The Pomp Podcast - I Just Revealed My Current Portfolio… | Anthony & John Pompliano

Episode Date: June 23, 2026

Anthony and John Pompliano cover the Mag 7 selloff, AI CapEx fears, and why inflation is more under control than the headlines suggest. We also break down Anthony's current portfolio, what Kevin Warsh is really doing at the Fed, and why bitcoin's volatility is a feature heading into its next decade.=====================Award-winning Fountain Life - Energy supercharged. Memory sharper. Life extended. Ready for the best investment you’ll ever make? Schedule a life-changing call at http://fountainlife.com/pompGet $1,000 off the cost of a life-changing membership with Fountain Life when you schedule a call at https:www.http://fountainlife.com/pomp=====================Bitget is the world's largest Universal Exchange (UEX), serving over 125 million users with access to over 2M+ crypto tokens, and TradFi markets. Bitget’s Stocks 2.0 brings 500 major equities and ETFs (like Tesla and NVIDIA) directly to your portfolio. Enjoy 1:1 mapping, deep liquidity, and USDT dividend payouts with ultra-low 0.04% fees. Upgrade your portfolio on https://www.bitget.com/ today!=====================Arch Public is an agentic trading platform that automates the buying and selling of your preferred crypto strategies. Sign up today at https://www.archpublic.com and start your automated trading strategy for free. No catch. No hidden fees. Just smarter trading.=====================0:00 - Intro0:56 - MAG7 selloff & AI CapEx spending16:28 - Large caps vs. asymmetric bets19:10 - SpaceX & other exposure to the AI trade29:34 - Kevin Warsh & the Fed 37:13 - Bitcoin outlook for the next decade

everyone who's worried about bitcoins lost their mind. I like the fact that the things I own go through these periods where people don't like them. I do not want to own assets that are always in favor. Because if they're always in favor, that means they're popular. If they're popular, that means they're crowded. If they're crowded, that means the return has been armed away. And so I actually want things that go in and out of favor, because that means that the things that are out of favor, likely have a lot more asymmetry to them, they have a lot more potential return in the future. And so that volatility is really important. What's going on, guys? Today, we've got a great conversation with John Pompliano. He interviews me all about

Kevin Walsh, the Federal Reserve, inflation expectations, interest rates, the AI CapEx question, what's going on with the Mag7, the S&P 500, Bitcoin, we talk about SpaceX and many, many other things. And I even explain exactly how I think about investing right now in public and private markets. And I talk about some of the investments that I've allocated to in my portfolio. Here's my latest conversation with John Pompliano. All right, John, what's the first topic? All right. Mag 7 sell-off recently.

Is this a valuation reset or is this the market kind of rethinking this whole AI trade? Well, I think the big reason why the Mag 7 has been selling off is because they're long-duration assets. So they're very sensitive to inflation. And people were very worried about the Iran war, the spiking energy prices, and they thought that inflation was coming. As I have said over and over and over again, in 2025, tariffs are not going to be inflationary. The second thing I said is that the Iran war, as long as it was short sighted, it was not going to be some multi year thing. Then there was going to be a short term spike in prices, which we've seen in the energy. But ultimately, inflation was not going to be a long term problem. A huge reason is because there's the deflationary forces that are hitting the US economy. Now, of course, there are going to be people who say, oh, my God, inflation went up above 3%. It is high. It is. No, it is not. Right. What people were predicting, if you go back and you look, is everyone somehow got their brain broken on inflation because they saw it go over 9%. And they just thought that happens all the

time. There are very few times in your lifetime where inflation is going to go over 9%. If I remember correctly, the last time that inflation went over 9% was back in like the 70s. That's before I was born. So my entire lifetime, one time it went over 9%. Now it was horrific. It was very obvious to see that it was going to happen. And if you were paying attention in 2020, we're putting trillions of dollars and putting interest rates at zero, of course, we were going to get high inflation. But that is a very different manipulation than when you see things like the Iran war or tariffs. And so if you go and you look at the mag seven, people are basically have two big concerns. The first is if there's going to be higher inflation, then you get these long duration

assets that are very sensitive to that. Therefore, they sell off. OK, fine. Get some like multiple compression. The second thing, though, is that everyone's worried about the AI CapEx spending. And they're saying, wait a minute, these companies are plowing tons of money into CapEx. And if they plow tons of money into CapEx, it means free cash flow is going to go down. If free cash flow goes down, doesn't that mean the company should be worth less in the future? I'm not going to make as much money from a cash flow perspective. And so ultimately, I think there's two things that are going to play out. Inflation is not going to be nearly as big of a problem as people think it's going to be. You're already starting to see this, right?

