Navigating the Macro Landscape with Infranomics

[00:00:00] Speaker A: The bigger that bitcoin gets, the more valid that it becomes. Right. Like when I going back to those early days, like I tell people it felt illegal to talk about bitcoin. Like you felt like you were breaking the law. Even just talking about it, like it was so sketchy feeling. Right. It was like, like my parents, anyone I talked to about it was like they thought you were in some crime, you know, like involved in some illegal thing. [00:00:25] Speaker B: It still exists to some degree today. [00:00:27] Speaker A: For sure. [00:00:27] Speaker B: For sure. [00:00:28] Speaker A: Yeah, for sure. But you know, a transition from a $500 million market cap to a two and a half trillion dollar market cap, the bigger that gets, the more validity that it gains as a real store of value. [00:00:42] Speaker B: Hello, welcome to the Money Adjustment. I'm your host, Dr. Mark Kramer, D.C. i am a chiropractor who loves investing and trading. Are you interested in what's moving markets and your money? Great. Me too. Let's get started. [00:00:59] Speaker A: I've always been interested. And puzzles. I'm a mega nerd that when I was a kid I would do puzzles and these big books of puzzles. And so yeah, I kind of like realized that global markets are basically like the biggest puzzle in the world. And it's kind of the most high stakes puzzle, right? Where like generally speaking, some of the smartest people in the world are trying to figure it out, participate in global. So to me, yeah, the nerd inside of me kind of once I, once I started to look at it like a puzzle, I was kind of that, that, that was the, the nail in the coffin. I was gonna do whatever it took to understand every single nuance, every single mechanic, every single link and correlation and dynamic. So yeah, I mean I took it pretty crazy. I would like sleep with Bloomberg TV on throughout the night. I took it very seriously. [00:01:48] Speaker B: I might. I might. That's funny. I ne. I almost never know what I'm going to do when I hit record. And I just like whatever my first impulse is and I'm like, I think I'm just gonna right away to the guests because I started saying it to you already. I'm excited for the audience today. I'm excited to have on with me infra or Robert the robertson parentheses. I don't even know your last name. I don't know if you want to share it or not. It's not necessary, not yet. Okay. And so Robert has a very cool YouTube channel called Infernomics and his channel is very good about educating, I would say arguably the retail investor, but the layperson, macroeconomic data and specifically a lot of the videos I've seen, especially recently, have dealt with the money supply and the yield curve. And I've heard you talk on these subjects very intelligently on multiple spaces. I've heard you speak on finances daily, and that one occurs in the morning. And, and I'm familiar with you from Bitcoin Spaces and Bitcoin Today. That's where I've been interviewing. I've been drawing probably all of my guests from Bitcoin Today because there's so many really interesting people there and kind of it's an interesting community and great community to be a part of. And I like to bring people out of those spaces and get into a little bit more depth with them. So that's why I have you on today. Infra. If you'd like to just say hello to the audience. [00:03:19] Speaker A: Yeah, thanks for having me and thanks for the kind words. Yeah, I'm just a nerd that is interested in things like yield curves and bond markets and macroeconomics and that sort of thing. So, yeah, I'm just a nerd. You know, no one special. [00:03:35] Speaker B: I. I consider myself pretty nerdy as well. So I'm very cool with that. One of the things I've been doing recently with my guests, and I'm going to do it with you as well, is have you ever groked yourself? [00:03:46] Speaker A: I don't think so. [00:03:48] Speaker B: I'm gonna take that as a no. I've only had one person say yes. [00:03:53] Speaker A: I think I did like a. When it. When it first was becoming a thing. I think I asked it analyze this profile or something like that. [00:04:01] Speaker B: Yes, it's very much in that vein. So basically it has the Grok icon over your main page and so I'm going to click on that and I just feel like this is kind of a nice icebreaker. This is what GROK has to say about you at Infra. I'm going to spell this out too for the audience. Infra we have a lot of underscores, so I want to make sure people get so fra. Underscore a macro savvy bitcoin bull decries currency debasement and a broken social contract warning of multipolar world, warning of a world where gold and BTC challenge the status quo. Infra is dissecting Fed rate cuts, soaring debt costs and a shaky UK pound, warning of tough times ahead for the average American. So we're definitely. I'm definitely going to want to dive into that with you. The X community praises NFRA for insightful macro analysis with Ericardone calling him good. He Calls you good in quotes and at earice lauding his clear explanation. So I've had both of those people on and I love them. Like I said, I'm very into the. I'm a bitcoin space enthusiast. And so last thing here infra is they pick out a tweet. I don't know if it's a recent tweet or just one to highlight for you, but this is what they have. The Overton window is shifting rapidly. [00:05:39] Speaker A: So interesting. I don't remember that one. [00:05:42] Speaker B: You don't even remember that one. Okay. [00:05:44] Speaker A: Might have gotten a. It might have gotten huge engagement. Yeah, I'm trying to think what that would have been about. I mean, I think that the Overton window is shifting politically, socially, kind of, especially with like the younger men, younger male demographic. And it ties into a lot of the kind of silent depression stuff. That was probably what it was in regard to. [00:06:03] Speaker B: What, what is the Overton Window? [00:06:05] Speaker A: So I'm not going to get the technical definition. [00:06:08] Speaker B: How big of a question is that? [00:06:11] Speaker A: I think it's my understanding of the Overton window is that it refers to kind of the acceptable range within which political opinion or ideology falls. And that by expanding the Overton Window, you are bringing in kind of maybe different opinions or ideologies into kind of accepted discourse beyond what was normal before. [00:06:34] Speaker B: I think it's a pretty good definition. I can appreciate what that means. Before we get. We dive a little into the macroeconomics, what I found interesting is I reached out to you for the macroeconomics, but when I direct messaged you and we exchanged a little bit of our history. You have a history and background in mental health? [00:06:56] Speaker A: Yep. [00:06:57] Speaker B: Yeah. [00:06:57] Speaker A: And substance abuse. [00:06:58] Speaker B: Yeah, and substance abuse. So did you do like counseling or. I think we discussed it a little. [00:07:05] Speaker A: Yeah, I've done. I've done everything. So I started. My first job was a adolescent place and it was like three months after Lehman Brothers failed. It was turning 18 or 19, kind of getting my first job. And it was, yeah, this dual diagnosis on mental health and substance abuse. And there I was just starting as a tech, you know, just bottom level, entry level. I think I was making like 1150 an hour or something. Did that for a number of years and then became a house manager, like middle management kind of at a different place. And then, yeah, from middle management I