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The Wolf Of All Streets
Bitcoin Whale Dumps 24,000 BTC Sparking Market Sell-Off! Should We Be Worried? | Macro Monday
01:04:08
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- [00:01]
A
A bitcoin whale dumped 24,000 bitcoin in a single clip yesterday, causing a sizable market dip down to the mid 110,000 before Bitcoin bounced immediately back. All of this on low liquidity, thin books on a Sunday. Of course, when something like this happens, we need to deeply analyze why it would happen, how somebody could be so stupid as to market sell 24,000 bitcoin and and if it's a harbinger for things to come for the market. All of this in the context of everything happening in macro. We've got a very special macro Monday today. We've of course got James, Mike and Dave, but also Lawrence Lard joining us for a five, some not even allowed on most golf courses. We'll allow it here at Macro Monday. Let's go.
- [00:45]
B
Let's dope.
- [01:00]
A
Good morning and happy Macro Monday. To those who celebrate. We have a lot to unpack today. Obviously the bitcoin price action showing a bit of weakness dropping below that 112,000 level. Many are watching as a floor for the range that bitcoin's been traveling in. But of course, we haven't had a chance on macro Monday yet. With our panel of geniuses to talk about the Fed, Jerome Powell and Jackson Hole going to bring them all on right now we've got Larry, Mike, Dave and James. Good morning, everybody. You're wondering how we ended up with five. Dave wasn't going to be able to make it and he saw A whale dump 24,000 Bitcoin and had to get off of vacation to come discuss it with us. Right, so we'll get into that.
- [01:39]
C
Still on the ship seek.
- [01:46]
A
Beautiful. All right, Mike, let's start with the morning meeting. What's happening here? There's actually quite a bit after Jackson Hall.
- [01:52]
D
Yeah. Anna Wong came out pounding hard. That's on Friday. I love comments on Friday afternoons in August. And. And she said this wasn't a duba statement and it's proving that she was right so far. She reiterated that in the morning meeting. She said almost every time he said a few things or somewhat dubbish, he passed a gave a contingent statement otherwise. So looking past those headlines, she thinks we should expect higher rates from longer from the Fed. She thinks there's a 5050 chance they're going to cut 25 base points at the September meeting. And she says right now her data for cpi, which is early, is not looking good. But he gave the market what it wanted to hear, but keeping it nuanced. So she thinks it was not as dumb as the market feared it was. Michael Casper, our equity strategist said he's pointed out that key issues for the key misses for The S&P 500 were Walmart and Home Depot. I think that's part of that shifting consumer patterns towards lower cost retailers and things. And of course a lot of that's showing the issues with tariff tariffs hurting earnings in some of those spaces. Ira Jersey came on. He says the Fed did not shift to focus on inflation as a market had expected. Which is what he was part of is we got that bounce on Friday. But he came some key statements. He says we could see more bull steeping. That's his main quote. And his main I think think he pointed out is that I don't think it's going to get much worse. He didn't think it's got much worse for the long end. You think it's going to be pinned here. But he sees a shorthand dropping to it's a pretty substantial move if it happens. I focus on what I think's happening. We're getting towards lower price cures in commodities. Elastic commodities like crude oil which is dipping this year's low is right around its break even costs in the largest producer US So downsides becoming limited and upside spikes will be happening. Same thing in corn, grain, soybeans and wheat. Getting to those break even costs US still trending lower but getting towards a point where responsive buyers are going to be looking for the sharp rallies. This is what you should expect. And then I focus on the world's most significant oh, copper. I think it's copper is a key metal I'm watching right now. If it closes here at 448, it's the highest close ever. Despite the world facing this paradigm shift of this world's largest good importer hitting it with tariffs. And then I focus on they switched over to the most significant bull market in commodities. I think that's gold. To me, gold is just loving Mr. Trump, especially this statement over the weekend that he Trump threatens NBC and ABC licenses over news coverage. I mean gold just loves him. I think it's just a matter of time that gold breaks above 3,500 an ounce. It goes to 4,000. And I think a key catalyst for that will be the stock market giving back some gains. And a good leader for that is cryptocurrencies, which maybe they're starting now. Back to you.
- [04:41]
A
All right, let's dive right into the market first and then we'll get into all the macro. So the story that we have here Obviously, by the way, this story is being told in many different ways. So I can only say that somebody sold 24,000 Bitcoin basically all at once on a Sunday in an illiquid thin market, but still holds over 17 billion worth of Bitcoin. This is a big whale. So obviously there's a couple theories here, dumbass, which I think a lot of people are leaning to are market manipulation. Dave, I'll go ahead and bring up your tweet here. Either the whale was trying to trigger liquidation cascade to profit from derivative positions, AKA they opened a huge short, crashed the market, closed the short free money, or they're a. You want to go ahead, Dave, because you came all the way back from, from Europe for this.
- [05:29]
C
Yeah, I, I, I don't, I haven't been paying attention to the specifics. But here, here's the deal. So if you, if the person actually sold, there's only three possibilities. There's a third and, and it's the one, the first one is the one that people are speculating the Internet which is the least likely, that this was a whale who sold a bunch of bitcoin on the theory that they could buy it back lower after they crash. People's confidence. Okay, if you believe that then I used to, to live where you could get a glimpse of a bridge in Manhattan. I'd love to sell you that bridge. That it's not what happens anymore, not the way the market works. That real possibilities. Possibility one, they're dumb and they called five OTC brokers bid wanted for 24,000 principally to get it done on the wire. And the one, everybody knew that there were four others or five others that knew about this and so they rushed to collapse it. And so you had multiple people front running against it, stupid selling, etc. You can contrast that with how galaxies sold 80,000 and caused less impact than these 24,000. And they use technology specifically designed to minimize market impact and in fact did it extraordinarily well. Something I know, I'm very familiar with and we can talk about that separately. But you know, I don't need to plug technology other, you know, it's, it's very simple. But the most likely scenario is that somebody had established a derivative position where they were short derivatives against their long crypto. They sold a chunk of their long crypto and place bids on well below where they, where, where, where they were their average price of selling. So they bought back into derivatives. And now over the next few weeks they'll re, they'll slowly transition from Derivatives back into the long crypto.
- [07:18]
A
So you're saying they were not necessarily short and taking advantage of a short, they were using it to get a lower bid on longs.
- [07:26]
C
It could have been however you want to look at it, whether it's, it's either. And without knowing all the positions, there are lots of derivative exchanges. Here's the point. There's about 5x4 to 5x the liquidity on derivative exchanges at any, at any point in time than there is in spot. And so it is a lot easier to accumulate a bigger position across Finance, OkX, Bybit, etc. Notice I didn't say Hyper liquid. Everyone in the world is staring at hyper liquid. So it's much harder to do this on hyperliquid, which is one of those.
- [07:56]
A
Things that I go to hyper liquid from what I read. So interestingly, he could be dumb, but yeah, go ahead.
