The Wolf Of All Streets - Bitcoin FALLS As Gold & Silver RALLY! Are We On The Brink Of War?

Episode Date: September 1, 2025

On this Macro Monday, we cover a volatile week for markets. Bitcoin fell below $110K after a whale dumped 24,000 BTC, even as gold and silver hit record highs on Fed and tariff concerns while WLFI derivatives linked to Trump surged toward $1B. James Lavish warns of a looming U.S. consumer debt crisis, and tensions between the U.S. and Venezuela add to a heated global backdrop.

Bitcoin price continues to struggle as gold and silver absolutely pump gold right at a new all-time high right now and silver making a move. What is this telling us? I know who has some ideas. Of course, that's Mike McClone because he always tells us about what gold is saying about the rest of the market. We also have the United States moving a number of warships off the coast of Venezuela. Are we on the brink of war? We have a lot to talk about today on macro Monday. Let's go. Let's go. Good morning, everybody, and welcome to a Macro Monday. Happy Labor Day to those who celebrate and give the channel a subscribe and a like.

I'm going to go ahead and bring on Mike, Dave, and James. Thanks for showing up on this very important national holiday. that I would argue 99% of people don't know why we celebrate. Well, I mean, I guess one could argue that. I have, you know, my kid this morning was like Labor Day. Why are we celebrating people? So yeah, the sense is it's AI, celebrating AI. Oh, that's right.

The, you know, but it's obviously for those who are, and there are lots of non-Americans watching, it's the end of summer. And kids go back to school afterwards in America. So, you know, it's that last gas. That's right. It's exactly what it is. So, Mike, I know the markets aren't open today. I don't know if you had the morning meeting, but we can give the summary.

And then, okay, we'll skip the morning meeting and we'll jump straight to gold because this is actually really important. And we have a lot of headlines surrounding this. Gold and silver jump as rate cut bets reignite full run. We got Bitcoin split personality. We'll get into this on display as gold hits new record. as I mentioned before, kind of struggling. This is the chart I really want to dig into after you kind of give your gold silver breakdown.

Foreign central banks hold more gold than treasuries. This is the first time in 30 years that this has crossed since basically 1996. And I want to dig in with everyone on what this means because this opened my eyes when I saw it. But go ahead, Mike. Where are we at with gold? I'm becoming very concerned about markets.

very similar to 99, 2007. I remember this eerie feeling before 9-11, not that I called it, but I remember being way over late long bonds, and we all knew internet stocks are too expensive, just getting that feeling now. And the key thing I remember about gold, I think, is it's almost a perfect storm. Number one, we have the most discombobulating president,

probably in U.S. history. So gold loves President Trump. It's just the things he does, pushing back and fed independence, and, you know, pushing back in U.S. data and all those kind of things that are somewhat traditional. That's fine. But it's also what's happening on a global scale. We know that central banks, they're still buying, they've curtailed their buying.

The World Gold Council puts great data on that. The significance is the last three years, they bought the, about a thousand tons a year. That's almost two to three times the average the last 10 years. And there's good reason for that. It's the world order shifted with the unlimited friendship. And now we have this very, you know, the whole world looks at the U.S. with their eyes right up of what is going on in that country that used to be there to just save us and we could just export stuff too. Thank you very much. But that's somewhat ending. And the same time, what's really been happening is gold investor inflows are significant this year. ETF flows. They're up about 11, almost 12% now. And that's after four years of outflows. The thing is that's very rare to happen when volatility is going down. Now the VIX 50-day moving average is. potentially it's like it's just bottom it's very rarely happens and when the stock markets hit record high so i think what's happening is we're seeing this paradigm shift on a global scale where

people are saying all right we need something to diversify us and lock in some profits and certainly from equities and so here's my numbers i don't know gold's put in like almost a perfect bull flag for five months in a row this is starting the sixth month as of today um and then you look at yourself like okay what's this is looks too easy it's just supposed to break out to the next key level which is around $4,000 an ounce. And the key thing, it's also pulling up all the other precious metals with it. Silver's catching up a little bit.

Platinum, one of the best performing metals this year, but it was the gold platinum ratio just a few months ago was the platinum was the lowest in our database going back almost 30 years. So everything is breaking out for gold and the key question is what stops down. So the key thing I'm worried about is we're starting September. We know this is sometimes this time of year,

September, October, you can have years trading few in a few months. We have this eerie, very, you know, low volatility period. The low for the year in the VIX was just last month, around 14.2. And that's when Bitcoin put its high last month. The high for the year in the VIX was in April. And that's when Bitcoin put in its low. So people are starting to realize that the whole crypto space is wonderful, but it's very much significant, even certainly Bitcoin, a risk on space. And gold's the risk off. And we're getting towards the time of year, it's a risk typically bounce until he picks up. So you absolutely need the stock market to go up.

You want to see Mr. Trump pull back on his outrageousness, but that's not going to happen. So I see a perfect storm for gold to go higher. I just don't know what's going to end that. And that's when I look at myself. That's when things go wrong if I was way, you know, leveraged long, which in my past was. So if I was leveraged long and I was saying the same thing, it would go down. It's just the way things work when you're a trader. But so I see gold still one of the best performing assets here.

So I'm very concerned it's going to continue to do that. And I'm concerned we're going to have a period that we're going to look back at this period right now. Similar to we did is 1999 in 2007. That's why to me these next three months are so significant. The stock market risk assets, Bitcoin has to go up. But I think at a minimum, the biggest is at least going to go to 20. That's basically the average is here. And then what it does after that.

And at minimum, Bitcoin is going to least going to go to 100,000. It's what happens after that that matters. And gold just is front-running things. Yeah, but we've had silver that it's been kind of lagging this entire time. Here's the silver chart. We're back to the highest we've been since 2011. Actually, you know, a hair's breadth, 25% is-ish off the all-time high, which, you know, depending on who, yeah, it's about 49, just sub-50.

We're back over 40 bucks for the first time since 2011. This actually looks like the gold chart looked before it broke out to new all-time highs and basically flew from two to four, right? So this isn't just a gold thing. Dave, I see you nodding. You got to put it in $2025 and the chart looks very, very different. That straight line will look like Swiss cheese. It'll be like the tissue paper it's going to rip through.

