The Pomp Podcast - #1481 Anthony & Polina Pompliano | Bitcoin & Economy Will EXPLODE From Trump Tariffs?!

Episode Date: February 4, 2025

Polina Pompliano, Author of ‘Hidden Genius’ and Founder of The Profile, and Anthony Pompliano, Author of ‘How To Live An Extraordinary Life’ and CEO of Professional Capital Management, discuss tariffs, why so many people misunderstand how they work, 2018 tariff impact, bitcoin, volatility, brand new sovereign wealth fund, and how that will change the way the government acts.  ======================= Polina recently released a brand new business profile on Anthony Scaramucci. Read it here ======================= Ledger has been trusted for 10 years to secure 20% of the world’s digital assets. Their latest devices, Ledger Stax and Ledger Flex, feature secure touchscreens for safer, easier crypto management. Go to ledgerpomp.com to take control of your digital future ======================= The future is being built today and the future of currency isn’t dollars, euros, pounds, or yen, it’s crypto. And Gemini thinks that’s a great thing. Because a future where money is decentralized, inclusive, and globally accessible, that’s a future that we are anxious to be a part of. Go where dollars won’t. With Gemini. ======================= This episode is brought to you by Bitdeer (NASDAQ: BTDR), a global leader in Bitcoin mining and high-performance computing for AI. Led by a seasoned management team, Bitdeer is driving innovation with its proprietary SEALMINER ASICs for Bitcoin mining and has a massive 2.5 GW power portfolio across three continents. Learn more about Bitdeer at www.bitdeer.com ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's going on, guys? Today, we got a great conversation with Polina Pompliano. She is the founder of The Profile, and she recently released a brand new business profile

on Anthony Scaramucci, which we talk about at the end. But before we get to that, Polina and I talk about the tariffs that were levied by President Trump. We talk about why so many people actually misunderstand how tariffs work. We explain the 2018 tariff experiment and what happened to consumer prices and why the American population and American manufacturers We're actually better off after the tariffs. On top of that, we talk about Bitcoin, why the price has been changing so much and where we think Bitcoin will go in 2025. And then we even talk about the brand new sovereign wealth fund and how that is going

to change the way that the government acts. This conversation is packed with unique ideas and things that you probably won't hear anywhere else. I'd love for feedback after you get done listening. So jump on Twitter or X and let me know what you agreed with, what you disagree with, and how we can make this entire show better. Here's my latest conversation with Polina Popliano. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast

are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. Today's episode is brought to you by Ledger. They're celebrating 10 years as the most trusted name in crypto security with over 7 million users and 20 of the world's digital assets secured ledger continues to lead the way in protecting your crypto and digital ownership their latest devices ledger stacks and ledger flex feature the world's first secure touchscreens making

managing your assets easier and safer than ever plus the new ledger security key app offers a secure alternative to traditional passwords enhancing your digital security go to ledger ledgerpomp.com to take control of your digital future. That's ledgerpomp.com. L-E-D-G-E-R pomp.com. Today's episode is brought to you by Gemini. The future is being built today, and the future of currency isn't dollars, euros, pounds, or yen. It's crypto. And Gemini thinks that's a great thing because a future where money is decentralized, inclusive, and globally accessible, that's a future that we are anxious to be a part of. Gemini teamed up with futurists, technologists and designers like award-winning artist matt griffin known for his illustrations

for dune to craft a vision of the future with crypto at its core the creative theme go where dollars won't emphasizes exploration growth and the crypto market's limitless potential whether it's going on that martian safari to capture an unforgettable photo of a herd of woolly mammoths grazing the red planet or using bitcoin to pay for your lift pass to go strata skiing down the mountain peak of a breathtaking comet whatever adventures we'll be living one thing is for sure. In a future this fantastic, the limits of traditional currency simply cannot keep up. Financial innovation will usher in this new frontier. And so go where dollars won't with Gemini. Go check them out at Gemini.com slash go where dollars won't. Again, go check it out at

Gemini.com slash go where dollars won't. Today's episode is brought to you by NASDAQ listed BitDeer. They trade under the stock ticker BTDR. They're led by a seasoned management team. Bitdeer is a global leader in Bitcoin mining and high-performance computing for artificial intelligence, and they are backed by technological innovation and a massive 2.5 gigawatt global power portfolio. Recently, Bitdeer launched its own Bitcoin mining ASICs named the Seal Miner to target what Wall Street analysts project to be a multi-billion dollar annual market. Their proprietary Seal Miner ASICs are redefining efficiency and performance,

and they are backed by the industry's most advanced chip roadmap with two more groundbreaking models set to launch in 2025. To learn more about Bitdeer's cutting edge technology and business, visit their website at bitdeer.com. That's B-I-T-D-E-E-R.com. Go check out Bitdeer today. All right, Plin, what's the first topic? All right. So Trump hit Mexico and Canada with 25% tariffs, and that had implications for Bitcoin. Upon the news of the tariffs, Bitcoin kind of went down. It went down a lot. What happened? Well, you got to remember two things, right? Bitcoin is the most sensitive macro asset. So whenever there is uncertainty, whenever there is change that happens, Bitcoin is going to react the most. Why? So we'll go back for a second to

when Iran launched 300 missiles at Israel. And if you remember, it happened on a Saturday. So immediately, the stock market's not open. Bitcoin is open. So right there, structurally, Bitcoin is more likely to see movement and the stock market's obviously frozen in time like a dinosaur.

And so that's first. This also happened over a weekend. So the announcement of the tariffs happens on the weekend, stock market's closed, Bitcoin is open. The second thing is whenever there is uncertainty and or fear, which took hold, This was like a wildfire of fear that spread throughout investors' minds because they're all sheep. And so naturally what happens is they're ready to sell, sell, sell.