Energy was responsible for 60% of all increase in the inflation number. So it's all energy. That's what's driving these moves. When energy prices come back down, oil now is below 80 bucks. If it goes back to $60, what do you think is going to happen to inflation? I don't know. I don't know if I'm confident yet enough to call the top of inflation, but we're pretty damn close in my opinion. And so whether it actually already peaked or it's going to peak in the May or June number or whatever, my guess is that inflation is going to be lower in Q3 and Q4 than it was

in Q2. If that's the case, then guess what's going to happen to the multiples on the MAG-7? They're going to expand again. Okay, fine. That's one part of it. What about the AI CapEx? There's two components to this, in my opinion. The first is that the AI CapEx, the whole thing is predicated on, does the demand actually

exist that we think is going to exist in the future? And will there be an ROI on this CapEx spending? Well, there will be an ROI if the demand exists, right? Because that means there's going to be someone there to use it. Well, the question of, is there going to be the demand? I don't know. Do you use AI more today than you did a year ago? Of course.

So that was the big narrative that people were talking about, though, was now the whole media is all talking about hey are we being efficient enough with the ai tokens that we are using and is like the actual energy that we are consuming worth it for our business well if you go back right in may i think like may 20th or may 22nd something like that i started tweeting and saying i personally was experiencing we're building a product called cfo sylvia as many people know and in that product one of the things that happened is we started to see cost run because the users get to generate the queries which means that they are basically unlimited exposure to expenses, if you are not intelligent about how you manage those tokens. So when you first start

building these projects, you're trying to make the product work, then you realize, oh, there's a problem, token expense, okay, how do we get more efficient at token expenses. So some of the examples were, when people would refresh certain pages, it would hit the model, like, we don't need to do that, stop doing that, okay, that takes down the token usage. The second thing is that there were certain features that were persistently hitting the model every, you know, certain amount of time and surfacing information. It was cool, but it was one of the biggest draws on our token usage. So what did we do? We killed the feature and we just said, let's see if anyone complains. No one complained. So we just didn't bring it back, right? To save the bunch of tokens.

So like we started to get smarter. Then we created some architecture changes and we started to look at cash and we started doing all these things. When we were doing it, I thought it was just an us problem. I was like, Hey, we got to solve our own problem. Then I started to talk to a bunch of CEOs. So I went and I talked to friends who run all these companies and they all were saying the same thing. They're like, this is crazy. We're spending all this money on these tokens. I have no clue if I'm getting an ROI off it or not. So what did they all do? They started to say, I want the output with less token usage. And so there was a huge shift. That's why I started tweeting about it saying this idea of like token maxing or these leaderboards, this is not going to be

where the world ends up. We are going to go back to efficiency and effectiveness and measuring ROI all this stuff. Now, what I find most compelling for OpenAI, Anthropic, you know, Grok, any of these private companies is that you have your individual customers. So CFO Sylvia or any company saying, I need to consume less tokens, but I need to get the same output, right? So we're becoming more efficient. Yet the total adjustable market is growing. The adoption of your product is growing. So your revenue is still sky high, even though your individual customers are becoming more efficient with their token usage. So to me, that is a sign that these people have product market fit. The product is going to continue to grow. I think that they have an incredible business

all bite as long as the open source models don't eat their lunch, right? But for right now, these guys are doing a great job. So then the question becomes, okay, what is the limiting factor for using this technology? Power, data centers, chips, right? You just go through all these different components. And so if you go, I just saw a story that there's a company that is shifting their work hours to 1am to 10am. They're asking their employees to work from 1am to 10am. One of the cited reasons is because they believe that the usage of the models from 1am to 10am is not only cheaper, but there is less demand on the systems. And therefore, they also believe that the answers are more accurate during that timeframe. Now, I don't expect almost anybody

else to go do that. That is a very unique situation. But people are obviously thinking about this stuff. And so if there's going to be this persistent demand for this technology, then that means that we don't yet have enough data centers, power, chips, etc, which means that there's going to be this persistent bid. And so everyone who is worried about the ROI on the CapEx spend, could we get to a point at some point where we've overbuilt 100% happens in every cycle, it's very hard to have finite control of this stuff. But I don't see that anywhere in the short term. And so I think that demand for the software is through the roof. I think that there is demand for specialized workflows, that's through the roof.

