EVERYTHING IS BETTER IN ASIA (Guest: Vincent Deluard)

hit it it's friday august 14th 2026 episode 298 i'm patrick ceresna and i'm kevin muir this week we welcome back to the show stone x's vincent de lois vincent is just back from japan and he's got a couple of new trades for us including one that has europe and japan swapping places you don't want to miss this and then we're back to normal with my favorite technical analyst grabbing a mouthful of crayons and telling us what he sees in patrick's talking charts all right well kev uh i'm gonna have a beer while uh while watching this i've got the murmurio it's a uh an american amber ale made out here in portugal so uh what's with you and these american beers in made in portugal i think that's the second one why do you always drink uh indian pale ale it's made in india all right let's uh let's do the disclaimer and get to uh the interview nothing in this podcast should be viewed as investment advice listeners should consult an investment professional before making any decisions regarding topics mentioned in the show side effects of too much huddle may include inflation relief dependency payroll performance dysfunction older men get that and the copper conviction contagion i have a bit of that all right let's get to the interview all right it's my great pleasure to welcome back to the show a fan favorite and i know i say that a lot but i truly mean it with vincent everyone when i go places vincent everyone always says oh you got to get that vincent guy that french guy back he's just so much fun uh it's vincent deloard from stone x thanks for making time for us buddy um super happy to be here and right back at you buddy all right so let's start with uh with japan and now you were recently in japan uh with your with i love this quote that you that you started one of your pieces recently with it's like and it's from lost in translation that great movie uh with uh scarlett johansson and uh bill murray was that right yeah i think i got it right you guys says there's there are two types of foreigners in japan's in japan those who have been here for one week and understand everything and those who have been here for 10 years and understand nothing that was just great tell us you know you were there for probably more than a week do you understand everything yet yeah i definitely belong in the former category the stupid white guy who's gone to japan for two weeks and uh you know come come come stop talking about it and boring his friends about you know how much it's better over there you know uh so with that caveat yes i was there for a little over two weeks with my two boys traveling around we we hiked up mon fuji and it was a blast and i am i mean i think i got some slides that are um somewhat interesting i also think the uh it was kind of interesting for me to travel there as a as a european um because i i i got this impression that japan is the road not taken for europe i feel like 25 years ago that europe and japan could have ended up in very similar position and japan made different choices which i think are better uh and maybe there was a bit of luck i think the depreciation of the yen played a lot but i think after 25 years you can see the different outcomes and there was a little bit of a almost envy or nostalgia when i thought of like what europe could have been uh and and what japan is well let's let's explore that because i think a lot of people have this image that japan's not doing well like you know you have the kind of st bart's crew that are calling for 250 usd gpy as they collapse into this demographic stew of despair then we have guys like you that are like looking at this and saying look actually things are going well and uh why don't you first address how much they've devalued their currency over the time and then explain when you what you mean when you say that europe could have been like japan and i think that people might hear that and not really appreciate that you're very much saying that japan is doing a lot of things right yes yes absolutely so i i think we have to start with the currency because i i don't think there's a precedent in in a you know g3 economy with floating rates where we've allowed a currency so i i remember i think it was after the the earthquake and the tsunami uh on promise of the fiscal seems i think the yen was at about 85 90 against against the dollar yeah i think it had a seven handle at one point seven hundred okay yeah i think yes it went to 79 or something it was way down there so we were when i was there after the intervention came back but i touched 164. so we are talking at halving in nominal terms and then if you're just for inflation differentials uh the fact that you know even after the spike of inflation japan's inflation has always consistently been one or two percent less than that of the us i mean you're talking a 75 devaluation in real term of a major currency now you could argue that the yen was surely overvalued but this is insane like this is really insane uh and that will fix a lot of things you know it will take care of a lot of problems so i i think that is the primary that that's kind of the elephant in the room whenever we we talk about uh japan yeah um and i mean i'm happy to talk about more about what we see but i want to go to the the latter part of your question um you know uh yeah i'm not you know on the jpy 250 and the fiscal dominance and that dynamic create insanity i mean i if you really want to do that i mean look at france look at england look at the you look at look at the us but like japan i mean objectively speaking i think they have a small primary balance uh x interest it's it's even surplus or it's balanced right run the same number in france run the same number in the us if you look at net debt to gdp so you you net out the government held and banks central bank uh held debt uh from the stock of debt because it's you know basically a lot of liability on yourself uh it's been going down but like 25 of gdp over the past five years i can't think of any single country that's achieved as much public sector deleveraging as japan and then the last part which really stunned me uh is you know in the us i'm a big tax collection guy right so yeah oh yeah and i i think it's been super helpful keeping helpful and i the great thing about japan is also they have like this great data availability and now that we have the you know the fancy lm you don't need to speak japanese you can just say hey can you find it so i i found the tax collections in japan and i i found that tax collection in japan i've been growing by six seven percent a year uh for for a couple years now so um and the deficit is not that bad there are these massive piles of foreign assets on which they earn a lot of money uh so i am not at all on that you know uh fiscal train wreck and i think the people who are most vocal about it are the one who know even you know so at least i spent two weeks in japan like that that makes me an expert and i want to thank you for that thank you so much thank you for that thank you for that thank you for that thank you for that thank you for that thank you for that thank you for that thank you i saw something the other day it's not just net debt of uh central bank it's i believe when you do debt debt as a percentage gdp japan has actually been decreasing over the last 10 years or five years at least um i think bloomberg had a piece in the recently about that so we're seeing that and and what do you mean when you when you talk about europe and what europe could have been and you know you're contrasting japan to europe tell me about that uh analogy yeah i think the the let's start with the similar points right if you start in the in um late late 90s um early 2000s and at the time i think that the trade was to be on europe right japan was this kind of deadbeat economy also run had their bubble in 89 could have come out of it stuck in deflation you know balance sheet recession uh and then facing a a very grim demographic future um and in that sense europe and japan were quite similar right i mean europe was also slowly aging i kind of missed the uh the tech revolution and and all of these things uh but still in 2000 objectively you would have thought europe was going to do a lot better they were you know integrating and building the common market expanding east um and the reality is you look at you know 25 years later i would argue that life has gotten better in japan uh and it's gotten significantly worse in in europe and i would think it boils down i i would think it's it boils down to generational choices and and um and the way europe and japan have handled this this demographic crisis has been completely different uh japan has actually allowed pain on on its older generation i mean if you go to the stores in japan you'll see you know 75 80 year old work now maybe it's the japanese work ethic and they like to do it or i don't know but i think pension payments in japan as a share of gdp have not gone up even though the proportion of older people has gone up uh they've allowed uh housing prices to come down i mean i'm sure you've heard reports of this you know there's plenty of website where you can buy a house for one yen uh i thought about it uh and and then finally they uh they allowed the the currency to depreciate massively which is a way to that's the most again that's why i go back to this currency argument that's that's the most powerful If you devalue the currency in real time by 80%, instead of having boomers taking a cruise in Thailand, like what's happening in France, because the euro is a bit overvalued, or in the US, and at the same time, you're losing your manufacturing base and you have a very high youth and employment rate. So strong currency is effectively a transfer from the young, the poor, and the working to the old and idle. And in Japan, the falling currency is the exact opposite, right? The Japanese boomers, by the way, I still think they're fine. Like in Japan, life costs nothing. You know, like you go to the convenience store, I mean, you can eat for really just a couple dollars. So they're still fine. I mean, just if they go abroad, they get, you know, do we, as a society, do we have a duty to provide, you know, repeated cruise vacation to our elderly when we have the demographic profile of Japan and Europe? I don't think so. And this week. And this week, currency has allowed Japan to maintain a very large manufacturing base. I mean, you see that even if you travel across Japan, one thing that struck me is there's still industry, even in small towns. There's industry, there's farming. It's not like, you know, you go to a lot of European cities, right? You have like the big metropolis, like Paris, there you have your services, you have some industry, but outside it's just like tourism and government, like there's not much left. While Japan maintains this kind of beautiful economy. There's a lot of money balance on its territory. Okay. So when you're thinking about how to take advantage of this, one of the things is that you're explaining why it's so good for them to have a low currency. Why is that going to change? And what's the best way to take advantage of this cheap Japanese assets? Well, I don't know that it's going to change right away. But I think that. The risks have increased so much that it would be kind of the proverbial picking down in front of a steamroller, right? The first immediate thing we can think of is the currency, the interventions, right? I mean, we saw the last week, I mean, we can talk about how gloriously ironic it was to see Besant, who made a fortune betting against currency intervention, do one. And then with a note, you know, like that. Yeah. I don't remember. buy some milk some butter and sell 10 yards of yen and he put the ticket just in case yeah yeah and doing it against the euro together i mean it's insane that we have like the treasuries run like like a like a like a hedge fund uh i mean we truly live in in extraordinary times um so there's the intervention right i mean the bearish case is that well they always do that and then just wait six months and the dynamic are gonna are gonna fulfill it back now i i would take the the other side of that trade um even though i think it can continue but again it's all a matter of like you know balancing the risk right uh what's the main driver the secular depreciation of the yen it's a race differential right at the end of the day you could get free money in japan and you could just pay the carry trade with you know any asian mexican rare basil brazilian rare whatever so you know you could get free money in japan and you could get free money in japan and you could get free money in japan and you could get free money in japan and you could get free money in japan but that rate differential has been shrinking i mean you look at the long end i mean the 30-year the 30-year jgb yield i think is one of the most shocking charts you can look at i mean just straight up like it's close to four percent now so on the long end we've we've done like 95 percent of the way now you could argue on the short end it's not there yet like the the bank of japan has been kind of slow uh but i would it's still closing i mean i'm not very bullish on the short end but rates in the u.s i think i think wash is kind of full of it i think the market kind