Transcript: Chris Martenson: 15% Inflation Is Coming Back

Marty Bent [0:00] Chris Morinson, welcome, welcome to the show, sir. I'm very very excited for this conversation, been a fan for years.

Chris Martenson [0:07] Thank you. And thank you for developing the show and inviting me on. I'm I'm thrilled to be here.

Marty Bent [0:12] Like I was saying, I I it the my audience, myself, we have to give you a a massive thank you for hosting our crazy Uncle Dave's year in review for many years now. And it's it's one of my favorite times of the year is when Dave finally gets around to publishing his year in review and then having a conversation with him.

Chris Martenson [0:30] Yeah. Yeah. It's always always a little bit of a mad how can you hear that? Unfortunately. The dog. Okay. yeah. It's such a fun thing with Dave because somewhere around November he says, I'm not doing it. And then somewhere around mid early December he's like, Okay, I'm doing it. And then the stuff flies in like last minute, hundreds of pages, and he's very, very meticulous. Like everything has to be referenced, footnoted, you know, everything. And it's always a mad scramble, but what a

Marty Bent [0:37] It's fine. Yeah.

Chris Martenson [0:59] What a joy to host that thing. It's one of my favorite I I just love reading it every year.

Marty Bent [1:04] I do as well. It's take a day or two over Christmas break if he gets it out by then and and dive in. But we're we're here to speak with you, Chris. And I think it's a good time to speak with you considering everything that's going on in the Straight of Hermuz, I guess flip flopping, tacoing, ceasefire on, ceasefire off. what is going on? You wrote a piece, I believe, almost a month ago in May.

Chris Martenson [1:12] Yeah.

Marty Bent [1:34] Calling for oil above two hundred dollars, possibly much higher. are we on trajectory to hit that still, do you think? W how are you viewing everything that's going on in the Middle East right now?

Chris Martenson [1:47] Well y y you have to take one of two positions here, right? One is this is just rank and competence, right? And you get these terrible outcomes. And the other is that this is part of a suite of things that that are being done to intentionally damage the United States. and I I'm leaning kind of eighty percent towards this is intentional because you know, if you flip a coin fifty times, it comes up heads every time. Gotta start thinking maybe it's not a fair coin, you know. so what's been happening is, you know, what we saw early on, like the straight of Hormuz gets closed.

Chris Martenson ⋮ Within two or three days, oil spikes to 120 a barrel, and then all of a sudden all these traders out of Trefigura and all these other big houses are like somebody has stepped in in size and has started to sell these things, right? And so my my architecture for understanding the markets, I was a I was a day trader for a while. I was really successful, 2005, 6, 7, and then my whole system fell apart in 2008. And I think that was kind of the rise of the machines at that point, right? Where there were really elegant algorithms with with obviously faster fingers than I had, you know.

Chris Martenson ⋮ and and I remember the moment that so I was trading gold futures at that point in time almost exclusively. And I was sitting on 10 contracts and they had a really nice gain on them, but I had this really distant trailing stop, and I woke up the next morning and all 10 were gone. And somebody had come in and And the price had gone just down. I personally got pickpocketed. Right. The my ten contracts was the total volume in that tick. And it just just somebody reached in and took it. And I Okay, this isn't a fair game anymore. It's just it's, you know, you you tuition's expensive in trading.

Chris Martenson ⋮ But when I figured out just how fraudulent it was at that moment, right, because that's not price discovery, that's clearly thieving and price setting. I I started understanding that that's what the future markets are really used for. and that started obviously in the precious metals, but then I started to see these same patterns. And it about two years ago, that same pattern started to show up in oil, right? Where in a single one minute candle, there would be three, four, five, six million barrels of oil sold all at once. It just crushes the bid stack. Every every bid under that normal bid stack that and an ass stack that's sitting there just gets crushed, right?

Chris Martenson ⋮ And it had the same flavor as like watching a two AM Silver Slam where the bid stack would get crushed, but then that's the new price. It's not like

Chris Martenson [4:13] All this activity reassembled and brought it back up again. And so I I observed, okay, price setting is a thing, and obviously there's no regulatory oversight that's interested at the CFTC, SEC, and and you know, curbing that behavior. And I I think the the explanation for that's easy because when that behavior is reinforcing the official narrative, it it's it's it's okay. You know, that that's just part of the game. So I watched oil suddenly just start getting the same treatment really heavily, actually starting in Trump's first year in office, right? It just coasted down from about 75 all the way down into the high 50s, almost, almost ruler straight, Marty.

Chris Martenson ⋮ Just like tick, tick, tick, tick, tick, tick, month after month. It was just like going down and Trump's out there saying oil should be 50. And Chris Wright, the energy secretary, is like, oil should be 50. And he comes out of the biz. He, you know, CEO of a fracking company. Nobody's making money at 50 in the oil space, in the shale space. Nobody. They're all hemorrhaging capital. Ask me how I know, right? and because I'm a a direct investor in this space. So watching oil just mysteriously get clocked over and over and over again, I said, okay, let's get in the silver treatment, if you want to call it that.

Chris Martenson ⋮ And then I I watched it happen again here during the open part of the war. And I listen, I can even understand we want to keep markets calm. We think this thing's just about to end. We wouldn't want a big price shock. But here's where we are. We are now because oil is like I think it's with ninety-two at the time we started recording on WTI futures, right? That's not enough to cause demand destruction. In fact, internal demand in the United States is here. Yeah, supply is here. And so how do you close the gap? Well, normally with price settings, so price goes up, kills demand, brings it to supply.

Chris Martenson ⋮ Uh-uh. We are tapping the SPR and commercial inventories and also distillate inventories, and we're exporting those and consuming those to make to make up that supply-demand gap. Prediction, real easy. this all carries on until you get to tank bottom, and then it's then it's then it's a crisis. Then it's really bad. Then we get back to my original thing I opened with, which is like if I wanted to intentionally harm the United States, one of the things I would do is have it go full speed into tank bottom, where you actually not a supply demand mismatch that can be corrected with price, but an actual shortage, now you're gonna have to triage.

Chris Martenson [6:38] Who gets it, who doesn't, and that's just a hot mess every time it's tried.

Marty Bent [6:42] And you can't even get the tank bottom, right? 'Cause I think we learned this during the Biden administration, that due to the physics of these petroleum reserves, you need to have a certain amount of of oil in the salt caverns or else they become defunct.

Chris Martenson [6:57] Yeah, for the SPR, it's there's a bunch of different salt caverns out there and ha ha well some of them, probably two thirds, are holding this medium sour grade, which is actually the stuff everybody wants. And the other one third is this late sweet, and nobody's really buying that. there's tons of that floating around. refineries don't need that. So actually we're what I'm tracking mostly is just the medium sour caverns and I I'm guessing I'm guessing they have about half left. of of their current balance. So at current rates, I would give that another 80 to 100 days. And then that's out. Right. And and for people listening who don't know what that means, the salt cavern is actually a physical hole in the ground.

Chris Martenson ⋮ It's a cavern, right? We mine salt out of it. and then the way you get the the oil out of it is you put water in the bottom because oil floats and you you drive it with water pressure. As it drives up for every barrel that gets taken out, 15 barrels of salt are dissolved into this process. And there's only th those walls suddenly become unstable, you know, and and they they can start to collapse and they can cover up your injection pipes and th there's things that can happen. so I think and nobody really knows. I've I've dug around Marty, I can't find like you would think the DOE would say we've studied it, we know the number, right?

Chris Martenson ⋮ Here it is. Like it's matter of national security or they haven't studied it yet. So I don't know that we actually know.

Marty Bent [8:22] And I mean bringing this back to like futures market, because I actually think it was on your site earlier this week and you were you were talking about overnight markets, particularly with silver. And if you're trading overnight, that's where you're gonna experience most of the gains versus during the day. So to your point of potential price manipulation while markets are open, and sort of tying that concept to oil markets. I I think you had Scott Besent and others in the administration come out. couple of months ago and say that they would do everything in their capacity to leverage futures markets to keep oil within a certain range. And do you think they're doing that?

Chris Martenson [9:01] Yeah. I I was looking down because I I wanna I wanna build on that point because that to me this is just the most astonishing thing. Sort of sort of how did I come by my there's there's there's an invisible hand operating at night thesis. I come by it honestly. so this is a chart showing that if you had held silver from nineteen seventy, just during US open trading hours, right? Just during those few hours that were open, silver is apparently worth thirty four cents an ounce. If conversely you just held it from the moment New York markets closed, overnight, the rest of the world is doing whatever it does with silver, and then sold right before the open, silver would have been worth three hundred and ninety-six dollars an ounce.

Chris Martenson ⋮ So, wow, it's worth a lot more overnight than during open New York daylight hours, right? And then somebody was observing s you know, weird behavior for Alphabet here overnight versus daytime. Okay. maybe we can make some allowance for that, but This is the part during WikiLeaks. Have you seen I'm sure you've seen this. This is one of my favorite things. WikiLeaks dumps this thing. So we get this cable. It goes from New York to London. And this is in 1973. And of course, gold became legal for US citizens to hold again in December of 73. It was illegal before that. And so they're very worried like what would happen if too many people bought gold and the price went up, and then that price is rising and it makes the, you know, dollar look bad or US treasuries look bad.

