The Government Has Been WRONG About Inflation For Years

0:28Hello, everyone. but I want more. My goal is to get to 1 million. Hit the subscribe button and let's get into today's episode. All right, ladies and gentlemen, we all want a crystal ball to see into the future. If you had one, you could just buy stocks low and sell them high. You could avoid the problem areas and you would be richer than you could have ever imagined. But none of us have a crystal ball, right? Well, not so fast. We finally have data that supports what I've been saying for a long time. Trueflation is the most important measurement of inflation in America. Now, I measure importance along two aspects, speed and accuracy.

1:02And Truflation is more accurate and it gets you the accurate data much faster than the government. But you don't have to believe me anymore. Mark Hackett points out yesterday that Truflation has a 97 % correlation to CPI with a one month lag. In layman's terms, Truflation is a crystal ball into what CPI is gonna say a few months later. The fact that correlation is between the two of 97 % should be compelling enough for people to start paying attention. But add in the fact that Truflation tells you weeks in advance, and it is a no-brainer to merely watch Trueflation and completely ignore CPI at this point.

1:33So what is Trueflation telling us is going to happen in the next two to three months? Well, Bloomberg's new AI feature summarized it perfectly. It said the model forecast CPI year over year will decline to approximately 0.9 % to 1.3 % by March of 2026 and will continue following towards 1 % to 1.5 % in April. That represents a significant disinflationary trend. This forecast stands in stark contrast to the consensus Q1 2026 estimate of 2.59%, suggesting a divergence of approximately one percentage point. Now, if the Truflation-based forecast proves accurate, it would indicate inflation falling well below the Federal Reserve's 2 % target within the next two months, potentially opening the door for more aggressive monetary policy easing than currently priced into markets.

2:17But Truflation is not the only crystal ball that people seem to be acknowledging now. Yesterday, the Federal Reserve put out a paper titled, Koushi and the Rise of Macro Markets. Prediction Desk summarized the paper with the following points. One, Cauchy has correctly predicted every single Fed interest rate decision the day before the meeting since 2022. Two, Fed Funds Futures, the tool that Wall Street has relied on for decades, performed worse than Cauchy with statistical significance. Third, Cauchy outperforms the Bloomberg survey of professional economists on inflation forecast. And fourth, the paper calls Cauchy the most mature and comprehensive prediction market for economic forecasting.

2:52So now we have two different measurements that are outside the traditional financial system. Kaoshi is using a market-based approach to better forecast various economic data points than traditional tools. Truflation is using a centralized approach to collect, synthesize, and calculate data better than the government can do it. So my big takeaway from all of this is that these two revelations are very simple. The private sector no longer trusts the government data, but rather than complain about it, they are now directly competing. And that's exactly what should happen. The private sector has built solutions that are faster and more accurate.

3:23And that makes these solutions more important and more valuable. It's how capitalism is supposed to work. If you don't like something, build a better version. Truflation and Cauchy seem to be doing just that. And now it is just a matter of time, in my opinion, before all the large pools of capital stop listening to the BLS, finally, and they start paying attention to the private market solutions. I went on Patrick McDavid's podcast yesterday and talked about the AI arms race and why Elon Musk declares that retirement savings are going to become useless. And he says that you no longer need a retirement.

3:52Well, I actually disagree a little bit. And so here's my conversation with Patrick on this topic. I'm literally building a company around this because I think that this is the single most important thing that the everyday American has to understand is happening right now. There is a arms race that is about to occur, which is there is artificial intelligence that is being built at hyper speed. And that artificial intelligence is being able to automate away tasks and eventually jobs at a very very fast rate now let me give you a couple examples uh how many software engineers now aren't writing code they're just letting ai do it i am invested in a lot of these companies 50 plus percent of the code being written inside these companies written by ai now there is claude co-work so now it can go and do a bunch of tasks that an entry level employee could do you're now starting to even see elon in that same interview or i'm sorry He did an interview with the Cheeky Pint with Dwarkesh and one of the Colson brothers.

4:46He kept saying, we think that Grok has a way to learn faster than all the other models. And he wouldn't say why. And so I started thinking about – because he kept mentioning Tesla, the Tesla model. And so I said, oh, my God. He is basically going to have people just record their computer screen while they work, and they're going to use the machine learning to figure out how to do what you do. And so I tweeted that. Elon responded. I didn't tag him right that he responded. He said, pretty much. And so what's going to happen here is artificial intelligence is going to go put a bunch of people out of work.

5:14What I believe is the arms race is we have to race to harness artificial intelligence to make you money. Because basically what's going to happen here is if we do not harness the ability for artificial intelligence to make people money in terms of you have capital, you give it to the artificial intelligence, it goes into the market, it makes you money. What is going to happen is you're going to be out of work. You're not going to have any capital and you're going to not have a path because the machines can do a better job at anything that you do. And so the first thing that we did is we built this product called CFO Sylvia, which basically you come in, you load all of your different accounts, you put your bank account, your crypto, your brokerage, all that stuff in there.

5:47And then you can start to talk to the AI and ask it simple questions. How do I get my tax rate down? What should I do if I want to have this net worth in five years or 10 years? You can also ask it like, how does this current event go ahead and impact my current portfolio? And the beauty of this is if you ask a chat GPT or, you know, Anthropic or any of these guys, it'll give you very basic answers. Here's what people do to get their tax rate down. What this does is it tells you to your specific situation, asset by asset, what to do. And what's interesting about this is we start to get feedback from these users.

