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The Wolf Of All Streets
Will Trump DESTROY Bitcoin Or TRIGGER A Massive Bull Run? | Macro Monday
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Will Trump DESTROY Bitcoin Or TRIGGER A Massive Bull Run? | Macro Monday
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- [00:01]
Scott Melker
By now, everybody is aware of Trump's pro crypto stance, of all of his pro crypto appointees, of all the legislation and regulation that's seemingly going in favor of the crypto industry. But this could be in direct conflict with tariffs and trade wars, pressure on the economy that could cause risk assets like crypto to drop. So will Trump destroy crypto or trigger a massive bull run? Discussing this and much more today with the Macro Monday legends Mike McGlone, Dave Weisberger and James Lavish. Let's go, let's go. Let's dope. What is up, everybody? I'm Scott Melker, also known as the Wolf of all streets. Before we get started, please subscribe to the channel. Hit that like button button for everything except for the super bowl last night, which I watched kind of on a plane and it was trash and not worth discussing. Dave, James, Mike. Good morning, gentlemen. Macro Monday is 10 times the entertainment as the Super Bowl. Super bowl halftime show, super bowl commercials, all things Super Bowl.
- [01:15]
Dave Weisberger
You guys want to hear something funny? I was out running around yesterday and I realized that the super bowl had started. I hadn't even, I wasn't even. And, and I realized I was like, this would be a really good time to go to Costco. Oh, empty. It was unbelievable. There were no lines. It was awesome.
- [01:36]
Scott Melker
No lines, but also no beer, no wings.
- [01:39]
Dave Weisberger
It was so good, but no lines. I caught the second half. That's all I needed. You know, it's funny because the super bowl usually used to be a blowout, right? So it just, I didn't expect it to be a blowout this, in this direction, that's all.
- [01:52]
Scott Melker
Yeah, I don't think many people did. So listen, let's start from the beginning as usual. Mike, what you got in the Monday.
- [02:00]
Mike McGlone
Meeting today was not really made too many fireworks, too much, much different. I think comes things from Ana and Wong was quite significant. She pointed out she thinks the market's underestimating what the new Trump administration will do to lower yields. It seems they're focused. Besant and Trump have doubled down on that. On that intention of lowering 10 year yields and less focus on the stock market than he was past. One thing I did agree disagree with her is she thinks food prices are going to rise, particularly things like oranges from Brazil. A lot of the food we get from tropical areas of the world, Ivy's cocoa, oranges, coffee have been spiking because of weather issues. If those transmit to the rest of the world is significant. But the thing about food in this country is we have A massive surplus of grains, soybeans, corn, wheat, surplus of energy. We got to export it. If trade picks up, we're going to have those gluts developing. The thing we don't have a surplus of is copper that's been jumping up. But that's a key thing from Ana Ira Jersey Our key thing, the 10 year note yield could drop to 4.2%, particularly if the CPI is not too bad. But overall, and Gina pointed out earnings have been much better than expected, doing well. But the key things that she's worried about is there's too high expectations embedded in stock market price. And the key weak spot she's pointing out is margins are deteriorating and price reactions are worsening as we hit these earnings focus. So that's the key thing from the Bloomberg meeting. And I think the most striking thing was what Ana said, that don't underestimate the desire of a Trump administration to get 10 year yields lower. Which, you know, has been one of my calls and I haven't been right yet.
- [03:47]
Dave Weisberger
That's interesting. That's interesting. Mike and Scott, can you pull up the screen that just shared. So on the Bloomberg interest rate probability, it looks like we got to go all the way out to December to September to get a full rate cut baked into Fed fund futures. So that's, that's interesting that she's saying that because you can see down here what the expectations of the terminal rate are, which is about 3.9% in 26. You know, this is the, these are kind of outliers to me out in 27. But this is what it kind of looks like people are thinking it's going to be about. It's just about a 4% terminal rate for expectations. And so that's interesting, Mike, I'm not sure what you make of that.
- [04:30]
Mike McGlone
So I want to follow up on that. The one thing that I agree with and I think the Trump administration is smart enough to do is take the pain for the gain, get it over with as soon as possible. They know one of the best ways to get yields to go down is just a little bit of a backup in the stock market. Now Anna didn't say that specifically, but she mentioned specifically Doge. Now what we're seeing from Doge is I've been very impressed with stuff that I would think is when you start out at a company, you see they're melting cat or just spending too much cash. What they're doing is very impressive. Caught off everything first and you know, and let people beg for their money back. You Know, let them figure it out later. So that's been impressive. But overall it's the, what I've been looking for is that trade, the pain trade, just maybe get back to a 200 day moving average S&P 500. It's been since what, 2023. We've seen that, you know, that's just initial trade. It's the macro that matters. But that's what she thinks I think she thinks, I think they're going to focus on is get over the pain for the gain towards you. Get to the, as you get to the end of the term.
- [05:30]
Dave Weisberger
Yeah, because then you, because then you can kind of blame it on, you know, the last administration.
- [05:34]
Mike McGlone
Right.
- [05:35]
Dave Weisberger
So, but here's another key point is that here's your 30 year mortgage. It's still up here at 7%, 6.93%, you know, so I don't know where this settles in. But if the, if the, if the tenure settles in at 4% means you're staying at 6%. Right.
- [05:55]
Mike McGlone
Well that's, that's my point. What keeps the 10 year note at 4%, what keeps the Fed from easing is a strong stock market. The number one factor, we need unemployment to go up a little bit. Maybe let's, we're doing a lot of government layoffs and it's also this negative sentiment for that. But to me, the number one factor for that little chart for that yield to go down is the stock market having a little bit of normalization. You know, stuff that used to happen. 10% corrections.
- [06:17]
Dave Weisberger
Yeah, yeah, a little bit of re, mean reversion like you've been talking about. What's interesting though is we got a little bit of mean reversion. It bounced right back. This is what, what I found interesting this morning is all the, the bluster again last night about tariffs. Right. On, on steel. Well, and aluminum. The market kind of just shrugged it off. Right. I mean if you're, the, the futures just kind of shrugged them off. Right. So that's what's, that's what's interesting to me is that it, it sounds like the market's starting to take. Like we had talked about months and months and months ago when we were talking about the possibility of, of tariffs and the, and the impacts of markets, it was like, well, there's just a lot of threat and some of the markets just saying, yeah, it's just another threat. We'll see what, what actually happens. And the fact that they've already worked out Mexico and China for at least another month, so. And that's where those tariffs would really impact mostly, right? So in Canada.
