The Pomp Podcast - Bitcoin & Stocks Are Going Higher (The Money Printer Is Coming) | Darius Dale

Episode Date: September 24, 2026

Darius Dale is the founder and CEO of 42 Macro. In this conversation, we break down whether Scott Bessent is bluffing the bond market, why stocks keep hitting highs, and why balancing the budget may be impossible. We also discuss the K-shaped economy, AI, bitcoin, and America's political realignment.===================Arch Public is an agentic trading platform that automates investment strategies across Stocks, Commodities, ETFs and Crypto. Whether you’re rotating into AI & Gold, allocating to the S&P 500, or accumulating Bitcoin, Arch Public executes your plan 24/7 without ever taking custody of your assets or funds. Sign up today at https://www.archpublic.com, and start your FREE automated trading strategy! ===================New description for Lava with a clickable url: Lava is a global platform for bitcoin financial services. Spend with Lava Card and earn up to 5% back in bitcoin with every purchase— all with no annual fee, no FX fees, and zero spread. Plus you can borrow against your bitcoin at the lowest rates, earn yield on cash, and move fiat or stablecoins globally. Get started at https://www.lava.xyz/POMP===================Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/pomp===================0:00 - Intro0:47 - Is Scott Bessent bluffing the bond market?7:34 - Druckenmiller's op-ed & Bessent's playbook13:13 - Why stocks & bitcoin are near all-time highs16:42 - Why balancing the budget is impossible & the impact 24:30 - Housing, young vs old & the lock-in effect28:02 - Cut, grow, or print?32:12 - How AI & bitcoin can level the playing field36:15 - Social mobility & keeping up with the Joneses39:00 - America's political realignment & future outlook49:45 - Power, politics & the path forward

Calculating route to avoid seeing poverty. Turn left to bypass the unhoused youth sleeping on the street. Then keep right to skip by the lines of people waiting for food. Steer clear of the crowded shelter turning people away, then take the next exit. Let's stop looking away and get in the way of rising poverty. Your donations help the United Way fight poverty in thousands of ways, like providing food, shelter, and crisis prevention. Donate today at United WayGT.org.

Spotify advertising connects you with an audience that's engaged and ready to discover your brand. Launch a campaign with Spotify Ads Manager. And so you have this powerful telling for earnings at the same time you're getting, you have this problem that keeps requiring policy intervention in the form of financial oppression or monetary debasement. That is a reason for stocks to be at or near all-time highs. And it's one of the reasons why we think stocks will go to, make significant highs from here over the next 12 to 18 months in our view.

We don't think this bull market is over. What would stop it? What would stop it? What's going on, guys? Today, we're a great conversation with Darius Dale. In this conversation, we talk about the Besson Bluff, the Bessent Bazooka, what's going on with interest rates, what's going on at the Fed, what's going on at the Treasury, what's going on in the economy, how all of this is tied together and why so many people are upset, yet so many people are getting so rich. All of this is tied together in a way that you probably don't understand, but if you listen to this conversation, you will. Here's my latest conversation with Darius Dale.

All right, Darius, I want to talk about the Bessent Bluff. You like that, huh? You like that? No one used that one yet. Is he bluffing or is he got the goods? Can he intervene in the market and get everyone back on sides or is it just a bluff? I apologize in advance, Scott. You didn't think that was coming, huh?

Oh, no, no. Look, you know, I'm here to speak my mind and say what the data lead me to tell people. And ultimately, I think your characterization is partially accurate. I don't think it's fully accurate because I do believe we're in a fiscal dominance regime. And ultimately, if the bluff fails, then he's got backup. And we know what backup looks like. You can either take the form of an expansion of reserve management purchases by the Federal Reserve. We could see, we're going to see, in our opinion, a substantial degree of a relaxation,

a bank regulation that will create the balance sheet capacity for them to, you know, address this kind of supply demand and balance in the Treasury bond market. And if that's not the preferred path or if that of bank due regulation process takes too long, you could actually see the Fed come out. You can see Besson sort of direct the Fed to come out and essentially say, hey, look, we need to get the cap yields at a certain level in order to achieve our, you know, they'll make it up. You know, they make it up. You know, they make it up. You know, this is what we need to do to achieve our price stability mandate or our labor mandate or, you know, our moderate long-term interest rate mandate, which, by the way, that's the Fed's third congressionally stated mandate that no one ever talks about. So there's the Besson Bluff, but I think it's backed up by the Besson Bazuka. Ooh, what's the bazooka?

That he has unlimited firepower. This man brought a butter knife to a gunfight. What are you talking about? Six billion dollars of buybacks? Yeah, because all he's doing is, he's just testing. He's like, I think of it kind of, people think of the U.S. government as like America's army in a war. And what we learned over the last 25 years, one, we shouldn't be in foreign wars, another topic. but is the insurgents, they understand something

that America had a hard time learning for a while. What they used to do is, let's say that there's a base somewhere in the Middle East. They would test. So maybe they send one guy over, he takes a couple shots, runs away. How'd they react? What'd they do? Did they all of a sudden get up and go full security?

Did they send someone after him? What weapons did they have? What vehicles? How many people? Next day. somebody else from a different angle. And they just kept kind of prodding and prodding and prod. And then they would learn.

And then they would start to understand who they were up against. And as Americans, we knew what they were doing. It's not, you know, you're not that stupid. You're like, all right, that guy just shot at me. That guy's got a camera. Yeah. Audible. We do something.

