Transcript: Tom Luongo: London Closed the Strait of Hormuz

Tom Luongo [0:07] You've had a dynamic where money's become freer than free. Let me talk about a Fed just gone nuts, all, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be.

Marty Bent [0:34] Probably should be.

Tom Luongo [0:35] Probably should be.

Marty Bent [0:36] Mr. Luongo, it's been too long, sir.

Tom Luongo [0:39] It has, Marty. I'm glad to see you. You look well.

Marty Bent [0:43] Feeling well. We had the Coin Center Gala in New York City last night. Brought the wife, and we wound up taking the late night Amtrak back to Philly, so I didn't get home till like 2:00 AM, but all things considered, feeling good right now.

Tom Luongo [0:54] Yeah, I just got back from doing like 3 weeks in the American High West. So first we flew into Salt Lake and then we went up to Boise for a week, got the chance to hang out with Blaine Holt and the Amberling game and a bunch of my patrons. And my wife got to go rockhounding out in the mountains and look for agates and opals and stuff. And she had a grand time. And then we went down to 2 weeks down at Moab and just— and that was retarded. And then we just flew home. And the point of this is that we just Flew home on Monday night/Tuesday morning. We took the red-eye out of Salt Lake. We got back yesterday morning. My daughter picked me up from the airport. My wife's up in Tennessee getting things because our whole life is in flux. I'm in Florida. She's now in Tennessee while we make the final transition out of there, or potentially final transition out of there. I don't know anymore.

Marty Bent [1:44] So you're making personal transitions. It looks like the world is making a tectonic transition. Where do we start?

Tom Luongo [1:50] 6. Yeah, that's a good question. Where do we start? Yeah, it is a good question. Like, I don't know, because you and I haven't talked in a while, so. And I monitor your Twitter feed here and there, or at least the TFTC Twitter feed. And it's interesting. I want to touch on the stuff that I'm— because I want to, by the way, we're building this as a home and home. I want to have Marty on the GG&G podcast. Because there's a lot of stuff happening in crypto that I have no freaking clue about because I don't have any time. But I don't want to talk about that today.

Tom Luongo ⋮ I want to save that for that podcast where Marty gets to be, quote unquote, the talent, right? And I get to be the dumb host. So I want to just keep it in— let's just keep it in the midterms and all that stuff. I'm actually interested to hear what you have to think. Maybe I'll do a little bit of a Caitlin Long thing where she comes on my podcast and interviews me, which is hilarious. But I'd like to hear where you stand on where we are 6 months into this whole Iran operation, the blowing up of the old order. I want to hear where you think we are because I'd be interested in that.

Marty Bent [2:53] I think we're in a spot where if you would've told me in February that we're still immersed in a conflict with Iran, I would've called it conflict. Doesn't even seem like a war yet. Tankers are being blown up, but it seems like we're in the the blockade phase, I would have been more dismayed than I actually— like, I would expect to be more dismayed than I am. It feels like— I mean, again, and people hate when you say this. I mean, yeah, would I prefer not to be at war with Iran? Yes. But if you look at the oil flows, particularly coming from Venezuela, if you look at how I guess resilient the market has shown. Yes, WTI, Brent, the spread exists, and diesel prices are up. And obviously, I don't like— I filled up my car today, it was like $126. We got a Tahoe, so it's not cheap, and I don't like looking at that.

Tom Luongo [3:51] Right.

Marty Bent [3:52] But all things considered, I don't think the Armageddon that people were calling for, the famine that people were calling for, has manifested. And if you look at the concessions that not only Iran may be forced to make, but others have made over the last 6 months, it seems like we're winning on the deal side. That's my perspective at least.

Tom Luongo [4:19] And no, that's a good starting point. So let's talk about, you mentioned Brent WTI. While you were talking, I was I was looking at on my phone because I wanted to bring up the actual state of the markets today. Because the one thing I didn't do this morning for the patrons was actually look at the Brent to WTI spread, which is kind of important, right? And I normally do, but I was going— I had my head in quarterly charts and bond spreads and all that stuff. And like, look, we have a $12 Brent WTI spread this week. 50 and Brent is trading at $150. 50.

Tom Luongo ⋮ Now, $12 Brent to WTI spread is a classic. Since this thing has started, whenever it blows out that wide, that's a classic. The Brent paper oil market is desperate to keep the price of oil up because somebody's going to go broke if it collapses. So there's a lot of this trying to keep that bubble in oil prices high. And for me, that's a— That's a telltale sign since this thing has started that someone is short collateral. The value of that oil is necessary to keep certain derivative contracts that are based on that price and the price of Brent in a range that will keep somebody from having to make a margin call.

Tom Luongo ⋮ Right. And so you see that spread widen out all the time. It usually happens at the month end. Where they paint the tape into the monthly close on Brent, but WTI is just not comparing because remember, one is a physically settled contract, the other one is a purely financial contract. There are no oil trades against the Brent crude contract. It's purely— it's like the world's biggest contract for difference on the planet. It might as well be a currency forward. You know what I mean? And so When I see something like that, that in market terms is like the worst kind of believe me book. No, really, guys, the world's going to melt down.

Tom Luongo ⋮ The WTI is trading at $88 and it's trending lower and it's pulling everything else down with it. So yeah, no, from the beginning of the conflict, I think you and I spoke when? Back in April, May, something like that. I can't remember the last time you and I spoke. And we were early on in the process and I was trying to parse what I thought was going on. It was very obvious to me in the first days of the war that Trump and company had a plan. That plan may or may not have been what they told us the plan was. And I think 6 months into this, I've now come to a different conclusion about where I thought we were back then.

Tom Luongo ⋮ But All this is a preface to say it was very obvious with a number of the announcements that they made and the moves that they forced other people to make, specifically things like Lloyd's of London and all that stuff when the shipping insurance and all that, that was their goal was to blow up that old order. However, that was going to work itself out and how long it was going to take for that to work itself out. Is you know that timing is up to the gods. I don't know. Like I I don't have any idea. But when you see a moment like Lloyd's of London canceling everybody's shipping insurance, and then you can you can confidently go onto Twitter and go Iran hasn't closed the straits for moves.

Tom Luongo ⋮ Lloyd's of London has closed the straits. The bank the tankers can't move because of legal reasons because they don't have any insurance, so they can't move. And then now all these tankers are sitting ducks for Iran. degraded weapons capability or missile capability to blow tankers up here and there when they need to, to write a headline and then pump the tires on Brent crude. So that's the way I looked at it back then. Now, what's really interesting, Marty, and I know, is that the next big move on that board was— that was that one. Then there was the MOU that was signed.

Marty Bent [8:26] Right.

Tom Luongo ⋮ And that was immediately, effectively within 20 days, immediately abrogated. But that was an MOU that was designed to be broken. It's kind of like the Minsk Accords. The Minsk agreements between Russia and Ukraine back in 2014, 2015 were a set of prerequisites for conflict to end that neither side would ever be able to agree to wholly. So it was an agreement designed to not be implemented. Well, in many ways, that's exactly what the Iran-US MOU about the ceasefire was about. It was a thing where neither side could, or let's put it this way, and I take the American side on this, is this was a set of conditions that were perfectly reasonable for Iran.

Tom Luongo ⋮ We gave Iran more than they deserved because they already lost the war and Iran still couldn't hold to it, which exposes the fact that they actually, or in this case, the IRGC, not Iran the country, but the political authority, the dominant political authority in Iran, couldn't agree to those terms because if they did agree to those terms, they would cease to exist as the dominant political authority in Iran. Right. So that played out exactly the way I expected it to. And then once I started to see an entire cadre of people that I hadn't seen on Twitter in 6 months, Start screaming about the yen.

Tom Luongo ⋮ And that started in mid-June, by the way, sort of right after the MOU was signed. And I'm like, oh, what's going on here? I haven't seen, for example, Michael Gayed post anything other than pics of himself at the gym for like 6 months to a year. And then all of a sudden he's like, the yen, motherfucker, the yen. I'm like, oh, okay, I know what's going on here. And I saw that not just with him, but with like 6 or 7 other people. I'm like, oh, we're moving forward now because Bank of Japan raised rates. And then Bessent steps in and takes center stage. Trump fades away from the center of the political attention over Iran.

Tom Luongo ⋮ Bessent is upgraded immediately, and then the intervention happens. That's when the definition of the story changed. This was no longer a story about Iran's nuclear weapon capability. This was always a story about we are going to break the old colonial powers of Europe, and this is That's how we're going to do it. And that's what I wrote in last month's newsletter for my subscribers. I said, sometimes you watch a movie where you think it's one thing and then it becomes something else. And I'm not talking about Fight Club, where Fight Club was always a movie about insomnia and isolation that manifests itself as this weird thing with the narrator having his imaginary friend direct his actions.

Tom Luongo ⋮ Or offload is actually really a story about schizophrenia. No, I'm talking about a movie where it looks like something in the first half, and then the midpoint turn happens and it turns into something completely different. And in the article that I wrote for last month, I used 2 minor movies. One is Hancock with Will Smith, which just looks like a star turn, dumpy comedy, and then turns into this massive mythical story about gods and loss and love and sacrifice and all of that. And then Bone Tomahawk is another— Craig Zahler's Bone Tomahawk, which looks like some guys squabbling amongst themselves while they go to deal with the local Indian nuisance.

Tom Luongo ⋮ And it turns into a fucking clash of civilizations of epic proportions. And these guys are getting slaughtered and eaten and all sorts of shit. Turns into a horror show. And it's a completely Everybody didn't— when you go in and you look at the story, you sold one story, but it's not really that. It's about a much bigger thing than just this little tiny conflict. And that's where I think we are. And to your point that you made at the outset when you said, if I thought 6 months from now this was still lingering on, would I feel better about it or as good about it as I do?

Tom Luongo ⋮ And the truth is, is that I never I always, from the moment it started, I always knew that this wasn't the real story, but this is the story you had to sell. I'm like, okay, so what is the real story? And the real story is that we chose this time and place. Davos didn't choose it for us. Netanyahu didn't choose it for us because the sequence of events is too strong. Once you realize that it was the end carry trade, that was the— and the oil trade based on the end carry trade. That is the story. Then you have to go back to the Japanese party elections back in February.

Tom Luongo ⋮ So what a shock that we get. Takahashi is able to put together a coalition that has zero British influence in it. That wing of the the sovereignist wing of the LDP, plus the minor party Ishin no Kai, who are the base motherfuckers of Japan. They're the anti-immigrant party, kick out all the Indians, kick everybody out, Japan for Japan. They're the party that the Western press tries to paint AfD as in Germany or MAGA as. That coalition made it abundantly clear. And then the purges that were happening over in China of the Hu Jintao faction within the Chinese military and the gutting of the old military architecture, both in China and the United States.

