What Bitcoin Did - The US Is Long-Term Insolvent | Lyn Alden

Episode Date: September 8, 2026

“We don’t really have the tools to deal with fiscal-driven inflation.” Lyn Alden returns to discuss why the US is entering deeper fiscal dominance, what the Treasury’s recent buybacks signal, and why America’s growing debt and $2 trillion deficits are changing what monetary policy can actually achieve. We discuss the increasingly K-shaped economy, why developed markets are beginning to take on characteristics once associated with emerging markets, and why Lyn believes this macro environment could persist well into the 2030s. Lyn also explains why she believes Bitcoin is increasingly well positioned for the years ahead, why capital could rotate out of the AI trade, and what would need to happen for Bitcoin to enter a stronger bull market. • - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - THANKS TO OUR SPONSORS: LEDN SWAN ANCHORWATCH BITKEY CAPE • - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - FOLLOW: Danny Knowles: https://x.com/_DannyKnowles Lyn Alden: https://x.com/LynAldenContact

Basically, the U.S. is like long-term insolvent, not in like the sensationalist sense, but in the sense that the obligations that they owe are basically untenable when you also have bondholders expecting to get paid back their money on a real basis. We don't really have the tools to deal with fiscal-driven inflation. Most of our tools are literally inherently designed around lending-driven inflation. This is just not the core of what's happening right now. You know, we don't have tools to deal with an energy crisis. We don't have tools to deal with 7% of GDP deficits, but they can't really say that. And so he comes out, says a lot, and then doesn't raise rates. The market's like, why is not raising rates when we have above target inflation?

And then the deeper question is, even if he did, would that actually solve it? Lynn Olden, good to see you. This is very high definition for you. You must have better webcams in Egypt than they do in the United States. Or just a different setup and it makes it look better, better lighting, I guess. It's looking good. How's everything going? How are you doing?

I'm doing well. How are you? I'm good. I'm confused. There's a lot of crazy stuff going on right now. And a lot of stuff that's really been playing into your Nothing stops this train narrative. We've got to start on the Treasury buybacks.

I think that seems like the most obvious place to kick this off. With Scott percent increasing the Treasury buybacks, is that the most clear indication that they know, we know, everyone knows that this is fiscal dominance right now? I mean, I think that's the evidence of it. Yeah, I mean, basically when a country gets deep enough into fiscal dominance, you start to get various types of financial repression. This is one of the softer types of it.

So on the far end of the financial repression curve, you have yield curve control. That's kind of like the nuclear option. And on the softer side, you have kind of, you know, just kind of moderate amounts of QE or, you know, treasury buybacks and things like that. And so the fact that they are doing it, you know, we're not in a recession,

they're not really trying to stimulate anything. They just don't like where yields are. And so we see that kind of intervention. Now, the interesting thing is that it's not acutely needed. So when we saw, you know, the Fed stepped in in 2020, that's because the off-the-run Treasury market outright broke. It just became illiquid, basically was going no bid. And so you had all that forced selling.

So they stepped in. In 2022, the Treasury market got really wobbly. I mean, the UK's Treasury market, you know, the gilt market outright broke. The Bank of England had interviewed. in 2022 for the US, it just got really rough for a period of time. So the move index spiked, liquidity got really bad, but it didn't outright break. And what's interesting here is that, you know, the move index is pretty modest,

so you don't really have unusually high treasury volatility. You don't really have unusual signs of liquidity stress in the treasury market. You just have yields going up fairly orderly to a level that they're not really comfortable with while you're hitting certain kind of milestones, you know, 40 trillion in U.S. public debt, over 5% yields on the long end. It's very uncomfortable for the administration. And so we have this kind of intervention,

which is not out of the ordinary for countries that are in fiscal dominance. And I would say the only kind of interesting thing about it is that it seems very premature. Like it didn't have to be this month, even though that these types of tools increasingly get used when there is an actual issue. So why did they step in now, then?

If it wasn't a liquidity issue and if yields were moving up in an orderly fashion, why did they step in? Well, I think there's multiple reasons. I mean, there's stated reasons and then there's kind of potentially underlying reasons that we can speculate on. I think in general, you know, the market, like, basically the U.S. is like long-term insolvent in the sense that, not in like the sensationalist sense, but in the sense that the obligations that they owe, and are basically untenable when you also have bondholders expecting to get paid back their money on a real basis, right? So basically, debasement is going to happen and or entitlements are going to be restructured and or defense is going to have to, you know, multiple of these variables are going to have to adjust at some point in the years and decades that follow, with most likely the bond market taking the hint, the bond and the cash market, like they have been over the past, you know, five, six plus years.

And the bond market kind of rests on a certain version of cope, basically, that, you know, it's not looking great, but they'll get the things back on the track, right? And that, you know, that basically a handful of rate hikes might be able to help slow down inflation, might be able to help the long end, or, you know, maybe it's bad now, but once we get this straighter to open again, you know, deficit can come down, or maybe, you know, AI can, you know, boost tax recedes or something. You'll get these kind of various, like, there's always a name. from what's on the horizon, you know, stable coins will absorb treasuries, whatever the kind of the direction is at the time. And what they can't really let happen is kind of like large market participants that oversee, you know, trillion dollars of capital say, wait a second, like nothing stops his trade. I got to reduce my exposure. So I think some of it's perception management that they just, they don't like where yields are. And of course, what's interesting is that I mean, the yield curve is not even that steep. So, I mean, you'll see narratives like they're losing control of the long end.

Well, compared to the short end, long end's kind of roughly where it should be. I mean, if look at the yield curve, I mean, it'll invert generally during recessions. When markets are booming, you generally have a very steep yield curve. You can get, you know, 300 basis points, like a 3% differential between long end and short end rates, even longer on like the very end of the spectrum. And yet they have nothing like that. They have something like average yield curves. So again, like, you know, no major volatility issues, no major liquidity issues, and not an unreasonable steep yield curve.

And yet they have intervention just because the, the interest expense is super high. The public perception around it is not great. This is also a Treasury Secretary that kind of made getting the 10-year lower one of his initial goals, explicit goals, which is not going the direction he wanted. And so, you know, they're intervening. I don't think they have to intervene right now, but they've made a choice to. So you mentioned that Bessent coming in and wanting to control the short end. I saw you put a tweet out recently, which was Bacent equals Yellen. Does the market just not allow him to do what he wants to do?

Is that why he's not managed to issue more at the short end? I mean, issue more at the long end. Sorry, sorry. Yeah, wrong way around. Yeah, pretty much. Both Yelan and Bessent, it's always easier when you're out of. office to criticize what's what's happening. He was critical of them for not issuing more in the long end, kind of relying more on T-bills. Then he comes in office and does it even bigger.

Like, it's just like even more explicitly. We're reading double buybacks, even though we're not in any sort of, you know, specific crisis at the moment. And so, yeah, he's acting just basically just like his predecessor was. Obviously, there's other, there's other differences, but the kind of the overall dovishness of duration is one of them. And that's, that's one of the, kind of the softer ends of financial oppression, which is that they don't like where yields are. If they put too much of the long-end supply out there, it drives yields up because the market just only wants

to absorb so much of those. And so they issue more T-bills. And if, you know, in an extreme sense, like if you have Brazil hyperinflating in the 1990s, you know, something like 98% of the debt will be like overnight paper. Because, like, no, who would lend, you know, more than, you know,

longer than they have to. Now, this obviously isn't anywhere near that, but it's kind of like these emerging market-like characteristics, but on the lighter end of a developed market. And that's basically what happens when a developed market enters fiscal dominance, is that they take on characteristics that in the past 40 years or so financial pressure professionals would normally associate with emerging markets. And so, yes, you have a kind of light version of that, and it just becomes full of contradictions because he has to do things that are different than, you know, what he had initially proposed and then kind of go on media and justify why he's doing it or why it's not a big deal or why it's all according to plan. And then, of course, that breaks down trust further.

