The US financial system operates through deliberate manipulation of futures markets, where institutional players artificially suppress commodity prices (like oil) to serve their interests, creating conditions for future price spikes that benefit the system. This manipulation is enabled by the absence of regulatory oversight and the inherent fraud of fiat currency, which allows governments to print money without accountability. The solution lies in transitioning to sound money (like Bitcoin or gold) that cannot be arbitrarily expanded, combined with hard assets and skills that provide genuine value rather than speculative financial instruments.
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What If They're Doing This on Purpose? | Chris MartensonAñadido:
If you flip a coin 50 times, it comes up heads every time. Got to start thinking maybe it's not a fair coin. We have a fraudulent system of money cuz it's fraud if I can steal from you without you know. Larry Frink, he says, "Ordinary people, savings accounts and pension funds will be used to build data centers and power grids for AI if I wanted to intentionally harm the United States."
Sup, freaks. Before we get into the show, I just want to send a heartfelt thank you. Thank you for joining us and ask for one quick thing. Could you like this episode? Subscribe to the channel and if you like the conversation, join us in the comment section. Chris Martinson, welcome. Welcome to the show, sir. Uh very very excited for this conversation. Been a fan for years.
>> Well, thank you and thank you for uh developing the show and inviting me on.
I'm I'm thrilled to be here. Well, like I was saying, I I the my audience, myself, we have to give you a massive thank you for hosting uh our crazy uncle Dave's year in review um for many years now. And uh it's uh it's one of my favorite times of the year is when Dave finally gets around to publishing his year in review and then having a conversation with him.
>> Yeah, it's always always a little bit of a mad. Uh can you hear that?
Unfortunately, >> it's a dog. Okay. Um, yeah. And and every year it's such a fun thing with Dave because somewhere around November, he says, "I'm not doing it." And then somewhere around mid early December, he's like, "Okay, I'm doing it." And then the stuff flies in like last minute, hundreds of pages, and he's very, very meticulous. Like everything has to be referenced, footnoted, you know, everything. And uh it's always a mad scramble. But what a what a joy to host that thing. It's one of my favorite. I I just love reading it every year.
>> I do as well. It's uh take a day or two over Christmas break if he gets it out by then and uh and dive in. But uh >> yeah, >> we're um we're here to speak with you, Chris. And I think uh it's a good time to speak with you considering everything that's going on in the straighter Hermuz um I guess flip-flopping, tacoing, uh ceasefire on, ceasefire off. Uh what is going on? you wrote a piece, I believe almost a month ago in May calling for uh oil above $200, possibly much higher.
Um, are we on trajectory to hit that still, do you think? How are you viewing everything that's going on in the Middle East right now?
>> Well, you have to take one of two positions here, right? One is this is just rank incompetence, right? And you get these terrible outcomes. And the other is that this is part of a suite of things that that are being done to intentionally damage the United States. Um, and uh I I'm leaning kind of 80% towards this is intentional because if you flip a coin 50 times, it comes up heads every time.
Got to start thinking maybe it's not a fair coin, you know. Um so what's been happening is you know what we saw early on like the straight of Hermuz gets closed within two or three days oil spikes to 120 a barrel and then all of a sudden all these traders out of Trefugura and all these other big houses are like somebody has stepped in in size and has started to sell these things right and so my my architecture for understanding the markets I was a I was a day trader for a while I was really successful 2005 667 and then my whole system fell apart in 2008 and I think that was kind of the rise of the machines at that point, right? Where they're really elegant um algorithms with with obviously faster fingers than I had, you know? Um and and I remember the moment to so I was trading gold futures at that point in time almost exclusively. And I was sitting on 10 contracts and they had a really nice gain on them, but I had this really distant trailing stop and I woke up the next morning and all 10 were gone. and somebody had come in and and the price had gone just down. I personally got pickpocketed, right? The my 10 contracts was the total volume in that tick and it just just somebody reached in and took it and I said, "Okay, this isn't a fair game anymore.
It's just it's you know you tuition is expensive in uh trading." But when I figured out just how fraudulent it was at that moment, right? Because that's not price discovery. That's clearly thieving and price setting. I I started understanding that that's what the futures markets are really used for. Uh and that started obviously in the precious metals, but then I started to see these same patterns and it was about two years ago that same pattern started to show up in oil, right? Where in a single one minute candle there would be 3, four, five, 6 million barrels of oil sold all at once. It just crushes the bid stack. Every every bid under that normal bid stack that and and ask stack that's sitting there just gets crushed, right? and it had the same flavor as like watching a 2 a.m. silver slam where the bid stack would get crushed but then that's the new price. It's not like all this activity reassembled and brought it back up again. And so I I observed okay price setting is a thing and obviously there's no regulatory oversight that's interested at the CFTC SEC and in you know curbing that behavior. And I I think that the explanation for that's easy because when that behavior is reinforcing the official narrative, it's it's it's okay. You know, that's it's just part of the game. So, I watched uh oil suddenly just start getting the same treatment really heavily. Actually, starting in Trump's first year in office, right? It just coasted down from about 75 all the way down into the high 50s. Almost almost ruler straight, Marty. Just like tick tick tick tick tick month after month. It was just like going down and Trump's out there saying oil should be 50 and Chris Wright the energy secretary is like, "Oh, oil should be 50." And he comes out of the biz, you know, CEO of a fracking company. Nobody's making money at 50 in the oil space, in the shell space.
Nobody. They're all hemorrhaging capital. Ask me how I know, right? Um, and cuz I'm a direct investor in this space. So watching oil just mysteriously get clocked over and over and over again. I said, "Okay, getting the silver treatment, if you want to call it that."
And then uh I I watched it happen again here during the open part of the war.
And listen, I can even understand. We want to keep markets calm. We think this thing's just about to end. We wouldn't want a big price shock. But here's where we are. We are now because oil is like I think it's 92 at the time we started recording on WTI futures, right? That's not enough to cause demand destruction.
In fact, internal demand in the United States is here. Yeah, supply is here.
And so, how do you close the gap? Well, normally with price setting, so price goes up, kills demand, brings it to supply. Uh-uh. We are tapping the SPR in commercial inventories and also distillate inventories and we're exporting those and consuming those uh to make to make up that supply demand gap. Prediction, real easy. Um, this all carries on till you get to tank bottom and then it's then it's then it's a crisis. Then it's really bad. Then we get back to my original thing I opened with, which is like if I wanted to intentionally harm the United States, one of the things I would do is have it go full speed into tank bottom where you actually not a supply demand mismatch that can be corrected with price, but an actual shortage. Now you're gonna have to triage who gets it, who doesn't, and that's just a hot mess every time it's tried.
>> And you can't even get the tank bottom, right? Because I think we learned this during the Biden administration that due to the physics of these petroleum reserves, you need to have a certain amount of of oil in the salt caverns or else they become defunct.
>> Yeah. for the SPR. It's there's a bunch of different salt caverns out there and well some of them probably 2/3 are holding this medium sour grade which is actually the stuff everybody wants and the other oneird is this light sweet and nobody's really buying that. Um there's tons of that floating around. Uh refineries don't need that. So actually what I'm tracking mostly is just the medium sour caverns and I I'm guessing I'm guessing they about half left of of their current balance. So, at current rates, I would give that another 80 to 100 days and then that's out, right? And and for people listening who don't know what that means, the salt cavern is actually a physical hole in the ground. It's a cavern, right? We mine salt out of it. Uh and then the way you get the the oil out of it is you put water in the bottom because oil floats and you you drive it with water pressure. as it dries up, for every barrel that gets taken out, 15 barrels of salt are dissolved into this process.
And there's only those walls suddenly become unstable, you know, and and they can start to collapse and they can cover up your injection pipes and there's things that can happen. Um, so I think and nobody really knows. I've I've dug around, Marty. I can't find like you would think the DOE would say, "We've studied it. We know the number right here. is like it's matter of national security or they haven't studied it yet.
So, I don't know that we actually know.
>> And I mean, bringing us back to like futures markets because I actually think I was on your site uh earlier this week and you were you were talking about overnight markets particularly uh with silver and if you're trading overnight, that's where you're going to experience most of the gains versus during the day.
So to your point of potential price manipulation while markets are open um and sort of tying that concept to oil markets, I think you had Scott Ascent and others in the administration come out a couple months ago and say that they would do everything in their capacity to um leverage futures markets to keep oil within a certain range.
