WEBVTT 1 00:00:07.240 --> 00:00:10.080 All right, guys, we are jumping into another episode fresh 2 00:00:10.080 --> 00:00:12.240 off the XRP Las Vegas event. You guys got a 3 00:00:12.320 --> 00:00:14.599 chance to see everything. But joining me now of course 4 00:00:14.679 --> 00:00:18.679 is Verson and Van Dell coming in from Black Swan Capitalists. 5 00:00:18.679 --> 00:00:22.160 How are you guys doing great? Good to see Paul guys. 6 00:00:22.480 --> 00:00:25.640 Yeah, I wish I know you couldn't make it in Vegas, 7 00:00:25.679 --> 00:00:28.359 but we would have had a good time there because 8 00:00:28.399 --> 00:00:31.359 there was a lot of people at the event that 9 00:00:32.079 --> 00:00:34.479 we had a chance to see all year round, you know, 10 00:00:34.640 --> 00:00:37.840 obviously within the show, but in general. It was a 11 00:00:37.840 --> 00:00:40.560 good time to catch up with everybody. But a good deal. 12 00:00:40.880 --> 00:00:43.320 You guys are busy though, you've got a lot going on. 13 00:00:44.039 --> 00:00:46.799 Well, just like you, but you were able to make 14 00:00:46.840 --> 00:00:49.640 it over there. I'm glad you had a good time, 15 00:00:49.719 --> 00:00:52.600 you know. I saw all the videos online. Yeah, it 16 00:00:52.679 --> 00:00:53.479 was very exciting. 17 00:00:54.200 --> 00:00:57.240 It's pretty deep, I think in general, when you look 18 00:00:57.320 --> 00:01:04.519 at the market where it was at the time versus 19 00:01:04.599 --> 00:01:08.200 what we've seen in past years. Typically up markets usually 20 00:01:08.280 --> 00:01:13.000 means up events. They had quite a few people attending 21 00:01:13.079 --> 00:01:16.519 even though we had a down market. So interesting stuff. 22 00:01:17.000 --> 00:01:21.439 I want to go into the first topic today, and 23 00:01:22.000 --> 00:01:25.159 that is midterms. You know, I know of Vandel you 24 00:01:25.200 --> 00:01:27.840 mentioned that in the pre show. I'm going to share 25 00:01:27.879 --> 00:01:30.799 something with you guys right here to give you kind 26 00:01:30.799 --> 00:01:34.599 of an example of what's going on with midterm elections 27 00:01:35.120 --> 00:01:38.799 right now. It is a fifty four percent chance that 28 00:01:38.879 --> 00:01:42.760 Republicans could possibly reclaim the Senate. This has moved up 29 00:01:43.599 --> 00:01:46.680 quite a bit, which kind of surprised me when you 30 00:01:46.719 --> 00:01:50.760 look at where midterms have been in the past, and 31 00:01:50.840 --> 00:01:55.280 if you think about that and the potential of markets 32 00:01:55.359 --> 00:01:58.480 at the same time. First of all, what do you 33 00:01:58.519 --> 00:02:01.000 guys think we're dealing with right now? Do you feel 34 00:02:01.040 --> 00:02:06.200 like this is a potential catastrophe for the Republicans or 35 00:02:06.200 --> 00:02:08.599 do you think that they might actually pull it out. 36 00:02:08.919 --> 00:02:10.879 What are your thoughts there, because that may dictate where 37 00:02:10.919 --> 00:02:13.280 the markets go. 38 00:02:13.280 --> 00:02:14.840 Go ahead, No, please up again. 39 00:02:15.199 --> 00:02:18.520 Yeah, so my take is very contrary, and you could 40 00:02:18.560 --> 00:02:19.039 say so. 41 00:02:19.199 --> 00:02:19.680 I think. 42 00:02:19.840 --> 00:02:23.039 I think a lot of it is theatrics, to be honest, 43 00:02:23.719 --> 00:02:28.919 regardless who takes a seat, what side, left right, vote left, right, 44 00:02:29.000 --> 00:02:29.560 up or down. 45 00:02:29.719 --> 00:02:33.080 I mean, the fiscal deficits will keep rising, yep. 46 00:02:34.479 --> 00:02:36.439 Interest rates are going to have to be cut at 47 00:02:36.520 --> 00:02:40.240 some point to refinance the debt. It's just unsustainable for 48 00:02:40.319 --> 00:02:43.319 the system at the moment, and I think at the 49 00:02:43.400 --> 00:02:47.360 end of the day, regardless you know what side wins, 50 00:02:48.439 --> 00:02:51.240 the outcome is going to be the same as it 51 00:02:51.280 --> 00:02:56.759 pertains to monetary policy, the increase in the deficits, and 52 00:02:57.199 --> 00:02:59.240 really the ultimate direction we're heading in. 53 00:02:59.599 --> 00:03:01.479 So I don't think it's going to make much of 54 00:03:01.520 --> 00:03:02.120 a difference. 