Chris Martenson ⋮ So There was a lot of concern over how they were going to manage this. And so here's the quote To the dealers' expectations will be the formation of a sizable gold futures market. And the dealers, these are all your primary dealers, right? The big ones, Scotia Makata, JP, etc. And each of the dealers expressed the belief that the futures market would be of significant proportion. And physical trading would be minuscule by comparison. So signal versus noise, right? The signal is now the futures market, not the the actual. gold, physical gold itself. And here it is, in black and white, highlighted in yellow. Quote, also expressed was the expectation that large volume futures dealing would create a highly volatile market.

Chris Martenson ⋮ S. citizens, end quote.

Marty Bent [11:21] Some manufactured volatility to scare people away from holding.

Chris Martenson [11:24] Yeah. And by the way, volatility in in their is code speak for sudden downward price spikes. Right, volatility is never upward pr you the VIX doesn't measure upward volatility, it only measures downward volatility. Yeah.

Marty Bent [11:38] Mm-hmm. Yeah. I mean, and I mean, and that now I'm having flashbacks to last year when silver and gold were running. You had the Thanksgiving, the day after Thanksgiving sort of comacs glitch where it seemed like if you had your tinfoil hat on that they were just hitting the circuit breakers. And I think the theory was that JP Morgan was trying to get on the right side of that trade. They were nut short silver and they were gonna get called out on their BS and I mean we ended the year with fireworks and precious metal markets, and it's that seems to have quelled for the first half of this year. you think they're trying to suppress it after after it was running?

Chris Martenson [12:19] Yes. Yeah, yeah. They they are. And there's something else weird running here that I don't understand. because as of this morning I just checked again, China, Shanghai silver markets running about nine bucks hotter per ounce than the US market. It's been persistent for probably six months. That shouldn't exist. Like if if I had the capability, if I was a big enough player, I could just sidle to ComX, you know, take a million ounces out, put it on a plane. And make nine million bucks, right? Minus some trading fees and import costs and things like that. But still, it's free money. Arbitrage like that doesn't exist in an actual free market. So something else is operating here that I don't quite understand.

Marty Bent [12:59] Yeah, I'm just looking at silver and gold now. Silver's at seventy five, down from one twenty, and gold at forty five hundred, obviously down from around like fifty four hundred. And it feels like they're consolidating. And that I mean, that's the big question with everything going on in the Middle East. I mean, bringing this back to Hermuz, I'm sure you saw it. Not only are people worried about whether or not the ceasefire actually happens and we get some sort of deal, a MOU, whatever it may be, but I think and I don't know. the extent of the validity of these claims, but now people are talking about this barnacle barnacle apocalypse that could that could actually basically severely perturb the the the ability for ships to move through through the strait because barnacles are just building up on on the propellers and you could have this sort of negative externality of sitting sitting in the strait for months that even if there is a a a peace agreement that that you can't move the oil through the street because the ships can't move because of the barnacle buildup.

Marty Bent ⋮ And again, bringing this all together just to highlight it seems like there's the potential that what we're witnessing in in markets, not only in commodities, but potentially in stock markets, just this this beach ball being held underwater, the beach ball representing volatility and just waiting for a domino to fall to to really signal to the market like, there's gonna be massive supply chain disruptions beyond oil and gas because of this.

Chris Martenson [14:27] Yeah, and it's I mean it's truly a bizarre time, right? Because I've lived through multiple periods where, you know, 2008 oil went to hundred and fifty dollars a barrel, hundred and forty eight, right, in July of eight. And it did so because there was this persistent mil one million barrel per day shortfall back then. and and that terrified everybody, right? That that took about a year to really develop, but you know, it just that little that little bit. So oil is a highly inelastic commodity, meaning Tiny, tiny move on one end in supplier demand can actually have outsized impacts on price. And it always has.

Chris Martenson ⋮ It's not this time. And it's not just like, you know, there was this Gulf Arab crisis of 73 to 74. There was the 2022 crisis where people thought maybe three million barrels a day were gonna be missing due to Russian sanctions on the Ukraine war. this is bigger than all of those, Marty, combined. Then some, right? And it's the most mysterious thing. So you hear like the the chatter, like, the strait could be open tomorrow. You know, everybody runs their analysis. And Goldman Sachs or or the head of you know Qatar's energy agency say the same thing. They're like, well, within six months, we think it'll be 70 to 80 percent recovered.

Chris Martenson ⋮ Okay. Well, it used to be 25 million barrels a day. So 80% recovered is we're still missing five million barrels a day six months from now. There's nothing even remotely that that scales to what we're talking about here at this point. And yet Really just total placidity and and you know, complete reliquefication of the US stock market. Well, it's not just US. If you you can see this South Korean stock market, even Germany's stock market just powered to all time new highs last week, you know, and and Germany's just imploding at this point, from a business standpoint. So there is just something going on here that just doesn't make sense.

Chris Martenson ⋮ And I think you got it right, that that beach ball is being held down.

Chris Martenson [16:25] I think that everybody who's a professional beach ball holder cut their teeth on all these things like I don't know, the dot-bomb crisis, the great financial crisis, you know, long-term capital management. These are all like human contrived issues. And you can paper over them if you need if need be. And I think they think they can do that. Oil's different, right? Oil's a molecule. Energy is the master resource. You can't just paper this over. It's just, it's not possible. So I think we're getting set up for the biggest of all possible rug pulls. sudden re emergence of that beach ball and then we're gonna be facing actual rates of inflation that are gonna be I think really terrifying, both for the market masters who are the beach ball holder downers, but all also for the rest of us. It this could be a darker repeat of that double hump inflation of the seventies to nineteen eighty era.

Marty Bent [17:16] No, I d I I forget who surfaced the chart, but that that echo inflation of the seventies resurfaced a couple of weeks ago and we're tracking pretty tightly to it, right now with the latest inflation prints. And that's the other thing, like CPI's notoriously under reporting actual real inflation and when you get into the knock on effects of the supply chain disruption. I mean, I had somebody who runs a fertilizer business on last week and he's saying that John Deere, which will typically extend financing to farmers in the US is is not because they're they're looking at fertilizer prices, looking at corn prices and saying corn prices aren't high enough, f fertilizer prices are too high.

Marty Bent ⋮ We can't finance your your your sort of your your endeavor to go bl plant crops. this season. And so talking about like lagging effects, that's what I worry about is this fall, particularly not only oil and gas, but moves into food. And then you get real tough conversations at the dinner table about what are we gonna do.

Chris Martenson [18:29] Well, this is this is such an important point because again, now corn, its price is also set in the futures market. And again, I believe that all the big giants, you know, conspire to keep the price of corn down because it it serves their interests, right? And and so the producers just get hammered all the time. I kind of hope that we get a producer rebellion, you know. What if all the silver miners got together and said, sorry, you know, quit your or or or only make direct deals, you know, with Chinese solar manufacturers or something like that. But corn today is trading at exactly the same price it did in 2008.

Chris Martenson ⋮ Right? Can you imagine if like Ford F-150s had a futures market and the market shrugged and said, sorry, Ford, you have to sell your F-150 trucks for $32,000 because that's what they were in 2008. Like Ford would go out of business and that's happening. They are driving farmers out of business. And that sounds like a bug. But it's kind of a feature if BlackRock's on the back end snapping up the farmland, right? So There's a something going on here, but it's very clearly not capitalism and it's not legitimate price discovery between willing consumers and producers. There's there's another tet, you know, what Matt Taibi called that blood sucking squid.

Chris Martenson ⋮ It's just like, you know. It's it's bad, but you know, then you're right. You have that uncomfortable moment around the dinner table someday, like, wow, who knew that if we kept copper prices this low for two decades, we wouldn't have enough?

Marty Bent [19:43] Mm-hmm.

Chris Martenson [19:56] Who knew that we need farmers in business, not out of business, you know?

Marty Bent [20:02] Yeah, I mean, and then in parallel to all this, you have the massive reindustrialization campaign, obviously the AI data center build out, and I think more and more people becoming quite aware that the the energy infrastructure, particularly the gridded infrastructure in this country, is not as robust as it may need to be if you're going to supply all that demand from from the hyperscaler build out. And it's It's very confounding to me. 'Cause as somebody like I use the AI tools and I love them. I I think they're extremely powerful. They've helped our business out. but there is like this this sort of existential fervor behind the AI race, that that we're speeding towards it and particularly on the infrastructure side, and it seems like that industry is getting priority over all others, at a time where attention may need to be elsewhere or may need to be divided evenly elsewhere, particularly when it comes to food and energy prices, like things we cannot neglect.

Marty Bent ⋮ If if you w like to your point, energy is the base of everything we do in the economy. And even if these

Chris Martenson [21:07] Yeah. Yeah.

Marty Bent [21:17] AI tools are incredibly productive or create efficiency gains for individuals and companies. Like it's all for naught if you don't have the energy base there to actually support the the growth that'll be necessary to make it more widespread.

