treasury bill, which is effectively a claim on the growth and productive capacity and thus, you know, tax cases. capability of the state of the US government. And if you're if the the walking around money that you use that you and I use to the extent that you still have dollars to pay for things that you hold in your bank account or you're holding the corporate treasury is subtly suddenly becomes you know a collateralized obligation a digitally spendable and instantly spendable collateralized unit instead of the you know an unbacked liability sitting on you know Fed ledger that shift in definition.

of what a dollar even is, I think opens up meaningful incremental capacity for T-Bill issuance. There are, to the extent that that's true, there are significant implications on the inflation picture, and there are constraints still on how much you can really pump into that in any given interval. I do think, you know, this Fed paper from San Francisco Fed, this interestingly time paper mentions that they think that the demand for short-term Treasury securities could nearly double to more than $400 billion by end of 2030 with the growth of stable coins. I think you probably need a lot more than that. I don't know that you can realistically safely do more than like, say a few trillion.

But I think that's like the direction of travel that I'm trying to get my head around that I think is what we're driving toward is basically a reinvention, a subtle reinvention of the dollar in such a way that it's not necessarily going to be obvious to anyone walking around today that like anything happened um but turning you know your bank account and turning your your local dollar access to just a funnel and a sink for you know a new version of like collateralized units that are sobbing up t bills basically yeah it's happening we're not going to notice but it's happening it's happening freaks and then on top of that i mean you mentioned the dollar dixie screaming higher but the euro's euro is uh in a in a bad spot relative to the dollar it's

to basing faster. Not that you have this up, but that's another thing I was following over the weekend is the precipitous decline of the euro or rise of the euro, but decline of the purchasing power of the euro compared to dollars. And then our good friend, Nick Batia, sharing the Bitcoin to gold ratio chart. It looks like Bitcoin is breaking out. So as all this is happening to lead up to the first 38 minutes of this discussion is all roads lead to hard assets and our favorite hard asset being Bitcoin.

Yeah. I mean, I think, you know, I got two of my favorite line squivers on here, the Nick on the right and then the Dacy chart's taken from Dynes's feed. You know, the interesting piece on that left-hand side chart of dollar versus Bitcoin is just kind of moving into a direction of the two moving much more in tandem over the last couple months. So strong dollar aligning with strong Bitcoin. You know, Matt, Matt's view is that it may just a counter trend rally. So maybe fade it, you know, too soon to tell. But that those are the kinds of things, right? that plus like Bitcoin gold ratio moving up meaningfully during sovereign debt sell-off.

Those are a couple of data points that I think you'd look for if you were looking for kind of meaningful regime change in Bitcoin specifically and markets more broadly. Yeah. You don't have this on, but I wanted to pull this up from a great account, great file, great poster, the chivalry guild. A lot of dooming out there. A lot of people, a lot of people saying it's the end of the world. The plague is upon us.

but hard times, bad times, hard times. That is what people keep saying. Let us live well in time shall be good. We are the times. Never forget that. Don't let the algo manipulate you and thinking that you can't manifest good times, people. Never do them.

Never do them. We'll see you guys next week.