#1526 Darius Dale | Trump Tariffs Will Destroy The Economy?!

Darius Dale is the founder & CEO of 42Macro. In this conversation, we discuss tariffs, risk assets, blue collar vs. Wall Street, and what could happen next. ========================Today’s episode is brought to you by Consensus. Consensus, crypto’s longest-running and most influential event, is coming to Toronto this May 14-16, 2025. Curated by CoinDesk, Consensus will welcome 20,000 builders, investors, policymakers, and pioneers shaping the future of the digital economy. From understanding Bitcoin’s potential amid regulatory shifts to exploring the latest innovations in digital assets and infrastructure, Consensus is your best bet to unlock market-moving intel, make meaningful connections and get business done. You can’t afford to miss it. As a listener of The Pomp, get smarter and get 15% off registration with the code POMP. Register now at go.coindesk.com/pomp========================Bitwise is one of the largest and fastest-growing crypto asset managers. As of December 31, 2021, the company managed over $1.3 billion across an expanding suite of investment solutions, which include the world's largest crypto index fund and other innovative products spanning Bitcoin, Ethereum, DeFi, and crypto equities. Whether you’re an individual, advisor, or institution, Bitwise provides intelligent access to crypto with your unique circumstances in mind. Visit www.bitwiseinvestments.com to learn more. Certain of the Bitwise investment products may be subject to the extreme risks associated with investing in crypto assets. Visit www.bitwiseinvestments.com/disclosures/ to learn more.=======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

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

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's going on guys? Today we've got an amazing episode with Darius Dale, the founder and CEO of 42 Macro. We talk tariffs, what's going on with risk assets, was it a mistake? What's going to happen next? And Darius, he lays it on. Is this the blue collar industry versus Wall Street? Who's going to win? We got it all covered today. Here's my latest

• 0:46Anthony Pompliano?

  conversation with Darius Dale.

• 0:48Speaker 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.

• 1:12Anthony Pompliano?

  Today's episode is brought to you by Consensus. They're the world's longest-running and most influential gathering of the global crypto, blockchain, and AI communities. Curated by CoinDesk, this prestigious annual event happens in Toronto, Canada, on May 14 through the 16th, and it is set to welcome 20,000 builders, investors, policymakers, and pioneers shaping the future of the decentralized digital economy. From understanding Bitcoin's potential in a shifting regulatory landscape to the latest innovations in the digital assets and infrastructure, Consensus is your best bet to unlock market-moving intel, make meaningful connections, and get business done. You can't afford to miss it. And because you listen to this podcast and you watch this show, you get 15% off registration if you use the

• 1:52Anthony Pompliano?

  code POMP15. Go to coindeskPOMP.com. Again, that's coindeskPOMP.com to register now. Once again, go to C-O-I-N-D-E-S-K-P-O-M-P.com and use code POMP15 for 15% off your Consensus Toronto tickets today. It's no secret that Bitcoin ETFs have taken Wall Street by storm. With over $35 billion in assets in just one year, it's become the most successful ETF launch in history. My partner, Bitwise, is the first and only Bitcoin ETF provider to openly publish its Bitcoin wallet addresses, allowing anyone to verify the fund's holdings. I believe this level of transparency is exactly the kind of innovation that only crypto makes possible.

• 2:34Anthony Pompliano?

  Bitwise is also the only ETF issuer that is a crypto specialist asset manager, meaning their team solely focuses on Bitcoin, and they have the research, education, and support to help investors navigate the space with confidence. All of that is great, but what I love most about Bitwise is probably their commitment to developers. Bitwise donates 10% of their ETF's profits to Bitcoin open source developers. Bitcoin developers are the unsung heroes, working tirelessly to maintain, improve, and innovate the blockchain. Their efforts ensure that Bitcoin remains true to its promise as a decentralized system that is built to last. Go to bitwisePOMP.com to learn more about their ETF and other services. Once again, that's bitwisePOMP.com. Bitwise, P-O-M-P dot com.