I think there's demand for data centers, power chips, et cetera. So much so that we literally have a company that's saying that they're going to go build it in space, the orbital data centers. And so I just think that this whole idea is a little misplaced. Now, when it comes to the MAG-7 in particular,

one thing that I think that we will start to see is that everyone is going off of a projected CapEx spending. It's like projected revenue. They didn't book the revenue yet, right? But they also didn't book the CapEx spending. Now, in some cases, they're making commitments or they're projecting what they're going to do. But what we have to get is the actual data.

And so I think that it would be very interesting if they say, you know, just take easy numbers. Hey, we're going to spend $10 billion in CapEx spending over the next two years. But we get the actual numbers and it's like six, still $6 billion of CapEx spending from a single company. But it's not 10. It's a 40% less CapEx spending than what was perceived. And so I just think that people are very caught up right now in, you know, what is inflation going to be?

I think that's very mispriced in the market. People don't understand it. But more importantly, is this AI CapEx? I don't believe the numbers that the guidance is. I actually think that they're going to spend less than that. And so, again, if you look at the Mag 7, go look at some of the companies. Google has sold off in recent days. OK, why is that interesting?

Google is now cheaper than Apple, but it's growing faster than Apple. So the question becomes why? It is all related to AI CapEx spending. And so if you go and you actually look at the information, if you actually go look at the data, I think that there's going to be a very big opportunity to own some of the best businesses in the world at lower valuations and go look at like the PE multiples,

go look at some of these metrics on these businesses. They have come down substantially over the last couple of years and they now are in valuation ranges where I think a lot of investors say, you know doesn't seem that crazy to me right as long as this ai capex thing isn't a problem like i don't know it becomes pretty attractive to go and allocate to these businesses and so i just think that everyone just needs to calm down stop freaking out and these ai companies they're not

going to be some huge implosion they're not going to be zeros and at least mag seven and i think that you've got to look and say to yourself is the company that we're looking at today any different than it was three weeks ago. Remember, the MAG-7 is up 18% in the last year. You wouldn't know it by reading the headlines. Everyone is trying to convince you that the MAG-7 is over, it's lagging. Yeah, it's lagging year to date, 100%.

But the S&P is still up 9% for the year. The other 493 stocks are up 13%. The MAG-7 is like flat to slightly down. Okay, so it sounds like the MAG-7, oh, it doesn't work anymore. Well, hold on a second. If the MAG-7 is still going to be valuable, shouldn't you become more interested in owning the mag seven because all of these other stocks

have run and these haven't moved in valuation for six months but the mag seven ran first of course it's up huge over the last five years right so like could it be a cooling off could it be a consolidation there's all these things the theories that people have but the point just being that imagine being able to buy the same business today or i'm sorry to buy the business today after getting another six months of great data of growth and profitability, et cetera, but be able to pay the price from six months ago. That's pretty much what the MAG-7 is letting you do. Now, that doesn't mean I'm taking my whole portfolio and going and plowing into the MAG-7, right? But I think that if you are some sort of value investor, if you're a large cap tech

investor, if you're more of an index type person, I would not be worried about the MAG-7. I actually think it's becoming more attractive there. And so I just think that all of the concerns are really overblown. And I think that people are bored. That's what I ultimately think. I think there's a lot of people who are like, we're in this generational bull market. There's not that much stuff to talk about. So let's start inventing problems. Let's start just pontificating about things that could go wrong. Great. If you want to be a risk manager, sure, you should be thinking about what the possible problems are. But I like to focus on the problems that I know are real problems, right? I don't like thinking about things that, oh, maybe one day if it's raining

outside, a squirrel comes out of a hole and a peanut drops from the tree, then that's going to be a problem. I worry about things that are actually problems and AI CapEx spending right now is not actually a problem. Could it become one? Maybe, but right now it ain't a problem. Today's episode is brought to you by Fountain Life. Your body is incredibly good at hiding disease. Unless you look. True wealth isn't measured in possession. It's measuring the time you gain, the energy you feel, and the life you create. It may be the smartest investment of your time you'll ever make.

Life is so very, very precious. And I want each of you to be truly awakened to your aliveness and live longer without limits. your number one job is to educate yourself and fountain wants to help educate you okay so if it's not a problem how do you measure it right how do you measure success on this stuff is it user growth revenue growth are there uh should you look at margins free cash flow like how should a business be thinking about are we getting what we want out of this ai capex well forget the AI CapEx for one second. The profit margin of the S&P is up 58% since 2011. So in a little more than a decade, the profit margin of these businesses has increased 58%. They're

better businesses, so they should be valued higher. And I think people kind of forget this shift from like an analog world into this digital world where these companies have, you know, IP and they're selling digital products and they're providing all this stuff. They are more efficient more valuable companies so everyone keeps pointing to like oh my god look at the uh historical valuations look at oh the dot-com bubble like dude the dot-com bubble you had to print out physical paper from map quest to try to find how to get to the other side of the city what are you talking about iphones ai right like i went recently to our san francisco office um at uh for uh sylvia and i was sitting with some of the engineers and i said hey can we make a change to something

And they're just typing in Claude, right? Now they understand, they're engineers, right? They understand how the technical architecture works. They understand how a lot of things that get broken, they can go and they can fix it. The databases, the file system, all this stuff, right? But at the end of the day, they got magic. Like they're magicians now.

