Mel Mattison argues today’s bubble is the beginning of a long-term bull market driven by AI, Bitcoin, and demographic shifts.
Mel Mattison presents a bold, contrarian outlook on today’s economy, arguing that what many view as a precarious bubble is actually the beginning of a long-term structural bull market that could run through 2036. He believes the U.S. economy is far stronger than the headlines suggest, supported by robust job growth, strong consumer balance sheets, and demographic tailwinds. Rather than popping, the current asset bubble is set to expand, driven by retiring baby boomers reducing labor inflation, AI-fueled productivity gains, and massive fiscal stimulus disguised as interest expense. He views Bitcoin as uniquely positioned to thrive in both inflationary and deflationary environments, unlike fiat currency, and sees AI’s high energy demands as a healthy bottleneck that will slow its rollout and allow society to adjust. According to Mattison, the U.S. is entering an era of permanent stimulus and rising productivity, with politics largely irrelevant to the macro trajectory, whether under populist left or populist right, the fiscal and demographic forces shaping the next decade are already locked in.
“Bitcoin works in an inflationary world and it works in a deflationary world.”
“People are going to look back at 110,000 Bitcoin just like they looked back at 30,000 and say, ‘Man, I should’ve been buying.’”
“Interest expense is fiscal stimulus. There’s no difference between a COVID check and 4.5% on a 3-month bill going into a retiree’s money market account.”
“AI will be massive, but its energy demands are the bottleneck that will save us from an unmanageable shock.”
“This isn’t the 1970s. The U.S. is the largest oil producer in the world, and the demographic structure has flipped.”
“We are in the early stages of a seismic change, think Agricultural Revolution or Industrial Revolution level.”
This episode offers a compellingly optimistic view of the next decade, with Mel Mattison arguing that we’re entering the early stages of a historic bull market driven by demographic shifts, fiscal transformation, and exponential technologies like AI. Rather than collapse, he sees structural strength and enduring growth, positioning Bitcoin as a core asset in this new paradigm, resilient in both inflationary and deflationary cycles. Mattison urges a focus on long-term fundamentals over short-term noise, framing Bitcoin, demographics, and AI as the key forces reshaping the global economic order.
0:00 - Intro
0:55 - Getting up to speed
6:57 - The Rates Boogeyman
14:42 - Bitkey
15:37 - AI revolution
28:13 - Boomer exit and fiscal stimulus
34:07 - Unchained
34:35 - AI bottleneck
42:59 - Wealth gap
52:53 - Bullish vibes
(00:00) the 1971 Nixon shock where he took the US off the gold standard he also put on 10% sweeping across the board tariffs he announced that they were going to do spending cuts something like a Doge this is 55 years ago it's like the exact same things the demographics the oil differences between the 70s and now they're going to allow this situation to work out a lot more like the 80s we had between 1985 and 1996 360% S&P growth the days of 2000 something gold are probably over with Bitcoin you know I've been thinking this month we've got an AI
(00:31) super cycle boom going on it it just all speaks to extreme bullishness but we've got a lot more to go gold and Bitcoin I think actually in geopolitical uncertainties are are only going to do better mel I'm not going to lie I've been pretty disconnected for the last 3 weeks so I'm very excited we're having this conversation cuz I have a feeling it's going to help me catapult back into the present day get caught up with everything that's been going on we had the conference in Vegas a few weeks ago now at this point I had a cross country move between now and then and I had a wedding in Chicago over the weekend and
(01:20) I've been sort of out of the loop with what's going on and I need an update what are what are you seeing out there no well that's that's perfect and uh I'm getting ready to head out for a few days uh myself um on Thursday to the the Blue Ridge Mountains here in North Carolina haven't been there since the hurricane went through uh so interested to see how my old spots are doing um but it's always good to get away so happy to bring you up to speed um you know there's a lot going on and at the same time there's not right that the steady march higher in Bitcoin in equities uh
(01:58) gold has been on you know just a consolidation phase basically since it kind of blew up to 3500 um but given how fast and how strong that move was it actually is just a sign of strength to me that it's still you know holding well above 3,000 i think the days of 200 something gold are probably over i think I think if it ever gets there into five figures again it's not going to be for long with Bitcoin i think this this is a big move um you know people are going to look back at 110,000 Bitcoin just like
(02:35) they look back at 50,000 Bitcoin or 30,000 Bitcoin and say "Man I should have been buying there." Um you know we we've broken over uh the high set you know a few months ago i think that's now clearly you know a floor you know um support and you know I think the next upside target for me has always been that 150 range which I think you know I've been thinking 120 uh this month uh 150 is my call by the end of the year but really that's like a base case based on technical analysis i do that that is is a point where I reassess and and when I
(03:15) reassess it I have a feeling like um I'm going to pretty quickly come out with the target um around uh 190 195 as like a next upside target and you know we'll see when we get there but so just you know I think the best thing you can do actually for these markets is turn off your news because it's like last night I'm flipping between the channels and it's you know kurfles with Elon and Trump it's riots and fires and protests in LA it's um you know uh US behind the eightball with rare earth versus China um you know tariffs are
(03:56) going to start rolling into the inflation numbers uh job market only created 130ome thousand it's weak which I think is BS it's actually was a super strong report um there's been almost no government job creation since Trump took office so you essentially have to look and say well if every month under Biden there was like 40,000 government jobs and now that's not there i mean you take the 139 or whatever it was last week you had 40 you're up to about 180 you know which is really what the private sector is creating and it's doing that at a time where you have this demographic
(04:33) rollover where you have literally when you look at the unemployment reports which they break down you know foreignb born native born you know you have nativeorn you know people in the workforce declining and so if you're creating jobs I mean that that's why you're seeing you know the unemployment rate still 4.
(04:52) 2% so we've got a super strong job market we've got a consumer that is as unlevered as it has been in the last 20 years um you know you can't look at like credit card delinquencies or something like that you have to look at you know net worth you know yes is this skewed towards the wealthier you know 50% of America sure i mean the bottom 50% isn't exactly rolling in the dough but the top 20% certainly is especially when you factor in um over 12 trillion of tappable uh home equity um which I think is just now beginning to be tapped and and will begin getting tapped even
(05:35) more so um once the Fed fund funds rate goes down and I think it will um exactly how much and how quickly we can get into that too but I mean basically I guess where I'm going with all of this is the the doom and gloom you hear about whether you're scrolling through Twitter or turning on the news channels is masking what is an incredibly strong economy we've got an AI like super cycle boom going on we've got the blockchain and um all of that brings all of what that brings to financial services um you know uh counties or states in New Jersey
(06:12) now putting real estate deeds on the blockchain DeFi finally starting to happen in the real world stable coin bill um you know Bitcoin you know being part of the institutional investment mindset people understanding it more um I mean it it just all speaks to extreme bullishness and yet when you look at some of the surveys out there there's still net bearish you know like there's different sentiment gauges we were really really bearish we're still net bearish we're almost back to that median line uh you know overall and so we've got just people that are just doubters haters and you know which I think is
(06:53) great because it just means you know we've got a lot more to go yeah i'm very happy that you confirmed that being disconnected is probably the right move it's It's felt good not being in the day-to-day the actually the only day that I was really plugged in I was on a cross country flight and that was when Elon was having his his uh meltdown on X but that seems to have been brushed under the rug pretty quickly they were like "Okay damage control.
