Is The Stock Market About To CRASH?!?

0:00Hello everyone. The perfect storm is upon us. Asset prices are crashing and a substack post destroyed the U.S. stock market yesterday. We're live today from the desk of Anthony Pompliano.

0:21Before we get into today's episode, I need your help. We currently have 44 ,540 subscribers on YouTube, but my goal is to get to 1 million. I know it seems far away, but we're going to get there together. So hit the subscribe button and let's get into today's episode. All right, ladies and gentlemen, asset prices are selling off aggressively and everyone is left scratching their head. What is happening here? What is driving so many investment assets lower? Well, I believe that the perfect storm is upon us and it's worth investigating a little bit more. We are seeing three things happen simultaneously, and those three things are creating significant headwinds for stocks, Bitcoin, and other assets.

0:55First, there are four deflationary forces that are swallowing the U.S. economy. Tariffs, deportations, artificial intelligence, and robotics. Each of these is creating a deflationary pressure that is pushing consumer prices down and serving as a cap on asset prices. Second, we have global liquidity that is likely peaked, and we are now seeing a liquidity contraction. Cross-border capital is Michael Howell. He is one of the world's foremost experts on this topic, and he believes that we will see liquidity continue to diminish until a trough in 2027. That would be at least an entire year of asset prices taking the liquidity drain right square on the chin.

1:32Now, third, AI companies are launching competing products to legacy companies, and that is creating significant headwinds for certain stocks, especially in the software sector as investors try to figure out what's signal and what is the noise. So this perfect storm of deflation, liquidity contraction, and AI competition is putting asset prices in a very tough position. We know the S &P is down off the all-time high, but so is gold, Apple, NVIDIA, Bitcoin, and many other assets. Some investments are down more than others, but generally we are seeing a repeat of 2022's sobering rather than a repeat of 2021's unbridled enthusiasm and insanity.

2:09I sat down with Jordy Visser over the weekend and he explained his view on why he actually thinks right now the world is deleveraging and how that deleveraging could actually help an asset like Bitcoin over the longterm. Take a listen to Jordy's thoughts. I believe the world is deleveraging. The$800 trillion is heading back towards where it should be, which is monetary base of the world, nominal GDP of the world. Both those numbers are about $120 trillion. Now, the question is, do we go from$800 to$120 trillion overnight? Well, that was the Great Depression. That's not allowed. That's what the governments are going to do everything they can to prevent.

2:41The more likely scenario is that we come down in this manner over the course of 20 to 50 years. And that's why deflation equals de-leverage. De-leverage equals Bitcoin to go higher as part of the rotation. So I'm not in any way changing the goalposts. This has always been my writing. This has always been my thesis. I will say to everyone, I got sucked into believing in Bitcoin in this theory when I listened to Michael Saylor back in 2021 when he was describing the decision. And I always say, yes, he did bring up debasing. He did bring up that the government was going to steal his money by moving rates to zero while inflation was going to go higher.

3:22And he was sitting with money in his bank, in his treasury account. But he also said he was in this position where he had to make a decision because of exponential innovation, because Microsoft had completely destroyed his software business. He could not compete with them anymore. That is where you have this running of inflation that is incredibly deflationary and it allowed these companies to have a moat that they're not going to have in a world of intelligence. Now, I got to say, I don't disagree with Jordy on this one. It does seem like the world is deleveraging and deflation and liquidity contraction are a big part of that.

3:56You can also see this in the accelerated purchases of gold by central banks as the global investment community tries to figure out one thing, where do you put your capital? Now, the most uncertain aspect of the U.S. economy and what is really causing a lot of heartburn for investors as they try to figure out where to put their capital, it's what's going to happen with the tariffs in the United States. We know that the Supreme Court struck down tariffs levied under IEPA, but it seems like the administration's got a few other tools in their toolbox, and they still plan to collect the same revenue from our trading partners with those new tools.

4:27Here's Treasury Secretary Scott Besant discussing his plans.

4:31Anthony Pompliano:What the Supreme Court said is that the president cannot use the IEPA, the Emergency Economic Powers Act, to do this. The president does have other authorities. And as I said, the Section 232 tariffs and the Section 301 tariffs have withstood more than 4 ,000 lawsuits. So it was very narrow. And it's very interesting that the Supreme Court said that the president can't raise$1 of revenue with tariffs, but he can't put on a full embargo. So they reaffirmed his ability to block all trade. He just cannot accept$1 for the trade. And I will tell you, the tariff revenues, they have come into the Treasury.

