Raoul Pal: The Economic Singularity Is Coming by 2030 — Here's How to Position Now

Welcome back to Impact Theory with Tom Bilyeu! In this episode, we’re joined once again by Raoul Pal, a renowned macro investor and futurist thinker. Raoul Pal dives deep into the seismic shifts happening in the global economy, exploring how AI and technology are driving the next exponential age, reshaping markets, and pulling liquidity away from sectors like crypto. Together, we examine the opportunities—and challenges—facing investors in an uncertain world, including the impact of central bank decisions, the evolution of money and digital assets, and the looming transition to AI-driven decision-making at every level of business and government. From debunking doom-laden narratives about the decline of the US dollar to strategies for surviving—and thriving—amid market cycles, Raoul Pal shares the hard-earned lessons all investors need to hear. Prepare to rethink your playbook for the future as we tackle everything from the psychology of investing to the profound societal questions emerging in the age of artificial intelligence. 00:00 Intro 00:59 Liquidity In the Stock Market 06:44 The Dot-Com Math Nobody Runs 11:20 The $600 Test 22:03 Why The US Wants $3 Trillion In Stablecoins 32:43 The Real Danger of the Doom Narrative 44:03 Why AI Can't Kill Us Cash App: Download Cash App Today: https://capl.onelink.me/vFut/v6nymgjl#CashAppPod *Cash App is a financial services platform, not a bank. Banking services provided by Cash App’s bank partner(s). Prepaid debit cards issued by Sutton Bank, Member FDIC. Cash App Visa® Debit Flex Cards issued by Sutton Bank, Member FDIC, and The Bancorp Bank, N. A., pursuant to a license from Visa U. S. A. Inc. See terms and conditions for the Sutton prepaid card, Sutton debit flex card, and Bancorp debit flex card. Cash App Green features, Savings, Direct deposit, Round ups, Overdraft coverage and Discounts provided by Cash App, a Block, Inc. brand. Visit cash.app/legal/podcast http://cash.app/legal/podcast for full disclosure. Quince: Free shipping and 365-day returns at https://quince.com/impactpod Whatnot: Download the Whatnot app today and get free shipping on your first order. Surfshark: Go to https://surfshark.com/TOMBor use code TOMB at checkout to get 4 extra months of Surfshark! ATT Business: Switch to AT&T Business at business.att.com http://business.att.com Horizon.ai: Go to https://horizon3.ai/IMPACTTHEORY and request your free NodeZero demo. No commitment required. Results in hours, not weeks. Quo: Try for free PLUS get 20% off your first 6 months at https://quo.com/impact Incogni: Take your personal data back with Incogni! Use code IMPACT at the link below and get 60% off an annual plan: https://incogni.com/impact Pique: 20% off at https://piquelife.com/impact Shopify: Own your customer relationships. Own your revenue. Start with a free trial at https://shopify.com/impact Ketone IQ: Visit https://ketone.com/IMPACT for 30% OFF your subscription order What's up, everybody? It's Tom Bilyeu here: Want my help starting a business? Join me here inside Zero To Founder https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show Sign up for my AI Masterclass: AI Masterclass https://tombilyeu.com/ai-masterclass?utm_campaign=Live%20Masterclass&utm_source=podcast&utm_medium=evergreen FOLLOW TOM: Instagram:https://www.instagram.com/tombilyeu/ Tik Tok:https://www.tiktok.com/@tombilyeu?lang=en Twitter:https://twitter.com/tombilyeu YouTube:https://www.youtube.com/@TomBilyeu See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

• 0:00Speaker 00

  Let's talk about the moment your side hustle becomes a real business. Now, I see way too many founders stay stuck running their business like it's a hobby. And then they wonder why nothing ever feels real. It doesn't feel real because it's not. I've helped thousands of entrepreneurs build real businesses through Impact Theory University. And the first step in the path to building a legit business is registering it. And Taylor Brands will help you do just that in a few clicks. An LLC, a limited liability company, is an official business structure. It's inexpensive to form and very simple to maintain. It's how you open a business bank account. It's how customers know they're dealing with a real company. And Taylor Brands doesn't stop at the filing.

• 0:45Speaker 00

  Their dashboard tracks what comes next based on what your business actually needs. So EIN number, registered agent, licenses and permits, bookkeeping, business banking. I tell every founder the same thing. Just make it official. Click the link in the show notes to check out Taylor Brands and get started on your business today. This is a paid advertisement.

• 1:07Speaker 01

  AI is easily the greatest discovery humanity will ever make. This is not an easy game to win or to start, but this is not going to be stopped.

• 1:17Speaker 00

  AI is sucking up all of the liquidity and it's causing a problem in crypto. And now, oh Jesus, we're 2008 again.

• 1:25Speaker 01

  This has cost more opportunity cost than anything I've ever seen. Meanwhile, the dollar keeps going up and they all say, yeah, but it's going to crash.

• 1:35Speaker 00

  Every empire that's ever had a reserve currency has lost it.

• 1:38Speaker 01

  What useful information is that? How useful, how useful is it? How does that help anybody apart from create a long doomy story about the world? So the US has lost its empire. The dollar is over, it's all going to collapse. How does that help anybody? Who do you think is going to be running economies in 10 years' time? Obviously going to be AI.

• 2:04Speaker 00

  Ralpal, welcome back.

• 2:06Speaker 01

  It's great to see you again, my friend.

• 2:08Speaker 00

  Been a while. Always, always wonderful to sit down with you. Now, this is a very particular time that we're living through. What I see happening in crypto shows that AI, a good thing, can pull liquidity out of the system so profoundly that somebody that was in crypto on debt now finds themselves in trouble. If we get a bearish sentiment that ends up hitting, let's just round it to the euro-dollar. And people just suddenly start going, meh, I don't want to lend money anymore to whatever. And now, oh Jesus, we like, we're 2008 again.

