What Bitcoin Did - Has the Debt Spiral Started? | Luke Gromen

Episode Date: October 15, 2025

Luke Gromen is the founder of Forest for the Trees. In this episode, we discuss why the U.S. debt cycle is reaching a breaking point, how AI and geopolitics are accelerating structural change, and why we could be witnessing the endgame of the fiat era. We get into why stablecoins may represent the next phase of the petrodollar system, the rise of financial repression, the return of inflation as a political tool, and why gold and Bitcoin are the only real safe havens this decade. He also lays out how AI threatens the debt-based monetary system itself, why autonomous labor could cause mass unemployment, and why meaning, not money, might become society’s scarcest resource. In this episode: - Why the Fed has to cut rates and inflate away debt - The new “petrodollar” built on stablecoins - The coming wave of financial repression THANKS TO OUR SPONSORS: IREN RIVER ANCHORWATCH BLOCKWARE LEDN BITKEY Follow: Danny Knowles: https://x.com/_DannyKnowles or https://primal.net/danny Luke Gromen: https://x.com/LukeGromen

The central bank and the government faces a choice, which is simply, do we stand aside and default on our applications, or do we print money to keep our debt nominally money good? We're in a spot where one false step and, you know, things can go pear shape pretty fast. When you do dumb stuff with borrowed money for 40 years and you follow an economic dogma, you eventually get to this point. They're financing deficits in your cash markets because they can't. issue enough bonds at the long end at rates that don't blow up the debt. We've got exponential functions in two different directions happening. And that means it's going to happen like way, way faster than we think. I think over time, all else equal, Bitcoin probably wins.

Mr. Lou Grohman, good to see you, man. How are you doing? I'm doing great. Great to be back. And it's great to catch up with you. Was that your first beef steak last night? I think it was. What did you think? I like meat, so I like steak, and I certainly had a lot. And it was excellent. It was prepared exactly as I love it, you know, sort of medium rare, medium, you know, it was excellent.

The company was great, conversation was great. So I enjoyed it. He's like a real legit chef. Oh, no, well, I believe it based on how everything tasted. It was amazing. But yeah, I didn't eat much all day, so it hit the spot. That's just what you want. I got roped into playing beer pong and I was there quite like,

and I feel a little bit slow this morning. So if I'm slower than normal, that's why. Early. But we've got a lot to talk about. I follow your work pretty closely. I read all the reports you put out, and things are getting pretty crazy. Like, obviously, you've been working this for 30 years or whatever it is.

I've been paying a little bit of attention to macro stuff, really only since after getting into Bitcoin. So, like, 2018, 2019 was probably when I really started, like, enjoying listening to people talking about the macro side of things. And it's not like it's ever seen, like it's in a really healthy spot. But right now, it seems like it's in an absolute mess. Is this the worst environment you've ever seen?

I wouldn't say worst. I would say most precarious. I think it's in sort of an okay spot at the moment. But in terms of worst, I would, you know, most precarious, where you're almost on the head of a pin. And any step you take in either way, there be dragons, whether it's geopolitical, whether it's debt, whether it's unemployment, whether it's demographics, whether it's, you know, there's a whole list of things, you know, resource constraints slash competition. There's just everywhere you go, it seems like, you know, if we don't know if the next step that is going to be, the step where you sort of, oops, you know, go over the edge. But you know, we're in a spot where one false step,

and, you know, things can go pear shape pretty fast. So there's a, like I say, there's a lot of we want to go through. But can we start with the Fed? Because they've obviously started cutting rates. And I understand why, from one perspective, like jobs aren't looking great in the moment. But at the same time, inflation is still above target. It looks like inflation is likely to come back in a more reasonable, like more sizable away over the next few years.

Like, what do you think they're doing the right thing by cutting rates and potentially continuing to cut rates throughout the rest of the year? It depends on which, which hat or which team you want, you play for, right? If you play for the Fed independence, you know, preserve the real value of the bond market, no matter what, sort of the, the operating environment of the last 40 years, then it's not the right thing to do. I think they, they probably shouldn't be. But if you play from the side of the much, I think the much bigger, and this is the side,

this is the team I'm cheering for or playing for, if you will, if you go from the side of a broader strategic context where we are trying to extract ourselves from the errors of the past 40, 30 to 40 years of economic policy, this neoliberal, globalist type of dynamic. And I don't know that there's anything wrong with those strategies, those theories, in and of themselves. The issue is they've been taken far, way too far in one direction. And so now as a nation, the United States, we've offshoreed too much of our defense industrial base.

We have hyper-financialized. And we find ourselves where it's essentially a national security threat. When you are reliant on China to make critical components for your military, you don't have a military. China, it backs your military. when you have have um offshored your labor and you have you your economic system has changed or perverted the incentives of your economy such that it makes sense to go way more sense to go into finance and then it does into engineering or skilled trades and i say that as someone who made a conscious decision to go into finance for exactly the reason the the the incentives were simply much more

attractive for someone, you know, going into college in 1993. We have created these massive distortions. And if we look at what the Fed is doing from that side, continuing to manage the economy as they have over the last 40 years for the bond market, for the banks, you know, for sort of, you know, neoliberal, global, globalist, roadmap, if you will, that's only going to worsen the issues, the distortions in the economy it's created and worsen the national security issue. So I think from a broader construct of if we as a nation, and I've said this before, we need to decide where we want to be in five years

and 10 years as a nation. And even as U.S. but also as the West. And we need to say, look, if we want to rebalance things. If we want to not be dependent on potential adversaries for our defense supply chain, if we want to have a skilled trade base in five or eight years, that it actually exists. I mean, because a lot, you know, the small amount that we have relative to what we need is going to age out over the next five to eight years. Then we need to make a decision today that looks like cut rates, run it hot, financially, repress the bond market, financially repressed the banks, put up some protectionist barriers so that we can bring some interest, you know, we can bring some balance back to this very

imbalanced economy from a perspective of where we want to be in five years strategically, 10 years strategically. And so I think it's the right thing to do, but it is, it's always a, the Fed has always been a political institution. It's always been a political question. It should be raising rates. It is hyper political now. And it feels like a, that's because we're at such a critical moment in time. Like, if we don't make the right decision now, you know, I think the next five years or now, 10 years from now could be, you know, could be pretty tough, could be pretty bumpy.

And is that right decision now basically paying in the short term to actually have real growth in the long term? Yeah, in essence. I think it's inflation in the short run for a rebalancing. You basically, you know, there's a great quote by Lord Acton. That, you know, down through the centuries, the issue that has always swept down through the century and that we'll have to be fought once again is the people versus the banks. And I think it's a quote that defines the moment that we're in. Ultimately, the banks and the bond market have won for 40 years.

