#1357 Marko Papic | Bitcoin Saves Central Banks During Global Crisis?!

Marko Papic is a macro strategist who incorporates geopolitics into his investment analysis. He is also the author of "Geopolitical Alpha: An Investment Framework for Predicting the Future." In this conversation, we talk about geopolitical alpha, how to apply it to your investment process, China, Ukraine, Russia, Isreal, El Salvador, United States, rest of the world, commodity prices, public media narrative, inflation, proxy wars, bitcoin, and more. ======================= Join me at Consensus 2024 May 29-31 in Austin, Texas. This year marks the tenth annual Consensus, making it the largest and longest-running event dedicated to all sides of crypto, blockchain and Web3. Use code POMP to get 20% off your pass at ⁠https://go.coindesk.com/3Q60F2Q⁠ ======================= Buy and sell cryptocurrency in a tax-advantaged crypto IRA with iTrustCapital. Enjoy 24/7 access, lowest fees in the industry, and tax benefits for your retirement. Open an account today at ⁠⁠⁠⁠⁠⁠⁠www.itrustcapital.com⁠⁠⁠⁠⁠⁠⁠ ======================= 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 Marko Papic. He's a macro strategist who incorporates geopolitics into his investment analysis, and he's also the author of Geopolitical Alpha. In this conversation, we talk about geopolitical alpha, what it is, how you can apply it in

• 0:43Anthony Pompliano?

  your investment process. Then we go around the world: China, Ukraine, Russia, Isreal, Iran, Africa, Argentina, El Salvador, and the United States. We talk about various things, including demographics, how he's looking at commodity prices, why the public media narrative may not always be the best thing to listen to, how inflation, the national debt, the fighting of proxy wars, and also the issues at the southern border are all playing into his current investment philosophy. We also cover things like Bitcoin, crypto assets, demographics, and robotics as well, and I think that you will learn a ton from this conversation. Here is my conversation with Marco Papic.

• 1:21Speaker 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.

• 1:45Anthony Pompliano?

  Today's episode is brought to you by Consensus 2024 by CoinDesk. On May 29th through the 31st, I'll be heading to Austin, Texas to speak at Consensus, the world's most established global event for all things crypto, blockchain, and Web 3. I'll be sharing my thoughts on what the next bull run will look like, how it will differ from previous run-ups, and the broad macro investment thesis for Bitcoin and crypto more broadly. That's not all. Consensus has tailored programming

• 2:10Anthony Pompliano?

  For Bitcoin Maxies and multi-chain Mavericks alike, covering everything from post-having strategies to mining and more. Plus, get ready for the epic showdown Bitcoin versus Ethereum at karate combat. That's just a taste of what's to come at crypto's only big tent event. Join me in Austin alongside 15,000 other investors, founders, brands, and more to take in all that blockchain has to offer. Get your pass today by clicking the link in the description and using code POP to save 20%. Again, click on the link in the description and use code POP if you want to save 20% and I'll see all of you at Consensus 2024. Today's episode is brought to you by I Trust Capital. Are you buying crypto on an exchange because you're excited about the bull run?

• 2:51Anthony Pompliano?

  Well, I hope you're reporting your crypto gains to the IRS because they want you to pay your taxes. That's right, when you buy and sell crypto on an exchange, you need to pay the government taxes when you make profits. That sounds pretty taxing. There's another way you can buy and sell crypto without worrying about taxes. At I Trust Capital, you can buy and sell crypto inside of a tax-advantaged crypto IRA. Crypto IRAs are retirement accounts that work similarly to an exchange but with tax benefits. Let me give you an example. If you can buy and sell crypto on an exchange and you make a $20,000 profit, you have to pay the government taxes. However, if you do the same thing in your Roth IRA and you make a $20,000 profit, you don't need to pay any taxes.

• 3:32Anthony Pompliano?

  That's right, you get to keep all the profits and not have to pay taxes because it's in a tax-advantaged account. So, opening a tax-advantaged IRA at I Trust Capital only takes a few minutes. You have 24/7 access to the markets with some of the lowest fees in the industry. The bull run has begun and people are starting to see their accounts go up. So, start taking advantage of tax benefits with an IRA at I Trust Capital. You can start maximizing your crypto investment today. Go to Itrustcapital.com. That's Itrustcapital.com.

• 4:04Anthony Pompliano?

  All right, guys. Bang, bang. I've got Marco here. Marco, I thought a great place for us to start is this idea of geopolitical alpha. You wrote an entire book about it. It's a very different way of thinking about investing. Maybe you could just unpack, like, what exactly does that mean? And how can everyday investors go ahead and leverage this for their investment decisions?

• 4:21Speaker 03

  Well, you know, uh, thank you, first of all, for having me on the show, Anthony. It's a, it's a real pleasure. What I would say is that geopolitical alpha is a solved problem. Uh, and I even say this in my book, honestly, just like, you should probably just read four pages of my book and then put it down. Except it's really funny, and I think there's a lot of cool little anecdotes in it. But, um, the real message is if you want to generate geopolitical alpha, uh, nine out of 10 times, it basically means fading the market reaction to an event. Uh, because most of the time, uh, the market reaction, whether it's to bid up a price of an asset because of a premium or to, um, basically bid it down, uh, because of a discount. It's almost always, uh, misinterpreted by the markets.

• 5:07Speaker 03

  And that's because I think geopolitics and politics are still not something that most investors really take very seriously as an analytical endeavor. And so we're really, uh, using, uh, media, you know, whose job is not to make you money. God bless them. It's to make, to buy newspapers or to click. And so you're using, um, a suboptimal tool in which to assess the actual impact of these risks. And even if you go to a more expensive tool, such as a professional, you know, political risk advisory group, notice that the term is political risk or geopolitical risk. It's almost always about like, the world will end. Please buy my subscription so I can come back 12 months from now when the world hasn't ended.

• 5:51Speaker 03

  But I will tell you in how more creative ways it will end. And so, uh, I think almost always the geopolitical alpha, the answer is fade that risk. It's not always the case and just some, sometimes when I, you know, have to eat crow or have to like actually take it seriously. But, uh, I think it's, it's easier to explain when it's more serious because of the positioning and because the market just ignores the risk.

• 6:15Anthony Pompliano?

  Can you give us a, like, a recent example, maybe where this highlights, you know, how there's overreaction? And you're like, nope, that is actually showing us that the opposite is going to be true?

