Speaker 1Whether Trump is doing this or the Democrats are doing this, it is becoming systemically critical to the health of the economy. If *** hit the fan, there would be bailouts. We just passed like a critical psychological threshold where a lot of the FANG companies went cash flow negative for the first time. I think there's a relatively short window to get really worried about the systemic risks that it may pose to the economy.
Speaker 2This was the first AI-led business cycle. NVIDIA, Google, Amazon, Micron, SpaceX, Anthropic. That's where the new credit expansion is going to come from. That's the monetization. We thought it was going to be quick and easy. It all funnels into each other. All of this is building up a system for. Bitcoin just has to survive.
Speaker 3All right, gentlemen, welcome to the show. We have a first-time appearance, Matt Dines. How are you doing? Hey, great to be here. Thanks, Rob. Absolutely. And Marty, a repeat appearance. How are you? Doing well, Rob. Glad to be here. Yes, very glad to be having this conversation with you two because I really enjoy whenever you two are on a podcast together. We're going to talk about what is going on in the world today. If you look at the headlines, it just seems like madness. But if you have a lens, it can start to make sense. And I think that Matt Dines has one of the most interesting lenses out there on your own podcast, Mindprint Hash. And so let's start off with you, Matt. If you had to describe or explain the grand macro strategy, of the United States, since Trump took back over in January of 2025, how would you explain it to the layman?
Speaker 2Okay, so there's two swim lanes here. I'll stick to, like, just to start, this is Bitcoin news, right? Start from the standpoint of Bitcoin when it arose on the scene, 2008. Slowly, we're coming to revolve around, you know, a trustless, you know, decentralized ledger of money. So that's what's going on in the background. I know. You can kind of miss that, I guess, forest for the trees, if you will, not to steal other people's taglines. But that's the big thing where I start from, right? May not seem to be there at all times. But for the Trump administration coming in, one angle that I look at it as is a displacement of, like, two competing power structures, right? We had the 2020 to 2024 Biden years. I was really focused on moving the Fed, the central bank, the monetary transition, a specific direction. And you had executive orders, like, to, from Biden's, you know, Autopen desk, to go out to all these agencies and come back on, hey, what's the feasibility of a CBDC, like, from the DOJ standpoint, like, whatever, just every little, you know, little political fiefdom in Washington, D.C. As soon as Donald Trump came in for the 47th administration, like, January 20th, it was really, if you look back on the tape, the executive orders, it was really hit the ground running. And if you, if you go back and look at the sequence of events, there was a very clear fork in the road there. We're going a different path. And just to make this even more complicated, right? This was already a path that was underway. We talk about the broader, you know, the Bitcoin, bigger primary wave. There's also this displacement going on from the old offshore dollar, just global financial system that was really installed, you know, as part of the post-World War II, I guess we'll just call it the global political and economic and financial order. That thing is unwinding as well. So that was already underway. You know, we deprecated LIBOR, the marginal dollar and overnight funding markets and repo money markets shifted center of gravity from London to New York City. That process continues. We can go into that with some big financial infrastructure developments coming down the pike in the next six months. But all those things were kind of coming to a head, right? So 2025 election, we chose that river. We're getting away from the offshore dollar. We have to move to something else. And that's part of the credit bubble when we talk about the Fed, the money printing, all of that. You know, in Bitcoin, especially in 2020, we focused on one specific room of that bigger dollar house. Not realizing like, holy crap, there's a 15,000 square foot house here to explore all of that going on. All right. So you go through the Trump executive orders. You get a lot of things like, all right, stop. The first one was stop immediately. The work that Biden had you guys doing, all of your political fiefdoms come back, report on whether the CBDC route is feasible. And then we started seeing things, well, number one was the token, right, that he promised at Nashville 2024. Free Ross, right? So he delivers that, you know, I guess prisoner exchange would be one way to think about it. But it was meaningful and extremely symbolic, you know, in my, you know, framework or mental map of the world. And then he gets into, you know, signing executive orders, like, hey, all of these Bitcoin that were stored around, you know, different branches of government or someone's, you know, desk in a, you know, a ledger wall. Or someone's Coinbase account over here. Like we're going to aggregate those all up and those now need to be parked at Treasury. So you started to see the movement towards US Treasury dominance again. And when we, when we think about that as Bitcoiners, right, we've been sold this narrative of the credit bubble, fiat money, nothing stops this train. But in my point of view, to get all of that to work, you had to have a US Treasury under the executive that was willing to. I guess like take a backseat and buy into this offshore dollar system, which was extremely profitable for them for, you know, 50, 60, 70 years. We had to have a moment where the Treasury had to like stand up, assert itself and like not keep letting the dollar. Be vandalized. And if you put to that, you're saying like not letting the constitutional order keep degrading. Right. So you saw that foot being put down. And then we started to see the slow. Development of like the new infrastructure scaffolding that a new dollar can be built upon. And I'll just be totally honest, like say we wanted to get done, you know, a hundred, you know, as a, just an arbitrary number of, of progress in two years, I think we might've ended up getting done maybe 25, 30, something like that. Like we got genius act, right? Everything else, the, uh, Bitcoin act failed. Um, the American reserve monetization act failed. So, you know, we, we made more strides. And when I say we, I speak from like a sovereign test perspective, like I, I'm not too shy about this saying, like, I want to maintain the constitutional order, uh, of the United States. I want to have a country if that