Bitcoin & Stocks Are Going Higher (The Money Printer Is Coming) | Darius Dale

Darius Dale is the founder and CEO of 42 Macro. In this conversation, we break down whether Scott Bessent is bluffing the bond market, why stocks keep hitting highs, and why balancing the budget may be impossible. We also discuss the K-shaped economy, AI, bitcoin, and America's political realignment. =================== Arch Public is an agentic trading platform that automates investment strategies across Stocks, Commodities, ETFs and Crypto. Whether you’re rotating into AI & Gold, allocating to the S&P 500, or accumulating Bitcoin, Arch Public executes your plan 24/7 without ever taking custody of your assets or funds. Sign up today at https://www.archpublic.com, and start your FREE automated trading strategy! =================== New description for Lava with a clickable url: Lava is a global platform for bitcoin financial services. Spend with Lava Card and earn up to 5% back in bitcoin with every purchase— all with no annual fee, no FX fees, and zero spread. Plus you can borrow against your bitcoin at the lowest rates, earn yield on cash, and move fiat or stablecoins globally. Get started at https://www.lava.xyz/POMP =================== Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/pomp =================== 0:00 - Intro0:47 - Is Scott Bessent bluffing the bond market?7:34 - Druckenmiller's op-ed & Bessent's playbook13:13 - Why stocks & bitcoin are near all-time highs16:42 - Why balancing the budget is impossible & the impact 24:30 - Housing, young vs old & the lock-in effect28:02 - Cut, grow, or print?32:12 - How AI & bitcoin can level the playing field36:15 - Social mobility & keeping up with the Joneses39:00 - America's political realignment & future outlook49:45 - Power, politics & the path forward

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

• 0:00Speaker 00

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• 0:29Speaker 01

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• 0:35Speaker 02

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• 0:44Speaker 03

  And so you have this powerful telling for earnings at the same time you're getting, you have this problem that keeps requiring policy intervention in the form of financial oppression or monetary debasement. That is a reason for stocks to be at or near all-time highs. And it's one of the reasons why we think stocks will go to make significant highs from here over the next 12 to 18 months, in our view. We don't think this bull market is over. What would stop it? What would stop it?

• 1:07Anthony Pompliano?

  What's going on, guys? Today we get a great conversation with Darius Dale. In this conversation, we talk about the Besen bluff, the Besen bazooka. What's going on with interest rates? What's going on at the Fed? What's going on at the Treasury? What's going on in the economy? How all of this is tied together and why so many people are upset, yet so many people are getting so rich? All of this is tied together in a way that you probably don't understand, but if you listen to this conversation, you will. Here's my latest conversation with Darius Dale. All right, Darius, I want to talk about the Besen bluff. You like that, huh? You like that? No one used that one yet. Is he bluffing or is he got the goods? Can he intervene in the market and get everyone back on sides? Or is it just a bluff?

• 1:47Speaker 03

  I apologize in advance, Scott.

• 1:49Anthony Pompliano?

  You didn't think that was coming, huh?

• 1:53Speaker 03

  No, no, no. Look, you know, I'm here to speak my mind and say what the data lead me to tell people. And ultimately, I think the, I think your characterization is partially accurate. I don't think it's fully accurate because I do believe we're in a fiscal dominance regime. And ultimately, if the bluff fails, then he's got backup. And we know what backup looks like. It can either take the form of an expansion of reserve management purchases by the Federal Reserve. We could see, we're probably, we're going to see, in our opinion, a substantial degree of a relaxation of bank regulation that will create the balance sheet capacity for them to, you know, address this kind of supply to demand imbalance in the treasury bond market. And if, and if that's not the preferred path, or if that, a bank

• 2:35Speaker 03

  deregulation process takes too long, you could actually see the Fed come out, you could see Besen sort of direct the Fed to come out and essentially say, hey, look, we need to get the cap yields at a certain level in order to achieve our, you know, they'll, they'll make it up. You know, they make it all this stuff up the whole time, by the way. They'll make up, you know, this is what we need to do to achieve our price stability mandate, or our labor mandate, or, you know, or our moderate long-term interest rate mandate, which by the way, that's the Fed's third congressionally stated mandate that no one ever talks about.

• 3:01Anthony Pompliano?

  So there's the Besen bluff, but I think it's backed up by the Besen bazooka.

• 3:06Speaker 03

  Ooh, what's the bazooka?

• 3:08Anthony Pompliano?

  That he has unlimited firepower.

• 3:10Speaker 03

  This man brought a butter knife to a gunfight. What are you talking about? Six billion dollars of buybacks? Get out of here.

• 3:16Anthony Pompliano?

  Yeah, cuz he, cuz he, all he's doing, he's just testing. He's like, I think of it kind of, people think of the US government as like, America's army in a war. And what we learned over the last 25 years, one, we shouldn't be in foreign wars, another topic, but is the insurgents, they understand something that America had a hard time learning for a while. What they used to do is, let's say that there's a base somewhere in the Middle East. They would test. So maybe they send one guy over, he takes a couple of shots, runs away. How'd they react? What'd they do? Did they all of a sudden get up and go full security? Did they send someone after him? What weapons did they have? What vehicles?

• 3:56Anthony Pompliano?

  How many people? Next day, somebody else from a different angle. And they just kept kind of prodding and prodding and prodding. And then they would learn. And then they would start to understand who they were up against. And as Americans, we knew what they were doing. It's not, you know, you're not that stupid. You're like, all right, that guy just shot at me. That guy's got a camera.

• 4:14Speaker 03

  Yeah.

• 4:15Anthony Pompliano?

  Audible, audible.

• 4:20Speaker 03

  Yeah, we need to do something differently, yeah.

• 4:21Anthony Pompliano?

  So that's kind of, to me, what Besen is doing, is he's like, all right, if I go here and I say, I'm gonna go to six billion, what happens? But he knows that he could throw the kitchen sink, but he kind of doesn't need to do it yet. And so he could use words, he could do a little prodding. He's kind of like trying to figure out where's his pressure points. But I do think at some point, if the market keeps calling the bluff, then he's like, all right, you guys want to test me. He's got a lot of firepower.

• 4:50Speaker 03

  He's got a lot of backup firepower, to be clear. And I agree with your, your theory here, that he's sort of prodding the market. Like, look, ideally, he would not have this problem set, right? Ideally, that's the ideal.

• 5:01Anthony Pompliano?

  You think that's what he thinks?

• 5:02Speaker 03

  Yeah, exactly. Ideally, you wouldn't have to do any of this. That would be, that's the ideal problem. But since you can't control the fact that there's a geopolitically driven supply to demand imbalance in the treasury bond market, he has to respond to it with policy intervention in order to do his job. By the way, he's just doing his job, you know, his, his job to get financing costs down and capitalize the US government.

• 5:20Anthony Pompliano?

  He, just, just to be clear for folks, I do think that he is one of the most clear-headed communicators when it comes to what is happening, what are we doing in response? And I think what sometimes is taken as his irreverence for the critics, et cetera, is actually what we should have had more from other Treasury Secretaries or Fed Chairman. Because what it allows him to really do is he's kind of just like, hey, man, here's the game being played on the field.

• 5:51Speaker 03

  Yeah.

• 5:52Anthony Pompliano?