5:18Anthony Pompliano:But more importantly, the ultimate goal of tariffs is rebalancing trade and bringing our trade deficits into balance. We've seen the goods sector, the deficit with our trading partners, drop by 17%. We've seen our bilateral deficit with China drop substantially. And we are seeing trillions of investments and factories coming back to the U.S. because of the tariffs. Now, the most interesting aspect of this development last week is that U.S. stocks were up less than 1 % on the news of the tariff logic being struck down. And then we saw no negative impact when Trump announced brand new 15 % tariffs across the board a few hours later.

5:56So my base case is that we will continue to see the tariffs collect billions of dollars in revenue. Most of the companies that are asking for refunds, they're going to be pretty disappointed in their lackability to collect. And the economic headwinds of deflation and liquidity contraction are going to challenge investors' long-term conviction in 2026. So we are living through one of the most exciting times in human history. Seems like every single day, something new is being built and scaled. We have synthetic superhuman intelligence at our fingertips, and we are getting closer to a world of abundance.

6:26You just need to weather the volatility along the way and just ensure that your portfolio is resilient enough to benefit over the long run. All right, this story is pretty crazy. There was a viral sub stack that got posted from Citrini Research. And in this piece, they explained that they've got a thesis of where the world is going in 2028. Alop Shah is the optimistic AI realist who is one of the co-authors of that piece. And he went on TBPN and explained what his thought process is. Here's what he had to say about why the piece resonated with so many different people. I think the problem, A, the first thing, the most important thing is just the labor market dynamics.

7:04We've just been in a really weak labor market for a while, and that's before these things roll out. But then you put that together with the fact that, you know, we just have a very structural environment where what is the thing that drives our entire economy? It's wages. Most of those wages that are ultimately driving all the discretionary spending is coming from the white-collar worker. And the problem with that is that we're now entering this place where you made all these assumptions on loaning money to all these companies, to mortgages, and everything else. Like, the white-collar economy is our economy.

7:40If you all of a sudden just take a leg out of that economy, it has a contagion effect into basically every asset in the world. And so that I think is the part that people haven't thought about. Because when, you know, people were making these loans, no one ever consumed a world in which, wow, OK, now like white collar jobs are in sort of permanent decline. Right. If that's at 2 percent a year, then I think we can skate through. But if it's at four or 5 percent a year, then, you know, we have to we need action a lot more quickly. Now, my big takeaway from this entire situation is that the academic reasoning behind this piece is actually true.

8:12Yes. If all of a sudden you take a sledgehammer to white collar labor and you say you're not going to have as much capital as you thought you were going to have, then the entire debt driven system, it all starts to collapse on itself and there becomes this huge problem. But here's the thing is that academic theory and reality, they're usually two separate ways to think and they're two separate ways that the world works. Yes, of course, that's how it should happen. But instead, what we're much more likely to see is that artificial intelligence, robotics and many of these innovative technologies, they are going to create a GDP boom.

8:44They're going to create new jobs that didn't exist before. White collar workers are going to continue to make tons of money and that this entire debt driven system that we created, it is not going to implode. And so this is a classic example where pessimists sound smart, but optimists make money. Anytime I see in the market that everyone is going for all the fear porn and the doomsday predicting, I always say to myself, do I think the world is going to end? No. that my guess is the same thing that has been happening for 200 plus years is that asset prices are going to keep going up into the right.

9:18They're going to keep printing money. They're going to devalue the dollar and all of the people who can prevent from losing their minds when everyone else is scared and running around in fear. Those are the investors that do well. And so I like reading this stuff just as much as the next guy. But my guess is that actually technology is going to do what it's always done. It's going to make our world better, more productive, economic abundance will be more available, will be safer, and frankly, will be more prosperous. But on top of that, we will create new jobs, we will solve new problems, and ultimately, we will look back at this and we will say, we all underestimated the positive impact of artificial intelligence and robotics.

9:59And man, aren't we glad that we scaled that technology to billions and billions of people around the world. That's it for today's show. Thank you guys so much for watching. Please remember to subscribe on YouTube, and I'll see you guys all live tomorrow from the desk of Anthony Pompliano.