makes me, I don't know, in the fringe. I don't know. Like, I don't, I just don't know where we are, you know, it's, it's cool to shit in your car. Right. And brag about it. Um, but I guess if, if, if I say I want to maintain. Or uphold the constitution, if that makes me radical, so I don't know, I don't know where we're at. All right. So we get, we get done a little bit, but we don't fully take it home, right? We don't do, we don't even get clarity, like whatever, you know, pros and cons of, of that, uh, just laying, establishing a law of the land for the U S in this digital assets world, as they want to call it, you know, I think everybody here would agree. It's a Bitcoin world. Uh, we're all just living in it. Like the rest of the rest of, uh, humanity is gonna wake up to that fact, I guess, uh, not so much sooner, but more so later, uh, eventually. All right. So I guess that brings us to 2026, right? And so that was the monetary front where we're going. Um, I think ultimately like the, the answer, if the U S treasury wants to continue to exert itself. Right. And I, I, I define those areas like the offshore dollar is an era of federal reserve dominance, right? Because to have this offshore dollar era, you had to have a dominant central bank and you had to have a treasury taking the back seat. And that's where you get, uh, treasury secretaries like, uh, Hank Paulson or Timothy Geithner or, uh, Brady in the nineties, who is basically like pulling Latin America into this, uh, offshore dollar orbit. Um, they were like, it was just profitable that what, that was like the, the way the winds were blowing, people were chasing the financial incentives. That's where we were going. Right. So that dominance, uh, in that old central bank and model, and you can kind of see it in the news or like the way we covered headlines, right? Like what's the fed going to do? Oh, the, what did the market do today? Oh, it's cause the fed, you know, smelled the wind and you know, they said it's blowing that way. Oh, okay, cool. Um, in this era, um, and, and my framework, what I see happening, I see this is, this is treasury dominance as we're moving towards a new dollar. So you start with SOFR as opposed to LIBOR. It's very sick, like it's, it's a secured overnight financing rate is literally what it stands for. There's some collateral behind it. You have to post some IOU, right? It's still, it's still Fugazi money, but it's still a, it's still an asset, right? You have to put some skin in the game if you want to borrow and create a new dollar LIBOR, you didn't have to do that. You just like spin it out of thin air, um, pure, pure on back on secure liability. All right. Um, and then from there and, and the, and the next six months we're moving to cash settlement. settlement, centralized clearing of cash settled U.S. Treasury transactions. But then the big one is going to be the centralized clearing of repo and reverse repo, which hits in June. We can talk a little bit more about that down the road. But all of this is building up a system like for more control of the dollar domestically as opposed to offshore. And then you think about what the Genius Act did is now you're on these new rails, crypto rails, you know, all the unicorn shirt wearers and hoodie bros, the stable coins, right? You know, piping the new, you know, dollar units through these channels. You're back now one to one under Genius Act with a treasury bill, right? So you see all of this architecture. You know, if we had Claude spin us up a diagram, I'm sure it could do a pretty good job. But now instead of this loose, decentralized, unsecured, um, you know, offshore dollar that sits out of any, uh, you know, regulatory purview of the treasury, uh, treasury is, you know, in the backseat, the U S military is pulled in to defend this system, you know, around the world. Uh, you know, every bottleneck choke point, whether it's Persian Gulf, straight to Malacca, where you name it, right? Like we're there as, you know, team America, world police.
Speaker 3Um, well, actually let me pause you right there. Cause we can get into the geopolitics, but just the, the money, right? The monetary standard that is changing. I'd love to get Marty's take on the, the changes that have happened since Trump took back over when it comes to the dollar stable coins, Bitcoin, and how you see the monetary paradigm changing over the last couple of years.
Speaker 1Well, I would come at it. Like, I agree with everything that Matt just said. We've discussed this on, uh, TFTC at length over the course of the last year, but I would, what I would add is on the industrial skull. So I think one of the things that the government's trying to do is like reverse stripping this dilemma, which is like you hollow out your manufacturing base, you export the dollar and the product of that was the offshoring of the dollar into this opaque black box that the federal government really had no control over. And so I think coupled with all of the financial infrastructure, um, sort of base layer fundamentals have been laid out. Uh, that, that Matt just described, you have the industrial side of things. So things like the big bill, beautiful bill, really creating these tax incentives to re shore industrial capacity here in the United States. And so if you're going to make this massive monetary shift and really try to get control over the dollar, you need to de-risk your supply chain. So bringing things home, I think another underappreciated aspect of, of Trump too, that really wasn't Trump's doing, but it was the Supreme court is the Chevron doctrine, doctrine. Ruling, I think that de deregulation to again, uh, stoke, the reshoring of industrial capacity is going to be very important. And I think the effects of the Chevron doctrine ruling are going to be lagging. And so we literally need companies or states to go sue federal agencies that are over-regulating certain industries. And then you think of the national security strategy from last year, which really laid out sort of the, the playbook, obviously the war in Iran is a bit confusing for people with that national security strategy document in mind, because the whole idea was to, to pack it and focus on the Western hemisphere. But in line with that doctrine, I think is the moves that we made in Venezuela. So similarly trying to reshore industrial capacity, I think it's reorienting supply chains for oil and gas. And if you look at the flows of oil from Venezuela to the United States, they're going up into the right productions going up. And so, yeah, the color I would add to what Matt just said is on the industrial side. Like you have to pair that reshoring of the dollar with industrial capacity as well, which I think is happening.