  I think of it as, you know what, Fisher chess is?

• 5:54Speaker 03

  Oh, what's that?

• 5:55Anthony Pompliano?

  Fisher chess is when they mess up the pieces at the start of the game.

• 5:58Speaker 03

  Oh, interesting.

• 5:59Anthony Pompliano?

  So I know somebody who is one of the top people in the world at one-minute Fisher chess.

• 6:05Speaker 03

  Wow.

• 6:06Anthony Pompliano?

  He's excellent. He hates when I bring it up, so I'm not gonna say his name, Evo. And the whole idea is, when you start the game, it's just, what is the outlay of the pieces? Like, you got to start from that point. That's kind of what he's doing, right? Is he's like, look, man, the chess pieces are where they are. I didn't put them here, but I gotta play the game. I gotta win. And that kind of feels like he's the right guy for the job.

• 6:29Speaker 03

  Yeah, I've been saying this. He's one of the, you know, certainly in the, in the modern post-war US economy, and maybe in the, since the turn of the, you know, the 1920, turn of the 20th century, he's probably the best fit chair, or Treasury Secretary. You know, we've seen in, in terms of his understanding of all these dynamics, like, a lesser Treasury Secretary would be either getting dragged by the market and not understanding the full scope of the game. Like, it's very clear to me that he understands that there is a supply to demand imbalance in the treasury bond market. Why else would you be intervening alongside Japan's Ministry of Finance to defend the yen? He understands the circular nature of all this. The US is a net international investment deficit economy. We have a current account deficit of three to 4% annually. We need to find 3% to 4% of our growing GDP's

• 7:12Speaker 03

  worth of capital every year, just to have the same level of economic outcome, let alone growing the economy. And so, you know, this is a big problem in the context of foreigners owning 30% of the market, the private non-bank sector owning 60% of the market now, up from 36% in the, in the 2021. And so you have all this, you have such a change in the composition of the treasury ownership, that now incremental units of supply will be met with incremental requests for higher ex ante yields. That's essentially the condition that we, that's the Fisher chess condition that he's inheriting, and he inherited at the start of 2025. And so, you know, we can quibble with his communication style, to your point. We can quibble with what at times seems like a touch of arrogance at some point. But I think it's coming from

• 7:56Speaker 03

  a place of saying, look, you guys don't get it. This is a big problem. He can't come out and say it's a big problem, by the way. I can say it's a big problem. It is a big problem.

• 8:04Anthony Pompliano?

  He could think it.

• 8:05Speaker 03

  I know he thinks it, otherwise he wouldn't be taking the policy action that he's taking. But at the end of the day, I think he is responding to the appropriate thing to respond to, which is the supply to demand imbalance, the geopolitically driven supply to demand imbalance.

• 8:18Anthony Pompliano?

  When Druck published the op-ed that was AI-written, and everyone freaked out.

• 8:23Speaker 03

  Which, by the way, this is Stan Druckenmiller. Who cares if he uses AI to write his, this is Stan Druckenmiller. The man did 30% annualized returns with no down years for 30 years. Go find me another investor in history who's ever done that.

• 8:36Anthony Pompliano?

  Bernie Madoff.

• 8:37Speaker 03

  Yeah, exactly, exactly. Bingo.

• 8:39Anthony Pompliano?

  All right. Do you think that Besen and Druck talked, and maybe Besen encouraged him to publish it? That's my standing theory. And the reason is because everything that was said in that piece, I believe Besen believes.

• 8:55Speaker 03

  Yeah, of course he believes, yeah.

• 8:56Anthony Pompliano?

  He just can't say it.

• 8:57Speaker 03

  Of course.

• 8:58Anthony Pompliano?

  So it's very helpful if one of your best friends says it publicly for you. And then you could take it, and it's like going to the teacher, say, look, somebody else said this. You know, hey, we should, he's smart.

• 9:09Speaker 03

  Yeah.

• 9:10Anthony Pompliano?

  The messenger is just as important as the message.

• 9:12Speaker 03

  Yeah.

• 9:13Anthony Pompliano?

  And if you're Druck, you weren't gonna write that unless maybe you got a phone call from your friend. And you on vacation, probably somewhere in the Mediterranean, hey, man, Grok, write this shit for me.

• 9:24Speaker 03

  Yeah.

• 9:25Anthony Pompliano?

  Right? Let it fly.

• 9:26Speaker 03

  Let it fly. I love how you think it was Grok, too, by the way.

• 9:31Anthony Pompliano?

  Yeah, he's like, write this thing for me. He literally has it sent to the, you know, Wall Street Journal or whatever. And I just imagine him closing his laptop, saying, good luck, guys. See you in a week.

• 9:41Speaker 03

  Yeah. You know, I, I try to, I'm not, I'm a conspiracy theorist in the sense that a lot of times you do enough analysis, you just wind up at the natural conclusion of things. And I feel like that's kind of what we do in our research of 42 macro. We just keep pulling on threads until we can't pull on the thread anymore because the data doesn't exist. That's kind of the nature of our research style. And does this, it's, did Druck, you know, here's what I think. Whether or not Druckenmiller and, and Stan, or Stan Druckenmiller and Treasury Secretary Scott Bessent colluded on that, I think the outcome would have been the same regardless, which is. The more the public knows about this, the more likely it is that the politicians in DC

• 10:25Speaker 03

  who are responsible for addressing the problem will take the appropriate action. And so whether or not you colluded or not, I still think you too.

• 10:33Anthony Pompliano?

  I don't even think it's collusion.

• 10:34Speaker 03

  He wants this outcome. This is a good outcome.

• 10:36Anthony Pompliano?

  I don't even think it's collusion. I think actually my point is, uh, we've been talking about Besen from a financial like operator standpoint as the Treasury Secretary. I think this dude is dialed when it comes to the political process as well.

• 10:53Speaker 03

  Oh, yeah.

• 10:54Anthony Pompliano?

  And if there was a conversation before that op ed was published and maybe Besen encouraged it.

• 11:02Speaker 03

  Yep.

• 11:03Anthony Pompliano?

  This dude understands Washington DC better than most of the politicians understand it.

• 11:07Speaker 03

  Yeah, of course.

• 11:08Anthony Pompliano?

  And so what that then tells me is if he understands domestic policy and the political process, he might be the best person we should be sending to Japan or some of these places and saying, hey, Scott, I think in Trump's words, one time he said, I get the markets rallied up. He gets them to calm down.

• 11:28Speaker 03

  Yeah.

• 11:29Anthony Pompliano?

  And so now all of a sudden, we have a very unique individual, it seems like, who is financial operator, investor, political operator, and a great communicator. We have not really had somebody in that seat and he's happens to be in the seat at a time where like we kind of need a person like that to navigate all this. It's fascinating.