Policy, economic policy in this country, be it what the Fed has done with rates, be it with the offshoring of the industrial base to lower deficits. or excuse me, to lower inflation, reduced costs, et cetera. It has all been done with one goal in mind, which is to subjugate the U.S. middle and working class to support the real value of the bond market and by extension Wall Street. And that has now been taken too far. And so if we want to be where, I think most Americans

would agree we want to be, then, yeah, pain is all in the eye of the beholder, right? It's something I say all the time is, you know, what's normal for the spider is chaos for the fly, right? If you own lots of long-term treasury bonds, you know, yeah, what I'm advocating would be very painful. If you own Bitcoin. If you own Bitcoin, if you own gold, if you own productive businesses, if you're a working-class person whose wages are going to rise as fast or faster than inflation, maybe for the first time in 50 years, that's not as painful. And I think as a contrary, we wake up and you have a more rebalanced economy, a more self-sufficient economy where you're not as reliant on potential adversaries for key things. It's tricky. It's bumpy. There's no guarantee it's going to work. We've let it go on so long. It's a little bit more market-driven, paradoxically, right? Ultimately, if we do those things, there should be more inflation. But that inflation is a market signal telling us,

hey, you've underinvested for 40 years in your industrial base, in your working class, in your skilled trades, in your young people, and now you need to catch up. And doing that is going to be inflationary. And that's that, you know, that is just the fallout of the decisions we've made over the last 30, 40 years. What if you could lower your tax bill and stack Bitcoin at the same time? Well, by mining Bitcoin with blockware, you can. New tax guidelines from the big, beautiful bill allow American miners to write off 100% of the cost of their mining hardware in a single tax year. That's right, 100% write off. If you have 100k in capital gains or income, you can purchase 100K of miners and offset it entirely. Blockware's mining as a service enables you to start mining Bitcoin right now

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You know, if you try to doge before you devalue the real value of the debt significantly, you're going to create a huge crisis. They tried. They created a huge crisis aided by Liberation Day. And then they backed off. To their credit, I will say that the, to my eyes, the senior members of this administration have been very open to course correcting relatively quickly, whether that be Bessent, whether that be Vance, Trump, etc. Miron, they seem to take market feedback and adjust course. And so I do. do think plan A is now, you know, we need to run this hot. We need to nominal growth, nominal GDP growth, and paired with Fed help, or that is ultimately, I think, part of the rate cut dynamic. And get out of this the way we got out of it after World War II, right? We spent a bunch of money in World War II, debt the GDP was 110%. It was 55%. Sorry, it's 110% in 1946 by 1951. It was 55%. How did they do that? Real rates in the United States are negative of 13% at the lows, right?

So bondholders got very, very repressed. We had capital controls, so it was a little different. But we also grew really rapidly, right? You had all these GIs coming back. You're building houses. You're rebuilding the world. So you can do it. There's some things that are different this time, but all of those things point to,

it's, we're going to need a lot hotter nominal GDP growth than the low double digits we ran at coming out of COVID. Where does that come from? Like, how do they do that? Is it literally sort of money printing stimulate the economy in any way possible? That's a very good question. I think on the surface of if you're running big deficits, that's going to be stimulative. And that is depending on how you finance that somewhere between stimulative and

you know the close cousin of outright money printing. And it depends how you ultimately finance that. that's a big part of it. Then you need the private sector helping, in theory, with some of the things we're seeing. Right now, the big capital spending project du jour is AI and data centers. And that's certainly adding to GDP. The trick within that is that is a productivity driver, which ultimately then sort of under, you're investing faster in something that's going to remove jobs faster.

Yeah. And that that's a paradox that I haven't kind of solved for in my head, right? There's what you end, you know, there, you end up with a situation where you have a moment in time where, you know, nominal GDP grows faster. I think stocks, you know, the productivity, as stocks grow or stock prices rise, I should say, you end up with a consumer spending binge. And this is kind of what we're seeing. This is how they're kind of trying to do it, right? We've got big deficits. So we're running still 6, 7% of deficits at all-time high receipts.

We're running AI and data center capital spending is really hot. Sort of traditional industrial spending still, like, you know, they're spending on the grid and stuff, but your ISM indices across the country are, you know, plus or minus 50. So they're not really humming. And then you've got consumer spending that is still strong, but very bifurcated amongst, you know, basically, top 10%, top 20% of consumers and the boomers, and then sort of the bottom 50% are under pressure, I think partly due to inflation, partly they are in the crosshairs of some of these productivity gains. So it is a very tricky blend to try to get there in real terms other than just straight, hey, we're going to grow 5% real and inflation is going to be 10 or 8. And I think when you talk through it

say it's real tricky to get there in real terms, the conclusion is ultimately, you know, CPI has probably got to go to eight or ten if they want to have a chance of growing out of this. And, you know, that sets off a whole other set of, you know, tradeoffs, as the economists like to call them. When you were on the previous what Bitcoin did, I would have guessed it had been a couple years ago. We were talking about inflation coming back. In fact, I think it was when inflation was still relatively high. said that it's not a zero percent chance that it goes like 40, 50 percent inflation. Do you still think that's on the cards?

I think only, I think there's still a risk of it for some period of time simply because of the level of debt in the system. You know, all the great inflations that you see are not because oops, the central bank was too loose and the economy ran too hot. And inflation suddenly went to 40 or 50. That's not how it works. It's the great inflations are we have debt to GDP of 120% and our foreign creditors are not buying our debt like they were either at all or certainly relative to the new deficits. And our deficits are 6 to 7% of GDP. And then we have some sort of crisis. And when we have the crisis, receipts fall, interest, you know, doesn't fall.

Foreigners sell bonds to get liquid. and the rates start going up in your crisis and you go into a debt spiral because of the level of your debt, level of your secular deficits. And then the central bank and the government faces a choice, which is simply do we stand aside and default on our applications or do we print money to keep our debt nominally money good? And it's those times when governments are printing money to keep their debt nominally money good that we've seen the greatest inflations in history. And of course, the numbers I just laid out were the numbers of the United States. And so, is it possible? Sure. Is it my base case?

No. But it would depend on events. It would, you know, if we get a crisis, we get a recession where receipts start to fall, GDP starts to fall. GDP falling with debt to GDP and deficits where they are, structural deficits, you don't, it's not a policy option. You have. You have, yeah, you start to see. And, you know, importantly, we've seen hints of this.

We even saw it earlier this year where, if you remember, part of the plan, right, we're going to do austerity, and we're going to doge, and we're going to take some pain. And we're going to, Besson's going to scare stocks into bonds. And he's going to get the tenure down. Judge us by the tenure. Judges by the tenure. I think this was February, he said this. And then we do, we start moving toward, we weren't even into Liberation Day yet.

We were just into March. And stocks are going down, 10 year olds going down, so far so good. And like 10 days in, all of a sudden, stocks keep going down, 10 year olds start going up and keeps going up, keeps going up. And then we do Liberation Day and it like comes down for a cup of coffee and then takes off like a scalded cat higher. This is emerging market with a fiscal crisis having a recession, trading action. And had they stood aside, had Trump not tacoed, right? Trump always chickens out. They didn't have a choice.