• 2:43Speaker 01

  But Tom, let's just call the business cycle. It happens all the time. It's exactly, that's what it's supposed to do.

• 2:50Speaker 00

  So you know something like that's probably going to happen, but just don't be a dumbass.

• 2:53Speaker 01

  It's very clear to me by 2030, we have no clue how the world's going to work, really. We literally don't.

• 2:58Speaker 00

  That's the economic singularity.

• 3:00Speaker 01

  Yeah, we just don't at that point. What does it mean when you put an AGI brain into a robot? You know, what does it mean when GDP growth can go at 20%? Who does it accrue to, as you say? To the invisible economy of agents we can never see, we can never touch, we can't talk to? That's a wild world, right? So I've been saying all along, I've been very consistent is this period is pretty easy. We've got the exponential age of technology kicking in furiously, which I started talking about about five, six years ago. And we're like, we've never seen anything like this. And to your point, the central bank has to keep debasing currency so our investments go up regardless.

• 3:47Speaker 01

  And we're in a race with China that we cannot lose, simply cannot lose. It's humanity level stakes. And China will say the same thing. They cannot lose to the US because no, we can't have a world system run by one AI. Can't happen. So therefore the chances, and we got the capex spent, the biggest in history, planned out by companies with huge amounts of money.

• 4:12Speaker 01

  So the chances are this elongates for a bit. Now, the problem with elongating is you end up with more excesses. Because not everybody's great, right? You end up with people misvaluing all sorts of shares, all sorts of things. Things can go bust, whatever. I just don't think it's now. I just don't think it's now, you know? And then I don't know what the world looks like in 2030. What is a company? What is a corporation? It's to give a, a group of people together, the rights of a human, which is what's corporate. So it has the legal rights and status. And it exists to make a profit.

• 4:52Speaker 01

  I don't know, it's a weird concept, actually, of a bunch of humans working for this entity that is no thing. But what is Royal Dutch Shell, one of the biggest oil companies in the world? Nobody knows anymore what it is. It's just a thing that just does its thing. No reason that can't be an automated thing doing its thing. So what is the value of half of these companies? We don't know. What could the stock market do in 2032? Well, you know, SpaceX could be worth $10 trillion. And 80% of the US companies could fail. And the economy could still grow. It's like, it's a really weird world, Tom, and I don't know what it means. And so I just think, I'm not going to worry about that yet.

• 5:36Speaker 01

  I worry about trying to protect yourself by making as much money as possible in the interim. And make intelligent decisions by using it as an opportunity to not have debt. To be able to observe, rather than freak out what it's going to do to me. You can observe and say, I wonder how this is going to play out. It's a much easier mindset to go through if you've kind of planned for it. This is exactly what I've been talking about. You know, when I started, I said, you have six years to unfuck your future, then five years to unfuck your future. We've got about four years to get this right. The gift of the opportunity was there. I mean, technology, we had crypto before it. Now we've got technology, crypto will probably have another run. It's all there. Just invest in your own demise. Don't fear the demise.

• 6:21Speaker 01

  And if you, if you, if you always think that tomorrow's going to be a rainy day, you're never going to go out anywhere or today, you know, you just, and it stops you investing. And that's why I've, I learned the hard way that I always looked for the doom.

• 6:41Speaker 01

  And what I did was miss the upside. And not over short periods of time, but I still see it with friends of mine. The kind of gold bugs who've been doing this doom mongering for 30 years.

• 6:55Speaker 01

  And they've not made money because they haven't been able to invest. They've kept their capital. You know, they've, they've staved off devaluation and, and debasement by owning gold, let's say. But they've missed the entire output of humanity, which is this increase in intelligence. They hated it because it was always going to go bust.

• 7:18Speaker 01

  But that's mad. When human ingenuity and the rise of intelligence and the increase in the value of NASDAQ companies or technology companies overall is relentless. The technology companies of the past, you know, get replaced by new technology companies. So yeah, could you be in the wrong company? Just buy the NASDAQ. It's the same thing with the crypto. I'll just buy Bitcoin, buy NASDAQ and save up some cash. And if there's a big sell-off when it's down 50%, you say, thank you very much and buy some more.

• 7:51Speaker 00

  How does somebody avoid the reality that when the dot com bust happened, it took 15 to 20 years for a lot of those companies to rebound?

• 8:04Speaker 01

  So you're missing what I'm saying. Let's say price of asset at peak is 100. Let's say you got in at the last part of it. So you got into 70 or 80, let's say, right? So you didn't get the absolute top and it falls 90%. So it's down to 10.

• 8:22Speaker 00

  Yep.

• 8:24Speaker 01

  And you double your position. Your average is now 50.

• 8:29Speaker 01

  Where did, how long did it take to clear that? Not very long at all. If you chose a bit of stock picking, had you chosen Amazon into that fall, which went down 96%?

• 8:41Speaker 01

  I mean, Christ, the amount of money you have made, you were more than compensated for that sell-off that you had. But people just think so short term. Because what they're not doing is projecting their future self here. You're projecting your current self onto your future. So if you're saying, hey, there's a secular trend that goes probably into infinity. And there'll be some big ups and downs on route. And I'll take advantage of those by, if it gets wildly overpriced, I might sell some. And if it gets back down to super cheap levels, I'll just buy more.