• 6:25Speaker 03

  Yeah, well, I think that the performance of commodity markets, commodity assets following Russia's invasion of Ukraine was a very good example of this. So oil prices went up significantly, wheat prices as well, as well as various other commodities. And what was interesting was that as Russia was invading Ukraine from February to like May of 2022, June was early stages, something else was happening on the other side of the world. And that's something else was that China was absolutely collapsing in terms of its economic performance for a number of different reasons.

• 7:02Speaker 03

  And, you know, the fundamental demand for most of those commodities was actually weakening. The other issue was that investors bid up the price of something like crude without really thinking about it, you know, yes, Russia is the second largest exporter of crude in the world, but how is actual global supply of oil going to be impacted? Oh, well, you know, the West will impose an embargo. Yeah, but have you actually read the EU's oil embargo on Russia? I mean, it gave Russians nine months to find alternative sources and alternative customers. And that wasn't something that the West did because they were being nice to Russia. It's because they obviously were also dealing with a very big political issue in early 2022 called inflation.

• 7:46Speaker 03

  And then the other issue that was, I think, very, very clear was that the US was not willing to impose secondary sanctions on companies around the world that ended up buying this supposedly sanctioned Russian crude. This is something that the US did use in run up to 2011 oil embargo against Iran. The US was extremely clear that it would sanction India, China, and allies that bought Iranian food, which got some China on board with the sanction against Iran to produce ultimately the nuclear deal that Obama administration negotiated. So that's an example of, you know, like a serious effort to actually limit supply of

• 8:29Speaker 03

  crude by the international community. This notion that, well, there's no real way to prevent Russia from buying, from selling oil is incorrect. There is, it's called secondary sanctions, and if you want the Treasury Department after you, God bless you. You know, so none of that was done, and it wasn't done because clearly the West, including the US, wanted Russian crude to end up in the markets. And so that run up in oil prices was a great example of just, you know, completely ignoring fundamentals, Chinese demand, Chinese economy collapsing, while bidding up this kind of a theoretical, you know, risk of Russian crude somehow not finding its way to the market.

• 9:10Anthony Pompliano?

  Now, what's really interesting about this specific situation is I remember when India was asked, are you going to stop buying, you know, natural gas and oil from Russia? And they basically were like, no, we're going to keep doing it, right? So that, you know, the, the fact that there wasn't that ramification allowed them to do that. And then also there were stories that came out that Germany, uh, who took a very kind of harsh stance against Russia and the importation of their oil, uh, they basically were buying quote unquote Chinese oil. But there was kind of tracing where basically Russia was selling it to China. China was putting a Chinese flag on the barrel, jacking the price up and then selling it to Germany. And so in some weird way, you know, it's not just that there was quote unquote more demand. It was also that some of the demand that had existed was now just paying a higher price because they basically had created that problem for themselves.

• 9:57Speaker 03

  Well, you know, I think, yeah, there, there's a lot of that. I mean, the, the Russia-Ukraine war was a great example. I mean, first of all, serious people were discussing use of tactical nuclear weapons, you know, at the time. And, um, and what ended up happening 18 months later and even earlier was that many of these, uh, supply chains were actually rebuilt, restructured much faster, uh, than people thought. I mean, who can forget the neon gas shortage of 2022? And I laughed, of course, because none of us can remember it because it never happened. You know, there was this like notion that a lot of neon gas used in semiconductor production was a byproduct of steel aluminum smelting in like Ukraine.

• 10:39Speaker 03

  And so therefore the attack on Myriopole, uh, Myriopole would lead to a shortage. And it didn't happen because you can actually make neon gas in your kitchen. You know, surprise, surprise. A lot of investment notes were written about this. Uh, and then of course, natural gas oil, as you point out, um, natural gas was a very interesting one, actually. Azerbaijan ended up, um, you know,

• 11:02Speaker 03

  Buying Russian gas, which was very quietly announced at the end of 2022. Of course, if anyone knows anything about Azerbaijan, he knows that they're swimming in natural gas. And so the whole point of them buying some Russian natural gas was obviously a way to kind of circumvent some of these. I wouldn't even say sanctions, it was just political correctness, you know. Uh, Europe didn't want to be seen buying natural gas from Russia and Russia, quite frankly, didn't want to be seen uh being weak enough that they needed to sell it. Currently, natural gases continues to stream through Ukrainian pipelines. Like literally right now Russians and Ukrainians are fighting a war and there is natural gas going through those Ukrainian pipelines from Russia to Europe.

• 11:43Speaker 03

  Um, and so, yes, that is a good example of when I think the market just is kind of shocked into um overpricing, overbidding a geopolitical risk premium, which is why the correct call was to short commodities. I was a little bit surprised by how wheat participated in this as well. I mean, at least you can make a case for wheat, Ukraine does produce a lot of it. But then when you actually look at some of the supply chain issues or where some of these farms were, you realize that in much faster period of time than most people thought, Ukraine could actually move from delivering wheat through its ports in the Black Sea to actually moving them onto trains and also uh either river ports in the Danube via Romania

• 12:26Speaker 03

  or simply just sending them to north and using Baltic ports uh for the exports. Um, now, there's plenty of other examples of this as well. I mean, there's um, you know, pre-Brexit, you have another way to think about this. Um, it was the market not paying attention. So I don't want to say that it's always about, you know, um uh, the market overestimating risks. There are times when it underestimates risk. In the case of Brexit uh in 2016, uh, the market was basically pricing a probability of Brexit based on the pound exchange rate at about 25, 30%. Of course, it ended up being much higher than that. Um, and then you you have to take a hit on the currency.

• 13:06Anthony Pompliano?

  Now, one of the things that is surprising to me, but maybe I shouldn't be surprised is like, this is not a news story. And so I don't know if you're familiar with Mark Rich, the guy who basically created like the oil spot market. And, you know, I read a book and as I was reading through it, there was a lot of similarities of like, you know, he was helping Iran and Israel basically secretly trade during a lot of the Iranian oil issues. And he had become a US citizen, but he had kind of a Swiss company and all stuff. And so US politicians and law enforcement went after him, said that he was, you know, the largest kind of tax evader in history. The headlines read, he was trading with the enemy, right? I mean, like, very kind of bombastic headline grabbing

• 13:48Anthony Pompliano?

  things. And his point was like, well, I'm a Swiss company, you know, trading. Now, again, without speaking to like, was he right? Was he wrong? You know, there's a pardon. There's very complex kind of political process. But this idea of like, the movement of oil with a backdrop of the geopolitical relationships and conflicts, and people getting either caught in helping, you know, continue the movement of these commodities, or being caught up in, you know, and being prosecuted for it, has been around for decades, right? And I don't think that that's going to change anytime soon. It sounds like you don't either.