Yeah, >> I was looking down because I want to I want to build on that point because to me this is just the most astonishing thing sort of sort of how did I come by my there's there's there's an invisible hand operating at night thesis I come by it honestly um so this is a chart showing that if you had held silver from 1970 just during US open trading hours right just during those few hours it were open uh silver is apparently worth uh 34 cents an ounce if conversely you just held it from moment New York markets closed overnight, the rest of the world is doing whatever it does with silver and then sold right before the open, silver would have been worth $396 an ounce. So, wow, it's worth a lot more overnight than during open New York daylight hours, right? And then somebody uh was observing, you know, weird behavior for alphabet uh here overnight versus daytime. Okay. Um maybe we can make some allowance for that. But this is the part um during Wikileaks. Have you seen I'm sure you've seen this. This is one of my favorite things. Wikileaks dumped this thing. So we get this cable.
It goes from New York to London. And this is in 1973. And of course gold became legal for US citizens to hold again in December of 73. It was illegal before that. And so they're very worried like what would happen if too many people bought gold and the price went up and then that price is rising and it makes the you know dollar look bad or US treasuries look bad.
There was a lot of concern over how they were going to manage this. And so here's the quote.
To the dealers expectations will be the formation of a sizable gold futures market. And the dealers, these are all your primary dealers, right? The big ones, Scotia, Makata, JP, etc. And each of the dealers expressed the belief that the futures market would be of significant proportion and physical trading would be minuscule by comparison. So signal versus noise, right? The signal is now the futures market, not the the actual um gold physical gold itself. And here it is in black and white highlighted in yellow.
Quote, also expressed was the expectation that large volume futures dealing would create a highly volatile market. In turn, the volatile price movements would diminish the initial demand for physical holding and most likely negate long-term hoarding by US citizens. End quote.
some manufactured volatility to scare people away from holding.
>> Yeah. And by the way, volatility in there is code speak for sudden downward um price spikes.
Right. Volatility is never upward. You know, the VIX doesn't measure upward volatility. It only measures downward volatility.
>> Mhm.
>> Yeah.
>> Yeah. I mean, and I mean, now I'm having flashbacks to last year when silver and gold were running. you had the Thanksgiving uh the day after Thanksgiving sort of comx glitch where it seemed like if you uh had your tinfoil hat on that they were just hitting the circuit breakers and I think the theory was that JP Morgan was trying to get on the right side of that trade.
they were net short silver and they were going to get called out on their BS and um I mean we ended the year with fireworks and precious metal markets uh and it's that seems to have quelled uh for the first half of this year. You think they're trying to suppress it after after it was running?
>> Yeah. Yeah, they are. And there's something else weird running here that I don't understand. Um because as of this morning, I just checked again, China, Shanghai, silver markets running about nine bucks hotter per ounce than the US market and it's been persistent for probably 6 months. That shouldn't exist.
Like if if I had the capability, if I was a big enough player, I could just cidle up to ComX, you know, take a million ounces out, put it on a plane, and make 9 million bucks, right? Minus some trading fees and import costs and things like that. But still, it's free money.
arbitrage like that doesn't exist in an actual free market. So something else is operating here that I don't quite understand.
>> Yeah, I'm just looking at silver and gold now. Silver's at 75 down from 120 and gold at 4500 obviously down from around like 5,400.
It feels like they're consolidating and that I mean that's the big question with everything going on in the Middle East.
I mean bring this back to hermuz I'm sure you saw it. Not only are people worried about whether or not the ceasefire actually happens and we get some sort of dealou whatever it may be but I think and I don't know the extent of the validity of these claims but now people are talking about this barnacle >> barnacle apocalypse that could that could actually severely perturb the the the ability for ships to move through through the straight because barnacles are just building up on on the propellers and you you'd have this sort of negative externality of sitting sitting in the straight for months that even if there is a a peace agreement that that you can't move the oil through the straight because the ships can't move because of the barnacle buildup. And uh again bringing this all together just to highlight it seems like you there's the potential that what we're witnessing in in markets not only in commodities but potentially in stock markets just this this beach ball being held underwater.
the beach ball representing volatility and just waiting for uh a domino to fall to to really signal to the market like oh there's going to be massive supply chain disruptions beyond oil and gas because of this.
>> Yeah. And it's um I mean it's truly a bizarre time, right? Because I've lived through multiple periods where you know 2008 oil went to $150 a barrel, $148, right? in July of 08 and it did so because there was this persistent mil 1 million barrel per day shortfall back then. Um and and that terrified everybody right that that took about a year to really develop but you know just that little that little bit. So oil is a highly inelastic commodity meaning a tiny tiny move on one end in supply or demand can actually have outsized impacts on price and it always has. It's not this time. And it's not just like, oh, you know, there was this Gulf Arab crisis of 73 to 74. There was uh the 2022 crisis where people thought maybe 3 million barrels a day were going to be missing due to Russian sanctions on the Ukraine war. Um this is bigger than all of those Marty combined and then some, right? And it's the most mysterious thing. So you hear like the the chatter like, "Oh, the straight could be open tomorrow." you know, everybody runs their analysis and Goldman Sachs or or the head of, you know, Qar's energy agency say the same thing. They're like, well, within 6 months, we think it'll be 70 to 80% recovered. Okay. Well, it used to be 25 million barrels a day. So 80% recovered is we're still missing 5 million barrels a day 6 months from now.
There's nothing even remotely that that scales to what we're talking about here at this point. And yet really just total placidity and and you know complete requequation of the US stock market. Well, it's not just US.
You can see this South Korean stock market. Even Germany's stock market just powered to all-time new highs last week, you know, and and Germany's just imploding at this point uh from a business standpoint. So, there is just something going on here that just doesn't make sense. And I think you got it right that that beach ball is being held down.
I think that everybody who's a professional beach ball holder cut their teeth on all these things like I don't know the dot bomb crisis, the great financial crisis, you know, long-term capital management. These are all like human contrived issues and you can paper over them if you if need be. And I think they think they can do that. Oil's different, right? Oil is a molecule.
Energy is the master resource. You can't just paper this over. It's just it's not possible. So, I think we're getting set up for the biggest of all possible rugps, sudden emergence of that beach ball and then we're going to be facing actual rates of inflation that are going to be, I think, really terrifying both for the market masters who are the beach ball holder downers, but al also for the rest of us. This could be a darker repeat of that double hump inflation of the 70s to 1980 um era. Now, I I forget who surfaced the chart, but that that echo inflation of the 70s resurfaced uh a couple of weeks ago, and we're tracking pretty tightly to it uh right now with the latest inflation prints.
And that's the other thing like CPI is um notoriously under reporting actual real inflation. And um when you get into the knock-on effects of the supply chain disruption, I mean I had somebody who runs a fertilizer business on um last week and he's saying that um John Deere, which will typically extend financing to farmers in the US is is not because they're they're looking at fertilizer prices, looking at corn prices and saying corn prices aren't high enough, fertilizer prices are too we can't finance your your um your sort of your endeavor to go uh plant crops this season. And so talking about like lagging effects um that's what I worry about is this fall particularly um not only oil and gas but moves into food and then you get real tough conversations at the dinner table about what are we going to do. Well, this is this is such an important point because again now corn its price is also set in the futures market and again I believe that all the big giants, you know, conspire to keep the price of corn down because it serves their interests, right? And and so the producers just get hammered all the time. I kind of hope that we get a producer rebellion, you know, what if all the silver miners got together and said, "Sorry, you know, quit your or or or only make direct deals, you know, with Chinese solar manufacturers or something like that." But corn today is trading at exactly the same price it did in 2008, right? Can you imagine if like Ford F-150s had a futures market and the market shrugged and said, "Sorry Ford, you have to sell your F-150 trucks for $32,000." Cuz that's what they were in 2008. Like Ford would go out of business and that's happening. They are driving farmers out of business. And that sounds like a bug. It's kind of a feature of Black Rockck's on the back end snapping up the farmland, right? So there's something going on here, but it's very clearly not capitalism and it's not legitimate price discovery between willing consumers and producers. There's there's another t you know what Matt Taibbe called that blood sucking squid.
It's just like you know it it's it's bad. But, you know, then you're right.
You have that uncomfortable moment around the dinner table someday like, "Wow, who knew that if we kept copper prices this low for two decades, we wouldn't have enough. Who knew that we need farmers in business, not out of business?" So, freaks. This was brought to you by our good friends at Bicki.
