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TFTC - I Spent 30,000 Hours Studying Bitcoin—Now the BIGGEST Short Squeeze in History is Here | Infra

Aug 11, 2025
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TFTC - I Spent 30,000 Hours Studying Bitcoin—Now the BIGGEST Short Squeeze in History is Here | Infra

TFTC - I Spent 30,000 Hours Studying Bitcoin—Now the BIGGEST Short Squeeze in History is Here | Infra

Key Takeaways

Robert (“Infra”) distills 30,000 hours of macroeconomic research into a sweeping critique of the U.S. financial system, tracing its structural flaws to decades of globalization, offshoring, and the Triffin dilemma, which have inflated asset prices for the wealthy, hollowed out manufacturing, and fueled wealth inequality, social unrest, and “deaths of despair.” He argues that genuine reindustrialization requires a weaker dollar, possibly through a modern “Plaza Accord”, to restore competitiveness and reduce dependence on geopolitical rivals for critical goods, while warning that attempts to balance the budget would trigger a severe recession, forcing policymakers toward negative real interest rates and financial repression. In this environment, Bitcoin’s scarcity, neutrality, and predictable monetary policy make it an ideal reserve asset and collateral for credit markets, with adoption set to expand from individuals to corporations, real estate, and even nation-states. Framing today as a “silent depression” marked by falling real wages, declining savings, and generational pessimism, Infra advises focusing on trades, avoiding debt traps, and saving in scarce assets, while acknowledging AI’s potential productivity gains if managed carefully. Though cautious in the near term, he remains optimistic that this turbulent “fourth turning” could give way to a new golden age, with Bitcoin as a stabilizing anchor in a politicized monetary world.

Best Quotes

“The dollar is even more overvalued than it was in 1985… Scarcity is the antidote and Bitcoin has one of the lowest supply increases of any asset.”

“A 15% tariff isn’t going to make American manufacturing competitive when currencies are 35–40% mispriced.”

“If the income needed to qualify for a mortgage on the same house increases by 200% in five years, you’re going to tell me inflation is only 21%?”

“The net worth of the top 1% as a share of GDP is almost a perfect inverse of the trade deficit.”

“You know the monetary policy of Bitcoin today, six days from now, six years from now, sixty years from now.”

“They need suckers at the card table to financially repress… I just want to know who’s going to buy a -2.5% real yield Treasury bill.”

“The only winning move is to play. Scarcity is the antidote.”

Conclusion

Infra concludes that the U.S. is trapped in structural deficits, an overvalued currency, and deepening inequality, with policymakers likely to pursue a weaker dollar and negative real rates to inflate away debt while reviving industrial capacity, an approach that will be inflationary and socially turbulent but ripe with strategic opportunity. He sees Bitcoin not as speculation but as scarce, neutral collateral capable of anchoring a new credit system, preserving purchasing power, and providing stability in a politicized monetary order; despite short-term volatility, he believes those who position in politically immune assets could emerge from this period into a post-financialization golden age.

Timestamps

0:00 - Intro
1:28 - Globalization and deaths of despair
11:23 - Trade imbalances
17:00 - Bitkey & Opportunity Cost
18:39 - Trump’s capitulation
24:33 - Stablecoins and consequences of weak dollar
32:56 - Unchained
33:21 - Automation
36:39 - Progressive social policies
41:53 - Correlation/causation & silent depression
50:18 - Young people taking large risks
57:44 - Zuby’s Gen Z advice
1:03:04 - Great definancialization
1:35:20 - AI productivity miracle?