did that for another seven years probably and then eventually worked my way up to director level position. And so, yeah, I've been doing compliance and all that kind of thing, so licensing, all that kind of stuff, accreditation all that. [00:08:02] Speaker B: So this was like an odd similarity between us because I too, I started my career in mental health. I actually got my bachelor's degree in psychology. But my first internship experience was in a group home with persons with schizophrenia. And then I also worked in a residential treatment center on two different floors, one with the adolescents. And so I dealt with a lot of like anorexia and bulimia and those kind of disorders which. And maybe you can relate to this as a young person. You're kind of. I felt as a young person still trying to figure things out for myself and especially trying to relate with some of what people were dealing with mental health wise. But without getting too much in the details of that, how did someone. And I think even, I think this is like some self reflection for me because when I found out your background, I was like, how did he and I starting out, kind of where we started out, fall into discussing money and macroeconomics? [00:09:00] Speaker A: Yeah, about. I mean, I unfortunately kind of found bitcoin quite early. It was either 2009 or 2010. It was like very, very early. But I had no idea anything about monetary macro. Nothing. I didn't know anything. I just heard there's this cool like cypherpunk kind of anarcho, you know, freedom money sort of thing. I found it on some like obscure anarchist blog spot back in those days. So I knew about like bitcoin and you know, therefore markets to some degree going back to right around the time I was starting that first job. Yeah, no, it didn't really. My interest in, in markets didn't really start until like 2019. I think Robinhood was pretty recent, had probably just come out 2018, 2019. And yeah, some, some of my co workers were talking about kind of, you know, stocks and cryptos and that kind of thing. And I had experience with bitcoin, unfortunately, kind of off and on like throughout, throughout the time. And so yeah, I had experience with bitcoin but never really like the stock market. And you know, you would see people that of course it was really no different than today where you'd see people that have these 300% gains and you know, people are getting rich on Wall street, that kind of thing. So yeah, I kind of fell into like the trap of that right. Of, of investing but trying to get ahead. I think I was making like $19 an hour or something back then. And so that was, you know, like that was, that was really when it started, was 20. It was like 2018, 2019. Then of course, all the events of 2020 and the kind of chaos right between the event itself, but then also the monetary effects, the effects on markets was really kind of what got me interested. And then I would say the second, what really, really got me deep in the rabbit hole was 2020. So I have had a pretty high level position, basically top level job for the past seven years I think so about 2019 and you know, was making decent money and I started to look in 2020 at some houses, buying some houses and I found a couple, I live in la, obviously I can't afford, you know, the west side or Downtown or WeHo or anything like that, but the nice areas but, but I found some places in kind of some of the suburbs and, and you know, I could make it work, I could buy a house. And I was kind of having that feeling of like I, I've arrived. I climbed the ladder for 15, 16 years. I worked really hard, never called out, always, you know, try to have a good attitude, say yes to overtime, right? All that kind of stuff. And I did it and I got that top director level position and I'm making good amount of money and I can buy a house and then yeah, like 2021, 2022, the money printing push that house severely out of reach. You know, house, house in this area went from about 400k and we're talking like a 70 year old house, not big, you know, just like a single family home, small, single story, two bed sort of house. Went from like 400k to like a million, you know, almost a million. And of course interest rates had also gone up as well. So the amount of money that it was going to take basically tripled once you factored in the interest. So yeah, it was really, I would say, you know, I kind of started to become interested in 2018, 2019, but then kind of 2020 on was when I started to kind of progressively get more and more interested because I could already feel by then something was happening with the economy, with markets. Like I didn't really know what, what exactly was going on, but I wanted to find out more. I've always been interested in puzzles. I'm a mega nerd that when I was a kid I would do puzzles and these big books of puzzles. And so yeah, I kind of like realize that global markets are basically like the biggest puzzle in the world and it's kind of the most high stakes puzzle, right? Where like generally speaking, some of the smartest people in the world are trying to figure it out, participate in global. So to me, yeah, the, the nerd inside of me, kind of. Once I, Once I started to look at it like a puzzle, I was kind of that. That. That was the, the nail in the coffin. I was going to do whatever it took to understand every single nuance, every single mechanic, every single link and correlation and dynamic. So, yeah, I mean, I took it pretty crazy. I would like sleep with Bloomberg TV on throughout the night. I took it very seriously. I really wanted to figure out. And especially by 20, I think it was kind of 2022, inflation was running really hot. And so by then there was also the financial, personal financial incentive to figure it out. Uh, because, yeah, like, gas here in LA was like $8 a gallon. The owner that I was working for, you know, kept going, asking for a raise. I can't give you a raise. Inflation was like, according to the shadow stats, the way we used to calculate inflation, inflation was like 18%, you know, during that time period of 22. And so there I was getting squeezed kind of financially. And that was, that was kind of the real like, final nail. Like, I have to figure this out because not me, I'm not going to make enough money at the day job. So, like, I have to figure it out. [00:14:42] Speaker B: Yeah, no, it's interesting and I, And I think your story, it resonates with me and I think it would, it res. Would resonate with a lot of people, just the last four years and what we went through globally and as individuals. But relative to the money component of it, because I think similar to you, I couldn't. I didn't seek a career in Wall Street. I wasn't seeking, like, I didn't see myself as a trader. I never really saw myself as a money person in general. But, but it was this finding myself in situations where I'm like, wow. And also being very curious and wanting to understand things. The puzzle component of it found myself really wanting to, for my own benefit, to understand where I fit into the macro puzzle. Like, why. Where was I feeling squeezed from a larger perspective, you know, getting past the personal psychology of whatever people might feel relative to money in general. But before I dive into that, you, you've said a couple times, unfortunately, you knew about Bitcoin in 2009. Why do you say unfortunately? [00:15:49] Speaker A: Yeah, it was the biggest regret, biggest mistake of my life. I had. I mean, this is back in like the bitcoin faucet days and stuff where you press a button and get five bitcoin. I, I