• 11:49Speaker 03

  It's it's beyond fascinating. I think one of the best things that's happened in the last few years at American policy is the downgrading of all the other voices around President Trump and the upgrading of Treasury Secretary Scott Bessent's voice. I mean, you know, at the risk of being, you know, sued or yelled at, I mean, we obviously had a nepo baby running the Commerce Department. You know, he his views needed to get, go somewhere else and say that and do that. Go work on this. We have bigger fish to fry. We have a massive geopolitical driven like this, this, in my opinion, the PC one of all of global finance is the fact that Treasury bonds are no longer considered to be a safe haven asset. Now, why is that? In my opinion, and I think the opinion of other, you know, smart people, people much smarter than me, Ray Alio and Neil Howe, Peter Turchin, they would say that, you know,

• 12:34Speaker 03

  America's sick, a sick patient internally. And I would argue, and I'm sure Ray Ali would argue, uh, that America is a sick patient internally because we have too much, we have such a high level of public sector debt service and it's squeezing out income and wealth accumulation for households, small businesses, and interest rate sensitive sectors on the bottom of the K. And part of the reason that's happening, that squeezing dynamic, we talked about this in previous, in previous shows and discussions where the amount of money that the US Treasury needs on an annual basis to either roll over, refinance its existing debts, roughly about 12 to 10 trillion over the next year, uh, to capitalize the new debt in terms of the budget deficit, that's about 2 trillion over the next, uh, year. And then the amount of money it needs to refinance into a higher interest rate regime, that's about 125 billion over the next year.

• 13:19Speaker 03

  So you're talking about over $12 trillion that it needs. It's up from about less than 5 trillion prior to COVID. And so that's 40% of global savings, the flow of global savings over the next year. That used to be on average, 20% of the flow of global savings prior to COVID. And so we've doubled the, the, the, the demand for capital. The US Treasury has doubled its demand for capital. And then obviously in a world where there's not an infinite amount of capital, it's draining resources from the bottom of the K shaped US economy. It's obviously draining resources from around the world and it's causing more inflation. We just have a persistent supply shock, uh, for capital and it's persistent demand shock for that capital from the Treasury and this is causing all sorts of outcomes.

• 13:57Anthony Pompliano?

  If I said to you, close your eyes and imagine a world where there is $100 oil price, 5%, 10 year yields, the Fed just raised interest rates for the first time in a while. And there's still a geopolitical conflict going on. There seems to be a lot of disagreement or waning support for, uh, the current administration going into the midterms. And the entire economy seems to be propped up by a single sector and AI and everything else seems to be suffering. And I said, now decide are stocks at all time highs or below?

• 14:37Anthony Pompliano?

  You probably would say not at all time highs, but we're pretty dang close. Bitcoin is up in that environment. Many of these assets are up. How do you rectify those two things where many of these data points actually should tell us like they should be headwinds, like assets should be under pressure? But it kind of feels like investors don't care. They're just like, eh, I still want to go buy Nvidia, you know? I still want to own some Bitcoin.

• 15:02Speaker 03

  Look, uh, I appreciate that thought exercise and it was really thoughtful. Uh, I will push back mildly to suggest that, uh, I would, I would actually argue that stocks would probably be at all times because of some of the dynamics you listed.

• 15:14Anthony Pompliano?

  Okay.

• 15:15Speaker 03

  Uh, in our view, we've been bullish, we've been structurally bullish since January of 2023, save for the three months in February through April of 2025. Uh, we saw Paradigm B, the, the cut the deficit portion as being negative for the economy. The markets at the time were correct on that. Uh, but we were also correct to immediately pivot back to being bullish, which was where we had been since Jan 2023, uh, when we noticed the pivot to running the economy hot, uh, in, in April of last year. The reason I think that we stocks should be at or near all time highs is for a couple of reasons. One, this policy intervention associated with this supply and demand imbalance, they're not going to sit idly by. And we've, we've long forecasted that an increasing amount of policy intervention, uh, whether it be through extension of dovish net financing policy. This is some of the more dovish net financing policy we've seen on record, uh, for the US Treasury and it's only going to get more dovish, uh, in the coming years.

• 16:00Speaker 03

  Uh, we've seen, uh, the Federal Reserve, uh, cut interest rates by 175 basis points with the inflation, you know, with missing their inflation target for five consecutive years, now going on nine consecutive years, um, in terms of their projections. Uh, we've seen the Federal Reserve monetize US sovereign debt, uh, in the middle of a nationwide affordability crisis. You know, we've seen all sorts of reactions to this supply, demand imbalance in the Treasury bond market. And then you have this orthogonal demand shock called AI. This is a massive AI capex bubble. You're talking $800 billion in hyperscale capex next year, growing to 1.2, 1.3, 1.4 trillion dollars, uh, next year. And so obviously that creates a powerful tailwind for earnings. Um, and so you have this powerful tailwind for earnings at the same time you're getting, uh, you have this problem that keeps requiring policy intervention, um, in the form of financial

• 16:45Speaker 03

  oppression or monetary debasement. That is a reason for stocks to be at or near all time highs. And it's one of the reasons why we think stocks will go to make significant highs from here, uh, over the next 12 to 18 months in our view. We don't think this bull market is over.

• 16:58Anthony Pompliano?

  What would stop it?

• 16:59Speaker 03

  What would stop it? Uh, a, a, a, a lack of realization of the policy intervention required to address the problem. Like if they wanted to pivot back to Paradigm B and be serious about cutting the deficit.

• 17:11Anthony Pompliano?

  Stop, stop.

• 17:13Speaker 03

  Again, I don't, I think it's a very low probability event. If the world's smartest man and best inventor of all time and best innovator of all time, if he couldn't do it, I just, I don't know how, like, you're not going to get Congress to do it without a crisis.

• 17:26Anthony Pompliano?

  I did, uh, I did a little, uh, mental, uh, gut check.

• 17:30Speaker 03

  Yep.

• 17:31Anthony Pompliano?

  Uh, recently, and I went back and I was thinking, okay, at the start of the Trump administration, what was I excited about? Bouncing the budget was probably the number one thing. Closing the border was another thing.

• 17:41Speaker 03

  He fooled you.

• 17:42Anthony Pompliano?

  Well, he, he closed the border.

• 17:43Speaker 03

  I'm talking about the balance of the budget.

• 17:45Anthony Pompliano?

  So balancing the budget and, and I tried to really think through like, why was I excited? I went back and I looked at some of the stuff I read and I tweeted and, and was trying to almost look at it like, okay, what did I believe? What went wrong? And a big part of it was actually not the Trump administration as much as it was the Trump administration deputizing Elon and like, dude, this guy's the best in the world at doing this, right?

• 18:06Speaker 03

  They're going to find the fraud, the waste, the abuse.

• 18:08Anthony Pompliano?

  And as I was looking through my Twitter feed, I found absolutely hilarious in hindsight, different data points that we kind of forget. And the one that I, I've talked about in the past is if you remember, he was inside of, I think it was like the education building or USAID wherever. And there was politicians outside banging on the doors. If you remember, there was a video of the security guard and he was just standing there and they were like, why are you protecting him? He's killing people, blah, blah. And the security guy was just like, I'm just doing my job, man. Like, you know, he's just, he was like, he is not about it.

• 18:42Speaker 03

  Yeah.

• 18:43Anthony Pompliano?

  And if we had said, if they try to balance the budget, could you imagine if the politicians literally went outside the building and tried to physically stop them?

• 18:53Speaker 03

  Yeah.

• 18:54Anthony Pompliano?

  You'd be like, there's no way they would ever do that.

• 18:55Speaker 03

  Yeah, that's true.

• 18:56Anthony Pompliano?

  Right? Like, you're just like, of course the politicians want to balance the budget.

