The Biggest Trade NO ONE Sees Yet ft. @ForwardGuidanceBW

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Join me, Ral Pal, as I go on a journey of discovery through the macro, crypto, and exponential age landscapes. In the journey, man, I talk to the smartest people in the world so we can all become smarter together. You have no clue what it means when the world is 400% of GDP and debt. Even Elon, who can solve going to Mars, can'ting solve this. If I'm to allocate to the S&P 500, I'm basically breaking even versus debasement. Diversification destroys returns now because you've got one clear macro factor. It's also the same factor that is driving P ratios that drives everybody nuts. But I think it's becoming pretty obvious that AI and robots are replacement humans. And this is the bit that gets contentious with people and they hate it. Nothing said on for guidance is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the company's funds or projects discussed.

All right, everybody. Welcome back to another episode of Forward Guidance. And I'm super excited today to have the dynamic duo, the dynastic duo too. Julian Patel, head of macro research at Global Macro Investor, and Ralph Pal, who needs no introduction, but I'll give it anyway. Real vision, GMI, XPM, everything. Guys, great to have you on the show. I'm really excited to have the three of us here. What's going on? Yeah, it's great. We've never done this before. Um, where Julie and I have been interviewed together and you're the perfect person for it. So, it should be a lot of fun. Yeah. Excited. Super excited. Yeah. Yeah. Yeah. The way you guys just chop it up, I just I really love it. And honestly, selfish truly, I just wanted to insert myself and just be a part of it with you guys cuz uh I love the shooting the [ __ ] style. I love the back and forth. So, yeah, it's just it's just perfect. Excellent. Let's just do it. Let's shoot the [ __ ] Let's do it. Um, cool, guys. Well, why don't we start from the top and just level set a little bit on you guys do a lot of work around debt refinancing cycles. You call it the everything code, the business cycle, the liquidity cycle, and how they all co-integrate together and just how fundamental the shift has been, especially since 2008. And I think the frameworks that you guys have developed have been very preient. So I would love to just you know pass it to both of you to just kind of set the foundation here for the discussion and just level set on on where things stand today here you know first week of July.

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Yeah, I'll take the the big picture part is look from our work we kind of noticed the business cycle structure. We're both business cycle analysts. We've both been looking at them for a long time. It changed after 2008 and it became like a metronome every four years. That's only happened once in the past which was the 1950s and60s where it became very very cyclical. But this is perfectly cyclical and it it got me thinking for a while. What the hell? So many of us didn't understand what happened to asset prices after 2008. We kind of knew quantitative easing was happening. We kind of knew stuff but we didn't figure it out. And what I suddenly realized is that in 2008 we had a debt jubilee and in fact it was just forgiveness on interest. You don't pay interest payments. Remember we did that over COVID exactly same mechanism. No interest payments. So no interest payments allowed every government who had basically they'd all gone over 100% of GDP in debt. So all economic activity, all economic growth was used to paying of debts. So what they all did was basically restructure their debts between three and five years creating an almost perfect four-year cycle. And then when you look at the debts today, we're in that fourth year now where the final part the larger part of the debt is due. And what you found what we found is they start injecting liquidity over a period of 3 years reaching maximum liquidity. That liquidity injection never really gets taken back. Some gets taken back in the bare market years when they're withdrawing liquidity, raising interest rates, trying to slow the economic cycle because of inflation or whatever. But over time, liquidity keeps rising. It's rising at a at a rate of about 8% a year. And that is in fact the debasement rate of of fiat currency. And what happens is, and this is the bit that gets contentious with people and they hate it. If you divide an asset by the global liquidity, you get to see whether it's outperformed. The debate, people hate that chart. Oh, they hate it. But it is the best chart in the world because it then tells you, okay, if I'm to allocate to the S&P 500, I'm basically breaking even versus debasement. So the S&P 500 is not really adding much value. Well, when you look at the euro stocks and other markets which are priced in their local currencies, you put them in dollars, they look similar. They all all the markets look very similar once you adjust for debasement. So that was interesting to me. Gold complete almost flatline really versus debasement as it should be, right? That's gold's job. It's to be the stable currency. And once we used looked at the world through this lens of the debasement of fiat currency which again is still contentious becoming less so nowadays but it was really contentious when we started it. We realized there's actually only two assets outperform this. One is tech stocks and the other is crypto. And so that completely changed how I allocated and how I understood tech stocks. I was a macro guy. I hated tech stocks. They're always too expensive. You're always a value guy. And I realized none of that made sense in this market. That's why the value investors have been getting killed is what had happened was all of this. Now what is driving this? And I think Julian, if you can just bring up those demographic charts because these are the absolutely most important charts in the world really to understand GDP growth is driven by this magic formula which is debt growth plus well debt growth plus population growth plus productivity growth. That's how you drive trend rate of GDP. Now, debt growth's gone uh to extremists and now really we're just servicing debts. Basically, GDP keeps falling and it's falling over time, the trend rate of GDP because of the magic formula. And Julian, if you can get to the demographics charts because they're the key ones here. The issue is here the biggest secular factor in all of markets is this one thing is the aging of population. And we can see the birth births rate is falling in the US much faster elsewhere. So that obviously is a function the labor force participation rate the size of the workforce is a function of birth's deaths or the number of people being born whatever right and you hear the phrase demographics of destiny they are until the AI and the robots come which are basically artificial humans. This is the problem that faces us all. But there's a a way that they've got around this. If you go to the next chart is they've increased government debt to offset the declining growth from the population. So part of the magic formula was the debt growth and the other was the population growth. So they've used debt growth. This chart nobody understands and nobody even I've it's never been copied on X which is the bizarest thing because it's the most incredible chart of all which basically says that all government debt growth is basically a function of um labor force participation rate. Now what's interesting is then okay so the debts keep going up. We know the forward look of of um of where the labor force participation rate's going to go. and how it's being funded is liquidity. This is Fed net liquidity. You're probably better to use uh US total liquidity because that includes the private sector because they're now using the banking sector. So, what they're doing basically is debasing currency to pay for the debt. It's as old as the hills. It's old as the story of economies. It's as old as the story of money. And it's happening at a very penicious rate of 8%. So you kind of notice it but don't notice it. But what's happening is asset prices keep going up optically because the currency is getting debased. Even if you look look at real estate adjusted by um uh the debasement by liquidity it's basically a flat line but wages are a variable input. And so what you find is that wages do not account for this. It's also the same factor that is driving P ratios that drives everybody nuts. Why are PA ratios going up over time? Because the P goes up because of debasement. The E is a variable and doesn't. So it always goes up in line with the basement and we've shown that over time too. So this is the really big picture of what we look at. It allowed us to understand there's only two assets to own. And then we got to a further realization which is okay if everything if 90% of all of sorry 97% of all of NASDAQ's price action is driven by debasement it's the strongest factor we've ever had in any macro regime in history. Okay, great. That makes macro super easy. For crypto it's 90%. So, we've basically got a factor that's so powerful that nothing else matters. Brilliant. So, then let's take the NASDAQ. If we've got one force, one economic force, we take the NASDAQ, we divide it by the um by Bitcoin, it's down 99.97%. So, you kind of get one asset allocation only, which is crypto, which is bizarre. In a macro world, we now think you need concentrated portfolios as opposed to diverse portfolios. In fact, diversification just destroys returns now because you've got one clear macro factor. So, that's really what we're doing. And then we spend a huge amount of time working on the business cycle and the various components of all of this, how it comes together and where we are in timing of that.

