#1449 Darius Dale | Wall Street Is BULLISH On Bitcoin

Darius Dale is the Founder & CEO of 42Macro. In this conversation, we evaluate the bull market, the 60/30/10 investment portfolio, dollar strength, the impact of potential global refinancing, and can DOGE be successful in cutting government costs? ======================= Show notes: https://42macro.com/?utm_source=youtube&utm_medium=social&utm_campaign=the_pomp_podcast&utm_content=dec_4 ======================= Meanwhile is the world’s first licensed and regulated life insurance company built for the Bitcoin economy. Protect your loved ones with sound money built to manage life’s uncertainty and a broken financial system. Their BTC-denominated Whole Life Insurance policies allow HODLers to pass more BTC on to their loved ones and a tax-advantaged way to access BTC for liquidity during their lifetime. Visit their website at https://meanwhile.bm/ to join the waitlist for a policy and to learn more. ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's going on guys? Today I've got a mind blowing conversation with Darius Dale. He's the founder and CEO of 42 Macro, one of my favorite macro research firms, and Darius brings charts, graphs, data, and insights that you're not going to get anywhere else.

• 0:44Anthony Pompliano?

  Today we talk about, we're in a bull market, but when could it end? What are some of the data points that he's paying attention to? How should investors react when we get to the top of the bull market? What about the dollar strength? And how is that going to impact things like gold and Bitcoin? And then we even get into this idea of an air pocket around global refinancing. This is going to blow your mind. If you watch this episode, I think you'll learn a lot. And Darius is always in rare form. So here's my latest conversation with Darius Dale.

• 1:11Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:35Anthony Pompliano?

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• 2:16Anthony Pompliano?

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• 2:30Anthony Pompliano?

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• 3:12Anthony Pompliano?

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• 3:28Anthony Pompliano?

  All right, Darius, everyone is super excited. They all think all asset prices are going higher, up and to the right. It's so easy. You just put money in the market, you could buy any asset, and you're gonna make money. Sounds awesome. You, though, may have a couple of different ideas here, so let's get into it. Help us understand how you're evaluating right now: bullish, bearish, or somewhat neutral?

• 3:50Speaker 02

  Yeah, absolutely. So, thanks again for having me on. Excellent question, excellent way to kick off the show. I'll start by answering the question simplistically by saying, we are still bullish. If you go to slide one, Matt, you know, one of the things that we do for our investors at all times here at 42 Macro that our clients find quite valuable is to, you know, help them understand the full distribution of probable economic and financial market outcomes. Irrespective of whether we, 42 Macro, was bullish or bearish at that particular juncture, we are constantly doing research on the full distribution outcomes so that our clients can, A, have a divergent view of us, or to help them understand how our views might change and evolve in the future. And so, you know, I'll start by saying, most of what we do in terms of, all of what we do in terms of telling our clients what to do from an asset allocation or portfolio

• 4:34Speaker 02

  construction standpoint, comes through the lens of our systematic processes. These are quantitative processes. They have No bearing on, you know, anything I say about growth, liquidity, inflation, et cetera. And so if you could look at slides two and slides three, slide two is our systematic process for retail investors, which shows that we are still fully invested in the context of our construction process. Recall that's the 60 30 10 trend following strategy with stocks, gold and Bitcoin. Slide three is our discretionary risk management overlay where we show, where we help, you know, our buy side clients, you know, pick factors long and short across all the various asset classes. And as you can see, we are still in a risk on reflation market regime. And as a function of that, Dr. Mo is still recommending, you know, long max positions across, you know, pretty much every risk asset.

• 5:20Speaker 02

  And so that's the starting point for this discussion. And I think it's important to kind of paint that picture in the context of what we show on slide one again, which is, you know, the number one thing we do for our clients is helping them identify a position for the market regime.

• 5:31Anthony Pompliano?

  All right, I want to unpack something you said in there, which is 60 30 10, you said stocks, gold, Bitcoin. I don't hear bonds, so maybe you can explain why no bonds. I tend to agree, but let's hear your thought process. And then two is you got 30% gold, 10% Bitcoin. A lot of people watching the show would say, hey, why don't you do the opposite? Why don't you have 30% Bitcoin, 10% gold, explain that as well.

