The Pomp Podcast - #1533 Jordi Visser | Why Bitcoin Will Hit An ATH This Year

Starting point is 00:00:00 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? We've got an awesome episode today with Jordy Visser. Jordy breaks down exactly what is happening in the market, why he thinks that you shouldn't be as

Starting point is 00:00:37 bearish as you probably are. He explains exactly what's happening with the Fed, the Treasury, and the President, how tariffs are going to impact markets, where are some of the areas of risk, how things like humanoid robots, artificial intelligence, machine learning, and other technology is playing into all of this. And then he even tells us some of the areas in the stock market that he's interested in that you may want to take a look at as well. Here's my latest conversation with Jordy Visser. 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

Starting point is 00:01:12 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 sponsored by Figure Markets, the place to go to earn yield and borrow against your Bitcoin or Ethereum. Figure Markets crypto-backed loans let you borrow against your Bitcoin or Ethereum with up to a 75% loan-to-value ratio, one of the highest in the industry. Whether you're looking to reinvest and double down back into more Bitcoin, cover everyday life expenses, or just have cash on hand, these loans make it simple. Interest rates start as low as 12.5% with no credit checks, no long applications, and no prepayment penalties. Figure Markets also offers multiple investment

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Starting point is 00:04:34 that Bitcoin remains true to its promise as a decentralized system that is built to last. Go to bitwisepomp.com to learn more about their ETF and other services. Once again, that's bitwisepomp.com, bitwisepomp.com. As always, remember investing is risky and carefully consider the extreme risks associated with crypto before you invest. All right, Jordy, I thought a great place to start the conversation, American exceptionalism. That is a term that Americans love and lots of people internationally, they hate it. They think it's egotistical. They think that this idea of the city on the hill, that America is somehow the paternalistic, you know, governor of the world, they think is bad. And one of the things that I always take out of this is the criticisms of American exceptionalism tend to be very emotional driven.

Starting point is 00:05:23 they don't point to facts or data. They don't say, well, you're wrong about that. But I do think one of the big problems right now is that people are starting to point to structural changes that are happening in both the U.S. economy and also how they perceive the impact of these tariffs. And they're saying, well, actually, we may have criticisms in the future where American exceptionalism will go away because of factual changes in the economy, not just emotions. Yeah. And this week, so I consume a lot of content. And it's very hard right now to listen to a podcast of the ones that I generally listen to on the markets from a macro perspective where the number one conversation isn't about the end of American exceptionalism. Because the bonds,

Starting point is 00:06:07 stocks, and the dollar all weakened last week, everyone has jumped on this. So I have a couple thoughts on it number one this feels a lot like when people said new york was dead during covid during the worst of it it'll never come back and that's just not the case um is it back to where it was before covid no is it as bad as it was during covet obviously not so the first thing is as is usual with the way people especially in this day of social media and people putting stuff out they try to put out something that'll get a headline and i think american exceptionalism and saying it's over makes no sense i do think that there's a reshaping of global trade i do think there had been a massive amount of investments that were sitting in the u.s

Starting point is 00:06:54 that were very exposed to what has happened um the administration wants a weaker dollar they're getting a weaker dollar if you own long-term treasuries in the u.s and from and you're living in europe two weeks ago or last week it was down 10 for the week on something that's yielding foreign change for long-term bonds so i think there's been a re-shifting which makes sense i will say this i've always believed as someone from a macro perspective that people underestimate what happened from 2007 to 2025 to put us in this position the only way you have american exceptionalism as a theme is if the markets accrued so much market cap over that time period there were two major things that happened that cannot be refuted number one technology and

Starting point is 00:07:39 innovation, the software boom, was dominated by the Mag7. They took no debt to do this, and they've grown significantly. So the US is very tech heavy. So it deserved to have that because of the innovation that everyone has benefited around the globe from. The second thing is, Europe's in a problem right now where they still depend on their energy to a great degree from Russia. The US was the largest net importer of energy back in 2007, and have turned it into one of the largest exporters of energy. So those two themes that dominate the history of progress, innovation, and the power needed for the innovation. And as we go into AI, humanoids, robotics, it's deserved. We actually got there. So I don't think it's over. I just