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Use the promo code TFTC. Once you set up your account, you're going to get $99 a month for your subscription for the first three months. Yeah. I mean, and then parallel to all this, you have the massive re-industrialization campaign. And obviously the AI data center build out and um I think more and more people becoming quite aware that the the energy infrastructure particularly the grid infrastructure in this country is not as robust as it may need to be if you're going to supply all that demand from from the hyperscaler buildout. And it's uh it's very confounding to me because as somebody like I use the AI tools and I love them. I I think they're extremely powerful. They've helped our business out. Um uh but there is like this this uh sort of existential fervor behind the AI race that that we're speeding towards it and um particularly on the infrastructure side and it seems like that industry is getting priority over all others uh at a time where uh attention may need to be elsewhere or may need to be divided evenly elsewhere particularly when it comes to food and energy prices uh like things we cannot neglect if if you like to your point, energy is the base of everything we do in the economy. And even if these AI tools are incredibly productive or create efficiency gains for individuals and companies, like it's all for not if you don't have the energy base there to actually support the the growth that will be necessary to make it more widespread.
>> Yeah, there's a whole larger story to unpack around all that. And um I'm I'm one of those people who tends to really um so let's just take natural gas. This is how we're funding all of the energy requirements of the AI centers, right?
So we're not building nuclear at this point. We're not really recommissioning coal fired plants. So it's gas, right?
And that's great because you can drill wells and it's fairly dispatchable um kind of energy. But I'm sitting on the back end of this going, "Well, wait a minute. Outside of the Perian Basin, every single other source of natural gas out of the Bachan basin, out of the Woodford, the Hanesville, the Marcelus, offshore, everywhere, they're all in decline.
So then you say, okay, well, you know, these data centers are going to be consuming another 8 to 9 BCF, billion cubic feet per day by 2030. And when I say another 8 to9 BCF per day, these things are on 24/7 365. There there's no like slight loading, you know? These things are just on. They I call them toasters. They don't make toast, right?
They just they make waste heat. I mean, it's crazy, right? You take like say a gigawatt of actual natural gas, burn that, you create, you know, however much waste heat from that. Then you take the electricity, shove it into this thing, and then you have to burn more energy to cool it. So if you have a gigawatt data center, typically you're going to be burning about 2 gawatt of power to both create the electricity and then to cool the the resulting heat. It's massive.
Okay. And that's what we do with it. And so now there's this second order effect which you hinted at. I want to just call it out cuz it's important. We're going to be spending trillions on this buildout. Fine. Maybe it's really super productive. It's the other side of the coin. Well, that's capital that's not going to something else, right? By definition, that capital went for that purpose. Not for new highspeed rails, not for reshoring manufacturing, you know, not for anything else, it went to that. And I don't know about you, but when I drive around my country, I I see that we have we have some self-investment that's been a little bit neglected for a while, you know, and if you do go to China, which I I I do from time to time, it's astonishing. They're putting their capital into their infrastructure and it shows, right? And so all capital going towards infrastructure is got a timer set on it.
You build it, it's shiny, it's new, and then it degrades and you have to maintain and replace it. So we're not even we're we're barely maintaining our infrastructure at this point, which is painfully obvious. You go to New York City in a rainstorm, you're like, "Oh my god, it rained. What again?" You know, and their subways are flooded and you know, all this stuff is happening because it's just it's in that bad of a shape. And so I think that's the other part we have to talk about is we're putting trillions into this and not that by definition. And I think we need more of that um compared to the data stuff.
But I don't know what I'm still confused like you you said it's almost like a some mad dash like how do you understand like like what what's the theory winter? And the theory that the theory that we get in uh public is that it's a national security issue and we need to beat China to the punch of getting to AGI. I'm skeptical of AGI in and of itself. Like I think these things are calculators. I'm not one of those guys who's like uh we're going to get to the singularity and we're going to have some transhumanist uh utopia that we all live in. I think that's actually very dystopian. I think they're just very good at predicting the next word uh probabilistically and can can help you get a lot of work done. But I think when it's being positioned as we need to beat China to the punch of of basically having control of the most powerful artificial intelligence systems um and then we'll make sure that the the uh the free and open democracy wins out against the the communist regime in the vigil age. Um, but really I think it's there's also that the command and control aspect. We need to win this just so that we can suck up all the data >> and um and basically try to get to a point where we have this Orwelli in surveillance state. And I think it may sound a bit crazy like Marty, why are you uh like very bullish on this stuff using it? because I I do think um if you're looking at the progression of the models particularly the open- source models verse the um frontier models from the hyperscalers which are closed source the open source models are not as cutting edge as the closed source models but they're not too far behind and so my hope is that um recognizing that this is a useful technology that can bring a lot of productivity obviously it's going to bring a lot of disruption as well but um I Pandora's box is open, cat is out of the bag. You can't really turn back the clock and make this technology not exist. So, with that in mind, it's like, okay, how do we leverage it um so that that humans can can use it, but in a way that's not um hyper controlled by the government, the hyperscalers, whoever it may be. So that's why a lot of our coverage here, particularly in our newsletter, focuses on open source models and how they're progressing. And I think if you're looking at the trends of how those models are progressing and then how easy it is to get to uh host them locally, I do have hope that we can leverage this technology in a way that um individuals actually control the ultimate um the the ultimate way in which we leverage these tools and not the the hyperscalers and the governments. Yeah, we're currently taking 20 years of my content and cramming it into an LLM, you know, and you know, and and then I think I'll I'll finally have the search tool I've always wanted for my own content, you know.
>> Yeah. I mean, we've done that here. So then our we have an agent running and it's got every newsletter, every podcast we've ever recorded and um and we can quick search like, hey, what do we like? We're talking about energy and AI today. when have we talked about that over the last eight years and what have we said and within a minute it has everything.
>> I'm jealous. I'm I'm still waiting.
We're going to get ours soon, I hope.
But yeah, so that that's a good use and and I think for for most people, you know, maybe super advanced uses is different, but Deepseek is pretty robust model, right? Quinn works pretty good.
Like they they're they're pretty darn good, you know, I think for average people and using them for average productivity, you know, tools. I I there must be something they have behind the scenes that that they've seen has scared them. You know, it's it's an idea I've had that they have different models that we haven't seen. And so they're like, "Oh, they can see where this is going." Like we we're going to need data centers so fast that, you know, nobody need like like they're just overwhelming communities with these things right now.
And there's I've never seen a buildout like this. This feels like a very public Manhattan project at this point.
>> Oh, it certainly is. And I mean because I've been in the Bitcoin mining industry from almost decades. So I saw that build out when China banned Bitcoin mining in 21. Obviously a lot of that migrated here to the United States and I had an up close some personal experience and view of of that buildout. I thought that was pretty all inspiring at the time when we were spinning up uh 100 megawatt uh facilities, then 250, then 500, and then Riot um announced their their gigawatt facility in Texas. It was like, oh my gosh, like this is insane. Cuz when you think about the the largest data centers in the US weren't larger than like 25 megawatts a decade ago, and now we have gigawatt facilities.
Um, but the AI wave of the last two years just far exceeds when even I witnessed in in Bitcoin mining. It's astonishing how how quickly they're they're trying to scale this up. And as somebody who understands how these power purchase agreements and these interconnection deals and the demand response deals and what it takes to spin up new generation, uh it does make you question like how how are we going to do this? And two sides of that coin. pessimistic side is like we're going to run into these supply constraints and it's just going to not happen. And then the optimist is like, hey, constraints breed creativity and efficiency or maybe this is good because we'll produce so much generation. To your point about the overfocus on natural gas, I completely agree. We should spin up all the coal plants. We should rip the red tape off nuclear.
Let's just have um as much energy generation as possible. Um cuz we've gone off the Henry Adams curve since the 70s and we need to get back on that curve.
>> And you know who's on it? China, right?
Yeah. So in the last 10 years they've installed as much electricity generation um actual generation, not name plate capacity but actual electrons flowing out the pipes um as as in 10 years as we have currently have right like they just doubled. And so I think AI is fundamentally a story of energy. I think all of economy is fundamentally a story of energy. China's clearly dialed into that. They wrote this big beautiful it was like two years ago they released it a a five-point strategic plan for how they're going to build out their energy infrastructure. And I almost cried cuz I'm like that's what one looks like. We don't have one here in this country.
Like we don't have a a strategy, right?
And they said, "Yeah, we're going to be People focus on look at all the solar China's putting in." But they very clearly said they're going to only put 1% of total incremental capacity in in alternative wind and solar per year and it's going to max out at 12%. Cuz they can't you can't afford more than that where that you get grid instability.
