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Chris Martenson
You've had a dynamic where money's become freer than free. If you talk about a Fed just
Marty Bent
gone nuts, all, all the central banks going nuts.
Chris Martenson
So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Probably should be. Probably should be.
Marty Bent
Chris Martinson, welcome. Welcome to the show, sir. Very, very excited for this conversation. Been a fan for years.
Chris Martenson
Well, thank you. And thank you for developing the show and inviting me on. I'm thrilled to be here.
Marty Bent
Well, like I was saying, I, the, my audience myself, we have to give you a massive thank you for hosting our Crazy Uncle Dave's Year in Review for many years now. And it's, it's one of my favorite times of the year is when Dave finally gets around to publishing his year in review and then having a conversation with him.
Chris Martenson
Yeah, it's always, always a little bit of a mad. Can you hear that? Unfortunately, it's a dog. Okay. Yeah. Every year it's such a fun thing with Dave because somewhere around November he says, I'm not doing it. And then somewhere around middle early December, he's like, okay, I'm doing it. And then the stuff flies in, like last minute, hundreds of pages. And he's very, very meticulous. Like everything has to be referenced, footnoted, you know, everything. And it's always a mad scramble. But what a, what a joy to host that thing. It's one of my favorite. I just love reading it every year
Marty Bent
I do as well. It's. Take a day or two over Christmas break if he gets it out by then and dive in. But yeah, we're here to speak with you, Chris, and I think it's a good time to speak with you, considering everything that's going on in the straight, or Hormuz, I guess. Flip flopping, tacoing. Cease fire on ceasefire off. What is going on? You wrote a piece, I believe almost a month ago in May calling for oil above $200, possibly much higher. Are we on trajectory to hit that still, do you think? How are you viewing everything that's going on in the Middle east right now?
Chris Martenson
Well, you have to take one of two positions here, Right. One is this is just rank incompetence. Right. And you get these terrible outcomes. And the other is that this is part of a suite of things that are being done to intentionally damage the United States. And I'm leaning kind of 80% towards this is intentional because if you flip a coin 50 times, it comes up heads every time. You got to start thinking maybe it's not a fair coin, you know. So what's been happening is, you know, what we saw early on, like the Strait of Hormuz gets closed within two or three days, oil spikes to 120 a barrel. And then all of a sudden all these traders out of Trafalgara and all these other big houses, like somebody has stepped in in size and has started to sell these things, right? And so my architecture for understanding the markets, I was a day trader for a while. I was really successful 2005, 6, 7. And then my whole system fell apart in 2008. And I think that was kind of the rise of the machines at that point, right? Where they're really elegant algorithms with obviously faster fingers than I had. And I remember the moment. So I was trading gold futures at that point in time almost exclusively. And I was sitting on 10 contracts and they had a really nice gain on them. But I had this really distant trailing stop. And I woke up the next morning and all 10 were gone. And somebody had come in and the price had gone just down. I personally got pickpocketed. My 10 contracts was the total volume in that tick. And it just, somebody reached in and took it. And I said, okay, this isn't a fair game anymore. It's just tuition is expensive in trading. But when I figured out just how fraudulent it was at that moment, because that's not price discovery, that's clearly thieving and price setting, I started understanding that that's what the future markets are really used for. And that started obviously in the precious metals. But then I started to see these same patterns. And it was about two years ago that same pattern started to show up in oil, right? Where In a single one minute candle there would be 3, 4, 5, 6 million barrels of oil sold all at once. Just crushes the bid stack. Every, every bid under that normal bid stack that and, and ask stack that's sitting there just gets crushed, right? And it had the same flavor. It's like watching a 2am Silver slam where the bid stack would get crushed. But then that's the new price. It's not like all this activity reassembled and brought it back up again. And so I, I observed, okay, price setting is a thing. And obviously there's no regulatory oversight that's interested at the cftc, sec, and, you know, curbing that behavior. And I think the explanation for that's easy because when that behavior is reinforcing the official narrative, it's okay, you know, that's. It's just part of the game. So I watched oil suddenly just start getting the same treatment really heavily, actually, starting in Trump's first year in office, right? It just coasted down from about 75 all the way down into the high 50s. Almost. Almost ruler straight, Marty. Just like tick, tick, tick, tick, tick. Month after month was just like going down. And Trump's out there saying oil should be 50. And Chris Wright, the Energy Secretary, is like, oh, oil should be 50. And he comes out of the biz, you know, CEO of a fracking company. Nobody's making money at 50 in the oil space, in the shale space, nobody. They're all hemorrhaging capital. Ask me how I know, right? And because I'm a direct investor in this space. So watching oil just mysteriously get clocked over and over and over again, I said, okay, getting the silver treatment, you want to call it that. And then I watched it happen again here during the open part of the war. And listen, I can even understand. We want to keep markets calm. We think this thing's just about to end. We wouldn't want a big price shock. But here's where we are. We are now because oil is like, I think it's 92 at the time we started recording on WTI Futures, right? That's not enough to cause demand destruction. In fact, internal demand in the United States is here. Yeah, supply is here. And so how do you close the gap? Well, normally with price settings. So price goes up, kills demand, brings it to supply. We are tapping the SPR and commercial inventories and also distillate inventories, and we're exporting those and consuming those to make up that supply, demand gap prediction. Real easy. This all carries on until you get to tank bottom, and then it's a crisis, then it's really bad. Then we get back to my original thing I opened with, which is like, if I wanted to intentionally harm the United States, one of the things I would do is have it go full speed into tank bottom, where you actually. Not a supply demand mismatch that can be corrected with price, but an actual shortage. Now you're going to have to triage who gets it, who doesn't. And that's just a hot mess every time it's tried.
Marty Bent
And you can't even get the tank bottom right. Because I think we learned this during the Biden administration, that due to the physics of these petroleum reserves, you need to have a certain amount of oil in the salt caverns or else they become defunct.
Chris Martenson
Yeah. For the spr, there's a bunch of different salt caverns out there. And some of them, probably two thirds are holding this medium sour grade, which is actually the stuff everybody wants, and the other one third is this light sweet. And nobody's really buying that. There's tons of that floating around. Refineries don't need that. So actually, what I'm tracking mostly is just the medium sour caverns. And I'm guessing they have about half left of their current balance. So at current rates, I would give that another 80 to 100 days and then that's out. Right. And for people listening who don't know what that means, the salt cavern is actually a physical hole in the ground. It's a cavern, right? We mine salt out of it. And then the way you get the oil out of it is you put water in the bottom because oil floats and you drive it with water pressure as it drives up. For every barrel that gets taken out, 15 barrels of salt are dissolved into this process. And there's only those walls suddenly become unstable, you know, and they can start to collapse and they can cover up your injection pipes. And there's things that can happen. So I think, and nobody really knows. I've dug around, Marty. I can't find like you would think the DOE would say. We've studied it. We know the number right here it is like matter of national security or they haven't studied it yet. So I don't know that we actually know.
Marty Bent
And I mean, bringing this back to futures markets, I actually think it was on your site earlier this week and you were talking about overnight markets, particularly with silver. And if you're trading overnight, that's where you're going to experience most of the gains versus during the day. So to your point of potential price manipulation while markets are open and sort of tying that concept to oil markets, I think you had Scott Besant and others in the administration come out a couple months ago and say that they would do everything in their capacity to leverage futures markets to keep oil within a certain range.
Chris Martenson
I was looking down because I want to build on that point, because to me, this is just the most astonishing thing. How did I come by my there's an invisible hand operating at night thesis? I come by it honestly. So this is a chart showing that if you had held silver from 1970, just during US Open trading hours, just during those few hours that were open, silver is apparently worth 34 cents an ounce. If conversely, you just held it from the moment New York markets closed overnight, the rest of the world is doing whatever it does with silver and then sold right before the open, silver would have been worth $396 an ounce. So wow, it's worth a lot more overnight than during open New York daylight hours. Right. And then somebody was observing, you know, weird behavior for Alphabet here, overnight versus daytime. Okay, maybe we can make some allowance for that. But this is the part during WikiLeaks. Have you seen, I'm sure you've seen this. This is one of my favorite things. WikiLeaks dumps this thing. So we get this cable, it goes from New York to London. And this is in 1973. And of course, gold became legal for US citizens to hold again in December of 73. It was illegal before that. And so they're very worried like what would happen if too many people bought gold and the price went up and then that price is rising and it makes the dollar look bad or US Treasuries look bad. So there was a lot of concern over how they were going to manage this. And so here's the quote to the dealer's expectations will be the formation of a sizable gold futures market. And the dealers, these are all your primary dealers ones, Scotia, Makata, JP et cetera. And each of the dealers expressed the belief that the futures market would be of significant proportion and physical trading would be minuscule by comparison. So signal versus noise. Right. The signal is now the futures market, not the, the actual gold, physical gold itself. And here it is, black and white highlighted in yellow quote. Also expressed was the expectation that large volume futures dealing would create a highly volatile market. In turn, the volatile price movements would diminish the initial demand for physical holding and most likely negate long term hoarding by US citizens. End quote.