(07:24) " Uh it seems like they want to forget that that happened and pretend like it it never did but I think diving into you were mentioning this before we hit record how do rates play into this cuz looking at the 10-year at 4.47 30-year at 4.94 up over the last month but down from their highs intrammon and I think a lot of the focus of the doomers if you will is the elevated 10 year and 30-year and all the debt that needs to be rolled over how do you see that factoring into this outlook yeah I mean I I call it the rates boogeyman um I I think that you know you got to break it down in
(08:03) different ways i like to actually look at the impact of rates on the three key components of the economy which are the government households and the private um you know commercial industrial center um so what what's really going on in my opinion is you know when you're looking at something like a 10-year what that rate is telling you it it's factoring some sort of expectation around nominal gross domestic product it growth and and that can be a factor of inflation it can be a factor of real growth but it's essentially telling you like you know
(08:40) call 4.5% makes sense as far as nominal GDP um over the coming 10 years and I I I think that's probably low uh and I think the inflation component that is being baked into that is probably low and so I think ultimately uh rates need to go higher um a lot of people have said that's going to be a problem they they're looking back they're looking at 2023 when the 10-year hit 5% and that caused a lot of problems in the financial markets but I believe that in many ways um equities in particular um Bitcoin as well of course they've become immune in
(09:23) a certain sense to a 5% tenure where it's not going to be as much of a headwind as people think that it is and and here's why like back in back in 2023 number one the dollar was much stronger and and that has a a big impact on things number two is the speed in which it got there so we we were at you know 1 and a half 2% tenure not long before we went to five and that that was so quick and caught so many banks off guard it caught investors offguard that it was a little bit of of a shock and even back then you would hear people say well you know it's not just what the rate we get
(10:04) to it's it's how fast we get there but you're not hearing that as much anymore when I listen to the pundits and the commentators a lot of them are still maintaining something magical about this 5% level on a 10-year and and I don't necessarily think we're going there anytime soon my my case that I'm trying to make is that if we do the markets will absorb it because what it's telling you is that markets baking in stronger you know growth expectations going forward and this is going to be very very positive you know for earnings and
(10:35) it's also going to be very positive for Bitcoin because part of that expectation um is going to be an inflationary component of growth and and I think this big beautiful bill um which has a lot of spending in it which which this economy is completely addicted to um is going to fuel that what I don't think it's going to do is cause some sort of a inflationary death spiral bond visual anti- Liz Trust moment blow up i I think what it's going to do is it's going to just allow for interest rates to kind of reflect on the longer end these
(11:16) inflationary and real growth expectations um which are very strong um and then on the shorter end I think what we're seeing at least you know we'll see we have a uh inflation report coming up this week of CPI i I think it's going to be relatively benign and I think as long as oil prices which have ticked up I mean they got as low as $55 a barrel last month now they're you know up about 10 bucks from there um you know like but as long as I mean when you think about oil I mean just think about how cheap that is $65 a barrel when you adjust
(11:48) that for inflation I mean we were at $147 a barrel in 2008 when the GFC happened you know if you inflation adjust that I don't know it's got to be well over $200 a barrel so in inflationadjusted terms we're like 25% of the all-time high price in oil so like as long as you've got this cheap energy and this is you know Bitcoin is tied to energy energy is the key where I do see energy constraints coming in is with AI um I think natural gas is going to play a role in that so natural gas is probably gonna you know go up but you know we've got uh we've just got this
(12:25) big um seismic change like on the agricultural revolution industrial revolution type change that's starting to unfold and it's going to do things that we we can't even imagine yet so like people are worried about inflation from all this government spending and it is inflationary but here's the thing there's going to be a lot of deflationary forces that this a AI brings productivity increases um you know I've heard people talking about you know we might need to go to a 3 or 4 day work week at some point in the future
(13:01) because you know there's just going to be so much stuff that's able to get done with the help or completely by AI and I'm not talking about next year but in the coming you know decades and and once some of those expectations start getting you know recognized then you are going to see those impact you know things like a 30-year bond rate cuz people are going to say "Whoa whoa whoa.
(13:29) " You know maybe this big inflationary bubble from all this fiscal spending isn't actually going to happen maybe we actually need this fiscal spending to prevent a deflationary collapse and once you start getting into that dynamic I mean you can just see the the light bulbs going off in the head of equity investors where they're like "Oh my god the government's got a green light to to run 7 8% deficits from here to the moon because of the deflationary aspects that AI is bringing to the economy and and what's that going to do to the profit margins when Microsoft and Meta are laying off employees and their their earnings are still going up because they've got I
(14:02) mean I mean it's just this to me it's like it makes me giddy and then you you I I still see people saying well you know what we've come back to a level but I just don't see what takes us higher uh you know like like we had a Vshape because you know these tariffs were overblown and he backed away and it's the taco trade but now we're at fair values and we're at 22p and market's expensive 22p is going to look cheap 110 bitcoin is going to look cheap all this stuff's going to look cheap once people start understanding what this economy is going to be like in the 2030s and stop
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(15:30) world use the key TFTC 20 at checkout for 20% off your order that's bit.world code TFTC20 the AI stuff is fascinating i mean we've been implementing it here at TFTC on the back end and so what would have probably required me two years ago to hire at least one to two people to build these back-end processes I've just put it on my ops/growth guy and he's handled it himself and we've created incredible efficiencies that make our jobs significantly significantly easier and then allow us to go do more and then to your point about earnings and margins increasing I'm not sure if you've been
(16:13) following Jordy Vest but I caught one of his shows last week talking about exactly this AI's impact and I think he had a similar idea with rates is like rates can stay elevated because all these companies are just going to be implementing AI and despite the fact that they're cutting workforce their profit margins are going to either stay stable or potentially increase and so they can stomach the higher rates because of the productivity gains they're getting from AI and so on that topic like how how far into the transition of AI implementation into the
(16:50) economy do you think we are yeah and and I do follow some of Jord's stuff and he's he's great if people don't um know who he is or or haven't seen him you know he he does some of his own stuff and he does some stuff with Pomp and stuff and and you know he's he's really more into the AI details and understanding of it than I am it's something I bake into my thinking um and then I add around it all the other stuff which I would say my specialty is really kind of a fiscal understanding um understanding why I think um you know I I'm excited for the monthly treasury
(17:27) statement to come out um I think it comes out later this week i believe it's the eighth business day of the month it comes out where we can see what the interest expense was last month because uh one thing I noticed in April was that year-over-year interest expense was down for the United States and a lot of people are going to scratch their heads and say "How in the heck did the US pay less in interest expense in April 2025 than they did in 2024 when I tell them that uh treasuries went from 34 plus trillion to 36 plus trillion?" So treasuries went up about 1.7 trillion
(18:06) interest expense went down and that was because last year we were just beginning for the market to start to price in rate cuts right because that first 50 basis P points came in September and so you started seeing rates on the one-year or the two-year coming in a little bit and that trend is going to continue and so this is one of the the points I make in a a piece I an article that I have on X called the 10year ain't what it used to be where I argue that the government is going to be able to actually increase its debt outstanding and maintain its
(18:43) interest expense um at around what it is currently which is 3% of GDP which um I I went back to say when was the last time we were paying 3% of GDP in interest expense events and it was a 10-year period from roughly 1985 to 1999 96 it was actually an 11-year period where for the entire 11 years uh interest expense was around 3% of GDP which is exactly what it is right now and I looked at what did the stock market do and it went up over 350% the S&P went from like 170 to 750 um and if the S&P were to have a similar move during this period of time then
(19:29) we're talking about a 20,000 plus S&P which I think is completely doable over that time frame which is a 10-year time frame and so you know why do I why would I think you know high interest expense is a good thing and it's like you got to realize what is interest expense it's fiscal stimulus it's it's a stimulus payment into the government it's There's no difference between sending out COVID checks and sending out uh 4.