Tom Luongo ⋮ That set the— I think that was what set everything in motion. So that happens on February 8th, and 20 days later, he just comes out of the woodwork and starts bombing Japan. And all the pieces were in place because he moved 3, 2 fucking full carrier groups in. It's not like he was not telegraphing his move. Sometimes a spade is just a spade. So you attack Maduro, then you take out Maduro, then Japan is stabilized and taken over, is added to your pile of assets. Now you can go after Iran, and then you can force the Gulf Arab states out of this duplicitous, two-faced thing that they've been doing for 70 years.

Marty Bent [14:46] Yeah. No, I think Maduro being the first in the order of operations, right after National Security Strategy document or a couple months after.

Tom Luongo [14:58] Right.

Marty Bent [14:59] And then you look at the imports of Venezuelan crude. Yes, maybe the refinery's capacity isn't where it needs to be, or maybe the utilization of the refineries isn't where it needs to be, but I think if you're going to go attack Iran, it's like, okay, we need to show the American people that we have supply coming from somewhere else on the back end of this while there's this massive disruption. And then on top of that, I think the narratives around the strait, I think it's become abundantly clear that they were completely wrong. There was actually oil flowing through the strait to a significant degree. Yes, we're not— well, on crude, it looks like we're at pre-war levels.

Marty Bent ⋮ Diesel, not quite there yet, but it is recovering as well. And I think that's looking And reflecting on everything, particularly in the summer and early fall, and thinking you're always on my shoulder. I always had the Tom Luongo, Lyn, like a little devil or angel. I don't know what you would prefer to be.

Tom Luongo [15:59] Imp of the perverse. If you're channeling your inner Neal Stephenson, then the Imp of the perverse likely is better, right? Go for it.

Marty Bent [16:08] But I mean, you brought up the Uncary trade. And for the longest time, it's like, again, reflecting and really trying to be introspective on my priors, one of which, I mean, I'm a Bitcoiner, I've been screaming like yields are going to go up, the debt situation's going to blow up. And if you just look at the long end of the yield curve, the charts of yields over time, it looks like it wants to go into a structural bear market and the world can end. It looks like Bessent and crew know they're going to they're going to hover higher and they're just trying to manage that.

Marty Bent ⋮ And one thing I've been tracking is the MOVE index for the last 6 months. And yes, it did pop last week, but they were able to basically contain the volatility of the yield movements pretty significantly there. And I guess one last thing I'll just throw out there is just it seems like when it comes to yields and government bonds across the world, it's all relative game. Yes, ours are going higher, Japan's are going higher, but if you look at France, In Europe, they're screaming right now. And so it's like, I think that's my perspective right now when it comes to sovereign debt is like, it's a relative game.

Marty Bent ⋮ And I think that seems like—

Tom Luongo [17:17] That is the gig. No, I would agree with you completely. And what I'll— I'm going to throw— you're in the right ballpark because this is where my head has been for the last 6 months trying to work all this. I'm ready, if not 3 to 4 years, right? Trying to work all this stuff out. And so, you know, let's, let's play some, uh, some of those, those stories out. Um, who can handle the higher cost of capital better, the United States or the rest of the world? When you're the issuer of the, of the world's reserve currency, when you're the issuer, uh, when there's a— as Brent Johnson just posted a thing up just literally like an hour ago on his Twitter feed of, um, you know, the amount of The amount of dollar debt that's out there, both currency forwards and interest rate derivatives and outright dollar-denominated debt, it's $117 trillion and it keeps going up, by the way.

Tom Luongo ⋮ It hasn't— if we were talking about a de-dollarization story that everybody on the quote unquote BRICS side of the equation wants to talk about, and that's all horseshit, that number would've been going down for the last 5 years, but it's not. It's going up. So now let's dig into the things that you just mentioned. Let's dig in some deeper on that because there's some really interesting points I want to make relative to that. So let's talk about everything in the 10 to 30-year range. For all intents and purposes, the marginal flow into those areas, into those issuances, are central banks. Certainly when it comes to the United States, the central banks are the ones buying the long-term debt.

Tom Luongo ⋮ You can see it's in the TIC report. They're buying the long-term debt. They're not adding to their short-term debt as reserves. Go look at the TIC report if you don't believe me, it's right there. When you look at the headline flow, you'll note when they're trying to run an operation, a headline operation, a kind of psyop operation around sovereign yields, they always quote the 30-year bond blowing out. They never They never talk about the 10 because the 10 is like the heart of the yield curve. They never talk about the 5s and the 10s where the liquidity in that space is an order of magnitude higher than it is in the 30-year space.

Tom Luongo ⋮ Right. Because there's just more 10s out there by an order of magnitude than there are 30s or whatever the numbers are. It doesn't matter. The size of the potential market is much, much higher in the 10s than the 30s. So when you want to write a headline and you want to move a market, it's like Polly market. You want to, you want to like write a headline, you know, dump $20 million on some guy to win some nobody to win, nobody Democrat to win in a safe Republican seat, and you can move the odds, right? Well, it's the same thing in the 30-year space. If you're the Bank of England and you're worried about losing your trade franchise and what's left of your trade franchise in the United States or Canada or anywhere else, and the United States is on the other side of that trade, well, then you're going to like first have bought a shit ton of 30s to be able to dump on the market when it's strategically advantageous to you or when the United States makes a move against you.

Tom Luongo ⋮ So that you can then dump those bonds, get the dollars that you need to unwind whatever currency forwards you have and whatever yen carries you're running. Like, this is the natural ebb and flow of these assets. And then we get caught up in the day-to-day news spam of yields are going higher, yields are going lower. Look, long-dated debt is an— and long-dated government debt is— somebody put it this way to me this morning on Twitter. They said, look, it's a dead— it's a dying market. We're moving into a Treasury-dominated market. We're moving into a stablecoin market, which is all going to be backed by T-bills.

Tom Luongo ⋮ We're not funding government the same way we did 50 years ago. It's a different model. And so while we're moving from one model to the other, you're going to watch those markets be used as weapons to reprice all the assets. And so you're in that— we're just in this ugly period of central banks fighting amongst themselves, and that's fine. Let them fight amongst themselves. I don't care. So, I mean, I do care. I'm an American. I don't want to lose. I just know that if— let's really play that out. So if you take my hypothesis, that's mostly the central banks playing in that space. We have oodles of TIC data, which says that the eurozone, the European zone of control, that would be the Bank of England, its subsidiaries, plus most of Europe.

Tom Luongo ⋮ They've accumulated net-net over 5 years almost $2 trillion worth of long-dated US treasuries. So a lot of 10s, a lot of 30s, a lot of 5s, a lot of 7s. Right. Okay. Well, they bought those at much lower interest rates. 5%, 3% coupons. 7. They're going to dump them on the market at 75 cents on the dollar. Okay. And Bessent understands what he's doing. That's why they screamed at him when he said, oh, I'm going to up the amount that I'm willing to buy back in the 10 to 30-year space. Yeah. Because he knows that those bonds are all underwater and he has his pick and choose of what he can get rid of, of what he can take off the market.

Tom Luongo ⋮ Now I'm going to go through the basic math of why this is advantageous for the United States. 5%, 3%. Let's use 2% to make the math easy, but you'll understand what I'm talking about when we get down to brass tacks. 5% coupon, and it's 10 years old. You're going to pay 25. So that means a million-dollar bond's going to pay out $25,000 in interest every year for the next 20 years. That's $500,000, right? For Yeah. Yeah. $25,000, $500,000. If you— that's a future liability against the balance sheet of the United States, that $500,000, right? It's a fixed cost. We're going to pay it. Oh, and at the end of the loan, at the end of the bond, you're also going to pay back the million.

Tom Luongo ⋮ 5 million against that bond, correct? Okay. Well, if the Bank of England dumps that thing on the market and you're the buyer on the other side, And you're willing to buy that off for $750,000, that million-dollar bond for $750,000, you neither have to pay the 20 years in interest nor the full coupon value of the bond. 5 million worth of future liability is a $750,000 current payment, and the future liability comes off the balance sheet. So net-net, the United States saves $750,000, whatever the numbers are. I'm just using example numbers here. That's the situation. And if you look at what Vicente has been doing and you go into these Treasury buybacks, that's exactly what he's doing.

Tom Luongo ⋮ He's buying, he's picking and choosing the ones he wants that are the best value, the ones that he knows are going to lower the future and present liabilities of the United States, and that he can then And then that gives him capacity if necessary, because of that, to go in and issue necessary issue T-bills to expand the stablecoin market and to issue, you know, short-term credit to finance, you know, for the banks to shoot to the banks and the banks can then issue credit to build these factories and the tire shops that are going to need to be built and the copper mines and all the other rest of it.

Tom Luongo ⋮ And that's what they're doing. And That almost precludes, it almost demands that you do the bear flattener thing that they're trying to do, which is to allow— Warsh has to raise rates a little bit on the short end because the money markets are demanding it. Because on the short end, Warsh raises interest rates, that uncovers new demand for T-bills, right? Because that curve is not linear. 75%. At 4%, there's X times 3 amount of demand for T-bills or X times 2 or whatever the number is. But it's not linear. It's not 5% more or 7%, 10% more, whatever the relative rate is there. 75% to $150 billion at 4%.

Tom Luongo ⋮ That unlocks a lot of liquidity, right? So that's the short end of the curve. On the long end of the curve, you're getting rid of future liabilities. And so the bear flattener curve is then putting upward pressure on everyone else who's in the exact same situation, but they don't have the fiscal capacity because who's buying German bunds, right, to do this? Or who's buying French oats? Or I like to call them cheese bonds personally, but who's buying any of this stuff? That's the thing, and that's the game they're playing, and that's the real reason for the war. And that's the real reason why the more Iran/London or Brussels or the high table, the European high table, whatever you want to call it, try to maintain, try to play this game of extend and pretend on this conflict that has been over for months, months out because they think they're going to win the midterms and then put Timur Obama in as speaker and impeach Trump.

Tom Luongo ⋮ These people are out of their fucking minds. That's not what's going to happen. So, but there you go. That's, that's my, that's my argument at this point. And everything else is just a chase scene, again, to invoke the Neal Stephenson.

