Market Volatility Is Coming… And So Are The BIG Gains

0:00Hello, everyone. We've got a lot to discuss today. Volatility is coming back to markets with an absolute vengeance. Tariff revenues exploding higher. Balaji Srinivasan highlights a massive problem. coming on the horizon, and a geopolitical analyst is going to join us to explain the trade negotiations and various governments' use of Bitcoin cryptocurrencies. We're live today from the desk of Anthony Pompliano.

0:30Real quick, before we get into today's show, I want your help. We've got 16 ,048 subscribers on YouTube. My goal, one milli. I need your help to get there. Please make sure you subscribe to YouTube. Let's get into today's show. Volatility is the name of the game moving forward, ladies and gentlemen. Technology is accelerating and it is disrupting large incumbent players. Entrepreneurs can now do more with less and financial assets are gyrating up and down like a roller coaster. Hold on, baby. Historically, this volatility would have been deemed a negative. Investors would be screaming about risk and they'd be scurrying into cash and treasuries.

1:05But we ain't living in the past, though. We are now living through the macro trends of digitalization and the financialization of the world. But there's only one problem right now in this moment. Volatility has been dampening, completely disappeared. The risk takers are wondering where all the fun has gone in recent weeks. But don't worry, the fireworks show is about to begin again. At least that's what the VIX seasonality chart tells us from the historical data. Take a look at this. Lance Roberts, the chief strategist at RIA Advisors, he believes it's going to happen. In the Wall Street Journal's Gunjan Banjari explains that we are currently sitting at the lowest VIX reading of 2025, the lowest of the entire year.

1:40So unless you think volatility has completely left the market forever, we should be nearing the point in time where things start getting fun again. I don't know if it's gonna happen this week, next week, or in a couple of weeks, but right when everyone is lulled to sleep, volatility will return with a vengeance. Add in the perceived rate cuts and a little money printing, and you've got the perfect recipe for an asset price explosion to the upside that's gonna happen through the second half of this year. Make sure you've positioned yourself accordingly because as the meme says, volatility is coming.

2:08Oh boy. Treasury Secretary Scott Besson recently did an interview and he says tariff income is going to be over 1 % of GDP. Mind-blowing. Take a listen to what Besson had to say here. Just on the tariff income, I'd been saying 300 billion, but I think we're going to have to substantially revise that up. So well in excess, 1 % of GDP. And then with the new investments, they're the sovereign investments that we talked about. But then in terms of the committed investment by private industry, we're well over 10 trillion. So there you have it. Scott Bessent said$300 billion of tariff income, but now we got to revise that upwards.

2:50Regardless, whatever you think about the tariffs, whether they work or don't work, one thing is clear. We're going to make a lot of money. And so now the private industry is also committing$10 trillion to invest into the United States. There's big moves being made. The tectonic plates are shifting in the geopolitical trade realm. And my guess is the people who are betting against the U.S., they're going to be on the losing side of this trade. Now, Balaji Srinivasan is one of the smartest people I know. He constantly is thinking about the world, where it's going, where it's been, and tries to understand different frameworks to think about it.

3:23And he just dropped an absolute intellectual bomb on a recent podcast with A16Z. He said that we're entering a new political axis, futurism versus primitivism. And he thinks that only one side's got the advantage. Take a listen to what Bellagio had to say here. So it's quite possible, I would even say probable, that the combination of all the copyright lawsuits, these are desperate lawsuits, by the way, desperate attacks by all these journalists and authors, writers, et cetera, who hate AI. and I understand why they hate it, but they just hate it. So they just want to kill the thing. And you know, they'll say, they'll say, are you an AI supporter?

3:59With like venom in their voice. It's like, have you not heard that one? Yeah, go ahead. Yeah, so it's like, because like, you know, they'd say like, are you a Trump supporter? Are you an AI supporter? It's similar to actually like when Discord tried to roll out crypto. People were like, you're doing crypto? You know, people got super, super mad, right? And that is a building thing of an anti-AI, anti-crypto, anti-tech, and it's setting fire to the Waymos. It's a real thing that we should not just watch out for. I think it's going to become actually the future political axis between futurism and primitivism.

4:31That's going to be the new left-right-up. The whole thing finishes rotating. Now, I think Blashe has got a great point. Yeah, of course, the people who are looking towards the future, the people who are trying to build, the people who are trying to solve problems, they're going to have the upper hand because the people who want to stay back in the stone ages without technology and think that all innovation is bad, not only are they stupid, but they're actually going to end up being the ones who don't build any of the solutions, they don't have access to the technology, and ultimately, they're going to be left behind.

