The Pomp Podcast - #1572 Jordi Visser | BITCOIN NEW ALL-TIME HIGH MEANS WE GO HIGHER!

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Starting point is 00:01:03 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.

Starting point is 00:01:28 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. What's going on, guys? Today, we've got an amazing episode with Jordy Visser. Jordy is a 30-year Wall Street expert. And he is here to explain why is Bitcoin breaking out? How did he know it was going to happen? Whether he thinks Bitcoin's going to go sideways or go much, much

Starting point is 00:02:06 higher. And then on top of that, he also talks about stocks, what's going on with tariffs, how to think about the big, beautiful bill. And of course, AI, where exactly is all the value going there? Jordy is a wealth of knowledge. This conversation gets into all kinds of nuances that I didn't know. And so I learned a lot and I hope that you do as well. Here's my latest conversation with Jordy Visser. All right, Jordy, all-time highs, S&P all-time high, NASDAQ all-time high, gold all-time high, and Bitcoin all-time high, you called it. Why is Bitcoin breaking out? Let's start there. You previously talked about a short squeeze. You talked about people wanting this decentralized digital asset. What is driving Bitcoin to these higher prices?

Starting point is 00:02:48 Well, I think there's two things that have gone on. One thing we talked about, which I'm going keep emphasizing to people um once options expiration passed um i think a lot of the supply in bitcoin started to wear off i think people are going to have to just start recognizing that at the end of every quarter there is a lot of open interest uh from people that are selling future production and the bitcoin miners from what i've seen have done it and i think there's a lot of people that just have joined on the party and so vol was compressed you got bitcoin implied vols below 40 so i think once we came out of expiration there was less cell pressure there were a lot of shorts that had built up in the 110 to 120 area around the all-time highs

Starting point is 00:03:32 or the prior all-time highs so i think that started but there's something big that's happened and and i think you and i because we didn't do one last week the momentum is growing from the traditional finance community and i can feel it um i think circle was a bigger event and may have been truly as as tom lee said this this week um the chat gpt moment for the crypto world and specifically this situation that circle made people do research i think one of the things that i have noticed when i talk to people that i've known for a long time in the hedge fund industry they haven't done put in the time and you and i've talked about this like if you don't put in the time to understand this uh and i was on a call um this week with chris camillo and he was

Starting point is 00:04:20 saying the same thing about humanoids it's it's basically if you don't put the time in i don't think you can fully understand what's going on with crypto and so circle put a spotlight that hey we got to be participating in these ipos there's been a bunch of successful specs there's been a whole bunch of things that have gone on i think we need to do some research and i think the research has helped one other thing that's gone on when tom lee while we were gone basically started the ethereum corporate treasury balance sheet strategy and he explained why this fits into the network effects that i always thought were going to happen from stablecoin so i think if you take stable coins circle happens people need to do more research then they start realizing oh

Starting point is 00:05:05 we've got this whole digital oil thing underneath it and the platforms are going to benefit from the the volumes and the transactions and the network effects lead to ethereum and i said to you a couple weeks ago that the technical breakout would be if ethereum closed two weeks above 2700 well now we hit 3000 today so i think the altcoin season is starting to enter into people's uh minds again so i think it was just a triggering of events that that circle helped a lot uh as an expiration when you look at the expiration component right so you get some of that dampening volatility that goes away. You now have Bitcoin allowed to do Bitcoin things. It starts to really kind of run. And I think that one of the aspects that usually catches people offhand, if they are

Starting point is 00:05:51 experiencing this for the first time, is like when Bitcoin moves, it really moves. And what we've seen over the last even 48, 72 hours is Bitcoin pretty much went from 108,000 to 118,000. I mean, that is not just a direction of move, but that's the severity of a move. You just don't see that often for a multi-trillion dollar asset. And so how much of that is kind of normal market stuff versus could it just be like one or two big buyers coming in the market and saying, hey, I'm a sovereign wealth fund. I need to buy a bunch of Bitcoin. It feels like we're too big now for it to be any one buyer. And this is much more a market-driven thing, which to me means that we probably are in true price discovery and there probably is you know significant momentum that is

