#1496 Darius Dale | Trump Is Crashing The Market On Purpose?!

Darius Dale is the Founder & CEO of 42Macro. In this conversation we talk about global liquidity, what’s going on with inflation expectations, why the government may be taking the market for a foundation of strength, and how this impacts asset prices. =======================The future is being built today and the future of currency isn’t dollars, euros, pounds, or yen, it’s crypto. And Gemini thinks that’s a great thing. Because a future where money is decentralized, inclusive, and globally accessible, that’s a future that we are anxious to be a part of. Go where dollars won’t. With Gemini. =======================BitcoinIRA: Buy, sell, and swap 75+ cryptocurrencies in your retirement account. Take 3 minutes to open your account & get connected to a team of IRA specialists that will guide you through every step of the process. Go to https://bitcoinira.com/pomp/ to earn up to $500 in rewards.=======================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 we've got a great episode with Darius Dale. Darius is the founder and CEO of 42 Macro. In this conversation, we talk about global liquidity, what's going on with inflation expectations, how the government may actually be tanking the market in order to actually then build a foundation of strength. And Darius walks

• 0:46Anthony Pompliano?

  through how this should impact your portfolio and various assets. I always enjoy talking to Darius and this conversation is no different. Here's my latest conversation with Darius Dale.

• 0:54Speaker 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.

• 1:18Anthony Pompliano?

  Today's episode is brought to you by Gemini. The future is being built today and the future of currency isn't dollars, euros, pounds, or yen. It's crypto. And Gemini thinks that's a great thing because of future where money is decentralized, inclusive, and globally accessible. That's a future that we are anxious to be a part of. Gemini teamed up with futurists, technologists, and designers like award-winning artist Matt Griffin, known for his illustrations for Dune, to craft a vision of the future with crypto at its core. The creative theme, "Go Where Dollars Won't," emphasizes exploration, growth, and the crypto market's limitless potential. Whether it's going on that Martian safari to capture an unforgettable photo of a herd of woolly mammoths grazing the red planet, or using Bitcoin to pay for your

• 2:00Anthony Pompliano?

  Lyft pass to go strata skiing down the mountain peak of a breathtaking comet. Whatever adventures we'll be living, one thing is for sure. In a future this fantastic, the limits of traditional currencies simply cannot keep up. Financial innovation will usher in this new frontier. And so, go where dollars won't with Gemini. Go check them out at gemini.com/go-were-dollars-won't. Again, go check it out at gemini.com/go-were-dollars-won't.

• 2:30Anthony Pompliano?

  Today's episode is brought to you by Bitcoin IRA. Are you a crypto investor with a retirement account, but don't have any crypto in your retirement account? Then listen up, this is for you. Bitcoin IRA is revolutionizing the way Americans save for retirement by helping smart investors diversify their savings with access to over 75 cryptocurrencies. With world-class customer service, military-grade encryption, and a vertically-integrated licensed trust company, it's no wonder more than 200,000 Americans trust Bitcoin IRA to secure their financial future. Getting started is quick and easy. It takes just three minutes to open an account. Once you're set up, their team of IRA specialists will reach out to guide you through every step of the process. Whether you're transferring an IRA from a legacy bank, rolling over an old 401K, or

• 3:12Anthony Pompliano?

  starting fresh with new contribution, the Bitcoin IRA team is here to help you get access to real crypto in your retirement account. And here's the best part, as a listener to this podcast, you can earn up to $500 in rewards when you add funds to your account. That's right, search for Bitcoin IRA in the App Store or visit bitcoinira.com/pomp to join 200,000 Americans on their journey to upgrade their retirement. Bitcoinira.com/pomp to upgrade today and you can earn up to $500 in rewards when you add funds to your account. All right, Darius, I thought a great place to start our conversation today is there's tons of change that's happening, there's lots of chaos, uncertainty, people are trying to figure out where asset price is going, what's going on with the economy.

• 3:57Anthony Pompliano?