Otherwise, it's going to be nuclear. You know, they've got two thorium pilot plants right now. They did a hot refuel, meaning it's running and they refueled it while it was running. So, they're way ahead of us on on the thorium fuel cycle. They're slamming in uh uranium plants left, right, and center. And so they have a policy that makes sense. And it included a geopolitical component.
They said, "Oh, by the way, we're going to have to be very friendly with the countries that supply these sorts of things like oil and gas because that's going to be really important for us going forward." So geopolitically, they're forging alliances, you know, which I strategically I align with. You know, United States does this gunboat diplomacy. We're just going to ride in and take out your leaders kind of a thing. um it doesn't tend to win friends and influence people, you know. Um and China gets that. I kind of wish we got that too, the commentary there. But China has a plan and it's it's a pretty comprehensive energy buildup plan and we do not have one in this country. If they if we do, we're keeping it secret, you know.
>> Well, if we were to make one, if we don't have one, what would your plan be?
Um, first off, I would just absolutely can all these LG terminals. It makes zero uh thermodynamic sense to take a gas out of the ground, turn it back into a liquid. So that costs you x% of the native energy in that just doing that one process, right? And then you lose x% motoring it somewhere else in the world.
Also, you can what? Sell it for currency units. Dude, we make those out of thin air. Like why? I don't understand that.
So, nope. All of our all of our uh natural gas becomes just for Americans and future Americans, too. We rip it out of the we rip oil out of the ground so fast that we still have to flare the gas into the air. You know, that's how excited we are to just get the stuff out of the ground. Two, you create a strategy, right? And a strategy for a business or for a country is the same thing. Always the same. And two components. Where are you going? How you going to get there? What's the vision?
And what are your resources? visions are easy to come up with. Resources are always limited. That's why you have to go through the process. So, if we said, look, our our fossil fuels are abundant, but not infinite. And we can clearly track out where they're going to be, like they'll run out. And we owe it to those people in the year 2100 to have been thoughtful about this and to have engineered where we're going to get there. So, we get there. What's it look like? Well, you paint the vision. Okay, we still we think electricity is like this awesome thing. It's a great way. We think we're going to be able to electrify transport. we're going to be able to electrify all these different processes. Maybe the habash process for making nitrogen fixed out of the atmosphere. Whatever the thing is, you you you go through all of that to say, what does that look like? You're like, wow, we're going to need this many nuclear plants. We're going to need this kind of nuclear recycling containment facility. Obviously, we're going to need thorium as part of that mix. Maybe fusion comes along, maybe, you know, but whatever that is, you you you have some allowance for that. But you have to just basically say, here's our bequeefment.
coal, oil, natural gas, and here's what we're going to use it for. And if there's something left over, fine, ship it to Europe if you feel it's important.
But we do not have that capability right now cuz we don't have that larger plan.
And you know what takes energy? Not just making more energy. We have to use energy to replace that Francis Scott Key bridge that got taken out of Baltimore Harbor. We're going to have to use energy to build trains that are electrified that go from A to B if that's part of our future, right? We're going to have to think all of that through and then we're probably going to have to onshore the development and the the capability of building every one of those components ourselves, right? So, we're critically short on I think 20 critical elements according to the USGS that like 100% dependent like for almost 100% dependent for rare earths, titanium, all kinds of stuff. So part of that energy strategy is how do we how do we rebuild all of these components that we've we've built out here at this magic future point. Okay, that's what a an honest to god strategy would look like.
We're slamming in LG terminals so fast right now as if that's the highest best use that we're going to double our LG exports probably by 2033 from 17 to about 34 35 billion cubic feet per day.
And we currently only produce about 108 billion cubic feet per day. So the question is where's all that coming from and nobody can answer that right now.
It's just going to arise because it always does. Um it's a mystery and what's the justification for that? Just the geopolitical aspect of creating dependent trade partners. And so it's just the cost of this strategy is yes, we it may be better used here on US soil, but we need uh some geopolitical leverage via these these energy trades. Well, I'm I'm a little mystified because, you know, a big part of that is um sending it over to Europe, right? Last I checked, Europeans don't even like us all that much, you know.
So, not really clear what the geopolitical strategy there is. Um, and and you know, I could I could understand shipping it to Asia, to Japan, you know, Singapore, maybe China. I could understand that.
But um any it's not a it's not a we don't have that plan though that says how much of this stuff do we have left and what does it look like when it when it when it you know in the future like what are we using it for? Um >> and if we really want to like like you know re if we want to compete at all with China. So, if anybody listening, if you really want to know just how far ahead of us China is, go to timu.com, right? It's their, you know, Amazon and just buy something you're familiar with, right? So, you know, I just buy like tools and building supplies and things like that. And Marty, I don't even know.
I couldn't even source the raw materials for the price of this thing that's been manufactured halfway around the world and shipped to me at a profit. I don't know. Like you can just get a sense of how far ahead of us they have to be to produce all of these different things, right? Like like I just bought little charge controllers, individual units that can run um just a small collection of solar panels cuz I've got extra solar panels just in case people in the future might want to use them, you know, certain certain outcomes. But you need a charge controller and and a little output device. So I buy these little devices and they can handle up to um 100 amps, right? Which is a ton. That's like I don't know how many panels that is.
Like awesome. And they work. They were $563 each.
>> Holy >> Like how does that So anyway, so so you look at that and and then I then I heard about the BYD plant where they're like, "Okay, we're going to start manufacturing cars." They found a facility which was 50 square miles, you know, it's like the size of San Francisco, right?
>> Yeah. That's that was the quoted thing.
Seven S. So seven miles on a side gets you to 49. So just think of like a seven mile by seven mile block. And the point is like raw materials come in one end of this thing and cars come out the other end of this thing.
So their entire supply chain is 7 mi long and internally consistent. Ours because of NAFTA and geopolitical considerations. I think the transmissions are made in Windsor Canada but the truck bodies are made in Mexico and they're assembled in Detroit.
Whatever. We have like multi,000 mile long supply chains. We can't compete with them. So, you know what the answer to that is? Yeah, we've just blocked import of BYD cards.
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and they're trying to sew discontent among the American populace and uh it's propaganda >> that's coming in here to to push the um the communist talking points but objectively I mean looking at the energy generation and the BYD plant and all these other things like it's like hey there's stuff is happening there and God I've seen what you've done for others I'd love that for myself like how do we like there's a chasm like in my mind who knows maybe I'm incredibly naive idealist. It's like, why can't we both go after that stuff and sort of work cooperatively together? Which brings up the the trip to China, which I thought was interesting um last month. Uh that signal to me that the Trump administration, everybody or the mainstream media was saying, look how strong we're we've got all our CEOs and our complete cabinet over there drawing a strong strong force within China. But to me that they actually signal weakness. It's like we we need to bring up all these heavy hitters to to basically flex in a way there. Another way to put it, it didn't seem like we had a quiet confidence that we have leverage in negotiations with China is the way I read it. could be wrong, but >> um this whole superpower juxtaposition of China and the US. I think a lot of what we're seeing today is a proxy war between that sort of um struggle of China's rise in the US trying to figure out what's what it wants to do as it turns 250 years old.
>> No, I I agree. And I I often get people sort of yelling at me about China like they just copy stuff which is such a 1980s talking point. You know, I'm usually talking to somebody older than myself when you get that sort of refrain because I'm like, "Well, who did they copy the circulating quantum satellite from?" Because we don't have one of those. Nobody does. Who did they copy like their manufacturing process efficiencies from? Cuz I saw this this other instructive video and it could be Chinese propaganda, but it looked kind of real where they showed a plant that was making um missiles and they said, "This plant can turn out a thousand missiles a month, right? It was just fully automated. It's just running all on its own, right? And then we had the the CEO of Ford go over and come back terrified and said, you know, I went into this factory and they had to turn the lights on so I could see what was happening because there weren't any humans on the floor. It was all robots manufacturing stuff turning out a new chassis like every 20 seconds, right?
You couldn't even conceive of the efficiencies in in that model. So if you dare to believe your own lying eyes, it's clear that China can outmanufacture usly.
So, and then skip over and look at what just happened between the Ukraine war and then the Iran war. We ran out of our fancy pants missiles, you know, the THAADS, the SM2s, the SM3s, like we're like just ran out like it's going to take years to replace our Patriots and all this stuff, right? Um, so I will tell people right now without flinching that we've already lost the next war with China because wars are fundamentally logistics and manufacturing. We can't compete on that front and I hope we never try, right?
Because we'll just lose a lot of people.