• 18:59Speaker 03

  Yeah.

• 19:00Anthony Pompliano?

  And so in hindsight, I was naive in the sense of it's not actually about can you balance the budget? It's a lack of will.

• 19:07Speaker 03

  Insane.

• 19:08Anthony Pompliano?

  Wanting to do it.

• 19:09Speaker 03

  Amen.

• 19:10Anthony Pompliano?

  And why is there a lack of will? Well, if you're a politician, it's a pretty good pitch to be like, look at all the stuff I came back from Washington for all of you constituents with. And so then, as I was going through this, actually, I said, dude, there's no way. It, it is impossible. I, I am now convinced it is impossible. It doesn't matter who goes in, any of that stuff. So can we ever have a recession?

• 19:34Speaker 03

  No.

• 19:35Anthony Pompliano?

  Can we ever have any sort of prolonged market downturn going forward?

• 19:39Speaker 03

  Oh, I love it. Thank you for that, that trip down memory lane and thank you for your intellectual honesty.

• 19:44Anthony Pompliano?

  Yeah.

• 19:45Speaker 03

  Not a lot of people who do what we do say we get things wrong.

• 19:47Anthony Pompliano?

  All right, listen, could you imagine if they had bounced the budget? That'd been amazing.

• 19:53Speaker 03

  That would have been amazing. That's the best way out of this mess.

• 19:55Anthony Pompliano?

  On what planet was I or anyone else thinking that the politicians who quite literally accumulate power by giving away free money were ever going to let that happen?

• 20:04Speaker 03

  No, they're not.

• 20:05Anthony Pompliano?

  I made the mistake of every human. I thought that they had good intentions.

• 20:10Anthony Pompliano?

  I thought they actually cared about the future of the country. I thought they cared about the debt that was going to be inherited by our children.

• 20:18Speaker 03

  Their own children, their own children. Don't even worry about my kids or your kids. What about your own kids? What do you think we're headed with this? So, uh, thank you for all that. And I appreciate again, your intellectual humility and intellectual curiosity are two things I really admire about you. Uh, and hopefully I'm following in your footsteps as well there.

• 20:33Anthony Pompliano?

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• 21:18Anthony Pompliano?

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• 21:32Speaker 03

  A couple of things on this balance budget. Uh, I'm sorry that you were fooled by Doge. Hoodwinked by Doge. Uh, uh, I was very on record, uh, very loud on record, uh, in the fall of 2024 when we replaced our 30% allocation to bonds with gold in our, in our flagship, uh, asset allocation, our Kiss model portfolio. Uh, we did it with the, the recognition that neither the Republican Party or the Democrat Party were serious about balancing the budget. When you looked at the, the scoring, uh, for Trump's policy proposals, you couldn't tell the difference. It was like a Coke versus Pepsi test with Kamala Harris.

• 22:06Anthony Pompliano?

  Well, I, uh, if I remember correctly, um, and this will show you how good my long-term memory is despite my loss of short-term memory. Uh, Kabuki Theater, I think was a phrase that you were using at the time.

• 22:17Speaker 03

  It was, it was. I did call it Kabuki Theater. I said, that chainsaw is really dumb. He's gonna regret the chainsaw because it's not gonna solve the problem. But, but

• 22:24Anthony Pompliano?

  It looked cool.

• 22:25Speaker 03

  It looked cool. It made headlines. It did what it was supposed to do in a 24-hour

• 22:29Anthony Pompliano?

  Viral.

• 22:29Speaker 03

  Cycle. Exactly. Did exactly what it was supposed to do. But those of us who are serious about tackling these challenges, understand that that was not gonna be the credible path. You actually need Congress to get on board and the probability that Congress would get on board when both parties are projecting to expand the budget deficit to record non-war, non-recession wides, you have to give up the ghosts. And so, um, you know, just on, and then one final thing I'll say on these politicians, uh, yeah, I'm talking to you, all you politicians in DC, you know, the reason that, the reason they don't care about the budget deficit is to your point, you know, one party spends money and gives it to their constituents to, to, to stay in power, to get, gain power, stay in power. The other party cuts taxes and gives and supports their constituents' income that way. Uh, and I think, um, you know, this conversation in the country about, you know,

• 23:14Speaker 03

  buying votes, if you will, I think we have to realize that the wealth pump is on. You and I talked about Dr. Peter Turchin's, you know, thesis and his colleagues at the complexity science hub. Uh, they have this term called the wealth pump. I call it the reverse Robin Hood effect because it makes it easier to, for people to figure out what we're talking about. Uh, you know, the reverse, just imagine what the Robin Hood effect is in reverse. Like, so that's in my opinion, what's happening, uh, with Congress and you can

• 23:36Anthony Pompliano?

  You mean the people who don't have money have to fund the people who have money?

• 23:39Speaker 03

  Yes, that's exactly what's happening.

• 23:40Anthony Pompliano?

  Yeah, that's a mind bender.

• 23:42Speaker 03

  Here's some statistics for this. Uh, so we see when you break down, there's probably like 700 different line items in the monthly treasury budget statement. So we had to do some data science to figure out, um, you know, where the money goes and most of the money goes to social security Medicare. We know that's, you know, it's probably like 45, you know, percent of the, the outlays, but

• 23:58Anthony Pompliano?

  Where's it come from?

• 24:02Speaker 03

  But, uh, the point I'm making is, is when you look at the rest of the spending and you tally up all the money the government spends on poor people via means tested programs, federal government, uh, spends on poor people via means, these programs, somewhere about 1.2 to 1.3 trillion dollars annualized. Uh, and it's been that, it's been, you know, these ratios have been roughly the same over the last, you know, dozen, dozen years or so. Uh, when you look at the money the government spends that pretty much winds up in the pockets of rich people like us, it's about 2.6, 2.7 trillion dollars. Uh, and you know, about 1.1 trillion of that on its way to 1.2 trillion is, is net interest on the debt. Obviously, poor people don't own financial assets, much less treasury bonds. Uh, and then the, uh, another trillion on, on defense, on net defense. And obviously, that money doesn't go to poor people. It's going to folks who work at SpaceX, Palantir, Anduril,

• 24:46Speaker 03

  you know, all these, you know, defense suppliers. And so you're talking about 36% of the money the federal government spends, about eight, almost eight trillion dollars of federal government spends, is going directly to rich people where only 17% is going directly to poor people. Now that's a, that's an issue. And this has been compounding for, for a long period of time. And so, you know, I don't know how we get out of this without more political dysfunction and, and more just, you know, political upheaval. Uh, but also I still think we wind up in a better place, maybe, you know, five, 10, 15, 20 years from now.

• 25:15Anthony Pompliano?

  If you go and you look at

• 25:16Speaker 03

  Because it'll get that bad.

• 25:17Anthony Pompliano?

  Of course it's gonna get that bad. Look at, uh, social security. Where's the money come from? Young people are funding the old people. The old people, there's a lot of them. The young people are not growing as fast as the older cohort. And therefore you have quite literally a Ponzi scheme that is being run, which, whether people like it or not, whatever, the idea that the young people are funding the old people is the opposite of what I think people generally, philosophically believe should be happening is the older generations should be looking out for the younger generations. You should be giving a better future and all this stuff. We have the opposite happening in this country. If you look at homes, there is a very large cohort of people

• 25:59Anthony Pompliano?

  who do not want home prices to go down. And it's all the people who own the homes.