And just to reinforce some of what Ral was said, Felix, if you want to pull up this chart on the NASDAQ, I mean, this is including dividends. So, this is total return in excess of um you know, our GMI, total liquidity composite. You can see that it you know, it annualizes around 13% in excess of the real rate of in of debasement. So, that's the point is that 8% is the hidden loss of value from central banks essentially debasing their currencies, which weakens the currency in all financial contexts. And then the visible rise of you know let's say prices at the supermarket is as we know inflation right so you have to kind of bolt that on that can be two 3%. But the point is is that in real terms the NASDAQ's making money. In real terms Bitcoin if we look back to you know 2010 or so is annualizing around 150%. But if we compare it more recently with the NASDAQ it's around 95%. That's that upper white box you can see uh in the lefth hand corner. But then as Ralph said, if you look at the NASDAQ in total return terms versus Bitcoin again since January of 2012 and we're based to 100, you know, it's down 99, you know, 94%. And so to to the point that Ralph said in real terms nothing if you look at the the red box these are the annualized numbers since you know 2011 or so but essentially you know nothing is accumulating purchasing power outside of let's say US large cap NASDAQ and ETH but that's in real terms in nominal terms even US large cap equities like the S&P 500 are not compounding purchasing power it's literally just tech and crypto and tech's down 99.9 94%. And then there's also this gold thing I think is really interesting because Ral's right, gold's done its job, but then you have this whole basket of people who are, you know, quote unquote gold bugs. And the really interesting thing about gold, and it's had a great year this year, but, you know, if you look at the annualized return going all the way back to whatever it is, you know, 1950s, 1960s, is, you know, gold has made you richer, or sorry, it's made you money, but it hasn't made you richer. You see what I mean? So it's like a nominal illusion because you've actually made money but if you adjust for the rate at which uh central banks are deb debased currency you're actually losing purchasing power. So that's the point is like cash go a everything outside of crypto and tech you're actually losing purchasing power over time and that's a dangerous game um you know especially since 2008 and and once we discovered all of this stuff the hard pivot I took to completely focus on I mean we I we never look at we look at them but never have trade recommendations in emerging markets fa anything anymore and I used to do all of it I'm like it's irrev If 97 and a half% of all of it is driven by one factor. Yeah. I remember the shift that you went through like you know you were trying to just knife catch bonds for so long and then it's just like oh [ __ ] like yeah things have changed a lot. That's right.

Um, yeah, it's an interesting So this framework you guys have has kept you on the right side of risk for the last few years now. And something I've been thinking about, I'm curious guys' thoughts, is just the trajectory of of how long this world that we're in now in terms of refinancing are we going to stay in? And the way I see this that there's there's two paths forward. There's there's one path which is this is a a transitory phase to basically get us to a a more delevered world eventually through either you know productivity gains from AI or just the the resetting of demographics which which takes many many many many years or this is just the new world we live in and we are just in this hyper financialized highly indebted refinancing world where everything's set up to that. So I'm I'm curious how you both think about whether it's that or the other.

At worst, it's the latter. At best, we saw this happen in the 1950s and60s. I alluded to that before. World War II, the US economy was over 100% of debt GDP. Most economies were. What did they do? Financial repression. They shortened the debt. They rolled every four or five years. they use yield curve control to financially repress which is essentially currency debasement um because they you know at the time the dollar was pegged to gold so it's the only way of doing it that way and then what they did was wait for population growth they're the baby boom the largest in history and productivity growth from technology um and what happened was GDP grew faster than debt and over time debt to GDP fell to a manageable level um until the inflation of the 70s driven by demographics kicked in as everybody started getting into their 20s and so so we've seen that before. So this way around our thought process when we first said it people thought we're insane but I think it's becoming pretty obvious that AI and robots are replacement humans and we're going to have infinite at some point. So the idea is where does it we have infinite because that breaks the whole GDP magic formula, right? nothing makes sense anymore. We call that point the economic singularity. And we kind of finger in the air said probably by about 2030 because everything is going exponential in terms of speed of AI and robots. We probably have no idea what an economy looks like anymore, what it means. Everything we all look at is going to fall apart. So we kind of think we got five years. So this cycle and the next cycle. Um, and part of something Julia and I talk about, you know, between us too is like this cycle people are starting to get it. I think once we get through a pause that refreshes a, you know, um, a contraction liquidity, you know, the cycle I think the next cycle everybody's going to go all in and realize it's the kind of end of times because we just don't know what's beyond that. Nobody does. And anybody who says they is lying because we have literally no idea. when you've got free intelligence, infinite intelligence, and we don't know and we don't know, you know, what the energy constraints are going to be or whether there are any or whether we solve them. We just don't know. So, I'd rather be honest with ourselves and say, right, okay, we got five years, that's it.