• 9:15Speaker 01

  But most people actually fear going there because they're worried there's a pothole in the road. It's like, I say I don't get it, of course I get it, because the human emotion side is the hardest part. And I've been there, I've been paralyzed by that stuff in the past. I was paralyzed from 2008 to really buy equities, after 2008. I just didn't buy equities. It took me until 2020 to buy equities again. Yeah. I mean, I make money in all sorts of bond markets and currency markets and stuff, but equities, no way. And in fact, I saw 2000 coming, because I saw this demographic bust coming as well.

• 10:00Speaker 01

  So I hadn't been long equities, myself personally, since 1997.

• 10:09Speaker 00

  So wait, this seems like you're, now I'm having to update my mental model. I thought you were saying, you're in equities, they drop, no worries, W your position, you lower your, you know, the rate at which you're going to break even. But you're saying your actual reaction to 2000, 2008 was to eject out of equities for a very extended period of time.

• 10:32Speaker 01

  Yeah, because I was lucky enough to be able to make money in other things, right? Because I'm a macro investor. But that's the psychological scarring that you do. And if I had just held on to the S and P 500, which is not the most exciting thing in the world, since 1997, you would have made a prosperous amount of money. And this was the same lesson I learned with Bitcoin, if you remember. Told you that story where I sold out and blah, blah, blah, and then bought back in. And I've realized, why is Jeff Bezos so rich? Why is Warren Buffett so rich? Why is all of this stuff so? It's because they basically have long-term holds, and they buy when it's cheap.

• 11:13Speaker 01

  And you started with Buffett here, and Buffett's wildly underperformed a lot of people, lots of stocks over time. But really, all he's doing, he just holds on to stocks for a very long time, and if they get cheap, he buys some more. This is exactly what I'm saying. But because I quite like racier things that go up faster, because it's not other people's capital, it's my capital, that's different.

• 11:36Speaker 00

  If we're going to run an average Joe playbook right now, I think I've heard you just say it, which is, okay, listen, if I were going to redo 2000 to now, instead of dipping out and just being gone forever, I'm not going in on debt, I'm going to have a broad-based position, I'm going to think long-term, when things dip down, then I need to get back in, not necessarily double my position, but I need to get back in, stay in, as long as whatever thesis I believe about the technology, which you haven't said this here, but you've very much on record as saying, look, tech is the only thing that really grows. So presumably, that would be the statement that the average Joe, you've got to be in

• 12:18Speaker 00

  technology in a smart way, meaning no debt, broad-based, and then hold for a long period of time. Is that the average Joe playbook?

• 12:28Speaker 01

  Yeah. And then you think, okay, how much does it psychologically affect me if it goes down?

• 12:36Speaker 01

  And people tell you they're okay with a 50% drawdown, but they're not.

• 12:43Speaker 01

  But technology stocks, because they perform so much, and crypto, because it performs so much over time, has these drawdowns. So you have to be honest with yourself, look yourself in the mirror, and say, 50% drawdown. So then say, okay, my whole investment pie is $1,000. If it went down 50%, how would I feel? Sick. Okay. Then all you do is say, okay, I'll take that portion out in cash, so I've reduced my position size. Now how do I feel if my $600 falls 50%, I've lost $300, I don't mind anymore.

• 13:22Speaker 01

  That's your comfort zone. That cash is what you use when the market falls. That's what Buffett is doing. That's all it is. That's the whole game of long-term investing. It's so easy, it's ridiculous, but we complicate it. We want to go on X all day and look for the latest stock pick, and then we want to worry about, you know, where the latest crash is going to come from. We debate it and do it. You don't actually need to do any of that stuff.

• 13:47Speaker 00

  Okay, I was going to ask you if there was a metric that if it moved in the wrong direction, you would consider AI to be in trouble, bearish territory, whatever, but it sounds like you don't really think about that.

• 14:00Speaker 01

  Of course I do, because I have, you know, I write research and I have to think about other people, and we, you know, just because I've said to you with conviction, these are my views, you have to hold them loosely, because, you know, nobody knows, things change, things happen. So I've actually built myself, I'm going to boast now, with Claude Code, an enormous dash, not dashboard, it's a platform for Global Macro Investor, my research business, and then Real Vision as well, has versions of these, but I've built ones around just this. Supercycle, is it going to be a supercycle? What is the, what is the intelligence cycle? Where is the debt risk? Where is this?

• 14:41Speaker 01

  So I've got like 15 indicators in that, that I put together as one single indicator. And that's everything from credit spreads on Oracle and CoreWeave and the other listed ones, to the rate of change of the earnings of the hyperscalers, through to the, you know, the rate of change of the adoption of the technology, through to, you know, there's a whole bunch of these things that make sense. You want to see, is that stable? Of course it's going to go up and down, or is something happening there that's not good? Then we go back to the, so that's the exponential age stuff. Then we go back to the basics is, is liquidity going up or not? Are financial conditions amenable for this to continue?

• 15:24Speaker 01

  Because to your point, if there is not enough liquidity for the needs of this beast, then we run into problems, because there's not enough money around. Now, what the US has done, Kevin Walsh has done this, well, he was part of it, Scott Besen was part of it, and Steve Mirren was part of it, they've changed the banking laws. And Japan has done the same thing as well. What they're doing is, from 2008 until last year, basically all liquidity was provided by the Treasury or the Federal Reserve, by the balance sheets and the Treasury general accounts and the repo markets and all this stuff, centrally controlled.

• 16:08Speaker 01

  What's happened is, they're changing the banking regulations to make sure the banks do it. So the banks, only two places can, two people can create liquidity, the central bank can create money, the central bank or the banking system itself. And they're basically asking the banking system to do it. Japan did this, they steepened the yield curve, they released the currency valve, and what's happened is, everyone's like, oh my God, Japan's going to blow up. The opposite happened. Japanese banks started lending. Why are they doing this? Because it's exactly your point. There is no way the governments can provide the liquidity for this.

