The Canadian Bitcoiners Podcast - Bitcoin News With a Canadian Spin - The Canadian Economic Time Bomb - Joey Temprile, Richard Dias, Joseph Barbuto, Rajat Soni

Episode Date: October 23, 2025

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That is not convincing, I'll tell you. Looks like you guys are crashing a little bit. Like a Brampton man in a big rig, right? Like a Brampton man in a big rig. Is that too harsh? I hear some laughs. No, it's good. Okay.

We got a good day plan for you here. A lot of good talks at the Bitcoin Treasury Bitcoin Conference. Oh, a lot of people upstairs today. Good to see you guys. I actually don't even know how to get up there, if you can believe it. I know there's, like, coffee over here somewhere on the third floor. What floor is this?

That's just... Now I've heard it all. Okay, interesting. The first talk today is going to be about the economic long wave, which you'll become familiar with. Joseph Barbuda, Richard Diaz, myself, and Rajat Soni, who I don't see... Or do I see him? There he is. You're a little late, but I'll stall for you.

Are you ready? That's okay. I mean the schedule's online. Okay. Welcome everybody to the stage. Let's get after it. I said welcome everybody to the stage. Okay, okay. Everybody on, talking. Hello. Great to see everyone. Rajat, thanks for making it today. That's good that you... Okay, let's introduce ourselves first a little bit.

You guys know me, Joey Canadian Bitcoiners podcast. Rich, why don't you tell people who you are? Hi, thanks for having me, everybody. My name is Richard Diaz. Richard Diaz, and I'm a global strategist with ice cap asset management, which is a portfolio manager that's based out of Halifax, but we have clients all over Canada and the world. I'm also a co-host of the Looney Hour podcast, which is Canada's best and brightest podcast. So Looney Hour fans, all right.

That's probably where you guys know me from, I'd say, and I'm pretty popular with Twitter, and the libs don't like me, so here you go, Joe. Yes. Hi, my name is Joseph Barbuda. You might know me as the economic long wave. It's just a theory that Nikolai-Kondrit of discovered in 1930s and it was kind of dismissed because of central planning, but those of us who have studied macro cycles know that this is coming to an end and it's going to end very badly.

And the strategy is how do we survive economic winter, which we're going to cover. When I discovered this, I felt like, I've got to share this with people because we can try to save as many people as possible. Houses tie into Bitcoin, we are moving into a decentralized wave. Condraeative study three waves. We had a fourth wave, which is centralized governments, and now we're moved to a decentralized wave. And the good news is Bitcoin is part of that technological revolution. Regiak, go ahead, brother. My name is Rajat.

I guess I'm known as somebody who just posts on YouTube, social media. I used to work at TD Bank as a fixed income analyst. I did that for a few years. It took me a little bit of time to really figure out what Bitcoin is. But once I really got it, once it clicked, I don't think you can go back. Once you see it, you can't unsee it. Love it. I love it. Okay, so let's talk a bit about the economic cycles.

They're all sort of colliding here. I think that's the theory. anyway, that these long-wave cyclical, I guess you could call them business cycles or social cycles, they all seem to be ending at the same time for the first time in a long time, which is a good name for a punk band, ending at the first time for a long time together, or whatever I said. Is this something that you think, I mean, Rich, from your point of view, you're working in macro. Are people talking about this in your field at all? Is this something that comes up when you're giving advice, doing research?

or are we just like out to lunch here? I mean, so I come from a sort of much more boring world than I would say in the more high-paced, technologically sophisticated world of Bitcoin. I come at it from an investment perspective. We manage money for people in a rather conservative and might even call it boring way. And these people are usually involved with banks

and other asset management businesses that, you know, when they do well, they speak to a skill set, and when markets go down, they say, oh, no one could have ever seen this coming. And so that's something that drives us totally crazy, because we do sort of see it coming. We are at the end of, I don't call it the long way, but I'm focused on sort of long-term interest rates, and we were at the end of a 40, 45-year cycle, which peaked in 1982, bottomed in 2008, was delayed because of central bank intervention, which is one of the problems with 1929. And so, but your short answer to your question is, no, people don't, in our world, whether you're, I'm not going to mention the big banks in Canada, certainly, you guys know them, they're not at all interested. They're not only not talking about it. They're not interested in that view because that's not that way that they're incentivized. And so for our clients, we really try to focus on risk and what to avoid. And right now, for example, bonds are something that we're really worried about, government bonds, and then the knock-on effects to others.