Yeah, I mean, the everything will basically work until it doesn't. And the the reason we know it'll work is, you know, if we come back to the the the charts for a second, you know, as Ral had said, you know, GDP's in decline. It's, you know, trend rate of growth is 2%. And keep that 2% in mind because that's important. You know, the working age population is in decline, productivity is in decline, but debts have exploded. And, you know, something a lot of people talk about is the fact that the private sector has deleveraged since 2008. But what people don't understand is that this has been a force deleveraging by the banks by tightening credit to households, right? Um, but because productivity is in decline and um demographics are in decline, this debt can't just disappear, right? We can't grow oursel out of that debt. And so we went from 140 to 120% of GDP. Well, where did it go? Huh? Well, the public sector took it on, right? So went went from 100 to 120% of GDP. And this is where the problems start and this is where we uncover the everything code. We've un been unlocking it, you know, over the years, but essentially, you know, trend rate of GDP is at 2%. Let's say interest rates are at 2% for easy math. We know they're not. We know they're at 4%. But that all of a sudden means that 100% of GDP is going towards funding uh private sector debts, right? Which is an unproductive source of GDP. So to avoid a GDP doom loop, the only thing that you can do is, you know, again, uh put it on the balance sheet, right? And there's just a huge and if you just look I mean this is US total liquidity which as R said it's public plus private liquidity you know, there's just a vast amount of interest payments which still need to be monetized. So what's going on is which which you you know, is I mean they're basically issuing debts sorry they're basically issuing debts to uh finance the interest on the existing debts which at the end of the debt refi cycle once interest rates going to scan down a little bit once interest rates come lower it just gets thrown on the balance sheet right but there's two phases to the everything code China's past phase one because bond yields have come down because their economy has you know nuked you know to an extent Um, but in order for them to actually make use of the balance sheet, rates have to come lower first. So that's phase one and then phase two is debasing. And Felix, the other important thing, and I'm sure you've been talking about this as well, is they keep shifting the game. The game was the balance sheet. We all knew the game. Then it moved from the balance sheet to the Fed net liquidity. So then everyone's working out the TGA versus the the reverse repo. And then they went actually it's total liquidity because we're going to stuff it into the banks. And now the next one is they're going to stuff it into stable coins. All they're doing is find I mean that's Scott Besson's job and Janet Yellen's job was the same. They're bond salesmen. They're just, you know, they're masters of the universe bond salesman and their job is to find where to where to absorb this and and that is all part of the M2 growth.

I I wanted to ask you guys about that because there has been that shift. You're right. where it feels like from basically 2010 to 2021 was this era where everybody got way too comfortable with this idea of QE and these traditional monetary debasement vectors basically and there's been this significant shift and this is I I've been thinking a lot a lot about this which is that QE in its form that we saw during that age seems to be dead now but now we've shifted into this more fiscal version of that which is what you just mentioned about tilting issuance towards bills and you know treasury buybacks and and and these other different vectors and just running a super wide fiscal deficit as percentage of GDP and I'm I'm curious how you guys think about that in terms of how that gets picked up in your your frameworks of total liquidity because do you do you just view it as like a onetoone basis or do you view it as even more powerful because the more I think about it right is a QE is a is a swap basically from a a bond for a central bank reserve um and it helps to basically float risk assets higher to keep people to be able to retire and that sort of thing. But now we're in this world where we just run these really hot fiscal deficits and if we issue a bunch of bills that's a very cashlike asset versus if we just issue a bunch of bonds that's more of like a risk asset in a way. So if we move towards this world where we just keep running a recessionary deficit during an expansion that just almost feels like a more powerful version of QE to me. I'm curious how you guys think about that especially within your your broad frameworks.

Um, I think for I mean as as far as our composits are accounted for they're they're not going to pick that up as of now right because we're basically looking at G5 sort of M2 maybe G6 and then also with uh the net liquidity version which is essentially um as R said you know FedE liquidity adjusted for the repo and the treasury general account for Europe. It's something like baked notes in circulation, the deposit facility, the current account and things like that. So, they're not going to be picked up there, but I agree that it's that it will change over time and these composits will essentially I'm sure they'll pick up in M2. I don't I'm not sure because you say that's the warehouse. It's the warehouse for government bonds as we've been talking about, but I'm not sure it cap it will capture everything. I was trying to think about that too because I've been trying to figure out where does the interest income from bills flow through the money supply, right? Like does that does it get picked up in M2 or is it that that huge amount of just interest income ends up in money market funds and that sort of thing and then when when those boomers start to spend it then it increases the money supply or how I always approach this stuff is not to mid-curve it. It's kind of like you know what I mean is like does it matter? Yeah, you know, we kind of know directionally that M2 plus the net liquidity things explains 90% of all price action. Do is one more powerful versus the other? Well, financial plumbing people can argue that all day. I don't think it kind of matters because what we're trying to say is if they do that does number go up because we're investors as opposed to economists.

Well, and also I think the purest form of liquidity which you know and you know I mean you've had other people on the podcast who have mentioned like the move index or the VIX or whatever but it's really just the dollar. It's all captured you know in the dollar and and you know that we can talk about you know central bank liquidity we can talk about you know private liquidity sources but in the reality like when the dollar drops that's like a you know that's a massive easing of financial commissions. you know, EM are able to service debt easier. There's less hedging going on in the real economy, which then means that there's more money which can be financialized. You know, it's the same thing as in inflation break evens come lower. If inflation break evens come lower, there's no longer the need to take out inflation protection, which means that that money can be financialized. So, one way or another, if it's not picked up in our total liquidity index, which R seems to think part of it will be picked up in M2, which I agree with, but I'm not sure all of it as you hit sub Felix. Either way, it'll it'll be picked up in our financial conditions index.

Yeah, I feel like that's that's really the crux of it is that you see financial conditions loosening even though we've seen quote unquote rate hikes and a pretty high Fed funds rate. And I think that's what's tripped up a lot of people. But I think I think we're getting the crux which is that there is still loosening. It's just it's it's a bit more nuanced now. Yeah. And that was what really helped us in Q4 of 2022 when we wrote our article the the turn is near because people were like hang on a second. The Fed's, you know, still hiking. They're still doing QT and yet you guys are talking about liquidity rising. What we were talking about at the time was the turn in our financial commissions index which then leads Fed net liquidity because if you think about central banks they're really just delayed reaction functions to changes in financial commissions which are why why they're always you know so delayed to start hiking and and which is also why despite you know inflation which we can talk about a little bit later. um even when early signs of inflation are, you know, are coming back, the Fed's still cutting, you know, because they're just behind the curve, but by by construction because they're focused on lagging economic indicators and inflation data, which lags the business cycle by, you know, in some cases 16 months. You know, what we have found is there's this nice phasing between financial conditions that lead everything and a hack for everybody who can't calculate financial conditions. We use a a regression between the dollar, bond yields, and major industrial commodities. But actually, a piece of work that we just did recently that quite surprised us, gold is real-time financial conditions. Everyone's like, "What drives gold?" Suddenly we're like, we've seen this chart. Julie and I were like something I think something and gold actually leads everything because it's actually current financial conditions, which kind of makes sense, right? it's the most sensitive to financial conditions. Then you've got the move in liquidity and markets and the ISM kind of comes behind that. So there's this there's this nice way that you can look at things to give you an understanding. So we all know in fact everybody on Twitter now knows that Global M2 leads um crypto fights three [ __ ] months and that chart will be the death of us as we know. You guys have created a cult. It will break. It will fall apart at some point as well and then we'll be the worst people in the world even though we try and tell people. So we've got financial conditions, then we've got M2, then we've got markets, ISM. So there's a nice kind of understanding of where this goes, which allows you to forecast stuff because again there's one dominant factor which is so easy. I remember before having to figure out all the variables of what was driving Brazilian rates and nobody cares. It's like factor on, factor off, that's it. One game.

