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- [00:00]
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- [01:36]
Tim Miller
Hey, everybody, it's Tim Miller from the Bulwark here with Katherine Rampel, our economics guru, writer of the Receipts newsletter. And I had to grab her because, Katherine, I've got a. I got a friend in town visiting and. And I don't know if you have anybody like this in your life, but he's. He's kind of down about the state of affairs. You know, he's pretty angry about things that are happening in the news, and he's mentioning that to me. And there have been only two things this week I've been able to mention to him that brought a. The glimmer back into his eye. The first. Have you seen the video of the people shouting ice at the wrestling match?
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Katherine Rampel
I have, yes.
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Tim Miller
Let's pull that up for everybody else really quick. Now.
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Katherine Rampel
The face in the eyes of the champion. Little glimmer of hope there.
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Tim Miller
That's nice. That makes you feel good, doesn't it like a wrestling match that feels like.
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Katherine Rampel
The message is penetrating it certainly I will say the people who go to wrestling matches are not necessarily like the hardcore tree hugging far left commie types that I would. I mean I wouldn't expect stereotype, not.
- [02:50]
Tim Miller
Trying to stereotype wrestling viewers, but like, you know, it's not the whole Foods crowd. Yes, it's a little bit more of a mixed demo, so that's encouraging. That made him smile. The other thing now this one's a little bit more in the shade and Freuda space is just the absolute crash of bitcoin and other cryptocurrencies and their associated ETFs. And if we have some bitcoin holders out there, apologies, but I think that for some of us to watch ungodly wealth amass among some of the stupidest people in the world and a lot of criminals, including the president and his family, that's been a little disheartening. To see some of that get clawed back is nice. I'm not asking you to comment on that. I'm just speaking for my friend. He was happy to see that. But that led me to try to figure out what is happening. The bitcoin price, just to give people the top line here, it dropped below 64,000. It's down 13% today. It's down 46% off of its all time high. And we're back down basically to where it was at its high around 2021. So there was a period of time where chart just went up for bitcoin. It kind of had as volatile, but like.
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Katherine Rampel
So you're saying that it's a good thing that we didn't develop the strategic bitcoin reserve when it was priced at an all time high.
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Tim Miller
It's good for my laughs. Yeah. Oh, you meant like it wouldn't have been good for our finances as a country to have invested in a strategic.
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Katherine Rampel
Exactly.
- [04:24]
Tim Miller
Yeah, that, that does seem like that would have been a risky bet to drop 46%. Did we do that? I thought we did. We made some bitcoin investments, didn't we? Did our country? Yeah, they did an executive order, but. But you know, those aren't real.
- [04:38]
Katherine Rampel
Yes, exactly. So anyway, what is the law? Yeah, so yeah, I think it's a good thing that we didn't do that. Look, I am not to be clear, like a crypto fintech guru, I don't give financial advice. I can tell you my basic understanding of what's going on here to the extent that it's not just like animal Spirits. So long term interest rates are up and that's bad generally for speculative assets of all kinds. You want money to be really cheap, you want borrowing to be very cheap. If you want to have these inflated asset bubbles. When you have long term rates going up, that tends to be bad for asset bubbles. You have Scott Besant, the Treasury secretary, saying I think yesterday that there was not going to be any sort of bailout for crypto. So when you already saw things taking a nosedive, that made them nosedive further. You know, there was also like a tech sell off that was probably pretty significant, you know, some forced liquidations and stop orders that had already put in, been put in place. So again, it's like Klein sort of builds on itself and becomes self perpetuating. So I think there's some of that. If you ever thought that crypto had some use beyond just a speculative asset, I think we have seen time and again that that has not been borne out. You sort of alluded to the fact that it's crypto is being used by like criminals and kidnappers and drug dealers and other people who were trying to hide transactions. I think we've known that for a while. But it's also like it hasn't really been a great hedge against inflation, which I think people thought, you know, when you've seen gold prices go way up in the last year or so and silver prices until recently, but crypto has not held up. It looked like that might be the flight to safety, but then it was tested when we invaded Venezuela and you did not flight to safety in the form of crypto. So I think there are a few different things here I'm looking to see. I had written some notes. Yeah.
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Tim Miller
How do you understand the divergence of gold and crypto? Can we talk about that gold and crypto divergence a little bit more? It does seem to undermine their core arguments.
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Katherine Rampel
Yeah, it does. And you know, gold's been around for thousands of years since like the dawn of human civilization. So maybe it's just that more people view it as a safe harbor against inflation than is the case with crypto. But you know, I think it's also about interest rates that when interest rates are low or money is cheap, these sort of unproven speculative assets are more appealing. And it has like, obviously some commercial uses as well. But that's not really what I mean. I just mean that it's like the thing that since the dawn of human civilization, people went to. I don't know.