Transcript

(00:00) For someone who spent 30,000 hours digging into academic papers and the Fed and all this stuff, if there's a black swan event that just collapses trust, you could see a little bit more of a dramatic move into Bitcoin. We've seen clearly kind of a short squeeze, you know, positioning got stretched.
(00:16) The dollar is even more overvalued than it was in 1985. Balancing the budget would result in a GDP contraction worse than CO and worse than 2008. So severe that it would throw us into a debt spiral immediately. As the trade deficit has gotten larger and larger, the net worth of the top 1% is increasing at a faster rate than GDP. If we start issuing interestbearing debt to buy Bitcoin, China can just turn around and say, "Look, well, we're only taking Bitcoin.
(00:37) There's nothing we can do." So, the Bitcoin ends up flowing out. M2 money velocity, S&P, and gold terms, all of these peaked around the same time. I don't see how like any of those things are bullish for the dollar. The income needed to qualify for a mortgage on the same house increases by 200% in 5 years.
(00:53) You're going to tell me that inflation is only 21 22%. The S&P 500 has increased 10 times faster than the average hourly wage. The current account deficit on a quarterly basis is about $450 billion. It's about $150 billion per month that mechanically must flow into the dollar. I just don't see how we don't have higher inflation for the next decade.
(01:18) Scarcity is the antidote and Bitcoin we know has one of the lowest supply increases of any asset. Robert, thank you uh thank you for joining me, sir. Yeah, good to be here. The uh we got introduced by a mutual friend, Roberto, uh formerly known as and still known as popularly as Peruvian Bull. He uh he reached out introd. We've been going back and forth a little bit through email this week and just really excited to touch on some of the topics that you're focused on and passionate about. Globalization, silent depression, Triffin's dilemma.
(01:59) And as we were discussing right before we hit record, let's start with globalization. uh because obviously I think this year particularly we're seeing uh political reactions to globalization in the form of tariffs and economic policy here in the United States making big shifts and so let's let's start with globalization like how did it get to this point uh and where do you see it going in the future? Yeah.
(02:28) So, uh really started in the 80s at least kind of from what I can gather from bounce of trade uh current account data started in the 80s and uh basically you know what we did was we offshored uh over 5 million high-paying manufacturing jobs uh in critical industries to the rest of the world. And the reason that this was done was uh the labor in the developing emerging market economies is much lower.
(02:58) Uh and so if you're a multinational corporation, you're able to uh you know increase your profit margin significantly by uh utilizing that that you know low um uh you know cheaper labor uh despite you know uh being an American company and and eventually selling your goods in America and benefiting from uh the American people. So uh yeah it started in the 80s and uh you know it also kind of coincided with some of the silent depression stuff.
(03:22) uh there were clearly some immigration policy even under uh Reagan, you know, under both admin uh both uh political parties that kind of started to exacerbate some of the wealth uh dynamics that we started to see. But, you know, the the other side to a trade deficit that many people don't talk about, they're they're talking about it more recently, which I appreciate, is this capital account.
(03:50) So if you are running a current account deficit as the US has uh there is a a opposite side to that which is a capital account uh and so we've been running a current account surplus meaning we are importing the value of goods that we are importing is higher than the amount of goods the value of goods that we're providing to the rest of the world. Um and and the way that you balance that current account is by an inflow of capital.
(04:10) And uh so this you know kind of goes into the Dutch disease dynamics with the dollar where uh you know certain industries have done very very well from this. You think fire right is the the little acronym that gets thrown around finance, insurance, real estate um you know uh if you are a MIT grad you know in engineering you're not going to build rockets uh for NASA.
(04:34) you're going to build a a algorithm for Jane Street, right? So certain industries have done very well. Um with these billions and billions, hundreds of billions uh cumulative it is worked out to be trillions of dollars um tens of trillions of dollars actually in capital inflows. And this can be uh real estate, this can be you know equities, corporate equities, uh you know the US stock market, this can also be treasury bonds of course. Um, and you know, certain industries have done exceedingly well. And I would also point out those that
(05:07) are wealthy enough to afford to own financial assets, uh, you know, have also done well as not only the corporate profit margin has been boosted due to that cheaper labor, uh, boosting the profit margin for the corporation, uh, but also due to the structural dollar, uh, bid. And this is part of the reason the dollar has become kind of so grossly overvalued.
(05:32) uh and and as the dollar continues to appreciate uh our goods are become less and less competitive in the rest of the world. Um so there's a lot of kind of concepts interlin there. Uh but I think it ties in well to uh some of the tariff dynamics that we're seeing now.
(05:51) You know, a rise of what I would call uh I wouldn't call it protectionism so much as I would call it economic nationalism. uh you know for the longest time we for some reason our policy makers worried more about uh building the middle class of Indonesia and Malaysia and China and India than they worried about building the middle class here.
(06:13) uh you know and of course traditionally high you know manufacturing jobs uh you know were kind of the the core the cornerstone of the kind of uh you know post World War II American dream right the family especially in the rust belt we've seen uh that that area been absolutely decimated um and this has led to not only the economic and financial consequences with you know this kind of huge amount trill tens of trillions of dollars coming into capital markets boosting the value of say stocks and keeping bond yields low. Um, boosting the dollar of course and real estate.
(06:44) Not only that, uh, but you also have this dynamic where, you know, socially in America, we see the highest suicide rate going all the way back to the Great Depression. We see deaths of despair that are double the rate that they were during the Great Depression.
(07:01) So, uh, deaths of despair being defined as, uh, suicides plus drug overdose. We know that, you know, the the prior industrial heart of America in the rust belt, it was especially hit during the opioid crisis. Um and and you know, I think a lot of these concepts are kind of interlin and it goes into the issues with the dollar.
(07:24) Um you know, Dutch disease, I think, refers much more to the uh the benefit for certain industries, right? uh the Netherlands discovered this uh great natural gas field that was going to revolutionize, you know, boost their economic output. Well, it ended up hollowing out uh you know, all all their other industries that had been core to their uh kind of economic success leading up to that.
(07:43) So, uh you know, we've seen this hyperinancialization of the economy. That's what's really driving kind of the wealth inequality story is those who own financial assets and those who don't. Um, and you know, the current account deficit, the trade deficit, uh, you know, is really great if you're one of the, you know, top 1%, uh, that own the vast majority of US equities.
(08:06) Um, you know, the top 10% own 93% of household equity exposure. So, we know the bottom 50% have debt. That debt has skyrocketed in cost due to the interest rate uh, hiking cycle. And meanwhile the uh top you know 1 to 10% they own financial assets and financial assets have have skyrocketed uh due to due in part to this current account deficit.
(08:32) I would say that you know the current account deficit on a quarterly basis is about $450 billion. Um, and so if you take that down to to per month, it's about $150 billion per month that mechanically must flow into the dollar. And then financial assets within America. That's $150 billion a month is a is a significant amount of money. Um, and you know per quarter that would build uh I forget the exact number. I did the math.
(08:58) It was like eight or nine uh uh Ford class aircraft carriers, right? So it's a huge amount of money that we are um you know needing to finance via other ways and that gets into the Triffin Triffin dilemma uh with running the need to run this current account deficit due to being the reserve currency issuer of the world.
(09:18) Um and so I think you know I'm I'm I'm not supportive of every single thing that Trump has done but the one thing that I have been very outspoken uh in in favor of is the tariffs and the the at least the attempt to start to address some of these issues. I mean it ends up being a national security threat when you know our industrial capacity is so hollowed out that we rely on what a lot of people would consider to be an enemy uh for 65% of active pharmaceutical ingredients or you know we we see on the defense side we're losing a proxy war to a country with one 12th of our GDP. uh and then
(09:53) you look at the net international investment position which has accred over many many years of this kind of prolonged current account deficit that uh nip refers to how much assets do we own of the rest of the world versus how much of our assets do they own and uh that's negative 100% of GDP so it it's it's a level I've looked uh for another kind of you know parallel to that and I've never seen a parallel to that in history which means means all of all of our whether it's US treasury debt even corporate equities um to some degree real estate as well we saw in April what
(10:31) happens when foreigners start to uh you know uh dump US dollar assets and mass and it basically brought you know the president of the United States into capitulation on one of his core uh you know policy agenda proposals.
(10:52) Uh so the power that that net international investment position being so insanely large in a negative direction that power is immense. You know foreigners literally own us to some degree and and you know uh we start to threaten tariffs we put on tariffs and they don't like that they can just start dumping treasuries and force Trump to capitulate.
(11:12) So um there's a there's a number I mean we we didn't get here overnight and a lot of these issues are interlin. They'll they're complex and they'll be difficult to uh fully unravel, but I do see positive steps in in some of those areas. Yeah, this reminds me of a conversation I had with Lyn Alden a couple of months ago after I believe her from May or June newsletter which covered this sort of tri like the effects of Triffin's dilemma.
(11:39) flood you hollow out your manufacturing base, flood these emerging markets with dollars so that they can build the things that you're replacing and then that flows back into financial assets. And I think what we sort of dug into is that works for a period of time but eventually it falls under its own weight because you just have this imbalance socially, economically that exists domestically that is untenable.
(12:04) Yeah. Well, I would I would argue that uh you know, looking at some of the societal KPIs, I'm a I'm a big uh pretty outspoken on what I call GDP maximalism, right? This idea that GDP is the end- all beall for measuring uh the success of an economy.
(12:25) Uh I much prefer to look at real wages, for example, or the suicide rate or uh you know, drug overdose deaths and and and deaths of despair. kind of broadly speaking, I think anti-depressant prescriptions, which have 13xed in the past 50 years, um, you know, some of those metrics are pointing to a very sick society. Uh, and I think we see that with the political polarization uh that, you know, to some degree Trump is a uh symptom of, and I think it'll continue to get worse.
(12:53) I mean, we uh see kind of I, you know, I I said it uh uh before mom Donnie, but I I I warned people. I said Trump is a, you know, your kind of populism, right? The kind of populism a lot of uh people might like, but be careful because, you know, the the natural consequence of kind of all of these things is that we see the other side of of you know, left-wing populism. And sure enough, Mom Donnie kind of came out of nowhere and uh, you know, did really well there.
(13:19) So, yeah, politically, I think I think most of the issues we see in America are downstream from economics. Uh and and that is not just because I'm a you know a macroeconomic nerd but because that's genuinely how uh the correlations that I found um you know that that's generally what the data supports at least for me.
(13:40) Uh and you know like at at some point like you said it has to come to an end. uh certain systems are not sustainable and I would argue that a 7% procyclical deficit uh in combination with a 4 and a half% current account deficit uh you know is not sustainable in any in any in any reasonable world. Um and you know the the unfortunate thing you know for us as Bitcoiners is you know uh Lynn is great talks about broken money um and fractional reserve and debt based money and a lot of those concepts which I think are great. I I've been talking about this concept of kind of global broken money, which is that um in trade,
(14:17) you know, going back hundreds of years, uh there have always been imbalances. There have always been countries that uh you know, run a trade surplus versus another country. The release valve used to be when it was gold uh goldbacked money.