Yeah, our fancy missiles will knock down the first wave, but not the second, the third, or the hundth wave. And China can outmanufacture us. That that's how we won World War II. Our manufacturing centers did not get bombed. We were able to outmanufacture our adversaries. And that's pretty much what every military person will tell me. It's like, oh yeah, you know, you don't go up against a foe who can outmanufacture you. Not just 2:1, but probably 100 to one or even a thousand to1 in some uh select areas.
Plus, we get a lot of our missile components from China. So, that might be awkward. Hey, yeah, I know we're shooting at each other, but can you send us another >> another load of titanium nose cones?
That would be awesome.
>> Yeah, we need the chips, too. Can you send those? No. And then you factor in you layer in the fact that it uh we are I think fully in the age of asymmetric drone warfare and um I'm sure you've seen the videos of the the drone light shows in China over the years. That's always been a a sort of light-handed milit military flex in my mind. It's like, hey, we have all these drones over here.
>> Uh be a shame if we use them in other capacities.
>> And a 23-y old kid's running them off a laptop, all 10,000 of them.
Yeah.
>> Yeah.
>> It's uh are you are you hopeful that sanity will prevail or do you here in the US? And because I mean I guess we can bring this back to like precious metals and monetary matters too. I think if inflation rips again if you're looking at the um 30-year 10-year yield here in the United States. I mean that's I mean this is a Bitcoin podcast. A lot of what we've discussed over the last nine years of running the show is, hey, looking at the national debt, looking at entitlements, looking at the trajectory, and it's becoming clear that we are on this runaway um debt train um driven by fiscal insanity that doesn't seem like it will ever get fixed. And uh what does that mean moving forward with I think post 2022?
I think that was like the massive inflection point with the the freezing of the Treasury assets of Russia. We're four years beyond that and now we are in another war. Uh the yields are going up.
The debt is going up. The interest expense on that debt is going up.
Inflation's about to rear its head again. Um and then you have a AI wave that's coming. And many of the builders of this technology are saying, "Hey, it's going to wipe out a ton of jobs, too. So prepare for that." How does the dollar system survive that?
>> That's uh it it it doesn't. I mean, listen, it it's got a lot of inertia.
It's going to take time to play out, but we're already seeing it play out. Um I was asked in an interview yesterday.
Somebody said, "Well, you know, the dollar isn't doing that bad." Like, well, that's cuz you look at the USD index and you're comparing it to other fiat currencies. Um but let's compare the dollar to gold. Oh, it's lost half its value in about four years. um you know and uh so on and and so that's really going to be the ultimate arbiter here is what is the dollar against real things and that's what's about to get exposed because of the closing of the straighter form which Marty you know this but everybody needs to keep this in mind because every day it's like oh oil oil well it's also oil products oh it's also helium it's aluminum too and fertilizer and sulfur right it's just it is actually a poly crisis Each one of those is an individual full conversation with all kinds of stuff that's just now rearing its head and it's going to be with us for a few years. So we have that and sometimes inflation is a monetary phenomenon because we we mischaracterize it in the United States. We call inflation rising prices. Does milk cost more this year than last year? That's inflation.
True to a point. So we have inflationary pressures because the ultimate source of inflation always is government deficit spending. Right? That's that's the real headwaters of the Nile on this whole thing. And there we're spending as if I know there's a war going on, but even before the war, we were spending as if it was World War II. We were spending nearly 7% of GDP in deficit. You know, we just sort of ramped it up in 2020 because of COVID and never found out how to dial that back, right? And and so we just kept that going. 6 7% of GDP deficit spends. That's highly inflationary. Um, and that inflation is coming. You know, we just caught a PPI print last month or the last month came out a week ago at 6%.
PPI leads the CPI. It's almost a guarantee that we're going to get 6% CPI prints in just a few months, right?
Because it's usually a 3 to four month lag between those two. And so, if that happens, well, do you want to be holding a 30-year bond even at 5% if inflation 6%. No, sir. Um and and so that's a lot of the selling pressure, but it's not just US, right? Japanese bond, long bonds are selling off. UK guilts are getting murdered. They're all on the rise in Europe as well and the US. So 10 2030s all like heading upwards in yield.
So that's that's pretty much baked in the cake at this point. My personal prediction is that we're going to sort of get to tank bottoms and then oil's going to go to whatever it's going to go to much much higher numbers. We're going to call that inflation. And it's a little bit driven by the fact that we have tons of money circulating the system. Explosive M2 growth worldwide, tons of margin debt, tons of bank lending, mostly for these AI centers. So there's cash everywhere. That is going to provide some some inflationary pressure, but it's really is going to be a supply shock, too. And so sometimes you get cost push inflation, which just happens because you don't have enough stuff and prices rise as a consequence.
those two things together. I would not be surprised if I could just pull this chart up again because this is the one we talked about. I got this one from um James Lavish, the informationist, but first came out.
>> That's the one I was using.
>> Yeah, I first saw the first iteration of this uh with from Torsten Sllock at Apollo, but let's use this one. And for everybody watching, the blue line is the '7s and up into 1980 peak, right? Green seems to just be like almost perfectly echoing. And here we have the April P CPI reading at 3.6. 7 8% it's going to go to 6% on the next couple of readings out. I it just probably unless something's broken with the PPI model.
Uh and I actually think my model that you know I think we're going to see 15 to 20% inflation in about a year and a half to two years if we follow this and it's going to be a lot of money right out there chasing too few goods and also too few goods in some critical areas.
It's those two things combining together. And at that point, we have to ask the question like, okay, we had Paul Vulkar, right? 6'5 Texans, cigar chomping, pushed people in the chest, backed him into the walls when he didn't like what they were saying kind of guy.
Uh, who was capable of ramming. He had to run short-term interest rates at this peak, 21%.
They block that. Can you even what what happens to our interest expense if the long bond goes to 14% like it did back then and short-term goes to 21%.
It's game over. Like it's it's not possible.
>> Well, that that would make uh at 39 trillion. Yeah, that would make the interest expense what like six six trillion a year or not not six but uh or like five four and a half five a year. It's at what 178 right now.
>> Yeah.
>> About to surpass social security.
>> Yeah. Yep. Thankfully, we had Janet Yellen, the gnome genius, the garden gnome genius, um putting all of our our treasuries in into short duration. So, we have these massive 8 n 10 trillion roles every year now because we're all on the short end of the curve. As if that would always remain subdued. Um, we should have should have as a nation when when 10 years were at 75%. We should have just slapped everything we could gone Argentinian style, Austrian style, made hundred-year bonds. I mean, just like pushed like that would have been smart. Uh, I again it just keeps coming up heads like was she really that that dumb, you know?
Well, that that's the another sort of confusing thing is because coming into the Trump administration, uh Scott Asent and others were saying this was a terrible mistake. She shouldn't have been doing this. To your point, I think Trump explicitly said we should have been issuing 10 years bonds when the yield was that low. I think he mentioned a 100red-year bond too, maybe even a 50.
And then Besson got in and kept hammering the front end, too. And there's something structurally behind the scenes. I don't know exactly what that seems to make it so they they feel forced to do this. Um and obviously as long-term yields go up and they're probably going to favor it um the the front end just to avoid locking in higher interest rates on long-term debt. But no, it feels like a a problem that uh isn't easily solvable unless you figure out the fiscal side.
And that's another confusing thing. It's like, hey, this has been the year of unearthing the last 12 months of unearthing all this incredible waste and grift within the the um the federal government, whether it's social security, um having dead people get paid social security till they're 115.
uh obviously the Medicaid Medicare fraud that's been laid bare with um uh all the learning centers and hospice centers across Minneapolis and LA and other parts of the country um from many different it seems predominantly immigrant groups uh >> and it's just laid bare right in front of us and um the public myself included makes an uproar like hey they're obviously overtly stealing our tax dollars let's do something about it and you'll get like headlines and a week of uh a week of um just pandering to to that sentiment and then nothing happens.
They'll come out and say, "Well, we actually can't fix this because uh reasons."
>> Yeah.
Yeah. I I confess I had some optimism in January of 2025, particularly when Elon rode in with the 20some crowd and aed their way right through the bureaucracy of DC. just like those all those people had those little like thieftdoms with their like my SQL databases of spending that were all like squirreled away that you could never you know forensically audit and AI just ripped it apart right you know they smashed through USA ID and we were starting to get the data republican showing all the connections and it was just this big sea of graft I'm like finally and then next thing I know Trump unceremoniously dumps Elon proves that he will betray even somebody who is highly responsible for being a key supporter uh financially and and otherwise in a critical moment to help him get elected and and just spit him out and said, "Nope, we're all done.