  One of the things that I know that you guys do at 42 macros, you constantly are looking at regime change. And before we get into what the data is telling us, maybe you could define what exactly is regime change?

• 4:06Speaker 02

  Yeah, great question, man. Thanks for having me, it's always a pleasure to be here. So I'll start and say that the number one thing that we do for our clients that helps them make money in bull markets and mitigate losses in bear markets is identifying the market regime and helping them position for that either via Kiss or Dr. Mo Signals. And so when we talk about market regime, what does that ultimately mean? Well, there are risk on regimes, obviously, and then there's risk off regime. That's kind of the main way you think about regimes. And then in the risk on regimes, you can sort of segment into two kinds of regimes. One, there's Goldilocks where they don't The markets are sort of pricing in risk on with the disinflationary bias in terms of the sector and factor leadership.

• 4:44Speaker 02

  There's reflation where markets are pricing risk on with an inflationary bias in terms of sector and factor leadership within asset markets or asset classes. And then in the risk off regimes, you know, we have inflation where markets are pricing risk off with an inflationary bias in terms of factor leadership. And then deflation where markets are pricing risk off with the disinflationary bias in terms of factor leadership. So first it's starting, are we risk on or risk off? That should tell you the kind of asset allocation and portfolio construction you want to have in your portfolio. And then is it inflationary or deflationary? Because that should tell you the kind of factor leadership you need, the bets you need to make, especially if you're an institutional investor.

• 5:19Anthony Pompliano?

  Okay, now what's the data telling us in terms of where we are right now?

• 5:23Speaker 02

  Yeah, well, in terms of where we are right now in the market regime side of things, you know, that's, that's reserved for our clients. That's the number one thing we do. So we obviously don't talk about that stuff outside the paywall. But we do talk about, what we do talk about outside of our paywall are the things that could cause the market regime to change. And then, so we use our grid model as one of the tools in our toolkit that may cause the market regime to change. And one of the things that our grid model has been signaling for months now is that the US economic growth is likely too slow and actually slow faster than consensus expects. So that's new. That's different from where we've been for most of the past two plus years. And this, as it relates to our resilient US economy thing where we've been generally expecting growth to accelerate and surprise consensus expectations to the upside.

• 6:04Speaker 02

  We now have the opposite conditions in place and that dynamic is likely to persist over the medium term and may cause some initial, some, some, some, some headwinds in asset markets from the perspective of potentially transitioning us to a risk off market regime.

• 6:16Anthony Pompliano?

  Now you have this great chart where you say, is President Trump doing his best Ronald Reagan impersonation by kitchen sinking the US economy and asset markets? What's that mean?

• 6:24Speaker 02

  Yeah, great question, man. So kitchen sinking, you know, I think Elon Musk made that statement popular again when he came in with Twitter with that kitchen sink. And ultimately what it means is you're trying to, you know, sort of cause the maximum amount of pain early so that you can sort of right size the system and ultimately supply the solutions that gets you sort of out of the malaise, right? You know, they're essentially trying to transition from a demand side economic economy and. Fiscal policy to a supply side economy and fiscal policy and that process could potentially be painful, at least in the short term. And this is exactly what we saw when we see when Ronald Reagan became president. If you look at this chart where we show the S and B 500 index, you know, from the three months prior to Ronald Reagan's presidency and then sort of the first kind of

• 7:07Speaker 02

  a couple of years of his presidency, we saw that the S and P 500 actually declined 27% basically, you know, in the first, you know, year and a half of his presidency, presidency as he pushed the economy into recession, you know, with some of those kitchen sinking type policies. So that may be what President Trump and Elon Musk are actually attempting to do. So maybe some light version of that, but that that's very clearly what it looks like they're attempting to do. If you read the tea leaves coming out of DC, you read the tea leaves coming out of the Treasury Department and so on and so forth.

• 7:38Anthony Pompliano?

  The January PCE report seems to suggest that we are seeing slowing growth?