Marty Bent [26:51] Well, yeah. And my, my question is like, how, how long? Like, it feels like particularly in Europe, they don't have that much time left. Like, it's I could be wrong, but I know, and I'm very happy to see that throughout the course of this year, you and Matt Dines have developed a relationship and have been collabing on podcasts with people. But I'm sure you saw this, but when it comes to— I was like, how much longer can Europe hold on? It doesn't seem like they don't have a productive economy. Their governments are getting more restrictive via regulations and just nanny state stuff. People are pissed off, obviously, in France.

Marty Bent ⋮ And that's the thing, like Matt's tweet from earlier this week, tinfoil hat boilerplate warning. So take it with a grain of salt. Given the fiscal and bond market situation in France, incentive for its leaders would align with allowing this sort of social unrest, like in the original post below, to take place. If you want to take a deeply cynical view, one might even suspect this type of publicly subversive activity might be actively encouraged. We have riot false flags happening in France as their bond market goes to shit.

Tom Luongo [28:02] Yeah, no. And shout out to Matt. Matt's a freaking powerhouse. He came up to Cornerstone in Calgary earlier in the year, March, when we were up there. And I got to— he introduced himself. He's a patron. He's been a patron for a while and introduced himself. And we just sat there for the entire evening, entire evening, Like after Cornerstone was over, we were there with Matt Arrott's wife, Cynthia Chung, trying to explain to her what was going on. And he and I were just ripping back and forth. We started at 9 o'clock, we went till 3:30 in the morning. And then since then it's just been— and it's just been a big bromance ever since then. Like, you should see those— the stuff we talk about on my— on our private Slack server for the Gold, Goats, and Guns, uh, private Slack server. This— the man has been just an absolute powerhouse.

Marty Bent [28:46] And I'm like, well, and he knows about everybody.

Tom Luongo [28:48] Yeah. Yeah. And after about 2 or 3 weeks of him doing that, I'm like, I've got to get you inserted into my podcast, you know, my podcast stream. So I got him on Tommy and brought him on Rich, and we did— brought him on my podcast. We did it on purpose. I did it absolutely on purpose. I'm like, oh no, this guy needs to be in the public eye because he is so good and he understands this stuff far better than I do. I understand the geopolitics of it. Like, I made the call that France was going to be the weak link on on the European debt situation about 9 months ago when I really went— because I started adding— I don't know why I did, but one day I just said, you know, I'm going to go look at like the French-Italian spread and see what that looks like.

Tom Luongo ⋮ Because I was already tracking German-Italian, German-American, and others, right, in the US and British-American 10-year bond spreads. But I started looking at the French-Italian one because I wanted to see what was going on there. And when I started mapping that to the operations in Iran, dude, it's like night and day. The volatility on that spread stopped the day they ended the 12-day war last summer. And then it's just been basically a straight line down except for one small blip right before the war where they were trying to shore up the French bond markets. And then war came in and destroyed it because there's a huge— the one thing we've always been missing about this Iran story, I got focused on London, obviously, because there is a longstanding relationship between Iran, its oil, and London.

Tom Luongo ⋮ But there's also a very strong relationship between Iran, the IRGC, and France.

Marty Bent [30:30] Right.

Tom Luongo ⋮ And I've always known that. And it was in the back of my head and I started watching this. I'm like, oh, the French bond market's going to fuck up. And because to make it short, my subscribers have already heard this 1,000 times, but for everybody else in the audience, the long story short is I started watching the US-German spread as a means by which to look at the 2 different safe haven trades of the various geographic areas. So the German Bund, the safe haven asset of Germany, of Europe. So when there's crisis in Europe, everybody runs into the German Bund, the money that's not going to leave Europe.

Tom Luongo ⋮ Right. And the rest of the world runs into the US market. So if that spread is rising and falling, it's telling you where everybody is, you know, where everybody's head is. If you believe in free markets, which I don't, I believe in free markets, but I don't believe we have free markets. Let me clarify that. since we have central bank dominated markets. So in an age where Christine Lagarde is actively doing yield curve control at the ECB, which she's been doing for 4 years, which no one talks about, but she's still doing it, then the US-German spread is going to be managed by her in particular ways.

Tom Luongo ⋮ And then if you start charting that and you start noting changes in those spreads, I chart both the German 2 and the 10, by the way, just for a variety of reasons. And then you tie that to specific calendar events, big geopolitical calendar events. This is the interesting thing that pops out. I'm like, well, she's rigging the German market, but she's rigging the German market to keep everybody else on the periphery from blowing out. Because if Europe's markets are anchored by Germany, then if she can control the German spread, the German yield, then she can control everybody else's yield, right? So then I'm like, well, okay, well, let's see if she's— that's working.

Tom Luongo ⋮ So let's chart the German-Italian spread and see what happens. And lo and behold, every time there's a big geopolitical event and the US-German spread blows out towards the Germans, the German-Italian spread blows out because she's sitting on the German spread. She's sitting on the German yield, but she can't sit on the Italian yield at the same time. So the Italian yield blows out, that the Italian spread relative to Germany blows out 8 to 10 basis points. You just see these, like, it's like little heart attack blips, like heartbeats on the chart. They're everywhere. It's a general trend down, but the little spikes that last 2, 3, 4 days, whatever the length of the crisis is.

Tom Luongo ⋮ Now, once you do that one, then you track the French-Italian spread. And you see the general trend of how much the other leg in the tripod that makes up the core capital base of Europe. And you're like, oh, the French-Italian spread is just doing this. So as Italy, up until the war, Italy's yield spread versus Germany was dropping. So what was really happening as Meloni was getting control of power in Italy, and was winning political battles. And as Trump was coming back to power, we watched the Italian-German spread drop, meaning capital was preferentially moving into Italy over Germany. And then at the same time, we were watching the same thing happen between France and Italy as well.

Tom Luongo ⋮ So it was like of the 3 legs, cap— global capital was choosing Italy first over the other 2. That was the interesting part. The war interrupted all of that and sort of blowing things up left and right. And now all I can do is watch the US-German spread as Lagarde attempting desperately to hold the entire European bond sector together. And she's reached her point. This is to go circle all the way back to what you just said about them running out of time. 8. It's blown way out. The German-Italian spread's blown out 30 basis points. 5%. She cannot let it go any higher. And she's running out and she's got no borrowing capacity out of Japan because the Japanese keep raising interest rates and allowing their long end to rise.

Tom Luongo ⋮ So there's no carry trade left for her to go play and play the game with, or even worse, for the Bank of England to do it on her behalf, which is what was going on. That's another Side of the story again, if you're a GGNG subscriber, I go over this shit every Wednesday and every Sunday on the market reports. Everybody's tired of me talking about it, but the what was in what's what's clear is that she has reached that moment where they can't rig the currency markets anymore. They can't they can't rig the euro JPY to pay for the the euro yen cross to pay for.

Tom Luongo ⋮ the yield curve to try to freeze the yield. And we're at that point where you can either save your bond market or you can save your currency, but you can't save both. And that's why the euro's breaking down. When Bessent intervened in the intervention, it began the process of breaking the euro-yen out of the band that they had held it in between 181 and 186 on the euro-yen cross. for over a year. So since Trump, in effect, since Trump started, put the tariffs on, it's been in a very, very tight band. They got it up into that band and they held it there. And it's incredibly complicated how they've been doing it.

Tom Luongo ⋮ I haven't even mapped it all, but just to tell you that that's what they were doing. And the minute it dropped below 180 on a weekly closing basis, I'm like, we're going to do it. And then you should watch them try to pump it up into the close every Friday. And then eventually, Well, now we're trading at 176 on the euro-yen cross. 11, the pound's at 131 or 132 and crashing. And now we're getting to watch the process of whether or not the Bank of England is going to leave the Germans, the Italians, the ECB, and the French and try and save itself. That's part of what's going on as well, because if you notice in the last, at the last cycle of rate hikes, what 2 central banks didn't raise interest rates?

Tom Luongo ⋮ England, Canada, it's a wholly owned subsidiary. So everybody else raised.

Marty Bent [37:00] Yeah. Australia. I saw Australia raised last week.

Tom Luongo [37:05] Yeah. Everybody raised except England and Canada because they're trying desperately to hold it. And the US-UK spread collapsed to 7 basis points last night. It was crazy. Then it blew out this morning to 16. basis points as the entire market. They just did a massive intervention over the last couple of days and it lasted 48 hours. Unlike Bessent's interventions, which fundamentally broke and changed the direction of the markets, by the way.

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Marty Bent [39:55] You can access it for free at simplemining.io/tftc. That's simplemining.io/tftc. Again, how much Mark Carney is— we've talked about this before, but it's such an obvious op. It's the fact that he's the Prime Minister of Canada is one of the most laughable things.

Tom Luongo [40:17] Well, his job is just to oversee the liquidation of what's left of Canada. They know that Trump is coming for Canada. They know it. That's why they installed Carney. That's why he got the Greenland deal done. That's why he got the Panama Canal deal done. That's why he went after Venezuela. That's why we're just going to wait the Cubans out. Okay, we don't have to do anything at this point except wait them out. And then Canada's the next one on the list. So what do you do if you're Mark Carney and you were sent by the globalists to do this? You pick a trade war with the United States.

Tom Luongo ⋮ You try and pick a real war. He's acting just like Zelensky was acting in Ukraine. But the big thing that he's doing is he's trying desperately to clear the title to all the lands. He's trying to make relationships and agreements and treaties and whatnot and trade deals that when Trump goes to deal with this problem, he's going to have 10 times the problem that he had previously and ensure that certain entities that exist like Brookfield and all the private equity groups that he represents on behalf of, you could argue the King of England, you could argue the high table, whatever you want to call it, right?

Tom Luongo ⋮ He represents them, and what he's trying to do is shore up their cash flow from Canada, their part of it, as much as possible, and clear the title line. That's what I think he's doing.

Marty Bent [41:42] What do you think that private credit hiccup with Mark Walters at the center of it from earlier was about?

Tom Luongo [41:47] Oh, that's part of it. I think Matt is the guy who better understands what's going on there. But Matt's the one that's been— Matt Dines has been the one that talking about, been making that connection that there's a The Brooklyn connection. There's something very hinky, very, very hinky about all these guys buying sports teams, sports betting sites. The fact that professional sports has been— hit its peak in terms of revenues ages ago. And now we've got nothing more than professional sports televised events are nothing but advertisement for the betting markets. I was watching the UFC thing with Ian Burlingame when I was in Boise, and it was like, it's all they talked about.