55 00:03:02.199 --> 00:03:05.479 It may in the short term, but I don't think 56 00:03:05.560 --> 00:03:09.039 the long term outcome is going to drastically change. 57 00:03:09.280 --> 00:03:10.199 And we've seen this. 58 00:03:10.199 --> 00:03:17.240 Throughout historical periods of similar election cycles. I mean, nothing 59 00:03:17.319 --> 00:03:21.919 really changes in the grand scheme of things from the 60 00:03:21.960 --> 00:03:25.520 markets perspective, you know, So maybe in the short term, 61 00:03:25.520 --> 00:03:28.800 but long term the direction is obvious. You know, we're 62 00:03:28.800 --> 00:03:33.599 going to have increase of the money supply over time. 63 00:03:35.280 --> 00:03:38.879 Rates are eventually going to come down at some point 64 00:03:38.960 --> 00:03:41.000 because out of. 65 00:03:41.000 --> 00:03:43.759 Necessity, financial conditions will loosen. 66 00:03:44.560 --> 00:03:48.000 Crypto is going to go through its cycles and that 67 00:03:48.080 --> 00:03:51.680 will mature over time. But ultimately, even the Clarity Act 68 00:03:51.759 --> 00:03:55.159 is eventually going to go through because like all historical 69 00:03:55.319 --> 00:04:02.719 disruptive technological innovation, it eventually gets regulated, controlled, adopted and 70 00:04:02.919 --> 00:04:05.159 integrated into the broader system. 71 00:04:05.560 --> 00:04:07.039 So it's all a matter of time. 72 00:04:07.199 --> 00:04:11.319 But short term, anything could happen long term, I think 73 00:04:11.360 --> 00:04:14.280 the outcome is the same regardless which side wins. 74 00:04:14.560 --> 00:04:14.759 You know. 75 00:04:14.960 --> 00:04:20.439 Yeah, Well, the point is is that obviously the politics 76 00:04:20.480 --> 00:04:23.720 side of it has really started to play out. Even 77 00:04:23.759 --> 00:04:25.800 around clarity. We're going to talk about that before we 78 00:04:25.839 --> 00:04:28.319 get into clarity because there's some big news out on 79 00:04:28.399 --> 00:04:30.519 Capitol Hill that will break down and I want to 80 00:04:30.560 --> 00:04:32.319 kind of get your opinion on this, but before we 81 00:04:32.399 --> 00:04:37.160 go there, when you consider the current situation right now 82 00:04:37.319 --> 00:04:39.120 of the market, we have the CPI day to come 83 00:04:39.120 --> 00:04:42.439 out bad. This does not look good for the market 84 00:04:42.439 --> 00:04:44.959 in general. You also had this right here, which was 85 00:04:45.800 --> 00:04:48.000 the issue that we're already seeing and I'll kind of 86 00:04:48.079 --> 00:04:50.319 zoom in on that if I can, and that is 87 00:04:50.360 --> 00:04:53.000 that auto loan and credit card delinquencies now are up. 88 00:04:53.040 --> 00:04:56.160 So this is usually indicative of what we have seen 89 00:04:56.199 --> 00:04:59.680 in the past, because what Lavish is talking about here 90 00:04:59.839 --> 00:05:02.759 is that this isn't necessarily a case shaped economy, but 91 00:05:02.839 --> 00:05:06.319 it's the system that's breaking. And you guys talk about 92 00:05:06.319 --> 00:05:10.560 this a lot, that the system is breaking. The issue 93 00:05:11.040 --> 00:05:14.920 that we're dealing with is breaking. And beyond all of that, 94 00:05:15.759 --> 00:05:18.879 would you say right now, based on the CPI data 95 00:05:18.920 --> 00:05:22.279 that we saw come out this morning also based on 96 00:05:22.680 --> 00:05:25.920 some of this new data coming in from the consumer 97 00:05:25.959 --> 00:05:30.439 goods side. Are we in a position yet where people 98 00:05:30.560 --> 00:05:33.959 will start to abandon the dollar and start to go 99 00:05:34.079 --> 00:05:36.120 into something else? What do you guys think? 100 00:05:37.800 --> 00:05:40.000 Well, first thing I'd like to make a statement on 101 00:05:40.959 --> 00:05:43.720 as far as the political system, to complement my brother's 102 00:05:43.759 --> 00:05:48.360 research and his insights, is the truth is both sides 103 00:05:48.439 --> 00:05:51.759 serve the same masters, sure, and they ultimately keep us 104 00:05:51.759 --> 00:05:54.680 fighting with each other while the real power structures continue 105 00:05:54.720 --> 00:05:57.639 to extract our wealth and they're building out the next 106 00:05:57.920 --> 00:06:02.000 era of finance. So, just to give some context for everyone, 107 00:06:02.040 --> 00:06:05.199 the game is really never left versus right, It's always 108 00:06:05.240 --> 00:06:07.600 been us. It's greg there you go. 109 00:06:07.720 --> 00:06:09.519 Yeah, there's no different way to say it. 110 00:06:09.519 --> 00:06:10.120 It's rigged. 