• 7:43Speaker 02

  Yeah, 100%. So again, going back to that, that first chart where we show our projections for growth, we're essentially expecting growth to slow faster than consensus is expecting growth to slow. And I think the January PC report was the first major hard data report that was supportive of the soft data that we got right over the past few weeks. We've seen a lot of net bad soft data, whether it be on the PMI front, the consumer confidence front, small business optimism, all those things are, you know, declined pretty markedly in over the in recent weeks. And then now we finally actually got a hard data report. So real PC, which is 70% of the US economy, that slowed from a well above trend pace of north of 4% on a three month annualized basis to, you know, to 2% on a three month annualized basis, which is now a below trend

• 8:26Speaker 02

  level of growth. That slowdown was driven by a sharp slowdown to a well below trend level of growth of 1% for goods consumption. So, you know, we saw a bit, a bit of front running of tariffs over the past, you know, several months. And now we're starting to give that back. We had a pretty meaningful slowdown to 2.5% in, in, in services consumption from over 3%. And, and really, I think that the number one thing we have to think about is, okay, why is this slowdown occurring? You know, why are we now growing at a below trend level of consumer spending as opposed to the above trend level of consumer spending that we've seen over the past? Uh several last couple of years and the reality is is we you know this is coming. This is coming because the savings rate is actually increased.

• 9:07Speaker 02

  We saw real disposable personal income growth actually accelerate to above trend level 3.6%. But we also saw the savings rate tick up over 100 basis points to 4.6%. So consumers are getting nervous, they're getting cautious and they're pulling back on spending as a result.

• 9:21Anthony Pompliano?

  Now, is that all because of the uncertainty of policy or are there other things driving that?

• 9:27Speaker 02

  Yeah, well, it's it's I would say policy uncertainty and and and how that's contributing to the competence channel is the main driver. Because again, we saw real disposable personal income growth and nominal disposable personal income growth accelerate to above trend levels in in in January. And so the fact that we saw consumer spending flow sharply tells you that this was really being driven by the increase in the savings rate. And so why you just put yourself in the shoes of an American consumer, we're both American consumers. Why would your savings rate go up? Well, suddenly you don't feel as confident about the economy and labor market and your role within that system as you did. And so in this chart here on slide four, we show the Bank of Loma Davis US Economic Policy Uncertainty Index. And essentially outside of, you know, the height of the GFC and and and night of the COVID crisis.

• 10:12Speaker 02

  You know, we bought as much, we have as much policy uncertainty as measured by this particular index as we've essentially had ever. Uh, and so in my opinion, that's definitely weighing on growth. And we saw it weigh on growth in Q4 as well. You know, you go back to the Q4 GDP report, business investment on a real basis contracted minus over 2% in Q4. And that may be, uh, that may continue as long as we have this elevated policy uncertainty.

• 10:33Anthony Pompliano?

  You've got this slide that shows that consumer confidence is pulling back. And bullish stock market expectations are coming down as well. You know, I was definitely in the camp of, hey, Trump's good for the stock market. He's going to do everything he can to push it up. Maybe he does end up doing that over the long run, but it does feel like market expectations have shifted here.

• 10:50Speaker 02

  Yeah, 100%. And I think you're so glad you said over the long run because I think what matters here, and this is what always matters to investors, is the sequence. The sequence is more important than the destination. You know, and so as it relates to the sequence, yes, over a long-term time horizon, the net results of President Trump's economic agenda may, you know, contribute to a boom in the economy and a boom in asset markets, but it may not from the starting point, especially in the context of legislating and implementing a bunch of change from a policy perspective relative to a Biden administration that was also very supportive for the asset markets and very supportive for the top half of the K as it relates to the distributional aspect within consumers and business. But getting back to this chart, in the third panel of this chart, we show consumer confidence for the Conference Board, consumer confidence

• 11:35Speaker 02

  for high-income households. You saw that decline for the second consecutive month. It's the lowest print we've seen in years in this particular indicator. And then you see the bullish stock market expectations. That's the third consecutive month of decline in that particular sub-index, and it's now starting to fall off a cliff. And so, you know, you think about consumers, the consumption story here in the US economy has been largely driven by the upper-income part of the distribution. You know, if you think about the distributional share of consumer spending, the top third of households, you know, spend more than 50%, contribute to more than 50% of total consumer spending, whereas the bottom third only contribute 15% of consumer spending. So we have a very K-shaped economy that, in my opinion, was the reason President Trump was elected. You know, there was a popular

