← The Wolf Of All Streets
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- [00:04]
A
Markets are breaking right now. Now bitcoin just swung from below 69,000 to above 71,000 and back into the 69,000. All driven by conflicting war headlines between the US and Iran. Of course we had Trump saying that there's peace talks and a five day pause and then Iran almost immediately saying yeah, that's completely not true. Very hard to know who to believe in these situations. But it gets even crazier because gold has had its worst week in 43 years, wiping out 7.3 trillion in value even as war, inflation and oil shocks raised. That's obviously not supposed to happen. And crypto regulation apparently is also accelerating in Washington. There are so many things to unpack here. If the traditional safe havens are breaking and bitcoin is ripping on headlines, are we watching a massive shift and where capital is flowing next? We're going to unpack all of that here on Macro Monday with Mike, Dave and James. So much to talk about.
- [01:01]
B
Let's go, let's do, Let's go.
- [01:17]
A
Good morning everybody. We are back. Obviously I took a few days off last week because of spot bloody Internet and spider monkeys attacking my computer while I was attempting to do a live stream that actually happened and I have video proof but we're not going to talk about that right now because we have something even dumber than a spider monkey to talk about and that is the war in Iran. We've got Dave, we've got Mike and we've got James here to unpack it. Mike, we're going to go into the morning meeting but I do just want to very briefly show what was happening this morning because you just really hard to prep for a show when you have a president with this bad of ADHD. This is absolutely insane. At 7:04am President Trump said the US and Iran have had productive discussions to end the war. I'm old enough to remember last week when he said there was nobody to Talk to. By 7:10am The S&P surged plus 240 points adding 2 trillion to market cap. 27 minutes later, Iran completely denied all of President Trump's claims and said there's been no contact with the US. By 8am the S&P had fallen 120 points raising 1 trillion in market cap. That's 3 trillion swing in market cap in 56 minutes, just in the S&P 500. What is happening here? I haven't even looked to be honest to see what happened in the last 14 minutes or so since this happened. But I think we understand what's going on and that's that nobody believes anyone and markets have no idea what to do. But Mike, we can start with you here.
- [02:37]
C
Well, it's been so much conflicting information. I took a screenshot, maybe you can see this, of this weekend of cnn. You can see it, but here, there it is. The headline was on CNN 22 nations issued joint statement safeguarding the Strait of Hummus. I think that was Sunday morning. The key theme that I think. Well, so we'll talk to the meeting. But I mean there's so much great information but there's some good stuff in the meeting. Stuart Paul, our economist came on. He says before this war the FOMC pointed out their inflation estimates were going up. So they're all off easy obviously, except for one person, Stephen Moran. But the key question for him is when will consumers not be able to help pull back on spending belt tightening? He's pointing out $4 gasoline savings rate of 4% is very low. Typically they'll come from savings and point out the dot plots, they're really not priced for tightening. The quote basically is they typically fade energy inflation where the down risk is a prolonged war and the bar for hiking is very high. So basically our whole meeting, everybody pushed back in the potential hiking in this environment. Ira Jersey came on and pointed it out the members are not for cutting, but they're not for hiking either. The market he says shows the Fed's on hold. Its quote with him was it's hard to imagine the Fed to do anything while the war's on. He pointed out the two year note yield is 55 basis points higher since the war began. Obviously that's part of the pressure on gold, almost all from inflation expectations. And higher oil is the top reason. Chris Kane, our stock strategist pointed out the big difference. S&P 500 finally dropped below its 200 day moving average. But very rarely it typically does it with volatility much higher and volatility is lower. He says the CPI uptick something to worry about. Audrey chilled. Freeman pointed out the dollar continues to do better and I just focus a little bit on crude oil. I can dig into that later. But my main quote was finally McGlone I think is going to be right this year for my call for crude oil to go to $40 a barrel. And I just pointed out that December contract which is front month, right, right before the leader of the world's most significant energy producer and net export of crude oil, natural gas, wants to before those elections, right before he wants to win. And that's why I think that price right around $75 bill is going to be more likely go to 50 than low or lower. And here's the opposite. If it stays above 100, that's a global recessionary trajectory. Back to you.
- [05:06]
A
Oh my gosh, there's so much sun pack here.
- [05:09]
B
Can I say one thing first because there's, I've been debating with people on, on, on the Internet who claim those
- [05:16]
A
aren't people, they're A.I.
- [05:17]
B
no, no, no, no, no. In this case there are some people and they all have and they're PhD economists, which really makes me sad for the state of education in this country. I, I would like to make the statement that the reason that the Fed isn't wasn't thinking of tightening is maybe there are, they aren't all morons. You cannot tighten interest rates to cut off inflation caused by a supply shock. It literally is impossible. The only thing that raising rates does and why it has an impact on inflation. There's two facts. One which I had to explain to a professor and I was right and he was wrong and he gave me a B and it pissed me off when I was in college is Robert Gordon was that the one they're talking about is when you raise rates, it does decrease inflationary expectations in the sense of people don't demand as much. But the most important effect is it hurts aggregate demand. But demand isn't the issue here. And in fact it also at the same time is hurting aggregate demand hurts investment. And the one thing you need in a situation when we have plenty of oil, in fact we have oil coming out of our ears, but we just can't get it to the right places is investment in getting it to the right places. And so the notion of raising rates to curtail an oil shock is just dumb. It doesn't make any sense. It's cpi. It's not overall monetary inflation. And it's actually sad how these Keynesians have twisted themselves into not saying so. At least they understand politically what would happen if they tried to do it. So they won't. But there's literally no point in doing so. And so I don't understand why, you know, why people obsess about oil prices. Oil prices will in fact is a shock to the economy. But unless it has something to do with wage demands going up, it isn't going to lead to a cycle of inflation that has anything to do with rates. Now why does that matter? Because what the hell is happening with, with wage demands? Well guess what? People are being fired left and right in the, in the professions that used to have the highest pricing power for wages, namely engineering and other things like that. And we, and AI's deflationary force is combating this at the same time. So there really is no reason to believe that you'd have a wage demand cycle of inflation because of an oil shock. And, and you, you have to have your head screwed on badly if you don't understand that. Sorry, I just. That was the PSA for people who need to understand how economics really work as opposed to what they say in textbooks that get outdated because they've never seen this situation before.
