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- [00:00]
Raoul Pal
But really, if we're going from two and a half trillion dollars to $100 trillion, why the fuck would you ever sell anything? I mean, that's, that's why I keep getting into my head is like, unless you have to or want to, you literally wouldn't. You would just keep finding opportunities where it gets oversold to buy more, because that's where it's going. This is the biggest phase transition shift humanity's ever faced. And the whole thesis of don't fuck this up is this. You just keep hold of this trade in every guise that you've got it, and ride the fucking thing.
- [00:30]
Julian
Yeah, we're leaving a world that's been dependent on capital and labor and moving into a world that's entirely dependent on compute and energy. And that's a very different world.
- [00:41]
Raoul Pal
Don't forget the earnings coming out of Anthropic is the fastest scaling of any company in the history of the world in by far the shortest period of time. It's three years. It's gone from zero to $100 billion in revenues. This is La La Land. Hi, I'm Raoul Pal, and welcome to my show, the Journeyman. That's when I travel to the nexus of understanding between macro crypto and the exponential age of technology. I'm obsessed by these things ever since I started the crypto journey in 2013 and started the exponential age, which is something I coined back in, I don't know, 20, 21. And everyone thought I was fucking nuts. And now everything's going exponential. We talk about this a lot. I've been producing a lot of content around this. There'll be more on the platform, more on the YouTube channel as well. But you'll see this focus of this universal code idea where we're converting units of energy into increasing units of intelligence, and that is going exponential anyway. To that effect, Julian and I do something on the platform for Alpha members and above called shooting the shit, where we just talk what's on our mind to each other. It's kind of like a twitch stream on the Real Vision platform, but I thought it would be worth sharing it with you guys so you can see a what's on the platform and what's in the outfits here. But also because even though it's a very loose form, us kind of shooting the shit with each other, I think it gets across some really important points that you guys have to understand. So I hope you enjoy it. And then come across the Real Vision. Sign up for Alpha and get some Real Alpha in this whole journey because we're on a hell of a ride. Anyway, enjoy. Join me, Raoul pal, as I go on a journey of discovery through the macro, crypto and exponential age landscapes. In the Journeyman, I talk to the smartest people in the world so we can all become smarter together. Hey, everyone. Welcome back to Shooting the Shit with Julian and I. Quite a lot going on, so I think we'll whiz through quite a few bits and pieces from my perspective, some of the things that I've been focusing on, on the broader picture of what's going on. I've had this whole thesis around this universal code that everything is funneling from energy into intelligence and it's driving the geopolitical process, it's driving the investment process, it's driving literally everything right now. And what we're getting into is this funnel moment where this Trump administration, which was basically chosen by the accelerationists, if you remember, is backed by the crypto lobby and by all of the Democrats who used to be all of the tech overlords who used to be Democrats, all flipped because they all knew that this chance was the chance, because we're going to, by the time we get to the change of administration, we will have AGI, we will have crypto everywhere, all of this stuff. So it's been hurtling towards this. Now we're getting to the summer where everything has to resolve, everything has to resolve for Trump for the midterms, because again, if I Divided by E continues to play out, that is intelligence needs to accelerate, then it really has to have the Republicans winning the midterms. It's not necessary, but it's highly the most efficient path for this to happen. So it feels that all obstacles clear out the way. Now, I'm not sure people realize, even the governments realize that this is what they're doing, but this is what they're doing. Trump is getting the Clarity act across the line as we speak. I said that was going to happen because it had to happen, because the crypto lobby and what needs to happen before the midterms, we will see similar with AI because that's going to come too. We have now got the change of Wash. He's been voted in. Wash is the Greenspan appointment of the 1950s appointment. He's going to run it hot. We will have financial repression and they will let productivity take the sting out of CPI and keep core CPI lower. That's what they're going to do. That's what was in place. Here's the tech accelerationist. He's a crypto Guy, he's a prolific tech investor. He understands the game. Productivity is the game. Trump in the meantime is with Elon Jensen and about 100 others of all the tech leaders in the United States have all gone to China. And Julian and I have talked for a long time about a grand bargain that's coming and we think this is the stage of the grand bargain. Iran, Venezuela is all part of the same picture, which is get the cost of energy lower, get the Chinese, the Japanese, the South Koreans to own as much of the long bonds as possible. The ESLR takes care of the short end plus stablecoins too, which is why stablecoins was so important, because it finances the deficit. Trump's going to negotiate here with the Chinese, maybe to give them a lower dollar. In exchange they will buy the long end. There'll be some kind of agreements on trade, some agreements on who gets what technology. That's why Jensen's there. There's going to be some agreement over access to Nvidia. This is to avoid going to war over Taiwan, which nobody can do because it slows down the intelligence side because all of the chip fabs are there. So there has to be a splitting up of the two regions into the US and China, the only two people who can compete in the AI race. That is what is going on in this negotiation in my belief. The weaker dollar is another part the the UAE being given swap lines bessant going to South Korea and Japan. He's basically saying the Eurodollar system that lends to China is out of those countries and he's basically going to offer the Chinese liquidity and the Chinese liquidity will flow through to the system in the same way that we expect global liquidity to come through. It allows the dollar to weaken, which weakens financial conditions. It'll allow oil price to come down because there's going to be agreements on Iran. At the end of this, we have Venezuela weakening wrapped in as well. This is a very big setup happening and it all has to get done and agreed and see things happening over the summer because the election's coming up. So it's a crucial time and it seems to be playing out in the business cycle markets charts. It's all corroborating this. So Julian, what are you seeing?