Because what they think happens is that tariffs are going to be highly inflationary. If it is inflationary, you're going to get this stronger dollar against other assets around the world. If that occurs, then all of a sudden asset prices will sell off. And so I'm going to get to the exit door before everybody else. Monday morning is going to open. Let me put my sell orders in. you saw S&P futures and others were, you know, crashing. Obviously, stock market opens like a bloodbath. Mainstream media is going nuts. But Bitcoin didn't have to wait for Monday morning.

Bitcoin could go down during the weekend. And so that's what we saw. Now, what's interesting about this is we go back to 2017 or we go back to 2020 and 2021. During these bull markets where Bitcoin skyrockets, what we have seen is that there are usually three, five, six, maybe seven different corrections on the way up. Those corrections are usually 30% or more. So in 2017, if I remember the data correctly, I think Bitcoin started the year at around $1,000. It went to $20,000. But there was six different times during the year where Bitcoin crashed 30% or more. So was highly volatile. So you get those crashes, but you ended up 20x for the year. Same thing in 2020 and 2021. There was multiple times where we had these 30 plus percent corrections. If you actually

look at what happened with Bitcoin, we went from called 105,000 to like 92,000, which everyone's like, oh my God, that's so crazy, whatever. But it's actually not that deep. Instead, the way to look at the crash of Bitcoin was tariffs got announced, people freaked out, they sold Bitcoin $4. When they did that, there was a ton of people sitting there ready to buy Bitcoin. There was this really strong bid kind of in the $90,000 to $92,000 range. And that didn't let Bitcoin fall further than normally it would have done. Sorry, just really quick, but it's really hard for me to take it seriously when people say, oh, Bitcoin, you know, hit a three week low of $91,000. It's like, it's $91,000. Do you remember when Bitcoin was two? No, they don't. They don't. And the fact

you do means that you're probably a better investor than most of the people who are yelling and screaming during these times. But I joke all the time and I say, we used to dream of the headline, Bitcoin is crashing to 100K. Just think of how crazy that is. And so I do think that that is kind of a core component. The other thing that you just said is the three-week low. I tweeted at one point and I said, Bitcoin crashing to price is not seen since two weeks ago. And so people are like, wait, in the middle of January, the price was like $93,000, $94,000. At the beginning of February, it's crashing back there. People are freaking out. It goes to show that emotional control and emotional discipline is incredibly important when it comes to these kind of

situations. But I got to say, I think it's easier to have emotional control and discipline when you've been following this asset since 2016, 2017, and you've seen all the iterations of the price versus somebody who just got into Bitcoin a month ago? Well, I think there's three things. One is the experience with the volatility for sure helps to your point. The longer that you are exposed to this type of volatility, the more desensitized you are to it, right?

A swing of $10,000 isn't really that big of a deal. The second thing is if you are sitting in what they call spot Bitcoin, meaning that you don't have leverage, you're not trading on margin, you haven't posted your collateral and borrowed capital, it's much easier, right? you're not going to get liquidated. There's not as many kind of pressures to you to make short

term decisions. And the third thing and probably one that's underrated is people who have been buying Bitcoin for a long time, their cost basis is lower. So if you come in and the first day you buy Bitcoin is at one hundred and six thousand dollars and then it drops to ninety five. Oh, my God, I'm losing my money. But if you have been dollar cost averaging into Bitcoin for years, all of a sudden you're like, hey, it went down. It just means that I have less profits than I would have otherwise had, but your principle isn't necessarily at risk. And so, I do think that there are a bunch of these kind of components that lead up to it. But let's go back to the tariffs for a second. You know, tariffs and people who follow me on Twitter probably saw me,

you know, really hammering on this all weekend long. Oh, we saw. And the reason why I think it's so important is because when something like this gets announced, the mainstream narrative that starts is basically that becomes you know the gospel yeah that becomes the gospel unless there are a few people who are willing to stake their reputation and willing to take the time and energy to push back on that narrative over and over and over again and try to explain to people why the mainstream narrative is and just really quickly why was it important for you to push back so hard on this issue this is gives me the exact same vibe as uh the virus

didn't come from a lab the same vibe of inflation is going to be transitory inflation was yeah that that was crazy they sat up there and they said inflation is transitory and whether they actually believed it or not doesn't matter they said that and so what you have here is you have uh the argument is this tariffs are a bad thing and the reason why tariffs are bad is because the free market is better. I agree with that. I agree that the free market is better. But the myth is we don't have a free market. How do you call trade between the United States and Canada? Free trade. It's not free trade. They are levying taxes using tariffs against us. If you go and you look at the list of tariffs from Canada to the United States, they're putting tariffs of 200, 300 percent on

food and other products that the United States is producing and sending to Canada. On top of that, There are certain things that happen. Let's take lumber as an example. In America, most people don't know this. They think that we need the Canadian wood, right? They're like, oh, we need this soft lumber from Canada in order to build homes, et cetera. The United States is the largest producer

of lumber in the world. We don't need lumber from anybody else. The reason why people buy Canadian lumber over American lumber is because the Canadian government is intervening in the market and they are subsidizing the cost of producing that lumber. And therefore, the Canadian producers of lumber can now sell it for a lower price than the Americans can

because our government isn't subsidizing the American lumber production. So now all of a sudden, what you have is you have the United States government who's sitting there and the critics will say, let the free market figure it out. It's not a free market. The government is intervening.

So the US government has a choice. We can either continue to allow the Canadian government to essentially take advantage of the American lumber producers or the U.S. government can match the intervention and try to level the playing field. And by introducing a tariff, you say, hey, that subsidy that you're providing that is giving you an unfair advantage in the market because your producers actually couldn't compete with the American producer if it wasn't subsidized. We're just going to remove that competitive advantage. We're going to level the playing field. And so we're going to put a tariff to negate the subsidy that you have. And so this whole idea of tariffs is something that, again, let's go back in history for a second. We know that tariffs is how America was built.