Right. So that's kind of to me what Bessent is doing. Is he's like, all right, if I go here and I say I'm going to go to six billion, what happens? But he knows that he could throw the kitchen sink, but he kind of doesn't need to do it yet. And so he can use words, he could do a little prodding. He's kind of like trying to figure out where's his pressure points. But I do think at some point, if the market keeps calling the bluff, then he's like, all right, you guys want to test me. He's got a lot of firepower. He's got a lot of backup firepower, to be clear. I agree with your theory here that he's sort of

prodding the market. Like, look, ideally he would not have the this problem set, right? Ideally, that's the ideal set of conditions. Yeah, exactly. Ideally, you wouldn't have to do any of this. That would be, that's the ideal problem. But since you can't control the fact that there's a geopolitically driven supply demand and balance in the treasury bond market, he has to respond to it with policy intervention in order to do his job. By the way, he's just doing his job. You know, his 100% job to get financing costs down and capitalize the U.S. government. Just to be clear for folks, I do think that he is one of the most clear-headed communicators

when it comes to what is happening. What are we doing in response? And I think what sometimes is taken as his irreverence for the critics, et cetera, is actually what we should have had more from other Treasury Secretaries or Fed Chairman. Because what it allows him to really do is he's kind of just like, hey, man, here's the game being played

on the field. Yeah. I think of it as, you know what, Fisher Chessas? Oh, what's that? Fisher chess is when they mess up the pieces at the start of the game. Oh, interesting. So I know somebody who is one of the top people in the world at one-minute Fisher Chess.

Wow. He's excellent. He hates when I bring it up. So I'm not going to say his name, Evo. And the whole idea is when you start the game, it's just what is the outlay of the pieces? Like, you've got to start from that point. That's kind of what he's doing, right?

He's like, look, man, the chess pieces are where they are. I didn't put them here. but I got to play the game. I got to win. And that kind of feels like he's the right guy for the job. I've been saying this. He's one of the, you know, certainly in the modern post-war U.S. economy and maybe in the since the turn of the, you know,

the 19, turn of the 20th century is probably the best feature, or our treasury secretary. You know, we've seen in terms of his understanding of all these dynamics, like a lesser treasury secretary would be either getting dragged by the market and not understanding the full scope of the game. Like, it's very clear to me that he understands, that there is a supply demand and balance

in the treasury bond market. Why else would you be intervening alongside Japan's Ministry of Finance to defend the yen? He understands the circular nature of all this. The US is a net international investment deficit economy. We have a current account deficit of three to four percent annually. We need to find three to four percent of our growing GDPs worth of capital every year just to have the same level of economic outcome, let alone

growing the economy. And so this is a big problem in the context of foreigners owning 30 percent of the market, the private non-bank sector owning 60% of the market now up from 36% in the late in the in the 2021 and so you have all this you have the such a change in the composition of the treasury ownership that now incremental units of supply will be met with incremental requests for higher ex ante yields that's essentially the condition that with that that's the fish or chess condition that he's inheriting and he inherited uh at the start of 2025 and so you know we can quibble with his communication style to your point um we can quibble with what at times

seems like a touch of arrogance at some point. But I think it's coming from a place of saying, look, you guys don't get it. This is a big problem. He can't come out and say it's a big problem, by the way. I can say it's a big problem. It is a big problem. He can think it.

I know he thinks it. Otherwise, he wouldn't be taking the policy action that he's taken. But at the end of the day, I think he is responding to the appropriate thing to respond to, which is the supply to man in balance, the geopolitically driven, supply to man in balance. When Druck published the op-ed, that was AI,

written and everyone freaked out. Which, by the way, this is Stan Druck and Miller. Who cares if he uses AI to write his, this is Stan Drucker Miller. The man did 30% annualized returns with no down years for 30 years. Go find me another investor in history who's ever done that.

Bernie Madoff. Yeah, exactly. Exactly. Vingo. All right. Do you think that Bessent and Druck talked and maybe Besson encouraged them to publish it? That's my standing theory. And the reason is

because everything that was said in that piece, I believe best in beliefs. Yeah, of course he believes. He just can't say it. Of course. So it's very helpful if one of your best friends says it publicly for you. And then you could take it,

and it's like going to the teacher, say, look, somebody else said this. Yeah. You know, hey, we should, he's smart. Yeah. The messenger is just as important as the message. Yeah. And if you're drunk,

you weren't going to write that unless maybe you got a phone call. Yeah. From your friend. And you're on vacation, probably somewhere in the Mediterranean. Hey, man, Grock, write this shit for me. Yeah.

Right? Let it fly. Let it fly. I love how you think it was Grock, too, by the way. Write this thing for me. He literally has it sent to the, you know, Wall Street Journal or whatever. And I just imagine I'm closing his laptops. Yeah.

Good luck, guys. See in a week. Yeah. You know, I try to, I'm not, I'm conspiracy theorists in the sense that a lot of times you do enough analysis, you just wind up at the natural conclusion of things. And I feel like that's kind of what we do in our research of 42 macro. We just keep pulling on threads into we can't pull on the thread anymore because the data doesn't exist.

That's kind of the nature of our research style. And does this, it's the truck, you know, here's what I think. Whether or not Drunken Miller and Stan Drucken Miller and Treasurer's Gapeson colluded on that, I think the outcome would have been the same regardless, which is the more the public, knows about this, the more likely it is that the politicians in D.C. who are responsible for addressing the problem will take the appropriate action. And so whether or not you colluded or not,

I still think you too. I don't even think it's collusion. He wants this outcome. This is a good outcome. I don't even think it's collusion. I think actually my point is we've been talking about Bessent from a financial operator standpoint as the Treasury Secretary. I think this dude is dialed when it comes to the political process as well. Oh, yeah. He's so. And if there was a conversation before that op-ed was published and maybe Besson encouraged it,

this dude understands Washington, D.C., better than most of the politicians understand it. Yeah, of course. And so what that then tells me is if he understands domestic policy and the political process, he might be the best person we should be sending to Japan or some of these people. places and saying, hey, Scott, I think in Trump's words, one time he said, I get the market's

rallied up. Yeah. He gets them to calm down. Yeah. And so now all of a sudden, we have a very unique individual, it seems like, who is financial operator, investor, political operator, and a great communicator. We have not really had somebody in that seat, and he happens to be in the seat at a time where, like, we kind of need a person like that to navigate all this.