- [07:19]
Scott Melker
So we have this headline, crypto prices slide as Trump announces new 25% tariffs on steel and aluminum. To your point, that's yesterday. And today we're going up, right? So, like, the market is shrugging this off. It's a great idea, but clearly it's just a Sunday and prices go down a little bit. And here we are with bitcoin rising. I mean, we're trading, what, at 97, 793 up. We had four days of literally having candles open and close within $150 spread. That was really insane. So I don't think the market, at least the crypto market at this point is viewing tariffs and the tariff threat as a huge risk. Dave, I know you got a lot to say.
- [07:59]
James Lavish
Well, I mean, the market for bitcoin. Bitcoin is in a 5% range. It's been in a 5% range, which is one quarter the size of the range that we live through for eight months. We call that in the business a coiling spring. The longer it continues, the bigger the move will be. On the other side of it, at the same time, the entire crypto sentiment, crypto Twitter, everyone, whether it's Arthur Hayes, who the lead cheerleader for bitcoin, and all of his minions and everyone else calling for bitcoin to drop to 75,000 to get into an entry point means money from the crypto world is sitting on the sidelines. That is the situation. At the same time, money from outside the crypto world is still coming into crypto, and you're seeing people in the crypto world cashing out, looking to buy in later. That is what we call in the world, if it wasn't such a. A bad analogy in terms of human suffering, that is literally the same thing as leaving dry brush underneath the forest waiting for a match or a lightning strike or something. That is literally what you have going on right now. And just remember that I've said this multiple times, but that is exactly the setup. We've seen the great washing machine. I mean, Mike makes a point which, while I dismiss it and I make fun of him for it, has. Has an element of truth to it where he talks about 22.1 million Bitcoin wannabes. They're not point one million Bitcoin a lot wannabes or 2.1 million freaking lottery tickets that degens in the crypto world insist on playing in. And that is alive and well. I mean, we saw Dave Portnoy barstool Sports getting into it this weekend. Woohoo stool presidente. Exactly. So what that is and what we've seen is all the lottery tickets in the crypto world taking a big steaming dump. Sort of like Pat Mahomes did in the super bowl with his offensive line. I'm not going to blame Pat, but you know, he, you know, I remember the last time I saw a quarterback who had zero chance in a Super bowl was Pat Mahomes against the Tampa Bay Bucks. It was the same thing. I mean literally zero chance. And you know, the entire crypto market outside of bitcoin over the last few weeks is down 30%. Those are not, that's not a small number. Bitcoin's down 5% in the same period of time. So what are we actually seeing there? What we're seeing, that great sucking sound is money being lost in the crypto verse in the, in the casino that we know is alive and well. We know there's still money on the sidelines. At the same time institutions are happily accumulating bitcoin. Well, this is the setup that this is where we are and so any kind of move matters yet. We had one piece of news that I haven't seen a lot of people talking about, but it's a massive piece of news. You know, did anyone read Hester purses? You know, 10 things. Yeah, I should share screen here because this is.
- [10:54]
Scott Melker
I can do it. Okay, I get it. We talked about it last week here.
- [10:57]
Mike McGlone
Yep.
- [10:57]
James Lavish
It is really important. There are things in here so determining security status, we know that matters effectively. What she's saying here, if you read the rest of it, is that it shouldn't matter. It's just who's going to do it. Understanding what is jurisdiction, not acting. So no more lawsuits until we know making it possible for coin and token offerings to Coin and token offerings to happen in the United States to allow certain things to be registered, to fix the broker dealer path, to make sure custody can happen, to make sure staking and lending can happen, to open the floodgates to have exchange traded products based on these products to make get rid of the stupidity in. In 70 year old rules for clearing agencies and transfer agents that gum up the works. You can't have a conversation with a lawyer about these projects without about crypto, you know, at least five years ago or four years ago or three years ago without pointing them pointing out. Well, you know the rules on crypto unclearing and transfer agents get in the way of that because crypto doesn't need that because it's peer to peer, she recognizes that. And then the last one, which nobody's focusing on but maybe the most important one in the whole thing, cross border sandbox. This is a global market and it is why crypto will win. Every asset is going to go global. When Larry Fink, you know, you know, late to the party, five years after I said it, says everything's going tokenized, what does he mean? Well he means it's more efficient but he also means it's global and multi currency. Anybody in the equity markets can tell you the following statement. People in the reader, your watchers don't know this is true, but it is true that the most complicated settlement systems in the world are the ones to handle U S and Canadian dually listed securities. Which seems like it should be trivial, right? But what's so complicated about that? Well, they trade in two currencies, US dollars in America and Canadian dollars in Canada. Their arbitrageurs that keep it in line but the same security can is fungible between the two. It's one of the only examples of that in the world. What is crypto? Crypto is fungible. You can buy something in dollars, sell it in yen and it's the same instrument. Buy it in a stable coin, sell it in a different stable coin, buy it in bitcoin, all of that, that that multi currency features opens up a global market. And here we have the sec, the one that's been openly hostile to the industry, telling everybody that they are open to this and want to try to make this work. If you are bearish on crypto projects that have real utility and you're bearish in bitcoin with this sort of backdrop, I don't know, I can't help you, I just can't. You know you might be a short term trader and say oh yeah, the money flows are going to be bad. But understand that was the news this last week. So we're a macro show. That is a macro thing. That is a big picture thing. Doesn't mean it's gonna go up tomorrow because it may not. We may be stuck in this range for, for weeks even. I don't know.
- [13:56]
Dave Weisberger
Go ahead. Yeah, please Mike, because I want to. I also want to ask you a specific question about the meeting this morning. Go ahead.