• 16:47Speaker 01

  So it has to come from the banking system, the lending markets, the capital markets, the savings pools, all of that. And in the end, maybe you're right. In seven years' time, five years' time, will that be a misallocation of capital? Doesn't look like it, because this is the fastest growth of anything we've seen. But who knows where the debt ends up and who does the stupid things? Because there will be stupid things. We're seeing margin debt on US equities as a percentage of market cap being high already. And that's like, you know, you don't like to see that, because it tells you that humans are speculating on all of this stuff. You know, you get that stuff, so, but again, is it likely to end?

• 17:31Speaker 01

  Again, I've been through the 90s and this ain't nothing yet. It was insane squared. I mean, I remember being on holiday, I can't remember where I was, somewhere in the Caribbean, some fancy place, no, it wasn't the Caribbean, I can't remember where else, somewhere in the world, some very fancy dive resort, Maldives or somewhere, and I was chatting to this American guy, I'm like, what are you doing here? He was a guy who climbed the telegraph poles and fixed the AT&T wires. And he's like, you know, I've just, he was talking about his new $200,000 kitchen he just put into his house, or whatever, $100,000, whatever the number was, it was a stupid number, blah, blah, blah. Like, what are you doing? And I'm like, how did you do this? Because I'm a day trader, that's where I make all my money.

• 18:16Speaker 01

  And it's at that point when you realize, we haven't got there yet.

• 18:18Speaker 00

  Yeah.

• 18:19Speaker 01

  We're not, we're just not there yet.

• 18:22Speaker 00

  We're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere. There's a reason Quince sells cashmere for $60, and it isn't the cashmere. It's real 100% Mongolian cashmere. It's the same stuff luxury labels charge a fortune for. Quince just works directly with ethical factories and cuts out the middleman. So there's no need for a markup and no logo tax. The $60 goes to the actual sweater, not the fancy name on the tag. That's why everything they make runs 50 to 80% less. And it's not just the cashmere. I ordered a few things myself, their fleece joggers, a couple of their tees, which I wear obsessively.

• 19:04Speaker 00

  First thing I noticed was the quality, soft, well-made, built to hold up. They make down jackets and wool outerwear now, too. So upgrade your stuff to things you'll actually wear. Find your next fall favorites at Quince. Download the Quince app for app exclusive offers or go to quince.com. Get free shipping on your order and 365 day returns now available in Canada and the UK, too. And when Quince asks where you heard about them, let them know it was Impact Theory. It's the best way to support the show. Let's talk about what it means to actually be visible in today's day and age. When you build something public, whether it's a business or an audience, anything on social media, you become a target.

• 19:47Speaker 00

  This is something that legitimately keeps me up at night because our data isn't just on the obvious broker sites. It's on old news portals, public forums, obscure directories, places you would never think to look. That's where Incogni's exposure scanner comes in. It hunts down your personal information across the wider web, not just the 420 plus broker sites. Incogni already removes your data from automatically. They can't harm you if they can't find you. Go to incogni.com/impact and use code IMPACT for 60% off an annual plan. Try it risk-free for 30 days.

• 20:26Speaker 00

  That's incogni, I-N-C-O-G-N-I.com/impact and use code IMPACT. Let's talk about your sales pipeline reviews. If your CRM is half-empty fields and notes, nobody finished, every review turns into guesswork. I've seen it so many times in my own sales team, and that's where today's sponsor Pipe Drive comes in. An intelligent AI-powered sales CRM that is loved by growing sales teams. Pipe Drive just launched meeting intelligence built right into the CRM. Before the call, it pulls the deal history and past conversations into one brief. During the call, it records and takes notes. After, it drafts the CRM updates for your rep to review and approve.

• 21:11Speaker 00

  The record stays complete and you see what's actually happening. Switch to a CRM built by salespeople for salespeople and join the over 100,000 companies already using Pipe Drive. My link gets you an exclusive 30 days free instead of the usual 14-day trial. So make sure you use it. No credit card or payment is needed. Just head to pipedrive.com/impact to get started today. That's pipedrive.com/impact and you can be up and running in just minutes.

• 21:45Speaker 00

  Thanks for sticking around. Let's get right back into the action.

• 21:49Speaker 00

  What lesson should we be taking right now is where crypto's at in this moment, which I'll say is chopping sideways. Is that a liquidity story? AI's just sucked all the enthusiasm and all the money? Or is it a fundamentally flawed tech that nobody's going to remember?

• 22:03Speaker 01

  No, I mean, look, it's exactly, exactly as you said. There's a certain amount of liquidity.

• 22:12Speaker 01

  And the reason being is the US is not making a lot of it because what they want is the banking system to do it. But the yield curve is because of the Iran war and slightly punished inflation and the oil price and stuff like that. The yield curve's not been steep, so banks aren't kind of wanting to lend at the long end. They're not making enough turn, enough spread. So that's stopped the banks using their balance sheets enough yet. So Wash, Beston, they're trying to get that resolved. That's, those are the levers they want.

• 22:45Speaker 01

  And then the banking system should step in. But generally speaking, US liquidity growth has not been big. And that's been the reason. So if it's not growing super fast, my general broad liquidity measure is about 4%, but we need to grow at about 8% to fund the debts and the interest payments. So therefore it gets enough to fund the AI bet, but it's not enough to fund everything else. And they have to do something about it because the interest payments on the debt, they've got a lot of debt to roll this year.

• 23:20Speaker 00

  A lot.