• 12:20Speaker 02

  mandate to sort of fix that, those distributional ills, if you will. But at the end of the day, the path they may take to fix those things likely require some pain, and they may actually be trying to front-run, front-load, rather, all of that pain, much like what we saw with Ronald Reagan, and much like what Elon Musk did with Twitter.

• 12:37Anthony Pompliano?

  On Slide 6, you have the negative impact of President Trump's protectionist policies on the North American economy. What are you guys seeing there?

• 12:44Speaker 02

  Yeah, so we got the manufacturing PMI data this morning, ISM in the US and then the global PMIs as well over the course of the weekend. And if you look at the top panel where we show the North American economies, we see the ISM manufacturing ticked out at 50.3 on a headline basis, but we actually saw it slow the fastest month-over-month slowdown in the new orders component since April of 2020, since the lockdown of April in 2020. So new orders are contracting on a delta basis as fast as they have since the COVID crash. And then if you look at Canada and Mexico's manufacturing PMIs, those are slowing sharply as well, and they're now well below 50 at kind of 47.8 a piece.

• 13:24Speaker 02

  So we're already starting to see the impact of just the uncertainty regarding tariffs and the protectionist policies, you know, kind of, you know, cause a contraction in manufacturing activity here in North America. And obviously, the implementation of those policies is going to have an incremental negative impact as well. So this is, you know, this policy uncertainty, you know, I've been saying to our clients over the past few weeks, it's we're getting clarity on bad policy like tariffs and restricting immigration, but we still don't have clarity on the good policies as it relates to deregulation, tax cuts, the size, the ultimate scope of the Doge project. You know, we don't have any clarity on the good stuff, but we have clarity on the bad stuff, and it's now really starting to weigh on the data.

• 14:07Anthony Pompliano?

  Let's talk about some fun stuff, which is the Fed. Are they going to take the 2% inflation target and move it up to 3%? Or are they going to leave it at 2%?

• 14:15Speaker 02

  This is the, this is the question of the year and one of the great questions of our time as it relates to where we are in this fourth turning process. You know, so, you know, we've been, so what you're seeing on this slide here, slide seven is our secular inflation model. And what this model is designed to do is, you know, sort of, you know, relate, interpolate the normalized change of, you know, sort of of these major, you know, economic variables that have been academically proven to be correlated or co-integrated with the underlying trend of inflation. We're trying to interpolate the normalized change of those variables in this business cycle on the, onto the underlying trend of core PC inflation to see if there is a Structural shift in the equilibrium rate of core PC inflation.

• 14:58Speaker 02

  And our model suggested there has been a structural shift in the equilibrium rate of core PC inflation. You know, it used to be somewhere around, you know, you know, the mid twos, high, sort of mid ones, sort of low, you know. It was 1.6% if you look at the 2010 to 2019 decade. It was probably closer to 2% if you look at the latter half of that. Our model suggested the equilibrium inflation, the core PCE inflation rate in the US economy is somewhere between the high twos and low threes. And it has every month since we've refreshed this model for our clients in our monthly macro scouting report since January of 2022. And so ultimately, you know, go back to that first chart where if you look at the the bottom right plot, where we show our core PC inflation forecast, we have core PC inflation bottoming here in Q1.