types of credit products in that stack. So, yeah, that's the way we sort of see it. Just a little bit of background. Is that picture? Good. Okay. I managed capital for 23 years, and being bearish is not very popular in the industry, so it was always a clash I had. I think I've told some people the story is I started the

investment business at the peak of the 1989 real estate bubble. So that was my first experience with money, actually losing a lot. And from that, it made me curious about understanding bubbles. And now, with the help with AI, have developed a program where basically you can spot every bubble that's in exist. And right now, AI is in a massive bubble. Okay, I want to, this chart is from, and the insight came from the next economic disaster. The long wave is a theory. Ray Dalio has a big debt crisis. This is a great book I'd recommend. There's so many philosophies on this. I just love the long way because it's a social cycle. If you look at this chart, I overlaid it with

the U.S. history, and it's a private debt to GDP. Now, if you read the next economic disaster, he says that about Richard Vague, who wrote the book, at anything above 150%, you're asking for a banking crisis, credit crisis, economic crisis. Peter Kondo, a great value manager, said, that, you know, evaluations, and I would say private debt is a measurement of risk, not timing. It doesn't tell you when it's going to happen. Now, you can see in 29 that occurred at 154% private debt to GDP. Japan broke that record in 1991, about 217%, I believe, or 213. And Canada, you can see in 220 during COVID, 245%.

That's dropped down to 221. Okay, what does it tell you? It doesn't tell you when the banking crisis is coming. We believe in the next couple of years we're probably headed for one, but it does tell you that we have the red warning size. It's like a hurricane, right? This is a satellite view. This is what's coming toward Canada.

And we're going to have a massive banking crisis. Will it start next year? I think so. But I think in the next two years of the Finley's going to happen. You can see now we have one of the greatest private debt bubbles in history. so it's inevitable and what that means we're going to see maybe one or two Canadian banks go under

now people say well that's impossible I said well that's fine but you got to remember during the 2008 crisis where Canada sailed through and just went on to a bigger bubble half of their banks do no longer exist here in 2025

to suggest that one bank won't go under is ludicrous because our private debt is such a level one last point that blow off in 2020-21 came from the lowest interest rates in history

there is no precedent for an asset bubble blowing off from the zero bound and that now as you know is unwinding in Toronto or in Ontario and BC and here in Quebec I understand the people say what's going on

you're hitting you high still but you're going off into another asset bubble I'll stop there you worked for the bank What do you think? So I used to work at a bank and there was no talk of this, not at all. People were completely unaware. I think most people have no idea that something like this is happening. I don't think they see the significance of it.

Just the impact over the long term is going to be huge, but like I said, most people have no idea. Most people are just trying to get through their day to day, right? And if they're struggling to pay for shelter and if they're struggling to pay for just food, then I don't think. they're paying attention to this at all. They're more struggling to get to the end of the week than they are to get to the end of the decade.

And that's something that's really hurting a lot of people. But like we see in this chart here, things are getting worse. There's more debt. It's almost like playing a game of monopoly where the banker just can't lose, right? And it's just getting worse than worse over time. It'll continue to get worse. I think that the game has to be reset, and that's what Bitcoin does. So it's interesting.

You look at this chart and, you know, you have to ask. is that your debt to GDP, or you're just happy to see me, right? That spike at 245. With this number, and you mentioned a banking crisis, are we an agreement on the stage that we're in for like a banking crisis? No, no? Okay, tell me why. Well, I mean, the problem with this chart, sorry, is that it's not up to date. And so there's a couple of data points that are missing.

You'll see it. It says Q4 2020. And so the reason I don't think we're necessarily in for a banking crisis is because the central banks won't allow it. And doesn't mean it won't be in for a crisis. It just means it'll be that crisis bubble will just shift to a different part of the capital curve. And so what we're seeing is, to me,

we're seeing a little couple of signs really quickly. One is inflation will be allowed to run hot. So three will be the new two. They won't say it, of course. People will deny it, a conspiracy theory, all this bullshit. But we're seeing it already. The UK cut interest rates,

inflation's at 4%. Canada cut interest rate and core inflation is 3%. The U.S. is cutting interest rates, inflation's at 3 and whatever. And so that's what they're trying to do is inflate nominal GDP in order to bring this number down, the debt to GDP number down. And then the other thing is the people who are running the system, whether it's Tiff McLem or what, or Mark Carney's of the world, have every incentive to keep the party going.