- [07:14]
Julian
No, I mean I agree with everything you said. I touch on small bits of it within mit, but obviously we wrote a really big piece about this in gmi. The thing that yesterday during an IC call, one of the questions was where are we in the cycle? Are we late or early and I said mid. But I think what's interesting is if we're right about oil and if we're right about the dollar, all of a sudden we're in a situation where we have almost a new breath right of where financial conditions extend the cycle even further into next year.
- [07:49]
Raoul Pal
And I'm going to write this up in Jimi and you did a whole piece on this last month is that the probability of a super cycle is getting reasonably high now because of this massive capex spend that cannot stop. The race with China is on. The administration wants this to happen. They need it for votes and everything else. So they will push for this whole thing. Liquidity looks like it'll come in any way, shape or form now because bill issuance is the main part of the liquidity cycle. We're actually losing cyclicality because of it. Even though we've got the big debt rollovers, but we've got 9 trillion to do this year, 10 trillion next year. It's like it's ongoing. So the point you of I have been talking about for maybe a year and a half, maybe two years is we thought that after this cycle would be a super cycle and now we're kind of starting to think, you know what, maybe we don't get a full liquidity down cycle here. Sure we'll get market corrections, we'll get sideways trends for six months, whatever it is. But really speaking we could see an extended extremely hot business cycle that runs and the only thing that would null and void that is if the bond market says no fucking way. Which is why Bessant is over in China and Japan trying to stop that happening by getting more buyers at the long end. So anything over five, five and a half percent of ten year notes you start to say okay this could decouple. But we also know the reaction function is the moment that happens they do something. So they don't want it to happen. They'll use some vague form of yield curve control to keep this happening. So I kind of am erring towards the super cycle which is the dangerous thing because somebody on here is going to say, you know, after we have some liquidity cycle. You said it was a super cycle. I'm not saying probabilistically it's increasing. And you think that as well, right?
- [09:43]
Julian
Yeah, I do think that. I mean that was the compute cycle article from gmi. Right. And I also talked a little bit about that in the MIT video. It's just to the extent that now everything is downstream to compute so AI has flipped causality now everything used to follow the ism because people would say well new orders are ticking higher, expectations are improving and therefore semiconductors followed the real world production cycle. That's now changed. And then you have everything that we've discussed, like the Red Queen which I talked about in my last video, but it's all these things coming together and the charts as well. So that's the point is like there's inflation wasn't nearly as bad as it was made out to be over the last two days. Which is why on the PPI print again I talk about this in mit, you saw the market come lower but the one year break even didn't move. The forward curve. Pricing for Fed rate hikes last year actually flattened and equities closed at all time highs. So it's telling you that inflation's not a problem. And then even then the five year break even hasn't moved at all. So the market's just priced in. Isn't what we supply driven oil shock which the Fed should therefore look through. And I talk about WARSH in the same way that you do in my latest mit, but it just feels like it's kind of all coming together which was highly out of consensus heading into this year, right? It was that liquidity peaked last year. If liquidity peaked last year, you would not have the NASDAQ at all time highs staging the most significant rally. Forget coming out of COVID over the last month, it's the most significant month rally since coming out of gfc. And there's other things going on, right? Of course there's anthropic, there's segment.
- [11:18]
Raoul Pal
I mean anthropic is fucking wild. I want to mention this because again you wrote about it in the last gmi, but anthropic now looks like it's going to go from 44 billion to 50 billion, which makes it like 100% year on year rate of change that's happening. Their compute is. They're completely out of compute. I can see it in my Claude, they've had to negotiate from Elon, plus gets a bunch of other compute. Jensen's telling us, AMD are telling us, intel are telling us just the endless amount of compute because Jeevon's paradox is paying out is the more compute you give people, the cheaper it is, the more people want and it's never going to stop. So unless there's a complete paradigm shift, the demand for this semi cycle is going to be at least into 20, 30 and beyond.