Marty Bent
Some manufactured volatility to scare people away from holding.
Chris Martenson
Yeah. And by the way, volatility in there is code speak for sudden downward price spikes. Volatility is never upward. You know, the VIX doesn't measure upward volatility, it only measures downward volatility.
Marty Bent
Yeah, I mean, now I'm having flashbacks to last year when silver and gold were running. You had the Thanksgiving, the day after Thanksgiving sort of COMEX glitch where it seemed like if you had your tinfoil hat on that they were just hitting the circuit breakers. And I think the theory was that JP Morgan was trying to get on the right side of that trade, they were not short silver and they were going to get called out on their bs and I mean, we ended the year with fireworks and precious metal markets and that seems to have quelled for the first half of this year. Do you think they're trying to suppress it after it was running?
Chris Martenson
Yeah, yeah, they are. And there's something else weird running here that I don't understand because as of this morning, I just checked again, China, Shanghai, silver markets running about nine bucks hotter per ounce, and the US market has been persistent for probably six months. That shouldn't exist. Like, if I had the capability, if I was a big enough player, I could just sidle up to comex, take a million ounces out, put it on a plane and make 9 million bucks minus some trading fees and import costs and things like that. But still, it's free money. Arbitrage like that doesn't exist in an actual free market. So something else is operating here that I don't quite understand.
Marty Bent
Yeah, I'm just looking at silver and gold now. Silver's at 75, down from 120, and gold at 4,500, obviously down from around like 5,400. It feels like they're consolidating. And I mean, that's the big question with everything going on in the Middle East. I mean, bringing this back to Hormuz. I'm sure you saw it. Not only are people worried about whether or not the ceasefire actually happens and we get some sort of deal, mou, whatever it may be, but I think, and I don't know the extent of the validity of these claims, but now people are talking about this barnacle, Barnacle apocalypse that could, that could actually severely perturb the ability for ships to move through the strait, because barnacles are just building up on the propellers and you could have this sort of negative externality of sitting in the straight for months, that even if there is a peace agreement, that you can't move the oil through the street because the ships can't move because of the barnacle buildup. And again, bringing this all together, just to highlight it seems like there's a potential that what we're witnessing in markets, not only in commodities, but potentially in stock markets, just this, this beach ball being held underwater. The beach ball representing volatility and just waiting for a domino to fall to really signal to the market like, oh, there's going to be massive supply chain disruptions beyond oil and gas because of this.
Chris Martenson
Yeah, it's truly a bizarre time. Right. Because I've lived through multiple periods where 2008 oil went to $150 a barrel, 1:48 in July of 08. And it did so because there was this persistent 1 million barrel per day shortfall back then and that terrified everybody. That took about a year to really develop, but just that little bit. So oil is a highly inelastic commodity, meaning a tiny, tiny move on one end in supply or demand can actually have outsized impacts on price. And it always has. It's not this time. And it's not just like oh, you know, there was this Gulf Arab crisis of 73 to 74. There was the 2022 crisis where people thought maybe 3 million barrels a day were going to be missing due to Russian sanctions on the Ukraine war. This is bigger than all of those martyrs combined. Then some, right? And it's the most mysterious thing. So you hear like the chatter like, oh, the straight could be open tomorrow. You know, everybody runs their analysis and Goldman Sachs or the head of, you know, Qatar's energy agency say the same thing. They're like, well, within six months we think it'll be 70 to 80% recovered. Okay, well it used to be 25 million barrels a day. So 80% recovered is. We're still missing 5 million barrels a day six months from now. There's nothing even remotely that scales to what we're talking about here at this point. And yet really just total placidity and complete reliquetion of the US stock market. Well, it's not just us. You can see this South Korean stock market, even Germany stock market just powered to all time new highs last week and Germany's just imploding at this point from a business standpoint. So there is just something going on here that just doesn't make sense. And I think you got it right that that beach ball is being held down. I think that everybody who's a professional beach ball holder cut their teeth on all these things like, I don't know, the dot bomb crisis, the great financial crisis, you know, long term capital management. These are all like human contrived issues and you can paper over them if need be. And I think they think they can do that. Oil's different, right? Oil's a molecule. Energy is the master resource. You can't just paper this over. It's not possible. So I think we're getting set up for the biggest of all possible rug pulls, sudden emergence of that beach ball and then we're going to be facing actual rates of inflation that are going to be, I think really terrifying. Both for the market masters who are the beach ball holder downers, but also for the rest of us, this could be a darker repeat of that double hump inflation of the 70s to 1980 era.
Marty Bent
Now I forget who surfaced the chart, but that echo inflation of the 70s resurfaced a couple of weeks ago and we're tracking pretty tightly to it right now with the latest inflation prints. And that's the other thing. CPI is notoriously underreporting actual real inflation. And when you get into the knock on effects of the supply chain disruption, I mean I had somebody who runs a fertilizer business on last week and he's saying that John Deere, which will typically extend financing to farmers in the US is, is not because they're, they're looking at fertilizer prices, looking at corn prices and saying corn prices aren't high enough, fertilizer prices are too high. We can't finance your, your, your sort of, your endeavor to go plant crops this season. And so talking about like lagging effects, that's what I worry about is this fall, particularly not only oil and gas, but moves into food. And then you get real tough conversations at the dinner table about what are we going to do.
Chris Martenson
Well, this is such an important point because again now corn, its price is also set in the futures market. And again I believe that all the big giants conspire to keep the price of corn down because it serves their interests right. And so the producers just get hammered all the time. I kind of hope that we get a producer rebellion. What if all the silver miners got together and said sorry or only make direct deals with Chinese solar manufacturers or something like that. But corn today is trading at exactly the same price it did in 2008, right? Can you imagine if like Ford, F150s had a futures market and the market shrugged and said sorry, Ford, you have to sell your F150 trucks for $32,000 because that's what they were in 2008. Like Ford would go out of business. And that's happening. They are driving farmers out of business. And that sounds like a bug. It's kind of a feature of blackrock's on the back end snapping up the farmland. Right. So there's something going on here, but it's very clearly not capitalism and it's not legitimate price discovery between willing consumers and producers. There is, there's another, you know what Matt Taibbi called that blood sucking squid. It's just like, you know, it's bad but you know, then you're right, you have that uncomfortable moment around the dinner table someday. Like, wow, who knew that if we kept copper prices this low for two decades we wouldn't have enough? Who knew that we need farmers in business, not out of business.
Marty Bent
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Chris Martenson
Yeah.
Marty Bent
I mean and then parallel to all this you have the massive reindustrialization campaign, obviously the AI data center build out. And I think more and more people becoming quite aware that the energy infrastructure, particularly the grid infrastructure in this country is not as robust as it may need to be if you're going to supply all that demand from the hyperscaler build out. It's very confounding to me because as somebody like I use the AI tools and I love them, I think they're extremely powerful, they've helped our business out. But there is this existential fervor behind the AI race that we're speeding towards it and particularly on the infrastructure side. And it seems like that industry is getting priority over all others at a time where attention may need to be elsewhere or may need to be divided evenly elsewhere. Particularly when it comes to food and energy prices like things we cannot neglect. To your point, energy is the base of everything we do in the economy. And even if these AI tools are incredibly productive or create efficiency gains for individuals and companies, it's all for not if you don't have the energy base there to actually support the growth that will be necessary to make it more widespread.