• 26:07Anthony Pompliano?

  Because every time you hear affordability, they hear, I'm gonna lose money on my home.

• 26:12Speaker 03

  A hundred percent.

• 26:13Anthony Pompliano?

  And right now, I've actually seen in the last two weeks or so, a number of articles that are talking about mortgage rates are ticking up, interest rates have gone up, home prices are getting slashed. If you don't own a home, you don't really understand. There's a full-on panic in this country of anyone trying to sell their home because they're like, wait a minute, there's a gridlock, there's not a lot of home, uh, transaction volume happening. And in order for me to sell this home, I've got to drop the price to such a low level that I might as well just keep it.

• 26:45Speaker 03

  Just keep it.

• 26:47Anthony Pompliano?

  And so then they turn and they say, okay, well, could I rent it? But one of the things that goes undiscussed is a lot of the boomer generation, and I say this as a loving term, they live in homes that they've lived in for 20 years. Young people don't want those homes. They don't want the McMansion in the suburbs. That's a 20, 25, 30-year-old home. And so I was explaining to somebody recently that has one of these homes and is trying to sell it. And I've watched them for a year and a half, two years now. You have a product that the person who's supposed to buy does not want.

• 27:25Speaker 03

  And can't afford.

• 27:26Anthony Pompliano?

  And you have it at a price point where they quite literally do not have the money.

• 27:30Speaker 03

  Yeah.

• 27:31Anthony Pompliano?

  So even if you were to say, I'm going to put new paint or you know what, like, like, put lipstick on it, they still can't afford it. So you have a choice to make. Either you're the bag holder and you gotta figure out something to do, or rip the Band-Aid off. And that's what's happening across the economy is people are realizing like, wait a second. So we have actually young people are funding older people, which puts immense amount of stress on government spending.

• 28:00Speaker 03

  A hundred percent. Man, this is a, it's an intractable problem. I love your, your analogy. That, that makes a lot of sense, especially in the context of what we were talking about earlier. The spread between the, uh, marginal mortgage rate and the effective mortgage rates, the marginal mortgage rate is what you would, you pay if you bought a, got a mortgage today and the effective mortgage rate is what's the mortgage on all the existing mortgage stock of debt in the economy. You know, it's about 250 basis points, but it's roughly an all-time wide spread. And so that's obviously contributing to this lock-in effect, uh, that you're, you're essentially alluding to, uh, as well. And part of the reason that spread is so high and part of the reason the spread between mortgages and treasury bonds is, is, is not historically wide. It was wider a few years ago, but it's still, you know, structurally wide, you know, relative to what had been for decades. And part of the reason that spread is wide as it is, is going back to what we talked

• 28:44Speaker 03

  about, that 40/20. The government now needs 40% of the world savings as opposed to 20% of the world savings. So there's a missing 20% of the world savings that used to go to capitalize our mortgage market, used to go to lend to small businesses, it used to go to lend to low to median income consumers, it used to go to lots of things that is no longer going to. Um, and it's really just, I mean, it's, it's, it's a perverse set of incentives because ironically, the only ways to deal with this, this, this will be calling the debt disease are three ways. We're three acceptable ways. There's, there's a fourth, there're fifth, there's five ways, two of them are bad. Uh, one of the acceptable ways is you can reduce the deficit, you know, try to cut your way out of the problem. Uh, that's what we call paradigm B. Uh, you can, right now we're in paradigm C. You can try to boom the economy, grow your way out of it, or try to, you know, try to grow

• 29:29Speaker 03

  the denominator faster than you're growing the numerator. Uh, that's what we're attempting to do. And, and we're having quite a bit of success with that. We're growing nominal GDP on X government and net exports basis. It's 8% in the most recent quarter. It compares to a law of a pre-COVID mean of 4%. So we're doubling our nominal growth rate. So we are succeeding at, at paradigm C. Uh, but ultimately the factors of production will eventually limit how fast you grow, uh, unless you create more factors of production, which obviously is part of the reason why they're so gang-ho and, uh, gung-ho in, in advancing AI, but that's a different topic.

• 29:57Anthony Pompliano?

  Uh, supreme intelligence, we call it now?

• 29:58Speaker 03

  Yeah, whatever y'all wanna call it, man.

• 30:02Anthony Pompliano?

  We don't like artificial, we like supreme.

• 30:04Speaker 03

  Exactly. Uh, and then there's paradigm D. Typically what happens is, you know, you run out of growth, uh, and then ultimately you have to start printing the demand for, uh, the debt securities. Uh, the issue is, is the only path that leads to less political dysfunction, and there's, uh, the other two, obviously default and total war. Uh, historically, countries where when they needed money, they would drum up war and try to go take money from some other people. They would go get it. They would literally go get it. They'd cross borders and try to take money. That's, that's, that's, assume those are less desirable outcomes. Let's focus on these three. The only one of these three outcomes, acceptable outcomes, cut, grow, print, that actually leads to less political dysfunction, more societal cohesion is

• 30:42Speaker 03

  Reducing the deficit is because the other ones lead to eventually inflation and eventually inflation in an economy that already has a nationwide affordability crisis where by the way 70% of JP Morgan senior economists said that 70% of Americans live paycheck to paycheck. That is a heartbreaking statistic pop. As someone who grew up barely hoping to live paycheck to paycheck because we didn't even have paychecks, the hopelessness you feel as a human being when you can't accumulate savings and get ahead and at least aspire to join the capital class, which is the only class in this country and this capitalism society that allows your life to get better over time. You need to have your money making money for you. If you're just using your labor to your hand in the mouth, you're never

• 31:26Speaker 03

  going to get ahead, especially in this in an economy where the laws, the regulations, the monetary policy and the fiscal policy is designed to support capital holders, not labor. And so, and that's by design, by the way, it's not on accident. We talked about that.

• 31:38Anthony Pompliano?

  The craziest part of this whole thing. Today's episode is brought to you by Simple Mining. Bitcoin mining has a reputation for being complicated, risky and hard to evaluate as a real investment. If you're considering mining in 2026, what actually matters isn't headline profitability. It's uptime, repairs, and whether the operation is run like a real business. That's why I've been using Simple Mining. They're based in Cedar Falls, Iowa, and they run a white glove hosting operation where you own your miners. You choose your own pool and you have Bitcoin sent directly to your wallet. They were featured on the INC 5000 list as the fastest growing company in Iowa with over 40,000 machines under management. What stands out to me is execution. They have the number one rated ASIC repair center and for the first 12 months repairs are included.

• 32:22Anthony Pompliano?

  If mining margins get tight, you can pause with no penalties. And if you want to resize or upgrade your fleet, there's a marketplace to resell equipment instead of being stuck. To help people think it through whether mining actually makes sense right now, they put together a short resource called the 2026 Bitcoin Mining Blueprint. It walks through the five mistakes investors make when allocating to mining, and they also explain how to avoid them before deploying capital. If it sounds interesting to you, you can get it for free at simplemining.io/pomp. That's simplemining.io/pomp. Go check it out today and see if you should get into the mining game. The craziest part of this whole thing is the one technology that can lift all of

• 33:02Anthony Pompliano?

  these people out of the situation is the exact technology that a bunch of rich unemployed kids, for the most part, are railing against.