Chris Martenson [21:31] Yeah. Th there's a whole larger story to unpack around all that. And I'm I'm one of those people who tends to really so let's just take natural gas. This is how we're funding all of the energy requirements of the AI centers, right? So we're not building nuclear at this point, we're not really recommissioning coal fired plants, so it's gas, right? And that's great because you can drill wells and and it's fairly dispatchable kind of energy. But I'm sitting on the back end of this going, Well, wait a minute. Outside of the Permian Basin, every single other source of natural gas, out of the Bakken Basin, out of the Woodford, the Haynesville, the Marcellus, offshore, everywhere, they're all in decline.

Chris Martenson ⋮ So then you say, okay, well, you know, these data centers are going to be consuming another eight to nine BCF billion cubic feet per day by 2030. And when I say another eight to nine BCF per day, these things are on twenty-four seven three sixty-five. There, there's no like, Slate loading, you know, these things are just on. They are I call them toasters, don't make toast, right? They just they make waste heat. I mean, it's crazy, right? You take like say a gigawatt of actual natural gas, burn that, you create, you know, however much waste heat from that, then you take the electricity, shove it into this thing, and then you have to burn more energy to cool it.

Chris Martenson ⋮ So if you have a gigawatt data center, typically you're gonna be burning about two gigawatts of power to both

Marty Bent [22:35] Yeah.

Chris Martenson [22:58] create the electricity and then to cool the the resulting heat. It's massive. Okay. And that's what we do with it. And so now there's this second order effect, which you hinted at. I'm gonna just call it out because it's important. We're gonna be spending trillions on this build out. Fine. Maybe it's really super productive. It's the other side of the coin. Well that's capital that's not going to something else, right? By definition. That capital went for that purpose, not for new high speed rails, not for reshoring manufacturing. You know, not for anything else. It went to that. And I don't know about you, but when I drive around my country, I I see that we have we have some self-investment that's been a little bit neglected for a while, you know.

Chris Martenson ⋮ And if you do go to China, which I I I do from time to time, it's astonishing. They're putting their capital into their infrastructure and it shows, right? And so all capital going towards infrastructure is got a timer set on it. You build it, it's shiny, it's new, and then it degrades and you have to maintain and replace it. So we're not even we're we're we're barely maintaining our infrastructure at this point, which is painfully obvious. You go to New York City in a rainstorm, like, my god, it rained. What? Again? You know, and their subways are flooded and you know, all this stuff is happening because it's just it's in that bad of a shape.

Chris Martenson ⋮ And so I think that's the other part we have to talk about is we're putting trillions into this and not that by definition. And I think we need more of that, compared to the data stuff. But I don't know what I'm still confused. Like you you said it's almost like a some mad dash. Like how do you understand? Like like what what's the theory? Winner takes all?

Marty Bent [24:38] I mean the theory that the theory that we get in public is that it's a national security issue and we need to beat China to the punch of getting to AGI. I'm skeptical of AGI in and of itself. Like I think these things are calculators. I'm not one of those guys who's like we're gonna get to the singularity and we're gonna have some transhumanist utopia that we all live in. I think that's actually very dystopian. I think they're just very good at predicting the next word probabilistically and can you can help you get a lot of work done. But I think when it's being positioned as we need to beat China to the punch of of basically having control of the most powerful artificial intelligence systems.

Marty Bent ⋮ and then we'll make sure that the the the free and open democracy wins out against the the communist regime in the digital age. but really I think it's there's also the the command and control aspect. We need to win this just so that we can suck up all the data and and basically try to get to a point where we have this Orwellian surveillance state. And I think it it may sound a bit crazy, like Marty, why are you like very bullish on this stuff using it? Because I I do think if you're looking at the progression of the models, particularly the open source models versus the frontier models from the hyperscalers, which are closed source, the open source models are not as cutting edge as the closed source models, but they're not too far behind.

Marty Bent ⋮ And so my hope is that recognizing that this is a useful technology that can bring a lot of productivity, obviously it's gonna bring a lot of disruption as well. But I think Pandora's box is open, cat is out of the bag, you can't really turn back the clock and make this technology not exist. So with that in mind, it's like, okay, how do we leverage it? so that that humans can can use it, but in a way that's not hyper controlled by the government, the hyperscalers, whoever it may be. So that's why a lot of our coverage here, particularly in our newsletter, focuses on open source models and how they're progressing.

Marty Bent ⋮ And I think if you're looking at the trends of how those models are progressing and then

Marty Bent [27:04] how easy it is to get to host them locally. I do have hope that we can leverage this technology in a way that individuals actually control the ultimate the the ultimate way in which w we leverage these tools and not the the hyperscalers and the governments.

Chris Martenson [27:21] Mm-hmm. Yeah. We'll we're currently taking twenty years of my content and cramming it into an L L you know. And you know, and and then I think, well I'll finally have the search tool I've always wanted for my own content. You know. Should be great.

Marty Bent [27:28] Okay. Yeah. I mean we've done that here. So then our we have an agent running and it's got every newsletter, every podcast we've ever recorded and we can quick search like, Hey, what do we like we're talking about energy and AI today. When have we talked about that over the last eight years and what have we said and within a minute it has everything?

Chris Martenson [27:55] I'm jealous. I'm I'm still waiting. We're we're gonna get our soon, I hope. But yeah. So that that's a good use. And and I think for for most people, you know, maybe super advanced uses is different, but Deep Seek is pretty robust model, right? Quinn works pretty good. Like they they're they're pretty darn good, you know, I think for average people and using them for average productivity, you know, tools. I I there must be something they have behind the scenes that that they've seen has scared them. You know, it's a it's an idea I've had that they have different models that we haven't seen. And so they're like, they can see where this is going. Like we we're gonna need data centers so fast that, you know, nobody need like like they're just overwhelming communities with these things right now. And there's I've never seen a build out like this. Th this feels like a very public Manhattan project at this point.

Marty Bent [28:47] it certainly is. And I mean, so I've been in the Bitcoin mining industry for almost a decade. So I saw that build out when China banned Bitcoin mining in twenty one. Obviously a lot of that migrated here to the United States. And I had an up close and personal sort of experience and view of of that build out. And I thought that was pretty awe inspiring at the time when we were spinning up a hundred megawatt. facilities, then 250, then 500, and then Riot announced their their gigawatt facility in Texas. It was like, my gosh, like this is insane. Because when you think about it, the the the largest data centers in the US weren't larger than like 25 megawatts a decade ago.

Marty Bent ⋮ And now we have gigawatt facilities. but the AI wave of the last two years just far exceeds one even I witnessed in in Bitcoin mining. It's astonishing how how quickly they're they're trying to scale this up. And as somebody who understands how these power purchase agreements and these interconnection deals and the demand response deals and what it takes to spin up new generation, it it does make you question like how how are we going to do this? And two sides of that coin. The pessimistic side is like we're going to run into these supply constraints and it's just going to not happen. And then the optimist is like, hey, constraints breed creativity and efficiency or maybe this is good because we'll produce so much generation to your point about the overfocus on natural gas.

Marty Bent ⋮ I completely agree. We should spin up all the coal plants. We should rip the red tape off nuclear. Let's just have as much energy generation as possible. because we've gone off the Henry Adams curve since the seventies and we need to get back on that.

Chris Martenson [30:37] And you know who's on it? China. Right. So in the last 10 years, they've installed as much electricity generation, actual generation, not nameplate capacity, but actual electrons flowing out the pipes. as as in 10 years as we have currently have, right? Like they just doubled. And so I think AI is fundamentally a story of energy. I think all of economy is fundamentally a story of energy. China's clearly dialed into that. They wrote this big, beautiful. It was like two years ago, they released it a a five-point strategic plan for how they're going to build out their energy infrastructure. And I almost cried because I'm like, that's what one looks like.

Chris Martenson ⋮ We don't have one here in this country. Like we don't have a a strategy, right? And they said, yeah, we're going to be people focused on look at all the solar China's putting in. But they very clearly said they're going to only put 1% of total incremental capacity in in alternative wind and solar per year. And it's going to max out at 12%. Cause they can't, you can't afford more than that without you get grid instability. Otherwise Going to be nuclear, you know, they've got a two thorium pilot plants right now. They did a hot refuel, meaning it's running and they refueled it while it was running.

Chris Martenson ⋮ So they're way ahead of us on on the thorium fuel cycle. They're slamming in uranium plants left, right, and center. And so they have a policy that makes sense and it included a geopolitical component. They said, by the way, we're gonna have to be very friendly with the countries that supply these sorts of things, like oil and gas, because that's gonna be really important for us going forward. So geopolitically They're forging alliances, you know, which I strategically I align with it. You know, United States does this gunboat diplomacy where it's gonna ride in and take out your leaders kind of a thing. it doesn't tend to win friends and influence people, you know.

Chris Martenson ⋮ and China gets that. I kinda wish we got that too, commentary there. But China has a plan and it's it's a pretty comprehensive energy build up plan. And we do not have one in this country. If they if we do, we're keeping it secret. You know?

Marty Bent [32:37] Well, if we were to make one, if we don't have one, what would your plan be?