• 15:39Speaker 02

  And it's starting to meander higher in Q2 and by, you know, Q3, it'll be pretty clear that we're in a uptrend in core PC inflation. If our model is correct, it may not be correct, but you know, our model has been generally more accurate over the past few years than than Wall Street consensus. But if our model is correct and we do have a uptrend in core PC inflation, I think what's going to happen is the market narrative around accepting the fact that we're going to get back to 2% inflation, you know, in 2027 or 2028, you know, these made up long term, you know, forecasts that the Fed keeps throwing out there, I think the market's comfort with that will start to dissipate. Because the market will say essentially, hey, you're wrong on inflation now here in 2025. Well, I can't trust you on 2027 or 2028. And so ultimately, what it's going to do, in my opinion, again, if we're right on the uptrend,

• 16:24Speaker 02

  it's going to force the Fed to have to acknowledge that the equilibrium core PC inflation rate in this business cycle is higher. And ultimately, they're going to have a tough choice to make. Do you, if it is higher, do you want to just bury your head in the sand and kind of try to pound us back to 2% by running monetary policy way too tight? Or do you just revise the inflation target higher and give yourself policy flexibility to use your balance sheet to take some pressure off of investors from capitalizing the US government? And one final thing I'll say on this is I think they should revise their inflation target higher and acknowledge that we have a higher equilibrium level of core PC inflation, because ultimately what that'll do is it'll, it'll, it'll address some of these case Take distributional ills that we've seen in the economy that have caused so much political

• 17:08Speaker 02

  chaos in recent in recent years, right? If you you think about the marketable treasury market, we've gone from us, the private nonbank sector, me, you and everybody else that's not part of the government or part of commercial banks or part of foreign central bank reserve managers, us, the rest of us have had to go from thirty six percent share of the marketable treasury market in December of twenty twenty one. Now we have a fifty six percent shift. We've gained two thousand basis points of share in terms of us having to capitalize Uncle Sam over the past few years. And that's obviously causing it crowding out in asset markets. You can see it in terms of, you know, the Russell two thousand has been flat on its back. Basically, any stock that is tethered to the real economy has been flat for years. But every stock that's, you know, tethered to

• 17:51Speaker 02

  the digital economy, you know, we've seen that kind of case shaped play out. We've obviously seen the case shaped dynamics play out with respect to consumer spending and and and and and and the quality of life here in this country for for for for, you know, for the lower half of the K. And so ultimately, if we can stop the Uncle Sam from crowding us out from an investment standpoint, you know, that'll trickle down into stopping that, you know, eliminating some of that crowding out that we're seeing from an economic standpoint as well. So I think the Fed needs to use its balance sheet to take some pressure off of us, the private nonbank sector, because if they don't, we're going to have some significant problems in twenty twenty five in asset market terms.

• 18:29Anthony Pompliano?

  I have for years said that I thought they were going to increase the inflation target, and people used to say that I was insane. So the fact that you're even suggesting it's possible makes me feel a little bit better that maybe I'm not so crazy.

• 18:42Speaker 02

  Yeah, no, you and I have been talking about this for years, man. Absolutely. And I, you know, look, you and I, you know, I don't want to toot our own horn, but you know, I this isn't horn toot, and so close your ears if you need to. You and I have consistently stayed one to two quarters ahead of the of the consensus in these discussions. And it's not because I'm smarter than anyone, or you're smarter than anyone. It's because we're doing the work. I know your research process. I know how hard you work. I know how much you grind for your clients and for your investors. And we're doing the same thing in 42 macros. Again, it's not because they're smarter than everyone. It's because we're working harder. And that's, that's the beauty of this country. You can outwork people and have success.

• 19:17Anthony Pompliano?

  Facts. Explain slides eight through 10.

• 19:20Speaker 02

  Yeah, so slide eight through 10, real quick. So a lot of what, everything we just said here in the last 20 minutes or so, is designed to help our EU guys or whoever's listening, understand the full distribution of probable outcomes. So, and the reason that's important is because we, in terms of how we help our clients actually make money in financial markets, is we use systematic quantitative signals. I don't say, hey, growth's going to slow, so sell short stocks or sell a short Bitcoin. Or growth's going to accelerate, or liquidity is going to go up, so buy Bitcoin. You know, I say liquidity is going to up, go up, therefore our systematic signals are probably going to make sure that you're long Bitcoin throughout that process. But if my forecast, my fundamental prediction is wrong, those systematic signals will say, Gary, you're an idiot. It's time to sell Bitcoin.