(19:59) 5% on a 3-month bill to a money market account that goes into a baby boomer's wallet that they then use to take a ski vacation in Utah it's the exact same transition mechanism it's the same process and so we actually have with a trillion plus interest expense we have now baked into our budget a trillion dollar COVID styi every year you know from in perpetuity until this interest expense goes down which I don't think is going to happen anytime soon and so you know this is another one of my kind of contrarian things i also I started taking a look at you know debt outstanding who owns it and you know the
(20:38) the the federal or the foreigners um currently own about 25% of the outstanding debt so that means of that let's just call it trillion it's going to be more than that but let's of that trillion in interest expense 750 billion of it is getting paid into the US economy the more that foreign central banks dd dollararize meaning the less they want to hold of treasuries what that means is that even though the treasury supply is going to be increasing it's going to be held in the United States it's going to be held on the balance sheets of banks it's going
(21:08) to be bought by um baby boomers it's going to be in in money market funds and stable coins um and what that's going to do is that's going to recycle that interest expense that I call interest stimulus it's going to recycle this interest stimulus into the economy on a continual basis and so we've now gotten ourselves into a situation where we essentially have a 3% of GDP stimulus check um on autopilot we've got um you know government spending as far as like employees and things you know relatively flat but when you look at you know the entitlements like that's you know
(21:50) there's no stopping that train as Lyn Alden likes to say like that like this is this is just going to continue so what we have to do is we have to figure out how do we do that without interest expense going to 6 or 7% or getting out of control and I think ultimately the way you do that is you you start packing more bonds onto the the balance sheet of the Federal Reserve i think they have capacity that's you know money printing more or less and that's you know music to the ears of of Bitcoin and gold investors like that's you know that's
(22:22) what you know people are just going to see that writing on the wall eventually and it's going to go there and I actually think it can go there without stoking you know 9% inflation I think we we got that high inflation partly because of the money printing during COVID but also there was a lot of supply chain disruptions there was a lot of um weird things going in the on in the economy with people moving because of remote work there was kind of pent up demand for travel and experiences once the lockups were lifted and so we had a
(22:57) lot of like stuff h and it was also a ton of stimulus very quickly um that's not what I'm talking about i'm talking about like a drip drip drip of significant stimulus not like 5 trillion in one year but so I think this is all going to keep continuing stoking this and that the fear is going to be the bond vigil anties and this is going to collapse and so uh this is the last thing I'll say on these rates is you know what what they're going to do is they're just going to continue this this policy of issuing a lot of short-end debt um the once either POW realizes
(23:32) that inflation because of these low oil prices that I've mentioned is relatively contained i don't know what the inflation report this week's going to read but I can tell you I'm pretty confident of this i if if it if it is hot which it probably isn't it's going to be certain line items in the consumer price index and that's what it is it's not an inflation report i shouldn't call it that because it doesn't me measure monetary inflation it it measures changes in the price level on a specific basket of goods well sure if 90% of toys
(24:02) are made in China and China's got a 35% tariff or whatever it is you know the toy line item is going to go up okay that's not inflation that that's a that's a one-time change in the price level so it's either going to be cooler than expected because the underlying monetary inflation isn't really there or if it's hotter than expected it's going to be because of some of these one-off type deals um with tariffs and the overall trajectory Japan just had their producer price index come out hit negative 3.5% like deflation so like we
(24:36) we we people really don't understand the amount of deflationary impulses that are in this economy and why we're going to be able to run these massive deficits and debts for a long time this is not the 1970s where we were beholden to the oil producers in the Middle East the US is the largest producer of oil in the world we we're a net exporter um you know prices at this level are not going to produce a lot of shale production but if they go up they will start to produce shale production and so there's a little bit of a cap on
(25:11) it um and you know the other really really big difference between now and the 1970s is the makeup of the labor market if if you look at the period from like let's say 1970 to 1980 what was happening baby boomers were turning 15 to 25 years old let's say that the people born between 1945 5 in 1955 in 1970 those people were between 15 and 25 entering the labor market so throughout the entire decade of the 70s you have tens upon millions of baby boomers entering the labor market you now have the reverse
(25:49) excuse me you've got tens of millions of baby boomers leaving the labor market and so what that's going to do is it it's going to allow for all of these crazy things that economists aren't used to seeing happen happen it's going to allow for massive deficits without massive inflation it's going to allow for the labor market to grow at 100,000 you know jobs a month and the unemployment rate stays low it's so these are things that people just aren't used to modeling they're not used to seeing it and they haven't really understood it um and so I think AI is a
(26:23) component of it like you said you know I think Jordy does great work on that and you mentioned it helping your business and so I think that that was your original question but that that's going to just come into these markets and I think in a way what might constrain it and this constraint might be a good thing is the energy consumption that's necessary for compute because it's going to take time to get the small modular nuclear reactors going uh figure out you know natural gas new plants Um but we are going to see that over time and so
(26:57) the these are like the big broad themes I see happening now when you pull back and you say "Well what's going to happen to Bitcoin or equities in the next you know six months between now and the end of the year?" I think the March is higher as I've said but I do think there's there can easily be these these news stories that we're probably all better off ignoring whether it's ICE uh raids or maybe Trump needs to you know tamp down the screw screws in a tariff negotiation and he announces something that if it actually gets enacted would be disastrous but at the end of the day
(27:32) he doesn't actually enact it um you know all of these things I think could easily cause at least one possibly two 5 to 10% corrections in the next 6 months um but I think just like this big correction we had in the first half of the year was like a V i think if we get a five or 10 percent scare whether it's because of the rates uh you know like let's say rates really spike that might cause a 5 or 10% selloff then the market starts to get used to it understand these dynamics that I'm talking about and then even if
(28:05) rates don't retreat you know the the equity market starts to march higher Bitcoin goes higher yeah this is very very contrarian right now because the um I mean not Bitcoin and equities marching higher but this whole idea that it's okay and I think the demographic part of the conversation is very important to understand and that this is not the 1970s anymore and the the economy is much different in in terms of Trump his administration their policies obviously it's been a bit chaotic But I I think everything you said starting at the end of the last year and our multiple conversations throughout the
(28:48) beginning of this year seems seems to be coming true you have the uh salsa and sour cream and I mean I even said what I said look you know terrorists are going to and I I even mentioned like ICE causing maybe some problems i but you'll notice like the the markets are shrugging off these these uh protests riots in LA um I I had suspected that there'd be an ICE raid gone gone bad um uh where maybe like an Abua got killed accidentally um you know they go in to arrest some bad ombres and somebody pulls out a gun and you know