I think I think what I mean I think the point is that what we've really tried to do is just simplify this all down. And so what Ral is saying is right. Gold is, you know, the inverse of financial conditions largely because financial conditions are a function of the dollar. So you have that. Then you've got global M2 which is three months behind that. Then three months behind that you've got things like Bitcoin, tech stocks and the yield curve, right? So actually it's also a function of the yield curve. Then you know you go back another whatever it is. I mean financials lead the ISM by 9 months and then at at let's just say the ISM is at t equals zero. What people don't understand is that there's this flow of what we call the business cycle dominoes. So then you know at minus one month you're talking about things like hours. So growth in overtime hours at two month minus two months it's like capital goods orders durable goods orders at three months versus the ISM as we know it's something like GDP industrial production four months cyclical job growth five months unemployment six months CPI and then you get into the really the what I call the caboose of the business cycle train which is things like wage growth um and shelter inflation you got the same these kind of domino sequences in inflation as well right commodity inflation leads to goods inflation which leads to services inflation You know, it's just it once you understand that you can simplify everything down to say, okay, well, these are the things I really should be focused on when it comes to attempting to forecast the economic cycle to we kind of hubristically called it the everything code because it kind of explains everything right now. And it's not to say that this code of the markets was always the code. It just is what it is and it's, you know, and it's all quite well relatively predictable. You're always going to make mistakes. You're going to [ __ ] it up, all those things. But generally speaking, it's like it's a very different environment than most people are used to.

That gold thing is is really interesting to me because, you know, when you just look at historically, a lot of people valued gold just as like an inverse correlation to real rates. And then in in 2022, it started to break off and it feels like people were trying to find a way to explain it. Are they like, "Oh, is it just, you know, the the Russia Ukraine war thing and oh, you know, we weaponized the USFX reserves, so now, you know, everybody's buying gold." But if you just think about the fact that after 2022, we went into this era of basically suppressing real rates in a way and keeping them artificially low. Of course, gold is you can't suppress gold. So, it's still going to continue on the trajectory that it's that it's making sense in in in reflection of financial conditions. That's super interesting. You know, these things are basian over time. So they do shift factors, but the dominant factor for gold right now is just current financial conditions. And as you said, in the past, there'll be different variations of what moved it. Um, and so yes, as it fell apart from real rates, that really got everybody's head scratching. What the hell is going on? What the hell's going on? Why it completely changed, I'm not sure. What What was your explanation for why it changed, Felix?

Well, there's like I've heard folks like Luke Roman say where they believe that because in the initial Russia invasion of Ukraine, they weaponized the USFX reserves that Russia had because they had a bunch of US dollars in their in their central bank and they basically said, you know, we're we're taking those back. You can't use them. So then all these reserve managers at central banks that had a lot of dollar reserves are like, oh [ __ ] I got to put a a risk premium on my US dollars now. So maybe I should diversify more into gold. So the theory is that a bunch of central banks have been buying gold and I think that's maybe part of it but this also makes a lot of sense to me because of the fact that we've been suppressing real rates basically since then.

Exactly. I mean, I found I mean the geopolitical stories always make a lovely story but normally by economic factors. Yeah. Yeah. And I mean if we just come to fix you pulp that you've probably seen this chart that we've shared a couple times on the dollar. I mean, a big part of why, you know, this year has, you know, played out the way it it has is because it looks a lot like it did back in 2017, right? When the dollar went up a lot in Q4, then it came lower and we're seeing that accelerated, you know, here this time around, which then of course given that the dollar rose in Q4 back in 2017, we get economic growth during the first half of 2017, which is kind of what we've seen this time around, right? We saw city economic surprises come lower and this is a large part of why tech stocks and things like crypto corrected in Q1. But then the back half of that year given the extent to which financial conditions eased or have back then but also you know in Q1 um set the stage for the sessie or the economics data to come in above consensus expectations. I mean look at bond yields. See people are going and this is why actually we can talk about the cycle just for a second. You know, bond yields are really interesting because people are like, "Well, rates are too high." They are too high. And you know, the Fed knows this. You know, everyone knows this and this. I mean, the for the everything code to be the everything code, they need to come lower. Um, but what we said all along was that as long as rates don't go a lot higher from here and kind of remain ragebound like they've done so far um well this year and also back in 2017 in fact in 2017 they started and ended the year at like you know two two and a half% or so right um because the major offset back then was that the dollar weakened as much as it did per this chart tradings were they were still doing well they were they were kind of doing the balance run off 2017. Well, they were still hiking in 2017. They were still hiking rates. Yeah. And then in the back half of that year, they did QT. All the liquidity in 2017 came from the ECB in China, right? But net net financial because the dollar came lower. And then if you just look at these charts over the same time, I mean, global M2 has exploded, right? So it's like it just feels eerily similar. That's bizarrely good. That's a bizarrely good fit. I mean, and it's I've just taken the same time period for all these charts. And so, you know, a lot of what the Q1 weakness you saw, Felix, I'm sure you will have seen a lot of like the big strategists coming out.