Chris Martenson
Yeah, there's a whole larger story unpack around all that. And I'm one of those people who tends to really. So let's just take natural gas. This is how we're funding all of the energy requirements of the AI centers. Right. So we're not building nuclear at this point. We're not really recommissioning coal fired plants. So it's gas. Right. And that's great because you can drill wells and it's fairly dispatchable kind of energy. But I'm sitting on the back end of this going well wait a minute, outside of the Permian basin, every single other source of natural gas out of the Bakken basin, out of the Woodford, the Haynesville, the Marcellus, offshore, everywhere, they're all in decline. So then you say okay, well you know these data centers are going to be consuming another 8 to 9 bcf billion cubic feet per day by 2030. And when I say another 8 to 9 bcf per day, these things are on 24, 7, 365. There's no like slate loading. You know, these things are just on there. I call them toasters, don't make toast, right? They just, they make waste heat. I mean, it's crazy, right? You take like say a gigawatt of actual natural gas burn that you create, you know, however much waste heat from that, then you take the electricity, shove it into this thing and then you have to burn more energy to cool it. So if you have a gigawatt data center, typically you're going to be burning about 2 gigawatts of power to both create the electricity and then to cool the resulting heat. It's massive. Okay? And that's what we do with it. And so now there's this second order effect which you hinted at. I want to just call it out because it's important. We're going to be spending trillions on this buildup. Fine. Maybe it's really super productive. It's the other side of the coin. Well, that's capital. That's not going to something else, Right. By definition, that capital went for that purpose. Not for new high speed rails, not for reshoring manufacturing, not for anything else. It went to that. And I don't know about you, but when I drive around my country, I see that we have some self investment that's been a little bit neglected for a while. And if you do go to China, which I do from time to time, it's astonishing. They're putting their capital into their infrastructure and it shows, right? And so all capital going towards infrastructure is kind of timer set on it. You build it, it's shiny, it's new, and then it degrades and you have to maintain and replace it. So we're not even, we're barely maintaining our infrastructure at this point, which is painfully obvious. You go to New York City in a rainstorm, like oh my God, it rained. What again? You know, and their subways are flooded. And you know, all this stuff is happening because it's just, it's in that bad of a shape. And so I think that's the other part we have to talk about is we're putting trillions into this and not that by definition. And I think we need more of that compared to the data stuff. But I don't know, I'm still confused. Like you said, it's almost like some mad dash. Like how do you understand? Like, like what's the theory?
Marty Bent
Wintertime, the theory that we get in public is that it's a national security issue and we need to beat China to the punch of getting to AGI. I'm skeptical of AGI in and of itself. Like I think these things are calculators. I'm not one of those guys who's like, we're going to get to the singularity and we're going to have some transhumanist utopia that we all live in. I think that's actually very dystopian. I think they're just very good at predicting the next word probabilistically and can help you get a lot of work done. But I think when it's being positioned as we need to beat China to the punch of basically having control of the most powerful artificial intelligence systems and then we'll make sure that the free and open democracy wins out against the communist regime in the digital age. But really, I think it's. There's also the command and control aspect. We need to win this just so that we can suck up all the data and basically try to get to a point where we have this Orwellian surveillance state. And I think it may sound a bit crazy, like, Marty, why are you very bullish on this stuff, using it? Because I do think if you're looking at the progression of the models, particularly the open source models versus the frontier models from the hyperscalers, which are closed source, the open source models are not as cutting edge as the closed source models, but they're not too far behind. And so my hope is that recognizing that this is a useful technology that can bring a lot of productivity, obviously it's going to bring a lot of disruption as well. But I think Pandora's box is open. Cat is out of the bag. You can't really turn back the clock and make this technology not exist. So with that in mind, it's like, okay, how do we leverage it so that humans can use it, but in a way that's not hyper controlled by the government, the hyperscalers, whoever it may be. So that's why a lot of our coverage here, particularly in our newsletter, focuses on open source models and how they're progressing. And I think if you're looking at the trends of how those models are progressing and then how easy it is to get to host them locally, I do have hope that we can leverage this technology in a way that individuals actually control the ultimate. The ultimate way in which we leverage these tools and not the hyperscalers and the governments.
Chris Martenson
Yeah, we're currently taking 20 years of my content and cramming it into an LLM, you know, and, you know, and then I think I'll finally have the search tool I've always wanted for my own content, you know.
Marty Bent
Yeah, I mean, we've done that here we have an agent running and it's got every newsletter, every podcast we've ever recorded and we can quick search like hey, what are we like we're talking about energy and AI today. What have we talked about that over the last eight years and what have we said? And within a minute has everything.
Chris Martenson
I'm jealous. I'm still waiting. We're going to get ours soon, I hope. But yeah, so that, that's a good use. And, and I think for, for most people, you know, maybe super advanced uses is different but Deep Seek is pretty robust model, right Quinn Works pretty good. Like they're, they're pretty darn good. You know, I think for average people and using them for average productivity, you know, tools, there must be something they have behind the scenes that they've seen and scared them. It's an idea I've had that they have different models that we haven't seen and so they're like, oh, they can see where this is going. We're going to need data centers so fast that nobody need. They're just overwhelming communities with these things right now. And I've never seen a build out like this. This feels like a very public Manhattan Project at this point.
Marty Bent
Oh, it certainly is. I've been in the bitcoin mining industry for almost decades, so I saw that build out when China banned bitcoin mining in 21. Obviously a lot of that migrated here the United States. And I had an up close and personal experience and view of that build out and I thought that was pretty awe inspiring. At the time when we were spinning up 100 megawatts facilities, then 250, then 500 and then riot announced their, their gigawatt facility in Texas. It was like, oh my gosh, like this is insane because when you think about the largest data centers in the US weren't larger than like 25 megawatts a decade ago. Now we have gigawatt facilities. But the AI wave of the last two years just far exceeds when you and I witnessed in, in bitcoin mining. It's astonishing how, how quickly they're, they're trying to scale this up. And as somebody who understands how these power purchase agreements and these interconnection deals and the demand response deals and what it takes to spin up new generation, it does make you question like how, how are we going to do this? And two sides of that coin, pessimistic side is like we're going to run into these supply constraints and it's just going to not happen. And then the Optimist is like, hey, constraints breed creativity and efficiency. Or maybe this is good because we'll produce so much generation. To your point about the over focus on natural gas, I completely agree. We should spin up all the coal plants, we should rip the red tape off nuclear. Let's just have as much energy generation as possible because we've gone off the Henry Adams curve since the 70s and we need to get back on that curve.
Chris Martenson
And you know who's on it? China. Right.
Marty Bent
Yeah.
Chris Martenson
So in the last 10 years they've installed as much electricity generation, actual generation, not nameplate capacity, but actual electrons flowing out the pipes in 10 years as we currently have. Right. Look, they just doubled. And so I think AI is fundamentally a story of energy. I think all of economy is fundamentally a story of energy. China's clearly dialed into that. They wrote this big beautiful, it was like two years ago. They released it a, a five point strategic plan for how they're going to build out their energy infrastructure. And I almost cried because I'm like, that's what one looks like. We don't have one here in this country. Like we don't have a strategy. Right. And they said yeah, we're going to be people focus on, look at all the solar China's putting in. But they very clearly said they're going to only put 1% of total incremental capacity in alternative wind and solar per year and it's going to max out at 12% because they can't, you can't afford more than that. Whether you get grid instability, otherwise it's going to be nuclear. You know, they've got two thorium pilot plants right now. They did a hot refuel, meaning it's running and they refueled it while it was running. So they're way ahead of us on, on the thorium fuel cycle. They're slamming in uranium plants left, right and center. And so they have a policy that makes sense and it included a geopolitical component. They said, oh by the way, we're going to have to be very friendly with the countries that supply these sorts of things like oil and gas because that's going to be really important for us going forward. So geopolitically they're forging alliances, you know, which I strategically, I align with. You know, United States does this gunboat diplomacy. We're just going to ride in and take out your leaders kind of a thing. It doesn't tend to win friends and influence people, you know, and China gets that. I kind of wish we got that too. With commentary There. But China has a plan, and it's a pretty comprehensive energy buildup plan, and we do not have one in this country. If we do, we're keeping it secret.
Marty Bent
Well, if we were to make one, if we don't have one, what would your plan be?