What people consistently do in trading is do everything in nominal terms. So the two biggest chart mistakes that people make when trading are when they look at stock market returns, they ignore dividends. And when they look at asset returns, they ignore the depreciation or the printing, as it were, in the world of Bitcoin. Everyone looks at it as printing, but basically depreciating value of the currency that you're valuing it. I just got back from, you know, a trip through Central Europe, which was fascinating. It was an incredible experience. We went through Germany, Austria, and ended in Budapest, which is an amazing city. And Hungary is a particularly illustrative thing because Orban,

who is equally, well, they're very friendly with Trump, has taken that country from inflation rates in the double digits down into the very low single digits now, and the country has a completely different vibe. But it's through the amount of building. I mean, we talked to business owners there. I mean, it was fascinating. I got in conversations with owners of multiple restaurants

and other things, and they all say the same thing, which is, yeah, the government's going to put your hand in your pocket everywhere in Europe, but at least now in this administration, they're taking less. We can get that here, then maybe, quote, the disruptive force that Trump is, we'll start cleaning out the Aegean stables that is, are the muck in Washington. And so you call it disruption, I call it necessary, we disagree politically. That's cool. That's a different show.

But what's happening here is the dollar and the euro and every other fiat currency is being printed. So when I look at silver and I look at that chart, I'm thinking, well, geez, you know, the first time it hit 50 was the Hunt Brothers cornering it. Well, that's bullshit. You know, you can take 50% of that move and kind of eliminate it from the chart because if the manipulation didn't happen, it wasn't going over the 20s. The next time probably got it, it was fairly typical over extending. Now, if you look at it based in dollars, silver wouldn't look extended even slightly. And in fact, it looks like it's ready to start to follow gold as It's under price. Look, I think gold goes to 5,000. So I'm more bullish on gold than my kids, which is kind of funny. I just think that that basically takes the upper, the, my upper range for where Bitcoin goes up by the 25% that that would indicate. That's the difference between the two of us. I think that gold is the baseline that Bitcoin is going to use as from a market cap point of view. And he doesn't. And, you know, we can, we can banter about that all you will. But.

Look, I agree with Mike. I am very nervous about the stock market. I keep seeing posts and talking to people. And when you talk to normal people, and I talk to people who had some Bitcoin or some dabbling and whatnot, but we talked to a lot of people this trip, just normal people are outside the bubble. I didn't log on except for last week's Macro Monday. I didn't participate in any of the crypto town halls.

And what I saw this morning when I was going through X isn't surprising. So many people are talking about the stock market and are happy about it. when people start quitting their jobs to day trade that's when you know the whole the jig is up but it does make it's the the selling when they're yelling the yelling is not in crypto there's no there's no yelling in the world's crypto except for in our inside our bubble and even there it's really small and it's certainly not in bitcoin i mean the overwhelming people seem technical seem to be bearish uh but in in the stock market wow i mean everyone's talking about invidia i must have heard and video mentioned to me two dozen times not as many times as palenteer could we just I want to

transition to James but I just have to mention one thing we do not disagree politically I did not mention one political view I mentioned what the mark based on what's happening in in in the political situation this is what the market is doing and why that needs to be that needs to be pointed out there was no political view expressed in this okay fair fair enough is what the goal I am you're right I apologize I was implying a political view that's just the point it's and you're right you're right absolutely i think um yeah i think one thing we have to point out that um we're not talking about is yeah of course i mean i'm also worried about about the the market heading into september it's interesting that bitcoin's making

a move before that you know and isn't that the way it's done it uh recently where it's the head of the the tip of the risk spear and it makes it move it's moved first um and then kind of settles in, and the stock market does its thing, and other assets do their things and follow it. But I think the gold move and the silver move is interesting because gold you would normally think, yeah, it's pointing to uncertainty in the markets. It's pointing to uncertainty across the world. There's a few things going on. That chart you brought up, Scott of foreigners, foreign central banks buying gold, you know, more than they're buying treasuries, it would make you ask the question, well, who's buying treasuries, you know?

And one of the things is, one of the things is we're, you know, the amount of treasuries that we're issuing hasn't gone down. It's just the end of the curve that foreign central banks would buy to hold is going down, you know, because we're not issuing as many longer dated securities we're not issuing the seven year 10 year notes as much the 20 years a throw away i'm not sure why we even have that but or the 30 year so then you you know and then so that's one thing you wonder well then who's buying when you look at the auctions who who's buying all the you see the foreigners you see the you know uh when you when you look at the auctions but that's most of that's coming out of the cayman islands and for the listeners that means that it's hedge funds

hedge funds are buying the treasuries you know hedge funds are buying the the um the notes they're buying the bills those are the ones who are buying it so um and that's where you see those numbers and and i i just saw a chart this weekend show that the caymans they're the largest uh foreign buyer of treasuries in the world and so that's hedge funds um and then you know on top of that you wonder is is gold rising because of uncertainty well it's rising here because of the realization that we are deep we are devaluing our currency a lot faster than we've admitted to over the over the last 25 years and so the last five years we've admitted to we've admitted to devaluing the currency 25 percent and that's just crazy right so of course foreign central banks are going to buy gold that

just that that makes sense that's number one number two you think is gold being bought because of uncertainty because we have warships moving around the world because we we have uncertainty around tariffs because we have uncertainty around tariff wars is that you know so we've got money wars we've got physical wars going on is that part of it well yeah some people will buy gold because of that i think in this instance some people buy gold because of what mike pointed out right at the beginning the show is that there's uncertainty around the markets heading into september and then finally the thing we haven't talked about is people buy gold before the Fed starts cutting rates. And the Fed is almost certainly going to cut rates 25 to 75 basis points in the next three months. So we have

to recognize that. And that's part of the move in gold here is that people are gearing up for that reality. And most of the time they gear up for that reality. Why would they do that? Because the Fed is always late. The Fed is always late. The Fed is always late. The Fed is always late. And that means the Fed is going to cut when it's too fucking late. And so they're they're going to cut and the market's going to be going down and people are going to be pouring into gold. So that could also be the anticipation of Bitcoin going down, gold going up at the same time tells me that you have investors anticipating a tough September.