- [07:48]
D
Yeah, I mean, we can't leave the Fed off the table on that one either, Dave. I mean, you know the Powell in, in the press conference last week, I have the video.
- [07:59]
B
He, he.
- [08:00]
D
Because this is just.
- [08:02]
A
I'm playing the video and then. James. Yeah. Finish here.
- [08:03]
B
Yeah.
- [08:04]
D
Total inflation, sorry, total core inflation, it's about 3%. And some big chunk of that, between a half and three quarters is actually tariffs. So we're looking for progress on that.
- [08:14]
A
Oh, that was the tariff quote. But he also made a comment about, you know, oil prices and that inflation could be.
- [08:27]
D
The second was the comment that got me. The one I wrote about this weekend is that he would reserve the term stagflation for a much more serious set of circumstances. You're either in stagflation or you're not. It's not that. Oh, well, stagflation is really just like something happened in the 1970s. It was that kind of phenomenon. But it's exactly what you just said, Dave. You have oil prices that are affecting every single good in the world. You know, it's the largest input for any price of. The price of anything. And so when you just, when you just outright dismiss that, it just, to me, it just, it impacts your credibility to the point where you just, you just can't trust that they know what
- [09:10]
B
the hell they're doing anymore. Well, you can't dismiss it, James, but he can't do anything about it. That's the point.
- [09:16]
D
Correct, Agree. Agreed. But, you know, but because he can't do anything about it, he dismisses it to ring fence his reputation, but his reputation is already damaged from what they, from creating the fire that they're trying to put out.
- [09:36]
A
Didn't Trump have to know, James, that starting a war was going to release the pressure on the Fed to cut. That nothing was going to happen during that war? Or do we think that they thought the war would be five days long? We have moved on from now I don't really understand.
- [09:51]
D
I, you know, I think Trump loves to make bold moves and bold statements. And, and those two things combined puts everybody on edge. I mean, everybody, including Republicans, including people like, very tight with him. And you know, so that's, that's his M.O. he likes to put people on edge. They have no idea what he's going to do. And in that, in that way, it's a, it's a, it's a negotiating, it's a negotiating, negotiation tactic for him where he uses this, you know, it's completely unpredictable actions and statements to manipulate people into doing what he wants them to do. It, it often works. But you're talking geopolitics on a, on a scale that is so complicated, on a global scale that, I mean, none of us are even close to experts to figuring out what, what will happen when you pull each of these strings. Let's just, just admit that. And that's why you're seeing markets, including them. It's exactly. I agree. And, and that's, and so you're, that's why you're seeing markets react overnight where you've got gold. I mean, did we see, did you guys pull up the gold chart yet on, on where that moved last night? I mean, gold and sil hammered below their 200 day moving averages. Gold dropped to 4000 and in fact, it was, it got down to the lowest level. It looks like it got to, was 4100, 4098 on my screen. I mean, and now it's recovered all the way back to 44, 4400, 4445. Like that kind of move in, in gold. It's because people are, the investors are deeply concerned that they're going to need cash because there's going to be a
- [11:51]
B
market crash
- [11:54]
A
really quickly. Before you jump in, Dave. Yeah, go ahead.
- [11:57]
D
I don't want to, I don't want to oversimplify it, but simplify it, but yeah, go ahead.
- [12:00]
A
I was just going to say that, you know that you have all these headlines saying that gold and silver failing is safe haven assets, which I love because it's like being a bitcoin guy and going, you know, like the price moves a little bit and all of a sudden you failed as a safe haven. The truth is that gold, but more even so silver moved because of the hot ball of money Dave talks about. So yes, there were some fundamental reasons for them to go up, but then they caught the zeitgeist of retail and you had this massive speculative wave. So people aren't exiting gold and silver because they're not safe haven assets. They're exiting because it didn't keep going up when they speculated on it. And that's what retail does is they sell and they're down after the thing doesn't work anymore. So it's panic.
- [12:43]
D
Right, but remember retail retailers and trading it on a Sunday afternoon.
- [12:47]
A
Hyper liquid but yeah, now they're trading.
- [12:50]
D
Yeah, but not as much as, not as much as institutions, not as much as has as hedge funds.
- [12:55]
B
So but here's the thing. There are two cross currents going on. One, we learned something this weekend and the weekend before. What we learned is that the marginal buyer of physical gold and physical and, and, and, and, and the marginal buyer of gold and silver in general are the epicenters in the Middle East. We learned that. Now how do we know that? Because when the desalinization plants are being targeted then the rich people are getting the F out of Saudi Arabia, the uae, Qatar, etc And what happens when you're getting out? You take your assets, you sell them, you convert to cash. People in the Middle east have told me that they've been selling gold or when they try to leave or get it into cash at 20 to 30% discounts. Now if there are watchers of this show that want to read in the comments and send to Scott your own stories of this. That sounded incredible to me but I suppose anything's possible in war. But it tells you that there is actual physical selling from people who just want to get the hell out. And traveling with a lot of gold is very, very hard. It also when the fact is when Trump said that in the middle of the night and the only asset that was trading it was bitcoin. And what did bitcoin do? It went from 70 some odd thousand or 70,000 ish to 68, that's Tuesday. That is like nothing. And the reason is because you don't have to sell bitcoin to get out. You could just take it with you. And the reason that gold fell more is because it is not as portable, it is not as easy to transact, it is not as useful as bitcoin. And this weekend and weekend before it are going to show this. Peter Schiff is probably having an aneurysm because one of the things that bitcoiners have been hounding him on is this exact point. And now it's being seen like the data is the data. As Mike says, where's the beef? This is the beef and we understand it. The other thing worth understanding is Scott's right. The hot ball of money is in the contract for differences market. When those markets opened, that's when that flush happened. That is when. So basically there were two flushes. There was the first sell off down to when I was still awake and I was watching two incredible games in the NCAA. I don't know if you saw the St. John's game and the Iowa Florida game, but they were both unbelievable basketball games. March madness for those who don't know what that is. And you know, then I looked and I said, okay, fine, gold is down there. People are doing that. So I went to bed later. And then what? Everything James talked about happened later when the CFD markets, the futures markets were all open. That was Monday morning. And so when you see that kind of a retail flush, it is exactly what James is saying. And so, yeah, you know, look, gold is going to re establish its equilibrium because there's still demand from those who need it. I mean, if there's no if. There's one thing we know about war is it's going to create money printing. There's no question it's going to create money printing. It's just a question of right now.