of overestimates the extent to which wash will raise rate if at all and conversely in japan because there's all these narrative about the fiscal dominance and the debt dynamic uh which which i think are false like the bank of japan can't hike rates nothing's bad nothing bad is going to happen uh and so in fact things might things might actually be positive because then japanese might bring money back into japan we're not going to be able to do that in japan we're not going to be able to do that in japan we're not going to be able to do that in japan we we might find that it is actually positive for financial assets for them to raise rates correct i mean because all these foreign assets that i mean what a trade you know that they bought all these straight they have like what the largest holders of treasuries right i mean by official just just in the reserve like there's 1.2 trillion in there they probably bought that at like 80 you know like that what a trade you know what and i think that my understanding is it kind of kept that in dollar kind of compounding like it's uh so um so yeah so so i think they can raise rates uh i think that the also another major driver of this sacred dungeon of the yen was changes in the asset allocation of the pension fund sector so that was kind of part of the the the three arrows and the abe uh you know basically structural reform uh cheap yen and then and qe and the way you would cheapen the yen was by telling your insurers your pension funds hey just buy buy foreign stuff uh and you can see that for a while uh and you can see that for example a gipf japanese government pension fund uh used to be domestically oriented and then after 10 years of of abinomics now it's 25 domestic equities 25 foreign equities 25 domestic bond 25 um foreign bonds uh so huge increase in the holdings of foreign equities and foreign bonds and of course that weakens again that means that they have a huge capital gains on this position and now the the argument uh that the new prime minister has repeatedly said is we want to bring the money back um so you really i mean no matter where you look at what whatever your theory of exchange rates is is it about purchasing power parity japan is massively overvalued is it about rate differential they're closing is it about flows they're moving the other way uh is it about you know politics like i i do think there's a shift in the political vibe like that i think the us was kind of happy to have this weekend uh because we we kind of wanted to give japan a little bit of breathing air like you know they suffered for for 30 years they had the earthquake also they had this strategically important and it wasn't only in china right i mean the weekend was a way to put a put a stone in the shoes of xi jinping now it's gone too far so even the politics i think are turning again so it's hard for me to find a convincing um bearish argument for the yen not one that is not kind of the the stuff we've been hearing for 25 years not the that's well i think the fact that people are calling for 250 and getting greedy about their calls after they've been right and just you know that one guy had it at 200 started to get close he's like 250 i'm like dude like take a victory lap and just ring the register on the trade um okay you mentioned something one um that i thought was really interesting and i i think a fact that a lot of people too often forget and you said something to the effect if you want to talk about problems with the fiscal we should talk about the u.s france other the uk and that to me is one of the other things that people just keep forgetting about japan is they're the ones with the capital they're the ones with the money go figure out who is borrowing from who and it's japan is the one lending to everyone else so you mentioned france let's start there because i think that you've been writing some pieces recently about the problems in france and you're um you're a real european bear so let's let's hear it because i thought this was a really interesting uh kind of uh trade idea well thank you and i think by the way it plays nicely with the yen story i mean one thing that could come out of it i think is a uh you know short uh short uh euro yen yeah just like besan yeah yes do you like the pros you know but i i think there's more meat to that i mean i think we can come back later if you but first let me let me start the the french situation um i think france has been um you know quite lucky like it's been the uh you know the the bad student that gets put in the in the group with a good nerd and you know no one can you know no one asked them to do much everybody knows he's a problem but you know he's kind of friendly and uh you know he's kind of a friend but we've been doing that for a long time and i think we're at the end of our ropes here uh so the fiscal has been awful i mean with the exception of the us and i think the uk actually starting to address the problem so i think really the two the two problem children for fiscal are france and the us but the us is the world hegemon and issues its own currency uh france is a foreign great powers with uh you know who can't print euros so that's a bit worse uh so the fiscal has been terrible for We are, if you want to do like the debt dynamic, right, it's all about R minus G at the end of the day, right? And R is how much you pay on the debt, G is how quickly your economy is going, right? And if that gap is positive, and you keep running primary deficit, your debt snowballs. That's France. France runs big primary deficit, R, if you look at the 10-year OAT, now, of course, the weighted average cost on French debt is not 4% yet, because we shoot a lot cheap, but it's like a magnet, right? The more time passes, the more it gets pulled toward that 4% that we pay on the 10-year OAT, and at the same time, nominal growth is not 4%. We actually have very little inflation in France and to the extent that we have inflation is coming from commodities, which is not great. So if inflation is around 1%, real GDP growth is, I would say, less than one. So we have a gap there and we have a primary deficit and we have a big deficit country. So we need foreigners to buy our stuff. The Japanese have done a good job at that, but I think it's going to be increasingly hard. And on top of that, I don't know if you want me to get into French politics, but- Sure. Let's do it. Yeah. No. Give us some French politics. I think there's incredible complacency about the rise of populism in France. So basically the French political system has excluded the extreme, which I think is a big mistake. I mean, you can't run a democracy by saying 50% of the people are idiots and we should not even talk to them, but we've always kind of set it up so that, oh, the far left, the left is awful. The far right is a bunch of fascists. And we keep doing that every election and every election, the middle gets smaller and smaller because the middle keeps making stupid mistakes. Right? I mean, we, we, I mean, everything that Europe has done in the past 25 years has been horrible. So yeah, over time, the, the, the ranks of the disgruntled grow. Okay. Can I, one second, can I interrupt here because you had this line in your post that I had to, I was going to address, and this is a good time to address it, you say the social media following of the main contenders. And France legacy parties is embarrassing, low, embarrassingly low. The two likeliest centrist candidates, Gia Tal and Yves Philippe have fewer followers than the average OnlyFans foot models. I don't know if that's right. You should be aware that there are a lot of people on OnlyFans foots. That's my point. I'm saying like, if you just have like average foot on OnlyFans, you probably are more popular than the person. And I think that's a good point. I think that's a good point. take it from from europe right uh one of the things that you mentioned there is we the u.s and um i have to give you credit uh i turned bearish and i remember you reaching out saying ah you you make a lot of sense but i'm not quite there yet i think that the fiscal is still is still that you know sale on the in the back of him pushing the economy more forward recently you've kind of you know played that out you did a terrific trade you were more bullish and you're kind of slowly backing away from that what's driving that what do you see what are you worried about you know thank you for the the kind of words and um i mean i um yeah it's hard for me because i i've been the nominal growth bull for five years no recession fiscal you know it's the driving force of the economy and i think that's the thing that's everything and and i'm i'm i think i'm really changing gear like i'm turning into a not necessarily a recession you stop it's only a bear on the equity market i'm like there's a graveyard of them out there do i do i really want to add my my head but i i do yeah i mean i i i think the u.s but we're but hey uh there's more and more going the other way though guys giving up on the being a bear and moving in like just think about it there's a very famous uh bond bull into a bear like what's the world coming to right like we're no i i i mean i okay i'm gonna say it i i think the market overestimates hikes and uh long-term treasury yields are attractive i mean i'm with you too i feel dirty when i say it okay but in all seriousness so i i i was saying that that thing about you staying bullish and and you did i remember because i i got more bearish and you're like i don't think we're there yet and you kept talking about you saw the tax you know receipts that was your big driver and you know kudos to you because that really was the signal that it was sent and it was stronger than i thought it was and it didn't roll over but one of the things that i was thinking about when i was preparing for this interview was that we've been talking about fiscal and how important it is for a long time and we think about the one big beautiful bill and if you step back and think about uh kind of not just in like month to month or even quarter to quarter but go to year to year it was all front loaded to basically be ending right in front of the midterm and on the other side of the midterm this all goes into contraction yeah well that's it i mean so two things so first you mentioned the tax collections um so this is i i watch this like like a hawk okay i guess and i'm not ringing the bell yeah i'm not gonna go into that but it's certainly flashing orange so we had this and i remember we talked about this right in april sorry no february we're looking at 10 growth in personal without employment that's 10 i'm stunning we cut taxes and we get more money like this is arthur lather on steroids uh and i didn't have a good re i mean it was insane it's it's slow now we're looking at five now you can argue five percent when you have zero labor force growth uh and a major tax cut before it's still pretty good so that's why i'm not turning full resistance i think i'm kind of starting staxationista if you will okay but but it's it is slowing and i think it's going to slow more uh exactly your point on fiscal i i think that you know trump likes to talk like he's some sort of maverick but the stance of fiscal has been exactly what your political cycle theorists would have said right so we had we tried to do the hard stuff the first few months right doge and that blew up the tariffs so we had some sort of fiscal contraction uh you know less spending and more more taxing which is what tariffs are uh in the first year and then the stance of fiscal policy switched uh this year right so one big beautiful so let me just run through the number and i think because i think that that helps especially when we think about this earnings growth in the u.s stock market right so we had about a hundred billion in um uh tax reforms extra compared to last year and you know that was spent right away right because this is this is right when we had the iran war and this is why concern you know okay you pay more for the gasoline but you got a thousand dollar more i mean so that that was like a straight shoot of of adrenaline in the arm then we had the tariffs the the dhs is actually sending money net because the the new tariffs are lower right where this 10 percent from the apa uh and then we have to repay the old tariffs so for the month of may and june dhs sends something like a hundred billion uh to like walmart target and and all of that right so that that that's a form of money leaving the public to the private sector uh then there is this massive capex boom which is happening at the same time as we have a hundred percent depreciation rule so if you look at corporate income tax collection they should be a hundred billion dollar higher but because of that massive loophole where if you do all your capex now you can write it off this year you against your taxes that so that's my and then you add in the spr release we had you know close to 350 billion in in stimulus that hit in sequence right it was further tax reform then the tariffs and then the the the corporate income tax is kind of quarterly thing uh and as you point out if i if i look forward it's gone like we're not gonna have a one big beautiful bill again right i mean it's uh the impulse you know it's gone uh the tariffs if anything i think is going to switch back right