• 23:21Speaker 01

  Yeah, and they keep jamming at the short end, which is liquidity. So yeah, liquidity's not enough yet versus what we need for this. They're hoping the banking system takes the difference, then crypto takes off. And I think it all resolves itself. Again, they're not, they're not stupid. I always take, I've known Scott Beston for 30 years. I first went into his office when he was at Soros and I was at Goldman Sachs in London. He's been to my house in Spain. He was a subscriber to my research for many years.

• 23:57Speaker 00

  Let's go.

• 23:58Speaker 01

  So he's not a stupid guy. These guys know what they're doing. Now, did they get it right? Different matter, but they know the game. Don't forget, we've got a macro hedge fund manager running the US Treasury. Never happened before. And we know, we know, we, we understand his language. He understands our language. He knows the game.

• 24:20Speaker 00

  Yeah, no doubt. Beston is an interesting character to me. I think he's becoming more political as the days go by. But yeah, it definitely feels like you've got somebody that understands how to pull the levers in the right way. So as you look at where crypto goes, do you think that people are going to return to it? Because there's something fundamental there. Like when I look at the Clarity Act and I see Japan moving on theirs, I see Russia moving on theirs. You know, I get how it creates appetite for debt. You get the stable coins back at one to one. The US started the hype train on that, but we haven't been able to get it across the finish line. Do you think it's that finally goes across the finish line? We've got a fundamental reason why people come back. Or is it just, no, no, no.

• 25:04Speaker 00

  Crypto is when there's enough liquidity sloshing around, people go way out on the risk curve. Crypto is a fun thing that they can gamble on.

• 25:12Speaker 01

  All of the above.

• 25:15Speaker 01

  I mean, you know, we can't pretend that it's not the most liquidity sensitive asset on earth. Reason being, it's the scarcity in Bitcoin and then Bitcoin drives further speculation. It goes out the risk curve, but it's also a technology. And that's the important part to understand. Let's use Ethereum because it's easy or Solana. These are just technologies. They're technologies that allow you to do certain things. And what we're seeing finally is the entire financial system scrambling to adopt it. So it's not just about buying Ethereum. In fact, don't really care about that stuff. Sure, some investors do. What they care about is using blockchain. And Ethereum is the cost of the block space. It's a currency in that respect.

• 25:59Speaker 01

  It's a claim on the block space. And so we're seeing the rise of stable coins. It's been huge how fast they're growing. And everybody's built from Stripe to Shopify to Circle to, I mean, you name it. Everybody's building out stable coins. So they've made the decision. Scott Beston has said, well, this is where the liquidity for our debt is going to come from. We want to get to a trillion, two trillion, three trillion of stable coins. Why? Because it means that US dominance of currency goes to the end person in the rice field in the Philippines, where they're holding dollars in stable coins. To the fact that three trillion of stable coins is a three trillion buyer of short-term debt. Great, that solves a lot of problems.

• 26:45Speaker 01

  So stable coins is good for everybody, which is why it got through its regulations super fast. It's an economic weapon. It's an economic superpower, increases velocity of money, does all the things you want it to do. Then the banks are building rails for tokenizing assets, funds, real estate, whatever it is, because it's an efficient way of doing it. Great. Then the DTCC who custodies and clears all of this stuff, does like four quadrillion trades a year or whatever. Well, they're building on this now. The Nasdaq's building on it. So the use of the technology is going like this, but they're also relatively early stage. So the speculators are the difference.

• 27:30Speaker 01

  So the, the, the building is all happening. The speculators are the difference. Right now, the building is still relatively early, apart from stable coins, which are growing fast. A real world assets are growing fast, but they're too small and the speculators aren't around because there's not enough money around. So you might as well, if you've got any money, you speculate in the easier trade.

• 27:50Speaker 01

  Probability of the of the bull market returning, continuing the secular trend that it's been in since it came out, you know, for me is extremely high because every single bank and every single financial institution and every single government is telling you it's going to. They wouldn't be regulating if it's not going to happen. The entire banking system is telling you it's going to happen. Everybody from Larry Fink to Jamie Dimon is telling you it's going to happen. And yet people are saying, well, it's not going to happen. So that's highly unlikely. So it's the liquidity story more than anything that brings in excess capital and excess savings, which allows us to speculate more, which is why they always go hand in hand. And I think we haven't got to that point in markets because liquidity has not been growing enough. And my bet is it's coming.

• 28:35Speaker 00

  All right. I've got a crazy idea that I'm not even sure how much I believe in this, but it certainly is in the back of my mind that one thing that's going to happen is you've got the central banks buying up gold, trying to get out from under the US system, I think. And China obviously being the most aggressive among them. I think China's really making a play to, I think they're going to try to back the yuan with gold and say, no, listen, you guys have us all wrong. Like, we're the sensible people. But at a minimum, they're going to be able to get out from under gold. They've stopped their own people from trading paper gold. I think they want to get a Hoover to get

• 29:15Speaker 00

  all the gold that they can to leave the US, the West, London certainly, and get over into China, both in the central banks and with personal buying. And then if they ever need to clamp that valve off, they can do what the US did and revalue the yuan or whatever they decide to do. But what's interesting to me in terms of Bitcoin is you've got this major play where the number one central bank asset is now gold over US debt. And I think for a digital native, we have, call it one generation right now that were kids when Bitcoin came out. So for them, Bitcoin is just a thing. You're going to raise another generation for whom not only Bitcoin will be that, Bitcoin will be like the graybeards,

• 30:00Speaker 00

  that's what they're into. But stable coins will just be the native way that they think about it. And as the world begins to say, we need to get out from under US debt as a reserve asset, we're going to gold, that the digital natives will be like, oh, yeah, cool. I want the same idea. I just want mine in Bitcoin because I don't like the idea that it's physical. I have to store it somewhere. And I could see that because I don't think right now people actually treat Bitcoin like digital gold, though for me, that remains the most compelling aspect of Bitcoin. Could you see that psychological shift happening? Or do you think that's fairy dust?