And so they will not go quietly into this good night, and that's why you see these massive budget deficits coming out, which again are inflationary. And so I think that there's going to be quite a bit more drag to the story than just a out-and-out banking crisis. So maybe, Joe, I'll go back to you. It's interesting to talk about inflation and stuff, and obviously the banks around the world have chosen to run it hot.

There's a trial balloon in Canada. You may have seen, I think, the FT, or one of the Canadian publications, that the Bank of Canada is going to ignore core inflation as a mechanism for choosing interest rates. Completely backwards, bad shit crazy. but to Rich's point, it allows for a run-it-hot policy that's backed by data. If you just ignore the data you don't like, which is nice. Joe, talk about, you know, what you think about Rich's thoughts there.

Is a banking crisis necessarily, like one huge implosion, or, like you said, delayed and slow grind to, you know, surf them? Oblivion. Yeah, it is delayed because the banking index just hit a new high, so is the TSX. And I had to look at the data and know what the reasons are. And you can see the rest of Canada of real estate prices, even

here in Quebec are here in New High. So until the rest of Canada rolls over. But saying that, Ontario and B.C. are exhibiting classic signs of a deflationary bust in that not only are the speculators gone from the party,

you see the banks retracing lending. So when you see a deflationary bus, it's a psychological phenomenon where the investors pull back and so do the banks. I mean, it's this classic joke, if you heard, the banks lend you an umbrella when it starts to rain, they take it back, right? They retrench. So this is a psychological aspect, as we call it, economic winter. The psychology changes in mass from the top to the bottom.

The public is not interested in leveraging anymore. The banks aren't interested in lending. Central authority said, oops, we made a mistake, and we need to change the economy. I will tell you that the resets will continue into 2026. So I believe the banking crisis is at least six months away. And how would you know, if I'm wrong or right, watch the banking stocks. And what's great about the stock market is it always will telegraph a story. Somebody knows inside what's going on with the banks in trouble. You'll see a bank sell off of 5% move in a day.

I think that's delayed for our next conference, and I'm sure by 2007 we'll be talking about the crisis in Canada. We'll let nature follow its historical pattern. What I love about AI, by the way, is AI has its weakness, but I'm inputting everything in because I have enormous amount of data that I use from my book and I had to call it back. I give AI all the information, and it spits out a pattern recognition of exactly what's happened in the past. And to suggest that Canada is not going to go through a crisis, I'm talking about the ignorance of the public who isn't aware.

They haven't studied history. You can't prevent social cycles from following its natural path, and that's what the theory of the long wave is. Yeah, I think I agree with what you guys are saying here. the banks are definitely going to struggle over the next few years. If there's a credit crunch, I don't know how long that'll take. It's much harder for people to take on loans because interest rates have gone up. People are, like I said, struggling to just make ends meet. And they're not really thinking about buying a house, right?

Which young person is thinking of buying a house right now? I think there's a stat for the, again, this is for the U.S. I'm more focused on the U.S., but in the U.S. there's more people who are over 70 buying houses than people who are 35 and under, which is just insane. Who's planning to lend to somebody who's 70 or older when there's a 30-year mortgage? How are you going to pay that back?

How many people even live to 100? It's insane. It doesn't really make any sense. And I think, like you guys said, this thing is going to fall apart, and I don't know how long it'll take. It could take six months. It could take a year.

But eventually, like I said, everything needs to be reset. This thing needs to, it's a bubble that needs to be, I guess, slowly inflated. Otherwise, there's going to be a lot of pain. I don't know what the pain looks like. Sometimes when I think about what a bubble, like the damage a bubble could do on deflation or popping, we saw, at least for people my age, like I was born in 87, for people my age, we saw it in 2008, and that's basically the only bubble I know. And, you know, I was barely sentient, you know, at that time,

about the economy. Why are you laughing? Why are you laughing? You weren't having vodka sodas at the bar when you were 20 years old? Okay. Anyway, very rude of the crowd there. That's the only bubble I know. And the damage there was significant and the response was swift and, you know, proportionate to the monetary supply at the time enormous. It sounds to me like everyone here thinks the response to the next bubble will need to be enormous, we'll need to be swift, but will be basically a neutered version of 08, because maybe there's a social aspect, people already understand that this thing is over, or maybe there's another fiscal response that just doesn't have the teeth, won't fix the problem. How does