- [14:01]
Mike McGlone
So I want to piggyback on what Dave said about coiled spring scenario. And almost four decades ago I used to use that as a outlook for markets and things. And I want to show a screen that shows the coil of spring scenario, not the codex screen. The only One that matters. That's gold buying by S&P 500. That's a 200 week Bollinger band. It's the narrow. In 30 years it's breaking out to the upside. Gold's up 10% since Bitcoin reached 100 grand. The milestone which I think put in a peak for all cryptos for a long time. As you see, bitcoin's down a little bit. How much is Ethereum down? Which is what I want to tilt over to. To me Ethereum is indicative of those. I'm sorry about the word wannabes but I'm up to a better one than that 11 million wannabes. But why would something like Ethereum has massive. Every time I hear about another better Ethereum platform I think okay, well it's more likely to test 2000 and sustainable 4000 which means the whole space is way overdone still. And I think Dave, I really appreciate what you said about you know, I think crypto people are focused a little too much on past of choke point 2.0. I agree you moving forward. But then what markets do is we all learn when markets put peaks, they put in pretty extreme peaks. But to me this is the one that matters. It's that bitcoin to gold ratio rolling over stock market being massively uber expensive. 1.63 in that 10 year note in China it's only 300 base points below the US the rest of the world's yields heading lower. And I still stick with gold and I think it's going to be the better play than bitcoin this year. And here's the breakout. If this, this breakout is one key thing I'm worried about. It's really scary that it's just a little mean reversion up in. That is scary.
- [15:49]
Dave Weisberger
Well the, the gold, gold is up 1 1/2% this morning. That's a move for gold. Like that's not insignificant and essentially it is. It's completely breaking out. And the question I have for you Mike is what did your analysts and economists say this morning about the dollar, about the US dollar and where they think is going from here with rates and tariff impacts?
- [16:14]
Mike McGlone
Yeah, I was very good from our, I think some good stuff from Audrey Child Friedman, our rate analyst. He thinks it's going to be hard to get that Euro much below parity. What I'm sensing from her and a lot of analysts are underestimating that Trump determination and tariffs. Now obviously I've read a couple books on that and I like don't. Okay, he might be delayed a little bit. He doesn't even have his force in yet. And it's only been how many days? Maybe three weeks. It's just, I mean don't underestimate this and that. To me, this is something that's, I, like I mentioned, I mentioned 30 years ago to tweak things that, that brought out stuff that, you know, from people like me who've been markets for a long time, like, yeah, it's overdue if they just get the rest of the world to realize, no, it just can't have. The same way to say is you just can't. You know, the whole world wants free trade as long as they can have surpluses with the US he's going to do that. So that's the key thing about the dollar, is pretty good dollar resistance around parity with the euro. But here's the bottom line. That's the key thing they said about the bond dollar. But I'll end with this. What Gina Martin Adams has said about the dollar for since 2011, if you look at the trade weighted broad dollar, not so much against the euro, overlaid with the US stock market versus rest of world, it's tick for ticket for what, 14 years now. So when people imply a weak dollar, I'm like, okay, well what does that mean about US Assets in stock market? You have to expect the divergence or they're all going to go down and we're kind of overdue for just a little bit of correction.
- [17:45]
Dave Weisberger
Yeah, that's interesting. Something we have also we haven't talked about that we, we should touch on at some point is, you know, besent talked about how he's, he's going to move out on the treasury curve. He's gonna, he's gonna start issuing longer dated Treasuries, ones that actually have coupons rather than just these, you know, the T bills. Because we need to find demand for Treasuries, which goes back to your point here, Mike, about demand, global demand for dollars, global demand for Treasuries. Well, I think he's quickly realizing that it's going to be very difficult to move out on the curve, you know, without exploding interest expense and locking in interest expense for, for the treasury for a long time. And so this is, this is an issue. And he, so in the last press conference or last report that he, he gave the press, I don't remember, I don't remember if it was, if he was standing in front of a microphone, if he just issued a release, but he said that they're they're not going to change their expected issuance of Treasuries, which means that they're going to stay on the, the short end of the curve and keep issuing T bills. We have $9 trillion of, of debt that's coming due this year that we have to refinance. Like this is, this is a ticking, like a little bit of a ticking bomb. You know, they can keep pushing it out. There's no, there's. Right now we're over the, we're over the debt limit, so we can't issue more debt, really. So we're just going to continue to issue T bills and, and refinance. I know, Dave, you're thinking about it, but it's, it, you can't. We've just got to do extraordinary measures to manage the, the drawdown of the, the general account and do the best we could can until we have an agreement.
- [19:31]
Scott Melker
But we know exactly what the, the debt that has to be refinanced at is currently financed at. I hear a lot of conjecture, but I don't know what the actual number is.
- [19:39]
Dave Weisberger
Just think, just think of it. Every time a piece of debt matures, the, the investor gets dollars and they're going to turn around, likely reinvest almost all of those dollars back into more debt. I mean, it's likely what will happen. So it's not a, it's not as big of a problem as people may believe because of that. But what we're seeing, what I just thought it was extremely interesting to hear after all of, you know, the talk about we've got to move out on the curve, we got to move out on the curve, we got to move out on the curve. And then suddenly the reverse repo is drained down. You know, there's, there's, I think about a hundred billion dollars or less left in it. I didn't check this morning. And we're going to stay on the short end of the curve. So this is gonna, this is gonna get interesting. Where's that money gonna come from? And that goes back to Mike's point. Is this going to come from the stock market, where people go into money markets?
- [20:30]
James Lavish
So, so James, could you expand on that? There have been a lot of people talking about the reverse repo. And you, you're the first person that, that I know that's actually talked about that extensively. So a lot of people are talking about reverse repo being drained, and therefore there has to be some new place to get liquidity or the gears of finance could, could seize up. I think that A lot of us would like to hear, you know, once a reverse repo is drained in it, for all intents and purpose it is, what do they do next? Is there, how would they refill it? Or, or what is the risk?