• 33:13Speaker 03

  Yeah, which is ironic. Yeah.

• 33:15Anthony Pompliano?

  Right? And you basically have two groups of people. You have a bunch of nerds who are saying, ooh, we created something that could kill everybody. Okay. And then you've got a bunch of other people who are saying, oh, this AI thing, don't use it. Yeah. Don't use it. But if you look at, what does Bitcoin do? It creates all these computers that work for you to defend your economic value. You took what used to be the dream of the richest person in the world in terms of how it's an army of compute that is defending against money printing.

• 33:53Speaker 03

  Yeah, 100%.

• 33:54Anthony Pompliano?

  Incredibly valuable, but you give it to and you democratize access to the average individual. AI, all it does is it says, okay, you're one person. What if we got you higher level of intelligence? So you're hiring someone who's 150 IQ. And then let's just multiply, like you could have 100 of these people working for you at all times. Now, there are still people who are lazy, who don't want to do anything. I love when people are like, oh, most consumers don't want to be productive. Like actually, they just want to like go into snooze mode and just watch TV.

• 34:24Speaker 03

  And that's their right, by the way. Yeah.

• 34:25Anthony Pompliano?

  100%. But this technology now is giving them access to, you know, go to an extreme. When Bill Gates was running Microsoft in the 90s, how many people did he have? How much intellectual horsepower was inside of Microsoft?

• 34:41Speaker 03

  Yeah.

• 34:41Anthony Pompliano?

  In 30 years, have we now given the same amount of productivity power to the average human that Bill Gates had in the 90s?

• 34:50Speaker 03

  Yeah.

• 34:51Anthony Pompliano?

  Maybe people, maybe people are like, okay, not that extreme. But okay, if we go back to the 50s for sure.

• 34:57Speaker 03

  Yeah.

• 34:58Anthony Pompliano?

  Give it 12 more months, 24 months. Like you're going to have more resources available to you than Bill Gates did when he was running Microsoft in the 90s in terms of intellectual horsepower. Well, like that dude did pretty well for himself.

• 35:11Speaker 03

  100%.

• 35:12Anthony Pompliano?

  And so we're discouraging people from using the one technology that actually can help them escape the problem that they're in.

• 35:20Speaker 03

  Yeah. I completely agree with everything you said. The one thing I would, my caveat would be, I don't think, we're never going to have like a classless society. There've been classes since the beginning of time. I mean, I've read the Holy Bible and a lot of what we see today in terms of the cyclical pattern of human behavior, you know, the cohesion, the move towards cohesion, the move away from cohesion, the move towards community, the move away from community, the move towards selfishness, the move towards selflessness. There's all these cyclical patterns you can see across, you know, millennia of time, you know, tens of thousands of years of time when you read the Bible. And, you know, so we're trapped in that same saga today because we're humans and we're, you know, we're born sinners. And so on this point of classism, like we're always going to have different

• 36:04Speaker 03

  classes. That's why I've been saying, you know, we need to turn the K-shaped economy to an E-shaped economy because not everybody wants to climb the socioeconomic ladder or is willing to do what it takes to take the tools and climb the socioeconomic ladder. You know, we should create an economy and a society where everyone feels like they're moving in the same direction. That's, that to me is the underlying issue. Like we can't create, we're never going to be able to create a society where everyone is rich by definition. Like it's like just by definition, you can't do that. And so, once we move away from that kind of fallacy, you can start to, you know, you can start to create.

• 36:36Anthony Pompliano?

  Don't tell socialists.

• 36:37Speaker 03

  Well, they don't listen to anybody but themselves, obviously. And I'll say the same thing about the staunch capitalists. I'm on my way to our friends at Fox Business this afternoon and I'll say the same thing to them. Both, both extremes only listen to themselves because they think they have all the solutions. But the reality is, none of us have all the solutions. We all need to work together to solve these intractable problems because otherwise they're not going to get fixed.

• 36:59Anthony Pompliano?

  The, the thing I do find interesting is when you look at economic mobility, you were in a score countries, America is still probably the leader, if not one of the top leaders for sure.

• 37:09Speaker 03

  Of course.

• 37:09Anthony Pompliano?

  In economic mobility. If you then go and you look at.

• 37:12Speaker 03

  The problem is it's going down. That's the issue.

• 37:14Anthony Pompliano?

  Well, if other places are going down as well.

• 37:17Speaker 03

  Yeah.

• 37:17Anthony Pompliano?

  But America almost had so much of a lead that has further to like fall, like it can accelerate, right? It's kind of like, you know, the higher up you are, the faster the acceleration now. The second piece though is if you look at social mobility. And I actually think that we, everyone focuses on economic mobility for obvious reasons. The social mobility, very interesting dynamic in this country. If you go on Instagram, you see some people who appear to have socially been very mobile.

• 37:43Speaker 03

  Yeah.

• 37:44Anthony Pompliano?

  Hey, I knew that kid in high school.

• 37:45Speaker 03

  Yeah.

• 37:46Anthony Pompliano?

  He wasn't the smartest. He wasn't the richest. He wasn't whatever. He got a Ferrari now.

• 37:50Speaker 03

  Yeah.

• 37:51Anthony Pompliano?

  The appearance almost becomes more important than the truth.

• 37:53Speaker 03

  Yeah.

• 37:54Anthony Pompliano?

  But that same person, and I know some of these people, there are a couple of people I've met in the last two or three years that turned to me or people that are close to me and were like, hey, I need help with XYZ thinking through from a personal finance standpoint.

• 38:09Speaker 03

  Great.

• 38:11Anthony Pompliano?

  And I would know how much money they made, how much money they had in their bank account and we're trying to help them think through their life. And then they'd be like, yo, I'm hitting the eject button. I'm going to Italy for two weeks. And you would just be like, yo, there's no way you got the money to do that. And they'd figure out a way, like to their point, they're almost entrepreneurial about it, right? They would, they would find a way somehow.

• 38:35Speaker 03

  They would just try harder to make money.

• 38:37Anthony Pompliano?

  Like credit cards. It's kind of like, you know, in school, I spend more time trying not to do the homework than I should have just done the homework, right? But you know, whatever. You felt like you're making progress. You're just running the, you know, quicksand.

• 38:46Speaker 03

  Yeah.

• 38:47Anthony Pompliano?

  But you see this and you're like, oh, wait a minute, there's some financial education issues. But also there's something about the human nature of like keeping up with the Joneses. And I think that actually the administration understands in a very weird way, this problem better than most. And they never talk about it. But it does feel like there's something about the respectability of the American citizen.

• 39:11Speaker 03

  Yeah.

• 39:11Anthony Pompliano?

  And they don't just want to quote unquote, get rich. They want to feel like they have something to stand on.

• 39:21Speaker 03

  Yeah.

• 39:21Anthony Pompliano?

  And.

• 39:22Speaker 03

  Dignity.

• 39:23Anthony Pompliano?

  Dignity, you know, you're like the farmers in Iowa. They're like, look, man, I don't need to be the next Rockefeller. I just want to be able to have a place where I could build a living, have my family, do all this kind of stuff. And so it always is hilarious to me that like the dude with gold toilets in Manhattan somehow understood that plight of those people. And now you have this very weird faction where you have, you know, look at the Republican Party was one example. You have people who don't have a lot and you've got people who got a hell of a lot.