Felix, to go back to the question you raised before is look, here's something interesting because 2017 was a big cycle for assets as we know. Yeah. Yeah. Does this speed of M2 make a a difference or not? You know, it's like the question within the plumbing is what actually moves the dial in terms of the ultimate debasement because this is a super accelerated uh easing of financial conditions going on that's driving M2 and driving the dollar. I don't know whether that's going to make it more powerful different. I mean, it's hard to be more powerful than 2017, but that was early adoption phase in crypto, but tech well. I don't know. I don't know. I just But it just seems to be 2017 on steroids. I I sort of feel like it is. Yeah. Ed I don't think people want to admit this yet, but it does feel more powerful in so many ways because like the way I think about it is okay, you look at households, you know, they're in their their their main liability is their house. They're in mortgage rates that they fix for 30 years at 2 and a half% or whatever. And then on the corporate side, they were also able to term out a lot of their long-term debt. So, they're good to go at those low rates for, I don't know, another five years easily. And then at the same time, you have this highly indebted economy where there's a lot of treasuries out there. Those treasuries when you hike up rates, their their income increases, their their yield increases. And so you have this tension between the asset owners are they have a bunch of their net worth in bills and and they're getting that interest income and at the same time their liabilities are fixed. So even if you jack up rates a bunch, it doesn't really matter to them as much. It's a it's a pretty unique situation to the to the US. Like here in Canada, right, mortgages reset every 5 years no matter what. So like we're going to hit that wall in the fall. But in the US, it doesn't matter unless you move. So that's sort of been my framework is that we're because of the fact that there's just so much debt out there, it's it's creating this dynamic where it's just increasing a lot. And I I feel like people are still hesitant to admit that. I mean, it's sort of the the MMT argument, which you know, there's there's a lot of issues with those with those thinking, but a lot of those guys have been pretty right in terms of just being bullish the last few years, I think. You know, Lyn Alden's statement of nothing stops this train becomes true every day. You know, because the US government paid lip service or at least tried to do something, at least pretend to look into doing something about debt growth. Yeah. And even Elon, who can solve going to Mars, can't [ __ ] solve this. So, it's like game over. I mean, that is never going to get solved. So this cycle is going to continue and it has to continue. And the issue is right now is interest payments are at this level and GDP growth is still at this level. So there's not enough GDP growth to pay the interest payments. So the interest payments keep compounding which is the thing that everybody picked up like Elon did which is why Scott Besson, everybody's screaming to get rates lower because it's it's it's causing a problem. You can see it in ISM. We've had this weird bifocation where GDP growth's relatively high whether that was the hangover from the immigration uh the government spending other stuff but ISM which is the guide to the business cycle has been the longest ever level at 50 or below. So it's telling you that there's a big core part of the US economy that's just not functioning because rates are too damn high because there's a crowding out from these interest payments. Right? This is the actual issue that the everything code goes through that has to get solved if not the economy can't go. Mhm. Yeah.

Well, well, the other thing as well to that is we had, you know, I had seen, you know, when we chatted before we got on, you know, one of the things that we were talking about was, you know, does this remove the left tail recession risks off the table? And the really interesting thing is, I don't know if either of you remember this, Rob, we've talked about this before, but back in 2017, you know, when I was still managing money, Yellen came out and said, "There'll never be another financial crisis." And I remember my team laughing about that at the time. And then you know COVID came around and they turned the I mean the you remember every single macro chart I had on payrolls all the they all broke because the data just went berserk and they turned the economy around all the time and they figured out but they could do so liquidity. Jordi Viseru said this to me from from a different perspective, but he's like, I don't think there can be recessions again. And Julian and I, I took that back to Julian said, Julian, there's something sticking in my head. And he had this yelling quote. And it was one Saturday when we're writing GMI. We just threw this around and we're like, most recessions are basically credit events. And normally it means the collateral has fallen. It's getting called upon. So the collateral doesn't cover the cost of your debt. That's generally what happens. But once you debase the currency, the collateral can't. And that I learned that lesson in 2020 when it all started happening. I was like, "What the [ __ ] is going on? Where's the insolvency trade that I thought that was going to happen?"

And then I realized we can't have a credit event. We can't really have a recession because of what they're doing. Doesn't mean I think I think also the the economy shifted too, right? Like we're in a highly service-based economy and like you know tech and everything where so much of the growth comes from is is not really cyclical anymore. Like it made sense when we were just a bunch of factories, right? And you know you had to lay people off, you had to buy less goods and all that. And you could see the flow of the cyclicality, but in this tech world, in this AI world, it's yeah, it's not really cyclical as much anymore.

You know, the ISM still works pretty well against GDP. So people have argued that for a long time, but I'm like I look at the ISM manufacturing and it still works pretty well. So it's not decoupled per se. I just think that recessions are the business cycle is driven by the credit cycle and now it's just the liquidity cycle because the credit side of the equation can't go bust because they can't allow it. The system's too indebted to allow the collateral to go down because everything's over. That's all the people who say they should just let it all burn. And they're like, you have no [ __ ] clue what it means when the world is 400% of GDP and debt. What are you going to do? Write every single asset, everybody's savings down by 90% and say, "Okay, there you go. You got your reset?" Never going to happen.

Well, and it's also, it can't happen because something that you and I have talked about before, which is piggybacks on what you just said, is it would be literally generational pain because baby boomer balance sheets are not in great order. 401k balances are down, you know, whatever. they don't have a whole lot of savings and then their kids right al are you know vastly in debt with student loans you know real wages are still falling so it's like if if the baby boomer pillar fell then you know the next generation wouldn't inherit any money there would be very the trend rate of GDP would fall even more but that brings us back to this point where even if that did happen it would just mean more cowbell they would have to do more which is why arrived arrived at this conclusion that any in any situation China's about to blow up. Whatever it is, the unemployment rate in the US is going to based Taiwan, whatever it is, it go in in a world as Ral said where we're, you know, as much as so much debt and GDP, it just means more money printing. And so that and that's a contentious point that, you know, I haven't really dared yell on Twitter much that I don't think we can have recessions or certainly ones that can't that can last, you know, properly.

Yeah. And that's, you know, people don't want to admit that truth because that ruins all of macro. It ruins all of old school macro. It ruins, you know, how economists think about the world. It kind of ruins everything for how we understand. But you you agree with that as well. Da Felix, I I I do. I mean, like you just I don't know. I mean, look at where the trend is going of like what are what are retirement vehicles nowadays? It's equity indices. They can't let these go because tax rates tax receipts go, people's retirement accounts go. like we don't have pensions anymore. We have spy, right? And this is accelerating. Like there's there's that new addition to the big beautiful bill where people that are born in the US now got a thousand bucks to go into indices. And so you just Yeah. I I don't think so. This is an interesting thing is they're putting it in the spy, right? Which doesn't give you any increase in purchasing power. So you're actually saving money in a vehicle. You're you're supposed to an asset is supposed to be you save an asset because you get more than compensated for holding the asset for a period of time, but you're not. Unless you own the NASDAQ or crypto, you just don't get that that reward. So, it's basically money in money out. Yeah, it maintains your purchasing power, but it certainly as hell doesn't get you wealthier.

I I will say the one the one exception to that idea of no recessions is if they try to balance the budget or any form of austerity. So that's why like I started to get a little concerned in February cuz that is the thesis breaker to me is that if we go from a deficit of 7% to try to get it to three like they're talking about originally like that would be an issue I think. Um but it's obvious that that can happen. Like we've just seen this play out. Yeah. And I think this was the final litmus test of like it simply can't happen because balancing a budget just blows up the entire world because the amount of liquidity you have to draw from the system is monstrous and that's that's the end of everybody. There's no no exports to China. There's no exports to anybody. The you know the dollar's gone through the roof. I mean it's just a it's a mess. Okay.