- [21:03]
Dave Weisberger
Yeah, you've got to draw down on the, on the bank reserves. The bank reserves are, I think, I believe they're about $3.2 trillion. Correct me if I'm wrong, Mike, but that's where I believe they are right now. And so these got hundreds of billions of dollars you can still draw down there. But those are bank reserves. They need to buy Treasuries. They're not going to be buying T bills. So that's where you go out on the curve a little bit. But I think what the, so the, the reverse repo is just excess cash that's in the system. There was so much excess cash from the money printing back in COVID lockdowns in 2021, 2022 that the reverse repo got up to $2.6 trillion. That's just excess cash in the system that's being parked in money markets. And so money markets turn around. They buy the reverse repo because it's a very, very, very liquid overnight Fed window where you can take cash, get an effective treasury rate yield, a T billed yield and then, and it's overnight, it's an overnight commitment. So you can really move around cash very easily. They love that. The second thing that the money markets buy are T bills. They love T bills because, you know, and they'll buy some longer dated Treasuries to, in a, you know, the way they manage their liquidity. But by and large they're buying T bills and reverse repo. So now you, the reverse repo has been drawn down because we've been issuing, the Treasury's been issuing so many T bills they've been take. They've been drawing money out of that reverse repo because it's just a little bit better rate than the reverse repo. And so getting the money markets by the T bills instead. And then these are, these are things that are just a few weeks or a month. And so they're, the liquidity is plenty for them. All right, so now you've got the money markets and T bills. There's nowhere to get more T bill money except other assets. And that's just the real or, or you've got to print more money. And so but they're not doing that yet. We're still on technically on QT in that the, the, the Fed is allowing $25 billion of their treasures that they own from QE to roll off and mature. And they're not replacing them right now. So that's kind of what's happening on the back end of the curve. The treasury is, is doing something that, that they're regular treasury buybacks. It's buying off the run treasuries just to create more liquidity. These are illiquid treasuries that are in the market. So if you're a bank and you're sitting on these, and we've talked about this before, Mike, with the big run, that big dot matrix run. If they're not on the run, that means that they're illiquid. The treasury's out there buying those to just keep the market liquid. Is that qe? It's qe, not qe. You know, it is, it's, it's promoting liquidity in the market. That's just what it is.
- [23:55]
Mike McGlone
I'll just, I think Dave's got, I just want to follow up on your, what you mentioned, James, if I can just share screen a little bit. You mentioned bank reserves. I was just kind of playing with the chart. This is a chart of bank reserves. You're writing about $3.2 billion and.
- [24:10]
Dave Weisberger
Trillion.
- [24:11]
Mike McGlone
Trillion. Yeah, sorry, zero. But you know, just look, this is what sparked the, the evolution or the, the birth of bitcoin. I mean our data, we only started. Bitcoin was started trading at $0.06. But you know, bank reserves jumped up from zero to you know, we're 3.2 trillion now. And have they come back, they've come off 4.2 trillion. But. And then you overlay that. Bitcoin was part of that life. Now we of course have 11 million cryptocurrencies. But I just want to point out to me how insignificant public debt is now compared to the stock market capitalization. Now we mentioned this before, we're basically about 20 year low. So what is this sore thumb in the space? Stock market capitalization has to keep going up. We're, you know, 57 of u. S. Stock market capitalization. That's total U. S. Government debt now. Yes, we all know it's run away. It's part of the reason some of us remain bullish gold. But it just means this. The, the elephant in the room is stock market capitalization.
- [25:07]
Dave Weisberger
Or, or, yeah, okay, go ahead, I want to hear. Go ahead Dave, because there's a, there's.
- [25:11]
James Lavish
Another very simple question. If you took both gold in the stock market market capitalization and divided it by Growth in. In total. In. In total liquid printed dollars in circulation, whether that be M2 or M2 plus government debt issued. How does it look? Because I think that it's mo. Most of that. That stock. I don't think the stock market's up at all during this period of time. Nearly as much as the denominator there. And I think gold has been slow to move because of, you know, James Friend, you know, Lawrence Leopard, who just has a new book that more or less says this, that the gold has been manipulated. And so that's why. And the manipulation is just failing now. And so expect to see gold between 3 and $5,000. I'm wondering how much of this is just pure monetary inflation. You know, I always laugh at PhD economists saying the dumbest fucking thing. They always say it's like, oh, well, you could print money without inflation. There are tons of them. Well, no, that's not true. Every time you talk, Mike, every single time you talk, you're a walking testimony to my point. Without my, without a PhD, without even a master's in economics, just undergrad, that I can understand that when you print lots of money, you always get inflation. Milton Friedman was right. It's just that the governments have managed to push that inflation into assets. The most obvious asset of which the financialization of which is the stock market. So you and I agree on that. I just don't know how much of it is a reversion to a mean that you think that can never happen because we've had all this monetary inflation. Yeah, you know, that, that, that's the point that I, that I really want. And I'm curious, what do you think? I know Larry would agree with me. I'm curious what you think, James.
- [27:01]
Mike McGlone
Well, James, why don't you answer that question? But you, Dave, you asked about overlaying some markets. So let's just overlay what, what's happened with, with gross money supply. This is a measure I've. Scott, if you can share that screen total. Since the end of 2019, it's really, really mattered as money supply has jumped 40%. And the total return, the stock market's up 102%. But you see that big breakaway, and we know why, because the government spent a lot of money. But the key thing I like to point out is the thing that always usually happens in history when you have massive money pumps, massive inflation pumps usually go to a period of disinflation or deflation. Now China's doing that. That's my point is we're still talking about 3% inflation. This number is still going up.
- [27:42]
Dave Weisberger
So it's, let's expand on that. Let's expand on that Mike, because, and Scott, I've got a screen to share. This is Michael Howell's the chart and he does a little bit deeper dive on liquidity. I, I've always looked at liquidity on M2 and global M2 and all that. He, and he incorporates, you know, expansion of debt, shadow debt and, and then liquidity with the, with the debt that is pinned to collateral which means that the, the volatility of, of debt and, and interest rates matter. Okay so anyway what you're seeing here is exactly what you said Mike is the, is msci, the, the S P has just gotten away. It's, it's, it's run away from itself here. It's just, it's gotten ahead of itself. Right. It's really moved above that mean of, of that expansion of the global liquidity. Right. So if you then look at the global liquidity it's it, it actually bottomed in 22 and so now we're seeing it rise again. So the question is are we going to have a mean reversion where the S P, the global markets kind of sell off here or are we going to have a quick drive to expansion of liquid liquidity to meet that mean? That's the question. And I think that we're going to have an expansion of money because of everything we talked about the beginning of this conversation which has to do with Trump getting interest rates down, the dollar being a little bit weaker and, and the, the Fed coming off of interest rates and making it easier to access capital, that's my guess.
