#1464 Darius Dale | Bitcoin & Stocks Are In For A Wild 2025

Darius Dale is the Founder & CEO of 42Macro. In this conversation we talk about a strong US dollar, impact on stocks, bitcoin, many other assets, why international investors own so much of US assets, and what could possibly happen if they decide to sell. ======================= Xapo Bank, the world’s first fully licensed Bitcoin-enabled bank, offers military-grade security with an unmatched blend of physical and digital security, as well as pioneering regulatory oversight, so your funds are always protected. Beyond secure storage, they enable you to grow and use your Bitcoin. Earn daily interest in Bitcoin, spend with zero FX fees using a global card, and make instant payments via the Lightning Network for unrivalled access and convenience. Visit https://www.xapobank.com/pomp to join. ======================= 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. Today's episode is with Darius Dale. He's the founder and CEO of 42 Macro. Darius is one of my dearest friends, and he continues to bring the heat with all types of economic analysis. This conversation is no different. We talk about a strong US dollar, what the impact would be on stocks, Bitcoin, and many other assets.

• 0:44Anthony Pompliano?

  Then we talk about why international investors own so much of US assets and what could possibly happen if they change their mind and start to sell. This conversation will give you a peek into the future of what could happen, but not necessarily is guaranteed. So I hope that you enjoy it. Here's my latest conversation with Darius Dale.

• 0:59Speaker 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.

• 1:23Anthony Pompliano?

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• 2:08Anthony Pompliano?

  more of your Bitcoin stays where it belongs, in your pocket. Whether you're trading big or small, every move you make is designed to boost your gains and fuel your financial future. Head to zappobank.com/pomp to join. That's X-A-P-O-B-A-N-K.com/pomp.

• 2:27Anthony Pompliano?

  All right, Darius, new year, new us. Uh, let's talk about global liquidity. This is the kingmaker of financial assets. Global liquidity determines so much in the financial markets. Help us understand first, what is global liquidity? And then we're going to get into a lot of data and charts about what's going on right now.

• 2:42Speaker 02

  100% man. Happy New Year, brothers. Good to see you. Uh, so before we get started, I, uh, I got a bone to pick with you, my friend.

• 2:48Anthony Pompliano?

  Uh oh.

• 2:49Speaker 02

  You tweeted on December 23rd that you were unaware of a single organization that was accurately bullish on the stock market last year, and I'm going to hold your feet to the fire.

• 2:58Anthony Pompliano?

  No, no, no, no, that's not what I said. What I said was nobody accurately predicted the exact percentage of the stock market performance.

• 3:05Speaker 02

  Oh, gotcha. Yeah.

• 3:06Anthony Pompliano?

  You were bullish. You get credit for that. You're bullish.

• 3:08Speaker 02

  No, no, no, no, no. I wasn't just bullish. I said in December of 2023 and in January of 2024 that this was the most bullish I had ever been in my 15-plus year career on Wall Street.

• 3:18Anthony Pompliano?

  And you're right.

• 3:19Speaker 02

  I will take a bow.

• 3:20Anthony Pompliano?

  And you were right.

• 3:20Speaker 02

  I will take a bow. So, uh, anyway, go back to this topic of, uh, of global liquidity. Uh, so, uh, you're saying global liquidity is the kingmaker of assets? Yeah, it's certainly one of the most important dynamics that you need to figure out as an investor in order to get asset market performance, right? Um, you know, there's a, there's no official data, if you will, that sort of tracks global liquidity. And what we really mean by liquidity is really balance sheet capacity to absorb the creation of new financial assets, you know, to facilitate the purchases of financial assets. And so it's on, it's on us, folks like myself and others, uh, who've done a lot of pioneering research on this subject to essentially create, you know, uh, indicators that allow us to track and forecast, uh, quote unquote, global

• 4:02Speaker 02

  liquidity or global balance sheet capacity among the global investor sector. Uh, so one of the ways in which we've done that here at 42 Macro for our clients, uh, is the lens of our global liquidity proxy. Uh, that is the aggregated sum of, of the major central bank balance sheets, plus their broad money supply in each of those economies, plus the FX reserves, uh, in each of those economies minus gold. And so these are all three pockets of, of sort of, um, of capital, if you will, uh, that can be used to, to, to buy assets at any given time. Uh, and then we actually add a bond market volatility overlay to our indicator, uh, to simulate the impact of, of contractions and expansions, uh, in the repo market upon this sort of balance sheet capacity, if you will.