And that's kind of where I'm coming out on it. So what's interesting to me really quickly, Dave, is that this really makes the case for stable coin so clear. That chart to me just screams digital crypto dollars, as Mike would like to say, because I think right now with the pace of growth of stable coins and the amount that we're seeing launch, they could be a top three buyer on any given year-to-year basis of treasuries. I don't think they'll be the top-tether is already a top-10 buyer. Yeah. There was six, I think, last year. So let's imagine we get Citibank coin and PNC Bank coin or in Western Union coin on top.

of the growth of tether, inevitably growing the United States. Western Union coin will take 25% for the fee for you to buy it. I just, you know, imagine if you didn't have the stable coins moving forward, that blue line on that charge is going to start to look much more aggressive on the way down. That's right. Because the foreign governments are selling them, not buying them. Go ahead, Dave. Yeah, I mean, we're letting him roll off the book.

I wasn't going to go to stable coins yet, but I think let's let's go there. Say what you were going to say. Yeah. Well, I mean, what I was going to talk about was the, you know, the, the, the, the, the, the, the, the, the, the, the, the, the, she's, she's, she's, she's all powerful. I mean, the, the, the, the, the, if you were scripting a way to, to, to, to, to, to get political support for auditing the Fed and ultimately re, uh, creating real accountability. Uh, this woman, uh, is literally the poster child. I mean, she is, I mean, she has, I mean, uh, I mean, I mean, she is, I mean, I mean, she is, I mean, I mean, I direct from central casting of someone who is going to ultimately mean that the notion of a completely private fed accountable to no one, which has been draped in this veneer of political independence, which is complete bullshit, has been complete bullshit. And basically since Volker is absurd. And it's going to happen. I mean, you don't have to be a political prognosticator to understand that the American people, when you mentioned to a person to a normal,

human being, a voter, that the federal reserve is neither federal nor has any reserves. They think you're nuts. As soon as you say it, they're like, well, why the hell are they the most powerful people control in the economy? Watch this space. They're going to force the people, the Rand Paul wing, the libertarian wing of the Republican party are going to force the Democrats to have to defend this shit. Rokana is in a safe district, but he looks like a fucking idiot when he talks about the Fed

because he tries to say, well, this political independent, it's just, it just doesn't exist. I mean, this great video that was made by AI, which talks about the history of the Fed being basically, you know, engineered by J.P. Morgan, which is, by the way, is true, is very important. You know, having human beings controlling the single most important price on the planet, which the price of money in the world's biggest economy is going to be under attack. And that is one of the reasons that gold is sniffing this stuff out. You talk about Trump. That's a big one. Now, yeah, he's the agent provocateur in this case. Absolutely.

But the truth is, when James says the Fed is always wait, the Fed is always late, when Lawrence says that they are fuked because he doesn't want to get his account banned banned again, you know, from Twitter. They're all right. I mean, you know, we've laughed about the fact that they have 20,000 people and 900 PhDs and they can't do a pro, and they can't get a forecast right in having for 20 years. I mean, they make the local weather girl look like a frigging genius when it comes to, you know, when it comes to predictions. And yet we think of this as this almighty, all powerful person.

Now, look, I personally said, I think Powell's doing a pretty good job, you know, as recently as a year ago or six months ago. And I think he did in a very difficult situation. But the truth is, we know these facts. Fact number one, there's a bazooka, our howitzer, that says if banks are going to go, they're going to print. We know that. So they're a backstop on the banks. Why do we have a need of backstop on the banks? Because we have fractional reserve banking, which is a system that was absolutely essential

from the time of the Medici's to now in order to be able to have local lending work. Because we didn't have perfect information. There was isolated information and capital flows are expensive. Well, guess what? With the internet, capital flows are now completely mobile, and information can move at the speed of light around the world. So you have to ask yourself the question, why are we propping up a system that pays bankers an extraordinary amount.

Honestly, and this is going to piss off a lot of people, but I don't care because I'm in a ranting mood this morning. If the banking system was controlled by the Jews, we would start to see a repeat, an even bigger increase in anti-Semitism because if you look at what caused this anti-Semitism throughout Europe, and I went through a history tour of this for the last week, and I'll talk about this with anything.

There were two major causes. Major cause, number one, banking was considered a low-class, ass occupation. And so the Jews were kind of pushed. Okay, you guys could do this. You couldn't own anything. They were basically pushing stuff where they had to be mercantiless, but they couldn't own anything. Well, that makes so you adapt. And the second thing, which just as a historical curiosity, is the Jewish culture involved lots and lots of washing of hands. And so they didn't die as much in the plague. And so they were called demonic and devils. And that continues to this day. So you learn these two things and you understand where anti-Semitism comes from.

But if you think people hate the banks now, I mean, look at the greed, look at what goes on in the banking system. Why do we have this printing? Why is it? Well, we have it because we've had 25 years of basically below market interest rates with, as I pointed out, five of those years, we didn't. But 20 or 25 years of negative real interest rates. And so we've had financialization. And that's what gold is sniffing out. That's what Bitcoin will be sniffing out.

that's already sniffed out a lot. And that's a large part of it. Now, that was a big rant, and I'm sorry for, you know, for going off the rails on this, but I know you kind of like it sometime. But, yeah, those grants are great. Scott, can I just, good. Can I follow that in that day? First of all, our banters, I think this is the best thing we can do for our audience.

Just point out some facts of history of the Fed. First, I suggest everybody take a look at the book, The Courage to Act by Ben Bernacki. The purpose of the Fed is to be there when things, get bad. And that book, I think, nailed it. I don't know how many times he mentioned the stock market in there, but it would really nail it. Like, thank gosh, we had the right people at the right time to help solve a great depression, which we're heading up. So the Fed that they were supposed to do then, agree with you, James. They're always too late. We need a markets person

on the Fed. Someone who gets markets, like Scott Besson, why do you think he's pushing so hard for cuts? Because he sees what's coming. But another thing I want to point out in the history of the Fed, the one of the most significant things that happened was when President Carter appointed Paul Boker. Paul Boker went into that meeting. He said, inflation's a problem. I'm going to raise rates. And Carter knew right away, if I appoint him, I might lose the election. He did it anyhow. Now, that's a bit of a profile in courage. Carter knew what would happen. And this happened again. Now, we just had this big pump and inflation. It helped get rid of Biden and brought Trump back in. So I don't, I just be careful about the politicization is fed.