You know, I think he said the bond market is getting a little queasy. Yeah, it was getting a little queasy. It was getting a lot more in queasy. They were getting themselves into a position where, okay, your interest rates are going up, your receipts are going down, you've got a couple of weeks until you're, you're have a really bad or failed auction. And then it's only going to get worse and and and. And so their choice is sort of taco and get what we've in Taco and get what we've had as we sit here, what today's October 8th, get what we've had in the ensuing six months, which is sort of, you know, bubble time and inflation is stopped going down and maybe it's ticking up a bit.

And, you know, gold's at 40, almost 4,100 as we sit here. and Bitcoin's $120,000, $125,000, and stocks are at all-time high. It's like, that's the choice. That's the tradeoff to making the decision in April not to send the United States. And by extension of us being the world's reserve currency and base reserve asset, incumbent base reserve asset, into a debt, death spiral, which would have been rates up, stocks down, bonds down, you know, just wash your rates repeat until you either default or you print at all. And so it is still a possibility.

And it's one of these things where the margin of error keeps getting slimmer over time. As the debt goes up, you know, in theory, there's this operating room where, okay, we're keeping inflation high enough that we're above stall speed where we go into into a debt spiral. But we still are low enough where the bond market's not freaking out on the other side, right? but the rate that you need to stay above stall speed goes up with your debt. And the rate, whether it's a hard ceiling or it's a declining line of the rate where the bond market starts to go, we're done here. That space is narrowing. And once those lines cross, that's when you get brief moments of very high inflation. that makes it sound like its fate accompli versus a tail risk, which I realize I kind of just talk my way into.

So, you know, there are externalities that could stop that, right? If, you know, if China falls off the map first, right? Part, you know, if Russia falls off the map first, if we get some sort of productivity miracle, if something really happens, you know, either tech or health care, whether it really is a productivity miracle, or they kind of restructures the economy, then there's ways out of that. But that's the path we're on, where ultimately that type of decision will eventually lead to that. I just think there's probably a few more iterations of it between here and there.

When I normally talk to people about inflation, one of the big concerns and one of the big impacts that it has on society is the sort of wealth inequality that that drives. But you're saying you think that wages will outpace inflation in this environment. Why would that happen when it's not happened in the past necessarily every time? I think wages for certain constituencies would outpace. I think basically you'd be taking money out of the pockets of rates traders and bankers and putting it into welders and skilled trades, which I think would serve to narrow some of the

wealth inequality in theory. It is a blunt instrument, admittedly, and it's not guaranteed to work. but we can see the gap in wealth and equality that financialization is driven. It might not work. The thing we know is we know we're short, I don't know, I would have saw some congressional person say we're short, 600,000 welders or something like that. You know, I saw the headline. I didn't dig into it, so it might be misquoting. But, you know, we're not short 600,000 mortgage bankers.

You know, we're not short. 600,000 rates traders. And so, you know, if we want to be able to build some of the things we want to build, you need to sort of restructure that. You know, it is being an old dog myself, it's, it's hard to teach old dog new tricks, right? So it's not like the rates trader's going to sort of, you know, have his salary go down because rates don't move around because the feds capping them. And he's going to go learn to be a welder.

It's not how it's going to go. No. And you can't just click your fingers in. do that overnight. No, you can't. And that is further tricky because the solutions that are, well, you bring in more people to be the welders, but there too, there's a delay. And sort of here too, immigration policy of the U.S. is always framed in humanitarian concerns. Understandably so. But I think the politicians and the economists do that from a very cynical standpoint. which is to say they don't care about humanitarian what they care about is keeping inflation low what

they care about is keeping wages down and that way they can keep bond market rates low so they can borrow more money to spend on their pet projects and if it requires them saying oh you know you are cold uncaring person because you want to restrict immigration it's think about it in supply demand terms if the supply of labor shrinks what's going to to happen to wages. There's historically just countless, you know, go back to, you know, extreme examples, the Black Plague. Labor was able to dictate terms to sort of the lords and ladies for like decades, if not centuries. Yeah. And again, all with the greater, I'm not trying to play, hey, you know, blue collar versus white collar, anything. I'm looking at it from the United States

of America, this distortion that has been allowed to evolve in support of the body. market in support of Washington in support of Wall Street has become so egregious that it's now creating these political problems and that you have to do something to fix it. But it's to your point, you know, there's there's there's no guarantee because the inflation market signal is is a blunt instrument. But that's like that's you you need an inflationary market signal to fix, you know, to fix what has been distorted. Right. You have inflation.

We want to get wealth inequality down. How do we do that? Well, you have wages of the bottom go up and you have the real value of the bonds at the top come down. That can buy you time. But to your point, it's risky because inflation as a market signal tends to exacerbate some of those very pressures you're trying to fix. And yeah, I would fully concede that this is not. hey, it will absolutely work if we do this. It might not.

We just have to try. We have to try because I, well, the one thing I can tell you with absolute certainty is it's not going to work, we go the other way. Like, we're already seeing that, right? We already, you know, whether it's the Charlie Kirk shooting, whether it's the Brian Thompson shooting, whether it's Peter Turchin, who's written a great book, End Times, and he tracks, he has a political violence index. As of a few weeks ago, it's at the highest level since. the 1860s in the United States as he tracks it, right? We've surpassed the 1960s. So like, I can tell you, we're going to get a lot more of that if we don't, you know, it's like the old pair, the old saying, right, if you don't get off the road that you're on, don't be surprised

when you arrive at your destination. We know the road we're on. And we know we're running towards our destination faster. So I can, I know pretty high degree of certainty how this is going to go. this you know the inflation to try to sort of rebalance things that have been imbalanced by it's a Hail Mary maybe not quite a hair marry but it's but it's it's not a sure thing but the road war on is a sure thing exactly um so when you talk about productivity miracles there's a very obvious one in AI um I did a show a couple of days ago with um an AI safety expert he's actually the guy that came up with the term AI safety. So he's very concerned about AI, for one, taking basically every single job in the world,

and then on a more extreme example, literally killing humanity. But if we just focus on the first part, which is like, let's say AI is as powerful and is as sort of disruptive in terms of taking jobs as we think it may be, whether that's three years or 10 years or 20 years, it doesn't really matter. Like, if you assume that all jobs in the world are going to be taken by AI, how do we even manage that? Because, like, again, I know the Fed is just one small part of this. But if they've got a dual mandate of jobs and inflation, like, they may as well just forget about one of them. Like, how are we going to manage moving into this world? I don't know.