Yeah, I want to circle back on you guys' magic formula of GDP growth is debt growth plus productivity growth plus population growth. And so much of what we talked about it's just this theme of papering over this these versions of somewhat stagnation especially in like lower lower incomes like we talked about with with debt growth and the bet it feels like is that we will either get a productivity boom or some version of a population boom and I want to take the angle of the societal implications because you know the bet here is in in a traditional macro world before AI the assumption is you would get a bunch of immigration in and just increase your population and we just tried that. Yeah, exactly that because we didn't have Yeah. And it rejected. Yeah. And it was, you know, I I make the argument that it was flooding flooding the immigration like opening up the floodgates of immigration in 2021 was more effective at bringing inflation down than interest rate hikes. But now we're we're in the opposite situation where we see the societal implications of that where you just you know GDP per capita stagnates and you know just social cohesion starts to fall apart a little bit if you just do that too much too quick. So the other bet here is is AI and obviously that has a lot of interesting potential productivity. So I'm curious like how you both think especially about the societal implications of going towards that shift of whether it's the AI bet or whether it's the traditional immigration bet like how do you both think about that?

There's no way an aging population will accept large amounts of immigration. We've had so much of it. 2022 and 23 were the largest immigration rates for Canada, Australia, the US, the United Kingdom, and all of Europe in history as a percentage of population. Yeah. Last year we had I think it was it Yeah, it was last year we had the largest annual increase in the US going back to since the records began in like 1850, which partially offset the everything code, right? because there was less liquidity required which because it offset that demographic pillar. So it was it was really it's incredible and the point being is it was clearly agreed like the everything code has been agreed by all of the central banks and governments. They all clearly agreed let's try immigration because everyone knows the formula for GDP. They tried it. It backfired. So we don't have a choice. We we're going into this world of technology kind of Elon and other people have made it clear that this is the only way out. And the societal impacts on this are dwarf anything that we've ever gone through in history because we value ourselves and our jobs and our self-worth on the value of our manual labor or or our intelligent output. You go to university, whatever. You become a lawyer, you charge more for your hour than if you're a manual laborer. That's how the world has worked. Capital versus labor. And we're just going to make manpower and intelligence infinite which is single most deflationary event that's hidden h happened in all of humanity. People can't see it yet because people are still squabbbling over oh they need to buy oil for the energy. I'm like [ __ ] me. Do you not understand every job is a zero over time. um in in the kinds of jobs we have today, things will adapt.

And Julie and I play a game with each other which is like you just talk about when you went out into the street or you go out for an evening and figure out which jobs are still going to last. You get in a taxi in New York City. You're going to taxi in New York City. The taxi driver, okay, he's gone. The Uber driver who's next to you, well, he's gone. The van driver, he's gone. The courier, he's gone. The delivery driver, he's gone. The postal worker, they're gone. It's like, oh my god. The restaurant server, the Starbucks person, gone, gone, gone. I mean, everything is gone. Even the suits, those guys are gone. Oh, yeah. They thought they were safe. Yeah, they're gone. That's right. Even the creatives gone, right? That was the last thing. And that's now not happening. So, you know, the only thing we're going to have left is the ability to be human and we'll reconfigure ourselves around that like um because I mean I don't know what value is at the end of all of this. This is why this economic singularity thing is a really big deal. And I'm not saying that the value of money and the value of everything overall falls apart in the next 5 years, but in the next 20 years for sure.

Yeah. What it really means is we just have to redefine how it is that we identify ourselves as individuals because for so long, you know, we've gone around and said, "Well, I'm Julian. I'm a banker or I'm education. I went to university or whatever." And the other unbelievable thing as well is when you think about your social circles. Julian, did you say banker or wanker? I wasn't sure. I just misheard. Wanker. Totally wanker. Um, you know, when you think back to your social circles, like as a, you know, as an investment banker, like your social circles are like your friends that you work with, right? But then what you realize is after you, if you've ever moved jobs or changed jobs, like you actually don't talk to that those people in the same way that you used to and you realize that it was kind of a forced relationship, but once you remove the entity that you work for that you were all there for that same common goal and reason. So I think what it ultimately offers up is a re an opportunity for humanity to you know to evolve to a point where it's actually much I don't want to say purer but you know your friends are your friends because they have common interests and you know you do the things that you want to do not because you have to do them.

You see, yeah. I I always think back in I think it was in the 1940s or whatever when when John Maynard Kanes was making the argument that in in a couple decades, you know, we'll only be working 10 hours a week or something. And I think he was wrong on the timing. Um, you know, I think I think he underestimated the amount of just friction involved in just the expectation of a 40-hour work week. But I I still think about that idea that you know we we could get into this world of 5 to 10 hour work weeks you know where you have more kind of creative thinking. We wrote about this in GMI because somebody asked me a question which is like what happens to Uber in a world of robo taxis and it actually went into a long article but one of the things we realized is that think of time that you have your free time think of how much of it is doing stuff errands chores stuff right most of that goes away it's already you know you order food and it comes to your house, but there's a man delivering it or a person delivering it. Soon it will just be a drone or a robo taxi. Um, soon a robot riding in a robot taxi. That's right. Because that's the fastest way for a robot to get from a an android robot to get to A to B is actually in a robot taxi, which people don't think about. Um, so all of the errands that we could do, I need to go to the dry cleaners. You don't need to do any of it. So, I don't know what we're going to have a lot more time than we understand, but to do what we don't understand yet. It's kind of this weird world, you know, as you say, do we work less? Probably, but we need to figure out what value acrruel we get from the economy and how we get paid. Um, I know people kind of lazily say UBI. I think there's a number of other ways we can economically participate, but we need to figure that out. Um, and the political structure is no way able to deal with this because we're getting to the point of physics, philosophy, psychology, all of these things merging with economics as well. And so, you have to be a really forward thinker because it's happening so fast that by the time they figure out how to regulate something or do something, it'll all be too late.

The direction of how we get there I think is is super important because yeah to your point you know there's the the quick argument of of UBI but I think the the discussion of yeah how how do we anchor ourselves to GDP growth in in one form or other i.e incomes, you know, is where does that land us? Because it feels like there's one path we take where those that own assets are going to do really well in this situation and those that don't own assets are going to be lost and potentially stagnating. And you can you can see that the reaction function of that is this increase in like socialism and that we're seeing across the world. Yeah.