• 4:41Anthony Pompliano?

  So is it fair to say global liquidity is the equivalent for an individual of like, how much money do I have in my bank account? How much cash do I have? And if you take a bunch of different people and put it together, it's like, how much cash do we collectively have? That's really what's going on at the government level?

• 4:53Speaker 02

  Essentially, 100%, that's exactly what it is. It's how much money do we have that's available to purchase financial assets?

• 5:01Anthony Pompliano?

  All right, so you've got this global liquidity monitor, and you were mentioning a bunch of the different kind of inputs to that. When you look at this, how sensitive is it to changes? If, you know, China decides to change their monetary policy, or the US decides to change it, can that have a profound impact on the overall global liquidity? Or do you need kind of a regime change where a bunch of the central banks decide to go and become more tight or more loose?

• 5:24Speaker 02

  Yeah, well, it's both, right? I mean, if you have a significant program in a country like China that has a significant influence on global liquidity, China, Europe, and the US, in that order, sorry, China, US, and Europe in that order, in terms of the global liquidity, yes, you could see, you know, sort of these idiosyncratic one-off developments from a central banking perspective or economic boom perspective have a significant influence. But a lot of times, what we tend to see is, you know, the monetary policymakers of the major economies are generally speaking rowing the boat in one direction or another. Right now, they're rowing the boat in the direction of globally coordinated easing, but it's not necessarily showing up here in our, in our model. So if you look at this table where we show the leading indicators of private and public sector liquidity across growth, inflation, and policy for all these economies, when

• 6:09Speaker 02

  you look at the columns on the far right where we show the individual country liquidity proxies underneath the global liquidity proxy, they're all actually trending lower. Those red arrows in that column there indicates that global liquidity is trending lower globally, but also across most of these major economies. And so that's something that should have your, you know, your eyebrows raised as an investor.

• 6:31Anthony Pompliano?

  Now, when we go and we take a look at this global liquidity, a lot of people just say global liquidity is increasing or decreasing. I'm guilty of that, I say that all the time. But you think that it's not just a directional thing, you have to be more precise than that explain.

• 6:43Speaker 02

  Yeah, well, look, if it's increasing, generally speaking, you know, asset markets are co-integrated with global liquidity for obvious reasons, as we talked about. And so if global liquidity is increasing, you should be expecting, generally speaking, asset market performance to increase, the market capitalization for all these various asset markets to be going up. And vice versa, if it's going down, you would expect the market capitalization of all these assets to generally be going down. But in terms of forecasting where markets are heading, because that's what you need to do to make money as an investor, you need to understand the drivers of global liquidity over various time horizons. And so what we show here on chart two is the three and six month leading correlations between a collection of indicators that relative to our global liquidity proxy. And so what we find is that, you know, based on our analysis, we know what leads global

• 7:28Speaker 02

  liquidity. We know it's, you know, the market cap of stocks and crypto. We know it's, you know, things like the dollar and currency volatility. We know it's things like global interest rates and bond market volatility. We know it's global growth, global inflation and global unemployment. These are all, you know, different things that either lead private sector liquidity or public sector liquidity. And so that, you know, based on that analysis, if you look at slide three, we can actually determine, you know, where, you know, the, what the, what the medium term outlook is for, for global liquidity. And right now, the key leading indicators are currently aligned in a way that suggests that you should be expecting a modest decrease over the medium term. So we already have this sort of meandering lower trend in global liquidity that's developed over the past couple of months. And our model is suggesting that global liquidity probably needs to catch down to where the

• 8:12Speaker 02

  leading indicator suggests, or they, they, the leading indicator suggests that they currently are over the medium term. So that's something that is obviously a negative for asset markets. Doesn't mean asset markets have to go down. It just means this is not a supportive dynamic for asset markets. And if you're leaning on this as an investor, then you certainly should probably do something different in your portfolio if we were projecting an increase.