Chris Martenson
First off, I would just absolutely can all these LNG terminals. It makes zero thermodynamic sense to take a gas out of the ground, turn it back into a liquid. So that costs you x percent of the native energy in that just doing that one process, right. And then you lose x percent motoring it somewhere else in the world. Also, you can, what, sell it for currency units. Dude, we make those out of thin air. Like, why? I don't understand that. So, nope, all of our, all of our natural gas becomes just for Americans and future Americans too. We rip it out of the. Rip oil out of the ground so fast that we still have to flare the gas into the air. You know, that's how excited we are to just get this stuff out of the ground. 2. You create a strategy, right? And a strategy for a business or for a country is the same thing, always the same two components. Where are you going? How are you going to get there? What's the vision and what are your resources? Visions are easy to come up with. Resources are always limited. That's why you have to go through the process. So if we said, look, our fossil fuels are abundant but not infinite, and we can clearly track out where they're going to be, like, they'll run out. And we owe it to those people in the year 2100 to have been thoughtful about this and to have engineered where we're going to get there. So we get there. What's it look like? Well, you paint the vision. Okay, we still, we think electricity is like this awesome thing. It's a great way. We think we're going to be able to electrify transport, we're going to be able to electrify all these different processes. Maybe the Haber Bosch process for making nitrogen fixed out of the atmosphere. Whatever. The thing is, you go through all of that to say, what does that look like? You're like, wow, we're going to need this many nuclear plants. We're going to need this kind of nuclear recycling containment facility. Obviously, we're going to need thorium as part of that mix. Maybe fusion comes along, maybe, you know, but whatever that is, you have some allowance for that. But you have to just basically say, here's our bequeath, mint, coal, oil, natural gas, and here's what we're going to use it for. And if there's something left over, fine, ship it to Europe if you feel it's important. But we do not have that capability right now because we don't have that larger plan. And you know, what takes energy, not just making more energy. We have to use energy to replace that Francis Scott Key Bridge that got taken out from Baltimore Harbor. We're going to have to use energy to build trains that are electrified, that go from A to B. If that's part of our future. Right. We're going to have to think all of that through and then we're probably going to have to onshore the development and the capability of building every one of those components ourselves. Right. So we're Critically short on 20 critical elements, according to the USGS, that like 100% dependent, like, or almost 100% dependent for rare earths, titanium, all kinds of stuff. So part of that energy strategy is how do we, how do we rebuild all of these components that we've, we've built out here at this magic future point? Okay, that's what an honest to God strategy would look like. We're slamming in LNG terminals so fast right now, as if that's the highest, best use, that we're going to double our LNG Exports probably by 2033, from 17 to about 34, 35 billion cubic feet per day. And we currently only produce about 108 billion cubic feet per day. So the question is, where's all that coming from? And nobody can answer that right now. It's just going to arise because it always does. It's a mystery.
Marty Bent
And what's the justification for that? Just the geopolitical aspect of creating dependent trade partners. And so it's just the cost of this strategy is, yes, we may be better used here on US soil, but we need some geopolitical leverage via these, these energy trades.
Chris Martenson
Well, I'm, I'm a little mystified because, you know, a big part of that is sending it over to Europe. Right. Last I checked, Europeans don't even like us all that much, you know, so not really clear what the geopolitical strategy there is. And, and you know, I could, I could understand shipping it to Asia, to Japan, you know, Singapore, maybe China. I could understand that. But anyway, it's not a, it's not a. We don't have that plan though, that says how much of this stuff do we have left and what does it look like when it, when it, when it, you know, in the future, like what Are we using it for. And if we really want to, like, like, you know, re. If we want to compete at all with China. So if anybody listening, if you really want to know just how far ahead of us China is, go to Temu.com, right? It's their, you know, Amazon. And just buy something you're familiar with, right? So you know, I just buy like tools and building supplies and things like that. And Marty, I don't even know. I couldn't even source the raw materials for the price of this thing that's been manufactured halfway around the world and shipped to me at a profit. I don't know, like, you can just get a sense of how far ahead of us they have to be to produce all of these different things, right? Like I just bought little charge controllers, individual units that can run just a small collection of solar panels because I've got extra solar panels just in case people in the future might want to use them. You know, certain, certain outcomes. But you need a charge controller and a little output device. So I buy these little devices and they can handle up to 100amps, right? It was a ton. That's like, I don't know how many panels. That is like awesome. And they work. They were $5.63 each.
Marty Bent
Holy shit.
Chris Martenson
Like, how does that. So anyway, so you look at that and then I heard about the BYD plant where they're like, okay, we're going to start manufacturing cars. They found a facility which was 50 square miles.
Marty Bent
You know it's like the size of San Francisco, right?
Chris Martenson
Yeah, that was the quoted thing. So seven miles on the side gets you to 49. So just think of like a seven mile by seven mile block. And the point is like raw materials come in one end of this thing and cars come out the other end of this thing. So their entire supply chain is seven miles long and internally consistent. Ours, because of nafta, geopolitical considerations, I think the transmissions are made in Windsor, Canada, but the truck bodies are made in Mexico and they're assembled in Detroit or whatever. We have like multi thousand mile long supply chains. We can't compete with them. So you know what the answer to that is? Yeah. We've just blocked import of BYD cars.
Marty Bent
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Chris Martenson
No, I, I agree. And I, I often get people sort of yelling at me about China, like they just copy stuff, which is such a 1980s talking point. You know, I'm usually talking to somebody older than myself when you get that sort of refrain, because I'm like, well, who did they copy the circulating quantum satellite from? Because we don't have one of those. Nobody does. Who did they copy, like, their manufacturing process efficiencies from? Because I saw this, this other instructive video, and it could be Chinese propaganda, but it looked kind of real where they showed A plant that was making missiles. And they said this plant can churn out a thousand missiles a month. Right. It was just fully automated. It's just running all on its own. Right. And then we had the CEO of Ford go over and come back terrified and said, you know, I went into this factory and they had to turn the lights on so I could see what was happening because there weren't any humans on the floor. It was all robots manufacturing stuff, turning out a new chassis like every 20 seconds. Right. You couldn't even conceive of the efficiencies in that model. So if you dare to believe your own lying eyes, it's clear that China can out manufacture us, amazingly so. And then skip over and look at what just happened between the Ukraine war and then the Iran war. We ran out of our fancy pants missiles, you know, the Thads, the SM2s, the SM3s, like we like just ran out like it's going to take years to replace our patriots and all this stuff. Right. So I will tell people right now without flinching, that we've already lost the next war with China because wars are fundamentally logistics and manufacturing. We can't compete on that front. And I hope we never try. Right, because we'll just lose a lot of people. Yeah, our fancy missiles will knock down the first wave, but not the second, the third or the hundredth wave. And China can out manufacture us. That's how we won World War II. Our manufacturing centers did not get bombed. We were able to out manufacture our adversaries. And that's pretty much what every military person will tell me. It's like, oh yeah, you know, you don't go up against a foe who cannot manufacture you. Not just two to one, but probably 100 to one or even a thousand to one in some select areas. Plus we get a lot of our missile components from China, so that might be awkward. Hey, yeah, I know we're shooting at each other, but can you send us another load of titanium nose cones? That would be awesome.
Marty Bent
Yeah, we need the chips too. Can you send those?
Chris Martenson
No.
Marty Bent
Then you factor in, you layer in the fact that we are, I think fully in the age of asymmetric drone warfare. And I'm sure you've seen the videos of the, the drone light shows in China over the years. That's always been a sort of light handed military, military flex in my mind. It's like, hey, we have all these drones over here, shame if we use them in other capacities and a 23
Chris Martenson
year old kid's running them off. A laptop, all 10,000 of them.
Marty Bent
Yeah, yeah, it's. Are you, are you hopeful that sanity will prevail or here in the US and because, I mean, I guess we can bring this back to like precious metals and monetary matters too. I think if inflation rips again, you're looking at the 30 year, 10 year yield here in the United States. I mean that's, I mean, just a bitcoin podcast and a lot of what we've discussed over the last nine years of running the show is, hey, looking at the national debt, looking at entitlements, looking at the trajectory and it's becoming clear that we are on this runaway debt train driven by fiscal insanity that doesn't seem like it will ever get fixed. And what does that mean moving forward with, I think post 2022, I think that was the massive inflection point with the freezing of the treasury assets of Russia. We're four years beyond that and now we are in another war. The yields are going up, the debt is going up, the interest expense on that debt is going up. Inflation's about to rear its head again and then you have an AI wave that's coming and many of the builders of this technology are saying, hey, it's going to wipe out a ton of jobs too, so prepare for that. How does it, the dollar system survive that?