Starting point is 00:08:21 think there's been a repositioning. And I think people are over, as usual, dramatically taking this to a level that is not realistic. I find that a lot of the analysis ends up being deterministic uh they say hey um or binary right they're like uh this is true or this is not true there's no probabilistic uh kind of analysis and so right now american exceptionalism it like at risk of going away 10 right you know some small percentage chance it's not zero but it's not 95 which i think many people would want you to think and i think that that uh probability uh is very important here because maybe what used to be 2% has jumped to 10%, but we're still at 10%, right? And so I always laugh that sometimes people will say, oh, the recession, it's a 30% odds. I'm like,

Starting point is 00:09:07 so 70% odds, we don't have the recession, right? Which always people kind of forget. Another thing that we've talked about, and I can't get this idea out of my head, is the United States as that global reserve currency, kind of top of the capital stack, you know, we're kings of the mountain. Could we be actually taking ourselves out of that position and moving more towards this decentralized world where maybe there's a bipolar or tripolar type environment. And so there's not a single global reserve currency. Instead, we're moving more towards something where there may be a couple of different currencies based on regions that people choose to use. So this is a great question. And this is where I'm going to say to everyone who

Starting point is 00:09:42 reads Macro People, before you even ask this question, you said something really important. It's very binary right now. And I always say to people and they go, oh, the market's going to go down a lot further. I'm like, okay, so that means the fiscal deficit is going to get worse. So do you think it's a depression? No, I don't think it's a depression. I go, okay. I kind of view this as the problem we have here is a, it's binary to some degree, meaning if you're going to let the stock market fall and your debt to GDP is at such a high level and your fiscal deficit's there, you're going to end up in a problematic situation. I have looked and I needed a solution in my mind back in 2018, because none of the things we're talking about weren't already headed to this path.

Starting point is 00:10:26 This has been going on for some time. So I needed to find something and I couldn't. Innovation was the initial thing that made me optimistic. The reason that your question about not being in this single place, I actually 100% believe the US has lost its reserve currency status. I still think it's the best currency in the world of all the currencies. But the reserve currency is being used right now and it's being weaponized. This is not the first time, meaning they've made the decision. They did it with sanctions. Sanctions were weaponizing things. So I think the world has been moving away from the dollar for quite some time. China's been doing it and they've been preparing for this moment. I think what people have to get comfortable with is that's

Starting point is 00:11:06 what Bitcoin was a solution for me. The more macro people that I meet, if they can't talk about artificial intelligence from a knowledge basis, if it starts with AI as a bubble, okay, well, then there's no reason to have a macro conversation. They generally, those same people have no interest in Bitcoin. So I think a decentralized capital stack, a decentralized world where people are migrating, and it's not the people at the top. I keep saying this, there's a revolution that's happening. And the reason I got interested in Bitcoin is because I can see the democratization of entrepreneurship through AI. And I can see the democratization of wealth creation through this decentralized network which is a digital economy and there's no doubt in

Starting point is 00:11:49 my mind that that's going to happen so for the macro people that regurgitate historic books that they read about how the french revolution ended this way and how this ended this way and it has to go this way russell napier has been very smart about this there's national capitalism happening which in a sense is a breaking down of borders which is really what i believe is happening and And that's what has allowed Google and Amazon. They've kind of broken down the borders of the way trade was done and the way delivering stuff was done. I think it's happening on a global basis.

Starting point is 00:12:20 I really do. What are the positive impacts to the everyday person as we move towards a decentralized world in many facets of their life? Is it just like the government doesn't have as much control and oversight over them? Do they get more kind of autonomy and agency? What impacts their life in particular? So that's a good question, because at a dinner I was at last night, when I kind of described this democratization side, you're dealing with people that have kids, and a lot of them haven't gone off to college yet. My kids have gone off to college.

Starting point is 00:12:56 I said they don't have a lot of hope if they're in the healthcare field of rising up the ladder. When we were down at a crypto event in Miami together, that was the thing I took is the reason people were so interested in Bitcoin was the hope side. I think if people kind of break down and they can get to the philosophical side of if none of us have work in 20 years because the abundance world gets here, can you have a happy life that way if you don't have to go to an office and you don't have to work? I think we've been kind of heading that path since 2007. in. Most people don't realize that about 50% of the people that have the jobs in this country,

Starting point is 00:13:33 they're not in an office anymore. They're not only gig economy people, the people riding the bikes, delivering stuff on the service side, but there are also people like me that don't want to work in a business anymore. I want to create content. I want to develop, I want to be an entrepreneur. I want to go out and give people research to help them navigate this. But what I really want to give them is the hope that they have that this world is going to get better. So I think for the people that are having trouble, and I'll just again use my kids, that they have no hope of living in Manhattan on the salary that they make unless I help them. That's a pretty depressing thing. I think AI and if they had to work less and they had more time and the cost of things started to