Speaker 2Can I go at like Marty? Yeah. Thanks for bringing us out of the, uh, you know, monetary view, but yeah, what you mentioned there, the Triffin's dilemma, we talked about that a lot on the Bitcoin circuit in 2020, 2021. As you get to thinking about this, you realize that was part of this offshore dollar order, right? First and foremost, like why were we fighting world war one, world war two, what the hell, you know, all of that, why was this locked in place in the first place? The way I have, have come to think about it, you've got what's actually the largest business in the world. It's not Nvidia. Um, you know, in the headlines, we can talk about that later. It's, it's actually your global trade franchise and the way this operates, think about, uh, financial markets, you're looking for arbitrage, right? Think about what, like we were doing with Christopher Columbus, you know, Magellan, et cetera. What they were actually doing was establishing trade routes to bypass the old silk road, the old land-based, uh, trade franchise monopoly. Um, and it's, it was really the European order, you know, trying to pull, you know, put this, put this, uh, you know, bypass, uh, together because they were on the, their economic back foot. In, in the prior system. Right. Um, so if you think about arbitrage, right. In financial markets, it's buy something low, sell it high or vice versa, capture a risk-free profit. Think about like trade on the high seas with deep water, you know, maritime shipping, um, oil tankers, you know, front and center in the news right now. Um, you start in a port, you get something out of the Persian Gulf. You buy it low, you sell it over in Hong Kong high, you capture that spread. Now that profit or that, that, that financial profit, then like, that's a tie. That's the compliment of the, the goods moving on the water, right? That financial profit then builds up like your, your monetary nodes, right? You got UAE, you got all, you got Hong Kong, you got Singapore, um, you got London, um, you know, Panama, Caymans, et cetera. So you look at all of that and like, that's actually how this system gets built up. It's, it's like on top of this global trade business, plus a global monetary franchise. And if you want to think about the Trump administration, the 47th, and some of the moves don't necessarily, you know, map perfectly onto this framework. But I think if you look for, go for the 80%, you know, the, the 80, 20 rule, um, in my mental model, like most of the, most of your results are explained by this pushback from the nation states, the sovereign states against this, I guess what you call it, like the, the global trade cartel, the global monetary cartel, uh, that really operates on the, the high seas outside of the purview of the kind of the, the rule of law, the regulatory domain of, of the, the sovereign states. So, and then part of that was this Triffin's dilemma that Marty talked about, um, to pull profits out of the system, right? Like you, you can't compete if you, if you're us manufacturing, uh, you know, really starting to show in the 1970s, uh, 1980s, and basically the, the entire course of our lives, if they've developed to this point, right? So that, that hollowing out of the American, you know, industrial base, uh, it exported itself, uh, relocated to China. That was a by-product of, uh, this offshore dollar
Speaker 3system. Okay. So we've set the stage, right? We want to reshore, uh, our industry. We want to shore up the Western hemisphere, make sure that all our interests are aligned on this side of the world. And then we establish a new dollar system, right? No more offshore dollar, have an onshore dollar through stable coins that we can emit our power. Well, you said we only got 25% of the way there in the last, uh, two years. And now it seems we've hit a major roadblock, uh, at least in terms of Trump's plan, right? So the blue tsunami came and took over both houses of Congress. Uh, Marty, I'd love to get your take on what that means. And did it surprise you?
Speaker 1Uh, no, it wasn't surprising. Um, having read the tea leafs of, of how American citizens were thinking particularly about the war in Iran and the effects on prices, particularly oil and gas. Um, however, I don't think that will stop the Trump administration that much. I think they will be distracted by subpoenas and, um, basically lawfare brought, brought onto the administration and Republicans, uh, from the Democrats. But I, I think we, we saw a glimpse of what we can expect to come when clarity act failed in the beginning of the fall, which is don't care. Like executives gonna give the order to the agencies to go make the rules. I think the executive order will be, will be used pretty heavily, um, over the next two years. And I think as it pertains to this conversation of, um, reshoring the dollar and building up the manufacturing industrial capacity here at home, it, it's like, can you thread the needle of just stiff farming, uh, lawfare and put brute forcing executive orders through, um, and just having the agencies that are under the purview of the executive move forward with, with their plans. And, and again, when clarity act failed, you had the OCC, the SCC, the FT or CFTC basically get the go ahead to go rule make. And I think that's the big question is, can they rule make? And then. Will private industry build out the infrastructure to an extent where it's pretty much ingrained and it doesn't matter what happens in 2028. That's what I believe is, is what will happen and what the posture will be moving forward
Speaker 3and matt i've heard you describe this loss by the republicans as luke skywalker getting his hand cut off uh would you say it's that bad and uh and how would you define the two teams do you think republicans are are sovereigntists and democrats are globalists like how do you see it if you're anything like me the cold card hack shook you to the core personally it made me completely rethink how i custody my bitcoin my biggest takeaway was pretty simple i don't want all of my bitcoin relying on a single custody model for me diversifying how i secure my bitcoin is what helps me sleep better at night that's what led me to onramp onramp offers multi-institution custody where three independent institutions protect your bitcoin none of which can move it use it or lose it onramp also maintains custody insurance through lloyds of london and beyond custody they offer a full suite of financial services and a full suite of financial services and a full suite of financial services including the ability to buy bitcoin directly to cold storage but the thing that impressed me the most about onramp is how they handle inheritance if something happened to me the last thing i'd want is for my wife to have to go on a treasure hunt trying to figure out how to access our bitcoin with onramp you can designate your spouse or other beneficiaries as part of your inheritance plan from the very beginning it takes something that can be incredibly complicated with bitcoin and makes it much easier to plan for it that's why onramp has become part of how i think about protecting my family's bitcoin for generations go to onrampbitcoin.com to learn more and book your complimentary consultation today uh no they i