because we're going to have now it's fully reimbursed we're going to i'm sure trump is going to afford some new tariffs because that's going to be if i'm right that the democrats are going to sweep everything that's the only thing he can do and because he's like a child with a hammer you know everything looks like a nail to him so i think that the tariffs will be back on uh and then um the capex story might still keep going but in terms of impulse it's just not going to be there now you can argue that maybe the fiscal is going to come from military spending um you know we have about a 500 billion dollar increase in military spending in the plan so that's 2 gp that that's significant my concern is that it's not going to go through all right we're gonna we we're losing the war in iran the the democrats are going to win it uh and it's going to be stuck there and even if it doesn't get stuck there it's going to take some time to kick in like this so at least there is a a gap you know uh between between now and and january when the new budget kicks in where there's little stimulus uh and and yeah that's that i see the the tax collections kind of kind of rolling over uh i see the kind of middle class getting squeezed the low drop numbers uh i could see the economy finally scoring uh you mentioned you don't think that warsh is going to hike um and might actually be cutting and i understand i i suspect that it's kind of tied to your view about the economy rolling over but let's just play a game for a second and assume that the ai bulls are correct and that this transformational technology is going to be going to be going to be going to be going to be going to continue and the ai spend out might even increase like we saw those guys half a trillion on cnbc the round table of all the guys they're talking about half a trillion is spending which is just insane but let's just imagine that the private sector steps up through ai and continues this going along and what happens do you think if we get a situation where unemployment um the employment market tightens and we're going to have a situation where we're going to have a situation where we're meaning that the jobs get even better and inflation goes back up because you know oil doesn't go down and the economy picks up will warsh be forced to tighten and does that does the market even care anymore i think in this case he would um he would hike i mean i think he would like to hike uh because you think he would like to hike so i think he wants to be cute i mean he doesn't really want it but he i think he he wants to um you know regain credibility and then get get some you know he's not happy with his performance so i i think there's probably a part of him that that just you know would like to throw in uh uh so if he gets an excuse i think i think he would do it and i just don't think he's gonna get that excuse but okay fair enough i understand that argument but you there's a and show how tough he is yeah yeah like a little bit of a macho like i'm actually i'm not i'm not trump's puppet i can actually hike like yeah and he'd like to surprise markets too you know but then why not hike last meeting uh no and listen i understand it's he's just one guy on a committee of whatever so but you know i i still assume that it felt like he had switched back like to me it felt like he went did all this hawkish talk and then was like whoa actually i that wasn't his i didn't want that as much as i thought i wanted it and and he was like and he's all over the map and it's you know i shouldn't really be surprised because we remember back to like like i still go on and on about this but in 2018 i remember at the beginning of 2018 him and stanley were writing op-eds about how what idiots the fed were and how they had to crank rates and then within you know six months when the market rolled over they started writing op-eds the other way saying that the fed didn't understand how bad things were and they had to you know you know like cut rates by huge amounts so the reality is i think he chases like he chases the economy more than most other fed governors he's more like a trader's fed than he is an economist fed yeah i think that's right that adds a level to risk i mean which is why i mean i mean if you ask me like over the long term i would i would take the under i think that the fed cannot cannot hike won't hike i believe you know fiscal dominance and you know he was put there but but i because of his personality because of his ideology because of his ego honestly uh i think there is a risk of like you know little like policy mistakes where you just hike and then you have to cut now why didn't he hike last time i mean probably because i mean i think he was right not to do it because the data came in somewhat soft right in facial yeah it was a nothing burger uh the job numbers were soft uh we also have the the seasonal stuff right the world cup is over the so uh yeah it was probably not the time to hike uh in general the fed kind of likes to wait after you know jackson hole and um that that's been the pattern of prior feds that chair chairperson and um so he's um honestly i think he was right not to hike uh yeah i hear you i i i completely agree i was just surprised to hear you say that he wanted to that he wanted to hike that was just interesting and i let's i'm not gonna push back i think the little part of him does want to be all tough with the market and show the show them that he's not trump's puppet and let's not forget he's there for what seven years nine years i can't remember what the number is but two of those are trump there's going to be another five with another president he doesn't want to throw away his career on you know doing trump's bidding and i think too often people forget that that's that's a very good point all right so how does the u.s dollar so you're bullish on the u.s dollar or bearish on the u.s dollar against the yen bullish on it against the euro this is it really not like does u.s dollar go somewhere as a whole or is it going to be a bunch of individual currencies yeah that's so i'm going to answer i think the correct answer is zero yen right yeah yeah so like what about the real what about like the canadian dollar is there a trend in the in the u.s dollar in the years like in the in the coming quarters and maybe year like you know you're does it sell off against everyone except the euro or yeah that that would be my guess um i i i think that the you know u.s economy is slowing um the war that we are losing uh you know just a matter of accepting the terms of the defeat uh that's that's got to be dollar bearish i mean you you lose all your allies in the middle east you lose you know control of you know the most strategic region in the world that has to be dollar bearish i think we have a massively overvalued stock market there's still risks of foreigners repatriating so i long term i'm still kind of a you know lower dollar camp now the the problem is you know it's the same thing with fiscal right you say this japanese fiscal is awful which which fiscal are you bullish then you know say you got to find something worse than the dollar right and uh it's like okay i i think europe is europe is worse canadian i'm not i'm not sure um i mean i could see yeah i'm still bullish latam i mean i'm kind of a broken record on this although i do worry about the brazil the election is gonna i think ula wins it so that's that's gonna that's gonna kind of delay the the case but i still long term and i remain bullish but that won't matter for the dollar index that really doesn't matter right dollar index is basically euro and a little bit of yen uh so i think if i were to take a guess i think the euro depreciates more than the yen appreciates anyway the weighting is such that the dollar index could go up uh but but i think that the right currency trade and if you if you allow me a minute yeah i i want to kind of uh test an idea that i have been toying with um so it seems to me that you know after the the earthquake uh in japan there was this this umass moment on the world where we realized okay japan has suffered too much like there's they've gone nowhere for 25 years they're uh they have different now they got this this earthquake we got to help them out and it was not disinterested out right it was uh also japan is strategically important we have bases here we need them for china so we kind of allow the world collectively allowed japan to run this massive experiment of you know whatever it takes to fix the economic issues of japan we will do it and then we let them do it okay i wonder if we we will not be at the same point with europe in a little bit like europe is the the sick man of the world in the same way that japan or the sick man of the world in 2012 we are also getting you know acts of gods against us like you know it's hotter in paris than is in dubai uh france is burning uh the immigration crisis is getting completely out of control i mean you can see like a scenario where europe really goes really bad and i gotta think that no one really wants that you know like no no no one wants europe to fall like the the the you can see you know the euro breaks up uh and that would be a major major source of problem uh so i i wonder if we will not get to the same points like okay japan you had your time you fixed your issue thank you very much now we help out europe and we allow the euro like the europeans okay you don't have tech uh you have to pay super high energy costs uh your chinese market is like the only thing that can save you is you know a euro less than one against the dollar for extended period of time uh until you can sort your problems out so that that's kind of my my uh my secular currency idea that we need to give the europeans a break because if we don't they will implode whichever way means a weaker euro that's fascinating i like it i like it all right you mentioned latam and you said you're a broken record but why don't you uh break the record one more time with us and uh give us the bullish case because i really think that um if we were to get an ai correction it will be an uh an opportunity for investors to go find something that's not tech related and that latam would be a very obvious um beneficiary of a collapse in the ai bubble yeah it's spot on i mean that's uh i mean there's mercado libre which is kind of a argentinian amazon but that's still really only serious tech name in that time i mean otherwise it's your your bbc right beer bank cement um very commodities value tangible asset heavy indices um and yeah i mean the so one thing like that for example the europe is suffering from this china shock right where uh you know suddenly we see like a you know car imports through the roof uh anything that germany does china does 10 times better for 10 times cheaper uh for a time that's positive because there is no uh there's no argentine argentinian car there is no uh colombian tool machine right i mean so for them it's all it's all wonderful they get it for cheap makes them more productive now europe and the us are putting trade barriers and tariffs so they are sinking their own competitiveness while latam has a positive company that's shocked from all these these chinese uh that are flowing in uh you also have the chinese investment that have been going on for a long time you see this giant port in peru uh and now the americans are waking up to it like oh wow if we want to keep to keep these guys in our camp which i don't know if they can like at this point if you're peru if you're chile like it's really you know you do like more than 50 percent of the trade of china i mean it's it's it's gonna cost you like you can't just like you know invite them at you know golf parties or whatever you have to give them stuff and you saw them already do that with argentina like there's a reason why that's unveiled out argentina even though you know worst mistake in the world uh repeatedly uh it's because if we want to keep them like the donald doctrine we have to pay we can't just be the kind of abusive uh bully that just takes them from them uh so that's the geopolitical angle as you know you know both you and i are quite bullish commodities so i mean you have a copper in chile and argentine in peru you have a brazil has everything uh colombia has a lot of oil now venezuela is in play too and then you have the politics right i mean with the possible exception of brazil you have this wave of pro market uh so you know it started with the uh bouquet in el salvador then we just had the colombian election uh chile with cats uh peru with fuji mori uh and of course argentina with malay now i don't think these guys are as great as they are portrayed but you know it's certainly better than the alternative uh so yeah everything's lining up uh yields are still uh very elevated um you know you've got you know six seven percent real yield on on brazilian tips so um yeah i would um write out the volatility and keep over waiting the region uh one of the things in my groups i always have to sit around and listen to them like do their inside baseball stuff in terms of the brazilian election and i'm you know it just feels like they're looking to too close and that they might miss the bull market. I was wondering if you feel the same way and why don't you give us the inside baseball just for those who are interested and