- [08:02]
C
Well, it could be. Maybe they'll figure it out. But whatever, in any event it is, you can, you can cover your tracks a lot easier in all the other big derivative exchanges and you could do some on hyper liquid and spread that out. And so imagine you're long, whatever you're long, you establish a short position against your long of, you know, 24, 000 coins worth on a bunch of exchanges at whatever the price was. You then start selling. You crash the price from wherever it is, you know, 115 down to 111, 117 down, it doesn't matter. The average price of selling is going to be around 113, 114, kind of halfway down after you do this. And yet your bids are likely to get filled at the bottom of the, of the base. So you're going to make the difference between the average sale price and where your terminal price was, where you're likely to be able to buy back and cover your short position. This is a strategy that the SEC would call momentum ignition. I don't know what they call it in Hong Kong, but it is illegal there too. It's illegal manipulation in Tokyo. It's illegal manipulation of most exchanges in Europe. In crypto, there's no composite regulator and no cooperation. So you can do it. The last time we saw something as obvious as this, weirdly enough, and here's what I wanted to talk about, was in August of 2023, around August 16th. I can't tell from the charts I was looking at it. I need access to my home computer to figure it out where Bitcoin was knocked from 29 and change down to 26. And change, which in a percentage terms is a very large move. And it happened on a weekend with low volume. It was exactly the same kind of liquidation cascade right here. And you can look at it and you can see exactly what happened afterwards. It stabilized for a while, kind of flat to down drifting. Then it started to recover. And when it got back to its initial level, a month and a half later, you see what happened. Now, my saying that history is going to repeat. History doesn't repeat, but it does rhyme. And I think that my argument with. And I'd much rather hear Larry, you know, Lawrence and James talk about their thoughts about what Powell said. But my base case is it's going to rhyme rather well to what happened in August of 23. Not just because of technicals, not just because of the reason why, but there's all sorts of rational reasons for it. But I think it's important people to understand that this stuff still happens in bitcoin. It is going to shake the confidence of some institutional investors who didn't realize that there was nothing stopping this sort of thing from happening. So, you know, you may see residual effects for days, but in the long run, it's not going to matter a toss. But it is important to call a spade a spade. Okay, that's my rant for today.
- [10:41]
A
Yeah, I guess the next then natural topic. James, Larry, either you can jump in. Is any of the price action right now of any concern to you? Because of course, when you see it drop, regardless of a 24,000 bitcoin sale or whatever, start to lose key levels, people start saying the top is in. It's all over. You know, we see the narratives. Right. So the bull market apparently is over according to crypto.
- [11:04]
B
Twitter.
- [11:05]
E
Look, what is it?
- [11:07]
B
It's.
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E
What day is this? August 25th. Is that right?
- [11:13]
B
Yeah. James, you're breaking up.
- [11:20]
A
Yeah, I lost James. James, you went mute audio.
- [11:23]
B
Yeah, I think you want mute, James. Inadvertently. Yeah.
- [11:27]
A
Now. Now we can't hear you at all. I think your mic switched and it muted you. So we'll try to jump back up.
- [11:35]
B
For a minute while James. Oh, there you go. He's back.
- [11:40]
D
Is that better?
- [11:41]
E
Yeah, sorry. Yeah, yeah, yeah, we got you. They make all these things so smart that it tried to connect to my iPhone as a. But as a microphone, that's what you want. Super helpful. Really helpful. Anyway, so stop updating the iPhone.
- [11:55]
B
Stop.
- [11:56]
E
Anyway, so, yeah, I mean, look it, we're in the depth of summer. You know, it's August 25th. There, there's just. It's quiet I, I don't put a lot of weight on what happens on a Saturday or Sunday in bitcoin because yeah, exactly when you want you people are looking for liquidity, they, they, they move out of bitcoin on the weekend. And I mean it's just, it's, it's not the smartest play. Like Dave said, it could have been a two sided trade, it could have been an unwind of a trade that you didn't see the other side at all in the derivative side and you know, and that was closed out on the books of a, of a prime broker somewhere. You just don't know. And then so you know, low volume, these moves like this, it doesn't, doesn't distract me at all. And it's still within a trading range. I've been watching this channel and, and you know this, there's a, a channel that you could see in Bitcoin that's going up and to the right and it's close to the bottom that the bottom of the channel is about a 110. But you know, it's natural, it's a natural grind sideways to me. And after Friday with, with some I guess mixed reviews over, over what Powell said and you know Mike, I, I read what Anna Wong said and I typically agree with almost everything she says. I, I, I do disagree that he was hawkish. I think that what he was doing is he, he basically just set it up to say look, this is his last, this was his last Fed speech from, from Jackson Hole where you're supposed to be relaxed. It's your send off, this is your, this is your declaration of victory. Right Larry? So he was gonna, he's gonna declare that they're on the right path. Their policies have been, have been tightening the economy appropriately and now they can kind of turn their attention away from inflation because we got some positive numbers out in for inflation outside of that crazy PCE number because of tariffs. You know, he, he's now saying we're, we're more concerned with the employment side of the equation and then pretty much taking out the inflation side altogether. But then he, he, he continues to, to hammer on the point that they're data dependent which gives him cover for the next three prints. We still have a cpi, PPE and a PCI number that come out before the next meeting. So he' to, to change his mind but basically said all things being equal there's going to be a rate cut is what I read from it. So you know that was to me it was pretty dovish in that he didn't come out and say, I'm not going to be bullied by this White House. I'm not going to be told what to do. I'm going to still stay the course. I'm going. We're, we, we need to keep rates high because the, you know, the, the threat of tariff inflation. He didn't say those things. He, he basically said, look, we're, we've all but tackled inflation sufficiently here. I'm not worried about it anymore. Now we're worried about employment. So, and that we've all seen is going in the wrong direction, which means rate cut. So that's why the rate cut probability is still at over 80% here for the next meeting. You know, if you look at the W question. Yeah.
- [15:27]
C
I'm curious what you, you think, and I'm very curious what, what Larry thinks. There was a lot made of the fact that he sort of backed away from 2% as an official inflation target. Do you make anything out of that?
- [15:39]
E
Well, it's, what I just said is that I think he, he basically is, is declaring victor on inflation because it's going the right direction, you know, and do I make, I mean, I, I tweeted about it last week and I believe they've been headed in this direction for a long time. Look, why do we even have 2% inflation as a target, Larry? You know the answer, Mike. You know the answer, and you might know it also, Scott, but for the listeners is basically new. It was the bank of New Zealand that, that came up with this target back in the 80s. And everybody just kind of jumped on board. Why did they jump on board? Well, because it's what they can get away with. They realize that, yeah, 2% is kind of, that's, that's, that's Goldilocks. Like nobody's going to really miss 2% of power a year. Right. So why do they even have that? And so to have a hard line. I mean, he was asked about it on 60 Minutes. He was asked about it by Congress and he has no answer, you know.
- [16:42]
B
Because it's always, that's what happens to lawyers in his Fed chairman. The guy doesn't even understand the theory behind it. But.
- [16:49]
E
Right. And so, you know, and his answer, his answer in, in Congress became a nonsense or on, on 60 Minutes was this answer was completely nonsensical about a neutral rate and had nothing to do with the actual inflation rate that they were talking about. But he just talked around in a circle and like they do. And you know, to avoid the reality that there's no real reason for a 2% inflation rate. It just doesn't make any sense.