And most people, when they see something like tariffs, first of all, there's a whole collection of people who just say Trump did something that's bad, right? I think people who have been watching this long enough know I don't care what side does what, right? I'm an independent. I think that Trump does some good things. I think he does some absolutely incredibly insane things. I think that Joe Biden actually had some positive things. If you look at stock market went up, all this stuff. I also think that he was asleep for half his presidency, right? And so there's pros and cons to both sides of the aisle. But when you go and you look at tariffs, how many people heard, okay, tariffs are going to be implemented. And they went and they actually

researched and learned, talked to people. The sentiment online, the second anybody said tariff, the sentiment was, oh, Trump's going to start a trade war. It's like, is he or is this a negotiating tactic? Well, his point was the trade war is already underway. I'm just now going to fight back. I think that's the big thing, right, is and again, we go back to, you know, let's talk about another big myth of finance. People will always hear me say there is no efficient market. So the efficient market hypothesis that most of Wall Street believes is not true. There is no such thing as intrinsic value, but here's the third one that people, they really don't like, but it's true. Globalization actually hurt American consumers

more than people realize. Now, why do I say that? If we look at when did globalization really kick off? It started kind of around the thirties and forties, but really kicked into high gear in the 50s and beyond. It's like 1948, 1950 to today. That was the era of globalization, free trade. We are going to go. And the whole idea of globalization is the following. The United States is really good at making X.

Let's just say the United States is really good at making lumber, the largest lumber producer in the world. Another country is really good at making avocados. And so, why don't we specialize in making the lumber, you specialize in making the avocados, and then we'll trade. That, in theory, sounds really good. But here's the problem of where this went awry, is that look today. The millennial generation is the first generation in centuries that the millennials are worse off than their parents.

The whole story of America is that the children were always better off than the parents. There was progress. There was acceleration. There was kind of prosperity that continued. When you look at where did that happen, you can look at the boomer generation handed the millennials the following. A bankrupt Social Security program, a devalued dollar, an exploding national debt, an unsecure border, massive national security issues, the highest home affordability or highest unaffordability in homes in more than 40 years, and wage growth that hasn't kept up with inflation. and they also completely hollowed out so much of the American manufacturing

and the American jobs for the average American family. So they do all of this in pursuit of this globalization. And really the pandemic exposed this in a way that I think people didn't appreciate at the time. What happened during the pandemic? We locked everyone inside their homes, let alone their countries. And the United States got exposed

because we ran around the world looking for the lowest cost products. But the trade-off was we went after efficiency and low cost at the expense of national security and resilience. And so what was the problem? We went and said, we need all these products and services. We can't do them ourselves. And so that has led to a renaissance of American manufacturing.

Now I want to get into the 2018 tariffs because I think that's really important. We don't have to go back to the 1700s and 1800s to understand tariffs. Although, for those that don't know, the second bill that George Washington, the first American president ever signed, was to implement a blanket 5% tariff on all imports coming into the United States. The reason he did that was because the government had no revenue otherwise, there was no income tax, and he wanted to protect the American industries from foreign competition so that they could be shielded in a more conducive environment so that they could grow and become large. That's what happened. And so we created something called the U.S. Revenue Cutter Service, which now is known as the Coast Guard. The origin of the Coast Guard was to patrol around the country and collect the 5% import tax.

Yeah. So that is how we built America. The entire industrial revolution is the benefit of the tariffs. We protected the American industry so that they could continue to grow. And now let me interject and say that it is more complex than simply just the tariffs, right? An economy is complex. Other elements and things are at play. So we can't just credit or discredit the tariffs in their role. The tariffs were incredibly important because the U.S. government had no other way to protect the American industry and drive revenue. It was over 90% of the government revenue. So you can say, hey, were there other things? Sure. But 90% of the government revenue came from tariffs, right?

And so from 1850 until 1950, we went from more than 90% of all government revenue being tariffs down to nearly zero. At the same time that tariff revenue was falling off of a cliff, we implemented a federal income tax. That federal income tax started around 1913 and then exploded higher. And at first it was, hey, let's do a 1% income tax. Today, there are people who pay more than 50% of their wages to the government in federal income tax. But let me ask you this. Why a president who implements tariffs would be wildly more popular than a president who taxes his own people for revenue, right? So why did the tariffs, why? Because people don't even understand how this works. When you understand how it works,

you realize, wait a second. That's true. But why did the tariff revenue go down so much? because two reasons. One is it's easier to tax your own people than it is to tax foreign countries. So the whole model previously was let's tax foreign countries and foreign corporations to benefit the American people.

It became let's actually tax the American people. And now we just send aid all around the world. And now we're just kind of like a global player, power player. I would argue that it's even worse than that. We are just taking the money from the American taxpayers and we're sending it all over the world. If you go and you look,

I mean, President Zelensky in Ukraine just said that I believe that they got sent, it was $150 or $175 billion. He says that they only received $55 billion. He doesn't know where the rest of the money went. A hundred billion dollars of American taxpayer funds. Right, right. Went missing.

Yeah. And everyone is just like, oh, I wonder why our national debt is going up. It's crazy. Guys, yeah, go ahead. Well, so if you look at what Trump did in 2018, And again, I should caveat this with, before the last couple of weeks, I just looked at it and I said, hey, we have a free market. Let the free market play out.

The tariffs don't make a lot of sense, right? Kind of the mainstream belief. That's what I believed. Now, after spending an inordinate, I haven't spent this much time. Guys, inordinate. We were on vacation and he was doing tariffs. I don't do vacation. He was talking tariffs, doing tariffs.

Somebody was on vacation. It was locked in on tariffs. Go on. I just want to call out real quick that you did call vacation and I was working, but okay. Oh, yeah, you were. Well, it was my vacation because I tagged along. Of course. There we go.

All right. So if you think about what happened in 2018, there are two levers to this story. The first is in 2017, Trump dropped the federal income tax rate from 39.6% to 37%. He pulled down federal income tax. Well, if you pull down federal income tax, you got to implement and catch up with the revenue somewhere else. And so he implemented a number of different tariffs. He implemented tariffs on steel, on washing machines, and on solar panels.

