Coin Stories with Natalie Brunell

Episode: Luke Gromen: Dollar System is Breaking and Markets Aren't Ready
Date: January 20, 2026
Guest: Luke Gromen, founder of Forest for the Trees (FFTT), macro analyst
Host: Natalie Brunell

Episode Overview

This episode dives deep into the unraveling of the US dollar-based global financial system and the growing tensions in the world economy—especially as they relate to resource competition, currency reserves, and the future role of both gold and Bitcoin. Luke Gromen brings his signature blend of skepticism, historical analysis, and strategic foresight to explain why he believes the "dollar system" is breaking down, why market complacency is dangerous, and where he thinks Bitcoin, gold, and real assets fit into the changing landscape. There are frank discussions about geopolitics, trading decisions, and the disruptive force of AI on financial and labor markets.

Major Discussion Topics & Insights

1. Current Geopolitical Tensions: Tariffs, Greenland, and Resource Competition

• Timestamps: 00:30–05:19
• Key Points:
  • The US is embroiled in a fresh round of geopolitical "tariff turmoil," with Trump threatening European nations over Greenland and critical mineral access.
  • The interest in Greenland underscores US vulnerabilities around rare earths and critical minerals crucial for defense and manufacturing.
• Notable Analysis:
  • Luke references the importance of "inverting" problems (Charlie Munger's advice) and looking for "dogs that don't bark" to get a fuller understanding of geopolitics.
  • The US is late to lay claim on strategic Arctic resources compared to Russia, Canada, and Denmark: "America being America, we don't think about things as a country until it's literally biting us in the rear end." (Luke, 04:15)

2. Japan’s Debt Crisis and Global Bond Markets

• Timestamps: 07:29–15:55
• Key Points:
  • Japan is the G10 country closest to a debt crisis; the interplay between China, Japan, and the US has underappreciated risks.
  • China can push Japan into a bind via trade and currency moves—potentially forcing Japan to sell US Treasuries or buy commodities in other currencies.
  • The broader concern: bond volatility is low but could spike suddenly, affecting all major Western economies.
• Quotes:
  • "Compounding interest is undefeated all time against empires. And then, you know, people like, well, we're America, it's different. Like, no, math is math, people." (Luke, 13:45)
  • "I'm discouraged by the complacency around most market participants... there's just chest thumping of, you know, we have all the leverage and no one else can do anything. In the meantime, I'm watching them do something." (Luke, 14:42)

3. US Dollar Reserve Status, Gold, and Intentional System Change

• Timestamps: 15:55–22:00
• Key Points:
  • Luke believes the post-1971 US dollar system is unraveling—intentionally or not.
  • US policymakers face a dilemma: maintain reserve status (and outsourcing/deficits) or reshore industry.
  • Replacing Treasuries as the world reserve asset likely means sharply higher gold prices.
• Standout Analogy:
  • The US wants "the poor farmer she loves and all the money of the rich boy," but can't have both (riffing on a famous movie scene): "Can I marry the rich guy's money and the poor guy's... passion? Unfortunately you have to choose right?" (Luke, 17:00)
• Quote:
  • "I can't tell, I sometimes feel like you're like, 'no, no, no, it's really on fire,' or if there's really a plan here. And I got to tell you, I go back and forth. If not daily, then certainly weekly." (Luke, 19:30)

4. The Fed, Gold, and Export Mysteries

• Timestamps: 24:20–28:53
• Key Points:
  • Gold is now a larger share of global FX reserves than US Treasuries; however, the Fed’s balance sheet no longer contains gold.
  • The US increasingly exports physical gold (mostly to Switzerland and then to China/UK), raising questions about trade settlement and fiscal weakness.
• Quotes:
  • "The Fed's balance sheet has gone from gold plated to... basically crap over the last hundred years." (Luke, 26:55)
  • "The countries that are buying gold are not the ones collapsing. It's the countries selling gold that are the ones having the fiscal problems." (Luke, 40:13)

5. Material World vs. Financial World

• Timestamps: 28:08–35:17
• Key Points:
  • Physical commodities and industrial capabilities are regaining primacy over financial engineering.
  • Major powers (e.g., Russia) anticipated the West’s industrial weaknesses before engaging in conflicts like Ukraine.
  • The US is at the initial “admission stage” of its industrial problems but is underestimating the time and inflationary pressure required to fix them.
• Memorable Observation:
  • "The bond market's kind of sitting there like Ralph Wiggum at the back of the bus going, 'I'm in danger.'" (Luke, 33:45)

6. Trade, Gold Settlements, and the Limits of Trust

• Timestamps: 34:20–43:35
• Key Points:
  • Gold is flowing eastward, possibly as direct trade settlement for critical materials amid low trust between countries.
  • Nations are likely reverting to “proof of work” (physical deliveries) in trade, rather than digital or fiat promises.
  • Gold is an imperfect but trusted bridge in the absence of faith in fiat or rivals’ tech.
• Quotes:
  • "No tiki, no washi... You don't send the gold, we don't send the oil. And I think that's where things are going to go with gold, right?" (Luke, 45:00)