• 3:19Anthony Pompliano?

  As always, remember investing is risky and carefully consider the extreme risks associated with crypto before you invest. All right, Darius, I thought the best place to start is with the main show. The Super Bowl of all of capitalism is Main Street versus the blue collar businesses. This feels like, all my friends in finance, they hate tariffs. They think this is the dumbest policy they've ever heard of. A lot of the people I know in the industrial manufacturing industry, they're pretty excited about it. There was a guy from Marlin Steel, he's a CEO. He was on the floor of the factory on CNN, holding up a basket saying, "Trump is gonna level the playing field", and he seemed really excited. What is going on here? Why are there two different factions?

• 4:01Speaker 02

  Yeah, great question, and thanks for having me as always. Great to be here, especially during such a trying time. The reason there are two factions is because we were exiting a game, a paradigm whereby the winners of the game were people who most benefited from globalization and that geopolitical world order. And we're likely headed to a paradigm where the winners of the game are the people who benefit from more regionalized and localized, you know, factors of production. And so that's why you see this sort of debate between Wall Street and Main Street, because Wall Street exists to find profits, to find productivity, and ultimately, the best way that they figured out, quite possibly in history, was globalization, right?

• 4:44Speaker 02

  You basically reduced the largest cost of, the largest input cost for most production, which is labor. You found a way to, to, to, to, to, to, to, to, to spread those costs around the, around the world and ultimately lower costs and, and create a significant positive shock to corporate profits. My favorite chart, which you guys will put up while we're talking, is the chart that shows labor versus capital. It has corporate profits as a share of gross domestic income up at 14% relative to a long-term mean data back to the 40s or 50s of about 9%. And then we have labor share of national income, which is somewhere around 51, 52% compared to a long-run mean of about 56, 57%. Now, the deviations from those means doesn't sound like a lot. It's like 500 basis points.

• 5:25Speaker 02

  But 500 basis points effectively, you know, equates to about $1.5 trillion of lost income that's going from the household sector to corporate profits every year. That's about, you know, let's call it 11% of the median, uh, 13% of the median income. And it's roughly about, you know, $11,000 per private sector employee. So basically, every American household with two working people is losing about $20,000, $25,000 a year as a function of globalization, and that's why the entire Electoral College map was red from sea to shining sea.

• 5:57Anthony Pompliano?

  Now, I agree with that, and I think that Wall Street doesn't understand it. I, for a whole different reason, have spent the last two years talking to a lot of people in the industrial manufacturing space. I've gone to these businesses, I've walked the factory floors, I've met the workers, I've met the CEOs, all this stuff. These people do not care if your Wall Street portfolio is going down. And people say, oh, their 401K, all this stuff. Listen, the people who are working in these businesses, I'm not talking about the CEO who's got stocks and stuff like that. I'm talking about the people. I went to a electric harness, electrical harness business in Michigan, and there was a bunch of people, and they were literally assembling electrical harnesses that go into cars and different electrical products, right?

• 6:38Anthony Pompliano?

  These people are sitting there assembling these products with their podcasts or their music playing in their headphones, they're doing it all day long, they don't even know the stock market is going down. They're trying to go to work, make a living, go home, enjoy their life, and make a better life for their kids than they had for themselves. That's their goal. And so, the investors, though, they do have investments. They do care about the stock market. I knew that this was gonna be a very important chart, because I have never seen you draw on a chart before, and when I saw the drawing, I said, my boy was in the lab cooking. So, before we put this chart up, I want everyone, take that wax out of your ears, put your glasses on, if you've got rec specs, you know, with the elastic band for sports, put the rec specs

• 7:23Anthony Pompliano?

  on. Darius, hit us with what's going on in the risk asset chart you got here.

