What Bitcoin Did - The Everything Rally Is About to Begin | Joe Carlasare

Episode Date: September 1, 2026

“You could have a massive cycle here this time around that will shock people.” — Joe Carlasare Joe Carlasare is a commercial litigator, Bitcoiner and author of Unconfiscatable. In this interview, we discuss why he believes the Bitcoin bottom is in, how the recent drawdown changes Bitcoin’s risk profile, and why a move above $100K could trigger the next major cycle. We also discuss institutional adoption, the future of the four-year cycle, Bitcoin-backed banking and credit, Treasury buybacks, fiscal dominance, AI investment, structural inflation and why Joe is bullish on the economy, markets and Bitcoin. THANKS TO OUR SPONSORS: LEDN SWAN ANCHORWATCH BLOCKWARE BITKEY CAPE FOLLOW: Danny Knowles: https://x.com/_DannyKnowles Joe Carlasare: https://x.com/JoeCarlasare

I think there's plenty of indications that the bottom is in. You're about to do a monthly close over the 10 month moving average, which historically has marked the end of every single Bitcoin bear cycle since the Liddy's 2016, 2017. You have a very compelling case that this was the most muted, mild drawdown in Bitcoin history. That is extremely persuasive. I think the vast majority of people will have exposure to Bitcoin in one form or another without even realizing. If you have a situation where you get back over 100K, you have an economy, which

I think it's starting to turn up and start to be coming along here. You could have a massive cycle here this time around that will shock people. And you have this Industrial Revolution 2.0 with AI, which is going to have huge effects on our economy that we can barely feel. And to me, the consistent picture through all commodity markets is higher structural inflation. Joe Carl Sari, how are you doing, my friend? I'm doing excellent. Good to see you. Good to see you too. One of my favorite people speak to.

You always have a bit of a, I don't want to say contrarian, because I feel like Bitcoin is a contrarian, but you have a different view to the normal Bitcoiner on the state of the economy, what Bitcoin's doing. So I'm excited for this. We've got a lot to talk about. Well, I've got to talk about. So where do you want to start? Well, I think we've got to start with the price. So Bitcoin's absolutely ripped in the last two weeks. We're just under 80K now. This kind of came on the back of the Treasury announcement, the buybacks. How much do you think that played into this? I think it was sort of the match that lit the fuse.

But to me, I think Bitcoin bottomed effectively in February when we hit that 60K wick down. Yes, it is true that we went slightly lower. I think, you know, it tested 58K gang came through and held that sports wrong, which I thought was great. I love memes. Bitcoin is so sentimental that memes narratives really do control. but if you look, just sort of take a step back.

For one, I was a big person, as you know, I think it faded this like four-year cycle theory because they didn't think fundamentally there was any reason for it, especially given the economic data, which I look at pretty closely, as you know, stock market, which has been doing really well just consistently all year, many other asset classes ripping. That being said, that was wrong, right? The idea of the four-year cycle, whether it is a self-fulfilling prophecy, whether it is something that is just something that is traded upon by Bitcoiners, sort of becomes that, you know,

self-fulfilling prophecy. It doesn't really matter. It is what it is. So everybody that was fading that narrative was wrong. That being said, I think there's a lot of green shoots you can look at with the Bitcoin price that showed you that fundamentally at this time is different, at least with respect to the mutedness of the drawdown. Right.

So if you go back and look, we had that cycle high in the fall where Bitcoin was at, you know, roughly, you know, 126, 127, thereabouts. And then you sold down hard very quickly. You were at 80K in November. And then you had the rally back. And then you had the whole sort of slow grind lower until February, we just basically went down. And then really, we've been bouncing around between 60 and 80 roughly for the entire to the year. Right now as we record this podcast, Bitcoin's at $79,000 after that big run. So what do you take away from that? You take away that to me, you had one of the, because I think personally the bottom's in. I think there's plenty of indications that the bottom is in.

You're about to do a monthly close over the 10 month moving average, which historically has marked the end of every single Bitcoin bear cycle since at least 2016, 2017. If the bottom is in fact in, you have a very compelling case that this was the most muted, mild drawdown in Bitcoin history. That is extremely persuasive. The fact that Bitcoin roughly fell from peak to trough, you know, a little over 50%, compared to prior 70 or 80% drawdowns, that's really encouraging.

So yes, I mean, I thought that, whoa, I thought this was sort of a, I used the term artificial sell-off. It's sort of like it felt like it had to happen. Like people just didn't want to get burned again. So they had all these profits above 100K. They saw that nice run up since the 2022 bottom. So they felt like a prudent thing to do was, you know, don't fool me again. But I do think that the vast majority of Bitcoin, Twitter and Bitcoin,

traders were waiting for much lower numbers, which they may not get. And that's exactly what market does. Over time, the market evolves. It changes sort of the patterns that people come very familiar with. And whatever worked in the past tends to a longer work in the future. It certainly worked for people that sold in Q4, right? But when you sell, Danny, the difficult thing, why I sort of rage against people trying to trade and sell Bitcoin is that not only do you have to nail a top, you have to account if you're in certain jurisdictions for taxes, but you also have to nailed the bottom. And there were plenty of people sitting at 60K where we were at for a very long time saying Bitcoin's going much lower. Bitcoin's going much lower. If the bottom is in and Bitcoin

heads up from here, your ability to sort of take advantage of that trade is very challenging. I know a lot of people now, since we had that big move up into the high 70s, they're saying, when are we getting a pullback? When are we getting a pullback? Maybe you get one. Maybe get one in the low 70s, but I bet there were going to be a lot of people afraid to buy that because they believe that, you know, we're going to go much lower. So to me, like, I look at this whole year as basically sort of a game of chicken. Like people who were playing games of chicken last year and wanted to sell, then they're playing games of chicken and I'm going to buy. To me, what's more encouraging is where do we go from here? Because even among the cycle believers, even among the

four-year cycle, they're telling you Bitcoin's going to bottom, you know, sometime in October, right? well, October's, you know, less than 60 days away. We're in September by the time you record this. So to me, like, what is the compelling bear narrative? I don't really hear any. And given the fact that we're down, you know, roughly 40% as you record this podcast from the all-time high, to me, it's a very poor risk award to try to mess around trading Bitcoin.

And I think far more individuals are going to be front-running that expectation that the bottoms in, we're going to have, you know, bright, sunny skies ahead, and Bitcoin's going considerably higher. So all of that is to say, like, I'm really bullish. I think that what you've done here is you've done what Jordi Visser calls the IPO moment of Bitcoin, where you've wiped out a lot of people that had psychologically that 100K mark in their head. They were going to sell. They were going to take some profit. You've gotten rid of that supply. You've made it, you defused the supply. You've got it in the stronger hands that are going to hold for the long term. And you had a very muted drawdown, you know, by Bitcoin

in terms at least 50%. To put that in context, there are mega cap tech stocks that fall 50% not too long ago, right? A 50% drawdown in a high volatility asset, although it sucks, right? It's painful relative to a 70 or 80% drawdown. That is very constructive, right? So going forward, if you're a money manager, you're looking at this, Bitcoin's starting to trade differently. Bitcoin's starting to have a different risk profile relative to other assets.