Chris Martenson [32:42] first off, I would just absolutely can all these L and G terminals. It makes zero thermodynamic sense to take a gas out of the ground, turn it back into a liquid, so that costs you X percent of the native energy in that, just doing that one process, right? And then you lose X percent motoring it somewhere else in the world. Also you can what sell it for currency units? Dude, we make those out of thin air. Like, why? I don't understand that. So nope. All of our all of our natural gas becomes just For Americans and future Americans too. We rip it out of the ground, we rip oil out of the ground so fast that we still have to flare the gas into the air.

Chris Martenson ⋮ You know, that's how excited we are to just get this stuff out of the ground. Two, you create a strategy, right? And a strategy for a business or for a country is the same thing, always the same. It two components. Where are you going? How are you gonna get there? What's the vision and what are your resources? Visions are easy to come up with, resources are always limited. That's why you have to go through the process. So if we said, look, our our fossil fuels are abundant, but not infinite. And we can clearly track out where they're going to be, like they'll run out. And we owe it to those people in the year 2100 to have been thoughtful about this and to have engineered where we're going to get there.

Chris Martenson ⋮ So we get there. What's it look like? Well, you paint the vision. Okay, we still we think electricity is like this awesome thing. It's a great way. We think we're gonna be able to electrify transport. We're gonna be able to electrify all these different processes, maybe the Haber Bosch process for making nitrogen. fixed out of the atmosphere, whatever the thing is, you you you go through all of that to say, what does that look like? And you're like, wow, we're gonna need this many nuclear plants. We're gonna need this kind of nuclear recycling containment facility. Obviously we're gonna need thorium as part of that mix.

Chris Martenson ⋮ Maybe fusion comes along, maybe, you know, but whatever that is, you you you have you have some allowance for that, but you have to just basically say, here's our bequeath coal, oil, natural gas, and here's what we're gonna use it for. And if there's something left over, fine. Ship it to Europe if you feel it's important, but we do not have that capability right now because we don't have that larger plan. And you know what takes energy? Not just making more energy. We have to use energy to replace that Francis Scott Key Bridge that got taken out in Baltimore Harbor. We're gonna have to use energy to build trains that are electrified that go from A to B, if that's part of our future, right?

Chris Martenson ⋮ We're gonna to think all of that through. And then we're probably gonna have to onshore the development and the the capability of building every one of those components.

Chris Martenson [35:09] ourselves, right? So we're critically short on I think 20 critical elements according to the USGS that like 100% dependent, like for almost 100% dependent for rare earths, titanium, all kinds of stuff. So part of that energy strategy is how do we how do we rebuild all of these components that we've we've built out here at this magic future point? Okay. That's what a an honest to God strategy would look like. We're slamming in L and G terminals so fast right now, as if that's the highest best use, that we're gonna double our LNG exports probably by twenty thirty three, from seventeen to about thirty-four, thirty-five billion cubic feet per day. And we currently only produce about a hundred and eight billion cubic feet per day. So the question is, where's all that coming from? And nobody can answer that right now. It's just gonna arise because it always does. it's a mystery.

Marty Bent [36:05] What's the justification for that? Just the geopolitical aspect of creating dependent trade partners. And so that's just the cost of this strategy is yes, we it may be better used here on US soil, but we need some geopolitical leverage via these these energy trades.

Chris Martenson [36:25] Well, I'm I'm a little mystified because, you know, a big part of that is sending it over to Europe, right? Last I checked Europeans don't even like us all that much, you know? So not really clear what the geopolitical strategy there is. and and you know, I could I could understand shipping it to Asia, to Japan, you know, Singapore, maybe China. I could understand that. But it it's not a it's not a we don't have that plan though that says

Marty Bent [36:34] Huh.

Chris Martenson [36:54] How much of this stuff do we have left and what does it look like when it when it when it you know in the future? Like what are we using it for? and if we really want to like like you know re if we want to compete at all with China. com, right? It's their, you know, Amazon, and just buy something you're familiar with, right? So, you know, I just buy like tools and building supplies and things like that. And Marty, I don't even know I couldn't even source the raw materials for the price of this thing that's been manufactured halfway around the world and shipped to me at a profit.

Chris Martenson ⋮ I don't know. Like you can just get a sense of how far ahead of us they have to be to produce all of these different things, right? Like like I just bought little charge controllers, individual units that can run just a small collection of solar panels, 'cause I've got extra solar panels just in case people in the future might want to use them, you know, certain certain outcomes. But you need a charge controller and and a little output device. So I buy these little devices and they can handle up to a hundred amps, right? Which is a ton. That's like I don't know how many panels that is.

Chris Martenson ⋮ Like awesome. And they work. They were five dollars and sixty-three cents each.

Marty Bent [38:11] Holy shit.

Chris Martenson [38:13] How does that so anyway? So you so you look at that, and and then I then I heard about the BYD plant where they're like, okay, we're gonna start manufacturing cars. They found a facility which was 50 square miles, you know. So yeah, that's that was the quoted thing. Seven sip so seven miles on a side gets you to 49. So just think of like a seven mile by seven mile block. And the point is like raw materials come in one end of this thing, and cars come out the other end of this thing. So their entire supply chain is seven miles long.

Marty Bent [38:23] It's like the size of San Francisco, right?

Chris Martenson [38:43] And internally consistent. Ours, because of NAFTA and geopolitical considerations, I think the transmissions are made in Windsor, Canada, but the truck bodies are made in Mexico and they're assembled in Detroit or whatever. We have like multi thousand mile long supply chains. We can't compete with them. So you know what the answer to that is? Yeah, we've just blocked import of BYD cars. Cause it's unfair.

Marty Bent [39:06] Well that I mean that's a big question. I think everybody a lot of people that talk about we have people who will point out what's happening in China on the show and then I'll read some of the comments and people will quote tweet and say, Why are you having these China shills on? They're trying to sow discontent among the American populace and it's propaganda that's coming in here to to push the the communist talking points. But objectively, I I mean looking at

Chris Martenson [39:26] Mm.

Marty Bent [39:36] the the energy generation and the BYD plant and all these other things. Like it's like, hey, there's stuff is happening there and God, I've seen what you've done for others. I'd love that for myself. Like, how do we like there's a chasm like in my mind, who knows, maybe I'm incredibly naive idealist. It's like, why can't we both go after that stuff and sort of work cooperatively together, which brings up the the trip to China, which I thought was interesting last month, That signaled to me that the Trump administration, ever everybody more the mainstream media was saying, Look how strong we're we've got all our CEOs and our complete cabinet over there strong and strong strong force within China.

Marty Bent ⋮ But to that actually signal weakness. It's like we we need to bring up all these heavy hitters to to basically flex in a way they're the the qu another way to put it, it didn't seem like we had a quiet confidence that we have leverage in negotiations with China. Is the way I read it. Could be wrong, but this whole superpower juxtaposition of China and the US, I think a lot of what we're seeing today is a proxy war between that sort of struggle of China's rise and US trying to figure out what's what it wants to do as it turns two hundred and fifty years old.

Chris Martenson [40:57] No, I I agree and I I often get people sort of yelling at me about China, like you they just copy stuff, which is such a nineteen eighties talking point. You know, I I'm usually talking to somebody older than myself when you get that sort of refrain, 'cause I'm like, well, who did they co copy the circulating quantum satellite from? 'Cause we don't have one of those. Nobody does. Who did they copy like their manufacturing process efficiencies from? Because I saw this this other instructive video and it could be Chinese propaganda, but it looked kind of real. Where they showed a plant that was making missiles.

Chris Martenson ⋮ And they said, This plant can churn out a thousand missiles a month. Right. It was just fully automated. It's just running all on its own. Right. And then we had the the CEO of Ford go over and come back terrified and said, you know, I went into this factory and they had to turn the lights on so I could see what was happening because there weren't any humans on the floor. It was all robots manufacturing stuff, turning out a new chassis like every 20 seconds. Right. You couldn't even conceive of the efficiencies in in that model. So if you dare to believe your own lying eyes, it's clear that China can outmanufacture us amazingly so.

Chris Martenson ⋮ And then skip over and look at what just happened between the Ukraine war and then the Iran war. We ran out of our fancy pants missiles, you know, the Thads, the SM2s, the SM3s, like we're like just ran out and like it's gonna take years to replace our Patriots and all this stuff, right? so I will tell people right now. without flinching that we've already lost the next war with China. Because wars are fundamentally logistics and manufacturing. We can't compete on that front. And I hope we never try, right? Because we'll just lose a lot of people. Yeah, our fancy missiles will knock down the first wave, but not the second, the third, or the hundredth wave.

Chris Martenson ⋮ And China can outmanufacture us. That that's how we won World War II. Our manufacturing centers did not get bombed. We were able to outmanufacture our adversaries. And that's pretty much what every military person will tell me. It's like, yeah. You know, you don't go up against a foe who cannot manufacture you. Not just two to one, but probably hundred to one or or even a thousand to one in some select areas. Plus, we get a lot of our missile components from China. So that might be awkward. Hey, yeah, I we're shooting at each other, but can you send us another another load of titanium nose cones?

Chris Martenson ⋮ That would be awesome.