111 00:06:10.519 --> 00:06:11.560 Yeah right. 112 00:06:11.879 --> 00:06:14.519 Well, the US dollar, right, I would say, is reaching 113 00:06:14.560 --> 00:06:17.480 the final chapter of a failed experiment. Really and all 114 00:06:17.519 --> 00:06:19.839 we have to call it for what it is. You know, 115 00:06:19.920 --> 00:06:23.160 people talk about the national debt, they say it's too high. Well, 116 00:06:23.240 --> 00:06:25.560 the truth is it's completely out of control, and it's 117 00:06:26.319 --> 00:06:31.199 sadly it's inseparable, inseparably tied to the dollar itself. So 118 00:06:31.199 --> 00:06:33.800 when you have a system that prints money off thin 119 00:06:33.839 --> 00:06:36.480 air of the service yesterday's promises. You're not running a 120 00:06:36.519 --> 00:06:40.399 currency anymore, You're essentially running a Ponzi scheme. And that 121 00:06:40.480 --> 00:06:44.040 ponzi scheme is systematically transferring more wealth from the productive 122 00:06:44.079 --> 00:06:47.920 class to the financial and political elite. Central bankers and 123 00:06:48.040 --> 00:06:51.560 power players. They don't just print their way into more power. 124 00:06:51.600 --> 00:06:54.519 They actually print at the direct expense of everyone else's 125 00:06:54.560 --> 00:06:58.079 purchasing power, saying, look at all of this, that's kind 126 00:06:58.079 --> 00:07:00.519 of the cycle we're trapped in, or we have been 127 00:07:00.519 --> 00:07:03.920 trapped in. We print more, we export more inflation aboard abroad, 128 00:07:04.279 --> 00:07:06.040 and we just repeat the cycle. 129 00:07:05.800 --> 00:07:06.439 Over and over. 130 00:07:07.000 --> 00:07:10.519 And other nations they've played along for decades because the 131 00:07:10.560 --> 00:07:13.439 dollar was the most liquid game in town. But I 132 00:07:13.480 --> 00:07:16.680 think overall nations and people alone are getting tired of it, 133 00:07:16.800 --> 00:07:19.920 extremely tired. And right now we're watching the end of 134 00:07:19.959 --> 00:07:24.079 the post Brettonwood system. Cash is gradually being phased out. 135 00:07:24.439 --> 00:07:27.360 Alternatives are being built, and the dollar it's still widely 136 00:07:27.480 --> 00:07:31.000 used today because of its liquidity and deep markets, but 137 00:07:31.079 --> 00:07:35.600 it is losing its status as the unchallenged hegemonic reserve currency. 138 00:07:36.000 --> 00:07:39.879 How long do you think that can hold though? I mean, 139 00:07:39.879 --> 00:07:43.560 because you think about where we just showed some stats here. 140 00:07:43.639 --> 00:07:46.600 Consumer debt is just getting out of hand. You're seeing 141 00:07:46.639 --> 00:07:51.160 the rich getting richer. You're looking at the investment class 142 00:07:52.040 --> 00:07:55.720 that has absolutely exploded, even though we had that retracing 143 00:07:55.879 --> 00:07:58.040 in the market this morning because of CPI. But how 144 00:07:58.040 --> 00:08:00.959 long do you think this can hold of the US 145 00:08:01.000 --> 00:08:06.959 dollar holding a position of power, especially now that the 146 00:08:07.000 --> 00:08:09.879 EU has realized that the US is no longer going 147 00:08:09.920 --> 00:08:11.879 to be there to back them up, because that's been 148 00:08:11.959 --> 00:08:13.879 kind of the strength of one of the one of 149 00:08:13.879 --> 00:08:14.839 the core strengths of the. 150 00:08:14.800 --> 00:08:18.360 Dollar for quite some time. I mean, it's again all theatrics. 151 00:08:18.759 --> 00:08:21.000 The truth is the dollar is dead as we know it. 152 00:08:21.399 --> 00:08:25.839 All your fiat currencies are Ponzi schemes by designs. A 153 00:08:25.839 --> 00:08:28.000 matter of time, it's just a matter of time. But 154 00:08:28.120 --> 00:08:31.800 if you look at the reality, we're already transitioning into 155 00:08:31.800 --> 00:08:35.840 a multipolar monetary world. This is happening day by day. Elasa. 