- [15:53]
A
That's why we do it.
- [15:54]
B
What's the source? Right. So yeah, I think that James is right 100%. But it also proves a point and that point is going to be made. And it's a narrative and narratives take a long time to trade. But this narrative is going to be, you know, is going to be trumpeted about for, for quite some time because we learned something. Okay, enough of my pontification.
- [16:13]
A
Yeah, I want to know my takes on what's happening with, with, with metals right now. I just absolutely opened the gold chart, by the way, and wow, what a daily candle.
- [16:22]
C
Cryptos were the example. That's the key thing to think about here. So I'll look ahead for it. I'll give you my outlooks first and I'll give you why gold's put in and silver put in peaks for potentially decades, mostly years, at least years. This year they'll forever be fighting to get above $5100 an ounce. And key supports. Gold is 4000 as you mentioned. It got there last night and key support for silver is $50,000 50 an ounce. If history is a guide, the peaks we saw this, this year were very. Gold was precedent. Everything to me about last year's rally and gold never made sense. It was wonderful to be on top of it, but now it all makes sense. It was a front runner to this buy the rumor sell the fact before at the end of February gold was just on a many measures the most expensive in maybe like 50 years. Okay. It's not expensive anymore. The bottom line is it's no longer a store value. It's shifted over to a highly volatile risk asset. It's 180 daily volatility still two times as 500s and P500 goes down. Anything was a higher volatility that does not have a negative negative data goes beta goes down. But I'm on a picture this in the big picture. So that's to me is out like for gold and silver and why. But it was all predicated on cryptos. Cryptos led the way up in all risk assets and peak last year. And now they're a bubble that burst. And that bear market should last for maybe decades at least years. It's just getting started. And I put levels on that. Okay, prove me wrong. Sustain Bitcoin above 75,000. Sustain a theory Ethereum above 2500. That's the first sign the bear sell bear markets. The key thing now it's a key theme so far this year is we have volatility. 90 or 60 day volatility and crude oil running on the year it's up 130%. We have 60 day volatility on gold up 60%. 60 day volatility on the S&P 500 still down 7%. That's just the beginning. This is just getting started. So we had the bubble and cryptos bursting. It's going to last forever. The hangover is going to be a long time. With the bubble in metals bubbles bursting, the hangover is going to last for a long time. Including copper gapped in there six. It might languish between four and six for decades. This is what happens the bottom line for any of these things that go up. Everything I mentioned so far, even gold is the stock market has to go up and I mentioned volatility still too low. So to me this is just get beginning on the whole space and I just don't. I still stick with the best way to be this year is to be tactically orientated. We still have had some great opportunities. I just don't see other than buying on dip for trade any reason to buy any risk assets for more than the trade so far. And I'll just point out last night that long bond got from their 5%. That's the lose lose. If it stays above 5% everything goes down. I think it's more likely to drop towards 3 that the crude oil front contract tried to get above 100 last night. It couldn't do it. And that this contract that's going to be front month by time trumps. We have midterms, it's trending, it's trading 74. This is a whole thing tilting lower the bottom line, I'll end with this for these things not to continue lower. I mean everything including bond yields is. Stock market volatility has to stay inordinately low, near a 10 year low versus 180 day volatility. That's not going to happen. So this is just a great trade getting started. And by the way, it's still only Q1.
- [19:33]
A
I would just like to mention that bitcoin peak to trough was down over 50% but now currently down about 43% from the highs. Silver this morning was down 50% from its high and is currently down 45% from its highs. So I don't hear the metalheads screaming about the. I hear you Mike, but. But not the metalheads who are supporting it screaming about the endless bear market in metals that's actually performing worse than bitcoin.
- [20:01]
C
Yeah, well you saw it. Silver this year Silver was up 63%. Now it's down 5%. A lot of people are learning lessons of things like the devil's metal and buy. You never buy a commodity, typically almost any commodity after it goes up. If you're not in it before. Auto correlation will almost always get you as question the time. So I still expect that's just how they work.
- [20:20]
A
I haven't seen the stat. James, I love your thought on this. I want to talk about bitcoin specifically and how it's performed. I think it was, you know, it changes every five minutes but it was like 25% as outperformed gold by 25% or 30% or something since the beginning of the war. Right. And we're starting to hear these emerging narratives that bitcoin maybe is the safe haven asset. I'm not quite, I'm not ready to jump there yet. But listen, it has remained at least uppish and sideways since the war started while the classic safe havens like silver and gold I guess have dumped. I mean what do you make of bitcoin's performance right now? You did get that news this morning and it did jump from under 69 to 71. Again it's a rounding error but you saw it react in very real time.
- [21:06]
D
Well, I mean what, what I make of all of it is that investors are still looking for places to put money in, in risk everywhere. And, and they're just, it's just a rotation from the Mag 7 to the smaller caps from, from gold into bitcoin, from bitcoin into, you know, silver, from silver. Like it's just been moving around and around and around and people are trying to find a place to get more yield and like, you know, and Mike is right in, in that the, the mean reversion here is not a shock. But what, what I disagree on is look, bitcoin is down from125,000. It, it dropped all the way down to 60. It's had a, a significant drawdown. A gold. It got up to, it got up to almost 5,500, right? And it's dropped down to 4 to 4,000. So actually it got up to 5,600. So it hasn't drawn down quite as much as bitcoin has. And so when you get news last night, when you get headlines out of Trump where he's saying that you've got 48 hours, there's only a few hours left and then we're going to wipe you off the face of the earth kind of statements, then it's like, okay, where can I get some cash? And what has run quite a bit in my portfolio that is still elevated compared to where I bought it? Well, probably not bitcoin, you know, but you've got gold and silver. Those have run quite a bit. And so you can get some cash there without too much pain. You're still in profit, you know, and so that makes perfect sense for, for a source of, of cash to me. And so, you know, when you, but, but as far as the, the longer term outcome of all of this, there, there is no other way but for the, the Fed and the treasury to support all of these risk assets. They, they have to support them because the stock market is so intimately. It, it is, it is, it is ingrained in our economy now. And so you can't have the stock market obliterated without having a recession or at least a recession or maybe a deep recession. And they all know this. And by the way, all the congressmen and senators, they're all invested in the stock market too. They want, they want to go up, you know, they want this to go up too. Yeah, invested.