give us your opinion about the election and does it really matter? So one Brazilian hedge fund manager told me, I'm going to butcher it, but the quote was something like Brazilian socialists are like your friends' kids. You know, from a distance, it looks adorable, but if you have to live with them, it's hell. So yeah, I mean, I'm with you on this. Okay, but you need maybe get Paulo or some other Brazilian guys on to take the other side. My view is Lula, we had, you know, this is his third, like he's not a new, you know, it's his third term. He's the biggest bull market in Brazilian equities was the first two Lula terms. You know, you don't suddenly become like a communist dictator at age 84, whatever it's going to be. Plus, you know, the Brazilian politics are so messed up anyway that nothing really changes. This is insane like checks and balances and you know, you add in the corruption in there. I mean, no one can do anything anyway. So even if you have the guy you want, he can't do it. And the guy you don't want, he can't do anything either. And in the meantime, just look at, you know, the farming output of, you know, Minas Gerais or like, you know, some of the provinces, look at the oil output and that's what matters. So that would be my take on it. Okay. But I don't know if you have the counter argument. I don't. They sit around and they're very much like they're passing around polling and all this stuff. And I'm like, I don't think it's going to matter. And the other thing about it is if you're a big investment manager, like I remember watching Michael Sembliss from JP Morgan talking about buying like, you know, South America and he can only buy Brazil. Like he can't even buy any of the other countries because they're not big enough. So the reality is that if that if your secular theme is going to work, Vincent, they're going to buy Brazil. Yeah, 100%. It's like, you know, I remember when people got bullish on uranium and they were buying all these crappy little stocks. And I was like, you know, Fidelity can only buy Cameco. So Cameco is going to go. Like that was it. They can only buy the biggest of the big. And so therefore in a true bull market, the big stuff goes first, not the little stuff. That's my fear. Yeah. And if you're like, you know, it's like a you know, late time equity, long short form, like one popular trade, for example, was the Colombian oil company Eco Petrol against Petrobras. You know, that was one way to express a bullish view on, you know, the continent without acknowledging the excess level of political risk in Brazil. But I for most people, they just buy ILF and you're like, you know, I don't know what it is, but ILF is probably like 60% Brazil, 25% Mexico. So yeah. Okay. So you go around and you talk to a lot of different clients. What's the mood like out there? And what surprises you when you, you know, you get the questions and you learn their positioning and where they're at right now? What surprises me honestly is how well they know the rest of the world. You know, if I talk to like a portfolio manager at a Chilean insurer, he can have a very sophisticated conversation about Kevin Walsh and Kashkari and the inside politics of the Fed. And I wonder if I had the same conversation in the U.S., you know, could they even name anyone beside Lagarde? And I do think that's I mean, I don't want to do the whole ugly American thing, but that to me is a major weakness. I don't want to talk about the U.S. And you see that, for example, in the way the Iranian conflict played out. I think I think by virtue of us being the world hegemon, everybody and being somewhat open society, everybody knows more about us than we know about them. And I think that creates all sorts of biases and risks. Oh, wow. And do you think that that's an opportunity? Like, I'm shocked at the the willingness of people to to stuff their money into an overpriced currency in an overpriced stock market that is the highest concentration that it's ever been. And I get it. It's working completely understand. So it's been the right trade. But as it becomes more and more overpriced and more and more concentrated, it just seems to get more and more scary to me. I would agree with you. I mean, I see I see the risks really building in the U.S. stock market. And then, yeah, I see all the you know, that on the boat, right, is everybody's on the same side of like, OK, you got to be in the U.S., you got to have the, you know, the story, the capex and if any of these things, you know, turn out to be missing, for example, going back to this whole Brazil story. Right. I mean, if if Brazil growth disappoints and Lula is elected, I mean, it's not the end of the world. Like, you know, people will, you know, it'll be a bad quarter or so, but then you'll go back, right? I mean, if the whole AI thing blows, that's really bad. So just from a risk management perspective, I have to agree with you. All right. What is the thing that keeps you up at night the most? Like, what is the what is the market? What risk is the market underappreciating? In the long term, it's got to be inflation. I mean, if there is only one, I think it's it's still going to be inflation. I think the, you know, now we had a couple of good, you know, PPI, CPI. You see, like, CPI swaps have come down quite a bit, breakevens have come down. I understand it for the next year. I wouldn't bet against it. But yeah, five, 10 years. I mean, that that one good CPI report changed nothing about the next 10 years. And I still think we are in this environment of, you know, it's like if you can think about a pendulum, right, a pendulum, just, you know, usually every every move is less strong than the other one. And I think the pendulum in the U.S. is swinging with harder and harder. And we are still in this escalatory dynamic, whether it's in Iran, whether it's with Russia, I think that the U.S. politics are getting increasingly violence, increasingly like between, you know, clash of the populists, that we will have a left wing populist take over the U.S. in 2020. I mean, I think that the U.S. politics is going to be a little bit more aggressive in the future. I think the U.S. is going to be more aggressive in the future. And I think the U.S. I think the U.S. surfing without a wetsuit it never happens uh that means that we're gonna have like uh you know massive flooding in latin massive drought in uh in um east asia uh europe we had all these fires in the summer like we could have another shock to agricultural prices next year uh and we still have these fertilizer issues that are lingering uh so you know i'm saying like i i don't want to sound like you know the the catastrophic guy but there's there's no shortage of things that could you are i have found somebody that is structurally more bullish on inflation than me because i i like we're both kind of looking for a cyclical downturn in inflation but you're you're scaring me on the other side and you're making a lot of sense i tend to agree with you um but wow that's uh that's a great note to end it on now listen before we end uh you I've asked you all the questions that we've had over the time so let's talk a little bit about your trip to japan because more and more people are traveling there and you were there with what teenage boys can i ask yeah yeah so so tell us what the highlights were you know if anyone's thinking about doing this trip would you recommend it um what would you make sure you hit and what would you avoid give us the whole kind of uh uh vincent deloade's uh guide to the to japan to japan i mean the whole thing was awesome i think if i had to pick one i mean we we hiked mon fuji so that that's a that's a serious mountain and uh so how long does that take is that like a multi-day affair two days yeah okay so you sleep halfway up or yeah which is really cool like you stay in a little hut you know when they do all the cute japanese things and uh you know everything is spotless and uh uh no it was so that was that was definitely awesome um yeah two two thoughts maybe trying to generalize from from my experience uh i think i can share two thoughts on that uh the the first one is that the the magnitude of the tourism boom in japan is something that's kind of part of my case for for the stronger yen now tourists i mean japan there was no foreign tourists in japan for you know long 20 years ago almost no one now uh tourism is japan's second largest exports almost on a par to cars and again go really after this to this idea of you know europe versus japan uh so japan is also getting hit by the china eevee car shop right but as the as the car production declines the tourism is picking up right right europe is not in the same boat uh if things continue within five years there will be more foreigners visiting japan than the us and i mean the two curves are incredible like for the us like the number of tourism as plateau is actually coming down that's i think that's that's uh the price we pay for being kind of you know big bullies like we're pissing off a lot of people or the japanese are doing the other the other round so i think that's that's that's becoming a structural competitive advantage and it changes the trade dynamics and all that so that was the first idea and the second one is i i thought it was interesting to look at japan from from the lenses of my um my 11 year old and my eight year old um and for them they are utterly convinced that you know every everything's better in east asia basically like they the way they view japan china and korea is the same way i view the us growing up as a child in france in the 80s you know it's like oh wow they have the new nintendo there everything is better and this is weird because this is not i'm not with a song who's you know our common friend who's like you know kind of and for a reason but he's always talking about asia i never talk about asia i don't make them i don't have like all the it's just popular culture has convinced them that but like they don't even doubt it like for them the most the technologically advanced i have to tell no you know the us is still richer like this is like i mean i can't explain gdp to them but like most chinese people are like live on way less money than you do kids but no they are entirely convinced that everything's better in asia and that's i think it's a generational thing okay thank you very much for your time why don't you tell people where they can find more about you and your great service in your great firm uh thank you uh so um yeah i work uh for uh stonex which is a uh fortune 100 uh almost 20 billion dollar market cap these days that's nice very well yeah uh congrats to the executive team there uh so the easiest way is if you're a client already um you know just reach out to your broker and say i i want vincent stuff and we'll figure it out uh if not uh my twitter handle x x handle is at vincent v-i-n-c-e-n-t deluard d-e-l-u-a-r-d vincent deliard there is a pin tweet where you can subscribe for a free trial uh we give them out to everybody reach out in your dm if you're looking for a specific report having a conversation um i spend less time on x because of all this ai slop these days but uh i try to spend more time interacting with actual intelligent people uh so i will still do that um and then yeah you can reach out by email vincent.deliardstonex.com yeah and if you're an institution make sure you hit him up on the bloomberg he is there vincent it is always a pleasure having you on the show thank you very much for your time buddy thank you kevin bye all right patrick time for talking charts lots happening actually a lot is happening let's uh let's talk about the s p 500 uh and and the market so now me and you recorded uh on uh thursday the 30th uh july 30th uh a day where we had this bear a bullish engulfing candle come in on the s p so we have not talked at all about this but let's talk about the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and uh the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 and the price of the s p 500 uh from my interpretation and you can certainly tell me whether you feel the same but it what's happened more and more is that options have become a bigger and bigger player on the field and when markets are not asymmetric increasingly traders reach for uh out of the money calls uh or even at the money calls as a way to get participation on the upside and when that explosive move happened uh i i was reading uh one of the i think it was charlie mcallagher or something but the the implied on the dailies were basically so underpriced that dealers had to reach for extraordinary amounts of um of hedging as the um they were basically mispriced and they were the fuel that really sparked uh that additional uh marginal buyer that uh that really uh kind of literally let's call it a crash to the upside because that's what it pretty much almost was uh it had all of the characteristics of what happened on the way down but it happened on the way up we saw uh like we saw to the hundredth percentile the uh steepness of the call skew occur like where they literally uh um steepen the right tail like that's very uncommon to see on the s p during that move how did you see it did are you have any yeah so i i noticed the same thing you had a lots of days where the more violent it was to the upside usually you get uh selling a vix and uh