Marty Bent [43:13] Mm-hmm. Yeah, we need the chips too. Can you send those? No, then you you factor in, you layer in the fact that it we are I think fully in the age of asymmetric drone warfare. And I'm sure you've seen the videos of the the drone light shows in China over the years. That's always been a a sort of light handed militar military flex in my mind. It's like, hey, we have all these drones over here. it'd be a shame if we use them in other capacities.

Chris Martenson [43:39] Mm-hmm. Yep. Yep. And a twenty three year old kid's running off a laptop, all ten thousand of Yeah.

Marty Bent [43:49] Mm-hmm. Yeah. It's are you are you hopeful that sanity will prevail or do you i here in the US? And cause it ca I mean I guess we can bring this back to like precious metals and monetary matters too. I think if inflation rips again, if you're looking at the dirty year tenure yield here in the United States, I mean that's I mean this is a Bitcoin podcast, and a lot of what we've discussed over the last nine years of running the show is hey looking at the national debt, looking at entitlements, looking at the trajectory and it's becoming clear that we are on this runaway debt train, driven by fiscal insanity that doesn't seem like it'll ever get fixed and What does that mean moving forward with I think post twenty twenty-two, I think that was like the massive inflection point with the the freezing of the treasury assets of Russia.

Marty Bent ⋮ We're four years beyond that and now we are in another war. the yields are going up, the debt is going up, the interest expense on that debt is going up, inflation's about to rear its head again. and then you have a AI wave that's coming in many of the builders of this technology are saying, Hey, it's gonna wipe out a ton of jobs too, so prepare for that. Like how does the dollar system survive that?

Chris Martenson [45:13] That's it it it doesn't. I mean, listen, it it's got a lot of inertia, it's gonna take time to play out, but we're already seeing it play out. I was asked in an interview yesterday, somebody said, Well, you know, the dollar isn't doing that bad. I'm like, Well, that's because you look at the USD index and you're comparing it to other fiat currencies. but let's compare the dollar to gold. it's lost half its value in about four years. you know, and so on. And and so that's really gonna be the ultimate arbiter here is what is the dollar against gold? real things. And that's what's about to get exposed because of the closing of the straighter from Moose, which Marty, you know this, but everybody needs to keep this in mind because every day it's like, oil, oil, oil.

Chris Martenson ⋮ Well it's also oil products. it's also helium. it's aluminum too. And fertilizer and sulfur. Right? It's just it is actually a poly crisis. Each one of those is an individual full conversation with all kinds of stuff that's just now rearing its head. And it's going to be with us for a few years. So we have that. And sometimes inflation is a monetary phenomenon, because we we mischaracterize it in the United States. We call inflation rising prices. Does milk cost more this year than last year? That's inflation. True to a point. So we have inflationary pressures because the ultimate source of inflation always is government deficit spending.

Chris Martenson ⋮ Right? That's that's the real headwaters of the Nile on this whole thing. And they're we're spending as if I know there's a war going on, but. even before the war, we were spending as if it was World War II. We were spending nearly seven percent of GDP in deficit. You know, we just sort of ramped it up in twenty twenty 'cause COVID and never found out how to dial that back. Right. And and so we just kept that going. Six, seven percent of GDP deficit spends. That's highly inflationary. and that inflation is coming. You know, we just caught a PPI print last month for the last month, came out a week ago.

Chris Martenson ⋮ It's six percent. PPI leads the CPI. It's almost a guarantee that we're going to get six percent CPI prints in just a few months, right? Because it's usually a three to four month lag between those two. And so if that happens, well, do you want to be holding a 30-year bond even at 5% if inflation's six percent? No, sir. and and so that's a lot of the selling pressure, but it's not just US, right? Japanese bonds, long bonds are selling off, UK guilts are getting murdered. It they're all on the rise in Europe as well and the US. So

Chris Martenson [47:39] 10, 20, 30s, all like heading upwards in yield. So that's that's pretty much baked in the cake at this point. My personal prediction is that we're gonna sort of get to tank bottoms and then oil's going to go to whatever it's gonna go to, much, much higher numbers. We're gonna call that inflation. And it's a little bit driven by the fact that we have tons of money circulating the system, explosive M2 growth worldwide, tons of margin debt, tons of bank lending, mostly for these AI centers. So there's Cash everywhere. That is going to provide some some inflationary pressure, but it's really it's going to be a supply shock too.

Chris Martenson ⋮ And so sometimes you get cost push inflation, which just happens because you don't have enough stuff and prices rise as a consequence. Those two things together, I would not be surprised if if I could just pull this chart up again, because this is the one we talked about. I got this one from James Lavish, the informationist, but first came out,

Marty Bent [48:33] Yeah, that's the one I was using.

Chris Martenson [48:35] Yeah, I first saw the first iteration of this with from Torsten Slock at Apollo. But let's use this one. And for everybody watching, the blue line is the 70s and up into 1980 peak, right? Green seems to just be like almost perfectly echoing. 78%. It's gonna go to six percent on the next couple of readings out, right? At it just probably unless something's broken with the PPI model. and I actually think my model the you know. I think we're gonna see fifteen to twenty percent inflation in about a year and a half to two years if we follow this. And it's gonna be a lot of money, right?

Chris Martenson ⋮ Out there chasing too few goods and also too few goods in some critical areas. It's those two things combining together. And at that point we have to ask the question, like, okay, we had Paul Volcker, right, six foot five, Texans cigar chomping, pushed people in the chest, backed them into the walls when you didn't like what they were saying, kind of guy. Who was capable of ramming he had to run short term interest rates at this peak, twenty one percent, to block that. Can you even what what happens to our interest expense if the long bond goes to fourteen percent like it did back then and short term goes to twenty one percent?

Chris Martenson ⋮ It's game over. Like it's it's not possible.

Marty Bent [49:54] That would Well that that would make at thirty nine trillion. Yeah, that would make the interest expense what, like six six trillion a year. Or not not six, but like five. Four and a half, five a year. It's at what, one seven, one eight right now? It's about to surpass social security.

Chris Martenson [50:14] Yeah, I think. Yeah. Yep. Thankfully we had Janet Yellen, the gnome genius, the garden gnome genius, putting all of our our treasuries into short duration. So we have these massive eight, nine, ten trillion dollar rolls every year now because we're all on the short end of the curve. As if that would always remain subdued. we should have should have as a nation. When when ten years were at point seven five percent, we should have l just slapped everything we could. gone Argentinian style, Austrian style, made hundred year bonds. I mean, just like pushed like that would have been smart. I again it just keeps coming up heads. Like, was she really that that dumb? You know?

Marty Bent [50:59] Well, that that's another i sort of confusing thing is 'cause coming into the Trump administration, Scott Ascent and others were saying this was a terrible mistake. She shouldn't have been doing this, to your point. I think Trump explicitly said we should have been issuing ten years bonds when the yield was that low. I think he mentioned a hundred year bond too, maybe even a fifty. And then Besson got in and kept hammering the front end too. There's something structurally behind the scenes, I don't know exactly what that seems To make it so they they feel forced to do this. and obviously as long term yields go up and they're probably gonna favor it the the front end just to avoid locking in higher interest rates on long term debt.

Marty Bent ⋮ But no, it feels like a a problem that isn't easily solvable unless you figure out the fiscal side. And that's another confusing thing. It's like, okay, this has been the year of unearthing the last twelve months of unearthing all this incredible waste. and grift within the the the federal government, whether it's social security, having dead people get paid social security till they're hundred and fifteen. obviously the Medicaid Medicare fraud that's been laid bare with all the learning centers and hospice centers across Minneapolis and LA and other parts of the country, from many different it seems predominantly immigrant groups

Chris Martenson [52:28] Mm-hmm.

Marty Bent [52:29] And it's just laid bare right in front of us. And the public, myself included, makes an uproar like, hey, they're obviously who's overtly stealing our tax dollars. Let's do something about it. And you'll get like headlines in a week of a week of just pandering to to that sentiment and then nothing happens. We'll come out and say, Well, we actually can't fix this because reasons.

Chris Martenson [52:55] Yeah. Yeah. I I confess I had some optimism in January of twenty twenty five, particularly when Elon rode in with the twenty something crowd and AI'd their way right through the bureaucracy of DC. Just like those all those people had those little like fiefdoms with their like MySQL databases of spending that were all like squirreled away that you could never you know forensically audit and AI just ripped it apart, right? You know, they smashed through USAID. And we were starting to get the data Republicans showing all the connections. And it was just this big sea of craft. I'm like, finally. And then next thing I know, Trump unceremoniously dumps Elon, proves that he will betray even somebody who is highly responsible for being a key supporter, financially and otherwise, in a critical moment to help him get elected, and and just spit him out and said, Nope, we're all done.

Chris Martenson ⋮ We're all done. And Doge just went nowhere. Like that to me was the DC power structure saying that was a little too frightening. We saw the light. the end of the tunnel, you know? And they just put a rip on it and and stopped it. and since then absolutely nothing of substance has happened. Nothing.

Marty Bent [54:03] Yeah, even after Nick Shirley and yeah, the sort of man on the street investigative journalists highlight billions and billions of dollars worth of fraud in in one state alone and nothing. I mean well that's like if again trying to I try to wear many different lenses and one of the lenses talk to Tom Wongo a lot and he's I think he's big on like, hey, this isn't gonna happen overnight, it's gonna take time.