• 7:27Speaker 02

  Yeah, look, man, this, thank you for saying all that, man. And by the way, I agree with you, you and I both have very humble beginnings to where we've gone to today. We, I think we, you and I understand the plight of the common man, of the folks who've been left behind by globalization, much more silently and much more real tangibly than the average person on Wall Street, the coastal elites who comprise Wall Street and Palm Beach and San Francisco and, and all the stuff that's going on in Hollywood. You know, at the end of the day, what we're trying to do is educate them as to why President Trump feels so compelled to stick with this fourth turning transition. And so, that takes me right to this chart here, which is... When you think about how markets behave in a quote-unquote "normal regime," a non-fourth turning

• 8:12Speaker 02

  regime, where we have these massive, huge geopolitical, social, institutional changes. In a normal regime, you just have, you know, your kind of standard bull marketed stocks. They go up, they go down as a function of the business cycle, and that's pretty much it. When we're in a fourth turning regime, you have all these very powerful forces pulling and pushing on each other, much like a sumo wrestler or, you know, offensive or defensive lineman in the trenches. There's so much force that, you know, when the tide changes even a little bit, you have these massive melt-ups and melt-downs in markets. Can I throw a stat at you, pump? That's gonna... The ones... Sorry, I'm gonna throw two stats at you. One's gonna shock you to your core. The first one won't, but the second one definitely will.

• 8:53Speaker 02

  The first one is, every year since 2015, the market has either gone down 20% or up 20% in that calendar year. This... I mean, we've been living in a nuts timeline, right? Every year for the past decade, the market has either gone down 20% each year or up 20% each year. Like, that's more than double what a normal market return is. And that's what we're trying to suggest, is that the fiscal largesse that you tend to see as a function of populism in a fourth turning, as well as the monetary policy response to that in terms of, you know, gobbling up bonds and trying to, you know, force financial repression onto investors, these are the kinds of dynamics that basically cause us

• 9:33Speaker 02

  to go from up 20, two years in a row, to down 20 the next year, maybe up 20 a couple years in a row, to down 30 or 40 the next year. This kind of very volatile setup is a function of the fourth turning and all those dynamics. And one thing I'll conclude with, go back to the folks in that manufacturing plant in Michigan that are, you know, just trying to provide a better life for themselves and their kids, and hopefully that their kids can live a better life than they did. Those people definitely don't own stocks. Did you know, Pump, that 88% of all financial assets in this country is owned by the top quintile of investors?

• 10:11Anthony Pompliano?

  It's crazy.

• 10:12Speaker 02

  The top 20% of human beings, of households in America, own 88% of all financial assets. That means the other 12%, we gotta divide that with the 80% of us have to divide the other 12%. And so you know wonder no one gives a damn about if the stock market's down because of tariffs. This is a real institutional societal shift, transformation that's happening and Wall Street is incentivized not to report it, they're incentivized to fight it, and ultimately they're incentivized to lose money because of it, because ultimately, they have to lose the game in Paradigm A to facilitate the transition to Paradigm B.

• 10:49Anthony Pompliano?

  It makes a ton of sense. You've got a slide in here talking about the journey's more important than the destination. What's that mean?

• 10:55Speaker 02

  Yeah, 100%. So this, one of my favorite charts I've ever created in my almost 17-year career on Global Wall Street now. This chart helps explain what I think is the most misunderstood, but very important, one of the most important concepts in all finance. The average retail investor does not understand this chart, but everyone feels this chart, especially as you get older in life. So what this chart essentially explains, the impact that volatility drag has on investor portfolios. And volatility drag is if you look at the far right of the chart where it shows portfolio size after year three, look at the bars. There's $338 in the blue bar and $200 in the red bar. Volatility drag is the spread between those two bars, or essentially is the spread between

• 11:37Speaker 02

  those two bars, as a function of the path that the assets have taken to get there. Both of the, both the red bars and the blue bars in this chart feature identical 50% average annual returns. However, you wind up with more money if you take the path that the blue bar takes, which is a more smooth ride to building wealth, as opposed to a more volatile ride for building wealth. And this is what we try to coach investors on, is that you can build wealth by participating in assets like Bitcoin, I'm a huge Bitcoiner, you're obviously a Bitcoiner, but you also need to be respectful of the fact that if you buy the asset or are overly exposed to the asset at the wrong time in the investment cycle, you will suffer volatility drag and you'll ultimately wind up with less money over a longer period, over a longer time

• 12:22Speaker 02

  horizon. So I think 2025 is a great year to reintroduce investors to this very important concept.