Starting point is 00:06:35 behind this you know kind of going through the rest of this year so here's one of the things i so as as a derivatives um geek who was born in the options market this move has not i mean it's been fast but as you said you're getting like three percent moves a day so bitcoin's been trading at, or the implied vol is just under 40. Just under 40 implies about, you know, almost a two and a half percent move a day. So when you're getting 3% moves, these are really one standard deviation, slightly over one standard deviation move. So I think people have to start to get used to that just because it happens in three days, that is the way a lot of stocks move. That's the way a lot of other trillion plus assets move. I mean, Nvidia's

Starting point is 00:07:21 move like that. Nvidia went from a low of 80 back up to 160. It's a $4 trillion asset. It's bigger than Bitcoin. And so its vol is higher than Bitcoin. It doubled. Bitcoin didn't double from the lows back during Liberation Day after effects. So I think people just have to start adjusting to the fact that the vols move lower. And I think the moves are probably more likely to happen like this just because there's a tremendous amount of option volume that is out there and open interest much, much more so and growing because of iBit. And I think this is going to continue. So I think this was a normal move. And I think people should just get used to it. And you know this better than anyone. Historically, when Bitcoin range trades like it did last summer before the election,

Starting point is 00:08:04 when it breaks out of that range, there tend to be a lot of shorts that have built up and it just tends to go. So I'm expecting a lot, a lot bigger move than what's already happened in July. I think people are going to be surprised at the levels that we hit before the end of this month. And so you think that this is still short term, you know, kind of from a momentum standpoint, do you have any sort of indicators? We're sitting around, you know, 118,000. Is this like a 125? Or do you think like we could hit like 150 in the month of July? So obviously, some of it's going to depend on if the stock market can just hold its gains at this point. But I have some other signals. And I'm going to be talking about this in greater detail

Starting point is 00:08:45 over the weekend but uh global m2 has gone sharply higher uh so bitcoin has kind of underperformed what would be normal and just to give you an idea now a lot of this is because of the dollar weakening but again the dollar weakening is good for global growth it's good for assets it's good for liquidity uh so far this year global m2 using china europe and the us is up over five trillion dollars uh in 2020 it was up 11 trillion dollars so i think there's a lot of pent-up liquidity that people have kind of ignored because the stock market had gone down i've been you know all over my belief this year and i still believe it and i'll i'll segue into something that i think is important from the economic side on the back of the pmis or on the back of liquidity which usually

Starting point is 00:09:36 leads to all starting to outperform bitcoin which is i think what we're starting to to enter into uh you get this point with global m2 that you should have had bitcoin up higher already this year so i think there's um we range trade we're going to extend this move i still think there's going to be a very large short covering squeeze this year if anything were to come out positive out of washington at this point when momentum is going i think it's going to add to it meaning any kind of positive news on the clarity act anything along those lines i just think now we're in the the phase where you have more traditional finance people looking at it. But remember, the MAG-7 are unchanged for the year. So this transition that I think is going to happen away from software

Starting point is 00:10:19 technology winners and into more of the AI trade that is relative to construction, infrastructure, commodities, this fits into the PMI. And this is the other thing that Bitcoin, but in particular, the alts have historically had a high correlation with is when PMIs around the globe start going higher. That is the surprise that I think is going to happen in the second half of the year. I see signs of it in the equity market that it's starting. I think this is going to be a very, very dramatic momentum shift where people are going to start to realize that Bitcoin is not the mag seven. It's actually benefiting from not only liquidity, but from global growth. Now, one of the aspects of Bitcoin that I think really is underrated, I think I told you

Starting point is 00:11:02 previously, there's a very well-known macro hedge fund. I was talking to the CIO and he said to me, I come in, I look at global liquidity first, I look at Bitcoin's price second, and then I go look at all my other data points every single morning. Bitcoin moving higher, I think, will drive immense amount of optimism and capital flows into other assets as well. How do you think that that occurs? Are you hearing anything from some of these other professional investors? It does feel like as crypto becomes more and more of kind of in their realm or in their analysis, that optimism that I think Bitcoin has really benefited from and embraced over the years, that seeps into the stock market. And, you know, in a weird way, Bitcoin moving like this may actually just say, hey, the stock market's next. Yeah. So the person you're speaking to is very unique, meaning if they're actually watching Bitcoin and using it as a signal.