So the key question I want to ask you, Dave, after I'm done with my slight little rant is, you suggest about a better way, a wetter way to do it. Because right now, this is really good to have this point, counterpoint. Every single economist on the plant on Greece, we do need separation from those who set monetary policy and the politicians. Because politicians will do what Trump. Trump's just so blatantly obvious. It's awesome. I love that because how is history going to judge this if he does get his way?

So the key thing I want to point out, let's tilt it back over to markets a little bit and then I'll let you go into that. The key things I'm worried about is there's major cracks in the armor. like, first of all, micro strategy, the leader of everything is broken below its 200-day moving average. Copper has collapsed from its high. What I saw in copper this last few months is exactly what I saw in Cruel in 2008. And I remember, so I got some of that trade right. I was early. I was wrong for well, but by that end of the year, man, there's some really good peas in my profits just because I was trying to make up. So copper, if it breaks down, the whole system starting to break down. And I'd like to put those together. And I love when people push back on it

because they have an exact same kind of pattern like Bitcoin as everybody sees the trend going, going up. Everybody's bullish. The copper took out, it took, it dropped 22% in an hour. I mean, it's ran through stops. This is what markets do sometimes. This is one of the most liquid commodities on the planet. So this is when I see things tilting. And that's why I'm really worried as we walk into these next few months. But just remember a thing about anybody complains about the Fed. It's like, give me a better solution. There's, okay, there's one thing I want to unpack there. And then Dave, you can respond to the rest of it is micro strategy is a, specific event. And that event is that Michael Saylor has moved the goalposts on investors

on where he'll tap the ATM to sell stock to buy Bitcoin. And he originally said he wouldn't do it below two and a half and now he's doing it. And so and he's doing it at one and a half, one point six. And so there's a lot of frustration from investors around that. They're they're really frustrated and they're wondering if they can trust him because uh and you can see it online and there's a lot of infighting going on around micro strategy specifically around that issue now not getting into whether it's right or wrong or you know i mean quite honestly look we i still own micro strategy and we own it in the fund um and long term i think it is a a you know one of the we will be one of the strongest if not the strongest uh

Bitcoin treasury companies out there. However, short term, people are wondering how much runway he's got because of the issuance of the preferred and how much can he tap the market, how much of the capital market's going to be open to him. And is he worrying that they're not going to be open to him? Is he anticipating that? So he's issuing more stock, diluting the stock at 1.6 MNAV instead of. 2.5.

Can I ask you a question, James? Yeah. So what's interesting to me on that, and Dave's pointed this out quite a few times, obviously, that the key to micro strategy success or the fuel is volatility, obviously, right. So you know that in these very boring phases, consolidation, that can become problematic. But also listening to you, like, price isn't even really down. I mean, we're down 12 or 13 percent from the all-time high. Shouldn't they have anticipated when creating these new products?

and releasing these new things, that even a period of sideways could start to be problematic because what happens if Bitcoin actually drops if the market's actually already concerned about boring for three or four months. It's only problematic if he still needs to be buying Bitcoin. I mean, quite honestly, look, there's a lot of different ways you can play this. I'm not going to second guess Michael Salele. He's made tens of billions of dollars on this strategy with strategy. you know so however the the question is does he really need to be tapping the atm here to be buying

bitcoin here does he have to keep buying bitcoin every single day that's the question and and so that's what's frustrating investors um that's what you're seeing on x um you know on twitter that's what they're wondering but the bigger question around that to mike's point this is where i think Mike is hitting on the right point is now you've got this is one of this has started the conversation of what's the MNAB that all these treasuries should be trading four five six or should it be one and a half to two and a half and I've been saying for a very long time they're going to they're going to be gravitating down to one and a half two and a half level over the course of time now that doesn't mean it's that's a bad thing it's it's just reality you can still make money in bitcoin and in these

treasuries with bitcoin going up even if their m nav is is contracting so you just be buying bitcoin and shorting any treasury company that has a premium to nav over two well i mean that is a strategy to to play the problem is that these you to get into structure and this is a good question this is a question i get on twitter a lot is like why aren't you just why don't you just borrow and sell and short these things. Well, the cost to borrow these things is astronomical. I mean, astronomical, which is another reason that the MNAV just stays very high because you can't find shares to actually short. And if you are finding shares, some of them are over 100% premium a year, 200% to just borrow the stock. So it's important to dig into why, because the why

there matters a lot. Boy, there's like three different threads I could pull on. You know, as far as the Federal Reserve, the answer is nobody. The market should be setting the price of money, and we should have a sound money policy. And I think the great lie, the biggest lie that has been told to economists for the last 50 years is that inflation is needed in order to have productivity and advancing population. And so at 2% or whatever inflation target is good, because otherwise we'll get a deflationary collapse because of technology. I think that is the biggest single lie that's been told it is worth getting one. And there's insidious lines.

Honestly, I think the best way to do that, Scott, so when we start doing shows, because, you know, we're going to do my own show, Mike and I should do a long-form show where we literally debate these particular structural issues, but that's not what people want to hear about today. So let's table that for a second. But I do think it's a really important topic, and I totally agree with that Mike's exposition of this is really meaningful. So let's let's stop that. But the threat I want to pull on that James just mentioned in terms of micro-strategy,

and MNAVs is fascinating. Look at banks. By the way, the right range is 0.75 to 2 is probably the range of MNAVs. The really best banks, the ones that can generate revenues in excess of just holding books, book value and being in line with the market, can get towards two, the ones and sometimes over it if they have really explosive new businesses. But the average crappy bank often goes below book value. happens all the time so this so hold that for just a second this is why we've been saying on our

on our partner calls that we're looking at jp morgan as our target mnav on you know with their book value for the long-term mnav for micro strategy because of what we believe they'll be able to do with their book of bitcoin and that's a 1.5 that's a 1.5 book value for and that and that makes sense to me you know, but that's long term. You know, I don't know when it settles there. And if it makes it to come back to $125,000, macro strategies MNAV is not staying at 1.5. It's going to go up, you know, in my opinion.