All of these things are little thumbs on the. scale that you want to see as this matures into an institutional quality asset. And man, if we get back over 100K, I think the FOMO is going to kick in big time, and I think we're going to get moving very quick. I think you could be a new all-time highs, if not this year later in 2026, really 2027. So you basically outlined every single reason I don't ever bother trading Bitcoin. Because like realistically, normal people, it's very hard to call the top. Like the people who are, you know, creating the ITO moment in Bitcoin, that guy

selling 80,000 coins back in 2025, which we all funnily called bullish selling. They're the ones that put the top in. But realistically, if you're trying to catch the top, you're probably going to be selling somewhere around the 100k range. Very few people get the actual top. And then the interesting thing is like when we're down at 60-ishk, under my videos, like I did a video with Checkmate, every comment was calling for, you know, somewhere in the 40s. And so if you miss the 60k, like Bitcoin moves so fast that realistically you're now looking at buying at 80k. And once you, in fact, in tax, have you made any money? These are the really, like, hard things about creating Bitcoin,

and so few people win. Well, I think the same is true right here, right? So, like, you can make a case, a very compelling case. And I always scan some of the comments to your point, because they're very interesting. Like, people are, are the overwhelming majority thinks Bitcoin needs to reset. You have this awesome run. So we need to retest lower. It needs to go into the 70s or maybe it goes in tests, you know, even even the high 60s, right? But the challenge is that if the opposite is true, let's just say you break through this 82 to 84k range, all the TA traders, they'll say, oh, the market structures change. Now we put in a higher high relative to where we were in the spring, right? So that move from 8284, say, upwards to the 90s, it's going to happen just as quick.

You're going to have a bunch of fast money pile back in all the traders, all the momentum junkies. they're going to flow back in and Bitcoin can rocket higher. So do you really want to gamble here? And it's like, you know, to me, when you have this incredible asset, I don't want to live with that sort of stress of, oh, I have to wait now to buy it back lower. And if I don't have to buy it back lower, then I have to move very quickly if it breaks through 84K because it's going to run even higher. It's just a mess, right?

It's not something that I think, I mean, they're playing markets to trade. And, you know, I do, I trade traditional markets all the time. time, it's way easier. I think Bitcoin is a much more challenging asset, particularly with size to trade. And I've seen weird things happen over the course of Bitcoin's existence where TA traders and people were telling me, there's no way Bitcoin can do this. There's no way it can move this low or this high. And it doesn't. It seems to always find that max pain point and a lot of frustration for people. So to me, it's a loser's game to trade Bitcoin. I always say like you should be focused on having a sizeable allocation that you feel is appropriate for your risk tolerance, that you feel

is appropriate for your portfolio, and then let it go. Just forget about it. Yeah, and there's the crazy start in Bitcoin, which is, I think if you take out the 10 or 12 most volatile days in Bitcoin, you basically wipe out all the gains. Like, Bitcoin is a very volatile asset, but it does it in very short bursts, and it's sideways a lot. Like, holding is definitely the way. But I'm interested to know why you think this time is different because like you, I thought the cycles were done. I still in my heart just can't believe that the calendar they take when the Bitcoin price goes up and I find it very hard to get into the four-year cycle. And I'll probably be the first person saying it's done again next time.

Because at some point that four-year cycle has to break, I think. But why do you think this time is different? Well, first off, I want to just emphasize with something you just said. If Bitcoin is perpetually locked into a four-year cycle, I don't think Bitcoin is fully realized that makes it a perpetual trading asset. There's no reason to own the asset if it's always going to boom, bust every four years. So I think even the cycle theorists, right, they will concede, yes, at some point it has to break, but they will say, oh, we got two or three more cycles then where this pattern will repeat. To me, okay, fine, but the one time you screw that up could be the most, the biggest cycle in Bitcoin's history or one of the bigger cycles relative to how

much capital could float into the markets. And that, again, that game of chicken, I don't want to play. I'd rather just hold through it, particularly since, you know, I thought holding through this bear market, although annoying and frustrating, was perhaps the easiest to hold through. I mean, it was not even, you know, prior bear markets, people were legitimately saying Bitcoin's going through zero. It'll never come back. This one, we're debating about, will it bottom in the spring or will it bottom in the fall? You didn't have a contagion event, like an FTX type event, which was causing panic and for selling across the board. the most you had was STRC and strategy, which, you know, we'll put that aside. Why do I think it's different? I think it's different because psychologically, again, we talked about this, and I'll credit Jordy Visser, because I completely agree with his thesis on this.

I think there was an IPO moment of Bitcoin. I think when you had the final coming of the ETFs, right, BlackRock, major institutions involved, and that wave of early toddlers who, you know, to your point, they're selling Bitcoin at 80,000, according to clip. That's significant, right? So getting that supply diffused out into the marketplace was huge. I mean, I know personally because I have some clients who told me anecdotally, like, you know, 100K was a threshold that they're selling 20 to 30 percent of their Bitcoin because they can buy

that second or third house. They can buy that yacht. They can take advantage of hoddling for the last 10 years. And I don't begrudge to that. That's a good thing, right? If they want to sell because they're going to, you know, put it in something else or diversify, so be it. A lot of these guys are really still bullish on Bitcoin.

They just realized like, you know, okay, I bought Bitcoin in my 20s. Now I'm coming into my 40s, whatever. It's time to sort of, you know, to diversify, buy what I need to buy for the family, do what they need to do. Right. They were hodlers for years. But what I find to be very bullish about that is you do that once. Okay. You have that sale at one time and that supply is diffused, right?

Other people now have it. as some allocation of their portfolio. That's hugely significant. You can't overstate the fact that if you really want Bitcoin to become more of diamond-handedness, right, you don't want concentrations of supply because the concentration of supply make it altogether easier for those folks with the bigger allocations to just sell and do certain periods. You want it to be where people have their 5% allocation. They see that 5% or 10% double or triple into the future.

and then they say, hey, maybe I want to just hold this. There's no real reason to, I have other assets. And I think that's increasingly going to become the story. I think the vast majority of people will have exposure to Bitcoin in one form or another without even realizing. I think financial advisors already that I'm aware of are sticking 2%, 3%, 4% into Bitcoin. There are guys that will, you know, I listen to a lot of TrotFi podcast. There are guys that absolutely do not care at all for Bitcoin.

And they're putting their client standing into a 2% or 3% allocation because they're they see what it does from a portfolio construction standpoint. To me, that's awesome. I love that idea that, you know, you don't have to, you don't have to be in love with the asset. You don't have to get married to it. But you're going to realize, like, from a portfolio construction standpoint, it makes sense to own itself.