- [12:14]
Julian
Well the demand as you say is already here. That's what's very different to this build out versus the Internet or rail or anything is that that demand was all speculative.
- [12:25]
Raoul Pal
Right.
- [12:25]
Julian
But the demand is already here, so it changes the entire cycle. So, yeah, things are coming together. In terms of things I'm looking at. Let me move you over here. Just pulling up a couple, couple charts. So share. So I'll just start. I'll start by, by just talking about bitcoin and then I'll kind of move out the curve and talk a little bit about equities. But this is basically the same chart I've been showing repeatedly on these shows. And what I been watching is this 120 day exponential moving average. And you can see that basically we tapped against that here, you know, rejected. We tapped against it here, rejected, of course, but, you know, managed to stabilize and now we're well above that. And if anything, I think if we just zoom into this, I mean, this looks a lot like a bull flag to me. I don't know how, how you. You're thinking about it, but so that it does. So that's bitcoin. And then if I look at eth, it's a similar setup, but we're not yet free because here's the exponential moving average and you can see the compression going on here.
- [13:36]
Raoul Pal
Yeah.
- [13:37]
Julian
And we really need to clear. Call it 2400. But that's kind of the level that I'm watching there. Sui is just what a move we had on Sunday. But if I zoom in a bit, I don't know, looks like a bullish falling wedge to me. It's consolidating before the next move, I would say.
- [13:55]
Raoul Pal
Yeah, I agree.
- [13:56]
Julian
Deep. A little further out the risk curve. Again, these patterns are really interesting because these symmetrical triangle patterns, because it's either like traditional technical analysis, it's either a continuation pattern or reversal. So they're a bit difficult to. To play, which is why sometimes you could do like a straddle or a butterfly, you know, in options, which is basically just you get to play either move, but in this case it's broken higher. Come down to retest and it had a pretty. What's up 3% today, Tao, I don't know how you're drawing your, your bit tensor charts, but this looks, you know, pretty good to me. Hype. Just a series of, you know, continuation consolidations. And then I touched on Doge last time. I think this chart still looks good.
- [14:46]
Raoul Pal
Yeah, don't disagree.
- [14:47]
Julian
And then going over to, you know, equities. I mean, look, circle.
- [14:53]
Raoul Pal
I mean, that's like such a fabulous chart.
- [14:56]
Julian
It is. And we added at the pro tier at $56, so we bought here. So we're up well over 100%. But the point is, is that if we're right about where we're going with everything here, people are really still underestimating this story. And the chart's kind of telling you that, isn't it? It's a huge inverse head and shoulders
- [15:16]
Raoul Pal
pattern and this chart is not pricing in the speed of which stable coins are going to grow and are growing. It's as simple as that. It's an easy story. It's just not there. It's just not priced.
- [15:28]
Julian
No. And then Tesla's had a pretty decent run here, so I think that that looks good. Having retest the downtrend, I still keep coming back to this chart on solar once again. Well, hang on a second, let me just look at the D mark counts because. Oh well, there you go. Okay, so There's a daily 13 here now, but it feels to me like maybe we can do a 9, 9, 13, 9. By the way, this is a weekly chart, so it's.
- [15:57]
Raoul Pal
And it's got a clear. There's a lot of congestion over on the left. Right. So yeah, it might not get through that first time. It needs to around for a bit and then do something.
- [16:06]
Julian
Yeah, but the point, I mean we got in a lot lower for pro and gmi, but the, I think the point with this is just.
- [16:12]
Raoul Pal
Well, we got in near the very low.
- [16:14]
Julian
Yeah, yeah, gmi, we're a little bit higher on pro, but yes, I mean this is something we've been talking about for a long time. I mean the solar story is one of those big stories as well covered with stable coins. So I just wanted to revisit this chart because really it's been, it's been flying and then coin is really trying to break out here. So this looks like an ascending triangle. And again, if we can close above 214, I like to look at that chart. It's a big day for coin. It's up almost 9%. So anyway, those are kind of just the, the market charts I'm been, I've been looking at and just kind of following this week.