156 00:08:35.879 --> 00:08:38.240 We'll talk about the great reset, they talk about the 157 00:08:38.240 --> 00:08:41.159 reset of the financial system, and they say it's coming. No, 158 00:08:41.320 --> 00:08:45.000 it's not coming. It's already happening now in the way exactly. 159 00:08:45.360 --> 00:08:48.360 So the dollar is not going to vanish overnight because 160 00:08:48.399 --> 00:08:52.679 it's too embedded. But it's monopoly. The monopoly on the dollar, 161 00:08:52.759 --> 00:08:55.919 a global pridity and reserve status is gradually coming to 162 00:08:55.960 --> 00:08:59.159 an end. And that's why you see physical commodities re 163 00:08:59.399 --> 00:09:04.559 anchoring trust again, that's why you see digital rails providing exactly. 164 00:09:05.720 --> 00:09:09.639 Think about what is happening right now. You look at 165 00:09:10.000 --> 00:09:15.600 the geopolitical positions of what Trump has done, it clear, 166 00:09:15.799 --> 00:09:18.600 it is clear now of really the pressure that is 167 00:09:18.639 --> 00:09:20.360 being put on the rest of the world from an 168 00:09:20.480 --> 00:09:25.279 energy standpoint, which is now starting to shift the dynamics 169 00:09:25.399 --> 00:09:28.559 of how the United States plays with the rest of 170 00:09:28.600 --> 00:09:31.759 the world as well, because what you have had is 171 00:09:31.919 --> 00:09:35.399 even France, I think Macron came out and was starting 172 00:09:35.440 --> 00:09:37.519 to push a little harder in the sense of eventually 173 00:09:37.600 --> 00:09:41.200 they're going to see a departure of the United States 174 00:09:41.200 --> 00:09:43.600 out of I think, out of NATO. Once that occurs, 175 00:09:44.120 --> 00:09:45.639 the EU will be on its own. They're going to 176 00:09:45.679 --> 00:09:48.919 start negotiating, who knows, with most likely the Russians and 177 00:09:49.200 --> 00:09:51.200 the Chinese, which will start to shift some of that, 178 00:09:51.480 --> 00:09:54.720 to your point, into other currencies. And it does kind 179 00:09:54.720 --> 00:09:59.039 of beg the question, you know, has the Monroe doctrine 180 00:09:59.240 --> 00:10:06.200 influenced enough to create this you know, Western hemisphere focus, 181 00:10:06.240 --> 00:10:08.200 which is really kind of where he's going right now, 182 00:10:09.000 --> 00:10:13.240 and the push towards digital assets, gold, et cetera, which 183 00:10:13.320 --> 00:10:15.559 is really the strength right now of the US. What 184 00:10:15.600 --> 00:10:18.399 do you guys think about that, because that's that's underway 185 00:10:18.480 --> 00:10:18.919 right now. 186 00:10:20.600 --> 00:10:24.600 I mean, honestly, in my opinion, behind closed doors, this 187 00:10:24.759 --> 00:10:28.840 was all decided. And again it's a very contrarian view. 188 00:10:28.879 --> 00:10:32.320 People like to look at the headlines and they kind 189 00:10:32.360 --> 00:10:35.039 of feed on that in a in a way, it's 190 00:10:35.159 --> 00:10:39.080 very strange at this point, but the distortions are clear. 191 00:10:39.639 --> 00:10:43.600 I think what they're doing essentially is having these back 192 00:10:43.720 --> 00:10:46.519 channels about how this is all going to end up 193 00:10:46.519 --> 00:10:48.120 and how it's going to play on in real time. 194 00:10:48.480 --> 00:10:50.840 I mean, if we even look at the regulatory landscape, 195 00:10:50.840 --> 00:10:54.200 and that's very important here, because when you talk about 196 00:10:54.240 --> 00:10:58.240 the regulatory landscape, it really is a circus. And again theater, 197 00:10:58.559 --> 00:11:01.639 I mean all the lawsuits and forth endless hearings that 198 00:11:01.679 --> 00:11:05.240 you see, it really looks like confusion on the surface, 199 00:11:05.279 --> 00:11:07.639 and that's what we're talking about here. But it's actually 200 00:11:07.720 --> 00:11:10.840 perfect timing because if you think about it, it's all 201 00:11:10.879 --> 00:11:14.600 aligning with the geopolitical script. The way the world is 202 00:11:14.720 --> 00:11:16.279 kind of entering this multipolar. 