Chris Martenson [54:10] One of the things.

Marty Bent [54:31] Like you brought up USAID, like we got USAID out. that's doesn't seem to have come back. We're not gonna get everything all at once and holding on to hope that like maybe that's the case where it's like hey, we can only do s a little bit at a time, but it is hard to see it right in your face and then I mean th the the Medicaid fraud, the Somali daycare fraud is like that should be cut overnight, like stop feeding the money. Yeah.

Chris Martenson [54:58] Instant. Instant. Yeah. Instant. I I think something like one in sixth hospice k what is it? In home care specialists works in LA County. Like it's an impossibility, right? You know, for Medicaid, you know. It that seems easy.

Marty Bent [55:17] And that that one's I I forget who I Dr. Oz went and did that one. And that was like a Russian immigrant fraud. Like we're not we're not racist here. We're not against Somali specifically or whoever it may be. it just seems like there's very clear loopholes are being exploited. And that's the weird thing. You brought the deep state. There is there seems to be some sort of organized effort to make make it the Somalian and Russian immigrants aware, like, hey, these loop balls are here. Here's how you can claim to be a hospice care nurse and and just take millions of dollars from the US government.

Chris Martenson [55:53] Yeah. Hey, if I could, Marty, I'd love to get your take on this because this is to me the most astonishing thing ever that came out of this was late January, early February twenty twenty five, right before Elon got shit canned. and I'm sure you're familiar with it, but you've heard this, right?

Marty Bent [56:11] Nonpro.

Chris Martenson [56:12] This is the th this is the most astonishing thing I've ever heard. So so he's Elon is on a interview on Ted Cruz's show with this other guy, I don't know. listen things you told me about. Okay. Right here. I mean they're not totally wrong, but they're probably off by five percent or ten percent in some cases. so I call a magic money computer any computer which can just make money out of thin air. Best magic money. So how does that work? It just issues payments. And you said there's something like eleven of these computers at Treasury that are that are sending out trillions in in payments?

Chris Martenson ⋮ They're mostly at Treasury. some are but there's some at HHS, some at there's one at s one or two at state, there's some at DOD. I think we found now fourteen magic money computers. With they just send money out of nothing. So This is the guy who who presumably knows something about payment systems, you know, having cut his teeth at PayPal, right? And he's very he three times he says these are magic money machines because they just emit credits. Now, in my limited understanding of the world, that feature only exists at the Federal Reserve. And he's saying that's now metastasized. And you have them at HHS, DOD, of course, that makes sense.

Chris Martenson ⋮ Like they can't pass an audit to save their lives, right? You know, but they're just these machines emitting credits. And then all that just it violates everything we know about money, right? It just means we're just manufacturing just one side of of the debit credit balance sheet and we're just emitting credits. I don't understand how that reconciles inside the banking system. I mean the and right after that they were like, Okay, you're out.

Marty Bent [57:56] Yeah. And he left with the black eye too. It's like, remember? Yeah. And

Chris Martenson [57:59] Did he? did he join the club? no.

Marty Bent [58:06] Well that's that's like the the cre like think I mean, we're getting the pure Wizard of Oz territory and think about just how fake reality is if they're able to do that. The misallocation of of money via the printing of it ex nihilo towards all these things that are I think against what most American citizens, what humans want at the end of the day. And so like that I I'd really be interested to get your perspective on I I mean deep stake deep state is a very broad topic. It has many meanings for many different people. But I I do think there is something here to this sort of entrenched sort of supra like unelected layer of the federal government that exists and historically has sort of just abused the system and done it through monetary means too.

Marty Bent ⋮ I mean one of The favorite books I've read in the last couple of years is Gold Warriors, which highlights how the CIA basically plundered the the gold that was in Southeast Asia after World War Two and just used it as a black box slush fund for for decades until these investigative journalists figured it out. And I mean, back then you actually had to find the gold to run the the the slush fund. Now you can just use the magic money machine to to print it out of nothing.

Chris Martenson [59:32] Yes, well, very important that we don't audit Fort Knox if if that story is right, you know. Somehow that's too hard. I don't know, counting bars. Well, difficult. well, so two things, right? So remember during the Iraq war, like there were all these pictures, like tankers filled with gold bars and smiling servicemen kind of holding up bars. I'm like, Well, where did it go? Right? Nobody can answer that question. Like, was it returned to the Iraqi treasury? Nobody will say. Like, just went missing. And then

Marty Bent [59:41] Yeah.

Chris Martenson [1:00:01] Hop, skip, and a jump. It was just last week we heard about this fake CIA agent. He was real CIA agent, but he had faked his resume. And they found $40 million in gold bars in his in his apartment or house. And and he said, the he had those were for he was paid in gold. Like those were for he's I think he said pay remittances or something. Like basically for hours work. The CIA pays people in gold?

Marty Bent [1:00:27] You're making forty million dollars at a government job? The Well we talked about Right? Well th we talked about this last week on the weekly show that I do. Like how did how did the CIA not flag that this guy was lying about his military rent? Like, is there no sort of interdepartment information sharing between the the the military and the

Chris Martenson [1:00:30] There's more to that story. That'll get buried, trust me. Mm-hmm.

Marty Bent [1:00:54] The CIA. Like I find that hard to believe. Like the fact that the whole story stinks, in many different regards.

Chris Martenson [1:00:59] somebody he submitted 40 million dollars of time payment stubs like what it's a lot of overtime you know i mean just like no something really stinks in that story but but gold is is central to it you know so so here here's here's my here's my wackadoodle you know hypothesis so i i track positive and negative space stuff so negative space in the story is that in 2003 the Federal Reserve stopped reporting MZM its largest money measure Right, money of zero maturity, because it was not cost effective to track it anymore. Like you guys print money out of thin air. What's cost effective? I'm I'm losing the plot.

Chris Martenson ⋮ Second, 2006 we lost M3. Now, M3 tracks all the money in the United States plus offshore money. And now we're not tracking offshore money. So the question is where would these magic money machines be emitting credits? And my guess is a lot of it's going offshore to do things, right? You got to pay contractors, you've got to. You know, whatever. Buy off dictators, you know, there's things that have to be done. But that could be where where all of this is going. And so my my hypothesis here, Marty, is that whatever you think our money supply is, it's larger than that. I don't know how much larger.

Chris Martenson ⋮ I hope it's not twice as large. Because you could imagine, like Panama papers showed us there were two hundred and seventy five thousand shell companies offshore where people have s money stash, maybe CIA officers with $40 million, right? And imagine they're all just parked there thinking they have all this US cash and it's good as gold and all that stuff. And then one day they wake up and the and the rumors have gotten started and the dollar's starting to tank, and all that money suddenly says, I'd rather be in something different, you know. That could be another sort of beach ball moment where you're like, woo, there was a little bit more pressure in the system than we thought, you know, out there.

Chris Martenson ⋮ But I'm I'm convinced at this point we do not have good insight into how much actual money has been created. Money is power, money is privilege, money is an extraordinary substance, and there's not a chance in the world that people who are unauditable, who are unaccountable, haven't abused that system.

Marty Bent [1:03:16] Yeah. I mean, i i it wa I think it was I for I mean, and it's almost like it's in your face now, 'cause what was it like last year for some reason or another, like the Cayman Islands like was forced to report their treasury holdings and I mean it's not the government to the Cayman Islands holding the second amount of U I think I I forget if it's larger than Japan or just below it, but in the same ballpark as Japan, which is the largest holder of US Treasuries, and obviously these are all sort of came in funds that have exposure to treasuries and many people are believing that's sort of the a lot of that is hedge fund fronts for the CIA to to run slush funds down there.

Chris Martenson [1:03:59] Well, th this was an astonishing thing to me because I just I just tracked this down the other day. So the the Board of Governors, Federal Reserve System, they have some paper. Paper comes out by Barth, Beltran, Khan, Perozek. Comes out in October of twenty twenty-five. And they said, we're kind of trying to square it up because you know the US tick report out of Treasury says the Cayman Islands have four hundred twenty-seven billion at the end of twenty twenty-five. But when we looked at their nine F their PF forms, it turned out they had one point eight trillion. It's like we missed one point four trillion.

Chris Martenson ⋮ What's one point four trillion among friends? And I'm like, I'm reasonably certain that that either the the treasury has to send you a coupon payment or upon remittance, right? Because it's a you know, it's a T bill, so it was sold at ninety eight, but you par out at a hundred when it rolls. they have to send that money somewhere. They didn't know where it was going? Impossible. It I mean it's just

Marty Bent [1:04:56] Yeah.

Chris Martenson [1:04:59] implause like you said, it's in your face now that you have to accept these like, we just didn't know. One point four trillion extra.

Marty Bent [1:05:07] Yeah. And it's like, the Pentagon failed another audit. Can you literally cannot audit what we're doing with all your tax dollars or the money that's just being printed. That's I mean do you I mean you you you mentioned like the the beach ball in regards to people basically calling BS on the fiat system and going towards harder currencies. that's why I got into Bitcoin. that's why I'm passionate about Bitcoin. Like I think they're is not only a sort of pressing need to to transition back to a sound money economy, but I think there's a moral obligation. I think the the ethics of money production by Holzman was very influential on my my my thinking on on just like the morality of of money printing and I I I do think there's an ethical dilemma that the whole world finds itself in now where we're living in immoral monetary systems and getting back to sound money is is an imperative if we want to have a true society.