- [16:50]
Raoul Pal
Yeah, let me, let me share some mine as well. So let me just get rid of the female. I mean we said here that this was going to reverse because of the liquidity flows came back and fuck me did that reverse as you said. I mean that was historic like this one was as well. I mean there is no stopping this every time you have a correction and people were yelling at us, saying it was all over, it was all over, and then that happened. But we've had the same thing in. I'll come back to stocks in a sec. But as you mentioned, when everybody said, that's it, the party's over, it's the end of the bull market, we can all go away. The market did exactly what we suggested, which was come up, and this was exactly to do. And I think you should tip that chart in a bit, the one we looked at this morning, you and I, which is the US liquidity chart. It's fucking perfect. So that seems to be playing out as expected. The liquidity flow is happening. It's all on track for what we expect. I still think crypto will outperform tech stocks at the next phase of the cycle, so I think that's pretty good. I won't go through most of these. The other chart I'm very closely following is zcash, which has been a great one. And I think somewhere here we're going to be doing another one of these kind of inverse head and shoulders continuation patterns. It comes down, breaks through next phase of acceleration. So I kind of like that one as well. Going back to stocks, as you said, Tesla's. Now let's look at the weekly to give it some perspective. I mean, this wedge is going to break. When this wedge breaks, nobody's really prepared for this. I still think fundamentally it's amazing. Rocket Labs has been fucking rocket ship. And look, I get this is a very overvalued stock versus its revenues. But before the SpaceX IPO, the only way of playing the SpaceX IPO is owning this stock. And if I look at this rising wedge, if it breaks the top of this, which it looks like it's going to do, it's just going to go vertical for a while and then I think we'll take profits into that because it's not making a lot of revenue right now. It's still losing money. Everything else, I get it. And the SpaceX IPO will satiate the demand for, you know, space stocks. But this is the play and I think it's going to go vertical.
- [19:41]
Julian
The thing about that chart, though, that's crazy. I just pulled up the GMI portfolio. We added Rocket labs at like seven bucks originally. Yeah, then. Then it did a 300%, then we sold it and then we bought it back at 18, $18. And now it's up 6. That position's up 600%.
- [20:03]
Raoul Pal
The new position, the New position. Yeah. So I don't know how much fucking money we've made in that but it's been preposterous. I don't know. I don't think we've got it in Pro anymore, have we? We probably got it in Exponentialist.
- [20:16]
Julian
Yeah, no we don't think we have it in Pro.
- [20:20]
Raoul Pal
So okay. I mean that's been a killer obviously. Nvidia exploding again. It helps. Jensen's in China, clearly he's going to be allowed to sell Nvidia chips to China. On what terms we don't know.
- [20:34]
Julian
And when you look at this chart, assuming that we're right, assuming the compute cycle article is right, the move has just started.
- [20:43]
Raoul Pal
It's just one of the wildest charts in history.
- [20:48]
Julian
Wow, had you bought that back in 2012? Yeah.
- [20:55]
Raoul Pal
What a move then. Intel has been. I mean that chart was la la land as well. Oracle. I think everyone's going to be wrong on Oracle. Oracle's probably going to go back to the new all time highs semis. You showed Tan Circle good. Hims still really like this stock. I think people are still wildly underestimating the size of the market in personalized medicine and these compounding clinics and the technology that they've got and the sheer size of the peptides market. So yeah, it came down on earnings. I think it finds a base somewhere here and as it goes through we'll form an inverse head and shoulders and this thing's going to be exploding higher. So I really like hims as well.
- [21:46]
Julian
The DMARC wave count just opened up a new wave higher now that we've come lower as well. So on Bloomberg
- [21:54]
Raoul Pal
Etoro we don't have but we had Yoni Asron recently. Lovely inverse head and shoulders low. I mean interestingly they had great earnings in the same quarter that Robinhood and Coinbase didn't. They got one and a half billion of cash. It's like a third of their entire market cap is cash they're sitting on. So it's a wildly undervalued stock. So I kind of like that DXY not doing a lot. I think we need to get through the China situation, get some outcome. It won't happen immediately but over time we still think that the dollar goes lower or at least doesn't go anywhere important. So nobody has to worry about the dollar. There's a chance that it comes back down to here.
- [22:40]
Julian
Foreign
- [22:43]
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- [23:43]
Raoul Pal
If that happens, then you know this really is going to be a very, very big bull market.
- [23:49]
Julian
Yeah, absolutely.
- [23:50]
Raoul Pal
So we'll wait and see on that. Rates we looked at, you know, rates are kind of not very happy right now. I think this is going to end up being a false break and we'll break back down again for the reasons we've talked about. But we need to watch it if it starts breaking up here, you want to start considering a what the reaction function is. Remember the friend of ours quote, it's not trading the thing, it's trading the reaction to the thing. You don't short rates. It's what they do. If rates get high, that's an easier trade and more profitable. So I think that gets interesting. Oil has been. Let's go to the daily chart. Fucking around for a bit.
- [24:31]
Julian
We erased the nine count, which is slightly annoying, but nevertheless not sure what the latest counts are.