We're all done." And Doge just went nowhere. Like that to me was the DC power structure saying that was a little too frightening. We saw the light at the end of the tunnel, you know, and they just put a rip on it and and stopped it.
Um and since then, absolutely nothing of substance has happened. Nothing.
>> Yeah. even after Nick Shirley and you know the sort of man on the street investigative journalists um >> y >> billions and billions of dollars worth of fraud in in one state alone and yeah nothing I mean yeah >> well that's like if again trying to I try to wear many different lenses and one of the lenses talked to Tom Lango a lot and he's um >> I think he's big on like hey this isn't going to happen overnight it's going to take time like you brought up US a like we got USA out. Um that doesn't seem to have come back. We're not going to get everything all at once. And um holding on hope that like maybe that's the case where it's like, hey, we can only do a little bit at a time. But it is hard to see it right in your face and then I mean the the Medicaid fraud, the Somali daycare fraud is like that should be cut overnight and stop feeding the money.
>> Yeah. Instant. I I think um something like one in six um hospice care, what is it? Inhome care specialists works in LA County. Like it's an impossibility, right?
>> You know, for Medicaid, >> you know, it was I I forget who I think Dr. Oz went and did that one and that was like a Russian immigrant fraud. Like we're not we're not racist here. We're not against Somali specifically or whoever it may be. Um, it just seems like there's the very clear loopholes are being exploited. And that's the weird thing.
You brought up the deep state. There is there seems to be some sort of organized effort to make make it the Somalian and Russian immigrants aware like, hey, these loopholes are here. Here's how you can >> claim to be hospice care nurse and and just take millions of dollars from the US government.
>> Yeah. Hey, if I could, Marty, I'd love to get your take on this because this is to me the most astonishing thing ever that came out of this was late January, early February 2025, right before Elon got shake hand. Um, and I'm sure you're familiar with it, but you've heard this, right?
>> No, >> this is the most astonishing thing I've ever heard. So, so he's uh Elon is on a um interview on Ted Cruz's show with this other guy. I don't know. Um, listen, >> one of the things you told me about.
>> Yeah. Okay.
>> Right here.
>> Um, I mean, they're not totally wrong, but they're probably off by 5% or 10% in some cases. Um, so, uh, I call a magic computer any computer which can just make money out of thin air.
>> That's magic money.
>> So, how does that work?
>> It just issues payments.
>> And you said there's something like 11 of these computers at Treasury that are that are sending out trillions in in payments.
>> They're mostly at Treasury. Uh some are but there's some at HHS, some at there's one one or two at state. Uh there's some at DoD. I think we found now 14 magic money computers >> where they Okay.
>> They just send money out of nothing.
So this is the guy who who presumably knows something about payment systems, you know, having cut his teeth at PayPal, right? And he's very three times he says these are magic money machines because they just emit credits. Now, in my limited understanding of the world, that feature only exists at the Federal Reserve. And he's saying that's now metastasized. And you have them at HHS, DoD. Of course, that makes sense. Like, they can't pass an audit, save their lives, right? You know, but they're just these machines emitting credits. And then that just it violates everything we know about money, right? It just means we're just manufacturing just one side of of the debit credit balance sheet and we're just emitting credits.
I don't understand how that reconciles inside the banking system. I mean, and right after that, they were like, "Okay, you're out."
>> Yeah. Have you left with a black eye, too? Like, >> did he Oh, did you?
>> Yeah. And uh >> Oh, no.
>> Well, that's that's like the the crazy like think I mean, we're getting the pure Wizard of Oz territory and think about just how fake reality is if they're able to do that. the misallocation of of money via the printing of it ex nilo towards all these things that are I think against what most American citizens what humans want at the end of the day and so like that I'd really be interested to get your perspective on I mean deep stake deep state is a very broad topic it has many meanings for many different people but I do think there is something here to this sort of entrench drenched sort of supra like unelected layer of the federal government that exists and historically has just abused the system and done it through monetary means too. I mean, one of the favorite books I've read in the last couple years is Gold Warriors, which highlights how the CIA basically plundered the the gold that was in Southeast Asia after World War II and just used it as a blackbox slush fund for for decades until these investigative journalists figured it out. And I mean, back then, you actually had to find the gold to run the the the slush fund. Now you can just use the magic money machine to to print it out of nothing.
>> Yes. Well, very important that we don't audit Fort Knox if if that story is right. You know, somehow that's too hard. I don't know. Counting bars.
>> Well, difficult. Um well, so two things, right? So remember during the Iraq war like there were all these pictures like tanker filled with gold bars and smiling servicemen kind of holding up bars. I'm like where did it go?
>> Right? Nobody can answer that question.
like was it returned to the Iraqi Treasury? Nobody will say like just went missing. And then op skipping a jump. It was just last week we heard about this fake CIA agent. He was a real CIA agent, but he had faked his resume. And they found $40 million in gold bars in his in his apartment or house. And and he said, "Oh, he had those were for um he was paid in gold." Like those were for he I think he said uh pay remittances or something like basically for hours work.
The CIA pays people in gold >> and you're making $40 million out of government jobs. The uh >> we story that'll get buried, trust me.
>> Right. Well, we talked about this last week on uh the weekly show that I do.
Like, how did how did the CIA not flag that this guy was lying about his military? Like is there no sort of inter >> department information sharing between the the the military and the the CIA?
Like I find that hardly like the fact the whole story stinks. Uh many different he submitted $40 million of time payment stubs. Like what? It's a lot of overtime, you know? I mean, just like no, something really stinks in that story. But but a gold is is central to it, you know? So, so here here's here's my here's my wackadoodle, you know, hypothesis. So, I I track positive and negative space stuff. So, negative space in the story is that in 2003, the Federal Reserve stopped reporting MCM, its largest money measure, right? Money of zero maturity cuz it was not cost effective to track it anymore. Like, you guys print money out of thin air. What's cost effective? I'm I'm losing the plot.
Second, uh 2006 we lost M3. Now M3 tracks all the money in the United States plus offshore money and now we're not tracking offshore money. So the question is where would these magic money machines be emitting credits? And my guess is a lot of it's going offshore to do things right. You got to pay contractors, you've got to, you know, whatever buy off dictators, you know, there's things that have to be done. But that could be where where all of this is going. And so my my hypothesis here, Marty, is that whatever you think our money supply is, it's larger than that.
I don't know how much larger. I hope it's not twice as large. Cuz you could imagine like Panama Papers showed us there were 275,000 shell companies offshore where people have money stashed, maybe CIA officers with $40 million, right? And imagine they're all just parked there thinking they have all this US cash and it's good as gold and all that stuff. And then one day they wake up and the and the the rumors have gotten started and the dollar starting to tank and all that money suddenly says, "I'd rather be in something different." You know, that could be uh another sort of beachball moment where you're like, "Woo, there was a little bit more pressure in the system than we thought, you know, out there." But I'm I'm convinced at this point we do not have good insight into how much actual money has been created. Money is power. Money is privilege. Money is an extraordinary substance and there's not a chance in the world that people who are unauditable, who are unaccountable haven't abused that system.
Oh yeah. I mean it was I think it was I for I mean and it's almost like it's in your face now because what was it like last year for some reason or another like the Cayman Islands like was forced to report their Treasury holdings and I mean it's not the government it's the Cayman Islands holding the second amount of I think I I forget if it's larger than Japan or just below it but in the same ballpark as Japan which is the largest holder of US treasuries and obviously these are all sort of Cayman funds that have exposure to treasuries and many people are believing that's sort of the a lot of that is hedge fund fronts for the CIA to to run slush funds down there. Well, this was an astonishing thing to me because I just I just tracked this down the other day. So the the board of governors federal reserve system uh they have some paper paper paper comes out by bar belt conac comes out in October of 2025 and they said ah we're kind of trying to square it up because you know the US tick report out of Treasury says the Cayman Islands have 427 billion at the end of 2025 but when we looked at their 9F their PF forms um it turned out they had 1.8 trillion.
It's like we missed 1.4 trillion. what's 1.4 trillion among friends? And I'm like, I'm reasonably certain that that either the the Treasury has to send you a coupon payment or upon remittance, right, because it's a, you know, it's a T- bill, so it was sold at 98, but you par out at 100 when it rolls. Um, they have to send that money somewhere.
They didn't know where it was going.
>> Impossible. Yeah. I mean, it's just implaus. Like, like you said, it's in your face now that you have to accept these like, oh, we just didn't know 1.4 trillion. Yeah.