And it kind of goes from there. And so $4 billion in the grand scheme of things is not that much money. When we're talking about, I think there's a trillion dollars in the Treasury general account. Has this been blown out of proportion or is it just that this signifies something much bigger? Good question. So I would say nine times out of ten, Treasury buybacks get blown out of proportion. I even had a tweet the other day. I was like, here's the common things on financial Twitter that you can usually ignore. And it's like just the things that are like routine operations that get to sensationalize because the gross number has a big headline on it. And one of those was treasury buybacks. Like I think over the past couple of years,

whenever you see someone talking about treasury buybacks, they're often kind of like equating them with QE as though it's the same thing. And they're really not. So routine treasury buybacks are not a giant deal because the routine ones tend to be somewhat more duration neutral. You're basically, you know, if you issue a 10-year treasury, it's a brand new fresh tenure treasury, it's the benchmark security, it's very liquid, that's an on-the-run security. Now, if that 10-year treasury is, say, a year old, it's now a nine-year treasury. That's like kind of an awkward, non-standard instrument now. It's a less liquid market, you know.

It's kind of like every used car is different, you know, compared to a new car. It's just a, it's a rougher market. It's kind of like that with like older treasuries that have kind of just weird numbers of remaining years. And so they're less liquid. And so it's not that unreasonable for them to say, okay, we're going to buy back some eight and a half year treasuries or nine-year treasuries and issue some fresh new 10-year treasuries. Now, part of why they end up having to do that is because there's, again, it still ties the fiscal dominance. we have such a large stock of debt out there, and relative to even compare to new issuance,

but it's just a very large stock already out there. So they have to kind of intervene in their own market to kind of keep it somewhat liquid, but the actual outcome of that is not really that significant. Now, where it does get significant, you know, where it becomes the one out of 10 where Treasury buybacks are actually noteworthy is one or two things.

One is you buy back a ton of long-end debt by issuing extra T-bills. So you shorten the duration. That is actually a somewhat pro-liquidity move because you're taking duration out of the market. You know, it's not the same thing as quantitative easing, but it's something like an operation twist by the Treasury. So it is a relevant factor in markets.

And to your point, it then depends on size. You know, $4 billion is not much, but if you do $4 billion over and over and over again, it can start to add up, even in the macro sense. But it's still not, you know, we're not talking like 2020 COVID-level, like stimulus bazookas or anything. We're just talking about a

around the margins of pro-liquidity move. And then the other notable thing would be an unscheduled announcement of these things. They basically, instead of, you know, coming out every three months or so, as the Treasury generally does and says, okay, this is what the next three months look like for our, you know, operations. When they come out with

unscheduled things, just weeks after their prior scheduled announcement, kind of like how, you know, when the Fed comes out with a change between meetings, that's an event. And so this one was notable because they're upping buybacks at an unscheduled time with either Teeble issuance or potentially draining the TREG general account. So the actual magnitude of the impact, it's not zero, but it's not the biggest thing out there, I would say.

But the signpost that they're doing that is showing, you know, non-traditional methods of operating the treasury, which of course gets everyone's, you know, the hair in the back of their neck stands up because it's suddenly like the something's, you know, there's a disturbance in the matrix that the black cat walks and then it resets and walks by again, if people are kind of like looking at that now. Obviously, it was unscheduled announcement. And in the terms of the duration, are they retiring longer term bonds and issuing T-bills? Is that how they're doing it? So because they did not announce an increase in coupon auction sizes, the presumption, yes, is that basically that they're still issuing the same number of longer duration treasures that

they were going to do, but then they're buying some of those back, which means that the difference has been made up with either changes in the TGA or T bill issuance. And so I know that the sort of shorter, shorter term debt is more cash-like in the economy, but what does that actually mean? Like what can people take away from that? What changes? So in general, yeah, it's more cash-like. It basically means that they're funding more of their deficit

with things that are more cash-like. It also means that they're more subject to short-term interest rates. It generally means that there's just less duration in the banking system, in insurance companies and foreign markets for them to have to absorb and compete with other longer-term savings

because, you know, 10-year bond in some sense competes with an equity because you're thinking, okay, what I want to own for 10 years? Obviously, depends on the fund structure itself. That's a different discussion, but that's essential what the instrument is, whereas a T-bill is more like competing with a bank deposit

with other kind of short-term stuff. So by taking out duration, you're slightly easing the competition for other longer-duration assets. And one of the ironic aspects of it is that generally speaking, the more T-bills they issue, like as a percentage of their debt, the bigger their TGA kind of has to be. Not in the short term, but part of the reason they have such a big TGA, I mean, partially gives them a buffer against government shutdowns,

you know, basically refusals to increase the debt limit they have then a buffer. But also, the bigger their amount of T-bills, the more they have to roll over on a constant basis, which means they have to have more cash at hand to avoid disruptions. And so, you know, one of the, like the Fed talked about potential reducing their balance sheet. Well, one of the options to reduce their balance sheet is if the Treasury somehow could reduce its T-bill issuance, increase the long end of the curve, the Fed might be to operate with, you know, half a trillion TGA instead of a trillion TGA, right? But that, of course, has the uncomfortable thing of just putting more duration into the market.

So again, it's not the end of the world that they're around. around the market, I mean, it's 40 trillion in debt, of which 30-something is publicly traded, because you have intra-government debt as well, like Social Security owns debt to, you know, from the government. But you have 30-some trillion in actual, you know, securities out there that trade. And, you know, we're talking about, you know, billions and billions of intervention. So, again, it's not massive. It's just the fact that it's unscheduled and it's not a crisis and that it's happening anyway. If you hold Bitcoin long enough, there's going to come a time when you need some dollars.

It might be a tax bill, a business expense, life getting in the way, but whatever it is, it might come at a time when you don't want to sell your Bitcoin. That's where Lennon comes in. Lennon lets you borrow against your Bitcoin instead, with tiered rates that go as lower 9.25%, so you don't have to sell your stack if you don't want to. Linden have operated through every market cycle since 2018 and have originated over $11 billion in loans. But the important part for me is the way Lairdon handles these loans. your collateral is held in custody and never lent out to generate interest.

And Ledden's more than just loans. Tether gold is now live alongside your Bitcoin with instant training across 10 pairs, and later this year you'll be able to borrow against gold in the same way that you do with Bitcoin. Ledden really is an awesome company. I've used them multiple times. The applications have taken me less than 15 minutes and you have the dollars in your account within hours. If you want to check out Ledon, go to LEDN.io and use the code WBD for 0.25% off your first loan. That's leaden.com.io and use the code WBD. If you own a Bitcoin ETF, especially if it's GBTC, you need to listen up.

Spot Bitcoin ETFs provide price exposure to Bitcoin, not direct ownership. You can't withdraw it, you can't self-custody it, and they charge you a management fee every year to hold it. Well, Swan recently announced Swan Real Bitcoin Exchange, and it's ready to use right now. RBX is a structured in-kind exchange that converts your Spot Bitcoin ETF shares into real on-chain Bitcoin. It does that without selling on the open market. and it's designed to support a tax-efficient outcome.