- [29:31]
James Lavish
But either way, when you take the liquidity into account, the 20 year, all the points that Mike makes, which are very valid if you look at it without, you know, based on inflation adjustments but not actual, you know, growth and liquidity adjustments. It takes the extremes out. I, and a lot of the people who, you know, the, who laugh at the perma bit at the perma bears that say that we're, we're extended extended. IAD doesn't matter. You know, they hang their hat on this. Now I'm in between the two. I, I do not, I am not a permeable when it comes to the stock market. I mean I think that a very narrowly focused, you know, I think the seven stocks, some huge percentage of, of the rally market is not healthy. I think when you look at the, the price, all the various fundamental metrics, they're all extended and they're all extended for a very good reason. They're extended because people have been pushed to put things in. And Mike is right and do not underestimate the point that he makes, which is without the wealth effect, what happens to the economy. Now the leaders know this and therefore they are going to continue to create that, that, that, that situation and keep kicking the can down the road. The problem is what's fraying at the edges and what is why gold is, is, I hate to say running. I actually think gold has been a, a beach ball that they've been holding under the water for a long time and they're starting to lose their grip on it. I think that's more interesting and I think a lot of that upward thrust is going to end up finding its way into bitcoin. We're not talking about crypto now. Now we're talking about bitcoin. And I think when bitcoin does break the range and the malaise in the crypto market ends, etc. I expect Bitcoin to outperform gold, but I expect both of them to outperform the S and P over the rest of the year. And I think that's important because people think of it as binary. It's not a choice. There are n people in this world who buy gold as a safe haven, as a monetary asset. It's why gold is more than double platinum. Actually, it's getting closer to triple platinum, despite platinum being 30 times rarer than gold and generally throughout human history being more prized for jewelry and industrial uses, etc. What you're seeing is some people buy that. There are also people, smart people who are buying bitcoin for the same reason. The difference is, is there's no asteroid that could be mined for bitcoin and there's no. The supply is just so much smaller that I expect it to get very close to parry pursue this year. So as gold, what people need to understand is as gold rises, the intermediate top for bitcoin rises at the same time. Right. And considering gold's market cap is 10x is Bitcoin, every 1% increase in gold increases the potential for bitcoin to go up by 10%. And so that I think is what you're seeing. And so that, that's my bull case. I mean, people who say this is Dave and Mike arguing all the time. We don't disagree on the fundamentals here. We don't. Where, where I disagree is I think there are a lot more. There's a lot more money and a lot less Supply in bitcoin, we're not talking about the rest of crypto. The rest of crypto is a different thing. The rest of crypto, I think you're going to see a rotation. I've been calling for it all year. You play back the tapes from in November when I said that. I think the theme that will eventually assert itself will be real utility will win out over memes. But right now it hasn't happened. No, they've all gone down.
- [33:06]
Scott Melker
The problem is there. Yeah, but the problem is there. And listen, I don't disagree. I hold a ton of these tokens. I believe that these layer ones, while I'll find product, market fit and do well. But the problem is tokenomics and supply. Right. So the problem is they're not stocks. And finding utility does not necessarily mean that the token has to go up if there's billions of them being unlocked onto the market every day. That's correct. I'm just playing devil's advocate, but no.
- [33:33]
James Lavish
No, and we don't disagree. Scott.
- [33:35]
Scott Melker
Yeah, as James always points out, it's gambling. But there's a reason that the Meme Coin casino is going crazy. I'm going to bring this back up. I mean, for people who didn't see this, I mean, you got Dave Point Portnoy literally pumped and dumped two tokens, admitted it, asked on Twitter if he's going to go to jail for doing it, and then is pumping a token called jail stool or something, literally as a joke about him going to jail. Right. You have CZ tweeting about Meme coins. You have an entire African country that the Central African Republic that launched a meme Coin. This is where all of the money is. The money's coming into bitcoin, the rest is going into memes. And it's going to be very challenging if it's institutional money coming into bitcoin for that to find its way into thousands of new tokens that may legitimately have utility. I'm not saying it won't happen. I believe there will be alt seasons of a sort, but there is not enough money to. For everything to go up all the time.
- [34:29]
James Lavish
So people like lottery tickets. One of the worst jokes, because it's unfortunately true, is lottery tickets are a tax on the poor. Now, what, what, what, what? Why does that. Is that such a bad joke? Well, because it's true. And what do we see in the world of crypto? We see a lot of people buying things because they think that if they can't get 100x, it won't really matter to their life.
- [34:57]
Scott Melker
That's right.
- [34:58]
James Lavish
And that that amount of money is always going to exist. It's going to exist more in Asia than in the United States. But believe me, there are plenty of people that are degens in the United States that, that want to do that. And when you're playing with that kind of sloshing money around, you're always going to get a lot of noise out of it. Most of us in the crypto world believe that there is a lot of real utility and real value that's going to get created. It hasn't happened yet. And what we keep talking about outside of Bitcoin is what's that value? The only token that's really created a lot of value outside of Bitcoin. I shouldn't say only because I'll get, well, Solana and potentially Solana because it's the casino. The token that's most likely to create value outside of, outside of it is probably XRP because of all the banking contacts and all the other stuff and you can have nickel on and talk about it etc. And you know, look, I, I own both of them. I'm not gonna lie about it. I've been very, very clear. You know, when I won a lottery ticket, you know, I was given for my birthday, let's see if I can get this thing, you know. Yeah, here's my lottery ticket. It's exceedingly unlikely to mine a block, but if it does, cool, I get, you know, if, if it does, then I get $300,000. So you know, how much ever a nerd miner cost is now a $300,000, you know, lottery ticket every 10 minutes. It's very unlikely to hit.
- [36:25]
Scott Melker
I agree with you fundamentally on XRP's relationships, but what I've never understood, and this is not hate towards xrp, is that all that can happen without XRP token moving. This is a perfect example actually of what I was saying, which is that the value of the contacts and all those things on any of these networks, utility doesn't necessarily accrue to the actual token.
- [36:47]
James Lavish
Well, yes and no.
- [36:48]
Scott Melker
The company can do exceptionally well and XRP could just, just languish or go sideways.