(14:37) The release valve used to be that the currency would uh move right to offset uh the currencies were valued on balance of payments for example. The currency would move to offset that uh particular imbalance over time. You know, it's not an immediate overnight sort of thing, but over time uh the currency would be this kind of equalizing equilibrium force.
(14:57) Uh well that's completely broken down with the dollar's reserve status. Uh the dollar uh at least as of a couple months ago is even more overvalued on a purchasing power parody basis than it was in 1985 leading into the um the plaza accord when we saw this historic uh you know uh weakening of the dollar.
(15:20) So so the dollar has kind of remained way too strong for way too long and has just kind of exacerbated these issues. And if we had a neutral measuring stick against which to measure fairly fun on fundamental basis, you know, uh the the actual strength of currencies, we wouldn't see any any anywhere close to the degree of problems that we see. So that's one of the really unfortunate things.
(15:43) And you know, sure enough, we have uh central banks kind of gold is over the past couple years, gold has uh been uh kind of, you know, on the rise. My hope is that Bitcoin is kind of joining that uh in terms of use as a reserve asset. The problem for America with something like uh you know a Bitcoin strategic reserve however is that because we run a twin deficit n uh a good country the only thing we can accumulate is debt.
(16:12) Um it it when you think of it in those terms it's you know it I I I think most people would agree that's not sustainable. you know, if we start issuing interestbearing debt to buy Bitcoin, for example, uh then, you know, at some point, China can just turn around and say, "Look, uh, you know, all those 65% of active pharmaceutical ingredients that you rely on us for to keep your people alive.
(16:39) Well, we're only taking Bitcoin, right? And because we're a twin deficit nation, there's nothing we can do. So, the Bitcoin ends up flowing out. A twin deficit nation by by definition is kind of net unproductive. So really we got to address kind of the deeper issue in my opinion which is why are we running this twin deficit and what are some policies that can be done to to address that actual underlying kind of root problem if that makes sense. So freaks this rip at TFTC was brought to you by our good friends at BitKey.
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(18:37) That's opportunitycost.app. And like going back to what you said earlier about Trump's capitulation in April due to the dumping of treasuries. It seems since then I mean there are still some posturing hardlines policies decisions being made in regards to terrorists but it seems pretty clear combination of Trump and Bent specifically have sort of committed to this we're going to grow out of the debt situation and really turn it on turbo as Elon said um a few months ago and I guess that's the big question like that capitulation that recognition that the only way out is through uh is a bit unnerving.
(19:22) Yeah. I mean, uh I think it was November when Elon started talking we're going to balance the budget. We're going to cut 2 trillion from the deficit. I did some math and granted I don't have a PhD in econ economics. I'm no mathematician, right? But uh just this humble nerd's math um found that balancing the budget would result in a GDP contraction worse than COVID and worse than 2008.
(19:47) Um, so you know, I always kind of faded the the Doge thing because it just number one, most of the spending, as you know, is entitlements and you politically can't really touch that. Uh, but then number two, like if you were to really cut that much government spending, um, it would it would it would result in a contraction of GDP so severe that it would throw us into a debt spiral immediately.
(20:12) So, I always kind of was skeptical of of do I support it, right? Like on a personal level, I I very much support cutting all that waste and fraud and abuse. But from a, you know, just pure objective accounting standpoint, one man's fraud is another man's income, right? That that USA ID worker who's getting fraudulent, wasteful money, right? Uh they have a mortgage, they have a car loan, right? They have personal loans and credit cards, right? So, uh they buy groceries, uh they buy insurance.
(20:40) So, yeah, I I I was always skeptical. Um I was hopeful right cautiously optimistic that they would uh cut something but we look back and they cut like 1.6% I think of the federal budget. So, uh, yeah. So, so I noticed that too. That pivot that you noted, uh, a couple months ago, I noticed that, too. It was like all in one week.
(21:00) You had Bessant, Elon, Chimoth, all the key people coming out and basically publicly abandoning Doge, right? Just like, yep, is do we're not going to cut our way out of this. The step, the key, how we're going to win is to grow our way out.
(21:20) And I thought to myself, okay, so here's the negative real rate uh story, right? like they're going to come in, they're going to propose, they're they're going to find some way whether it's explicit QE yield curve control, uh tinkering with regulatory levers like SLR and LCR, but uh they're going to find a way to get negative real rates.
(21:38) Um and and you know, that's kind of the direction I think things are headed in uh generally speaking for the next 12 months or or so. Um it appears that they really want that negative real rate environment especially in bills uh and bills you know should be pointed out uh that transition happened under the last administration with Yelen uh and Bessant was very critical and um you know as I I just did a video on the QR uh the most recent one you know he is not changing the issuance schedule right so uh I think he recognizes you know the the reality of the the situation of the bond market especially at the long And um but
(22:13) you know he we're talking about a shift even more into bills. And what's important for that for people to understand is and you can find this on Trading View, right? Pull up a a single uh percentage chart, right? And throw on like a short-term bond ETF, TLT, and then like a 5-year bond ETF.
(22:32) And you can see that the that the short shorter duration bonds move very little compared to TLT, which has these big massive moves. And that's due to convexity with the with the duration. Um but because the the the shorter term duration the treasury bills uh because those are less volatile uh they can be levered much more easily and created into new dollars.
(22:57) Uh treasuries being the collateral for kind of the global financial system. So uh it's very pro- liquidity. Um it's very stimulatory. It's very it you know uh I think inflation is going to pick up. uh been saying that for a couple months and I think that this the Treasury bill kind of focus uh and and the the the ease at which they can be so readily levered into new US dollars. Uh I think it's very proquidity.
(23:23) Um the thing I would say though is like you know I per like I just want to know who's going to buy this -2.5% real yield Treasury bill, right? Because Trump's talking about taking the federal funds rate from three uh from 4.3 down to like 1, right? He's talking about just massive cuts in the short-term rates.
(23:45) That would result in a, you know, bills and and shorter duration follow the Fed funds. Uh and and that would result, you know, we're talking probably inflation's around three, maybe even 3.5 or four. So, you're talking like significantly negative real rates. I just kind of want to know who's going to buy those. Uh maybe it's stable coins, I don't know.
(24:04) But who like who wants to take a guaranteed loss where you're losing two to three to 4% per year in inflationadjusted terms. And we know of course inflation is actually higher than CPI. So it's even worse. Um so that clearly is their plan, right? And that's clearly like I think the direction that they're heading.
(24:26) But um yeah, for me, I just kind of want to see like who's actually going to end up buying those cuz I I I surely wouldn't want to. No. And you touch on like such great points here. Number one, like Bessant completely shifting face about the short end of the yield curve, like berating, yelling like the Trump admin gets in like they messed up the curve and then silently sort of implicitly like recognizing, all right, maybe that was a good idea, continuing with it. But to your broader point, and this is something that did not get enough
(25:00) coverage last year, but funnily enough, Noriel Roini co-wrote a paper basically explaining why the overindexing or how the overindexing on the short end of the curve is actually stimulatory. like stealth QE essentially in a way which you describe cuz you can take that short-term paper and so basically get dollars out of it and spend those or push those dollars into other assets and so it's like stealth QE without saying Q it's not the mechanics of QE as we know it but I think the overarching point is like the system has gotten to such a
(25:34) point that politically you need to find those mechanisms to stimulate the economy and that they're doing on the short and of the yield curve. And um the the other thing I wanted to bring up, it's I lost it, but like building on that um that theme of the Oh, it's the stable coins, right? like it seems like the genius act and they're going to try like I don't I I think they're I don't know how certain they are but I think they're basically exploring all the options possible to drive demand to these things
(26:13) and by really pushing the stable coin narrative which particularly here in the United States doesn't make any sense to me like like I as an American citizen my bank account works well cash app works well then but like I don't need stable coins but they're really trying to make fetch a thing with stable coins And I think what's underlying that is this need to drive demand for for these Treasury bills. Yeah. They need balance sheet uh to financially repress.
(26:42) Um they they need they need suckers at the card table. You know, as Luke Gman says, they need to, you know, get those suckers at the card table uh to to repress them. Uh, and look, maybe foreigners are willing to take a guaranteed 2.5 three 3.5% loss to to um I I'm not sure. I I you know, I also think that uh it could weaken the dollar.
(27:07) I I I don't see how significantly negative real rates combined with a shift towards basically payday financing the government. Um and and and just fully admitting, yeah, we're in fiscal dominance. Um and we're going to run the turkey, you know, central bank has no independence, right? We're doing all stuff with that.
(27:26) Uh and and and the 1951 Fed Treasury Accord, we're basically reversing it, right? Uh I don't see how like any of those things are bullish for the dollar. Um, and again I what I've been I kind of got very bearish on the the dollar the Dixie uh back in like January and uh it was it was for a number of reasons but um you know we've seen clearly kind of a bit of a a short squeeze you know position and got stretched and and whatnot but I still think that like you know if you just look at incentives and Bitcoiners
(27:56) are big on incentives and and we can see uh kind of through a lot of things by just looking at what are the incentives they're they as much as they may say they want a strong dollar, they want a weak dollar. Um, going to the point of of uh, you know, the current account deficit and trade and re-industrialization, we need a significantly weaker dollar to make any of this viable.
(28:20) You know, at a 15% tariff is not going to suddenly make American manufacturing cost effective for the rest of the world when the currencies are, you know, 35 or 40% mispriced. Um, and so, so, you know, I I was one of kind of the first people talking about like some sort of accord, right? Like that's kind of their only option is to to weaken the dollar sort of like Plaza Accord.
(28:45) Um, and the reason was I watched I think it was in like May or June of last year, Bessant did a speech at the Manhattan Institute and as soon as I I as soon as I got done watching it, I watched it again and I thought it was very notable that he mentioned monetary reordering three times during that speech and and he said something like, "And I want to be a part of it or something.
(29:11) " Uh, you know, I think that that inevitably is going, if they're they're serious about re-industrialization, they're going to need some sort of accord. Um, and it when it when it first kind of came up as a topic, it didn't have that Mara Lago accord name, you know, like whatever it whatever it ends up being, is it a Mara Lago accord or, you know, the the Hilton Accord? Uh, we need to weaken the dollar if they're serious about re-industrialization.
(29:35) And uh that you know has consequences to it, right? Like all those cheap imports, all that cheap Alibaba plastic junk that Americans have been you know piling up uh that gets more expensive. Uh but the good news is that over kind of medium to long-term highpaying manufacturing jobs hopefully come back.
(30:00) Now I I fully concede some degree of automation and robotics will make that difficult, right? reshoring 5 million is out of the question most likely. But even Bloomberg, which I take as kind of a pretty globalistleaning organization, uh even they were forced to admit, this was a couple months ago, uh on the morning show, forced to admit that Apple, an assembly technician, right? So, not a plant engineer, nothing crazy, not a supervisor, just a technician, uh US-based, the salary was $112,000 per year.
(30:33) So you know these in the medium to long term uh there there is a world where inflation is rising at say five or 6% because this will be very inflationary uh especially if you mix it with negative real rates and all the bill dynamics uh both you know both of those are inflationary weaker dollar and that so you know there is a world though where uh inflation is 5% but real wage gains are eight or nine uh and that's what I would hope to see because going back to the silent depression stuff you know, the average hourly wage priced in gold has declined by 80%. Um, going back