It's fascinating. It's beyond fascinating. I mean, one of the best things that's happened in the last few years in American policy is the downgrading of all the other voices around President Trump and the upgrading of Treasury Secretary Scott Besson's voice. I mean, you know, at the risk of being, you know,

sued or yelled at, I mean, we obviously had a Nepo baby running the Commerce Department. You know, his views needed to get, go somewhere else and say that and do that. Go work on this. We have bigger fish to fry. We have a massive geopolitically driven, like this, in my opinion,

the PC1, of all of global finance is the fact that treasury bonds are no longer considered to be a safe haven asset. Now, why is that? In my opinion, and I think the opinion of other, you know, smart people, people are much smarter than me, Ray Dalio, and Neil Howe, Peter Turchin, they would say that, you know, America's sick, sick patient internally. And I would argue, and I'm sure Ray Dalio would argue, that America's a sick patient internally because we have too much, we have such a high-level public sector debt service, and it's squeezing out income and wealth-to-eastern, for households, small businesses, and interest rate sensitive sectors on the bottom of the K.

And part of the reason that's happening, that squeezing dynamic, we talked about this in previous shows and discussions, where the amount of money that the U.S. Treasury needs on an annual basis to either roll over refinance its existing debts, roughly about $12 to $10 trillion over the next year, to capitalize the new debt in terms of the budget deficit, that's about $2 trillion over the next year, and then the amount of money its needs to refinance into a higher industry regime, that's about $125 billion over the next year. next year. So you're talking about over $12 trillion that it needs. That's up from about less than $5 trillion prior to COVID. And so that's 40% of global savings, the flow of global savings

over the next year. That used to be, on average, 20% of the flow of global savings prior to COVID. And so we've doubled the demand for capital. The U.S. Treasury has doubled its demand for capital. And obviously in a world where there's not an infinite amount of capital, it's draining resources from the bottom of the K-shaped U.S. economy. It's obviously draining resources from around the world and it's causing more inflation. We just have a persistent supply shock for capital and it's persistent demand shock for that capital from the Treasury, and this is causing all sorts of outcomes.

If I said to you, close your eyes and imagine a world where there is a $100 oil price, 5% 10-year yields, the Fed just raised interest rates for the first time in a while, and there's still a geopolitical conflict going on. There seems to be a lot of, disagreement or waning support for the current administration going into the midterms. And the entire economy seems to be propped up by a single sector and AI and everything else seems to be suffering. And I said, now decide, are stocks at all time highs or below?

You probably would say not at all time highs, but we're pretty dang close. Bitcoin is up in that environment. Many of these assets are up. How do you wreck the those two things where many of these data points actually should tell us like they should be headwinds, like assets should be under pressure. But it kind of feels like investors don't care. They're just like, eh, I still want to go buy in video. I still want to own some Bitcoin. Look, I appreciate that thought exercise and it was really thoughtful. I will push back mildly to suggest that I would actually argue that stocks would probably be at all times because of some of the dynamics you listed. In our view, we've been bullish. We've been struck. Actually bullish since January of 2023, save for the three months in February through April of 2025.

We saw paradigm B that the cut the deficit portion as being negative for the economy in the markets at the time were correct on that. But we were also correct to immediately pivot back to being bullish, which was where we had been since Jan 2023, when we noticed the pivot to running the economy hot in April of last year. The reason I think that we stock should be at

or near all-time highs is for a couple of reasons. One, this policy intervention associated with the supply demand and balance are not going to sit idly by. And we've long forked. cast it an increasing amount of policy intervention, whether it be through extension of Dovish net financing policy. This is some of the more Dovish net financing policy we've seen on record for the U.S. Treasury, and it's only going to get more Dovish in the coming years.

We've seen the Federal Reserve cut interest rates by 175 basis points with the inflation, you know, with missing their inflation target for five consecutive years, now going on nine consecutive years in terms of their projections. We've seen the Federal Reserve monetize U.S. sovereign debt in the middle of a nationwide affordability crisis. It's just, you know, we've seen all sorts of reactions to this supply of demand imbalance in the Treasury bond market. And then you have this orthogonal demand shot called AI.

This is a massive AI CapEx bubble. You're talking $800 billion in hyperscale capax next year, growing to $1.2, 1.3, 1.4 trillion dollars next year. And so obviously that creates a powerful tail win for earnings. And so you have this powerful tail win for earnings at the same time you're getting, you have this problem that keeps requiring policy intervention in the form of financial oppression or monetary debasement.

That is a reason for stocks to be at or near all-time highs. And it's one of the reasons why we think stocks will go to make significant highs from here over the next 12 to 18 months in our view. We don't think this bull market is over. What would stop it? What would stop it? A lack of realization of the policy intervention required to address the problem. Like, if they wanted to pivot back to paradigm B and be serious about cutting the deficit, which, you know. Again, I don't think it's a very low probability of it.

If the world's smartest man and best inventor of all time and best innovator of all time, if he couldn't do it, I just, I don't know how, like, you're not going to get Congress to do it without a crisis. I did a little mental gut check recently. And I went back and I was thinking, okay, at the start of the Trump administration, what was I excited about? Bouncing the budget was probably the number one thing. Closing the border was another thing. He fooled you. Well, he closed the border. I'm talking about the balance of the budget.

So, bouncing the budget. And I tried to really think through, like, why was I excited? I went back and I looked at some of the stuff I read, and I tweeted, and I was trying to almost look at it like, okay, what did I believe? What went wrong? And a big part of it was actually not the Trump administration, as much as it was the Trump administration deputizing Elon.

And like, dude, this guy's the best in the world at doing this, right? They're going to find the fraud, the waste of abuse. And as I was looking through my Twitter feed, I found absolutely hilarious in hindsight different data points that we kind of forget. And the one that I've talked about in the past is, if you remember, he was inside of, and it was like the education building

or USAID, wherever. And there was politicians outside banging on the doors. And if you remember, there was a video of the security guard, and he was just standing there. And they were like, why are you protecting him? He's killing people, blah, blah. And the security guy was just like, I'm just doing my job, man. Like, you know, he was like, he is not about it.