- [36:53]
James Lavish
Right, considering. No, I, I want to be clear. I think most of the people in the XRP army on Twitter, the vast majority, say things that are so dumb that it makes me want to ignore and, and throw hate and gasoline on, on the token and just say you guys are a bunch of morons. I can't stand cults and whatever. And that is a Fact, Mickle, however, is not dumb. John Deaton is not dumb. There are a lot of smart people and I went through the numbers and the numbers basically say that if they get the market share of getting into Swift or FedNow or any of the things, the probability, probabilistically speaking, if it gets there, the token will go, will be worth between seven and ten bucks. And if it gets more than one, it will be more than that. And so if you attribute a 50% probability to that, then I come up with a reasonable valuation right now, an expected value of around 5. So buying it between 1 and 2 made a lot of sense to me. Right, that that's the way I look at it. Now note, I'm not talking about XRP eclipsing Bitcoin. Note, I'm not talking about XRP going up by a factor of 20. I guess anything can happen in a bull run, but I do see a base case there and you know, one could do Solana, I think I'm a little bit more bullish on because I do think that they will continue, that this casino will continue, but it will all branch out into other things, other markets that it could be part of. And that is, that does matter. So look, you know, we could value crypto all day long, but on a macro show, what we really all need to acknowledge is we've, we're living in a world right now where the President of the United States administration is operating at a pace that they've done more in three weeks than by the Biden administration did in four years. And the best is coming yet. I mean, the things that are coming out are amazing. Now, do any of us believe that? I think DOGE is going to be successful in a lot of what it does, but the scope for what it can do can't stop money printing. We still have to grow our way out and that takes time. And so anyone who believes we won't have continued money printing, I think is delusional. But I also think it's delusional to think that they won't be able to eliminate barriers to entrepreneurship, which could, could cause growth, but that growth is going to happen slower, which is why read the body language and read the room. Everyone involved says you're going to feel short term pain before you get longer term gain. And that is what they're trying to do. And some of the stuff that's come out is insane. Right? You know, people, the USAID stuff, that's insane. The one this morning that FEMA spent more money to house migrants in New York luxury hotels than they don't than they gave to the people in North Carolina. You want to get people mad. How's this for a, for, for a stat. When's the last time a president had over a 50 approval rating? Well we got one now and we got one who's arguably the most bifurcated politician in U. S history is over 50%.
- [39:55]
Mike McGlone
Well and think about just seeing him at the Super Bowls. That's a clever move. The guy from a marketing standpoint is just the most clever person. He go, he gets that he's crushing it. So you know I just have to bow in his general direction. But it's the key points about you said the more pain the cane the pain for the gain. We can't guarantee the gain. And that's the key thing I'm concerned about is just the next trade I'm looking for is that pain. I just look at the optionality of it. So I'll just macro over to the macro. But I'm a commodities guy so this year so far WTI crude oils peaked around 80. Right now it's on 72. I don't think what stops it going to going from 40 and on the number one thing that needs to just stay stable is US stock market. It stay, it has to stay up. Corn looks like it peaked. Natural gas looks like it might have peaked. And we got a lot of these positions got all along. The only one that commodity major one that's been going up is copper. It's actually beating corn but that's because of tariffs. That's US copper copper and LME is at a 30 year low versus CME copper. So from a commodity standpoint we're getting this little bounce. People are excited about it. And then I look over in China and like okay what's going to make things better there versus what's happened in Japan and the Soviet Union 30 years ago. It's all tilting that way. It's just what stops that. That's why there's increasing dependent on the US stock market.
- [41:10]
James Lavish
Sorry, I want to make a point. You just literally made my point for me. You have a president whose goal goal is to lower the inputs into consumer inflation, namely oil drill baby drill, namely mine, namely produce. All of that. He wants consumer disinflation. At the same time he needs asset inflation. He won't say it but he needs it and he wants to do it. And he wants to unleash entrepreneurship which is code for make. You know, let people be willing to pay more for growth and more for multiples. That is literally the policy. And if he's successful, and you're right, that he's successful, that he can push oil. You know, it's funny, I don't know if you've seen it.
- [41:59]
Dave Weisberger
And remove red tape for companies. I mean, that's right.
- [42:01]
James Lavish
Well, that's what I mean by unleash growth. But did any of you see the. There's a. I think it was an Apple show called. Or maybe it was Paramount. Paramount. It was a Taylor Sheridan called, called Landman. Billy Bob Thornton has some incredible, you could find it on YouTube. Just some incredible rants in there where he talks about the economy and he talks about the importance of oil being in. And he calls it the sweet spot. His sweet spot is right where it is today. And his point is that if it gets too low, it turns the oil basin into a dust bowl and investment stops and it's going to trigger itself for an inflationary coiled spring. And if it gets too high, it strangles the economy. And that's not good because people can't buy it. I hate to say Taylor Sheridan is driving United States industrial policy, but that rant was epic and, and true. Right. He, he nailed it and.
- [42:57]
Scott Melker
Right. But they have to do that for everything. Right. That, that's what's always been impressive to me. I would listen to James talk about the reverse repo, right. And all of the different levers that they have to pull to keep that sweet spot in every single one of these agencies. And in the reverse repo, in the treasury, in the Fed, in the stock market. And now we're talking about Trump needing to be in a sweet spot where he needs short term pain with tariffs for long term gain, but wants assets to go up. I mean, that is a challenging challenge.
- [43:31]
James Lavish
Right.
- [43:32]
Scott Melker
I need the market to go up, but I need tariffs and I need, you know, trade wars.
- [43:36]
James Lavish
Energy is the core, Scott. Energy is the core. It is the key input into the key input that they can potentially move in inflation. They're not going to get unions.
- [43:46]
Dave Weisberger
Consumer inflation. Consumer inflation.
- [43:48]
James Lavish
Consumer inflation. And remember, they're trying to engineer consumer disinflation with asset inflation. Anyone who thinks other than that isn't paying attention. And so I do think that's relevant. I'm sorry. But you know, and that's why it disturbs me. I mean, I, my brain can't handle paying, you know, generationally high prices for future discounted cash flows, which is basically boil down Mike's argument and I find myself agreeing with him. Yet I know that the system is rigged in order to get people to want to do that. But that's literally the world we live in. Yeah, right.
- [44:33]
Scott Melker
I mean, yeah, I just think it's an incredible challenge that they have right now. And it's funny, I mean we get these narratives. We talk about gold and we talk about, about bitcoin. Just quickly I brought this up before. Bitcoin lags behind gold as Trump's trade wars spurs safe haven demand. Okay so everybody at Bloomberg or the mainstream media expects that gold's going to trade that bitcoin's going to trade exactly like gold. But then when stocks go down and bitcoin goes down it's trading exactly like stocks. But then when stocks go up and bitcoin goes down, it's not trading like a risk asset. Maybe bitcoin just isn't digital gold as a trading asset and it's not a risk asset as a trading asset and it just trades on its own. I've said this over and over again but it almost feels like a disservice to bitcoin to try on a daily basis to compare it to the price action of gold or of stocks when in reality if you zoom out it doesn't really follow either. You can be digital gold without the price moving with gold.