And it's going to spike up. And so that's just reality. But, okay, because we're in a sideways grind, like you point out, Scott, it's getting, it's just getting a little bit tedious for people. But go ahead, Dave. Okay, so let me pull on one thread and then I have a screen to share. So the pull on one thread is when you talk about hard to borrow, when Bitcoin became incredibly hard to borrow and people were paying, not hard to borrow, but expensive to borrow. So when going long on the preferreds, on the perpetual swaps, excuse me, or futures markets become extremely expensive.

To me, that's an extraordinarily good top signal. It talks about euphoria, et cetera, et cetera. It's exactly. It still is, by the way, we're nowhere close to that. I mean, we haven't had that at all during either the eight. months that went back over a year ago with the last four months. We just haven't had any signs of derivative lead buying that did Bitcoin. But Bitcoin is a free market for boroughs. Most of these treasury companies are what we call specials. They are companies where the float

is held by the owners of the company. And the owners of the company are smart enough to say, well, screw this. I'm not going to let these be available for lending. And so they hold it out. There's no Bitcoin, you know, Bitcoin doesn't work that way. I mean, those rates are economically set. They are what people call paper Bitcoin rates, but it's the exact opposite effect in this particular case, their market rates, whereas the rates for specials, and this is not just in Bitcoin Treasury, this is, if you look through all the hard-to-borrow lists, there have been situations, I can remember when we were at 2-Sigma, there was a natural gas, ETP exchange-traded

product that was run by Credit Suisse, and Credit Suisse refused to let it be borrowed. And so effectively, this ETP went to an MNAV on natural gas of four and a half. And of course, every market maker was shorted and we couldn't borrow it. And so therefore, you got bought in and you just had to play it. Know very well that you couldn't really be short this thing. Eventually it collapsed. But the fact is that these things can continue for a long time. Just for the listeners, what that means is that if someone wants to sell their stock and their prime broker has

lent it out, did they want to sell it, that means that they're going to have to go get it. That means that they're going to call you if you're a short seller and you borrowed it and you have to give it back to them and you have to buy it at the market to get it back. And that's being called, that's called getting bought in. That's right. And that's where your face gets ripped off. Right. So there's a lot of it.

That was that thread. But you mentioned micro strategy. So Scott, can you pull up the screen that I shared? Yeah. So this is the 30 and 60 day Bitcoin volatility. over the last year. If you want to understand why micro strategy stock, what it's done, I don't have the ability to overlay this with micro strategy stock,

but I think you'll notice that those spikes are exactly where the stock did well. And that's because that's, and those spikes are able to make those great sales of STRK and all the other stuff. But when it's down at these levels, which are at the low over the last year, and you can go back to forever, I can do a larger chart if I wanted to. Let's go back.

Let's go do this. This is one year. You do five years. So yeah, there have been some periods in 23 when, you know, post, you know, whatever, where you got a little bit lower. But the 60 day, we're pretty close to the bottom over the last five years. And you could chart this. And look at the scale here. You know, we're at 1.29. The peak that we've had recently, even in the best bull market this year, the best of it was 2.25. I mean, you go back five years and Mike always likes to do this. And we were at five. I mean, you know, it's dramatically lower. So when you talk about a VIX of 16 to 20 on the CME, I mean, we don't have that many periods of VIX at 100. When VIX is at 100, you should be backing up the truck to buy, right? Because generally the markets have collapsed, right? So we're at those levels, roughly speaking, in an inverse sense. So it's important to understand that.

So if you're Michael Saylor, and he's a smart dude, he says, look, volatility is really low. I'm not going to be able to sell anything else. I want to continue to add to my pile. Yeah, I'll get some pissed off investors. But remember, he owns 10% of the stock. The likelihood of a human being taking it doing, you know, if he thought it was a bad idea for his stock, then he wouldn't be doing it.

He's doing anything. It's a good idea. And he doesn't care what people yell or scream about. He didn't care about the short-term movements of the stock. He cares what were the stock going to be in 10 years? Because he doesn't need the money right now. He cares about his legacy. Now, is he making too big of a bet?

Maybe, maybe it happens. I mean, we've seen lots of people like Icarus fly too close to the sun. Is he doing that? I don't think so. But that's what you're basically arguing if you want to be short this thing long term. If you believe that it's a reasonable way to play a evolving Bitcoin ecosystem, on the other hand, then it makes sense. So, you know, I see the views on this. I'll call out Dr. Donish, who thinks MSCR, he made a pose.

But if you're long MSTR, it's an IQ test, and if you're long it, you failed. It's like, okay, I don't know between he and I whose IQ is higher. I'm guessing it's within punching distance of each other, he's a smart guy. But the truth is, it's not. If you buy it at an MNAB of two and a half to three and then sell it when the MNAB goes down from to 1.6 or 1.5, yeah, then you're an idiot. But if it's a long-term hold as part of your portfolio, because you think it makes sense for a bunch of reasons, particularly if you bought it from lower levels and don't

want to take tax hits not an IQ test but that's what's going on you know it's really simple when you look at this if bitcoin volatility going to return of course it's going to return it's going to revert to the mean and you'll end up at a volatility in the twos and that will will allow them to do things that will will effectively goose their emin and that's what that's james's a point does that make sense yeah okay yeah that's exactly right should we talk about we had two more two two topics i wanted to touch on james you can finish that if you want no i mean that's that's that's the that was the point though is that you know um we're going to we're going to see some shakeout here um i don't think that that it's over i think the capital

markets are still available for these companies and it's going to continue um and it's going to continue for the the top companies for a long time it's just uh it's going to consolidate in my opinion. Okay. So you had another topic, Scott? I want to talk about Venezuela. Okay. Because just touch on it because it seems relatively important that we've sent three warships off the coast. And we have a we have a congressman who's basically bullposting the idea that we're about to go to war, say that thanks President Trump, that Maduro head of the criminal cartel has a $50 million bounty and then saying he's about to get annihilated. So listen, I'm not saying that this guy necessarily knows, but this is the United States government sending

free warships to the coast of a foreign country, I believe 4,000 U.S. soldiers and others in support and Maduro saying they're coming to get me for regime change, which is kind of an American thing to do, especially. We usually do it to the CIA, though. Yeah, we usually do it. I want to make two points. First, I absolutely 100% think that pretty much every single time we attempt regime change, it screws us. It's a terrible idea. So I am not. suggesting it. Okay, let's get that out of the way. But Mike's thesis on oil is very much a play here. Venezuela is one of the richest countries in the world. Venezuelan citizens used to be in the top five richest overall per capita GDP. Venezuela, since Chavez and Maduro have

implemented the same policies that Zoran Mondami wants to put in New York and Bernie Sanders wants to be national with AOC has gone to now the poorest, or into the bottom 10% of per capita GDP despite all these riches. There is a very big tail risk to oil. If Venezuela ever were to go back to being capitalist where money flows could be understood and you can increase their oil production back to where a capitalist-led system, that is a huge supply of oil that comes on to the market and it makes, you know, it is not a good thing for the price of oil. We'll just leave it at that. And if you think that this doesn't have anything to do with Trump trying to put pressure on Putin, then you're not paying attention.