• 12:29Anthony Pompliano?

  Now, asset prices are crashing and inflation was crashing. If you look at things like trueflation.

• 12:38Anthony Pompliano?

  The Fed emergency rate cut odds are up like 25 to 30%, but you're saying, yeah, I mean, which still means they're not likely to do it. People forget how odds work.

• 12:49Speaker 02

  What's 25 basis points gonna do, Bob? Come on.

• 12:52Anthony Pompliano?

  The labor market that you think is too robust. You think that they can't cut. Explain.

• 12:57Speaker 02

  This is the problem. This has always been the problem with the Fed. They anchor on lagging indicators. The Fed only eases policy for three reasons. One, we have a miraculous disinflation, which almost never happens in the history of the data. So you can kind of rule that out, especially in the context of, you know, going back to before smooth holly and tariff prices and tariff tax rates. Two, the labor market comes unglued, which the labor market is a lagging indicator. It lags the economy and the stock market by about two quarters. So it's too late. If they're gonna do that, then as a function of labor market. And then there's financial stability concerns, which of course, it'll be too late in market price terms, may not be too late in labor market terms. You know, they ease policy in September of 2019 in response to financial stability concerns and it

• 13:42Speaker 02

  prevented what may have prevented a recession. We wouldn't know, obviously, COVID is a kind of factual, but it may have prevented a recession then. But the reality is, we had already crashed in Q4 18 and the credit market froze up. So the reality is, is the Fed is a, I think I talked about this a few years ago in 2022, which is the Fed's like a janitor, right? Like, you don't see a janitor like sweeping the mop and broom over people's shoes when they're working or partying at the event. The Fed comes in after with all the trash on the floor and sweeps it into the dustpan and mops the floor, right? And so ultimately, as an investor, you need to be aware that, you know, you can't be so myopically focused on the Fed to bail you out because they're usually going to be too late, is what I'm essentially trying to say. And right now, the labor market

• 14:24Speaker 02

  is too robust, as evidenced by non-farm payrolls growing 345,000 since Trump took office. I mean, this is a labor market. I mean, granted, you can take issue with this data, and I do take issue with this data to some degree. But even when you look at hyper-high-frequency data, like jobless claims, or some of the Indeed survey data, or leading soft data, it still says that the labor market is still reasonably robust, and that's a problem for investors.

• 14:47Anthony Pompliano?

  Now, the Fed, what can they do? Obviously, they're not going to cut. Where do they, you and I have talked before, are they going to raise the inflation target? Are they potentially just going to say, screw it, we messed up? Uh, I mean, they're behind the ball. Uh, they're, they're lost in the sauce, right? Frankly, what do you do? Jerome Powell is just like, I'm not going to listen to Trump. Trump's tweeting at him. What, what happens?

• 15:08Speaker 02

  Yeah, look, I think this is, see, this is why you play nice in the sandbox. And this is, Trump's going to regret being so mean to Jay Powell over the past, you know, what? Six, seven, eight years, you know? Jay Powell, if he was on board, would probably have already cut interest rates and probably have already signaled, hey, we are prepared to use our balance sheet to tone down volatility financial markets. That's what a good central, I'm not even saying Jay Powell's a good or bad central banker, but I think a proactive central banker would be doing that by now. Because they ultimately understand that whenever you have contractionary fiscal policy, in order to keep an equilibrium level of economic activity, you need to have equally expansionary monetary policy. And they're doing the exact opposite of that in terms of sitting on their hands and maintaining what they believe is a restrictive monetary policy setting. That's wrong, in my opinion.