Starting point is 00:11:59 I think everyone else is using it as a speculative vehicle in terms of the way they think about it. So for most macro places, they're more interested in shorting it when it's time for it to go down. You have a few people like Paul Tudor Jones that have focused on it from an inflation and from a spending perspective. If you went through the list of things that have happened this year, we went from, oh, we're going to be an austerity believing administration to we're going to go our way out of it. If you go through the Stablecoin Act, if you go through the Successive Circle, if you go through the ability for Bitcoin to distance itself from stocks during the Liberation Day and actually get back to the all-time highs way before the stocks did. I think this year has been one where Bitcoin has started to, I want to say, force anyone who doubts it. And as someone who spent the beginning part of the year really talking to a lot of hedge funds around the globe, I mean, some people didn't even want to hear it. They don't want to they don't want to talk about it. I'm telling you, I'm getting reach out.

Starting point is 00:13:00 And I had one yesterday on why Ethereum over Bitcoin right now. And it's not that I believe Ethereum is is long term a better investment than Bitcoin. But sometimes when you reach points where, again, if the PMI is going higher, historically, the alts have done better than Bitcoin because this is a growth thing. This is an ecosystem thing. I think the problem is for hedge for the what's going on is like a snowball effect. I think more and more people are realizing that it's an asset that is big enough for them to make money on. They're maybe having trouble making money on the AI trade the way they traditionally do. So I think Bitcoin is now going to be associated with the commodity side more so than people realize. And I think we are in the early stages of a structural bull market

Starting point is 00:13:43 related to building out the infrastructure of AI, which is going to take power, as we've talked about. It's going to take copper. I wrote a copper piece this week. I think people have doubted the structural nature of AI and what the tariff situation did was force us into a position where it is absolutely structural. And I think more people are looking for ways to play it. And I'll say it again and again, the purest AI trade is Bitcoin. When we look in the stock market, kind of intersecting with crypto, we've obviously seen all these treasury companies announced, but also we saw CoreWeave and CoreScientific announce a deal. What was your takeaway from that?

Starting point is 00:14:17 Yeah. So that fits in again. So if I think of stable coins as the bridge between the fiat money system and the crypto money system, if I think about CoreWeave and Core Scientific, I think about this as the power side of the fiat system, which has been the AI and the power and energy needs of crypto. these are all related to the digital economy and so i think this is just another another spotlight to people of why did they why are they doing this with core scientific and are there other miners out there that we can go look in how does this fit into the power needs the more they drill down in this i think they're going to recognize that there is a linkage again between ai and back over into crypto and you and i have talked about it ai agents means higher volumes it means higher transactions with stable coins core weave uh you know focused on the compute side and the power side here we go we've got another one that comes over from the ai side so i think it's just another

Starting point is 00:15:15 connection between the fiat system and and the ai world and back into crypto can you describe a little bit more detail about uh pmi data and the china trade deal i think those two things are somewhat linked here um in terms of like why are those two things important and then what specifically about what's happening in either bucket is kind of leading to this conclusion there's no doubt in my mind that the china u.s trade war and you have to remember back when um when we went to the 10 across the tariff um sweep when we backed off and then immediately put china up to 100 plus percent and the goal was to isolate the china from the rest of the world and now we've gone completely flipped the other direction there's a deal with the uk

Starting point is 00:16:05 and somehow within everything that's happening now the china us situation is fine and i'll keep saying it over and over again i think the two countries realize they need each other for the next five years uh and i say the next five years because the us has to figure out its rare earth problem china wants uh they want semiconductors and they want chips and they want software and And you're seeing, you know, lessons of of bans. The commentary coming out of the White House seems to be negative towards every country in the world right now, except for China. And so I think what that has done, China is the most important country in the whole trade situation. We all know in the U.S. that made in China is a story that most small businesses depend a lot on the supply chain of China.