Tom Luongo ⋮ The whole thing was just the betting. It was like watching an episode of the old Max Headroom show with And, you know, with, with the, with, with the, the live ticker of the government approval ratings going on the screen at the bottom, like, it's retarded, like, watching this whole thing. And I think it's all just one last gasp to try and figure out how to continue to keep the illicit money flow going as we shut down USAID. We're putting pressure on the cartels. We're doing this, you know, we're putting— we're taking Iran off the board. We're sanctioning Hong Kong banks for the first time ever.

Tom Luongo ⋮ Like, there's a lot of shit happening here. And so when you start drying up all those bits of capital and if these guys are— these channels, and these guys are levered in any way and the trade goes against them and they can't move their capital out, they're fucked. And they got to sell it and they got to fire sale assets left and right in order to make the margin call. And I think that that's part of this game. Yeah.

Marty Bent [43:21] I mean, speaking of the game and focusing on the Treasury too, what are your thoughts on Judy Shelton? Being brought in. I love it.

Tom Luongo [43:26] I love it. It's the most telegraphed move of all time. Was she going to go to the Fed? No, obviously not. But because they locked down that they weren't going to allow her to go to the Fed, so they move her into Treasury. And clearly the situation there, and this is going to be a long-term play, Bessent's under no time pressure here to revalue gold higher. He's not. He's openly said this. But it's going to because we have gold, the rest of the world has gold, and England and Canada do not. They have gold in the ground in Canada, but gold in the ground is— you can, you know, gold in the ground is only defensible if you can control the government.

Tom Luongo ⋮ Well, if you don't control the government, Canada's trying to break up and under— and openly, you know, the Albertans within a year or two are going to finally like realize that their best bet is to just openly ask for political asylum from the United States and become a territory. That's like the— you want— you guys want to win, that's the way to do it. Um, and, uh, and then the rest of Western Canada will fall in line.

Marty Bent [44:33] But, um, what would Canada's response to that even be? Would it be like, they're not going to go to war with us?

Tom Luongo [44:39] Just—

Marty Bent [44:39] they wouldn't be able to do anything, right?

Tom Luongo [44:41] With what?

Marty Bent [44:43] Right.

Tom Luongo [44:44] I've talked to Canadians about this. They're like, they were laughable. What do we do? We put a couple of M1 Abrams on the Trans-Canada Highway and call the whole of Western Canada ours. What are they going to do? All their assets are our assets. They don't have military assets. They have our assets. They're going to do the same thing that they were trying to do with Greenland, which is they knew that if we had permanent access and control and they didn't have final say over what assets we could put in Greenland, which is the point of the Greenland Agreement, which is that the United States, for all intents and purposes, is a permanent lease on the defensive Greenland. We can do whatever we want. We have final say over what goes on the on the continent or on the on the island. That deal was cut, by the way, not with the government of Denmark, but with the king of Denmark. That's a very important point.

Marty Bent [45:37] You had the monarchy stepping up in Spain, king of Spain stepping up, saying, "I'm going to do my." My monarchical duty to protect the borders.

Tom Luongo [45:45] M. Burlingame. M. and I had when I was out in Boise. We didn't record it, but we talked about it, and he's been talking about it here and there on the podcast he's been doing. I, I heartily recommend everybody listen to him. M. impression here, which is to say, look, The titles to all these lands have been weird since the Glorious Revolution, since the democratic, the quote unquote democratic takeover and the marginalization of the monarchs. Yes, of course, at the end of the day, might makes right. And whoever is in charge of and has the— whoever has the army over the land, possession is 9/10 of the law, right?

Tom Luongo ⋮ What's the dollar backed by? The United States military. Okay, let's not kid ourselves. But from a legal perspective and from a, how do we fix all of this in a way that is satisfactory to everybody such that we can walk back to a world where things were cleaner? We have to go back to the 16th century and all the 16th, 17th centuries. Where all the monarchs actually owned all the land. That land was taken away from them, put under the administration of these democratically elected governments and parliaments, blah, blah, blah, blah. But they still are title. But the king still has title. Like, the King of England still owns Canada.

Tom Luongo ⋮ Okay? It's titled. It's in their constitution. It's there. It's Canada as a country. It's still British North America as owned by the king. So that's part of the negotiation. And that's all Ian is saying, or at least what I gleaned from it, which is that by having the kings be at the center of the resolution process and by Trump going and meeting with all the kings, you'll notice how he's met with all the kings of Europe. He's treated them all very well. He's gone through the pomp and circumstance and all of that. I think that's an important point. It's subtle. You don't have to buy this argument.

Tom Luongo ⋮ I've talked to Dexter White about this. He just says, that's all bullshit. Mike, you may be right. He may be completely right, but at least we have to go through the process of thinking about it in these terms, and then we'll see how it plays out. Because if it plays out the way Ian's talking about it, then clearly at some point all the kings are going to step up, overthrow these, or be given the opportunity through the United States' ability to project power to say, these are the people in charge, not these undemocratically elected, chosen pretenders to the throne. And then we're gonna work out the title to all these lands and we're gonna fix all this shit.

Tom Luongo ⋮ This is, by the way, a century-long process. This is not something that's going to happen tomorrow. If that is in case is in fact what's going on.

Marty Bent [48:50] If you look at the domestic armies of European nations, they're not strong. I mean, look what's happening in France. Another perspective on France, comparing it to Matt Dines, who's like, oh, maybe they're inciting the riots because their yield curve is getting out of control, their bond market's imploding, and they want to instill martial law to restore order or whatever and use the riots as an excuse. Another way to look at the riots is the French government doesn't have the leverage of violence. They've let a lot of people come in, particularly in remote rural areas, and take over.

Tom Luongo [49:24] That's a possibility. The other possibility is that they use that as an excuse to then steal everybody's savings, steal everybody's pension, and do the military buildup, which is the way they've been talking, right? Oh, we have to be prepared to go to war with Russia in 2029 or 2030. The Russians are not going to stand for that. And you don't tell everybody, I guess, like the first rule of warfare is you don't tell everybody when you're going to attack them or when you're going to go to war with them. So clearly these democratic governments, it actually speaks to Ian's point, right? Which is that in order for these kings or these old monarchies to be able to reassert themselves, the time is now while the civilian governments don't have any legitimacy and any power.

Tom Luongo ⋮ And they don't have any standing militaries to contain the violence and the chaos that they've invited into the situation. So you could argue that our window to effect these changes, to start the ball rolling— remember, this is not a step function. We're not going to turn around tomorrow and Europe's going to be turned into a bunch of monarchies again. That's not what's going to happen. But in order to get the ball rolling downhill towards that eventual outcome. You gotta get it up over the peak and up and over and get it getting enough momentum going so that it's unstoppable. And I think that is the better way of looking at it.

Tom Luongo ⋮ And I think that's the other reason why they're trying desperately to stop Trump from winning the midterms. Because again, they know, and this is the points that Susan Kokinda has made, because you and I talked about it. Susan, before we hit record, that to Susan's point that she's made multiple times, which is that Chatham House keeps telling you, we can't survive 2 terms of Donald Trump. We can't do it. By the time he's done doing what he's going to do with 2 full terms, our old model will have been broken to a point where it will not be recoverable. We'll still have some agency, we'll still play around the edges, but for the most part, America's just going to steamroll us.

Tom Luongo ⋮ And whatever America wants to do, America's going to do. And that's the way Trump is acting right now. And he's not acting like a guy who's worried about the midterms at all, because really the midterms don't matter in the grand scheme of things. It does not matter at all. All they can do is delay what's going to happen. But at the same time, they do matter because it would accelerate the process of getting up and over that mountain and making this an inevitability, and an inevitability with as few people wind up getting dead as possible, with them burning as little of the world to the ground in the process possible.

Tom Luongo ⋮ And so that's why I want to see, obviously, that's why I want to see Trump win the midterms because the political, socio— the sociopolitical and economic benefits are off the charts. What it will unleash on his end to be able to unlock the wealth of the United States that's been written to zero around, you know, over the course of decades. This is why he's talking about these $5,000 dividends. He's not saying he's going to print a trillion dollars and hand it out to He's saying, I'm going to be able with a full Republican, real Republican majority, I can change the fundamental nature of this country in such a way that I'm going to unlock $100 trillion worth of assets.

Tom Luongo ⋮ And it's only right and proper that I pay you, I give you 1% of it as a finder's fee for, in fact, a finder's fee for doing so. And then we're going to take that $100 trillion in assets and we're going to develop them into a quadrillion dollars worth of assets, and you guys are going to get a 5% stake in that going forward, and we're not going to have to pay income tax. Well, this is the way he's thinking.

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Marty Bent [55:43] Well, this is one of the things I was talking about with Susan, which is, uh, it's just so confusing. It's like, why does he message it this way? Like, I feel like the messaging of the administration is not aligned with— because I mean, if you sell that vision, I think people would get on board. But other, other people see the $5,000 dividend checks, they're like, he's just trying to buy our votes.

Tom Luongo [56:05] Yeah, I, I know. And I, and He's got 25 days, 26 days to make that sale. And I think that he may make that sale before this is all over. Remember, Trump made a lot of moves in 2016, that last week or two of the election cycle. I don't know if you remember back that far. I did. I remember watching it really carefully because I was not on board with him at all. I was still in my law retardian phase of don't vote, it only encourages them. And I only made the choice to pull the lever for Trump like 3 days before the election, by the way. And because I just didn't believe it, I didn't believe that. But then he dropped a number of things all at once that said to me, okay, what's the worst that can happen? I'm going to get Hillary Clinton as president. And that to me is the worst thing possible. This guy could at least be hilarious.

Marty Bent [57:07] Right?

Tom Luongo [57:07] And I think between now and then, he's got at least three or four big things up his sleeve he's going to do. But he's, as always, you're always waiting for your opponent to make the first move. They made their. I think they made their first move the other day with this this thing up in Rareford, up in England. You know, with the the the potential attack on. RAF Riverford.

Marty Bent [57:34] Yeah.

Tom Luongo [57:35] And the way the British government handled it, like, oh yeah, our bad. It was just a bunch of kids having fun. Like, bullshit. Those guys were all MI6 assets.

Marty Bent [57:43] They were jacked. There's a picture of them with their shirts off. Yeah, they weren't kids.

Tom Luongo [57:47] Yeah, bullshit. You guys were all SAS and/or Ukrainian special forces or whatever. You were some British fucking carve-out and you were going to leave a whole bunch of Russian passports at the scene of the crime. Let's not kid ourselves, because you wanted the casus belli. You needed to attack something that would force the United States into a casus belli per our military doctrine. That's what that was. And I think it was going to be timed with— I still say this, I think it was going to be timed with the first Monday in October, which just passed. That's the perfect time that they always pull this shit.