decline in bix as the we go up into new strikes and uh the people sell uh calls against it instead what we were seeing was vix was positively correlated to the stock market we would get the the stock market rallying all day and it was like vix was going up with it um oftentimes that's the a bad sign and shows that we're near the end of the rally but it doesn't like all these rules and kind of old like uh relationships seem to be breaking down um in hindsight patrick i think that it's a bad sign and shows that we're going to have to do something about it and i think that it's pretty clear that the leo leopold uh stop was was more pushing markets around and that was the real problem and once we cleaned that up it was the you know all clear for the bull market to resume and come on the uh when citadel picks up you know five to ten billion dollars of assets at a discount it's only proper that they get to unload it a week later i'd have five you know everyone says that you know you're going to get a lot of money out of it and i think that it's a good thing that the leo leopold was able to take advantage of the fact that the leo leo leopold was able to take advantage of the fact that the leo leopold was able to take advantage of the fact that the leo leopold was able to take advantage of the fact that the leo leopold was able to take advantage of the fact that the leo leopold was able to take advantage of the fact that the leo leopold was able to take advantage of the fact that the leo leopold was able to take advantage of the fact that the leo leopold was able to take advantage of the fact that the leo leopold was able to take advantage of the fact that the leo leopold was able to take advantage of the fact that the leo leopold was able to take advantage of the fact that was in the pressuring the stocks down into the print. And that was really where we saw the weakness. And then it was just a matter of instead of them, you know, holding it and being able to sell into the rally, because the rally, you would think that if they were long all this inventory, that the rally would have been like hampered on the way up afterwards. But to me, it almost feels like once you clean up the cellar, there was no more cellars left. So I really I kind of interpreted the opposite of most people where they think that he made they made all their money by being long afterwards. I feel like that they probably made just as much, if not more, by being short into it or by pushing it down into the level. And I suspect they're long gone. And and I also listen, you know what? It probably wasn't just Citadel. There's a lot of other people like everyone would have known that trade. I'm sure that when you were if you're in the know on Wall Street during that period, you everyone knew he was in trouble and they were pushing it down lower. So, OK, well, we agree. And so let's talk about here and now. So since that squeeze higher, we've gotten a weak jobs number, inflation numbers that are coming in soft. And overall, the stock market is. Was trade until today's little pop and we're recording this Thursday afternoon, the beyond that little pop. We've had a market that for a week has stayed in an incredibly tight range. It was almost inactive during this, you know, five days right here in the middle. And but what it to me is price acceptance. The this. Could have been a classic product when you have that kind of a squeeze to the upside, there could have been price rejection at that upper level. Sellers would have hammered straight into the strength and it would have faded all the way back and we would have been talking prairie dogs all day long. But but it actually broke out and they accepted the new fair value up at the upper level and the sellers. Have not even begun to retrace any in any form that advance on the upside to me, no matter how on a macro scale, one can be bearish saying, you know, the AI bubbles burst and and turn the tide on a number of different metrics, but on a tactical short term basis, as in, let's say, a one month basis. This broke bullishly, and we have the bulls have a very strong cushion safety net where, like, we would need a greater than a 400 S&P point drop to trigger CTAs or systematic selling, there would need to be to reverse the primary trend to do anything at this moment, so long as all dips are bought within 100 S&P point pullbacks, then we could end up seeing this being the story. Of the rest of the summer, like we could be at Labor Day, and we could be at 8000 on the S&P. And so, so that we have to separate the timeframes of a macro thesis versus the short term technical reality, which is no matter how bearish one can be in the long term, on the short term, the bulls prevail, and they're in control, they've got the possession of the ball, they're the ones making the drive, and the bears have been broken, and they're, and they're scrambling and routed. And so until they can regroup, there's right now you have to respect that the bulls are in control. At this moment, the question really becomes what will drive a bull continuation, because this impulse, shockingly, was driven by mag sevens. Yeah, there, there was an explosive move on. Amazons of the world that that shot higher. So but the question is, can the mag sevens continue to do the lifting? Because the semiconductor bubbles burst, and they look like dog shit. I don't care if they're up today. The this chart, this chart is brutal on these semis where I have here, like the semis, you know, S&Ps at all time highs, semis have not even been able to to a 50% retrace of their prior drop. And some of the individual semis look like shit. You know what it reminds me a lot of? What's that? I was waiting for the story. I'm a little slow today, by the way, because I because I had the my market. I don't meet up. We'll talk about that afterwards. But yeah, not my market. My macro tourists meet up. Sorry. Okay, so so you're a little bit hungover. Yes, I'm a little bit rough this morning. Okay, so this is very reminiscent of 2000. I you know, I've some I'm not the first person to say this, but I want to actually give context to this. So if if and more importantly, I think that the the poster child for this is actually the Cosby. So what I want to do is I'm going to put on a weekly chart on the NDX and I want to go and have a quick peek at the bubble. And so the NASDAQ when it peaked back in the dot com bubble, we had a 40% drop that happened about two months. Okay. And then you had a dead cap bounce rally. It was a staggering 40% rally that took three months. And as you point out, you lose 40%, you rally 40%. You're still well off the high. So this when we when we take a look at, for instance, the Cosby, which I continue to think is the kind of epicenter of the bubble in that manner. We had not a 40%, but a 44% route on the downside. It took only 42 days, not two months. And at this moment, over the course of three months, there's nothing stopping the Cosby from going to 7500. Up 40% or even 8000 going up 49% off of there. But it is very likely that the Cosby and the AI story can mimic the NASDAQ in the post peak period, where everyone over the next couple months will be making lots of money and say, Oh, shit, in the last two months, you know, the Cosby and semis are up 10, 15, 20%. But structurally, they've already pivoted into a bubble. But it is very likely that the Cosby and semis are up 10, 15, 20%. Alls will be disappointed. And it's funny because a lot of people are talking about they're shocked by the low VIX. First of all, at a 14 handle. First of all, I want to highlight that there is a long history of summer doldrums on the volatility indexes trading near lows during August. Simply because there are many occasions where the summer literally just becomes boring. And you're not going to have a volatility premium that is reflecting an active market when, you know, there's two windows. Usually during Christmas and during August is the kind of typical periods where volatility tends to revert to kind of doldrum levels. And I don't think reading into a 14 VIX handle here, it has to be put in context of the fact that it is August 14th. Yeah. 14 isn't that low. Like, we've been at 8. Like, we've been at truly stupid. Well, on a daily VIX, like if you look at, you know, daily VIX, you got your 8 handle on VIX on a one-day vol basis. I mean, that's right along one-year lows for daily volatility. So, that's already manifested. But we've been on 8 for 30-day VIX before in the summer. Yeah. Yeah. To me, no, not 8, 12. Really? We've been at 12. Well, we've been at realized of something. Realized, yeah. No, realized, yes, but not VIX. Okay, let me just, I thought we had gone down to 8. Maybe I'm wrong. One of the things, though, Patrick, that I will, like, and I'm agreeing with you here is that if you think about the potential, like, what could have derailed it? What could have made an exciting August? To me, two things could have made that. We could have had a CPI that put the Fed in a box, like, made it, made, increased the pressure. We didn't. We had a CPI basically on the screws. I should save that conversation because I want to move to rates in a second. Okay, we'll talk about that. But then the other thing that could have, like, made things exciting this August was earnings disappointing. And they haven't. They've meet slash beat. Yeah. So, the reality is that between the two. Big macro drivers that would have added some excitement to this summer, both of them have come up, you know, duds. So, it's not surprising that we're just, you know, meandering around and it's boring. And I suspect that's what will continue. Now, the fact that you and I are both saying this means, you know, folks, you should be going out and buying VIX because something bad is going to happen. But, yeah, I guess I'm looking at the chart. Well, VIX is very low because it's only 30 days forward. And realistically, between now and the September expiration, especially with the fact Labor Day comes in, like, what is it, the 7th or what is. It's late, yeah. Like, yeah, Labor Day is, yeah, the 7th of September. So, like, you're one month forward. The 14th of September is one week after Labor Day. So, the likelihood that the next 30-day window is summer doldrums is very high. Okay. Yeah. Patrick, can you pull up VIX in 05? To, like, 07? And then it did the same in 16 and 17. We've been down sub-10s. Yeah. Given how low correlation is, like, it's. You're talking about these two little dips down to 8. Yeah. And then, like, we've been down there. Like, 05 into the, like, the last. There was a, you know. I see it was 07. Yeah, sorry. Into, like, 05 to 07. The whole period was super low. Yeah. Anyway, I'm a seller that we're going that low. But. No, but 14 is. But the point I want to talk about 14 to me is just reflecting the time we're in. Like, why should we have 18 to 20 vol in August? Now, let me. Let's move on for a moment. Okay. I want to. I want to specifically talk about mine. I want to talk about my current market call. If this market is going to clear 8,000 and have one more leg higher, which I actually am more sympathetic to than you. You are clearly much more in the camp that's thing. I mean, for me, it's a simple call. Will we see a few of the key mag sevens turn up off of key levels? Let me start with Apple. Apple had an earnings miss. Gap down, but as more or less held into what we would define as a Fibonacci. Retracement. If in the coming weeks, Apple breaks back and above its 50 day moving average and turns back up at the same time to Google, which has been, you know, had a huge earnings miss extraordinary comeback in the post earnings miss window and is also retraced down into fib zones. The point here is if the mag sevens are bought on dip. And they all go through one more impulse higher indexing staying flat. And I think your flat scenario is where the mag sevens tread, where they just grind into a spin wheels in a mud, not necessarily bearish, but simply are not contributing under that scenario. Semiconductors are already stuck. And so if mag sevens get stuck, there's just nothing that's going to take the index. It's higher. There isn't enough breath in the market. And so I think that whether you're right or I'm right is going to be determined very quickly as to whether or not the mag sevens participate. If they if they fail at these levels and these big behemoths hyperscalers are not participating, this index ain't going nowhere. OK, and I I'm fine with that. And I actually do think that they all going to fail and they're going to be choppy. And every time you turn around, somebody is issuing more. Well, I'm giving them the benefit of the doubt. So I actually we we have just slightly tilted the thing. We agree on the outcomes if certain scenarios happen. But you obviously are just thinking one's get more likely than the other. Actually, before we talk commodities, let's talk interest rates and let's talk about what happened with the Fed. So let's let's first rewind here. Talk about the nonfarm payroll coming at minus 20%. And then let's talk a little bit about what happened with the Fed over the past year and a half. So let's talk a little bit about what happened with the Fed over the past year and a half. Because obviously, a weak jobs numbers, it's very hard for the FOMC to feel that they need to tighten conditions. Right. And