it look? Are you talking about Canada? Yeah. I think that's a, it's a fair comparable, but I think there's some really important nuances in Canada. Canada does, yes, Canada has a housing debt problem, but unlike in the U.S., there was no funny business on the mortgage-backed securities and all those esoteric things. So that leverage component, the quadrupling of the leverage and all that squeeze just doesn't exist here. I think Canada is going through a crisis, but a completely different crisis. I think Canada is going through a productivity emergency. People in Looney Hour know I've talked about this all the time. And it's a function of the fact that we traded investment in real things, knock on wood, and capital

goods for a bubble in credit and population growth. And those two things, as Joseph has illustrated, and I've illustrated, are now popping. So nobody wants mass immigration. No one wanted mass immigration, but now we're all paying attention to it. And then the banks are pulling back as a function of the charts like we're seeing here. Unfortunately, there's nothing to pick us up on the bottom end, which is capital goods investment in things that are not buildings. like natural resources, et cetera, et cetera. And so if you do not have any CAPEX in productive assets, that productivity growth will continue to fall,

coupled with the population growth. There's zero support for GDP, which might bring forward a crisis in the banking sector against what I've said. But, yeah, Canada, we have lived on basically as fake economy for a long time, and we have leadership that continues to not reckon with the reality. That's sort of my view.

Well, here's one thing that I have a concern when the crisis does arrive. And this is what AI has spit it out when I've uploaded all the data I have gone back 500 years. You need a private credit bubble, which will lead to a banking crisis,

and because of Canada's situation, it's going to lead to a fiscal crisis, which is going to lead to a currency crisis. So the timing will see this over the next four years. Here's Here's the difference. In the 1920s, the last private debt bubble in North America, governments were paying down debt and they were running surpluses. When the bubble collapsed during the Great Depression, the private debt bubble, as you can see, there were the U.S. and also in Canada,

governments stepped in, and this is when Keynesian economics became very popular. There were a lot of philosophies, included in the Kandrativ cycle, and Schumpeterter's creative destruction. And they were against this, because they knew exactly what's happening today. Governments will run perpetual deficits. Who cares? They're interested in being reelected. So when the crisis comes, we already hit the zero bound, so you cannot re-inflate the bubble,

and then governments are already running massive deficits. So they'll be forced. They will bail out the banks, bail out as many economies. Then they're going to run huge surpluses, which then the bond market's going to say, well, how are you going to pay us back? Now, we have resources, but I'm going to tell you something that really is scary. You're probably all ignorant of. During the crisis in Greece, in 2008, Canada and Greece's five-year yields were about the same, about three, four percent. And over the next four years in Greece, I don't know if everybody knows this story, but as they ran into their fiscal crisis,

and I'm worried about not this high of interest rates, but could interest rates hit 10%, the five-year yield in Greece, and you know most mortgages in Canada are tied to the five-year-year-old, right, went from 5 to 63%. Can you imagine if interest rates just went to 10% in Canada? it would totally collapse the real estate market. And that's simply because the bond market said, how you're going to pay us back. Now, I'm not suggesting we're going to go to 60, 50, 40. I don't know.

Nobody knows. But I would say that the bond market in the U.S. in Canada could shoot up to 10%. Historically, in asset bubbles when they collapse, real interest rates rise 12%. So either that's going to be a combination of an inflationary policy or deflation collapse, because once deflation takes hold, you can't lower interest rates below zero, so we'll get real rates.

This is historically. I mean, again, I have data going back to 1,500, and I've looked at every crisis, and I've uploaded it, and with AI, it just is able to warn historically, probability, where we're headed. So that's my concern. Once the crisis hits within two years, what is the government going to do? We know what they're going to do, but it puts them in a fiscal situation, a difficult situation, which will impact a real estate market where most of the leverage is. I think most people are not expecting that this is going to happen.