(29:25) ICE returns fire and an innocent gets killed and and you know god forbid that happens i'm still worried about something like that happening that then sets off you know another summer like we had in 2020 so that like that's a total you know potential flare up issue that but but to me that's like a a 5 to 10% V correction move type of an event because at the end of the day it's like demographics are destiny and what's happening demographically in the United States can I don't think it can be underestimated i think I think when you really understand what's happening
(30:00) demographically you almost come to the conclusion that the right course of action is to lower Fed funds and run high fiscal deficits like everybody's out there saying this you know Elon US is going to go bankrupt i mean it's it's i mean the US cannot go bankrupt i mean like we have a printing press you know you know he'll say things like you know if I ran um you know you got to run the government like a household or like a company okay let me let I would pose this question to Elon what if Tesla had a US dollar printing machine at its you know gigafactory
(30:42) somewhere and it could produce as many dollars as it wanted what would he do i can tell you what he would do he would start expanding which is what the government does into all areas of the economy and that needs to be guarded against because you know I'm you know free markets do a better job than governments you know waste money that that's why I think tax cuts are are a good thing um but what we're doing with interest expense um is we're providing stimulus into the private sector for the private sector to then allocate that trillion dollars in interest expense in the most efficient way that the private
(31:18) sector sees fit so we're essentially juicing the private sector's balance sheet then you know the one thing we are doing is we're paying you know the health care costs and and and the one part of the the market all year that I've been bearish on has been like healthcare and pharma because I do think that when you look at where the government spending has gone haywire and where we're not as a society getting a great return is in in the health care spending and that's not that I mean it's not important to keep people healthy it's that you know if if we've got the government sending out $20,000 checks to
(31:56) Fizer for some drug that you know costs them $50 to produce like you know and they say "Well we need to charge this because we're subsidizing you know the drug production around the world we're subsidizing drug research for the world.
(32:13) " You know like these types of things are probably unsustainable in the long run and so I I'm not someone who's been trying to buy a dip on United Health that's for sure you know I don't know what's going to happen with that stock but I wouldn't touch that with a 10-ft pole because I don't like that sector um there's too many great things to invest in uh sure it could bounce back but um you I just think there's too many opportunities out there to to waste time on on trying to pick a bottom in in United Health or something like that so I do think there's things in the economy
(32:38) that are going to change and there's going to be winners and there's going to be losers and there's going to be corrections and there's going to be volatility um but I think the the the path higher um is the four key assets that I think about which are you know Bitcoin gold stocks and real estate are all going to do well and the dollar and bonds you know are not and and it's it's it's not any more complicated than that and it it's just a matter of the demographics the trajectory of economy AI government balance sheet fiscal
(33:10) stimulus um you know and all of this is going to start to produce things that just don't like like these MAGA accounts like kids getting $1,000 you know like like the stock market now plays a completely different role in the economy than it did in the 1930s it it can no longer be allowed to like have a a depression type behavior where it goes down 80% and stays down for 20 years like if that happened you're you think these riots in LA are bad i mean it would be out of control because of how much the stock market supports not just in you know people taking out wealth and
(33:47) then spending it into the economy but also tax receipts and so we've got this you know really wo woven together economy in such a way that you know it's going to react and behave differently than than it did in say the early parts of the uh 20th century is Bitcoin's next parabolic move already starting two of the strongest historical indicators global M2 liquidity and the copper to gold ratio are flashing green again unchained and TechDev break it all down in a new report bitcoin's next parabolic move could liquidity lead the way if you
(34:24) care about the macro forces shaping Bitcoin's trajectory now's the time to pay attention visit unchained.com/tc to read the full report that's unchained.com/tc you said one thing earlier that interested for you to expand on which is the inability of the energy infrastructure to expand at the pace that AI is demanding right now could actually be a good thing do you think that's for social reasons people have time to adjust to the changes that are happening yeah exactly because um you know Luke Romans talked about this where you know like a productivity miracle could help things out but it has to happen at just
(35:03) the right pace um and I think that that makes sense it's like if if all of a sudden you got artificial general intelligence and it was able to essentially eliminate you know in the matter of a 24-month period 50% of the white collar jobs right i mean like but but you know what would happen i mean that would be deflationary and and and then you get into these Orwellian situations right where you start saying "Well we don't need you to work but because of these deflationary aspects we can print money and now we're
(35:37) going to start universal basic income." You know we start getting into this you know whole uh WEF you're going to own nothing be happy type thing and I think that's not what we want what we want is for AI to come in at a pace that allows for maybe a reduction in the work week maybe a reduction in the days of work maybe people work 4 days 35 hour weeks um you know who knows what what happens um but where you know the benefits as they come in there's also going to be this need for all this other stuff that
(36:15) you know physically has to happen that I think we're still a long ways away from robots being able to build bridges or you know like like it's just not going to make sense to have a robot you know um you know I don't know do doing a basic thing that you could pay somebody you know 25 hours uh $25 an hour to do um and so there's going to be there's going to be at least in the beginning right because these things are going to be so expensive it needs to be very high value work once once it gets nailed out and eventually like you're you're rolling humanoid robots off the line for you know $5,000 instead of
(37:00) 500,000 or whatever these prototypes are costing um sure then you can start having the robots mow the grass or whatever but so we do have in this country a huge need for infrastructure you know whether it's you know potholes in the street bridges collapsing uh airports that need uh refurbishing um we need homes built uh you know we we we we have all these things that you know still need people you know moving the physical objects around to do it and I think eventually the the humanoid robots get there but that's like a 20 30 year down the road type
(37:43) thing where I think a lot of the the things of like I forget who it was some famous investor said something about like AI can basically do an S1 you know IPO perspectus in like a matter of minutes or hours where it used to take a team of people weeks to put together and you know so those things are going to happen i mean I've used it too the same way where you know I'll I'll I'll use AI i'll I'll search for a legal document uh find one tell the AI you know my uniqueness compared to this legal document you know recraft it for me what
(38:19) have you um and then send that off for a final review to an attorney instead of going to an attorney telling the needs and having them spend 20 hours they spend two hours in the billing hours and and you know law firms you know the these are examples of things that are going to be hit right i mean um the AI is going to get start getting into these professional services areas in the ways that um outsourcing and mechan uh or machinery took away you know manual labor in in past decades so this has to happen at the right speed um and the right pace and I think that the amount of compute power that's needed for like
(38:59) you know some of these applications is huge um and the grid that we have currently just cannot handle it and so it's got to it'll it'll act as a constraint it'll act as a bottleneck from this getting rolled out too fast yeah it seems like it could be a classic case of people tend to overestimate what can happen in the short term and underestimate what can happen in the long term yeah a lot of people were like "AGI's right around the corner.