I was, I hadn't thought much about AI prior to two years ago, almost three years ago. So May of 2023, I was invited to speak at a conference out in Vancouver where I was on stage with an AI robotics expert and someone who has had a company and whose robots were already being AI robots were already being tested by major American companies in their warehouses. And these robots are literally, you know, they would beat, you know, the best. you know the best american chess player and they would you know they would literally pick up the strongest NFL lineback with one hand and throw them across the room and they never need sick days and they never take time off and and what this person said was that the um the pace the these robots aren't that different than electric cars in terms of the manufacturing process they're not very manufacturing intensive and they'll they'll continue to get better at an exponential rate

And that in their view, you would see what they called autonomous labor. You were already within a few years of it, there was some sort of labor test of like sort of just a basic functional of like your intelligence, your ability to pick up this box, put it over there. It was already approaching this sort of, you know, scoring as a human on a basic autonomous labor test. Or a basic labor test. And that once that happened and you make some extrapolations about sort of how technology improves exponential, you could see fully loaded fully amortized autonomous AI labor at $5 an hour by like 2035 or 2032. And I remember sitting there going, oh my God. Because so when I stepped onto the stage and it was my turn to speak, I came, I was talking about just sort of the debt picture and the receipts, et cetera. I said, look, what he just said is fundamentally incompatible with what we all know as our debt-based system.

Right? So I was on X the other day, and one of my friends Tony Nash mentioned, look, you realize that if if AI does what Wall Street thinks it's going to do, it's going to take all our jobs. I said, yes, and when it takes all our jobs, we're going to stop paying our mortgages. We're going to stop paying our car loans. When we stop paying our car loans and our mortgages, banks are going to start to run into trouble. What do the banks hold as their reserves? They hold treasury bonds. What are they going to sell to offset credit losses due to people stopping paying on there?

They're going to sell treasury bonds. So now you're going to have this unemployment rise, wage deflation, interest rates rising. Then what? like what do you do as a fat like that is an emerging market problem so it's almost i don't think i i think markets are actually starting to like based on conversations i've had with investors uh based on what i'm watching in the markets i think markets are trying go oh oh god oh god like i think they're starting to see that second derivative problem you know and and as you know we've been harping on this, I mean, I've been saying it over and over, AI is fundamentally incompatible with a debt-based

monetary system. It cannot work. Either it's going to collapse, or the Fed's going to have to come in and buy the entire bond market. Yeah. Well, when you go through those scenarios, like the only thing that it seems like they can do is UBI. You know, there's already jobs that AI is replacing. Like, if you're a computer programmer, like, there's a group of people that are using AI, making themselves way more productive. But then there's another group. probably the younger people coming through who are less experienced that are just being replaced by seasoned developers using AI to develop. And if you're like a long distance truck driver, like I can't imagine that job being around in 10 years time. And they are one of the biggest unions in the country,

I think, in America. So like, they're going to, there's going to be a lot of political pressure to just give people money. You know, I had a conversation here last night with someone. And I said, listen, AI is already better than all but the top 10% of developers. I said, wait, say that again? I want to make sure I heard it correctly. I was at a conference in Vail earlier this year. He said, you can take your phone already, take a picture of a spot on your skin. It's better than better reading dermatologist.

Do you have skin cancer or not? At that conference, they said, listen, within five to ten years, top 20% of dermatologists are still going to have jobs. Bottom 80% are going to find something else to do. This, you know, there's an article this, or there's, there's, there's, there's, there's, there's a hub of this week about AI actresses. Some AI actresses like reading for scripts and, and sort of the real actresses are all losing their minds. And it's, I'm not laughing at them.

I empathize with it, but it's, I recognize this because my mental model for all of this is what happened to the U.S. Rust Belt when China went into the WTO. China was the first AI. Everything I'm hearing from people on. on what AI is gonna do to white collar is exactly what I heard from blue collar guys. Like I used to golf every Saturday. My late father-in-law was a Teamster union official

in Cleveland and his two colleagues that ran unions, other units that are Teamster unions around the city. They're like, look, what do we do about this? We know that they're gonna be cheaper. We know how this is gonna go. What are we supposed to do? That's not, and I know how that played out. And, you know, the way it played out was private UBI, effectively, as the working class got offshore to China from 2001 to 2005 is what I've called private UBI, which is, hey, we take credit standards down to nil and subprime, right?

So you were making $30 an hour full benefits at Ford, and now you are, you know, now you're a $12 an hour greeter at Walmart, no benefit. but Goldman Sachs will write you a subprime loan so you can still buy a car and a house and a bass boat. And your living standards, they don't change from 2003 to 2006 when home prices start to fall. And now you can't refinance it. And then Goldman Sachs gets out of that business. And what ends up happening is, of course, we have a deflationary whoosh. And then all of it ends up in sort of second derivative fashion on the Fed's balance sheet, which goes from $800 billion to $4.7 trillion.

And so I look at this now and go, this is all so familiar. I've seen this before. And we've kind of already done some of the private UBI stuff, right? Credit standards haven't exactly been loose. But yeah, you end up with what do you do? You're going to need some sort of public UBI. Well, what's the quid pro quo of that? Who finances that?

Do you just straight money print it? I don't know the answer. And I would tell you, I've gotten indications that leaders have known about this problem for years, that AI, the AI sort of employment slash meaning mismatch is coming. So, yeah, I don't know. This is part of one, you know, when we let off of like, hey, there's a no, things are kind of okay right now. We're on the edge. We're on the edge. And, you know, this is technology.

So, like, we can stand here on the edge. And even if we don't take another step, the edge is going to come to us. So I don't have an answer, but it is one of the things that makes me, it makes me very uncomfortable. One of the things that keeps me up at night is the idea of a critical error with my Bitcoin cold storage. This is where Anchor Watch comes in. With Anchor Watch, your Bitcoin is insured with your own A plus rated. Lloyds of London insurance policy, and all Bitcoin is held in their time-locked multi-sig bolts. So you have the peace of mind knowing your Bitcoin is fully insured while not giving up custody.

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river.com forward slash WBD and earn up to $100 in Bitcoin when you buy. That's river.com forward slash WBD. AI isn't going away. Like, it doesn't seem like it's going away. I was even when I was talking to this guy, I used the example of computer engineers. And he was like, they've gone from being computer engineers to being prompt engineers working with AI. But the next harsh realization is that AI is better at prompt engineering than them. It's almost like training, you know, a lot of American engineers would complain about the times in major corporations where they are forced to train their replacement. Then the job goes to India. Yeah. Like, we've seen this before. Like, and then you look at it and go,

1990, biggest employer in America was manufacturing. By far, across almost all 50, states. In 2024, in 38 of 50 U.S. states, the biggest employer is health care. Now, it's not docs and it's not nurses. It's not practitioners where the growth and jobs has occurred. It's all in administration primarily. And like this, to me, health care administration, you talk about a field that is uniquely suited to being disintermediated by AI. You know, do you think AI can do billing better than a human? Do you think AI can do, you know, reading records better than a human filing? Oh my gosh. It's not even close. And so you then look at what's American GDP if the biggest employer in 38 to 50 states? And oh, by the way, these jobs tend to be decent jobs. They tend to

benefits. They tend to be the kind of jobs that you can use to buy a house with. This is this is almost like the failing of the, hey, we're going to get away from manufacturing. We're going to move into a service. based economy because it's higher, you know, it's cleaner, it's less dirty, it's safer, and it's higher paying, and it's higher ROI, higher corporate margins. I don't have the answer for that, but I can tell you with 30 years of doing what I do and seeing bottlenecks earlier than most people, I'm seeing this and it puts a pit in my stomach. I haven't seen, I haven't felt that since probably, you know, 07, 06, when I look at this, and go, oh, God.