Yeah. And, you know, he was just, he was like, he is not about it. Yeah. If we had said, if they tried to balance the budget, could you imagine if the politicians literally went outside the building and tried to physically stop them? You'd be like, there's no way they would ever do that. Yeah, that's true.

Right? Like, you're just like, of course the politicians want to balance the budget. And so in hindsight, I was naive in the sense of, it's not actually about can you balance the budget. It's a lack of will wanting to do it. Amen. And why is there a lack of will? Well, if you're a politician,

It's a pretty good pitch to be like, look at all the stuff I came back from Washington for all of you constituents with. And so then as I was going through this extra, I said, dude, there's no way. It is impossible. I am now convinced it is impossible. It does not matter who goes in, any of that stuff. So, can we ever have a recession? Can we ever have any sort of prolonged market downturn going forward? Oh, I love one.

Thank you for that trip down memory lane. And thank you for your intellectual honesty. Yeah. Not a lot of people who do what we do say we get things wrong. All right. Listen, could you imagine if they had bounced the budget? That'd been amazing. That would have been amazing.

That's the best play out of this mess. On what planet was I or anyone else thinking that the politicians who quite literally accumulate power by giving away free money, we're ever going to let that happen. No, they're not. I made the mistake of every human. I thought that they had good intentions. I thought they actually cared about the future of the country. Yeah, yeah.

Right? I thought they cared about the debt that was going to be inherited by our children. They care about their own children. Their own children. Don't even worry about my kids or your kids. Well, about your own kids. Like, yeah, what do you think we're headed with this? So thank you for all that.

And I appreciate again. Your intellectual humility and intellectual curiosity are two things I really admire about you. And hopefully I'm falling into your footsteps as well there. This episode is brought to you by Lava. The Lava card is the first credit card that allows you to earn up to 5% back in Bitcoin on every single purchase. Most cards have steep annual fees and unclear points programs.

But the Lava card offers a much better deal. Earn real Bitcoin every time that you spend. Plus, there's no annual fee. There's zero FX fees and zero spread when you spend internationally. On top of that, Lava gives you access to a Bitcoin line of credit, yield on cash, instant stable coin deposits and withdrawals, on and off ramps to and from your bank account and much, much more. With Lava, you can borrow against your Bitcoin at the lowest rates,

earn yield, move money globally, and stack Bitcoin with each and every purchase you make. Most financial services squeeze you with high fees, confusing rewards programs. Lava keeps it simple, and they help you build your long-term savings via your everyday spend. Visit lava.xy-z slash pomp to get started in just a few minutes today. Lava.xy-z slash pomp to get started today. A couple things on this balanced budget. I'm sorry that you were fooled by Doge.

Hoodwinked by Doge. I was very on record, very loud on record. in the fall of 2024, when we replaced our 30% allocation to bonds with gold and our flagship asset allocation, our Kiss Model portfolio, we did it with the recognition that neither the Republican Party or the Democrat Party were serious about balance of the budget. When you looked at the scoring for Trump's policy proposals,

you couldn't tell the difference. It was like a co-first Pepsi test with Kamala Harris. Well, if I remember correctly, and this will show you how good my long-term memory is, despite my loss of short-term memory. Kabuki Theater, I think, was a phrase that you were using at the time. It was. It was.

I did call it Kabuki Theater. I said that chainsaw is really dumb. He's going to regret the chainsaw because it's not going to solve the problem. But it looked cool. It looked cool. It made headlines. It did what it was supposed to do in a 24-hour media cycle. Exactly.

It did exactly what I was supposed to do. But those of us who were serious about tackling these challenges understand that that was not going to be the credible path. You actually need Congress to get on board and the probability that Congress would get on board when both parties were projecting to expand the budget deficit to record non-war non-decession wides, you have to give up the ghosts. And so, you know, just on, and one final thing I'll say on these politicians, yeah, I'm talking to all you politicians in D.C., you know, the reason they don't care about the budget deficit is to your point.

You know, one party spends money and gives it to their constituents to stay in power, to get gain power, stay in power. The other party cuts taxes and supports their constituents income that way. And I think, you know, this conversation in the country about, you know, buying votes, if you will, I think we have to realize that the wealth pump is on. You and I talked about Dr. Peter Turchin's, you know, thesis and his colleagues at the Complexity Science Hub. They have this term called the wealth pump. I call it the reverse robberhood effect because it makes it easier for people to figure out what we're talking about. You know, the reverse. Just imagine what the robin hood effect is in reverse. Like, so that's, in my opinion, what's happening with Congress. And you can... You mean the people who don't have money have to fund the people who have money?

Yes. That's exactly. what's happening. Yeah, that's a mindbender. Here's some statistics for this. So we see when you break down, there's probably like 700 different line items in the monthly treasury budget statement. So we have to do some data science to figure out, you know, where the money goes. And most of the money goes to Social Security and Medicare. We know that it's, you know, it's probably like 45, you know, percent of the outlays. But where's it come from? But the put I'm making is when you look at the rest of the spending and you tally up all the money the government spends on poor people via means-tested programs, federal government,

spends on poor people with a means-tests program, somewhere about $1.2 to $1.3 trillion annualized. And it's been that, it's been, you know, these ratios have been roughly the same over the last, you know, a dozen years or so. When you look at the money, the government spends that pretty much winds up in the pockets of rich people like us, it's about $2.6, $2.7 trillion.

And, you know, about $1.1 trillion of that on its way to $1.2 trillion is net interest on the debt. Obviously, poor people don't own financial assets, much less tarjury bonds. And then the, another trillion on, on defense, on net defense. And obviously that money doesn't go to poor people. It's going to folks who work at SpaceX, Palantir,

and rule, you know, all these defense suppliers. And so you're talking about 36% of the money, the federal government spends, about almost $8 trillion of federal government spends, is going directly to rich people, where only 17% is going directly to poor people. Now, that's an issue. And this has been compounding for a long period of time. And so, you know, I don't know how we get out of this

without more political dysfunction and more just, you know, political upheaval. But also, I still think rewind up in a better place, maybe, you know, five, 10, 15, 20 years or now. If you go and you look at... Because it'll get that bad. Of course it's going to be that bad. Look at Social Security.