And so trying to compare the valuations in 2026 to valuations from 1992, you lost your mind. And that's why I think that the value investors have lagged significantly. I think that's why the tech investors have done so well, is you should be aware of history, but you cannot simply just point back and say, oh my God, these things are so overvalued compared to everything else. Because you've been saying that for 15 years. So is it that you are going to claim victory if there's a 20% sell-off in the stock market? You're going to say, oh, see,

it was overvalued? Or are you going to shut up and get in the car and participate in a generational bull market? And I think that what you see is the best investors in the world, they're participating. whether it's Warren Buffett or it is name your favorite investor. They all have realized these are real companies with real profit that are solving real problems that have real growth in front of them. And so you got to allocate to them. And if you think that you're smarter than the market, you're going to sit on the sidelines and you're going to critique everybody. Great. But the way you measure success is do the businesses produce profits? Okay. Well, they all are producing a lot of profit. That's why they're so valuable. And people are worried

about the free cashflow and all this stuff, the profit margin of the S&P has increased 58% since 2011. Do you think it's gonna keep increasing? 100%. So these businesses are getting better over time. They're aging like fine wine. Well, you probably wanna own some of them rather than sit on the sidelines

and pontificate about how smart you are and how stupid Mark Zuckerberg or Jeff Bezos or Andy Jassy or Sergey is. Like, give me a break. I like that. That was good. When you think about these mag seven companies, though, I think most investors are under the idea that in 10 years, these things are going to be worth more than they are today. So that's what most people are looking at. How do you think about the short term and positioning yourselves from, hey, these large cap stuffs to, you know, there's crypto, there's all these other like kind of components to the market. And then we'll kind of bring this back. Well, I don't really care about the short term in the sense of I don't look at things on a day to day basis, week to week, even month to month. Right. So I like to buy things and say to myself, I'm gonna hold this for 10 years. And that's my general kind of timeframe. And over that period of time, I'll find more things. I spend most of my time trying to figure out how do I make more money? How do I go and actually get more capital? So if I bought something and I like to hold it for a long period of time, then I'll just go make more money and then I'll buy something new if I want to add something to the portfolio. you. Now, with that said, doesn't mean I don't always hold things for 10 years, right? Every once in a while, if the thesis changes or something, you know, I'll make some changes

in the portfolio, but I don't do a lot of changes. Now, with that said, if you go and you look, there's basically two ways to invest, right? If you go and I forget the exact number off the top of my head, but I think that the NASDAQ is up over the last decade has delivered something like a 18% return annually. I mean, that is bonkers, right? If the NASDAQ is producing 18, 20%, whatever it's been, compounded for a decade, what's been better than that? There's not many people who could beat that, right? And so you go and you look at it and you say, investing in these large cap indexes is a great investment strategy. You also could invest in things that are super asymmetric. What I think is the problem is the middle ground. What you don't want to do is you

don't want to allocate to midsize companies that have midsize growth trajectory and have midsize return profiles, right? Because that middle ground doesn't provide you the safety and security of the large caps where there's tons of cashflow and a lot of resilience and kind of toughness to the business, which creates durability, that durability you get paid for, right? And it also doesn't provide you the asymmetry of something that's very small and fragile that could grow into something big. So I like to operate in the barbells. I don't like to operate in the middle. Now, if I go and I look, Bitcoin and AI to me are the two most interesting technologies in the world. Now, a lot of these two technologies are being infused into tons of other things. So as you're seeing in

finances, people are putting Bitcoin in all kinds of stuff, right? The BlackRock website recently had a huge advertisement on their homepage for the iBit ETF and a bunch of products that they're building around it etc like that there's no more mainstream than being on the home page of black rock right at the same time ai look at spacex maybe as an example spacex largest ipo in history you know 85 billion dollars whatever it was comes out super hot what is spacex is it a space company is it an ai company is it something else right and you go and you look i say okay there's a couple ways to look at it they have a monopoly on space launches that's pretty valuable right they're putting starlink up and they're beaming the internet down from space pretty valuable there's