You know, it's like the old Satoshi adage, you know, it would make sense to buy some just in case it catches on, you know, that type of thing. That's sort of the, I think, analysis that a lot of FAs are doing with real money at this point. And I think it's only going to become more significant in the days ahead. And then, man, if you have a situation where you get back over 100K, you have an economy, which I think is starting to turn up and start to be humming along here. To me, I think you could have a massive cycle here this time around that will shock people.

Because right now, here's what the dominant expectation is. The dominant expectation is Bitcoin is going to maybe give you a 1 or 2x. Okay. And what do we learn time and again? whatever the majority consensus view is in markets, it's usually wrong. I don't care what market you're talking about. In 2025, people were saying we're going to go over 200K. I mean, go look at some of the projections of people that, what they had, they said, 300, 400, 500K Bitcoin. People were disappointed. I wasn't. As you know, like I was going for 130K to be the high for the year.

I thought that was sort of a reasonable framework of where Bitcoin would be given the move it had. and I think it needed to reset from there. I certainly didn't expect it to draw it down as much. But now, I mean, I don't see any reason why you can't be approaching well into the high twos the next time around, perhaps even higher. And to me, I mean, I can't find a time in Bitcoin where I've been more bullish about the, you know, high movements and I think the allocation that it's going to come to Bitcoin in the traditional finance world over the next, say, 18, 24 months.

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Head over to swan.com forward slash WBD and booking a call with one of their team. That's SWAN.com forward slash WBD. Let's go. Because, I mean, I was one of the people calling for way too high. number. I can't remember what I said. But yeah, you were, you were probably the most accurate call that I can think of. I mean, you basically nailed it. I think 130K, 120K,000, same thing. But what I want to know from you, because for me, as a Bitcoin, dropping 50% is obviously better than dropping 70%. But I was never going to be a seller. Like, I've, I've been through

worst bear markets. But what does Bitcoin only dropping 50% mean for, like, the serious, like, tradfi investors with a lot of money? Like, does that change their analysis of it when it only drops 50% during a bear market, assuming the bottom's in? Yeah, absolutely. It changes the risk profile because if you have a, first of all, in our markets today, one of the things I think is critical. I don't care if it's the Treasury market, if it's the equity market, the real estate market, Bitcoin market. And it's true in a weird way. It's true with the cycle theory. I think narratives are so important. We live in such a media-driven world, and you can see this from five minutes spent scrolling through your doom feed on Twitter, right, whatever anybody's talking about. We live in such a

hype in narrative-driven world that when you start getting narratives like, you know, Bitcoin, the days of 60, 70, 80-percent wipeouts are gone. Now maybe you see a pullback of 30, 40, 50%, that's going to be more normal going forward. People start to repeat that. You know, the idea of the debasement, trade, the idea of the debt, the idea of, you know, a digital goal. These narratives are really helpful in people communicating it. And what I think you'll see from financial advisors and traditional financial allocators over, again, the next couple years here, is if, if not kind of the bottom is it, and that was the bottom at 58K, they will start to repeat the fact that, you know, Bitcoin has matured to the point where we're no longer going to see the 70, 80 percent drawdowns. And we just have,

had a case, you know, case study in that. We just had a period where there was maximum negativity. I mean, look, if you go back and play, I save occasionally some of the spaces on Twitter where people are talking. They're talking about quantum. They're talking about Sailor going to jail, right? Like I heard a title of a space with about 2,000 people on it saying Michael Sailor, uh, it was going to jail because of STRC. You had all of these narratives that Bitcoin can't survive quantum and can't survive X, Y, Z, that's data technology, that there's just no more gains to be had. If Bitcoin actually starts ripping in that environment and you have the historical example of a muted drawdown, that will be something that people cling to. People will say,

despite all that maximum negativity, there were not sellers to drive this thing under 60K for any significant amount of time. I think all in, you might know this better than that, but I think it was like 72 hours, we were under 60K. Something. Yeah, it was no time. it was no time at all, 60K Bitcoin, which tells me that there was a lack of sellers, that people were, that you had this the diamond-handed folks at the bottom, they were never going to sell. And I think that that floor only gets higher. I think we will see a time in the near future where it's going to be really difficult for

people to give up coins under 100K. And once you have that floor at 100K, psychologically, that unlocks multiples of 100K,000, two, three, four, five, every K. And then at each, this level, right, there's going to be some group of people. There's going to be some cohort that says, you know what, I've had a good run. 200K might make sense here.

300K might make sense to lighten up. That's going to be true for all of the rest of, you know, time. You're going to have some level where it unlocked more supply. But to me, the psychological support of 100K is significant. Having that firmly establishes the floor, makes every multiple of that look even more cheaper. So that's why I'm foolish.

I mean, I think it's great. I mean, I'm super bullish at this point as well. And I want to bring up checkmate one more time because he, I mean, he's done really well calling this bear market. But one of the things I really like is he says that the bull market authors the bear that follows. And because we didn't have a crazy exponential run up last time, do you think that's why we only got the 50% bulldown?

And then to add to that, what does that mean going forward? Does it mean we're going to have less volatile upside? Because you're talking high 200s, maybe 300K. Like, that's a pretty significant bull market. Do you think the volatility is going to be dampened both ways going forward? I think that any market, and in the way I visualize it, I think about a rubber band. If you have a market that becomes stretched, okay, and it's unreasonably stretched, you generally get a snapback.

Okay. And we did not have, I don't think even at, you know, the high to mid-20s, I don't think Bitcoin was stretched as a market. So yes, I think that played into the downside being rather muted, right? Because you didn't have the blow off, I don't think you're going to have as big of a drawdown. That's not to say that can't happen in the future. I mean, if I'm right and Bitcoin has a serious bull move, which I don't think we've really seen since probably 2021, maybe even 2017, that was the last real move, if you have that period,

like where you're getting up into the three or four hundred thousand, then yes, I would expect there to be a pretty vicious snapback. Just because, you know, at that point, you've exhausted so many buyers. And I think there's going to be an incredible wave of sellers at that point. It's just, so to me, what I would much rather see, and again, this is not like a call or a forecast, it's just my preference. I would much rather see a more slow and steady climb. I think that's more sustainable. I think slow and steady where you build up sort of support levels is really positive, watch term, and it's much better.

Think about this if you're trying to spur adoption again. I think your podcast talks about the idea behind getting broader adoption, and you view that as a goal, right? Yeah. Seeing somebody buy when there's massive FOMO and Bitcoin's ripping every day and you have massive gains and then having that person have to endure a 60, 70, 80 percent drawdown, psychologically is devastating. Even if they have a smaller amount of money in it, I mean, I know plenty of people who they bought, you know,

between, say, $2,000 and $5,000 of Bitcoin in 2017. And then they saw that, you know, if they're buying in November or December, they saw that get cut in half or down 70%. Psychologically, that's very difficult for people. And although we can preach as Bitcoin as DCA, DCA, we know that's not what people are going to do. people are going to put the money in when it gets fast moving, when there's momentum, and they're going to take the money out when it keeps moving against them.