• 5:53Speaker 02

  Yeah, 100% great question. So I'll start by saying the answer to the first question is, you know, we don't think bonds are going to be a great store of value and really a great capital asset for investors over the long term. You know, we see a variety of reasons from a supply perspective, why it's very unlikely that bonds, you know, perform as well as other assets on a nominal basis, and certainly are unlikely to perform other assets on a real basis, primarily through our investing during the fourth turning regime analysis. Recall that, you know, we've done a big deep dive empirical study to help investors understand exactly what is likely to happen from the perspective of the economy, policy, and ultimately how policymakers are going to respond to some of these economic developments over the long term. And one of the key takeaways from that study is that we should expect

• 6:35Speaker 02

  a significant acceleration in the public sector balance sheet over the long term. We've already saw some of it, you know, we're halfway through this war turning. So it's, you know, kind of right on time and we're expecting that acceleration to accelerate. The acceleration of public sector growth to accelerate, which ultimately necessitate accelerated monetary debasement and financial oppression by authorities such as the Fed and other central banks around the world in order to sort of, you know, help investors and sort of digest that. So that's step number one. Number two is why, you know, why 30% gold, why 10% Bitcoin? That's really just a function of our client base. You know, our function, our client base, you know, on the retail investor side tend to be more sort of established investors with larger pools of money.

• 7:15Speaker 02

  Generally, you know, speaking closer to retirement or even some in retirement than the sort of, I would say, the average person probably watching our discussion right now, which is probably someone who's a millennial or Gen Z investor with a, you know, no offense, but a lot less money to manage and a lot less stuff to worry about. If you think about, you know, planning for their children's financial future, you know, planning for retirement. You know, you can't have, you know, more of my opinion. It's my opinion as a, you know, institutional risk manager. You don't want to have 30% of your portfolio indexed to a asset that has a 50 to 75 vault. It's just not a smart way to live life from the perspective of your health and your financial health, but it is what it is. But obviously 10% is pretty big, plenty big enough.

• 7:54Anthony Pompliano?

  That, um, that makes sense. So let's go to slide four here. You're talking about dollar strength, which I think a lot of people, when they look at gold or Bitcoin, they've been saying to themselves, well, if those win, then the dollar has to lose. Actually, maybe what we're seeing here is like dollar, gold and Bitcoin all are going to win in the future. And so describe what you guys are looking at here from a kind of analysis standpoint.

• 8:15Speaker 02

  Yeah. So I'll start by saying, you know, dollar strength tends to suck liquidity out of the global financial system, which is what we're talking here on slide four. And the reason for that is, you know, historically speaking, dollar strength and current dollar strength tends to be causal to currency volatility and currency volatility tends to be causal to drawdowns in broader global liquidity. So investors need to be aware of that. If we continue to see dollar strength in the context of, you know, the repricing of US exceptionalism as well as the impact of tariffs, not to, you know, in terms of, you know, shrinking our trade deficit and more importantly, causing our trading partners to depreciate their currencies relative to the dollar. You could eventually get to a place where we're crossing some critical thresholds as it relates to the supply and availability of dollar financing globally. You know, we show on slide five.

• 8:59Speaker 02

  The reason dollar strength tends to suck liquidity out of the financial system is because the dollar is the most important currency in the global financial system. You know, we kind of need a weak dollar, generally speaking, to have a good global economy and good global financial markets. You know, dollar is 60% of global FX reserves, 60% of global cross-border bank lending. It's 70% of international bond market, the international bond market. It's, you know, 79% of global trade invoicing and 88% of foreign exchange transactions and 99% of stablecoin backing. So generally speaking, if the global financial system is set up, you know, for the, you know, to use the dollar in these various forms and fashions, then we ultimately kind of need a weak dollar to improve the supply of dollar available, the available dollar capital to keep the global liquidity rising.

• 9:44Speaker 02

  And so that's kind of one of the things we're very concerned about in the context of where we are in the positioning cycle. That's one of the sides we don't have in this presentation today, but our positioning model is essentially saying we're probably in any eight or any nine of this raging bull market. And so, you know, you use that as a starting point from the perspective of our economy process. If that's the starting point for any discussion, we have to start to look around the corner at things that might cause, you know, the raging bull markets that we're all participating in. Recall that we are fully invested and have been for most of the year. You know, at some point, this raging bull market is going to end and we have to start, you know, anticipating things that might cause it to.

• 10:19Anthony Pompliano?