4:56All right, I've got a special little treat for you guys today. We've got Tanvi Rotnia, who's joining us. She's a geopolitical analyst and an engineer. She's been working on what she calls the chessboard between emerging technology, the economy, and state power, the intersection of those three things. In this conversation, not only do we talk about what's going on with these trade deals and how the White House is trying to negotiate them, sometimes using some tactics that you may not be aware of. But on top of that, Tanya was also very, very, very involved in the India ban of crypto and preventing that from happening.

5:26So we talk a lot about Bitcoin, cryptocurrencies, and state power and where crypto is going to fit in in the geopolitical stage. Here's my conversation with Tanvi Ratnia. All right, Tanvi, I know that we've got a bunch of stuff to talk through here. Maybe where we can start is that Donald Trump and the White House have been running around the world and they're trying to strike all of these trade deals. you've got a very interesting perspective on what's working and what's not working. And you've outlined four specific things that you think are actually helping in these tariff negotiations. Let's start with these oil choke points.

5:54Explain kind of what's happening here and why you think that this is a positive development. Yeah, thanks, Pom. It's great to be on the show. As far as Trump's tariff play goes, if you've seen my original thread, which had gone sort of viral in terms of explaining why he's doing it, why it's a blanket tariff, why he's launched it at this time in April. I'd explained those things in my initial thread. And now that we've seen about three months of these tariff deals, I think there was a lot of change in opinion over this period in terms of, you know, is Trump just basically doing anything he wants whimsically or is there any point to all of this?

6:39I think now that the US got its first few deals, I think a lot of people are just sitting up and being like, well, what is what is really happening? Like he's getting his deal. So what's really happening? So in my latest thread, what I was breaking down is especially looking at the Russia deal, because that whole meeting seemed almost impossible. There's a lot of commentators still saying that they actually cannot believe that this meeting is happening. And it took them by surprise. Right. What I really mapped out is it's a very nonlinear strategy that Trump is employing. And it's a very multi lever sort of economic play that's underway, which is not really happened in geopolitics.

7:35for ages, I would say. What I really deciphered looking at the moves that he's made with Russia and with Russia and its sort of adjacent BRICS countries is I see basically four different levers that Trump is pulling in bringing people to the table and making them agree to certain terms. and in the case of Russia like I said there are four the first of course is military and military operations it's not just you know defense sales and things like that it's actual operations so if we saw the if you remember this spiderweb operation that happened the Ukraine launched this big attack on Russia. And in Feb itself, there were a lot of drone attacks on Russian oil facilities.

8:35You know, all of this was not making sense from the lens of, well, it didn't look like Trump was interested in the Ukraine war. Why is he? Why is the US supporting Ukraine again after what happened with Zelensky in the Oval Office? these things make sense when you think of them as levers in the negotiation right so as i outlined in the thread and also the sub stack starting in february there were you know these a lot of these operations are hitting russian oil facilities or they are actually there to create deterrent against a big calculus that Putin has, which is that they're basically winning the Ukraine war.

9:25This is the opinion within Moscow, within Russia. So to challenge a lot of these notions and to also push back against the leverage that Putin believes he has or has on ground, a lot of these different levers are moving. So military, diplomatic with Whitcoff, with the State Department, with allies, you know, what happened with Russia and India. There's the, of course, the economic levers, the sanctions, the financial sanctions, and then the oil markets, right, the energy side of things. So I've broken this down in detail. But that's in a nutshell, what I was talking about. So is your general thought process that the U.S.

10:16is offensively going after a lot of these oil kind of facilities and various routes and the whole idea is to disrupt Russian oil specifically? Or do you think this is a broader global strategy where the U.S. is trying to do certain things around oil choke points that maybe are not just related to Russia? Yeah, it's the latter. So it's not necessarily energy by itself. It's not that that is the focus of the US. What I'm saying is the way these tariff negotiations are playing out, you don't actually see like, you know, the old school negotiation playbook where, you know, there's a lot of meetings and there's committees and they're meeting for like two years and then they come out with a resolution like that's not happening.