• 20:05Speaker 02

  Right? And so, you know, if we, you know, so that, what we found is that the results that our clients experience from following the systematic signals are better than the results that our clients experience from our fundamental research. And, you know, as I just said, we've had some of the best fundamental research on global Wall Street for the past, since the inception of our firm. So that's what this chart on slide eight is, is just comparing how we think about asset allocation and portfolio construction, and how those things change over time for investors in their portfolios, relative to, you know, how most people think about it, which is, I think XYZ is going to happen in the future, and if XYZ doesn't happen, I lose money. Right? That's, that's how most people invest. How we invest and how a lot of the top institutions on global Wall Street invest

• 20:49Speaker 02

  is we think XYZ is going to happen, and we're fine, you know, allowing our risk management signals, you know, keep us in the proper asset allocation and portfolio construction. But if our fundamental research process is wrong and XYZ doesn't happen, then we have this risk management system come in and actually change our exposures for us, you know, sooner than we otherwise would if we were just relying on fundamental information alone.

• 21:11Anthony Pompliano?

  Makes, makes sense to me. What do you think about the crypto strategic reserve?

• 21:15Speaker 02

  Yeah, so my initial thoughts are, you know, the reason, you know, just compare us to countries that actually have sovereign wealth funds. Those countries have large current account surpluses that, you know, contribute to, you know, essentially a growing stock of reserves and savings at the country level, right? If you think about, you know, your current account is your spread between your gross savings and your gross investment in your economy. And so if you have savings, you have a trade surplus, etc., and you have a fiscal surplus, or the net of your trade surplus is greater than your fiscal deficit, then you're growing your savings and you can actually, you have savings to actually

• 21:54Speaker 02

  invest in asset markets. We don't have that dynamic. We have a 7% budget deficit to GDP, right? And so my perspective is, where are we going to get the money to actually finance a strategic crypto reserve, right? Like, you know, are we going to have to issue debt to buy crypto assets just so that we can sell the crypto assets later to pay down more debt? I mean, that sounds about as dumb as anything as I've ever heard. You were suggesting that in our pre-production, that they could revalue the gold and rotate that into crypto. That's a smart strategy. But again, I still think that if your goal as a crypto investor, if you're listening to these types of headlines, you have to understand that we don't have

• 22:37Speaker 02

  money as a country to acquire these assets. So we have to issue debt on top of any sort of gold revaluation. Do you have any thoughts on this? Because I find it to be kind of preposterous, but I hope I'm not too crazy.

• 22:49Anthony Pompliano?

  I don't think that we should put anything other than Bitcoin in the strategic reserve. And that's coming from someone who is going to financially benefit from the fact that they will put other things in there. That is good for me. But I don't think that we should do that. I instead think that it should be Bitcoin only or nothing. And, you know, it's this weird dynamic, like...

• 23:09Anthony Pompliano?

  One, those other assets are not strategic. Two, to your point, where does the money come from is pretty important. And then three, and maybe the part that people don't really think as much about is the precedent. If we set a precedent for us to speculate, let's go buy Tesla stock, let's buy GameStop, let's buy Palantir, right, let's buy Berkshire Hathaway. And if we're gonna do that, let's go put LP interest from Citadel and Millennium. And hey, Renntac, why don't you guys go in there? And oh, let's go get our favorite private credit fund. And then Apollo wants to be, you know what I mean? It's just like, where do you stop? Might as well just give the balance sheet capital to Jim Cramer. Let him pick individual stocks, right?

• 23:52Speaker 02

  Yeah, you're right. Who's in charge of this stuff, right? Like, like, are we assuming that every Treasury Secretary has the investing acumen of Scott Besson? Absolutely not. I mean, I don't want Janet Yellen managing a strategic anything reserve.

• 24:08Anthony Pompliano?