People, follow the freaking money. What is the single best lever we can put on Putin? It's to decrease the price of oil. What's the best way to do it? Find new supply and get it online. Now, I know people aren't going to connect the dots on this. Even Simon Dixon with his wacko conspiracy theories won't connect the thoughts on this. But this, you don't have to look very far to understand U.S. foreign policy for decades has been about keeping the price of oil low, whether they succeed or not as a matter of question. Whether this will work or not, I don't know. But if you think that this isn't part of it, you're not paying attention. The government wants the price of oil to come down. Venezuela has absolute shit tons of supply and are really shitty at pulling it out. You know, the whole court, we could also talk about the court case. And Mike, you remember the court case with Chevron? Right. I mean, this is,

is a big deal but it's not going to be a big deal in the short run just watch this space in six months we'll talk about it perfect right did any thoughts james i guess no i was going to hit on the same i was going to hit on the same theory about oil too um now what the ultimate outcome is it's hard to tell but i mean Venezuela is obviously has is one the largest suppliers of oil in the world so yeah it's not part you don't have you both i think you all nail you That's right. What's that? It's the macro bigger picture. There's just so much more gushing supply on a global basis.

Even China's coming up ways to bring on more supply, just following some of the technology that U.S. is using. And there's significant pressure on demand. B.Y.D is proliferating around the world. And that's just one automaker, just replacing things. I point out, it's my B.YD baby is 11 years old. And now it's a Chevy Bolt, that same car is three times as efficient

and half the price. We have to have tariffs on it because the deflationary technology is so significant. But I'll stick with that call and I'll wear it, if I'm wrong, that I think oil's not going to bottom until around 40. That's what it's done for the last 20 years. It has to get below that cost of production with the U.S. is around $55 a barrel. And that's the low for the year. So it's bounced for now. It's got to make it difficult. And it's never ended the year above 100. And that's why we're getting towards the end of the year now. So it's that goal, Bitcoin, sorry, it's that gold, the crude oil ratio, I find exceptionally scary. All the gold ratios are exceptionally scary.

Highest Eber versus commodities, certainly versus gold. Crude oil, we've never ended the year. You go back 100 years, and the end of the year high was 39. One that started in 1933, it didn't matter as much then, and then just a couple years ago. So it's significant to mention it because those are severe deflationary forces. A lot of it's rapidly advancing technology. Jeff Booth is all over. but I want to tilt over to a little bit to that I don't know what's going to happen to Venezuela but I think like they said we might have a pop and curl but anytime you get a pop people just can't wait to sell forward particularly the largest producer in the planet that's US a net exporter but I want to tilt over it's a little bit what's happening with severe deflation air forces in the world's second largest economy who first of all I completely agree with you the best way to hurt Putin is just crush the price of oil I mean I wrote that a few years ago I think we're getting it Trump's getting it and his constituents are like it the bond market wouldn't love it but here's the thing

I'm really worried about it. Just to put a little cherry on that, the best way to hurt Putin is not to freeze his assets and take his treasuries. Like that's not the best way to hurt him. That was the stupid income. Yeah. It's a real baby drill, whether you or elsewhere.

Yeah. Finish up, Mike. Well, it's not just, but it's everywhere. I mean, it's just the average. Exactly everywhere. It's more cost effective. It's just the technology is overwhelmed. It's like we don't want to go back to, you know, to rabbit ears and our TVs.

We've got a better technology now, and that is electric cars. It's just, it's just matter of time. But here's why I want to end with, and I don't know if you want to tilt already. I'm really concerned is we have 300% debt to GDP running in China based on some mess with, that's Goldman Sachs. We have their money supply around $45 trillion. That's double what's happening in the U.S. They're massively pumping this system. Despite that, the 10-year-old yield is about 1.77%, which I think where the U.S. is going.

And the latest PPI measure, which I don't know if we can really trust it or not, you can trust a bond math, a bond yield, is minus 3.6%. So to me, this is what's happening. What people are missing in what happens a lot of times is, yes, we'll get massive printing, but it's when the U.S. stock market right now, when it drops 20%, that's 40% of GDP. That's the most in 100 years. I mean, it's right now about $70 trillion.

And that's why we're being propped up on just a little bit of, you know, the cards are tilting here. That's why it's so important that cryptos have to say expensive in the next few months or everything. But I'm just pointing out, shoot. Yeah, you said two things which are really fascinating and I think needs to be pulled on. One, you talked about how the debt to GDP in China is exploding, yet the 10 year is crazy cheap, meaning they don't have to pay much to borrow money. Who owns Chinese government bonds? Well, exactly. I hear it's mostly domestic, and I've heard a lot of it is, James, you probably know that.

James, why don't you nail that one? That's right. No, it's mostly domestic. That's right. And why would people be dumb enough to continue to buy them? It's a short answer. Because put it this way, you're running a company, and we know what's happening. So our whole livelihood for the last 30 years has been exporting and best, you know, U.S. corporate profit green.

said, sure, we'll export the US. These corporate profits, they know they can make profits. They import our cheap stuff. They just shut that up. And then the rest of the world is pushing back to this deflation. To me, this is a global depression just getting started in the next few months might signal it. Unfortunately, crypto should leave the whole thing. If crypto's drop, everything falls with it. And the number one's hottest crypto on the planet. And so I mentioned is leveraged Bitcoin micro strategy. Where is it, how is it even remotely possible that China, which is already printing like crazy has cheap costs of money what would happen and we know the answer to this it's a it's a totalitarian country she doesn't let them but if she let people

let chinese companies do put money into bitcoin or gold or i mean look i remember buying chinese that was the answer to your question why is because they have to they have to they have to they have to and so but there's a limit to what they can buy and there's only one way out the one way out is export like crap and push and push more and more money into the system. Keep blowing the bubble bigger and hope to grow your way out. And at some point it's going to fail. You're right. It can't have to because you're the first one to talk about this, Mike. I would give you props on this one. You say when an economy is controlled by one man, it ain't going to work, right? It doesn't encourage entrepreneurship. It doesn't encourage people want to get their money out.