the promise of orbital data centers so you look at all of that and you say okay it's like a space satellite maybe a orbital data center company okay great well if you go back and you look at the ipo presentation they had a slide that was all about the total adjustable market and the rocket launch you know market then the internet satellite business right they had all stuff and then they had enterprise ai that was like i forget the numbers like 28 trillion dollars of the like 30 trillion dollar total adjustment market whatever the numbers were but it was like the majority spacex is an ai company that is why they are valued the way that they are valued and they've now or at least uh entered into the agreement to acquire cursor

right they've got xai they've been signing up a number of contracts i think they signed in the last three weeks, three different contracts that are all at least a hundred million dollars a month for the compute that they've put together. So you start to look at this and you say, wait a minute, this is a business that's doing billions of dollars, tens of billions of dollars, maybe run rate on a compute business that didn't exist two years ago. So what does that trajectory look like? Again, it goes back to the AI CapEx ROI. Well, you think that's been valuable for XAI and SpaceX? Of course. So I start to look at, what am I interested in, right? I always hold some cash. I like Bitcoin. And then I want to

be exposed to where growth is, where innovation is happening. And to me, that's happening in this whole sector that is related to artificial intelligence. Now, that doesn't mean you got to just play the software, right? There's obviously all the hardware stuff and power, etc. But if you look at some of the things I own, I own Tesla stock, right? Why do I own Tesla stock? I believe that if Elon has a monopoly on humanoid robots and self-driving cars, that's going to be really valuable. I also believe he's going to merge SpaceX and Tesla together. He's probably going to do it before 2030. And when he does that, I think he's going to create this, you know, conglomerate of all of the things that Elon is working on, but it relies on hardware thinking

and seeing. And if he can make hardware think and see using artificial intelligence, machine learning, computer vision, et cetera, then he is going to have the embodiment of the physical AI space. And I think that's going to be really, really valuable. Another thing I own is a robo strategy, the publicly traded closed end fund that has exposure to all of the private or a lot of the private robotics companies. Why do I think that's interesting? Physical AI and robotics, right? Coming together. It is a way to get exposure to the private market. So you've got a public entity in Tesla, right? Then you've got RoboStrategy getting you access to the private. That to me is all physical AI and robotics. I think it's going to be a huge opportunity. Masayoshi Sun

recently said it's the next trillion dollar opportunity. If you go and you look at a lot of the different technologies that are being built, a lot of the applications, et cetera, I think that's going to be big. Another area that I think is really interesting is things when it comes to national defense and a lot of this technology. So for example, I've been pretty public about the fact I own on this stock, right on this is got a really interesting business model. One of the hard parts about the drone industry is that there's so much technical aspects to actually making the drone work and creating innovative technology. So usually the teams that are needed to be able to create the technology are not the teams that are really

good at commercializing it and building a company. And so what their business model is, is they let a bunch of startups go and have the technical breakthroughs. Once they prove the technology works, they step in and they buy the drone company. And then they're really good at the M&A part of acquiring these. But then they have a huge BD team or a very effective BD team, and they go and they basically start getting the commercial contracts. And so all they are is they acquire technology, and then they go and they commercialize the technology, right? But the reason why I like it is because you have national defense, again, you have AI, robotics, machine learning, etc, and the drones themselves. And then they even are pushing into drones, not just being

in the air as we think, but also on land and in the water. And so you can see a theme emerging from all this stuff, right? Is in a private market, I've got exposure to a lot of the software type, you know, companies, Replit, Lovable, Micro One, you know, those types of businesses that are very popular and have dominated their specific verticals when it comes to software. My public portfolio though, is much more focused on physical AI and robotics. And so I feel like I've got a full stack exposure to AI between the public and private market between software and hardware. So that's like one whole big piece.

Obviously, Bitcoin, I'm a huge believer in. I think that Bitcoin is going to continue to be the check and balance on the federal government printing an insane amount of money and manipulating the monetary policy and having insane fiscal policy. If that's the case, then we're going to see the national debt continue to explode higher. They're going to debase the dollar and Bitcoin will do very well over a long period of time. Everyone who's worried about Bitcoin has lost their mind, right? so that's fine. But I like the fact that the things I own go through these periods where

people don't like them. I do not want to own assets that are always in favor, because if they're always in favor, that means they're popular. If they're popular, that means they're crowded. If they're crowded, that means the return has been, um, arbed away. And so I actually want things that go in and out of favor, because that means that the things that are out of favor likely have a lot more asymmetry to them. They have a lot more potential return in the future. And so that volatility is really important. Think about the things I've talked about.