6:19What are these users saying? I trust the AI more than I trust a human person. I tell the AI more things than I would normally tell you. I ask questions I wouldn't ask a human because the human will judge me, but I can ask these questions here. And so what you start to realize is people are going to put all of their information and context into these systems, and they're basically going to say, help me. And CFO Silver is doing it on the finance side. But what we start to see now is, okay, if there is an arms race occurring, what you're going to see is you're going to see finance get automated. Because ultimately, if you're an average person and you're saying, I'm going to work every single day and I might lose my job in the future, what do I do?

6:55I'm going to have to use this technology to get ahead, or it's going to put me out of business. So that is the arms race that's occurring here. Do you agree with them, though? Do you agree with him that retirement's not something that's important today? I think that, one, you should always have some sort of safety net, right? What I think that he's basically saying here, though, is he's actually not saying don't have retirement. What I think he's saying is humans are not going to drive their retirement. It is going to be all this other stuff. So what the future I envision is you're going to eventually take your money and you're just going to give it to the AI.

7:26And the AI is going to make sure that you have monthly income, that you've got retirement money, et cetera. Now, there's a gap between where we are with the technology and where that eventually will be. But you see this. People are passively investing in indexes. You see them constantly looking for – there's all these AI bots and stuff that are now trying to figure out how to use the technology in the financial markets. High-frequency trading. Hedge funds have been doing this for a long time. So my view of this is he's right that you are not going to be trading your time for money in the future in the way that we've thought about that over time.

7:59but he's wrong in that you're still going to need money and so you need some sort of retirement that's interesting so how does that i mean again how does that work for say a plumber well the whole idea is that you know look if i said to you right now what can robots do most people say electricians are safe plumbers are safe etc okay but if i went back five years ago and i said do you think that robots are going to build homes you would tell me i'm crazy i've seen multiple videos online now the homes don't look the same but they're 3d printed they're They've got these cement automation, all this kind of stuff.

8:27And so as we rapidly get here, I think one of the aspects of all this AI stuff and robotics that to me is, frankly, it breaks my mind, right? Because it's scary and exciting at the same time is this idea of exponential production. So if the humanoid robots can start producing more humanoid robots, then what is going to be that future look like? Now, the one thing I will say is I actually think that the last human moat that exists is right here. This is the last human moat. There is not a thing in your brain that is a moat compared to software. Software is going to be able to do everything that you mentally can do.

9:01Now, I don't know about you guys, but my whole view is that you're still going to need retirement. But yes, artificial intelligence is going to be highly disruptive and you should start using it immediately. Let me know what you think in the comments. Everyone is worried about the price of Bitcoin. It keeps falling. But Binance Research says that the Bitcoin Fear and Greed Index fell to historic lows, bottoming at 5. It's below levels observed during the prior market crypto shock events, and this extreme reading reflects clear retail capitulation. However, the broader market context differs from previous cycles.

9:31Both prices and adoption metrics remain structurally higher than when similar fear levels were recorded in the past. In other words, sentiment has collapsed even though the ecosystem is materially larger and more institutionalized than in prior downturns. Historically, such extreme sentiment readings have coincided with selling exhaustion and periods of stabilization. Now, you can see in this chart right here, red is the fear and greed index and gold is the Bitcoin price. You can see that fear and greed is going down. What distinguishes this phase, though, is ownership structure. Over the past year, Bitcoin supply has shifted from individuals toward businesses, funds and ETFs.

10:04Individuals show net distribution, while institutional categories show net accumulation. See it in this chart here from River. Now, spot ETF AUM has also not declined in proportion to market cap, and that suggests that relatively stable institutional allocations continue despite all of the price volatility. And so as River is showing here, individuals own less Bitcoin today and businesses, funds, and governments have been buying more. Now the institutional catalysts are beginning to surface more clearly and the nature of engagement has shifted. Binance research shows that BlackRock's expansion into Uniswap, Apollo's partnership with Morpho across on-chain money markets, and the broader convergence between traditional liquidity providers and DeFi all point to something beyond passive allocation.

10:46Major asset managers are now acquiring governance tokens and they're integrating directly with crypto-native rails, which is a meaningful distinction from the ETF-driven exposure that has largely defined institutional participation to date. This selectivity is showing up in performance as well. The Neo Finance 7 and 7 Index has outperformed the DeFi core, L1s, and L2 indexes by more than 20 % year-to-date and has also outperformed Bitcoin over the same time period, which is a little surprising to people. While broader market segments have retraced sharply, revenue generating protocols embedded in active financial rails have held up relatively better.

11:18And this reflects early positioning that is more closely aligned with the next phase of institutional and on-chain adoption. The institutions are here and we're seeing it all over the data. Retail is capitulating, fear and greed index is down at five and price is down. But the institutions, they think long term, they tune out all the noise, they've got their blinders on and they want to participate in Bitcoin and crypto. That's it for today's show. Thank you guys so much for paying attention and watching. I really appreciate it. Make sure that you subscribe on YouTube and I'll see you all live tomorrow from the desk of Anthony Pompliano.