Like this, there's no way this works out without some sort of serious disruption. I don't know the answer to that. Like, the things I do know is, you know, there's a great quote by the physicist, Albert Bartlett, one of the, one of the biggest shortcomings of the human race is the inability to understand the exponential function.

And so people are going, okay, well, this won't be a problem for three or four years. So I can be three or four years. it's going to be faster than that. And even still, that's right around the corner. And even that, exactly. It is so soon. And, you know, if it's 18 to 24 months, markets are going to start to care.

Your forward thinkers, your forward thinking capital with mandates that allow them to be early, they're going to start caring now, six months. And so then I look at and go, gold doing what it's doing, where I, you know, gold goes up every day ending in why. Interesting. Right. One of the things I would probably buy, they go buy me some gold. Oh, by the way, like, Western investors are so woefully underweighted gold. It's like it's night and fun.

They could buy gold every day for the next three years and probably finally get to a market waiting, you know, or weighting equal to sort of people in the East. Bitcoin, because I don't see how you don't end up with some form of UBI, like you're saying. Like, it just is so, and part of that's why I'm so, I usually don't fumble for words per se, But sometimes there's nothing to say. Like, it's so obvious what's about to happen. While Wall Street has sort of right tail extrapolated, hey, look at all this productivity.

Yeah, well, it's like, you're forgetting about, like, maximum productivity, but with no one with a job, I don't know what that means. And the unprecedented thing here is, like, in those historic examples you've given, there's always something else to pivot into. But if AI is replacing things across the board, like there is no pivot left.

And I wonder if things like, UBI have to come as almost like reparations from the AI companies? I don't know. You know, the optimistic view of it, you know, I've been accused of being a half-empty guy on this and other issues, certainly. But once you write tail extrapolate, once you get to that, that, then in theory, you're going to. going to have the tools for a whole large number of humans to, I'm going to use sort of a,

to self-actualize, to whatever that means. You want to, you know, to educate yourself, create art, to create beauty, to create architecture, whatever that might be, you're going to have the tools to do it. And, like, I, the levels of disruption that that entails, you know, most humans like that's what I can tell you from the rest belt experience most people don't want to self-actualize they just they want some meaning they want a good job they want you know a group of friends they want social connection they want sort of these these fundamental human experiences that are all about to sort of just get tossed up in the air willy-nilly in the in the name of sort of productivity um you know the most productive thing in the world is if there's like one guy

working doing all the work and the machines are doing it all. And that's, you know, that's, that's, um, yeah, I don't, you know, the other thing that, you know, and, and Jordy Visser has done a lot of, you know, work on this. I've seen a little bit of his work. It's a really good point. I hadn't thought of it until he brought it up was, um, there's, there's a couple of eighth graders in a garage right now. And they're going to get these AI tools. And they're going to disintermediate, like, I don't know, some gigantic movie studio or like, that's 100% going to happen. And, and, you know, it almost does make you wonder not necessarily reparations, but just talking through this, there was a period in time in the 80s where, you know,

Michael Milken's like, hey, this revolution of junk debt, you know, and he did all the work, and he said, look, if you look at junk debt, the premiums that they're paying, the spreads that they're paying, relative the actual default rates make no sense. So like that was sort of the fundamental first principle of what he did was like, we can issue these junk bonds at lower rates because the default experience was lower than what. And then this will allow these companies to get capital, to grow, to drive jobs, et cetera. And early on, everyone loved it. And it all worked.

And then they started doing leverage buyouts of like, you know, the whole. grail companies, the crown jewels. And like the elites are like, whoa, whoa, whoa, whoa. Like, you can't take, you know, this little upstart firm Drexel letting these smaller raiders like borrow money to buy, you know, these gigantic crown jewel American corporations. And I just wonder if, you know, we're starting to see symptoms of that type of blowback already, right? Like, you know, whether it's Hollywood, you know, already with the AI actresses, like, you know, oh, these working class people, you know, South Park, you know, they took our jobs thing, right? Like, and the South Park makes fun to everyone. So I don't want to make, you know, I'm not picking on them per se, but like, you know,

when some kid comes up with an AI show that knocks South Park off the air, and I'm not saying that's what's going to happen. But just as an example, you know, like, like the dick or dur meme will have come full circle. And there's going to be a pushback from sort of the powers that be at some point, right of like and i don't know i it's what what does that look like you know whether that you know look if these eighth graders in a garage start disintermediating fortune 100 companies and people's 401ks you know now in theory they'll switch but like there's a massive wealth transfer away from you look you a proxy of or you know example might be what we've seen with bitcoin right like you know it's like ha ha ha those bitcoins are crazy and all of a sudden like

Four years later, holy cow, they're like a political force. Why? Because they have money. Why do they have money? Because they're holding a better money and they're they're a political force now. We're literally the government's talking about it. I'm not just talking about it. Like it is it is, you know, part of a, you know, at least tangentially, you know, a design to try to help finance deficits, right? So the same kind of thing. I'm talking I don't have an answer. I'm kind of talking through it. It's a fascinating question. It is. And I want to, I've got loads of other stuff I want to talk to you about. But just a quickly, last thing on the AI thing, you brought up before in terms of like meaning. If everyone loses their jobs, what are they kind of here for? And Roman Yampolsky, guy who I spoke to calls this like the icky guy risk. It's like, what do people do when they have lost their job? They've lost their meaning. They have to kind of start again and think about what they want to do. And the sort of doomer in me thinks people are just going to sit inside, drink at 10 a.m. and play video games. And, And like, what does that do for society? It's, um, it's really scary. I can tell you this exactly what's going to happen because I've lived it. I've seen it.

Look, when in 1992, in my hometown, it's town square, my hometown, Strongsville, Ohio. We had, um, late October. So right before the presidential election of 1992, we had president George Bush, Bruce Willis was there. everyone in the area was there to see it, right? That's how important that region was in terms of swing states, how vibrant. 2016, I guess six presidential elections later, right, for 24 years. On the same day that Hillary Clinton said, you know, I disagree with Donald Trump's dark version of America, America is still great, literally less than a mile from where President Bush had stood and given a speech,

somebody walked in to an upscale brewery with an AK-47 and held it up at assault rifle point with his buddy with a pistol and locked the people into the freezer and made off with the money. And, you know, from drug overdoses being nothing in that region, you know, and when I say that region, I mean, you know, from 1992 drug overdoses in the Midwest, Rust Belt, Tail. From 2008 through 2022, nearly a million Americans died of drug overdoses. Insane. When you then factor in suicides and alcoholism-related deaths into a basket that Case and Deaton in their study called deaths of economic hopelessness in the Wall Street Journal, you were seeing death rates in those parts of the world that were rivaling. the death rates seen in post-Soviet Russia in the 1990s,

which another example. You lose meaning. What do you do? You drink yourself to death. You use drugs. You go back in time. I have a friend of mine who's a Native American, Plains Native American elder. When they lost their meaning, when they started being fenced in, so to speak, right?