• 30:39Speaker 01

  Until it gets closer to saturation of its total addressable market, and volatility goes down, you're not gonna, it's harder to substitute because it's volatile. So if you're putting it in your savings assets, it's quite hard in gold. I mean, gold can move a reasonable amount. You know, 20% correction is not unusual, and they can last years. And in Bitcoin, it's 50%, 60%, whatever the number is, you pick your number. So until it gets deeper, more mature, it's unlikely to do that. But that process is the process of getting mature, is more people use it, more people adopt it, and more people lock

• 31:21Speaker 01

  it away, and less people trade it, and it becomes less speculative, all of that. So yeah, I think that's coming. I, yes, many of the world's central banks want to be less beholden to the US. But there's no way they can operate without them. They're not going to. The system cannot operate without dollars. And I've heard for my entire career, China or choose your own country is going to go back to the gold. Nobody's going to go back to the gold standard. It's never going to happen.

• 31:54Speaker 00

  Why do you think they're moving so hard then to buying gold?

• 31:58Speaker 01

  Well, because their currency has been going down. I mean, think of a central bank, right? Most central banks just do two trades. When their currency is going down, they buy gold. When their currency or the US dollar starts going down, they actually, they buy dollars and treasuries. They run this, almost all of them run this whole strategy as a function of their inflows and outflows and exports. Because when the US dollar is weak, they're selling more products. When the US dollar is weak, the economy is working better, their currencies are strong, they're making money, they start investing in US assets. And the other way with gold. So yeah, over time, they want to diversify assets,

• 32:42Speaker 01

  for sure. But I don't think anybody's got an answer to how did we get away from the dollar?

• 32:49Speaker 00

  We're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere. Let's talk about how much you're paying to stay safe online. Count it up. A VPN, a password manager, something to block ads and trackers, the service to scrub your data off of broker lists, a tool to flag scam emails. That's five. Five subscriptions, apps, logins, and most people still have gaps. That's the problem Surfshark solves. It's not a VPN. It's an all in one security suite. One tool that protects your connection, your personal info, and your devices all at the same time. Go to surfshark.com/tomb

• 33:32Speaker 00

  or use code TOMB for four extra months of Surfshark, backed by a 30 day money back guarantee. That's S U R F S H A R K dot com slash TOMB. Surfshark dot com slash TOMB. Use code TOMB for four extra months of Surfshark. Thanks for sticking around. Let's get right back into the action. I don't want to put words in your mouth. For me, it's just a question of timeline. When I look at what the US is going to have to do, they're going to keep inflating. And if I am in a Cold War with the US, which China is, in my estimation, I certainly don't

• 34:16Speaker 00

  want to be beholden to them. I want to get as much strength as I can. I'm already choking them out from a rare earth metal and processing standpoint, from a manufacturing standpoint, basically all drone roads lead through Beijing. So if I can also weaken their influence over me because I hold their debt, I will, which they obviously are selling the debt. So while I get it right now, the system certainly operates on USD, and it's certainly not going to change like overnight.

• 34:46Speaker 01

  But Tom, I've heard these Luke Gromm, I've heard it from, you know, all of these people, this argument has been going on my entire career.

• 34:56Speaker 00

  Okay, let me ask, I'll ask something.

• 34:59Speaker 01

  Not once has it been true, Tom. Not once.

• 35:02Speaker 00

  So I'm going to make the case that the, it's because you're looking at the time scale incorrectly, and that these guys have called the thing that actually is happening. And so it's just that, yeah, it might take another 20 years or whatever, but from a direction of travel perspective, it seems pretty self evident that China is, is going to free itself from being beholden to the US, that the US has done itself so dirty from a petrodollar standpoint, that you're going to see a weakening of the petrodollar. You've already got Scott Besson saying we need a Bretton Woods 2.0. So he admits the petrodollar is not working anymore. So it's like, well, if we're in this state of flux,

• 35:46Speaker 00

  I think these guys have been pointing to something that is, I'll say it's an inevitability. Every empire that's ever had a reserve currency has lost it on roughly the timeline that we're on now. And yeah, it may take a very long time. So these guys might have started calling a 50 year move at year 50. And so now it's going to take a very long time for that actually to play out.

• 36:11Speaker 01

  What useful information is that? How useful, how useful is it to say, in 50 years' time, the world may have adopted a different currency based around electricity, and some of them might use gold? How does that help anybody? Apart from create a long doomy story about the world so fucked, the US has lost its empire, the dollar is over, it's all going to collapse. How does that help anybody? This is why I've got a real issue with this story, because I've heard it my whole life, and it's actually lost people more money than any single other memetic that's ever been spread, even more than buy these stocks at the top, anything. This has cost more opportunity cost than anything

• 36:56Speaker 01

  I've ever seen. Meanwhile, the dollar keeps going up, and they all say, yeah, but it's going to crash.

• 37:02Speaker 00

  Well, it's interesting. So I'm not saying it's going to crash. So I'm painting a, I have a different narrative running in my head.

• 37:09Speaker 01

  Go on.

• 37:10Speaker 00

  So the way that I think about this, the reason I think that it makes sense to pay attention to that move is, I come at this from the perspective of, don't think that you see the future clearly, so don't make like these really extreme bets. Given that I see people moving away from the dollar, I think, okay, central banks are more interested now in holding gold. So while I would never want a meaningful percentage of my portfolio to be in gold, it's like, oh, cool, that's something for me to put a little bit more money in. So that's certainly part of my strategy is in this moment, I've made a lot of money off of, call it the straightforward trade, be in technology, expose yourself

• 37:54Speaker 00

  to equities. It's been great. Now I'm starting to take some of those wins, and I'm starting to diversify more, a little bit into gold is one of the plays that I'm making, going more broad.