(31:05) to to 2000. So, just just since.com, just since the the you know, Y2K and all that, just since then, uh, the the real purchasing power of the average hourly wage has declined by 80%. Uh, if you measure it in gold and if you look at personal income divided by M2 money supply, you know, that's fallen, I think, 30%.
(31:31) Um so again in real purchasing power terms the average American has been getting just decimated uh for decades and a lot of things did a lot of the turning points in my chart happened to be that early 2000s and I think it's not a coincidence that China was admitted into the World Trade Organization in December 2001 and that's when deaths of despair like literally to to the year uh that is when deaths of despair just went vertical um And that is when you know these these measures of real purchasing power wages started to decline.
(32:02) Um and personal savings has been declining. So I would argue that you know there are short-term consequences to a weaker dollar whether that's via uh just kind of policy or via an explicit accord. Of course, there's consequences shortterm, but you know, my hope uh would be that medium to long term you would see uh kind of a a definantcialization of the economy and a return towards a much more net productive economy that is not, you know, based around a bunch of people writing algorithms for highfrequency trading firms making, you know, millions
(32:35) and millions and millions hedge fund managers, right? but reorient around kind of actual useful uh uh productive capacity because whether it's you know kind of the medicine that I mentioned 65% of active pharmaceutical ingredients you look at uh chips and electronics some of these key industry like this is a national security emergency in my opinion serious about your Bitcoin? Start acting like it.
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(33:25) Yeah. And to your point, like, and I I think I tweeted this out a couple months ago, but like even if we do if and when we reshore manufacturing and even if 80% of it is automated by robots and AI, that's still preferable from the national security perspective that you're digging in here. Like it should be made here.
(33:50) it should be over overlooked and managed by American citizens to make sure that the quality is good and that not only the quality is good but you're able to make it yourself so you're not dependent on on geopolitical adversaries. Uh and so that like that whole that whole sort of theme of like oh the jobs aren't going to come back and even if they do they're automated. It's like I don't care if they're automated. Like we should be making it here is is my perspective.
(34:15) Yeah. And um you know I have uh firsthand experience with uh domestic manufacturing. Um we have my family has had a company for I think 75 years uh that has has manufactured goods in in America. And like I think that there's a a pretty large amount of kind of overestimation as well.
(34:40) I think a lot of people that are talking about uh re-industrialization need to go look uh go down, you know, to your local industrially zoned part of town and just ask for a tour. Like I know if it's our company, we'd be happy to, you know, uh they they love showing people around and what they do. I think a lot of people are kind of overestimating the degree to which automation will uh really play a role.
(34:59) Like we uh you know, we have a couple robots that I think they got uh maybe 5 or 10 years ago. you know there's some degree of automation but like it I think people are overestimating the amount of automation but to your point even if you know 70 or 80% is automated at least we are not relying on countries that you know arguably at at the you know turn of a hat you know flip of a h coin uh might be our enemy you know and like how how are we if we're so reliant on on say China for uh kind of chips and and
(35:34) electronic components for our own missiles and our own defense systems and our own ships and and vehicles. Like the minute that they like the minute we get into a war over Taiwan, which I hope doesn't happen, but like they just shut it off as we saw them do with the rare earths and like yeah, I just I it it's kind of my mindboggling that that our leaders let it get this bad, you know? It it it it just makes you uh it makes you wonder like what I mean you know you you you can you can infer what the what the incentive was but a lot of people got obscenely rich and you know now
(36:12) wealth inequality is even worse today than the guilded age uh which was so bad that we named an entire era of American history after how bad the wealth inequality was was even worse today. Uh, so yeah, it, you know, that was probably the incentive to do all this, but it just got to such ridiculous levels, it kind of makes you wonder like what were our leaders thinking cuz it was both parties to be clear.
(36:39) Um, so yeah, that's on the economic side. Then socially, you have like the rise of neoliberal progressive ideals. And if you're a student of like Yuri Bezmanov and that interview he did in the 80s, like have we been just under a slow rolling color revolution in the United States over the last four decades? Yeah.
(37:05) Well, I mean, look at um I mean trade is trade is a great uh illustration of that. I would say uh glo globalization and the degree to which it was embraced at the expense of the average American. I would also point to immigration, right? We're talking economics. One of the uh one of the key reasons in my opinion that the real purchasing power of the average hourly wage for the average American has declined so precipitously uh is both parties have uh you know our birth rate has been declining for decades.
(37:34) Uh and and the way that both parties up until Trump of course uh the way that both parties dealt with that was to import tens of millions of of immigrants from other countries to come in. these are, you know, willing to work for lower wages and and you know, the law of supply and demand is no different when it comes to labor.
(37:53) Uh that if you dramatically increase the supply of labor while demand stays constant or maybe slightly grows, you know, 1 2% per year, whatever it is, uh if you increase the labor supply by 10%. Um wages must go down just mathematically. Um, and so that's another kind of avenue where you see like Reagan was the one that granted kind of started it uh at least from what I can gather with kind of mass amnesty uh back in the 80s.
(38:19) And look like multinational corporations benefited massively from that. Um, you know that again it boosts their profit margins whether it's cheap labor here in America or cheap labor elsewhere. So there have definitely been beneficiaries. Um the other thing I'd point out that I think is really kind of uh uh interesting is if you take the net worth of the top 1% and uh look at it as a share of GDP so denominated in GDP uh and then you overlay the the the balance of trade and you invert it right so it's the capital account surplus it's it's it's almost a
(38:54) perfect fit right so the net worth of the top 1% uh as a share of GDP has basically ically I been identical to to an inverted trade deficit. So as the trade deficit has gotten larger and larger, the net worth of the top 1% and is is increasing at a faster rate than GDP.
(39:17) When you do one of those relative charts, when it when the line goes up, it means that the numerator is increasing faster than the denominator. So the net worth of the top 1% isn't just growing with GDP, it's growing faster than GDP uh as the trade deficit gets worse. So, you know, there are very clear, you know, beneficiaries to a lot of these policies and kind of the capital class, right, that uh Wall Street and those that own financial assets.
(39:41) It's the same thing with the housing market, too. Like, I'm a young person that like to own a home. I worked really hard for 15, 16 years, uh, had a particular, you know, uh, career, climbed the ladder. And it's the same story with housing. If you if you look at that uh the average sales price divided by the average income for a family say um and and again overlay it with the trade deficit it it is a perfect fit outside of QE2 and three where the Fed bought you know trillions in mortgage back securities uh but interestingly when they engage in
(40:12) quantitative tightening uh that it came right back down to where the trade deficit or the capital account surplus would indicate that it should be so you know I whether that's a correlation uh without a causation and that's just a spirious correlation. I'm not sure.
(40:31) But it's like the more the more of these metrics that I've been finding over the past year or two, the more I'm convinced that it's all it's all kind of one trade, one story. Uh at the end of the day, yeah, the whole correlation is not causation thing. It's like uh it's it's a whole it's like a way to obscure what you know intuitively to be true, but it's like so hard to like directly connect the dots that they're able to handwave it.
(40:54) It's like correlation is not it's like come on. This is certainly happened. Like if you have two brain cells to rub together and you can think about second and third order effects, it seems like there definitely is some causation here. Yeah. Well, you know, M2 money velocity, personal income as a share of M2, so real purchasing power of of of the uh personal income, uh S&P in gold terms, labor force participation rate, all of these peaked um money velocity as well, all of these peaked, you know, around the same time. Uh average hourly wage and gold terms as well also peaked in
(41:31) the early 2000s. So, it's like, okay, I understand, you know, contesting one of those or, you know, two of those, but like I've presented so much data over the past year or two charts, right? This like I I I I just it baffles me that people still try to dispute some of these things, you know? Yeah.
(41:56) And let's get like let's get into like silent depression and like something you said earlier which is like let's get away from financialization. Let's definant defanancialize the economy. Get back to a productive economy where people are actually working and building things and not just creating sort of synthetic financial exposure to things cuz it's all it's all connected. Again, in my mind, correlation is causation with a lot of these things.
(42:23) Like, uh, uh, you're not going to tell me that these things don't have effects on each other. Um, and it's like, it's weird cuz we live at this time. My go-to example whenever something like like we are literally, you're on the other side of the country. I'm looking at my laptop. I've got my mic in my hand.
(42:42) We're going to distribute this uh on many platforms and it'll be accessible to many. It's inarguable that the tools that we have, the technology we have is is incredible today. And that's what they use. Like, hey, like things are great. Look at what we can do. But despite that, there is this silent depression, these divergences in the quality of life between the halves and the halves not.
(43:11) And there has to be a better way, right? Like I think we have all of this in spite or despite excuse me despite uh all these things like they try to use um the fact that we have all these technologies as evidence that everything is all well and good but I'm a strong believer and it could be much better like we have all this despite all of that. Yeah. Yeah. I mean, look, it's great.
(43:34) Like, I uh I worked in healthcare. That that was that was kind of my day job that started working like very shortly after Leman collapsed uh and and was doing my first interviews at like 18 uh you know around that time. Uh so that that that was the start of my adult life. Uh, and I know a lot of millennials, especially zoomers, right? Like, um, you know, are kind of in this boat where, you know, then we had, of course, the kind of prolonged great moderation as they called it, but really kind of a lost decade of stagnant
(44:05) growth. Uh, very similar to Japan's last decade. Um, and then we had 2020, right? All the craziness of that. Uh, but it it really in my adult life like it felt like no matter how hard I worked, I kept climbing the ladder and getting the the next better job, you know, from from the bottom to to, you know, middle management and then from there to to, you know, basically right below the owner as a director making a good sal or what I had thought was a good salary.
(44:35) And like just for for kind of uh uh you know real real concrete numbers that people can uh kind of wrap their head around here at least here in LA in 2019 2020 my salary of like 90 $100,000 uh would have bought a you know starter home a 70year-old you know starter home not in LA but like in one of the kind of suburbs like the valley for example uh I would have been able to do that and I was looking at at at buying a home back then. Uh, and and you know, the income I could make it work with interest rates being what they were. Well, today that
(45:12) same house in that same neighborhood, not great neighborhood, not great schools, pretty high crime rate, uh, 70, 80 years old, right? Probably need some work. Um, that same uh I would need to triple my income to qualify for a mortgage on that same house. So, you know, like this this I I understand why they uh changed the CPI calculation, but that's like a very real uh cost for a young person, right? Like if if the income needed to qualify for a mortgage on the same house increases by 200% in 5 years, you're going to tell me that inflation is only 21 22%. Like, it just
(45:53) doesn't make sense. And um yeah, you know, I think the societal KPIs, anti-depressant prescriptions 13x since 1970, uh you know, the the suicide rate at levels rate, right? Not nominal numbers of suic the rate per 100 uh thousand. That rate not being this high going all the way back to the Great Depression. That's the last time it was this high.
(46:18) Deaths of despair just going absolutely parabolic since 2000. Um we see it with like political polarization as well. like all these societal KPIs, all these like horrible events that keep happening in public, right? That um you know, try and be careful like not to use bad words, uh but you know, the the these things that just like every day we're seeing, you know, people acting out in in just absurdly violent ways.