So, for example, if you hold GBTC, you're paying 1.5% a year in management fees for Bitcoin price exposure. But by swapping GBTC for real Bitcoin with RBX, you can drop that figure as low as 0% by just holding it in self-custody. This is designed in a way that maintains your cost basis and in a manner that supports the deferral of capital gains tax. So if you own a Bitcoin ETF, especially if it's GBTC, you need to talk to Swan Private about RBX today. head over to swan.com forward slash wbd and booking a call with one of their team that's swan.an.com forward slash wbd and how did the bond market react to this? Did it react in a positive way? Well generally the knee jerk reaction is to act positively maybe it's the algorithms maybe it's the initial human traders

but generally speaking the treasure market has just shrugged off the intervention which generally I think makes sense because again it's just it's not that like treasures are kind of trading it level that sort of makes sense relative to the short end of the curve and relative to where inflation is. And so, yeah, the treasure market just kind of said, okay, we hear you, but we're going to ignore you. So yield just kind of, they bounce right back. They even grind up a little higher.

You have international, like Japan was hitting 3%. It's not just a U.S. problem. It's most countries, with a notable exception of China. And so, like, a lot of these countries, their bond markets are kind of grinding up in tandem. And partially it's because, I mean, the world's kind of changing. perception of what inflation might look like over the next three, five, ten years. They're looking out over, they're changing their assumptions about whether or not any of these

countries are going to get their deficits under control in any sort of investable time horizon. And then, you know, things like the AI trade even, you know, when you have massive mega-cap companies like, you know, the hyperscalers issuing a ton of debt, that actually in some sense competes with the sovereign bond market. You know, these really big credit worthy issuers issuing large liquid amounts of bonds. And they're willing to pay pretty high rates because they think they can get a better ROI on their AI buildout. And so, you know, there's a spread that makes sense somewhere

between, say, what Alphabet's issuing and what the U.S. government's issuing. And if Alphabet's yields are going up, it can drag U.S. government yields up, especially when you take multiple alphabets, when you have multiple large mega-cap companies that collectively are worth many trillions issuing a substantial amount of debt

to do what they're doing. So when you say that the world's waking up to what inflation is going to look like, is that obviously higher than 2%, probably lower than 10% for the rest of the decade, which is something you've been saying, I think, since the early 2020s. You said this was going to be a decade of higher inflation. Yeah, I think that's what we're seeing. I mean, basically, you know, for a long time, like let's say in the U.S. you have 7% average money supply growth, but then you have various deflationary offsets.

I mean, we had the, you know, 40 years of Moore's law, for example, so computers is getting cheaper, cheaper, cheaper. We did automation of manufacturing. We did offshoring. So you connect Western capital with Eastern labor, you know, when China opens up and the Soviet Union collapses. We have, you know, labor and resources and capital come together, kind of stamp out these inefficiencies that existed.

Obviously, there's winners and losers from that trend, but that is a deflationary force. And the issue going forward is that that's, that's, that's, that's, that's, kind of done, which is that you don't really have, like, globalization, we're still a globalized role, but we're not, like, increasingly globalizing. Moore's law is slowing down because of some, like, kind of structural limits. We suddenly got a lot more demand for compute because of AI. So rather than just kind of, like, saving money on Moore's law, it's like, well, okay, now we can actually just bought, we need kind of 10 times more of it and more electricity to run it all. And so And then so when you have that kind of ongoing money supply growth,

you don't really have the deflationary offsets anymore. So if you had, say, 7% money supply growth, but 3% a year in various productivity growth or things like that, then actual price inflation in aggregate might be 4%. But if you only have 1% savings, then you get more like 6% inflation. And obviously, you know, during periods like a war or a pandemic lockdown, you can get negative productivity so it can add to inflation. So there's multiple kind of factors here that are just headwinds for getting inflation

down to a sub 2% target, even the way they measure it, which already has its own flaws, but let's just even just take their measurement at face value. Getting below 2% when you have 6, 7% money supply of growth is a lot harder when the deflationary offsets are vanishing. And then basically, you know, in theory, certain types. types of fiscal deficits could, you know, potentially not be that inflationary if they were, like, extremely efficient. Like if you, at the government said, okay, we're going to run a big deficit, but we're somehow

very efficiently build out highways, power plants, and, you know, manufacturing facility, something like, you know, kind of the, like, Eisenhower in, like, the 50s, for example, they did, like, the interstate highway system. If you're going to spend money, it's one of the most efficient things you can spend money for example. Whereas what we're primarily doing throughout the West and Japan, you know, and elsewhere, is that we have a demographics issue. So we built these entitlement systems based on every generation being bigger than the prior one. That's not happening anymore. And so we have all this, this obligations going to pure consumption, basically just financing the older end of the age

spectrum, rather than building things, per se. And so it's just more inflationary because you have consumption without an increase in production per se. I'm really interested to know what, say, let's say Walsh does at this point. Because he, at the thing at Jackson Hole, he came out and said the 2% inflation target was still very important to him. That's what he's aiming for. And he's kind of flirted with hiking rates again. But I know that, or I think that you think that hiking rates might not even fix inflation. Yeah, that's the issue.

So I'll answer that question by starting with why. that's the case, which is when people think of inflation, they immediately think of, if you've raised rates, you can fix it. Because they think of Paul Volcker, it's like, okay, we'd have to take the bitter medicine and we can do this. The problem is that the causes of inflation in the 70s and early 80s are different than the causes of inflation now. So in the 70s and 80s, you had actually low government debt to GDP. Because they already went through, you know, kind of the debasement cycle from the 40s into the 70s. Your bonds already got inflated away.

So debt to GDP is pretty low. I mean, it bottomed it something like 35% in the U.S. And inflation instead was coming from a couple major factors. One was that baby boomer generation, the biggest generation was entering their home buying gears, which means peak credit formation, so peak fraction reserve bank lending rates. And two, you had an energy shortage.

So you have a tangible resource, you know, geopolitical constraint, and then you have faster than average money supply growth. Then you add on guns and butter, and you have, you know, a problem. But the core of it was the energy and then the bank lending. And so when he raised rates super high, it did a couple simultaneous things. One is by raising rates super high, it strengthened the dollar, which killed emerging markets that were dollar indebted,

which at the time was primarily Latin America. So it kind of put them into a depression. and they reduced their oil consumption. So that was kind of the brutal, like we take demand out of the market by, you know, killing the economies that they got over indebted in our currency. So it's more for us.

That's kind of the strongest wins. So that's the brutal one. But then domestically, so it slows down borrowing and lending because people can't afford as much borrowing as they could with lower rates. So you slow it out. the money supply growth. And then the other factors that it does increase the deficit because you do blow out interest expense, but it's less of a factor when you have 35% debt of GDP. So you slow down

bank lending. That's a bigger effect than blowing out the interest expense. Now, if you fast forward to today, bank lending rates are pretty normal, meaning that the growth of the money supply from bank lending is kind of standard at the current time. And instead, we have larger than average structural deficits that are going to Social Security, Medicare defense, and then from there, it trickles into the economy because the Medicare worker, like the, you know, the workers in the healthcare system, the workers in the defense system, the soldiers, that paycheck, I mean, that eventually kind of floods into the rest of the economy as well, circulates around. Interest expense is very high. That, again, also partially that circulates back in. I mean, some of that

is spendable. And the problem is when you say, okay, okay, we have high inflation, we got to increase interest rates. Well, when you have over 100% debt to GDP, you know, we do put some downward pressure on borrowing. So, for example, because mortgage rates are so high, it's pretty hard to afford a home. There's not a lot of home turnover at the current time. You do put some downward pressure, which in a vacuum can be deflationary. But you blow out the deficit, interest expense by an even bigger absolute number. So every time they increase industry rates, people that are cash rich in their money market accounts, get a raise, and then go out and spend more, which actually defeats your purpose of trying to quell inflation. So when you go above a certain point, it's like Alice going

through the looking glass, everything, all the rules just flip. And it's not necessarily one-time thing, but it's kind of there's like a transition phase where they start, first day, first they just kind of nullify. So it's kind of like, you know, you go from industry rates being disinflationary to higher interest rates being kind of neutral. And if you get far enough, far enough in, they actually can potentially get inflationary. And so I don't think we're there yet, but we're more in that neutral zone where you're not actually tacking the core issue,

which is the 7% of GDP deficits, the $2 trillion deficits. And the interest rates only increases that. They already have restrictive housing in terms of because interest rates are so high. So that's the first issue. And then the second issue is so if you're worse there, like when people say, what do they do?