- [07:52]
Tim Miller
Well, I'm happy because I have a Little gold taste written up in the book. Coin. Just for those that want to engage in some schadenfreude. I've pulled up a couple of coins just to kind of see how things are going. For example, like Elon's favorite, dogecoin. That is down now at about 9 cents. That's been. That's down about 40% over the past month, 56% over the last six months, 66% over the past year. So that's not good. The Trump coin. Ooh, bad year for the Trump coin. If you got in on that, that's down to three bucks, three and a half bucks. 77% down over the year, over the past 24 hours. Down 15%. So that's a bad day. Ethereum over the last six months. Ooh, that's down 50%. Down 13% today. Fartcoin, maybe there's good news for Fartcoin. Let's look. Oh no, that's down 57% over the last month. Down 16%. 16.9. Really 17% today. So those are just a couple I picked at random. But it does seem like a broad based sell off.
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Katherine Rampel
There were some currencies that were like bitcoin that were initially supposed to take the place of the US Dollar, like it was going to replace the US Dollar as the global reserve currency. And there was this fantasy, I guess, that it would have some function other than as a speculative asset. And then you had a bunch of these other kinds of crypto currencies that were really just supposed to be like meme coins, jokes, shit coins, whatever you want to call them. And those really depended on very low interest rates.
- [09:33]
Tim Miller
Yeah, seems like both are down. I should just throw over in the real stock market, just again picking another stock that has some crypto exposure, the Trump Media and Technology Group. DJT stock hasn't been a great little period for that either. Down 33% over six months, down 24% over a month, and down, oh, let's see, about 12.5% on the day. So, you know, pretty solid across the board. And I wonder, and that takes me to kind of my final question. You've been kind of alluding to this, Catherine. Some of the sell off on some of these stocks, including Trump's own stock and Trump's own crypto, might be related to just the fact that people are less interested in speculative assets when the economy is bad. And I'm wondering if there's a recession indicator a little bit here because the last time bitcoin came down, it really was like in that contraction that happened, inflation period, post Covid, and people just didn't have as much cash sitting around to mess around with. And I do wonder if there are any broader economic signals we can take from the Schadenfreude analysis of the Trump coin.
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Katherine Rampel
I think it's possible certainly, that if people are feeling less flush for other reasons, like they're still seeing prices go up, they're worried about whether they're going to lose their jobs, they're worried about whether we're going to have a recession. And there are certainly some red flags in the economy about all of those things, that they may not be willing to be as risky with their money because they want to conserve it. You know, what if they do lose their job, they need to have some sort of nest egg. They don't want to just gamble it away. So that's certainly possible. I would also point out that on the Trump coin stuff, we don't have a lot of visibility into those transactions. And we whether Trump and his family may be doing lots of shady deals or selling off at various points to enrich themselves or to do, you know, they're. They're selling off to people who want some kind of favor from them. There was that big explosive story in the Wall Street Journal over the weekend, I think it was, or maybe last, late last week, about how their crypto Exchange sold a 49% stake to a royal from Abu Dhabi. I believe it was like the guy who's in charge of national security there. So, like, there's a. That was secret, that we only found that out because they were investigative reporters. So that's just one shady transaction. We don't know about the rest, you know, so it's really hard to say what's going on with his stuff. And I would kind of put that to the side, you know, put that in isolation from what's happening the rest of the market.
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Tim Miller
Okay, well, this hasn't been investment advice for everybody.
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Katherine Rampel
Sorry.
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Tim Miller
No, that's fine. We're not here to give people investment advice. We're just here to observe that it's been a rocky day and a rocky month in the crypto markets. And given that our president and a lot of his biggest supporters are highly exposed to those markets, we can observe that that happened. That was something that's maybe not great for them. And if you're out there, one thing I consider, again, not investment advice, just one man's idea, maybe invest in things that add value to the economy. That's one idea. Thinking about there's Usually a little bit more stability in products and companies and assets that offer some tangible value to the rest of the economy. I don't know. You're the expert, Catherine. I don't know. That's just one idea that I would.
- [13:13]
Katherine Rampel
That is certainly an idea. And to be clear, like, I am not cheering on the fact that probably a lot of unsophisticated investors lost a lot of money in recent weeks. Like, I am fine with the Trumps losing some significant value of their wealth, but the worry is that, particularly with this president who's been talking up speculative assets, who loves to, you know, milk his voters and the general public for all they're worth, that there are a lot of people who, like, maybe lost their shirts, who can't afford it. And you can have your schadenfreude and say they should have deserved. You know, they deserved it. They should have invested in something more wholesome or more tangible or whatever. But, like, well, something that's real. There are innocent people who got hurt. Sorry to. There are, you know, be the moralist here.
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Tim Miller
There are innocent people that got hurt. That's true. And we don't like that. We don't want that to happen to anybody. We really don't. We do not want that to happen to anyone. All right. We'll be keeping an eye on what's happening in the crypto markets and then the other speculative assets the Trump family is forcing us to care about. I appreciate you. Catherine Appel. She's working on another good newsletter. Go check her out. Sign up@the bullork.com for receipts. We'll see you all back here soon.