• 15:51Speaker 02

  And you and I have talked about this slide here, our secular inflation model slide, you know, many times over the past few years, which is, our model continues to suggest that the equilibrium core PC inflation rate in the US economy is around 3%. Somewhere in the high 2s, low 3s, can't be more specific than that. But the Fed is targeting a 2% inflation target. And as long as they're targeting a 2% inflation target, that means they're sort of forced to sit on their hands and keep monetary policy, at least according to their metrics, restrictive until they feel very confident that inflation is going to return to 2%. And based on our model, if the equilibrium inflation rate is 2%, if 3% or somewhere thereabouts, then the only way you're going to feel very confident about that is in a significant breakdown in the labor market.

• 16:33Speaker 02

  And what I'm trying to argue is, if they just acknowledge the fact that the inflation is running hotter in this business cycle, they would, we would have, we wouldn't have to suffer through all that needless job loss as a function of the policy mistake they're currently making.

• 16:46Anthony Pompliano?

  Do you think that they can get back on the ball? Like, is it possible for them to catch up?

• 16:51Speaker 02

  Ah, is it possible? Yeah, so, yes, but they've already kind of hinted that they're not going to. So they have a monetary policy review this year. Every five years, the Federal Reserve conducts a deep dive study on what they got right, what they got wrong, what they might need to change about their entire policy framework. And what's conspicuously missing from that monetary policy review is the 2% inflation target. Don't forget, pump. We got that thing from some random central banker in New Zealand. Like, why are we managing the world?

• 17:18Anthony Pompliano?

  No, dude, I heard it's part of the 10 commandments. It's part of the 10 commandments, obviously.

• 17:22Speaker 02

  I would prefer it to come from the 10 commandments. As a Christian man, I would much prefer Moses have come from Mount Sinai and said inflation needs to be 2% or else than some random guy in New Zealand. Nobody even knows his name, right? The Federal Reserve is making a monetary policy mistake that's going to cost investors trillions of capital destroyed in the stock market and crypto market crashes. And also, millions of people are likely to be put out of work as a function of their inability to get, you know, to acknowledge the changes in the economy that our model has been signaling since January of 2022, and just accept the fact that we're running a hotter inflation economy. If it's 3%, then you can start easing a lot sooner, which could potentially offset this fiscal contraction that we're hitting. And by the way, fiscal contraction is a big deal.

• 18:08Speaker 02

  We're talking tariffs, right? Everybody can see tariffs. I mean, you just take your head out of this hand and see tariffs. You can go to your local downtown. There's probably people protesting. But people have already forgotten that Doge is aiming to take a trillion dollars out of annual federal expenditures. Now, you and I very much agree that Doge is a necessary painful medicine that this economy needs to take to prevent a fiscal crisis. But again, emphasis on painful medicine. If you try to do it, it's going to hurt. And it may, in fact, you know, create, uh, trigger a technical recession, if not an actual recession, when combined with the net impacts of tariffs.

• 18:41Anthony Pompliano?

  You had this thesis called the kitchen sink thesis? What's the latest on that?

• 18:46Speaker 02

  Yeah.

• 18:48Speaker 02

  The latest is that Wall Street is, uh, they're still washing their hands like President Trump yanked the sink out of the, out of the wall and is like walking out of the office with the sink. Right? Wall Street is still standing there over what used to be a sink, rubbing their hands with, you know, with soap, with soapy, you know, with their hands doused in soap. They don't realize that everything you and I have been talking about with respect to this transition from paradigm A to paradigm B, how the globalists and the corporate fat cats and Wall Street have to lose in order for the, for those folks on that factory line in Michigan to finally start winning again. They don't realize this and they're very reluctant to take down their estimates to, to, to acknowledge this and part of it, right? I don't think they're incentivized to, uh, to say where we're going, right?