And so what happens when that money does come out if it comes out? That's a very big, deal and you know we're way way away but it's it's really there's crypto dollars there it's really it becomes harder and harder the the argument for bitcoin into the crazy sphere you know the bitcoin crazies i call them even though i might very well be there and i wear my orange shirt today uh is it is that all of this ends up in bitcoin because governments can't control it now i don't believe that that's completely true but by any stretch of the imagination but understand something that one of the escape vows for all that money in China is ultimately going to be Bitcoin.

It's one of them. And that is, and so when you compare Bitcoin as a, quote, risk asset tethered to earnings, which are going to be under pressure for all the reasons that you mentioned, that's where it's a problem. And when you talk about all these cryptos, yeah, there's a lot of cryptos that are there. And those could suffer too. I mean, look, I haven't looked at Bitcoin dominance. I'm just looking at Bitcoin's price having not moved, and I'm looking at altcoins not named Solana, and to some degree, Ethereum, and they haven't had a very good week, right?

You know, I come back and I see that. And so what you're seeing is a very large, me, look at XRP, for example, right? XRP was Bitcoin, you know, is still, I called it leverage beta on Bitcoin, so it's underperformed. It's basically been what it's been. And so we're seeing some of that. But, you know, you always use the word competitive. I just think of Bitcoin is very different than the rest of crypto in the same way gold stocks are very different than the rest of the S&P. They're both. They're all stocks, right? It's that. But your point about China and why it is is because people are forced.

In Japan, it was a little bit more subtle. People weren't forced, but that's all they knew. They had their postal savings accounts, which owned JGB's. And JGB yields are finally, as the economy is aging out, and people are looking at this thing, what the hell am i doing with this uh it that's why jgb's and that's why japan is a problem you haven't mentioned them that's another huge issue in the global economy i mean when you look at at at japanese bonds and you look at their yield curve it's it's definitely concerning right the long bond's getting pretty steep there yep are there the 10 years although up to 1.6 percent which sounds like sounds a little but where did it come but remember they were holding it at zero to 25 basis points for years yeah and it has blown out to they let it go and blown out so

yep no it's true i mean what's to stop it from doubling again to three percent and then what would that mean it will be there be some big implications there and we'd have to go through it but but those are the point, those are the things that people are going to start worrying about. Yeah, you're right. I just think that that's both the largest. By far, the largest buyer of their own debt. So, you know, and that's, this goes back to Mike's point, you know, that he brings up quite a bit. We're all turning Japanese. And it's a little bit, and that's true. I mean, China's on that road. But the difference is you and I look at this as bullish for Bitcoin. Forget the rest of crypto for a heartbeat. I do. And Mike looks at it as big.

perish for Bitcoin because he looks at it as a risk asset. It's that, but that's the knife edge here, right? That's the, that's the actual, by the way, Mike could end up being right in the end. I mean, I, you know, we, anyone who thinks that that just because we have opinions means that, you know, we're going to bet our lives on it. I'm not betting my life on anything, but I do think that sound money will win in the end, right? I do think that that is where we have to go back to me on camera. Yeah, you're, you didn't turn off the mic, Mike. You did it for a second, it says he's muted, but, uh, yeah, um,

So listen, with a few minutes left, should we extend that conversation, or we've got, I've got two other things on the docket that we can talk about. We've got the launch of World Liberty Finance. Go ahead. Pull something out of the hat, Scott. World Liberty Financial today, in theory, or we can talk about the looming consumer debt crisis that you wrote so eloquently about, James. Well, thank you. Well, I mean, that will tie in nicely to the rest of the conversation, which is, you know,

we're playing with leverage, and that's the fire that. is going to burn us and we've got to be we've just got to realize that and there's i mean i was writing about this i just i noticed that the new york fed put out their um their report um and for the second quarter of course everything is lagging every single freaking uh you know indicator we get from from the the economy is lagging but this one is giving you a pulse of what's going on right at the moment of you know when it's at least when it's it's measured the problem is then it's put into report and reported and now you're now we're bumping up against the fourth quarter and we're looking at these numbers from the

second quarter so what has happened since then well you know at the end of the second quarter you had 18 trillion 18.3 trillion dollars of consumer debt and okay so that that sounds like a big number it's hard to even wrap your head around it doesn't even matter because what really matters is are people in trouble on that debt and the answer is increasingly yes you know and so you're getting default rates that are that are bumping up against the 2008 levels and so credit card defaults are up around 13 percent you know um and uh i'm sorry they're around 12 percent which is which is close to the 13 percent of the great financial crisis and that's as they're already not paying their student loans So they've walked out on the student loans.

We're expecting some sort of relief there, which is not coming. And at the same time, you've got your auto loans are, those default rates are at 5%, which is close to the, you know, the level they were in 2008 as well. So these are just things that you have to be paying attention to. And so because it's kind of the, it's the canary in the coal mine that, and if, and if it's such an obvious thing and i don't know why you know regular investors don't look at this a little bit more closely probably because it's all lagging but if the consumer's not doing well in an economy that's 70% consumer driven that's that should tell you something so just be aware of that you know

which is why i think ultimately the fed is going to say uh we got to start lowering here we've really got to start lowering here the the yeah the the the unemployment rate is not looking that bad but it doesn't get adjusted it doesn't get revised the the number the employment numbers get revised but they don't revise the number the unemployment rate so let's see where that comes in and you know we've got the the PMI comes out tomorrow I think is that right Mike and then you still got another CPI another PCI you know you've got you've got you've got some important numbers that that are coming out but the health of the economy is driven off of the health of the consumer the health of the consumer is looking a little bit shaky so just be aware my thesis is that we're going to

get we're going to get liquidity before it gets out of hand but that may not be the case so just be aware of that you know and and of course bitcoin would have a drawdown if we have a whole market drawdown everything will go down it's it's the correlation of one trade I mean go down in the beginning. Oh, go down. It went down, you know, quickly on a drawdown. Like, if you have a black swan, people don't know what's going on. They just, they just try to go get everything out of the market.