Chris Martenson
It doesn't. I mean, listen, it's got a lot of inertia. It's going to take time to play out. But we're already seeing it play out. I was asked in an interview yesterday, somebody said, well, the dollar isn't doing that bad. Well, that's because you look at the USD index and you're comparing it to other fiat currencies. But let's compare the dollar to gold. Oh, it's lost half its value in about four years, you know, and so on. And so that's really going to be the ultimate arbiter. Here is what is the dollar against real things? And that's what's about to get exposed because of the closing of the straight of Hormuz, which, Marty, you know this. But everybody needs to keep this in mind because every day it's like, oh, oil, oil, oil. Well, it's also oil products. Oh, it's also helium. It's aluminum too, and fertilizer, sulfur. It is actually a poly crisis. Each one of those is an individual full conversation with all kinds of stuff that's just now rearing its head and it's going to be with us for a few years. So we have that and Sometimes inflation is a monetary phenomenon because we mischaracterize it. In the United States we call inflation rising prices. Does milk cost more this year than last year? That's inflation. True to a point. So we have inflationary pressures because the ultimate source of inflation always is government deficit spending. Right. That's, that's the real headwaters of the Nile on this whole thing. And there we're spending as if, I know there's a war going on, but even before the war we were spending as if it was World War II. We were spending nearly 7% of GDP in deficit. You know, we just sort of ramped it up in 2020 because Covid and never found out how to dial that back. Right. And so we just kept that going. 6, 7% of GDP deficit spends. That's highly inflationary. And that inflation is coming. You know, we just caught a PPI print last month or the last month came out a week ago at 6% PPI leads the CPI. It's almost a guarantee that we're going to get 6% CPI prints in just a few months. Right. Because it's usually a three to four month lag between those two. And so if that happens, well, do you want to be holding a 30 year bond even at 5% if inflation 6%? No sir. And so that's a lot of the selling pressure. But it's not just us, right? Japanese bond long bonds are selling off. UK gilts are getting murdered. They're all on the rise in Europe as Well and the US so 10, 20, 30s all adding upwards in yield. So that's pretty much baked in the cake at this point. My personal prediction is that we're going to sort of get to tank bottoms and then oil's going to go to whatever, it's going to go to much, much higher. We're going to call that inflation. And it's a little bit driven by the fact that we have tons of money circulating the system. Explosive M2 growth worldwide, tons of margin debt, tons of bank lending mostly for these AI centers. So there's cash everywhere that is going to provide some inflationary pressure. But it's really, it's going to be a supply shock too. And so sometimes you get cost push inflation which just happens because you don't have enough stuff and prices rise as a consequence. Those two things together. I would not be surprised if I could just pull this chart up again because this is the one we talked about. I got this one from James Lavish, the informationist, but first came out I was using. Yeah, I first Saw the first iteration of this from Torsten Slok at Apollo, but let's use this one. And for everybody watching, the blue line is the 70s and up into 1980 peak, right. Green seems to just be like almost perfectly echoing. And here we have the April CPI reading at 3.78%. It's going to go to 6% on the next couple of readings out. It just probably unless something's broken with the PPI model and I actually think my model, I think we're going to see 15 to 20% inflation in about a year and a half to two years if we follow this. And it's going to be a lot of money right out there chasing too few goods and also too few goods in some critical areas. It's those two things combining together. And at that point we have to ask the question like okay, we had Paul Volcker, right, 6 foot 5, Texans, cigar chomping, pushed people in the chest, backed him into the walls when he didn't like what they were saying. Kind of guy who was capable of ramming. He had to run short term interest rates at this peak 21%. They block that. Can you even. What happens to our interest expense if the long Bond goes to 14% like it did back then and short term goes to 21%, it's game over. Like it's not possible.
Marty Bent
Well, that would make at 39 trillion. Yeah, that would make the interest expense what I think 6, 6 trillion a year or not 6, but like 5, 4 and a half, 5 a year. It's at what, 1718 right now. That's a past Social Security.
Chris Martenson
Yeah. Yep. Thankfully we had Janet Yellen, the gnome genius, the garden gnome genius, putting all of our treasuries into short duration. So we have these massive 8, 9, 10 trillion dollar rolls every year now because we're all on the short end of the curve. As if that would always remain subdued. We should have, should have as a nation when, when 10 years were at 0.75% we should have just slapped everything we could, gone Argentinian style, Austrian style, made hundred year bonds. I mean just like push like that would have been smart. Again, it just keeps coming up heads like was she really that, that dumb, you know?
Marty Bent
Well, that's another sort of confusing thing is because coming into the Trump administration, Scott Besant and others were saying this was a terrible mistake. She shouldn't have been doing this. To your point, I think Trump explicitly said we should have been issuing 10 years bonds when the yield was that low. I think he mentioned 100 year bond too, maybe even a 50. And then Besant got in and kept hammering the front end too. There's something structurally behind the scenes, I don't know exactly what that seems to make it. So they feel forced to do this. And obviously as long term yields go up, they're probably going to favor it, the front end, just to avoid locking in higher interest rates on long term debt. But no, it feels like a problem that isn't easily solvable unless you figure out the fiscal side. And that's another confusing thing. It's like, hey, this has been the year of unearthing the last 12 months of unearthing all this incredible waste and grift within the federal government, whether it's Social Security, having dead people get paid Social Security until they're 115, obviously the Medicaid, Medicare fraud. That's been laid bare with all the learning centers and hospice centers across Minneapolis and LA and other parts of the country from many different, it seems predominantly immigrant groups. And it's just laid bare right in front of us. And the public, myself included, makes enough for it. Like, hey, they're obviously overtly stealing our tax dollars. Let's do something about it. And you'll get like headlines in a week of, a week of just pandering to, to that sentiment. And then nothing happens. We'll come out and say, well, we actually can't fix this because reasons.
Chris Martenson
Yeah, yeah, I confess I had some optimism in January of 2025, particularly when Elon rode in with the 20 something crowd and AI'd their way right through the bureaucracy of D.C. just like those. All those people had those little like, fiefdoms with their like MySQL databases of spending that were all like squirreled away that you could never forensically audit. And AI just ripped it apart, right? They smashed through USAID and we were starting to get the data, Republicans showing all the connections and it was just this big sea of graft. I'm like, finally. And then next thing I know, Trump unceremoniously dumps Elon, proves that he will betray even somebody who is highly responsible for being a key supporter, financially and otherwise, at a critical moment to help him get elected and just spit him out and said, nope, we're all done, we're all done. And Doge just went nowhere. Like that, to me, was the DC power structure saying that was a little too frightening. We saw the light at the end of the tunnel, you know, and they just put a rip on it and stopped it. And since then, absolutely nothing of Substance has happened. Nothing.
Marty Bent
Yeah. Even after Nick Shirley and the sort of man on the street, investigative journalists. One of the things.
Chris Martenson
Yep.
Marty Bent
Billions and billions of dollars worth of fraud in one state alone and nothing. I mean.
Chris Martenson
Yeah.
Marty Bent
Well, that's like if again, trying to. I try to wear many different lenses and one of the lenses talk to Tom Luongo a lot and he's. I think he's big on like, hey, this isn't going to happen overnight. It's going to take time. Like, you brought up usa, like, we got USA out. That doesn't seem to have come back. We're not going to get everything all at once and holding on hope that like, maybe that's the case where it's like, hey, we can only do a little bit at a time. But it is hard to see it right in your face. And then, I mean, the Medicaid fraud, the Somali daycare fraud is like, that should be cut overnight. Instant stop feeding the money.
Chris Martenson
Yeah, instant. I think something like 1 in 6. Hospice kit, was it in home care specialist works in LA County. It's an impossibility. Right. You know, for Medicaid. You know,
Marty Bent
I forget who. I think Dr. Oz went and did that one and that was like a Russian immigrant fraud. Like, we're not, we're not racist here. We're not against Somali specifically or whoever it may be. It just seems like there's the very clear loopholes are being exploited. And that's the weird thing you brought the deep state. There is. There seems to be some sort of organized effort to make it the Somalian and Russian immigrants aware. Like, hey, these loopholes are here. Here's how you can claim to be a hospice care nurse and just take millions of dollars from the US Government. Yeah.
Chris Martenson
Hey, if I could, Marty, I'd love to get your take on this because this is to me the most astonishing thing ever that came out of this was late January, early February 2025, right before Elon got shit canned. And I'm sure you're familiar with it, but you've heard this, right? No, this is the most astonishing thing I've ever heard. So Elon is on a interview on Ted Cruz's show with this other guy. I don't know, one of the things
Marty Bent
you told me about. Yeah, okay, right here.
Chris Martenson
I mean, they're not totally wrong, but they're probably off by 5% or 10% in some cases. So I call it magic. My computer, any computer which can just make money out of thin air. Best magic money. So how does that work? It just issues payments.
Marty Bent
And you said there's something like 11 of these computers at treasury that are sending out trillions in payments.
Chris Martenson
They're mostly Treasury. Some are with the sum at hhs, some at. There's one or two AT States, there's some at Dodge. I think we found now 14 magic money computers. They just send money out of nothing. So this is the guy who presumably knows something about payment systems, having cut his teeth at PayPal. Right. And he's very. Three times he says these are magic money machines because they just emit credits. Now, in my limited understanding of the world, that feature only exists at the Federal Reserve. And he's saying that's now metastasized. And you have them at hhs dod. Of course, that makes sense. Like they can't pass an audit to save their lives. Right. But they're just these machines emitting credits. And then that just violates everything we know about money. Right. It just means we're just manufacturing just one side of the debit credit balance sheet and we're just emitting credits. I don't understand how that reconciles inside the banking system. I mean. And right after that they were like, okay, you're out.