>> Extra. And it's like, oh, the Pentagon failed another audit. Can you literally cannot audit what we're doing with all your tax dollars or the money that's just being printed? That's I mean do you I mean you mentioned like the the beach ball in regards to people basically calling BS on the fiat system and going towards harder currencies. Um that's why I got into Bitcoin. Uh that's why I'm passionate about Bitcoin. Like I think there is not only a sort of pressing need to to transition back to a sound money economy, but I think there's a moral obligation. Uh I think the the ethics of money production by um Holman was um very influential on my >> my my thinking on on just like the morality of of money printing. I I I do think there's an ethical dilemma that um the whole world finds itself in now where we're living in immoral monetary systems and uh getting back to sound money is is an imperative if we want to have a true society because again going back to the point with all this magic money machines, these slush funds um in the Cayman Islands, whatever it may be, it's all fake manufactured out of nothing. And what has that done to push the trajectory of of humanity into the direction that we're on now versus what otherwise would have happened if those forces weren't there. This is such an important point and it's it kind of this is the genesis of where I got started, but I got started in all this, you know, way before Bitcoin was around. So, I kind of dialed in on on gold or anything. I didn't even care. Like it could have been sheep skins. Just anything that humans couldn't print out of thin air because if I if I reach into your bank account and I steal 3% of that, you know, I've stolen. It's it's it's it's immoral, right? It's unethical. But that's what the Fed does, right? They print all this money and they steal from everybody who's who's got existing hard. You know, money is supposed to be that store of value. Hey, I work hard. I overproduce. I have some excess. I save that. Right? and they're saying, "No, we're going to steal that from you on an ongoing basis." So, by definition, we have a fraudulent system of money cuz it's fraud if I can steal from you without you knowing, right?
It's just that's all. It's impossible to build a non-corrupt system on top of fraudulent money. It's it's like to me that's just sort of a philosophical like truism, right? Oh, we're gonna put these rules in place and we'll have this great system, but underneath it, the sill plate of this house is termite shot. You know, it's like we're gonna build this beautiful house on top, right? Good laws, rules, regulations. You can't. You just can't. So, I think if we want to have a just society, you have to have sound money. And I'm agnostic. I don't think we should have a sound money system. They sold us on it like you have only the dollar. I'm like, let's have Bitcoin. Let's have gold. Let's have sheep skins. I don't care. and let them compete because it's competition that keeps things refreshing and also honest over time, right? You know, if I want if I want to save my wealth in airline miles, fine. You know, but then I find out the airlines give me less and less and less for each mile over time. I'm like, nope. You know, I'm going to save it in Pokemon cards. Nope, that was a bad idea. Okay, whatever. You know, but you get I think that having choices would be great, you know.
>> I completely agree. And now now I'm starting to get uh not angry, but just thinking about it like they print I mean it's become a meme I think. Uh shout out to President Naibboi for coming what was it the CPAC a couple of years ago or and basically explaining like taxation is a humiliation ritual cuz that's the other >> that's what it is.
>> That's the other immoral thing is about hey you guys can print all this money.
You are printing all this money but then you're turning around and slapping 30 to 50% tax rates on people. Um, and you're taxing them on the way in, on the way out, uh, every which way possible. And you're compounding that immorality of debasement by basically stealing uh, stealing uh, the hardearned wage even more via taxation.
>> Mhm.
Yeah. Yeah. No, indeed. Um and you know again early 2025 there were these little glimmers of hope right where Trump actually said magic words to me which is you know maybe we should explore getting rid of property taxes which to me is the ultimate insult right so every so often somebody says we should tax unrealized gains on stock portfolios and the whole world erupts in fervor right like oh my god worst thing ever what a terrible idea and objectively it is a terrible idea but that's what happens with houses right you know you get taxed on the unrealized gains. The assessor comes around every so often and says, "Oh, your house is worth more. You owe more."
You know, it it's the craziest thing.
Why do I owe more on this thing that I have a house? It's a depreciating asset.
Trust me, you know, >> and I bought it. It should be mine. Why are you uh why are you taxing me incessantly? And I mean, this is another reason for the sound money economy, too.
I I believe is I mean people are using their houses as piggy banks and that is I think part of the reason we're seeing this sort of intergenerational struggle >> uh and resentment from the younger generations towards the older is cuz they've >> um been a combination of SCOP and forced via the the financial just the natural financial pressures of the system to use their their houses as piggy banks that that people um who are coming up are finding it harder to um to to buy a house because they don't have the cash to to purchase that piggy bank um for lack of a better term.
>> Well, I'm I'm either a very late boomer or an early exer depending on who's setting the starting date. Um ideologically I I align more with with Gen X cuz you know just how I grew up um and and and all of that. But every time I I say, "Hey, the boomers as a class are leaving behind a much worse world than the one that they were granted."
Right? Every single time, Marty, I get all these angry boomers, and it's this it's it's the same argument every time they go, "Nuh-uh, I'm not that way." Or, "Nuh-uh, my mom and dad weren't like that." And it's it's like I said, the average height of people in LA is 5'8", and somebody comes along and goes, "Nuh-uh, I know a guy who's 6'2. You're wrong." I'm like, they can't do the generalization. They have to destroy it with a specific, which is so classic for that generation, right? It's all about me. Me. It's the It's the the boomers are leaving behind a ruined world for their offspring. Full stop. There's no way to debate this at this point in time, right? You can't get by on minimum wage. You can't get by on two minimum wages. People can't even get by on, you know, you saw Professor Plum, Michael Green, saying, you know, let me make an argument. poverty if you live in a city is 140,000. No. Right. Oh, the approprium he got for that point of view. But the point is that the poverty line is not 32,300. Like what the government said it's way up there and it's going higher every year. That's the world we've left behind. And objectively, I mean, what can what can you see? Levels of happiness like way down. Household formation way down.
Having kids way down. Those are all markers. Forming a household, having kids are are signs that you're positive about life in the future. And the opposite of that means you're not positive. That's the world that's been left behind. And it's because I think boomers were asleep at the switch and they just didn't do what needed to be done. It's hard work kicking out raccoons who've taken over and infested your political structure. It's it's hard work pushing back against this and we just didn't get any push back. So I think it carries on till it breaks.
Right. So when you ask for you know where does this go? In my mind, I'm in my studio, but right outside I've got six cows and 30 chickens and all that cuz I'm a little bit worried that this could this will go to the breaking point at some stage. But this it's it's sooner or later you maybe you either get sort of that violent uprising which can happen. But there's another form of violence too which would be in China there was this little movement. I don't know how long it is, but people were overworked. And so they called it lying flat, meaning you just you just don't you just don't work anymore. You know, you just check out of the system. So we're seeing people check out of the system, right? You know, the the male participation rate and employment just plunging, right? There's guys who are just like, I'm out. I'm just I'm not doing this. And and when the males, the typical traditional providers and protectors are saying, I don't even want to play the game. Right? Well, you've got a bad game. And it's a rigged game and we know this now, right? So I have I totally support the younger generations are like the olders are leaving a mess and I'm sick of this. I don't want to play the game. I think that's rational and supportable as a point of view because if the game is rigged against you, don't play the game. Totally makes sense.
Yeah. The quiet quitting um trend growing.
I mean you can say I mean I'm a I'm smack dab in the middle of the millennial generation. got a younger sister straddles millennial and Gen Z and then cousins that are Gen Z and it is I mean I think it's objectively true this there's a lot of hopelessness um within the younger generations that's one thing I try to do with this platform though my audience my demo is a bit older we do have younger people listening but not as many as uh as Gen X and and boomers funnily enough that listen to the show but anytime I get to talk to uh to a young It is what you just said. It's like opt out, but opt out in the right way.
That's why Bitcoin like I think um adopting a sound money standard on my personal balance sheet in my early 20s has worked out well for me as I get into my mid-30s. I'm married, have three children, and I don't think I would have been able to do that as uh as um as much peace of mind if I if I wasn't on a personal sound money standard. So that's one way you opt out is don't use their broken money.
>> Mhm.
>> Um and then as somebody again with three young children trying to think of what the world will look like in 12 years when they begin to to get out of our house and on their own, it's like what what's that going to look like? And what can we do to make sure that it is uh a world of opportunity and relatively safe? And and I think um the big question that many people have right now is what are Gen Z and Gen Alpha going to do cuz >> they're going to be forced to pick up the pieces. Um and I think not only what are they going to do, but how quickly are they going to be able to do it if they figure it out.