So what I would rather see is more like equity performance on steroids, almost like NASDAQ performance on steroids, where you have, you know, 15, 20 percent gains year over year consistently. Maybe you don't have the 5, you know, 10x moves, but you have consistent, you know, double-digit returns. And when you have a drawdown, it's a 20-30 percent digestion move. where you, you attract buyers at lower prices and they come back in and then we off to the races. I mean, if you can break this cycle thesis, which the first step of that is, I think, you know, putting in this low and making sure we don't go back to the 58K area, if you can break that cycle

thesis that we have to pull back 70% to me, that's going to mean Bitcoin trades better in the future. And I think it's going to be less of an incentive to try to gain tops. You know, the equity market, one of the reason the equity market trades like how it does, Danny, is because the investors in VU or the S&B 500 index funds, they have been conditioned that, yes, you'll occasionally get a 10 to 15 to 20 percent correction, but we will make new all-time highs within, you know, a month or two months or six months, whatever it is, right? So, you know, you saw that in April of this year. You saw the year before in April of 25.

You see these very sharp downturns, but that it rapidly goes right back. go. If Bitcoin can start to trade like that, man, the whole noise about it being too volatile or not something for regular investors, I think it all changes. I think it goes to a position where Bitcoin is seen more as a fundamental pillar of your portfolio. Yeah, and I think to your point, it really doesn't matter how much money you have a Bitcoin. And if you take that to sort of the logical extreme, we've, I love grassroots adoption in Bitcoin. And last year, I was in Kenya, And we went to Kibera, which is the largest slum in Kenya. There's like a million people in this slum.

They have very, very little. And there's an awesome little Bitcoin circular economy that's built there. There's like 60 merchants. And the idea of people getting onboarded to that kind of program, buying Bitcoin at the top and then them losing half their net worth, which is a very small amount in Kibirah is a very, very poor area. That's devastating. And if we want real grassroots adoption, that does need to stop at some point.

And I remember when we first spoke, I think, in Vegas, you were saying, saying you like the idea of Bitcoin's stair stepping to a million dollars rather than these crazy moods up and down. Do you still think that's on their cards at all? Absolutely. I mean, here's the thing. The Bitcoin market, I think this dovetails really nicely with what we've been going through with this cycle thesis. Bitcoin, perhaps more than any other asset, I think it survives and thrives on narratives. Okay. And the narratives have changed, to be clear, if you're being honest, from the early days to now, they've changed the narrative like from peer to peer currency, has changed, I think now to more store of value. And I don't view that as a negative. The narratives

of companies change, the narrative of nations change, the narratives of even religions change. I don't view the fact that narratives change is somehow being a negative. I think what you're going to look at is as an alternative to sovereign debt as closer to a digital goal, but far more versatile and far have having far more utility and verifiability. I think gold will have a place, or Bitcoin will have a place in a portfolio. I think that will be very encouraging moving forward. The narrative that we have, that we have to have boom and bust cycles, although we will always have corrections and we'll have bold moves and consolidation moves. I think the boom and bust narrative may die. I think you may at some point in the near, not too distant future, put it that way,

not too distant future, I think you may have a period where Bitcoin, instead of having these boom and bust, it has more of a stable growth within corrections. But the secular story of it being the world's greatest store of value that can survive and thrive. And it's only enhanced, right? If I'm going to present something in the store of value, one of the common knocks that I see from the Tradify people is, well, what kind of store of value loses 50% in a year or 60%? Right. Well, I would say gold, right? Gold is. It is lots of giving it. You know, look at gold at various different points. It's gone down 20, 30, 40%, even in recent history. So you always have those corrections, but you don't have it with the regularity that I think Bitcoin has. Bitcoin is far more regular. And to me,

all that is is that's the volatility, that's the angst of like a young child who is extremely volatile if you have little kids. That's just a maturing asset, okay? But mature assets trade differently from immature assets. So where I draw the parallel with Bitcoin is I think as Bitcoin has more capital, as Bitcoin has more tools, as Bitcoin has, you know, ways where you can, and I know of three, three platforms where you can buy a mortgage with Bitcoin as collateral, right? When you have more of that versatility and integration in the traditional finance system, you have a less compelling reason to sell. When you can buy in any U.S. regulated brokerage account, you can buy various derivatives to help protect your downside risk from holding Bitcoin.

It's going to trade differently. And I think some of these things come. coming on line with the ETF, which again, I know that we lose sight of this, but we're like a little over two years into the ETF era of Bitcoin. To me, that's nothing. It's absolutely nothing. So for people to tell you they know with certainty how Bitcoin's going to perform, I have a lot of skepticism over that. And I think that you will be surprised over the next five years all the different ways in which Bitcoin is starting to adapt into looking very different from how it did in the early days. I think things like the mortgage as well are really interesting.

If there was a mortgage with a Bitcoin kicker where I locked Bitcoin up, I would certainly take that. I think they don't exist in Australia at the moment. But that kind of changes the duration of the asset a little bit as well. Like if you're locking Bitcoin up on a 30-year mortgage, it changes your ability to sell at such tight intervals. Absolutely. Why do we have a lack of sellers,

even among very negative concerning economic news and inflation, news and war and trade. Why do we have a lack of sellers in the equity market? Because a lot of that money's in 401k and retirement accounts where, you know, people just say, well, I can't really, I can't, it's one one partner in mind. He says he looks at his retirement accounts as sort of like fake money. Like he doesn't even, he doesn't even acknowledge it exists because he can't really tap into it. And I think that's that subconsciously like a lot of ways people in the United States and other countries that have access to 401k retirement type structures, they just think of it's like, it's there, whatever, I can't tap it, I can't really get liquidity of it, I'm just going to leave it.

And that's becoming the dominant philosophy, the dominant mindset that, you know, we're not just going to mess with it. I think that will increasingly be the dominant view towards Bitcoin. You get a little, you hang on to it, you don't mess with it, you don't try to time it. And once more and more people do that, you're exhausting supply. You're taking those coins out of circulation and you're leaving only, Only new marginal buyers, very limited marginal sellers, unless, of course, you move the price up. And then you move that price up and that will always unlock more supply. So it's always sort of going to be a balancing factor. But to me, I think there's going to be far more coins available for far more coins that are being hoddled than are available for sale in the coming years.

I mean, I do the same thing with my Bitcoin. I don't think of it as not real money, but I do have sort of a silo around it where I'm like, That's the last thing I touch. And that's something that I'm holding for a long time. But the more people we get thinking like that, the better. I'll have a question for you, though, because you said you don't think there's Bitcoin being just as store of value is a negative. And it has a place in a portfolio. Like, I don't disagree with that.

