Why Gold & Bitcoin Are EXPLODING Higher

0:29Hello, everyone. into today's episode, I need your help. My goal is to get to 1 million subscribers on YouTube, but we're only at 27 ,162 subscribers right now. Most people think we're not going to get there, but I promise you we will. Hit that subscribe button and let's get into today's show. All right, ladies and gentlemen, there is a gold rush underway. No, seriously. Gold has been on an absolute tear recently, and many investors are wondering what has been going on. Brookings Institute's Robin Brooks writes that the Fed's latest dovish pivot, which he says was telegraphed on August 22nd by Chair Powell at Jackson Hole, has unleashed something, and I don't think anyone really understands what that is.

1:07Gold is up a stunning 15 % since that day, and it's a rally that's so big that it stands out on this 25-year chart. Now remember for a second, gold is a non-productive asset. It's supposed to be a stable store of value with very little volatility on a day-to-day basis. That's why a 15 % move in just a month has put all eyes on the precious metal. One of the main reasons for this move is increasing investor demand. Duh. Adam Kobisi explains that investors are piling into gold funds like never before. The largest gold ETF, GLD, has attracted over$2 billion in net inflows so far in September. This marks the seventh monthly net inflow over the last eight months.

1:45That's pretty good. Now, year-to-date, GLD has pulled in over$13 billion of capital, and that's the most since the 2020 pandemic. People like gold. As a result, gold is on track for its seventh quarterly gain over the last eight quarters, which is its best streak since 2020 as well. Now, these large inflows are noteworthy, but they don't explain why so much capital is flocking to an asset that's been around for thousands of years. People could have bought it at any time. Why right now? Well, Robin Brooks attempts to explain this phenomenon when he writes that gold keeps rising even as the dollar is stable against the rest of the G10.

2:17That means gold is a refuge from fiat currencies generally, not just from the dollar. And that markets are now hunting for safe havens amid high debt and troubled fiscal outlooks. It looks like a broad debasement of fiat currencies is underway, according to Robin. Now, this broad debasement of fiat currencies should not be a surprise, though. We talk about it every day. Global Markets Investor points out that currency debasement is not a bug. It's a feature of the fiat system. Since Brentwood's collapse in 1971, not one of 152 countries has kept average inflation below 2%. Even Switzerland, of all countries, averaged 2.2%.

2:53Fiat money is in an eternal bear market. Although it's impossible to prove, I personally believe the rise of Bitcoin has greatly contributed to the marketing of gold. Bitcoiners have done an excellent job of calling attention to the problem with central bank activities. As Satoshi Nakamoto, the GOAT, once said in a 2009 blog post, The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Now, that warning, that could have come from a Bitcoiner or it could have come from a gold book.

3:25That is the beauty of sound money assets. The holders of either the analog or digital version, they're all on the same team. They are connected in their fight against currency debasement and against inflation. But we can't exclusively point to fiat debasement or central bank buying as the cause for gold's recent rise. There are other factors. We know inflation fears, increasing geopolitical tensions, and expectations of more rate cuts from the Fed are all contributing factors as well. Add in the recent media coverage of the gold rally. They're yelling and screaming about it almost on a daily basis.

3:54And you have the perfect storm for gold to surge higher and higher. Now, the challenge for investors is deciding whether they should buy gold today or abstain because they missed the rally that already happened. I don't have an answer for you, but I am reminded of the recent analysis from Deutsche Bank's Jim Reed. Jim says, had you bought gold at its peak in 1980, you will only have just outperformed inflation today, 45 years later. That's not good. But by contrast, if you bought the S &P 500 on that exact day, it would have provided you with a stunning 4 ,250 % real return. However, had you bought gold in 2000, you would have comfortably outperformed the S &P 500 since.

4:32So welcome to the challenge of investing. You can pick the right asset and you can pick that asset for the right reasons, yet you could still end up with less than desirable results. No one, literally no one, ever promised that this game was easy. Is the four-year cycle of Bitcoin going to survive or not? Well, Binance Research got a new research report out that shows the total market cap of crypto lost$300 billion this week and it fell to$3.7 trillion. Riskier assets like altcoins, they fell the most. Ethereum down 13%, Solana down 20%, BNB fell 3%, and Bitcoin slipped 6%. But according to the widely followed BTC rainbow chart, yeah, the beautiful one, we are in the mid to late stage of a bull market expansion.