- [24:37]
Raoul Pal
No, but we kind of know that they have to get a solution because of the election, because of the universal code. So I'm just patiently saying it will come. The other one's been Copper. While I love the copper thesis, what worries me about Copper is every fucking hedge fund I know is longness. We saw that the GMI roundtable. It's the easy way to say, well, I don't want to play the multiples on tech stocks, I'm just going to own Copper. I get the story, but that's the only issue to me is, is maybe it's not as easy a trade as people think it's going to be and maybe we see these moves a lot.
- [25:23]
Julian
The spec positioning right now is very stretched as a percentage of total open interest. So as you say, it does feel
- [25:30]
Raoul Pal
pretty consensus now and The Chinese have vast amounts of this stuff in storage, which I think they've been using as collateral to get dollars because they've been dollar starved. Now, if they open the swap lines, do they end up selling off or unleashing inventories of copper, which is excess demand in the market that wasn't there before? Don't know. It just always makes me nervous, copper. But I've also lived through some stupendous copper bull markets in the past. When China came on the scene, I mean this was a, I mean I never forget this move. I mean that was stupid. 2001 WTO $0.59. Yeah, I mean it's 10x in copper, basically, which is quite something. Now, could that happen again? Yes, but I think it's, it's not as clean a trade, but I could be wrong and that's basically what I'm looking at. Can you flip up that chart of the.
- [26:30]
Julian
Yeah, so you mean of, of liquidity versus Bitcoin?
- [26:34]
Raoul Pal
Yeah, the US liquidity chart, which seems to be still. What's the larger influence on bitcoin?
- [26:42]
Julian
There we go. Let's put it up now. Not yet on the screen. Oh, there it is.
- [26:46]
Raoul Pal
Yeah, I know people like Sarah Walker pick it to pieces saying, well, correlation, causation and blah, blah, blah. Look, it looks good to me, I like the chart, it's worked very well. And it doesn't. We don't expect it to be perfect. It will not be perfect. But contextually speaking, feels like the market should be strong into the summer. And that makes sense if liquidity is the dominant factor.
- [27:11]
Julian
Yeah, and then we need to figure out how high we get and whether or not what the sentiment's like at the time. But as I, as I keep saying, we don't necessarily need to play the TGA drain because the difference between a TGA drain with QT drain is that that's the amplifier. Whereas when you have qe either from the banks or the Fed, the TGA no longer is the amplifier, but just creates volatility around the trend.
- [27:37]
Raoul Pal
You know what's going to happen if we don't say to people, oh, you need to be careful of this. And it happens, people say, you didn't tell us. And if we do tell people it didn't happen, they're saying, you fuck wits, it's only the tga. So there is no winning for us in this. And I can already read the comment section in July where we're being scathed for whatever we say here. So do your own research, figure out yourselves because There is no upside for us. Literally, expected future, expected value from us. Making a call on this is negative in every circumstance. What I'm saying is.
- [28:14]
Julian
What I'm just saying is keep an open mind. You know, it's.
- [28:16]
Raoul Pal
Can you put up the chart of the. OR if you can't, I can. Of total US liquidity, including bank loans, which is important for the tech sector and everything else where the money's flowing. And I think it will reassert its dominance in crypto.
- [28:32]
Julian
So do you mean as opposed to just the banks looking at total loans and leases.
- [28:37]
Raoul Pal
The broader US Version. And then we'll look at the global version.
- [28:40]
Julian
That's this one.
- [28:41]
Raoul Pal
Yeah. And so you can see that the TGA drawdown there is less. That's now out of date. Let me see if mine is.
- [28:53]
Julian
Mine should be up to date because I took the latest reading, which.
- [28:56]
Raoul Pal
Yeah, no, because if I look at mine. Sorry, I'm just gonna stop sharing. Yeah, just stop for a sec and we'll go back to you. Because I think yours is weekly, and so mine is just a bit further up that ramp. So this is a nothingness, right?
- [29:13]
Julian
Yeah. But I have the latest data as being for total loans and leases being April 29th. That's why in my. My. My model. Which is why maybe you have something else.
- [29:24]
Raoul Pal
Yeah, anyway, looks I've got. I don't know. Anyway, yeah, they're the point. So go back to those charts we were just looking at. Stop sharing here. So a quick break in your regular programming. If you're serious about your future, grab my free report called prepare for 2030. I think you've got five years to make as much money as possible. And this guide will help you navigate what's coming. The link is in the description. Download it now. Okay, so that, that gives us, you know, that's basically if I put the NASDAQ against that charts one for one right now.
- [29:59]
Julian
Yeah. Well, we can in fact try again.