(46:44) And there is there is this kind of like scream from especially the younger generations uh that just appears to be falling on deaf ears uh with with the boomers and and if it was just deaf ears that might be one thing but instead it's generally met with righteous indignation of course.
(47:04) Um but yeah it it it it's going to continue to drive all of those same problems until until the the actual issues are addressed. wealth inequality will get worse and therefore the kind of political polarization will get worse. We'll see racial divisions get worse. We'll see the political extremes getting more extreme.
(47:24) Um I mean if you know I I've talked to a number of like you know kind of average Zoomer men and these guys are going to make Steven Miller look like a moderate, right? Like this is just a natural consequence of what happens when you default on the social contract. And I think that, you know, until we really address uh the underlying issues that are driving these uh these problems, all of the things that are bothering the average American person are going to just get worse and worse and worse. Uh and and I don't want that. Like I, you know, I want a safe,
(48:00) prosperous country. I want, you know, my people to succeed and do well. Uh I want a land of opportunity again. And and look to to your point about technology like there are certainly there are certainly uh certain advantages I guess you could say you know over the past couple years as I've kind of started doing all this uh you know markets and economics and uh YouTube and all this various stuff like it's a crash course for me in in in this whole new world that I didn't really know anything about. Um and look like it I I'll be the first one to say that it's it's great. you know, I can I can do spend an hour
(48:39) or two, you know, pro putting together a video, hopefully educate people, put that up on this website that people have on their phone, right? They like there's some really cool stuff. Like I'm not trying to make it sound like it's all bad.
(48:58) Um, but you know, we it kind of goes the other way, too, which is like you, you know, you look at the average Zoomer, the average young man, and what are they doing? They're gambling. whether it's memecoins or uh sports betting, we've seen a dramatic increase in that like the financial nihilism I would say offsets the benefits from like look the internet's great the kind of uh everything being connected the world being connected it's great but like it also enables these very negative and destructive uh expressions of you know within technology whether that's you know the memecoin casinos uh and kind all that craziness. Uh I mean I
(49:35) know a girl that just buys tech options every day. Zero DTE tech, you know, Meta, Nvidia, just buys calls every day. Doesn't know what a bid ask spread is. Doesn't know what IV or delta or gamma or theta. Just buys calls. Like just totally gambling, right? Like this is kind of the norm now with young people is that without that 10,000x return, they feel like they're never going to get ahead.
(50:05) So just as much as the internet can be used in positive ways, right, responsibly, it also has has I would argue offsetting negative sides to it too, which is it enables some of this gambling and kind of the financial nihilism piece. Does that make sense? Completely agree.
(50:24) That's exactly what I was trying to get to as well was like this financial nihilism, the enablement of it and this like this strive for yield, the younger generation specifically that feels like they have to play catchup and take obscene risk is real and it's having extreme negative consequences. Like you're talking about deaths of despair. You brought up sports gambling.
(50:43) I if you look at it's not only affecting zoomers like it's affecting millennials and Gen Xers too. Like there was a I think some FanDuel is getting sued by the wife of a guy who blew their $14 million trust um because he was a high roller and just it's so easy to access that he blew eight figures of wealth uh within a very short period of time.
(51:09) And that's I think the big question for me and a lot of what I've explored over the years on this show and just doing introspection personally is like can this actually be solved via political means or do you need something outside the system to actually fix it? And that's why I focus on Bitcoin. I I do tend to sort of bend that way and believing that you're not going to vote your way out of this.
(51:35) like you need to create systems outside of the terminally ill system that got us into this predicament in the first place. And to that point, like do you view it that way at all? Yeah. Um, and like I, you know, uh, with with all this kind of, uh, you know, uh, YouTube channel and all this stuff, the hunger and and the degree to which it's resonated for someone who spent, you know, I don't know, 30,000 hours nerding out, digging into academic papers and Investipedia and Trading View and the the Fed and all this stuff, right? like digesting it for normal people, the amount the the degree to which it resonated with just random everyday normal people I was not
(52:16) expecting. So what I would say is that there's clearly like I underestimated the the appetite um for for that sort of content uh because I think everyone knows that things are deeply deeply wrong. Uh it's just that, you know, you shouldn't have to spend 30,000 hours, you know, nerding out uh to in order to to grasp some of these concepts and understand how your own financial system works.
(52:48) Uh, and I would say that like the Overton window, the the the discourse is shifting, you know, like uh a lot of people have been talking about the uh the interview Tucker did recently with um uh Wernern, the economist. And uh that was actually one of the first uh things that kind of I did like a a Twitter post or article on was uh I had listened to one of his speeches uh at at some university uh about about Japan and and and uh the fact that like you know that sort of discussion is happening on such a large platform um you know and I've had invite invites recently for kind of not Bitcoin channels right not
(53:28) you know, economics or macro markets sort of channels, but like much more kind of political uh sort of channels. And like there's clearly an appetite for discussion about economics and what's really going on because part of the problem and and and uh what I always try to do is, you know, if you just look at the average hourly wage, which is what you hear reported on the nightly news, the line is it looks great.
(53:53) It's up and to the right. It's kind of even parabolic. You would think everything's great. Well, you got to go a couple layers deeper, right? Like all these numbers that they're reporting to the American people. It's like they're they're sitting there, you know, getting home after their third job, right? Um and and and uh you know, using a firm to pay for groceries, hearing the nightly news talk about, oh, unemployment's only 4.1 and GDP grew at 3%.
(54:19) And they're like, huh? You know, like what I always say is what good is GDP if the average hourly wage or personal income is is is not keeping pace. Um so yeah, like you know, certain things have outperformed of course uh government debt has outperformed GDP. That's why government debt to GDP has doubled right in the past like 40 years.
(54:45) Um the net worth of the top 1% has also doubled as a share of GDP over the past 20 30 years. And then you look at like financial assets, you know, the S&P 500's just radically outperformed GDP. A stat that I I think is really telling to the hyper financialization and the K-shaped economy is if you take the S&P 500 divided by the average hourly wage, what you get is the number of hours needed of work at the average job to buy one share of the S&P 500. And it goes all the way back to the '60s.
(55:14) And the average when my parents were coming of age and and working was like 15 to 20 hours of work at the average job to buy one share. Now that number is 200, right? So what that indicates is that the S&P 500 has increased 10 times faster than the average hourly wage. Right? So those that hold financial assets, those bureaucrats that have benefited from a massively uh expansion, a massive expansion in the size of the federal bureaucracy, uh that you know the top 1% right that own all these assets, they are doing better and better and better.
(55:46) Um and people see that like they might not know the stats, right? They might not uh be able to kind of conceptualize it, but they feel it and they see it and they know it. Um, and so I I would say that like the the benefit or or or the the the side of me that's optimistic is that there is such a growing kind of recognition uh and willingness to talk about it even on the right wing, right? which I mean both parties were equally responsible uh in my opinion for a lot of the globalization you know a lot of the things we talked about uh but you know historically when I was younger you
(56:21) know started paying attention to politics it was like you couldn't talk about wealth inequality or corporate profits greatly outpacing GDP that's another one that's outpaced GDP growth um like you can't talk you couldn't talk about those things well now not only are you getting it from the kind of momi side of of things, but you're having a willingness to talk about even on the right wing.
(56:45) So like that to me that's a positive sign because that's kind of the horseshoe theory in action. You know, we're seeing that on a political level at least there's a willingness to talk about it. Now to your point, whether or not the solution ends up being a political one, I'm not so sure.
(57:04) Uh, but I would point to, you know, I think that I'm seeing more and more of a of a discussion around the struggles for young people, the structure of the economy, wealth inequality. Uh, I'm seeing more and more discussion about it. like just over the past couple months it seems like it's just absolutely gone exponential which for you know someone who was like the old man yelling at the cloud about it for 2 years it's really like it it's good because it I feel like oh you know I didn't do that much right to actually hopefully you know advance it but it's like it makes me feel a little bit more
(57:35) validated that like okay at least at least like everyone's kind of talking about this now because we're we're not going to be able to get to a solution unless everyone knows what the problem is that's an incredible point. It's funny that you mentioned that because literally I recorded an episode this morning with Zubie about this exact topic.
(57:54) He wrote a Substack piece last week about like tell 12 pieces of advice for Generation Z and we walked through that. But like the whole point of his article and our discussion about the article is to sort of transfer knowledge to the Zoomers of like, hey, we're a generation ahead of you. Like here's exactly what's happening.
(58:12) you guys need to understand this and here's how you should operate with with that understanding. And I completely agree like the recognition of the problem is greater than it ever has been for somebody who was radicalized by the great financial crisis and like I went the the timing for me personally was perfect cuz I was a senior in high school.
(58:36) It affected my dad and my father's career and sort of in like engendered me with this spirit of know your enemies. So I went and studied econ and always even when I worked at a fund and was doing like sort of tradi world things in the back of my mind was always like the system's broken.
(58:56) I need to figure out how and ultimately found Bitcoin I was like all right this is what I think is a key part to the solution of of solving these problems. But back then it was like an island. I was that crazy Bitcoiner. 2013, 2014, people were like, "Shut up." And now it's not Bitcoin specific, but I just think to your point, the recognition of it's cuz it's impos like it's gotten to the point where it's impossible to ignore.
(59:22) Um, and it sucks that it had to get to this point, but you can only solve a problem if you recognize that it exists in the first place. Yeah. Yeah. And like if I had to give one piece of or maybe two pieces of advice for the for the younger folks like I think it's hard for them cuz we as millennials um like you know when I was climbing the corporate ladder and you know trying to trying to get ahead and stuff I could look to the Gen X right the generation ahead of me they had the you know nice car and a house and the kids and a good salary that they were comfortable on. You know, I think what is part of what part of what the
(59:55) zoomers have that is so difficult is they look to us. They look to the millennials and we're like directors making 100k a year and right like not having any of that. So, uh they have it I I they don't have that like optimism, right? Like at least we at least I and a lot of the millennials I know, we could look to the Gen Xers for kind of like optimism or hope.
(1:00:21) Uh but the zoomers don't have that. Like all they know is bad. Um and if I if I were to give two pieces of advice, it would be um trades, right? Like I think that um you know the Wall Street Journal did an article like the next millionaires uh wear tool belt or something like that was the title.
(1:00:43) And I think that that'll continue to be a trend that uh some of the highest paying, most successful people, especially if we definancialize with a weaker dollar, uh some of the best industries for for a young person to make a living in will be trades. Um and even now, like even today, they're making like hundreds of thousands of dollars. I know a guy that drives a GT3 and he's like he puts in pipes like he I still don't really understand like what it's probably more complex than that but he basically like digs holes and puts pipes in.