• 14:19Speaker 03

  Well, yes. And I think it's in the moment, you know, on February 22nd, when 2022, or February 21st, I forgot the exact date when Russians crossed the border. But when it, when those things happen, you know, it seems like a new world is upon us. It seems like there's a this real break in the past. Things cannot possibly be the way they were in the past. And then the journalists get involved and they, you know, they moralize and they, they make a normative story about this, about, you know, Russia being evil, Ukraine being positive. And then we get Twitter involved. Now, today's modern and, you know, on Twitter, everything is very black and white. And you got to put a Ukrainian flag on or a Russian flag. Well, I don't think

• 15:00Speaker 03

  anyone has Russian flag on Twitter, but you know what I mean? It becomes like impossible to see a world where Russian natural gas continues to go through Ukrainian pipelines into German homes. And yet, here we are where that is the case. And I think that, so that's the first issue. I think that in modern world in particular, particularly with social media, we tend to norm, uh, introduce norms and morals at an extreme level, that in the past may not have been there. I mean, I'll give you one example, Israel and Iran, are they? Are they century-old enemies? Are they Islamic Republic of Iran and Israel? Like, how will they ever talk to one another?

• 15:43Speaker 03

  Well, that's an interesting question, because they talked to one another plenty in the 1980s. In fact, the famous Operation Opera, in which Israel attacked Iraq's nuclear reactor in Osirak, was in some way actually coordinated with the help of Iranian intelligence. Why? Because they shared a common enemy, which at the time, at the time, Iran was very far away from Israel, and the real enemy was the one in between them, which was Saddam Hussein. And so, yes, Israel and Iran, the current regime of Iran, collaborated at a pretty significant level throughout the early 80s. No, I'm not saying that that's going to come back, or I'm not saying like, I'm just simply pointing out

• 16:24Speaker 03

  that the world is not as neatly bifurcated into two camps as your Twitter stream. You know, and I'm not saying, of course, to you, Anthony, you, but like, the listeners here, you know, the world still remains what it was in the past, which is complicated and nuanced. And for investors, this is really important, because geopolitics and politics, for most of us, has never been as important in our professional life as it is today. And yet, we have never had as much pressure to be moralistic and normative, and to have these virtue signaling, like, performances, as we are today.

• 17:06Speaker 03

  I mean, even media itself is becoming more and more, you know, almost like activists. And so, why is this important? It's important because we have to maintain a cool head. And sometimes, the message that data and analysis provides is that, no, you know, like, the West will not sacrifice its economic well-being for Ukraine. You know, I'm sorry that I'm the messenger of that news, but oil prices will collapse, because the West will allow Russia to continue to finance its military operations by selling crude, quite frankly, to one of the largest American allies versus China, which is India. So you have this incredible situation in 22 to 24,

• 17:49Speaker 03

  where one of America's most important allies, in terms of decoupling from China, India, is bathing itself in Russian crude.

• 18:00Anthony Pompliano?

  So when you think through these scenarios, it's very obvious like there's a media narrative and usually that narrative makes us feel good, makes us feel kind of moralistic and you know, take the high ground, if you will. How do you figure out what the truth is, right? And maybe we can go to kind of Israel, Hamas, Iran and kind of the current conflict there. One of the interesting data points to me was on the Saturday when Iran kind of had all the missiles and drones, the day before on Friday, gold was actually peaking and hit a new all time high. And I wrote this letter and I said, you know, is somebody buying gold right now in anticipation of some sort of geopolitical event that they think their sanctions are going to follow, et cetera? Now, again, you know, I got to admit, it was kind of like a, that'd be kind of crazy if that's

• 18:45Anthony Pompliano?

  true, you know, type scenario. And then literally within 24 hours, you know, they have this attack. Now they tipped their hand to the attack. It's unclear whether they actually wanted to be successful or it was more of kind of like a way to shake their fist and, you know, kind of seemed like they were doing something to the Iranian people. But like, that I think was one of the times where I'm like, wait a minute, we are watching financial assets tell us a little bit about the future, right? They almost act as like alarm systems to some degree in some of these. And it may go against what the media narratives are, right?

• 19:14Speaker 03

  Well, I think, I don't know if I agree with you on that one, you know, I think oil has been on a tear for two and a half years, you know, and I think the number one reason for that is that I think a lot of investors, including institutional investors, including central banks, quite frankly, don't believe long-term break evens or five-year, five-year forward or the surveys of long-term inflation expectations. Wherever you look, there's this like anchoring of long-term inflation is two and a half percent. And I think that a lot of professionals are just like, nah, I don't believe it. And so it's difficult for me to kind of disassociate the two and a half year, you know, mega rally in gold prices. And I've

• 19:54Speaker 03

  been like a bull in gold since January 2023. So I've missed the 22 because I was so shocked in 22 that gold went up. Given that, you know, real yields went through the roof, it the gold should not have performed well in twenty two and yet they did.

• 20:10Anthony Pompliano?

  Well, why do you think, why do you think that it did? Is it just literally they don't believe the inflation expectations? They think it's going to be higher and so they want to buy assets that will benefit from the higher inflation?

• 20:19Speaker 03

  No, I think in twenty two it was geopolitics. So I think in twenty two it wasn't yet the long term inflation expectations. I think it was, I mean, I don't, it's not that I think we can actually short chart of central banks buying. And central banks were buying gold because of what happened in twenty two in terms of, you know, the, the West basically deciding to seize or freeze Russia's currency reserves. And so I think that a lot of countries out there, I mean, and we're talking a lot are saying to themselves like, look, the West might have imposed this on Russia today because of its, you know, illegal invasion of Ukraine, which truly is illegal by international law. But maybe in the future they'll impose this on me for normative or moral reasons. Maybe I don't have the right climate policy.

• 21:04Speaker 03

  So I want to diversify a little bit from the dollar. I mean, if I was running a central bank in like nominally allied country to the US, like nominally allied, like India or Saudi Arabia, I would be like, hmm, maybe I want to diversify a little bit. And by the way, the diversification away from the US in terms of currency reserves, not currents, not reserve currency, two different concepts. In terms of currency reserves has been astonishing. I mean, US has declined in terms of percent of currency reserves, a quite, quite precipitous over the last twenty five years, even though I don't think it will lose reserve currency status, two different kind of things. But anyways, in twenty two, I think it was geopolitics. In twenty three, I think it's long term inflation expectations and today it's, it's still that. I do agree with you geopolitics may have played a role as well.