- [23:47]
B
Right.
- [23:48]
D
And so, you know, there, there is the people, the D.C. has a, a deeply vested interest in positive stock market activity. And so, and that goes all the way from Congress all the way through the Fed and the treasury. And they understand this. Like Dave said, though the Fed There may be very little they can do with this spike in energy prices. And it blows people's mind that we are completely independent or we could be, but we just, with the just there's just so much noise and activism in this country that we've made it more difficult for us to be independent on energy. And so we can't do the things that everybody says we can do. And that is part of the issue. And so you're seeing these oil prices really affect everything across the globe, including the United States. And that, and that's what people are positioning for. They're positioning for uncertainty and risk. And when you then you get the whipsaw of oh I'm just kidding, you know, we're going to be in peace talks now like you just pulled up that the one statement after another. The chronology of that is just mind boggling. And markets hate that. And they're whipping around trying to figure out where to put capital. And if you're putting capital in short term Treasuries, you're just admitting that you're going to lose a little bit of purchasing power over the in the next 612 months because inflation is going to be higher than what you're going to get there. And so in real inflation, not the what we're reporting on CPI but actual real inflation of goods and services. And so that you're, you're just watching real time people trying to find pockets where they can hide but there's no hiding place. Yeah, there is literally no hiding place
- [25:41]
A
except cash on to that. I saw your face.
- [25:46]
C
Well we have to disagree. We're not of value. And that's why I sold to you, James. I think the bigger issue is going to be deflation by then. Yes, very much. This is worse than 2008. 2008 started out the stock market cap, the GDP was 1.2. Right. 2026 started out stock market cap was 2.3. Everything's about the stock market. So to have inflation, stock market has to be either unstable or higher to have normal deflation. As you pointed out earlier, we dropped 20%. That's almost 50% of GDP. It's gonna happen. It's just a question for where. And that's my point is I think we reached the end game. Gold told us that last year. Cryptos collapsing told us and warned us and now it's all happening. I just say good luck. Any type of rallying risk assets supposed to sell and buy more Treasuries and sit and wait. This is just getting started. If by the year you only make that 4% coupon. Okay. And everybody else has their inflated assets. Well, they had it for the last three years. That's my point is this is the end game.
- [26:42]
D
This is your hint though, the Fed changing rules and Basel rules to have for banks to take on more leverage is your hint that they understand that they need to continue the liquidity pump into the markets. They must have liquidity. It's not about them. Again, this is where you and I, and I do.
- [27:05]
C
Well, I disagree, but I agree with that.
- [27:08]
D
I, you and I agree on so many things. This is the one fundamental thing that we disagree on is that it's not about the Fed and the treasury learning lessons. It's about them being absolutely painted into a corner of, you know, a financial expansion suicide. And there's no, they're just going to keep going until we go off the cliff. And we'll see when that is, when Larry's right and we have a big print or if Lynn is right and we just continue this, which I agree, I agree with them both in a way where you just have this gradual continued print of money to just keep the system going. And you know, it's not, it's, it's a gradual print and so there's, there's just, there's just no way out there. You please explain the math to me how we're going to continue on without liquidity. I, that's just the math doesn't work.
- [28:02]
C
Let me explain the iterations. You'll get the liquidity after the stock market goes down. Look what right now the Fed is not easing. They're stuck. They can't. We've had this energy shock that's the perfect storm. It did it in 2008. Some of us made a lot of money in that. Crude oil spiked to 145. That's the difference.
- [28:19]
D
You're talking.
- [28:21]
C
No, no, I'm talking a trade. This is the beginning. So that's my point. It all gets started with the trade. I'm talking about deflationary forces. That's in the back of selling bitcoin at the begin a year. Selling copper above 6, selling silver above 100. Now crude oil above 120. Now you have to go further down. The contracts you see, they're all happening. The bottom line for your scenario to happen is for to make money in that environment. Yes, you'll get the liquidity after you lose money. That's my point. We're all going to lose money. Anybody's long risk assets, crypto people get it Stock market people are just starting to get it. And the bottom line is for we'll get the pump. We're not getting until after. This is just the post, this is the deflation we're heading towards. I'm sorry, inflation ports towards the post inflation deflation at China. They've been doing what you've been saying for almost 10 years and they're still in a deflationary environment. They're only surviving because of massive fiscal massive. But you said printing. They're barely getting by.
- [29:16]
B
So we're gonna just, you know, look, this, what the audience is hearing is Keynesian versus Monetarist. And you know, at this point it's hard for me to believe that people are still Keynesians considering the fact that, that what we've seen over the last n number of years. When Mike says deflation and I always look like I just drank sour milk when he says it, it's because it's literally impossible when you're printing this much money. Inflation, as Milton Friedman said, is a monetary phenomenon. When you talk about the reason that you see it differently. And I've said this before, but I will continue to take this one forever, which is that asset inflation is what has been pushed. Consumer inflation has been the result of technology and policy choices. Technology, I. E. Now AI but before many others, has been relentlessly pushing down consumer prices that people pay. They can't, you know, and that includes oil, by the way, as Mike has pointed out, the cost of production of oil in, in real terms is dramatically lower than it was a decade ago. And it has continued to, to fall in nominal terms. It's more or less stabilized. But that's because we're printing so much money. At the same time, the notion of a major deflationary collapse when you have a debt fueled situation, this is not the 70s, we don't have a 30% debt to GDP. We have 130%. And by the way, it's over 200% if you take into account unfunded liabilities. Right. You know, Social Security, Medicare, et cetera. So you have to look at it in those terms. There is no longer a question. You can't. If you're the government and you see a 25% plus stock market correction in a day or two, their fear is it'll become a 50%, you know, great Depression. They can't allow it. That's why the stock market burps 5% down. 5% is, is not that big of a number as, as Mike said, it's normal, normal reversion he always uses these terms, if it happens, the government's gonna do everything they can to convince people that they're going to backstop. We used to talk about the Fed put, now it's an entirety of all central banks and governments put that everyone's leaning upon. And the one thing I grew with Mike on is if that proves to be impossible and people lose faith in that, then it's look out below. Isn't it also the Trump truth?