Starting point is 00:14:13 come down, and that's why you have to believe in a world of abundance. If inflation actually is something that people are very wrong on and the productivity boom is actually coming and they've forgotten that then people benefit from prices coming down and it's the exact problem we've been in if my daughters can live in new york city and afford to live here and they're still making what they make in the social work or the health care field they'll be ecstatic and i think we are going to get that i think it's going to take a little less time but ai and innovation is going to be the thing that drives it global debt to gdp is a huge story i think over the next two or three years you've been very instrumental in me understanding i think some of the the nuances

Starting point is 00:14:49 here. I think when we talk about AI robotics, like Bitcoin, 5, 10, 15, 20 years, you can be wide-eyed and bushy-tailed and it's super exciting and it's going to change the world. And I truly believe that. We've got some problems in the next two, three years. Describe a little bit as to this global debt to GDP number and what's going on there that you pay attention to it. Yeah. And this is where people, I think, should write down some of these numbers or go read some the reports in fact there there are two research reports one by the oecd and you can get it online which kind of it's called the global debt monitor and global debt report it'll take you through the numbers some of the numbers i'll talk about but then also there was a paper released by the imf

Starting point is 00:15:33 in january of last year which went through the title of how did the us work out of world war ii debt and those two things will kind of highlight that we're in a similar situation that that we were post-World War II, but not just the US. And this is the thing about the numbers. So we're hearing that US treasury yields are going higher. No one's got a front page headline saying Japanese 30-year yields are rapidly going higher and are even at higher levels relative to history than the US. The UK, UK had a big problem in the long-term part of their curve back in 2022, too. And they had to do something to kind of stop it from going higher. There's $100 trillion globally of debt at the public and corporate level. 40% of that matures before the end of 2027.

Starting point is 00:16:21 So the reason the bond markets are freaking out is not just because of what Trump is doing. I've said it here. I've written about it. I actually believe this is a better, more controlled way of dealing with an inevitable problem that was going to happen over the next three years anyway, because of the amount of debt that needs to be financed by someone putting money in. And in the last week, for the people who want to be bearish, liquidity has evaporated. It is the number one story that I'm fixated on when I do my YouTube video for this week to kind of show people what's happening. We've lost liquidity in the most liquid assets in the world. We've lost liquidity for junk bond deals, for leveraged loans. The banks got hung with two deals this week.

Starting point is 00:17:03 liquidity has dropped off. When you're levered this much, if the economy freezes, which is where we are, the reason I'm optimistic, and I hate to say this, is because it will turn into a depression very quickly unless we restart the economy, unless we're going to print. And there might be both of them, but I don't believe that we can sustain this kind of freezing of the economy with China for more than another month without having someone come to the market with liquidity, which I think will happen. What are the areas that you're paying attention to right now in the stock market in particular? I went through this exercise recently. I asked Perplexity, what are the three stocks that someone should buy right now if they're optimizing for resilience in any market condition and

Starting point is 00:17:46 significant potential upside in the future? And I just wanted to see what is it going to do? And not so much what are the stock picks as much as what was the rationale? And he told me three stocks, told me Alphabet, Google, Johnson & Johnson, and Digital Realty Trust. And the logic behind it was actually pretty okay. It's just like, hey, I understand how somebody can make this argument. Maybe I agree or don't agree, whatever, but it makes sense. For you, when you see the market come down, if you go and you look at the 1, 3, 5, 10-year returns, I think it's something like if the market draws down 15%, the forward five-year return on average is something like 66%. It's 185% over the next decade, right? These are numbers that people get very excited

Starting point is 00:18:29 about. But is it just like an S&P thing? Or is it like, hey, there's certain market segments that you actually are analyzing and saying to yourself, I'm most attracted to this because they either drew down so much or the future prospects are so high. How do you think through this? So I'll take it on two things. Let's barbell and everything that in my opinion, people should think about is barbell. Barbell meaning what are the steady kind of tortoise the tortoise and the hare side and then what are the fastest ones to come out of this problem so the fastest ones to come out are always the innovation and growth stories that are going to sustain regardless of what's happened that for me is not the mag 7 i've been very negative on