• 21:50Speaker 03

  You know, all that said, the Israel Iran tensions didn't amount to much for the most important asset, which is the one that you would think a conflict in the Middle East would impact, which is what?

• 22:04Speaker 03

  So if you see, and that's why it's difficult for me, you know, Anthony, to say that gold is reacting to geopolitics. Because oil isn't. Um, and so how do we explain that? How do we explain the impact of Israeli-Iran tensions on gold? If they're not going to impact oil, like it's almost for for a conflict to matter for gold, you would have to rise to the occasion of, you know, things being destroyed that matter to the world. You want you want to have a hedge. You want to own an asset that will not decline in value. Well.

• 22:38Speaker 03

  I mean, how is it that oil is then not going up as well? And I mean, I can explain that. The reason is that it's very difficult for Iran and Israel to actually wage a war against one another. And the other issue is that Iran has been beyond reticent. I mean, it's been unwilling to to impact in any way, shape or form the global supply of oil. So for example, if you think of what its proxy, the Houthis have been doing. The Houthis have been attacking Red Sea shipping, uh, which does not include any oil. Um, oil shipping in the Straits of Hormuz has not been affected. And more importantly, the Houthis who have attacked in 2019 Saudi oil facilities.

• 23:19Speaker 03

  In 2022 UAE oil refining facilities and the airport in Abu Dhabi, which I landed on three months ago. The Houthis have decided to send all their drones south, none north. And this is because Iran doesn't want global oil supply to be impacted. They have a deal with Saudi Arabia that's actually given them a lot in the region. And it also means that Iran and Israel could actually have a conflict. Although I think it would be a pretty muted conflict, given their lack of capacity to wage this kind of like a long range war. But it could be a conflict that doesn't impact any, not a single oil barrel on a single ship. Um, and that's again, one of the reasons why I think even after these two attacks, you know, Israeli retaliation to the Iranian retaliation.

• 24:03Speaker 03

  We've seen oil prices actually almost collapse since then.

• 24:09Anthony Pompliano?

  Now, when you start to look at kind of these current conflicts, the US participation, I think, is a big topic of discussion. On one hand, you have politicians who say, "We've got to send, you know, hundreds of billions of dollars to these various countries in support and weapons and ammunition, et cetera." On the other hand, the United States' economy probably doesn't need to be spending a lot of money right now. Like, it feels like, you know, maybe we've got some economic issues at home, and the Fed is trying to drain liquidity and tighten things, and we're spending at the same time. We've got the national debt. Like, talk a little bit as to, you know, almost these, like, proxy wars internationally.

• 24:43Speaker 03

  I have no idea what you're talking about. What are you talking about? The Fed is out there not raising rates with Bitcoin at 6,000, with the S and P at 5,200. We're good. Don't worry about it, Anthony. We can do whatever we want. No, listen, you know, here's what I would say. You know, it's fascinating to me. It's fascinating to me because I've been speaking this language of political science in the financial community for a long time, because I'm basically like a failed political scientist who backed his way to finance, you know? And so, since 2011, my claim has been that the world is multipolar, which at the time was not a popular view. Political science nerds are very familiar with the term multipolarity, but folks in finance were like, "Meh, what is that?" You

• 25:28Speaker 03

  know? And so, I was trying to make this claim that US hegemony was over, the world was much more differentiated, and that that had implications for investors. And most importantly, that the world is not bipolar, that this isn't about US versus China. That's the wrong structure, historical structure, for us to kind of try to graft 2024 world onto. Most Americans, I think, are very comfortable with bipolarity because, you know, they won the Cold War. And I'm not saying like most Americans, like most investors. I'm talking policymakers, too. So, they kind of like see a nail, and they want to hammer it, right? So, they see China, they want to hammer it. They're like, "Okay, it's bipolarity.

• 26:08Speaker 03

  We have to de-risk from China, decouple from China. We have to isolate China." But the world is a much more complicated place in 2024, where you have multiple countries kind of doing things independent of either China or the US. Now, that said, what's interesting about US involvement is how much it proves that the US is still the most powerful country in the world.

• 26:33Speaker 03

  And so a lot of people have this like brain aneurysm. Well, how can it, how can the world be multipolar and America be so powerful? And just to be very illustrated, like Iran sent 200 plus projectiles at Israel. And the US was like, oh, my beer. We got this. And none of those reached Israel. And a lot of like the, the credit goes to, you know, Israel itself. But I think that it's pretty clear that the US has just a plethora of systems that just snatched these out of the, like, no, you know, no. And that's, that's a great advertisement for not just American power, but how, uh, you know, lucrative or how beneficial it is to be an American ally.

• 27:17Speaker 03

  Now that said, uh, so, so what I would say to you is that America's involvement is still very, very impressive. It's very important. It still can be a difference between life and death, literally. At the same time, Iran and Israel almost went to war. So it's this interesting thing, Anthony, where like both the US is the most powerful country in the world. Nobody's kind of listening or taking it seriously, including its own ally, Israel, which is not following really the Biden administration on either Gaza intervention or on Iran, although it is pretty clear that they did tone down their retaliation against Iran. So where am I going with all this? Uh, I'm going with all this that I think the world is very complicated, but it also

• 27:59Speaker 03

  may mean that there is a, there's some level of American involvement in the rest of the world. It's held back not by a lack of money or material competency, but rather by a different material constraint, which is not technological supremacy or military supremacy, but rather political reticence to be involved in the rest of the world. And the reason that's important is because if that were to change, then maybe the world wouldn't be so multipolar anymore. And it's just something to kind of think about. Um, so what I would say to you is, yeah, I mean, you are, your question, the way you led your question just simply shows that I think the,

• 28:41Speaker 03

  the Americans are kind of done with, you know, using that power on a very broad scale. And I don't know what changes the US to go back into this kind of a unipolar moment.

• 28:52Anthony Pompliano?