- [17:17]
B
Yeah, I think the reason he came to that conclusion, I think the reason he came to that conclusion or people come to that conclusion, he, he said something along the lines of the neutral rate may be a bit higher. So I think that kind of led people think oh, okay, so he can, you know, he's willing to tolerate a little bit more inflation. But.
- [17:33]
E
Yeah, but, but the question was why 2%. Yeah, 2%. And there's no, there's no reason for it. Right. So anyway, so I've been thinking about a long time, I've been talking about this for a long time. I think they're just going to put it in some sort of range, you know, 2 to 3% range and that that's good enough. Everybody would be happy with that. And you know, talk to a normal person out there who's not all over investments in finance and, and Bitcoin and ask them about inflation and they'll tell you it's necessary, we need it or else people won't spend money and the economy won't keep going. We need inflation. And so it's, we've been brainwashed and never taught about finance all the way through.
- [18:15]
A
I love that now we, we get an acceptable level of inflation in inflation because inflation is so natural. So naturally we can inflate from 2 to 3% in the acceptable level of inflation. Larry, I would love you go ahead Dave.
- [18:31]
C
I just want to make 1, 1 comment just to T. Mike up after and for Lawrence is that the average amount of gold supply mined every year is between 1 and a half and 2%. I've always thought that the 2% from the bank of New Zealand came from them. Looking at, because they're very resource dependent, came from the gold supply which means if you're willing to tolerate an inflation rate over 2% then you should be buying gold with both fists. Now I personally think digital gold is going to outperform physical gold. So that's a different story and we can get into that. But that's the reason in my opinion.
- [19:02]
E
Yeah, the ultimately what they pointed to. Yeah, but, but the real reason is it's what they can get away with, you know, it's what they can get.
- [19:11]
B
Yeah, well, and the Keynesians have defined it as it's absolutely necessary or else we're going to fall into some deflationary spiral. I mean that's my book. I talk about how Yellen said that, which is just absurd. But to the, to the. Are you done, James?
- [19:22]
A
Yeah. You're up. You're up, Larry. We want.
- [19:26]
B
So. Well, first of all, in the price drop, you know, to me it's, it's Christmas in August. I, you know, I woke up and saw all my limit buy orders at strike got executed.
- [19:36]
A
I bought 1:12.
- [19:37]
B
I kind of have a continual, you know, buy stack just down to, you know, down to zero. And so that was, that was pleasant.
- [19:44]
A
Mine only goes to 88 now.
- [19:45]
B
But, yeah, whatever, you know, regarding Powell, you know, it's just such a word salad and he's so all over the place and, you know, he said, you know, the risk to inflation are higher, the risk to, you know, unemployment are higher. I mean, clearly the employment numbers must have shocked him. You know, the revision of the employment numbers which led to Trump firing the guy who kept the numbers. And, you know, I don't know. I, I was conversing with somebody who's very macro savvy, I won't dox him. But it basically said, you know, God, the guy really cowarded out. I mean, if he, I, I actually called this wrong. I thought he was going to try to be Volcker. I thought he would want his reputation to be, I'm a tough ass. Screw all you people. I'm going to be the one. You know, look, everyone on this panel knows that massive inflation is coming. It has to come or the system collapses. We all know that to be true. And I might, I see Mike smiling. He might disagree, but, but we'll see. It depends on the policy response. I'm pretty sure we know what that is. You know, basically his stick was, I'm Volcker, I'm going to control this beast and, you know, I don't give a shit what the markets say. And he just crumped, he just cowered it out and said, well, you know, maybe. And it might have been the two adverse votes, it might have been the fact that they're attacking, you know, Governor Cooks for mortgage fraud, which she committed. It looks like. Who knows what it is? I mean, the bullying is working. And, and also it might just be the outright data that the employment report came in soft. I mean, my sense is if I'm him, I want to get out of there asap and I want to try and hit the ball in the middle of the fairway and just, you know, get out without a disaster. And so if I'd probably follow what the CME Fed odds are doing and we'll probably get 25 in September and then we'll wait and see, and yeah.
- [21:34]
E
You can pull them up, Scott. They've got the option.
- [21:36]
B
We don't, you know, but to me, it's all.
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C
Can I ask one question?
- [21:42]
B
Yeah.
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C
I mean, look, you know, you and I are on the same page on most of this stuff, but when you use the word massive inflation, I think it's exceedingly important to understand what kind of inflation because the kind of inflation matters. They absolutely have to inflate away the debt. So they need asset inflation 100%. But they don't want the price of eggs going up.
- [22:03]
B
No, they don't.
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C
And so it's really, it's a question of what type of inflation can they engineer and can they continue to keep the party going in asset prices at these extended levels, which has been Mike's biggest beating of the drum and the one that is the one which I think is accurate, by the way. Right. I mean, to me that's the issue. I mean, they need long rates to come down. They think that'll create a virtuous circle. I think that's kind of an illusion, but, you know, etc. Because we're still spending plenty. But isn't that the issue?
- [22:34]
B
Well, yes. I mean, there's a lot, there's a lot there, you know, and Besant is selling short and buying long, so he's doing, you know, kind of reverse twist or, or shadow QE to try and accomplish that. But they also, at the, at a fundamental level, they need G to be bigger than R, which is growth is fat, is higher than rates. And they don't, they don't have that until, you know, they get more, you know, money supply growth and money supply right now apparently is growing about 4.5%. And you know, they're going to have to do a big print to, to get it to grow more than that. And they're going to do that, you know, or else what Mike fears, which is, yeah, the price of everything is going to come down massively when the bubble bursts. And you know, we are in a bubble, financial bubble driven by all the free money and but the policy response, I'm highly certain will be, you know, to keep things going. I mean, we've heard it from, you know, Miran and Trump and Everybody. I mean, J.D. vance, I mean, they, they get Triffin's Dilemma. They know what's going on and, and you know, they, they crumped on, on Doge. Right. I mean, you know, we're going to save 2 trillion, 1 trillion, maybe 300 billion. Oops. Now it' you know, the big Beautiful bill comes through. So, you know, we're going to spend between 2 and 400 billion more than we thought. Granted, tariff revenues are nice and are really helping out, but even that, you know, I mean, I got into a big argument with a lot of people on Twitter that tariffs aren't inflationary. And you're right at a technical, macro, Austrian point of view. I mean, if you don't increase money supply, it's not inflation. But the fact of the matter is tariffs do make the price of certain things go up. And the price of certain things go up, you know, gets into the cpi. And inflation is a reflexive thing. I mean, inflation occurs when, you know, the price of something goes up. And the person who has to buy it then goes to his employer and says, hey, I'm not making enough money. You got to pay me more. And so the employer says, oh shit, I got to pay you more. And then in turn, you know, I got to charge more. And it's a circle, right? And it's, you know, we saw in the 70s that when you get in one of these things, it's harder than hell to get out of it. And that's where we are. And so, you know, I mean, first of all, the stated inflation numbers, they're just a joke. I mean, is there anyone who really believes inflation is running at 2 or 3%? Not me, not my experience, not my grocery shopping experience, not my car insurance experience, not my home insurance experience. I mean, just. And I go down the line. So I mean, you know, point to the price of something that's gone down, maybe eggs, because there was a shortage of eggs and chickens a while back. And so they've come back down. But, so, I mean, that's, that's kind of my rant on that.