• 8:32Anthony Pompliano?

  Now, we know that the dollar being strong has had this profound of impact on global liquidity. Donald Trump, the incoming US president, he is very much a pro strong US dollar. He wants the dollar to be the best, et cetera. How does that stuff play in? And how do you think about what are we currently seeing? Intersecting with, hey, there's a new political regime that may be changing here. And could that actually change something very rapidly?

• 8:57Speaker 02

  Yeah, great question. To me, the dollar is the number one thing we need to get right as an investors in 2025, because I think it's ultimately going to have a, one of the more significant impacts on global liquidity and broader asset market performance. So in this chart on slide four, we show the rate of change, the year-over-year rate of change of our global liquidity proxy. That's the black line in both of those charts. In the chart on the left, we show the year-over-year rate of change of the dollar's real effective exchange rate value. And then the right chart, we show the year-over-year rate of change of the Deutsche Bank Currency Volatility Index. And what you can see is that both the dollar and currency volatility are very obviously inversely correlated to fluctuations in the global liquidity cycle. So the strong dollar is already weighing on global liquidity, as we talked about in the previous slide. And so you have to think about, you know, President Trump, you know,

• 9:41Speaker 02

  one, tariffs are obviously strong, very supportive for dollar strength, which is something we'll talk about in a couple of slides. But number two, if we had, you know, sort of a significant pro-growth reflationary policies that cause the Fed to have a less dovish monetary policy outlook than what's currently priced in, and certainly relative to the rest of the world, then that's something that could create trending dollar strength from here as well. And obviously, as we're talking about with this analysis, if we get trending dollar strength from here and trending currency volatility from here, because those two things tend to be correlated, then you're talking about an incremental headwind to global liquidity on top of what's already being, you know, sort of projected by our leading indicators.

• 10:18Anthony Pompliano?

  Now, when I take a look at the strong US dollar, and it's sucking this like liquidity, right? You have this chart here that says the US dollar strength tends to suck liquidity out of the global financial system by inflating debt service and refinancing costs. Well, the national debt is exploding. The costs obviously have been exploding as well. We now spend more on the interest rate payments than we do on national defense. So is this kind of like a double whammy, where like the debt exploding plus the US dollar strength is actually creating more of a problem?

• 10:46Speaker 02

  Yeah, well, it's less so for us because all of our debts are made in dollars and for obvious reasons, you know, that's not the currency market, it doesn't really matter for us when we issue debt because we're at the top of the global capital structure, at least for now. That's something that could change in the next 10, 20 years, who knows. But going back to this chart, you know, so the reason the dollar strength tends to, you know, the reason the dollar and currency volatility are inversely correlated to global liquidity is because when the dollar goes up, everyone else's currencies go down. And when their currencies go down, you're talking about, you know, debt service costs inflating. 60% of all cross-border bank lending is denominated in US dollars. And again, this is bank lending between countries that don't have organic access to dollars. And so that's denominated in dollars. And then 70% of the international debt market or bond market

• 11:31Speaker 02

  is denominated in dollars. And so, you know, again, you're talking about, you know, with tens of trillions of dollars of global debt outstanding, international debt outstanding, if the 60 to 70% of that is denominated in dollars and the borrowers whose currencies are depreciating in value, they're going to be, you know, they're going to struggle to service that debt. And their inability to service that debt obviously means that they have less balance sheet capacity to acquire new assets. So you obviously have a depressing impact on global liquidity.

• 12:02Anthony Pompliano?

  Let's talk tariffs. It seems like they're coming. I don't know how severe they'll be. I don't know how many there will be. There's obviously some portion of the tariff threat is a bargaining chip, a kind of a negotiation tactic. But he put in tariffs last time he was president. So you got to think he's going to put some in place, you know, again, how does that impact the dollar?