  It's a very interesting thing, you know, I was in the army. We fought for 20 years, two different wars. Um, and I think every generation kind of goes through this where they kind of say, hey, you know, should we have done that, right? And in hindsight, it's always easy to play armchair quarterback and all that stuff. But coming off a 20 year kind of dual war to then go right back into another war. There's a lot of people who I think just are kind of like, hey, I don't know where the appetite for that is. Um, at the same time, you know, I always remind people like there's very bad people around the world who do very bad things and somebody's got to, you know, kind of go and take care of it. Um, speaking of countries that, you know, kind of are going around the world, China seems to have their hands in a lot of things. Uh, we see them heavily investing in African nations, uh, trying to go into South America.

• 29:35Anthony Pompliano?

  Obviously there's the threat when it comes to Taiwan. And then inside their own country, they have kind of a real estate crisis. The stock market, they seem to be kind of stepping in there. Talk just a little bit about that country and, you know, maybe the 2010s was defined by the China growth story. And now that seems to kind of be unwinding a little bit.

• 29:55Speaker 03

  100% it's unwinding. Yes. Uh, I would say China is like, you know, I grew up in Yugoslavia. So I grew up in the second world, as it was called at the time. And so we would always get all the TV shows like 10 years later, you know? So like I am 42 years old, but I have like the TV, you know, like sort of schedule of like a 50 year old in the US. Cause we got everything like all, so I'm like a huge McGyver fan. Like, you know, like Hawaii 500, like, love it, not the new one, not the old one. And then all the BBC shows that all my British peers are like, wait, you were a fan of that? My grandma watched that, you know, I was like, yeah, but I was a kid when I got that. Why am I saying that?

• 30:40Speaker 03

  Because China's kind of like me. They're 10 years behind. And from a macro context perspective, China is where the United States of America was between 2010 and 2020. Look, it's that simple. This isn't complicated, you know? We had a real estate crisis, which was caused, why? Well, because liquidity was too abundant. Why? Well, I believe there was a geopolitical reason the Fed was behind the curve from 2001, important year to 2008, and that was geopolitics. It was 9/11. You know, you had this shock to the American system and the Fed was basically dealing with a post-recession context. It was extremely concerned about the sentiment.

• 31:24Speaker 03

  And it ended up keeping interest rates probably too low until 2004, 2005, 2006, causing a real estate bubble. There's obviously regulatory issues as well. But then we got into secular stagnation from 2008 to 2020. We know that term, low growth, low inflation. The private sector had to deleverage. And interestingly, the public sector did not come in to help. In fact, it did the opposite. So the Tea Party won the 2010 election. And then it sat down with Barack Obama at the table and both of them came to a solution. And that solution, the bipartisan solution, was austerity. Remember at the time, everybody was saying like, you, we need to run the government the way you run a household.

• 32:05Speaker 03

  You know, we need to belt tight, which was mathematically actually the incorrect thing to do. But morally, from a moral hazard perspective, it seemed like the right thing to do. Let's not expand debt. China is doing exactly the same issues for exactly the same reasons, honestly. It had a credit binge in the 2010s when everybody was like, oh, my God, China's going to overtake the US. Well, yeah, but it was like credit led. Now it has a hangover. It's a decade later than the US and it's now stuck in secular stagnation. Its policymakers are unwilling to ramp up the public sector because of moral hazard. They're doing exactly the same. They have their own Tea Party basically running the country. I mean, Xi Jinping is like Mark Meadows.

• 32:48Speaker 03

  You know, like, is he a member of the Communist Party of China? No, I think he's a member of the Tea Party. Like, seriously, they're very reticent to use fiscal policy in public purse to offset this private sector deleveraging. And so what's interesting about this from a geopolitical perspective is that I do think that most American policymakers and planners, strategic planners and national security and Pentagon got it wrong, just like they got Soviet Union wrong. You know, there were still, like, textbooks and CIA reports in the, like, 1970s and 80s predicting Soviet Union would overtake the US economy. Very similar mistake, linear extrapolation. A lot of people doing the linear extrapolation are not economists, they're not market people.

• 33:33Speaker 03

  And so they, I think, mistook the 2010s growth of China for anything but, you know, credit fueled bench, which China now has to spend in the next decade digesting like the US did. And so that's the first thing I would say. The second thing I would say is that China is definitely engaged in investing around the world, infrastructure, strategic things. EVs are a strategic priority for China for two reasons. One, they see an opportunity to have an edge in an industrial output. So they're looking around the world, they're like, okay, what large scale manufacturing process could we own? Well, the Europeans seem really, really stuck on internal combustion engines.

• 34:16Speaker 03

  The Americans have Tesla, but not much else, so why don't we own EVs? So there is that mercantilist, you know, like, let's flood the world with GPVs, for sure. But there is also another issue, which is that China is extremely geopolitically vulnerable because of its import of oil. You know, and that's because the US Navy literally protects Chinese exports out of the Middle East, not American. You know, like, it's not the US that needs the oil out of the Straits of Hormuz. It's China. And so American tax dollars are literally being spent to secure China's, like, oil supply. And Beijing is obviously concerned that at some point, Americans will put the two and two together and say...

• 35:00Speaker 03

  Eh, why not have an Israel-Iran war? Shake things up a little bit, you know? You can see some Machiavellian in the White House being like, "All right, like, let's see what happens," you know? So the Chinese are, they have two options here. They can either put hundreds of billions of dollars into the ground of Russia, like literally into the ground, nail pipelines into the ground, and take those commodities, and they haven't done that. For all the talk of endless friendships and China-Russia alliance, China is extremely reticent to put any money into Russia. For obvious reason, they don't know what's gonna happen to that money where they put it there. And so instead, they've made a strategic national security

• 35:42Speaker 03

  decision to just eliminate as much of crude imports as they can through a headlong, you know, descent into EV production. And so that's something that they are doing right now. And that's where a lot of their investment in Africa comes in, because of course, an average EV has 200 kilograms of materials relative to about 20 that an internal combustion engine has. But the final thing I would say, just to wrap this up, and you know, we started off this conversation about how everything is nuanced. The third thing that the Chinese are doing is they're sending a lot of FDI into places like Indonesia, Mexico, Vietnam, and Malaysia. And here, I would challenge the conventional view.

• 36:27Speaker 03

  This isn't their attempt to kind of spread their Chinese infrastructure around the world and make the world addicted. No, no, no, no, no, it's much simpler than this, Anthony. They're financing American national security priorities.