What did they do? They drank themselves to death. So, like, the history is very clear. Like, there's no mystery, in my opinion, when you take the meaning of people away what they're going to do. And, yeah, to your point, it is very troubling. I don't, you know, it's one of these things where it's, it's, I don't, I know how it's going to go. Yeah. And it makes me, it makes me sad.

And I think the thing that's sort of like some of the division in this country, is, is, you know, New York City, you know, some of the area, you know, there have been winners and losers, as there aren't anything, any period of time, but over the last 20 years of this globalization, there have been a winner, very clear winners and losers. And the winners have been very isolated by and large from exactly what, what I'm describing, certainly at the scale. They're not going to be isolated from this. They're going to witness it for the first time. And that kind of goes back to the point of like, you know, they have more political power than sort of, you know, of the people in the Rust Belt.

Nobody cares about the Rust Belt. They care about Manhattan. When it comes to Manhattan, when, and oh, by the way, guess how they're going to react to it politically? They're going to elect, you know, Mimittani's of the world. Yeah, right? And that's not going to make it better. It's going to make things trickier.

So there are second derivative impacts of this AI thing that are simply not being thought through. And I don't know that it's been released, right? It's like, it's a virus. Like, you can't stop it now. You know, you've, you've, you've, you've, you've, you've, you've, you've, you've, you've, you've, you've, you've, you've, you've got to reap the whirlwind. And. For God off worse, it's out there now. It reminds me of the line in the big short is Brad Pitt's character.

I don't actually know if this is factually true, but it's in the film. He says, for every one percent, unemployment goes up, 40,000 people die. And, you know, if unemployment goes up to 60, 70, 80 percent, then I don't know. It's scary. It is, right? It's just like, like, you know, just stop fucking dancing, right? Yeah. Yeah, it's one of these things where you go, I don't know. I mean, to me, it's all about this. Like, you've got to be what's coming, good or bad. Like, it is, if this all goes well, it's going to be disruptive and, you know, everyone can be flexible. Great. You've got to be mentally tough. And if it goes how it's gone historically, you got to be really mentally tough because it's going to be, these effects are going to happen. When you take away the meaning of people, mass. We know how it goes. There is no mystery to this, and anyone says otherwise it's lying.

Let's go from one slightly doom a topic to another. One of the most interesting things that I've read of your work recently, and I've not really seen anyone else talk about this, is what's happening in the Middle East. So you wrote about after Israel bomb Qatar, Qatar moving more towards China and kind of the implications on the petrodollah system. Can you explain what's happening there? I can illuminate on what I'm hearing, which is that in the Middle East, that was seen as a bridge too far.

That essentially, it was almost like a red wedding kind of thing, where they were invited under certain one auspice and then found. In a city that is, you know, I've never Ben, but I'm told it is very much like a, you know, like a Geneva or, you know, it's sort of a beautiful city with, you kind of seen as like a neutral, you know, everyone, everyone leaves their swords at the door and comes in and negotiates in good faith and then leaves. And this was seen as a violation of good faith in certain circles is what I hear. And it was tricky as well for the

United States because, you know, the first story was, well, we didn't know ahead of time. And then we, which is not a good look for us, by the way, right? Is we are, you know, we're the empire and we're being filled in on things after the fact. It's not a good look for the administration. Is this when Trump said they don't know what the fuck they're doing? Was that, was that in response to this? I can't actually. It might have been.

I don't know. I don't know. But I think it was not a, I think it was not. a coincidence that shortly thereafter, the Pakistanis and it was the Pakistanis and the Pakistanis and the Qataris did, or no, excuse me, Pakistanis and the Saudis did a mutual defense agreement. Well, Pakistan is a nuclear-powered country, a nuclear-armed country. They are a long time close ally of China. And so to me, you can make the case that, you know, that the Saudis just went under a nuclear umbrella of China of sorts, which I think

is really interesting because people say, well, there'll never be any change of the petrodollary system, etc. because, you know, you, well, Russia showed you can make change of the petrodollary system if you have nuclear weapons. That was the lesson of Saddam. That was the lesson of Gaddafi. And so viewed through this lens, I'm not saying it's a right lens, but I think it's a lens worth considering

is that, look, the Pakistanis have deals with the Chinese. Pakistanis now a mutual aid agreement with the Saudis. The Saudis don't have nuclear weapons technically. Hey, we don't have nuclear weapons. We're abiding by everything. You described this as nuclear umbrella

as a service, though. It's a nuclear umbrella as a service, exactly. You know, and if, hey, if the Chinese bleed certain missile technology to the Pakistanis, who then use it or transfer it over to the Saudis, you know, that's, oops. So it, I just saw it as the whole daisy chain sequence, particularly in the context of what transpired in June, when the Israelis attacked Iran while we were negotiating still in theory. And the, you know, it came out that the Israelis were running short of air defense missiles within like 10 days. And the U.S. had burned down 10, 15% of its high-end air defense missiles helping defend

Israel within like 10 days of medium intensity combat, not high intensity, just medium intensity combat. To me, my overall takeaway, is that the unilateral advantage that we have enjoyed in that region, we, the United States, have enjoyed in that region, it seems to be gone. And if it's gone, then you're moving towards a more multipolar balance. And in that case, to me, you're going to end up with changes to the system,

multi-currency energy pricing, maybe even by, you know, parties that have historically only priced in dollars, more settlement in things like gold of energy surpluses at the central bank level because, you know, it's just another example, right? You already, it was another violation of trust. You know, when we grabbed Russia's FX reserves, you know, I think, I think Janis Verifakis, the former Greek finance minister said, privately said, I'm not saying they should or they shouldn't have done it, but they did it. And when they did it, okay, then people say, fine. We're going to, we're going to, you know, we're going to start buying a lot more gold rather than treasuries. And that's what's happened.

And in the same way, I think this was seen in the Middle East as a violation of trust of sorts. And a view of, well, okay, well, then we need to start making alternative arrangements or even just threatening alternative arrangements. And I don't, you know, it's one of these things. I think once you see it, once you see it, you can't unsee it. And so I think it's more of sort of a move towards multipolarity that this move, you know, by the Israelis bombing Doha seems to engendered. And to put it into context, like if this does kind of break down the trust in the Middle East, if the petro dollar system unwinds to a degree where not all oil is going to be priced in the U.S. dollar, that's a potential future you see. What does that actually mean for like the U.S. bond market? Oh, that's a big question.