Marty Bent
Yeah. And you left with a black eye too.
Chris Martenson
Did he. Oh, did he join the club? Yeah.
Marty Bent
And.
Chris Martenson
Oh, no.
Marty Bent
Well, that's, that's the, the craze. Like, think, I mean, we're getting the pure wizard of Oz territory and think about just how fake reality is if they're able to do that. The misallocation of, of money via the printing of it ex nihilo, towards all these things that are, I think, against what most American citizens, what humans want at the end of the day. And so like that I'd really be interested to get your perspective on. I mean, deep stake, deep state is a very broad topic. It has many meanings for many different people. But I do think there is something here to this sort of entrenched, sort of supra unelected layer of the federal government that exists and historically has just abused the system and done it through monetary means too. I mean, one of the favorite books I've read in the last couple years is Gold War Years, which highlights how the CIA basically plundered the gold that was in Southeast Asia after World War II and just used it as a black box slush fund for decades until these investigative journalists just figured it out. I mean, back then you actually had to find the gold to run the slush fund. Now you can just use the magic money machine to print it. Out of nothing.
Chris Martenson
Yes. Well, very important that we don't audit Fort Knox if that story is right somehow that's too hard. I don't know. Counting bars, difficult. Well, so two things, right? So remember during the Iraq war there were all these pictures, like tanker filled with gold bars and smiling servicemen kind of holding up bars. I'm like, where did it go? Nobody can answer that question. Was it returned to the Iraqi treasury? Nobody will say. Just went missing. And then op, skip and a jump. It was just last week we heard about this fake CIA agent. He was a real CIA agent, but he had faked his resume. And they found $40 million in gold bars in his apartment or house. And he said, oh, he had, those were for. He was paid in gold. Like those are for. I think he said pay remittances or something. Like basically for hours work. The CIA pays people in gold and
Marty Bent
you're making $40 million at a government jobs.
Chris Martenson
Yeah, we talk about story that'll get buried, trust me. Right.
Marty Bent
Well, we talked about this last week on the weekly show that I do. Like, how did, how did the CIA not flag that this guy was lying about his military? Like is there no sort of inter department information sharing between the, the, the military and the the CIA? Like I find that hard to believe. Like the fact the whole story stinks.
Chris Martenson
He submitted $40 million of time payment stubs. Like what? It's a lot of overtime, you know, I mean just like no, something really stinks in that story. But gold is central to it. So here's my wackadoodle hypothesis. So I track positive and negative space stuff. So negative space in the story is that in 2003, the Federal Reserve stopped reporting MZM, its largest money measure, money of zero maturity, because it was not cost effective to track it anymore. You guys print money out of thin air. What's cost effective? I'm losing the plot. Second 2006, we lost M3. M3 tracks all the money in the United States plus offshore money. And now we're not tracking offshore money. So the question is, where would these magic money machines be emitting credits? And my guess is a lot of it's going offshore. To do things right, you got to pay contractors, you've got to, whatever, buy off dictators. There's things that have to be done. But that could be where all of this is going. And so my hypothesis here, Marty, is that whatever you think our money supply is, it's larger than that. I don't know how much larger. I hope it's not twice as large, because you could imagine Panama Papers showed US There were 275,000 shell companies offshore where people have money stashed. Maybe CIA officers with $40 million. Right. And imagine they're all just parked there thinking they have all this US cash and it's good as gold and all that stuff. And then one day they wake up and the rumors have gotten started and the dollar's starting to tank and all that money suddenly says, I'd rather be in something different. You know, that could be another sort of beach ball moment where you're like, woo. There was a little bit more pressure in the system than we thought, you know, out there. But I'm convinced at this point we do not have good insight into how much actual money has been created. Money is power, money is privilege. Money is an extraordinary substance. And there's not a chance in the world that people who are unauditable, who are unaccountable, haven't abused that system. Oh, yeah.
Marty Bent
I mean, it was, I think it was. I for, I mean, and it's almost like it's in your face now because what was it like last year for some reason or another, like the Cayman Islands, like, was forced to report their treasury holdings. And I mean, it's not the government to the Cayman Islands holding the second amount of you. I think I forget if it's larger than Japan or just below it, but in the same ballpark is Japan, which is the largest holder of U.S. treasuries. And obviously these are all sort of Cayman funds that have exposure to Treasuries. And many people are believing that's sort of the, a lot of that is hedge fund fronts for the CIA to, to run slush funds down there.
Chris Martenson
Well, this was an astonishing thing to me because I just, I just tracked this down the other day. So the Board of Governors, Federal Reserve System, they have some paper. Paper comes out by Barth, Beltran Khan, Perozek comes out in October of 2025. And they said, we're kind of trying to square it up because, you know, the US Tick report out of treasury says the Cayman Islands have 427 billion at the end of 2025. But when we looked at their 9F, their PF forms, it turned out they had 1.8 trillion. It's like we missed 1.4 trillion. What's 1.4 trillion among friends? And I'm like, I'm reasonably certain that, that either the treasury has to send you a coupon payment or upon remittance. Right. Because it's a, you know, it's a T bill, so it was sold at 98, but you par out at 100 when it rolls. They have to send that money somewhere they didn't know where it was going. Impossible. I mean, it's just implies, like you said, it's in your face now that you have to accept these like, oh, we just didn't know. 1.4 trillion extra.
Marty Bent
And it's like, oh, the Pentagon failed another audit. Literally cannot audit what we're doing with all your tax dollars or the money that's just being printed. That's. I mean, do you, I mean, you mentioned like the, the beach ball in regards to people basically calling BS on the fiat system and going towards harder currencies. That's why I got into Bitcoin. That's why I'm passionate about Bitcoin. Like, I think there is not only a repressing need to, to transition back to a sound money economy, but I think there's a moral obligation. I think the, the Ethics of Money production by Holman was very influential on my, my, my thinking on, on just the morality of money printing. And I do think there's an ethical dilemma that the whole world finds itself in now where we're living in immoral monetary systems. And getting back to sound money is an imperative if we want to have a true society. Because again, going back to the point with all this magic money machines, these slush funds in the Cayman Islands, whatever it may be, it's all fake, manufactured out of nothing. And what has that done to push the trajectory of humanity into the direction that we're on now versus what otherwise would have happened if those forces weren't there?
Chris Martenson
This is such an important point, and this is the genesis of where I got started. But I got started in all this way before Bitcoin was around. So I kind of dialed in on gold or anything. I didn't even care. It could have been sheepskins, just anything that humans couldn't print out of thin air. Because if I reach into your bank account and I steal 3% of that I've stolen, that's immoral, right? It's unethical. But that's what the Fed does, right? They print all this money and they steal from everybody who's got existing hard work. Money's supposed to be that store of value. Hey, I work hard, I overproduce, I have some excess, I save that. And they're saying, now we're going to steal that from you on an ongoing basis. So by definition, we have a fraudulent system. Of money because it's fraud if I can steal from you without you knowing, right? It's just, that's all. It's impossible to build a non corrupt system on top of fraudulent money. It's like to me, that's just sort of a philosophical like truism, right? Oh, we're going to put these rules in place and we'll have this great system, but underneath it, the sill plate of this house is termite shot. You know, it's like we're going to build this beautiful house on top, right? Good laws, rules, regulations, you can't, you just can't. So I think if we want to have a just society, you have to have sound money. And I'm agnostic. I don't think we should have a sound money system. They sold us on it. Like, you have only the dollar. I'm like, let's have bitcoin, let's have gold, let's have sheepskins, I don't care. And let them compete because it's competition that keeps things refreshing and also honest over time, right? You know, if I want, if I want to save my wealth in airline miles, fine, you know, but then I find out the airlines give me less and less and less for each mile over time I'm like, nope, you know, I'm gonna save it in Pokemon cards. Nope, that was a bad idea. Okay, whatever, you know, but you get, I think that having choices would be great, you know, I completely agree.
Marty Bent
And now, now I'm starting to get a. Not angry, but just thinking about it. Like they print. I mean, it's become a meme, I think. Shout out to President Nayibo Caitley for coming. What was it to CPAC a couple of years ago? And basically explaining like taxation is a humiliation ritual because that's what it is. That's the other immoral thing is, hey, you guys can print all this money, you are printing all this money, but then you're turning around and slapping 30 to 50% tax rates on people and you're taxing them on the way in, on the way out, every which way possible. And you're compounding that immorality of debasement by basically stealing, stealing the hard earned wage even more via taxation.