- [25:02]
A
I mean, there, you and I, there.
- [25:04]
B
Will be a lot of inflation. I think people are underestimating just how face peeling it's going to be. I mean, you think Covid, you think the COVID inflation was bad? It's going to get a lot worse in my opinion.
- [25:16]
A
Over both of our left shoulders is your book the big print. I can see you got two copies.
- [25:21]
B
I appreciate the plug. The sales are slowing down.
- [25:26]
A
Either way, though. That means you, that you. Inevitably, we know what comes next. But yeah, go ahead, Mike, jump in.
- [25:31]
D
Let me jump in. I'd like to share a few charts and just kind of. Someone's got to be. You got to disagree a little bit. So let's go short term to long term. Short term. Right now, I think it's A very likely. In fact it's almost a done deal. The Vix is going at least trade 20 or higher before the end of the year. Maybe just trades to stay above 20 is the average this year. Okay maybe it's going to stay below but it's the highest in a couple of years and that means bitcoin is going to get to a hundred grand. What really happened Friday was bitcoin which made a new low a new high. When the VIX initially made a new low back in early August did not make a new high Friday and now it's just tilting back down. I think it goes back to 100 grand. Normal reversion in a normal market. And let's just point out the number one thing that's been like the top of the charts for like everything is strategy. Strategy is going to open this morning morning at 344. That's well below its 200 day moving average it bounced from on Friday. It got and just as an ex trader I'm okay. You're supposed to buy the first move but when you get stopped out you watch out. So strategy might be going below that 200. Just let me finish. I got a rant here. First 200 day moving average in quite a while on the way down that it's going to drag everything with a Bitcoin S&P 500 it's the same chart. So let's look at some pattern recognition. The last time it did that was very similar to the peak in 2021 and then the attempted a higher high in 2021 later and then it dropped 80% same pattern. Now it's below the 200 day moving average can easily go back to 100. No position, no bias observation of the market. What could happen then? Let's just look at the thing about strategy. It's the same chart with the SMB 500 with the 30 year and with Bitcoin they're all volatilities about correlations are very high. It's just you got to look at the. Look what the rabbit in the space. Then I look over at gold. I see a nice five month bull flag. It's just waiting to break above. You'll get that little pattern awaken right above 3500 needs a catalyst to get to 4000 and what's happening at the same time. You look at the US dollar this is a trade weighted broad dollar. It's going down hard. That's great for gold. And what's a good reason for that? This is the S&P 500 versus the rest of the world stock market just starting to tilt over a little bit now end up with the massive big picture is part of the reason I think we're going to see a normal cycle of deflation following the inflation. We have the most inflated stock market in the US in about 100 years. This is since 1929. Then a great indication was the bitcoin to gold ratio. It's rode all the way up and it's starting to tilt back down. It's August. It's not supposed to matter much. We're supposed to see the bitcoin drop to 100 grand and mean nothing. Supposed to see the Vix go up to 20 and mean nothing. It's what happens after that. So to me, my macro sense is this is the big picture getting started. And when you talk about massive inflation, we already had it biggest most of our lifetimes. Those of us who remember from the 70s and we learned what that did for the market, it shifted. It helped upseat a president, Ben and Biden, and helped the people that present another space shift over to a president who realized, oh, the benefit of cryptos, helped him get elected. And now we're at the point now things like Bitcoin absolutely have to go up. Things like copper absolutely have to go up. And I look at his next trader man, I'll try to buy some puts in those space just for insurance.
- [28:32]
A
Who wants to take it?
- [28:34]
C
I mean, look, you know, you're making the, the most. It's just an egregious mistake, which is taking Bitcoin as if it's a static asset and not growing. The network In Bitcoin is eight times stronger today than it was in 20, in 2021. So if you value it as a static asset, as if it existed then, the same people, the same audience, the same network effects existed in 2021 as today, then I'd agree with you completely. But that's not the case. It's a growing asset, it's a maturing asset. It's an asset that is still arguably an option on itself. Now, that matters because you could use the exact same analysis, could have said, post various fits and ties. I mean, in fact, it's one of the things that Tom, Tom lee back in 2009, 10, 11, 12, 13, 14 got right. All the people who said, well, when the market was hated and it was rallying, okay, well this rally is going to fade. And it's. And by the way, here we are 15 years later and we're at all Time highs and it really never stopped. And so you can't ignore adoption when it comes to bitcoin. You just can't. And it does matter because everything you're saying about gold, there are a lot of people today in traditional finance who, the same reasons that you say gold should be going up and I agree with you are saying, well, yeah, well, even Ray Dalio said, well, you can choose between gold and bitcoin. That motivation can't be ignored. Those people didn't exist in 2021 yet. Paul Tudor Jones kind of saying, well, maybe it'll be the fastest horse of the race. But everyone else was ignoring him. And it certainly wasn't, you know, the fan. It wasn't people like Larry Fink, right. And others, and there are many. So that, that to me is the main problem I have with your analysis. Everything else I agree with Mike.
- [30:20]
B
I'm completely with you on a trading basis and I think your, your analysis is spot on. And could we have a deflationary impulse before we get the big print and then inflation breaks wide open? I mean, I think you're a bull on gold, as am I. I mean, I think what's going on is gold is looking around the corner and smelling what has to come next. Right, which is, which is more monetary accommodation. But I interacted with James this weekend. I mean, I've got my eyes peeled on the chart of Palantir. So if you want to kind of look at the bubble, right. In my opinion, this has, this has all the, this, this has the real feel of 2000 to me with Cisco. And you know, we were just never going to have enough routers, never going to have enough bandwidth. I mean, these things couldn't trade expensive enough. And you know, as we all know, WorldCom Nortel, a bunch of other companies went BK and to me, you know, the, the capital is being thrown into AI without necessarily a payback on it is pretty substantial. And Palantir is probably the biggest bubble company in, in terms of multiples in the AI space. And you know, as a trader, Mike, how does that chart look? So, you know, my sense is that, you know, we could have found the pen, right? Yeah, yeah, right. And if, and it's, and if it's true that we found the pen, you're right, we get deflation. I mean, there's just no doubt about it. But, you know, what's the policy response to that? Well, that's what gold smells, right?
- [31:47]
D
That's a beautiful. That's why it looks too easy to just short it, right? Where you put that right little hat. That's why I get stuck up.
- [31:56]
B
I felt good for a bunch of days. Of course now I'm like fuck. But I'm thinking of reestablishing support.
- [32:03]
D
But yeah, but that's the key thing to remember about what's happening. And this is cryptos are the biggest casino on the planet ever. Every kid in the planet can trade on their phones in a bar. And I remember seeing my kids do that. Nor that was five years ago. Now that's the key thing that I also want to point out. What Dave said is very profound. He mentioned the name Tom Lee. Tom Lee is a great example of what the problem with his cryptos. People say there's only 21 million bitcoins. Well now there's 21 million cryptos and Mr. Lee just tilted over to another one of those 21 million. I didn't say 21,000. And they're growing every day. Just massive excess supply, excess hubris. And just you know the example of don't tempt the market guys. I think that's what's happening now. We're get people like him tempting the market gods. When you get that much money and you do that well, you're supposed to say yeah thank you. I'm gonna go relax a little and buy some T bills and are gold. And that's I think should be looking now again it's August. It's what's going to matter is the next few months here if we can get above these levels and not have a normal like I think we're tilting into a 1929 like market into cryptos. If you read what happened in 29 and I think it's just going to start cascading. Hopefully it doesn't. And my key thing I like to point out is when Dave said how great bitcoin is. Everything is this is a paradigm shifting year with what's happening and gold still winning and it's starting to break away a little. It's. It's only August. It's maybe bitcoin's only a big 19% and that's what the stock market up. I just look at imagine if we have a stock market down on the year. That is where everything starts tilting. And that's why I think that's the next big trade at leak. It's worth trading for, testing for. And that's where what we see today is maybe just a little whiff of that.