Starting point is 00:16:50 And so when China tariffs were going in, the business uncertainty took off. where the PMI fits in is if China and the US have now set and we have full expectation of what's going to happen, then I think the PMIs are going to go higher because of that certainty. But most importantly, we've had a lot of changes since Liberation Day that I don't think people have fully looked at. First of all, new orders in the PMI was already going higher after the election. Most people thought it was happening because of the front loading of stuff before the tariffs, and I'm sure some of that had an impact. But people can't forget that this was a pro-business expectation coming into the year when he took over. Well, now the tariffs are lessened from

Starting point is 00:17:32 where they were, and now the Big Beautiful Bill is done. The China-US situation seems to be at a stalemate where they realize they have to be together. But most importantly, we've had a recognition that AIs move faster than we all expected. It is now a structural race against China, but also for the hyperscalers to avoid obsolescence. The build-out for that is much bigger. The nuclear EO was signed, surprisingly, with three times the nuclear energy that we're going to need, three times the nuclear energy. Everyone has seen the electricity numbers in the U.S. The build-out of power and data centers is going to be a driving force. And so I think the PMI data, for all of those reasons, is going to go higher. And at the same time, China realizes

Starting point is 00:18:14 they have to focus domestically on their economy. There's more speculation that they're going to announce more measures on the property side. All of this leads in when you combine it with what copper is doing, which is at all time highs, the cost is at all time highs, the dollars weakened significantly. These are all pro PMI things. And so I think you're going to see the PMIs rally in the second half of the year. And it's not the way people are positioned. One of the things I think people are paying attention to, which is important in the media is there's a Bloomberg article that talks about this rotation in the stock market. I know you've been paying attention to this. Maybe talk about what you would expect to see in these kind of momentum-driven rotations,

Starting point is 00:18:53 and then what are we actually seeing and what that means? Yeah, it's a good point. And there's a lot, if you go on X, there's a lot of people highlighting, and they're doing it for bearish reasons. Because this started in December of last year, we started seeing momentum weaken. And just so for the people that don't follow the stock market that closely. Think of momentum as taking the top 10% of the best performing stocks relative to the bottom 10% as an index. So you're really talking about the winners versus the losers. And sometimes when that's moving dramatically, where the losers just keep losing and the winners keep on winning, you end up having this massive move in momentum.

Starting point is 00:19:33 And obviously, AI has been the dominant impact to the long side of momentum. And that is where things had been driven. So back in December, we started to see a shaking of momentum. It led to more weakness when the DeepSeek announcement happened in January. And by that point, NVIDIA had traded to 113. It had been up at the highs close to 160. So you really had this fall off and everyone was bailing out of the AI trade. And that led to a lot of hedge fund liquidations. So a lot of people are associating that when you have momentum changes, that's usually a bearish thing or it was the last time. So it probably means the same thing is going to happen because it seems to be happening at the same time as the tariffs coming back on. I think there's a

Starting point is 00:20:15 massive difference right now. I think the AI trade is structural. Semis are doing extremely well. Nvidia is going higher. Nvidia had peaked in June. So that was already a weakening trade that was out there. I don't think there's any doubt in people's minds. What I think is happening is that a lot of the losers have been related to the PMI. The PMI has traded below 50 for almost three years now, the longest period in history. It only posted two months above 50. And that was in the months beginning of the year when the Trump enthusiasm was in there and the front loading was in. So to stay below for that line, that's historically a recession period. The LEI has been in recession land. And so the fact that we've been sitting there means a lot of companies like

Starting point is 00:20:56 material stocks, bank stocks, energy stocks. There's a lot of companies that are more on the value side, I think we're getting a shift right now because the software names to me are exposed. I think they're overvalued relative to the likelihood of the disruption that will come from AI. So I think we're going to see a momentum shift. Now, historically, that momentum shift where momentum starts to break down, that's usually an inflection point involving the PMIs, and it's usually a bottom in the PMIs. And that's what feeds back into bottoms and PMIs usually lead to a rally in Bitcoin. And those rallies, do they then feed back into any of this data or is Bitcoin kind of the final end of a chain, right? One of the things I always think about is like asset