Speaker 2don't i don't think the uh kind of the room as has organized themselves that cleanly even within the republican the old i guess republican coalition that has revealed itself to be broken as of last tuesday um like if you want me to start with uh the big swing right like if you just look at it that that is a massive like once in a or maybe two or two or three times in a century type type of shift i think um especially when you look at the texas result um you could chalk it up to just a normal you know presidential cycle midterm you're gonna lose seats in in the and and uh the senate typically um but to see texas uh shift uh for the first time since i want to say the late 1980s um i think that reflects something deeper going on right so i i'd say just the top two or three right if you if you voted blue uh last tuesday i if it won it was like a big tent right so if you if you check the box on any of of two of these three things i think you were were incentivized to pull the lever uh towards the democratic candidate uh number one just being anti-trump and number two just being anti-trump you know the no kings phenomenon all of that okay that's that's more typical of your legacy you know back half of your 2010s like the the anti-trump you know uh just definition of of the democratic uh party for one um so you just stand like define yourself by opposition uh to trump and no kings was like the biggest uh kind of astroturf movement uh show like for that wing all right uh number two would be anti-iran war so this is where i think you pulled in a lot of the libertarian wing and it's not that big but it's uh like in terms of share of the electorate but it's enough when you know you know three out of a hundred let's just say move from you know one side of the you know the field on red rover over to the other side like oh that's actually a plus six swing right right there um and then i think if you look at uh the third thing i i think in texas is is you know we know it's kind of uh the the mothership for uh ai compute uh you know data center build out you know uh projects and i think you know a lot of people have been ingrained with this fear of ai whether it's driving prices up it's you know the reason you're you're paying more for your uh electricity bill or um you know you've almost got the mental illness uh side of it and you've just been drilled with this anxiety that that you know arnold schwarzenegger and skynet are going to come for you and you know you're going to have to it's not just going to take your job it's like this this uh could end humanity as we know it that type of narrative so i think that fear and the pushback against ai was was a huge part of that result on tuesday and then the last one i don't know if this one's true i don't have the date on it but uh marty mentioned one big beautiful bill uh the the um the depreciation you know acceleration incentive uh aiding the uh re-industrialization the industrial industrial uh in the united states a part of that bill was the removal of you know public welfare benefits just state-sponsored transfer payments right and so a lot of the people felt the pullbacks um there whether it's snap benefits or you know um there there were some health care uh you know assistance you know package into that but i think when you look at it that way you saw a large share of the american population just just because of the budget concerns right this is where the state doesn't have the financial capacity to just keep doing or running you know running those programs and then there's also the element we need to you know there's there's an effort to tighten up on fraud that was outside of the uh obbba um but i think that share of people who you know once you take away that that little bit of financial assistance they had just to survive and a lot of these people don't know another way like how am i going to just keep going and get through life you know where's my next grocery uh cart you know going to come from um i i think that actually probably also was a tailwind to what we saw on tuesday as well and marty i
Speaker 3mean you lived in texas uh are you surprised that it's now fully blue i am and i've
Speaker 1been talking with some uh some former you know some texans that are on the ground it's just i don't know there there is i'm not saying that all the elections are rigged and this blue wave doesn't have any but like the the numbers the amount of people that they got on the voting registration in texas within two years the the shift the the amount of votes that uh governor hinojosa got compared to kamala harris in 2024 there's something there's something fishy there there was somebody who got voted into the texas state legislator she she literally got convicted as sentenced to go to prison uh i believe early next year and like something she she got voted into the texas state legislator uh the but you couple that with demographics changes that have happened obviously the rhetoric around beau french um pissed off the the uh indian population living within the country and i think uh ovick roy um he tweeted out um got a lot of attention last week that he voted democrat down the uh down the ballot uh as a reaction to beau french's comments on the university of texas student section one of the games earlier this year and i wouldn't be surprised if uh a lot of the indian population in in texas voted that way too but um yeah it is shocking to see texas go go blue um and you already have governor hinojosa coming out and saying that she would like to figure out a way to freeze residential rates on electricity with innercot um before so they can take time to figure everything out and uh there's a list of like a hundred laws that they uh that they're going to put it to the legislator when the legislator meets that are just like peddled to the metal gonna increase medicaid gonna increase property taxes all that and so it looks like they're they're really uh trying to go hard with this opportunity that they've been
Speaker 3given yeah uh they've been given power and the democrats know how to take power keep power and use power and it seems as if republicans uh are just always reacting and uh never really taking the opportunity that
Speaker 2they have i have some nuanced thoughts on this um before we get into the next question um all right so i frame when we're actually just like drilled into our heads we think about the democratic party or the republican party um as i go back and you know try to read more history books like written 70 years ago or post-civil war stuff like that you'll see them talk about these movements like these these kind of uh factions represented in american society like what they're actually supposed to represent is support for the you know the two sides of our governance structure the democracy with the capital d the republic with the capital r we all should have learned in elementary school if if the schools are doing their jobs what those two things are right there's an overlap between them right um republic like at the core level just means like ross publica marty i know you took latin in high school so your latin is way better than than i could ever understand but it just means like the the affairs the the the government uh affairs are a public matter it takes place and and in the public forum it is not uh as opposed to like private or monarchies right holding the chain of command and the rest of society just kind of has no visibility of of what's going on with the whole governance mechanism of the society. All right. And then you got democracy with a capital D. That is kind of the Greek side of it as opposed to the Roman Republica. And there's kind of different flavors. It's a sliding scale where it's either direct democracy, you slide it all the way up and you have kind of direct legislation or rulemaking kind of decided by the population at large. Yeah. And we have part of that. And then you also have the elected representation element. So then that's where you see the overlap with the democracy and republic. Now, those two things come into conflict and like at a fundamental level, that's what these two parties are supposed to be representing. Now, we get taken off that track by the divide and conquer, you know, cultural elements, the monetary, you know, monetary developments, all that. War, geopolitics, all