• 36:43Speaker 03

  The Chinese Communist Party is financing US Congress and White House priorities. And what I mean by that is that after 2020, after the COVID crisis and after all the Trump wars, Trump trade wars, the Chinese policymakers were like, "Okay, wait, hold on a second. What do you guys want? Oh, you want less stuff made in China? Got it, no problem. You're spending hundreds of billions of dollars on making American dream a reality." And I'm not, I'm not kidding, I call it enemy shoring. You know, people talk about French shoring. China is literally enemy shoring. They're setting up factories outside of China to reduce the tensions. And they're telling Americans like, is it okay if they're in Vietnam? Is it okay if they're in Mexico? Now, I'm not sure if it is okay.

• 37:27Speaker 03

  President Trump, who's campaigning, is currently saying it's not okay. But interestingly, what he's saying is it would be better if they were in America. And I'll tell you this, if Donald Trump goes to Beijing and asks President Xi to move EV factories to Ohio, like President Xi will be like, done, no problem. And so this is the interesting kind of evolution of where we are today. A lot of people out there talk about decoupling and think it's like a real thing. And they think it's a binary thing. It's a zero, one. It's much more complicated than that. China itself is actually financing its own decoupling. You know, and they're okay with that because they, you know, at the end of the day, it's a Chinese company producing something in Mexico.

• 38:11Speaker 03

  But from an American perspective, from a national security perspective, that is actually a better outcome. You know, if there's ever a war between China and the US, that physical plant is something that an American ally can appropriate, can nationalize and can use that physical plant for American priorities. So it is a better national security outcome than having everything built in China. And what's interesting to me is that how willing the Chinese have been to accommodate those demands. From an investment perspective, of course, what this means is that there's just a lot of stuff being built around the world. And I think that the impact on commodities is going to be pretty clear.

• 38:52Anthony Pompliano?

  Have you all done any work on like asset prices or investments around regime changes? You know, obviously we have Putin, we have President Xi, there's many other leaders. You could even go to maybe like an Argentina where you have Malay, you have El Salvador, Bukele comes in. Sometimes it is maybe like more kind of libertarian type policies are going to come in and they're going to, you know, cut spending, et cetera. Some of them are more kind of adversarial. You know, if obviously Putin was to go through some sort of regime change there, like, how do you think about investing through those types of kind of leadership changes in some of these countries?

• 39:28Speaker 03

  You know, so there's been some research on this. I think what I would say is I've seen some research on this done by private companies I can't name because, you know, basically like very large hedge funds doing long-term historical research. And I remember there was this interesting database about Latin American regime change. And what's the counterintuitive outcome of this research was that even if you get a left-wing populist come to power, chances are assets are going to go up. Why? Because regime change is usually a sign of the bottom.

• 40:13Speaker 03

  You know, so the reason there's a regime change, the reason that the incumbents, whoever they are, lose, they lose because asset prices have probably declined, currency has collapsed, inflation is probably at a peak. And so regime change should theoretically mark the bottom of those assets. Now, that is not always the case. But it was interesting to me that in this particular data set, the sort of the message was like, don't worry about whether it's left-wing populist or right-wing sort of libertarians. Ultimately, a regime change is a function of something going wrong in the country. It can get worse, sure, or it may not. For example, when Lula came to power in Brazil first time, you know, he came to power

• 40:58Speaker 03

  because of a lot of macroeconomic events, but he also marked the bottom in assets. So he, he was like, you know, the economist was writing these like incredible, oh my God, who knew? Lula's a reformer. Yeah, it's easy to be a reformer when like money's literally raining down on your head from the commodity bull market in the early 2000s. And so he didn't have to be populist. He didn't have to, you know, appropriate wealth or redistribute it because there's plenty of it to go wrong. So I think the macro context combined with that bottoming of asset matters more. Of course, then you have a situation like Macri, who came to Argentina and had very ambitious reforms proposals, and he just, he ran out of time.

• 41:40Speaker 03

  He just ran out of time and the macro context just wasn't positive enough. Commodities never turned. And that's why I think what happened in Argentina this time around is a reason to be positive. Number one, you have policymakers willing to cut down the size of the government, which is something that Argentina sorely needs. But also I do think that the macro context is better than it was under Macri. So in those terms, Anthony, what I would say is that the macro context and valuation almost matters more importantly than who it is. You know, in other words, if Brazil is cheap, if commodities are going up, and if the dollar is going down, like Karl Marx could rise from the grave, run for president or Brazil, I'd still buy Brazilian assets.

• 42:25Speaker 03

  I'd be like, yeah, it's fine. Like, you know, commodities are going up, Brazil is cheap. All right, what can Marx do?

• 42:32Anthony Pompliano?

  So one of the assets we haven't talked that much about, that people who watch or listen to this will be very interested in your thoughts is Bitcoin. It seems like, on one hand, it is this kind of apolitical, decentralized, you know, kind of asset that could be a great store of wealth. On the other hand, you mentioned earlier Bitcoin at 60K and rates, you know, not moving. So what are your thoughts on Bitcoin and kind of how it fits into a lot of what we've been talking about?

• 43:01Speaker 03

  Well, you know, like, I mean Bitcoin has still been somewhat correlated with the equity risk premium. It still trades somewhat as a sort of a risky asset, you know? But I do think there's a case for Bitcoin to be a store of value and digital gold. And in those terms, I think that the most recent rise in Bitcoin, I'm not sure is related necessarily as neatly just to equities going up. I do think that there's a component there, just like with gold, where investors are a little bit worried. You know, if the Fed is being political ahead of an election.

• 43:39Speaker 03

  You know, uh, to elect Joe Biden, let's say, or rather, that's, that's too mean to the Fed. I think it's more to take away left tail risks ahead of an election. And so they're creating right tail risks. But if they're doing that ahead of an election today and then Trump wins, you know, well, then he will just have as much right then to politicize the Fed going forward. So there is, I think, a concern about loss of independence of the Fed on both ends of the spectrum. I think there's a concern about long-term inflation expectations, and I think there's a concern about, you know, where the dollar is going over the next five years, given that it's as expensive as it really could be. And all of those are creating a bid for both gold and Bitcoin. And I think that's fair.

• 44:24Speaker 03

  I think that's fundamentally sound. And so that would be my answer to that question. Now, whether Bitcoin is a foundation of some sort of a future digital, you know, currency, I don't think so. I don't think that there's anything beyond digital gold. But that's because I'm not maybe creative enough, and I will be the first to say it. To me, you know, Bitcoin is not going to be a foundation of the next monetary regime or anything like that. It is deflationary, which a lot of people say, that's great, that's why we need it. That didn't turn out that great either in the past. So I, I, I don't think it's flexible enough. But as a digital gold asset, I think it's kind of proven its, its value and merit.