Starting point is 00:19:06 the group i thought the valuations made no sense uh and that's the reason on the innovation side for the fastest horse i'll just keep saying it i think once we get any kind of clarity on two levels so i think over the next month we will get clarity on either the tariffs will be paused with china will come to a deal or we will be forced to put liquidity in to stabilize the markets while the dealing and the negotiating is going on either one of those scenarios to me bitcoin explodes higher so i'm very fixated new all-time high by the end of the year oh for bitcoin i think absolutely will be at new all-time highs and part of it is because i don't not part of it i don't believe a depression is is the answer i don't believe the s p going to 3500

Starting point is 00:19:48 is allowed because in the tax trees he won't be in there so on the innovation side it's going to be geared towards that the second thing is that i believe the embodiment side the hardware side the data center buildup is going to happen nvidia and stuff like that they've got so much depending on the china us relationship that it's very hard for i think people to jump back into them but for the memory side i will continue to fixate on micron on sk hynix on stuff that is geared towards robotics memory to me that will happen no matter what one of the things that uh i think people should really start to realize humanoids are a big part of kind of the competition between china and the us again not just from a hey we're building stuff but actuators which are kind of

Starting point is 00:20:33 the muscles of humanoids uh with the tariffs we have on china provides most of that and export most of it so when people talk about bringing manufacturing back to the us there are some things that are not manufactured here at all and it would take a long time it would put us back big time and humanoids because i saw you posted something and talked about humanoids they're a critical part of kind of the next five years and it will slow down with the tariffs so that's why i don't believe it's going to happen i would focus on the embodiment side for the for the slower things the tortoises i've talked about it before the one thing that will not change is that our health expenditures will continue to rise as a percentage of gdp and companies like mckesson cardinal health

Starting point is 00:21:14 Cigna, ones that have already shown that they're using AI with inside their inefficient businesses to get better. I still think the healthcare providing side that is already incorporated AI will be in there. And if I throw one more for people, I think you're getting a discount on power names. The energy stocks, they were leading this year. Now they're back in the middle of the pack for AI to still work second half of the year. We need more power and I think energy is going to be a big play. Now, those are pretty interesting sectors, but you mentioned liquidity. And if something goes down, the US has to step in. Scott Besant gave an interview to Bloomberg, I think it was, in Buenos Aires earlier this week. And he talked about essentially the Treasury taking the place of the Fed in terms of the tools that they have to control liquidity. And I was texting with a friend of mine and we're kind of joking back and forth of like, so let me get this straight. The president said cut interest rates. The Fed said no. So they said, we're basically going to break your will by we're going to slow down the economy. We're going to force you to cut interest rates.

Starting point is 00:22:18 And now that you also have the Treasury stepping in and saying, and by the way, if you don't want to provide liquidity to the market, like we have our own toolbox, we got our own ammunition over here, and we're willing to do it as well. And so it does feel like multiple groups are ganging up on the Fed, and the Fed's not going to be able to withstand this like assault. But talk a little bit about the Treasury in particular, what he's talking about here. And then do you think that this is kind of a leading indicator that the Fed is going to capitulate and have to cut rates and kind of provide more of this liquidity? So one of the things I want to make sure people remember and realize, I believe if the Fed were to cut rates in a surprising fashion, you'd get even higher moves in long-term yields. So I think the thing people have to just stop with is the rate cut side. the market would view cutting rates into short-term inflation, which is what tariffs will bring. They might bring long-term deflation, which I think you and I are on the same page with. But

Starting point is 00:23:14 short-term, if you're going to immediately have, I mean, Druckenmiller said it well, it's a consumption tax. So it does move price. They're passing through prices. And if they don't pass through prices and small businesses go out. So the first thing is, I think if they were to cut, remember what happened in September, they cut aggressively and long-term yields are significantly higher than they were. Ten-year yields were 360 when they began the rate cutting cycle, and we're now at 435. Explain why that happens. Well, at that time, I think people were very, very scared that this was going to be inflationary. And I think that's where the fears have been is inflation may not be a justified thing right now,

Starting point is 00:23:51 but we kind of knew that Trump was in the lead. We kind of knew what was coming. People just extrapolated and said, well, if you're going to cut this aggressively when inflation is clearly about to take higher. This must be an election decision. We're going to go. It hasn't changed. So if people thought that that was about whatever it was, rates are higher. So I think the issue for the liquidity question, and it's really important for people to understand, the Fed is not going to do QE and come into the market and buy long-term bonds. The reverse repo facility is basically empty now. It's taken two and a half years for us to get there. But as of the other day, it's almost empty, which means theoretically, just you can