- [30:02]
Raoul Pal
So look, I bet it is 100.
- [30:06]
Julian
Well, there you go. I. I have to want to scale it. But you can. I mean. Yeah, something like that. Yeah. Be it even 8,000. Whatever it is.
- [30:18]
Raoul Pal
But again, whether the lead lag is slightly different or whatever. So.
- [30:26]
Julian
So. And then, you know, having taken the. I keep saying this, or. Sorry, we keep saying this. US Liquidity bottomed right after the shutdown ended. And. And here I've rebased US Total liquidity. Now this is the broader measure, including total loans and leases and then the GMI Daily Liquidity Composite, excluding us. So that's at all time highs. And then the US is also. This was the, this was the, the TGA rebuild.
- [30:58]
Raoul Pal
Yeah.
- [30:58]
Julian
And now obviously we're working that out already. So these things are again to our point that we've been outlining in reports rising together for the first time really since July, August of last year.
- [31:11]
Raoul Pal
Exactly.
- [31:12]
Julian
And then if I look at GMI total, which is. This is the daily one.
- [31:17]
Raoul Pal
That's a thing of beauty.
- [31:19]
Julian
It is. And again, this only accounts for about 70% of our total monthly number. But it's enough to at least tell you directionally where we are. And look, the consensus view, the backlash that we were receiving really all through
- [31:33]
Raoul Pal
the Mike Howell backlash. I remember that one.
- [31:36]
Julian
But like Feb. March all the way through it was that Liquidity peaked in Q3 of last year. I mean, no. And again, the market would not be doing what it's doing if that was true. Chunk spreads are almost near all time lows. The move is back at the lows. The VIX is back at the lows. I mean if the theory was that credit would be deteriorating and as a result of that credit spreads would widen, the market would be lower. None of that is actually happening.
- [32:04]
Raoul Pal
No.
- [32:05]
Julian
So anyway, that's what I'm watching.
- [32:07]
Raoul Pal
Also, you were building a dashboard around the pro positions and stuff. It was. The average trade is up 155%. Yeah. There's a couple of long term ones that were up a lot, but that was crazy.
- [32:17]
Julian
Right. Okay, let me. Should we show that or not yet?
- [32:21]
Raoul Pal
No, we shouldn't. We can't show all the positions to non pro.
- [32:23]
Julian
Oh, that's right. That's right. Yeah, yeah. No, it's. Yeah, it's. They let me, I just closed down because I've. I have to open it in. But let me. Yes. Our average active position is up 130%. We've got an 84 win rate out of, you know, positions historically open and closed. And of the ones that are open, 25 are winners and six are losers. And the losers are not really that big of a loser either. Currently our biggest win. Well, Solana's up 200 since we added, you know, some of the other positions like Circle World. As I pointed out just a minute ago, we're up over 130%. That was a big win. I mean since, since you added. This is before you and I started working together because this portfolio existed before then. But Bitcoin was added in June of 2020. That's up 900%. Ethereum's up over 900%. I mean again and that goes back to what you and I have always been saying. Like, we play the business cycle. It's important. It's why we track everything. You have to pay attention to inflation and growth and things like that. But over the long term, assuming you have conviction in whatever it is that you're investing in, it's better to just zoom out and add on on dips as opposed to trying to day trade. I hear you say that all the time around the podcast that you've been doing around. I don't know. You know, I know very few people who are successful day traders and I know a lot of very, very wealthy investors. The whole thing about being an investor is what, what does that mean? Doing a bit of research, investing in something and locking up a pool of capital for an extended period of time and seeing those returns compound.
- [34:11]
Raoul Pal
I know. And people are so freaked out about the cyclicality in crypto that they miss the bigger picture. Now we're building that dashboard that hopefully will come out soon, which gives people the ability to buy the two standard deviation of oversold and sell it when it's high. You could take some lifestyle chips off. It makes it so it's not just waiting for when I do mine. It's like, you can make your own methodology. You can choose it, you can do it, that's fine. But really, if we're going from two and a half trillion dollars to $100 trillion, why the fuck would you ever sell anything? I mean, that's what I keep getting into my head is like, unless you have to or want to, you literally wouldn't. You would just keep finding opportunities where it gets oversold to buy more, because that's where it's going. And if we think about the agent economy and its infinite tam, we think about the Clarity act getting passed, we think about the entire fucking financial system building on crypto rails. Think about id, think about agentic id, robotic id, human id. Think of all of these things and you're going to sell it because Raoul and Juliet thinks the liquidity cycle is going to slow down for a bit, it's fucking bananas. And I kind of get pissed off with it now, even though I understand people need it. But I'm just. When I look at the opportunity and I present it and I talk about it and we're at this moment in time, the fastest acceleration of technology in all of human history. And we're trying to. Time technology is stupid. Anyway, that's my rant over.