• 12:22Speaker 02

  Yeah, that's a great question, man. So today, we actually got news out of the Washington Post, which has leaked sort of this conversation between Trump and his aides about, you know, him potentially being sort of amenable to a less aggressive tariff plan or tariff package than what he talked about on the campaign trail. So that would be an incremental negative for the US dollar. Dollar's down almost a percent today on the news. But historically speaking, what we've seen with the advent of tariffs is a stronger US dollar. So in this chart on slide six, on the top panel, we have US customs receipts indexed to the end of March of 2018. Go back to 2018, March of 2018 is when the first sort of US trade, uh, sign of trade war, uh, began when Trump started to levy tariffs against China.

• 13:05Speaker 02

  Uh, so we had a customs receipts double from the, basically from the end of March of 2018, all the way through the end of 2018, December 2018. And so we index it. And so if you index the performance of the dollar and the S and P 500 to when Trump announced those tariffs, dollar was up around seven, eight percent from that point in March in 2018, all the way through the end of 2018. The S and P, I think, when it declined right about eight percent, but in, in, inclusive of that eight percent decline, we actually had a 20% crash uh, in the stock market, uh, here in the U S in, in Q4 18. So it's our belief that, you know, one of the things that we tend to see, and this is not just with the US China trade war in 2018, this is something, this is, you know, centuries of data.

• 13:45Speaker 02

  What you tend to see is when new tariffs tend to get offset, uh, you know, right around two thirds of new tariffs get offset in the currency market. So let's say we add a 10% tariff against the, against China, then with, you know, you would expect to see six to seven percent uh, depreciation and the Chinese yuan offset that. And that's exactly what we're seeing on slide, um, on slide seven.

• 14:05Anthony Pompliano?

  When we saw that devaluation, uh, I see here that it had a max drawdown of 20% in the S and P 500. How much impact did these other currencies really have on US stocks?

• 14:15Speaker 02

  Yeah. So that to me is the, this is why we said earlier in this conversation that the dollar is one of the key lunchpans for 2025. Because again, if we saw incremental tariffs levied against the, say, a country like China, which clearly the US has a, uh, is, is an economic rival of the US. Then what, what was going to happen, it is historically is what happened and what's very likely to happen is Chinese yuan gets devalued, uh, 2018, 2019. You saw 13% uh, de- devaluation of the Chinese yuan. But again, the rest of the world's economies are not going to sit there and watch China siphon 10, 15, 20% competitiveness from them. So they, what it tends to happen are the sympathy devaluations of the euro, of the Japanese yen, of the Swiss franc, uh, et cetera.

• 14:55Speaker 02

  And so, uh, the, the sympathy, those sympathy devaluations cause a significant, you know, uh, up move, uh, in the US dollar. And that strength in the US dollar, uh, has a, a depressing impact on global, uh, liquidity and global balance sheet capacity, which ultimately has a depressive impact on global asset market performance. You know, for a couple of reasons. One, we just talked about dollar and currency volatility inversely correlated to global liquidity. But also, don't forget, you know, this US S and P 500 is a multinational index, you know, more than 50% of the company or for the S and P 500's on profits come from abroad. Right? So if you're talking about dollar strength, you know, to that degree, you're going to have a significant negative revision cycle amongst, you know, sales and earnings forecast that could also weigh on the index.

• 15:37Anthony Pompliano?

  Let's talk about international investment. Anytime that I see that we are doubling our investments and we're getting to trillions, let alone tens of trillions of dollars of deficits, et cetera. I just throw my hands up like, of course we are. Talk a little bit about what you're seeing here.

• 15:52Speaker 02

  Yeah, totally. So this is not, this deficit is not as bad as the deficit that you and I tend to be concerned about as fiscal hawks to some degree. And but, but this is really important, given the starting point of what could potentially be a refinancing air pocket that I want to say we talked about maybe in our previous conversation. So if you think about the US, so what are, what our net international investment deficit is, is just the, what a net international investment position is, is the sum of all of your, your, your foreign assets minus your foreign, minus the assets that foreign investors own of yours. And so foreigners own $20 trillion more US assets than we own of theirs.

• 16:31Speaker 02

  And so that, that, that, that deficit went from, you know, roughly $10 trillion of a deficit to a $20 trillion deficit over the past five years. And that, in my opinion, is a pretty dangerous indication of the kind of, you know, sort of selling pressure that could occur. If foreigners deem that the dollar is getting too strong, we got to start liquidating US assets in order to preserve our ability to extend and or refinance and or service debt. So if you think about this as a starting point, you know, again, this is an economy that's been around for almost 250 years. We doubled our net international investment deficit in five years. So in our opinion, that's a lot of hot money, you know, that could potentially come out of the US economy and US asset markets over a short period of time.