• 38:06Speaker 01

  But I'm more worried, Tom, not about that, which is the sensible way of earning gold. Everyone should earn a bit of gold. It's the strategy of telling people that this is all going to unravel in this big world order change. And what happens is it psychologically affects people that costs them a fortune.

• 38:25Speaker 00

  Yeah, no, I think you've got your finger on something. I want to make sure though you, you realize I'm not saying that. So.

• 38:31Speaker 01

  I know, but the story you're telling is, and people won't hear what you've just said, which is like, oh, I've got a percentage of my allocation in gold because it's got a place in a portfolio. And it feels right. I can see a trend there, which is very rational logical, to the US is doing this, and it's a 4D jigsaw puzzle of which the Chinese are going to win because they're going to take over the, the rare earth metals in Africa and the Belt and Road, and the US can't see this, and, you know, and then suddenly there's going to be a new currency in this gold. But that whole stuff gets people into a feeling that it's all about to end.

• 39:11Speaker 01

  Any day now, my position in the US or the US economy or US equities, can't you see they're going to take it away from us? That's what all these newsletter guys are selling. They're all selling.

• 39:24Speaker 00

  Yes, well, yeah, they're all selling clicks and certainty and all that. Totally understand. But let me ask you a very specific question. Because I have this belief that, oh, this is something that I think is happening in the background, I don't own any long-term US debt. So I own a ton of US debt, but it's all short-term. So that's a very direct way that that belief plays out in my portfolio. Do you think that's crazy? And you own long-term debt and you're like, yay? Or?

• 39:52Speaker 01

  No, I was a bondholder for years because it was a bond bull market. As we went, you know, as the baby boomers went through retirement, it drove down inflation. I still think, I don't think we're going to have long inflation. I think we'll have deflation back again because that's what population shrinkage and technology does. But you might as well back the innovation, which is owning the equity, than owning the bond, which is the US government's liability. So no, I wouldn't, I wouldn't own them. Short-term debt, great. Interest rates are pretty decent right now. You know, gives you a bit of cash balance, not a problem. If the world, you know, if the markets correct sharply, you've got some cash in short-term T-bills.

• 40:35Speaker 01

  Fantastic, you can use them, all super sensible, you know, to have a bit of gold, a pot of cash, earning some, some, some yields, some technology equities, bit of crypto. It's a very sensible portfolio.

• 40:52Speaker 00

  You mentioned earlier the K-shaped economy, it's going to keep going. God, this is, it's so funny, talking to you is like a fascinating mirror on myself. So I look at the K-shaped economy.

• 41:04Speaker 01

  Let's hear the doom now, come on.

• 41:06Speaker 00

  Yes, so well, so I actually don't buy into doom because that would assume that I can see the future clearly, which I know I cannot. But when I.

• 41:14Speaker 01

  You assume it's going to rain tomorrow?

• 41:16Speaker 00

  No, but I own an umbrella and I keep it by the door. That's probably the right way to think about me. So that should I go out and see raindrops on the street, I'm not like, where the fuck do I get an umbrella? But so I look at the K-shaped economy, this is probably the thing that I think the most about, this is the only reason that I started researching the economy in the first place was I, at the point that 2020 hit, I was still only a few years out from having thousands of employees, a thousand of them had grown up very hard. And so they're, you know, at the, the wrong side of the K, they're on the wrong side of the K. So that's what got me engaged in all of this. Now, I see in the US, the rise of the DSA, which occupies, I am emotionally triggered

• 42:00Speaker 00

  by the DSA, so that already gets me invested in all of this. But do you see any concerns about doing economic things that will ensure that the K remains a K? Or to you, is that a nothing burger and it will peter out on its own?

• 42:19Speaker 01

  Which, the K-shaped economy?

• 42:20Speaker 00

  Yeah, because I, I see growing tensions in the US that will not resolve until the K is closer to the middle.

• 42:27Speaker 01

  It's only going to get worse. And so is the.

• 42:32Speaker 00

  Not, not a big deal? Or it's going to get worse and this one pay attention?

• 42:35Speaker 01

  Of course it's a big deal, but it's been happening for quite a while, which is why the US has done this in politics and the UK has done this and everyone has done this, right? Virtually centrism has disappeared from everywhere. Why? Because one group want to blame one group and one want to blame another. But as I said, a lot of this is down to demographics. Blame World War II if you want to blame anybody. And so this whole issue doesn't go away. And that fight has also been the fight between capital and labor. That's always been the balance of politics and economies. We're about to get something bigger, which is, we're going to split between the accelerationists

• 43:17Speaker 01

  and the decelerationists, those who want to embrace the technology to give them the superpowers of economic superpowers or physical superpowers or mental superpowers versus the people who are going to go suck their teeth and go, no, you don't want to do that. This is dangerous, this is terrifying, you don't know what it's going to do, we're going to lose our jobs, right? That is going to be the defining battle and then it will eventually morph into who wants to give the AI robots rights, economic rights. That's all coming. So we're going to be divided for a long time. The issue is the printing of currency to service the debts, to keep everybody's livelihoods basically okay, costs the poor side of society, everything.

• 44:02Speaker 01

  And I don't know the answer because every side is trying it. They all see it. If you're, if you're in the US, if you're a Republican, the center of the country, screwed because of the K-shaped economy. If you're a Democrat, city dwellers who aren't rich, screwed because of this. Those are their voters. Both have tried, both have been in power, none of, nobody's resolved any of this because it's, they can't. The answer would be stop printing currency. What does that do? That collapses all the pension system. Because the equity market, which way do you want it? Do you want a 5%? You're on, you're on an 8% debasement, which is the cost of the put? Or do you want an 80% haircut? You choose.