(1:01:14) He has a GT3 you know so like it's already kind of at that point. So I would say trades uh you know the traditional four-year education I think is a scam and I think it's it's dead and gone. And then I would also say of course save in scarce assets like Bitcoin that will preserve your purchasing power and hopefully continue to outpace uh the amount of kind of currency debasement that I think you know I think most of us are whether it's Larry Leard with the big print. I I don't think it'll be that big you know I don't think it's one big print. Uh but I
(1:01:45) do see kind of a a higher inflation period of you know regime that we're going into. Um scarcity is the antidote right? So like uh you know or as Jack says you know don't don't work for money that another man can print. I think that's great.
(1:02:07) Um and so yeah you know saving your your time and energy and your labor uh in an asset that cannot be inflated cannot be printed. I think that that's another critical I mean if I had done I I uh I came across Bitcoin in like 2009200 if I had even put just 5% of my kind of average you know weekly earnings in a bit I would be insanely rich like insanely rich um I didn't know what I had back then I thought it was just like a you know internet money thing uh and I would you know it would have a little runup and I'd think oh great I'm rich you know that was great sell it So, I didn't really know what I owned until
(1:02:40) recently, unfortunately. But, uh, but I think that, you know, the the antidote to an overabundance of fiat currency units is scarcity. And Bitcoin we know has one of the lowest supply uh increases of any asset. So, when it comes to the scarcity side, it is one of the more scarce uh assets that you can own even now more than gold.
(1:03:05) So, yeah. And like bringing this back to how do these overarching problems get solved in the long term? Like I'm a big believer that Bitcoin can lead to the great defanancialization. The Parker Lewis's uh blog post and ultimately chapter in his book gradually and suddenly about the great deanization is something that I truly believe and something that like 10:31 we're investing behind.
(1:03:30) Like obviously uh you were just talking about the individual saving scarce assets like Bitcoin ideally by I think inarguably if you look at all the scarce assets Bitcoin is still going in the very early stages of its monetization phase and has the highest upside.
(1:03:49) But then in terms of like actually beginning to defancialize the world and sort of manufacture a soft landing in the long term. I think Bitcoin needs to be injected as collateral in in credit structures. Like you you need to refinance the existing pools of credit that exist out there with better collateral.
(1:04:13) And to what you were saying at the beginning and throughout this conversation really is like we've seen the financialization people are the people who understand what's going on and want to outpace inflation. They're pushing it into real estate into stocks into financial assets. And now an alternative exists, like instead of basically putting money in a house and using that as your long-term savings vehicle, you can put it in Bitcoin.
(1:04:37) And now we're getting to a maturation point of Bitcoin's sort of development where you can sort of replace uh instead of taking out a mortgage on a house and just using the house as collateral loan, you begin to dual collateralize it with Bitcoin. And at that point, you're not really uh wholly dependent on the equity value of the house. You have the Bitcoin collateral in it as well.
(1:05:02) And to me, I could be wrong and very interested to get your thoughts on it. Like that's how you manufacture a soft landing from the private sector and you're not beholden to the whims of the political apparatus and the ping ponging that goes on there. Yeah. and and Luke uh was like way Luke Roman was way kind of the you know out ahead of this uh concept but they need something to to inflate right and uh ideally that is a kind of uh it's not a a a commodity that's needed as an input in critical industry or or or global trade, right? So you need kind of an asset uh that can that can absorb some
(1:05:40) because we know financial repression is coming. We know it's really the only way out of a 7% procyclical deficit with interest expense eating up 20% of tax receipts and mandatory spending over 100% of tax receipts. Like it it's getting to a point where we know the only way out is uh to to uh you know inflate the debt away, run it hot, whatever term uh you want to use.
(1:06:05) And Bitcoin emerges as a perfect asset because it's small, right? To your point, it's still early days. uh $2 trillion dollars is a lot of money on the one hand, but when you compare it to say gold or equities or certainly bonds, uh it's still relatively young, very young. Uh so, you know, it it offers kind of an escape valve uh for the coming financial repression. Uh and and Luke, you know, was kind of the first person to to frame it that way.
(1:06:32) And I think it's a great way to look at it. I would say, you know, like with the young people in Bitcoin versus homes, the only kind of push back that I usually uh kind of think of when when I hear that argument in the Bitcoin circles is the real secret with housing is that you get insane leverage.
(1:06:54) So, you know, you you go and put 10% down uh on a million-doll home and you know, when that million-doll home inevitably doubles over say 5 years, 6 years, uh you get the equity of the whole home, right? You can then tap the home a home equity line of credit for 2 million to, you know, however much was, right? So, so your your your equity is is the entire value, right? Even though you only put up 10%.
(1:07:24) So the leverage is really where like owning a home builds builds wealth. Like it doesn't actually build wealth because the home price is just going up as the currency is debased. Uh but you know in in dollar terms like that leverage is really the secret. Now we know Bitcoin has an insanely high keer.
(1:07:43) So it could be the sort of thing where Bitcoin continues to appreciate a you know 45 50% kager. I think that that would be enough to offset the leverage side of of that's why I always say like home ownership and the wealth that you get. You what it really is is just levered exposure to currency debasement. The house goes up, you know, it's optical illusion. The home price goes up as the currency is debased.
(1:08:06) You have a large amount of leverage, right? And can then, you know, tap the equity. So, you know, if people if there was a company that came out to offer like Bitcoin mortgages, that that would I think be probably the single best thing that could be done. Uh because then you're getting the benefit of leverage and the Bitcoin's appreciation. And that's where PE that's where the young can really kind of get ahead in a quick way.
(1:08:32) Um because that's really what home the like the home situation that's really what it is is just leveraged exposure to debasement. Uh and because Bitcoin I mean you can get leverage with Bitcoin but it's not as intuitive and it's certainly not as large of an amount of money.
(1:08:50) Like no one's going to give some Zoomer that's got $5,000 of Bitcoin. No one's going to give them you know crazy amounts of leverage. So, um, in a in a, you know, 30-year structured product like that with a relatively low interest rate. So, yeah, I think I think it, you know, I've heard people saying we want to create that sort of product.
(1:09:10) Uh, you know, and like we were both saying, you know, it's early days, so maybe something like that comes comes along and is able to kind of really accelerate the degree to which the the young people can get ahead. Yeah. And it's not not catered towards young people at all, but we invested and sort of helped incubate this idea of battery finance where they're starting out focusing on commercial real estate, which is a market that desperately needs um uh more creative financing options.
(1:09:39) and they basically go and find high-grade properties that are uh sort of at their pick of the litter, refinance, give them the cash they need to pay off their original mortgage, a little cash for a little cash for improvements if they need it, and then a chunk of cash to put into Bitcoin that sits in the loan structure.
(1:10:00) And uh just having been close to the development of that product, like I'm I'm wholly convinced that like this is the way you manufacture sort of like a a transition from aping your your leverage and your uh your sort of savings and value uh into real estate and begin sucking it into Bitcoin will start like dual collateralized and then hopefully over the long long run like these these assets that really aren't optimal to be stores of value, long-term long-term stores of value because they have uh other use cases, consumable use cases that that more people should have
(1:10:38) access to. That's how you get them to repric to what I would argue is um like like a real a real price for these assets. Yeah. And um the thing I would say about Bitcoin in particular, like kind of going to the what we were talking about with uh the direction the Fed and Treasury and all that is going um I would say that like you know in a world where there's you know basically a political puppet as Fed chair and uh monetary policy is now a political decision. Uh, I would just say for those on the right that support Trump and you
(1:11:15) know all of that, just imagine a Biden controlled Fed, right, where everything about monetary policy was a political decision. I don't personally think that that's going to be very good, uh, no matter who is in charge of it. Um, and I think that like as as we see that kind of go the emerging market sort of route, um, probably higher inflation, uh, and and you know, a worsening of the K-shaped economy as asset prices really kind of take another leg higher. All the all the dynamics we've been talking about today. I think I think something
(1:11:49) like Bitcoin emerges is like you know what what's so cool for someone who's so immersed all day in macro and and markets here in US and Europe and Asia and all this stuff following every word of every Fed speaker and watching every bond yield in the entire world.
(1:12:08) Uh what's cool about Bitcoin that I keep coming back to that I always tell people is like look you know the monetary policy of Bitcoin. You know the monetary policy of Bitcoin today, 6 days from now, 6 weeks from now, 6 years from now, 60 years from now, you know the monetary policy of of Bitcoin and uh these kind of you know bare assets that are are neutral, right? this this ability for neutral reserve asset uh that a lot of people have been talking about like I think that the appeal of that is going to grow just generally speaking like I think corporations I think in the real estate sector like I know uh uh Grant Cardone is doing a lot of cool stuff with Bitcoin and and and real estate I
(1:12:47) think on the individual level right like there's so much chaos and kind of instability and all this kind of stuff I think normal people like the you know the emergence of a of a of an asset where it is so predictable. You know exactly what the monetary policy of it is. It's consensus derived.
(1:13:08) It's hardcoded in in in lines of code that are, you know, confirmed and and and secured by the the strength of the network which keeps growing. All the properties that of Bitcoin that Bitcoiners talk about, I think are going to start to really become appealing uh amongst kind of normal people if that makes sense. Yeah.
(1:13:27) It's this anchoring mechanism gives you a high degree of certainty in an incredibly uncertain world, right? And like if you can but I think that's just like the like when you get back when you get to like first principles Austrian economics perspective of Bitcoin like that is the sort of stabilizing nature of the asset is like and then conversely like why everything is so instable is because you have an inability to know at any given point in time what's going to happen with your money because it's centrally controlled. Once you can have certainty and anchor into that certainty by using Bitcoin,
(1:14:01) you can then begin to coordinate economically with a higher degree of certainty and have to you can take less risk and you don't have to financialize everything to get a return. Like I think succinctly put first principles Austrian perspective of Bitcoin. That's what it does, right? Yeah.
(1:14:21) And it's also outperforming so many other assets, right? Like the first thing I do when someone when I see someone, you know, advocating, oh, buy this stock or buy this, the first thing I do is just divide it by Bitcoin. And it's almost always just down and to the right. You know what I mean? So, it's like it's outperforming the vast majority of assets.
(1:14:40) Like, yeah, over certain time frames you can find, you know, some tech stock that whatever, but like the vast majority of people don't have the skill to be stock pickers. So, like it it's very simple. It's very straightforward. You just you just buy it and hold it and it goes up and it goes up forever because the dollar has no bottom, right? There's no top in the Bitcoin price because there's no dollar on the bottom.
(1:15:01) There's certainty with with what it is, how it works, the monetary policy, right? The the the new supply, all of those things. And I would also point out that like since kind of the the Tradfi adoption, uh, which at first I was kind of like knee-jerk reaction was negative because the whole reason I founded in 2009 or 10 or whatever it was was some like anarchist blog spot, right? And it was like the the cipher punk ethos and the uh the kind of you know revolutionary uh sort of side of it and and and like so then to see it kind of you know be adopted by like Black Rockck and and this it it was my first reaction
(1:15:41) was negative but now that I've had some time to kind of you know really think about it it's it's really decreased the the amount of volatility that we've seen. It's almost like, you know, Bitcoin pre pre-ETTF versus after ETF has been just a different thing.
(1:16:04) Uh, and I think that to your point with the with the uh the stability, I think that the lack of that volatility as we build you know derivatives complexes on top and uh you know all these different products uh are offered and and there is it becomes a bigger market. I think that we'll see less volatility and that'll that'll uh encourage more inflows, right? So, it becomes a strange game where the only winning move is to play.