- [31:37]
A
Social put at this point, I mean literally time, every time the market moves, he makes insanity.
- [31:43]
B
But the one thing we know, the one thing that's the difference in the United States and Turkey which has, you know, double digit percent inflation and has had it that way for years and years and years is, is people still consider the dollar the currency with the least fleas on it. Right? You know, they're all dogs and the least fleas. Now I do think it's worth commenting on gold and silver, they are not the same thing. There are different things going on. Silver is a risk asset, full stop. Silver has created, has new industrial uses and is running at a supply deficit and it is absolutely tied to economic growth in the economy and all. Any silver investor who's smart enough understands that today's silver situation is not the same as it's been in the past, but it has enormous amounts of speculation involved. Gold is also become a speculative asset for people who want to escape this, this thing. But we just had a war and this war has changed supply demand dynamics. I disagree with Mike on this one. I, I, I'm the one who's more bullish on gold. I told you I thought gold's equilibrium over the course of 2026 will move toward 5,500 from where I think right now it's around 5,000. And does that mean I think it's going to rampage higher like some people think? I don't know. It depends on the size of the print, depends on whether Lynn is right or Lynn Alden, just to be clear, and Larry Lepard, you know, both of them think there's going to be enormous amounts of liquidity injected. I think they're both right, by the way. I think it'll be somewhere in between. I think you're going to see if this war continues to rage on, you're going to see significantly more than people expect. But is it a big print? As Larry would say, probably not, because I think they want to try to be incremental about it. But in any event, gold is going to react to that. What's important. And what I saw, heard Mike say that made me absolutely almost fall out of my chair was the notion that an asset class that is one third the size in total of the move that gold just had in a weekend somehow led the way. It didn't lead the way. It just happened to be the first place where some core of sound money speculators happened to bail. You know, gold literally lost more 3x the entire market cap of crypto in one weekend. I'm sorry, tail wagging the dog here. No, gold dropped that much because a lot of people needed to sell it for personal security reasons. And it started a snowball and then retail got the heck out. And that doesn't make it a risk asset all of a sudden. It makes it a risky asset. Risk assets are ones that are tied to economic output and the economy. Let's at least get our definitions right here, people. If you are tied to the economy, if you are tied to the ability to create productive investment, then you're a risk asset. If you are, that does. Being risky in volatility does not make you a risk asset. It means that we have a lot of speculation. The entire world has turned into a casino. Scott's favorite comment about prediction markets is true. The entire world is a casino. We all gamble. We gamble too much. I mean, hell, I sat here yesterday playing an online poker tournament for most of the day only to have someone, you know, hit a. A 10 outer on the river to take out in the money, but not where it was.
- [34:59]
D
And I. Yeah, but Dave, that's just because it's been. Those are two different things. It's been normalized for people just to gamble, but it's also been. People have been forced into situations. Absolutely. 100 must gamble to. To keep up, number one. And then you've got the younger kids who are gambling because they just, they. They want something to like, they need something to hit to catch up quickly. So they want.
- [35:26]
C
They're.
- [35:26]
D
They're going further on the risk curve to, you know, to. To get something where they can catch up quickly. They want it. They want it now. They don't want to be using risk assets for 20, 30, 40 years like all of us. You know, they want to get. They want to catch up quickly.
- [35:41]
B
And that is a tremendous point. I mean, that's why all coins exist. I mean, there's some value potential argument or used exist. Right? You know, the notion of buying lottery tickets as investment strategy is a disaster for the. The nation's youth. They will learn it. It's the same Thing. Look, this has happened before, you know. You know, Mike likes to go back in history. Go back to the 1800s and the early 1900s and then the crash. You know, what happened in the Great Depression. I mean, if you read reminiscences of a stock operator, you will know that the notion of buying on 98% leverage is not new. In fact, it's been around for a very long time. The notion of lottery tickets to try to make money is not new. And it's just. It's always new and different things. And everyone thinks that they're doing something that's untrodden. But you're right. We go. Every generation needs to learn. Just like the Internet. In the Internet bubble, people. Yes. There was a lot of institutions buying Cisco and Amazon and pets.com. there was a ton of traders buying Net Taxi and the thousand or so Internet companies that moved up by all this. And they all. And. And those ones all died, right?
- [36:50]
C
Yeah.
- [36:50]
D
It wasn't the. It wasn't the Uber driver that was talking about use your taxi driver wherever you were.
- [36:54]
B
That's right.
- [36:56]
D
And the. And the waitresses and the way.
- [36:58]
B
And your dentist. I had dentists.
- [37:00]
D
Everybody. Yeah.
- [37:01]
B
Talking about everybody. So, you know, every generation needs to learn. We're learning that again. And Mike is providing sage advice for people who are looking at that. And I totally agree with them on a lot of assets, but you gotta get the forest for the trees. Right? That's all. That's really the only statement. So it's not that we have total disagreement because we all agree that there's enormous amounts of stupid speculation. So the real question is, what's cheap, what's enduring, and what's a good bet? I will continue to tell people I think that bitcoin has proven to be resilient to the downside. And it's only a question of time when all this ends, that people are like, well, wait a minute, that selling I expected to happen isn't happening. And that's when FOMO rallies are born. That bitcoin right now reminds me of the S and P in January to February, March of 2009. Very similar. Beating the crap out of. Everybody hates it. And yet it's not going down anymore. That. That's what I feel like.
- [37:57]
D
Unless we get a correlation to one event, then everything's.
- [38:00]
B
Of course. Of course. Look, if the streets of Hormo, if. If for some reason, and it is a absolute possibility, let's be clear here, because we don't know what the hell is going happen to Going on if for some reason Trump did decide to try to seize Kharg island and, you know, suicide waves of drones and suicide bombs took out all the infrastructure and 90% of the oil in the region was stuck in the ground and couldn't get out. Yeah, you would have. Oil would be A$300 a barrel. And as Mike says, that's game over for the global economy. Yeah, that is true. Is it likely? I mean, the market's saying no. I hope to God it's no. But Mike's not wrong. You know, you know, that sort of thing. There's no, there's no, there's no positive way to spin that event.