- [33:36]
A
I think they can also still afford to have that happen before midterms at this Point. So. Yeah, exactly.
- [33:41]
D
If you affirm him, you want to get it over with really soon though.
- [33:46]
B
Make a distinction though between all other crypto and bitcoin because they really are two different animals completely.
- [33:51]
D
Well, Tom Lee disagrees with you.
- [33:53]
A
Welcome to macro Monday, Larry. Welcome. Welcome to macro Monday, sir.
- [33:59]
D
If you're going to mention Tom Lee, that's one example of people to look at all the flows.
- [34:04]
B
Okay. I mean, exactly. Bitcoin is digital gold. It is. And you know, the market hasn't fully figured that out.
- [34:12]
D
20 million competitors.
- [34:13]
C
But you know, funny is, is if you. So we're very bearish, right? Everyone's talking bearish. And you look this weekend and if you compare Solana's price today, and since I own some, I, I did to Solana's price a week ago, guess what? Solana's price is 7% higher, 6% higher than it was a week ago. Bitcoin is down like 3 or 4%. You know, it's like these things can move differently, right? And you know, yet today everything in the crypto space is going down. People will go, you know, people, it's, it's just the way, it's the way it is in August that things happen.
- [34:49]
A
But, but you're speaking to bitcoin. These things has fallen off a cliff. I mean this is bitcoin dominant.
- [34:54]
E
But that's, but let's, yeah, but let's back up.
- [35:00]
C
I agree with Lawrence. I agree with Lawrence. I think you really, really do need to look at bitcoin differently than the rest of crypto. Otherwise you basically say Palantir is an equity and I should trade Microsoft and I should trade IBM and I should trade Pfizer the same that it's competing with Palantir.
- [35:19]
A
And, and it's for me, I've said it a million times. It's like, it's like to me, it's almost like being a huge gold bug in saying that Nvidia is a competitor. I just see them as utterly different asset classes. I know Mike doesn't agree and I know most agreements beyond the technology underlying, I don't see that bitcoin has a competitive asset.
- [35:40]
D
So let's, let's, let's point out, I do agree in many ways, but there's times to get really bullish an asset that's revolutionary. I completely agree with what it's doing with tokenization, everything or that, that technology. And that is when Michael Saylor got really bullish in 2020, partly when he admitted was companies, software companies not going to compete with the competitor, the competitors might as well tilt the bitcoin. And there's a time to get bearish is when all the people I see like on the screen right now bitcoin saying it's going to, saying it's going to go to 500,000 after it's gone up 10x in the stock market. There's just levels you're supposed to like I heard a crypto person say this week and you're supposed to be, supposed to be responding. You know when people are fearful, you're supposed to be greedy. Well they're not, they're greedy. So you're supposed to be fearful. So I am very fearful. Honestly this is, I'm as fearful now as I was in 1999 and 2006. I say six because seven was a bad year for me. Then I saw it and then it all made it all back up. It just, this to me is worse than those periods. It's many X's. And then we also have the rest of the world tilting towards recession. What's this point about? You talking about things like money supply, inflation and everything. Right now in China their money supply is running double the US around $45 trillion. Yeah. And their debt to GDP is running around 300% yet PPI is minus 3.6% and they're 10 year old needle is 1.77. We've seen this in Japan. It's tilting our way and the only thing that's holding up stock market and if cryptos go down, that's the leader and that's what I'm waiting for is for a trade right now, maybe a real big trade. And everybody hopes I'm wrong, but I'm, I do too. But I'm just pointing out facts of valuations of where things are heading.
- [37:15]
E
Scott, bring up the chart that I, that I just shared. So one of the, one of the problems here is that we keep, we, we always revert and default back to the beginning of the year as a measure. And the reason we do that is on Wall street is because that's when you get paid from, from December to December. Right. January 1st to December 31st and everything's reset. You know, company financials are reset, you've got taxes are reset, everything's reset. But the reality here is our reset this last year was a massive reset in, in November from changing out the anti crypto army into you know, the, this, this, this the new administration that is crypto and bitcoin friendly. So if you're going to look at gold versus Bitcoin, if you look at anything versus bitcoin, you've got to go back then because that is really the starting point of the reality around bitcoin as an emerging asset and getting some regulation around it. And so just comparing from January doesn't make any sense because bitcoin had quite a bit of a move before that.
- [38:27]
D
So let's respond to that real quick. From the future, the history people are going to look back at the trumpet administration is four years. This is year one. It's not going to consider those few little months. I'm trying to pick this from the future as a big macro trade. And I don't disagree with you. Some people would call that picking a point in time. Maybe Dave has accused me of that all time. I'm thinking. But the thing is what's happened this year is he also has to add into the psychology this year is a paradigm shift. Just the things you saw on the tape from Mr. Trump this week and you would have never heard from us President potentially revoking the licenses of the major network. When I was a kid, that's all we had was three networks rabbit ears. That that's a shocker. This, the world's facing that right now. So looking back from the future, I like to point out this stuff is happening and I love when Dave points out the accumulation of bitcoin. I get it. But there's also 21 million. Okay, we can come competitors wannabes, wildebeest.
- [39:16]
A
No, no, no. Wait, wait, wait.
- [39:17]
E
Before you. It's not the accumulation of bitcoin. It's the strength of the network.
- [39:21]
D
The network strength of the network. But then we also was talking about financialization. Let's talk about what's going to happen on the open this morning. People are going to be hitting stops and strategy and everybody know overweight. It's due just, just from some normalization. So mice chart strategy can easily get to 100. It doesn't mean it's failing. It just means a normal correction in the rapidly advancing revolutionary technology that does what they always do, they back up. The thing is this one is linked to the macro. It's linked to the systematic risk of the word treasury and bitcoin in the same sentence is an oxymoron. I'm going to write about my book. It's just they're not treasuries. They're highly volatile risk assets. Bitcoin is too with a high correlation with into the stock market. So everything is connected now worse than maybe in 1929. Certainly worse than 1999 in 2006 and 7.
- [40:10]
E
I definitely agree with. I agree with that pullback. If we, if we have, if we have an event, when we have the next event. We've talked about this before. We seem to have a 100 year event every seven years. When we have our next event, it will draw down. There's no doubt in my mind. But to Larry's point and in, you know, diametrically opposed to what, what you have expressed, you believe thus far, Mike, is that we will respond with liquidity. We will respond with an, with a fire hose of liquidity, a bazooka of money. And that the reason is we have to. And it's in your statement that stock market has to go up. That's right. Yeah. There's no way.