And when he did that, there was a bunch of things that we learned about what I call the tariff experiment. Again, when I started to look at this data, it blew me away. Everything that I had believed about tariffs before, I no longer believe. And so here's what happened in these situations. When he implemented the tariffs on solar panels, we saw solar panel prices continue to drop. Now, there was a decade long structural deflationary element. The technology was getting better and the prices were going down. As that occurred, even though we implemented tariffs on Chinese solar panels, the price of

solar panels continued to drop. The second thing is that American manufacturing of solar panels continued to increase. So the whole idea was we were punishing the use of solar panels produced elsewhere and we were incentivizing the production of solar panels in the United States. And that's exactly what happened. On top of that, consumer demand for solar panels nearly 10x from 2018 until 2024. So what that shows is the tariffs did not actually change anything structurally in the market. What it instead did is it allowed the U.S. government to add protections to American industry. It allowed the U.S. government to collect more revenue from these Chinese manufacturers that were putting these solar panels in the United States and consumers ended up better off.

They ended up with lower prices and they ended up with 10 times as much demand for this. And so a lot of people look at that and they'll say, OK, but solar panels had this structural advantage. It had the tailwind of demand. It had this deflationary nature already in place. That's not a good example. OK, let's look at washer machines. With washer machines, what we saw was that we put in the tariffs in place for foreign made washing machines. One of the first things that happened is that washing machine prices jumped about 12%. Now, the tariff was about 25% and the washing machines jumped about 12%. So people will point to that and say, oh my God, look, the prices jumped.

True. For the first three months. And then the washing machine prices started to fall substantially. We implemented that tariff in March of 2018. by the end of 2019, the price of a washing machine in the United States was less than the price before the tariffs. So if you think about that, what actually happened is the tariffs, again, we were collecting more revenue from foreign made washing machines. Now the consumer after 18 months actually has lower prices than they did before the tariff. And then two different

Korean manufacturers of washing machines came into the United States. They built American manufacturing plants and they created more than 2000 jobs. So if you look again at the tariffs on washing machines, what we saw was that prices ultimately went down. We saw that American jobs were created. American manufacturing had a resurgence and the U.S. government was able to collect more revenue because they were able to tax the people who are making washing machines outside the United States and making it here. And I just want to highlight for the people when we came back from my vacation at which Anthony worked, we came back, I was doing laundry and I opened the thing and the washing machine says manufactured in Charlotte, North Carolina.

And I was like, hey, look, anyway, the tariff conversation has bled into every aspect of my life, but go on. So the third example is U.S. steel. Now U.S. steel is fascinating because we put a tariff on the steel. Guess what happened? Before the tariff was levied in March of 2018, the price of U.S. steel was already rapidly increasing. It peaked towards the end of the summer of 2018. And then what did we see? We saw a substantial fall in the price of steel towards the end of 2019. The price of U.S. steel was lower than pre-tariff prices. So again, the American consumer ended up with lower steel prices within 18 months. Second of all, we saw American manufacturers of steel explode in terms of productivity.

They went to over 80% of their production capacity. We saw a return of American steel jobs because if you increase the capacity that you are doing, you need more workers. Then any foreign made steel coming into the United States, the government was collecting more taxes on them. And so what did we get? In all three scenarios, whether it was an industrial product like steel, a consumer product like washing machines, or it was something like solar panels, we saw that prices within 18 months were lower than pre-tariff prices. We saw American manufacturing be incentivized to come back and increase production, and they did. And we saw

the creation of American jobs. Now, if you think about those tariffs, they're highly surgical. They're on specific products and sometimes even from specific countries. But everyone who says that tariffs are inflationary, then why, when the tariffs were implemented in 2018, beginning of 2018, did inflation go from 2.1% in January of 2018 to 1.5% in January 2019? Inflation did not go up. Inflation went down over that time period. So it shows that the mainstream narrative of tariffs are inflationary is not true.

If you also go and you look at Norway, Norway has a 25% VAT. A VAT is basically a value added tax. Think of it like a consumption tax. A tariff is ultimately a similar type of consumption tax. They're implemented in a different way, but you just think of both of them as a consumption tax. that 25% tariff or VAT in Norway on all imported goods has been in place for years. So if you have a 25% blanket tax on all goods, if tariffs are inflationary, shouldn't there be high inflation? The inflation rate in Norway is less than 2%. Now, why is it

less than 2%? Because the VAT tax has been 25% for years. There's no change. So tariffs on their own are not inflationary. What can increase prices is if you have no tariffs and you put a tariff on, but that change has an impact for three, maybe six months. And then what happens is prices normalize. Now, here's the most interesting thing is if you look at washer machines, solar panels, and steel, the three products that were tariffed in 2018, all three of those products have seen price increases from 2018 to 2025 at a rate lower than consumer inflation. So they all actually, even though we saw the massive inflation of 9% during the pandemic, et cetera, those three assets or products still grew at lower rates of inflation

than the inflation itself. And so the reason why I look at that 2018 experiment is because I believe that Donald Trump during his first term saw what happened. I was able to lower federal income tax and I was able to increase government revenue, protect American industry, help bring back American jobs, and the consumers ended up with lower prices. He now is going to take that experiment. He's going to extrapolate it out

and we're going to head into the tariff era. And what I think he's going to try to do, I have not heard this from anyone in the administration, this is my personal view, is he is going to now bring these tariffs to market and he's going to find them as a tool, both for negotiating, but also in order to be able to continue to bring down federal income tax. Can he get it to zero? That seems unlikely. But what if he could go from 37% to under 30%? That means that during his two terms,

he would have been able to reduce federal income tax by 25%. That would be a really, really big deal. And so what would happen in that environment? American consumers would end up with more money in their pocket. Add in the fact that if you want to keep inflation down, you have to cut government spending. Milton Friedman, inflation is created in Washington. So guess what's happening there? You have Elon Musk and Doge that they're publicly saying they think they already cut $4 billion off of per day, $4 billion per day of savings. That would equate to a trillion dollars of government spending they think they already cut in two weeks. And so if that is the situation. Now what you've done is you've created this deflationary backdrop