• 19:33Speaker 02

  Like it, cause it's saying, hey, I'm, I have to lose, right? Nobody's incentivized to raise their hand and say, yeah, uh, we have to make a lot less profits going forward in order to make the American worker happy. Right? Cause that's where we're going, right? If, if, if President Trump and his Trump administration can stay the course with respect to their policy path, and it may, it may, it may not be, I'm not even making an argument about that, but if this is where we're going, then ultimately the numbers on this chart have to go down. What we're showing here, S and P 500, uh, index sales, uh, estimates, uh, with respect to this, the broader index, technology, specter and then X technology. As you can see on the chart on the left, there's a linear acceleration in revenue growth projected as of today for S and P 500 companies, both technology and X technology from the

• 20:15Speaker 02

  low in Q1 2025 all the way through high to 21 2026. How in the world is revenue growth going to accelerate from 4% to 7% over the next four quarters in the context of everything we can already just see on the tape without having to do any empirical econometric analysis? Moreover, we have this back half of the year hockey state projected where you got earnings growth accelerating from about 7% to 11, 12% in the back half of the year. At the same time, the economy could very well be in a technical and/or actual recession at that point in time. And so to me, I continue to see a great deal of resistance among my colleagues across global Wall Street in acknowledging this fourth turning transition from paradigm A to paradigm B.

• 20:57Speaker 02

  And ultimately, that reluctance, in my opinion, insulates the downside. It doesn't insulate, it doesn't insulate, it accelerates the downside in asset markets. Markets are not going to be able to bottom until we have a serious conversation about what the economy is going to look like two to three quarters from now and how we can start to build up from that base. But we gotta actually have a serious conversation about that.

• 21:16Anthony Pompliano?

  The Republican Party, one of the promises they've made is they want to make a big tax cut, but not for the rich. They want to do it for people making $150,000 or less. Sounds great, a lot of people will be very happy. I don't think they're gonna be able to cut federal income tax level to zero, but I do think that they can have a cut. But it would be backstopped or paid for with debt is kind of the plan. Describe a little bit as to what this plan is and does that just mean like all assets go up if we're gonna keep on taking debt?

• 21:43Speaker 02

  Well, that's a phenomenal question, Pom, as always. You know, you're one of the best in the world at this. They're going to, the Trump administration will tell you that it's not going to be financed with debt, by the way. They'll say the tariff revenue is coming. We have tax spending cuts offsetting that in terms of what they're likely to legislate, at least with respect to the House bill. That's the table on the left there in that chart. And then they have the tariff revenue, the spending cuts, and the Doge cuts. They think this is all going to wind up with lower deficits over the long term. I take great offense to that. We've done a tremendous amount of econometric analysis, you know, analyzing, you know, all these irrelevant time series to demonstrate that there's been, ever in history, has there

• 22:26Speaker 02

  been an administration that, certainly not the post-war US economy, that has paid, you know, paid down the debt and grown its way out of the debt. So we don't think we're gonna start now, especially with our starting point of a positive output gap, you know, one point of our 1.6%. Recall that the output gap was minus 0.3% when they launched the first TCJA, and we got a positive shock to growth then that ultimately wound up with still the deficit declining, getting worse. It went from minus 3% in 2017 to minus 4% in 2018 to minus 5% in 2019. So we had deficit expansion then with a negative output gap. With the positive output gap, plus tariffs, plus Doge... Plus a Fed that has got a too tight monetary policy setting for everything that's happening from fiscal policy setting, I don't see how you don't want to expand the deficit. But that's neither here nor there.