had quite a number. Like, I had. I had enough that like today would be like obscenely rich, you know, And. [00:16:07] Speaker B: I just didn't that you had it, you, you had it early but didn't know. [00:16:13] Speaker A: Yeah. And so like, yeah, like the, what would happen is every bull cycle, you know, every bull run, it'd go up 200, 300 and I would think, oh, it's great, you know, I triple my money, sell it and then it would come back, you know, and I would participate in the next bull cycle. I, I did mine from like, I want to say like 20. I think I got my first miner in like 2014. I don't know, it's all kind of a blur. But like I, I kind of messed around with mining in there for a little bit. I had some space heaters in my living room and did the mining thing for a little bit. But yeah, I didn't like I knew it. The thing that frustrates me, the reason I say unfortunately is like I knew at the time it was significant. I knew the technology. I knew Bitcoin itself was significant. I just couldn't understand. I didn't grasp why it was significant, if that makes sense. Like I knew that it was something. [00:17:09] Speaker B: Yes. [00:17:10] Speaker A: I could feel it almost like a spiritual thing, you know, like you could just tell that it was. There's something there. The problem is I just didn't know. [00:17:19] Speaker B: Yeah. You know, to your credit, because I too was aware of it in 2009. I was, was on the wrong side of the 2008 financial crisis and I had just purchased property and started a practice in like it was a. Near the end of 2007, if not early 2008. So I had like this whole line of credit going into, before the Lehman Brothers collapse and, and we know the whole history of the gfc, the great financial crisis. I, I'm, I'm bringing this up to the, to because, because I, I was aware of it in 2009, but I didn't go as far as you did to actually participate. It was one of those intellectually curious things for me that I was like, oh, I'll just see what this is about and kind of follow along. And I, and I was probably deterred because of the fud of thought of trying to memorize keys and, and just thinking through the logistics of what it would take to own this at the time. Very uncertainty, technology and asset. And so I, I didn't have any skin in the game until 2020, so. And it was probably about that 7k level. So like when you said it's unfortunate and this is. I, I guess what I'm the point. I'm Trying to make was cognizant enough to get it kind of on a trading level. And I reached a certain amount that, that I wish I kept today. And I also just like you, I say probably the biggest financial mistake of my life was selling my bitcoin. And, and that's why I was like I'm never, I'm not selling my bitcoin. I wasn't, I wasn't, wasn't planning to go the bitcoin maxi route right off the bat in terms of the interesting thing about it and getting back to the macroeconomics and I think you had a similar experience where, and I've heard people say this about bitcoin and it certainly was my experience is that bitcoin itself is, is an educational tool. Like in order to understand bitcoin you have to have some bigger macro sense of what, what happens with specifically money and currency and fiat and what that actually means. And I found again with my own experience I, I was familiar with the gold story so I was able to make that transition with bitcoin. But following bitcoin on a technical level kind of gave me an interest in technical analysis and reading charts and getting into that aspect of it. It kind of this, this is reminding me of something you brought up earlier, how you, you went the macroeconomic route with it. And I was thinking to myself, a young person and if my am around a lot of people and they're saying hey I'm making money in crypto, you should do this or try this out or this coin or you know, whatever to get to the macro route. Because I would a lot of people do like just the trading route. Not like you can't be aware. Everybody is aware. That's one of the kind of. Actually the cool things about finance in general is I think when I was younger I had a kind of a narrow sighted view of what financ and it was just like greedy people on Wall street trying to make a ton of money. Not like that isn't true to some degree, but there's so many conceptual layers to the financial system because some people take a macro view and some people take a micro view or look from economy from company up versus looking at the economy down. And so in your case you got drawn towards the macro side of things sort of. [00:20:44] Speaker A: Yeah. I also, I would say initially it was actually the kind of like you mentioned the TA or the trading the chart. Right. Was kind of the initial. It was, you know I participated in a lot of the like meme stock stuff back in whenever that was 2020, 2021. And you know, like kind of fell down the idiot rabbit hole with some of that stuff. And the way I was looking at it is just I need the candle to go up. I don't care what it is. Like, I'm just trying to make money. And that was kind of initially like my understanding, but then as I wanted because like, you know, as you become aware of how the financial system works, how the, how markets themselves work, how money works, the macro kind of fundamental side of Bitcoin becomes so much clearer. So there was definitely like a turning point for me in like 22 where, where yeah, I'd, I'd learned enough by that point about macro and about how money works and all that I had learned enough to realize that thing that I had played around with that I thought was kind of a joke or you know, a way to make quick money here and there actually has like insane value to it. And, and yeah, so it was kind of like initially, you know, ta and just try to make the, you know, get the green candle and just make, make more dollars. But then that transitioned as I learned. [00:22:12] Speaker B: More about what do you see? What do you see? I have a vision in my head. When you said insane value, but what were you, what are you alluding to when you say that insane value? [00:22:22] Speaker A: Yeah, well, given, given what I see as kind of the structural changes that are going to happen that are starting to happen and probably going to continue for the next decade or two, what bitcoin represents. You mentioned gold. I also like gold. I know this is heretical, but I like bitcoin more. But I like gold. Gold and bitcoin emerge as really the only alternative to the old system of the centralized dollar reserve sort of system. And when people talk about the dollar reserve currency or what they're really referring to is interest bearing dollars, which are U.S. treasuries. You know, these, these countries don't hold Benjamin's right cash dollars. They hold interest bearing dollars like treasury bills. And so, you know, the, especially after 2022 where we froze, really defaulted on our debt legally held by Russia and seized their reserves, U.S. treasuries from that period. I mean it really started before that in 2011, 2012. If you look at foreign held debt as a share of total US government debt that peaked in 2011, 2012. So some of these things have been in place before 2022. But I think that that seizure of the FX reserves was really the major signpost indicating this transition away from everyone stores excess savings on a country level. Right. On a sovereign level, not the US unfortunately, but you know, a country like Japan or China basically on, on a, on a. Because they run a current account surplus, they are accumulating more value is flowing into their country than is