Starting point is 00:21:37 prices either are part of the flywheel or they are kind of the end result. And Bitcoin to me actually feels like it is the final home of capital, which means that it is not coming back out, right? Like most Bitcoiners, both at the institutional level and the individual level are like, I'm buying the Bitcoin, I'm never selling the Bitcoin. So it's like this quote unquote like Bitcoin is the final home of all capital because that's where it's treated best? Is that a fair way to think about it? Yeah, Bitcoin and just like, so let me give you the difference between why investors love investing in tech stocks and particularly software and not so much in energy companies. So historically, energy companies are cyclical. And so you get these

Starting point is 00:22:21 large corrections and they're very sensitive to macro changes while software is kind of this consistent earnings thing that unless you get something like 2022, they tend to be better sharp ratio assets to invest in. Bitcoin has a little of both. So it has a cyclicality to it, but then it also is an innovation stock. And if you believe that AI is going to accelerate, I think you should be in Bitcoin. I don't think anyone yet is in that mindset. So one of the important things that you're bringing up, and I think where investors are going to start to see a change. It's the reason why I thought a doubling, you know, a move to 250 this year in my mind was something that I thought would happen. I still believe it will be the second

Starting point is 00:23:00 biggest asset in the world at the end of the year. But I have higher beliefs in where it can go because the setup is a little bit scary. Liquidity is already rallied. We haven't gone through. The PMIs to me are bottoming and they're turning up. And that will mean that tech stocks and specifically the MAG7 will have trouble. So one of the things that could be interesting about this and what I believe is likely to happen. If the MAG7 are unchanged at the end of the year, it's really, really hard for the S&P to have a big up year because there's such a big weighting in the market. If you add in that all tech stocks, other software names like Palantir, which has had a great run, great company, I could see that be down from here to the rest of the

Starting point is 00:23:39 year, not because anything's changed, but just because it got too far in front of itself if there's a move back into the economically sensitive. Now, those weightings are smaller, So you could have a scenario where more stocks are going up. Very few are not going up, but the index doesn't move that much. And that means people are going to look for something that's still moving, that has innovation associated with it. And that's where I think Bitcoin should be. That's one of the interesting things about this year is we still have government support coming for this. We still have positive news coming. The Circle IPO is not the last one that we'll see. It's not the last enthusiasm that we're going to see in the space. We're just getting the altcoins to break out, but they're still down on the year. So there's a lot of catch up that can happen that bring a lot more of the day traders and people back into the ecosystem, because that actually serves, as you know, as a big rallying

Starting point is 00:24:28 cry for the crypto community to get more involved and get more enthusiastic. But I think you have the traditional finance crowd that's coming in. And I can envision a scenario where the economy PMIs are going up and the Fed is cutting rates. And that's what I expect to happen in the second half of the year. I can't think of a more powerful situation for Bitcoin than a weaker dollar that's already happened, liquidity that's already gone higher, positive stuff from the government, and then the Fed joining the party while the PMIs are going up. And I think that's the baseline.

Starting point is 00:24:54 I don't think that's an out-of-reach forecast. So the US dollar down 10% or more start the year, worst start 50 years. there are these charts that I've seen. There's an ascending channel, not a TA guy, but that's what they call it, where the dollar has now hit kind of the lower band, if you will. And I don't know, I'm not Albert Einstein, but if I see it at the bottom of the channel, the thought process is it goes back up. And on a relative basis, the dollar index strengthens. Is that possible? It feels like everyone is convinced it's going to be weaker and weaker, but then you see something like that and you say, well, wait a second, maybe the fact that everyone

Starting point is 00:25:33 is thinking that it's going to be weaker and weaker, could it actually reverse and kind of higher? So I think there's likely to be a bounce, but I think the dollar is in a longer term structural trend. So we fall 10%. It's one of the weakest beginnings. Could I see a rally for the rest of the year of 3%, 4%? Theoretically, I could. I'm not going to say it's going to happen. And the reason is because there's not a day that doesn't go by that Donald Trump doesn't attack Fed Chair Powell. I don't see how this works out well in the fact that they seem to have a goal here to move rates lower in the face of stronger growth. And so we'll see how the market handles that. But if the MAG-7 aren't performing well, I'm not really sure that that helps also on the