Starting point is 00:24:33 see the drying up of cash, excess liquidity in the system through a combination of QT and the drawdown in the reverse repo facility. We've gotten to a point where there's still cash out there, bank reserves. But what Besson talked about was trying to bring some stability and help, which did work for what is called the term premium for long term rates to try and get it more under control. We don't know 100% whether this was all the basis trade unwind. We don't know whether this was some other type of levered position taking off or whether it was foreign owners selling bonds. But the thing that we do know is they didn't want rates to go higher on the long end. And the only way to control that, and this is what they were trying to do, is say,

Starting point is 00:25:14 OK, we're going to be around. The issue is, to me, everyone keeps looking at these auctions. Just the fact that we're paying attention to auctions and rates are still not coming down, that's why liquidity is really evaporated inside the marketplace and so when you have junk deals that don't happen it's the longest stretch for loans 14 days now that we haven't been able to bring a loan to the market there were a couple buyout bonds that were issued this week the banks got hung with them they own them right now and so you're already seeing the freezing up that we last saw during covid and that's why liquidity is completely evaporated the longer this goes the more chance there'll be a negative GDP print in the second quarter, which I think is probably

Starting point is 00:25:54 going to happen. But most importantly, and this was today, the federal tax receipts are released every day and you get to see what's happening. The numbers are starting to show that we're probably going to start to see some job losses. I think that would make the White House flinch again. And when they flinch, they just start striking deals. They remove the tariffs. They create more certainty. If you're playing poker, folding is pretty much the only flinching that you can really do. Here, it's more like they're playing chess, allegedly, right? Or some people, the critics will say they're playing checkers and the supporters will say they're playing chess. There's a lot of options of what they could do. What do you think is most likely if they do flinch?

Starting point is 00:26:41 so i i think um one thing donald trump is the master of is something i call the second derivative of speaking so second derivative in the economy is when you go from three percent growth to two percent growth so the second derivative is moving down his second derivative speech is i don't care if the stock market goes down too okay everyone it's it's a good great time to buy he just we had we had a shift in the rate of change of kind of the words i think you see it with china where he's actually every time he speaks about china like yesterday he said we're going to get a very good deal done with china it's less now of the think about where we were with mexico think about where we were with europe think about where we were with china two weeks ago

Starting point is 00:27:27 i think the messaging out of his mouth has toned down i think besin as i've said people has moved to the front seat of the car. Lutnik and Navarro move to the back seat of the car. I'd rather have Besson in the front part of the car at this point to kind of keep everything. Is the language changing because China hitting back hard is loosening the language? Or do you think that it is,

Starting point is 00:27:52 you start out really tough, they start out really tough. You take a step towards the center, they take a step towards the center. And like you eventually, you know, you're going to meet and you're going to do a deal, but you have to like, in a weird way, give a indirect olive branch of loosening your language so that now they don't have to lose face by showing up for a conversation because over a couple of weeks you're like de-escalating

Starting point is 00:28:14 all right here here's my opinion on this in a in a um a mathematical political way okay i have said to people that i believe if you take an approach of analyzing how popular donald trump is he's arguably the most popular politician of our time and before everyone throws things whatever his base no matter what he does loves him 100 so 40 of the country loves what he does i think when he started backpedaling a little bit and this happened last weekend it's amazing how much can happen but on friday we we you know we do this saturday morning there was something saying okay okay, we're going to pair back tariffs on Tim Cook's goods. And I'm telling you, the base was not happy about that.

Starting point is 00:29:05 They want him to just continue to be aggressive. So I think for him, he has to kind of play this line of his base is not stock market. And then he's got the stock market where he knows his base gets hurt if the stock market just continues to go down. So he's kind of been put in this position when they lost the bond yields. And until the bond yields moved, there was no kind of change. So I think bond yields became the trigger point for him to kind of do the second derivative of talking.

Starting point is 00:29:32 And to me, knowing that we are down at the levels we are in the stock market because of the tariffs, people should have looked at the possibility that the lows are in happen when the second derivative change, because that's what drives markets. We know there's going to be a recession. The question is, what will the economy look like in December of next year? And if the economy is growing at 2% and we have a negative 2% in Q2, the market's going to start discounting that and it's going to be a buy on dips as opposed to a sell on rallies. And that's where I think the secondary showed up. So I think it's a very nuanced thing, but I think he needs to kind of straddle, be aggressive for my base and help them, which he's going to do with the tariffs.