flowing out. Right. The value of their exports is greater than the value of their imports. So on a net basis money is flowing into their country. Well, of course they need a way to store that, to save it, to store the value. And so for a long time that was U.S. treasuries. And you know, this helped keep rates low, but you know, helped to some degree caused the fiscal deficit. Because in order for there to be debt for the rest of the world to buy, well, you have to create new debt. Well, how do you create new debt? You run a fiscal deficit. Because by definition a fiscal deficit is a net increase in the new debt. And this gets into triffin dilemma. But yeah, a transition away from this world where US Treasuries are no longer a good store value in real purchasing power terms. You know, just look at TLT total return divided by gold or even S&P 500. I mean, is a better store value. You know, it's down into the right especially long bonds. As we transition or move further into this world where US Treasuries are no longer a good store value, well, something has to emerge because these countries, we're talking about hundreds of billions of dollars per year, maybe trillions globally, trillions of dollars of surpluses that have to get stored in something. And you know, we've seen gold rise as a share of total, total reserves. We've seen gold certainly start to rise. But you look at the properties of what would be an ideal store value. Gold does fit a good number of them, but bitcoin fits all of them. It's more divisible, more portable, it's more verifiable. It's scarcer as well. So you know, gold, look again, I think gold, I'm very bullish gold, I've been very bullish gold for three, three and a half years. I continue to be bullish on gold and I don't hate it like some bitcoiners. I again think bitcoin will do better. It has more upside potential. It's a smaller market, so it has kind of more room to the upside. And again, I think that the properties, when you go down the list of what, what you would, what properties you would desire in a store value, gold does fit a lot of them. But bitcoin fits all of them. And it does it in a Better way than gold. Again, more divisible, certainly more verifiable, certainly more portable, certainly. So, and it's of course scarcer as well. And so as we transition away from the US treasury and the dollar to some extent, I mean the dollar share of FX reserves has been falling for like 15 years. Horn held debt as a share of total debt has been falling again for 15 years. So this is already happening. This isn't a theoretical sort of conversation when it comes to the dollar. The problem is everyone expects that reserve currency thing to just be an overnight phenomenon. Overnight we wake up and the dollar is hyperinflated away and used as tinder for fires, right. And just completely worthless. And no one uses the dollar. These things take decades, you know, and it's, it's going to take some time for this to fully play out. But you know, the gold adoption by the sovereigns as a store value has already started for sure. For the past 5, 6, 7 years. You can see the gold as share of FX reserves starting to increase. So gold is already starting. I think it's only a matter of time before bitcoin again. It's not going to be, you know, you wake up tomorrow and China's bought $800 billion of Bitcoin. It's not, it's going to be around the margins, incremental increase in bitcoin holdings. I think, I think that, you know, a lot of countries are probably mining, if I had to guess. I know there's a lot of like, you know, speculation when it comes to certain countries are. And I don't have the time to like, you know, get into whether or not it's true. But like I'd be fairly confident that countries are already starting to mine bitcoin as a way to kind of accumulate some amount. And yeah, I think around the margins, like more of those trade surpluses, more of those current account surpluses start to get stored again. Gold is going to eat the majority for the next couple years. But I think around the margin, even if it's 1, 2, 3% around the margin, the bigger that bitcoin gets, the more valid that it becomes, right? Going back to those early days, I tell people it felt illegal to talk about bitcoin. Like you felt like you were breaking the law. Even just talking about it, like it was so sketchy feeling, right? It was like my parents, anyone I talked to about it was like they thought you were in some crime, you know, like involved in some illegal thing. [00:28:51] Speaker B: There, that it still exists to some degree today for sure. [00:28:56] Speaker A: For sure, yeah. But you know, a transition from a $500 million market cap to a two and a half trillion dollar market cap, the bigger that gets, the more validity that it gains as a real store value. [00:29:11] Speaker B: Yeah, my, my head went in so many different places as it often does when I listen to you guys and when I say you guys, I, the people that contribute to the bitcoin today and, and that, that aspect on Finance Daily and the macro thinkers. But, but one of the things like I, I'm like reminiscent of these conversations that I had with Dark early on and, and he was kind of, he was the first person that I interview today and I was listening to spaces and I was like, oh, this is very interesting what he's talking about. And the first episode we did which was back in April was on Bitbonds. And so when you were talking about foreign countries no longer wanting to purchase our Treasuries to save their, save the dollars in our Treasuries. If that's a kind of, that's a very oversimplified way of putting it. And if it's too simple, I'm sure you're going to let me know. But basically they're buying less. So what Darken delved into was the bitbond concept of how bitcoin backed bonds could be a potential. I don't want to say Hail Mary, but one of the many things, it's not going to be a single event or single financial instrument that's going to fix this problem. But it, but what is your take? Do you have any thoughts on the bit bond? [00:30:28] Speaker A: Yeah, I'm not, I'm not trying to hate on anybody or any concepts like I try to be open minded about everything and really take things, you know, balls and strikes, you know, take at it, look at it. And like I've said, there have been times where, where someone in one of those spaces like brings a topic up and I'm like, I don't know, I have to think about it more, you know, so I try, I, I try to be thoughtful. I try to give everything like full consideration before I have an opinion. That being said, yeah, I try at least. That being said, yeah, I think it depends, is it, is it possible to have a bitcoin, bitbond or gold back? You know, version with gold? Of course. Judy Shelton's been advising that for years. I mean a number of people in the gold world have been advocating for gold backed, you know, gold integrated sort of treasury bond look like Bitcoin. Yeah, I think it just the problem I think it, there's a number of areas. So number one, I would think that that would make the situation worse, which is that the dollar has become so grossly overvalued due to this kind of inelastic structural bid into the dollar price, insensitive structural bid into the dollar and dollar denominated assets. It has become so overvalued that that is the reason. Right. All this capital flowing from the rest of the world into our capital and financial account, buying dollars and dollar denominated assets has pushed the value of the dollar up so, so much that it is causing the trade deficit. So this is something that, I