(1:16:32) Um the the uh no that didn't I I completely agree like the I had similar aversions initially but now when you see it I do it would be naive to think that there aren't going to be some actors in the traditional financial system getting into Bitcoin in size that make mistakes get over their heels get overlevered ultimately blow up.
(1:16:59) But I think in aggregate the most important thing of this wave of adoption is it's growing the number of different archetypes of demand for Bitcoin. And I I think we're getting to a point where there's so many different demand drivers, whether it's an individual looking to um outpace inflation and save their their value in an asset that can't be debased or a company that realizes a private company, small medium-sized business that's profitable, is run by a Bitcoiner who understands that if you're I'm profitable and I'm skimming some of those profits into Bitcoin, it's going to be good for the equity value of my
(1:17:33) business. You have individual states who are saying maybe we should have a state level Bitcoin treasury. You have obviously countries doing that and then you can see going to like Luke Roman's thesis of a Mara Lago court or something like that probably won't happen this administration but at some point down the line I think at the geopolitical level it's going to be impossible to ignore that this neutral reserve asset that nobody can control is optimal and preferable to this sort of system of barter that exists in FX
(1:18:07) markets. Yeah, and like I would say, you know, we saw a very early glimpse of what the dollar trading on a balance of payments basis looks like. Uh, you know, we basically saw kind of the the early stages of a balance of payments crisis in that right after liberation day. Um, and you know, like it we're in a tricky spot like there's not a ton of room to to to really navigate politically.
(1:18:36) uh you know because this NIP is negative 100% of GDP foreigners own tens of trillions uh you know of of our assets they have us kind of you know they can control us if they don't like a particular policy so ultimately like you have to get to the root of the problem which is kind of the structure of the system and I would say that you know nations if I was a current account surplus nation um either in the Middle East or Asia the you know traditionally it was you put uh those those surpluses into US treasuries.
(1:19:08) Uh people say the dollar, but really it's interesting dollars like treasuries. Uh and you know, traditionally because we're in this secular bull market, that was a good move. Um but you know, it's not a good move, right? Like that bull market um that down that you know secular uh uh downtrend in rates, we've broken that in 2022.
(1:19:33) And you know, I'm I like uh uh Peter Turchin and Neil How and those guy those demographic guys and they talk about these long interest rate cycles. Um and if you look at all the structural drivers of inflation and and kind of if you look at negative catalysts for sovereign bonds uh it's just you just go down the list there's like half a dozen uh right catalyst whether it's deglobalization whether it's the fiscal side of uh the kind of uh uh you know the government's balance sheet whether it's uh kind of a move uh in a different direction in regard to immigration policy that's also inflationary just as
(1:20:06) increasing the labor supply keeps wages suppressed. The opposite is also true, right? So, you'll get um inflation driven by wage gains. So, yeah, you just go down the list and it's like it's all it's all bad for bonds, you know, and so I think that that long interest rate cycle, uh, you know, I think there's truth to that.
(1:20:26) Now, they could always do yield curve control, right, and just totally nuke it, but I think that the the bias is towards higher rates, especially at the long end. I mean, we've seen a we since the Fed started to cut rates, uh, you know, prior to the last election, they cut by 100 basis points and the 30 years up 90 like it went in the opposite direction by 190 basis points.
(1:20:51) Uh, of course, it wouldn't be one to one on the cuts, but you know, it it went it went in the wrong direction. Uh, and since the cutting cycle began, we've been in a bare steepener. Um, now, you know, today there's a big uh kind of bid into bonds, especially the short end cuz the NFP was weak. But yeah, like bonds just especially long-term uh, you know, duration.
(1:21:11) Like I I I just I don't see how it's appealing to all these current account surplus nations, especially after we did what we did to Russia where we basically just turned off a bunch of cips, you know, and defaulted on treasuries that they rightfully owned. Like what was it 200 billion? It was it was over 100 billion. It was a lot of money.
(1:21:30) And so, yeah, I just it's like, you know, the appeal of something like Bitcoin if I was, you know, an emirate country with a lot of oil running a current account surplus like it would it it's perfect. It's a bare asset that's not centralized. No one can control it. It's scarce.
(1:21:49) Um, and it's easily divisible, easily transportable like all the properties we know. um and it'll hold its value because if you're a current account surplus nation, that is really the purpose. That's really your goal is to uh you know, you're accumulating national savings uh via that current account surplus. You're trying to store the value of those savings.
(1:22:08) Um and you know, Japan did it in US treasuries. They also bought a lot of real estate, you know, of course. Um and I think that there will be on the margins those uh you know, a shift towards Bitcoin. It's not going to be like, you know, 20% of current account surpluses overnight get put into Bitcoin. Uh but, you know, around the margins over the next 5 10 years, I think we're I think it's inevitable that we will see that kind of start to grow.
(1:22:38) Uh and and and really just, you know, around the margins slowly but surely, very gradually, you know, stable sort of increase. I don't think it'll be violent. Uh but you you never know if there's a black swan event that that just collapses trust of the system. You could see uh you know you I think you could see a little bit more of a dramatic uh uh move into Bitcoin from not just not just nation states but people corporations and and everyone involved.
(1:23:03) Yeah. Yeah. When you think about long-term bonds, particularly the 30-year, and then like you have people like Chimath saying we should do a 100red-year bond, a 50-year bond, it's like take a step back and like what are you doing? You're literally lending money and your counterparty has proven that they spend that money terribly and uh they're only racking up more more debt.
(1:23:26) They're tapping the credit line, the revolver more and more every time. in 30 years uh is a long time to take that risk. So like why when you have alternatives like Bitcoin would you ever take that risk and then you pile in the sort of geopolitical situation the fracturing the bipolar multipolar world that is manifesting before us and it just doesn't make any sense at all. Yeah.
(1:23:53) And look like buying listen listening to the power centers like the Fed and Treasury uh you know the blew up regional banks right like they listened they bought all those really really you know long you know long duration uh treasury bonds and uh you know as soon as rates started moving higher like due to convexity those 20 30-year bonds just collapsed in value uh and you know ended up taking down uh you know some of some of the I think it's three of the largest poor bank failures in US history occurred during that uh time period. So yeah, like it's just I I could not be
(1:24:27) more bearish on long-term bonds. There's no world that I could ever see where I would now uh you know, as Jim Biano says, there's no b there's no bad bonds. There's only bad bond prices, right? If if if the thing was yielding like 50%, right? like some emerging market bond, then I don't know, maybe maybe I would buy a 30-year Treasury.
(1:24:53) But but then you get into the interest side, too, right? Which is like the if you take all of our marketable debt, the average interest rate on all of our marketable debt is 3.3. Um, as of yesterday, uh, you know, there's nowhere on the curve where you can issue a 3.3, which means interest expense will only continue to go higher. you know, if they are not able to kind of gain control of the Fed and really force rates down through mega dovish forward guidance, uh, yeah, like interest expense is only going to go up.
(1:25:25) And so, yeah, you you get into a situation where you're stuck. I think that they're very close to admitting, look, it's fiscal dominance. Can't blame us. Wasn't our fault. We just inherited the situation. Here's what we got to do. We got to run negative real rates. I think what I was saying last year that I think would be smart is to strategically uh to to to they we know they need negative real rates.
(1:25:52) Use those negative real rates strategically to help uh domestic industry, right? Use it as a create some sort of structure like Japan had. Uh they might still have that. uh I'm not sure, but you know, some sort of way to to try to approach uh fiscal and monetary policy and meld it with industrial policy, domestic industrial policy.
(1:26:14) I think look like it maybe, you know, people might think that that sounds like very anti-American, but if we got to run negative real rates and and financially repress the bond holders, like uh shouldn't we at least be doing it, you know, using it as a benefit by by uh cheap financing for things that we need like critical infrastructure and defense and all that? Yeah. Yeah.
(1:26:40) I'm thinking here the I certainly like if I guess the point I would make there is like yeah if you have to do it like and you're trying to optimize for optimal outcomes for American citizens that makes sense but what I would worry about like particularly when it comes to yield curve control and building on a point we made earlier is that more like you're seeing it with your channel like more people are hungry for this they're recognizing it and the it sort of seems like it's a foregone conclusion in many circles that like yes implicitly it's
(1:27:13) very implicit right now. It's not quite explicit but it's beginning to become more and more explicit by the day that they want to sort of officially eliminate the independence of the Fed, tie it in with the Treasury and go towards uh the Japan japanification of sort of uh the Treasury market.
(1:27:35) And I like I totally believe that's their intent and their goal and their what they're going to try to do. But I always wonder like we have we can just look at what it's done to Japan since the '9s and it's arguably not good.
(1:27:56) Going back to like silent depression like in Japan like it shows up there in the fertility rate like they're going to have population collapse. And I just wonder socially if enough people become privy to we're doing what Japan just did. Let's look at Japan and see how they're doing society. Um is that optimal? And people say I don't know if we should be doing that. Like does that throw a wrench in the yield curve control plan? I don't know.
(1:28:17) Yeah. I mean uh I you know I I looked at uh one of the videos I did looked at like the World War II, right? the the last time we've seen this sort of thing and inflation was like 18%. during uh one of those years of of yield curve control.
(1:28:37) Uh and granted it was, you know, wartime and there's, you know, we were industrial economy. It's not a onetoone thing, but like yeah, there's there's certainly consequences to it. Um for sure. And uh yeah, like I I I just don't see how we don't have, you know, higher inflation for the next decade or maybe even more. It depends really on like how negative they can get the the rates.
(1:29:02) Um and and how far below nominal growth they can get those interest rates or the average cost of the debt. Uh you know, that that I think will determine how long they will have to run uh you know, the particular regime. But yeah, it's not there. It what I always say is like you can't defy financial gravity forever.
(1:29:24) America tried to defy financial gravity for decades and was successful and you know at some point like the bill comes due. Um and it and there is no easy way out. There's no painless way out. there's no way out that is just perfectly you know risk-f free and without consequence and pain uh due to you know like accumulated uh policy decisions by the prior administr uh prior uh generations. So yeah, it's uh it's going to be volatile.
(1:29:47) I think it's going to be unstable. It's going to be um uncomfortable probably. Uh I yeah, you you you know generally you don't want to see uh monetary policy become a political tool. Um like Turkey did that, right? Erdogan did that and they had 45 50% annual inflation. uh and you know the price of gold in lera is like the craziest looking chart um when when he started to to to really make it a political organization.
(1:30:23) So um now of course you know we're not Turkey but like it's not going to be without consequence for the US um and I just yeah like I I I I feel that sentiment building that like people know something's not right. I think people also know that like something's coming. There seems to be this really pervasive sense that I get from like reading comments and stuff of people like feeling like there's something right around the corner like some shoes got to drop.
(1:30:54) Uh and you know maybe it's all I hope it's not war. Uh you know maybe it's all this kind of stuff you know negative real rates yield curve control. Uh you know they probably won't call it yield curve control. Like I think if they end up going down that route, they're going to make an effort to make it sound as different as possible from Japan. Um you know, different names, different acronyms, different terms.