Starting point is 00:30:11 And at the same time, not get too aggressive that it ends up being a depression. Ryan Peterson from Flexport um he is him and Craig Fuller I think are the two I'm paying the most attention to Craig has a freight waves kind of Bloomberg or data for a supply chain uh and then Ryan has a freight forwarding business where he really understands especially with China a lot of the the details there um Ryan had this great thread where he basically was talking about you know thousands if not millions of small businesses are under threat here's kind of how this all works? What did you take away from that whole kind of analysis? Yeah, I think it's really important because this is, I think, part of the unintended consequences that you just don't know

Starting point is 00:30:51 the answer to. Part of the problem with small businesses who, let's say, buy their, let's assume they sell toys or apparel, of which there's a lot of them. I mean, I live in Williamsburg, Brooklyn, and you walk down the street, there's a lot of really cool little shops where entrepreneurs have set up kind of these goods, and they obviously get almost all of them from China. The problem is Walmart sells lesser goods that are cheaper, but Walmart doesn't have to raise prices. They treat these events as something where they can put small businesses out. What Ryan wrote about in this thread, which was a great thread, is just we're starting to see the small businesses be in trouble. They can't afford this. They will have to start laying people off. I've

Starting point is 00:31:38 heard it from friends in the last week who do small business lending, individuals who do lending throughout the country to these places. And they just said they're frozen right now. They need more money because they still need to make payroll. So if you're not selling anything and your costs are about to go through the roof, which is kind of the dynamic that's happening, and you don't know what it's going to look like three months from now because nothing's being shipped across and you don't know what your cost is going to be, small businesses who may not have enough money saved up and they might live paycheck to paycheck with a little bit of money coming in a lot of those small businesses are in trouble and i think his thread kind of highlighted that this needs to

Starting point is 00:32:17 end soon he didn't say it was wrong he just said if you keep this going on you're going to start losing small businesses that's why i think the first time that job loss has show up in data which we still have not seen even on the weekly jobless claims i think that's where the next second derivative will be. We're still waiting to see when a China conversation will happen. But I think that Ryan's thing is very important because trade is a critical part of everything in this country. I kind of think of it like, you know, when kids are experimenting with each other, what the pain thresholds are, right? And it's like, all right, I'm going to do this thing to you and I'm going to keep doing it and go, you know, harder or press something into your arm or

Starting point is 00:32:57 whatever. And then you just yell when it hurts, right? And you kind of start real slow. And somebody like all right stop that feels like what the economy does right is the economy can absorb some degree of change uncertainty you know disruption uh quote-unquote pain uh-huh and then at some point people start yelling uncle yeah right and what i think you're pointing out is bond yields yelled first jobless claims is going to be the second like uncle yep but but actually we we're okay so far like no one's yelling uncle but when that comes out then it's a feedback loop and the administration will say okay we hear them yelling let's change let's de-escalate let's you know uh kind of move now is that their grand plan or do they just have to respond i'll leave that

Starting point is 00:33:43 up for the political people to debate because frankly just depends on what side of political aisle you're on is how you view that um but it does feel like in a weird way there's a there's an elephant in the room that no one wants to ask and i'm gonna ask the question I'm probably going to get, people are going to come at me for it, but it's an important question. I've said for years, I'm on record over and over again, 50% of jobs come from small businesses is the backbone of America. I think people get, I'm pretty pro-America. I'm pretty, when possible, bi-American versus not. It's not always possible. I get that, right? But generally being kind of supportive of the country, I think it's a good thing. There's a lot of businesses that I've seen

Starting point is 00:34:30 online posting videos. I make this blah, blah, blah, whatever. Some portion of them, and I'm going to say it's less than 50%, but some portion of them, you start to ask yourself, are you actually kind of like a Zerp phenomenon? And we saw this in tech. That's the only reason why I think it came up, right? Is there was a bunch of people who had access to cheap capital and they started companies that actually weren't good companies. There wasn't true demand for their product. There wasn't true, I would even argue, ability to build the thing that they were building. They built it really badly. And what we saw was that injection of capital led to an explosion of these companies. And then they all kind of subsided and they went out of business.