203 00:11:17.440 --> 00:11:21.679 The argument that always comes at me is this, all right, 204 00:11:22.080 --> 00:11:26.480 it's it's not really Trump it's doing this. It is 205 00:11:26.679 --> 00:11:30.960 the powers in DC that we often don't see, that 206 00:11:31.039 --> 00:11:34.120 don't get voted in and out. And that's really the 207 00:11:34.200 --> 00:11:38.159 construct of what's building maybe a new you know, the 208 00:11:38.240 --> 00:11:41.600 reset system so to speak. Yeah, and I think that's 209 00:11:41.639 --> 00:11:46.039 a factor that everybody needs to understand. This is going 210 00:11:46.120 --> 00:11:50.559 to become quite unique in terms of what assets to hold. 211 00:11:50.799 --> 00:11:53.600 Right now, everybody's setting in money markets. You're probably going 212 00:11:53.639 --> 00:11:55.960 to see the bond. Well, now the bond markets are flying. 213 00:11:56.000 --> 00:11:58.399 I think I saw bonds now at five percent. This 214 00:11:58.480 --> 00:12:00.759 is going to put pressure on digitalized assets because it 215 00:12:01.159 --> 00:12:03.279 starts to make those sticky. What would you say to 216 00:12:03.320 --> 00:12:06.279 an investor right now that says, hey, Paul, bonds are 217 00:12:06.279 --> 00:12:09.840 paying five percent. We're getting money market that continues to 218 00:12:09.840 --> 00:12:10.279 go up. 219 00:12:10.600 --> 00:12:11.399 It looks like. 220 00:12:13.519 --> 00:12:17.200 The new Fetchair is going to be toothless going into 221 00:12:17.240 --> 00:12:22.279 his job. So how would you argue that digital assets 222 00:12:22.279 --> 00:12:24.159 are the place to go? Is it just buy the 223 00:12:24.240 --> 00:12:24.799 last dip? 224 00:12:25.759 --> 00:12:27.240 I'd love to comment on this. 225 00:12:27.519 --> 00:12:32.000 Okay, So first of all, although you know bonds, corporate 226 00:12:32.039 --> 00:12:37.519 bonds offer you could say a nominal yield of what 227 00:12:37.639 --> 00:12:41.720 five percent something like that. Yeah, in real terms, you're 228 00:12:41.799 --> 00:12:46.879 actually going to have negative returns. If anything, we're much 229 00:12:46.919 --> 00:12:47.559 lower than that. 230 00:12:47.879 --> 00:12:48.480 Why is that? 231 00:12:48.840 --> 00:12:53.440 It all comes down to basic math, Because sure, it's 232 00:12:53.480 --> 00:12:57.440 considered a risk free asset class more liquid been around 233 00:12:57.440 --> 00:13:02.360 forever in the eyes of people globally and institutions. Risk 234 00:13:02.440 --> 00:13:06.960 free is a marketing phrase. Okay, it's not risk free 235 00:13:06.960 --> 00:13:10.960 when you do the real calculations, because sure, nominally speaking, 236 00:13:11.759 --> 00:13:15.480 six percent five percent looks good, but in real terms, 237 00:13:15.639 --> 00:13:23.279 when you actually account for currency debasement, inflation, the monetary base, 238 00:13:23.440 --> 00:13:27.360 which is then the money supply expansion, which is on 239 00:13:27.600 --> 00:13:32.240 average roughly eight to ten percent per annum. Now do 240 00:13:32.360 --> 00:13:36.159 the math plus taxes on top of that. So if anything, 241 00:13:36.200 --> 00:13:39.559 your returns are really negative. That's the fact of the matter. 242 00:13:39.879 --> 00:13:44.159 Not only that, if you take into account the outperformance 243 00:13:44.200 --> 00:13:48.840 that digital assets have had in every prior major expansion, 244 00:13:49.320 --> 00:13:53.440 it significantly outperforms anything you could make in even a 245 00:13:53.559 --> 00:13:55.360 decade sitting in the bomb market. 246 00:13:55.440 --> 00:13:56.879 Okay, so it's basic math. 247 00:13:57.240 --> 00:14:02.679 For example, XRP, every major historical cycle low it has 248 00:14:02.720 --> 00:14:06.519 had from cycle low the bottom all the way to 249 00:14:06.559 --> 00:14:11.559 its peak. Every major cycle expansion was more than more 250 00:14:11.600 --> 00:14:15.840 than eight hundred percent. Okay, so even out performing Bitcoin 251 00:14:15.879 --> 00:14:16.799 if you actually look. 252 00:14:16.679 --> 00:14:21.519 At the real math. So bonds, they're not risk free. Okay, 253 00:14:21.720 --> 00:14:24.240 they seem risk free on the surface, but they're not. 254 00:14:24.320 --> 00:14:25.080 And on top of. 255 00:14:25.039 --> 00:14:29.440 That, we're at the late stages of a monetary error. 