Marty Bent ⋮ Because again, going back to the point with all this magic money machines, these slush funds in the Cayman Islands, whatever it may be, it's all fake, manufactured out of nothing. And what has that done to push the trajectory of of humanity into the direction that we're on now versus what otherwise would have happened if those forces weren't there.

Chris Martenson [1:06:38] This is such an important point and it's it's kind of this is the genesis of where I got started. But I got started in all this, you know, way before Bitcoin was around. So I kind of dialed in on on gold or or anything. I didn't even care. Like it could have been sheepskins, just anything that humans couldn't print out of thin air. Because if I if I reach into your bank account and I steal three percent of that, you know, I've stolen. It's it's it's it's that's immoral, right? It's unethical. But that's what the Fed does, right? They print all this money and they steal from everybody who's who's got existing hard work, you know, money's supposed to be that store of value.

Chris Martenson ⋮ Hey, I worked hard, I overproduce, I have some excess, I save that, right? And they're saying, now we're gonna steal that from you on an ongoing basis. So by definition, we have a fraudulent system of money. Cause it's fraud if I can steal from you without you knowing, right? It's just that's all. It's impossible to build a non corrupt system. On top of fraudulent money. It's it's like to me, that's just sort of a philosophical like truism, right? we're gonna put these rules in place and we'll have this great system, but underneath it, the sill plate of this house is termite shot. You know, it's like we're gonna build this beautiful house on top, right?

Chris Martenson ⋮ Good laws, rules, regulations. You can't, you just can't. So I I think if we want to have a just society, you have to have sound money. And I'm agnostic, I don't think we should have a sound money system. They sold us on it, like you have. Only the dollar. I'm like, let's have Bitcoin. Let's have gold. Let's have sheepskins. I don't care. And let them compete because it's competition that keeps things refreshing and also honest over time. Right. You know, if I want, if I want to save my wealth in airline miles, fine, you know. But then I find out the airlines give me less and less and less for each mile over time.

Chris Martenson ⋮ I'm like, nope. You know, I'm gonna save it in Pokemon cards. Nope, that was a bad idea. Okay, whatever, you know, but you get. I think that having choices would be great, you know?

Marty Bent [1:08:36] I completely agree. And now now I'm starting to get not angry. But just thinking about it, like they print I mean it's become a meme. I think shout out to President Naiebo Caitly for coming what was it, the CPAC a couple of years ago or and basically explaining like taxation's a humiliation ritual. 'Cause that's the other that's the other immoral thing is about hey, you guys can print all this money, you are printing all this money, but then you're turning around and slapping thirty to fifty percent tax rates on people.

Chris Martenson [1:08:55] Yeah. That's what it is.

Marty Bent [1:09:06] and you're taxing them on the way in, on the way out, every which way possible and you're compounding that immorality of debasement by basically stealing stealing the hard earned wage even more via taxation.

Chris Martenson [1:09:27] Mm-hmm. Yeah, yeah. No, indeed. and you know, again, early 2025, there were these little glimmers of hope, right? Where Trump actually said magic words to me, which is, you know, maybe we should explore getting rid of property taxes, which to me is the ultimate insult, right? So every so often somebody says, We should tax unrealized gains on stock portfolios and the whole world erupts in fervor, right? Like, my God, worst thing ever. What a terrible idea. And objectively it is a terrible idea. But that's what happens with houses.

Marty Bent [1:09:43] Mm-hmm.

Chris Martenson [1:09:57] Right? You know, you get taxed on the unrealized gains. The assessor comes around every so often and says, your house is worth more. You owe more, you know? It's the craziest thing. Why do I owe more on this thing that I have a house? It's a depreciating asset, trust me. You know?

Marty Bent [1:10:12] Yeah. And I bought it. It should be mine. Why are you why are you taxing me incessantly? And and I mean that and this is another reason for a sound money economy too, I I believe, is I mean, people are using their houses as piggy banks and that is I think part of the reason we're seeing this sort of intergenerational struggle, and resentment from the younger generations towards the older is because they've been a combination of psyopt enforced via the the financial just the natural financial pressures of the system to use their their houses as piggy banks that the people who are coming up are finding it harder to to to buy a house because they don't have the cash to to purchase that piggy bank for lack of a better term.

Chris Martenson [1:11:00] Mm-hmm. Yeah. Well, I'm I'm either a very late boomer or an early Xer, depending on who's setting the starting date. ideologically I I align more with with Gen X because, you know, just how I grew up. and and and all of that. But every time I I say, hey, the boomers as a class are leaving behind a much worse world than the one that they were granted, right? Every single time, Marty, I get all these angry boomers. And It's the s it's it's the same argument every time they go, nah, I'm not that way, or nuh, my mom and dad weren't like that. And it's it's like I said, the average height of people in LA is five foot eight, and somebody comes along and goes, nah, I know a guy who's six two.

Chris Martenson ⋮ You're wrong. I'm like, that's they can't do the generalization. They have to destroy it with a specific, which is so classic for that generation, right? It's all about me. Me. It's the it's the the boomers are leaving behind a ruined world for their offspring. Full stop, there's no way to debate this at this point in time. Right? You can't get by on minimum wage. You can't get by on two minimum wages. People can't even get by on, you know, you saw Professor Plum, Michael Green saying, you know, let me make an argument. Poverty, if you live in a city, is 140,000 now. Right? the opprobrium he got for that point of view.

Chris Martenson ⋮ But the point is the the poverty line is not 32,300, like where the government says, it's way up there and it's going higher every year. That's the world we've left behind. And and objectively, I mean, what can what can you see? Levels of happiness, like way down, household formation, way down, having kids, way down. Those are all markers. Forming a household, having kids are s are signs that you're positive about life in the future. And the opposite of that means you're not positive. That's the world that's been left behind. And it's because I think boomers were asleep with the switch and they just didn't do what needed to be done.

Chris Martenson ⋮ It's hard work kicking out. raccoons who've taken over and infested your political structure. It's it's hard work pushing back against this. And we just didn't get any pushback. So I think it carries on till it breaks. Right. So when you ask for you know, where does this go in my mind, I'm in my studio, but right outside I've got six cows and 30 chickens and all that because I'm a little bit worried that this could this will go to the breaking point at some stage. But this it's it's sooner or later you you maybe

Chris Martenson [1:13:22] You either get sort of that violent uprising which can happen, but there's another form of violence too, which would be in China there was this little movement. I don't know how long it is, but people were overworked. And so they called it lying flat, meaning you just you just don't you just don't work anymore. You know, you just check out of the system. So we're seeing people check out of the system, right? You know, the the male participation rate in employment just plunging, right? There's guys who are just like, I'm out. I'm just I'm not doing this. And and when the males, the typical traditional providers and protectors are saying, I don't even want to play the game, right?

Chris Martenson ⋮ Well, you've got a bad game. And it's a rigged game. And we know this now, right? So I have I totally support the younger generations or like the olders are leaving a mess and I'm sick of this. I don't want to play the game. I think that's rational and supportable as a point of view. Because if the game is rigged against you, don't play the game. Totally makes sense.

Marty Bent [1:14:20] Yeah. The quiet quitting trend growing. Yeah, I mean you can say, I I'm a I'm smack dab in the middle of the millennial generation. Got a younger sister straddles millennial and Gen Z, and then some cousins that are Gen Z. And it is a I mean, I think it's objectively true that's there's a lot of h hopelessness within the younger generations. That's one thing. I try to do with this platform though. My audience, my demo's a bit older. We do have younger people listening, but not as many as as Gen X and and Boomers, funnily enough, that listen to this show. But anytime I get to talk to to a young person, it is what you just said, it's like opt out, but opt out in the right way.

Marty Bent ⋮ That's like Bitcoin, like I think. adopting a sound money standard on my personal balance sheet in my early twenties has worked out well for me is I get into my mid thirties, I'm married, have three children and I don't think I would have been able to do that as as with much peace of mind if I if I wasn't on a personal sound money standard. So that's one way you opt out is don't use their broken money. and then and as somebody again with three young children trying to think of what the world will look like in twelve years when they begin to to get out of our house and

Chris Martenson [1:15:29] Mm-hmm, mm-hmm.

Marty Bent [1:15:42] on their own. It's like what what's that gonna look like and what can we do to make sure that it is a world of opportunity and relatively safe and and I think that's the big question that many people have right now is what are Gen Z and Gen Alpha gonna do? 'Cause they're gonna be forced to pick up the pieces. and I think not only what are they gonna do, but how quickly are they gonna be able to do it if they figure it out?