(39:26) " And then you had Apple drop that paper earlier this week saying "Not really it doesn't seem like it." Yeah or quantum you know i mean I I mean my book quas quantum oz is what it's saying like it's about know kind of quantum computers merging with um artificial predictive intelligence as opposed to generative intelligence um and essentially just sapping volatility out of the stock market where where the AI models are so good that like like the VIX goes to four and and when you get this like super low V you know um people start saying okay now you should be at a
(40:01) 35 or 40 multiple because you basically have bond or less than bond volatility in in equities um you know like like these things are are completely I think possible but we're we're still quite quite a ways away from them um where where I do think things are starting to seep in and that's why I'm hopeful that this AI is going to come in at a at a pace that can improve margins improve productivity but not so fast that it creates some sort of a deflationary collapse and we're we're already seeing it with um certain companies that you know probably would have hired more people but they're not firing people but
(40:41) they're just not hiring people and you know that type of situation if it was the 1970s would be unsustainable because we have tens of millions of people entering the labor market but in this situation where we have millions of people leaving the labor market that's a completely sustainable situation kind of a steady steadystate number of jobs we don't even need to increase jobs and we can keep the unemployment rate flat um if if there were you know no immigrations or or or or no visas um you know if you look at you know the
(41:13) existing nativeorn and I use native born because that's the way they break out the statistics in the Bureau of Labor Statistics uh employment reports foreignb born versus labor they don't do illegals for citizens um you know the the the the native born labor market it's just it's just not growing and and so the the whole you know part of this immigration clampdown it's very interesting because during Biden's time we had this massive labor shortage and we had the immigration hit you know kind of when the economy needed it a little bit because of the inflationary impulses in the economy
(41:56) And now when we have this labor market kind of being more on even keel um we don't have the demand for more labor as much as we did a few years ago and so in a weird way it makes sense that now is a good time to clamp down on the border just from a completely a-olitical economic mindset it's like okay maybe an open border helped the economy a little bit but I mean you got to be careful there because the amount of services that that get paid out and so on um are are are pretty expensive so in the long run that's still questionable but my point is basically that you know we're
(42:35) at a point where a lot of people had predicted well if the border gets shut down it's going to be massively inflationary because who's who's going to have the jobs and the and the truth of the matter is is like we're not growing jobs as quickly as we were and so therefore with the border clamped down we're able to have 120,000 new jobs and the unemployment rate stay at 4.
(43:00) 2% yeah what do you think all this means for the wealth gap which is obviously um still a big topic you know conversation here in the United States since 2008 it's been an ongoing discussion and obviously we know that money printing debt expansion typically benefits asset holders at the um expense of those who don't hold the assets they get they get beaten up by inflation like with these AI forces potential deflationary aspects and pockets of the economy do you see this problem persisting increasing and something socially throw a wrench in all this yeah I I mean it it does concern me
(43:42) and I try to think about it and I I always try to be a little bit of an optimist half full guy um and I am on aggregate economic data and you know financial asset prices but just from a human perspective it's like well what would be a great way for this to work out to help the struggling Americans that are not part of that you know top 40 or 30% um that are at least doing okay right i mean I think once you once obviously the top five or 10% are doing very well top 20% pretty well maybe top 30 40 now you're like okay you've you've got a
(44:25) good life but it's still financial times get tight a little bit and once you get into the bottom 50 60% you know it's kind of tough and I think it's toughest on probably from like that 60th percentile to the 20th percentile because when you get below the 20th percentile what you're really talking about there is people below the poverty line that are I think a lot of the times you know they have you know either mental health or or there's addiction problems or there's there's there's things in their family history that that had led them down a road and they're they're kind of unfortunately like you know almost wards
(45:02) of the state where they're they're they're living off of the state and so you know I think the people that are in the toughest position are those people that are working they're trying to do the right thing they're trying to live the American dream they're trying to raise a family they've got a job um and yet they're falling behind and how do you how do you help those people and you know it's tough i for me what I think needs to happen and it it almost pains me to say it because I do kind of like you know free market you know stuff but like
(45:37) a lot of what we need is the type of job that you don't need a master's degree for we need a lot more people in elder care you know and a lot of the times what happens in this economy is an immigrant will work for $15 an hour cash or $12 an hour cash and they'll help take care of grandpa you know and it's like how do we get those jobs to be $30 an hour with benefits without bankrupting people right um and bankrupting the system how do we um build the bridges that I talked about and redo the roads and uh fix up the
(46:18) airports and build the power plants how do you know we need to do all of that and so we've got the jobs what we need to do is is actually make sure that those jobs are are are a livable wage and if you do that you'll help those people out the problem is is that will be inflationary right because now all of these things that are happening in the economy like senior care is expensive enough you know if if you take off out cheap foreign labor it's only going to go up construction is expensive enough if you take out cheap foreign labor it's only going to go up but I think that's a price that society needs to pay in order
(46:58) to um you know have a cohesive middle class and help to tamp down on some of this social unrest because I think a lot of the people that are kind of Marxist socialist you know some of them are just wacko ideologues but but a lot of them they're just drawn to it because they're frustrated with the e economic system in front of a lot of the people same people that were getting drawn to Bernie Sanders could have just has easily been drawn to Donald Trump because they're in the same kind of uh mess and I I don't
(47:30) know if the deflationary a AI forces will be strong enough to be able to allow for some of these jobs uh particularly in elder care and construction uh to have those prices go up so that you know people can actually make a living again and I think you know where the free market can come in come into this is in deregulation um you know the the actual cost to build a house like you look at some of the lumber tariffs on Canada you look at the the red tape it takes to build housing in cities um when you look at all of the federal land
(48:11) especially out west that is just beautiful open federal land millions upon millions of acres like we're not talking about ruining Yose here we're just talking about you know take some BLM land and and open it up somewhere or some national forest land that's adjacent to a city um and and once you start opening up some of this land and you start uh you know if you uh remove some of these uh I think tariffs on goods that are important to us like like lumber from Canada which is a tariff that doesn't really necessarily make sense to me um I think you I think you can address the housing costs without
(48:48) collapsing the housing market because that would be a disaster but where you start building supply and some of it again demographics is destiny some of this is going to take care of itself as the baby boomers um die off and so you know it's there's just a lot of fortunate accidents in the demographics that could help with a lot of these problems and you know hope isn't a great strategy so I don't want to just be like oh I just hope that the baby boomers die soon enough so that you know the housing prices become affordable again um you know that that that's not the way to to think about it so I do think steps need
(49:24) to be taken to address these situations but we've got some nice tailwinds we've got deflationary tailwinds we've got um demographic tailwinds that I think could help the the less fortunate um groups in our society who are trying to do the right things but they're just not able to make it and there might be a role for the government to play in some of that you know um paying for trade schools paying for people to learn how to you know you don't need a 4-year RN degree my mother never graduated from bachelor's degree but she worked in
(49:57) healthcare her whole life she was an RT a a radiological technician you know she she basically when X-rays were the new thing um you know she learned how to take X-rays um in the 1940s uh or excuse me that was in the 1950s uh she was born in 43 so she graduated high school right around you know 1960 and um you know learned how to take X-rays and and did that for 35 years so these are not jobs where you need master's degrees and you know AI and different things are going to allow people to do things that you