• 45:05Anthony Pompliano?

  So let's say that, okay, it's digital gold, but I tend to agree that right now, the clearest, you know, kind of use case is that is digital gold will continue to be digital gold. Central banks, will they eventually put it into their central bank reserves, both as like, kind of like a digital gold exposure, but also as a potential hedge against those sanctions that you're talking about?

• 45:24Speaker 03

  Potentially, yeah. I, I mean, it depends, uh, you know, like North Korea already is doing that. I mean, that, that's an extreme example, but, but sure, yeah, I mean, I can see other countries who are not as like on a spectrum of being a pariah, maybe not a 10 out of 10, but like a three out of 10, you might want to put a little bit in Bitcoin. I don't know, I haven't been asked to become the, the central bank governor of one of these pariah states, but, you know, I would take your recommendations. If I were, were, I would say like, hmm, not, not a bad idea. Maybe, maybe, you know, allocate 10% of what would go to gold to Bitcoin.

• 46:00Anthony Pompliano?

  That makes sense to me. Another thing that I think is interesting is I've spent a lot of time thinking about demographics and you know, obviously, there's many investors around the world who focus on demographics and want to invest, you know, kind of behind it. Nigeria's got a young population. It's going quickly, right? You know, great internet penetration, etc. So they'll all run to Nigeria and try to put money in various investment assets. One of the interesting things obviously is the birth rate is collapsing in the United States and elsewhere, but there's a rise of robotics. And so talk about demographics. I know you might not be a fan of investing alongside them, but then also kind of this rise of robotics and humanoids and kind of labor production coming from machines and how that plays into kind of evaluating some of these investment strategies.

• 46:42Speaker 03

  Well, you know, to me, demographics is, it's very dangerous to invest based on demographics, particularly the Nigeria story, you know, the, I don't know if you're familiar with the Nigerian brewery. It's like, like an iconoclastic investment idea. It's like, you know, Nigeria's got a lot of young people. They like to drink beer. It's hot. Let's go, you know, invest in Nigerian brewery. It's like the proverbial, you know, sort of play on this story. And it's, demographics are to me, just way too simplistic, you know? Why? Well, because they can be a real curse. Having a lot of young people tends not to

• 47:27Speaker 03

  be really a good thing. Like, if you think about the Arab Spring in early 2010s, which started in Tunisia and then spread around North Africa and the Middle East, it occurred in the most demographically healthy part of the world. I mean, these were the youngest populations with that, like, you know, cohort that was entering the labor market, but the countries themselves did not have the economies to digest all of that new labor.

• 47:59Speaker 03

  And so just having a lot of people is not a reason to invest in a particular country. I think that's a mistake. I like Latin America. Latin America does not have particularly good demographics relative to other emerging markets, but it does have a lot of folks who haven't been incorporated into the financial system. So for example, if you're thinking of like technology penetration in Latin America, that's interesting. You know, that's interesting, but it's not necessarily a story of demographics. It's a story of penetration of new technology into a particular economy. The other issue is that I think we over-index on Japan's experience.

• 48:40Speaker 03

  You know, we over-index on this one country and its experience over the last 30 years and say, aha, that's what happens when you have poor demographics as sort of like a cautionary tale of what's coming to us. But the issue is that Japan's problems with disinflation were rooted in the macro context of global disinflation. It was just then exacerbated by their own particular experience that, yes, had something to do with demographics, but also had a lot to do with their policy choices as well. In other words, until Abe, nobody really tried to bring out the big bazooka in Japan and kind of, you know, harness the full complement of structural reforms, fiscal and monetary policy.

• 49:24Speaker 03

  Not until 2012 did they even attempt it. So they wasted 25 years in trenching in the psyche of the public, this deep disinflationary, deflationary mindset, which is pretty clear our policymakers have not done. I mean, they've done the opposite, you know? And that's why I think demographics is just not a way to invest. I don't think it's a simple way at all. I think there's some demographic trends that are very interesting. The transfer of wealth from baby boomers to their, you know, kids is going to be a great story, interesting story. What's that going to do to like real estate prices in suburbs? Like you can make a demographic story like that in a particular sector, in a particular product, but I don't think that you can invest in large assets, global macro assets based on demographics.

• 50:09Anthony Pompliano?

  So speaking of maybe a version of demographics, in the US, the birth rate is falling. It has become somewhat concerning, both I think people who kind of look at it from a, you know, the United States and the ability to continue to grow the population, but also from a productivity and economic analysis. And then all of a sudden, there seems to be almost like a, a variable, right? An unexpected variable that was thrown out onto the game board, which is illegal immigration. And now at the southern border, you have literally millions of people coming across the border. And so from a like, it's important to have rules and laws. It feels like, hey, we probably should have closed borders, right? And we should enforce the law. On the other

• 50:54Anthony Pompliano?

  hand, if you forced me kind of gun to my head and said, what's a positive impact? Getting more people into the US labor force and the productivity that they bring and the population growth, et cetera, you know, does have some positive impact. And so how do you think through a situation like that? And like maybe the positives and negatives? When you think through kind of different investments?

• 51:15Speaker 03

  Yeah, first of all, I forgot to answer your question about robotics and all sort of things. Yeah, sorry about that. Yeah. So I don't think demographics are a huge issue. I just wanted to say, in Japan's case, you know, their GDP per capita is going up because their per capita portion is declining, basically. And so, I mean, I go to Japan every year. It's a lovely country. It's an incredibly well-run country. I never leave Japan thinking this is, this place is on the verge of Great Depression. You know, I just want to make that clear. And I think automation and robotics will ensure that as population declines, potentially productivity goes up. I mean, the combination of automation and AI does

• 51:54Speaker 03

  create this potential for significant productivity gains. Now, to be clear, potential GDP growth rate, your potential growth as a society over the long term is only a function of two things. The number of human beings who are in your labor market. And their productivity growth. That's it. So the growth of your labor force and a growth of your productivity. Those are the only two things. And then economists will argue that good growth, good organic, sustainable growth is all about productivity growth because you can't really continue to have labor force growth forever. I mean, at some point, you will run out of room.

• 52:34Speaker 03

  People will be living on top of each other and be very, very annoyed by how crowded they are. So labor force growth alone cannot be a solution for your, you know, long-term growth potential, which you kind of hope is to have a mix of both. But hopefully productivity growth to really be what's driving. Now, we haven't had a lot of productivity growth in the world, particularly total factor productivity, which is kind of the residual that cannot be explained through a use of labor and capital. And that's a problem. You know, why? All this tech we have, all these SaaS businesses running around have not actually enhanced their productivity that much. And there's two schools of thought here. One is that most of that productivity is there.