Tom Luongo ⋮ And then once that was blown up, they couldn't attack the markets. There's 100 different ways to attack currency and bond markets. There's financial nuclear weapons everywhere. They can go off at a moment's notice. And I don't have to paint you a particular picture on this, but we've gone through this. We've watched Archegos Capital, we watched Credit Suisse, we've watched Silicon Valley Bank, we've watched FTX, we've watched all of these things. This is not hard. These people sold Fannie and fucking Freddie on a bullshit argument back in 2008. Let's not kid ourselves. And then they blew up Lehman Brothers to cover their fucking thievery. That's what they did.

Tom Luongo ⋮ And then they installed Obama and locked our birthright away from us for the last 20 freaking years. Fuck, they can do whatever they want on the first Monday of October. Okay. First trading day of Q4. Easy to do. Everybody moves into tax loss selling, blah, blah, blah, blah, blah. Start the process. 24 hours later, blow up a B-1 bomber or whatever in the UK. Blame it on the Russians. World War III. That was their plan. I mean, I could be wrong about that. It could be my fan fiction, but better fan fiction than the shit that's been promulgated by everybody else out there. Sorry. So I haven't heard anything better than that.

Tom Luongo ⋮ Like, no, it's just a bunch of dudes and, oh, they didn't mean any harm.

Marty Bent [59:48] Bunch of dudes just got together like, yeah, let's go blow up a B-2 bomber.

Tom Luongo [59:52] Yeah, let's just go do that. Because that's what fucking Brits do when they have an extra pint. I'm surprised that Andy Burnham didn't turn around and go, see, they were drunk and we now need to shut down more pubs, local pubs, to make sure that that never happens again. No, they didn't even do that. They didn't even use that crisis to get rid of more pubs because they've been trying to shut all the pubs down in Britain because they know damn well that that's where revolutions start, is all in the taverns and the pubs. They know this. Old America, dudes. That's where it started here in America. So where it started the first time that they lost control of shit, right? Yeah.

Marty Bent [1:00:29] I mean, and leaning back into midterms, you say it doesn't matter because they'll just use the executive. function as he has been. They can slow him down trying to do impeachments. Like, how— I mean, and as it pertains to midterms, I think on the right there's a contingent who are completely dismayed, like, we're not voting, we're not going to do it. He hasn't been following up on his promises. And, uh, there's a lot of people dejected on Frog Twitter, very much against this administration. And, uh, They say it doesn't matter, but what is the threat? I mean, how big is the threat of impeachment if the Democrats—

Tom Luongo [1:01:11] Zero.

Marty Bent [1:01:11] Zero.

Tom Luongo [1:01:12] Zero. They're not going to take the Senate. The Republicans, I mean, I could see a weird outcome here. Don't get me wrong. I'm not going to tell you that I think the midterms are in the bag or anything. I'm not going to say that.

Marty Bent [1:01:26] I don't have a crystal ball.

Tom Luongo [1:01:28] But what I will say is the following. Enough has been done to shore up voting rights in enough of the places. The early voting numbers were all terrible for the Democrats. They're not gonna take the Senate. They can publish as many fake polls as they want that Susan Collins is gonna lose in Maine, and then she's gonna win by 15 points again, like 8 points or whatever she does, she's gonna win. They did this the last time she came in 2020. Like Seth Kessel was hilarious. Somebody posted up, well, all the polls can't be wrong. 6%. Like, yes, they can actually all be wrong. The polls are not, you know, they're not real.

Tom Luongo ⋮ I think that we can have a weird situation where the Republicans wind up with 55 seats in the House, or in the Senate, I mean. And then the Democrats wind up with a 2-seat majority in the House, and then it's split and it doesn't matter. And that 55-seat majority in the Senate will be a real 55 seats because Mitch McConnell will be gone, Thom Tillis will be gone, Bill Cassidy will be gone, John Cornyn will be gone. There's a bunch of RINOs that are gone. Trump got 3 scalps, 4 scalps in the primaries. Darlene Graham's going to win in South Carolina. It's not hard. She's going to be completely loyal to Trump.

Tom Luongo ⋮ And the political winds will have shifted enough, especially in the Senate, where these guys are going to have to— the squishy ones are going to have to play ball because they're not going to be able to pull their Fredo routine and betray him because he's going to put the kibosh on them. And so I just don't— I'm not— the stat I keep looking at over and over, I keep coming back to over and over and over again, which is it's unprecedented in our lifetime. 17% of the Senate is going to turn over in January. That's a lot.

Marty Bent [1:03:37] Yeah.

Tom Luongo [1:03:39] Just from primaries, retirements, blah, blah, blah, blah, blah. And so that, again, making the past as prologue argument about how American politics works is normally the right framework. Don't get me wrong, I'm not against using that as your base case, but we're not in the past as prologue. We're in a much different place than we've ever been. And again, because of the particulars of this election cycle, because of who's retiring and everything, I think it's just a different thing. So I want to believe that it's going to be a quote unquote Trump landslide. I'd like to believe it. I may be wrong. I don't care.

Tom Luongo ⋮ That's what I want. And I'm not going to lie, you want that to happen. Go out and make it happen. Not that hard, folks. Like, your focus determines your reality. If you look at all the, uh, look at all the polls, the polls will determine your reality for you. If you look at, you know, the bots on Twitter telling you that, you know, we're all doomed and the dollar's going to fail, well then why is the dollar index at 102 and climbing? You know, I just looked at the monthly chart of the dollar index, which is a great example of the health of the eurodollar system versus the US dollar, because it's literally the eurodollar index.

Tom Luongo ⋮ The top 5 currencies in the US dollar index are all euro-dollar currencies. No Chinese yuan though, you know what I mean? And every time it's tried to sell off in the last, after Trump took power in the early part of 2025 and there was a big— and we depreciated the dollar. And then since the tariffs have gone into place, it's always, whenever it's popped back up, it's always thrown a reversal signal to the upside, meaning it's always engulfed the previous down bar, the month from the previous bar, closed above the high, and then set things in motion. And then it gets suppressed and it keeps popping up.

Tom Luongo ⋮ 5 major bullish reversals in the last 15 months of trading on the US Dollar Index. And we finally get the break above 101, which I think Bessent is now going to— he's going to have to manage. He might not like it, but he's going to have to manage it. Because again, the Europeans have the choice. They have agency. They can choose to protect their bond markets or they can protect their currency. They're choosing their bond markets. So that means that the currencies have to devalue. The US dollar is going to get too strong at some point, but it's not too strong yet. But when we get back to 110, 115 on the US dollar index, everybody's going to have a lot of soul searching to do.

Tom Luongo ⋮ And if Trump wins the midterms in the It's going to just be a big US party and the world is going to be really fucking angry with us. And I'm going to be happy. I'm just going to sit there and crow and cackle like I did for 3 weeks after he won the first time in 2016. Did I ever tell you that? Literally, in 2016, after that election, I would just get up in the morning, I would be writing articles and doing the thing. I would get up from my laptop, walk over into the kitchen, make coffee, and just randomly start cackling. Like, for 3 weeks, I just ran this randomly.

Tom Luongo ⋮ Donald Trump's fucking president. Oh my God, this is hilarious. Like, I had to— fuck you, bitches. Like, I was— this is— this— I— it was— it— and it just— yeah, no, for weeks on end after the election, it took me— it took me like 3 to 4 weeks to stop just randomly cackling. So, you know, it's like the reverse grief of when you lose a parent, you know, and you're randomly like breaking into tears. on a regular basis. Well, in my case it would be my dad, not my mom. But yeah, it was that, but in the reverse. This is the best thing ever.

Marty Bent [1:07:18] Well, you mentioned the yuan not being included in that top 5 currency, but that brings up another thing that's become more apparent to me. Again, checking priors, it's like this whole kayfabe of the US versus China existential— I mean, it seems existential battle heading towards World War III in this fight over AI. I mean, I think the last month has shown that we're more willing to work with China and just say, hey, you take care of the East, we'll take care of the West, and let's get along and figure out how to do it.

Tom Luongo [1:07:48] Yeah. Yeah. I don't think that's— I don't think that that's— I mean, it's— don't get me wrong, it's not going to be a rosy relationship or anything, but it's not going to be, you know, a a perfectly adversarial one. Like Zeke said, we don't have to be adversaries. We could be rivals. We don't have to be adversaries. We don't have to fall into— he actually, I think him invoking the Thucydides trap, saying we can avoid it, was a big— because Thucydides trap is a bunch of bullshit that Henry Kissinger and Grant Allison made up in the '70s. It's a bunch of bullshit. Doesn't even exist.

Tom Luongo ⋮ It's not even like what happened with Thucydides. Literally, they made up a bunch of bullshit. Gave it a name and then just, you know, you know, intoned it from on high that it's some verity of historical precedence. Like, go fuck yourselves, guys. Seriously, it's not even real. So I think that that's like Xi being really cheeky towards the Brits going, oh, by the way, you're the falling power and we are the rising power and you're not going to survive us. And, and then, you know, And then the Russians are along for the ride, and as well they should be because they have a seat at this table.

Tom Luongo ⋮ And that's that. But at the end of the day, I've always said, you know, ARC, America, Russia, China, always makes sense because when you break up the world into seats of power, there are 4 of them and 3 of them hate the 4th. And now we have it very obvious. And the Europeans hate us with a purple passion.

Marty Bent [1:09:29] Did you see this?

Tom Luongo [1:09:30] This statue that they just— this piece of art that they just put up in the—

Marty Bent [1:09:35] European Parliament, right?

Tom Luongo [1:09:36] In the European Parliament of a fat Trump sitting on a— standing on the shoulders of a slave or whatever. I'm like, oh, is that not projection? Because that's who you people are.

Marty Bent [1:09:48] Yeah, I mean, it is. It seems like the cognitive dissonance in Europe is insane. They don't realize that.

Tom Luongo [1:09:56] The European leaders, certainly not the European people. The European people. No.

Marty Bent [1:09:59] Well, that's a— Yeah. The European leaders— That's the question. Do the European people get control and their sovereignty back? Do they get the money in sovereignty?

Tom Luongo [1:10:09] I think that doesn't happen until we can draw the collateral stack and then change the money flow. And this gets into where you and I have to do the other side of this home and home and start talking about what's happening in crypto and how that's going to fundamentally alter the way the world works. It's funny, Marty, I've been thinking about this a lot recently and you know how I— you and I have known each other long enough to know that I like to put up ideas, put forth hypotheses that I don't even believe in just to see if I can test them and play around with them and steelman them or just to see, right?