256 00:14:29.799 --> 00:14:30.159 Okay. 257 00:14:30.200 --> 00:14:32.600 So it does not mean the chapter is closing tonight 258 00:14:32.639 --> 00:14:35.840 and the system is going to collapse. But everything we're 259 00:14:35.840 --> 00:14:39.240 seeing dynamic, all the dynamics playing out in the world, 260 00:14:39.600 --> 00:14:46.360 the geopolitical issues, the rise in energy and commodities, these 261 00:14:46.399 --> 00:14:52.879 are and the debasement, the acceleration of the destruction of 262 00:14:52.960 --> 00:14:56.279 the current, the purchasing power of your currency. These are 263 00:14:56.360 --> 00:14:59.799 things you see at the later stages of monetary errors. 264 00:15:00.320 --> 00:15:03.759 So what that tells us is that they are going 265 00:15:03.840 --> 00:15:08.320 to continue to inflate away the debt, that means destroy 266 00:15:08.399 --> 00:15:11.279 the currency, and they're going to destroy it at a 267 00:15:11.279 --> 00:15:15.039 faster pace than they were several years ago, because that's 268 00:15:15.200 --> 00:15:19.399 historically what all governments and empires have done at later 269 00:15:19.480 --> 00:15:23.879 stages of a monetary error. So the worst thing you 270 00:15:23.960 --> 00:15:26.799 can do, and this is most you could say, the 271 00:15:26.840 --> 00:15:32.120 most contrarian thing one could say, but the most unsafest 272 00:15:32.120 --> 00:15:34.600 thing you could do is hold bonds. Actually, if you 273 00:15:34.679 --> 00:15:38.039 really do the calculations, Yeah, especially given where we are 274 00:15:38.159 --> 00:15:40.639 in the monetary era, and not to mention, we're at 275 00:15:40.679 --> 00:15:45.440 the later stages of the business cycle, to be honest, 276 00:15:45.519 --> 00:15:48.440 which is the credit cycle. And sure a lot of 277 00:15:48.480 --> 00:15:54.000 capital floats, fluctuates and heads towards safer investments at the 278 00:15:54.159 --> 00:15:57.440 end of a credit cycle. But again, and when you 279 00:15:57.519 --> 00:16:00.879 really do the calculations, each a set class could be 280 00:16:00.919 --> 00:16:04.120 at a different stage within its cycle simultaneously. 281 00:16:04.720 --> 00:16:06.200 So what that means is. 282 00:16:06.120 --> 00:16:09.440 While everything is still appreciating pretty fast here going on 283 00:16:09.480 --> 00:16:13.360 a parabolic move, the only asset class that is sitting 284 00:16:13.440 --> 00:16:17.279 in a macro accumulation zone is actually the crypto market. 285 00:16:18.360 --> 00:16:20.679 Yeah, and you compared this right here, we're looking at 286 00:16:20.720 --> 00:16:23.000 the CPI inflation data. This went up to three point 287 00:16:23.000 --> 00:16:26.039 eight inflation, much higher in I mean, this is the 288 00:16:26.360 --> 00:16:28.919 kind of numbers we're talking about, twenty nine percent on energy. 289 00:16:29.320 --> 00:16:31.480 Look at this data right here. I'm going to highlight 290 00:16:31.559 --> 00:16:38.679 this for everyone. Yeah, twenty twenty you're up twenty nine 291 00:16:38.759 --> 00:16:44.120 percent to today. Okay, in twenty twenty five, So that's 292 00:16:44.159 --> 00:16:46.120 the kind of thing that you're getting, no matter the 293 00:16:46.200 --> 00:16:49.960 kind of situation that you're in right now. What we're 294 00:16:50.000 --> 00:16:53.679 dealing with is the debasement of the US dollar. So 295 00:16:53.799 --> 00:16:56.559 really see the other even with because I think the 296 00:16:56.720 --> 00:16:59.759 argument that everybody will say, well, hey listen, okay, sure 297 00:17:00.279 --> 00:17:03.440 bonds are only getting five percent my money is debasing it, 298 00:17:03.600 --> 00:17:05.839 you know, twenty five percent over the past five years 299 00:17:05.839 --> 00:17:10.039 a but example, almost thirty percent. Excuse me, yes, but Paul, 300 00:17:12.160 --> 00:17:15.400 sometimes crypto is volatile and it takes me down. Sometimes 301 00:17:15.440 --> 00:17:18.039 gold comes down, you know, And I'm like, yes, that 302 00:17:18.160 --> 00:17:20.240 is true, but you're not looking at the long term. 303 00:17:20.440 --> 00:17:23.119 We know what the long term play on inflation is. 304 00:17:23.160 --> 00:17:25.720 We know what the long term value of bonds are 305 00:17:25.720 --> 00:17:27.720 going to be a ten year yield right now. 306 00:17:27.759 --> 00:17:31.519 So I wanted to add one more detail to what 307 00:17:31.559 --> 00:17:35.880 you just pointed out. So the CPI data, Okay, First 308 00:17:35.920 --> 00:17:39.319 of all, all the metrics are flawed. We know that 309 00:17:39.400 --> 00:17:42.680 for many reasons. They've revised the way they calculate the metrics. 