• 53:18Speaker 03

  It's just not being measured. I disagree with that, maybe because I'm a Luddite. I don't know. I'm a student of Robert Gordon and his extraordinary book, The Rise and Fall of American Growth. I think there's more than just us being like unable to measure productivity. I think we just haven't had meaningful productivity, actually, over the last 20 years. I know that's crazy to say. But, you know, the internet is awesome, but hasn't really improved our communication massively from the days of the fax machines and the phones. Like, yeah, in daily life, but from a commercial perspective, like, eh, it's okay. You know, it's, it's, it's fine. We need leaps in, in growth. And a lot of the productivity of the last 10 years, 15 years, I think, was just this.

• 54:01Speaker 03

  And like, a lot of that is probably not productive, you know, and is actually making us less productive. So to go back to your immigration issue, I think that labor force growth is just not enough. And so the fear that you should have about illegal immigration in particular is that are you enabling those human beings to be as productive as they could be?

• 54:24Speaker 03

  So yes, you are solving for labor force growth, but are they then going to go? Is illegal immigrants and their children, are they going to be able to be the best version of themselves as American laborers? Are they going to be able to see their productivity go up? And I think the problem is that if you're an illegal immigrant in any country in the world, the chances are that you're going to be

• 54:51Speaker 03

  in sort of the underutilized parts of the labor market. You will not be allowed to really get educated. And you will, and there will be all sorts of hurdles, both objective and subjective, to your ability to become the best version of yourselves. And so the reason to solve the immigration problem in the United States of America is to ensure that people who come to the country actually can be the best versions of themselves, that they are not at risk of deportation, that they are not at risk of, you know, suffering by going to school, by becoming trained up, by learning the language. And I think that it's, it's something that's, quite frankly, a relatively easy fix.

• 55:37Speaker 03

  And it starts by making it much more difficult to have a job if you're an illegal immigrant. And this is one of the most fascinating things in the United States. It's one of the countries where it's actually the easiest to be employed as an illegal immigrant. And you know, this is, this is part of the debate where both Democrats and the Republicans are actually kind of to blame. Particularly Republicans, by the way.

• 56:00Speaker 03

  Particularly Republicans. A lot of the pro-business legislation and rules allow businesses to effectively kind of employ illegal immigrants, right? You know, so like, think about the large agro businesses. You know, they're not these, you know, these are not run by liberals in coastal states. Let's be very clear. You know, I live in Los Angeles. In Santa Monica, I don't see a lot of like chicken plucking and strawberry fields in Santa Monica. So a lot of the pro-business regulation that kind of closes eyes to illegal immigration is actually a leftover from the 1980s, 90s, kind of like good old boys, you know, pro-business regulatory sphere. And so I would say it's very easy

• 56:44Speaker 03

  to end the immigration problem. You just make it impossible to hire a person who is an illegal.

• 56:52Speaker 03

  And you would most immediately disincentivize, you know, humans are not stupid. If I can cross the border and get a job, like, why wouldn't I? But if I can cross the border and not get a job, and then I have to, like, sell leather goods in the street, like, that doesn't sound good. And so that's one way to fix this without necessarily putting up walls or barriers or anything like that. You disincentivize, you make it much more difficult to be illegal and earn a living in the United States. And then, of course, create pathways to coming in legal ways, you know? So whether it's seasonal programs, whether it's easy, like, visa application rules, things like that, that can still be pro-business and can still bring enough labor force, but

• 57:37Speaker 03

  do it in a legal way, which then also allows those people to have kids and those kids to go to schools and, you know, be the best versions of themselves.

• 57:46Anthony Pompliano?

  My last question for you is, given kind of all the analysis, you kind of look around the world, you really pay attention to the geopolitics, how do you think about allocating a portfolio today? And like, how are you allocated or how are you talking to clients about it?

• 58:00Speaker 03

  Well, I think the most important issue is always price, you know, and positioning. And I will tell you that currently, I think, almost every investor I speak to, whether US-based or not, is pretty much overwhelmingly positioned in the US. Like, if you have a strategic asset allocation and you have sort of a allocation for the US, you are at the max level, you know, and you might have even expanded what allocation you want to have in the US. And so, yeah, that's what I would say. I think the issue right now is that there's this real sense that in the great discord that we are in the world with all these things going on around the world, it cannot possibly make any sense to be anywhere other than the US. And I think you see this from the performance of the dollar.

• 58:44Speaker 03

  The US dollar is as expensive as it's ever been, you know? And I think that's a real issue and something to really think about. Because I think over the next five to 10 years, that could change. And so what I would say is that, you know, I'm not asking a family office or an institutional investor to, like, completely devise out of the US. But let's say you have 60% of your assets in the US, maybe you want to have 55%. You know, maybe you want to have 50, particularly because your dollar goes a long way. And you can buy a lot of stuff for it around the world. And as I said, there's all sorts of things going on around the world that don't fit neatly into the economist headlines. You know, so like, think of like Indonesia or Malaysia.

• 59:29Speaker 03

  These are countries that are being showered by both China and the US with money. That might seem like an interesting place to acquire some assets. India is another one. Of course, it's a little bit more expensive than the other two. Vietnam, Latin America is an incredible place that is really benefiting from what's going on around the world, both from the commodity perspective, but also from the perspective that they're far enough from both the US and China that they can benefit from the FDI of both. Mexico is a great example of this, but I think Brazil will be as well, and potentially Argentina with the new administration. So I would say to investors, start nibbling at the rest of the world.

• 1:00:10Anthony Pompliano?

  Marco, I could literally talk to you forever. I've learned so much from you. And this conversation, you've given me a lot to think about. I love the demographics may not actually be something to invest alongside as much as everyone thinks it is. Where can we send people to find you on the internet or keep up with the research and the work that you're doing?

• 1:00:28Speaker 03

  Well, for now, I think the best way is just, I'm on Twitter. You know, geo underscore Papi, P A P I C. And also geopoliticalalpha.com. So let's keep it to that for now.

• 1:00:41Anthony Pompliano?

  Awesome. Well, I appreciate it very much. If people do not follow you, they should, and we'll definitely do this again in the future.

• 1:00:47Speaker 03

  Absolutely. Thank you so much, Anthony.