I mean, that's where I'm sympathetic, because I wouldn't know what to do. Where the part that I'm unsympathetic is then why did you take that job? Because at least I wouldn't take the job if I didn't know what I could do. Now, so you have to either think you know what you're going to do or pretend that you know what you're going to do. So he has to, of course, as the Fed share, he has to, part of it is perception management. You're say, our targets 2%, we're going to get there. We have the tools to get there.

But partially, the market's losing confidence in him because his initial speech was fine, but then in subsequent, every time he talks again, he kind of doesn't say a lot because there's not a lot to say. And he can't come out and say, hey, actually, we don't really have the tools to deal with fiscal-driven inflation.

Most of our tools are literally inherently designed around lending-driven inflation. It's just not the core of what's happening right now. You know, we don't have tools to deal with an energy crisis. We don't have tools to deal with 7% of GDP deficits, but they can't really say that. And so he comes out. says a lot and then doesn't raise rates. The market's like, why is it not raising rates when we

have above target inflation? And then the deeper question is, even if he did, would that actually solve it? And I would say probably, probably not. Yeah, it seems really hard because it's like there's sort of the question, what should he do? What can he actually do? And then what will he do under pressure? And it sounds like, you know, what can he do? There might not really be an answer. Pretty much, yeah. So he can, like, I've been on the record thinking that he'll probably raise zero to one times this year. Still not clear. You know, if he does one, it's probably symbolic.

You know, if it does two, it wouldn't be utterly shocked. If he does zero, I'd be like, yeah, I mean, that's this, you know. And the bigger issue is that, you know, there's a lot of attention pay on how many 25 basis point changes, if any, he'll do. Whereas I think that the band that matters, is like anywhere, like 50 base points is higher, 50 base points lower, barely matters when you're running 7% of GDP deficits and you have crack spreads at $100 a barrel. So, you know, the energy crisis, you know, when you have refineries taken off the market, you know, we have high diesel prices, not necessarily because oil itself is super expensive.

I mean, that's being intervened in various ways. But you do have really big spreads between oil and refined products. And so that fiscal deficits and a handful of other matters are, I think, much bigger macro variables than what the Fed does, 25 basis points at a time when they're in that neutral zone, where rate hikes, they do slow down some things, but then they actually ironically accelerate other things that are roughly of magnitude or bigger than the things they slow down. Yeah. And when you say, like just earlier you said they're not really tackling the core issue, which is the deficit,

it. I mean, they know that that's the issue, I'm sure. Like, is it just that they can't tackle that? There's nothing to be done there. Well, pretty much. I mean, that's more Congress and the president. So, you know, you'd have to have Democrats and Republicans agree on some combination of tax increases or spending cuts, sign it, get through, you know, the House representatives in the Senate and then have the president sign that. I mean, that's a huge thing. And then because the U.S. is so financialized. So many economies, if they somehow got through that part, they could actually potentially reduce their deficit. The problem is that the U.S., even if we somehow do that miracle, you know, they come out and say, we have this big package. We're actually, it's a grand bargain,

like Obama was trying to get with his speaker at the time, and they never, you know, they couldn't agree anything to make happen. Let's say there's a grand bargain today, and they say, okay, we've agreed, you know, put aside our differences, we're going to reduce the deficit. The problem is that because stock market is something like 200% of US GDP, and we have such significant wealth concentration that a very significant percentage of tax sheets come from executives making a lot of money, executives getting a lot of stock compensation and things like that, and then they pay into the Treasury.

If you slow down the deficits, you'd likely significantly impact financial markets, which on a lag starts to impact capital against taxes, executive compensation taxes, and then therefore about a year later negatively affects your tax receipts. So it actually, it's like a Gordian knot to try to untangle this in a way that actually does it,

which is why I think that the chances of that happening is virtually zero, and why, out of all the things I say or do, the most confident one is nothing stops his train. They basically in any sort of investable time horizon, meaning like from here well into the 2030s as a starter, they're just not really going to stop the deficit. And so when you say not stops this train,

with the Treasury buybacks increasing and Scott percent coming out and announcing that a couple of weeks ago, is that him essentially taking the wheel to some degree? Around the margins. Basically, it's that the Treasury does, you know, they can shorten the average duration of debt. And for example, if they find, okay, there's maybe not a lot of demand for the long end of our treasury market, but if he has a view that, hey, stable coins are growing and they like to hold T bills, and we can even mandate that they have to hold T bills, that's a source of demand.

And in general, I mean, you know, there is demand for money markets. There is demand by banks for treasuries. And so they can, you know, there's just more demand for that. You know, we can issue more of that without getting punished severely than they will. But yeah, it's basically monetary policy is always a combination of what the Fed's doing, what the Treasury's doing, and then more broadly what Congress is doing. So you have kind of these three keys together that controls, what does money supply look like, what does the debt market look like, and what are financial conditions like?

And, yeah, you have a somewhat interventionalist treasury at the moment. For a layman like me, what does all this mean? Does this mean things just continue to get harder throughout the next 10 years. Well, harder, I mean, there's a lot of people, a lot of different situations. So harder, harder can depend. In general, if things stay roughly as they are, in the US we have like a K-shaped economy. And that's certainly the case in some many other countries as well, not all of them.

Japan's kind of avoiding that problem. They have their own problems. But in the US, we have in some parts of Europe, we have a K-shaped economy, meaning that the deficits are primarily going, ironically, to wealthier people. So older people on average are wealthier than younger people. They're receiving the deficits. People in defense industry, people in the health care industry, that's where the deficits are going. People that have money are earning interest, which gives them more money.

And so it generally creates a top-heavy environment. And then when the Fed says, oh, because of all those deficits that's causing inflation, we have to raise rates, well, that doesn't impact me who locked in a 30-year mortgage. and has plenty of cash that actually goes up, I get more money when they raise industry. It's like, I'm in that bucket. My liabilities don't go up with my assets. I actually pay me more.

It impacts the new family looking to buy a starter home. And, you know, it impacts, you know, when they also then have $100 diesel crack spreads, which then translates to higher prices on store shelves because shipping is more expensive. They're sitting there saying, why is beef so expensive? Why can't I buy a house?

Why is insurance so expensive? You know, it's like, why do I feel like I run in place? Like my raise, I got a raise this year, but the house I want to buy went up even more in proportion. And then so you get very disillusioned voters that then usually veer to the sides of the horseshoe. You know, the horseshoe. You'll get more socialist or communist interests, and you'll get more kind of fascist, like, kind of the,

the more dangerous end of extreme nationalism. And that's kind of, that's kind of, and it just keeps fueling that until it's, until it's, until it's kind of debased away enough and we get past this demographic bump. And I think it's a fortune of very, very, like, long time away. If you're already self-custody Bitcoin, you know the deal with hardware wallets, complex setups, clumsy interfaces, and a seed phrase that can be lost, stolen, or forgotten. Bitkey fixes that.