10:57What you're seeing is a lot of chaos. And then suddenly within two, three months, there's a deal, right? So what I am trying to decipher is what is how are these deals actually coming about? What is that new playbook really looking like for negotiations? And what I see is a very non traditional playbook where you're actually leveraging your diplomatic channels, and you're leveraging your military operations, You're leveraging financial sanctions and things like this. And why I frame this around Russia, because it's very surprising to people that how has Putin come to the table? You know, nobody expected them to come to the table.

11:45And what I was breaking down is, you know, it's the it's the combination of these different cores of levers, which have actually compelled Putin to come to the table. And my hunch is that this has happened with most of the deals and most of the allies is it's been this sort of multi-pronged approach. And that's what I will be breaking down in my further writings. So the banking demands is another one of these four points that you've highlighted. And on the banking demand side, I think that we saw, obviously, when Russia invaded Ukraine, there was things around freezing assets, not only of people within the government, but also, you know, kind of the billionaire Russians that had kind of gone all around the world.

12:29On top of that, you've also seen talk of taking some of the Russian assets, giving it to the Ukrainian people. There's a lot of stuff that I think has happened here. And these sanctions seem to have woken up the rest of the world to the fact that if you are not a friend of the United States, like these are now options that are on the table. How do you see that those playing into maybe this broader conversation around these trade deals? And is that one of the biggest sticks that the U.S. is carrying right now? Yeah, I mean, the U.S. is definitely wielding it in ways that have not been seen in recent history.

13:01And I think coming to financial sanctions, I think the demand for the Russian bank, that is basically one of the key demands that Russia had in terms of, you know, what is one of the carrots, if you think about it, that they want from this negotiation, right? They want some of their banks back on the SWIFT network. They want the U.S. to lift its sanctions against those banks. And if you notice, a few months ago, very quietly, I don't think enough noise was made about this, but there was a task force. I think it's called the Klepto Force or something which was constituted by the U.S. government.

13:46And it was quietly disbanded about two or three months ago. And there wasn't much of furore on this, but there are these little carrots that in the negotiation process they have been putting out for Russia. So this task force is one of them. There was also discussions in the Saudi meeting where they talked about cooperating on Arctic routes, Arctic shipment, you know, more economic activity around there. So there is this whole idea of, well, we could have a different economic future if we work together, that they have been selling to Russia alongside, you know, pressurizing it with the Ukraine bombings and things like that.

14:38When you think about these Arctic deals, explain those a little bit more, like in terms of what are people trying to actually accomplish there? What do you think will get done? Yeah, I don't know what will actually get done because this is a sort of long term bet. And, you know, from from Trump's initial agenda, if you remember the Greenland stuff that was like it was right up there in his early first few days of taking office. the Arctic shipping routes are if you see in geopolitical readings of the Ukraine war and things like this the Arctic shipping routes were always considered a big reason why Putin invaded Ukraine at the time that he did.

15:25Apart from just not getting his demands met of demilitarizing NATO and things like that for years. But this is a time where, you know, with global warming and things like this, there is now the opening of potentially one of the largest transit channels, which will be through the Arctic. And China and Russia have been collaborating on that for some time. And this is basically supposed to be a challenger to all the cards so if you see like shipping routes are a very big part of what is um where a lot of the action is happening even during these negotiations like you keep hearing random reports of the houthis and the red sea attacks um and you keep hearing reports uh even around the south china sea and what this is doing um you know even if you think in terms of goods for Americans, right?

16:30These things basically raise a lot of the insurance premium for shipping, right? So a lot of the goods, I mean, they're goods that are getting expensive via tariffs. And they're also essential commodities like oil and things like that, which will get expensive because of expensive transportation or high logistics costs, right? And that can happen for oil flowing into the U.S., but it can also happen if the U.S. raises premia for oil that flows from Russia and China into India, then that also alters the economics within the oil market. So there is a lot of that going on behind the scenes. Now, when you think about kind of the traditional financial world, we're talking a lot about this like intersection of geopolitics and finance.

17:29One area that obviously people are starting to pay attention to is Bitcoin and cryptocurrency. You've got a very unique experience. I believe you were in India when they have tried to ban crypto at least once, if not multiple times. And you're pretty instrumental in standing up to those bans. Talk a little bit about that situation and how that played out. Yeah. So I think, you know, crypto is, you know, it's It's been a well-documented fight that the ecosystem has had against censorship in many countries. And I think it's a great moment in America with all the legalization that has finally come through for crypto.