Tesla, RoboStrategy, OnDisk, Bitcoin. These things are super volatile compared to just owning Walmart stock. And so that's really what I'm looking for is I'm looking for thematic volatility where I can go and I can put these things into a portfolio and I can play a major theme and do it across public and private markets.

Do you see that more on the consumer side or the picks and shovel infrastructure side? Well, think about Tesla, right? What is Tesla? Tesla is, a lot of people would say, self-driving cars and humanoid robots. And so they are not really a picks and shovel type provider. They instead are this like consumer type company.

And maybe they'll sell the human rights to enterprise and consumers both, right? Whatever. Okay, maybe. I actually think of Tesla as a picks and shovels company. What do I mean? The value to me in Tesla is not in the hardware. that is the way they monetize the thing that is valuable but really to me it is the computer

vision machine learning artificial intelligence it's all the models the data the real world application and the you know specific workflows in terms of how do you take all these models and this data and then make the hardware do something so that is as picks and shovels and infrastructure as you get is owning the actual models that's why open ai and anthropic all these guys they're getting injected into all these people's products usually people think of picks and shovels and they don't think of something like a model, right? Because they're like, oh, consumer interfaces with it. Yes, consumer interfaces with it, but also how much of the revenue is actually coming from non-consumer use cases? A lot, right? And so I think that Tesla

is to me a picks and shovels company because of what is valuable in that product or inside that company. But people just think of it as a consumer company because it interacts with or gets money from the actual consumer, but that's not how I look at it. Today's episode is brought to you by BitGet. BitGet is the world's first universal exchange, serving over 125 million users with access to over 2 million crypto tokens. And TradFi markets such as 100 plus tokenized stocks, ETFs, commodities, FX and precious metals like gold and silver. They officially opened its TradFi trading suite on January 5th, 2026, and has already hit the milestone of $4 billion of daily volume just days later. Users can now trade 79 instruments across global macro assets,

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Big dog. You think we're getting rate cuts this year? Cal State's got it at 78% for 2026, no cuts, same rate. Next meeting's in July. They got it at 77%, no cuts, no changes. Well, let's go through from first principles. What has to be true for us to get rate cuts? We have to have lower levels of inflation.

We have to have a Fed chair who believes that we should have lower rates and we need to have an economy that can handle lower rates. So those three things are somewhat interconnected, right? Because if we have lower inflation, that means the economy likely can handle having lower rates. And if we have lower inflation in an economy that can handle it, then we need somebody there who can make that decision as it occurs to do it. I believe that we will get a rate cut at some point in 2026. I understand that people think we're going to get a rate hike. Again, it goes back to my belief that inflation is not nearly going to be as high nor as persistent as people are predicting. Now, what's interesting, I do not think that America will become more affordable, but I think that affordability and inflation are two different things. Inflation is an economic concept that central bankers and sophisticated investors care about. Affordability is what the average American cares about. They don't care what the rate of change is. That is like some textbook academic nonsense to them. All they care about is I go to the grocery store,

my bill's too high. I can't figure out how to take the money I'm making and pay for the things I want. Life's not affordable. That is a problem. It's very different than going to somebody and saying, I know that the US dollar lost 30% of its purchasing power in the last five years,

but the rate of inflation now is only 2%. Investors would be excited about that, right? Central bankers would be excited about that. Inflation's under control now. And therefore that would mean that, hey, we've got this like strong economy that we don't have to worry about the high inflation, which would lead to lower rate cuts or more rate cuts.

Average American don't care. They don't care if inflation is 2% or 3%. That number means nothing to them. That might as well be the same number. All they care about is affordability. So if you go back to and you look at, well, okay, is inflation going to be a problem? I don't think so.

If you then go and you look at, can the US economy handle lower rates? I do believe that. A huge reason for it is if you look right now, the American consumer is super resilient. Spending data looks amazing. And on top of that, you have a stock market that continues to grow.