>> Yeah. I mean it's it's very difficult to have give advice. All my three kids are basically mid-struggle with all of this, right? um and and just tapping into what what they and all their friends are saying. They're like, "Well, what what even is the point?" Like, you know, so there's no company loyalty anymore. None of them believe that that Social Security, which dips into their paychecks when they get paychecks, you know, none of that's going to be there for them. They just they feel totally betrayed and abandoned by the system, right? Which which is not conducive to things. And so, you know, my my warning to boomers is, um, do not even remotely assume that when push comes to shove that you're going to have a lot of sympathy in the younger generations going, "Wow, well, let's, yeah, that's kind of a shame. You know, you paid in to that system." We'll we'll work extra hard to preserve it so you can have your retirement. Try and act surprised when they just like up and and walk away and say, "It's kind of on you. Good luck with that." And um I'm sure you saw this too, but I can't believe that that even the how are we not at like uh revolution at this point when you get Larry Frink who was born to steal from people, right? That's who he is. He's just born to steal from everybody and the CEO of Black Rockck and he says ordinary people's savings accounts and pension funds worth trillions of dollars will be used to build data centers and power grids for AI. Much of this, he says, will come from savings accounts and pension accounts.
Yeah. Cue the the famous um uh you know scene scene from South Park and it's gone.
>> Yeah.
>> So what's he talking about like a bail in to fundra?
>> Well, so right now you know the the free cash flows of all the AA companies like negative now because they're just like taking every ounce of earnings and now they're also starting to issue debt. So who's on the other side of that debt? I think the last figure I saw was 180 billion that's issued. Somebody's on the back side of that. You know who's on the back side of that? Probably the bond funds, right? Which all these 401ks are rolling into as part of a 6040 strategy.
And now they're also starting to issue um stock. So they're they're pushing both, you know, equity and debt to get this build out.
So um it's going to be the people on the other side of that who are funding that.
And of course, as you know, there's no business model that shows that you're going to be able to earn that amount of money back before these chips depreciate out, which is three to five years depending on the chipset, right? Um, so like it's just this is just we're watching a money evaporating machine in process right now. And Larry Fink just comes right out and says, "And you're going to pay for it."
How is that? How do people just sort of shrug and move on from that? I don't get it.
Yeah, it'll be interesting to see. I mean, the Larry Frink, I think as somebody who uh I mean, you mentioned flare gas earlier. That's how I got into Bitcoin mining. We we would go and take uh take gas that was being otherwise flared, run it through generator, produce electricity, mine Bitcoin with it. But at that era in 2018 2019 my biggest enemy was uh ESG which Larry Frink was the the u the main spokesperson for and I think that was a massive capital misallocation mishap and narrative mishap and I think >> thank god we've we've gone beyond that that nonsensical sort of view of the world and how corporations should be run and what they how they should be allocating capital and um and hiring people. But yeah, it is funny how these people just get a pass. Larry Frink especially and that and again to the AI point, the push back on like the profitability. I think whether I think Anthropic maybe starting to free cash flow, I think Elon's Colossus running that out to anthrop that's the other thing I'm trying to wrap my head around is like seeing the stories of the circular deals. I don't I don't know if it's exactly Enron like and I always fall back to like using these tools. They work and they are helping us and so um but for Larry Frink to go out there and be like oh no we're going to use your your pensions to fund all this.
It's like well I think uh I think it's a bit brash and getting then going back to sound money it's like why do we need all these uh exotic investment vehicles and you think of the amount I think the amount of ETFs has surpassed the amount of um >> actual stocks.
>> Yeah.
>> Yeah. Actual stocks.
>> Yeah.
>> And so we've just gotten into this hyper hyper financialized economy. I know I'm rambling here, but I'm getting to a point which is like we should be on a hard money standard where you're like forced to weigh the the the money system forces you to weigh the opportunity cost of capital allocation and uh the market basically figures out like okay is this productive?
If so, you'll be able to produce it and make a profit and reinvest those profits expand operations. The whole point of this ramble is like we can't even make these decisions because the money is completely broken.
>> I I I agree. I agree. It's a huge stumbling block. Um because it becomes about the money. And so financialization is making money with money, right? And almost every company's out there figured out that it's in a in an expansive monetary environment, it's just easier to make money with money than to do hard things like hire people and train them and manage inventories and take risks and all that stuff. That's terrible. Um, but if you can just make money with money, you know, that's easy. And and you know, I've got these this whole giant set of books by Will Durant, you know, inarguably the most complete and best historian ever. And there was this one little chapter thing that um was brought to my attention um by uh Simon Black. Uh and he did this brilliant presentation around it where he just read this paragraph out of I think it was Athens like 50 BC or something and they went through this whole monetary debasement. But will Durant describes exactly our society today. People under a debasing regime suddenly wanted to gamble, wanted to speculate, wanted to make money with money. Anything but actually being productive cuz that's hard work. We, you know, we're humans.
So if you give us an opportunity to like make money with money, that's so much easier than doing actual hard work. you need the hard work, you know, and so, uh, I think we're just sort of at the tail end of this whole thing. Monetary debasement has been pretty much the shest way to completely ruin a society through all of history. I don't think now is going to be any different just cuz we got some better tools, you know, got better computers. Um, I think it's the same story as ever. You have to understand where value comes from. It starts with energy. It starts with people working hard, taking real risks, and transforming that into higher value ad products, right? And that's the true source of prosperity.
Financialization is always always not a path to prosperity except for the individual playing in the game who wins, right? It it's just nibbling at the actual prosperity that's out there. It has to by definition, right?
>> All these private equity dudes out there, they don't make anything, right?
>> Great spreadsheets. If you haven't seen the spreadsheets, they're incredible spreadsheets. You should see the VLOOKUPs in the spreadsheets. They're pretty >> beautiful formatting. It's amazing.
>> You talk to some Excel nerds, they'll say, "Hey, this is this is actually pretty beautiful and uh productive what we built here with this VLOOKUP."
>> Um Chris, I want to be respectful of your time. I feel like we could go for hours. Um and I h I have it on the calendar for 90 minutes and we're brushing up on that. But this was incredible. Is there any parting thoughts for the audience based off of what we just discussed? Anything we missed? Anything you think people should be aware of before we wrap up here?
>> Yeah, absolutely. So, um, first, um, I can't give specific investment advice ever because I have a registered investment advisory and, um, that, uh, service at Peak Financial Investing just helps people get connected with portfolio managers who actually see the world this way. And it's a really important service. But um what I want to just direct people to, however you get there, I think the era of passive investing, which is really dominated, it's over, right? Just just throw money into an ETF, you know, and and just wait and magic happens. I think we we're entering an age of of severe turbulence here. I think there's supply shocks. I think there's inflation. There's all kinds of things coming along where I think everybody would be well suited to have a very nimble, very targeted focus.
Again, it's just the pendulum doth swing, right? There's times when it's fine to just sit back and just sort of be be patient. I think we're entering a period now where we're going to have to be nimble rather than patient. And the second thing is if all of that seems confusing and hard, and it kind of is, hard assets, right? For me, that's anything that can't be just sort of willy-nilly expanded on a spreadsheet by somebody, right? And so really important. So for me, hard assets, it's land, it's trees, it's cows, it's gold, it's silver, it's equipment, it's skills, right? All these these are the things to get back sort of into, I think. And and these two will come back in vogue at some point. And like you, I sort of share this idea that um we're only looking at the shiny side of the AI coin. And if we do that too long, it's going to be much to our detriment. Cuz if I had a magic, if all if all all I have to do is press a button and a machine makes itself, you know, I press the magic, you know, claw coding thing and it recodes itself, right? That's fine. You just carry that forward 10 years. Nobody remembers how the original code was developed. If the machine blinks out for some reason, nobody knows how to rebuild it, but we're all dependent on it, right? That's a huge risk here. So, I think that for anybody younger, people skills, right? actual human interaction. Knowing where real value actually comes from, you know, don't pay it. Money isn't money isn't isn't wealth. It's a marker for wealth.
Know where the value actually comes from and how you provide value in the story and you'll do fine. You might have to scramble and dodge and weave a bit in life, but but you know, the old era that your schools are still trying to train you for, it doesn't exist. It already went poof. It's gone. I don't think it's coming back. So, it's a whole new era.
And that era is all about knowing where real value comes from and how to add to that. And and there that's the best advice I have for people right now.
>> That's great advice. Have will agency sound money. You can opt out. Chris, this has been a pleasure. Hopefully we can do this again at some point in the future.
>> Absolutely. Pleasure has been mine, Marty.
>> All right. Peace and love, freaks.
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 add 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.
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