  Yeah. And my guess is that they're not gonna do active management. But the point just being like, look, we have a lot of strategic reserves of very different things. Most people know that we have a strategic oil reserve. They know that we've got a strategic gold, you know, kind of a reserve. They know that we have a strategic stockpile of medical supplies that obviously when COVID happened, right? But we also have helium and rare earth metals. We even have, a lot of people don't know this, we have a strategic reserve of cheese. Of cheese. Senator Lummis from Wyoming, she recently told me that, that was a great one. So like, look, we got like weird stuff, but it's strategic. There's a reason, right?

• 24:47Anthony Pompliano?

  We have a strategic reserve of, I think it's a home heating oil for northeastern homes.

• 24:56Speaker 02

  Yeah.

• 24:56Anthony Pompliano?

  Anything happens, right? We can go ahead and actually make sure that homes are heated. Like, there's reasons for this stuff. Bitcoin is digital gold. If you have the analog version, you should have the digital version.

• 25:08Speaker 02

  Agreed.

• 25:08Anthony Pompliano?

  There's no precedent for these other things. And so, again, what I think is not gonna matter, no one's gonna listen to me.

• 25:15Speaker 02

  They should. Why wouldn't they listen to you?

• 25:18Anthony Pompliano?

  Look, they're going to.

• 25:19Speaker 02

  You and I should just run for president in like 10, 20 years.

• 25:22Anthony Pompliano?

  Nah.

• 25:23Speaker 02

  I'll be your VP and then you be my VP.

• 25:25Anthony Pompliano?

  Nah, they, uh, they, they, there, there's a game of lobbying going on that is unlike anything that the world has ever seen because crypto is Wall Street magnified. And so now what you have is you have, uh, you know, a very high stakes game of who gets included in the reserve and you're getting a bunch of crypto projects that are going to do everything they possibly can to make sure they're included. And as we've seen, crypto projects take a lot of money. And, you know, frankly, they're willing to, uh, to do whatever it takes.

• 25:56Speaker 02

  Well, here, I still have a question and I agree with everything you just said. I still have a like a question like, cause usually actually the one thing I disagree with, um, is you said they're, they're probably going to not have an active management approach. Uh, unless they have the portfolio mirror, the, the, the global investor portfolio, they're making active decisions, right? Like just by, by adding these tokens and not other tokens, you made an active choice. You will have to make an active choice every time you sell something in the future to either pay down debt or to finance some other initiative of the government. And so these are all active choices. How do you determine like what the weights are? Like what if Solana doubles or triples in value relative to Bitcoin? Now you have this massive Solana position. Do you need to rebalance that? These are all active choices and, and choices that, you know, institutional clients have to make on a daily basis.

• 26:40Speaker 02

  And so again, it goes back to where's the money coming from? Who's managing the money? What assets are in there and how does this ultimately benefit the American public? Because I, right now I feel like it's, it's, it's really just benefiting Donald Trump from a political standpoint. He knows how popular this type of stuff is with, you know, a certain cohort of, of voters. And so just give them what they want. Tell them they're going to give them their huge Bitcoin reserve. And a lot of people aren't going to think critically about what are the ultimate implications about the stuff that you and I are talking about. Uh, and so I just want to make sure that people are, uh, thinking critically about these things as American citizens.

• 27:12Anthony Pompliano?

  The last thing I'll say is I don't think most people in the crypto community actually agree with this. I think they think it should be Bitcoin only or nothing at all.

• 27:18Speaker 02

  Good.

• 27:19Anthony Pompliano?

  So we'll see.

• 27:19Speaker 02

  Good.

• 27:20Anthony Pompliano?

  Where, uh, where can we send people to find out more about 42 macro?

• 27:23Speaker 02

  Uh, go 42macro.com, come check us out. You know, we got, uh, we got a little something for everything. You know, we got clients all across global Wall Street and the investment management space. We have retail clients all over the world, 80 different countries. Uh, you know, we're doing a good job for our clients and we're going to expect to continue doing a good job. So thanks for checking us out.

• 27:38Anthony Pompliano?

  Legend. All right, thank you very much. We'll do it again.

• 27:41Speaker 02

  Thank you, brother.