I think there's only one currency can replace a dollar on that as an oil currency and it's gold. And so I think it's noteworthy that the gold to oil ratio has gone from like 55 to 65 in like a month since the Israelis did that. What does it mean for the bond market? I mean, it ultimately, I think just further accelerates

a trend we've already seen. which is, as we have seen the marginal oil barrel priced outside the dollar over the last 10 years, you're going to see more of the marginal oil barrel priced outside the U.S. dollar. There was an article yesterday on Reuters that India is buying oil from Russia and Chinese Yuan. Iran and India and China are very big oil buyers. They're 35% of the world's population, right? They're both buying oil outside the dollar. now. Like, the petrodollar has been, like, it's like, it's like, you know, it's like breaking, putting a hole in an airframe at altitude, right? Like, it doesn't take a really big hole for you to lose pressure and start to have bad, bad consequences. And I think that's, what does it mean? I think it ultimately means that the U.S. would have to either significantly shrink deficits, which it can't because the debt's too high and the government's spending as a percent of GDP is too high. And so until you devalue the debt,

you can't, you can't shrink your deficits without going into a debt spiral that we touched about earlier. Or ultimately, you're going to have to run hotter. You're going to have to inflate away debt. You're going to have to nominally grow. You're going to have to invest. And so to me, I think ultimately, what does it mean? It just means the real value of treasury bonds. And I would, you know, as a proxy for that, I'd look at GLD over TLT, right?

The GLDE, ETF, the gold ETF over TLT, long. DTF, which is going vertical now. The gold is crushing long the treasuries. I think it's going to accelerate. It doesn't necessarily mean that the price of treasuries in a vacuum has to crash because there's a number of different levers. But I just think the real value of the treasury market will deteriorate more and perhaps faster as a result of that. So one of the reasons I ask that is obviously this administration have been very open to stable coins and I wondered if they can try and plug some of the hole in the Treasury the demand side of the Treasury issuance through stable coins through

the proliferation of stable coins and trying to spread those basically as far as wide and wide as they possibly can. I think that's the plan. I think ultimately has that become the almost new petrod dollar system. Yes is the short version. I think that's the goal. I think that's what they would like to have happen. Can it work? I I think, number one, let's call it what it really is. We can't issue long-term bonds anymore at rates that we can afford that don't blow up our existing debt and put us into a debt spiral. So we are going to let stable coins, which our near-cash equivalents proliferate. Translation.

We are going to finance our deficit in near-cash markets. We're running a 7% deficit. We're going to finance it near cash markets. Now, stable coins that, you know, stable coins yield zero, you know, short-term rates in the U.S. still, whatever, four-ish. I wouldn't be surprised at all if the administrator, you know, if this is successful, if you don't get Bessent to come out in some sort of, you know, non-transferable. non-redeemable T-bills into the stable coin market, which is to say everything in a stable coin is non-redeemable. And they're not going to yield four.

They're going to yield 30 basis points. And he will have reduced the deficit from seven to, you know, if once you have enough of the bonds in there, from seven to four, like that, right? Because so much, you know, whatever, a trillion and a half of the deficit on a gross basis is interest. And if you finance enough, the math is oversimplified. But again, let's not lose sight of what we're doing here. And by the way, when you take rates from four to 30 basis points, now it's really, like,

it is like that far from financing in cash markets. 30 basis point three-month T bill and cash, you're like kissing cousins. Basically the same thing. They're the same thing. And again, this is what has to happen. This is not, I'm not trying to reflect badly on the Trump administration, best in any. This was in the cake. When you do dumb stuff with borrowed money for 40 years and you follow an economic dogma of

globalism and neoliberalism, the way we have done so for 40 years to such an extreme with no balance, you eventually get to this point. And you could take it even broader and say, this is how fiat currency systems end up financing in cash markets. and then, you know, the inflation inflates away the debt. Like, this is what they're talking about doing. The stable coin aspect and the sort of new petrodollars side of it is essentially, you know, taking the Europeans heads. Like, we're barely keeping our heads above water and debt and basically taking the Europeans. And so the rest of the world shoving them underwater and standing on them, be like,

okay, we're okay now. And we would be for like a bit. But to me, I think it's super important for investors. It's a great, someone said it to me once, said, wisdom is calling things what they are, or seeing things for what they are, not for what they're called. And so stable coins, new petro dollar, all, you know, dollar wrecking ball, all this stuff. Like, they're financing deficits in near cash markets because they can't issue enough bonds at the long end at rates that don't blow up the debt.

And as an investor, once you understand, they're like, oh, you can get enraged about it or whatever. I know what to do with that. I absolutely know what to do with that. There's a guy, a friend of mine called Mark Goodwin, who wrote a book called The Bitcoin Dollar in sort of 2021, and he called this back then. And it seems like that book is playing out exactly as he wrote it. But if for anyone listening who is like, holy shit, what do I do? I mean, we know Bitcoin's the answer. You talk about gold a lot. It's funny because the first time you were on the show, I was having a look, it was like five years ago. And you were sort of interested in Bitcoin, but you were still a little hands off. And now when I read your pieces, every one of them finishes with buy golden

Bitcoin. Is the answer literally as simple as that? The way things have evolved, the average person should probably have, in my opinion, 20% of their liquid net worth in some combination of gold and Bitcoin depending on their risk tolerance, age, proximity to retirement, et cetera, Because obviously, you know, I think over time, all else equal, Bitcoin probably wins relative to gold. But there's ways that there's ways maybe it wouldn't, but let's set those aside. But then, you know, but Bitcoin in the meantime has been proven to be far more volatile. And that matters for the average investors. So but yeah, I mean, the way things have evolved and the way things are evolving with AI,

especially, right? Because we can just talk about the debt side. And you're like, okay, you know, we can see what they're doing. But AI is accelerating this. Like that's the tricky part around, like, you can see, you know, interest never sleeps, right? It's a compounding interest. It's the eighth wonder of the world. It's just going up and up and up.

And that's, you know, why they are having to issue more of the shift more of the dead into, you know, it's why, you know, Besson came in and he doubled the run rate of treasury buybacks that Yellen was doing. Like, and mostly shifting from long end to less short end. Like, it is what it is. I would be doing the same thing. He's not a bad person for doing it. Math is a math. And it's the stuff he said he didn't want to do.

It was the stuff he didn't want to do. Yeah. You know what? I want to go play in the NFL. I don't want to fly commercial. You know, sorry. Yeah. The math is the math.

And when you look at the math as a math and then you overlay the stuff we're talking about with AI, that's the really tricky part where we've got exponential functions in two different directions happening. And that means it's going to happen like way, way fast. than we think. Will a stable coin thing work? Maybe. I don't know. They, I mean, he needs to get, you know, he needs to get trillions into stable coins.