18:09But when I see crypto, I actually see it also as part of a lot of these larger world order battles that are happening, as part of these larger geopolitical battles that are happening. So I think a big reason actually behind a lot of this rejig of the trade system and as a result, the dollar system is actually what was happening with the BRICS economies in the last few years. So you've had multiple systems where China and India are trading oil through gold. There's a lot of de-dollarization payment rails. There's a lot of these CBDC experiments that are coming up. And I think this created a lot of concern within DC.

19:04And I think at the moment, like with the U.S. legalizing crypto, so we've seen this big liquidity event in the market, you know, a lot of monies come in. And now with the 401ks, you'll have more liquidity come in. But what I am really interested in seeing is just how much liquidity comes in from these other regions. So, you know, if I tell you one development in crypto, which was probably most curious to me from a policy lens, it was the sovereign reserves, right? The Bitcoin reserve. And that got created without much fanfare. I mean, there was a little from the community, but not a lot of people paid attention to it.

19:54And that one is structurally very important because you've literally gone within two months of this administration taking office. You've gone from crypto being targeted to actually being acknowledged as a reserve asset. That's a huge deal. But what a lot of people missed is that, you know, now that Bitcoin holding, I think, makes the U.S. government like the third or fourth largest holder of Bitcoin, right, amongst all the whales. But what happened quietly is that China also created a reserve fund and they created it from their seized assets. And they're almost comparable. So now you have like the third and fourth largest whales in Bitcoin are the US government and the Chinese government.

20:52And the first one, of course, is Satoshi. And then you have probably the Binance wallets, I think, are the second one. And so this is a very different situation, I think, from where we've been in crypto. And you hear now, I think, sovereign holdings. I think there was Bhutan and also UK who have fairly large sovereign holdings. I think this development is very interesting for me because, you know, this is behavior that's happening outside of the U.S., but these countries have no other policies, you know, which are encouraging crypto. So it's going to be very interesting to see what they're going to do.

21:43And while I actually just finished a field visit in China where I was trying to understand what's happening with the tariffs, what impacts are actually there on the ground. And the weeks that I was there, there were actually three or four meetings in the Chinese government at fairly high levels on launching a yuan backed stable coin. And they're thinking seriously about its architecture. So launching it from Hong Kong and things like that. So I think the whole stablecoin rail piece is becoming its own area of competition because that's the whole dollar backed ecosystem. Right. But I think Bitcoin might be like another area, like might be more of a neutral area of competition.

22:40And then you have these BRICS regions with their alternative stable coins, possibly in their CBDC. So I see like different theaters emerging around digital assets. It's fascinating to think through this because the governments obviously realize their people want these assets, right? And so now they kind of have this weird dynamic of we need to support this stuff because that's what the citizens want and their voice will eventually be heard. At the same time, if we go too hard into it, maybe that puts into question kind of our legacy system, our legacy currency and those types of things. Is there anything else that you think that these governments, if you were sitting down with the president or prime minister of one of these geographies, that you would tell them how to thread that needle?

23:20I think the currency games are very complex at this point because you have things shifting a lot in all the theaters, right? So if you see the trade currency, the trade finance space, there's a lot changing over there. There's a lot of regional blocks emerging. I'm sure they might look at different payment instruments and things like this. And you have in the bond markets, a lot had happened, you know, when the tariffs came out, there was a period where liquidity was really drying up. And, you know, there were auctions where you weren't getting good, good purchasing for US bonds. And I think that has been resolved for most part, but there's a lot going on with bond markets and governments globally.

24:10So a lot of interest rates are getting cut globally. And I think there's a lot of stability. You're in very uncharted waters, basically, as far as central bank and currency policy goes. I'm happy to talk about it, but there's just a lot of threads going on there policy-wise. That makes a ton of sense. We've got to go, but where can we send people to find you on the internet and also where they can find some of your writing? Yeah, I'm on Twitter. That's where I'm most active. You can just search my name. It's my handle, Tanvi underscore Ratna. And I also have a sub stack where I'm unpacking a lot of these things regularly.

24:55Your work is incredible and it's helped me think through a bunch of stuff. So I appreciate you not only writing and tweeting all the time, but also taking the time to come talk to us here. We'll definitely do it again in the future. Thanks. All right, that's the show for today. Hopefully you guys enjoyed that conversation and also a little bit of fun earlier in the show as well. Please make sure that you're following us on X and please, please, please subscribe on YouTube. We're trying our best to grow the show there as well. My goal is to get to 1 million subscribers and having you go and subscribe will be very helpful.

25:23I'll see you guys live tomorrow from the desk of Anthony Pompliano