Starting point is 00:26:29 dollar inflow story. There's another part about this that people have to remember. Depending on which dollar index you use, some of these like the DXY, which is probably the one that you saw, that's heavily weighted towards Europe. That's not a trade-weighted dollar. The Asian currencies are far more important. And a lot of those currencies are not changing direction. The Yen has. The Chinese Yuan hasn't really moved this year. That'll be a more important part. But the Taiwanese dollar, which had a significant rally, has continued to be there. A lot of the currencies over there have. We haven't yet seen a move in the Australian currencies. If I'm right about the PMIs and we actually see commodities be stronger, well, that would be good for emerging

Starting point is 00:27:15 market currencies. It would be good for South Africa, be good for Canada, be good. There's a lot of places in their currencies that typically do better when commodities rally. So if I had to guess, I think the dollar is going to end not too far away from where it is, meaning I think we've had the bigger part of this move and we can wait till next year. But I do think U.S. growth is going to be stable for the rest of the year. Do you think we'll get a shadow Fed president? And does that matter? Or shadow Fed chairman? I think it does matter because this is the thing that Donald Trump has to do. He gave in on the austerity measures, but what people have to remember, the austerity measures were meant to help the middle class. It was meant to help the

Starting point is 00:27:55 manufacturing sector. We still have a major problem in the country, and it's a voting block that's really important. We talked about what happened in New York City. I don't think it can be minimized as to the problem we have with the 25 to 35-year-old, and let's say 21 to 35-year-old voting block in this country, which is a growing voting block. They have student debt and they can't afford housing. So he has to find a way to help that. And one of the important ways to help that is to lower interest rates even lower than maybe theoretically where they should be. And I think that the shadow president thing is going to fit in with changes that are going to have to happen on the housing affordability side, because I'm not really sure long-term yields are going to

Starting point is 00:28:41 come down if they start cutting rates. I think it'll end up being a steepening of the yield curve and rates will still on the back end remain higher, which means he's got to find some way to help the housing market. All of these things lead to more printing, in my opinion. They're not going to be QE, but it's some form of helping the median voter. And if you're helping the median voter and you're helping the wealthy through the stock market going higher and you're helping the commodity sector, that just spells a lot of we're going to try and grow our way out of it and get more revenues on the tariff side. I think the shadow Fed thing is going to be a part of a bigger plan to get rates lower and help the housing market and the student debt market.

Starting point is 00:29:18 Do you think that the economic policy that this administration ran on part of their campaign, they failed? Or do you think that this is a natural evolution of they did something, they tried to implement it, the market reacted, and so you have to change your mind. It's a sign of intelligence. I see a lot of people saying, hey, they said they were going to balance the budget. They're not doing that, quote unquote, they failed. On the other hand, I think that it looks like they were trying to do the austerity measures, bond market, a bunch of these guys all freaked out. And then they're kind of changing their mind. How do you evaluate that transition? They are now in the crypto-backed loan space, and they offer industry-low interest rates

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Starting point is 00:34:26 all the people in that area or closed that whole area and then they pivoted towards ai and the company went from a 350 billion dollar market cap at the lows in 2022 to a peak at two trillion dollars. I think everything in business, everything in running a sports team, everything in life is you make the best decision on a probabilistic basis that you think will work. When it doesn't work and you find out things that you didn't know, in the case of this administration, I have 100% belief that they underestimated the need and the situation with Rare Earths. I will say it over and over again. I think Luke Roman has been on this as well. The Israel-Iran situation and the fact that at some point the reporting started to get in that the weaponry was getting harder

Starting point is 00:35:16 and harder to come by and that we need to make a lot of new weapons. I think Rare Earth is a major, major story that very few people have spent the time on. So I think the administration tried to do something. They're still going with some of the plan, but I do think they pivoted on the other option. The one thing that when you and I first started to do the show that I felt very comfortable saying was, you cannot cause a recession if you're trying to work your way out of a deficit. That'll lead to more spending for sure. In this case, what they're trying to do is grow their way out of it. And someone asked me yesterday if I thought it was a good idea from a non-political person. And I said, I actually think at this point, it is the only way to get out of