5:13That's where most participants already believe in the trend, and capital is now flowing back more broadly. But widespread out-of-control mania, that ain't happened yet. Just look online at sentiment. Upward expectations for the future market can still be maintained, which means price can still go up. So this begs the question, will the four-year cycle hold in Bitcoin? Well, according to Binance research, objectively, since 2014, the market has indeed experienced bull and bear cycles of approximately four years at a time. If we take the end of 21 as the beginning of the last cycle, then the end of 2025 would mark the end of this bull market cycle.

5:47However, Binance questions whether this cyclical pattern will mechanically repeat in the current cycle because they say that the structure of market participants has fundamentally changed. The rising proportion of institutional involvement is a very big reason. The behavior of chasing rallies and selling off in panic should theoretically decrease now that institutions are involved. Instead, institutions are more likely to engage in counter-cyclical operations. They'll accumulate during downturns and they'll gradually reduce positions during uptrends. They're supposed to be the quote-unquote smart one.

6:18Now, this would in turn smooth out that wild volatility that's inherent in the crypto market. and that is a potential underlying reason for the observed continuous decline in Bitcoin's volatility. Although volatility traders, they know, they may see continued calm next month, as seasonal statistics show October and November are historically the two months with the lowest Bitcoin volatility, especially for price action traders. But in October, we also know that it is a month that reverses September's weakness. In nine of the past 11 years, October has seen positive returns with an average gain of 20%.

6:51So all eyes are on October's performance, and that will be a key component as to whether the four-year cycle continues or not. Before I let you guys go today, I have a very special treat. We have Rannach Singh. He's the founder and CEO of Rome. And in this conversation, he is going to explain a very, very big and important idea that can make homes more affordable in America. As we all know, people want to own a home. It's part of the American dream. But it seems to have slipped away. Homes are now unaffordable and people are complaining. But Ronak and his team have created a very innovative product that would allow people to actually buy a home with a lower cost of capital.

7:27I think that this idea is something that every single American should see. So make sure you listen to exactly what he says here. He explains the product and then share this with everyone you know, your friends, your family, your neighbors, anyone who has a home. You guys need to see what's about to happen here. Here's my conversation with Ronak Singh. All right, Ronak, I thought a great place to start this conversation is the fact that we know homeownership in America, everyone wants to own a home. Obviously, there's a cost of capital problem. Interest rates are too high. That means mortgage rates are too high.

7:55People don't want to sell if they have a low interest rate mortgage. And people who are going to buy can't wrap their head around the fact that if somebody has a 2 % mortgage, all of a sudden I'm going to pay 4%, 6%. You guys have a very innovative solution. Talk a little bit about where you started with just assumable mortgages. And then we're going to talk about how people with low interest rates can actually monetize and sell their low interest rate mortgage, which I think is pretty interesting. Thanks so much for having me, Pomp. So spot on. When we started Rome, we started with the ability for buyers to take over your existing mortgage payment at the existing terms that you have today.

8:27And that was really beneficial for the buyer because they would accrue all of the savings. But then what we realized is that the market is substantially supply constrained, meaning very few sellers are on the market with these assumable loans compared to the portion of them that have them. And we know this because people went from thinking that the mortgage is a liability to thinking the mortgage is an asset, meaning they're going to be stuck at home longer. There's going to be fewer homes that list and the homes that list, given their supply constraint, will sell at a higher price. And so that's been part of the frustration we've seen from buyers and sellers alike.

8:57So we got to work thinking, how do we help sellers come on the market? What would incentivize them? And we talked to thousands of homeowners. And what we found was pretty shocking. Basically, we identified that 76 % of homeowners who had a mortgage rate below 4%, you know, they effectively said the low rate loan is the reason they are not moving their home today. And then we asked them, okay, well, what are the things you would take to be able to move out of the home? You know, would it be a Carnival Cruise? Would it be a new iPhone? What are the things that get you interested? And actually, 70 % of them said some form of monthly income, you know, because they want to be able to use the difference between their current mortgage payment and what their mortgage payment would be on the subsequent home.

9:35And they want some help with that. Not everything, but a little bit of help. And a lot of life is on the margins. So today we're talking about a product that can actually help to offset that issue for every homeowner who has an assumeable mortgage, which is just an FHA or VA loan. So one of three home loans in America will be eligible for this starting today. And what happens is if your mortgage was a thousand bucks a month and I I wanted to purchase your home and my new mortgage would be 2000 bucks a month. Why don't I just give you 500 bucks a month and I'll save on 500 bucks a month. And as a result, we're both happier off.