mean, I've been talking about the current account capital and financial account for a long time, but recently I've been hearing more within the, like, traditional macro world, more people talk about the trade deficit is a result of the capital and financial account surplus, not the other way around. Because on a balance of payments basis, those two buckets must, must net out to zero. If you run a very large current account, basically trade deficit, then you must run a, the mirror image in terms of a surplus with capital and financial account. Well, there have been a number of people starting to, to, to bring this idea forward that the trade deficit and the current account deficit is, is, is really, you can make the argument that it is the result of all this foreign capital pouring into the dollar and dollar denominated assets. And because again, on a net basis those, those two buckets must net out to zero and that, that is really the egg and that the trade deficit is just the chicken. Well, the trade deficit and the current account deficit has gotten so bad that it's become a national security issue. Like we have a negative 90 to 95% net international investment position, or NIP, which refers to the fact that foreigners own on a net basis $26 trillion more of U.S. assets than we own of theirs. That's the nip. So it you look at the U.S. what, how much foreign assets does the U.S. own? And then you look at the other side of it, which is how much of our assets do they own? And then the difference is the net international investment position is about $26 trillion. This is a national security emergency, in my opinion, because, and we saw this in early April with one of Trump's kind of core signature policy positions of tariffs. In five days, that nip of negative 95% GDP became enough to make itself known, right? Foreigners started selling. I mean, I was watching it, it really started back in February, which is when I started talking about the capital Repatriation trade that really started in February, but by April, it got violent where equities would be down sharply, the dollar would be down sharply, and bond yields would be. Bonds would be down sharply, bond yields would be up sharply. And when you have bonds down, dollar down, equities down, that's textbook capital repatriation, capital flight. You see that in balance of payments crises in emerging markets. And basically we were like getting into the early stage of a balance of payments crisis in that early April period forced Trump like five days of this. Right. Four or five days forced Trump to capitulate on one of his core policy agendas, tariffs. So that nip is a. Is. I make the argument quite often that we don't have sovereignty anymore because foreigners own so much of our assets. And it would be nice to say, who cares? Crash our stock market, crash our bond. Like bitcoiners are probably thinking, well, like, who cares? Like, let it all crash and burn. Like I'm right there with you. But the unfortunate reality is that's never going to happen. They're never going to let that happen. And if they're never going to let that happen, then you, you come to the conclusion that essentially we don't really have sovereignty. The democratically elected President of the United States was forced to capitulate by foreigners, by foreign capital, by foreign that has, you know, over, over many decades accumulated to be, you know, to own 26 trillion on net of US assets. So that's crisis number one. Then crisis number two is, is kind of a clearer or more straightforward national security emergency, which is we've hollowed out our industrial base so much that we rely on arguably one of our enemies for 65% of active pharmaceutical ingredients. We saw it during 2020, I saw it firsthand, trying to get gowns and masks and hand sanitizer and, you know, cavi wipes and all that kind of stuff. It was just impossible. You just couldn't get it. And, and so, yeah, I think, I think that the, the trade deficit in and of itself is an issue, but I think that it's more a second order effect from the dollar's reserves. Ultimately, this comes down to Triffin's dilemma. He warned about this exact dynamic back in 1961. So, you know, people have known about this is not, you know, current account capital and financial account overvaluation leading to bigger deficits, leading. Right. Like all these different dynamics have been known. They're not complicated, you know, for many, many decades. The problem is that our policymakers on both sides of the aisle Were willing to take the angle of, you know, we don't care about the middle class. All that we care about is, you know, boosting corporate profit margins and shareholder value above all else. Right. Nominal equity returns must go up and to the right. The stock market must go up and to the right. Corporate profits surged, right. They doubled as a share of gdp. Corporate profits have doubled over the past two or three decades. So yeah, you know, and this is, both parties did this and it's getting to a breaking point because now there's basically no middle class anymore. Now you have, you know, the suicide rate at levels not seen since the Great Depression. You have deaths of despair, sociological term for overdoses. And those are double the Great Depression, what they were during the Great Depression. Yeah, Antidepressant prescriptions are up like 13x over the past three decades. We see all these horrible events in public, right. Pretty much every day. Political polarization is at an extreme. Feels like something's going to break. Racial tension as well. Class tension is starting to kind of become more bipartisan, I guess you could say. All these things are getting to a breaking point. And they're all second and third order effects of ultimately the monetary system. And the policymakers have chosen to go about trade and fiscal monetary policy for many decades. But it's getting to a breaking point, whether it's the nip, right, these accumulated, these tens of trillions of dollars of accumulated assets that foreigners hold basically over our head. Whether it's that, whether it's the fact that we rely on arguably some of, you know what, our enemy, at the very least a competitor or an adversary for critical components. I mean, we lost a proxy war to a country with one twelfth of our gdp. You know, I call this GDP maximalism, right? That the vast majority of the macro world and economists and kind of policymakers and you know, lobbyists and those, those people, they have this GDP maximalist view that the only thing that matters is GDP goes up. Well, GDP is meaningless if you can't produce enough weapons to defend your homeland, to defend your people. And that's the point that we've gotten to, right? The trade deficit. We've hollowed out our industrial base so much we can't make the critical protective equipment our people need. You know, if there's an outbreak of something, can't produce the medicine that we need to keep them alive. We can't produce the electronic components go into our critical defense systems. Like in my opinion, it's a national security crisis on multiple different levels. I think again, you know, you look at the second and third order effects, populism starting to rise and. Right. All of those things, the kind of social KPIs that I always cite, you look at those and it's clearly a crisis. And I think that, you know, ultimately it resolves one way or another. My hope is that we're able to resolve it peacefully and nonviolently and somewhat politically. That would be my hope. But, you know, there's a side of me that is pretty pessimistic that