310 00:17:42.960 --> 00:17:44.880 That's one point I want to make. Second of all, 311 00:17:45.839 --> 00:17:51.240 they're too perfect, in line with expectations to be coincidental. 312 00:17:50.680 --> 00:17:52.079 Convenient, too perfect. 313 00:17:52.200 --> 00:17:55.359 Yeah, it's it's convenient, and it's too convenient because this 314 00:17:55.400 --> 00:17:59.119 happened last time as well. While twenty percent of the 315 00:17:59.200 --> 00:18:03.079 job data was magically gone because the government shut down. 316 00:18:03.359 --> 00:18:06.200 This tells us they're cooking the books because the economy 317 00:18:06.279 --> 00:18:09.039 is at the end of the credit cycle and things 318 00:18:09.039 --> 00:18:10.039 are worse than they. 319 00:18:09.960 --> 00:18:12.720 Want them to be shown to the public. 320 00:18:12.799 --> 00:18:15.240 Yeah, okay, that's that's a very good point. Is that 321 00:18:15.359 --> 00:18:18.319 this is a lot worse than what is being seen. 322 00:18:18.799 --> 00:18:21.640 And it's like, you know, the old metaphor of you know, 323 00:18:21.839 --> 00:18:25.160 just you know, if you boil the toad, you know, 324 00:18:25.279 --> 00:18:28.640 versus putting them in a flash hot panel water. It 325 00:18:28.759 --> 00:18:30.920 is what we're dealing with. That's how they're dealing with 326 00:18:30.920 --> 00:18:32.359 the American economy right now. 327 00:18:32.440 --> 00:18:34.880 Indeed, and the last point I want to add is 328 00:18:35.240 --> 00:18:41.319 the three point eight percent inflation that they just released 329 00:18:41.319 --> 00:18:45.000 that data. What's interesting is that's the highest it's been 330 00:18:45.039 --> 00:18:48.200 in three years, okay, since twenty twenty three. But here's 331 00:18:48.240 --> 00:18:51.880 the more interesting part that hasn't been priced in yet. Historically, 332 00:18:51.960 --> 00:18:57.240 if we look back every major in modern history, every 333 00:18:57.319 --> 00:19:02.480 time the oil price when pairabo, typically what you see 334 00:19:02.759 --> 00:19:08.680 following later are two things a recession eventually, and actually 335 00:19:08.799 --> 00:19:12.799 historically the recessions are announced roughly two weeks after the 336 00:19:12.799 --> 00:19:17.599 markets have already bottomed. Okay, now this yeah historically. Now 337 00:19:17.599 --> 00:19:21.839 the second thing is the every time the oil price 338 00:19:22.039 --> 00:19:27.640 rose significantly, like it did recently, what happens is this, 339 00:19:27.640 --> 00:19:36.039 This is very interesting. Following the few months of CPI prints, 340 00:19:36.480 --> 00:19:41.559 they're usually up, but because oil rises, you get something 341 00:19:41.599 --> 00:19:46.880 called demand destruction, so that eventually gets priced into the 342 00:19:46.920 --> 00:19:51.359 inflation data. So the inflation, the higher inflation we're seeing 343 00:19:51.359 --> 00:19:55.640 now is actually temporary, and oil rising is actually a 344 00:19:55.680 --> 00:20:00.599 deflationary pressure because when you put pressure on consumers and 345 00:20:00.640 --> 00:20:04.079 they have to spend more on energy, they eventually start 346 00:20:04.119 --> 00:20:08.160 spending less on other things because they have less disposable income, 347 00:20:08.640 --> 00:20:10.960 and that actually feeds into the economy. But it takes 348 00:20:11.000 --> 00:20:13.599 a few prints for that to happen, So in a 349 00:20:13.599 --> 00:20:16.880 few months that's going to be completely changed and different. 