10:07You can use that$500 to offset the cost of your new mortgage payment. And I can save$500 a month compared to existing mortgage. All right. So let me make sure I get this straight. So you own a home, let's say, and let's just say that your mortgage rate is two and a half percent. I'm going to go and I'm going to buy your house rather than me go and put a new mortgage on it. You're giving up a two and a half percent mortgage. I'm coming in at whatever, six and a half, 7%. You can now via this Roam platform say to me, hey, I'll not only sell you my house, but I'll also sell you a mortgage essentially.

10:40And by the way, it's not gonna be at two and a half percent. Maybe it's gonna be at 4%. And that 4 % mortgage is more attractive to me as the buyer of your home because that's cheaper than one I can get from the bank. But really all I'm doing is I'm taking over your existing mortgage that's already on the home. Plus I'm paying a little bit extra, but that extra doesn't go to the bank. It now goes to you as the home seller. And so it's a way to not only sell your home for a one-time purchase price, but also now you can start to drive like passive income by marking up your previous mortgage. Yeah, exactly.

11:10It lets homeowners sell their low rate mortgages. Buyers still save money compared to what prevailing mortgage rates are at and sellers get some additional income. So passive income for the seller, they'll probably make something like$30 ,000 over the next five years from selling their low rate mortgage to the buyer, which is pretty substantial when you think about typical America makes about$80 ,000. So getting five,$6 ,000 a year is a substantial rate. Well, I mean, it's like a no brainer, right? If this works, the whole idea that I can essentially now monetize an asset that I used to have, that when I sell my house, I just give up.

11:45Like you just walk away from, you know, you pay off the mortgage and you just walk away. Now that is a whole new asset class in my portfolio. because I'm actually able to monetize a mortgage that I don't even, that I'm not responsible for anymore. Exactly. It's something that people didn't know they could monetize, right? And when they do, it intuitively clicks for them. It's akin to, I think, many of the products that you and I use in everyday life, like Uber was monetizing people's cars at homes that they didn't know they could otherwise take for a drive and make some money from. And Airbnb monetized the spare bedroom in your house that you didn't know you could make money from.

12:19And we hope that this helps you monetize the mortgage So you can sell your mortgage and get money from it. And it's something you intuitively know is valuable, but you didn't know you can make money from until today. And now you said that this is available for FHA loan. Like who can do this right now? Yeah. So it's, you know, all FHA and VA loans. So all the government backed loans are fully assumable by law. So if we think back to 2021, when everybody, their mother, brother and cousin, you know, got a low rate mortgage at two or three percent. And one of three of those home loans were fully assumable because they were an FHA or VA loan.

12:52And so that means that you can transfer your existing loan to the subsequent buyer. All those people are eligible for the product today. We're also working on a solution to make it possible for all loans, but that'll be coming out later this year. This is just the beginning of what we have in store for all of those homeowners that you read about having the rate problem or the golden handcuffs or lock-in problem. All right. So you guys have two products now. You've got just, hey, I buy your house and I take over your loan. I don't pay you any extra money. I just start paying your payments. And I now have a low rate mortgage that I otherwise wouldn't have had because of this assumable component, all government backed loans available for that.

13:28My understanding is I can go to your platform and I can find, kind of like any platform looking for real estate, but the only homes that show up are ones who have assumable mortgages attached to it. The second product is basically that on steroids that now all of a sudden the seller can monetize the fact that they have this low rate loan. But you're saying that you believe at some point in the future, all mortgages in the United States, whether they're government backed or not, are going to be assumable. How does that happen? Yeah. So we think there's a couple of ways to do this. So spot on. There's a product today for buyers to be able to go browsing.

14:00And it's just like Zillow, except it's all homes you can actually afford is what I tell people. And on the homeowners, it's a way to make some passive income from selling your mortgage to the next buyer. It allows you to get an income stream didn't know you could otherwise collect but you intuitively know should be valuable um now in the future what we're excited about is uh you know creating a product that makes it possible to transfer any home loan um and so you know when we pitched um you know keith on investing in the company one of the things that was exciting for us is there's two simple ideas for changing economic and geographic mobility in the united states the first is when rates are high you can let homeowners transfer their loan from one borrower to the next.

14:41So I can transfer my 3 % loan to you. When rates are lower, the idea we're really excited about is letting you take your home loan from one property to the next. And, you know, it's silly because think about, you know, when you buy a car and you move from Nevada to Utah, they don't tell you to get a new car loan. You actually just keep the same car loan. But for homes, it doesn't make sense because everybody would make less money. And so we're excited to make it much more mobile in the United States for you to be able to get a new job or start a family or get a new relationship. So all of the products we're building are centered around economic and geographic mobility.