it'll be. [00:40:09] Speaker B: I think it's probably hard to see. [00:40:12] Speaker A: You see in what way? [00:40:14] Speaker B: Well, I'm going to say this because it reminds me of your videos too, because I follow your train of thought and any reasoning person is going to hear what you said and see the reason in it and where it makes sense and where we have this unresolved conflict. A lot of things that for lack of a better term seem. It's not that they're incoherent, incongruent so to say, but there is this a dichotomy that exists. And I, and I, and I think like my mind starts to go here because also like you, I like to take a balanced approach. And through what's become somewhat of a series with the bitcoin today is I had dark on and he explained his big long thesis and I also had Joe Collisari on and he, you know, took the other side. This is as someone who's a retail investor and people in my world have no idea who any of you are, which is great kind of, you know what I'm saying? Like they meaning like my small circle, my community, my friends, the normies, like all of this side is. All of this is outside of what they are listening to and consuming. But it's fascinating to me because I look back on this past year and see like that kind of debate still playing out. And even when you started to answer the question, I sensed in you and maybe correctly or incorrectly, like there was like, I'm aware there's the. And I guess this is where the term doomer comes from, right? So they say we want to just put a term on somebody and, and generalize it and simplify it and say it's doomerism. Because what you're describing feels sad. It feels like if you think about these things too long, it does make sense why you would feel like depressed about him. And my background's in psychology, mental health, like we talked about. And I think when I think of the individual, like the retail investor, the layperson out There they who are not even they're. It's hard enough to understand what you're saying if you don't have the terminology. And so when you don't have the terminology it's like they're. It's like they're living in a different world basically. Even though we're sharing the same land, it's the same country or American citizens. Like the things that you're talking about on a macro level, like I hear them and I'm with you. Like I am, I am concerned. And that being said, I've also done a personal level just been an optimist. So I like to believe that things will work out and not that they will work out magically work out, but that as a species can come to some kind of just like you said, political ways to resolve this and maybe even kind of I like to try to bring things onto the positive like the solution oriented of this. And it kind of brings me back to bitcoin. So I asked you about the bit bonds and that's where you shared your perspective. And it, you know, everybody's going to have a certain take on this and they don't exist as far as I know, they don't exist outside of I think title just recently started a bond backed by Big. They're one of the pioneers in this I guess and it would be an experiment, the whole bit bonds concept but without getting too detailed in that because the more I listen to these spaces and you talked about being aware of Bitcoin in 2009 and I was aware of it in 2009 didn't have any skin in the game until 2020 and it wasn't until this year that I self custody. And so I never even until now, even having followed it as long as I followed it, never viscerally felt compelled enough that having self custody of my Bitcoin was an important thing to do. And so when I think of these other kind of again I'm just bringing it back to Bitbonds because that was the last thing that we talked about these other financial instruments, these things that we're trying to create. There's a purism about the self custody component and self sovereignty to actually know that you're holding on to, to the asset and you are the true bearer, that true bearer asset. And I think as a nation too, what you're describing on the macro level and how you said it, America has somewhat lost some of its sovereignty. [00:44:30] Speaker A: Well yeah, the problem is it makes the situation worse because if you make bonds better which is kind of what the point of a bit bond is. You're making US Treasuries a better store value, right? Then that's just going to attract more flows into the dollar. So you're going to get the even more insane overvaluation. Like I always point out that in 2024 the dollar, I think Dixie was at like 108, 109, something like that. In 2024, at those levels on the Dixie, the dollar was even more overvalued than going into the plaza accord of 1985. On a purchasing power parity basis, as measured by the imf, the dollar was more overvalued last year than it was in 1984. 85. Going into the Plaza Accord when the Dixie was like 180. Right. So yeah, you make the dollar, we're already at record high kind of overvaluation levels for the dollar. You start to improve U.S. treasuries and make that with a BIP on, for example, and you just attract even more flows from foreigners into the dollar. Because again, remember, it's a dollar denominated asset. So the order of operation goes, if you're a Japanese business guy or foreign government in Japan, they use the yen. Well, can't buy a bit bond or U.S. treasury with yen. So you have to sell your yen and puts downward pressure on the yen, buy the dollar, puts upward pressure on the dollar. Then now that you have dollars, you can go buy your dollar denominated Bitcoin bond or equity. Right. Stock in the stock market or US treasury, whatever it is. And so yeah, so you make US Treasuries better and it just is going to attract even more flows into the dollar, causing even more overvaluation, causing the trade deficit to get even worse. And all of the kind of second and third order effects that come along with. [00:46:31] Speaker B: When you say it that way, it makes me feel like it's a, the dollar aspect of, is a pollutant in the sense that it is. [00:46:39] Speaker A: Yeah. [00:46:40] Speaker B: The bitcoin is, is a, in its, in its purest form, pure like gold. If you hold a bar of gold, you hold a bar of gold without getting into the, you know, fungibility and all the properties that make hard money, hard money. It's that concept of gold is gold, just like Bitcoin is Bitcoin. [00:47:01] Speaker A: And now that's how currency. [00:47:03] Speaker B: Well, go ahead. [00:47:03] Speaker A: These used to be valued right back in the gold standard. The way that this would work, right. Situation like we're describing past 20 minutes or so could have never happened. And the reason is because currencies were valued basically on a balance of payments basis, right? And the way that this works very simplistically is under gold standard, everyone's using gold. I had mentioned, say you're Japan and you export way more value than you import, so you run a trade surplus or a current account surplus. Well, what that means is on a net basis, gold is flowing into your country while you're on a gold standard. Gold is the base for money. So as that gold comes in, you're able to create more. If you're using a fractional reserves system, you're able to create more currency units. More currency units drives inflation, it drives economic growth, right? The economy starts to heat up, start making investments in new business application, new new business loans and that sort of thing, right? Eventually the, the, your currency becomes so strong, your economy becomes so strong as so much gold has flowed in and