that was the first kind of little blow to the hawkish positioning that followed up. With yesterday and today, we got the inflation numbers. And while CPI literally came in line with expectations tick by tick to the forecast, we had a weak PPI. The main PPI came in flat versus 20, forecast was 20 basis points. And we had core PPI come in at 20 basis points versus 20. So inflation is clearly not responsive, even in spite of tight diesel markets and all these other types of variables that are in there. We're not seeing it translate into inflation that is more or less running away. So I'm going to let you comment on all of this together. I'm just going to set this all up. But what we really saw, which I thought was super interesting, was we were seeing. A much greater probability than not on the Fed funds futures that the Fed was going to move in September. And literally since Friday till today's PPI numbers, the stir traders are walking back the probabilities of a Fed move here in September. Now giving a 65 percent. So two third odds that they don't move here in September is of these weaker numbers. And we saw that with the. Uptick in the silver futures, they've all kind of turned a little bit. But the part that makes me really interested about this is where I want you to take over and run with it for a little bit. The next meeting, if they don't move here in September, the next meeting is the 28th of October, which is a week before the elections. Yeah. And unless this my opinion is unless the next month numbers are so hot. That the Fed can't ignore them. I feel that it's much more likely that the Fed will have to take the knee in October as well in terms of not moving to not risk being politicized in that manner. To me, the September I thought was last month. But to me, the September window, if they're going to raise, it was that they were going to raise here in September. Because then the only alternative after that is to really raise at Christmas in the middle of December. Yeah. Yeah. So right now, the market is pricing in for year round. The belly of the curve at one rate hike at a 45% odds. But the shape of this distribution has massively pivoted. We had a fat right tail, which is that the odds of two rate hikes a month ago was like 30 plus percent. And the odds of them staying unchanged was down 20%. But now we're talking a one in three odds that there is no rate hike at all this year. And the majority is that maybe they might raise once. So the market has suddenly become in the camp that it's a one and done. Now, weak numbers, all of this, go for it, macro tourist man. Give us the. Well, first of all, I know somebody, there's going to be a real stir trader in there that's going to say that you are talking about the projected path as opposed to the distribution. So I just wanted to say that that's not you. You misspoke a little bit because to figure out the distribution, we'd have to go look at the options and to see how they've changed that. Because even though the projected path might be doing that, the distribution might be changing. But in terms of that projected path, I agree with you. I can't see them doing an October 28th hike. Like it'd have to be inflation just screaming. Employment, you know, tightening up, meaning that the employment rate is going straight down and everyone making money. Like it would have to be something extraordinary in my mind for them to tighten. Like, what is it? Five days ahead of the election or three plus three, six, six days before the election. They're just not going to do it. Like, so I agree. And I even think that it's difficult for them. To tighten in September. And this was part of the reason that I thought if you were going to do it, you should have done it last meeting. Yeah, because even September, I think that that is extraordinarily close and could be viewed as trying to change the election. And that's why I really did think they were going to go last time. Given that everything's headed the right way, Patrick, in terms of for the Fed, it sure seems to me that that they most likely outcome is that they just. Stay on hold now, right? They had the chance to hike. If they wanted to hike, they would have done it. That's not what the market's pricing in. But I personally am in this camp. Yeah, I'm in agreement with you. But but right now. But it's headed that way. So, yes, the market is still pricing in a hike. But, Patrick, that they since we've last spoken, they've priced in less hikes. Yes. And that's the that's the point. Right. Yeah, I have to. And I'm just looking. I pulled up the one year inflation swap to see what's happening there, because that is the market betting on where inflation is going over the next year. And that's not, you know, that has nothing to do with Fed funds. That's just folks betting on the inflation rate. And that that thing is, you know, it was three percent at the beginning of June. And now it's one ninety one. And we did have an uptick in July. And now we're almost back on the road. So the market is telling you that inflation is not really a worry. And given that, if the market is telling you that the inflation is not really a worry, given the fact that we're so close to the midterms, it sure seems to me that the Fed has time to just wait and see that in reality, you know, it will be the people that said, I don't think that Warsh wants to hike. He's not as hawkish as he made it. In hindsight, that was probably correct, right, that that he was talking more of a game in terms of pretending to be hawkish than he's probably going to end up being. I think he positioned himself. To be hawkish, and if the data was continued to be hot, I feel he would have been hawkish. I generally think he positioned himself, but he made himself that. Look, we're going to be flexible and we're going to adapt to the unfolding reality and the data as it comes. And what's clear is the data is coming like since his initial kind of inauguration and coming in, we had the AI semiconductors peak out. Yeah, we had we had generally inflation coming off. Oil had the big June decline. And even though it's normalized a little bit since then, overall, a lot of the things where he came in, listen, we're ready to fight. Things are like, well, maybe there's no one to fight, you know, like, you know, he point is, is I don't think I don't think he did a show. I feel like he went in and said, we're ready to fight, but we need the data to prove that we need to fight. And it's not. Yeah, listen, whether he made. To do that, whether he was trying to force the long end to to to at first, people were saying he's trying to force the long end to go down and yield because he's trying to flatten the curve. Then people were arguing, no, he's letting the long end do the heavy lifting for him. Everyone's got all these theories about it. I happen to believe that he's, you know, he's still just one person in terms of on on a committee and he has to deal with the with the committee and the committee is going to do what the committee. Wants to do. I don't think he can bully it around as much as people think. And on the whole, I suspect that the market has paid way too much attention to what he said. And we should just kind of think about what the committee wants to do. And it's I had a good buddy that really smart guy convinced me he's like, this is still kind of the Powell FOMC in terms of the committee members. And it's not that much different. And if you take out what Borsh is saying in terms of waving around. All these different theories and ideas. The reality is the committee is going to do what the committee wants to do. And if Powell was FOMC, this is probably where we would have been anyways. Right. Like he would have been he would have been in the wait and see mode. And the only thing that's changed really is that we got a little bit excitement in terms of for a little bit that we had more of a chance of a hike priced in. And I but he in fact, it seems to be worse. to interject some volatility into it um and he was successful in that but i i at the end of the day i think patrick we're back to the just that they're gonna do the fed's gonna do what the what the economy makes them do and to your point the reality is that we've had the uh conditions ease up for them not ease or may become like make it less so they could be more dovish and that's what they're doing all right so i want you know with the top of your head yeah give it i'm gonna ask you for a probability uh i yes uh throw probability what is the uh the probability that you assign that when we're looking here at the december 2027 so far that we saw the bottom um okay so you're asking numbers like what's the probability at the bottom that on the distance contract december 2027 we're going out to end of next year um okay i gotta look at the curve exactly one second uh no i said at the top of that bald head and then you're looking at the curve you're you're trying to calculate i want i want i want the i think there's a good chance i i'm more bearish on the economy than most so i have to take the uh the the increased chance that that's the bottom because i suspect the economy is more it's more precariously perched than than most the most market but i would probably be on the more bear side in terms of economic of the economy so therefore the sofa which is bullish this over because the economy rolls over 25 the one-third two-thirds um we're just we're just having fun just yeah yeah i i'd give at least a two-thirds chance that that was about so now uh let's go through the next step yeah um what would you envision a fantasy scenario where um this is clearly a wrong thesis what would have to like you can't just say inflation going up because something would have to be driving that inflation higher like what is it that would have to be the unfolding reality for this thesis to be crushed on the spot and the sofas go for another leg down okay that's a great question um from 1982 all the way to 2020 um the markets were or 20 the 2020s wrong probably 2008 the the gfc the federal reserve um tried to influence the economy by by changing interest rates and they changed interest rates to try to encourage private sector boring and that was how they influenced the economy in 2008 we hit the zero bound and they could no longer encourage private sector boring borrowing and so therefore eventually they tried all these extraordinary monetary means but but those didn't work because the reality is that if there's nobody to borrow money, then you can try all you want, trying to shove it into the system, but it doesn't create it. And then in 2020, we, the market figured out or the government's figured out fiscal spending. And so we had fiscal spending. And since then everyone has just been focused on fiscal spending and thinking that that's the only game in town. We went from just focusing on lending money into existence, which is what happened from 1982 all the way to 2008. And then we started to figure out fiscal, which is the government spending money into existence. And we became focused on that. You asked me, what would make me anticipate higher rates in the future? In essence, this private sector lending money to existence continues at a, at a fierce pace. And we are seeing some pickup in private lending in terms of banks lending it into money into existence. And what would occur is if I, I misjudge that ability for the gov for the private sector to create money. And therefore, if that continued and it would probably be a monetary inflation is, but yeah. And it's, it's like, you know, not supply shock inflation, but monetary. So you're not saying oil going to a hundred you're saying, no, cause I didn't want to. Yeah. Cause I feel like oil going to a hundred does it will be actually eventually deflationary for the economy because it, it will stifle the economy and cause it to, to eventually go lower. So to me, what I would be worried about is that I am incorrect in terms of my, uh, downbeat dour look on the economy and that the AI boom, you know, expands into the general boom in the economy that encourages people to go out and buy houses and to take loans and, and do all the things that we used to do in terms of, in terms of creating money through it, being lent into existence. So that would be what I was a, or I don't think this would happen. And I do wonder even if it did happen, if the w how the market would react, or we go back to running massive deficits. And I just don't see that happening. That's not a very realistic option. Right. And in fact, when we talk about like the one big, beautiful bill, we are going to go from all of this stimulus being front loaded, to, to encourage, to help the Republicans win as many votes as they can in the midterm on the other side of the midterms, a lot of these one big, beautiful bill, um, kind of expansionary policies that we'd be experiencing. We'll go in and flip the other way. So I, I, you know, I don't see us being in a situation where the government is spending the money into existence and where I would be wrong is if I misjudge the private sector's willingness to lend money into existence. Awesome. Okay. Long bond. I want to, uh, uh, it's been the chart of death yields up to five and a quarter beta, a beta highs. But one of the most interesting things that I wanted to observe, uh, and keep talking about, and this