Starting point is 00:35:07 And there's been analysis. People have been like, hey, that was a Zerp thing. But that's kind of the game of venture capital, right? Is the people who are providing the capital know that some large portion of them are going to go out of business. The founders are in a weird way trying to make asymmetric bets. And so they expect some of them not to work. And so like, it kind of smooths over because everyone's like, hey, this is the game. Small businesses, that's not the game. Small businesses are very much, this is, you know, the operators, personal income, they're employing usually family members or friends, people in their community, like it's a whole

Starting point is 00:35:38 different ballgame. But I do wonder, maybe it's 5%, maybe it's a bigger, I don't know. But in the small business bucket, are there certain companies that got created that when you don't have economic downturn when you have cheap capital like all of that stuff allows for them to persist and now all of a sudden it's kind of like the tide goes out and i guess i see some of these videos and i'm just like i get how you could make money is that really a business that should exist for a long period of time given where we are on the technology cycle etc like how do you think through you know again it's kind of this like almost like ruthless question of

Starting point is 00:36:16 are there certain businesses that are going to go out of business that were really like a Zerp phenomenon? And you can emotionally say, I want all of those small businesses to be successful, but also be realistic about not every business, not every business idea is a good idea, right? So this, you know, we don't really prep for this. We just kind of talk. Um, what you just asked. So I'm going to, I'm going to be a little bit, um, economic history side here and give people someone um to go into chat gpt on and just ask about so joseph schumpeter wrote a book uh called creative destruction and he's the economist on creative destruction so there's two parts to to your question and again i mentioned that in in 2018 and then finally in 2020

Starting point is 00:37:05 i made a big step towards why bitcoin was important in the world and the reason was As Joseph Schumpeter said, the creative destruction creates all these issues. And if you just bring up what he said, he basically goes through the steps that happen and it takes time. But every time there's new innovation, it destroys other businesses. So let's just take your example. I'm sure everyone, and I do this where I live, I know small businesses in my town, in Williamsburg, and I love them.

Starting point is 00:37:33 And I will pay extra money to buy from the butcher there. You do the same thing. I do with bookstores. I go into the independent bookstore. I know it's more expensive. I can go on Amazon. Exactly. But it's like, hey, I like these people. So on a rainy day, if you're home and you sit there or wherever you're buying and you're like, oh, I want to get this tomorrow and I order it

Starting point is 00:37:50 on Amazon, no matter how much I want that small business to make it, Amazon's on my phone and I get to do it. And so no matter what, at the country level, whether it's DoorDash and not going to a restaurant and buying, you order from DoorDash, it comes there. My building is flooded with kids that that do that i prefer to go out and buy the food come back make it myself but it old school yeah it ends up that's true yeah you like to make your own food blasphemy this this dara said give you his money all right i'm making you food you and your wife come over next week and i'll make you guys some dinner okay then we can have a proper conversation about the food that I'm making. So Schumpeter's path of creative destruction eventually leads to

Starting point is 00:38:40 the government getting bigger and bigger, leading to populism. These are all things he wrote about in the 1940s. And the reason was because the job of the government is to help the median person in the country. So when the distribution of wealth gets bigger and bigger because of technology, they have to do more printing. They have to raise the debt. He literally wrote all this until it leads to populism and some sort of an eventual revolution. And so he forecasted exactly where we are. If you break down what you said, we've destroyed businesses to where I think 70% of the country lives paycheck to paycheck. Now that doesn't mean like literally they can't pay for anything, but it means if they went out of work and lost a job for a few months, they wouldn't

Starting point is 00:39:22 be able to survive because they have a lot of debt and they haven't gone through it. Businesses, small businesses are no different. I respect people that try to fight through and don't want to work for Home Depot and run a hardware store, but we know they don't make that much money because we know how Home Depot has taken away from their business. So I believe what you said, the Zerp thing is a big part of it, but I believe Zerp was put in place to try and help people. It's getting harder and harder. And so the only answer I can see is either we do what donald trump is doing from a tariff perspective to try and help at the same time that bitcoin and the decentralized situation gets better the currency is getting weaker which will help the

Starting point is 00:40:03 trade deficit he's just trying to balance this out a little bit i think the end result for people is that bitcoin slash i mean gold is the same thing i think people just need to invest a little bit of their money in there and they have to hope at this point that they can have cheaper prices in the future from technology and that donald trump and government is going to try and help them again get us to that point it's not an optimistic scenario but it's the one that's happening the reason i bring it up is because um i have a number of friends who own small businesses and most of my friends i think run businesses that they've got a shot to be able to kind of weather the storm and they'll figure it out and some of them uh frankly operated in other industries and