350 00:20:17.640 --> 00:20:21.240 Do you feel that that acceleration, though, will ever catch 351 00:20:21.359 --> 00:20:23.920 up with itself. I mean many people would say, okay, 352 00:20:23.960 --> 00:20:29.839 maybe now the kind of inflation numbers and consumer defaults 353 00:20:29.839 --> 00:20:34.119 that we're seeing are considerably higher and faster, so it's 354 00:20:34.160 --> 00:20:39.079 almost as if the system of that flywheel is accelerating 355 00:20:39.200 --> 00:20:41.799 right now. Do you think that at some point this 356 00:20:41.920 --> 00:20:46.279 does catch up with real or at least somewhat real 357 00:20:46.519 --> 00:20:51.319 inflation that would give the American investor enough of a 358 00:20:51.480 --> 00:20:56.079 shock to say the really, the new alternative system is 359 00:20:56.119 --> 00:21:00.440 going to be risk. And also commodities, et cetera, whether 360 00:21:00.440 --> 00:21:02.680 it's energy, gold, you know, you name it. Do you 361 00:21:02.720 --> 00:21:05.640 think that that's within reach anytime soon? 362 00:21:05.960 --> 00:21:08.880 Can't make a few comments. First of all, we've been 363 00:21:08.880 --> 00:21:12.920 in recession since twenty twenty two. The numbers were just massaged, 364 00:21:12.960 --> 00:21:17.039 the headlines were bslied, and that's exactly why the markets 365 00:21:17.039 --> 00:21:21.200 are mispricing risk across the board. So the illusion is 366 00:21:21.200 --> 00:21:24.000 still intact. Another thing I want to talk about is 367 00:21:24.039 --> 00:21:27.599 the reset that we talk about isn't really an event 368 00:21:27.839 --> 00:21:30.720 if you look closely enough. It's all about its policies, 369 00:21:31.200 --> 00:21:34.920 policy driven, and the policies that are being deployed. 370 00:21:34.480 --> 00:21:35.160 In real time. 371 00:21:35.359 --> 00:21:38.160 It does start with energy, because energy is the foundation 372 00:21:38.240 --> 00:21:40.880 of everything. You can't run at an entire economy with it. 373 00:21:41.119 --> 00:21:44.559 Can't goods, can't grow, food, power, infrastructure, and so forth. 374 00:21:45.599 --> 00:21:48.720 So what are they doing. They're actually creating pressure. I mean, 375 00:21:48.759 --> 00:21:51.720 if you look, if you're realistic about this and you 376 00:21:51.799 --> 00:21:57.079 look at what's happening globally, we're seeing supply disruptions, geopolitical escalations. 377 00:21:57.119 --> 00:21:59.440 You talked about Trump for a second. This is all 378 00:21:59.480 --> 00:22:02.480 being done intentionally. I want to get too far off 379 00:22:02.519 --> 00:22:07.039 the subject here, but the policy decisions that are being 380 00:22:07.079 --> 00:22:11.680 deployed right now are collectively restricting access to traditional energy sources. 381 00:22:12.799 --> 00:22:16.400 So when you start to disrupt energy, the consequences are 382 00:22:16.440 --> 00:22:21.240 going to cascade. And that's why fuel prices, transportation costs surges, 383 00:22:21.559 --> 00:22:24.200 That's why airlines are going bankrupt right now. That's why 384 00:22:24.240 --> 00:22:27.440 food is becoming more expensive. So inflation is spiking again 385 00:22:27.759 --> 00:22:31.960 and people are feeling it already. It's disrupting their daily lives. 386 00:22:31.960 --> 00:22:34.799 So I've seen it myself. My electric bill has gone up. 387 00:22:34.839 --> 00:22:37.119 I talked to my brother about this, and you know, 388 00:22:37.200 --> 00:22:39.480 we can pay for it, but it's gone up by 389 00:22:39.519 --> 00:22:43.759 sixty bucks for most people. That's you know, that's a 390 00:22:43.759 --> 00:22:47.359 lot of money, right So it's real, it's measurable, and 391 00:22:47.799 --> 00:22:51.440 it's sad because pressure is actually being applied across multiple 392 00:22:51.519 --> 00:22:53.680 systems and you have to ask yourself what's going to 393 00:22:53.759 --> 00:22:57.319 happen next. I think people are going to gradually adopt 394 00:22:57.359 --> 00:23:01.440 to the new conditions as they always do, and that's 395 00:23:01.480 --> 00:23:06.079 when we start talking about electric cars, smart cities, things 396 00:23:06.079 --> 00:23:10.920 of that nature. Because what I reported on right after 397 00:23:11.039 --> 00:23:14.319 this energy crisis begun, and I think it was engineered 398 00:23:14.720 --> 00:23:19.400 for many different reasons shortly after it gave me goosebumps, 399 00:23:19.400 --> 00:23:22.680 because I saw in lockstep just the same patterns I 400 00:23:22.720 --> 00:23:26.720 saw with the pandemic. The IMF came out, the Bank 401 00:23:26.759 --> 00:23:29.960