• 44:47Speaker 01

  That's, that, that is, that is the game, unfortunately. It's horrific. Most people choose the 8% cost.

• 44:55Speaker 00

  When you look at, as a macro investor, you're looking at historicals, do you go, okay, this all leads to Maggie Thatcher? Or what do you think this leads to? Is this French Revolution or Maggie Thatcher?

• 45:09Speaker 01

  The fourth turning. What, who do you think is going to be running economies in 10 years' time? It's obviously going to be AI. The decision-making changes wildly. We're already seeing AI in every company. It's not fully on the board of many, but it is on some. If I go to the Middle East, which I go often and go and see the sovereign wealth funds, they've got AI on their investment committees as a person who votes.

• 45:41Speaker 00

  Wow.

• 45:42Speaker 01

  Yeah. And they've got it in companies and they've got it in government. We all will because it's smarter and better at decision-making, more level-headed and can see the picture better than we can. So in terms of optimal allocation of resources, which is what this whole game of humanity does, it's better than us. We're all using it for marketing strategies or whatever it is. Why? Because it's better. It's faster, makes better decisions, it sees with more depth and connects more dots than most people do. It's not as good as the greatest people on earth, but it's bloody good at everything. In fact, every single topic known to humanity and every single mental skill known to humanity,

• 46:26Speaker 01

  it's up there with the 0.01%. So of course it's going to be running governments. So when we talk about this in the future, do you think the Gen Z are going to say, you know what, we should, you know, have the, the, the Gen Xers or the whatever? No, they're all going to say, of course it makes more sense to use AI. So that's where I think it's going. And that changes now, is, does AI come good? AI come bad? You know, that's the whole world of sci-fi and we're going to find out. That's where we're going. We'll find out, is it good or bad? And my guess is, it was built on our intelligence, it'll be both good and bad like we are.

• 47:08Speaker 01

  But generally speaking, it'll just keep moving forwards in a way that doesn't blow everything up. Because if it removes us, it removes the compute that makes it, the messy compute. Humans have this very weird compute because we do all sorts of random things driven by qualia. So we create this very complex compute. It doesn't do that, machines don't do that yet. What do you think Neuralink is about? It's the, it's the direct connection between machine compute and human compute. Okay, that's super interesting. It's unlikely to get rid of us because it can't do without us. Like, we can't get rid of the trees that we talked about before, the ecosystem of intelligence that allowed for humanity.

• 47:52Speaker 01

  If we did that, if we destroyed the ecosystem, the planet, nature, we die. We're all built on each other.

• 47:59Speaker 00

  I've never heard anybody make that argument. Tell me more. It is not immediately obvious to me that that would be true.

• 48:07Speaker 01

  So we were talking before, and it's a longer conversation for another day, but I've built a thesis, which I call the universal code, which is even more grandiose than the everything code and more hubristic, even though I come from the acknowledgement is, I don't know, I'm no expert in physics, philosophy, mathematics, any of this stuff, but I stumbled into this whole big thesis. Part of the thesis is that intelligence is that, is that things, atoms, particles, all the component parts, eventually start creating coherence and networks.

• 48:49Speaker 01

  And what it does, and I'm going to go back to firstly, humans. So humans, we are hugely curious, we network with each other, we then start compressing all the intelligence of everything around us. That is what science is. People don't think of it that way. Science exists, I mean, these things exist. We think of science as a breakthrough, it's not. It's us figuring something out that already exists. We just didn't know the story and then we find the story. So we're compressing all of the knowledge of the things that were around us. How to, you know, how does geology work? How does biology work? How does physics work?

• 49:31Speaker 01

  How does, all of this exists. We're not making it. So we're compressing the intelligence of everything around us because we're the apex intelligence. The AI is just compressing human intelligence, of which more intelligence will come out. And the whole process of the universe is exactly that. It is forming coherence, compress it, that creates intelligence over time. And that eventually compresses and forms more because the universe solves for output of intelligence per unit of energy.

• 50:08Speaker 01

  So we, so AI is not going to kill us by definition because we are part of it. Like, nature is part of us. And the atom, the water is part of the trees. I know this sounds woo-woo, it's not, it's actually just physics and biology. This is exactly how things work. You can't kill it off. Take the water from the planet, all the trees die. Take the trees, all the humans die and all the animals die. Take the humans away, all AI dies. It's all the same thing. We are the same thing. We're just nodes in a larger consciousness and a larger computing process.

• 50:51Speaker 00

  That's it for part one. Make sure you are subscribed so you do not miss part two coming up soon. Let's talk about a pattern that is guaranteed to be killing your progress. You know what you need to do? You need consistent nutrition, we all do. You need vitamins, probiotics, greens. We all know that we should be doing more of it. When your morning gets chaotic, you skip it. When you travel, you skip it. When your routine breaks, everything tends to break and that inconsistency compounds against you every single day. AG1 is designed to solve the execution problem. One scoop, eight ounces of water and you're done.

• 51:31Speaker 00

  You're getting 75 plus ingredients, vitamins and minerals, pre and probiotics, nutrient dense superfoods, everything that used to require six, seven different supplements and perfect planning now happens in one drink that takes about 30 seconds to make. Right now, AG1 is giving you $87 worth of free gifts with your first subscription. You get a welcome kit, travel packs, vitamin D3 plus K2 and flavor samples. Click the link in the show notes or visit drinkag1.com/impact to claim this offer.