BitKee's self-custody built for real life. It gives you an intuitive, easy-to-use wallet with no seed phrase to sweat over, and it has a strong recovery system and built-in inheritance for long-term peace of mind. And BitKee's just had a massive upgrade. The new device now has a screen, so before you approve something, you can check it on the BitKee itself, the transaction, the address, or any account changes. It's a big difference. You're not just trusting what's on your phone, you're seeing it for yourself on the device.

It's simple, secure self-custody without the stress. Go to Bitkey.world today and use the code WBD to get 10% off the new Bitkey. That's Bitkey.org and use the code WBD. Every Bitcoin eventually has to answer one question. If something happened to me, would my family know what to do? Could my wife or parents recover my Bitcoin? And would my children inherit the Bitcoin that I spent years stacking? That's where Anchor Watch builds Bitcoin custody models to protect you and your family against real life.

Accidents, errors, kidnappings and even your own death. Every Anchor Watch custody solution includes their inheritance protocol. Designed so when the unthinkable happens, your Bitcoin reaches the people you intended it for. Whether you're a self-custody expert or what multi-institutional support, your Bitcoin estate plan shouldn't be an afterthought. Bitcoin is only generational wealth if it can actually be passed down through the generations. So make sure they can access in the future what you've built today. Anchorwatch is your custody your way.

Visit anchorwatch.com to get started. That's anchorwatch.com. 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 all use it to track you. The big carriers have been caught selling that data over and over again. Cape is America's Privacy First mobile carrier. Their identifier rotation feature changes your ID every 24 hours, so you look like a different subscriber every single day. And sim swaps are off the table.

Your number can't move without a 24-word phrase that only you hold. There's also no name of a number. sign up, no social security number, and there's no profile to build on you. If you're a Bitcoin or in America, I honestly don't know why you'd use any other network. You can head over to cape.co forward slash WBD and use the code WBD for 33% off your first six months. That's C-A-P-E.com forward slash WBD. By the way, my daughter's just got home, so if you hear a toddler singing a frozen song, that's why. Like, obviously in the K-shaped economy, you'd rather be in the top end of it, but it still affects you in the sense that the societal decay is going to be real.

Like, it, they can't, you can't have just the rich getting richer and the poor getting poorer and expect to live in the same world that you grew up in. Like, that's, that's over. And it's just, like, it's not a world I want to live in, but it's like, it's just a reality of the situation it seems right now. The thing that I find really hardlin is, like, when you talk about all this stuff that's happening with the fiscal dominance, there's war over oil in Iran, there's the AI, play, which has become a national security issue. And who knows how that's going to play out,

especially with, because that's both a national security issue and like an economic issue with the open weight models coming out of China. You have sort of the fracturing of the globalist world. Like compared to pre-2020, this is so complex. And this might be some recency bias because I've only started paying attention to this stuff in the last, you know, six, seven, eight years. But this is the biggest mess that I've seen. And I don't know what people are meant to to prepare themselves for that? Well, I mean, it's really good question. I think certainly in a macro sense,

I've described this as a macro-heavy decade and longer. So I mean, back in the 2010s, my first website was running like a dividend investing blog, right? I mean, my initial interest in investing was equities. And I grew up, you know, reading about value investing, and Warren Buffett saying, like, you know, if you spend two minutes on macro, you spent two minutes too much, right?

Because it's just buy a good company. and you ignore what's happening around you. And that was really good advice when you had 40 years of declining interest rates, 40 years of rising valuations, occasional recession, but if you just, you know, the point was just hold through it, and in the US markets, you got, you did fine. Now, when you kind of get the end of that 40-year period

of declining interest rates and you get to the next kind of sovereign debt bubble, then we're back in a macro-heavy decade. And it feeds on itself. So when you have a sovereign debt crisis, even a slow motion one, you get more interventions by the sovereign. That's when you're more likely to get trade wars. You're more likely to get capital controls. You're more likely to get interventions in markets.

You know, company owning pieces of companies, state capitalism, things like that. Industrial policy. Terms that the term sounds okay. Industrial is good and policy is okay, but it basically means more intervention by the government in the direction of industry, especially physical industry. And so it is a very kind of macro-heavy period. And, you know, I mean, the last period,

the last long-term death cycle the world was in was like the 1940s. And so we're back macro-speaking in that kind of environment. Hopefully nothing as extreme as that. But yeah, we have, you know, we have multiple wars that are active. we've got very eccentric decisions, you know, among leadership. You know, we're not in a world of Kennedys and Eisenhower's at the moment. You know, we're in the world of, yeah, we're in the world of presidents that can't kind of get, either get out a full sentence properly or that are just grifting in public and or both.

You know, it's just like, that's the, you know, that's the, the oscillation we're between, you know, the Biden, Trump versus the, you know, the Eisenhower Kennedy's different world. And so people, I think, rightly, have lost trust in institutions, whether it's government institutions, whether it's media, whether it's big corporations, you know. And so it is, you know, I think it's people, of course, have reason to bias. This is the joke of like, you know, you can go back in history in like old news articles and writings. And like every generation, you have the older generation will play about the younger generation. Like the younger generation is not okay. Right. So, of course, it always seems like that's the case. But if you go back in history, you, it's funny how reoccurring that is. So some things are forever. And everything seems like an emergency, and yet that's just how things go. But from macro perspective,

this decade is just quantifiably very different than anything we've seen in any adult investing time horizon. So we have to go back to basically what your great-grandparents were investing through to find anything that kind of remotely resembles this, with the exception that if you look at emerging markets, you can find more situations. So at least the developed world is going through a situation

we haven't seen in call it 80 years. Whereas they're actually taking on some emerging market characteristics. I mean, where I'm doing this interview from, our official inflation rate is 15%. And it's just, it's a normal Thursday. It's 15%. What was it last year?

Something like 15%. What was it, you know, a few years ago? Something like 15%. I mean, it peaked at 38% officially, I think it was. and you know like you know we were we were at dinner last night and people are taking their kids to child care and going to work and it's it's a mess but it's just that that's that's the world that's that's where that's where this place has adjusted to unfortunately and it's just it's a it's a different world

is that coming to a place near us do you think then i don't think 15% inflation anytime soon but i still hold that you know we're going to have above target inflation for any sort of investable time horizon and that holding kind of paper assets that don't pay your yield that's above that are going to get debased. And so you want to own scarcer things that are not in the bubble. Bitcoin. Bitcoin obviously rallied after the Treasury announcement. Do you think bear market's done? We're back in a bull market. What's your sort of big picture take on Bitcoin right now? Yeah, good question. Before then, I was thinking, okay, I think the bottom is looking closer.

I don't try to time exact bottoms. I mean, I think it's like you can ask, is it euphoric or is it cheap? Is most fast money elsewhere or is fast money here? Those are the big questions I ask. And so for multiple metrics, it was like, no, fast money is elsewhere, sentiments in the gutter, various on-chain indicators are kind of, you know, in their bottom, you know, 10, 15% of what they typically get. to in a bare market. And so I was kind of looking for a bottoming formation. And I mean, this has kind of showed, like, this was like one of the biggest liquidations of shorts. And

in Bitcoin terms, it wasn't that big of a move. And it wasn't that big of a reason. And it just how bearishly things were positioned. And, you know, I don't think we just go straight up from here or anything like that. But I think there's a good case to make that. the bottoms in. If it's not, and we test a little bit lower, I mean, I think it's, I think my, my kind of framing here is that, you know, three years from now, this will look like a great time to have bought, regardless of whether the 58K gang really has the bottom here, or if you managed to go a little lower. But I think Bitcoin's in a good position for the years ahead. Yeah. The interesting thing is the fast money being elsewhere, because it has been in the

AI trade for the last couple of years. Like, we really didn't see a euphoria. last ball market in Bitcoin like we have done previously. And one of the narratives that's going around Bitcoin circles at the moment is, like, when this AI trade eventually slows or rolls over or whatever happens there, that money has to look for a new home and Bitcoin is maybe one of those potential of places. Do you think that's right? Do you think that's where money will flow? Well, I think it's partially right. You know, I would caution against narratives in general, but, you know, I do think they're right now.