(50:32) don't need to be a nurse to do anymore right you you know you don't you don't need to be a a PA is I believe what they call physicians assistant like somebody's going to be able to go in there with a iPad and some sensors and diagnose and treat somebody in the same way that a highly educated uh PA or MD is now currently doing and these are these are things that you know again I like I try to think of the best case scenario how could things go right everybody a lot of times is so focused on how can things go wrong and I'm thinking like you know what things can actually go right sometimes and and
(51:10) maybe AI in a weird way can help level that playing field where you don't need all that training and $300,000 in student loan to be able to do something valuable from a medical perspective you know and and that could help drive down health care costs and that could help drive down you know government expenditures and and so like these positive things are out there i mean hey you know good things happen i mean you know you you look at the railroads you look at car you you look at how society has evolved over the centuries and it's
(51:42) had its wars and its calamities and its famines but yet like just when we kind of tend to need something we tend to get something and it does sort of work out that way and um you know like when the population really started exploding look at how we figured out how to grow all this food i mean when I was a kid you know I think the when I was born the global population was 2 billion something you know now it's 7 billion i mean people back then were like well we're never going to be able to feed 7 billion people you know like it's just
(52:13) not going to be possible how are we ever going to do it i mean I don't even think there's a concern anymore about uh food capacity like I think we figured out how to how to feed the Earth's population the only reason people starve is because warlords confiscate aid or you know for political reasons food sources get cut off to to countries um it's not for lack of food production in fact we produce every year more than enough food to feed every human being on the planet it's just inefficiencies and and wars and things that that that stop the food from getting to hungry people is why we still
(52:47) have starving people it's not because we're not growing enough food yeah it is funny i mean I'm guilty of it becoming consumed by the doomerism and I think actually in recent years become incredibly more optimistic overall but to your point I mean the long arch of human history is up and to the right in terms of progress like why the last ones to to continue that progress and I think if we're objectively looking at how society has progressed over the course of our lives obviously there's been terrible wars and financial crises but I'm sitting in a
(53:25) room hundreds if not thousands of miles away from you looking at a camera and we're having a conversation that was not possible the year I was born no it's incredible and I mean I I've seen it all i I was born in 75 i was the last class in my high school to tape typewriting you know with IBM select and you know hit the center button and count out you know okay my title has 12 characters so I hit the backspace six times and that's where I start typing the like like these skills that I was learning you know like you know really kind of ridiculous skill sets um looking
(54:03) back on it but like that that's how much has changed you know when I was born five person family three-bedroom home one bathroom um you know people used to have smaller houses you know houses were more affordable back then but you know people did not have all the you know central air conditioning was you know for the rich people we didn't have that um you know you had the the window unit and the air conditioning in the summer me and my younger brother we'd come home from school and go to the bathroom at the same time and have sword fights we'd call it um cuz there's one toilet in the
(54:36) house i mean you know like yeah you live differently right you live differently back then but it it was more affordable but the the point I'm making and and you know we had a TV and we had a radio and we had a record player that had an eight track and you know that was pretty much the extent of and a telephone with a rotary dial and that was kind of the extent you know then certain things started to creep up you know um a remote control was invented um you know different things that you know we've just come so far and that's just in my lifetime and I'm only 49 years old i
(55:13) mean and my father is born 39 i mean what he's seen my grandmother who's passed away was born in 1911 you know when women couldn't even vote and I mean just the the the change that has happened just in the last two or three generations um you know 1911 that was only a few years after the Wright brothers invented the airplane like I I think the human mind we're we're often limited where we look at some of these trends of what's going to happen and then we're trying to solve for it with the solution sets that we already have and it's like these these problems are
(55:47) going to be solved by solution sets that we haven't even imagined yet and and mother is the necessity of invention and these things do eventually get worked out and a lot of these problems that we're dealing with they're they're very similar problems i I I had listened uh a little while ago to like an interview with Eleanor Roosevelt and it was from the 1950s and they were talking about like the challenges that was facing America and the threat from the Soviet Union and they talked about it in the exact same way that we're talking about China right now they talked about the lack of American leadership they were
(56:23) bemmoning that current American leaders weren't the leaders that FDR was or Eisenhower was um and who was going to step up to the the plate um I just read an amazing book which I would recommend to all your readers called uh Three Days at Camp David the secret uh meeting that changed the global economy that focuses in on the 1971 Nixon shock where he took the US off the gold standard and what were all the concerns and how did Nixon attempt to address it and a lot of people don't realize that when he did that August 15th 1971
(57:02) um speech which is available ailable on YouTube it's an 18minute speech uh you can watch um uh Nixon delivered it Sunday night at 9:00 Eastern time cut off bonanza which a lot of people weren't happy about but um basically I mean he didn't just close the gold window he also uh put on 10% sweeping across the board tariffs he announced that they were going to do spending cuts something like a Doge he did a a tax tax cuts he did uh it wasn't immediate government expensing which they're currently talking about doing but it was
(57:37) uh government uh tax credit so if you'd invest a million dollars you got a 10% tax credit um he also talked about when they were talking about reducing government spending the main thing he wanted to cut was foreign aid and he was arguing that the US was shouldering too much of the burden burden of NATO uh and and that Germany needed to start picking up its defense spending like this is this is before I was 55 years ago it's like the exact same things the 70s didn't work out that great but for what we talked about in the beginning of the
(58:09) show I think we've got a completely different demographic uh destiny and I think it's the demographics as well as you know the oil differences between the 70s and now that I think are going to allow this situation to work out differently than the '7s and kind of skip over some of those bad parts and look a lot more like the 80s where things you know really started kind of rebounding and growing because of deregulation that got started under Carter actually but then really took place under um Reagan and and just opened up the floodgates and and we had
(58:47) like I said between 1985 and 1996 you know 360% S&P growth um you know did we have inflation yeah we inflation average somewhere between 2 and a half and 4 and a.5% during that time and I think that's probably what we're looking at during this time so I think you know even with all this fiscal spending even with the AI deflationary impacts um at the end of the day that there's probably no getting around this increase in the money supply that's going to happen that there's going to be a little bit of inflation
(59:20) but I don't think it's going to be 8 9 10% i think it's going to be a little higher than central bankers would like but it's going to be um sustainable it's going to be and and I think real wages are going to be able to to keep up with it um because of the uh demographic labor shortage and this time around we have Bitcoin too so if you are looking out you're expecting that inflation just make sure you're shoveling some of your savings into the scarcest asset we've ever seen which yeah I think should play a pivotal part in this transition yeah i I was thinking through like a
(59:56) Bitcoin world in my mind this week like just trying to imagine like let's just imagine the world totally run everything is Bitcoin right and thinking about what would that mean right so but where I think Bitcoin gets super interesting to me is it works in an inflationary world and it works in a deflation in a deflationary world and the fiat system we have to me it doesn't work well but it can kind of function in an inflationary world the fiat system kind of falls apart in a deflationary world bitcoin if we ever get beyond this hump where we get to this total abundance I mean it's kind of the
(1:00:39) perfect asset for that like it it and and here's what I was thinking i was thinking about like okay in a in a world where population is growing like and and let's just say everybody use nothing but Bitcoin if I go to buy a house when I'm 30 years old I should expect that house to go down in value right so be like let's say there's a 100 million people in the United States i know there's 300 some now but I'm just using an example 100 million people in the United States over the course of my life that's going to go to 200 million
(1:01:09) and so you know the number of houses that exist let's say are going to double but let's say the Bitcoin doesn't double right because the Bitcoin is is set so maybe I pay 1.2 2 bitcoins for my house but because now houses are doubled there's not enough bitcoin for people to be paying 1.