of the above. But at the end of the day, that's what society like. That's what these two parties kind of represent, you know, at their at their fundamental level. Now, when I sit when we talk about the democracy, things moving more left or blue, there's there's certain signs that I'm seeing that tell me the democracy with the capital D is already kind of like a rusted out, hollowed out, like vandalized institution and there's no one left supporting it. Now, what do I mean by that? All right. Case in point. Number one, the Dan Sullivan thing in Alaska. Right. Like you had one party, you know, purportedly representing the democracy with a capital D. Go in, recruit a competitor, an independent of the same first and last name, just purely to draw off votes like in this this whole, you know, supposedly like proportional representative share. people, you know, control, uh, their, their elected representatives. So there's number one that like, it's gone beyond just to the point where you respect the legacy institutions themselves. It's, it's about winning. And in this case, any, uh, or the ends, you know, that supposedly one group want, like wants to, uh, you know, see materialized into the world, any like those specific ends justify any means and you know if you want to learn more about that and how that goes wrong once that kind of uh mindset infiltrates a a movement go go read uh the uh the historian author etc arthur kessler's uh darkness at noon good book on that on on where that process eventually leads like it eats itself um essentially all right so you see that happening you see things here in seattle right for like we had i-648 a controversial social and cultural issue with let's say men participating in women's sports right it's like all right how are we going to settle this i don't know things have gotten um you know we're right up into the uh the the boundary uh conditions where we're just pushing these inflammatory issues like to their logical limits um and anyway so Washington state, we voted pretty much across the board blue. We have like super majorities in the state, you know, uh, houses, et cetera. They can get done anything they want. They put in so many taxes like in the last, let's say three, four years. Um, but this specific issue, you saw the electorate go the other way. They said, no, we don't want biological men competing in high school sports. And it was like a, a decent majority. It wasn't like a 50, 50, you know, a type of, uh, it was like 58 42 or something like that. Well, you had the Seattle, uh, public schools come out, uh, I want to say yesterday on, um, you know, public town hall type of form. And the, the bureaucrats have said, we're not going to respect the will of the, of, of the democracy. Right. So you're already seeing, you know, the purported left, they don't actually like respect, Like they're not maintaining the infrastructure of the democracy with a capital D. And if you just go, if you look at it, you can see it everywhere. Like this whole thing. And this is where, Marty, you're talking about like the vote counts, the more votes than Kamala Harris for, say, one candidate or like what happened. I don't know. We're told the elections are the most secure, highest integrity they've ever been. That's a low benchmark, right? If you go back and watch the movie Gangs of New York, you look at how American elections used to work. Watch the election day scene. We all learned about this in history, Tammany Hall, all of that. You know, the infrastructure has never been pristine, but you can already see it if if if if you want to look and not just, you know, keep your head in the sand, you can already see the signs that like like there is no respect for that infrastructure anymore. It's the same thing as our own industrial base. If you drive through, you know, a Rust Belt town, I grew up in, you know, Missouri, Iowa, you can see it everywhere. Marty probably saw the same in Philadelphia. Rob, I'm not sure where your base, but if you see it in America, like our industrial base, completely neglected, hollowed out, you can see the same thing happening with the just democratic institution. And that's not synonymous. I don't think it's a one to one fit anymore with the Democrat Party. And I think you can kind of see it the way the coalition's moving. It's not your Bill Clinton, Nancy Pelosi, Chuck Schumer party anymore. You can see the new the new ground coming in. it's, it's the DSA, which I think is, you know, at this point, the leadership, the energy it's coming from the, call it the communists, uh, the, the, you know, the, the, the sickle and hammer, and then you've got the, the star and crescent wing as well. So I, I, this was a big movement, I think, and what the democratic party took a turn towards. Um, I, I don't know that it's still the same democracy you know a political base with that capital d yeah marty i love your color on
Speaker 1that i mean i think it's obvious uh it's uh and i mean to matt's overarching point to like i haven't read uh darkness at noon but based off of how you described it i think we're slipping into very uh precarious territory i mean we're i think we're fully in it i think we've been slipping for decades now at this point and now it's sort of put in this situation you said it earlier rob like i think curtis yarvin's tweet on it was uh was very prescient and this is very true like democrats uh love power like an alcoholic likes wine and republicans like power like a wine snub likes wine. Like, like you, um, like the Republicans like power in the sense that they like to think that they won in argument as was determined by votes, but Democrats like power. They want to force their will on, uh, on the population. And I think we're getting to a point and we're seeing this to Matt's point about the, the communist and DSA wing of the democratic party really taking over the energy not only is this happening like within the government I think one of the social phenomenons to play to pay very close attention to from now moving forward if you haven't been already is the influence of Gen Z influencers on how this happens so I would just create the juxtaposition of like Hasan Piker and Nick Fuentes where I think Hasan Piker has done a really good job like getting energy around these DSA candidates and getting people to get out and vote. And I think what we saw last week was Nick Fuentes basically dancing on graves because he had a big push to get people to vote against the Republicans and vote Democrat, not as an endorsement of the Democratic policies per se, but a vote of no confidence in the existing institution the GOP and Republicans at large and I think on the Republican side or at least if we're not running with that dichotomy on that side of the aisle I think there's a big power vacuum and that'll be something to pay attention moving forward is do Republicans or the conservative movement let's just strip Republican as a as a descriptor away And just thinking about conservative, the conservative movement, when I say that, I mean, like Matt said earlier, like people who believe in the Constitution and in ordered society, do they begin to look at power the way an alcoholic looks at wine or do they continue to look at it like a wine snob? And I do think that particularly in Gen Zs and younger millennials, like the thirst for leadership that uses power when they get it, particularly on the right, is stronger than it's ever been. And so I think that's one thing to pay attention to moving forward is like who fills that power vacuum on the conservative side. And do they try to, to use power? Cause it's obvious. I think, uh, the GOP with, um, the house and the Senate, uh, in Trump too in 47, they had the mandate, they had the coalition to go do everything and they didn't do too much at all.