So for a long time, Bitcoin was the fastest horse. And then with AI, that became the fastest horse. So any money that just says, I just want to own the fastest horse in nominal terms goes there. Bitcoin is obviously still unique in the sense that you can self-custody it. It's an asset that you can actually own. You can pay with it permissionally. It's not a stock. And so it's got that gold-like aspect to it.

And obviously differences than gold, you know, several pros and some cons compared to gold. And I do think that, you know, once the AI trade gets exhausted, meaning that it's, you know, it's not to say that it's a bubble per se, or that it's just going to roll over and, you know, get cut by two-thirds or something. But if it stops going up at the rate that it does because it's already kind of priced in the next several years, it's already a big percentage of global GDP, then there will be money saying, okay, what's the next trade? And, you know, one way of looking at things is like, so I, I can't, keep using this example.

Like, during 2025, one of the best performing things out there was, like, Latin American bank stocks, like Brazil's biggest bank, Colombia's biggest bank. And, like, the U.S. was, like, putting, like, 50% tariffs on Brazil. Like, who would have had on their bingo card? The year of the trade were that, like, Latin American bank stocks are where you want to be. Yeah. And yet that they did, in general, they did great.

And the reason largely was just things stopped going badly for them. that basically they were already, like the money was already gone, that any money that was already going to leave was already gone. You know, Brazil, let's say Brazil, for example, they had a really high real rates, meaning that their industry that they set was much higher than their inflation, which eventually attracted capital. And then all takes a certain market participants to say,

hey, there's like banks trading for like six times earnings over there. They're just not going down anymore. It's like, I don't have a good reason why they should go up, but they're not going down and they're cheap. And why should? shouldn't I put 2% of my portfolio in it? And then when that happens, then you have another, then you have someone that looks at charts,

and they say, hey, that chart has like a technical, like a bottom looking, you know, squiggly on it. So then they hop in, and then you're up, you know, 50%. And then you have momentum traders and their algorithms come in and say, hey, that thing is going up and our strategy is to buy things

that are going up. So then that money goes in. And I think that's essentially what you get with Bitcoin, and it can be in a number of reasons. It could be that the AI trade gets exhaust, it could be because, you know, the market sudden surprise by a doveist treasury pivot in the case that happened here, that just money's washed out, you know, it's only held by diamond hands. And just the first thing, it just is not going down anymore.

And people say, hey, here's this like on-chain chart. And every time it gets to this thing, it ends up being a good buy. So maybe I'll just, I had 0%, I'll put 2% into it. Then the chart just come in and say, hey, that chart doesn't look awful anymore. So then they come in. you get, you know, if you break 100K and start going up from there, then you have momentum traders coming in. So it just kind of becomes self-feeding in a while. And the biggest North Star I have is just, is Bitcoin still the best in class of what it does? And is what it does

have a big enough total adjustment market compared to its current market cap and usage? And if those two things, I still have yeses, then it's an asset that I want to own when it's showing signs of being underappreciated. And I would say that all that is currently the case. With, you know, there's always caveats for risk, but that's how I view things. So it doesn't sound like you're bearish at all, but maybe not incredibly bullish expecting a bull market right away. Is there something you'd have to see for you to sort of flip very bullish on Bitcoin for

the shorter term? Is it like, is it breaking that 100K level again? What is it that you're looking for? So part of it is this I just don't do a lot of short-term trading unless they get a really, really high signal. It's pretty rare that all have a pretty high conviction short-term call. I mean, breaking well over 80 and staying there would be nice. I mean, right now, 80 is kind of serving as resistance.

You know, the chartists can point out kind of why. It's kind of visible in a chart, why that's the case. So, you know, if you break over 80, you get somewhat of a higher high from kind of this bare market period that it's in. So that would look good. But other than that, I mean, it's just, it's just in. general, I just don't really want to try to make six-month or three-month views. And instead, I want to constantly ask the question, does this look good on a multi-term

basis? Which currently my answer is yes. And so that this is kind of how I view things. Is there anything that could ever change that answer for you from being yes? Yeah. I mean, so I, you know, when I saw treasury markets, I mean, treasury companies trading it, you know, three times MNAT for the big ones. almost infinity for the small ones.

That was concerning. When I saw Al-Coyne treasury companies coming to market, it was concerning. So at least in the intermediate term, it's like, okay, this is, you know, the fast monies here. Longer term, again, it goes back to the two questions. Is Bitcoin the best at what it does?

Meaning that as far as, you know, cryptocurrency or as far as decentralized open source money, is it the best one? And because of network effects and because of decentralization and security and intentional simplicity and all that, my answer continues to be that it is and that it has a very, very high probability of continuing to be because those network effects and things like that feed on each other. So as long as that continues to be the case, as long as there's not some crazy security issue or other, you know, just major kill shot on the network.

So as long as that continues to be the case. And then two, what do I think, the total different market is of decentralized portable money and capital, you know, money that you can bring around the world with you. I mean, we just talked, we had a whole, almost hour-long discussion of how kind of crazy the world is. And it's like, you know, in a world of capital controls and fiscal dominance and financial oppression, there's a handful of tools that people have where they can actually self-custy their own money and be able to hand that money to another person without centralized intermediaries, like stocks or other things like that. Of course, one of them

is precious metals, gold and silver, which that can work great if you don't really want to go across borders and, you know, subject to search and all that. So if you want to stay put and have some gold and silver and it can do great. I'm bullish on, especially on gold, precious metals in general. Now, for people, you know, in America, because our country is so big, it's a continent of itself. We often don't think about things like that, but in many other countries, I mean, smaller countries,

more borders, more changing, more disruption on average. People do want to move around. And, you know, you can write down 12 words, even memorize 12 words, and bring your wealth across a border. Or, you know, you can pay some on the internet for a service and things like that.

And so it's like, what is the value of that? And, of course, it's undebateable. as long as the technical details continue to hold up. And so what is that worth? I mean, it's currently something like 0.2% of liquid assets in the world. And it's like, you know, if that is 2%, that's a 10x from here. You know, if it's 20%, that'd be 100x from here,

which I think it's premature to call it something like that. But I think it's not out of the question to go from 0.2% to 2% of global liquid assets for something like that. So as long as the kind of total adjustment market is still significantly bigger than the current market, I've kind of long-term, structurally bullish. You talked about the Treasury companies there, and they've had a rough year. And maybe let's forget about the smaller ones that, like you were saying, we're trading it essentially, like I think someone got to like 30 times Eminab.

Like, forget about those, just the big ones. What do you think the next few years will look like for them? Because let's take strategy as the biggest. I'm sure they'll do very well in a Bitcoin bull market. their stretch product is back to par or almost par. Like things are looking fine there. Do you think we'll see them trade at 2x, two and a half times MNAV again?