- [40:55]
D
There's no other way.
- [40:55]
E
It must.
- [40:58]
A
We will outgrow this. And outgrow means print.
- [41:01]
D
Exactly. So the biggest example of liquidity pump in history was in 1933 when we debase versus gold. That ended everything. I get it. But it took a 90.90percent correction in stock market and a great depression. Let's talk about one bridge at a time. We're not at that bridge and it's talking about events. We got an event right this morning. The deepest opening on the opening for like for MicroStrategy below its 200 day moving average in how long it's these little things. Isn't his strategy look for the indications in the event that happened last before. But it's just. We haven't seen. Maybe it's the beginning of the tide going out. Let's see who's wearing clothes. My point is it's nowhere near. Even though it's just getting started. It's August. Let's see how this conversation goes in September, October, November and maybe we'll be on the recovery and be fine again.
- [41:45]
A
It's interesting. I want to show you something on the microstrategy chart because you're right. This is the 200 day moving average on the daily. But if you go to the weekly, it just this week it hit the 50 for the first time since.
- [41:58]
D
What's it gonna open this morning? So it's Gonna open at 3:44.
- [42:01]
A
It opened. It opened. 340 something. Yeah, it opened.
- [42:04]
D
That's already right.
- [42:06]
A
Exactly.
- [42:07]
D
Yeah. So I forgot we're open.
- [42:09]
A
I mean listen, that. That's a weak chart. Like if you're just. If you're just objectively looking at as a chart and none of the other conversations. Mike can make a point there.
- [42:18]
D
It's just. So when you sense I'm sensing macro big pictures and I'm looking for signals again. It's August signal right now is kicking in. Maybe let's just see how it works out. Again I just point out the biggest risk is when assets have to go up like bitcoin and stock market. The risks are they go down.
- [42:38]
A
But Larry, I want to go back.
- [42:39]
D
To the idea of the big.
- [42:41]
C
Then Larry's right. But if you're right, then Larry's right. So bitcoin doesn't have to.
- [42:46]
B
Larry's always right.
- [42:49]
A
I learned something.
- [42:50]
B
I love you, man.
- [42:51]
D
Let's respond to Dave. Dave, let's respond to that. You said it doesn't have to go up and you've made, you've given me a hard time. Then you say when I said bitcoin could lose a zero, would fail. I don't look at as a failure, I just look at as a normal correction and correction. So what if say Bitcoin drops 50%? What does that mean for every single asset we're looking at bonds, stocks, everything.
- [43:09]
C
Well, I think it's the other way around. I think you're, you're asking the tail to wag the dog.
- [43:13]
D
I'm not. But you've made a statement and it's about why.
- [43:17]
C
What I said is, is the reason the stock market has to go up is the same reason the 10 year can't go. The 10 year yield needs to be flat to down because the government needs to finance and the stock market needs to be up because the 401ks and retirement accounts and other accounts of Americans are such that the wealth effect is what's been keeping our economy afloat. And we have a president that looks at it and the size of the stock market compared to the size of bitcoin is just dramatically bigger. But if the stock market starts to collapse, if there is a systemic event, to think that the plunge protection team will not swing into action, to think that we won't see something like we saw in March during the pandemic, which Larry's called the big print. So let's go with it. That's the big print. And he, he, he. The difference between Larry and you, the single biggest difference is you think that the pandemic print was the biggest print in history. And to quote you, we've learned from our mistakes and we'll never do it again. Larry, what do you think of that statement?
- [44:15]
B
We have not. They just keep getting bigger. Hey Scott, you should, you should move over to James and his great letter this weekend.
- [44:22]
A
I literally can you see this? Did you, can you read my mind?
- [44:25]
B
It was there. Yeah. I mean, this was brilliant stuff and it's really important people should hear this.
- [44:31]
E
Thank you. Well, I mean, look, the bottom line is we are complacent, like Mike is saying, and this is really important. You know, we are, we have, we're, we're, it's quiet, it's a dead of, you know, summer like we were talking about. There's, Nobody's thinking about these things yet. We're, the credit spreads are, they're basically, you look at the, the, the yields of some of the, the, the investment grade Treasuries, you know, investment grade bonds, stuff like Apple and Microsoft and all of those. Right. So when you look at those, and Charlie Bellelo put out this tweet and it, and it kind of piqued my interest because we, we, we look at these things and they've gotten so quiet. So if you go down further, Scott, you could see a better chart that. Yeah, keep going, keep going. That's, that's where they are now. The 75 basis points.
- [45:24]
A
Points.
- [45:26]
E
Yeah. And why is it significant right there? So, you know, the. When, when, when spreads blow out, then you do get a correction that Mike is talking about, and this is important you do get that correction because spreads are indicating that there's, that there's trouble and that you've got companies have to refinance. You've got companies that are not making the same, they're not making the, the same returns that they were because the borrowing costs are higher and all that just keep going down, Scott. And you know, the, but the, the bottom line is. Scroll down further, Scott. Yeah, so the bottom line is though, is that this one. Yeah. So when the Fed raises rates, typically you have your, your credit spreads widen dramatically soon thereafter. Right. And we haven't seen that in this last rate raise. And it goes around to what Dave and Larry are saying is that the money chasing all of this liquidity out there is just, it's mind blowing because of the last print. So you have fed funds rate rising and corporate spreads, meaning that the amount that it, it costs you, like the yield it costs you to borrow as a, as a company should be a lot higher than fed funds because, you know, the fed funds is the riskless rate. Right. And so if you're, if you're loaning money to a company like Apple or Microsoft or Facebook, then you ought to be asking for a higher rate than you are for the, for, you know, what you're getting from fed funds or the two year treasury and typically when fed funds rate rises enough it causes stress in the system and you get these spreads widen out. But we haven't seen that in this last rate raise. You can see they're all the way to the right. The spreads have gone tighter. So we're tighter than we have been since 1980 something and this is actually tighter than it was before the great financial crisis. So what, what, what Mike is talking about, which we, we tend to agree on is that there's a lot of complacency out there. But the reality is that is it complacency or is it recognition that the, the flood is still coming, that we're still going to get liquidity going into the end of this year and into next year and then we'll have some reckoning. That's the question is when does this all. When do the, when, when does the music stop and when does that, that line, that white line spike up? Because once those credit spreads are gone, that's it. The market is, the market's tumbling. Everything goes with it and they have to have a big print. And that's the point is that there's no other choice but to have liquidity come in.
- [48:21]
D
Okay, that's after you cross the bridge of the number one thing keeping everything buoyant. When you get to two times GDB, the stock market cap has only happened two times, relevant times in history. 1989 in Japan, I was there in 1929 in the US the stock market is the economy and that's where we are now. So I have to keep it lofty and you look for alternatives. That's why I'm sticking with gold. And at some point we're going to get some normalization in that all your spreads are wide enough. We'll get that normal recession. It's never going to happen of course when people tell me never. And that's what I'm looking for signals for that to happen. One of the first signals for that happen is the leader of them all, Bitcoin being heading lower. And that's why I'm really worried about microstrategy breaking this 200 day movement moving average.