where you're leveraging the tariffs. And so you put all this together and you say, wait a second, we are returning to these ingredients that allowed for the economic explosion that created the American economy that we enjoy today. And so that's why I think that these tariffs are so powerful is because first you have to say to yourself, forget what the mainstream narrative is for a second. Go look at the 2018 impact. What happened? How did they work? What were the results? And what you come away with is something very different than what you're being told by these economists. And so my conclusion over the last six years is the following. Anytime that all the economists agree on something, I immediately think the opposite is

probably true. The academics all agree on something. Name one thing that the academics all agree on that is true. You maybe could say supply and demand. Maybe there's three or four other things, but majority of the things that they quote unquote all agree on actually turn out to be false. Intrinsic value, efficient market, tariffs are inflationary, et cetera. Yeah. Well, so but I want to ask you. Tariffs could be a revenue generating initiative. However, don't you think that Trump, as evidenced by Mexico and Canada, that he's kind of using tariffs as a bargaining chip and he's not actually going to hit them with a 25 percent tariff? And he, I think, is using it as a bargaining chip and he's using it as an economic tool. And the reason why people want things to be black and white, but they're not black and white. It's a messy world.

And so if you think about what he did, he didn't take the tariffs off. He simply paused them for 30 days. So imagine if I said to you, OK, I want to strike a deal. I'm going to raise revenue for the U.S. government. I'm going to protect American industry and bring back American jobs and all this stuff. And at the same time, I'm also going to get our neighbors to help us secure our border to prevent the fentanyl coming into our country, blah, blah, blah, whatever, right? Because he's using the tariffs to get them to do that.

So he says, I'm putting the tariff on. Right. They yell and scream about it. He goes, okay, you know what? I'll give you an extra 30 days of no tariffs in exchange, secure the border. We're putting an immense amount of resources there, right? And to give you a sense of how crazy this is, there is a politician in New Jersey who came out and said that he's harboring an illegal immigrant think about how crazy that is not the

fact that somebody wants to be humane and help someone i get that right and there's a lot of complexity around the empathy and all this stuff but to openly brag about breaking the law as a politician is pretty stupid and so that is where the tariffs become really interesting is now all sudden if you give up 30 days of the tariffs in order to secure the border and then the tariffs go in place did you really give up anything but i understand why trudeau would be so excited about a 30-day pause because a lot of businesses there was a survey done by globe and mail and what they came out and they said was that up to 50 of canadian companies are already willing to move or evaluating moving some or all of their investment

or business operations to the United States to avoid the tariffs and remain accessible to the market. Now, are 50% of Canadian businesses going to move some part of their business? No, but some portion of them definitely will. And so you look at this and you say to yourself, okay, another component of this is that the U.S. government

has had a really big issue with the cartels. That has been a source of major pain for the United States. the United States government created the pause and there are already reconnaissance missions being flown over Mexico within 24 hours of the pause on that. Do you think that maybe Mexico agreed, hey, we're going to let US aircraft

enter the Mexican airspace and you guys are going to be able to actually do reconnaissance and we may even empower your special forces soldiers to come and deal with situations? The world is changing right now. And so if you look at this and people are saying, oh, Canada and Mexico outsmarted the United States,

they were already going to do this stuff. That's a very kind of elementary understanding of what actually got announced. Canada is announcing a fentanyl czar. They never talked about that before, right? They're announcing a US-Canada joint task force. They are announcing a number of different components yesterday. They never talked about before.

did they talk about previously hey we're gonna put some money towards this absolutely yeah but now what we're doing is we're taking these ideas and we're bringing them to a greater severity which is the whole point is we have to be effective i gotta say it does feel like in the last i don't know two decades i feel like the united states became this like ginormous blob of excess and bloat and it just spread like this i don't know if this is making sense but now it does feel like just like tightening and like what can we do within our borders to accelerate american innovation and you know invest in our own people and products and industries so the beauty below feels like it's falling away the beauty of the america first approach

is that it is america first and what i think a lot of people are uncomfortable with which is fair right? Their worldview is that there's a free market, that there is an even playing field, that we do just as much to help other countries as they do to help us. When you go and you look at it, that's not true. It's actually the exact opposite. The United States shows up and we take the moral high ground. And when you take the moral high ground and you say everyone can take advantage of us, but we're not going to push back. What do people do? They take advantage of you. They implement these massive tariffs against us. They actually do things to unfairly compete. Another great example is the China or the de minimis exemption. So there

is a import tax that has $800 or less. You don't pay the tax. Very generalized, you know, kind of description of it. But this de minimis exemption, well, guess who is shipping products into the United States at under $800? Timu, Alibaba, all these products, right? And so when they do that, it previously, when that rule got enacted, there wasn't this global shipping apparatus of very small price. It wasn't cost effective to do that. And so really the idea was, oh, if it's under $800, no one's going to ship that from the other side of the world. It's probably somebody just like mailing something to their friend or something like no big deal. Well, Trump just closed that de minimis exemption. Now, foreign countries, regardless of the size

of the item, you have to pay the same tax that everyone else pays. And so it's a very big threat to those businesses. Now, if you go and you also look at this pursuit of cheap products, right? I don't like to pay tons of money for products, but you and I were recently talking about this. We bought a dinner table, and the dinner table came from a foreign manufacturer, right? I don't know anything about design, right? I'm playing it better than I am, but we worked with somebody, and they said, hey, here's all the furniture you should buy, whatever. We bought a quote-unquote wood table. The table showed up.

it is a very cheap wood inside and then there is a wood like laminate around the outside well guess what happened the laminate starts to get chipped away this is what two and fall apart yeah i i let's just say it's the three-year-old table yeah it's crazy and so but we have that other wooden one from america we have another wooden table from america that i have had for a decade true we started and it looks and works the same way that it did on day one but it did come at a premium um but here's the thing is that cheap product which we didn't know when we were buying it that was a cheap product i think it didn't come from a cheap place i have a feeling that some of these you know retailers are buying these cheap products and marking them on that is that

might be it but what you think is quote unquote a lower price ends up not being a lower price because you got to replace the table more often. So let's say, well, at this point, we got to replace the table, right? We're three years in. If we have to do that every three years, that table is exponentially more expensive than the American wood table that we have

that I've had for a decade. Of course. That wood table, by the way, served as our dinner table. When we first moved in. Then it served as my desk. Yes. A dope ass desk, right?