Tom Luongo ⋮ So I had a thought pop into my head about 2, 3 months ago, and maybe I talked to you about this, but I don't think so, which is, so there's one of those classic arguments against Bitcoin, Which is oh, it was created by DARPA, and you know it's all just it's going to be this big rug pull and blah blah blah blah blah. Like that's out there; it's been out there for years. Maybe that's true. Maybe it is. But here's a question: but that it was created by DARPA—that's the nugget of truth. But the lie is that it was built by DARPA to rug pull.

Tom Luongo ⋮ All of our capital into it and then destroy us all. No, no, no, no, no, no, no. Let's reframe. That's a good— that's a great British psyop, right? How about the opposite? How about, yeah, we were thinking about ways to beat these freaking people into going back to the '90s, knowing that we needed to have a digital asset that we could introduce into the space, into the monetary system as a disruptive technology in order to break the hold of the old Eurodollar system.

Marty Bent [1:11:50] Yeah, it's funny. I was actually—

Tom Luongo [1:11:53] DARPA, get on that shit. Put something together. And then they launch it right after they steal Fannie and Freddie and install their Manchurian candidate, Obama, to destroy the country.

Marty Bent [1:12:05] Yeah. October 31st, 2008, right before. Right before the election.

Tom Luongo [1:12:12] Think about all of that and then go, maybe the nugget of truth is, yeah, they created it by DARPA, but then they turned, then they body swerve it. They twist that into something evil when the reality is that was always there as the thing that would be the antipode to the gold, to the completely corrupt gold and silver markets. Right? Because the gold, silver, and oil markets are all terminally corrupted by this Eurodollar flow. So now, if you have an ability to aggregate capital into an asset that they don't like, and notice that who's mostly who's who hates Bitcoin more than anybody else?

Marty Bent [1:12:52] The Europeans. The MICA licensing regime that they they just wiped out like eighty percent of exchanges with that burdensome MICA license regime. MICA.

Tom Luongo [1:13:04] And if you look at and if you look at the way Bitcoin's been attacked. since the double top at $125 grand, it's always been like agents of the old system coming in at this particular moment and pushing the price down in an uneconomic manner.

Marty Bent [1:13:18] And I'm not sure if you've been aware of it, but France is just letting rich crypto holders get kidnapped and tortured.

Tom Luongo [1:13:26] I did not see that.

Marty Bent [1:13:30] Like, governments— Thoroughly. Yeah. People working like in the tax authority, they're selling like KYC AML data of all the the rich Bitcoin holders to Moroccan gangs that are kidnapping them. So there could be some sort of social campaign to prevent people from wanting to adopt it because they think they'll get kidnapped and tortured.

Tom Luongo [1:13:49] And then to your point, they can also get the Bitcoin, sell it onto the market, use it to dump the price. Because look at the volatility in Bitcoin over the last 6, 7 days since the break above 86. Okay. So the The quarterly close. This is an interesting thing. So again, this morning did the quarterly closes for the market report and I was going through all of them, right? And gold and silver were— gold was bearish but kind of neutral. Silver was bearish and bearish because it was an outside bar to the downside where we broke the Q2 low. So it was less strong than gold.

Tom Luongo ⋮ But then Bitcoin was a 1-bar bullish reversal against the 3-quarter downtrend. since the peak at $125,000. 3 bars down, 1 bar bullish reversal when there was a 95% chance of it going lower than higher at the beginning of the quarter, and it held below and then reversed to the upside. The Bitcoin bear market from a technical perspective is now over. And since then, since September 30th, last Wednesday, a week ago today, well, I've been watching every time I look up the Bitcoin. Oh, we're back to $85,000. Cool. Great. 5. Like every day I wake up and it's like on a freaking $2,500 roller coaster every like 24 hours.

Tom Luongo ⋮ That's a tell. Someone is desperately trying to hold the market back from going to 90 grand or 95 or back to 100. But again, the long-term charts tell you the story. The weekly charts won't tell you the story. The monthly charts, sometimes the monthly charts will. But it's really important when you do these things, you— so I wrote this morning in my post to introduce the market report for today. I was like, it's really important that 4 times a year you review all of the quarterly closes of all the assets that you track, because that's going to tell you the big picture and it's going to wipe out all the fucking noise of, well, what about this little headline?

Tom Luongo ⋮ What about that? What about this, this guy and this guy's relationship to that guy and all this other rotten nonsense? The markets, course of a quarter, are going to tell you where the markets are headed and where the politics are headed. That's not to say we have free markets. It's to tell you that the aggregate sum of all of this noise and all of these issues sum down to be long Bitcoin, be neutral gold, be worried about silver. And we're probably never going back to $70 a barrel or $65 a barrel oil. We're more likely to stay at the $80 to $85 range, but it's going to be At the expense, I would say at the expense of $20,000 gold at some point in the future.

Tom Luongo ⋮ And that the foreign oil, just because of the number of refineries that have been hit, pipelines that have been attacked, ships that have been blown up, like, you know, you blow up a ship, it takes 5 years to build a new one. You know what I mean? Like at some point the, you know, the jackup rigs out in Singapore, you know, they can't make ships any faster. Just, you know, oil tankers just take a while to build and then you've got to get the capital to The order book and the flow book. I've spent too much time in my life in the past, you know, looking at that CapEx cycle in, you know, in the before time, you know, 10, 12 years ago, and understand it enough to understand.

Tom Luongo ⋮ You know, I used to look, I used to track the Singaporean shipbuilder Keppel, K-E-P-P-E-L, major shipbuilder in Singapore, and rig builder, like jackup rig builder and all that stuff. That's a huge part of that cycle. If you were a bad guy, you would be looking at the CapEx cycle in all of those markets to understand when the market's going to be the most vulnerable to start blowing up ships to get a desired economic choke point, which is what Davos is doing right now. That's what they're doing. They're attacking the oil refineries, they're attacking the ships. And they're trying to crash the oil economy so the oil can't flow.

Tom Luongo ⋮ As I put it this morning, there's nothing wrong with the upstream portion of the oil market. There's plenty of oil. People are pulling it out of the ground, but they're attacking midstream and downstream. Midstream shipping pipelines, downstream refineries, because crude oil is not a usable product. Why we have all this other shit we have, pull it out of the ground, move it to where it needs to be refined. The refineries are the key. And then from there, so of course they're attacking all the refineries. It makes perfect sense. If you're, if you're in a civilizational blow the civilization up mode, right? Burn it to the fuck down mode.

Tom Luongo ⋮ Well, that's what you would be doing.

Marty Bent [1:18:17] Well, let's stay on this. I do want to come back to the DARPA Bitcoin thing because it's funny. I was talking about that last Friday, but on that night we woke up to the headline of Ukraine bombing the Russian tanker this morning. And that, that's what I think the wild card in the situation is like, do they try to escalate that?

Tom Luongo [1:18:35] Okay. They're clearly blowing up tankers, blowing up all the Russian royal refineries, a mysterious event in Venezuela 2 days ago. It was funny when I was writing last month's issue, Dexter, as the editor on my work, pinged me for a line I had in the article about the refinery in Indiana, the Exxon refinery in Indiana or Illinois. Illinois. That was shut down for an electrical problem of unknown origin. Right. com directly. That was how they reported it. I didn't put it in quotes though. So he just looked at me and said, dude, that's way too conspiratorial even for you. So rewrite it. Like, what's really funny?

Tom Luongo ⋮ I said, I'll rewrite it. But what's really funny is that all I was doing was quoting Reuters. They wouldn't actually, because you know that if that was, say, a bunch of Ukrainians or a bunch of Brits or whoever it was, and they did that and they reported that truthfully, again, you now get into this casus belli thing. If we know that they did that, we have to respond to that. And they know we have to respond to it, which is why they pull off this, which is why they do this shit in the first place. Because we know that they know that we know that they know, blah, blah, blah.

Tom Luongo ⋮ And we can't Reported honestly, and that's why they get to continue doing it. And at some point, the Band-Aid's gonna get ripped off. And this, again, is one of those things where, again, the messaging, you invoked it earlier, which I didn't respond to, which is that, yes, the messaging from the administration has not been optimal. There are many things about the administration that are not optimal. If you're waiting for perfection, Well, got news for you. I hope you're Christian because that'll happen in heaven, folks. And if not, then you have to deal with the messy state that is the real world. And what looks obvious to you and to me may not be obvious to the people there because of one, information you don't have, two, their circumstances, three, their own personal bandwidth.

Tom Luongo ⋮ Their focus determines their reality. Right. So, you know, how about a little patience? A little— the way I, the way I've been, I've gotten through all of this is to say, look, I have my anxiety. I'm not going to lie. Everybody has anxiety. Like, you know, we all— none of us have a crystal ball. We all want, we all want to be able to say definitively, this is what's going to happen. We also know the enemy gets a vote. So how about as long as things are moving in the direction you want them to move in and the balance sheet is, or the scorecard is, well, we're putting up more points than they are, but we're still going to win the game 35-21.

Tom Luongo ⋮ If it's a football game, we didn't shut them out 49 to nothing. And there's too many people who expect that the only way we win is if we win 49 to nothing. Those games, games like that, and even in professional football, they only happen in really important events once in a generation where you get that kind of blowout, right? Because the other team is just so much better than the other one. We're not in that world. We're in a world where it's going to be kick and scratch. You might have to settle for a field goal as opposed to getting a touchdown. And then you move the ball forward 3 yards in a cloud of dust and you get up the next day and you And you move some other ball down the field.

Tom Luongo ⋮ One of the things that I've been impressed with by this administration from both a messaging and an operational tempo perspective is that they realize they are incredibly good. And I think this is all Trump, by the way, going, okay, well, we're going to push the ball down the field on this vector or in this game. They're playing 7 games at the same time. So we're going to move the ball on Cuba this far. Well, okay, we've reached the end. We can't go any farther. Okay, let's Shift off a cube and move on to this. And then when we're done with that, we'll shift onto the— because our opponents will never give him a definitive win in any of these arenas.

Tom Luongo ⋮ Because if they do, then that's something that he can then put in his back pocket, take off the board, and then concentrate more firepower on these areas of the board, right? On these areas of the board. You leave that aside now. So they never want to narrow his field, but he's like, I don't give a shit. I've got 18 ways that I can attack you people. I'll just pick one. And today I'll pick the one where I think you're most vulnerable. I'm going to go after that one. I'm going to poke that one. I'm going to force you to respond. So they stop him and then he responds and attacks somewhere else.