Chris Martenson
Yeah, yeah, no, indeed. And you know, again, early 2025, there were these little glimmers of hope, right, where Trump actually said magic words to me, which is, you know, maybe we should explore getting rid of property taxes, which to me is the ultimate insult, right? So every so often somebody says we should tax unrealized gains on stock portfolios and the whole world erupts in fervor, right? Like, oh my God, worst thing ever. What a terrible idea. And objectively, it is a terrible idea. But that's what happens with houses, right? You know, you get taxed on the unrealized gains. The assessor comes around every so often, says, oh, your house is worth more, you owe more. You know, it's the craziest thing. Why do I owe more on this thing that I have a house? It's a depreciating asset, trust me.
Marty Bent
You know, and I bought it. It should be mine. Why are you, why are you taxing me incessantly? And I mean, this is another reason for sound money economy too, I believe, is, I mean, people are using their houses as piggy banks. And that is, I think, part of the reason we're seeing this sort of intergenerational struggle and resentment from the younger generations towards the olders because they've been a combination of psyoped and forced, via the financial, just the natural financial pressures of the system, to use their houses as piggy banks. That people who are coming up are finding it harder to buy a house because they don't have the cash to purchase that piggy bank, for lack of a better term.
Chris Martenson
Well, I'm either a very late boomer or an early Xer, depending on who's setting the starting date. Ideologically, I align more with Gen X because just how I grew up and all of that. But every time I say, hey, the boomers as a class are leaving behind a much worse world than the one that they were granted. Every single time, Marty. I get all these angry boomers and it's the same argument every time they go, nuh, I'm not that way, or nuh, my mom and dad weren't like that. And it's like I said, the average height of people in LA is 5 foot 8. And somebody comes along goes, nuh, I know a guy who's six two. You're wrong. I'm like, they can't do the generalization. They have to destroy it with a specific. Which is so classic for that generation, right? It's all about me, me. It's the. The boomers are leaving behind a ruined world for their offspring, full stop. There's no way to debate this at this point in time, right? You can't get by on minimum wage. You can't get by on two minimum wages. People can't even get by on. You know, you saw Professor Plumb Michael Green saying, you know, Let me make an argument. Poverty, if you live in a City, is 140,000. No. Right. Oh, the opprobrium he got for that point of view. But the point is that the poverty line is not 32,300 like the government said. It's way up there, and it's going higher every year. That's the world we've left behind. And objectively, I mean, what. What can you see? Levels of happiness, like, way down household formation, way down. Having kids, way down. Those are all markers forming a household. Having kids are signs that you're positive about life in the future. And the opposite of that means you're not positive. That's the world that's been left behind. And it's because I think boomers were asleep at the switch and they just didn't do what needed to be done. It's hard work kicking out raccoons who've taken over and infested your political structure. It's hard work pushing back against this. And we just didn't get any pushback. So I think it carries on till it breaks, right? So when you ask for, you know, where does this go? In my mind, I'm in my studio, but right outside, I've got six cows and 30 chickens and all that because I'm a little bit worried that this will go to the breaking point at some stage. But this, it's. It's. Sooner or later, you maybe. You either get sort of that violent uprising, which can happen, but there's another form of violence too, which would be in China, there was this little movement. I don't know how long it is, but people were overworked, and so they called it lying flat, meaning you just. You just don't. You just don't work anymore. You know, you just check out of the system. So we're seeing people check out of the system, right? You know, the male participation rate and employment just plunging, right? There's guys who are just like, I'm out. I'm just, I'm not doing this. And when the males, the typical traditional providers and protectors are saying, I don't even want to play the game, right? Well, you've got a bad game, and it's a rigged game, and we know this now, right? So I have. I totally support the younger generations who are like, the olders are leaving a mess, and I'm sick of this. I don't want to play the game. I think that's rational and supportable as a point of view, because if the game is rigged against you, don't play the game. Totally makes sense.
Marty Bent
Yeah. Quiet quitting trend growing. I mean, you can say. I mean, I'm smack dab in the middle of the millennial generation. Got a younger sister straddles millennial and Gen Z and then cousins that are Gen Z. And it is. I mean, I think it's objectively true this. There's a lot of hopelessness within the younger generations. That's one thing I try to do with this platform, though. My audience, my demo is a bit older. We do have younger people listening, but not as many as. As Gen X and Boomers, funnily enough, that listen to this show. But anytime I get to talk to a young person, it is what you just said. It's like, opt out. But opt out in the right way. That's like Bitcoin. Like, I think adopting a sound money standard on my personal balance sheet in my early 20s has worked out well for me. I get into my mid-30s, I'm married, have three children, and I don't think I would have been able to do that as, as with as much peace of mind if I. If I wasn't on a personal sound money standard. So that's one way you opt out is don't use their broken money. And then as somebody again with three young children trying to think of what the world will look like in 12 years when they begin to. To get out of our house and on their own, it's like, what. What's that going to look like? And what can we do to make sure that it is
Chris Martenson
a world of
Marty Bent
opportunity and relatively safe? And I think the big question that many people have right now is what are Gen Z and Gen Alpha going to do? Because they're going to be forced to pick up the pieces. And I think not only are they going to do it, but how quickly are they going to be able to do it if they figure it out?
Chris Martenson
Yeah, I mean, it's very difficult to give advice. All my three kids are basically mid struggle with all of this, right? And just tapping into what they and all their friends are saying, they're like, well, what even is the point? Like, so there's no company loyalty anymore. None of them believe that Social Security, which dips into their paychecks when they get paychecks, none of that's going to be there for them. They feel totally betrayed and abandoned by the system, which is not conducive to things. And so my warning to Boomers is do not even remotely assume that when push comes to shove that you're Going to have a lot of sympathy in the younger generations going, wow, well let's. Yeah, that's kind of a shame. You know, you paid in to that system. We'll work extra hard to preserve it so you can have your retirement. Try and act surprised when they just like up and walk away and say it's kind on you. Good luck with that. And I'm sure you saw this too, but I can't believe that even the. How are we not at like revolution at this point? When you get Larry Fink, who was born to steal from people. Right. That's who he is. He's just born to steal from Everybody. And the CEO of BlackRock and he says ordinary people, savings accounts and pension funds worth trillions of dollars will be used to build data centers and power grids for AI. Much of this he says will come from savings accounts and pension accounts. Yeah, cue the famous, you know, scene from south park and it's gone. Yeah.
Marty Bent
So was he talking about like a bail in to fund the infrastructure build out?
Chris Martenson
Well, so right now, you know, the free cash flows of all the AA companies, like negative now because they're just like taking every ounce of earnings and now they're also starting to issue debt. So who's on the other side of that debt? I think the last figure I saw was 180 billion that's issued. Somebody's on the backside of that. You know who's on the backside of that? Probably the bond funds. Right. Which all these 401ks are rolling into as part of a 6040 strategy. And now they're also starting to issue stock. So they're pushing both, you know, equity and debt to get this build out. So it's going to be the people on the other side of that who are funding that. And of course, as you know, there's no business model that shows that you're going to be able to earn that amount of money back before these chips depreciate out, which is three to five years depending on the chip set. Right. So like it's just, this is just we're watching a money evaporating machine and process right now and Larry Fink just comes right out and says, and you're going to pay for it. How do people just sort of shrug and move on from that? I don't get it.
Marty Bent
Yeah, it'll be interesting to see. I mean that Larry Fink, I think as somebody who you mentioned flare gas earlier, that's how I got into bitcoin mining. We would go and take gas that was Being otherwise flared, run it through generator, produce electricity, mine bitcoin with it. But at that era, in 2018, 2019, my biggest enemy was ESG, which Larry Fink was the main spokesperson for. And I think that was a massive capital misallocation, mishap and narrative mishap. And I think, thank God we've gone beyond that nonsensical sort of view of the world and how corporations should be run and how they should be allocating capital and in hiring people. But yeah, it is funny how these people just get a pass. Larry Fink especially. And again, to the AI point, the pushback on the profitability, I think
Chris Martenson
whether
Marty Bent
I think Anthropic maybe starting to free cash flow, I think Elon's colossus renting that out to Anthropic. That's the other thing I'm trying to wrap my head around is seeing the stories of the circular deals. I don't know if it's exactly. And Ron like, and I always fall back to like, using these tools. They work and they are helping us. And so. But for Larry Fink to go out there and be like, oh no, we're going to use your, your pensions to fund all this, it's like, well, I think, I think it's a bit brash and getting then going back to sound money. It's like, why do we need all these exotic investment vehicles? And you think of the amount. I think the amount of ETFs has surpassed the amount of actual stocks. Yeah, yeah, actual stocks, yeah. And so we've just gotten to this hyper, hyper financialized economy. I know I'm rambling here, but I'm getting to a point which is like, we should be on a hard money standard where you're like forced away. The money system forces you to weigh the opportunity costs of capital allocation. And the market basically figures out like, okay, is this productive? If so, you'll be able to produce it and make a profit and reinvest those profits, expand operations. The whole point of this ramble is we can't even make these decisions because the money's completely broken.