Speaker 2Well, that's, that's, uh, the purpose of a system is what it does, uh, type of thing. So I think like, the lack the lack of results is the is the is the point you're not a bug yeah and that's that's why
Speaker 3i describe it as the democrats are the harlem globetrotters and republicans are the washington generals right they're just there to put out some fake resistance and uh lose every night to the to the team that's who like who's alcoholics for power right that's that's what it is um but moving on from politics one thing that was on the ballot that was resoundingly voted against were data centers ai was really rebuked in this election um marty you're like in that business uh you're into data centers why do americans hate them so much what if i told you that even if you started buying bitcoin near the peak of the 2021 bull market you could have nearly doubled your money here's how imagine you started buying just fifty dollars worth of bitcoin every week in november 2021 then bitcoin crashed nearly 80 percent but instead of panicking you kept buying through the bear market through the recovery and through the next bull run fast forward to today you would have invested twelve thousand eight hundred and fifty dollars and your bitcoin would be worth more than twenty five thousand that's a ninety five percent return outperforming the s p 500 nasdaq 100 with even gold over the same period and you didn't need to predict the market that's the power of dollar cost averaging and our sponsor rhino makes it easy to automatically buy bitcoin on your schedule set up automatic bitcoin purchases daily weekly or monthly and let rhino do the stacking for you you can even automate purchases when bitcoin drops by a certain percentage or reaches a specific price target because building your bitcoin stack shouldn't require predicting the next move just having a plan and sticking to it download rhino using the link below and use code bitcoin news deposit your first 100 and get 21 dollars in free bitcoin with rhino you get the most bitcoin for your dollar on your
Speaker 1schedule uh i think because of a number of factors one if i'm being honest most americans are ignorant to what they're they do and they don't know they don't understand when they send the tweet they're they're leveraging a data center somewhere and so they have this very disconnected and detached view of reality where data centers as a concept whether they be for training large language models or providing inference from large language models are simply running a cloud service that hosts files and data for particular applications like there's a complete detachment from reality in terms of american views of what these things are and how much value they actually provide society so that's one thing um and i think part and parcel to that is the fact that when we focus on ai data centers specifically i mean if we're being objective the industry is just done a terrible job of pitching the technology um to matt's point earlier you have anthropic coming out and saying in their s1 that one of the risks is that it could end human society you have dario and sam um lesser extent sam these days but in like last year year before running around saying it's going to take all of your jobs uh and then on top of that i think the perceived benefits that the technology is providing individuals is somewhat imperceptible and it's not really tangible and so they don't see the the benefits of the technology um at the end of the day and then when it comes to like the physical sort of uh nature of the data centers i think people rightly so are a bit discerning in terms of like all right we're gonna have these big tech companies come in buy a bunch of land buy a bunch of power like is this going to benefit me and so i think that's another problem with the narrative side of things that is getting better and i think will continue to get better which is clearly articulating the benefits for the local communities that data centers enter and participate in and i actually think we had a confirmation of this early last week or late last week you had the memphis mayor come out in a press conference talking about colossus one in memphis tennessee which is a very blue part of the state saying yeah like last year spacex via colossus one provided 24 million dollars of uh tax revenue for for our county which was the second largest um tax contributor uh in in the county that memphis is in i forget what it's called and this year there uh it's estimated that they'll provide 54 million dollars in tax revenue and that's going towards schools and roads and all that um and so i think long story short uh there's a there's a combination of two things that i think we're going to see in the next couple of weeks and that's going to be you know we're going to see more of this kind of ignorance bad storytelling um and i think dovetailing from the storytelling like really articulating to people like this is going to support your local community where it comes in we're going to be good neighbors and i mean the benefit that the data center story has is they have data on their side like so i sit on the board of dark horse technologies historically we've operated uh bitcoin mining uh facilities in north america and in the south america and in the south northern tennessee and southern kentucky and one of the municipalities that we work in is hopkinsville kentucky and we've had the uh the manager of the hopkinsville utility co-op go to city council meetings and basically explain to um to the population to the to the city like we've only been able to keep rates flat within hopkinsville for two years because dark horse has been here buying our power that extra revenue that they provide them has been an incredible boon for our balance sheet and therefore we've been able to keep rates lower and we we announced a few weeks ago that we're going to um in conjunction with hopkinsville uh build a new substation a 65 megawatt substation that'll get the the town access to a 161 kilovolt line from the tva which makes their much stronger uh and we're going to pay for that and so like i long long story short not to um not to pump my own bags here but i think this is like a tangible story with objective data that you can point to that these things actually help local municipalities and i think up to up till recently i think in the last six months the data center industry has really learned and the hyperscalers and the frontier labs have learned like hey we need to get better telling this message i think that will improve um and so i i'm actually not as bearish on the proliferation of data centers because it's it provides an incredible opportunity for the democrats if they want to um or for the left if they want to sort of feign in olive branch and say hey we're we're big tent we're here to help data centers can help and i would not be shocked if they take that narrative ball and run with it and take credit for um the build out of data centers headed into 2030 and
Speaker 3matt i mean data centers ai is three percent of american gdp now and i think that's going to be a big part of the future of data centers so i think that's going to be a big part of the future of data centers so uh are we going to see a significant slowdown and pullback in growth because of the democratic win