And now it literally is one of the conference room tables in our office. Oh, it's still around. And so if you think about that table, that table is indestructible. It's an American made wood table of really high quality. Yeah, I should hunt that down. See, when I outsource the buying of something to somebody,

they go and they buy cheap bullshit. So come back to this. If we want to make sure that America's national security is strong, if we want American manufacturing, if we want American jobs, if we want to have a government that actually makes more money than it spends, if we want to continue to drop the income tax so that American citizens have more money in their pocket, the path forward is to do things that are in the best

interest of the United States of America. Duh. and so i kind of feel dumb that for years bought into the globalization because it makes sense in theory hey we want cheaper products and we made somewhere else blah blah whatever as somebody now who has had the good fortune of living a few more years and personally experiencing the table and many other items. Yeah. Right. And seeing how this system works. This is crazy. And the entire American economy fell for the trick. A small story. But when we first moved to the U.S. from Bulgaria in the year 2000,

my dad became like obsessed with showing all of us products with the tag that said made in America and comparing the quality with other products that were not made here. And it was interesting because I do clearly remember like shoes and clothes and other items back then. The ones, it was much more common to see made in America than today. Today, it's usually made in China, made in Bangladesh, anywhere. Like that's probably the majority of things you buy, even if it's from a nice retailer that you assume is spending money on quality.

the the there by the way there are cheap products made in america like cheap in the sense of like they're not all high quality but i think overall a generalization is that the american-made products are of higher quality than others now people rightfully so say well the american products are more expensive yes than others labor is more expensive all this stuff right one of the things that i find very interesting is go back to that norway example that 25 percent vat norway has one of the highest quality of life of any country in the world okay now are those two things correlated does that cause it depends on how you look at it but i do think that there is this element of if you tax your people and you send the money everywhere else obviously you are headed in the

wrong direction versus if you can tax everybody else and do that and so people get very mad when I say this, but this is ultimately the truth. If you don't want to pay higher prices on tariffed goods, buy American made products. And what people think happens is that, oh, the tariff goods jumped 25%. So then the American company is going to increase their prices to be just underneath. That's not what happens. Instead, what happens is that the American manufacturers start to produce more of the goods because they have a competitive advantage. As they produce more goods, prices go down. And so this whole idea of the economists sitting there running their stupid models falls apart when you look at reality. Why is it that every single tariffed good

in 2018 within 18 months was lower in price? It's because in every single one of those situations, we saw American manufacturing increase the supply that they were producing. And if you increase the supply and demand stays the same, then prices go down. And so tariffs, what they ultimately do is they heavily incentivize American productions of these goods. Now, one other thing is people say America doesn't make anything. Well, I got on my little Google machine. Well, it wasn't really Google. I went on Perplexity. I went on a couple of other websites and I said, what does America make. I was blown away. America is the leading producer of lumber. America is a net export and one of the largest producers of natural gas and oil. America is the leading producer of corn,

soybeans, beef, chicken, and dairy. America is one of the leading manufacturers of pharmaceuticals. America is the leading manufacturer of aircraft, both for commercial and military purposes. America is the number one producer of military equipment. If you go through the software industry, America is so dominant that other people don't even matter. If you go and you look at innovation, America is the number one producer. And you can go down the list of all these things.

America makes a hell of a lot of things. And so I think that there is not only this renaissance of manufacturing that's happening. Look at companies like Varda, Inhadrian, Traba, Rainmaker, where you go through all these companies. They're all making this stuff. They're all supplying talent to these businesses. All of those companies, I'm an investor in.

I'm very intimately familiar with how these things work. Actually, I'm not an investor in Hadrian. I wish I was, but I'm not. Yeah, that's the one that got away, Chris. And if you think about those companies though, what are they doing? They are using the same thing. Think about Anduril, think about Cover, right?

these businesses that are actually solving the problems in America, the old manufacturing, we have plenty of it. But the new guys that are showing up, they're bigger, they're better, and they're badder. And I think that what we are going to watch is in this time of change, people hate change. They're going to yell and scream about it. But my guess is inflation won't show up. U.S. government revenue is going to go up. Income taxes are going to go down. American jobs and manufacturing are going to come back. And people are going to look back four or five years from now and they're going to say, damn, I was really against that. But actually, you know what? That worked. And that's why I spent so much time and energy fighting back against the mainstream

narrative is because I've already come to that conclusion. I don't need to wait four or five years. And if I'm wrong, I'll be the first one to say, hey, I was wrong. Would you be disappointed if Trump did, you know, use this as a bargaining chip and just not do tariffs at all? I think that uh yes with a caveat being what else is he doing right so if he let's say let's say here let me give you two examples let's say that he uh keeps negotiating with canada and mexico he takes those terror he says hey we're not going to do it okay but then he goes and he implements tariffs on another country that replaces the revenue right again and it the problem with uh kind of evaluating all this stuff in a vacuum is that it is this global complex economic machine and so uh if he

just takes off the tariffs from mexico and canada doesn't do anything else yes i'd be very disappointed right uh if he lowers the tariff right so like here's maybe another good part of the conversation what do i think he should do i think that there is immense abrasiveness targeting two of our largest trading partners with very high tariffs so if you go to mexico and canada it's 25 percent Yeah. Obviously, people in those countries and there's going to be Americans that are like, ah, that feels so painful. Instead, if you run the math, could it be more interesting to say we are going to implement a blanket 5% tariff on all imports? So now you get out of the game of targeting specific countries, right? You lose your bargaining chip. But now it is, hey, we're doing this for everybody. It's not an anti, you know, Mexico or Canada or anything. It's just for the entire country or the entire world. And then 5% doesn't feel as large. And so it's less likely to actually interrupt, even in the short term,