Chris Martenson
I agree, I agree. It's a huge stumbling block because it becomes about the money. And so financialization is making money with money. And almost every company's out there figured out that in an expansive monetary environment, it's just easier to make money with money than to do hard things like hire people and train them and manage inventories and take risks and all that stuff. That's terrible. But if you can just make money with money, that's easy. And I've got this whole giant set of books by Will Durant, inarguably the most complete and best historian ever. And there was this one little chapter thing that was brought to my attention by Simon Black. And he did this brilliant presentation around it where he just read this paragraph out of. I think it was Athens, like 50 BC or something. And they went through this whole monetary debasement. But Will Durant describes exactly our society today. People under a debasing regime suddenly wanted to gamble, wanted to speculate, wanted to make money with money. Anything but actually being productive, because that's hard work. You know, we're humans, so if you give us an opportunity to, like, make money with money, that's so much easier than doing actual hard work. But you need the hard work, you know, and so I think we're just sort of at the tail end of this whole thing. Monetary debasement has been pretty much the surest way to completely ruin a society through all of history. I don't think now is going to be any different just because we got some better tools, you know, got better computers. I think it's the same story as ever. You have to understand where value comes from. It starts with energy. It starts with people working hard, taking real risks, and transforming that into higher value add products. Right? And that's the true source of prosperity. Financialization is always, always not a path to prosperity except for the individual playing in the game who wins. Right. It's just nibbling at the actual prosperity that's out there. It has to, by definition, right? And all these private equity dudes out there, they don't make anything, right?
Marty Bent
Spreadsheets. Spreadsheets. Incredible spreadsheets. You should see the vlookups in those spreadsheets. They're pret.
Chris Martenson
Beautiful conditioning. It's amazing.
Marty Bent
You talk to some Excel nerds, they'll say, hey, this is. This is actually pretty beautiful and productive what we've built here with this vlookup. Chris, I want to be respectful of your time. I feel like we could go for hours and I. I have it on the calendar for 90 minutes, and we're brushing up on that, but this was incredible. Is there any parting thoughts for the audience based off of what we just discussed? Anything we missed, anything you think people should be aware of before we wrap up here?
Chris Martenson
Yeah, absolutely. So first, I can't give specific investment advice ever, because I have a registered investment advisory, and that service at Peak Financial Investing just helps people get connected with portfolio managers who actually see the world. This way and it's a really important service. But what I want to just direct people to, however you get there, I think the era of passive investing, which is really dominated, it's over, right? Just throw money into an ETF and just wait and magic happens. I think we're entering an age of severe turbulence here. I think there's supply shocks, I think there's inflation, there's all kinds of things coming along where I think everybody would be well suited to have a very nimble, very targeted focus. Again. It's just the pendulum do swing, right? There's times when it's fine to just sit back and just sort of be patient. I think we're entering a period now where we're going to have to be nimble rather than patient. And the second thing is if all of that seems confusing and hard, and it kind of is hard assets, right? For me, that's anything that can't be just sort of willy nilly expanded on a spreadsheet by somebody, right? And so really important. So for me, hard assets. It's land, it's trees, it's cows, it's gold, it's silver, it's equipment, it's skills, right? All these, these are the things to get back sort of into, I think. And these two will come back in vogue at some point. And like you, I sort of share this idea that we're only looking at the shiny side of the coin. And if we do that too long, it's going to be much to our detriment. Because if I had a magic, if all I have to do is press a button and a machine makes itself, you know, I press the magic, you know, Claude coding thing and it recodes itself, right? That's fine. You just carry that forward 10 years. Nobody remembers how the original code was developed. If the machine blinks out for some reason, nobody knows how to rebuild it. But we're all dependent on it, right? That's a huge risk here. So I think that for anybody younger people, skills, right? Actual human interaction, knowing where real value actually comes from, you know, don't pay it. Money isn't. Money isn't, isn't wealth. It's a marker for wealth. Know where the value actually comes from and how you provide value in the story and you'll do fine. You might have to scramble and dodge and weave a bit in life, but. But you know, the old era that your schools are still trying to train you for, it doesn't exist. It already went poof, it's gone. I don't think it's coming back. So it's a whole new era. And that era is all about knowing where real value comes from and how to add to that. And there, that's the best advice I have for people right now.
Marty Bent
It's great advice. Have will agency, sound money. You can opt out. Chris, this has been a pleasure. Hopefully we can do this again at some point in the future.
Chris Martenson
Absolutely. Pleasure's been mine, Marty.
Marty Bent
All right. Peace and love, freaks. Thank you for listening to this episode of tftc. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there. Also, wherever you're listening, whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can, leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad free, make sure you download the Fountain podcasting app. You can go to Fountain FM to find that $5 a month get you every episode a day early ad free helps. The show gives you incredible value, so please consider subscribing via Fountain as well. Thank you for your time and until next time.
Host: Marty Bent
Guest: Chris Martenson
Date: June 6, 2026
In this substantial conversation, Marty Bent welcomes economic commentator and analyst Chris Martenson. Together, they dissect today's inflationary environment, energy geopolitics, financial market manipulation, AI infrastructure, US/China dynamics, generational economics, and the morality of modern monetary systems. Martenson delivers a dire warning about coming inflation ("15% inflation is coming back") and unpacks why markets appear oddly placid amid brewing global crises. The discussion blends hard-hitting financial analysis, practical advice, and philosophical commentary on America’s future.
(03:30 – 13:34)
Chris Martenson's Market Career & Rise of Algorithmic Trading
Artificial Price Suppression in Oil and Precious Metals
Physical vs. Futures Market Discrepancies
(02:23 – 17:52)
Intentional Harm or Incompetence?
SPR Physical Limits
Inflationary Consequences
(22:34 – 35:11)
US AI Infrastructure: A "Public Manhattan Project"
Pessimism on US Energy Strategy vs. China
(35:14 – 62:51)
Lack of Visionary Policy & Resource Management
Rampant Government Waste, Corruption, and Fraud
"Magic Money Machines" & Broken Accounting
(50:00 – 55:45)
Trends That Will Lead to Double-Digit Inflation
No Volcker Solution Possible
(71:23 – 88:24)
Moral and Structural Imperatives
Bitcoin and Gold as Opt-Out Mechanisms
Hyper-financialization & Misallocation
(74:57 – 80:55)
Boomers’ Legacy and Youth Disengagement
Advice for Young People
On Market Fakery:
"Price discovery? That's clearly thieving and price setting, I started understanding that that's what the futures markets are really used for." (04:25, Chris)
On the Supposedly "Invisible Hand":
"How did I come by my there's an invisible hand operating at night thesis? I come by it honestly." (09:38, Chris)
On AI Data Centers:
"We're going to be spending trillions on this buildup... that's capital not going to something else, right? By definition." (24:35, Chris)
On Inflation's Return:
"We are getting set up for the biggest of all possible rug pulls, sudden emergence of that beach ball and then we're going to be facing actual rates of inflation that are going to be, I think really terrifying." (16:50, Chris)
On US/China Manufacturing:
"I'll tell people right now without flinching that we've already lost the next war with China because wars are fundamentally logistics and manufacturing. We can't compete on that front." (46:10, Chris)
On Magic Money Machines:
"He’s saying that's now metastasized...you have them at HHS, DoD...they just send money out of nothing." (61:33, Chris)
On Fiat's Moral Bankruptcy:
"It's fraud if I can steal from you without you knowing, right? It's just, that's all. It's impossible to build a non corrupt system on top of fraudulent money." (71:53, Chris)
On Advice for Uncertain Times:
"Hard assets... anything that can't be just willy nilly expanded on a spreadsheet... land, trees, cows, gold, silver, equipment, skills... these are the things to get back into." (89:03, Chris)
Parting Words (Chris Martenson):
"Know where the value actually comes from and how you provide value... and you'll do fine. You might have to scramble and dodge and weave a bit in life, but... the old era... doesn't exist. It already went poof, it's gone." (89:48)