Starting point is 00:36:02 this. I don't know whether it'll work or not, but I do think that there is a probability that five years from now, the benefits of AI will help the deficit. And so if I was trying to do something, I think taking the Ray Dalio cut expenses and do all this stuff to get it out, what Freeberg says on the All In podcast, I don't agree with right now. And I see the math and I understand how relentlessly impossible it is to think this will happen. But I do believe the productivity gains that are going to come from AI, the productivity gains that are coming from humanoids will help the deficit. I think there's other problems that will come out of that related to labor and how that all works itself out as a possibility. But I think the choice that they've

Starting point is 00:36:42 made at this point, in my opinion, is really the only one. I don't think the way our government works and the constituents electing in people that they want to spend, no matter what they think at the aggregate level, I think they just ran into a buzzsaw and there's just no way to get the U.S. government to stop spending money. So let's try to grow a way out of it. Let's figure out a way to do it in a way that makes sense related to AI. So we've got the big, beautiful bill. All of a sudden, though, tariffs are back. Seems like we're getting some random announcements and letters of some high tariff rates. What is going on? Is this for sport? Is this for for some other purpose. I literally think he's in negotiations with every country still trying

Starting point is 00:37:28 to get the best deal. Do I think he wants as many tariff dollars as he can get without hurting the economy? Yes. Because I think at the end of the day, when we look at the deficit, even though the revenues associated with the tariffs are not included in, you know, the numbers that you see in the paper. I do think the ability of getting the tariff dollars in because what the U.S. is giving up and what other countries have benefited from, I think there's a reality in this situation that we're going to end up in a place where the tariffs will find a level, whether it's 10% across the board or whether it ends up at 17%. I don't think this is going to hurt the economy to the nature to the level that people did and you've been on this all year and i i really did

Starting point is 00:38:21 join you in this um so i i didn't expect to be there so what i got wrong this year is i fully expected even without the tariffs that the inflation data was going to start to to tick higher it not only has not ticked higher but that code to you know putting today's rents in with it just showing that we're down at that level and then watching every economist, all 73, be above where we got the numbers in for May. I just think the inflation data is the benefit that is coming. And this is one thing I want to say to everyone. AI has an impact on the service side of inflation down the road. And if we're already seeing an inflation situation that is remaining sub 2%, percent, which is where we are in some measurements with this or just above two percent for the amount

Starting point is 00:39:12 of money we printed for the type of nominal GDP growth that we're having to even believe inflation could be at these levels is just it says with AI, we're going to be in a situation, whether it's five years from now, whether it's four years from now, that inflation is going to be the biggest surprise to people. And I think that's the benefit that's come out. So I'm a big believer that on both what we had to do and what the tariffs are doing. I think this is all a negotiation. And I think we're going to come out of this with an economy that's fine, with AI that's powering through in a structural trade. And I think some of the benefits that we are all hoping to see, we are going to see. And I think the middle part of the country is actually going to

Starting point is 00:39:50 see some benefits over time. I just think it's not working out for them as much as the White House had hoped at the beginning of the year. Is there anything that you're worried about right now through the end of the year? I'm pretty bullish through at least the end of the year. It sounds like you are as well. Anything that you're like, hey, this could derail the train. There's always something that we're not thinking about that could happen. I mean, the situation with Russia, Ukraine doesn't seem to be improving, although it's been going on for a long time. Trump seems pretty frustrated by it. It was a campaign promise he made. I think there's always something that could happen out of out of there.