(1:01:27) 2 bitcoin for a house so now houses cost 08 bitcoin or 7 bitcoin and so you know the the thing about a scarce asset like bitcoin is it can work in that inflationary world where you know as you know the your home price in in Bitcoin goes down as it goes up in dollars but it can also work in let's say we're in a deflationary world let's say population peaks let's say we're at 200 million people and now we're on our path like a Japan on a path to 150 million people and now there's a bunch of houses but we don't need all these houses you know you the the the the way
(1:02:05) that Bitcoin reacts in that environment is now your house can maybe stay flat in Bitcoin prices so instead of going down in Bitcoin prices um in an expanding world in a contracting world it it it stays flat and it and it conserves your value that way so it's it's kind of an interesting thought experiment to think about if fiat any other payment system did not exist if every single transaction and every single thing had to be handled in Bitcoin what would that world look like what would prices do over time in a Bitcoin world and it would be a deflationary world and so
(1:02:43) it's very interesting to me and I think Bitcoin I I don't think people really have fully grasped you know the importance of it as a as a replacement um you know store of value asset i think people have come to to understand now that the dollar is constantly going to lose its value um but I think that's fine and I think I think people just need to have in their mind the dollar is a transactional mechanism you know Bitcoin is your store of value as Bitcoin you know gets more integrated into payments that's fine if that happens i don't know how if that necessarily needs to happen i think it
(1:03:23) can happen because you can always pay with your store value asset but the the fact that it's given us this digital store of value asset with all of these attributes and all of these strengths where gold has weaknesses i do believe gold has certain strengths where Bitcoin might have certain weaknesses but that that all of these things are extremely important and that they're just going to be more and more endemic to the economy i think that the younger generations get it and understand it and believe in it and it's only going to grow it's only going to expand um you know I'm I'm
(1:04:02) super I've always said I think Bickin's the the best uh going to be the best performing asset over any extended period of time frame for the foreseeable future um so while I'm bullish on equities I'm bullish on gold I'm less bullish on real estate you know on a percentage basis I I think the Bitcoin uh run is you know just getting started in the the way that the AI AI run is just getting started mel you're you're making me bullish making me more bullish than I already am and more optimistic too i mean and and on that note I think another big topic
(1:04:39) of discussion we're first five and a half six months into Trump too and there's already people saying with the optics of what's going on with immigration in the mainstream at least not a good look the tariff quote unquote fumble uh the tariff negotiations fumble that many are pointing at people are already basically saying we're screwed at midterms and we're going to get President AOC uh in 2028 do you think that that is just short-sighted misreading of of what's happening and how do you see this economic recovery and the the pace in
(1:05:21) which everything has happened in the economy and the job market affecting midterms in the election in 2028 yeah i mean we'll see i mean I think if if I mean I think that first of I I think that if things go really well and we're we have turned this corner by you know let's say summer next year then there is a chance for you know Republicans to pick up seats in the House i don't know if they'll be able to take the Senate um but you know we go down that path if if we if we have say a traditional midterm where you know
(1:06:05) um like I believe happened last time with Trump i think it happened with Obama um you know Obama passed Obamacare and then lost the midterms you know maybe Trump gets his big beautiful bill passed and does some of this stuff and then loses the midterms you know I I still I still think the major trajectory which is the mandated fiscal demands combined with the larger demographic and technial technology trends remain in place and so when you look at the budget and you look at and you say okay there's entitlements there's interest expense
(1:06:40) there's veterans affairs like there's defense and then you get rid of all of that you're left with like 800 billion dollars so I mean how how much can they really move and change around and and so what's what what could that happen well I think probably the Democrats have learned a little bit of a lesson of having a completely wide open border so I think even if the Democrats come in while they're not going to be as aggressive obviously on the border as this administration is they're not going to be as uh completely wide open as as they were under Biden i think that was a
(1:07:24) particular time a particular moment i also think we had a labor shortage um and so in in a weird way I think a lot of corporations were behind it um you know like meaning supportive of of this open border um I I think if if you know that type of a scenario comes in where let's just say we got a red sweep in the midterms and then uh President AOC in 28 like what is she really going to be able to do and get through Congress i think what they're going to do is they're probably going to put in more government spending along the lines of some of these
(1:08:01) programs I've talked about more money for health care more money for elder care more money for construction and infrastructure projects and so what they're going to do is a lot of the stuff that I think the Trump administration wants the private sector to do and what he wants to incentivize done through um you know uh immediate depreciation through deregulation through tax cuts and so I think at the end of the day you either get the government sector doing a greater percentage of the same things that you have under Trump being hopefully done
(1:08:36) more by the private sector and then you still have all those core fiscal technology trends in place in the background and so I think it it becomes 601 half a dozen of the other um it it's perfect fodder for X it's perfect fodder for the media it's a bunch of stuff different stuff for the market to get worried about um but I think the the long-term trajectory marches on and at the end of the day it might not be as radically different when it comes to economic fundamentals as people think it might be more different from a cultural perspective um but we might wind up in a
(1:09:15) similar place whether we have President Vance or President AOC as crazy as that might sound such a fascinating world the um yeah it it just I I don't know how to describe it but I think having played with the AI tools and just looking out at the world when I unplug from the internet and hang out with my family and friends everybody seems to be doing pretty pretty well relatively and pretty happy and it it seems like even though the mainstream media and the algorithm on X is feeding you a bunch of doomerism and fear porn I think last week or two weeks ago was the
(1:10:05) autonomous drones that that attack on Russia by Ukraine deep into their territory and you begin to project forward like okay if autonomous drone drone warfare is upon us like how chaotic does the world get but I think like you I like to think positively and optimistically and hopefully we can thread the needle and like you said these um these unique tailwinds that we have at this particular point in time with demographics and the productivity growth that we're already experiencing and that's about to increase like I like to
(1:10:44) think that that can create the conditions for the incentive structure to move towards cooperation like why not cooperate why are we going to war why are we doing all this when we have all these tools and this technology at our fingertips to go do good in the world um so that's one thing I've been wondering about you know in the last couple months particularly like with all the saber rattling between China the US Russia Ukraine um Israel Iran whatever it may be like do we get enough productivity growth and
(1:11:21) technological advancement to the point where people are just become too busy building cool stuff that going to war doesn't even make sense yeah definitely i mean that those geopolitical concerns you know I I think in a way it's reminiscent of the 70s as well where um Nixon went to China so Nixon kind of reached out to China as kind of a counterbalance to the Soviet Union i think Trump is kind of trying right now to reach out to Russia as a counterbalance to China um so China's become the new Soviet Union and Russia's become the new China um and the war that