So they'll have to sell whole because they're going to have, that's going to be available for them to sell. And they're going to be, they're going to have to sell it in order to meet margin falls. All those ETF buyers are going to say, okay, I need money. Yeah, I mean, like, it's, but it's a quick, it's a quick fee. Let's piggyback. If it's a risk event that people are worried about, then they will pour into gold because on the other side of that trade, you know? And the other side of all of it, they're going to pour into things like Bitcoin

because they know that the money printing is coming. So let me piggyback in that. I had the honor of seeing and meeting Chris Waller on Thursday at the Economic Club of Miami. Got great, great press. Everybody kind of saw what he said. You know, he wants a 25 base point in September. it's already at 88% that's going to happen so i'm going to make a prediction i think what's going to happen in fourth quarter as we entered this year the fed is behind the curve i agree

the consumer is getting hammered it's just waiting for you to say where they're comfortable being and they've said it all along they're comfortable being behind the curve on on yes so let's look at what they did when they hyped last year unemployment member had shot up really quick from 3.4 we all agree it was going to 6 it's been stuck at 4.2 forever now the latest employment number are supposed to go up to 4.3. But that 12-month volatility of unemployment right now is the lowest in 20 years. So it's stuck there. The same time, actually, so it hasn't moved. But inflation is picked up. But that's the problem, Mike. That's the problem right there. I get it. I understand.

I'm just pointing out. That's what that's what it is. That's what it is. So the point is, I want to make a prediction. I think the Fed, they're going to cut, but here's what's going to happen, I think, is risk gases are going to sense that they're behind. And the consumer is still strong right now, but when risk assets go down in this environment, it brings down that the tide goes out. So I think the Fed's going to keep cutting. I think they'll accelerate cutting as risk assets go down, which means the stock market, crypto's in Bitcoin. And the number one thing that's way overdue for a little bit of ketchup, if we agree, if gold's going to go down initially, it's because people hit stops, then the number one thing that'll pop up is T-Bond prices

and down is T-Bond yields, because that's a severe deflationary force. Well, that's the thing that's going to see this happen in the next three months. I hope it doesn't happen, but I think that's still my base case, and that's why I think gold is front running. But the bottom line here is the Fed will be cutting. Chris Waller might be the next Fed governor. And the thing is, this might be a series where they have to be cutting. And I think it's going to last for a long time. We're just going to keep chasing it down because the number, we got to mention, we all mentioned, the elephant in the room, the biggest elephant in the room for all risk gas on the whole planet is U.S. stock markets, almost $70 trillion valuation.

Yeah. Well, these are all trades, though. We have to remember, you know, first of all, I think Bitcoin's already, it's already sniffed out what the Fed's about to do. Okay. So that's why you've seen, you know, it's down three straight weeks here. Um, and it went sideways for four weeks before that. So, you know, it, the Bitcoin has had a, uh, it's, it's been in a malaise here, a summer malaise. Okay. So what's the trade? Stock market. like everything starts to collapse stock market goes down bitcoin goes down gold goes down uh treasuries go up and then the flip side of that and the other side of this trade is treasuries go way down that then you've got bitcoin and gold go way up and the stock market follows it and that's the way

that the trade's going to go because they're going to come in with the money printer and it's going be a massive liquidity injection, in my opinion, because they just need it. They have to have it. You cannot have the stock market go down. You cannot go into recession and blow out our deficits from $2 trillion to $4 trillion. You can't have it, which could easily happen if we have a real steep drawdown and we go into a strong recession or depression, you can easily see $4 trillion, $5 trillion deficit. and that they can't have. I mean, it's just not, and percent won't let it happen.

And guess who else won't let it happen? Trump, he's going to put pressure on every single angle he can in order to be sure that in these midterms, they don't have a crash in the market and the economy because this is the next year is, it sets up for a flip in his power in D.C. And that is a problem for him. Yep.

we didn't get to talk about world liberty financial well it's down a bunch uh how you see what happened i mean i think tomorrow will be will be they were supposed to have a circulating supply of five billion and all of a sudden it was 24 billion so everybody dumped it well i mean it is what it is you know our contract things going on there i guess they didn't differentiate between uh their uh treasury company alt-figma and the other investing contract and ended up. I am a nonstop broken records on the topic of tokens, which is there needs to be a disclosure regime. We need to know when you're buying something, what the fuck you're buying, what the revenues are, what the ownership is, what is it? I don't know. I haven't looked.

I'm not saying they haven't done it. I'm saying that once people start figuring it out, then you can actually evaluate it. Until then, it's so hard. I haven't done the research yet. I'm probably going to do that today just as a hobby because I'd like to understand it before we talk about it tomorrow morning on Crypto Town Hall. Right. I just think it's going to be an important conversation over the next weeks based on the performance. I think that this is the final barometer for the chances for alt-coin market outside of anything listed publicly on the stock market.

The question is, if this thing can't go after what we saw with Trump token, when it promises actual utility, they have actual, like, holdings. But it could be, but maybe it is. It maybe just was hyped up, and it's not, you know, it's question. I mean, maybe it's going to do exceptionally well. What's the value? Yeah. I mean, it's really a question of value.

I mean, if you buy a token and you're buying a token because it's a meme, well, that's very different than buying a token because there's a revenue stream attached to it or an ownership attached to it, right? I don't know the answer until you know that. You can't make those questions. It can't have that conversation. I'm not ready for that right now. We'll talk about World Liberty Financial tomorrow, the next day, and probably into

perpetuity for the rest of our existence because, you know, what else is there to talk to besides President Trump and Crypto. All right, guys, I'm going to let you to everyone go. Enjoy your Labor Day. James, thanks for making up early. Dave, welcome home. Mike, enjoy the rest of your vacation. And we will see you guys.

We'll see you guys next week. Thank you, everyone. Have a good one. Happy holiday. Let's go. Let's go.