I think by the time people see this happening, it's going to be too late, and there's going to be no way to reverse course. It's at that point, like these guys are saying, the real estate market will fall apart. we're going to see a lot of a lot less capital expenditure from companies people aren't going to be buying as many investments they're not going to be buying as many houses of course the prices of everything have to go down

and the current financial system can't handle that it just can't handle that because so much of it is purely based on the value of real estate like think about all the banks that are giving out mortgages they're giving out all this private lending to to individuals to buy as many houses as they can, and they're relying on house prices going up. If house prices don't go up, the entire thing just falls apart. How does that even work? And even

right now, I'm sure that they're struggling because people are scared. People have this, they have this emotionally reaction, emotional reaction to prices. When they see that prices are coming down, they don't want to buy. And then when they see, when they see prices going up, they want to buy as much as they can. So right now we're in that phase where prices are coming down and people are so fearful, and they're thinking, oh, I'm going to wait till next year. I'm going to wait until the following year. I'm going to wait to the following year after that to buy a house

because why would I buy it now if I know that it's going to drop 10, 15, 20% in the next few years? And for houses, because houses are so overpriced and just it's a massive bubble, especially in Canada. And I guess it wasn't cleared in 2008, like in the US. So prices have just compounded and compounded and grown like insane. So you have condos that are selling for,

like a million dollars when they're just like shoeboxes and why would anybody really want to pay for that today if they know that the price is going to go down over time so it's it's a it's this I think it's this this deflationary spiral that we won't be able to to print our way out of yeah can I can I add to a quick sure this is what I love about the theory okay I'm going to say the long way it's the theory I don't believe it's a theory to me I've been studied for 30 well 23 years, but 33 years in the market, and it segments each part of the seasons. There's four seasons in the long way. We're in autumn. We're coming to an autumn. We just met today. We talked about it before, and we have different backgrounds, but we have the same kind of view about this

credit bubbles coming to an end. It came from a great credit firm, I think, gave you some great insight. That's very unique. And why you don't get it at the banks, I want to say this very quickly because when I started the investment business, if you want to buy a mutual fund, banks thought it was risky. They weren't even in the business. So you have this ignorant crowd, and I mean ignorant crowd of 55 and under who don't have any historical knowledge. They're just pushing our product. And now they're major players. So that's the biggest risk. Most of my clients are actually in the investment business, financial advisors are looking for independent research because I'm saying all the models of the past aren't going to work. So independent

firms, like what we would represent, are the ones that are going to give you the answers and the truth. But you cannot get economic winter from condrative cycle without economic autumn. Economic autumn and Richard has a

different way of saying it, and this is I think why we kind of see the same thing, is we had the falling of interest rates and the financialization of the Canadian economy. What did the bank sell? Credit. What what happened for 40 years? It's product fell. So people don't look at how much debt they were taking.

They were looking at what's my cash flow per month? And now I could take on a 500,000 loan mortgage. I could take an 800,000 because what's my cash flow? But nobody thought that that possibly could flip and interest rates to start to move higher. And this is the stress we're seeing in Canada. So that's why I believe economic winter, a transitionary period is inevitable, 100%. because you had all the precursors for a private credit collapse, what Japan went through in the 90s, and what North America and Europe went through the 1930s? The problem is that we underestimate the degree to which a soldier that does not know the war is over will fight.

And I'm always reminded of, I love these, well, it's kind of a screwed up story, but you know these Japanese soldiers on an island in the Philippines, and 20 years later he's still fighting to defend the emperor, etc. And so for all the worries about the housing market, there are going to be people who will hold on dear life. And for all the worries about the credit market, there's going to be governments and central bankers who are going to fight like hell to protect the system

that's enriched them, their friends, and has protected their class. And the other thing I would just caution everybody is when we can't think of the housing market in Canada as a homogenous blob, because in Vancouver, yes, prices to median income are 10x, but in Quebec City they're not. And they're not in, you know, in part in Camloops or what, or Red Deer, you know, shout out to Red Deer, Alberta. But you know what I mean?

So, and I think we just need to be very careful about lumping in all these things. And the other thing was just quickly I'll say, I know we're running out of time is that, um, the Canada is very, very wealthy. And it should be one of the richest countries in the world. And the only reason we're not is because of an ideology that is Malthusian in nature and that has basically given up on the future. And if you have a situation where you have a government, a changing philosophy at the top that rejects the Malthusian managed the decline idea that Canadians should be poor and apologetic for where we live and what we do and how we do it, all of this stuff that we are almost convinced will happen may be moot, because if you attract foreign capital, if you invest in corporate

businesses, if you cut taxes, cut regulation, and allow Canada to flourish the way it should, you might have what we are, what is the Holy Grail, which is productivity growth and sustained economic growth, which might subvert all these worries that we have. So anyway, just to give more positive. That's a great way to finish. Okay, thanks guys. Great. Great conversation. We'll, I guess, see you at the bar tonight, maybe. Okay. Thanks, everyone. During the hockey game? Oh, sure, yeah, maybe. Thanks, everybody. Thanks. Thank you.