Starting point is 00:40:43 then they've gone into these markets um but there's a couple of friends where uh you know we've kind of started to have the conversation of like, should you fight the trend or are you actually better? Hey, get this thing to keep running for as long as you can, but you should be looking for what is the tailwind in another industry that you can actually, you know, kind of position yourself for. And it's hard, right? It's very difficult. And I always joke that whenever I talk to people in the finance world or the tech world, and they're like, I'm working hard. I'm like, you're working hard, maybe hours wise, right. Or whatever. But like, you're not going into a machine shop, right? You're not going into, and you name some of these things and you

Starting point is 00:41:19 go and you look at these businesses. And I think I've said in one of our previous conversations, I mean, I went over the last two years to a bunch of these industrial manufacturing businesses, pretty much all over like the Eastern part of the United States. And one of my biggest takeaways were in tech, if I want to change something, engineer can make some changes. And if we have enough traffic, we very quickly within a day or two, we know, was that a good idea or was it not? do we roll it back or do we keep it in these businesses it may be hey we should order different materials okay it's gonna take three weeks to get here right now we got to put into the product now we got to go put it on the shelves and see if people will buy it right and so like that may

Starting point is 00:41:56 take months and the feedback loops just aren't nearly there and so one of the benefits is right now some of the tariff stuff hasn't hit some of these businesses but also any changes that they're making in preparation they're not going to know for a couple months whether it works or not and so i do wonder you know again is that like another point of like crying uncle so you get the jobless claims but then if all of a sudden people start saying wait a second my business is going out that feels like a pretty you know material moment where um and again ryan was talking about businesses that are sourcing things in china specifically creative destruction maybe there's other places that pop up in the world say hey we can do this too he outlines a lot of

Starting point is 00:42:35 reasons why he doesn't think that'll happen but i think that you know it's not just like hey steel or these really large products. We're also talking about, I'll use it affectionately, like trinkets. People who are trying to sell things for $5, $10, $15, $20 that they're sourcing from outside the country, that's a big part of the US economy. So one of the best ex-posts I saw in the last week and a half was from someone who just is part of Donald Trump's base. And he was very, as a small business owner. And he basically started off with, I'm 100% supportive of what you're doing. He complained. And again, this is the complaint that shows up. You didn't give me any time. If you would have said by the end of this year, this is where the tariffs are going

Starting point is 00:43:25 to be on China and nothing can come from there. He's like, I can work with that. I'll figure it out. But to immediately put the tariffs off, I can't work with that. I have no certainty. So I have no demand coming in. And I don't know what to do with my business because I won't be in business if a year from now we're at 125%. So I think the, the, the logic of seeing someone that literally was like, I agree with what you're doing. I think this has to happen as a small business person. I think the way you're doing it without giving us time is wrong. And that's why I believe if the base is saying that as small businesses, as opposed to you get the de-escalation exactly. And I think that is a way that if you come up with a scenario, it's like, okay, let's

Starting point is 00:44:03 take it down. But the tariffs are going to ratchet up over time. China is going to do foreign direct investment in the U.S. of X millions of dollars. I don't think people know the numbers again. China last year, we imported four hundred and sixty billion dollars from China by itself. It can't put the economy into a recession with even one hundred and forty five percent tariffs. I mean, it's not going to kill the economy, but can they ratchet that down and say, you're going to buy this, we're going to do this? Of course. And that's I do believe will happen because of those posts from the base i think the base is making logical requests it makes sense and i think this was negotiating leverage i really do where can we send people to

Starting point is 00:44:41 find you on the internet uh they can find me on my youtube and sub stack at uh viscer labs or j viscer labs and for institutional people they can find me at 22v research i'm really focused a lot if you're looking for figuring out how to make money coming out of this which is what i think people should be doing now even if the market were to make another new low it's time to be offensive because the second derivative of policy policy words has shifted and we could go down in the s p for a day under the low and then i think they would be forced to come back because when the liquidity drives up in a levered ponzi scheme i hate to say it all the time they have to come with liquidity and they don't want to come with liquidity so we're going to get some kind of a

Starting point is 00:45:25 of a balance here. They can find me at 22V on the institutional side. Amazing. Thank you so much. I learn something every time. We'll do it again next week. Appreciate it.

The Pomp Podcast - #1533 Jordi Visser | Why Bitcoin Will Hit An ATH This Year

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