- [49:01]
C
And to crystallize specifically Mike, everything you said in the beat before you got to the. But I agree with. I think that bitcoin and gold will move together ultimately and there will be lots of other stuff in crypto that are going to be a hell of a lot more like Palantir and the rest of the stock market. And that's where we differ which is interesting in a macro show, we're effectively saying that there's an overextension of the macro. The difference is the three other people on this panel all think that the government is going to pump, and when they pump, it's going to end up in places that, you know. Yes. In order to save the stock market, they will. Bitcoin will outperform. Gold will outperform. That's what we think. I mean, I think. I don't want to put words in your mouth, but I see, James, and.
- [49:47]
E
Not only that, but if. But also it depends on the event. Like we've, we've talked about this, this before is that Silicon Valley bank collapsed. Bitcoin went up 30%. I mean, there's a reason for that. There was a flight to safety in that moment. That was a flight to safety. And that's the, that's the crazy part, is that people are like, well, I need to put my money in something they, the government can't touch. They can't see I did it. They can't, you know, they, they can't.
- [50:11]
D
Take away from it. That's what's changed. That's what's specifically and has completely changed. Right now, the appreciation of cryptocurrency and bitcoin is completely indicative of the success of the Trump administration. That shifted completely. I loved it, and it was great at ten grand when the Trump administration hated it, and now they love it. And Mr. Trump Jr tells you you're supposed to buy it or you're going to feel poor for not buying it. That's the risk, and that's where you just have to put on that Spidey sense that Scott talks about. If you made money in the space and it's expensive, do you really want to buy it now? It's just, that's why I just point out the risks are inordinate here. Now you're part of that. You're part of the Trump administration. They better succeed and they better make bitcoin go fire. Good luck with that one. I liked it better when everybody hated it.
- [50:56]
E
Bitcoin is so much bigger than the Trump administration. It's, you know, it. Yeah. The US Dollar over bitcoin is the price everybody quotes. But go look at bitcoin against all the other currencies in the world. I mean, so it's not, it's not isolated. And, and it does help to have regulation here because we are the biggest market. We are the, the, you know, financial driver. And it is getting into, into institutions now because of the regulation. But the stablecoin bill is going to be a really big driver as well. And so it's not just the Trump administration, it's the removal of the anti bitcoin administration that was important. So it's not that Trump is pumping it, it's that we've removed that headwind of, of, you know, of Elizabeth Warren and her psychotic anti crypto army. You know, that's, that's, that's what we did.
- [51:54]
A
They could be back, they could be.
- [51:56]
B
Back in, in four years.
- [51:58]
A
Well, no, but I mean Elizabeth, if the Senate goes blue, Elizabeth Warren's the chair of the Senate Finance Committee in a year, less than a year and a half.
- [52:05]
B
That's a horrible thought.
- [52:06]
A
That happens. Yeah.
- [52:08]
D
So what, let's, let's tilt over to what you mentioned and I have to point out the great equalizer in all markets is gold, unfortunately. Stupid rock. I hate when I have to point out it's the same. You know, it's a flat line, the stock market's flatline and a total return for almost eight years. And I've been watching this for, for literally a decade. The bitcoin to go ratio certainly when it first went above, stayed above a 1 beginning in 2017. It's been flatline versus Bitcoin since 2021. And I say that deliberately because I know it's going to t off day but it's my pattern recognition for ideal. So I look at this and I said this is not good. This is showing me there's a problem. Right now it's 33. The high when Trump first got elected was 40. The low for the year is 25. Just afraid it's going to trade like a commodity normally does. And the green things that you learn in commodities, particularly when there's massive excess supply of competitors is auto correlation. And to me all the correlation risks are still down. For the bitcoin to go ratio get.
- [52:59]
A
Back towards 25 in a growing, we were at like 70.
- [53:04]
C
Not a commodity.
- [53:05]
A
There was no 25 since Trump got elected in this cycle.
- [53:09]
D
The bitcoin to gold ratio right now is 33. You can, I can share screen if you want to put it on. You can see it right now. After he got elected was 25. The high when he got, when he got elected was 40. The lowest 25. Good support. My fear is it's going to do what a normal commodity does. I see an auto correlated market here and I have good reasons for that. I think it's going to go back to 25. I say that about other commodities and it's just when people get bullish at these levels, you're supposed to be bearish. And when they get bearish at these levels, you're supposed to get bullish. It's not that easy. But it just looks to me that's.
- [53:38]
B
What we're doing, like it might, but someday it's going to break 40.
- [53:43]
D
Appreciate your view on that. Maybe someday, but it could actually get down to 10 first. That's my point. And what commodities usually work, and that's my point, is this is what I think is going to happen. I think it's more likely to get down to 10 or maybe even 5. You get your pump and then you might get to 40. That's the thing. You need something to get the pump. And the number one way to really get a pump other than some kind of event that can start, it's just risk assets to capitulate. That's what happened in 1929. That's what happened in 1989. When risk assets get really expensive and they just start going down in their own momentum.
- [54:12]
C
Maybe that's happened in 2020.
- [54:14]
B
James. And my partner David Foley has a brilliant chart which I can't pull up right now because I don't have access to to it. But it basically showed bitcoin and gold and how they're correlated. And what tends to happen is gold moves first, gold smells it first, and then bitcoin follows. So if you're bullish gold going through 4, 000, which I am, I think gold's on its way to 5 or 10. You should be massively bullish bitcoin because, you know, gold is more widely distributed and it just smells it. It smells the debasement that's absolutely certain to come because of the mathematical situation that we find ourselves in.
- [54:45]
D
One big difference is bitcoin's risk on, gold's risk off.
- [54:49]
B
Well, yes and no. I mean, that's slowly.
- [54:53]
C
If you drive a car using a rear view mirror, you're right.
- [54:58]
D
So that's why I appreciate your views. And I've been pointing that I wrote about this years ago and I really thought bitcoin is going to trade more treasury bonds and gold. And then we got this situation that kicked in and now it's. You can just see the correlations are continuing to increase with the stock market. That's great. It's wonderful.
- [55:13]
B
That's true. I'm not.
- [55:15]
D
It's a fact. I mean, I can show you the correlations. I mean, how far do you want to go back? 100 days? 100 day correlation to S P S P Bitcoin correlation is about 0.65, 0.67 100 late correlation S B Bitcoin compared.
- [55:28]
B
To like the 900 day. I mean I'm guessing today than it was three years ago. Correct.
- [55:33]
D
It's okay. I'm just guessing and I read the.
- [55:39]
B
Correlations breaking down over time in my view, you know.
- [55:42]
D
So what's happening so far this year? The low for the year in the VIX was in April. That's the day that bitcoin. I'm sorry, the low for the year in bitcoin was in April, the day the VIX printed the high. The high in. The low for. The high for bitcoin was a week or two ago when the VIX printed a low. Now that's just started diverge. That's a complete inverse correlation with the VIX bitcoin so far this year.
- [56:06]
C
Here.
- [56:07]
B
Yeah.
- [56:07]
A
Okay, Larry, we got a couple minutes left. You're the guest. I mean you get the big final.