Chris Martenson [1:16:06] They are. Yeah. I mean, it's it's very difficult to have give advice. I mean all my three kids are basically mid struggle with all of this, right? and and just tapping into what what they and all their friends are saying. They're like, Well, what what even is the point? Like, you know, so there's no company loyalty anymore. None of them believe that that social security which dips into their paychecks when they get paychecks, you know, none of that's gonna be there for them. They just they feel totally betrayed and abandoned by the system, right? Which which is not conducive. to things. And so, you know, my my warning to boomers is, do not even remotely assume that when push comes to shove, that you're going to have a lot of sympathy in the younger generations going, wow, well, let's, yeah, that's kind of a shame.

Chris Martenson ⋮ You know, you paid in to that system. We'll we'll work extra hard to preserve it so you can have your retirement. Try and act surprised when they just like up and and walk away and say, it's kind of on you. Good luck with that. And I'm sure you saw this too, but I can't believe that that even the How are we not at like a revolution at this point? When you get Larry Fink, who was born to steal from people, right? That's who he is. He's just born to steal from everybody. And this a CEO of BlackRock. And he says, ordinary people's savings accounts and pension funds worth trillions of dollars will be used to build data centers and power grids for AI.

Chris Martenson ⋮ Much of this, he says, will come from savings accounts and pension accounts. Yeah. Q, the the famous you know, scene scene from South Park and it's gone.

Marty Bent [1:17:45] Yeah. So what's he talking about like a bail in to fund the infrastructure build up?

Chris Martenson [1:17:50] No, he's like well, so right now, you know, the the free cash flows of all the AA companies are like negative now because they're just like taking every down ounce of earnings and now they're also starting to issue debt. So who's on the other side of that debt? I think the last figure I saw is 180 billion. That's issued. Somebody's on the backside of that. You know who's on the backside of that? Probably the bond funds, right? Which all these four O and Ks are rolling into as part of a sixty forty strategy. And now they're also starting to issue stock. So they're they're pushing both, you know.

Chris Martenson ⋮ Equity and debt to get this build out. So it's going to be the people on the other side of that who are funding that. And of course, as you know, there's no business model that shows that you're going to be able to earn that amount of money back before these chips depreciate out, which is three to five years, depending on the chipset, right? so like it's just and this is just we're watching a money evaporating machine in process right now, and Larry Think just comes right out and says, and you're gonna pay for it. How is that how do people just sort of shrug and move on from that?

Chris Martenson ⋮ I don't get it.

Marty Bent [1:18:53] Yeah. Yeah, it'll be interesting to see. I mean, th that Larry Fink, I think as somebody who I mean you mentioned flare gas earlier, that's how I got into Bitcoin mining. We we'd would go and take take gas that was being otherwise flared, run it through generator, produce electricity, mine Bitcoin with it. But at that era in twenty eighteen, twenty nineteen, my biggest enemy was ESG, which Larry Fink was the the the main spokesperson for and I think that was a massive capital misallocation mishap and narrative mishap. And I think thank God we've we've gotten beyond that that nonsensical sort of view of the world and how corporations should be run and what they sh how they should be allocating capital and and hiring people.

Marty Bent ⋮ But yeah, it it is funny how these people just get a pass. Larry Fink especially And that and then again to the AI point, the pushback on like the profitability, I think whether I think anthropic maybe starting the free cash flow. I think Elon's Colossus, running that out to anthrop that's the other thing I'm trying to wrap my head around is like seeing the stories of the circular deals. I don't I don't know if it's exactly Enron like. And I always fall back to like using these tools, they work and they are helping us. And so but For Larry Fink to go out there and be like, no, we're gonna use your your pensions to fund all this It's like, Well I think I think it's a bit brash.

Marty Bent ⋮ And get and then going back to sound money, it's like why do we need all these exotic in investment vehicles? And you think of the amount I think the amount of ETFs is surpassed the amount of Yeah, actual stocks. And so we've just gotten to this hyperli hyper financialized economy. I know I'm rambling here, but I'm getting to a point which is like we should be on a hard money standard where you're like forced away.

Chris Martenson [1:20:43] Actual stocks. Yeah. Yeah.

Marty Bent [1:20:58] the the the money system forces you to weigh the opportunity costs of capital allocation and the market basically figures out like, okay, is this productive? If so, you'll be able to produce it and make a profit and reinvest those profits, expand operations. And the whole point of this ramble is like we can't even make these decisions because the money's completely broken.

Chris Martenson [1:21:22] I I agree. I agree. It's a huge stumbling block. because it becomes about the money. And so financialization is making money with money, right? And almost every company's out there figured out that it's in a in an expansive monetary environment, it's just easier to make money with money than to do hard things like hire people and train them and manage inventories and take risks and all that stuff. That's terrible. but if you can just make money with money, you know, that's easy. And and you know, I've got these this whole giant set of Books by Will Durant, you know, inarguably the most complete and best historian ever.

Chris Martenson ⋮ And there was this one little chapter thing that was brought to my attention by Simon Black. and he did this brilliant presentation around it where he just read this paragraph out of, I think it was Athens, like 50 BC or something, and they went through this whole monetary debasement. But Will Durant describes exactly our society today. People under a debasing regime suddenly. Wanted to gamble, wanted to speculate, wanted to make money with money, anything but actually being productive, because that's hard work. We, you know, we're humans. So if you give us an opportunity to like make money with money, that's so much easier than doing actual hard work.

Chris Martenson ⋮ But you need the hard work, you know? And so I think we're just sort of at the tail end of this whole thing. Monetary debasement has been pretty much the surest way to completely ruin a society through all of history. I don't think now is going to be any different just because we got some better tools, you know, got better computers. I think it's the same story as ever. You have to understand where value comes from. It starts with energy, it starts with people working hard, taking real risks, and transforming that into higher value add products, right? And that's the true source of prosperity. Financialization is always, always not a path to prosperity, except for the individual playing in the game who wins, right?

Chris Martenson ⋮ it it's just nibbling at the actual prosperity that's out there. It has to, by definition. Right? You know, all these all these private equity dudes out there, they're they don't make anything, right? They just made great spread. Yes, true. Yeah.

Marty Bent [1:23:20] And zero sum. they make great spreadsheets. Have you have you seen the spreadsheets? They're incredible spreadsheets. You should see the V lookups in those spreadsheets. They're pretty pr pretty miraculous. You talk to some Excel nerds, they'll say, Hey, this is this is actually pretty beautiful and productive what we've built here with this V lookup. Chris, I wanna be respectful of your time. I feel like we can go for hours. and I ha I have it on the calendar for ninety minutes and we're brushing up on that, but

Chris Martenson [1:23:34] Beautiful. Got conditional formatting. It's amazing. Yeah.

Marty Bent [1:23:57] This was incredible. Is there any parting thoughts for the audience based off of what we just discussed? Anything we missed? Anything you think people should be aware of before we wrap up here?

Chris Martenson [1:24:09] Yeah, absolutely. So, first, I can't give specific investment advice ever because I have a registered investment advisory and that service at Peak Financial Investing just helps people get connected with portfolio managers who actually see the world this way. And it's a really important service. But what I wanna just direct people to, however you get there, I think the era of passive investing, which is really dominated, it's over, right? Just just throw money into an ETF, you know. And and just wait and magic happens. I think we're we're entering an age of of severe turbulence here. I think there's supply shocks. I think there's inflation. There's all kinds of things coming along where I think everybody would be well suited to have a very nimble, very targeted focus again.

Chris Martenson ⋮ It's just the the pendulum doth swing, right? There's times when it's fine to just sit back and just sort of be patient. I think we're entering a period now where we're gonna have to be nimble rather than patient. And the second thing is. If all of that seems confusing and hard and it kinda is, i hard assets, right? For me, that's anything that can't be just sort of willy nilly expanded on a spreadsheet by somebody, right? And so really important. So for me, hard assets it it's land, it's trees, it's cows, it's gold, it's silver, it's equipment, it's skills, right? All these these are the things to get back sort of into, I think.

Chris Martenson ⋮ And and these two will come back in vogue at some point. And like you, I sort of share this idea that we're only looking at the shiny side of the AI coin. And if we do that too long, it's gonna be much to our detriment. Cause if I had a magic, if all if all I have to do is press a button and a machine makes itself, you know, I press the magic, you know, clawed coding thing and it recodes itself, right? That's fine. You just carry that forward ten years. Nobody remembers how the original code was developed. If the machine blinks out for some reason, nobody knows how to rebuild it, but we're all dependent on it, right?

Chris Martenson ⋮ That's a huge risk here. So I think that for anybody younger, people skills, right? Actual human interaction, knowing where real value actually comes from. You know, don't pay it. Money isn't money isn't isn't wealth. It's a marker for wealth. Know where the value actually comes from and how you provide value in the story, and you'll do fine. You might have to scramble and dodge and weave a bit in life, but but you know, the old era that your schools are still trying to train you for, it doesn't exist.

Chris Martenson [1:26:35] It already went poof. It's gone. I don't think it's coming back. So it's a whole new era. And that era is all about knowing where real value comes from and how to add to that. And and there. That's the best advice I have for people right now.

Marty Bent [1:26:51] Great advice. Have will agency. Sound money. You can opt out. Chris, this has been a pleasure. Hopefully we can do this again at some point in the future.

Chris Martenson [1:27:00] Absolutely. Pleasure's been mine, Marty.

Marty Bent [1:27:03] Alright, peace and love freaks.