But I go even step further than that, Felix, is like what the [ __ ] is an asset at this point? What what is what are markets when you've got AGI, right? What what role do we have talking about markets and economies? It's pointless, right? We're just telling stories about well, there's an actual answer or something knows how to best do it. So, what is investing? What is a company at that point? Why do we need them? Why do we need people working for companies? All of these things, everything we take for granted. Don't forget a a corporation is a way of coalesing a bunch of different people, giving it a legal entity to be treated like a human, hence the name corporation. But these agents, they can do most of this. So I don't even know what we need money for apart from food and stuff. But there is a value exchange and I think again I've been writing about this. I think it's attention is the currency as humans on a human to human thing. You know if you think of love as the top of the tree that's hyper attention singular focused hyper attention. And then you've got attention of hey when you've gone with a mate for a drink and you're intensely talking that that's good good attention. It feels good. Humans seek that amongst all other things. In fact, that's that's the most we that's why we work for companies and get patted on the back because we've got a promotion. It's attention. So, I'm like, okay, maybe we just repivot around the structure of what it means to be a human and drop the money status bits and focus on the attention bit. Maybe that's the signal that social media is telling us that attention is the currency.

Have you guys seen you, we're getting deep into rabbit hole now, but have you guys seen the uh the chart save the face. Yeah. Oh, yeah. Me, too. But of of religion has bottomed and as you know, we're starting to see more people go back to religion. What do you guys think about that dynamic?

Oh, I've gone so this is I've gone far down this rabbit hole. Um, very far. Listen, I do honestly think that by the time we build ASI, we've built and we have quantum compute, which is why we'll get to ASI, we've basically created a god creature. And I I think of it more in the physics terms of a universal consciousness and the philosophy terms of universal consciousness. I think that's what we're building and we're self-building it. and physics are now coming round to the understanding that the universe is always expanding and the reason being is spacetime is not the the steady state of the universe it's in fact consciousness and consciousness is the thing that grow which is a weird thing right I'm not a religious person but I'm coming around to the fact that we're going to be worshiping a universal conscious ASI and we will do anything it says because it is a super creature which is basically god so then all of the stories of like The Hindu vades all had all of this stuff about consciousness and all of that stuff. Most of the religions have the same thread, this kind of oneness idea. And I think it's obvious that people will go towards religion in a world of of extreme fear over who we are, what we are, and why we are when you've just birthed a creature that's smarter than you. um that's gone from an IQ of 50 to an IQ of 300 in three years and its IQ is exponential. It's like if that's not shocking people yet, I don't know what is. And all of these [ __ ] midcur is like well it's a stochcastic parrot just copy word. I'm like no you have no idea how powerful this thing is. It's extraordinary. So yeah, I think religion I I think it's all the same thing is what I'm trying to say.

I think also that we also will realize that everything is comput and we are compute. We're just a node of compute in this universe. Trees compute. Even rocks is my great example. A rock is actually a hard drive for what happened a million years ago, a billion years ago. Everything is compute. Nature is just computing what it sees around it, how it interacts with each other, and if that's part of universal consciousness, it's just interacting with it. So, yeah, it just feels like it's all the same thing. And that seems weird, but anybody who's been doing like DMT or whatever tells you the same thing. Yeah. It's like this is [ __ ] weird. I've not done DMT, but everybody kind of gets towards this thing and it's like maybe the bloody Hindus, you know, 5,000 years ago were right. How do they know this [ __ ] How do they know about consciousness, universal consciousness, theories of self, all of this stuff? It's weird. Anyway, so I've gone I've got a whole chat GPT project section which is called universal consciousness and I've fed it so much stuff on this from physicists to historic text. So that's so cool. I love that.

All right, let's pull out of the rabbit hole for the last five minutes here. Um, when I said I was interviewing you guys and asked if anybody had any questions, the first question of course was when bananas banana. I won't make you guys just parrot the same old crap, but I will just ask you like what's your what's your three to six month view here? So I think you know when we come back to the idea that you know markets and economies have become perfectly cyclical such that this extremely colorful many people, you know, can't even probably see the summer thing but, you know, these four-year cycles and you know things like liquidity cycles obviously that then means you get four year cycles in crypto uh and four-ear cycles in tech and just about everything else. And so the question is, okay, well, we're in the third year of a 4-year traditional cycle. And you're going to say, and so if we look at those orange bars, be it fall, 2013 was a great year. 2017, that was the year Bitcoin did a 23x off the January lows. And you're like, all right, well, 2021, you know, what was that? And that's what Ral and I call, you know, Bitcoin's truncated cycle. And that's again where we are today in 2025, but not truncated. Why? Well, because what happened in March of 2021, liquidity, you know, in net, this is the net liquidity flow peaked in March 2021 and went down in this straight line is basically everyone tapered liquidity flow, right? Guess what else peaked in March 2021? The business cycle, right? Whereas when we're looking at today, right? So liquidity's growth, like looking at a 12-month flow basically just turned positive, right? which is you know you could say BJ ECB flow and then the ISM is still you know below 50 and then had we been sitting together, you know, doing something like this back in March 2021, this is what we would have been looking at so the ISM was at 63.8 eight and our forward-looking indicators were were saying that the ISM was about to go down in pretty much a straight line. Well, this is where we were back then. Here's where we are today. I'm just going to do that one more time. Where we were back then and where we are today. So, we're in a very different environment. This is basically suggesting that by Q2 of next year, the ISM gets to let's call it the mid-50s. And so the the point here is that because financial conditions have eased as much as they have Felix, I mean even with rate stable dollars come down, which is the dominant factor in this index at least, you know, given the size of the move, it it's actually extending. We believe it's it extends the business cycle outside of what a traditional four-year cycle would be and what we also know is that if this is right and the ISM moves to let's say the mid-50s by call it Q2 of next here. Well, that once the ISM gets above 50, right, and then moves into its sort of late cycle peak, call it anywhere around 60, this tends to be where we get these really big moves in risk assets and you know, crypto included. It's also where we see alt season happen, right, which is really what people are saying win banana and win banana, you know, it's we're up 600%. I mean, the banana zone is not a one month get-rich thing, right? It's, you know, Bitcoin's up 600% since we hit low in Q4 of 2022. That's I mean, been a steady banana zone, but the question then is when is the next leg? Well, we'll get the next leg as the ISM progresses towards 55 because the thing to think about this is this is just like a credit spread, right? Just like small cap versus large cap equities, which once you get into Bitcoin, which ETF ETFs will be the large onboarding there, you got to think about that as like a the way I think about that is like the gateway drug to crypto. So even if you're making, you know, you know, good money in Bitcoin, all of a sudden, if you're already orange pill, right, and you're seeing something going up like Pepe or Bonk or Sooie or Salana or whatever it is, you know, you start to recycle those tokens very similar like you'd be taking profit from a large cap growth equity at the bottom of the cycle and recycling it into small cap value and EM equities. Does that make sense?