• 17:13Speaker 02

  To the extent that the dollar gets too strong for foreign investors to service their debt.

• 17:18Anthony Pompliano?

  Now, what's interesting to me is Donald Trump one time famously said, "We're going to win so much that you're going to get tired of winning." And it feels like international investors dumping kind of US assets because the dollar is too strong. If we want a strong dollar, but it's too strong, it's like too much winning, that actually can be hurtful as well. And so, talk about these international investors liquidating the assets in this chart you've got on slide nine.

• 17:44Speaker 02

  Well, that's, I mean, I love that you brought that quote up. That's exactly what we're talking about here. It's if we win too much, it implies that everyone else is losing, right? You can't win if unless there's someone else losing. So that's, that's kind of the problem. If they lose in the form of a dollar that's too strong, that is threatening their ability to service and/or refinance their international debt obligations, then we're talking about the need for them to, you know, liquidate those assets. You know, I use the first three quarters of 2022 as the, as a, as a clear indication of what could potentially happen in this situation. You know, go back to the, that time period, we saw the dollar rally around 18%. We saw gold decline 10%. We saw stocks down 25%. Saw bonds down 31%. Saw Bitcoin down 60%. And then again, this is

• 18:27Speaker 02

  just in the first three quarters of 2022. Now, again, we're not saying you should expect a repeat of this performance. This is obviously very exaggerated by the fastest monetary policy tightening cycle that we had seen in the, in the US economy over in over 40 years. So that won't be repeated. But again, it's a very similar cycle of what could potentially happen in the context of, you know, the advent of new tariffs could be, you know, right now, we're expect, the markets are celebrating right now via weak dollar, that tariffs could potentially be, you know, less onerous than what we're, you know, kind of all fearing. They could actually wind up being more onerous than what we're all fearing, right? The Fed might actually wind up with a economy that requires not only not cutting interest rates, but potentially talking about hiking interest rates again at some point in 2025 or 2026. And so, you know, you, you,

• 19:12Speaker 02

  you, you think about this from the perspective of the global currency market, you know, there's more ways to win if you're long dollars. And the more long, the more the world gets long dollars, the less the world will be able to get long of everything else in the context of global liquidity and in the context of where S and B 100 sales and earnings come from.

• 19:29Anthony Pompliano?

  When you look at kind of the incoming administration, there are two specific individuals that have been chosen. One is Scott Bessent, the other is Paul Atkins at the SEC. How do you see, let's maybe take Scott first, the changes, right? Everyone, I think, kind of looks at it and they say to themselves, okay, well, there's lots of us going to stay the same, right? The US dollar is going to be the global reserve currency, blah, blah, whatever, but there are going to be changes. Are there specific things that you're looking for in 2025 as that change occurs?

• 19:58Speaker 02

  Yeah, 100%. This is one of our key themes for 2025, or we offered the theme a couple of months ago, which is our Triple S's theme, and it's regarding the size, sequence, and scope of pending US fiscal and regulatory policy changes, right? You know, there's a way in which you could implement a lot of the Trump policies in a way that has very limited impact on asset markets and potentially a net positive impact on asset markets. But by the same token, there's a way in which you can implement those policies in a way that has a significantly negative impact on asset markets, particularly from this very asymmetric point in the positioning cycle, right? Recall that, you know, everyone's on one side of the boat right now in terms of the positioning and sentiment. Very bullish. Everyone's expecting very positive outcomes. And so if we don't get a sequence of positive outcomes you're talking about, we could have some problems. So I've known Scott for almost