- [45:27]
Mike McGlone
Well it's just one of those factors Dave loves when you do your value at risk model. But if anybody leverage beta is what I still look at Bitcoin is I want to see it prove the otherwise anytime the stock market drops 10% almost always Bitcoin drops 30% or more. And that's this way it's been you're seeing what's happening with the alts. You see what's happened with theorem. You see you know what the the rules, unlimited supply. Yes I get the, the whole trip the Trump positivity. But I want to tilt over to what we were just pointing a little bit about energy where I see the next big trade. Now show you in this chart you you look at the average price of gasoline in this country I wrote a couple months ago as I think it's going to two because it always has. That's what I show. That's the average price is 3.13. And I just the same exact chart. If you overlay with the US treasury yield this is a 10 year note. Look at that. It looks pretty extended yet there's pretty in periods of time where the basically the same thing then we'll just rope in the rest of the world. How about the world's second largest economy open their 10 year note yields and they're collapsing. This is all on the same scale. So the key point is what stops this? What makes the price of gasoline go up? Well that would probably be bad for Mr. Trump so he'd do something about it. So I'm just looking for this little thing here. This is that US 10 year note yield which is I think is going to be the next big trade. I've been wrong. Just drop down here, drop a handle, drop to 3% and then we'll reassess what's going to take. Yeah, Fed easing, stuff like that. And that's just, that's one little 10 correction in the stock market stuff that used to happen to me.
- [46:49]
James Lavish
That's yourself the question. I'm not disputing what you said. If you're right then Scott Besant is hailed as a genius because he's cut 25% off of the largest single line item in the budget and he's kept it that way for 10 years. If he's capable. If you can get drive rates from 4.5 down to 3 and at the same time take that, you know those trillions of dollars that need to be rolled over and put it into the 10 year. He's a God. He goes into the pantheon of financial gods because that is exactly, that is the nirvana situation. And trust me, if I'm sitting in his office working with him, which would, you know, he, I actually think by all accounts he understands everything I just said and is trying to do that. It would prefer for people like me not to say it because it's what they want to try to accomplish. That would be a magical outcome. That is, but, but that is what they want to have happen. Now whether or not they're going to be able to do it is a different story.
- [47:52]
Mike McGlone
Well that's the key thing I could point out. It's, it's the cycle right now. You have to look historically at least on 100 year, 50 year basis. The Trump, let's look back from the future. How's the Trump administration going to be judged by the level of risk assets in. It's really, really a bad time to be becoming president. Say risk assets are going to make them make things better because they're so expensive already. You want to come in when they're cheap. Look what happened with Reagan. He turned, turn is the best ever. He, you know, it made a big difference. Just there's just so expensive. And that's my point about what you said, David. I think they're just tweaking a normal trend for reversion that's gonna might not be so look so good for the administration but for all we care about is risk assets. We're here to make money trading and investing. To me that's the key thing that's going to matter. It's just the thing I enjoy is when we're going to make the US Better when we're already the most expensive ever versus rest of the world in stock market capitalization and we're only 20% of the GDP, we're only 5% of the population. That's kind of pretty extreme.
- [48:55]
Dave Weisberger
Got to bring up a chart here. Talk about what Dave just talked about. This is percents issue, right. As the Fed, as the Fed has eased.
- [49:05]
Mike McGlone
Yes.
- [49:07]
Dave Weisberger
A full percent, the u. S. 10 year treasury has risen by a full percent.
- [49:14]
Mike McGlone
Yeah.
- [49:14]
Dave Weisberger
So the, the yield. So this is the problem. As you. As, as he eases the tr. As the, as the Fed eases the bond traders and investors realize that this could create more inflation in the future. And they're looking at just the sheer amount of debt that we've got to issue in the future and they want to be paid a real rate of return. That's the problem. So even if the Fed does ease, it doesn't mean that the 10 year is coming down or that the 30 year is coming down and interest rates for mortgages are coming down. That's the big issue.
- [49:56]
James Lavish
Now can I, can I piggyback please.
- [49:59]
Dave Weisberger
Somebody explain to me how that's solved.
- [50:01]
James Lavish
Because I want to be really clear. If you've been watching the speaking over the last two weeks, you've not heard, here's what you haven't heard. You haven't heard Trump in fact disavowed it. You haven't heard cut rates, cut rates, cut rates. What you're hearing is we want the long end of the curve to come down and we're going to take.
- [50:23]
Dave Weisberger
You're hearing that interest rates are too high, not the Fed needs to cut rates. Correct.
- [50:28]
James Lavish
And so you know, I often do the left hand, right hand nonsense. Right. You know, this is the, is rates, but this is the liquidity spigot. I think what you're gonna see, because there's no need the, the short end of the curve is more or less where it probably should be. And what they want to try to do is bring the long rate down. And so they pretty much can't cut short rates knowing that there's a risk that it will have the exact opposite impact of what they want. People don't the government doesn't care about, you know, overnight lending from companies perspective. What they care about is the fact that people can't refi their houses and take money out of, out of, out of house, out of houses, which is all dependent upon the 10 year not on, on the overnight rate and that.
- [51:15]
Dave Weisberger
They have to refinance all this debt at higher rates.
- [51:18]
James Lavish
Right.
- [51:18]
Dave Weisberger
They care about that.
- [51:19]
James Lavish
So you're going to see a, what you, what I think is highly likely my scenario is the, the, the, the Fed will do less politicized, less, less publicized QE of sorts in order to work on the long end at the same time that they hold interest rates where they are claiming that we're in a neutral. You're going to start seeing the language saying well we think interest rates are in a neutral, not accommodative stance. Chance you're going to see they're going to jawbone it that way and then they're going to start working on the long end of the curve and at the same time hope that they can get enough public wins from Doge to get people believing the US is going to be able to fix their problem which by the way they're likely to get. And people might actually not do the math to see that it doesn't really matter if they can't hit the long end down. But that's the policy. It's like the old example, the oldest expression we've all said. It's, I mean Mike used to have hair before the first time he heard it, which was don't fight the Fed. Well, what the Fed is trying to engineer is financial, is more financialization, less overnight accommodation, but really financing the deficit and financing the long end of the curve, which is what really matters. I think that's what you're going to.