is just at the caught signal.com looking at the commitment of trader reports, uh, which is by the way is free. Everyone should go check it out. Caught signal.com. It's free. Yeah, it's completely free. And it's free. It's free. It's free. It's free. But the interesting thing is, is that the two year note by large specs is in the hundredth percentile of positioning. Why long or short the two year. Yeah. But long or short, uh, the a hundredth percentile. Oh, you talk about it as percentile. So you're saying that long, they're on the long end, right? Okay. It's crowded. Okay. Versus the 10 year being at the zero percentile and the 30 year at the 16th percentile. You're seeing. Everyone's got the steepener on. Uh, yeah. And so what, what's interesting about this is how we got here. And so you can see the two year still net, uh, positioning is short as a percentage of open interest. It's just miss massively reversed, but almost all of it is not because there's a huge amount of long gross longs adding new positions, but rather over the last, let's say three months, two, three, four, five, six, seven, eight, nine, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 45, 46, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 67, 68, 69, 70, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 62, 63, 64, 65, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 90, 91, 92, 92, 93, 93, 94, 94, 95, 96, 96, 97, 97, 98, 98, 99, 100, 100, 100, The interesting part is that there's been a lot of people betting on the long bond going down and they've been rewarded. They've been rewarded because it's been getting its face ripped off. But the interesting part there is, will this lead to a short squeeze? Like, will there be a point where everyone is so consensus short the long bond? Because it's like, literally, you guys can all hold hands and sing Kumbaya or the long bond bears because there's literally not a long bond bull is few and far between. Including, by the way, Lacey Hunt has gone short bond. So, like, maybe that's the bottom. By the way, like, you know, like the famous, what's the, you never go full whatever. You're not allowed to. Yeah, you never go full. Yeah, you never go full flip because the reality is, and I know this all too well, if you're like a big bull and then you go, I'm giving up, I'm flattening my position and then you go short, you're just like asking for it. Like, that's the worst, utter thing to do. Like, because the reality is that if you were bullish and you're wrong, you're not thinking clearly. You're not, you know, approaching it with a nice open mind. By the way, I just want to push back a little bit. Patrick, you say, like, all the bond bears have made so much money. And one of the things that just kind of frustrates me about this is that you can tell that folks that are really trading and the people are just talking about charts because, like, those are like, look, the yield is at all time highs. And then you go out and you look at the total return. And I just pulled up the total return of the long bond future. And I'm actually shocked. You could have bought it at the. Lows in 2023 and still be up money. And part of the reason we're talking tactically, the move that has happened in this year, right? Tactically, we went from 119 to 109 in in less than a year. You're not is somebody that's been short the long bond this year. OK, for sure. Is making money, but it's not as good as it seems. And that's my point is that. Holding a high yielding asset. Short over the long term has a carry. You're I understand. Right. Like, it's just kind of all these guys that loved long bond at one and didn't understand that the reality is that when you had a one percent coupon, it was he was it didn't cost you very much to be short. The thing versus now, you know, five. Let's let's be clear that the short interest in a gross short interest was back in January. The start. January 100 and, you know, fifty six thousand contracts on the 13th of January. And now the gross shorts at their at their peak were four hundred twenty thousand. So you had short sellers this year in this calendar, not these long term bears that would cost to carry and all the shit that you're you're factoring has almost tripled from January 13. OK, and I completely agree. And that's what everyone's been highlighting is that the C. T's are short. We're the most short we've been in a long, long time. Your question was, are we going to get a rip the other way in terms of do they get squeezed? I do. they do i think that's a very good chance i'm sitting around hoping for um a kind of what do you call it your turtle head formation i'm hoping for like a big puke and the fact that i'm hoping for that so that i can buy it almost leads me to believe it won't happen that it'll just all of a sudden start rallying out of nowhere and and catch everyone off guard now having said that patrick i think part of the reason that this is such a crappy looking chart is because the hyperscalers just keep issuing and issuing up issuing and that is the part that and that's back to my thing about the private sector doing some crazy stuff the private sector is is is borrowing and expanding you know credit in a big way and that's the part that i'm having trouble reconciling um you know the besan can go and pull back on the duration that he's going to issue here and try to get the long end behaving better but the reality is that the hyperscalers they don't care and they're just they're the ones that are the marginal extra seller that is causing the long end to weaken and as long as they're doing that like did you see that cnbc round table or whatever yeah where like all those guys by the way chanos had the greatest comment he said like the next time these guys all get together it's gonna be in front of congress i thought that was a hilarious comment um but they're just like what was it half a trillion dollars half a trilly like i was just laughing like oh yeah sure why not why not half a trillion like just come up with a number let's go for it and we're in just this silly season in terms of them issuing and one of the things that really worries me patrick is that if you're sitting there and you're experiencing the long your your option adjusted um spread widening meaning that they're costing more to borrow like if all of a sudden you're going from an eight to a nine you might think that usually that would cause them to borrow less but the reality is they think that they're earning 25 on it so it might not be a situation where even as the market makes it more expensive for them to borrow that they slow down their borrowing and that and that is ultimately what i'm what i'm grappling with within the bond market is that this massive you know um creation of duration through all these hyperscalers is weighing on the bond market and it's it's a it's a difficult thing ironically patrick if we have a situation where the ai trade rolls over and people don't want to lend to these guys anymore that would be the greatest thing for the long end yeah anyway so what do you think so let's let's move on are you no no let's let's go um i'm i i'm not tactically bullish yet i i i believe that the shorts continue to be a reward on the short term and like for instance the tlt i wouldn't be shocked if we had another two points down to 80 or something at some point there's going to be a bottom and it's such a crowded short that there's going to be a violent move the other way but i'm not saying that it's happening this summer like okay it might be it might be a september october story it might happen after the september fomc or some trigger like this uh i'm i'm not i'm not positioning now for that and here's the question on everyone's mind did you take down the lacy hunt posters from your bedroom i did now don't tell anyone no so yen oh god you just want to rub it in you want to you rub it in that i was kind of somewhat bullish bonds uh and now you're going to rub it in with the yen well listen uh we did our episode recording last week yeah and this was just as raw on the tape as it could possibly get at the time when we were recording on the uh on on the 30th and obviously the intervention came in like a storm yeah like they just came in what was it 100 billion that they um i don't know i i missed it was a lot of money and then it was like that whole thing with besson posting the posted note let everyone read it did you see that no oh so he was at some sort of meeting uh and he left in front of his uh like you know where he's sitting they just they let he made it so that the the reporter could take a picture and it was literally it says like by japanese yen like you know it was like 5 to 10 billion or something it was some i don't know what the number was it was something like that but he so he he leaked it he like the guy's cage he knew it was like five to ten billion or something it was he knew what he was doing he knew what he was doing so what was interesting um is uh actually uh it was incredibly supported by uh crowded positioning so this rip we saw going into the meeting going back to uh the cot report that basically was two uh issued two days before um uh the uh the intervention so it was uh released on tuesday the 28th and we saw at that moment a five-year gross short positioning extreme on uh on yen futures oh okay and uh so obviously there's it's a bigger market but it gives a sentiment view of how broadly people were positioned um but what's crazy is the intervention created um a a hundred and eighteen thousand contracts swing in a week where where the the net position went from a like a hundred and sixty three thousand to forty five thousand contracts uh uh on from a net short perspective literally in a week flipped it was one of the largest cot report swings of positioning that i've seen uh yeah it was huge and obviously the intervention was the the gas like they lit it but they lit it at a time when everyone was leaning short the yen and then they scrambled like uh uh like chickens with their heads cut off to cover their and um that added the additional velocity to the to the burst and so now that happened now what's the interesting part is did it start a feedback mechanism that is now a new yen rally or will it be a deja vu of all the intervention attempts all year long that ended up just immediately fading right after they intervene uh now i'm not making a forecast but i'm just saying we're about to find out yeah and and listen absent them doing anything you have to almost go with that right like the the reality is that if they're just gonna waste some bullets you know and not really change anything then it's not going to accomplish anything that it's not going to work you have to either raise rates which i don't i would be like the numbers correct me if i'm wrong but the inflation numbers in japan came in hot speculation is that they're going to raise yeah yeah but they they have to raise rates faster than the market thinks they have to raise rates raising rates to affect the price of the yen right like they have to you're right you have to like you have to the path has been priced and and the reality is that the you know whatever they're they're stupidly easy right now i don't think rates are as important as the gpif like i would be more inclined to change the investment policy than instead of doing the rates um that's just me but absent them doing one or both of those things then the yen's just going to continue to weaken and it like you know what's the that line the the definition of insanity is doing the same thing and expecting a different outcome someone should tell the bank of japan that so i am going to make a tactical call here okay bring it on tactical call is very simple uh we have now retraced 50 percent of the rise okay which is uh in trading terms is an incredibly common thing even dow theory or anything you you have the primary impulse and the secondary corrective retracement of the prior move this is like basic uh kind of perspective so we're at the inflection point if this was a meaningful turn and uh and in fact the yen is in a new a trend move we should see it start being bought in the vicinity of this area right here and it should happen soon as in the next week or two uh and uh and if that holds i will be in the camp that the yen is going higher but i need to see the level hold first i'm not making uh i'm not making my move preemptively i'm being reactively you maybe even have to pay a little bit of a higher price but i want to see whether the bulls can defend the line on the us dollar yen it's easier to quote that's about the 160 level basically so long as it stays below 160 throughout the next week or so and rolls over i think you can uh short the us dollar yen for another move but that level has to thing if if we're north of 160 then my entire thesis is dead i'm gone not interested you won't you won't catch me there but this is an interesting moment that i'm watching this okay from your lips to god's ears or the poj's ears let's talk commodities for a moment okay uh crude oil first of all um looks like it's found a a new fair value zone uh what was clear on the way down in june was everyone was uh there was a very large amount of speculators long on the 120 oil 150 oil thesis and they all got squeezed they all got washed out they all got margin called you got cleaned out in june