  Now, if it does end, I think there's a lot of people who are saying, yes, but the central bank has immense amount of tools. They got a lot of interest rates that they can cut. They got a lot of money they can print. Have we actually outlawed bear markets or recessions because the Fed is so willing to step in so aggressively and kind of right those downturns? Or do you still think that, you know, investors need to be prepared for these market downturns? Because even if the Fed steps in, they may not be able to actually kind of mute them.

• 10:48Speaker 02

  Yeah, well, look, I've been doing this for, you know, 15, going on 16 years now as an institutional risk manager on Global Wall Street, and I've yet to see an instance where the Fed was proactive. Right, the Fed is a reactive government agency that uses lagging economic indicators to take action. Right, so that almost guarantees that there will be times in the, in the future, you know, Well, obviously, we've seen plenty of these instances in the past, but there will be times in the future whereby the markets are demanding accelerated monetary debasement, accelerated financial repression from institutions like the Federal Reserve, but they're not getting it yet. And the not getting it yet part is the part where S and P is down 20, Bitcoin is down 50 to 75% and gold is down, you know, 20, you know, percent as well.

• 11:32Speaker 02

  That's, that's the risk that you have to be aware of as an investor in the context of what should be, you know, a multi-year trend of a Federal Reserve balance sheet that continues to expand rapidly alongside the growth of the US public sector balance sheet.

• 11:46Anthony Pompliano?

  And let's go to this international investment deficit. You're saying that it's doubled. What does that mean?

• 11:53Speaker 02

  Yeah, so this is something I think is important to remind investors of. Here is why dollar strength could potentially cause some problems, and there's a couple of slides here on this. Well, so I'll start by saying the US international investment deficit on slide six has doubled in the five years through December 2023. That essentially means that the amount of, of, of assets, financial assets that foreign investors own in the US economy are, you know, doubled from $10 trillion in late 2018 to $20 trillion in 2023. It doubled. Again, the US has been around since the 1700s. Our net international investment deficit doubled in five years on an economy that's been around for almost 250 years. So that's how much foreign capital has flooded into US financial markets in recent years.

• 12:38Speaker 02

  And so we have to be cognizant of this as investors that if the dollar gets too strong, which is something we show on slide seven, if the dollar gets too strong, foreign investors will be forced to repatriate, you know, US dollar assets, you know, in order to preserve their ability to service that, you know, 79% of global, 70% of global international debt markets that is US dollar backed and the 60% of global cross-border lending that is US dollar backed. So that's an issue, you know, on slide seven, we show what happened in 2022 when we had, you know, significant up trend in the dollar that caused, you know, some of these conditions that we're talking about. You know, dollar is up. If you look at, you know, the, the performance of the dollar from, you know, the beginning of January of 2022 through September.

• 13:19Speaker 02

  Of 2022, dollar was up 18%, commodities are up 15%, and those two things caused a significant reduction in liquidity that caused gold to be down 10% through September of 2022, caused US equities to be down 25% through September 2022, caused US bond market to be down 31% through September of 2022, and it caused Bitcoin to be down 58% from, you know, the start of the year to September. I think it was down 75% peak the trough from the peak in November of 2021. So, the key takeaway here is that, you know, we have some policies developing from the perspective of the Trump administration, now, you know, at the least of which is the tariff policy, but we also have a potential change in net financing policy by the Treasury.

• 14:02Speaker 02

  Both of those things could cause, you know, accelerated dollar strength on top of what is likely to be, you know, extension of US exceptionalism vis a vis tax cuts, deregulation, etc. So, eventually, this will all become an issue for asset markets if the Fed is unable by, you know, there's a function of resiliency of the economy, it's taking this inflation to prevent the dollar from, you know, kind of, you know, trending higher and in uninterrupted fashion.

• 14:28Anthony Pompliano?

  Now, if we keep going through this, what is this showing us on this next slide?

• 14:32Speaker 02

  This, the global refinancing airbag?

• 14:34Anthony Pompliano?

  Correct.

• 14:35Speaker 02

  Yeah, this is probably the scariest chart in all of global macro.

• 14:37Anthony Pompliano?

  I just see a lot of red and that scares me, so I'm like, what's up?