certain things that people are buying. And so if you go from targeted large tariffs to much broader, smaller tariffs, I think that you can net out about the same money, but you lose the bargaining chip. And so I think that if we maneuver ourselves more towards the broad, smaller tariff, and are able to drive the same revenue,

bring down, do all these different things, that would maybe be better kind of accepted by the critics. The problem is a 5% tariff probably isn't enough protection in a lot of industries for the American producers. If you only do a 5% tariff on Canadian lumber, it doesn't level the playing field. And so you have to,

especially certain products from certain places, you would have to go bigger in order to actually be able to level the playing field. All right. I think we've beaten this tariff horse to death. I agree. So let's move on. Trump signed an executive order establishing a first of its kind sovereign wealth fund, which will invest vast amounts of money into national development projects like highways, new airports, et cetera. Scott Besant said, we're going to stand this thing up within the next 12 months. We're going to monetize the asset side of the U.S. balance

sheet for the american people there will be a combination of liquid assets assets that we have in this country as we work to bring them out for the american people i really think that um wait and trump also suggested that this could be used to purchase tiktok um and bitcoiners are bullish on the news as it suggests that bitcoin could be an asset used in this new government tool thoughts why doesn't the united states already have a sovereign wealth fund i don't know some of the richest countries in the world have one why don't we have saudi has one just why don't we have one okay so we should have one got it done one of the things that's really interesting about this the bitcoin story the united states can buy bitcoin right people are yelling and screaming

about how much they're gonna buy when they're gonna buy how they're gonna buy it's gonna be called it doesn't matter the united states gonna buy bitcoin everyone calm down on top of that though one of the things that trump has talked about in the past uh howard um uh lutnick and i We talked a little bit about it when I interviewed him. I've heard Scott Besant, you know, kind of mentioned tangentially things. If the United States government gives you contracts, maybe they should also get a little bit of equity in your business. Right? Could you think about it in the sense of, hey, if we're going to help you, you got to give back to the American people.

Right? That's a pretty interesting idea. Could it be warrants? Could it be, you know, a set kind of ownership, how it works? People will figure out. But the way that a sovereign wealth fund gets built is we can take taxpayer money. We could put it in there or you can have a fund and you can have people start contributing things to the fund. And you're essentially bartering.

So let's say, for example, take Andrew. If Andrew goes to the U.S. government says, hey, we want a billion dollars of contracts. And the government says, cool, if you give us 25 basis points of ownership in your company, then you'll be a preferred buyer from the government. Because we have an economic interest in seeing you be successful. And maybe it's 25 basis points. Maybe it's 1%. Some relatively small amount. 1% of Anduril.

Now you're talking about billions of dollars. right and so again is a billion dollars going to uh significantly change the course of american history no but if you go and you look at a lot of sovereign wealth funds if you have a hundred billion dollars you're a big sovereign wealth fund yeah right and so okay well if one company gets us you know one two three five percent of the way there we don't got to do many deals to be able to get there and so that's the type of thing that i think you're seeing is you're seeing essentially creative deal makers. You're seeing creative investors. You're seeing entrepreneurial people now go and run the government. They are 100% going to make mistakes. They're going to

do things that people are going to criticize, rightfully so. But it's way better than that blob you described that was kind of a machine that nobody really knew where the money was or how it was working or whether we were being effective or not. And it just leads to waste, abuse fraud etc there's a stat that recently came out that the u.s government thinks that they were defrauded of 230 billion dollars what and nobody cares how much a blob how much of the ukraine aid didn't make it to ukraine i don't know but it's probably a big number how much of the covid money that got handed out went to fraud i've seen estimates i don't want to say the number because there's pretty wide disparities in the estimates they're all big numbers and that

was the u.s government handing out money to its own people and so you look at this and you say to yourself maybe if we just say look we don't even have to really go after tons of these organizations just stop the the waste and the fraud if you just do those two things already there's significant savings do we think that with the amount that the trump administration has done in the first month of its um existence uh rain not rain what is it called term term um term do we think he's going to continue at this pace or do you think things will slow down every single other political administration that gets off to a fast start it's four years right it's hard to keep the pace i was telling a friend the other day you just forget the the pace during the first term right

and by the way the pace sometimes was uh positive things other times there's just insane chaos i honestly don't even remember there was times where you'd wake up i mean and he was just tweeting non-stop right it was you know between from 4 30 in the morning by seven o'clock you're like dude like six days happened in the first four hours right and uh already you're like three good ideas two dumb ones and an insane tweet right and you're like by the way if you count all that up it's like an it was that still isn't that positive like probably yeah it feels like there's better like delineation and people know what their jobs are no i think there's but also i think that is the biggest thing that i see so um you know for those that don't know i'm 36 years

old. I've been very fortunate that a lot of my friends have become very successful over the years. Many of them are not in their 30s. They're 40, 50 years old. And a lot of people I know have gone and worked in the administration in various roles. Some of them are appointed positions. Some are getting jobs, et cetera. And when that happened, I thought, oh, maybe that's just like as you get a little bit older, this happens all the time. And I talked to some of them and they said, no, this has never happened before. We've never seen a government role be so high status. We've never seen a plethora of business and investment people want to go do this. And so there are potential potholes with that, right? 100% there can be issues. But

so far from what we've seen is it looks like we're putting competent people in roles and then saying to them, go get the job done. And so one of the things that I thought was fascinating is Richard Grinnell. He went down to Venezuela and he got six hostages out or prisoners out. It was like a footnote. Happened in the first two weeks of the presidency. People are like, oh yeah, I kind of sort of remember I saw something. That would be a massive deal, but it's the pace of how much stuff is happening, right? Just think about the number of illegal crossings of the Southern border is down 95%. It's been two weeks. You start to focus on that. And then all of a sudden you're like, oh, wait a second. The sovereign wealth fund's getting created. Oh, wait a second. Tariffs.