Where's the money come from? Young people are funding the old people. The old people, there's a lot of them. The young people are not growing as fast as the older cohort. And therefore, you have quite literally a Ponzi scheme that is being run, which, whether people like it or not, whatever the idea that the young people are funding the old people is the opposite of what i think people generally philosophically believe should be happening is the older generations should be

looking out for the younger generations you should be giving a better future and all the stuff we have the opposite happening in this country if you look at homes there is a very large cohort of people who do not want home prices to go down yeah and it's all the people who own the homes Exactly. Exactly. Because every time you hear affordability, they hear, I'm going to lose money on my home. A hundred percent. And right now, I've actually seen in the last two weeks or so a number of articles

that are talking about mortgage rates are ticking up. Interest rates have gone up. Home prices are getting slashed. If you don't own a home, you don't really understand. There's a full-on panic in this country. of anyone trying to sell their home, because they're like, wait a minute, there's a grid lock, there's not a lot of home transaction volume happening.

No. And in order for me to sell this home, I've got to drop the price to such a low level that I might as well just keep it. Just keep it. And so then they turn and they say, okay, well, could I rent it? But one of the things that goes undiscussed is a lot of the boomer generation,

and I say it's a loving term, they live in homes that they've lived in for 20 years. Yeah. young people don't want those homes. I don't know. They don't want the McMansion in the suburbs. That's a 25, 30-year-old home. And so I was explaining to somebody recently

that has one of these homes and is trying to sell it. And I've watched them for a year and a half, two years now. You have a product that the person who's supposed to buy does not want. And can't afford. And you have it at a price point where they quite literally do not have the money. Yeah.

So even if you were to say, I'm going to put new paint or, you know what, like put lipstick on it. They still can't afford it. So you have a choice to make. Either you're the bag holder and you got to figure out something to do or rip the band-aid off. And that's what's happening across the economy is people are realizing, like, wait a second. So we have actually young people are funding older people, which puts immense amount of stress on government spending. 100%.

Man, this is an intractable problem. I love your analogy. That makes a lot of sense, especially in the context we were talking about earlier. The spread between the marginal mortgage rate and the effective mortgage rate, so the marginal mortgage rate is what you would pay if you bought a mortgage, they've got a mortgage

today, and the effective mortgage rate is what's the mortgage on all the existing mortgage stock of debt in the economy. You know, it's about 250 basis points, but it's roughly an all-time widespread. And so that's obviously contributing to this lock-in effect that you're essentially alluding to as well. And part of the reason that spread is so high, and part of the reason the spread between mortgages

and treasury bonds is not historically wide. It was a wider a few years ago, but it's still structurally wide, relative to what had been for decades. Part of the reason that spread as wide as it is, is going back to what we talked about, that 40, 20, 20. The government now needs 40% of the world savings, is supposed to 20% of the world savings.

So there's a missing 20% of the world savings that used to go to capitalize our mortgage market, used to go to lend to small businesses, it used to go to lend to low to median income consumers. It used to go to lots of things. that it's no longer going to. And it's really just, I mean, it's, it's a perverse set of incentives. Because ironically, the only ways to deal with this, this will be calling the debt disease

are three ways. We're three acceptable ways. There's a fourth, their fifth, there's five ways, two of them are bad. One of the acceptable ways is you can reduce the deficit, you know, try to cut your way out of the problem. That's what we call paradigm B. You can, right now we're in paradigm C. You can try to boom the economy, grow your way out of it, or try to, you know, try to grow the denominator faster than you're growing the numerator.

That's what we're attempting to do. And we're having quite a bit of success with that. We're growing nominal GDP on the ex-government and net exports basis. It's 8% in the most recent quarter that compares to a law of a pre-COVID mean of 4%. So we're doubling our nominal growth rate. So we're succeeding at paradigm C.

But ultimately, the factors of production will eventually limit how fast you grow unless you create more factors to production, which obviously is part of the reason why they're so gang hole in advancing AI, but that's a different topic. Supreme Intelligence we call it now. Yeah, whatever. See, whatever y'all want to call it, man.

We don't like artificial. We don't like a lot. Exactly. And then there's paradigm D. Typically what happens is, you know, you run out of growth. And then ultimately you have to start printing the man for the debt securities. The issue is, is the only path that leads to less political dysfunction. And there's the other two, obviously, default in total war.

Historically, countries, when they needed money, they would drum up war and try to go take money from some other people. They would go get it. They would literally go get it. They would cross borders and try to take money. That's, that's, that's, that's, that's, assume those are less desirable outcomes. Let's focus on these three. The only one of these three outcomes, susceptible outcomes, cut, grow, print that actually leads to less political dysfunction, more societal cohesion is reducing the deficit. Is, is, because the other ones lead to eventually inflation.

And eventually inflation in all, in an economy that already has a nationwide affordability crisis where, by the way, 70% of Jake Morgan senior economist said that 70% of Americans live paycheck to paycheck. That is a heartbring. breaking statistic pump. As someone who grew up barely hoping to lift paycheck to paycheck because we didn't even have paychecks, the hopelessness you feel as a human being, when you can't accumulate savings and get ahead and at least aspire to join the capital class,

which is the only class in this country in this capitalism society that allows your life to get better over time. You need to have your money making money for you. If you're just using your labor hand in the mouth, you're never going to get ahead, especially in an economy where the law the regulations, the monetary policy, the fiscal policy is designed to support capital holders,

not labor. And so, and that's by design, by the way. It's not on accident. Dude, talk about that. The craziest part of this whole thing. Today's episode is brought to you by simple mining. Bitcoin mining has a reputation for being complicated, risky, and hard to evaluate as a real investment. If you're considering mining in 2026, what actually matters is in headline profitability. It's uptime, repairs, and whether the operation is run like a real business. That's why I've been using simple mining. They're based in Cedar Falls, Iowa, and they run a white glove hosting operation where you own your miners. You choose your own pool, and you have Bitcoin sent directly to your wallet.