I think you're right. And I think that's how the world will view it. But if Bitcoin doesn't become sort of like money, as in it's used as store value, minimum exchange and unit the account at some point in the future, I think this is a long way off. Do you think it's failed in any way? You wouldn't reuse a Bitcoin address, so why does your phone broadcast the same identifier for life? Every sim has a static ID, and carriers, ad networks, and bad actors

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And what I think is fascinating is that, you know, we're applying sort of this framework that has to be all of the above. And I would argue that in the future, I'm not certain that that has to be the case. I don't really understand why a money can't be primarily the store of value. Because if you think about it, from an emphasis standpoint, what matters more to be? What matters to most of people is their net worth overall, right? the fact that you don't have it liquid to be used for coffee every day, to me, although it somehow it disintermediates sort of the tangible nature of money, like, okay, I'm using this for a purchase. With technology, I think you're just going to see this seamless integration between all these

things. Like, I'm aware of a company that is now letting you access payments for shares of VOOB, the SAB 500 ETF. Like literally, you can go buy a coffee and you can, use a partial share of your vote, right? I think you're going to see technological innovation blur the framework of medium exchange to the point where really there's no distinction between any asset that could be a store of value and also a medium exchange. Now, to your point, like, is there some sort of drawback to it never becoming the dominant medium exchange? I don't really think so. And the analogy I would use is the Treasury market. You know, you and I have talked at length about how important and integral treasuries are to the global system, right?

I think there's not a single individual that's an economist in the world who would say that the treasury market is not one of the top, if not be top global reserve asset, period, full stop. It's the whole backbone of our credit system, our banking system. It's the backbone of U.S. segemony. The treasury market is massive, right? My question to you, Danny, is, what was the last time you went and, took a 30-year bond and used it to buy bread at the grocery store or used it to buy a cup of coffee. You walk in with 10-year notes and say, here's my 10-year note, I would like to buy a cup

of coffee. No, you don't. But its place is paramount among the reserve assets. It's the highest quality liquid collateral that's accepted everywhere, you know, through banking systems. So to me, like the lack of payment systems that are tailored around Bitcoin, I think, you know, obviously you'd want something one day where that becomes a more dominant medium exchange. I don't see any reason why that's not a good thing. I definitely would encourage that. I'm not negative on that. I just don't necessarily think that that needs to be a necessary condition for Bitcoin to have success. You know, I've frequently quoted in spaces on Twitter, and I think it's the single most prescient thing. that was said in the early Bitcoin talk forums, and I really mean that, when how, how Finney talks about his belief that the end game for Bitcoin is to be high power money among between banks, with banks issuing, you know, various different coins on

higher layers, to me, that makes way more sense. I mean, if you had a banking system that was built on the back of Bitcoin as opposed to sovereign debt, how it currently has, I think the world would be a much better place. I think there would be a lot more of a disincentive to do the types of malinvestment and too big to fail type public policies that we have than currently. To me, that I think that is key, even if it wasn't even the dominant form, even if they had a blend of treasuries, gold and Bitcoin, I think you'd have a more stable banking system with that under the hood, then we have to have all sovereign debt. sovereign debt's the only name in town. I think private sector forces that would put a, you know, a curtail on the government excess saying like, okay, we have a choice between gold, Bitcoin, and treasuries. What do we want to hold as a central banking institution as high quality

collateral? That would be positive, okay, rather than right now, which you have compulsion, where they're almost forced, many institutions are forced to hold treasuries by law, which to me, that's not as healthy of a system. I think the only sort of counter to that is, from like an ideological perspective, does that mean that we don't really get the full benefit of permissionless freedom money?

Because you have that as your sort of savings, your store of value, but you don't necessarily have that. You still work within a mission system to actually interact with the economy. Well, this is where I differ, okay, from many Bitcoin's. I don't, I think the, I don't mean to use a pejorative, but I'll just, I can't think

a crypto anarchist, okay, version of permissionless freedom money that we're not going to have any curtail or any laws that would be applicable to our financial transactions. I think that is a fantasy. I think it will never come to pass. I think there will always be rules in place. The question we should be asking ourselves is not a system of no rules. It's what rules make sense, what rules are authoritarian, what rules are far too pernicious in terms of, you undermining privacy and liberty considerations, what is the right balance of rules? I wrote a book recently, we will probably get into, where I try to explain this tension. There are real reasons why we would want to have some order and structure on financial transactions. Now, I'm not at all

defending the current regime because I think there are many problems with the current regime that we all know about and we're all Bitcoiners because we care about trying to make something better. That being said, the idea of a laissez-faire where, you know, there's no restrictions whatsoever on financial transactions, I just don't think that's realistic. I think society on balance will reject that and you'll have more of a situation where, well, maybe we don't want that much regulation. Maybe we don't want that much control. We need to have the pendulum swing far back in the favor of liberty and privacy and more of a, you know, I won't say freedom money, but a freer money, right? probably just on the spectrum, you'd want it to be closer to the ideals of what, you know,

I think a lot of the original detent of Bitcoin was. And so from that perspective, do you think that Bitcoin essentially acts as like a check and balance in this new system? Yes, 100%. I mean, if you had a banking institution, okay, that, let's just imagine this with me. You had a banking institution where one of the major assets that it held is Bitcoin, okay? and it's not just all sovereign debt, then the notion of too big to fail radically changes,

okay, which, you know, Satoshi is creating Bitcoin in the wake of the financial crisis, right? When you chance around the break of second bailout of the banks, right? I think most human beings look at that and say there's, there's something wrong with that. If we have, if you have to have skin in the game,

you can't just make a ton of risky bets, and then get bailed out and parachute out with payments and bonuses and have no repercussions to your negative, negative decision making, your bad decision making. I think if you had a banking system there that was built with some core of it being Bitcoin, there's a real practical consequence that comes from a bank going down, right? That Bitcoin that had a run on it is gone. You're not going to be able to bail that person out.