caused so much. Because with, with that kind of money printing on top of the gold, you're able to maybe optimize your, your factories, right? So now you can make even lower cost goods and you become more competitive economically on a net basis. The problem is better money. Well, eventually it gets to a point where your currency and economy have become so strong from all of the gold that has flowed in and therefore all the kind of economic activity. On top of that, your currency gets so strong that now all of a sudden it doesn't make sense for country ABC to buy your stuff anymore. So now what happens? Now you start selling less stuff to the rest of the world. You might start to run a trade deficit. And what the, or current account deficit and what that means is gold is flowing out of your country. And then the exact opposite thing happens. And that, that was how currencies to a large degree wasn't, wasn't the entirety of currency valuations, right? The balance of payments, but it was a significant portion of a currency's value was based on balance of payments because the gold was money, right? The net settlement in gold. Well, that gold was money and certainly like kind of the base money. And so that's really the issue. You know, Lyn Alden, a lot of bitcoiners know the concept of broken money here in the U.S. right? They know that the dollar here in the U.S. is broken money. But I've been talking, I think arguably even more important is global broken money, which is kind of the stuff that we're talking about here. I think that that's arguably more important than the fact that fractional reserve here in the US Right, or debt based Money here in the. It's all important. But I think that more attention needs to be focused on the global broken money, that currencies, it's not just the dollar, right? The dollar is broken to the upside, but the yuan is horribly undervalued. Japan, the yen is horribly undervalued. For the US we have the problem to the upside to an overvalued dollar which has hollowed out the industrial base, made US goods not competitive in the rest of the world, led to an accumulation of a 95% negative, 95% GDP nip. So it has problems to be overvalued. But look, if you're China or Japan and you have an undervalued currency, well, things are great because why do you think that Alibaba thing is so cheap? Now? Some of it is labor, right? Some of it is while they use slave labor in China or this or that, they subsidize that particular industry. There's a lot of those dynamics at play for sure with, with Chinese goods, but like a good amount of it is the fact that the yuan dollar, that currency exchange rate is way out of whack, right? The dollar is so much more overvalued than it should be and the yuan is so much undervalued than it should be. Now for China, it's good because it means that they can boost their exports, they can sell more stuff to the rest of the world. They can run an even larger current account surplus trade surplus. Because the weaker your currency is, the more attractive it is for the rest of the world to buy your stuff. And that's what part of the reason that China has become the superpower that they are is, you know, with systematic weakening of their currency for many years. This is not a new concept. People have been talking about this for a while and it's allowed them to capture a record share of global manufacturing output. So yeah, look, fiat money has broken both directions. If the dollar kind of broken to the upside as the reserve currency and all those issues. But then on the other side, you have good number of currencies that are broken, you know, to the downside as well. So the problem is that fiat currencies are not fairly valued relative to each other. And again, going to the kind of first topic we were talking about with Bitcoin and gold becoming a reserve asset that helps to bring fair value between currencies, the more that neutral net settlement is, is done in gold or Bitcoin, the more fairly valued currencies are going to be. So, you know, it's a, it's a, you can get there by a Mar. A Lago accord, Plaza Accord, 2.0 sort of thing. You can do a currency accord and get there very quickly, or you can as gold and Bitcoin neutral stores of value, net settlement in things like gold and Bitcoin. As that continues to expand, you will eventually get to a place where currencies are much more fairly valued relative to, relative to each other. [00:52:51] Speaker B: Right. So like I'm thinking balance when you say that, like, and you know, I'm a chiropractor, it's the money adjustment. I think about alignment. And so what you're describing is an out of alignment. You said too much. On the US side, the US dollar is overvalued. And in other countries they have another problem where it's undervalued. So the system is just out of whack, for lack of a better term. [00:53:16] Speaker A: Yeah, and there's, there's incentives for both. Right. So like if you're China, you're incentivized to have an undervalued currency. If you're the US who is run essentially by Wall street and the top 1%, you're. I mean, look, if anyone has done well with the path that the US has taken, it is the elite, right? The elite. You look at the net worth of the top 1% as a share of GDP. It is literally the same line as the capital account surplus, which is the inverted current account. As our trade deficit got the other way to say that as our trade deficit got worse, the net worth of the top 1% outpaced GDP to an even greater degree. Right. So the bigger the trade deficit got, the richer that the top 1% got even over and above. Over and above GDP growth. Growth. Yeah. So, so it, I, I've put. Posted that chart many times. It's basically the same line. So look like there's some incentive. If you're part of that group, you're incentivized to have this overvalued strong dollar because you have this structural bid of $150 billion per month into financial assets. Right? So a very small minority of people in the US are incentivized to keep that strong dollar over value dollar. And then of course, you know, China's incentivize. So yeah, the, the, the system, unfortunately going to incentives is, it's, it's just all, it's all broken. [00:54:38] Speaker B: Wow. Yeah, that. It's funny, like I think to myself again and, and I feel this way when I watch your videos and I have to Preface it this way. And, and it's not as a. I can tell you, I can feel that you're balanced. You have a balanced approach, and you look at the mirror image of things, which is fantastic because you're like, it's like it's happening for a reason on both sides. There's reason to devalue it, like you said in China's case, and there's reasons to prop it up in the, in the case of the United States. So I find that all very interesting. And I think, because I'm like, piecing this together in my mind with past episodes that I've done. Oh, it's watching your videos, because I watch your. I, I before I prepare for any guests, I watch their videos. But I had already watched a few of your videos before I even reached out to you. And then I watched the last couple, and I believe it was. You were talking about M0 and M2, and you were illustrating very well, valuing things in gold as the metric versus the dollar and showing these inverse correlations. And I can't do it as well as you because that's really. I feel like it's your, you could tell you're very passionate about it and you're knowledgeable, very knowledgeable on the subject. So, so as someone who watches this as a, as a very curious layperson and then tries to under. Tries to conceptualize for myself what