And then on top of that, household wealth is growing. Now, real wages have struggled and had some headwinds. So you got to get that back in right shape. Some of that is inflation coming down because energy prices come down, the Iran war stops, et cetera. But if we get towards, let's say Q3 and that inflation number is coming down, Kevin Warsh is something we call trigger happy. He's sitting there ready. He's got his finger hovering over the button, right? Now he doesn't make the decision exclusively. There's FOMC and the whole thing, right? But my guess is that if that inflation number starts to come down, they're going to hit that button. We're going to get a rate cut. Now, I don't think we're going to

get like three rate cuts or anything crazy, but I could easily see them doing a rate cut, which is kind of a check on the market. Like, hey, look, we are willing to do this. Now, what would change my mind is if inflation did stay persistently high, or if we did see some sort of weakness in the US economy. I just don't see that right now. And so I think that before the end of the year, we're likely to get some sort of rate cut. I think you'll see the prediction market odds all change. But I also don't think it's a bad scenario if rates just stay the same. I don't think that they are necessarily hurting the US economy by keeping them where they are. I do think if they hike rates, it would be premature. I think that it would be ill-advised. And I think it could

actually create a lot of problems. But if they kept it flat, fine. I think they should cut. But that's fine if they want to keep it flat. I don't think it's that crazy. And then maybe I'd put it at like 60% odds that we get a rate cut before the end of the year. Now, do you think he's coming in from a position, and I know you're not him, so I'm not going to act like you can speak for him, but is he coming out of a position of, hey, let's do something because something is better than nothing? Or is this a, hey, let's evaluate, let's say, you know, the first couple of months, let's kind of see what the market is doing, look at the data a little more often?

Because I find it interesting that it depends how you look at it, right? You can look at credit card delinquencies, and you can quickly understand the consumer is not doing as well. Well, that's a credit card problem. That's not a consumer problem, right? I think that's a key piece of this. If I remember correctly, the average credit card interest rate in America

is something like 23%. If you don't pay your credit card off at the end of each month, you're screwed because this thing's going to fly, right? Okay, so is that a consumer strength problem? Because consumer spending is off the charts. Now, people may say, oh, it's with credit cards, but they're like, ah, not really.

Now, if the credit card interest rate was 5%, what would be the outcome? You probably wouldn't have as many credit card delinquencies, right? Now, I don't believe that they should cap the credit card interest rate, because I think that they're going to be putting the government in there, they're going to manipulate it. A lot of the credit card companies just stop giving credit to people, right? So they're trying to price credit, and the credit that they've deemed is over 20%. So that's just what it is, right, is they're using their math to try to figure out what

that credit card rate is. Now, with that said, if you go and you actually take a look at Warsh, his entire press conference, his statement, you know, all of the commentary around the Fed meeting, he pretty much did what I would consider a economic sleight of hand. What do I mean by that? He did not touch interest rates. He said, we're going to leave this where it is. But he is rejiggering the entire Fed. He's creating a task force. He's changing the metric in which he wants to look at to actually measure inflation. He's coming in and he is saying that he doesn't believe some of the things that have been going on previously. He's not going to give future guidance. I mean, these are seismic changes that if you took just one of them and Jerome Powell had did it, it would be headline news for a couple of days. If Jerome Powell all of a sudden

came out and said, we're not going to get forward guidance anymore. Oh my God, these people would go nuts. Right. But because you have change at the leadership level, the new person gets to come in and kind of change a lot of this stuff. But he did it without cutting interest rates. He did it without touching the interest rate. So it was almost like a balance beam, right? Like if I don't touch this, I can make a lot of changes over here. If he had cut interest rates, he couldn't probably make all these other changes as well. And so he's chosen along with his colleagues, don't touch the interest rate. Let's get some more data. Let's kick the can down the road. But then he has chosen the things under his purview where he probably has a lot more control

without the FOMC weighing in saying, hey, I'm going to make these changes over here. And he's laying the groundwork. He's creating the culture, the environment. He's probably making personnel changes. I wouldn't be surprised if we started to hear that to make sure that the right people are in the right seats. And he's got the organization optimized in a way that he thinks is best to oversee monetary policy in America. And I don't think that a lot of the things he said were that controversial. I understand some people don't like it or don't agree with it, but it all kind of made sense to me, right? Is he's like, look, we got to make sure we're looking at certain metrics that don't take in for the temporary spikes in certain prices.

We got to make sure that we're not trying to predict the future because I'm going to get boxed into doing that thing. Like that doesn't seem crazy to me. So I think that he's off to a pretty good start. I think I gave him like a, I can't remember. I think on a scale of one to 10, i gave him like an eight or eight and a half like uh it's not a 10 you know you didn't get an a plus but uh he also didn't get a c you know he sees get degrees but you know he got uh he was up in the bb plus range b plus yeah okay all right but not net i would love to get that grade in high school all right let's switch gears a little bit let's talk about bitcoin um over the next 10 years what's your bear case and bull case for bitcoin well peter schiff recently admitted on