There's real consequence that no public policymaker can just tap a few keys in print more Bitcoin. So that, that to me would encourage more prudent decision-making at the commercial banking level, which, to be clear, like, you know, the nonfiction book that I've been writing is about Bitcoin in the credit markets and how that works. And to me, that's the most interesting discussion in Bitcoin today. It's like, how do you forecast credit markets in the future? You have the extreme of there's going to be no credit, it's going to be Bitcoin only. Then you have sort of the more, I think, realistic perspective that you're going to always have some form of credit. credit is just a private arrangement between actors that is regulated, right? So like, how do you marry

these two? What's the appropriate level of credit? How do you put a curb on excess credit that leads to volatility in markets that is not good? You know, when crises happen, when there's liquidation events, it's always an asset liability mismatch. That's what it really is. That's the core of most crashes, asset liability mismatch. So how do we create more of a yen and the yang, more of a balance that is somehow a curtailed by the inclusion of Bitcoin into the system so that people have more free market potential for how to store their capital, where to store, what degrees, you know, what reliance you want to put on somebody. I mean, there's this whole debate right now, Danny, about like custody or there's non-custody, Bitcoin, et cetera. To me, Bitcoin succeeds so long

as I have the choice. If I have the choice to be able to decide if I want a custody or not custody, to me, that's an infinitely better system than one in which I'm required to rely on custodians. Absolutely. I totally agree with that. And okay, I want to, I mean, first of all, I want to read this book. When is it going to be out? Well, it's a, it's a fiction book. I think we talked about it in one of the past, I guess, it is out. You can buy it right now on Amazon. By the way, if you have a audible account, audible premium, or you have a Spotify premium, account. You can download it. It's got an audiobook. It is a Bitcoin thriller. It explores the tension between the law, something I live every day and Bitcoin. I've tried to use sort of a

realistic plot to the extent you can make a realistic plot between how judges have I've experienced treated Bitcoin, some animosity I've seen towards Bitcoin. And I try to do it in a compelling way, because I believe there have been a lot of great books rid of by very smart people about Bitcoin, explaining it, right? But one of the great things about fiction that lets you play in the sandbox and actually communicate in a different level to people is that it lets you have people learn through the act of entertainment. I mean, I believe most people want to be entertained rather than sit down, read a dry thousand-year history of money and, you know, how one island used giant large rocks as money. I think they want to get immersed into a narrative. The example I always

use as like the big short, right? The big short, I think, caught more about some of the issues of our economic system than a lot of other stories because you went and you went into the movie and there was all these funny stories and backdrop that was engaging and people learned a lot along the way, a pretty interesting story. I tried to do that in a fiction setting and I hope I succeeded. I've gotten some great early reaction to it and it's called Unconfuscatable. You can pick it up on Audible or Amazon right now and highly recommend the audiobook because the guy that did the voiceover. He's a professional voice actor. He's fantastic.

He nailed all the characters. So it's a good ride. Yeah. And I'm excited to hear what people think about it. I was trying to introduce Bitcoin to a mainstream audience. But I think if you're a bitcoiner, like you'll love the book because there's so many references to a lot of the stuff we talk about and the same themes of, you know, the individual versus the state and the government and non-governmental actors.

how they have tension between the two. I love that. I've literally just ordered it while you were talking then. I've got the hard cover for the bookshelth, but I need the Kindle version when this is fully released. Absolutely. Okay, I want to go back to the very start of this conversation where we're talking about one of the catalysts first move,

at least from a narrative perspective, with what happened in the Treasury market, or what Scott said, came out and said. Do you want to explain what happened there? You'll do a better job than I will. Sure. Okay. Okay. So again, we'll start from the standpoint of narratives, okay? Because again, as I told you, I think as I get older and more of a student of markets, I consider myself an evolving student markets. I continue to remind myself is that it's not necessarily about the reality. It's about the perception of the reality. Perception of reality governs people's actions. Okay. So, you know, Lynn Alden, who I love her work, she,

put out this, you know, sort of breakdown of common things you see about the Treasury market and misdomeurs and is this yield curve control? Is this not yield curve control? Is it QE, not not QE? You know, all the different monocers. But at the end of the day, I think there was a message that was intended to be sent by Bessent when he said, we're going to double the size of the buybacks. But I want to make sure people understand as we sort of conflate things what we're actually talking about with the buybacks, okay? So when people think about the treasury market, you or I, we may naturally think about like Bitcoin, right? The idea of one Bitcoin equals one Bitcoin, right?

You know, if I have a Bitcoin, you have a Bitcoin for all intensive purposes, they're equal. That's not true in the treasury market, Danny. There are different tenors of treasuries. There are what's called on the run treasuries, off the run, right? Off the run treasuries are more illiquid. So just think about it like this. there are certain tranches of Treasury market securities that are thinly traded. That because of when they were issued, at what time there was more of a variety of different tenors,

there's more than less. Some don't have liquidity as some of the other instruments. And when we talk about the Treasury, we really talk about the Treasury curve. You're familiar with the Treasury curve, right? All the different durations. You've got the bills, notes, bonds. And yes, it's all government debt. right? But it's not really equal. We're housing a 20 year is different than we're housing three-month

bills. And for your audience to think about this, it's like, okay, if I have three-month bills, those are effectively cash. In three months, I'm going to get whatever the yield is plus the cash back. Okay. Now, that's different if you're an institution. If you're housing that three-month bill on your books, that's different from housing a 20-year, right? Because you're still going to get paid with that 20 year, but you got to house that thing for decades, or maybe there's eight years left on it, and it was issued during the pandemic. It was a note issued in 2020 yielding 0.4, 0.5%, and you've got X amount of years left on that particular security. So why does that matter? Well, the treasury market has the ability, and they have consistently had this ability, to manage their profile

of debt however they see fit. Okay. So in other words, if they think that they're a certain, and tenors or tranches of the treasury market that are thinly traded, that are not good for liquidity overall, they have the right, and they've done this repeatedly. They did this in the early 2000s and had other periods to exercise a buyback. So they say, okay, we're going to take all these off-the-run treasuries that are thinly traded, and we're going to swap them. And then how do you make up the difference? Because unlike the Fed, as you know and your listeners know, the Fed can just print money. Fed can just go buy things, right? You know, tap the computer. Ding ding, ding, bought X amount of, you know, whatever we've engaged in QE.

The Treasury can't. Every single thing the Treasury has to do has to come from an expenditure of the Treasury market, of the Treasury, the TGA. And the way they do that is through either taxes, which we know they're running structural deficits, so they have to borrow, okay, because the taxes don't make up their full, the full outlay that the Treasury market does, you know, the expenditures, the U.S. government does. So they have to go borrow money from either the bills market or the short rate market. and then they take that borrowed money to swap out the longer dated treasuries.

So they've had a buyback program for years now. It was instituted in 2023, I believe. And they said, well, we're going to double the size of it. So the idea is to improve liquidity, we're going to go buy more of a certain vintage or a certain tenor of these securities. Now, why does that matter? Well, it matters because I think from a market perspective, from a trader perspective, the message is clear.

And it's always the message. It never changes whatever it takes. I mean, this is why I frequently fade the Treasury market domerers because I, to me, I think the constant role, the only rule that matters is whatever it takes. We'll do literally whatever it takes, including rewriting all the rules that we have to to make it work. So for me, like hearing the message of Bessett will do up to $4 billion or more. What he's clearly saying is, look, if these rates get out of control, we're going to do what we need to do in improve liquidity. Now, to be clear, that is not yield curve control. That's very different from a yield curve control type approach where you just say, look, there's, you know, Japan style, there's going to be an infinite bid. We're not going to let the yields rise higher than a certain level. That may or may not be the policy of the United States at some point, but it's not today. We have done yield curve control in the past. I think we've done a whole variety of things. But really right now, I think what they're saying is we don't need to go that far. We don't need to fire that bullet in the gun at this point. What we can do is just say, look, to the extent there's illiquidity in certain tranches or tenors of the treasury market,

we're just going to go buy those. We're going to take it off the books, we're going to swap them for bills, and that'll make it far easier for these institutions to hold. Because, again, it's easier to hold short bills because they're basically cash than have duration risk with longer dated instruments. So that's what it takes. We'll do it. Okay, I've got a ton of questions than that.