Speaker 2so this was already kind of the signal was already there that we were moving past for for this business cycle right we're we're past that that peak of the business cycle moving into the contraction i still think the bottom is in front of us somewhere right you'll you'll you'll probably catch it in the headline right the data won't come through for could be multiple years of revisions to you know to to ultimately come through and we're going to see a significant slowdown in growth and tell you so you're watching for markets you're you're you're watching for headlines as well to give you that signal but um yeah the growth uh phenomenon you've seen this from the federal reserve jp morgan like the the the data center build out the ai i guess integration into the the new economy right that is your growth driver and this is you can see it too in the u.s versus europe um kind of apples to apples comparison and the draugr report right they say for the last 20 25 years the the difference in in growth between the american economy and say france is the technology industry like full stop um you know without it you know maybe the american economy looks more like france where all you're doing is producing you know luxury goods uh louis vuitton handbags french wines and that's what that's what your economy delivers to the world so yeah the slowdown here it's it's pretty clear if you follow the stories this summer with oracle walking away from uh a data center project in new mexico right declaring force majeure because it couldn't get the i'm pretty sure i i think it was because they couldn't get the the facility powered right they couldn't get it plugged in uh they had to walk away from projects that was your signal that you're starting to see this growth run into its boundary constraints and that's where you know the the real economy then gets reflected in the data center project and that's where in the financial economy and you start to see credit spreads widen or you know look at oracle bonds right um some of the highest spreading uh bonds in the uh dollar denominated investment grade uh fixed income universe uh same thing like everybody was attached to core weave you know a few weeks ago uh before that you said you saw issuers like softbank uh making the the largest high yield uh debt deal um in history um to to keep funding its its equity commitment to open ai's latest round so you started to see kind of the the existing kind of resources of the real economy, but also the, the, you know, the, the financial balance sheets, the, the credit markets started to see us run again, run into those constraints as well. And that's your sign, right? That this build out needed to kind of take a pause anyway. Uh, this is how markets work the same way people do, right? We take three steps forward, two steps back, uh, that type of thing. So I think this was, it's all part of like the natural process. Uh, but the way I do think about this, I think this was the first like AI led business cycle, right? And it doesn't mean it's the only, like it's, it's a boom. It's a, it's a bust. It's, you know, uh, pets.com. We'll never see this again. No, I think like Marty, you talk about this on, on a few episodes you've done on a TFTC about how massive these tools have been for you, like for your own businesses. Productivity, like anybody who hasn't spun up their own, you know, Hermes client on locally, like toy with it, do it. Cause it's, it's insane. Like what you can do with these tools. Um, I think you're just like, like anything in society, a massive disruptive change, you know, across pretty much choose any swim lane, like politically, financially technology, uh, like any other fact of like relationships, like we're like dating for young kids. Totally changed. It's not the same thing as their parents or grandparents, uh, had to deal with. So this much change and this small of a window, it's, it's a lot to digest, I think for, for everybody. But, um, yeah, the, the AI led business cycle, that's, that's kind of how I'm seeing this. And, and so that growth kind of to bring it home, it's, you know, it's, it's, it's become clear, like to keep this build out going, we're going to need the, the hyperscale. which we used to just call the FAANGs or the MAG-7, right? Now we gave them a new fancy term. But what we're going to require them to do now is those balance sheets are going to have to raise debt to keep this thing going. And if you think about this, go back to 2020. What is inflation? It's a growth in the money supply, right? So to, and the way fiat monies work is they're a draw against a balance sheet, right? All ledger monies are essentially a draw against some issuer's balance sheet. The fiat part of it just means it's unbacked, it's unsecured. It's not redeemable for any, you know, base money or real good like gold or Bitcoin, right? But the monetary, you know, expansion in this next window is like, if you just read the tea leaves, it looks like it's going to come through more leverage created on these hyperscalers. So that's your NVIDIA. Google, Amazon, Micron, SpaceX, Anthropic, all the above. That's where, you know, over the next two, three, four years, I would expect we're building those balance sheets up. And then we have to figure out how the heck are we going to turn these into like economic businesses, which means do their, do their bottom lines cover their cost of capital and a dollar measurement? And I think that's where, like Marty, if we, if we kind of bring it back home, like full circle, the monetary transition we're going through, like we thought it was going to be quick and easy. I'm saying like back in 2010s, you know, maybe even 2020 Fed was just going to QE into oblivion. Bitcoin would go to infinity, you know, the infinity over 21 million meme and yeah, easy just buy Bitcoin and we're good sovereign individuals, but it turns out it's much more messy. Then that, um, and so you see this process coming through the stable coins. I think this all has to play together with the, the AI buildup. Sorry, Marty, go ahead.
Speaker 1No, it all, it all funnels into, into each other in like two points I would make number one, like, yeah, I think we just passed like a critical, critical, I guess, a psychological threshold where a lot of the FANG companies went cashflow negative for the first time in many years. And to your point, man, I think that's the big question is at what point does the return on invested capital? This infrastructure buildup begin to manifest and free cashflow that takes us back. Those, those cashflow levels back positive. And I think there's a relatively short window to really paint that picture and show it to the market before people get to get, begin to get really worried about the, the financial health of the buildout and the systemic risks that it may pose to the economy. But too, I've been thinking about you in recent weeks, Matt, and sorry to hijack this a bit here, Rob, but cause. Cause there's been a lot of talk about the, the debt being issued for these hyperscalers competing with treasury markets and having a little Matt dines on my shoulder and thinking about reshoring. That's probably what the treasury wants to a certain extent is like to show that the sovereign, the ability of sovereigns to not have to depend on the treasury and be able to go to private markets to, to access sort of a, a, a yield. On, on cash is maybe counterintuitive, but maybe welcomed by the treasury.