you're saying, and I actually had to go back and forth with Grok to do some kind of primer on M0 and M2. And I remember, I recall, I recall understanding that a little bit better in 2020. It was because it was thrown around a little bit more in the mainstream media, and then it kind of fell to the wayside. So I was like, I got to brush up on this. Exactly what that means, and maybe I'll even do for this video because I love the educational component of your videos. And, and this is kind of where I'm trying to land. And it took me a really long time to get here because I, I watched them and at the end of them, I feel like a little, like I said before, I feel like a little depressed because it is, it's. And again, it kind of goes back to when people use that term doomer, which I, which is just a jargon term. And I, and I, and I keep, I'm like, rambling on about this because I want to land where it's understandable why someone would interpret some of what we're talking about in a kind of doomeristic. Manner. That being said, it is not without solution and is by understanding the mechanics of what's happening that we can come to a better solution and for just trying to land this plane here for bitcoin or a hard money. And if you're like, if you want that balanced approach, people are still very positive on gold and. And there can be some debate around that for sure. For sure. And in fact, gold is the larger asset. And I don't have the numbers off the top of my head. We're in the bitcoin community, so bitcoin just seems like it resonates so loudly. But the broader community, the world gold still holds the gold position. Being a. I don't remember what the exact 9x is. If it's 24 trillion or 30. [00:57:39] Speaker A: Yeah, it's about. [00:57:40] Speaker B: Yeah, yeah. So, and, and Bitcoin's at 2 trillion in terms of market cap. But, you know, I would love to have you on again sometime because I really like your depth of knowledge and it's cool to actually put a face with the videos because your channel is a faceless channel. And I want to give you your flowers because I look to see when you started. I believe you started in March of 2025. So you started your channel this year and your videos are already getting like upwards of a thousand likes. Not just views, but people are actually really appreciating what you're putting out there. And I think it's so cool how you could take what are what. What maybe some people. And they are, to some people, jargon terms and concepts and presented in a way that if someone is genuinely trying to understand this, it's. It's a very useful. Your videos are very helpful in breaking these down. So I want to give you props for that. And is there anything that you would like to leave for our audience? [00:58:36] Speaker A: Yeah, I appreciate that. That was the goal really, with the YouTube. I. I never thought I was a good teacher. What you're describing, like people. I had no idea when I started the YouTube, I thought it would take me like two years to get to a thousand subscribers. And it took like two weeks. I just had no idea that I was a teacher. Like, I knew I was a lot of things, but I never thought of myself as a teacher. So I've been surprised along the way about some of the. Some of that. But yeah, I would say that, like my intention. I think intentions are important. So my intention was starting that YouTube was to, you know, I spent a lot of time like we were speaking in the beginning. I was Obsessive with the amount of macro podcasts I would listen to, the amount of time after I got home from my day job, I would spend four or five hours after I already was doing some of that during the day job, I would come home and just like, be on trading View or Fred. Right. The economic day, reading academic papers. Like, I spent so much time trying to understand this world. And, you know, back then in kind of the early 2000 and 20s, there was really no, like, educational for. For the everyday person. Right. And I spent a lot of time trying to figure all this out. And I thought to myself, like, man, I, you know, people shouldn't have to spend that much time, you know, to. To. To understand the way their money works, to understand the way that their financial system works. And so, yeah, the intention was just to. To start kind of a. A channel that was targeted to the kind of everyday person that here's current and capital financial account and, you know, this and this. And it's to target that person and try to make it at least somewhat understandable in simple English with charts that help to try to demonstrate certain phenomenon or certain dynamics or that sort of thing. So glad to hear that it's successful with that educational piece because that was really the main goal behind us. [01:00:38] Speaker B: Yeah, that's awesome. It was successful and you definitely got a subscriber with me. Yeah. Thanks again for coming on. And I look, I hope to have this ongoing conversation because Even though we're 16 years into Bitcoin, it's still relatively an experiment. It's just now a $2 trillion experiment. And the deeper the rabbit hole you go, you realize there's a lot of strong foundation and a lot of smart people and a lot of development happening at the layer of the actual bitcoin community. And it's like a. There's this macroscopic level and a microscopic level, like there is with things of value. And bitcoin arguably is. Is of apex value. Thanks again for coming on, people. AUDIENCE Check out infra nomics on YouTube and you're on Spaces pretty regularly. So if you're on X, check in on Finance Daily. And I've heard you on bitcoin today, and I'm sure you do other ones because I. I see you. I see. In fact, sometimes if I see you on there, I'm like, oh, I want to go hear what he's saying. So Spaces is really cool for that. Thanks again. Everyone else, you stay on. We'll do just a quick debriefing and I'll see you guys on the next one. Bye. Thank you for watching this episode of the Money adjustment. If you want more more like comment and subscribe, you can follow me on X Mark Kramer until the next episode. Stay healthy and wealthy. [01:02:13] Speaker A: Yeah. Is the biggest regret, biggest mistake of my life. I mean this is back in like the bitcoin faucet days and stuff where you press a button and get five bitcoin. I had quite a number. Like I had enough that like today would be like obscenely rich, you know, And I just didn't. [01:02:30] Speaker B: That you had it. You. You had it early but didn't know what. [01:02:35] Speaker A: Yeah. And so like. Yeah, like the. What would happen is every bull cycle, you know, every bull run go up 200, 300% and I would think, oh, it's great, you know, I triple my money, sell it and then it would come back, you know, and I would participate in the next bull cycle. I did mine from like, I want to say like 20. I think I got my first miner in like 2014. I don't know, it's all kind of a blur. But like I. I kind of messed around with mining in there for a little bit. I had some space heaters in my living room and did the mining thing for a little bit. But yeah, I didn't like I knew it. The thing that frustrates me, the reason I say unfortunately is like I knew at the time it was significant. I knew the technology. I knew bitcoin itself was significant. I just couldn't understand. I didn't grasp why it was significant, if that make sense. Like I knew that it was something. I could feel it almost like a spiritual thing, you know, like you could just tell that it was. There was something there. The problem is I just didn't know. [01:03:37] Speaker B: Yeah, anything.