- [52:34]
Scott Melker
See because the market is fighting the Fed. Fighting the Fed right now.
- [52:39]
Mike McGlone
It has been but that's, that's why I think we rope to solve and let's, let's wrap this up with one key thing. Bessant's not an economist, he's a trader and he gets it much better. Powell's a lawyer. Nothing. And it's one thing always.
- [52:52]
Dave Weisberger
Exactly.
- [52:53]
Mike McGlone
Yeah, exactly. So it's, he's a trader, he gets, he knows as a trader X trader, treasury trader. That's why I started a business. The number one factor now and think we discussed a year ago is oh, they, if they ease what's that going to do for risk assets? It did and, and now what did it do for inflation? It's Sticky. And now what's the Fed doing? They're stuck. And so on a one year basis, gold's up 44%, the S&P 500 total returns 21%. I think Bassett gets it. If we can just have. That doesn't have to go down, just kind of reduce that wealth effect. Bond yields are going to collapse because they already have in the rest of the world. And he knows the trade's completely in his favor. It's just how you tweak it without too much pain. And that's why I look at it every day. I think TLT is just a very nice positive returning a put on the S&P 500 now. And yeah, I've been early, I've been wrong, but I was in 2006 and I was in 1999.
- [53:42]
James Lavish
But there is a scenario, Mike, where you're, you're, you're half right. The scenario where you're half right is that they get long rates down and there's a rotation in the stock market towards companies that have to finance themselves on the long end and pulling a lot of the exuberance out of the, the absolute high flyers where the market languishes but doesn't, doesn't rip up and doesn't collapse while rates come down.
- [54:08]
Scott Melker
And that was, come down but bonds cannot perform well.
- [54:12]
James Lavish
Right. So the trade that, that I'm talking about is, you know, the, a world where the Russell outperforms the nasdaq. Right. You know, or outperforms the high flyers or the NASDAQ rebalances because new high flyers emerged because of regulatory changes that allow them to, to, to emerge. This is, this is to say this is steering a battle. An aircraft carrier is underestimating. And this is a incredibly complex thing trying to manage economies. And governments aren't particularly good at managing economies, managing markets a little bit easier because you can kind of kick people in the right direction. And, and this government understands that they can't manage the economy. They want to unleash it, but they absolutely understand what they, what, what market outcomes will be good for them versus bad, particularly in 2026. 2025. With all due respect, they don't give a crap. They claim they do, but they don't really care about market returns in 2025. They care a lot about what, what's happening in markets and what people's perception is in 2026. Because that's when the midterms happen.
- [55:22]
Scott Melker
I mean, I think it's the only time that they can allow the market to dip in the Entire president.
- [55:26]
James Lavish
Right. So, you know, so there's no market put on things. But, but markets do cause pain. You know, markets like to humble people. Why? Because markets are trying to discount what will happen in the future. And so it's like I always come back to the princess bride. Right. Surely you can't choose the glass. The market is saying, well, yeah, we know that they, they don't care about 2025, but they do about 2026. But I'm investing for 2026. So what do you do? I mean, that's the sort of crap that we have. But, but the key point here that Mike and I, where we agree is they really want tlt, they really want the long end to come down. And markets are looking at that, saying, okay, maybe they're going to succeed. And if they succeed, what does that mean? And I think that's a really important question for investors as you try to understand your portfolio.
- [56:15]
Mike McGlone
So the key question for that, Dave, is what if they don't succeed? That's my point is it's. There's no option.
- [56:21]
James Lavish
It's a. If they don't succeed, then, then I think overvalued assets are going to be problematic. And I think you'll see that gold S P ratio go. What I'm basically trying to tell you is your two trades are. Well, let's, let's say they hedge each other.
- [56:41]
Scott Melker
Sell Nvidia into the Russell.
- [56:43]
James Lavish
No, no, no, no. The two trades, the gold outperforming the S P is far more likely if long rates don't drop. That's kind of my point. So I think those two trades together make an interesting portfolio because they sort of hedge each other. Yes. It's a scenario where both can do well. I'm not sure there is a scenario where they both do badly.
- [57:07]
Mike McGlone
So I think, I think part of it, I think gold accelerates the outperformance of the S piece when long rates drop. So we have a great trade because it's going to take for long rates to drop. Got to reduce the wealth effect.
- [57:22]
Scott Melker
Well, as we come to a conclusion, I just want to tell you what else has been a great trade and that has been buying bitcoin. Right. And we have obviously Meta planet here up 4800% since buying Bitcoin. That's Japanese stock, effectively from a failed. I think he's a hotel company that decided to put bitcoin on the balance sheet. You have Saylor once again buying. You have 22 states and counting now proposing strategic bitcoin reserves. You have President Trump's world Liberty Financial itself creating a strategic token reserve. As you see them buying up everything but the kitchen sink, I think it's pretty clear and maybe this tweet actually is the best summary of it from Matt Hogan. There's an absolutely massive disconnect between retail and professional sentiment in crypto right now. Retail sentiment is the worst it's been in years. While professional investors are extraordinarily bullish. It's like living in two completely separate worlds. To me, that is the recipe for a massive bull run. A massive bull run. Because if the big money's buying and the small money is bearish, they're just going to be the ones who catch up when prices are much higher.
- [58:26]
James Lavish
Yep.
- [58:27]
Scott Melker
Yeah. So listen, we'll see. But I think that if Trump, quote, unquote destroys bitcoin or triggers a massive bull run as the title, I think it would be very short term. Term if it's down, but long term, there's just too much fundamentally, fundamentally happening to push Bitcoin down too far. It would be that that balloon pushed underwater.
- [58:46]
Dave Weisberger
Fully agree.
- [58:47]
Scott Melker
Yeah.
- [58:48]
Mike McGlone
Yeah.
- [58:49]
Scott Melker
So we'll see what happens. Right. But I can tell you that these tariffs don't seem to matter much for, for bitcoin, maybe for gold. That's all we got, guys. Macro Monday once again. We will be back next week at 9:00am Eastern Standard Time. James, Dave, Mike, thanks as always for being a part of this incredible show, guys. See you tomorrow, 9am Bye.