• 14:41Speaker 02

  Yeah, no, no, I got my crayons right this on this one. So, you know, I use red for a reason when I created this chart because to me, you know, our friend Rob Paul is one of, you know, smartest global macro minds in the world, huge fan of my, or huge fan of his, and I consider him to be a mentor of mine. He sort of created this framework called the everything framework that essentially identifies that, you know, the number one factor that you need to get right for predicting, you know, significant inflections and trends in the global liquidity cycle is the lagged growth of global financial sector debt, you know, sort of, you know, kind of piggybacking on his research, you know, we did a big deep dive study across with hundreds of economic time series to, one, confirm whether or not what

• 15:25Speaker 02

  Rob was saying was true, which it turns out to be true, and two, to confirm, okay, are there any other indicators that lead global liquidity from a multi-quarter and multi-year perspective? And the key takeaway from our analysis is, again, this is a deep dive empirical study with hundreds of time series. What Raul is saying is true. It is true. The global refinancing cycle is the leading indicator for global liquidity. Specifically in this chart on slide eight, we show the world total non-financial sector debt growth, the year-over-year rate of change of that growth lagged four and a half years to kind of account for, you know, kind of the typical amount of time that passes between, you know, when a piece of debt is issued and it needs to be refinanced, you know, just kind of the general duration for most, you know, global sovereign debt instruments,

• 16:10Speaker 02

  somewhere around kind of five to six years. So four and a half years is kind of when the beginning of that refinancing takes place. And so what you find is that, okay, there's a really tight fit between this on a lagged four and a half year basis relative to the fluctuations and trends in the growth rate of global liquidity. And so you have to be concerned as an investor, you know, looking at the chart where the question marks are, there is a significant acceleration in the lagged growth rate of global non-financial sector debt on the precipice, you know, kind of all the way through late 2020, from now all the way through late 2025. And so the issue is, you know, so the rose colored glasses or the Pollyannaist view of this would be, okay, we're going to get a significant acceleration of global liquidity.

• 16:52Speaker 02

  But the issue is, is that we may not get a significant acceleration of global liquidity. If we do not get a significant acceleration of global liquidity, we're going to have a complete meltdown in global financial markets, just like what we saw with all the other boxes. The first red box is the global financial crisis, where global liquidity was moving in the wrong direction of the lagged growth rate of the global financial sector debt. The second red box is the summer of 2011, which obviously it was a significant drawdown in asset markets. The third box was the summer of 2015, leading into the beginning of 2016. We had a couple of back-to-back, you know, 15 to 18% declines in S and P 500. And then we had 2018, Q4 18, we had a significant drawdown in S and P 500 and all other risk assets. And then we had one in 2022.

• 17:36Speaker 02

  So, you know, the risk to the upside is that the blue line chases the red line higher over the next, you know, three to four quarters, which, you know, I believe Raul and other analysts are, you know, caught on to this kind of line of thinking are forecasting. The risk, according to what we, you know, based on where we are in the positioning cycle, the risk that I'm putting my macro risk manager hat on, which is my primary job description, putting my risk manager hat on is, okay, what if the blue line does not catch up to where the red line is saying it needs to catch up to avoid this global refinancing air pocket? And that's, to me, is the big risk for 2025.

• 18:08Anthony Pompliano?

  Now, when you look at this, you've got this chart here that's showing the risk-off market regime. Why is it that this global refinancing air pocket causes that?

• 18:16Speaker 02

  Yeah, because what happens, the reason the global refinancing air pocket, so what a global refinancing air pocket is, is when those red boxes in the previous chart, right? If the blue line does not meet the needs of the red line, you have a refinancing air pocket. And the reason refinancing air pockets cause trending risk-off market regimes is because the global private sector, the global investor class needs to create balance sheet space in order to get the roles on those refinancings. Right? So what ultimately happens is you typically need to see the X anti-return across capital markets wide rise. So the only way you have X anti-return's rise is you have valuations come down, you have credit spreads rise, you have the yields on those credit instruments rise. And so that ultimately means is, you know, it creates more attractive

• 18:57Speaker 02

  conditions from the perspective of creditors who don't necessarily have enough balance sheet space to roll those debt those debt burdens anyway. You know, so they need to create the balance sheet space, and the only way to get them to create the balance sheet space is to create, you know, higher X anti-yields. And so that's what this chart shows is that every time we've had a significant drawdown in risk assets, you know, including Bitcoin and other crypto assets since the global financial crisis, it has occurred in the context of a global refinancing air pocket as determined by the drawdown in the growth rate, a drawdown in total global non-financial sector debt. And typically, those refinancing air pockets coincide with a drawdown in global liquidity. So this is again, it's not a forecast,