Or is that era over? Well, I hate to say never, but I do think that the total euphoria we saw in the treasure market will probably not be repeated, meaning that you won't see, like, strategies at three times MNAV, I mean, Metaplanet, I think was eight times MNAV, I mean, even earlier back in the really early period,

but when they were pretty sizable, they were at eight times MNAT for a period time, six times. You know, I think that error is done. Now, if you get a crazy enough sovereign situation, you know, you could get, you know, another huge run. But in general, the way that, like, for example, coin markets work is that, you know, you'll have, like, a new thing that cycle,

and that's where all the money goes. And then that thing has a resurgence in the next cycle, but it's not really as big as like its first cycle. And I think that this was like the treasury market cycle. And people now know how that ends. And so I think that just capital is more going to be flighty with those things. That's going to care more about quality metrics. It's going to say, okay, we're fine with Bitcoin treasuries and, you know,

preferred attached to it or convertible debt attached to it. But there's a certain limit of how much we want to pay for that. And so I do think that the big ones that are well capitalized will do well in the next cycle. But as a base case, I wouldn't expect them to be as euphorically priced as they were in this cycle ever again. The thing that I can't quite figure out with them is like strategy being a sort of more volatile version of Bitcoin essentially. It goes up more when Bitcoin's going up, goes down more when it goes down. Makes total sense to me. What I can't figure out is if it can ever be a longer term play where it might go up more,

in the bull market, go down slightly more in the bear market, but overall net out of being a positive. Do you think that's possible, or will it always just be a higher volatility Bitcoin? I mean, I think the end game there would be basically establishing a core business. I mean, ironically, they had that. They still have it with the software, but basically a core business with the Bitcoin. And I think basically what they have is optionality. I mean, they have a giant treasury. They have more assets than liabilities.

Their assets are non-debassable, where their liabilities are debasable. And so I think they're, and even the way that sailors kind of described it is he'll use the reference of like Manhattan like property, which is that over time with a long arc of time, the property just keeps increasing relative to the fee of currency. So why wouldn't you go long and short the other with a caveat that you just have to make sure you don't blow up somewhere in the middle, which of course is a very big caveat. out. And so I think that that can get them pretty far as long as they keep doing the no blow blow up part, which now they've navigated for two cycles. Now, if you do get Bitcoin closer to

his total addressable market, I mean, that's where you start to say, well, why should this trade at a premium? You know, or like if we expect less explosive growth in the future, if it's just bull markets are less explosive. And basically what happens is, you you have trouble kind of justifying the cost of capital at that point. And then it's like, what are you going to do with all that Bitcoin? Could you make acquisitions? Could you become the JP Morgan of the new Bitcoin economy? Whatever the case may be.

That's kind of, I think, what market participants would expect to see happen at that point. But I think that's still premature. And so, yeah, I think it's right now, it's mostly just a gap between, you know, what Bitcoin's going to do, what Fiat's currently going to do. when I went on the prior earnest call, my question is really about countercyclicality, which is that historically, you know, the market wants to issue them a bunch of capital when Bitcoin's high.

It doesn't want to issue them a bunch of capital when Bitcoin's low. And so they actually buy more Bitcoin when it's high and they buy less or even sell some when it's low. And it's like in the future, could they use their tools to ideally do that in reverse? Yeah. And because if you say,

why should this company have a premium. One of the answers, I think the most compelling answer would be, well, they have a bigger tool set than anyone else. You know, they have public market access, even compared to other ones, they're bigger, more liquid. It's not easy to do preferred. I mean, you need a certain scale to do preferreds. They, you know, they're one of the couple companies that have hit that scale in that space. And so they have tools to do various counter-cyclical things, which can accrue shareholder value and increase Bitcoin per share. And so I wouldn't pay three times MNAV, but you can justify above a one times MNAV if you determine that, one, Bitcoin is going to

keep going up relative to dollars and above their cost of capital, and two, that they're going to, you know, pull the levers in such a way that are accretive and that, you know, they have committed to try to be more countercyclical in the future. I mean, they've learned from two cycles now, so we'll see. talk about your treasury company. Do we even call it a treasury company? Tell everyone what orange juice is and how you sort of define it. Yeah, I would say it's a company that will have a Bitcoin treasury rather than a Bitcoin treasury company, meaning that it's not a pure play or nearly a pure play. So yeah, we founded Orange Juice, those of us at Ego Death Capital, along with

Rubin and Adrian as well, additional partners. And it's basically, it's primarily it's tackling the private equity market. It's basically a permanent capital vehicle, which is a jargon way of saying a company rather than a fund, that will seek to buy middle market and lower middle market private businesses that are cash flow positive that generally have nothing to do with Bitcoin. Buy them, hold them forever, and accumulate some percentage of its income in a Bitcoin treasury. So you have a combination of cash flows with a Bitcoin treasury, and we intend to to accumulate a lot of companies. And the kind of the reason for that is that we talked about the 40-year period of declining

industry and a really big unlock that did was financialize, you know, small to medium businesses. Basically, people in New York had really good access to cheap debt, cheaper than the MonPolly HVAC company. So they can go out and buy HVAC companies and buy them on a really cheap debt. and then they can fire half the staff and optimize things. And they'll have a fund with an estimated life of, say, 10 years. And so they'll buy a company and then a few years later, they basically want to flip it.

It depends on the company. They might want to go public with it. They might want to sell it to some other kind of larger strategic buyer. But they're in that more flipping mentality. And it's largely an industry arbitrage game. And now that you have a couple major things have changed. We no longer have structure to cladding its traits. So you can't just kind of keep playing that same game over and over again.

And then two, because of demographics, you have a really big number of businesses owned by baby boomers that are looking for eventual exits. And, you know, some of them would like to pass the business down to their kids, but maybe their kid wants to be a doctor or an engineer. Doesn't want to run, you know, their HVAC business. or, you know, that's kind of the meme. And so there's, there's a handful of options. One of the hardest things you can sell is a business. And so private equities kind of credit, I mean, there is a market for it. They create liquidity in businesses, buying, selling businesses.

But ideally, you know, if a company does not want to have it get chopped up and leveraged, you know, companies that emerge from the private equity process generally have a higher than average bankruptcy rate because they've been hollowed out and leveraged for kind of the short-term optimization. You know, we instead say, okay, well, if you care about legacy, and if you want to even keep participating in the company and, you know, have kind of equity upside, that's what we want to do. We want to come in and buy a business. Help where we can. I mean, we can bring in world-class AI experts to help, you know, with your administrative back end. But we don't want to just carve up and shittify the business itself. And nor are we going to optimize for a three to five

year flip. We intend to hold it indefinitely. And, you know, there have been a handful of companies that have kind of made that model work really well. I mean, the most famous example, which is like, it's almost a meme to compare yourself with it, which to be Berkshire Hathaway, which is that in addition to their public stock portfolio, they go out and buy whole businesses, dozens of them, and then they just hold them indefinitely. And ideally, they keep existing management in until they eventually want to retire, and then they can bring in other people to run it.

And other examples would be, you know, Illinois Tool Works, for example, is they basically make various engineering tools and equipment, and they go out and buy other engineering and equipment companies. They roll that into their own product line, and they just keep repeating that process over and over again. And so Orange used to kind of, go after the fact that there's a lot of business out there.

A lot of private equity funds are already kind of stuffed to the gills. It's hard to find kind of the next buyer. And that kind of Fiat arbitrage game is the engines, it's not dead, but it's kind of disrupted. And so we want to go out there, buy good businesses at low multiples, and then hold some of that in Bitcoin. So that's interesting because like the stereotype with private equity is they'll come in and they'll buy your local dentist. dental practice or whatever, everything gets worse, and then they'll obviously flip it five, seven years later, whatever it is.