Where is he at today? 300 billion? Like, it's not happening fast enough. He needs to be like $2 trillion by like mid next year. And that has implications, right? Because that means he's got to issue the T-bills and the stable coins got to get issued. And those are like, you got to start, you know, and oh, by the way, you know, of the banks, one of the provisions of the Genius Act is that the banks can use reserves to back stable coins.

Well, the whole reason QE wasn't like wildly inflationary, you know, and I and lots of other people when I don't, this was pre-FFTT. I was just, you know, sales guy on a desk. I thought it would be. But then as you read up and as time has gone on, it hasn't been as inflationary as feared, not by white stuff. because essentially so much of it was sterilized in bank reserves. Banks were paid a bribe by the Fed to basically take the money they gave them in QE and just

hold it. If stable coins start being used in day-to-day life as banks are issuing them back by reserves, you're mobilizing trillions in reserves. And now just ascribe a modest money multiplier to that. All the QE inflation that was, you know, although there was, feared and never arrived. He's come in. Like a freight train, as our friend Lynn would say.

So like, and again, this was always in the cake. There is no, like, the math is the math. And that's why I say the events, like, you need to, you need to protect yourself. Like this, you know, we all enjoyed the party, you know, whether we voted for it or not, right? You know, boomers and silent generation are getting 70% of, record tax receipts and entitlements. And yes, they did pay into that. They didn't pay that much for it all. You know, there's been inflation of services, et cetera. They're taking out more than they put in. That's why it doesn't know what they are. And oh, by the way, our politicians spent their money as

as they put it in. They're spending our money as I put it. So yeah, I mean, it's somewhat cliche. Like, yeah, you need to own gold in Bitcoin. But like, you need to owe going to Bitcoin. We're in that part of the cycle. It just is what it is. And I hope, you know, after it's over, then, you know, I can leave a note in my will for my grandkids or great grandkids and say, listen, there's going to come a time around, you know, 2085 and you're going to, you know, you're going to want to start buying some, some gold again. And I'll be done with it for the rest of my life. And, you know, it's just, it's the arc, you know, that's all it is.

You know, gold and Bitcoin is just the arc to get you through this monetary storm, this monetary flood. And I've written about it a lot more because, that's what's, you know, that's what's happening. It's, it's, it's, it's accelerating. Like, you know, the water's up to my knees and I'm still coming in. It's like, well, okay, get busy building the heart faster. It's funny though, it seems like the world is now waking up to this.

J.P. Morgan came out with their debasement trade. The only thing that I'm not sure about with that is if it's even a trade, because that assumes you get out of it at some point. Like, is there a world where you do see selling your gold? Sure. When does that time come? You know, for me, I, you know, gold specifically, I look at it as a, what's the price of the dollar, right, ultimately. So one of the metrics, as you know, I've published a number of times is the market value of U.S. official gold relative to the foreign held portion of U.S. treasuries.

And with this magnificent gold rally that we've had, that ratio is 11%. In other words, if at market price, all U.S. us official gold, if we have it, I'm assuming we do, collateralizes our foreign debt at 11%. In 1989, that was 20% as the Berlin Wall came down. We went into our unipolar moment. You know, it bottomed at like 6%. The long-term average is 40%. So gold would have to rise nearly 2x from here just to get to the 1989 levels. They would need to rise nearly 4x to get to the long-term average. And if we had an honest-to-goodness dollar crisis, like we did, in 7980. That was a dollar crisis. And gold was at up, the foreign, the market value of U.S. official gold was 135% of our foreign held debt. In other words, foreigners could have

showed up with their treasuries and said, give us gold. And the U.S. still would have had a third of its gold left over after they had extinguished all foreign debt of the United States. That was a gold bubble. We had 135% backed foreign debt. Today it's 11. And things are not getting better. They're getting worse. And oh, by the way, and not in, in, in, in, in, in, in, in, in, in, 1980, 30% that the GDP, 2% fiscal deficit. Entitlements were nil. We still in industrial base. Things were great.

And they had the ability to raise rates to 15% to defend the dollar. We can't raise rates. They tried to raise rates to four to defend the dollar. And everything went pear shape. All of a sudden, they're doing BTFP and this and that and what have you. So there's no ability to raise rates to defend the dollar. It's all going to have to. So the answer to the question is, it's 11%?

a foreign-held debt today, I don't know. The very earliest I would think about selling any gold would be that 20% number, but it's dependent on events. If we're seeing things evolve such that there's actually a path forward to fiscal austerity versus just run it hot, okay, maybe 20%'s a number. More likely, I probably wouldn't, I wouldn't even consider until 40%. Now, 40% that gets you, what is that, $16,000 gold, $15,000 gold? I would probably take some out there.

I would be maybe I would lend some to the federal government at four percent at $15,000 gold, but or maybe I'd buy some farmland at that point or something, some other more productive asset, but it's about the price of the dollar in real money terms and gold terms. Bitcoin, I think is a newer asset. I think it's going to be more volatile. You know, for me, it's all about what's what's the, what's the price of the dollar, what's happening. And with Bitcoin, there's also a geopolitical hedge, right? And I never thought, look, I'm not going anywhere.

I'm staying here. Like, I love this country. I was born and raised here. I'm an Eagle Scout. Like, I'm not leaving, right? For the meme. I'm not leaving. I'm not fucking leaving.

But it does give you some optionality for periods of time, right? Like, you know, in a way that, gold doesn't simply because, you know, it's hard to fly somewhere with any real amount of gold. It's really easy to fly anywhere with enormous amounts of Bitcoin. Or it's really easy to send, you know, Bitcoin over a Zoom call to friends, family, etc. around the country in a way that is just impossible with gold. So for me, it's all about multi, you know, what's the valuation of the dollar sort of relative to these assets. and what am I watching? What am I seeing? Like, are things getting better? Are things getting worse? What's the political? And unfortunately, I'll sort of cross the board. A lot of the metrics, I, you know, I think I wrote it a couple weeks ago, like two weeks ago. I'm still buying gold and Bitcoin every week because, you know, the other side of that is when do I want to buy dollars relative to gold Bitcoin? You know, hey, it's Friday. Do I want to buy gold and you know, I want to buy dollars and sell golden Bitcoin? No, based on what I'm saying? No, not yet. So I'd have to start.

seeing that and I think the prices are way higher before that balances in my own mind. Yeah, I think that's probably the perfect place to close out, Luke. I've really enjoyed this. I think we should close the show how you close every article by Golden Bitcoin. Buy Bitcoin first. Where do you want to send anyone who's want to hear more about you? Sure. Thank you. If you're interested in hearing more about our different research products, FFTT-L-L-C-com for more information. And as you know, I'm on the, I almost called it the tweeter, which is, I'm on exit at Luke Gromyn, L-U-K-E-G-R-O-M-E-N.

Love it. Thank you for this, Luke. It's been great. Thanks for having a fun few days ahead of us. Absolutely. Let's go. Absolutely. All right.

Thanks, ma'am.