- [38:44]
D
No. And then, and there's no way
- [38:47]
B
I'm disagreeing. So you could pick on what you
- [38:49]
D
want to what you want.
- [38:50]
A
I might have to jump for TV for a few minutes. Is that true?
- [38:53]
C
Yes, I, I have to jump, but I just want to. We agree on a lot of stuff. But the key theme, Dave, that I disagree is when you said silver is in a sub deficit. That was past tense. That's what's changed. That's the key thing I love pointing out. And sometimes people accuse me for being a technician. Like, no, you have to understand how much the elasticity of the price will change everything. That number one word you're going to be hearing, the top word you're going to be hearing in silver for probably a long time is the word thrifting. When you pump up prices like this, it shifts that supply and demand and everything. And that's what's happened in crypto. So I wish you luck. People keep trying to buy dips in a bubble that's bursting, but it's just getting started. I wish people luck trying to buy dips in metals. The bubble that's bursting and just getting started, you reach these record highs. And the key theme for everything then is stock market going up. But we just had the trigger. We just had. One of the best triggers I've seen in my lifetime is closing the straight of Hormuz, the trigger for that global recession. So think of what's doing for Consumer Center. Most people worried AI pushed prices up a lot. Now we're all worried about losing our jobs from AI and we have, you know, the expenses I see from like I don't know if you ever heard of Stu Leonard's Jr. He's on Bloomberg all the time. He was. My wife and I were her first base name basis in Norwalk because she used to shop there all the time. He's pointing out people are Just getting angry about food prices, you got to cut down. This is a classic it's sentiment shift. I think that's going to kick in and drive everything lower. And that's why I say the stock market volatility has to stay low.
- [40:20]
A
I mean, I have to get a house.
- [40:21]
C
I'll be right back.
- [40:22]
A
I haven't looked lately, but I have to imagine to Mike's point that Trump's approval ratings are pretty low at the moment.
- [40:28]
B
34%. Yeah. This weekend.
- [40:31]
A
Yeah.
- [40:31]
B
Lowest ever. I mean there's no doubt. But on the silver point that he makes, just to be clear, I just checked, silver refineries are still running at full capacity and it takes a long time to bring it on. If EV demand, data center demand, etc continues to sag. Yeah, it will overwhelm it. If on the other hand demand continues to increase, it will not. And it's a question of at what price does silver become uneconomic for those uses is really the things you have to watch at. And that price that is there is a price for that that starts, I mean look, it's a con, it's their curves, right. So it's not like it gets to this price and boom, it has to fall. No, no. But over 100 starts becoming difficult. Over 150 becomes. There will be mass substitution because it will start pricing products out. That's sort of the point. And so, you know, people who think silver goes to 300 or 400 are like, okay, fine, but they won't be able to use it because economically unless there's huge amounts of monetary inflation, they won't be able to get there. But I think that the notion that silver can continue to run at the deficit, that it is and that people will continue to sell as the price drops. No, that's not true. It is elastic. A lot of people were willing to sell at 100, you know, at 60 something, you know, 70 is probably some short term equilibrium. We'll see. But the reason I pointed out as silver being important is silver has turned into its volatility. It looks more like a tech stock than anything else.
- [42:04]
D
Yeah.
- [42:04]
B
From a chart perspective it is, it
- [42:06]
A
looks more like an altcoin than anything else. So.
- [42:08]
B
Yeah, that's right. And so, but it's a huge one. It's bigger. It's literally bigger than any. Right.
- [42:14]
A
You know, it's not bigger than Trump Token,
- [42:19]
B
but it, you know, this, this, this thesis, what's important is people remember just as to why I like to have coherence and theses now, Mike, is coherent. No question about it. I don't agree with him, but he's coherent. Mine was that bitcoin that when gold and silver peak and the hot ball of money, it starts looking for a new home, that it will find itself into bitcoin. When bitcoin sellers are exhausted, I see no reason to change that thesis. That has been my thesis going back since. Since October 10th. I was wrong and I've taken my Maya culpas for thinking that 90 would hold. But still nothing has changed the, the overall thesis. And that, that is, I think, where we're at. And I would ask Bitcoin to 71, 000, Scott. I mean, it kind of makes me
- [43:04]
A
think I would actually make the argument is just kind of furthering that point we talked about before. Whether bitcoin's behaving as a safe haven, why it's holding up so well in this environment. Maybe it simply has nothing to do with this. And it's just that sellers are exhausted here. So we've found an equilibrium. Equilibrium in price. There's been no catalyst to send it up with a bulk. The bulk of that selling being gone and these whale wallets exiting. But when there is, that matters, right? So maybe it's really not about headlines and not about other markets since bitcoin can trade, you know, obviously idiosyncratically. Maybe it's just. There's just not as many sellers here right now. But buyers haven't stepped in.
- [43:41]
D
Yeah. And it's already, it's already had a really deep drawdown. And this is where I also disagree with Mike and he won't be here to defend himself, but this notion that bitcoin has to stay over 75,000 to prove itself. No, it just has to. It will to me. It's going to trade in this range until it doesn't. And you know, it's going to be trading in that 60 to $70,000 range until it doesn't. And the key level for me is the, is the low from this cycle or the, the last number of months, which is somewhere around 60,000. And so if it holds above there, then it's just going to continue trading that range. The, the reason it wouldn't hold above there is not because of bitcoin anymore. It's because of global economics and, and global pressures on, on risk assets. And if you do have that correlation to one event, it's going to get dragged down with it. But I don't think it's going to lead it down anymore. I think that we've had that Bitcoin has already sold off or people were worried about that and they already got out and they panicked out and now you've got a grinding sideways until we get either some stability or you get some of this market consternation to calm down from the headlines and tweets, you know, like these, the, the one after another after another is just, it drives people crazy, it drives investors crazy. It does present opportunity for traders. If you're, if you're clever about it, you're not working off of leverage, then you can, you can scoop in and trade around some of this stuff. But you know, long, long term, I, I do, I, I do not agree with Mike that the game is over, that, that I don't agree with Mike that the game is over, that everything that, that, that we're just getting started in the crypto. And, and, and he, of course he doesn't, he doesn't bifurcate Bitcoin from crypto. That we're going to see a prolonged sell off and, and, and draw down to Bitcoin whatever he thinks, 10,000. But you know, I just, I just completely disagree with that. And flat out we've seen the bulk of the bitcoin centered and driven pain in Bitcoin. If it gets drawn down more from here, if it gets pulled, it'll get pulled down by the markets. Not, it's not going to lead it down like it did before.