Can you flip that on the head because you don't need the liquidity from selling it because you're doing cash flows in Bitcoin? Is that the idea? Yes. Basically that we, so instead does matter a lot because it's not like these private equity guys, I twirl their mustache and say, how can we make dentists worse? They, it's always, it's basically someone's like, okay,

I get paid if I give return to shareholders, and their way you get, I mean, fund investors. And the way that I do that because I have a time limit on my fund is they go out, buy dentists, fire some employees, cross-sell bad products, whatever, raise the prices, and then get out. And I have to pay the fund investors back. It's not a permanent vehicle, so I have to get out somehow.

I need a liquidity event. And so you make short-term decisions that optimize for three to five years. But then that dentist practice is going to have a higher-than-average failure rate after that because you kind of lost customer trust and employee, you know, waking up every day, like in the place they work at, and all this. Now, if your incentive structures to own it longer term, you're generally going to make different decisions, kind of like how the initial owner of that business made decisions to get it where it was. I mean, it's kind of the radical idea that we're, you got to where it was for a reason.

Maybe you don't change all those reasons, you know, you can help around the margins. You can fix it if there's a problem, but it's, it's, don't just come in and optimize for the short term. One of the things is the Treasury. The other thing is that if, if, you know, If you intend to go public, which we do, the liquidity for investors is at a certain point, they can sell their shares. And so unlike a fund structure, a public company has just inbuilt liquidity without having to sell the underlying. And so that's the longer term goal and intention with orange juice.

That's very cool. And so with the conversations you've been having with companies that you're looking to acquire, how do you try and explain that angle that this is going to be a Bitcoin treasury company at the top and they're going to get equity in that. Like, do these people understand, like, the longer-term plan with this? They do. So, I mean, especially at this early phase, it's generally, you know, people from our audience, people that have seen our reach, that, you know, and those people tend to, on average, like

Bitcoin. Some of them might already be Bitcoiners in their, you know, their personal accounts. Some of them were literally sitting on businesses saying, hey, I got private equity offers, but I didn't like the direction they were going to take that in. And I'm seeking an alternative. And so, you know, one of the early questions we got is, like, what industry are we going after? And initially, we're pretty industry agnostic.

I mean, we have certain characteristics, like, certain side characteristics we're looking for, certain traits that we're looking for, like, you know, not super cyclical. For example, cash flow positive. But we're kind of industry agnostic because we care more about that aligned owner or that aligned, you know, founder, seller that is basically a bitcoiner or could be a bitcoiner that appreciates the long-term value of the equity, which can also be more tax-efficient. Because if you sell a business, you'll capital gains taxes on it. If you exchange that business partially for equity, obviously every tax situation is unique,

but you can defer those taxes until you eventually sell that equity, let that keep compounding. So basically there's certain types of business sellers that just find that, it would be a more interesting deal than what they can get elsewhere. It's very cool. It seems like the incentives are more aligned for everyone. So the plans to go public. Do you think that will take some time from here? We expect years.

Yeah, we initially had a year target that we made public, but the lawyers didn't, we don't say that the exact target, but in a handful of years, the goal is to go public. Now, of course, it's all subject to risk and, you know, execution and all that, but that is the stated intention of the partners. And what's your actual role there? So I'm a partner, and I'm also on the investment committee for, as we buy companies.

And the way we structured it is that other than the partner we have running literally day-to-day operations, the rest of us take no salary, and we literally only get, you know, potential upside from this if it works out for investors. So, yeah, my primary role at the moment is making sure that our initial acquisitions are well selected and then well integrated. You know, we just hired a CTO. We haven't quite announced him yet because he has to, you know, leave his current position. But we're really excited because, you know, we can go into these smaller businesses and say, hey, we have leading AI expert, for example, that can help understand the business, help figure out. where to trim costs without doing the whole like, you know, gutting the company thing or just

kind of acting like, you know how to run the company better than them? It's saying, basically, how can we help you? And so it's kind of making sure all those tools to come together, make sure that the values keep kind of operating, as you said, that the incentives keep working for everyone. But the main thing is acquisitions and then making sure the integration goes smoothly. We've talked about so much there. I do have one complete tangent topic that I want to talk to you about quickly. But is there anything else before we move on to that that you want to cover?

that we've not. I think those are the big things. We've talked about the big things. I want to talk to you about your book, because last time you're on the show, it's been a little while. It's been nearly six months. I just started reading the book, and I've obviously finished it since then. I thought it was absolutely brilliant. I really, really enjoyed it. How's it gone? It's going well. So for people that don't know, it's called the Stolgaard incident. It's a sci-fi novel. And it's action, it's thinking. You know, it's a combination of both, I think. And it's going well. I mean, you know, I never expected to be like broken money, you know, where like I literally have a macro and tech audience.

I write a book about, you know, macro and tech. But as far as kind of hitting them with this curveball, it's been well received. The ratings are good. The reviews are good. We have an audiobook by Walker and Carla. And that's actually currently the highest rated version of it, so is the audio because we did something somewhat unusual. So most audiobooks are either read by one person, or if you do have more than one,

usually have someone read a whole chapter, and then the next person will read the whole next chapter, like let's see have a male point of view or a female point of view. And they'll read all that chapter, including all dialogue from all characters in that chapter. For our audiobook, we did full duet narration, meaning that, for example, Walker reads all the male narration, but also reads every male dialogue line,

even in the female narration chapters, and vice versa for Carlos. So the dialogue just comes out feeling a lot more realistic. And of course, they're both, especially Carla, but they're both amazing kind of actors. And they both have the radio voice and the acting abilities. And so, yeah, it's been kind of like in a world of spreadsheets and mostly bad news. And, you know, it's like I never really come on a macro podcast and say,

yeah, things have been great for the next 10 years. kind of the more creative outlet, the more fun outlet is saying, well, if we're going to write about dystopias, let's have some fun with it. See, I did the old-fashioned thing and read the book, but I think I'm going to listen to the audio book as well. Carla and Walker, awesome.

So I should do that. Is there going to be a second one? Because it was kind of left open like the potentially could be. Good question. So I wrote it as a standalone, meaning that as a book, it is just a complete book. There's no kind of intentional hooks left open or anything like that. The way that I approach is that life is messy.

You know, life is not just like one story. It's stories leading other stories. So the way that I did it was I outlined a prequel and a sequel, meaning that I know kind of what happens in the world that led up to this. I know what happens after this. And not for sure that I'd ever write those or write this book as though those have to exist, but that it makes the world feel more lived in and more realistic. So the first or first of the first.

foremost is just a standalone novel that I'm really happy with how it is. But I am over time chipping away at prequel and sequel concepts. The prequel is actually further ahead than the sequel. So you'd actually find out kind of what before potentially. But yeah, I don't like those series where it's like you have a character and it's like, let's save the world and then save the world seven more times, you know? And it's just like how many times is Ethan Hunt going to save the world in Mission impossible, right? It's not kind of the sequel situation I want to write. It's more like,

do I have a story to tell quality over quantity? And so, yeah, I have an idea of up to three novels with the world, but each one kind of stands on its own. Well, I will look forward to it if it comes out. I thought it was brilliant. It's my favorite kind of genre. Like, relatively near future sci-fi is my thing. So I thought it was absolutely awesome. Everyone should go and read that book. Or actually, listen to the audio book. Listen to Walker and Carla do it. Thanks, Lynn, this has been awesome. We should definitely speak again soon, but appreciate you. Thanks for having me.