• 39:54Speaker 03

  Yeah.

• 39:54Anthony Pompliano?

  And somehow they've created this like alliance in the MAGA movement. If you look at the Democrat Party, you actually have a very similar thing. You're very academic, kind of elite, wealthy type audience. And then, yeah, and then you almost have this.

• 40:07Speaker 03

  The way we technically are.

• 40:10Anthony Pompliano?

  Yeah. But then you have this like upright, like kind of the Democrat socialists of America, right? And they, and they have an alliance. And maybe it's not, you know, both sides of this are not like, hey, we're perfectly aligned, but definitely they lean similar.

• 40:25Anthony Pompliano?

  But when you see this rising up, I think the question is ultimately going to become, if you want the US economy to grow and you actually want to use those factors to improve people's lives, you have to produce things.

• 40:39Speaker 03

  Yes.

• 40:40Anthony Pompliano?

  And in a very weird way, we're entering a world where one side is producing a lot of theories and academic ideas. And the other side, like if you go look at the re-industrial movement and you know, all this kind of, like that is coming pretty much from one group of people.

• 40:55Speaker 03

  Yeah.

• 40:56Anthony Pompliano?

  They're in conflict with each other because one thinks policy can solve problems. The other thinks that action can solve problems.

• 41:03Speaker 03

  Yeah.

• 41:04Anthony Pompliano?

  Public sector versus private sector, right? Like, like this battle is not new, but we're actually watching it play out now and we're saying to ourselves, hold on, if we can't get any sort of alignment or like a strategy, ain't gonna get fixed. We're actually going to pull further apart and you're going to have the haves and have nots and like the K gets wider.

• 41:23Speaker 03

  Yeah.

• 41:24Anthony Pompliano?

  It's a bad situation.

• 41:25Speaker 03

  That's a great thesis. I, that's a, yeah, that's a fantastic thesis. Uh, I don't know that I would characterize the, uh, the Republicans as having more solutions than the Democrats as the right characterization. I think Donald Trump has more solutions than Democrats.

• 41:42Anthony Pompliano?

  I, I don't think that even it's like solutions. I actually think, I'm talking more about, go and, um, look at re-industrialization. Use that as an example. How many of those folks tend to lean according to the current political parties, although these, you know, kind of move all the time, right? The current political parties, they probably lean more right.

• 41:59Speaker 03

  Yeah.

• 42:00Anthony Pompliano?

  And they are less like, hey, we need to go do a bunch of like political stuff. Instead it is more, let's go and actually just build Andoril. Let's go build, you know, whatever the company is. Let's not slow down AI.

• 42:12Speaker 03

  Yeah.

• 42:13Anthony Pompliano?

  Right? Let's accelerate this stuff versus, you know, kind of the quintessential example right now is like the EA movement everyone's freaking out about.

• 42:20Speaker 03

  Yeah.

• 42:21Anthony Pompliano?

  That's more like intellectual ideas and all. Now to their credit, like they built Anthropic.

• 42:26Speaker 03

  Yep.

• 42:27Anthony Pompliano?

  Right? So like there is action happening. It's just that the approaches are very different. And so it's fascinating to think about like the political overlay on what's happening economically.

• 42:34Speaker 03

  Yeah, well, one side, one side understands that it's means to power, I'm talking about the Democrats, is by pretending to care about poor people, but not really doing the things that make their lives better. Uh, cause they don't really have to deliver the service. You just have to promise to deliver the service to get elected. Um, and/or say this guy is such a bad guy, you can't elect them like me, which has been their strategy for a long time, which obviously has been a failing strategy and it's an, it's an increasingly failing strategy. Um, the other side, um, you know, I, this is why I say Donald Trump is brilliant. You know, I'm not a, obviously not a Trump supporter. Uh, you know, you can take a lot of offense to the, who he is as a man and what he's been accused of and whatnot, and we don't have to go there.

• 43:17Speaker 03

  But he is a brilliant person for understanding that cut, grow, print is really the only solutions. And he's basically, in my opinion, from what I can tell in terms of his policy platform and re-industrializing, uh, America, um, uh, in terms of putting up the tariff wall and then taking, um, you know, in, in, in infrastructure commitments, uh, you know, public, private partnerships. I think he understands the value of paradigm C. If there's no political will to do paradigm B, we just cut the deficit. He understands that paradigm C is actually a much better outcome.

• 43:48Anthony Pompliano?

  Grow.

• 43:49Speaker 03

  Yeah, it's a significantly better outcome than winding up in paradigm D, which is default via debasement, you know, starting to use the actual money printer. Cause the big, you know, the government needs its money. It's got to capitalize itself. And so ultimately they will eventually wind up using some form of the money printer, whether it be through relaxing bank regulation and allowing them to print the money or, you know, some form of yield curve control, reserve management, purchase expansion. I don't know, who cares? It's all money printing. Uh, but to your point, you know, I, I do think he's, he's wise to understand that, you know, paradigm C is the best choice. Let's go back to something you said, I think we need to, um, unpack this a little bit further because I don't think it's talked about enough and you and I have enough, you know, cachet with our audiences and, and, and enough confidence and, and, and data-driven analysis to make

• 44:31Speaker 03

  the kind of, arrive at the kind of conclusions publicly that we arrive at, uh, without fear of being torn down because people trust us and trust us for having done the research. My analysis of, on this, this dynamic of the politics of it all is that there are now four political parties in America, four distinct political parties. You know, you got the, the socialist wing of the Democrat party, you got your old traditional blue dog Democrats. Uh, the whole party's been, obviously been pulled leftward over time. Then you have your traditional core Republican party, um, which is kind of dying in some, in some respects because so much of the winning strategy for Republicans, even if they were initially part of that core Republican party was dependent of Trump. And so obviously that's the MAGA, the MAGA wing of the party. My fear, uh, and also ultimately my hope, because I think we do need great crisis to

• 45:14Speaker 03

  bring on great solutions that will ultimately be lasting and really beneficial for society and mankind. My fear in terms of going towards the great crisis is that paradigm C will eventually run out. Um, whether maybe AI is a capitalist allocation, you could just see, uh, I don't know, there's a lot of things that could cause paradigm C to run out. I doubt it's running out anytime soon. Our research suggests it's going to continue at least to 2020, probably 2028, maybe even beyond that. Um, if, if they run out of paradigm C, the grow phase, you wind up in the print phase from a starting point of already having a nationwide affordability crisis where 77 out of 10 people, households in this country live paycheck to paycheck that currently feel like they're not getting ahead, that are watching all kinds of stuff on TV and Instagram

• 45:58Speaker 03

  and wondering why they're not part of the American dream. That's seven out of 10 households in this country. Um, so folks like us in the three out of the 10, you know, we need to take hold of how dire and desperate, uh, the situation is, the lack of dignity that so many of our fellow Americans feel. If you try to default via debasement paradigm D with that as the starting point, you're going to wind up with a major political realignment. I think total war is a high probability outcome in that scenario as well. And here's how you can get major political realignment. Most people think of politics as on a left, right spectrum. You know, the, so DSA on the far left, Democrats in the mid-left, Republicans mid-right, or quote, you know, the traditional GOP in the mid-right and the MAGA on the, on the far right. I think of it more as a, a circle, like it's a, it's a, it's a, it's a circle, like, you