- [46:07]
A
We haven't even seen the liquidity bazooka yet. Right? So even if you believe, I think in the premise that Mike has, I think you have to believe there's a lot more upside first. Right? Just because they haven't even pulled the biggest lever yet to send markets up or to save markets. Right? So I just, no, one of the,
- [46:25]
D
and one of the issues is people have, they can't tell where, where, where interest rates are going to be. So if you, I'll share this. And this is the, the, the Bloomberg, you know, this is the interest rate probability. The Fed funds futures ignore this right here because this is not pricing properly. Okay? So anything out over a year is not pricing really properly. So just ignore this. But this is what we do see. We see that Fed funds futures are higher going into next year. So you know, we're pricing in no cuts, we're pricing in, you know, we're pricing in a rate raise going into next year or going into the end of this year. And so again, ignore this. This is not right. But that, this, this is, this has traders and investors on edge because they don't know where rates are going to be. Another reason that gold is selling off, you know, because when you have, when you have yields rising and you've got an asset that doesn't yield anything that's, that's difficult for investors to, to remain in. So they, they start rotating into other things. You know, it's not. I agree, Dave. It's not just straight up like that. You can't just make blanket statements. It's not the only reason. But that's just another thing.
- [47:43]
B
Well, no, you're right. Economists and I will always tell people this. Everything is on curves. There's always marginal buyers. There are people who do. There are models out there that basically at certain yields will start to buy more, you know, you know, buy that yield. I mean, there's no two ways about it. I'm not disagreeing with that. But I think that in gold's case, the moves we saw are because of what we talked about earlier.
- [48:07]
D
Absolutely, absolutely. It's just yet another thing. You know, there's just so much like when you look at Marcus right now, there's so much going on that people are trying to digest and it's difficult to digest it when you, you know, two minutes later, after you finally get your thesis pinned down, the thesis changes. It's just, it's just, it's so funny.
- [48:26]
B
I'm looking at the gold chart right now, the daily chart, and right now in about, oh, I don't know,
- [48:34]
A
you
- [48:34]
B
know, it looks like in about 12 hours, if it hangs around the 4, 500 to 4, you know, 44 to 4,500 people are going to be talking about an inverse head and shoulders. It's almost perfect. You know, it's like, yeah, it's like this is literally the asset that people believe represents the, the sum value of this, of, of, of money. And they're talking about inverse head and shoulders. And you're seeing, you know, this kind of volatility. I mean, it tells you this is fourth turning collapse of fiat, end of day sort of stuff. I mean, I'm sure Peter Schiff is out there screaming at there's no way you should be selling gold because you're gonna have to print more money. And he'll be right. Except for what he doesn't. It's. All this stuff is bound together. I mean, it's sad but true. I mean, as I said, I disagree with Mike. I think gold will go back toward 5,000 at some point later this year. I do think that we're in a reasonable range here, but this notion that the veneer of gold has vis a vis bitcoin didn't bottom around the 12 and a half. When it bottomed, I think is wrong. I think it did bottom there. And I think because people saw it, I mean, it's like there's no better teacher than actual experience. Scott, I don't know. Have you been talking to people in the Middle east or have left the Middle East a bit?
- [49:53]
A
Yeah. And it's indisputable, even if you look at the crypto wallets in Iran, that there was a flight out. Right. A massive withdrawal. So it's the same kind of premise that you're having about selling gold and getting your cash out of the country. I mean, it's not disputable. I don't think it's in some massive size, but that behavior is definitely, definitely real. Yeah.
- [50:14]
B
And don't underestimate what happens when an asset stops going down. You know, it just don't underestimate that because.
- [50:22]
A
Well, that's how I feel about bitcoin right now. Exactly. That's what I'm saying. So if the sellers are gone and the buyers just aren't here. Well, the sellers aren't coming back if they've sold what they want to sell, at least those sellers. Right. So eventually buyers step in. That said, like, you know, I think the point is taken. James, you were talking about it before, and, James, your mic is off. But, you know, would anybody be surprised if bitcoin trades between 58 and 74 for the next six months? I mean, I don't have a. You know, I don't have the same magic eight ball that Trump has for his tweets. So I can't tell the future. But if I base case right, my base case would be a lot of sideways while there's uncertainty and then something, some catalyst will hit at some point, and all of a sudden we'll be back at 80, 85, and we'll be.
- [51:07]
D
Well, let's go. Yeah, let's go back to first principles, though. And that is. Okay. Trump cares about his legacy first. Okay. That's number one. He cares about his legacy and how he's seen in how he is affected America. And that's. So he's. He wants to be seen as the greatest president ever. So he's making bold moves to do that. But at the second. And then the second part of that, that first principle is that he understands that he needs Congress to get things done. And you've got midterms coming up, and it's hard Enough to get anything done in midterms as it is for him. So he's, he's having, he's, he's up against some, some serious headwinds here because now you've got, like Dave said, the approval ratings are down. You've got, you're going into midterms where people, they want, they want, they want things to be fixed and they're not getting fixed. It's just, it continues to get worse for people. You know, the, the job situation now you've got layoffs from AI that are coming, that have already started. You've got, the rise in prices is relentless. It's relentless. You can't, yes. So some things are down, bananas are, are down, and where negs were down from where they were. But there's still overall inflation from year to year to year to year to year. Okay, so, and gas prices up. That is right in people's face. It cost me more money to get in my car and drive to work. That's a problem. You know, it cost me more money to buy a flight if I want to go on vacation, if I want to get out of my house to go on vacation this summer and have
- [52:48]
B
fun at the airport.
- [52:53]
A
Yesterday, just to get through security. And I was connecting, I wasn't even at the airport at the outside.