- [56:14]
B
Yeah, I don't have any great insights. I mean a lot of great stuff out of these guys. You know, we'll see what's happened. I mean, I was. Let me say a couple things. I, I think the next couple of quarters are going to be a real freak show. I mean it's, you know, buckle up. It feels to me like I don't think Powell's going to get out of here unscathed. Saved. He's hoping that the end of May comes quickly. Sorry, dude. You know, you're, you're not going to be lucky. I, I think, you know, the fall is typically a pretty rough period for the markets, stock market, you know, I think Palantir might have just found a pen. You know, like the whole, you know, song, song and dance that the administration has done is getting a little bit old and tired. And my sense is that, you know, if the economy does slow down and you know, the cuts will. I mean, one thing is for sure is we know when the cuts actually start to happen rapidly and aggressively, it's over. I mean, you know, at the time, at the peak in 2007 or 8, they cut like crazy. Didn't matter. Same thing's true in 2020. Didn't matter. So, you know, in a sense, you almost don't want the cuts. I mean, and you know, George Gammon and others have made the argument that, you know, the cuts will actually drive it down lower. I mean, that's a complicated argument, but there's some logic behind it actually. So, so we'll have to see what happens. But I. I think we're going to see a freak show in the next two quarters. And I would just say buckle up. And I think everyone who's long gold and bitcoin, I mean, you got to be ready to ride this out. We don't know what's going to happen. But, you know, as I wrote a book about it, my strong, strong belief is that we know how this ends, and it ends with them saving the financial system because they have no other choice. The alternative, you know, just like when, you know, Hank Paulson was on his knees begging to Nancy Pelosi to, you know, pass tarp, the alternative is the whole thing freezes up. You know, that's why they broke the law and bailed out Silicon Valley Bank. You know, they literally broke the law. I mean, you know, Dodd Frank said, no, thou shalt not do that. And then they. They relied on the system systemic exemption clause to, you know, they knew the whole thing might go down if they didn't, and so they did, and that's what will happen again. So it's. It's tiresome. I mean, this is such an obvious pattern. We know where this is going. All roads lead to inflation. So, you know, it's pretty simple what to buy. I mean, you just buy gold, buy bitcoin, and go to the beach.
- [58:26]
A
I just think it's really interesting you could both be right because you could have the deflation that leads to the inflation, as we said.
- [58:33]
B
Well, that's right.
- [58:34]
C
That's right. Which means, just for those who think that, you know, be very careful with leverage.
- [58:43]
B
Totally agree, dude. Totally.
- [58:45]
C
Maybe the single most important point here, because it is entirely possible that you'll look back three years from now and have been completely right. If you're a bitcoiner and bitcoin is way higher than it is today. But in the interim, you get stopped out of your position and you say and. And you'll be like beating your head against a wall.
- [59:06]
E
There's an argument for you to have a look, there's definitely an argument for have some powder. And I, and I don't disagree with Mike on that. I just think that timing this thing and the fact that they have not learned their lesson. They've not learned their lesson. They're gonna. They're gonna. They need more. We need more cowbell. We need more cowbell. And so they're not.
- [59:25]
D
They're going to print.
- [59:29]
E
So here's the thing, is that the market was really worried about. They've been worried about a few comments from Powell over the last number of years. And those comments will boil down to number one, we are, we, we worry more about being too easy than we do being too hawkish, right? Being too loose and we then or dovish and we'd be being too hawkish. Why? Because we have, he said these words, we have tools to deal with that. If we, if we over tighten, we have tools to deal with that. So the market's like, oh God, they're going to push us into, you know, a, a downturn because they, they want to flood means a money printer, more liquidity. That's number one. The second statement they worry about is that he said that we're data dependent. We're data dependent. We're data dependent. This, this is statement he said over and over and over and over and over and over and over again. So they worry that they're going to wait for the data to turn, which is lagging. The data is severely lagging. It's also, you know, flawed. So as we've talked about with the CPI and all the other stuff, it's flawed data. It's, it's lagging data. The Fed is lagging the lag, right? So by the time you even get this unemployment rate, that's that the real unemployment rate that doesn't get revised even though the jobs do. They don't revise unemployment rate. So you're staring down, something happens really quickly, too late. And that's what the market has been worried about. So why the market was up on Friday. They got a hint of a little bit of oxygen that Powell said, all right, maybe we've got, we can cut 25, won't come cut 50 yet. We're going to cut 25 and see what happens. And so that, that's positive news for the market because what they don't want is for the Fed to strangle it like they usually do. And that's why when Larry said that when they start cutting, they start cutting fast and furious. It's already too late. And so the market is trying to, you know, is hoping tonight that's not going to be the case.
- [61:21]
A
Listen, as we come to the end here, I want to parrot a point that Dave has said multiple times on Crypto Town hall that I don't know has been said here. It's funny that we discuss this every single day wondering if we'll get rate cuts, if they'll do it in September. As bitcoiners, we all zoom out, right? And we look at the long term. We literally Know exactly what's happening when Powell leaves. Whether they come in September or November or January, massive cuts are coming. There will be a stooge at the head of the Fed who's going to do exactly what Trump is asking him to do. Rate cuts are coming. It's coming. They're saying it's coming.
- [61:58]
D
No, we can, we can just give China's example. They're massively stimulating their economy. Only because the stock market dropped 50% and still experiencing deflation. Good luck. Maybe we'll get out of this without that. But there's precedent for it.
- [62:13]
B
Yeah, right. But you can have deflating economy and inflating currency at the same time.
- [62:18]
D
Well, that's right. They're buying their stocks like Japan did. So maybe at some point we'll get to that. But what you have to do and get there first, you have to have the pain. And that's. I'm worried by. Dave mentioned. I come from a leverage background. I came from Futures 21 leverage. People stop out and then. And then you get the print. But I'm worried about this big. The big stop before the big print. There we go. Maybe that'll be our book, Larry.
- [62:36]
A
The big stop before the big print.
- [62:38]
B
A lot of people, big stop.
- [62:40]
A
But it sounds like as much as everybody believes bitcoin's going up, there's kind of, you know, when Larry, I hear you talk about the next few quarters, it could become extremely volatile again and you could get to buy bitcoin much lower before it goes much higher.
- [62:53]
B
You might. I wouldn't count on it, though.
- [62:55]
A
You know, sustained bid, you got to.
- [62:57]
B
Be prepared for everything. Is the point I think Dave's making on the leverage. It's a great point. I've seen people get blown on. It's horrible. Yeah, it's. This is a fourth turning. We have no idea what's going to happen. Prepare for anything.
- [63:09]
E
We do know one thing, Scott, I just put it up.
- [63:11]
B
What's that? That. That brings it.
- [63:23]
C
I can hear my Internet frizzing. So since you can see we're moving down the river, I don't know if you can see behind it.
- [63:28]
B
It's going to be Paul's successor.
- [63:30]
C
We're heading to Vienna, so.
- [63:32]
A
Well, Dave, you enjoy Vienna. The rest of you, this was a lot of fun.
- [63:36]
B
Thanks for having me on. It was really great to be with you. A lot of great minds here.
- [63:39]
A
Yeah. Final words. Bye. Bye. Larry's book now. That's all I got. Oh, and sign up to James's newsletter.
- [63:45]
D
Thank you.
- [63:46]
A
Cool. Okay, good. I shield. There we go. See you guys next week.
- [63:49]
B
It's dope.