Oh, wait a second. We're getting out hostages. Oh, wait a second. The Hamas people are releasing hostages oh and you're just like dude this is like every day all day long but that's what a startup looks like controlled chaos but is it a good idea to run a government like a startup when you're a failing or declining yes because if you want to turn something around the united states is in a weird way an incumbent but it's also a turnaround story we're in a company i named we're the largest producer in all these things right we have a rule of law we have all these benefits but some of that stuff was starting to kind of wobble a little bit free speech was wobbling national security was wobbling rule of law was kind of wobbling and so now all of a sudden

you're saying hey wait a second we got to run this thing tighter ship we got to get back right it's kind of like when facebook they had 80 000 employees said you know what we got to tighten our belt a little bit here they fired 20 000 people bam profits come back stock price rips right fit ready to go quote this it's easy to be a blob when times are good of course and so i just think like we're we're going through a transition period i get that it's a little rocky um and here's the thing that i actually appreciate the most about doing this every week and uh online I don't think people quite appreciate how willing I am to change my mind if people present good arguments to me and so what I've seen online in the last week or two is there's just a lot of

yelling and screaming you know I can't tell you how many times I got called an idiot or a r-word or whatever talking about tariffs but then behind closed doors I had a lot of people reach out to me people that I very good friends of mine, people I respect, et cetera. And we had some of the best, you know, intelligent, uh, kind of high respect conversations on any topic that I've talked with them about probably in our entire friendship. And so that to me is you got to make a choice. You can be a troll on the internet or you can actually use the internet to learn. And I'm trying to learn. And so if people heard anything today and they disagree, let me know to tweet at me, DM me, find my email, whatever. Let me know. What did I say that you disagree with? And don't

show up and just say you're an idiot, right? Because guess what? I'm going to say it takes one to know one. So instead, show up and say, hey, this is what I believe. Here's the data. Where else, you know, what else should I be looking at? And I think that's the type of stuff that will not only help me learn or help other people learn, but it will help push us towards better understanding and hopefully better decisions as we continue to kind of figure all this out. Because I genuinely believe even on certain topics where there are people who are standing facing each other, yelling and screaming, saying you're wrong. Everyone has the same ultimate end mission. Everyone has good intentions for the most part in wanting the United States

to continue to win. They just have different ideas of how to get there. And even this is my olive branch to the DEI, ESG, whatever alphabet stuff going on. I honestly believe most of them think they're right. They think that the path that they had laid out was the correct one. And they are not actively, although there are some, most not, actively cheering against the United States. It's just that a lot of those paths, we tried them. They don't work. They ended up in a bad place and so the country trump won the popular vote landslide mandate go a different direction here's the thing if he's right jd vance is probably the next president united states if he's wrong the democrats get a shot they're gonna put somebody up hopefully

they put up a great candidate right and people may like or you know disagree on a certain top whatever but like that is how democracy works is every four to eight years we get a switch back and forth and the people get to decide hey who's on the right track right now yeah but this last election the american people very vehemently said the direction we've been on is not the direction i want to go on we got to go in a different direction go america so one other thing before we leave that i want to talk about is you recently published this profile on anthony Scaramucci. I know Scaramucci, the mooch. Tell us a little bit about what's in there because you even got his returns, which he basically outperformed almost every single fund on Wall

Street. Yeah, he would be based on his returns. He'd be a top seven fund. So Scaramucci, I wanted to write this profile because I think he's a complicated person with good, with bad, with all in between. But the thing that I focused on was how does Scaramucci manage to not accept defeat? He's been knocked down so many times, and yet somehow he emerges stronger and more resilient than before. So when we first, you know, I spent a full day with him, shadowed him to meetings, conferences, saw him record his podcast, all this stuff. And the first thing he asked me when we sat down for breakfast, which is really interesting, given that he's supposed to be a logical, rational person in finance, is he asked me about astrology. He said,

what is your star sign? And I was like, oh, this is interesting. But he very much believes in this thing. He's been studying it for 38 years. And he says that Capricorns, which is what he is, have at least one major blow up in their career. And my profile talks about how he's had three. You know, he Skybridge Capital almost failed during the 2008 financial crisis. Then there was his catastrophic 11 day stint at the White House as Trump's former communications director. And then finally, as just as he was starting to recover his reputation, he partnered with Sam Bankman Freed and in which in a transaction which FTX bought 30% of Scaramucci's business. He announced this, everything seemed great. And then we all know what happened to SPF and FTX, which ended up being a complete fraud. So Scaramucci has had multiple opportunities to stay down, but he doesn't. He always claws his way back. And I think part of it is he feels underestimated, not respected by his peers. And in some ways, he still feels like an outsider, even though he's very much been an insider over the last 30 years. So I think it's a complicated story of a complicated guy. he runs what a multi-billion dollar asset management firm correct a lot of people who uh say hey i wish i could do that i mean yeah i read the profile i actually thought that uh

there was a lot of stuff in there i didn't know well i know that i didn't know um and uh i just think that there's so many investors who are going to see wait a second a fund to fund manager outperform the hedge funds that shouldn't happen right because the diversification um how do you do it well he put direct exposure to bitcoin cryptocurrencies in the fund and so if he's outperforming them a lot of these fund managers are going to say all right and not like how do my lps are going to come to me and say why am i giving you money as a hedge fund and you're getting outperformed by the fund of funds yeah that's crazy and so it's because 57 of his portfolio is in um bitcoin and other cryptocurrencies but smart but it is important to say it is

volatile so we can't just talk about this one year we have to look back wall street talks about year by year right like so so last year now we got to go to 2025 let's see who wins we'll see what happens and uh where can people go read it go read it on readtheprofile.com thanks for doing this thank you