But let's start with the swapping the older illiquid bonds for, like you say, the bills that are effectively cash. What does that actually do to the economy? If it has the perceived result, which is that there is a backstop between, you know, the Treasury market and best investments working with Warsh and, you know, there's no need to fear any concerns about debt. If that is the perception, I think practically what it does is it puts a lid on yields, it puts a floor on the bond market. And it gives investors confidence to say, you know, we don't really need to worry about, you know, a runaway 2022 style sell off in the bond market. If that is the perception, right? You know, Ben Bernanke,

former chair of the Federal Reserve, he said, and again, we're talking about Treasury here, so just be mindful of the difference. But he said, you know, the chief tool of the Federal Reserve chairman is to talk, right? His most powerful, one of his most powerful policy tools is to set expectations. Now, we have a, we have a Fed chair now who's sort of raging against that, who doesn't want to set forward guidance. In many ways, he's deferring, I think, to the Treasury Secretary, which is altogether fitting, I think, because you're in an era of fiscal dominance where fiscal deficits are perhaps the most important factor in the economy overall,

you know, six to seven percent deficit in GDP. In that era, whose voice is more impactful? Is it the Treasury Secretary or is it the Fed share? I think that they're in a coordinated way sort of trying to say, look, the Fed is going to take a backseat to Treasury. We're going to let the voice of the Treasury Secretary speak more loudly and clearly about the intention of fiscal policy. And I think in terms of the economy, again, if you set a floor on the bond market,

meaning a ceiling on the yields, to me, that's really positive. We'll see. I mean, I think that part of the reason you're dealing with high yields is you've got oil shocks, which continue to be pervasive longer than people expect. You've got massive CAPEX coming from the hyperscalers, which is causing inflationary pressures. I mean, go talk to builders about raw commodities and the prices there. I mean, my wife and I are looking at building a house,

and we were talking to the builder, and he's saying, look, every single raw component, the copper, et cetera, it's all going through the roof because the hyperskills are gobbling everything up, and all that puts it up were pressure on yields. So the question is, can the policymakers, can they talk down the real inflationary pressures you're seeing in society just by talking? Is that going to be enough? We'll see. And I know you say it's not yield code control. And I get that technically it's not. They're not saying at this price we're biased. But they're doing something a little more ambiguous, which is like we'll step in when we see fit essentially. Does it have the same impact as yield curve control? I mean, that remains to be seen, right? So to me, I think its intention is to have the same impact.

You know, I got to remember a, I think folks don't appreciate fully enough. I certainly didn't used to until I studied it deeply. How much confidence, how big of a role confidence plays, okay? You can have a bank. And the example is if you go read some of the fallout, even from recently, like 2023, Silicon Val. On paper, there will be people that swear up and down to this day. Silicon Valley was entirely sound. And there were other banks that were entirely sound that didn't need to fail. And what happened? You had a rumor. You had a rumor to be pushed by very prominent people. And it causes a banker.

Okay. It causes panic. When it causes panic, what that perception is that their bank is somehow unsound, it takes hold. And that perception can literally bring down that it. The same is true of governments, the same, to varying degrees, right? The same is true of companies. You could have a company that on paper is just humming along, making a ton of money. If there's a bad scandal that hits, if there's negative press that hits, if there's a scandal about, you know, a but-like commercial, right? That company can sink overnight because of that perception.

So to me, like, if you have confidence in Besson, if you have confidence in Warsh, that actually can move markets. And that confidence can have the practical result, which is to answer a question of something akin to yield curve control. You know, it also has the practical result of yield curve control. Actual yield curve control. Actually, we're going to do an infinite bit, right? But if you were trying to convince people to have confidence, you don't want to go to the extreme unless necessary, right? Unless they stop believing you, then.

And we see this with the yen market, right? I think it's amazing. If you follow like the Japanese yen market, right, the yen will sell off against the dollar. And all of a sudden, like on a random Sunday night or, you know, middle of the week, the bank of Japan will come in and scare, put the fear of God into some of the traders. The who's come in like a massive amount of defensive policy to defend the yet, defend a certain threshold. And then what do you see? You see the yen, you know, skyrocket against the dollar because the policymakers are interviewed. That is not, I think, a isolated aberration.

It's not a one-off, right? That's sort of what policymakers do. They try to keep this fragile system together through jawboning, through cojoling, through policies when they need to make the policies. And then they're always debating how much do we need to do? What's the minimal effective dosage, to borrow a medical term? Minimal effective dosage we need to use in terms of central planning to get a desired outcome. So, and I think it's important to say, talk about the scale of this, because it's gone from

$2 to $4 billion, which is like a drop in the ocean when we talk about these kind of numbers. Yeah. And I think the Treasury General account has about a trillion dollars in, is that right? Something like that. And so the people have seen this happen and are starting to talk about like, this is the start of the next big print. And again, I know the Treasury can't print money, but saying this is kind of like the escalation point and eventually the Fed might step in. Do you think that's overstating what's happening right?

Yeah, I don't think it's anywhere near the next big print. I think it is mostly a narrative that is taken hold. I think it was coincident with this other narrative that I think the $40 trillion psychological debt, you know, it hit is it, it permeated. I think it got some media traction. It's a big round number. People love big round numbers. They're repeated. It's very easy. It's 30, you know, 38 trillion or 37 trillion just isn't as impactful as 40 trillion, right? And then I, I I think you do have real inflationary pressures in society with the things we mentioned, oil and trade and tariffs and capax build out. So to me, like, I think it's a little bit overblown. I don't think it's a big print. I think it's sort of a cajole. We're really not comfortable with rates in the high fours, or we're not really, you know, willing to accept that.

But it's not a catastrophe. It's not like we're bearing down on 5.1% tenure, which I think, I think a 5% is a real line in the sand. I mean, it has been consistent. I think if you were above 5%, you might actually see more overt policy action that was taken, but we're not there yet. So we'll see to be determined.