They were featured on the Inc. 5,000 list as the fastest growing company in Iowa, with over 40,000 machines under management. What stands out to me is execution. They have the number one rated ASIC repair center, and for the first 12 months, repairs are included. If mining margins get tight, you can pause with no penalties. And if you want to resize or upgrade your fleet, there's a marketplace to resell equipment. instead of being stuck. To help people think it through whether mining actually makes sense right now,

they put together a short resource called the 2026 Bitcoin Mining Blueprint. It walks through the five mistakes investors make when allocating the mining, and they also explain how to avoid them before deploying capital. If it sounds interesting to you, you can get it for free at simplemining.io slash pomp.

That's simplemining.io slash pomp. Go check it out today and see if you should get into the mining game. The craziest part of this whole thing, is the one technology that can lift all of these people out of the situation is the exact technology that a bunch of rich, unemployed kids, for the most part, are railing against.

Yeah, which is ironic. Yeah. Right? And you basically have two groups of people. You have a bunch of nerds who are saying, ooh, we created something that could kill everybody. Okay. And then you got a bunch of other people who are saying, Oh, this AI thing, don't use it. Yeah. Don't use it.

But if you look at, what does Bitcoin do? It creates all these computers that work for you to defend your economic value. You took what used to be the dream of the richest person in the world in terms of how, it's an army of compute that is defending against money printing. Yeah, 100%. Incredibly valuable, but you give it to and you democratize access to the average individual. AI, all it does is it says, okay, you're one person. What if we got you higher level of intelligence, so you're hiring someone who's 150 IQ,

and then let's just multiply. Like, you can have 100 of these people working for you at all times. Now, there's still people who are lazy, who don't want to do anything. I love when people are like, oh, most consumers don't want to be productive. Like, actually, they just want to, like, go into snooze mode and just watch TV. And that's right, by the way. Yeah. 100%.

But this technology now is giving them access to, you know, go to an extreme. When Bill Gates was running Microsoft in the 90s, how many people did he have? How much intellectual horsepower was inside of Microsoft? Yeah. In 30 years, have we now given the same amount of productivity power to the average human that Bill Gates had in the 90s?

Yeah. Maybe people are like, okay, not that extreme. But okay, if we go back to the 50s for sure, Yeah. Give it 12 more months, 24 more months. Like, you're going to have more resources available to you than Bill Gates did when he was running Microsoft in the 90s in terms of intellectual horsepower.

Well, like, that dude did pretty well for himself. 100%. And so we're discouraging people from using the one technology that actually can help them escape the problem that they're in. Yeah. I completely agree with everything you said. The one thing that would, my caveat would be, I don't think we're never going to have like a classless society.

There have been classes since the beginning of time. I mean, you've read the Holy Bible, and a lot of what we see today in terms of the cyclical pattern of human behavior, you know, the cohesion, the move towards cohesion, the move away from cohesion, the move towards community, the move away from community, the move towards selfishness, the move towards selflessness. There's all these cyclical patterns you can see across, you know, millennia of time, you know, tens of thousands of years of time when you read the Bible. And, you know, so we're trapped in that same saga today because we're humans and we're, you know, we're born sinners. And so on this point of classism, like, we're always going to have different classes. That's why I've been saying, you know, we need to turn the K-shaped economy to an E-shaped economy because not everybody wants to climb the socioeconomic ladder or is willing to do what it takes,

to take the tools and climb the socioeconomic ladder. You know, we should create an economy in a society where everyone feels like they're moving in the same direction. That, to me, is the underlying issue. Like, we can't create, we're never going to be able to create a society where everyone is rich. By definition, like, it's like just by definition, you can't do that. And so once we move away from that kind of fallacy, you can start to, you know, you can start to create. Don't tell the socialists. Well, they don't listen to anybody but themselves, obviously.

And I'll say the same thing about the, the staunch capitalist. I'm on my way to our friends at Fox business this afternoon. And I'll say the same thing to them. Both extremes only listen to themselves because they think they have all the solutions. But the reality is none of us have all the solutions. We all need to work together to solve these intractable problems because otherwise they're not going to get fixed. The thing I do find interesting is when you look at economic mobility,

and you were to score countries, America is still probably the leader, if not one of the top leaders for sure. Of course. In economic mobility. If you then go and you look at... The problem is it's going down. That's the issue. Well, if other places are going down as well,

but America almost had so much of a lead that has further to, like, it can accelerate, right? It's kind of like, you know, the higher up you are, the faster of the acceleration now. The second piece, though, is you look at social mobility. And I actually think that we, everyone focused on economic mobility for obvious reasons. The social mobility, we're a very interesting dynamic in this country.

If you go on Instagram, you see some people who appear to have socially been very mobile. Yeah. Hey, I knew that kid in high school. Yeah. He wasn't the smartest. He wasn't the richest. He wasn't whatever.

He got a Ferrari now. Yeah. the appearance almost becomes more important than the truth. Yeah. But that same person, and I know some of these people, there are a couple people I've met in the last two or three years that turned to me or people that are close to me, and we're like, hey, I need help with XYZ thinking through

from a personal finance standpoint. Great. And I would know how much money they made, how much money they had in their bank account, and try to help them think through their life. And then they'd be like, yo, I'm hitting the eject, but I'm going to Italy for two weeks. And you would just be like, yo, there's no way you got the money to do that.

And they would figure out a way. Like to their point, they're almost entrepreneurial about it, right? They would find a way somehow. If they would just try harder to make money. It's kind of like, you know, in school I spent more time trying not to do the homework than I should just done the homework. But hey, you know, whatever. You felt like you're making progress.

You're just running in the near quicksand. But you see this and you're like, oh, wait a minute. there's some financial education issues, but also there's something about the human nature of like keeping up with the Joneses. And I think that actually the administration understands in a very weird way this problem better than most, and they never talk about it.