Starting point is 00:40:28 if the China-U.S. trade talks break down and the U.S. says we think we can get our own rare earth or they come up with some reason that I just don't think is possible, maybe I'm reading that wrong and that would definitely derail us. I'm not worried about the economy. I'm not worried about job losses. What I am worried about, let's say a year from now, is the power situation. So I'll keep saying it again and again. I think all investors should be looking at energy companies and looking at power over the I think it happened late last week or early this week. I don't know if you saw this. Elon Musk is importing a power plant. So if you didn't see this news, you have to go read about it. He literally to get around the restrictions. This is why the man has been

Starting point is 00:41:16 so successful creating everything. He couldn't get around the permit restrictions to help with his Colossus, the next phase of the build-out. So he bought and is importing a power plant. So I don't know what that means completely, but that just says, again, that we have a serious power situation that is going to be an impact. We are going to run out of power. We are going to have blackouts. We are going to have higher electricity prices. We have to focus on this. And the big, beautiful bill does not help it. And so I think that was a big mistake. And that would be the risk that i worry about the most is that people are underestimating the needs on the on the commodity side and specifically the power side and by the way for people the copper tariffs

Starting point is 00:41:59 which were announced this week um there's a copper problem that's going to be happening too copper is is an incredible uh incredibly needed part of the electrification story and the fact that copper is kind of in this this weird you know place now where we've got 50 percent tariffs on this, and we need a lot of it, and we don't have enough of it, and there's all kinds of supply problems. I think there's a potential story there that maybe we're overplaying our hand or not thinking far enough ahead. So power and copper and electrification and rare earths seem to be the issue to me. I actually do have one more question. Grok4 came out, Elon, cold start, behind the curve. Other people had years kind of jumpstart

Starting point is 00:42:43 on him. He's got the best model in the world right now. I mean, just seems incredible. Yeah. Whatever people think about Elon Musk and the issues that have come out, where would the world be without him in terms of the companies he's built, the SpaceX? I mean, I'm just about to have Starlink put into my home here in Maine. uh i drive a tesla like he's impacted my life for sure the same way steve jobs did and uh i think the robo taxis and the humanoids and everything that's coming space travel to mars uh you just you know you really can't uh ever underestimate him so the grok situation and i use grok every single day not as my primary tool but certainly for a lot of different things but I have been using it more and more this week because the speed of it is just, it's dramatically faster. And for those people, I was on a call this morning with an investor and they're in the space

Starting point is 00:43:44 of industrials and power. And we talked a lot about Colossus. And I asked him the question, have you ever gone through what he actually did to get that done? A lot of people don't even know what Colossus is. Everyone who's a curious person should just go into Grok and say, what can you tell me about Colossus and then go listen to a podcast with Jensen Huang and literally hear him say, we didn't think it was possible to put together that many GPUs. We thought it was done. And I think the number was like 32,000 and he was able to do 100,000. No one thought it was possible. And he did it in 122 days. So for him to build Colossus, which is a direct impact to Grok 4 and all this stuff. I think people should never underestimate the things that he says in

Starting point is 00:44:30 public about the need for solar, which he chastised the administration post the big, beautiful bill about the way they emphasize fossil fuels at the very end and really cut down on the wind and solar, which is obviously not only a necessity, but solar in particular is the end result. So I just think the Grok 4 situation and everything should not be surprising anyone, but it is an amazing tool for people to use. I completely agree, my friend. Where can we send people to find you on the internet? They can find me at Substack. They can find me on X. They can find me on YouTube, whether it's Visser Labs, whether it's Geordie Visser, wherever you want to go. And then for the institutional people, I continue to write a lot of deep research and do a lot of

Starting point is 00:45:14 AI presentations for the hedge fund community and the private equity community on how they can incorporate it. I'm spending a lot of time now trying to help firms on the culture change because I think the biggest issue people are having, especially with the young people, is how do we keep the young people engaged with artificial intelligence? How do we inspire them to work for the firm? Management seems to be having a hard time with that. If you want to not be disrupted, if you don't want to be obsolete, you got to have the young people at the firm. They're scared of what AI means to their businesses. The only way to get people to not be scared of something is to teach them how to use it and create a culture which embraces it.

Starting point is 00:45:50 I've been helping firms with that as well. So they can find me at all those places, my friend. Amazing. Thank you so much for doing this. We'll do it again next week. Thanks, Pop.

The Pomp Podcast - #1572 Jordi Visser | BITCOIN NEW ALL-TIME HIGH MEANS WE GO HIGHER!

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