• 19:39Speaker 02

  but it's me sort of doing the early work on following the bouncing ball where asset markets might be this time next year. Right? You know, it's not, you know, it's one thing to say, okay, all of our systems are ragingly bullish as they currently are with Kiss and Dr. Mo, but my job in terms of peeking around the corner, specifically for our institutional clients who may not be following our systems as, you know, religiously as our retail investor clients, I got to peek around the corner and start thinking about these risks. And to me, if we're having this conversation 12 months from now in the S and P 500s in like the high 4000s and Bitcoins in the 50,000s, then we got to, you know, this will be the reason why.

• 20:13Anthony Pompliano?

  Now, the United States of America, you think will play an outsized role in this scenario?

• 20:20Speaker 02

  Yeah, so to me, it's the growth of the US public sector balance sheet is most causal to the lack of balance sheet capacity globally. And this is, you know, this is something in our opinion, this is going to be a real feature of the economy and asset markets for an extended period of time, which is why we are so structurally and fundamentally bullish. We understand that the Federal Reserve is the only institution in the world that can offset that, and they will be forced to offset that, just like they were in the previous downturn, you know, going back to the 1940s, about the yield curve control we saw in the 1940s and persistent financial repression and monetary debasement we saw throughout. And we're going to, we're, one, we are observing it already, but I think we're going to continue to observe it in, in greater and greater degrees. But going back to kind of the, the root cause of the problem, the reason why the Federal

• 21:04Speaker 02

  Reserve is the only institution in the world that can keep up, keep pace with this, these, these financing needs from the US government, is because these numbers are just getting ridiculous. You know, so the chart on the left here on slide 10 shows the approximate next 12-month marketable treasury debt supply and in its impact on, on the interest expense. And so how do we determine the marketable treasury debt supply? That's the chart on the right. And so we determine what the marketable treasury debt, federal debt maturing over the next 12 months is. So we have that at around nine, just a little over $9 trillion. Then we annualize the fiscal year-to-date budget deficit. That's a little over $3 trillion. That's numbers a little bit too high. It's probably going to be closer to 2 trillion, but it is what it is, only one month of data. And then we have the annualized rate of divestment from the Fed's treasury portfolio.

• 21:46Speaker 02

  So this is the kind of total amount of, you know, gross supply that's going to be hitting the market from the perspective of, you know, the kind of the three main conduits where treasury supply comes from. And so we add all that up, you kind of wind up with a $12.5 trillion number from today's starting point over the next 12 months of the amount of gross treasury supply that's going to be hitting the market from these three conduits. Now, again, 12.5 is a little bit high. I'm guessing it's going to be somewhere closer to 11.5, just based on the annualized fiscal year-to-date budget deficit, probably coming in somewhere closer to 2 trillion by the time it's all said and done. But again, 11 and a half trillion dollars of gross debt supply is a significant number that could cause a lot of indigestion in asset markets, you know, to the extent that those ex-anti-yields haven't been raised prior to this.

• 22:29Speaker 02

  Prior to this process and then the chart on the red line and the chart on the left just shows the approximate nominal change in the interest expense due to this debt refinancing. So if you refinance, you know, 12 trillion dollars of debt from your current, you know, the current weighted average interest rate on the treasury's portfolio into the just the market, the average market rate across the entire treasury curve, you're talking about taking on an additional hundred plus billion dollars of interest expense. Right now, interest expense is already a trillion dollars and it's a, you know, tied for the third largest share of federal expenditures. We're going to go from the tie from the third largest share to definitely the second largest share by the end of this process. If, you know, I really don't see how you stop this process unless you have significant deficit reduction, which in our view, the most populous president since United States, since FDR is

• 23:13Speaker 02

  probably not going to, you know, take a big, you know, chainsaw and lead back or to the federal expenditures, at least not without force.

• 23:20Anthony Pompliano?

  So DOGE, Department of Government Efficiency, they claim that they are going to cut costs, they are going to fire all these employees, they're going to clean all this stuff up. Do you believe them?