7. Bitcoin, Capital Rotation, and Trading Discipline

• Timestamps: 43:35–54:37
• Key Points:
  • All major asset markets are in “bear markets versus gold”—a capital rotation unseen since 1930, 1972, and 2002.
  • Bitcoin is not (yet) trading as a neutral reserve asset, but as a “high beta tech stock”; technicals show risk of sharp drawdowns.
  • Luke defends selling part of his Bitcoin stack (“at 23–24 oz gold per coin”) to pay off all debts and secure tangible assets (like a lake house)—prioritizing peace of mind over leverage in an uncertain future.
• Host Challenge:
  • "I know the second I sell, we're hitting a new all time high. I'm telling you, I'm a top signal." (Natalie, 67:05)
• Luke’s Humility:
  • "You can't have an ego about it because... this is a humbling business." (Luke, 66:35)

8. AI, White-Collar Jobs and Debt Deflation Risks

• Timestamps: 67:05–77:00
• Key Points:
  • AI is not about replacing all jobs at once, but about eliminating “marginal” jobs much faster than society expects—especially high-paying white-collar functions.
  • In a debt-leveraged society, even small employment shocks can rapidly destabilize the banking system.
  • The labor market is over-optimized for "financial economy" jobs, not real-world (material) production.
• Quotes:
  • "It's not that it's going to take all our jobs faster than we think and more it's going to take the marginal job faster than we think... and in a highly levered system, people are underestimating how fast that's going to blow up the banking system." (Luke, 69:16)
  • "How are they going to pay their mortgage? They're not. How they gonna pay their car? They're not." (Luke, 74:01)

Notable Quotes & Memorable Moments

• On US Schizophrenia Over Reserve Status and Industry:
  "The US wants the poor farmer that she's in love with and she also wants all the money of the rich boy... and unfortunately you have to choose right?" (Luke, 17:00)

• On Policy and Planning:
  "I can't tell, I sometimes feel like... it's really on fire, or if there's really a plan here. And I got to tell you, I go back and forth. If not daily, then certainly weekly." (Luke, 19:30)

• On Gold as Settlement and Loss of Trust:
  "No tiki, no washi... You don't send the gold, we don't send the oil. And I think that's where things are going to go with gold, right? There ain't going to be auditing. It's going to be, we make this, you make that. We have a deficit. Send the stuff or we're done trading until you send the stuff." (Luke, 45:00)

• On AI and the Labor Market:
  "It's not that it's going to take all our jobs faster than we think and more it's going to take the marginal job faster than we think... and in a highly levered system, people are underestimating how fast that's going to blow up the banking system." (Luke, 69:16)

Key Timestamps for Important Segments

• 02:40 – Strategic relevance of Greenland and Arctic minerals; US resource vulnerabilities
• 09:05 – Japan’s economic pressure points; interplay with China and possible consequences for US Treasuries
• 17:00 – Analogy about the US wanting both reserve status and a domestic industrial base (movie riff)
• 22:08 – US, Russia, and China potentially moving toward a new neutral reserve asset system
• 26:55 – The Fed’s changing balance sheet: from "gold plated" to "crap"
• 35:17 – Why is the US exporting large amounts of non-monetary gold—and what does it mean?
• 43:35 – Capital rotation: why all assets are in bear trends priced in gold; implications for Bitcoin
• 48:19 – Luke’s reasoning for selling Bitcoin, paying off all debt, securing real assets, and preparing for volatility
• 66:35 – On humility in investing and not letting ego drive decisions
• 69:16 – AI rapidly gutting white-collar jobs and likely impact on the banking/financial system

Flow & Tone

The conversation is direct, candid, and at times laced with dark humor—reflecting both Luke’s skeptical macro outlook and Natalie’s probing, conversational style. Luke’s approach is nuanced and analytical, frequently invoking inversion and historical analogy, with a wary eye toward both systemic fragility and the psychology of market participants. There’s a spirit of “hard-nosed realism” about US monetary privilege, fiscal tricks, and the possibility—and danger—of profound systemic transition.

Conclusion & Final Thoughts

The episode offers an unvarnished look at why the dollar system is showing cracks—and why markets and policymakers may be more unprepared than ever. Luke Gromen underscores the need to focus on real assets (gold, industrial commodities, land), to pay attention to flow of physical goods versus the illusions of the financial ledger, and to understand how both markets and geopolitics are likely to break “faster than you think.” Whether talking about the risks of AI, his own portfolio decisions, or the fragility of fiat trust, Luke is crystal clear: buckle up—2026 may be one of the most event-packed years yet.

Recommended for listeners who:

• Want a macro, geopolitical view of finance
• Are interested in gold, Bitcoin, and reserve asset debates
• Seek practical, unsentimental takes on investment strategies
• Appreciate historical analogies and deep dives into the shifting world order