I think the question right now for people is, can they talk down the yields? Can you get a bid on bonds right now just by the Treasury Secretary and Warsh talking? And I also think, coincidentally, if you listen to Jackson Hole, I was playing around with the speech who was looking at the text. And I mean, if you just looked at that speech and it's a fun exercise, like you can ask an

L-L-L-L-L to do it, like just take the text of the speech and without looking at any other indicator, any other market pricing, if a venture is given this speech, what are the chances of a hike in the near future? And some of the ELOMs that I was running through are like, oh, it's like 80, 90%, right? Well, the bond market says the chances of a hike right now are like a coin flow. It's like 50-50. That's telling, right? When you give a maximum hawkishness speech,

because he went through sort of out of his way at Jackson Hole last Friday, as we're recording this on the 31st of August, Chair Warsh went out of his way to talk about how corporate profits are great. Unemployment is low. We've got massive cap-ex. We've got low signs of stress in the credit markets, basically painting all of the steps and saying, and we've got a bad inflation where it's running higher the trend.

he went through all the things you would say if you're trying to state the case for a hike and you have 50% odds in the betting market. To me, that's really interesting because I think what he was trying to do is trying to talk up maximum hawkish so he could just hold. Because if you think about it, you and I can't borrow the Fed Fund's rate. We have to rely on the private sector. So if the curve sells off and the curve actually has a steepening, you know, we have rates go higher. In some ways, that's already doing the practical effect of a hike without actually having

the hike, which is significant, right? Like Trump was pounding the table for two years about how the Fed is behind the curve and should be cutting. You know, I think he does a Bonafed chairman that comes in really shortly into his tenure. He's hiking rates. I think the far better thing is said, let the curve do the work for you, let the curve through talking it up, let it sell off and that yields rise. and then hopefully by the election and post-election, you'll have let these inflationary forces to abate. You get a 10-year back down into the lower fours, which if you come back down in the lower fours,

I think they're perfectly happy with the 10-year sitting there. I don't think they care much about having to do more than that. That war speech kind of asked the question of who really dictates what the rates are. He obviously gets to set them, but is he just listening to the bond market? Is the bond market a place you get the actual signal from? Absolutely. We've talked about this like, you know, on other podcasts, and I think on one of the versions we did together. I think that the Federal Reserve, mostly, you know, you have this language. They're always behind the curve. Well, if you believe that they're behind the curve, by definition, you mean that they're sort of following wherever the private rate market is going. The private rate market is setting these rates. And what I think is interesting about his whole thing about forward guidance is like, he's like, I don't want to give

the market forward guidance. Well, okay, if you're not going to give the market forward guidance, it's not like it's not going to still make prognostications on what you're going to do. Might just be worse guesses. Right. I mean, it's just going to be more guessing, right? Think about this. The Fed has people that leave the Fed and know how there are models work, knows how the Taylor Rule works, knows the personalities. I mean, if you're at the highest level trading fixed income, you are able to forecast. not only what the raw econometric models say, but also the personalities involve,

also the politics of it, also all these factors. It's no different than betting on a sports game, right? If you go at the highest levels and you're betting on NFL football games, right, they will say, well, how does this tackle match up against this running back? How does this quarterback match up in this arena,

which is a dome versus an open field and there's going to be, well, you know, a cold weather on Sunday. They're going to match all those, variables is up and they're going to make a model as to what their probability forecast is. The same is true of the bond market, dealing with huge amounts of money, they're going to make a forecast based on all the personalities, all the data and all the knowledge that they have about how the Fed makes decisions.

So the removal of order guidance, like that's going to somehow eliminate market conjecture as to what is going to happen, what's going to take place. To me, I think it's always going to be there. It's just a question what information you want to give. Okay. So we just moved by the Treasury. I understand the you don't think this sort of is the start of the big print. Is there anything that worries you about this move?

Does it signify anything to you that concerns you? In the bond market? In the economy in general, but yes, the bond market as well. I think the economy looks great. I think the economy is, you know, that's humming along. You've got, you know, second quarter GDI. You've got corporate profits, very strong $400 billion corporate profits. I mean, I think that you've got sticky higher inflation.

When we talked about this last time, you know, my view is for the rest of the decade, you're going to have stickier, higher inflation, closer to three than two. I think you're going to have a yield curve that's constantly under some sort of stress. I will fade the narratives that we're going back to a 2%, you know, 10 year or 3% 10 year anytime soon. I think you're stuck in a range. I think you've established sort of an equilibrium, say between 4 and 5, and I think it's going to chop there for a long time. I think you could chop there for the rest of the decade, the next four years.

I don't expect there to be anywhere near the move that the bond bears are thinking that we're going to go to like 10 percent, you know, 10-year rates. I don't expect that. But I also think that the doves, the people that think we're going to go back down to the pre-COVID era, they're also crazy. I think you've established this equilibrium. I think that the most concerning thing, if you were looking at, you know, economic news, the biggest event last week was not Jackson Hole or,

best in talking, it's really NVIDIA and Nvidia earnings and the AI CAPEX and is there any slowing in sight of that? Because if that is finally cooling off and the CAPX associated with that is truly going to be drying up, that's going to be significant. But to me, I don't really see any of that. I mean, there's even manufacturing PMI about 55. I mean, that's a killer number compared to where we've been in recent years. So,

very encouraging, very positive. I think you can make a case that looking back, say, five years from now, we will say that the period from really 2022 to 2026, that was all this massive digestion of the higher interest rate environment. A lot of assets went nowhere. A lot of, you know, productive capacity was really struggling in the manufacturing sense because we had to deal and react and respond to these rent rates. We had the shock of 2022, but we're seeing finally the green shoots come into the economy where we're adapting and we're able to overcome this. And you have this Industrial Revolution 2.0 with AI, which is going to have huge effects on our economy that we can barely feel.

And to me, the consistent picture through all commodity markets is higher structural inflation. Doesn't mean runaway. It doesn't mean hyperinflation. It means higher structural inflation, again, closer to 3D, low 3s, than, you know, than 2%. And I don't think there's anything they can do about it. I think in Warsh, by the way, I think he has basically resolved himself to that fact. I think he thinks no matter what we do or say, I can't get inflation back down 2% because we're in a different era. And there's too many inflationary forces that we're going to have to deal with from commodities and labor, etc.

For the next, you know, five, 10 years. So for a takeaway, Joe, is it like you're, you're bearish on inflation, bullish on the economy, bullish on assets, most bullish on Bitcoin? 100% of it. Yeah, no, I mean, that's generally it. I got a break here in a little bit. We're running at a time of my end. But yeah, I mean, that's it. I find it very difficult for people to believe that any of these things really breaks hard. For example, like, what would change my mind? We're suddenly going to become fiscally prudent and engage in austerity. Not going to happen. We're suddenly going to have a huge influx of housing that brings shelter costs down, which is the main drive for inflation. I don't know. like that's going to happen. I think people are locked into the 2% houses for a long time in the future. Suddenly we're going to have a massive amount of, you know, raw materials come into, you know, into circulation. No, no, we're going to have refinery and capacity issues for the coming

future. I just think you're in this environment where it's not great, but it's very, there are pockets of greatness, right? There's pockets of really a lot of strike. So with that, I think that's a good summary. All right, Joe, I love it. I always love to talk to you. Thank you, man. And go on buy Joe's book.

I'm very excited to read this. I've got it on the way. But I appreciate you, man. I'll speak you soon. Absolutely. Take care.