• 20:42Speaker 02

  a decade now. He's been a longtime client and, you know, not a client anymore, obviously. But, and so, you know, he'll, he won't have any issue with me saying this, but he's been, in my opinion, inappropriately critical of Janet Yellen's, you know, net financing policy. He's been, you know, hypercritical of her preference for, relative preference for bill financing. So on the margins, if we started to shift away from bill financing towards coupon financing, that is negative at the margins. So that's kind of number one. If you think about it from the perspective of the deficit, you know, he's calling for 3% budget deficit. It's very hard to give, I mean, we've done as much math on this as anybody. Have you seen our, our analysis? It's very hard to get to 3% budget deficit to GDP ratio without taking a significant, you know, weed back or two, the entitlement

• 21:24Speaker 02

  spending, and that's very much a third rail. It's still a third rail for most politicians down in DC. So I doubt he'll be able to achieve that, that, that dynamic. And then with respect to growth, he's calling for 3% growth. Maybe that, that is something that we could potentially do and sustain, but it's going to require a Lot more, you know, legal immigration than I think that, you know, the sort of median MAGA voter is probably comfortable with. Because we don't have the kind of labor force growth in our economy. That supports, you know, having 3% growth in perpetuity. No matter how much we deregulate, you still need bodies to produce. Things. And so maybe we get a big productivity boom, but betting on a government sponsored productivity boom seems like a silly thing to do in the context of our, you know, innovative US economy. So that's good.

• 22:07Anthony Pompliano?

  I was gonna say, continue. What is?

• 22:10Speaker 02

  No, no, no, no. So I was saying, that's all the kind of the, those are some of the things that could go right and some of the things that could go wrong with respect to Scott Bess.

• 22:18Anthony Pompliano?

  So another question that I have is the southern border being porous, kind of having this pouring in of illegal immigrants. Obviously has a lot of concerns. There's a lot of people who rightfully so are calling for that to stop and we should secure the border. The only positive thing that I have ever heard anyone mention, and I'm not even going to say that they're right, but just the one positive thing. Was it brought cheaper labor into the economy that helped to quell some of the inflationary concerns. And potentially had some economic impact in a way that we might not otherwise had. Again, I don't think there's a single economic argument you're going to make to me that we should open up the border, right? So kind of put that aside for a second. The border should be closed, obviously.

• 23:03Anthony Pompliano?

  But if Trump comes into office and does what he says he's going to do, and he's going to close that border and he's going to deport. A lot of these people, what do you think the economic impact of that would be?

• 23:13Speaker 02

  Well, it's it's that question, right? And this is something we've been talking about in our research for a few months now as well, which is. One of the benefits of opening the border and having millions of illegal immigrants pour into our country is that we had a significant deceleration in wages. We had, you know, for example, if you look at the private sector employment cost index, that peaked at somewhere around 6% in 2022. We're tracking it around 3% now. So we basically got a halving of, you know, the private sector employment cost index, which is the broadest measure of wages and salaries that we. Maintain here in the US, US, UK, US of A. And then so as a function of that, we had unit labor cost inflation decelerate to. From let's call it six percentage in late 21, early 2022 to basically 1% now.

• 23:55Speaker 02

  And so we've had a significant deceleration in in unit labor cost inflation, which in my opinion was causal to the persistent above trend growth of corporate profits. So just stopping that at the margins would cause the economic growth to slow down because we're going to run out of incremental bodies to hire in non-farm payrolls terms. But also, you know, just stopping that, you're probably going to have less of a disinflationary impulse upon wages, which ultimately, and if that starts to reverse, and we just have a tighter labor market here in the US, then you're going to have faster wage growth, faster unit labor cost inflation. And if you don't have an acceleration in productivity growth to offset that, you're going to have a slowdown in corporate profit growth. That's just how math works.

• 24:33Anthony Pompliano?

  Where can we send people to find you or find 42macro and the great research you guys do?

• 24:38Speaker 02

  Look, man, I appreciate you. I love having these conversations. You ask phenomenal questions, brother. You know, if folks are sleeping under a rock, come check us out at 42.com, 42macro.com. I apologize for that. But as always, you know, we're really just grateful for this partnership and, you know, look forward to our next conversation.

• 24:52Anthony Pompliano?

  Thank you so much for doing this. I learn something every time. You got beautiful charts and even better insights, my friends. We'll do it again next time.

• 24:59Speaker 02

  I appreciate your pump. Thank you, brother.