(1:12:01) Nixon wanted to end um at the time was Vietnam and and that's when he got what he was trying to do and he titled that speech in 1971 when he closed the gold window the challenges of peace and he started off by talking about like we're going to end this war in Vietnam and we've never been able to have full employment in this country since World War II you know during peace time and and talking about the challenges of how are we going to keep the economy going in a peace time environment so I do think that you know these similarities are there and I think that Trump is is
(1:12:36) trying to do this with with Nixon like end the Ukraine war i.e and the Vietnam War uh belly up a little bit to Russia um in the way that Nixon bellied up to China as a threat against Soviet Union so you know we'll see how it all works out it all kind of generally worked out last time without World War II and I don't think that's really in anybody's interest you know i mean it's like what is China going to gain by you know sending a bunch of troops to invade Taiwan i mean it's it's just a disaster um and as I mentioned they've got
(1:13:11) deflation in China right now they've got their own economic problems and this whole thing with Putin and and Zalinski you know it's it it's in a way it's unsustainable but at the other hand you know it could go on the Russian economy now has become mobilized for war it's used to it um I think it's going to be a lot harder to end than the V you know just like the Vietnam war was a lot harder to end than Nixon thought uh this war is a lot harder for Trump to end but eventually it did end and um and so I
(1:13:43) think I think these things will get worked out but you know in the meantime could a flare up cause a correction and things um sure um and you know gold and Bitcoin I think actually in geopolitical uncertainties are are only going to do do better and that's why you know I always have believed in those two assets as my biggest positions um and then and then stocks because you know they they just they do different things and and they can they can be there for you um even if some of these bad things do uh have some episodes
(1:14:20) yeah this has been great what um what should we leave the freaks with any anything we didn't touch on that that people should be aware of or paying attention to maybe maybe something in the next 3 months that's on your radar that you're you're paying attention to obviously you said CPI later this week um are you looking for anything out of FOMC meetings or uh in regards to tariffs yeah well I mean ironically I think the Fed not cutting might be helping things a little bit right now even though they probably should be like
(1:14:57) I think that's helping keep a little bit of a lid on those rates like from going too high i think that cutting would actually make people think that growth in inflation are going to be even stronger and therefore the long end would go up so I think a lot of people may be thinking like cuts on the short end you know would be good for rates are are completely wrong i think that we do need the Fed funds rate to come down because that's also going to reduce the government borrowing costs because of how much debt is being um issued at the
(1:15:32) short end and so you know what we're doing is we're rolling the we're rolling the longer maturities out of relevance where the US isn't really issuing any new net long-end debt it's it's it's maintaining whatever 30 years it has or whatever but it's not adding to it if anything it's adding to the bills and so I I say in that interest rates piece that you know people are going to be able to unlock that $12 trillion of home equity if Fed funds goes down not from mortgage refinances but from HELOCs home equity lines of credit which are tied to
(1:16:05) short-end rates they're floaters on short-end rates and corporations unlike the federal government also have the option to issue floating rate debt instead of um fixed debt which is tied to short rates so the Fed funds rate to me is now the key rate in the economy not the 10-year um and so we've got to watch what the FOMC is going to do um but I do think that whether you know it's PAL this year which it probably will be by the end of the year or it's Trump's new appointee eventually that rate is going to go down i think the way that you control the rates on the long end is you you get the Federal Reserve
(1:16:43) to to add to its balance sheet so I'll I'll end with this is a lot of people think the Federal Reserve balance sheet has really exploded but as a percentage of outstanding debt it hasn't it's the same place it was in the 40s and the 50s and the 60s the the Federal Reserve has consistently held around 13% of outstanding US Treasury debt it currently holds about 13% of outstanding Treasury debt and so there is room on the Federal Reserve balance sheet to to to claim that they need to increase reserves and that's why
(1:17:17) they're going to resume a limited amount of bond purchases and that's going to help contain things on the long end um once the front end starts coming down so I think just keep an eye on all of that uh be aware that Trump's probably going to have to do some threatening um as these tariffs start to expire and that could easily be a 5 10% trigger uh more of this ICE riot flare-ups this summer another 5% 10% trigger but don't get scared out of your positions um you know use them as opportunities to add if you
(1:17:53) have cash and um you know if you want to protect yourself um you know buy some puts once we we get the VIX back down around 15 um you know as uh as some protection cuz we're heading in that direction awesome well maybe we'll catch up at the end of the summer and see how all this is playing out we'll see i I I'm guessing we might have had one of those many corrections by the next time we talk but that we'll be higher than we are we'll we'll be well on our way we'll we'll we'll be in the 63 6400 range um
(1:18:30) and and we'll be marching higher all right well let's catch up at the end of the summer you go enjoy your trip to the mountains in North Carolina this week and as always thank you so much for for your time Mel i think your your analysis over the last nine months since we begun began talking was it nine months ago or did we talk like this time last year first i think it might have been this time last year first so you know it's been about a year I think probably since the first one i think this I don't know if this is our third or fourth um meeting but uh they've
(1:19:02) always been good ones and uh I think I think this is our fourth overall but it's our third since kind of my first prediction one which was kind of an end of the year December one where I talked about uh 15 20% decline in the first half V-shaped recovery uh Bitcoin 150 S&P 7000 by end of the year and I think we're still on track for that yeah well you've quickly become a fan favorite in the TFTC universe so um we'll uh we'll keep this conversation going throughout the month so go enjoy the mountains enjoy your summer and we'll catch up
(1:19:37) maybe end of August early September perfect looking forward to it all right peace and love freaks freaks thank you for listening to the show i hope you liked it if you did like it please make sure you subscribe rate review the show it helps us out a lot and also if you like these conversations I've come to realize that many people listen to the podcast they don't know we have another sort of layer of this media company we have the newsletter the Bitcoin Brief go to TFTC.io make sure you subscribe there a lot of the topics
(1:20:08) that are discussed on this podcast I write about 5 days a week in the newsletter we also have the TFTC elite tier if you sign up for that become a member we have a private Discord server for the elite freaks out there where we're dropping ad free versions of this show and having discussions about everything we talk about a day early logan wanted me to make sure if you want to get the show a day early become a TFTC elite member you will get that we have our Discord server right now conversation between myself and TFTC
(1:20:44) elite tier members but we're going to expand that we'll probably do closed Q&As with people in the industry uh I may be doing macro Mondays so join us go to tftc.io subscribe find the button in the top right corner of the website become a TFTC Elite member thank you for joining us okay