and it was a bloodbath uh and um oil overshot completely to the downside no business being there beyond washing leopolding everyone on the downside of oil and now oil bounced higher you have a situation where once again uh we were one day away for the 40th time in in four months from a peace deal uh and uh and once again um it was a nothing burger and you have an iranian administration that continues to hardball because they know think about it from a game theory perspective the elections are several months away they're holding the cards uh you know uh if uh why would they be the one to uh compromise uh pre-election uh they they know that if the situation is uh is uh very bad going into the election that it hurts uh the existing administration that is basically attacking them the point i want to highlight is that there's no reason for a peace deal to happen quickly there's there there is and so the idea that oil's heading back to retest 65 while the probability is uh i would call that the outlier scenario there would have to be a substantial building of longs and they would need to get squeezed but the crazy part is in spite of oil going from 70 bucks back to 90 and settling at higher levels there has been no meaningful rebuild of long positioning the cot reports basically everyone is sick of this trade nobody wants to deal with trump tweets anymore and no matter what the situation is fundamentally about oil this the everyone's been broken the the the the uh and and so the that to me actually is supportive because in order to wash oil back down to 65 you would have to have someone to wash out and there and there's no rebuilding of long so there's no one that's that's there to be washed out of the position and so i actually think we found a fair value zone the way i've been putting it is that this over the pre-war period this kind of 60 to 70 dollar area was the fair value zone uh now it with a tight oil mark is driven by a straight or hormose hormose that continues to be um uh constrained uh probably 80 to 90 is probably going to be uh the new higher shelf uh the area where generally prices are going to be going to be going to be going to be going to be will kind of gravitate above, below. And if conditions get really bad, it could obviously shoot. But I think that this is one of the drivers behind a lot of energy stock rallying because it's the acceptance that we ain't going back to the unprofitable $60 oil and that there's actually profits to be made at these higher levels. Any comments? No, I will kind of echo from a fundamental basis what Paul Sankey highlighted the other day. And for those who don't know, he's an independent energy analyst. And he said that there's indications that China, when oil slips back below 80 into the $70 range, they start refilling their SPR. And then when it goes back up to the $90 or $100 level, they ease back. They ease back on their filling of their SPRs. So they're in essence creating this new band, right? And it was interesting to hear you come up with the same numbers from a technical perspective that Paul is highlighting from a fundamental perspective. Smart minds think alike. Yeah. Just different ways. Anyway, let's talk gold. Okay. I know you did a macro tourist write up on the gold miners. By the way, all of our, all of our, all of our, all of my readers were like, you're stealing a page from Patrick's book. I, and, and they were like, I didn't know you actually, you know, chewed crayons as well. They gave me, you know, multiple like good, good, good natured ribbing about to the fact that I was doing something from a technical basis. So tell me from a technical basis, was I correct? You're getting, you're getting smarter and smarter every day. It's the, the, the, this is the first tactical meaningful turn in gold since the violent March retracement that was from a crash sequence on the downside of gold. We have not seen enough time pass to know whether this is still the start of a new trend move. What I'm fearful of, listen, I'm actually bullish and I don't want to sound bearish. I'm just fearful of is there is a lot of people that love gold and silver. And I remember back in May of this year when silver made this breakout move right over here on all technical basis, the amount of people on every side on every social media platform and newsletter thing claiming that the new silver bull market has begun blew my mind. I am media is like, how can so many people know and look how it faded back then. Now I'm not calling for this to happen now. But what I do want to stress is I am shocked by how consensus it is that this is now already the turn in gold. There is, there is a very large amount of outspoken people that is, that have made this. Now, if I was a pain trade and let's make a pain trade thesis. The pain trade thesis is how can the market fuck over the maximum amount of people in this? There's a lot of people that have leaned heavily into the fact that this is that major turn point. See, I disagree. I don't know who you're talking. I think that's your crowd. I'm just talking about my feeds. Yeah. People that are coming on. I, I just, I think that that's more among your gold crowd. Sure. And, and I think that of course the gold crowd is trying to buy every dip and trying to come up with bullish reasons. So I won't push back and argue that they're that they're skeptical because they're not, they are very excited about this and they do think it's turned. Having said that, when I think about more of like just the macro, community and like just traders in general, I don't see the same sort of excitement that you see. I, I, I don't, I, I, I appreciate the insight because I live in a bubble. Yeah. I think you do. Yeah. Um, so now having said that, I did have my macro tours meet up and everyone was long gold. So, but I think that that was just because it was in Canada and it was skewed to my crew. Um, so I, I, I just don't see it, Patrick. I don't see it. let's let's let's look at this two ways number one we had a two-year bull market that ripped to the upside right and uh that that rally on the upside was essentially a 3800 point rally let's round it to 4000 for the purposes of keeping round numbers okay we had a two-year uh four thousand dollar run and more or less we had a six month uh let's 1700 let's round it to two thousand dollar pullback we literally gave back half of the prior gain okay right so uh from a market perspective that is actually again a 50 retracement it literally is the market advances in primary trend two steps forward and takes one step back during corrections and it gives back half the gain so from an asymmetric perspective we are far closer to a buying opportunity than we were to the top this is already things so so when we look at this far enough out those with the buyer that are buying and forgetting about this for the next two three years and everything we're about to talk about is just noise this is uh this pullback is a tactical entry not tactical it is a long-term entry point because we gave back half of the prior rally it just is a good spot to take long-term position angle now so that uh being the first base the question is how is it going to play out tactically which is all these traders that are piling in on the first breakout above the 50-day moving average, it is not uncommon for the market to shame everyone with a pain trade, which is just like everyone gets too ambitious too quickly. They need to resolve who's the strong hands and who are the weak hands that can be shaken out of the trade. And I simply won't rule out that even though this is a long-term level to buy, that it's going to potentially challenge investors at least once in their resolve to hold through this bottom. And this is where I would not be shocked if we had the infamous turtlehead formation sneak in here for one little- I think it's going back to even below the lows there. I'm not saying I think. I say I would not be shocked. Oh, I would be shocked. I would not be shocked. And I'm in the camp that I would not be shocked. So the way I would tell you this, Kev, is I am long. I am not short. I am not bearish. I am bullish and I'm long, but I'm hedged. I feel that you need- Once a primary bull trend is underway, you can remain unhedged and just let it go. You have big profits protecting you, a primary trend that's well established, you can stay unhedged and lean into it. But the place where you want to hedge is always at the starting point, which is where you don't know whether or not the first inning of the game has actually really started or not. And so in my mind here, I'm optimistic. I'm long. But I feel that it would not shock me if the market did some sort of arrangement, retracement to shake everyone that it takes September and October to sort out the lows before the really big money is made. Well, listen, you could actually be correct. I guess my pushback would be that you're applying- No, no, you're applying traditional market metric, market behavior. And I would argue that even if you, you look at that 50-day for that whole bull run, it was shockingly unbelievable how it never really dipped below it in any meaningful way. And by the way, that would be the actual really good re-entry point. This is that as it retraces back to the 50-day, if you see the bulls defending that line very well, like they have done in the past, I would use that as confirmation evidence that the transition to the bull phase has actually happened. But I feel that it is, I would rather say that it will take all of the next month in the middle of September, if not early October, to genuinely establish enough price action to say a new bull market is underway. This is the first shot of a potential breakout. And long as traders don't, allow themselves to be shaken out on short-term noise, there's probably really big money to be made over the next year. Yeah. So I just wanted to say though, Patrick, I think since 2022, the gold market has changed and that it was, this is all a function of People's Bank of China and other central banks accumulating gold. And that in essence, what we experienced was the Western buyers starting to sense that and get involved in that. And that China walked away. And then we had Turkey selling and it got a little complicated. And if I'm thinking about it, I'm thinking China's back. And they did like what? 20 million ounces or something or something. And I, and I just. 200 tons or something. And I hear what you're saying about this and you very well could be correct. And maybe China, you know, walks away again and lets it sag and actually lets a turtle head, like you say, and then comes back. But to me, the bigger risk is that we just continue to walk upwards as even everyone is bearish and worried about it. And I guess this is why I feel a little more comfortable with this. You see everyone around you being bullish. I see lots of skepticism and people not thinking that gold is somewhere to be. I just, the reality is like, stop and think about us, you know, in late 2025, how everyone was long gold. And I think that's what's going to be the biggest risk. of fun we ended up at a at an irish pub it was great it was it was terrific fun but why would you expect to be anywhere else yeah um i want to say though patrick the number of folks that said i really thought patrick was going to show up i really wish patrick was here and lots of folks the guys from you know one of the guys that from barry that had come in from like all these things like a lot of folks that have been with us for many years uh they were all there and they were all asking for you so i just want to listen you are yeah i uh in november and december i'm going to make some appearances in toronto so if you wanted to do a a little um gathering i can i can do uh your share of drinking since you're lightweight so no it was really cool so danny and i are out here in in portugal and um uh the interesting uh they right here in this part of europe we just had the uh solar eclipse yeah danny was telling me earlier yeah and uh and there's some phenomenal footage online like my i just went blind i didn't i was gonna say i know danny's smart enough not to look straight into the sun no but i thought you were gonna pull a trump and just stare at it with your yeah with your eyes and i and i've ruined my eyes yeah that's it let me let me just get my glasses on but uh like i can't see anymore so like it ruined everything no but but bottom line though the images online were amazing like just some of these solar eclipse images were uh were so beautiful uh and i thought it was so cool i danny did you get you got a couple of shots didn't you he's like can't he's muted danny you're muted oh what a rookie mistake yeah that was a rookie amateur amateur hour uh yeah so i'm up in northern portugal and yeah uh i managed to it was super cool like it's kind of eerie your brain doesn't really understand what's going on and then it kind of everything goes dark very slowly and then i caught just the moment that it um passed through and it was just on this mountaintop so you could just sort of see the top and i managed to catch one image of it but that was it was pretty dope i thought it was pretty cool dope it was dope nope all right everyone have a great couple weeks we'll see you all take care thanks for tuning in cheers everyone take care cheers everyone bye