- [52:59]
D
Yeah, right. And so you've got him making these bold moves because he wants to be remembered as the best president ever, and he knows he's got to make some bold moves to do that. It's risky. And so, and, and now you've got the midterms coming up. So the point is that I think, you know, he will table some things as you come into the midterms in order to make sure that he shores up at least the tacit support he has in Congress as it is. And so if, if, if he loses, if the Republicans lose the, the House, like, that's, that's going to be a problem for him. And now you've got lame duck for two more years.
- [53:37]
B
Yeah, no, not lame. It's going to be impeach, impeachment all the time.
- [53:41]
D
Yeah, yeah, it's good. That's gonna be noise upon noise upon noise and forget about it.
- [53:45]
B
Is, it is completely unprecedented in American politics that, you know, this has happened, but Trump is completely unprecedented. It, there's no two ways around it. I mean, you know, it's, it's that simple. But you're right, the, the hysteria to get through this and juice the economy in the second half. I, I, I don't think that anybody truly understands how strongly they want that to happen, whether they'll succeed or not. I mean, certainly the betting markets think he won't. Right. You know, the, the betting markets are like, this isn't going to happen. Well, we'll see. I mean, I guess, I guess we'll see. I mean, it's been, you know, I don't think, I, I think that he thought he would be able to get in, get out, and he can't. And that is a problem. But what we don't, as I said, we don't know. There are too many things in this, in this war that we don't know. And I keep making the statement that I refuse. Look, in general, everyone, you know, Scott and I agree completely on one thing, which is the history of regime change, wars is, is absolutely awful. They don't work. Right. And the history used the idea of air power to do it is even worse. I think this morning when Trump was on the tarmac and he was talking something that is very important. You can see it in his voice. He made a statement. Let's see if I can find it. I can't find it now, unfortunately, basically, he said words to the effect of, we know who's running Iran now, but we're not going to tell you because if we told, if we publicly said it, they'd be dead. Which is, in other words, what he's basically said was if we tell people, if we, if, if, if Israel and the military are targeting these people, they'd be dead already and we need to have someone to negotiate with. That literally what he said. Now you can take that with however you want to believe it. Is he just lying? Probably not. Is he telling the truth that they're now trying to negotiate with people giving them the deal? Because remember, before the war, before the war, they offered Khomeini effectively the same deal that, that Jimmy Carter offered the shot, which is get the hell out of the country. We will make sure you'll have a good life, your family will be fine, everything will be good. And then he said, basically told them to go F themselves. And so they started killing them and every single layer underneath them. And there's like over 50 liters killed, you know, in, throughout the IRGC and whatnot, and never forget what they're trying to do. Now. Is he going to succeed with this? No. Yes. I don't know.
- [56:18]
A
I don't think we even know what the definition of success is. I think.
- [56:21]
B
Well, no, the definite. Oh, no definition of the. That's where you And I disagree. We know the definition of success. The definition, however unlikely it is, is not total regime change. It's abandon the theocracy and go to a civilian government which may or may not be worse.
- [56:44]
D
Total regime change back to something looks.
- [56:46]
A
Yeah, that's a 10 year judgment as to what success looks like.
- [56:50]
B
I agree Scott. I'm just saying we know what it looks like. I'm not saying it's possible. I'm just saying we know what it looks like. The peace dividend to that is not even remotely in any of these prices. Is that likely. I mean the markets are basically telling you that they think it's less than a 1% chance. That's the truth. That's what the markets are saying. Because if they thought markets thought that was a 50% chance, I can't even imagine the volatility.
- [57:12]
A
Yeah Mike, you came back. You're right at the end but you might have missed it. But any final thoughts here?
- [57:21]
C
I think the number one goal right now of the military actions is to eliminate the ability for Iran to have offensive capabilities to distress shipping in the, in the Strait of Hormuz and amongst his neighborhood. Right now they're just going to be pounding them until they can't do it anymore. Even if they say they can make sure they can't. That to me is the number one goal right now. And market's already priced it in. Gold's already figured out this is a safer world. After this is over and it's getting pretty close in that's I think that's the end of it for gold.
- [57:49]
A
Isn't that goal post starting the war and not before starting the war? Last I checked the streets of Heru's were open before we had a war.
- [57:59]
C
I'm only looking forward. This is what I completely missed. I never thought they would mess it up this much to have a straight close. But now that it has, think what it's done. It's spiked energy prices, it's kicking. It's a major substantial, not only psychological but tax for the global economy, not so much less the US that was already tilting towards recession. So this whole thing to me is part of that spark that I remember in 2008 when crude oil spiked to 147. That was my signal and to me it's worse now than then. Partly because so much more complacency we didn't have cryptocurrencies in the stock market is twice as expensive.
- [58:35]
A
Wild times. The good news is that we'll be able to shoot from my background in Cuba in the next six months.
- [58:44]
B
I mean that's actually a very interesting topic, especially living in South Florida. You know, there are a lot of people talking about, about that again but
- [58:53]
D
you know, that's next.
- [58:55]
B
Yeah, no, not that they're next that they're collapsed because well, they've, their power grid has collapsed three times in the past month and it's tragic in a way, but the regime is starting to realize, you know, their vulnerability has never been greater and, and understand Iran has had a lot to do with keeping that regime going over the last, you know, over the last 10 years. So it's, it's not, not trivial. But yeah, on a geopolitical asset based thing, not a big deal in South Florida given the number of, of Cuban Americans that I know and interact with on basically daily. It's a very big deal. It's just not from background Monday.
- [59:32]
A
Very big deal. Well we, we didn't get to talk about stablecoin bill or private credit or any of the other things, but hard not to just focus simply on bitcoin, metals, oil.
- [59:42]
B
And we could talk about that and we could talk about the stable coins. And
- [59:48]
A
I'm back. Yeah, I can't wait. Well, thank you guys. Mike, I appreciate you coming back after your TV hit. Dave James, always an incredible conversation and we never know what conversation we're going to have until about 8:59am so it's good. Thanks. Thanks to the news cycle. We'll be back of course next Monday and I'll be back tomorrow. Thanks guys. See you soon. Bye everyone.
- [60:10]
B
That's dope.