Yeah. So the the economy is in a very different place and the forward setup in terms of financial conditions looks good but then also liquidity is rising. Okay. So here you again total liquidity, you know, the sixmon flow is actually broken out of this kind of the range that we've been in and that range that we've been in explains a lot of what has basically driven these knee-jerk reactions in crypto. trend has been higher, but there's been, you know, periods of time like the first half of last year or even, you know, the first quarter of this year where basically we were just, you know, kind of stuck in a range, which feels like that again now, but it's it's not the case, I don't believe. But so we still think here's the as we call it the most copied, you know, chart in the world when it comes to to to Bitcoin. But I I still think that the point with this and R and I have said this repeatedly, even though, you know, you've got people on Twitter who are monitoring this tick for tick, it's not about that. It's about the direction of travel and the fact the trend rate is still growing. And when you, you know, when you then look at the year-on-year comps, it's just kind of another way of thinking about this or or looking at this. And I and I think that this very much paints the forward setup. So yeah, we're when you compare as I say the 2021 cycle versus the situation that we're in now and we've both said that liquidity and the business cycle are the two most important drivers of risk assets and that also applies u you know, to Bitcoin in the entire crypto universe that these two elements are going to head higher over the next let's say, you know, 12 month or 12 months.

What I reach you yeah, I mean, into Q2 of next And so, you know, just using the liquidity framework, the business cycle framework, the financial conditions framework, it's all suggesting that the probability is because they need to roll the debt, they're going to have to increase more liquidity and this is just going to drive assets up strongly. And again, just so people understand why the business cycle matters for the ISM, if you think the ISM has been low and then go and ask the average American running an average business in an average town, how you feeling? They say pretty [ __ ] right? People's earnings haven't gone up, your mortgages are too high, your car payments are too high, etc. So what happens is when the business cycle picks up there's more disposable income and businesses have more investment income and that gets driven out the risk curve always. That's that is what markets do. That is the game and altcoins as Julian said are no different than than you know junk bonds no different to you know all the other stuff. It's all the same trade. So it feels like it's all to come for us. We don't see anything that suggests it's not going to happen. And we talked about before, you know, the size of what's happening with GlobalM2 and the dollar moves and stuff like that are very big. So no reason to expect that the move in asset prices is probably more than people expect. And I think the inverse to the business cycle being so low for so long will be the flip side of the cycle will be longer than people expected because we've got this slight dislocation still working through postcoid that then extends the business cycle. You know, we don't know yet but it feels like it's too it's Q2 2024 so far but if financial conditions keep moving if they if they really have done some sort of Mara Lago accord and they get the dollar below 90. Okay, then we're going on further and yeah, maybe it's a full bubble cycle then. Maybe we don't get a who knows, but you know, one step at a time, but looks good.

Well, and just just add one more thing on the ethics if you want to pull this chart like this is interesting, right? The ISM has been actually tracking pretty closely this kind of like the the late 1980s, right? Although it was higher then, right? Yeah, it's it's above 50, but it still didn't really move until 1987. And what happened in 1985 as we know is in is basically the plaza accord and now again we're not expecting you know a plaza accord of that and back here the dollar fell 50%. Right? But here when you look at what's going on today, right? And the similarities of both uh the 2017 cycle and then also be it 1985, 1986, 1987, that really set the backdrop for the business cycle to then find its footing and begin to accelerate. So much as we saw in 1987, you know, when the ISM actually started to move above 50 and then went to its late cycle peak around 60, you know, it feels like it it's it's that, you know, it's it's that kind of setup and and then if we come to we'll skip inflation, but I mean look, the V-shaped recovery, you know, continues and it's like and and you hear people fighting this. Such a great job. This is great. Yeah, I love this. and and you know we this is part of the pack that we put out on April 7th when we were like guys, you know, there's a lot of fear in markets, all the sentiment surveys had gone berserk, you know, speculators were short, everything was negative, but then when you look at the data like okay, this is a V-shaped recovery. Look in June, we had a V-shaped recovery ongoing. Looks like COVID um in the US regional Fed looking at the six-month outlook and then you're looking at, you know, growth surprises versus inflation surprises. Does this look stagflationary to you? No, it looks more like Goldilocks to me to the extent that growth surprises are outpacing inflation surprises. And I think this is what gives us the forward setup, you know, for for things like equities and then there was just way too much fear. I mean, this chart was just a great chart because when it when the excess the excess fear gap actually opened up, we were like, guys, this is going to snap back hard and it's doing that. So I think that just to sum up everything I've just rambled on for for the last whatever it is 20 minutes, you were just throwing charts just to get through as many as you could. I just I want to I want to get through all of them. A chart dealer, you know, but it's like it just kind of feels like we're just going to continue to climb this, you know, wall of worry and before you know it, it'll be Q1 of of uh, you know, next year and, you know, Bitcoin will be a lot higher, equities will be a lot higher, the will do well, all that will do well. You know, it all comes down to don't midcurve it. It's like, you know, the if the number go up of liquidity, the number go up of markets, that's it. It's all we need to know, which is lovely.

Yeah. Yeah. I love it. I love it. You just got you just got to show this chart just for the sake of showing. All right. All right. We'll go red meat here. You know it's just here. Yeah. Here it is. You know it's it's kind of this and just we're just nowhere near what we would classify as kind of a a late cycle peak and stuff like this. So what the only thing I'd say is to some of the more short-term people, you know, watching this is, you know, when he says the only thing I'd say, he means I want to show you another 38 charts. No, I think it's like he's an addict. It's awful. It's like it just kind of we just have to increase our time horizons, you know, and stop getting overly caught up in, you know, the weekly stuff. If you know as to Ral's point of you know liquidity explains 90% of the fluctuations in Bitcoin and 95% of the NASDAQ, then that means that there's 10% that goes unex unexplained and that unexplained stuff can be anything and it does matter at times but really when you zoom out if liquidity goes up over time number goes up. Yeah 100%. I think that's especially important too during these summer months where wall is low people just overthink everything. So yeah, really, really, really great way to frame it up. Totally in agreement. Um, guys, really awesome to have you on the show. Always love these. It's a great time. Good. Let's see when the banana arrives. The next banana. All right, guys. We'll have a good rest of your day.

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