- [35:46]
Julian
No, that's why we're here. No, I totally Agree. So that's why our JPEGs, that's why
- [35:52]
Raoul Pal
our JPEGs will do so well, is because we can't trade them because they're illiquid. And having a liquid jpegs means you just hold them for 10 years and before you know it, something you bought for 25 grand is worth two and a half million dollars and you haven't had to do anything except look at it in your wallet and think what a beautiful piece of art. It's not that difficult.
- [36:10]
Julian
I was talking to a friend of mine earlier this week about the, the piece that we just published at GMI and he pointed me to the last bit which I reread this morning, which I think is just so good. And it says the world spent the past two years teaching AI to think. The next 20 years will be spent teaching it to see, move and build. Every step requires hardware. The world has not yet manufactured energy energy. The grids have not been generated yet and the rails and financial system has not yet deployed. Every step is investable. This is not the late stage of an old cycle, it's the early stage of a new one. And the buildout has only begun. Welcome to the exponential age.
- [36:54]
Raoul Pal
Exactly. And what we're doing is fully transitioning between the exponential age, which is the acceleration phase, where technology starts compounding into the economic singularity. This is the move we're making right now where the old rails are no longer fit for silicon based speed. Don't forget silicon processes a million times faster. That's six orders of magnitude faster than the human neuron. Nothing is set up for this and we have to rebuild everything from scratch. And that is what's underway. This is the biggest phase transition shift humanity's ever faced. And the whole thesis of don't fuck this up is this you just keep hold of this, trade in every guys that you've got it and ride the fucking thing.
- [37:47]
Julian
Yeah. And it's not just to the point of the Capex super cycle which we've been outlining and talking about really for over a year now, which is kind of coming into focus with semis up now, 80% year on year. But it's also that another thing I, I wrote about in the article is we're going to go through the largest immigration event in human history. Only it's not humans, it's agents and robots. And again none of that infrastructure has really been built out. It's being built out now.
- [38:12]
Raoul Pal
That's right. And we're going to shift from the magic formula of GDP equals Population growth plus debt growth plus productivity growth into the economic singularity version, which is AI plus robots plus humans. And productivity is how much intelligence you can produce per unit of energy. And then debt will get eroded away because GDP growth so strong will be so strong and inflation will be very subdued over the period of time that when you look back like the 1950s and 60s, you ended up going from 120% of debt to GDP down to about 10. And we'll do the same all over again.
- [38:56]
Julian
And no one's again. I haven't spoken to anybody who's thinking like that.
- [39:01]
Raoul Pal
No. But it's fucking obvious. And I keep saying these things now. It's like all of this is so fucking obvious and it's falsifiable and it is literally the whole framework is not putting a foot wrong on these big broad concepts. Sure wiggles here and there, but it is happening. It is happening at scale. And this whole funneling of the entire focus of the world is moving towards intelligence per unit of energy. And that's the entire game.
- [39:31]
Julian
Yeah, we're leaving a world that's been dependent on capital and labor and moving into a world that's entirely dependent on compute and energy. And that's a very different world.
- [39:43]
Raoul Pal
And both of them are in rights law. This is what people understand because they look at the oil price. But Wright's Law, if you look at the price of solar, wind, geothermal, everything, these things are down 99.9%. Compute is doing the same on top of Moore's Law, it's like. So you've got both sides of the equation seeing exploding productivity. And therefore the intelligent side of the equation is accelerating. And this is the thing people don't understand because normally they're kind of fixed. Ish. You could build a certain amount of factories per joule of energy, but when you're building intelligence, the fucking thing is moving at Reid's Law, which is Metcalfe's law squared. And we're seeing it. Every chart is doing this. Never in humanity has Reid's Law ever been witnessed at scale. And it's being witnessed in almost everything I look at right now.
- [40:40]
Julian
Well, this is what we were, we were just talking about before we came on the call. I don't again. Was it two years ago? Was it a year ago? Was it three years ago? But we, one of our clients had said to us that we talk too much about exponentials within our research. And how do you define an exponential? And now literally everything that we're talking about is going exponential.
- [40:59]
Raoul Pal
I Called it the exponential age when I first wrote about this bloody thing four years ago or five years ago and here it is, it's all happening and the economic singularity. I said 2030 to 2032. I think 2030 is spot on. I think we'll be straight into the economic singularity where nothing makes sense anymore in terms of how the economy works. I think we're hurtling straight into that and then the only variant factor is US rates. If they get too high because something happens then can that cause wobbles problems? Yes, but will it cause a tightening cycle? I'm not sure. It depends what's causing it.