But it does feel like there's something about the respectability of the American citizen. And they don't just want to, quote, quote, get rich. They want to feel like they have something to stand on. Yeah. And dignity. Dignity.

You know, you're like the farmers in Iowa. They're like, look, man, I don't need to be the next Rockefeller. I just want to be able to have a place where I could build a living, have my family, do all this kind of stuff. And so it always is hilarious to me that like the dude with gold toilets in Manhattan somehow understood that plight of those people. And now you have this very weird faction where you have, you know, look at the Republican You have people who don't have a lot,

and you have people who got a hell of a lot. And somehow they've created this, like, alliance in the MAGA movement. If you look at the Democrat Party, you actually have a very similar thing. You have a very academic, kind of elite, wealthy type audience. And then... Yeah, and then you almost have this...

The way we technically are. Yeah, but then you have this, like, upright, like kind of the Democrat Socialists of America, right? And they have an alliance. And maybe it's not, you know, both the sides of this, this are not like, hey, we're perfectly aligned, but definitely they lean similar. But when you see this rising up,

I think the question is ultimately going to become, if you want the U.S. economy to grow and you actually want to use those factors to improve people's lives, you have to produce things. Yes. And in a very weird way, we're entering a world where one side

is producing a lot of theories and academic ideas. And the other side, Like, if you go look at the re-industrial movement and, you know, all this kind of, like, that is coming pretty much from one group of people. Yeah. They're in conflict with each other because one thinks policy can solve problems, the other thinks that action can solve problems. Public sector versus private sector, right? Like, this battle is not new, but we're actually watching it play out now and we're saying to ourselves, hold on. If we can't get any sort of alignment or, like, a strategy, ain't going to get fixed.

We're actually going to pull further apart and you're going to have the haves and have not. And like the K gets wider. Yeah. It's a bad situation. That's a great thesis. Yeah, that's a fantastic thesis. I don't know that I would characterize the Republicans

as having more solutions than the Democrats as the right characterization. I think Donald Trump has more solutions than Democrats. I don't think that even it's like solutions. I actually think I'm talking more about go and look at re-industrial Right. You say that's an example. How many of those folks tend to lean, according to the current political parties, although

these, you know, kind of move all the time, right? The current political parties, they probably lean more right. And they are less like, hey, we need to go do a bunch of like political stuff. Instead, it is more, let's go and actually just build Anderil. No, totally. You know, whatever the company is. Let's not slow down AI, right? Let's accelerate this stuff versus, you know, kind of the quintessential example right now is like,

the EA movement, everyone's freaking out about. Yeah. That's more like intellectual ideas. And now, to their credit, like, they built anthropic. Yeah. Right? So like, there is action happening. It's just that the approaches are very different. And so it's fascinating to think about like the political overlay

on what's happening economically. Yeah. Well, one side understands that its means to power, I'm talking about the Democrats, is by pretending to care about poor people, but not really doing the things that make their lives better. because they don't really have to deliver the service. You just have to promise to deliver the service to get elected. And or say, this guy is such a bad guy.

You can't elect them like me, which has been with a strategy for a long time, which obviously has been a failing strategy. And it's an increasingly failing strategy. The other side, this is why I say Donald Trump is brilliant. You know, I'm not, obviously not a Trump supporter. You can take a lot of offense to who he is as a man and what he's been accused of and whatnot,

and we don't have to go there. But he is a brilliant person for understanding that cut, grow, print is really the only solutions. And he's basically, in my opinion, what I can tell in terms of his policy platform and reindustrializing America in terms of putting up the tariff wall and then taking, you know, infrastructure commitments, you know, public-private partnerships. I think he understands the value of paradigm C, if there's no political will to do paradigm B, which is cut the deficit. He understands that paradigm C is actually a much better outcome, grow. Yeah, it's a significantly better outcome than winding up in paradigm D, which is default via the basement, you know, starting to use the actual money printer because the big, you know, the government needs its money.

It's got to capitalize itself. And so ultimately, they will eventually wind up using some form of the money printer, whether it be the relaxing bank regulation and allowing them to print the money or, you know, some form of vehicle control, reserve match purchase expansion. I don't know, who cares? It's all money printing. But to your point, you know, I do think he's, why. to understand that, you know, paradigm sees the best choice.

Let's go back to something you said. I think we need to unpack this a little bit further, because I don't think it's talked about enough, and you and I have enough, you know, cachet with our audiences and enough confidence and data-driven analysis to make the kind of conclude, arrive at the kind of conclusions publicly that we arrive at without fear of being torn down

because people trust us and trust us having done the research. My analysis on this dynamic of the politics of it all is that there are now four political parties in America, for distinct political parties. You know, you got the socialist wing of the Democrat Party, you get your old traditional blue dog Democrats. The whole party's been, obviously, been pulled leftward over time. Then you have your traditional core Republican Party,

which is kind of dying in some respects, because so much of the winning strategy for Republicans, even if they were initially part of that core Republican Party was to pander to Trump. And so obviously that's the maga wing of the party. My fear, and also ultimately my hope, because I think we do need great crisis to bring on great solutions

that will ultimately be lasting and really beneficial for society and mankind. My fear, in terms of going towards the great crisis, is that paradigm C will eventually run out. Whether maybe AI is a captain's allocation, you could just see, I don't know, there's a lot of things that could cause paradigm C to run out. I doubt it's running out anytime soon.