• 23:29Speaker 02

  Uh, no, uh, I believe that they're going to try. I just don't believe that they're going to be very successful. So let me start by saying, when you sort of, you start looking at, you know, the various, you know, pockets of US government, US government expenditures, you know, if you think about the things that are definitely not going to be cut, it's about 61% of total federal government expenditures. It's interest expense, obviously, they can't choose to cut that at all. It's Medicaid, or sorry, not Medicaid, Medicare and Social Security. These are the two autonomous programs. In our opinion, we don't think they're going to cut that at all. And then you have total national defense. You know, in our view, none of those three things are going to get cut. It just, or so none of those four things are going to get cut. And then when we, you know, kind of taking our own secondary analysis, when we layer on

• 24:11Speaker 02

  things like veterans benefits, we layer on things like Medicaid and we layer on things like welfare, I just don't see how, again, the most populous president since FDR is going to come in with the national mandate to basically slash all the programs that benefit the people that are his base. His base are poor people, most specifically, poor white people in the middle of America. That's his base. And so I don't see, I don't see a very high probability of a significant, you know, DOGE being able to An act significant cuts these programs. And so if you add all those things up, like interest expense, Medicaid, Medicare, Social Security, National Defense, the interest, Veterans Benefits and Services, you're talking about 90% of the federal government budget, you know, a little bit over, you know,

• 24:55Speaker 02

  kind of six point, you know, roughly around 6.2 trillion dollars. The other 10% of the federal government budget is seven, is roughly 700 billion dollars. If they cut every other thing the US federal government did to zero, it'd be roughly around 700 billion dollars, about 2% of GDP of savings. So you're talking about going from 6% of GDP budget deficit to 4% of GDP. If they literally cut everything the government did besides those seven categories that I highlighted. So I just don't see Doge being particularly successful at their mission. But ultimately the markets are going to, you know, I think the market's going to give them a pass until they find out they're going to be unsuccessful with the mission. So at the margins that, you know, reduces volatility in the bond market with respect of the term premium. But eventually this is going to be something that, that, that we're going to have to deal with as investors.

• 25:39Speaker 02

  Probably at the worst possible time in the context of that global refinancing air pocket that may be developing.

• 25:44Anthony Pompliano?

  My favorite thing that they've said so far is just, we're going to make all the employees work five days a week in the office and like half of them are going to quit anyways because they don't want to do that.

• 25:52Speaker 02

  Agreed. No, again, like I said, they're going to cut a lot of stuff. I think there will be successful cutting hundreds of billions of dollars from the federal government expenditures. I just don't see how, when you start cutting programs that the most populous president since FDR is essentially promising to his base, his very loyal base. I just don't see how that's going to cause, you know, going to go over well. I think it's more likely that Elon and Vivek Ramaswamy and to some degree Scott Bessin get fired before these programs get materially cut. I think that's more likely and ultimately that could be something that takes us one step further to a US fiscal crisis and loss of dollar hegemony. But again, we got to follow the bouncing ball and the stuff, you know, we're talking about, you know, market dynamics and policy dynamics that could be, you know, multiple years away.

• 26:34Anthony Pompliano?

  It's fascinating to kind of think through this stuff right now. Thank you so much for putting these charts together. I learned something which is always a good sign. Where can we send people to find 42 Macro or find you on the internet?

• 26:43Speaker 02

  Appreciate you, man. It was a pleasure. So yeah, definitely come check us out. We're at 42macro.com. I'm DariusDell42 on Twitter. You know, like I said, when I started this conversation, you know, a lot of what we do at 42macro, so let me start by saying, we don't do what I think you guys do, you think we do at 42macro, which is think about all this stuff and then construct portfolios as a function of all this stuff. None of what I just said for the past, you know, half an hour, prior to the first or after the first three slides, has any bearing on our clients' portfolios. The only stuff that has bearing on our clients' portfolios are our systematic portfolio construction process and our systematic discretionary risk management overlay process. If we're right on our fundamental views, then our systematic processes will trend follow us into the appropriate solutions

• 27:27Speaker 02

  from a portfolio construction and asset allocation perspective. And if we're wrong on our fundamental views, then our systematic processes will manage risk appropriately. And so that's, you know, we found that to be the best way to invest. That's what all the world's best hedge funds are doing, by the way. So wink, wink, nod, nod. If you're not investing like that, you should probably start. So 42macro.com. Check us out.

• 27:46Anthony Pompliano?

  Thank you very much, and we'll talk again next month.

• 27:49Speaker 02

  Appreciate you, brother. It's great to see you, man. Happy holidays.