(1:31:18) Uh but like yeah, with um one of the one of the silent depression kind of pieces that I did looked at uh total bank loans and leases, right? And and this is what drove private bank credit creation was what drove you know the postworld war II kind of booming American economy.
(1:31:40) Uh and if you look at like total private bank loans and leases divided by M0 uh the monetary base which is that government money private bank credit just fell off a cliff in 2008 and like hasn't recovered. Um and and you know this is something that Warner was was talking about with Tucker in that interview uh is that you know that where the funding is going can be just as important.
(1:32:03) You know if if uh we're going to just you know if the banks are going to you know create private you know private credit creation but it's going to like securities purchases like that's not going to benefit most Americans. And in fact, if you look at GDP divided by M2, we had GDP growth outpacing the money supply.
(1:32:22) Uh again, up until the late '9s, when that turned over, and we've been getting negative returns, uh for each new dollar of debt that we that we print, we were getting less and less actual GDP. And it's the same story if you look at it, the uh GDP divided by the debt. And GDP out uh outpaced debt growth up until I think it was 82. And then in ' 82 83 in the early 80s it rolled over and we have been getting less and less return on each new dollar of debt. know they they got to do something.
(1:32:54) And if they if there's smart policy that can get uh that side of the economy, the bank and the lending side, uh to somehow direct into more productive like you you start getting into uncomfortable conversations though because like you know what if you take that one or two steps further that's like you know socialism or uh some pretty ugly industry. Yeah.
(1:33:19) like it you get into some uncomfortable conversations but like uh and and to be clear like I don't support you know a lot of that craziness but like I think that there is a a way that we can um I mean Japan had that right that was one of the things that they had like the trade and uh industrial ministry or whatever it was and it coordinated with and look like Japan did great after World War II um you know up until kind of the bubble started uh They were doing amazing. I mean, they thought there were people here in America that were worried that Japan was going to overtake America. Like this tiny island
(1:33:51) country was going to overtake America. So like you know there I think that uh you know free markets are generally good uh generally the side you want to air on. But I think that like to ignore any and all evidence that uh to the contrary I think you know like Japan made it pretty clear that like the average Japanese person from call it you know 1960 through to 1985 did really well and the economy as a whole did really well.
(1:34:22) Um, and you know, I think, you know, even Howard Lutnik is calling for some of this kind of much more like not typical conservative stuff. Like he did that interview with Pomp where he was talking about basically nationalizing the defense companies, right? So this is not the Republican party of my my parents, right? Or my grandparents.
(1:34:41) Um, and so I think, you know, there there there will be some degree of coordination uh to try to direct much more productive lending cuz I think that's a big story. I mean, if you look at that uh you know, private bank credit creation, it it uh if you look at it as a logarithmic trend, it fell off in 2008 and it's just been, you know, just anemic going sideways.
(1:35:00) And I think that's a I think it's a big problem and and Warner was uh was very on point with with his discussions about it. Well, and you're seeing the the product of that be the manifestation of all these private credit funds that are, you know, spinning up to service this market because the banks either won't or can't for some reason.
(1:35:18) Yeah. And last question, because this is a big meme and part of like the we're going to grow out of this, like do you have any hope or optimism about like the productivity miracle provided by AI? Like is is that is this a silver bullet? like black swan that we're getting handed. It's possible.
(1:35:43) Um I am not the biggest like just on a personal level. Uh I try not to let like my personal beliefs or feelings influence like my analytical right. Uh but just on a personal level like I'm much more into like get me a cabin in the woods of Montana, right? and like just I'm not one of those like tech accelerationist sort of people that is like begging for the singularity and all this craziness.
(1:36:08) It's generally not kind of who I am as a person. Um so so that being said, my bias, you know, being clear, uh I don't think that it's very likely. I think it's certainly maybe 10 20 25% likelihood um that you see productivity but as Luke Groman points out and it and it's it's it you know what he says I I I have found as well through like looking at it independently it would have to come at the right pace not too quick not too slow and just the right amount like because otherwise you know if it comes too quickly you're talking about I don't know 20 30 40%
(1:36:46) unemploy employment if if you throw robotics in there, you could see such massive disruptions and and then how do you fund the UBI, right, that ends up becoming necessary for that in that world. Uh, you know, some people say, look, for every job that's lost, one will be created. I would I don't fall into that camp.
(1:37:11) I think more jobs will be lost than created with this, especially once you throw in robotics into the mix. Um, so yeah, I think that, you know, we know how inefficient the government is. um and the cost of administering some of these social programs. I did a post maybe last month that looked at Medicare outlays, social security outlays, and VA outlays relative to tax receipts. Uh and uh I think it was Medicare has grown 7.
(1:37:35) 4 times faster than GDP or tax receipts going back to 1965. Uh Social Security I think was 3.4% uh 3.4x faster 3.4 four times faster than GDP or tax receipts and VA I think was in the in the low 3s as well. So government programs kind of by definition aren't efficient. So if you have high unemployment it, you know, it'll take money to then administer the programs that do all the UBI.
(1:38:01) So you end up talking about like even more money and then efficiencies. Yeah. And like you ask a question like or I asked a question for for tech stock kind of people like how are you going to fund that? Right. The only way that I see that being funded is by just like massive taxes on Google and Meta, you know, whoever whoever has those tools, just massive taxes on on them.
(1:38:27) And then then it's like, well, why why own the NASDAQ, you know? Yeah. Well, and then also to that point like and I'll hand my I'll put my bias out there like I'm probably more optimistic because I've just like we've been leveraging AI here and it's made us more productive and I haven't fired anybody for it. I've just like equipped people with it like extend your capability.
(1:38:52) But to your point, like I think it's very unclear like how how many if any of these companies are profitable yet? Like I think that's the big question. Like how much cash are they burning behind the scenes? Like how much of this is just like a an attempt to try to create enough energy and attention and adoption to try to get to profitability. But like certain companies at least I think it's pretty clear they're burning incredible amount of cash and not getting huge amount any return in terms of profits and like have we reached a point where these companies can actually do it profitably yet like I think no and like will will it ever manifest like that's I
(1:39:29) think that's a big question. Yeah. I mean I would say like I at first was like very opposed to adopting AI just myself. Um, but then I was like, "No, I'll try it out." Right? And so I kind of started like tinkering with it. And I got to say like I I've come around personally to AI. Like I was one of those people that kind of hated it in the beginning and was very skeptical, but uh it's helped like immensely for kind of like I can throw into it some complicated uh I can say, you know, country XYZ has a current account deficit D. they got they're running a fiscal uh right like give it all these
(1:40:05) conditions all these kind of like inputs or variables and then ask it to interpret how a a particular policy on this you know side can in like the the the degree to which it can uh think beyond my capacity so quickly has enabled me to you know it's helped me a lot and of course it helps with like little things like help me write a introduction to my video right like stupid stuff like that that saves you time.
(1:40:37) And so then that's more time that I can spend reading, you know, uh, you know, academic papers at the Fed or whatever. And, uh, so I I I do think I'm I'm I'm not trying to say that it's like a horrible thing. I think I think that the productivity uh I think that, you know, if people are skeptical of it, I would encourage them to to to try and try to just adopt it.
(1:40:55) Uh it's not perfect yet, of course, but like it, you know, I was one of those skeptics and I got to say like it it's it's been a massive boost uh for just a single guy that's trying to do all this, you know, YouTube and Twitter and right all this stuff. It's it it has, you know, massively benefited. Yeah. Fun times. Exciting times. You optimistic, pessimistic? I'm optimistic.
(1:41:22) I think uh you know I see a spirit um of that's kind of reemerging um especially amongst like younger people it beneath the anger beneath the uh resentment and hopelessness and despair like there is this kind of bubbling up of a p you know this is the first turning that Neil how talks about um and I think you know we're we're certainly in a forth turning and it's certainly you know I I think the next couple years are going to be very volatile, very unstable, uh uncomfortable maybe. But like the benefit is that coming out of this we
(1:41:59) are going to have such a golden age of American exceptionalism that I think uh you know might might might even surpass um kind of the the you know the la the last golden age of America after World War II. Uh, and so that part gives me hope, you know, and I would say for the people that like are worried about where we're at today and where, you know, the volatility and the chaos and this and that, I would just say like just try to to to weather through the storm because it I do have hope that it gets better. Um, and you know, that's what history that thousands of years of history,
(1:42:34) right? Like Peter Turchin goes back like hundreds and hundreds and hundreds of years and finds the same cycle. So, uh, yeah, like the inevitably kind of coming out of this for turning will be, uh, you know, a golden age unlike any other, uh, cuz now we're going to have tech, right? And, and look, one of the things to to to say about America is like we by far have the best tech companies and the best kind of innovation. So, that's a positive.
(1:43:03) Um, and yeah, I think uh, definitely medium to long-term optimistic. Shortterm it could be, you know, but you just got to like weather the storm, right? like don't do anything stupid, don't use leverage. Um, you know, just kind of keep it simple and just hold on. And I think, you know, 10 years from now, things will be a lot better. Hopefully.
(1:43:21) I agree. And that that sort of energy that you're describing. It feels like for a period of time, particularly post 2000, there's been a lot of complacency. Like we were given, like us as millennials, we were given the road map. Like you go to school, you get your four-year degree, you get a job, it's done.
(1:43:39) A lot of us went I didn't do it but like a lot of people I I went to college but like I didn't like stick to a career because I had basically sniffed out pretty early like ah this doesn't seem like the right thing to do but many of our generation did and recognizing like ah the road map didn't lead me to where I thought I was going. Yeah.
(1:43:57) And I think particularly with zoomers and millennials that are privy to what's going on like yourself, there's a degree of agency that's reemerging where it's like I'm not just going to take the the road map and basically use that for my life. Like I'm going to try to figure out and actually understand things and make my own way, which is incredibly encouraging.
(1:44:22) Yeah, it's the the weak men's weak men create hard times and hard times create, you know, strong men strong men create good times. It's kind of I mean it it sounds stupid but it's kind of the pattern that I I see as well. Yeah, Robert, this was incredible. Where can people find out uh where can they find your work on YouTube? Yeah, on YouTube it's uh infronomics I fraomics like economics and then uh on Twitter it's infr Aore and I have the blue check.
(1:44:52) There's I guess I'm at a size where I get the impostor. So, just make sure it has the blue check um and the underscore at the at the end there. And uh yeah, it's b that's basically uh most of where I am. I do spaces and stuff. So, I try to respond to all the comments on on YouTube. So, I try to engage with with people as much as possible.
(1:45:10) If you ever want to talk, come to one of the spaces we're in and yeah, just hang out, ask your questions, talk. Hell yeah. We'll link uh we'll link to all that in the show notes. We should definitely do this again. This was fascinating. Yeah, it was a great time. Awesome. All right, that's all we got today, Freaks. Peace and love, freaks.
(1:45:27) 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.
(1:45:46) Make sure you subscribe there. A lot of the topics that are discussed on this podcast, I write about five 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 adree versions of this show and having discussions about everything we talk about a day early.
(1:46:14) 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, it's conversation between myself and TFTC 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.
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