• 23:11Speaker 02

  On the right side of this table, we show the Senate plan. The Senate plan essentially is you're going to use this, what we call this current policy baseline, which assumes the cost of extending the Trump tax cuts does not cost anything, which allows them to dump a bunch of extra goodies onto the bill, like no tax on tips, no tax on social security, et cetera. That would be very debt financed. They're not calling for much of at all a deficit reduction in terms of spending cuts. So ultimately, you're talking about a potential net debt growth of about $7 trillion if the Senate, you know, kind of won this debate. It's unclear to me if Trump will have the political cachet as he currently does now in order to sort of whip the House Republicans in to get them, the fiscal hawks down in the

• 23:54Speaker 02

  House in line with what he wants, because he supports the Senate bill. But we'll see. But the reality is, we're not going to grow our way out of it. They're going to tell us they're going to grow our way out, but ultimately, we're going to wind up with a lot of debt, a lot more debt.

• 24:06Anthony Pompliano?

  Do you think the tariff are a mistake?

• 24:08Speaker 02

  Do I think tariffs are a mistake? No, I don't think the tariffs are a mistake because I support the transition from Paradigm A, which is a K-shaped, you know, top-heavy economy, you know, that is, you know, built on top fiscal largess, but most importantly, built a top very regressive fiscal largess. The, you know, we have a 25% government expenditure to GDP ratio. Clearly, it's not going to the people who turn the entire Electoral College red from C to signing C. It's going to the rich people who've been scamming the government. I mean, I know people personally that took PPP money and bought private jets, right? This is where the fiscal largess has gone. It's to the top part of the K, to the asset holders, to that, to that very narrowly concentrated

• 24:51Speaker 02

  subset of the United States society that has been, you know, eating high and living high on the hog at everyone else's expense. And so, yes, I do support this transition from Paradigm A, which is that, to Paradigm B, which is this more egalitarian, E-shaped economy where everyone, you know, the upper class, the middle class, the lower class, I don't know if you can say class anymore, I don't have time to be politically correct now, but everyone is just rowing the boat in the same direction, whether it be up or down, as opposed to the K, where the winners win and the losers lose. I very much support that as someone who grew up very poor and on the outside looking in and very supportive and sympathetic to the cause of Main Street. Do I support the way they are implemented with, quite frankly, Fisher-Price math? No. Do I support the order in which they were implemented?

• 25:33Speaker 02

  And you know, you can't really fault them for the order because they only have about a year to get this stuff done because we know Congress is going to flip hands again. It flips hands every single midterm election and has done that for like a decade. So we know he has a very narrow window to get his policy priorities enacted. And so I would have launched the tax cut and the regulation program simultaneously with this. See how we shook out in terms of negotiating the deals, then layer Doge on top of that in order to hit a negative shock to the demand for capital in the economy. At the same time, you're asking everybody to build factories here. That's the order of operations that I would have chosen, but I don't know if you can do that in the context of the midterms.

• 26:12Anthony Pompliano?

  Darius, where can we somebody will find you?

• 26:14Speaker 02

  I appreciate you, man. Thanks again for having me, man. I love catching up with you, brother. Forty two macro.com can check us out. Everything we talk about is very helpful for investors, but the number one thing we do for our investors is time markets and systematic quantitative risk management overlays. So forty two macro.com can check those out. And then you can find me on DariusDell42 on Twitter, where I kind of talk about all this fundamental stuff. I call it fundamental stuff because at the end of the day, the

• 26:38Anthony Pompliano?

  The best on Wall Street, the best on Wall Street. That's what I tell people.

• 26:42Speaker 02

  I'm definitely not the best. I'm definitely, I'm working hard to become the best. And I think we've done a really good job for our clients this year. Did a really good job for our clients last year. Did a really good job for our clients in 2023. Did a really good job for our clients in 2022. Did a really good job for our clients in 2021 when we lost the firm. So that's four years in a row of doing a fantastic job for our clients. And we fully expect to continue that run.

• 27:05Anthony Pompliano?

  I love it, man. Thank you so much. We'll do it again soon.

• 27:07Speaker 02

  Appreciate you, brother.