15:16Okay. Now, who can change this? The politics of this is very interesting to me, right? You've previously shared data with me. I don't know if you're allowed to share it publicly, but hopefully I'll be able to entice you to do that. The politics pretty much are like most people like this. They like the idea of being able to take their mortgage, to sell their mortgage, to assume a mortgage, like anything that makes homeownership more affordable feels like that is a win for politicians on both sides of the aisle. Is that true? Exactly. I think everyone in this country is excited about homeownership and home affordability.

15:48You know, I think one of the things we've spoken about is if you look at one of the key reasons why somebody like Zoran won or why socialism is on the rise with folks in Gen Z, it's largely because people feel like they don't have a stake in the capitalist system anymore. And the largest way many of us accrue to stake in the capitalist system was through ownership of real assets like real estate. And if you can't give anyone a chance to afford a home, of course, they're going to say, why don't we turn over the table and try something else? Because what's in it for me here? And so our view is that there is a lot of good politics and be able to make all of the loans assumable.

16:19It will not have much of an impact on the mortgage market because it would be limited to only the 20 and 21 loans. And additionally, the benefit to consumers would be substantial. homeowners would come on and list their homes in the market because they could collect a premium or they could collect passive income, as we're now demonstrating. Homebuyers could save a substantial amount on a monthly payment basis. Realtors would obviously be put back to work. But the most exogenous and most important effect that I think people don't think about here is actually that it would put about$100 billion of additional spending into the economy and about one and a half to two million jobs.

16:51When people move, they hire movers, they pay for furniture, they check out new coffee shops, they go out to new restaurants in their new neighborhood. They invest in their communities. And homeownership is generally, I think, a good, it's a net positive for America. And so it's one of the things that makes our country great. And there's many things that actually rest within the control of the executive branch that can be enacted to be able to address this. So we think it's good politics. And we also think there's a way to do this with the product. And we're excited to continue to demonstrate that in the next six months.

17:21What about somebody like a Bill Pulte? I know Bill. Bill's a Bitcoiner. Bill is doing a fantastic job over there with Fannie and Freddie. He's really focused on both making that organization efficient. He's trying to understand where the future of housing is going. He's really taking a look at, obviously, all of the kind of nefarious activities that are going on in the mortgage market. But I think he's also trying to create solutions to a lot of these problems. Are there things that he or his organization could do to help this problem? Yes, spot on. So Director Pulte actually oversees Fannie and Freddie, which are the entities that, you know, otherwise control the assumability here.

17:52So there are a number of ways that they can help to enact this, and we'd be excited to work with the administration to be able to do so. The key benefits would be that they would actually be able to make it much more affordable for homebuyers to be able to purchase, which only further strengthens the safety and soundness of the mortgage market today. Because, you know, it's effectively come to a standstill given sellers don't have an incentive to be able to sell their home and buyers can't afford a purchase. So FHFA actually has the control to be able to do it. And, you know, I think you and I both think Director Pulte is the best person that's ever held that office.

18:25And so there's a unique chance that he can help to influence and improve the outcome for homebuyers and homeowners across America without having to wait for the Federal Reserve to reduce interest rates. I think Bill Pulte is an incredible human. Obviously, all the philanthropy that he's done, he's an entrepreneur. He's built a bunch of stuff. And I think the part that I've always enjoyed about him is he understands what's going on in the parts of the country that maybe the coastal elites don't. And if there's a way for him to help save the U.S. housing market, I think that he's probably interested in having a conversation with you.

18:58So that's exciting to hear. All right. Where can people go find this new product and start using it? When you come over to withrome.com, so W-I-T-H-R-O-A-M.com slash sellers, or just come to withrome.com, you'll be able to see it. This is the product for sellers. We also have a product for buyers. It's a unique chance to be able to actually afford a home and not just keep refreshing the Wall Street Journal to see rates go up, rates go down. When am I ever going to have a chance to actually evolve in my life? We're here to say you can have agency and you can move on with your life today. So thanks so much for having me, Paul.

19:29Amazing, man. Thank you so much. We'll definitely bring you back. Keep going. We need this product and I'm excited for people to start using it. I told you it's a pretty big idea. If Rome can go ahead and make this product pervasive across America, homes will become more affordable and more people will be able to capture the American dream, which is good for the economy and our society.