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Speaker 2live on Bitcoin. So two different put two different hats on you see that the Treasury needs to obtain the funding it requires to keep its old legacy commitments going, right? We know the big ones, right? Obviously defense to cut that at this point, you're going to lose this competition for what we talked about the biggest of big businesses, right? The global trade and monetary franchise. Losing there just means you are subservient. You don't have a seat at the table. This whole Triffin's dilemma process you thought was bad from 1970 to 2020, it'll probably go much worse when you no longer have a seat at the boardroom. So probably don't want to cut defense. Then you look at like the entitlements, social security, Medicare, the way I view those is the state is bribing. A coalition to come in and form a 50% plus one electorate who will buy into that economic scheme. And just the governments are always the emperor's wearing new clothes, but they're they're incentivized to believe that the emperor's clothes are grand and pretty and all that. So the treasury has its own kind of problems it's working through. How does it continue to monetize itself? And that's where the you look at its project. The Gantt chart, its swim lanes, it's like, all right, we go into the Scott Besant framework, but like he made this statement multiple times, especially in 2025, we're going to monetize the US's balance sheet for the benefit of the American people. Part of that means like you, instead of drawing that liability directly from this banking system or the offshore dollar banking system, you would draw that liability off of the balance sheet of the US treasury, which could be it's gold reserves. It could be, you know, it has some, it doesn't have a, you know, a de minimis share of Bitcoin, right on balance sheet. It's a, it's a meaningful number at this point, right? It's not the number that say Cynthia Lummis or, um, representative baggage from Alaska want to see it get to with their acts introduced in Congress, but that could be a way for treasury to draw, um, uh, money against its own balance sheet or draw dollars against this balance sheet out, as opposed to the existing structure coming out, out of this offshore Fiat, you know, credit, uh, paradigm that, that we're leaving behind. Um, all right. So that's enough about treasury. Now with the AI companies coming in to compete, it's pretty clear to me, the CEO, like they're just chasing this, whatever you call this vision, like no matter what it doesn't, there's just like throw the football up. Um, I don't care. Just believe in Randy Moss. He's going to come down with it and he's gonna, you know, he's gonna put it in the end zone. Um, they don't know right now. If this stuff is going to be economic, but they're so caught up in this, uh, kind of the same way that we're sold that AI is like existential to your job or, you know, society as we know it, humanity, as we know it, they'll even tell you that the effect of altruists, right. Um, would, would probably have something to say about that. Um, but the companies themselves, like they view this as existential to their own business models. Right. Um. They, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they, they've tapped out of the legacy cash flows of their, their core businesses built up in 2000s and 2010s right if you think about each one is google search amazon warehouse you know attached to a search engine show up at your front door um you know we can just go through each and every one of these that legacy business that has been built up that got them to this fang or mag seven status they've they've now kind of fully extracted all of the funding capacity out of that um and pulled it in and already put it towards this new build out um and uh at this point they've started going to other currencies um they're they're tapping euro uh they'll like every other kind of uh bond market or credit market that they could tap into i think increasingly like the writing is on the wall they're going to start pulling in uh money capital from from those existing pools uh to keep going after this this big video the vision that they're chasing it certainly is
Speaker 3all-encompassing and so much is riding on it from the american economy to the way we live and work in the future but the one thing that's brought us all together here is is bitcoin how the hell does bitcoin fit into all of this uh marty tell us what are your thoughts now i'll say
Speaker 1what i'll say is all roads lead to bitcoin uh at the end of the day i think all like everything we just discussed is going to be going to be going to be going to be going to be going to discussed. John Arnold and I, John from 1031, we've been doing a weekly show based off of his weekly newsletter that we do. And like a lot of what we discussed today is very similar to what we cover on a week in, week out basis. And basically what we've been, John's been consistent about throughout the years that everything at the end of the day funnels to Bitcoin in one way or another as it pertains to everything going on geopolitically with the AI build out with the sort of vitriolic politics that we have here in the United States. And based off of what we just discussed with the AI build out, I think whether Trump is doing this or the Democrats are doing this, like Matt was just describing, just due to the fact that so much capital is being pulled in, it is becoming somewhat systemically critical to the health of the economy moving forward. And Trump said it famously with that Wall Street Journal. Headline a couple of months ago, like, don't worry, inflation's not bad. We're going to create so much productivity growth via the AI build out that we're going to be able to stomach the inflation. So I think the writing's on the wall, whether it's via inflation that's brought on because we're okay issuing debt to enact this build out because it does follow up on the promises that are being made in terms of the productivity that will be brought to the economy. Even if the productivity increases, inflation increases, as we know, via the Kentian effect, like the benefits of the productivity game, they're going to take time to trickle through to the lower rungs of the economic ladder. So I think Bitcoin in that scenario succeeds. And then if things go south, we are getting to the point where the AI build out is systemically important to the health of the economy. And I think if shit hit the fan, there would be, there would be bailouts that would induce a lot of money printing. And then on top of that, you just think about the multipolar nature of the world and how that's accelerating. And I think, I think Bitcoin obviously succeeds or faces or receives tailwinds because of that multipolar acceleration continuing. And then on top of that, I think to pull back to the beginning of the conversation with the politics talk, like if we are getting into, and we continue to, our politics continue to manifest in this ping-ponging between extreme left and extreme right, and the 80% of Americans stuck in the middle or just global citizens stuck in the middle of this ping-ponging, just say enough is enough. Like I've voted in like seven elections now and like all I've gotten is like whipsaw between the two parties. I think Bitcoin has a vote of no confidence in that system and a way to exit that system will always exist. And due to shows like yours, what we're doing at TFTC, what Matt's doing at Mindprint Hash, like there, there will be people become more receptive to this idea of Bitcoin as a vote of no confidence, um, in a way to voice their opinion in a way that doesn't preclude them going to a ballot box and trusting that somebody will count their votes. And then not only that, the person that they vote for will follow through with their wishes. And so I think Bitcoin is set up very well, despite what, uh, what the vibes may be like, and the sentiment may be like in the market right now for Bitcoin specifically, um, Bitcoin just has to survive. Uh, and as long as it does that, when the opportunity arises and you have this sort of serendipitous cultural moment at some point in the future, who knows exactly what it will be, but this has happened many times throughout Bitcoin's history. You have something happening culturally, politically in parallel to Bitcoin, just surviving people who go, oh yeah, I remember this Bitcoin thing. It's still alive. Uh, I think I'm gonna accumulate some of that.
Speaker 3I think you brought it home perfectly. Uh, yes. Voting with your money is the most powerful vote that you really have out there. And Bitcoin in many ways has never been stronger, right? The infrastructure that's been laid over the last couple of years is really phenomenal. And it's ready. Um, shit hits the fan and people need an alternative. Um, cool. What an awesome conversation. Marty, thank you for your time. I'm sure people know where to
Speaker 1go, but tell them anyway, uh, at Marty band on X, uh, you'll see FTC and your podcast at tftc.io. Go check it out. Thank you, Rob. Cheers.
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