Tom Luongo ⋮ He does it all the time. And watching him do it, and that's not trusting the plan or anything, that's just observational technique. I'm just doing the observational thing and I'm just being generous. And maybe I'm overly generous in my assessment of what he's doing. That's audience to decide for. I don't give a shit. I can't control that, so I can't care about it. The best I can do is present the argument the best way I can, and then you can either be persuaded by it or not. So then I'll go from there. But by doing that and realizing that, it's taken away a lot of my anxiety about the future and the catastrophism.

Tom Luongo ⋮ While at the same time, I'm not dumb. I'm going to hedge my bets. So why do you think I make certain decisions for my life. I don't want to be in a place where it's inhospitable without electricity. That would be Florida. So I'm moving to Tennessee. That's just a real practical decision and it has other benefits for it, but that was one of the deciding factors.

Marty Bent [1:24:12] Yeah. No, no. If you look at just last month, to your point about multiple games being played, I mean, you had Greenland, the China meeting, and then the AI summit where Trump basically shoved Dario I'm a day in the corner and said, no, we're accelerating. You're not slowing down this reindustrialization. We're not giving you your regulatory moat.

Tom Luongo [1:24:31] Yeah, not only that, but we're going to drive your stock price into the frigging dirt. You're going to force you to IPO when you don't want to so we can buy the fucking shares for $0.05 on the dollar and stick them in the sovereign wealth fund. Fuck you. Yeah, that's what's coming, dude. I don't know if anybody else hasn't seen this play.

Marty Bent [1:24:48] Well, that's like maybe like putting Putting Uncle Tom on the shoulder and thinking through the lens of the City of London. I mean, the effective altruists, they basically stem out of Oxford. And we have, I mean, one of the leading frontier labs is run by a bunch of Oxford effective altruist acolytes.

Tom Luongo [1:25:13] Pete Hegseth put a defective altruist. Larry, my God. Like, oh yeah, he's been hanging around Trump too much. It's good for him. I agree. No, I've never thought that that was anything other than— that was just communism for Zoomers. Yeah, that's just communism repackaged for Zoomers. That's all that is.

Marty Bent [1:25:36] But is that the City of London sleeper cell in the US?

Tom Luongo [1:25:40] London High Table again. I don't like to just use the City of London thing. I want to clarify this for some people because they misunderstand me. And I've said this to Dexter. I said, look, I have a messaging strategy like everybody else has to have one, which is that London has always been the third rail of geopolitics. We're not allowed to talk about the British Empire existing anymore because it ended in 1946, miraculously, after World War II. That's bullshit. Okay, that's just bullshit. I'm not saying that they're all-powerful. I'm not saying that they have ultimate agency or that they have ultimate control over anything. That is not what I'm saying and never have said.

Tom Luongo ⋮ All I've ever tried to do was to say, look, everywhere that you think it's evil America, no, that's probably London trying to sell you on the idea of evil America while they do their evil, nefarious shit. And it's not just the British, but since most of the money flows through the City of London, their carve-out banks, their shadow banks in the Caribbean, Hong Kong, Singapore, all of these places, Dubai, Zurich. Like, if we knew— well, I would say Zurich is probably more old European money. But when you realize that that's part of the process here, that's— you can't deny that. You have to incorporate that into your mindset.

Tom Luongo ⋮ You have to incorporate that into your understanding of how to read headlines. It doesn't have to be solely operative. It's not just a single vector analysis. I think the French have plenty of things to answer for. They have a lot of agency in this. There's shit going on with the Germans and the Spanish and everybody's got shit going on. The Chinese are doing shit. The Russians are doing shit. Iranians are doing shit. But it does all come back to where the center of the Eurodollar system, which is the liquidity pump for the entirety of this thing, and that includes the shitbag American would-be oligarchs who've been deposed, by the way, who still want to desperately get back into power, the Bushes and the Clintons and those people.

Tom Luongo ⋮ I prefer the term High Table as I get older. I really have gotten to the point now where I'm like, if you haven't seen the John Wick movies, maybe you should watch them because they really are a fucking documentary. You've got the Russian franchise, you've got the European franchise, there's the Italian franchise, you've got the British one, you've got the American one, you got the Japanese one, the Chinese one. They're all there in all 4 of the movies. And they're fighting amongst themselves. And it's a metaphor for the big fight that's happening with the old oligarch money that's been around since Rome. And vestiges of it are everywhere around us, and they're still fighting amongst themselves to see who's going to win.

Tom Luongo ⋮ Or— and then if you look at John Wick, as if you extend the metaphor, he's just the ordinary American who's like, you shot my fucking dog.

Marty Bent [1:28:49] No.

Tom Luongo [1:28:50] Rules and consequences. You guys broke the fucking rules, and I don't give a shit. I'm taking him out because it's wrong and it's against everything. I was a bad man when I worked for these people. Now I'm not working for them anymore. Fuck that. And it's a perfectly adequate metaphor, and it works better if you actually think of it that way, because that way there's not one star chamber. There's a plethora of little star chambers that get together every once in a while and think that they decide to control the world. And I've always said this, I've always described Davos as those who think that they control the world. They don't control the world. They just think they do. They just make you think that they do. And they spend all of their time trying to convince you that they're all powerful and you have no power. And that is bullshit. Complete and utter bullshit. Because if that were the case, I'd already be dead.

Marty Bent [1:29:49] Well, I think— and I think the veil is being lifted, particularly here in the United States. I mean, you mentioned the old oligarchs here in the US. I mean, Hillary Clinton's been making the rounds, like, talking about AI and other stuff, and everybody's just like, go away. Like, Bill Gates is coming out talking about AI. Everybody's like, go away, dude.

Tom Luongo [1:30:07] We're putting you in the hole, dude. What we have here is a failure to communicate. I'm going to induce what the Paul Newman— HUD? Whatever that freaking movie is, the one where what we have here is a failure to communicate and then they put him back in the hole. That's what I'm talking about. That's where Bill Gates needs to go. He needs to sweat it out in the hole. All of them, they all— it's fine. Let them play their games. Let them have their say. Let them spend their money. Let them spend their capital, let them try and extend and pretend. But if we decide we don't want to live in that world anymore, and enough of us say, that's enough, we're not living under your rule anymore, and we explain to enough people why you should never want to live under their rule anymore and fall for their bullshit, we win by default.

Tom Luongo ⋮ They will lose. We may not win with Donald Trump, or in this era. It may take another 50 years or another 2 generations or another cycle of generations, whatever. Nothing worth doing isn't worth fighting for.

Marty Bent [1:31:12] Yeah. It was never going to be easy and it wasn't going to happen overnight. That's the frustrating part of— because it's obvious on all fronts, the domestic economy on the reindustrialization, on the monetary level, what's going on with stablecoins, they're actively trying to re-architect But the physical economy and the financial economy in front of our eyes. And to your point, people want a 49 to 0 blowout. It was never going to be that way.

Tom Luongo [1:31:39] Right. And again, look, when you're in opposition, when you're losing, standing on your principles, shouting them from the high heavens is the right play. It's how you aggregate people to you to form an intentional community, to build the resistance necessary to get to the point where you could begin winning and get out. But once you're no longer in the opposition, that's when you have to take the opportunity that's in front of you and make the absolute most of it. And this is the part that the libertarians are just refusing to get through their heads. And I'm serious when I say this because they're doubling down at every turn.

Tom Luongo ⋮ And then I have to say, okay, really? The more you double down on this nonsense that Trump is betraying us and Dave Smith refuses to even Watch Rush Ulbricht's speech, for Christ's sake. Like you know this is shit's real. I'm like, are you kidding? Like so do you? So Donald Trump got you a banana split. You asked for you know a banana split with with you know with extra fudge, and you only got a banana split with a little bit of fudge, and you're bitching. Go fuck yourself. Like go out there and win. Go go make a a new fudge factory, for Christ's sake, so you can.

Tom Luongo ⋮ So the next time he gives you the banana split, it'll have enough fudge on it for you. I don't know what. I don't understand. And really what it comes down to is this. I was saying, this is what I said this morning, and I was thinking about this and I said, I go into a discussion with somebody and they go, well, and I say, well, don't you see what's happening here? And they're like, well, that's great, but I'm like, no, don't use that's great, but because that's great. The phrase that's great, but Means that you want more. And then because you don't care about— okay, well then at what point are you going to stop saying but?

Tom Luongo ⋮ Because we just built this, we got this thing done. That's great. How about that's great, I hope we get this, I'd like to get this next, as opposed to that's great, but you need to prove to me. Like, I'm all about distrust but verify and all this shit. I'm all for it. But there comes a point where you have to be able to do both things at the same time. And sometimes you just have to go, yeah, that's great, period. Cool. Tomorrow we may get something really cool too. I'm not really crazy about that. Yeah. Okay. And then we go from there. But I think what we've— I know that you've tried to do it, and I've been screaming to the high heavens for 6 months that the Iran War or conflict, or whatever you want to call it, was a necessary evil, for lack of a better term.

Tom Luongo ⋮ And if you think that it's terrible for the Iranian people to have to suffer and this, that, and everything else, yes. But notice how precious few videos there are of civilians being killed in Iran. Because if there were civilians being killed in Iran, they would have used them In every venue possible. And if you're going to go back to the first day of the war where the girls' school got bombed and that's your only example, wow. Okay. I'm really sorry that that happened. I truly am. But it's one or two in a war like this. I've chatted with Alex Greiner about it, who lived through the Yugoslavian civil wars.

Tom Luongo ⋮ I've chatted with all these people. The only thing you have to point to. Yeah, that's a tragedy. Certainly what's happened in Gaza was a tragedy with no reservation. No, it's a tragedy, but it's a tragedy, period. That's sincere. That's different than what we've seen here. And so maybe you should take a step back from— take off your I don't kick puppies shirt that you're so fucking virtuous that you don't kick puppies. Like, nobody fucking kicks puppies. I'm giving Dexter White credit on that one. That one's his. And say, I'm so much of a member— I'm not even going to go there. I'll do that one later.

Tom Luongo ⋮ But that's what we have to do. It's the real world. We have to accept the fact that bad things happen along the way of good things happening. Tragedies occur. Humans are messy. It sucks. Try and make it up in post or whatever you have to do and move on. Because if there's no forgiveness, if there's no— I don't know, there's no accounting, cost-benefit accounting or whatever, however you want to put it. I hate to use that phrase. Yeah, there's no karmic balance here. Those girls are dead. What are you going to do? But not do anything because of the threat of you're going to hurt one person somewhere?