• 46:43Speaker 03

  know, it's, it's like, um, uh, it's like a proton or something like, you know, it's constantly moving around, um, you know, a, a field. If you think about it as a circle, like a 360 degree circle, MAGA and DSA are really technically back to back to each other. They're on both far ends of this like circular spectrum. And so all it would take is more economic hardship to cause them to say, to turn around and greet each other and say, actually, we're just all poor. The rich people aren't taking care of us enough. And that's my core thesis. And that's not a capitalist thing to say, and I'll shut up after this. My core thesis is we've gotten so good at creating profits in this society that we've

• 47:26Speaker 03

  probably overdone it, us in the K1 capital class. We, we've created too many profits because what it ultimately means is it's less income for, for the folks in the W2 class. It's less wealth accumulation. It's less savings. It's less social mobility, upper mobility. It's inability for them to buy homes, inability for them to pay for their kids to go to college. It's an inability, it's a, it's a, it's an increase in their demand for public goods, for public services. And so we've created so many profits that we no longer have a stable functioning society. And so the last thing I'll say is to your point earlier about re-industrializing, we obviously need to re-industrialize to sustain paradigm C, the grow phase. If we do re-industrialize, who's going to eat the additional cost of goods and services?

• 48:11Speaker 03

  Is it going to be the K1 class via margin compression? Or is it going to be the K, the W2 class via higher inflation? That is a big question we need to answer as a society.

• 48:21Anthony Pompliano?

  If somebody has to eat it. I think the, the promise, which I don't know if it's going to happen, but the promise would be, we'll actually use Tesla maybe as an example. Cars made outside the United States, they have the margin they have. Tesla's able to make a car in America using robotics and drive down the price. And so therefore they can keep margin, but also nobody has to eat that, you know, kind of, uh, that, that disappearance of margin. He's one on one, man. Right? How many other businesses are going to be able to do that?

• 48:53Speaker 03

  Yeah.

• 48:54Anthony Pompliano?

  Now, maybe robotics gets so amazing and it's kind of like, you know, any dummy off the street can just plug the robotics in and all of a sudden you get the same benefit. But it's pretty clear there's not many businesses that have been able to build something as complex as a car using robotics, get the price down. And people forget the Teslas started at like a hundred and $20,000 or something, like the, the original, you know, kind of sports car-esque. It was over a hundred grand, if I remember correctly. You can go buy one of these cars now for like 40 grand.

• 49:20Speaker 03

  Yeah, but how does the person who used to work at the car manufacturing plant buy the car?

• 49:24Anthony Pompliano?

  So this goes into that business is able to offer this lower price. They do it through automation. So now the question is where do those people go? What do they do? Right? And I don't have all the answers for it, but it's almost like what you're doing is you, you're, you're playing whack a mole in the economy.

• 49:43Speaker 03

  Yeah.

• 49:44Anthony Pompliano?

  Okay, cool. We need to get prices down. So you whack that. Well, how do you get prices down? You use automation. Okay. Well, what happens to those people? They like pop up somewhere else. Now there's another problem. And so you go like, well, now we got to retrain these people to do something else. So you go whack that down. And then you're like, oh, but wait, like there's, you know, not enough companies or there's too many people or, you know, and you're just constantly trying to figure this out. And so I think actually that's one of the reasons why people are drawn to the politics stuff is because they're like intellectually stimulated by these problems where they're power hungry. Like there's one or two reasons. We need more of the people who are intellectually stimulated and problem solving and less of the power hungry people. My big takeaway from meeting tons of these people, you never know who you're dealing with.

• 50:21Speaker 03

  They're all chameleons?

• 50:22Anthony Pompliano?

  You never know.

• 50:23Speaker 03

  That's sad.

• 50:24Anthony Pompliano?

  Right? Like, uh, some of them I think have good intentions. Most of them don't.

• 50:29Speaker 03

  There's good neuroscience on, on power and how it actually corrupts the brain. It's basically people who attain power have very similar brain, uh, function dynamics as people who have traumatic brain injuries. And so, no, I'm, I'm not even joking. Like this is like written about in neuroscience.

• 50:45Anthony Pompliano?

  It doesn't surprise me, just absolutely ridiculous.

• 50:48Speaker 03

  Yeah, it's like they study, it's like this looks like this person had a traumatic brain injury. And so what ultimately happens is like, you have like more impulsivity, uh, more selfishness. You start, uh, downplaying, uh, other people's points of views and you highlight, uh, you aggrandize your own point of view. Um, uh, and ultimately you start thinking of the world and stereotypes, uh, as opposed to analyzing, um, you know, case by case data. Uh, and so ultimately they turn out to become kind of on this like conveyor belt of more and more power-seeking and aggrandization of themselves relative to what could have been their original starting goals. And so power does corrupt. And so you have to have someone who, you know, not only is intellectually stimulated by solving the problem, but has an uncorruptible heart.

• 51:32Speaker 03

  And in my opinion, and this is a, you know, the, my opinion, the only way to have an uncorruptible heart is to have, you know, a firm faith in God and, and, and a firm foundation spiritually. Um, and that's the, to find someone with enough intellectual capability to help solve these problems with a, with a firm foundation and, and uncorruptible heart, that's not a long list of human beings, unfortunately.

• 51:52Anthony Pompliano?

  Unfortunately not. Listen there, I think that's a great way to end.

• 51:56Speaker 03

  Yeah.

• 51:57Anthony Pompliano?

  Where can we still be able to find 42 macro?

• 51:58Speaker 03

  Yeah, so in my actual day job, I'm actually a day.

• 52:03Anthony Pompliano?

  Preacher Darius.

• 52:04Speaker 03

  Crunch numbers all day. Uh, thank God for technology. Our tech is as good as it's ever been. Um, and so, you know, I would say real quick, you know, uh, I love talking about this stuff with you. Um, you know, this stuff to me is more important than trying to figure out where Bitcoin or S and P is going to be six months from now, a year from now. I think we do that really well. We do that so well that I can spend a lot of time thinking about these big problems. Um, and so check us out, 42macro.com. I would say our, our primary specialty is risk management, full cycle risk management, making sure that in bull markets, you know, you stay invested long enough to, to maximize upside capture. And in bear markets, you stay uninvested long enough to not blow up your portfolio. That's our core competency. We're very good at that. We have many of the top institutions across global Wall Street who are clients and customers

• 52:46Speaker 03

  of mine, current Treasury Secretary is a former, uh, client of mine, um, who are relying on our, on our products. So, uh, check us out, 42macro.com if that can be helpful for you guys. And then check me out on Twitter, on our YouTube channel, DariusDell42 on Twitter, DariusDell LinkedIn, 42macro on YouTube, if you just want to kind of hear my thoughts on, on this kind of stuff.

• 53:02Anthony Pompliano?

  I think you do a great job.

• 53:04Speaker 03

  I think you do.

• 53:05Anthony Pompliano?

  You're a great job.

• 53:06Speaker 03

  Thank you.

• 53:07Anthony Pompliano?

  See you guys next time.