- [41:38]
Julian
Well no, because the hyperscalers aren't really worried about the fed funds rate. Right. It's not the old economy, the industrial economy that's been dependent on the cost of debt. Right. So that means the slowdowns all of a sudden if we're right, that and not just the Hyperscalers, just say AI and CapEx become a larger part of GDP going forward. That means that the GDP drawdowns over time will become less cyclical because until
- [42:06]
Raoul Pal
we've got to a build out that makes sense for the machine age and we're as you rightly pointed out, we're nowhere near that yet. We're not even close. We barely started
- [42:19]
Julian
anyway.
- [42:20]
Raoul Pal
Amazing. Lots of, lots of ranting from us today but, but it's look, what a time to be alive. That's all I can keep saying and
- [42:28]
Julian
I've been saying, I mean not now obviously but I do think maybe in six months time or whatever it is as these things play out, we should release the compute cycle article for everyone because it's really important for people to understand what's happening. Obviously that's at GMI now and it doesn't even need to be this year but at some point people need to see.
- [42:51]
Raoul Pal
No, I think we're trying to release it earlier and maybe for everybody just because it's really important people understand all this framing. People are still struggling with the universal code framing but everyone will understand over time. When we started the exponential age everyone thought I was a total moron. This universal code. I know I'm right. Hopefully people saw that sweet presentation where I applied this to blockchain valuations. We applied it to the HIMS valuation, we applied it to the Japanese market situation, I've just applied it to Wash and I've just applied it to the Trump China delegation. Mostly it'll be right.
- [43:34]
Julian
No. And the only reason I'm saying at some point we should Release it is because I noticed my language is changing. You know what I mean? I'm talking in a way that I haven't historically spoken. And therefore it's important that people understand the concepts you and I are referring to in order to make sense of everything.
- [43:52]
Raoul Pal
You and I talked about this at the GMI roundtable over drinks late at night. Is like the business cycle is less important than it was. Not that it's not important, but it's not the dominant factor anymore. The dominant factor is the secular accelerating trends. And there's. And that's the way it's going to be for a while, I think. But we'll see. Maybe we're wrong. We'll change our minds. We're not saying definitely, definitely, definitely. We're just saying as we see it, this is how we see it, that the business cycle becomes less dominant of the factor than both liquidity plus the secular acceleration of energy into units of intelligence.
- [44:36]
Julian
And this also explains, you know, in relation to my last video update in mit, you know, there's been this big bifurcation right between. You remember that famous chart from BCA which we refer to like AI driven, you know, gdp, and then like everything that's more historically linked to like industrial production. And this is why, and I'll say it again, why Heinrich has been wrong for three years. Because he's using an old business cycle macro framework to call for a recession. Because certain areas of the economy are not quite recessionary, but at least subdued, which is why the ISM is doing this. Because on one hand you've got one part of the economy that's doing this, the other one you got another part which is doing this. So the ISM is almost the average of that, but you can't actually see what's going on inside. But that old business cycle framework will never work again.
- [45:26]
Raoul Pal
No, and the other thing, and I was doing some work on this this morning, is people keep bringing up the Shiller pe, the most expensive the market's ever been. And you don't understand what debasement does to the denominator. Because what you're allowing is price keeps going up because of debasement, the price of a stock, but the earnings grow with GDP growth, unless you happen to be in the intelligence business and then your fucking earnings are going vertical. I mean, don't forget the earnings coming out of anthropic is the fastest scaling of any company in the history of the world in by far the shortest period of time. It's three years. It's gone from zero to $100 billion in revenues. This is la la land. And it did most of it last year alone. So it went from 10 billion to 100 billion in a year. Nothing has ever, ever come close to this.
- [46:30]
Julian
Yeah. And and to your point earlier about, I mean, there are no certainties in this in, in, in, in what we're doing, but as you rightfully point out is we're really. If you're not open minded to a changing structure of the business cycle and adapting your framework as a result of that, you're going to get left behind.
- [46:49]
Raoul Pal
Totally agree. Now you going to get left behind because you need to leave, get out
- [46:52]
Julian
the door and to go.
- [46:53]
Raoul Pal
All right, everyone, hope you enjoyed it. We'll see you very soon.
- [46:56]
Julian
Take care.
- [46:58]
Raoul Pal
You obviously enjoyed the episode because you're here with me at the end. But listen, don't forget to go to realvision.com join and grab a free membership. It's an incredible community packed with alpha great investment ideas and the research that you need to help you unfuck your future. So get started. Now go to realvision.com forward/join.