Tom Luongo ⋮ Well, meanwhile, these guys that we're dealing with in Iran are literally going around trafficking children and trafficking organs and running drugs and destroying people's lives and everything else. At some point, you have to just say, no, I have the moral authority as president of the United States to say I'm ending this bullshit and it's not in my people's best interest and I'm not going to have them I'm not going to have them raped and slaughtered, basically economically, financially, politically, in every other way and culturally, because I'm afraid of blowing up a girls' school outside of Tehran. No, fuck off. We're doing it. That's it.

Marty Bent [1:37:16] And I'm not going to feel bad about it.

Tom Luongo [1:37:19] Yeah, that's it.

Marty Bent [1:37:20] Well, then again, like, bring it back again, looking at the wins, like, it does seem pretty— like, I sit on the board of a data center company and like, we just like the whole data center, anti-data center rhetoric that's been going on, it's just like completely false. Like, it is creating a ton of construction jobs, a ton of electrician jobs, welding jobs.

Tom Luongo [1:37:41] It's going to lower electricity prices for everybody.

Marty Bent [1:37:44] Yeah. Like, we just, I mean, I don't know how far you are, but we just, we just announced this PR yesterday, but Hopkinsville, we have an operation there. We're actually expanding by 50 megawatts. And to do that, we need to build a 65-megawatt substation, and that's going to be fully funded by us. Like, the taxpayer's not going to pay for it.

Tom Luongo [1:38:02] Right. Well, and the taxpayers actually get the benefit of when you don't use the peak electricity load and you feed it back into the grid, which is what Trump said originally. And actually, what I do know is I heard a thing recently, it's like, I think it's in Georgia, I think 2 or 3 or maybe even 4 of these data center plus power generation colocation projects have gone online in Georgia and everybody's electricity bills are dropping like Yeah. Because it's the right way of going about it. Look, I have no problem with that model. I think it's a great model. It's a way of building everything out.

Tom Luongo ⋮ And then we decentralize the grid, which is great. That takes powers away from the local government. That's a big one because now we have private electricity generation competing with local franchise monopolies controlled by local governments. So they know this has to be in Gainesville, Florida. That's where my Gainesville regional utilities They own everything, water, power, gas, everything. And it's all run by the city of Gainesville. And then they just play the game of raising and lowering the tariff rates and the rates for water, power, and gas relative to property taxes every election cycle. So they raise the power bills and they lower the property taxes in order to run on the fact that we cut your property taxes.

Marty Bent [1:39:19] Yeah.

Tom Luongo [1:39:20] They've been doing this shit for years. And it's awful. But, you know, they have some of the highest— they have some of the highest property tax plus, you know, utility rates in the state. It's awful. I don't live there, thankfully. That's why I live north of Alachua County. I made that decision 25 years ago on purpose because I'm not an idiot. That's, that's where being a libertarian is of a benefit to you personally, because you can think through these things and you can see these systems for what they are and the risks for what they are. But then there's a point where, you know, hold your principles.

Tom Luongo ⋮ You can't eat them. Implement them as best you can. And when you see good things happening, then you say to yourself, well, the ledger board has all these good things and a few of these bad. Okay, I can live with that. And we move the ball forward and these things are going to pay massive dividends in the future that are going to obviate some of these other things that we're not dealing with today. Right?

Marty Bent [1:40:14] Yeah. No, it's— I mean, last topic here domestically, thinking like immigration too. I think that's one thing everybody's like, they're not all— they haven't all been sent back yet, and so therefore it's a failure. But if you look at net immigration, obviously there's been comments around H-1B visas and how that's being gamed and how we're going to fix that. And then heading into midterms, I'm sure you've been seeing what's happening, uh, in, uh, Minnesota with like these Somali gang outbreaks. Like, I don't— I think that's If anything, that's going to create a reason to even get more aggressive with it moving forward.

Tom Luongo [1:40:48] We are. And again, when you say things, when people say things like, just get them all out of here, I'm like, okay, how? You got 20 million of them. How are you going to run? Are you going to devote your weekends to this process? What are you going to do? Are you going to pay for the plane tickets? Are you going to pay for the ship captains to show up at Report to Jacksonville and stick 50,000 of these guys and ship them back to frigging Pakistan? Is that what you're going to do? Are you putting that money on the table? Do you know how much that costs?

Tom Luongo ⋮ Do you know how much time that costs? How about get rid of the worst ones first and then start setting up processes which disincentivize them to even stay, and then they go home and then they can't come back. And deportations are at an all-time high. The border's secure. You're starting to see the froth coming out off the housing market in the places where they— and the wage market and everything else where they have been inserted and subsidized to come. So that money's going to start coming off the budget. And again, the expenditures are going to get better slowly but surely. I did a thing with Grok A couple of months ago, I don't think— I know you and I haven't talked about this, but I said, I just sat down with Rock for like half an hour one day and I said, okay, talk to me about the situation with the fiscal situation.

Tom Luongo ⋮ And I said, okay, what's the rate of growth of government receivables? How much money are we— what's the rate of growth for government receivables, not including tariffs? And Rock's like, about 4% year over year. Okay. What's the rate of growth of expenditures? About 3% year over year. Well, so we're still spending more money, sure, but the government's bringing in more money. But yeah, and that's being reflected. And then plus the tariff revenue. Okay, let's add that back in, $275 billion a year. Now, ceteris paribus, and let's add in a 5% reduction year over year in waste, fraud, and abuse, headcount, forced retirements, Shutting down dumb systems that all this stuff, just 5%.

Tom Luongo ⋮ Can we get rid of 5% of the waste and fraud in these? What would that look like? 0. That's what And that's not anywhere close to the rate that it's going to drop as we go forward with just increasing receivables, growing your way out of it, that part of it, getting rid of some waste, fraud, and abuse, and balancing trade out. I'm not leaving it— I'm leaving aside all the investment that's come in. All the other stuff, tax breaks, expensing, all the other things that are happening, just that, those metrics alone cuts the budget in half in 3 years. Now, if you don't think that's going to make the United States more creditworthy in 3 years relative to global investors, then I submit that you might have the education of a 5th grader.

Tom Luongo ⋮ Or be an IQ 60 Somali organizing a gang in Minneapolis.

Marty Bent [1:44:16] Yeah. And again, bringing it back to Judy Shelton, who knows what the plan is. I mean, maybe gold-backed bonds, maybe Bitcoin-backed bonds, but recollateralizing the system too, I think is part of a plan.

Tom Luongo [1:44:33] It's absolutely part of the plan. It's not even a thing, but we're going to recollateralize That debt. We're going to open up the asset side of the balance sheet, which we're doing, and then we're going to recollateralize the debt side of the balance sheet. And we're going to do that at our pace, and we're going to do so in a way that is the least disruptive for the entirety of the global economy so that everybody benefits, so that the pain of that reorganization is felt by as few people as possible. Except for the fucking globalist shitbags at the high table who want to destroy us all. Why don't— why can't— nothing would make— like, how do you destroy a narcissist? You ignore him and then you destroy his reputation. You don't string him up by his toenails and feed him to dogs. I mean, that's— well, satisfying.

Marty Bent [1:45:29] Yeah.

Tom Luongo [1:45:30] If he's a traitor. No, the best thing to do is to let him Watch him bleed himself out and go from hero to villain and then have to live with the villainy while you move on without him. And you aren't locked in this fucking codependent relationship of his narcissistic view. That's how you deal with it, how you deal with a narcissistic parent, how you deal with— it's how you deal with an abuser. You walk away from them and you go build something Construct it for yourself. Think about construction, not destruction. There will be plenty of time for hangings and waterboarding and all the rest of it. Just remember, folks, it's not waterboarding if you use diesel fuel.

Marty Bent [1:46:17] Sorry.

Tom Luongo [1:46:17] I saw that on Twitter. I thought it was cute.

Marty Bent [1:46:20] Well, it's funny too, talking about they're going to go at their own pace. Again, last Friday, I recorded with a Roman historian, and one of the focuses of that conversation was how Constantine brought the empire back to a gold standard. And the way it was described is it took a while. He introduced the solidus, and it took about 2 decades of him working on it. But then after that, you had 700 years of basically a gold standard in that part of the world. something beginning to happen here too. And maybe that's like when I'm on your show, we can talk about how that may play out with Bitcoin and stablecoins. Because you had the solidus and then you had the silver coins on top of it that were spending, but the solidus was the gold coin that was used as the reserve asset. And I could see that being part of the plan with Bitcoin and stablecoins.

Tom Luongo [1:47:14] Yeah, absolutely. We should probably leave that for when we do this. So when we get— we should probably wrap up here. This is, I think, a good place to stop. And, and leave it off for as part 1. And then you and I will pick it up on my podcast in a week or 2, whenever you get a chance. So let's do it. That sound good? Let's do it. Sounds great. I love it. It would be good to— it would be good. I really do feel like I'm missing part of the whole crypto revolution thing and I need to reach out to Caitlin Long. I want to get her on the cast as well. We just got to— I got to go. Got to get back on the— got to get back on the hump, guys. Got to, you know, vacation's over. It's now time to get serious.

Marty Bent [1:47:49] The one thing I'll say, how it ties to this conversation, is to your point, midterms don't matter. They're going to go along with— they're going to go execute their plan no matter what. I think we've seen a precursor to that with the failure of the Clarity Act to get passed. They're just like, all right, SEC, CFTC, OCC, just go write the rules anyway. We don't care.

Tom Luongo [1:48:06] Yep. And then we'll solidify them and we'll enshrine them as law later on. That's fine. We can do that later. Yeah. Sounds great. Marty, as always, dude, Beautiful, beautiful to see you. Great chat. Like, well, we'll do it again soon. We'll do it on my— we'll do it in my crib. You know, you won't have to— and folks, you won't have to look at either of our ugly mugs. Audio only. I have the purity of the audio of the audio-only podcast. So there you go. We'll talk soon. Okay.

Marty Bent [1:48:33] Peace and love, freaks. Okay. Thank you for listening to this episode of TFTC. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there. Also, wherever you're listening, whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad-free, make sure you download the Fountain podcasting app. You can go to fountain.fm to find that. $5 a month gets you every episode a day early, ad-free. Helps the show, gives you incredible value. So please consider subscribing via Fountain as well. Thank you for your time, and until next time.