Our research suggests it's gonna continue at least to 2020, probably 2028, maybe even beyond that. If they run out of paradigm C, the growth phase, you wind up in the print phase from a starting point of already having a nationwide affordability crisis where 70, seven out of 10 people, households in this country live paycheck to paycheck

that currently feel like they're not getting ahead that are watching all kinds of stuff on TV and Instagram and wondering why they're not part of the American dream. That's seven out of 10 households in this country. So folks like us in the three out of the 10, we need to take hold of how dire and desperate the situation is. The lack of dignity that so many of our fellow Americans feel if you try to default via debasement paradigm D with that as the starting point you're going to wind up with a major political realignment i think total war is a high probability outcome in that scenario as well and here's how you can get major political realignment most people think of politics is on a left right

you know the so dsa on the far left democrats in the mid left publicans mid right there are court you know the traditional GOP in the mid right and the on the on the far right i think of it more as a a circle like it's a it's a it's a it's a it's a it's a It's a circle, like, you know, it's like a proton or something. Like, you know, it's constantly moving around, you know, a field. If you think about it as a circle, like a 360 degree circle, MAGA and DSA are really technically back to back to each other. They're on both far ends of this like circular spectrum. And so all it would take is more economic hardship to cause them to say, to turn around and greet each other and say, actually, we're just all poor.

the rich people aren't taking care of us enough. And that's my core thesis. And that's not a capitalist thing to say, and I'll shut up after this. My core thesis is we've gotten so good at creating profits in this society that we've probably overdone it. Us in the K1 capital class.

We've created too many profits because what ultimately means it's less income for the folks in the W2 class. It's less wealth accumulation. It's less savings. It's less social mobility, upper mobility. It's inability for them to buy home. and ability for them pay for their kids to go to college.

It's an increase in their demand for public goods, for public services. And so we created so many profits that we no longer have a stable functioning society. And so the last thing I'll say is to your point earlier about re-industrializing. We obviously need to be industrialized to sustain paradigm C, the growth phase.

If we do re-industrialize, who's gonna eat the additional cost of goods and services? Is it going to be the K1? class via margin compression, or is it going to be the W2 class via higher inflation? That is a big question we need to answer as a society. If somebody has to eat it, I think the promise, which I don't know if it's going to happen, but the promise would be, we'll actually use Tesla maybe as an example. Cars made outside the United States, they have the margin they have.

Tesla is able to make a car in America using robotics and drive down the price, and so therefore they can keep margin, but also nobody has to eat. eat that, you know, kind of, that disappearance of margin. He's one-on-one, man. Right? How many other businesses are going to be able to do that? Now, maybe robotics gets so amazing. And it's kind of like, you know, any dummy off the street can just plug the robotics in and

all of a sudden you get the same benefit. But it's pretty clear there's not many businesses that have been able to build something as complex as a car, using robotics, get the price down. And people forget, the Tesla started at like 120,000. or something, like the original, you know, kind of sports car-esque, it was over 100 grand, if I remember correctly. You can go buy one of these cars now for like 40 grand. Yeah, but how does the person who used to work at the car manufacturing plant buy the car?

So this goes into that business is able to offer this lower price. They do it through automation. So now the question is, where do those people go? What do they do? Right. And I don't have all the answers for it, but it's almost like what you're doing is, is you're playing whack-a-mole in the economy. Okay, cool, we need to get prices down. So you whack that.

Well, how do you get prices down? You use automation. Okay, well, what happens to those people? They like pop up somewhere else. Now there's another problem. And so you gotta like, well, now we gotta retrain these people to do something else. So you go whack that down.

And then you're like, oh, but wait, like, there's not enough companies or there's too many people. And you're just constantly trying to figure this out. And so I think actually that's one of the reasons why people are drawn to the politics stuff is because they're like intellectually stimulated by these problems, or they're power hungry. Like, there's one of the different.

two reasons. We need more of the people who are intellectually stimulated and problem solving and less of the power hungry people. My big takeaway from meeting tons of these people, you never know who you're dealing with. They're all chameleons? You never know. That's sad, right? Like, some of them, I think, have good intentions. Most of them don't. There's good neuroscience on power and how it actually corrupts the brain. It's basically, people who attain power have very similar brain function dynamics as people who have traumatic brain injuries. And no, I'm not even joking. Like, this is like written about in real science. It doesn't surprise me. Just absolutely ridiculous. Yeah, it's true. They study, it's like this

looks like this person had a traumatic brain injury. And so what ultimately happens is like you have like more impulsivity, more selfishness. You start downplaying other people's points of views and you highlight, you aggrandize your own point of view. And ultimately you start linking to the world and stereotypes as opposed to analyzing, you know, case-by-case data. And so ultimately, they turn out to become kind of on this like conveyor belt of more and more power-seeking and aggrandization of themselves relative to what could have been the original starting goals. And so power does corrupt. And so you have to have someone who, you know, not only is intellectually stimulated by solving the problem, but has an uncorruptible heart.

And in my opinion, and this is a, you know, my opinion, the only way to have an uncorruptible heart is to have, you know, a firm faith in God and a firm foundation spiritually. And that's the find someone with enough intellectual capability to help solve these problems with a firm foundation and an uncorruptible heart. That's not a long list of human beings, unfortunately. Unfortunately not. Let's end there. I think that's a great way to end.

Where can we say we able to find 42 macro? Yeah. So in my actual day job, I'm actually a date. Reach or dare. Crunch numbers all day. Thank God for technology. Our tech is as good as it's ever been. And so, you know, I would say real quick, you know,

I love talking about this stuff with you. You know, this stuff to me is more important than trying to figure out where Bitcoin or S&P is going to be six months from now, year from now. I think we do that really well. We do that so well that I can spend a lot of time thinking about these big problems. And so check us out, 42 macro.com.

I would say our primary specialty is risk management, full cycle risk management, making sure that in bull markets, you know, you stay invested long enough to, to maximize upside capture. And in bear markets, you say uninvested long enough to not blow up your portfolio. That's our core competency.

We're very good at that. We have many of the top institutions across Global Wall Street who are clients and customers of mine. Current Treasury Secretary is a former client of mine who relying on our products. So check us off 42Macro.com. If that can be helpful for you guys, and then check me out on Twitter on our YouTube channel,

Darystale 42 on Twitter, Dairy's Dell, LinkedIn, 42 Mac on YouTube, if you just want to kind of hear my thoughts on this kind of stuff. I think you do a great job. I think you do a great job. Thank you. See you guys next time.