national television that he doesn't think bitcoin is going to zero so you know he's like the last of the mohicans if uh if he's not going to i think it's going to zero i think a lot of people are like all right it's unlikely that it's going to go to zero um now with that said could it drop significantly sure but i do think that bitcoin has breached um you know kind of the last big wall which was getting institutional adoption and now that it has it you know i think that there's a lot of folks who say wait a second this thing that was super shiny asymmetric highly volatile um you know kind of the, the, uh, king asset of cowboy land. It's not that anymore. And so a lot of my friends aren't buying as much Bitcoin as they previously had been. Cause they're like, what's Bitcoin

going to do? Go up 30% a year. Okay. But like I can go and I can invest in ABCD, you know, things and I can do better than 30%. Whereas I know a lot of institutions that are like, you're telling me there's an asset that I could buy. It's going to go up 30% a year for a decade. I'm very interested in that. And so the compression of volatility from 80 vol asset down to 3540 or whatever it is, is very attractive to large bulls of capital. And so the upside case here, I think, is you are not going to see the 10X, 20X type bull markets, but you're going to get this asset that's going to continue to compound. My base case is 25% to 30% for the next decade. It's not what it did in the past, better than the stock market, right? I mean, if that's like the index,

how many people are able to produce a 25, 30% return annually for a decade? Not that many people. And so I think that it's going to do very well, but I always remind people that unhappiness is the gap between expectations and reality. So guess what? You can't have outsized expectations because you're probably going to be disappointed. So if your expectation is 25 30 percent and it does better great you're ecstatic but if you think it's going to do 100 a year then you know you're insane and so it's just like keep rational expectations asset will do well um it'll continue to gain adoption it'll continue to grind up the government will keep printing money like the bitcoin thesis is intact it's just that it is playing a different game now

right it kind of uh bitcoin went from uh playing you know high school basketball and you're like one of the 10 people on the court right now are going to the nba so now we're like in college right everyone is much better and uh there's a lot less variation on the court but also everyone's much better so the game is better right it's more fun to watch it it's um more likely to be good basketball at some point we're going to get to the nba sovereign wealth funds all that stuff right we're not quite there yet but you know we're like college basketball maybe like a duke game does this feel different than 2022 and the reason i say that is uh the bear market just like consumer sentiment to me has never been worse institutional adoption and excitement about bitcoin is actually

i don't think ever been higher um does it like what's the difference in these bear markets no internet bitcoin sentiment is bad i don't know maybe it was because we were living in miami and now we're in new york but it internet feels different internet consumer sentiment is bad right now. I got people I've known for a long time. They're sharpshooting each other. They're saying all kinds of crazy stuff. People rage quit and all that nonsense. Nobody's doing that stuff in the institutional world. They may not be allocating as much to Bitcoin, whatever, but they're much calmer. They're much cooler head. They have investment committees. They have risk management. They have more data-driven, all this stuff. So I do think a generalization that has

truth to it is retail investors tend to be much more emotional institutions tend to be a little bit less emotional not all i mean still humans right so there's still some emotion but a little bit different so i like to say that internet consumer sentiment is down institutional sentiment is fine i don't think it's like sky-high euphoria and like there's a bunch of frothiness but they're still investing in building out all these technologies they are still going and trying to create you know bitcoin related funds they're still going and building custody solutions they're doing accu hires of you know uh investment teams uh fidelity just went and uh did or i'm sorry franklin templeton just recently went and did this um we've also seen a bunch of things happen

um in terms of uh okx and ice just partnered with each other to go create a bunch of products like there's just stuff happening so when people say consumer sentiment is bad or investor sentiment is bad. They're using the internet as a proxy, but there's a balance. It used to be 100% of everything that you needed to know about Bitcoin was on the internet. I literally used to be able to tell you what the price of Bitcoin was up or down based on what I saw on the internet. I can't do that anymore, right? Because now you have a whole new player in the space. And so maybe it's like 50-50. 50% of the information and importance, et cetera, is on the internet, and 50% is in the institutional world. But it used to be 100 and zero, with zero being the

institutions so it's 50 50 now in 10 years is it going to be 80 20 90 10 you know whatever it's like the institutions are becoming more important they're more capital and the individuals some of them are capitulating and they're moving on to other things and so um you know i'm aware of it uh i don't like seeing my friends all argue with each other but also at the same time um you kind of needed to happen to get the bottom right and so i don't know if we've hit the bottom uh but uh you know, we definitely came down. There's a lot of signs to say, uh, we could have hit the bottom and, uh, let's see what happens. All right. Appreciate your time. Thank you. All right. Thanks for doing this. Everyone go check out CFO Sylvia, just C F O S I L V I A.com.

See all of you next time.