The End of The US Dollar, Globalization Failed, Jamie Dimon Sued By Trump, The Future of AI

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1:47If you go to any country that's experienced hyper deflation, corruption goes up, violence goes up. You literally see the fabric of what you're so used to start breaking down. And you can look at Weimar Germany or Venezuela, even places like Nigeria recently, which is doing well in some parts of it, but their currency gets weaker and weaker. It just makes it more and more difficult for the average person to have any confidence about their future. This Iranian revolution isn't happening because the United States wants it to. It's happening because their currency got the living hell kicked out of it.

2:21And shopkeepers said, I've worked my whole life for this shop to feed my kids and my grandkids and have a future. And it just evaporated. And so F you to the government. F you to the Ayatollahs.

2:32Michael Novogratz:It's super scary because your currency should be a store of value. And we don't have it as a store of value anymore. People have to get rid of the currency pretty quickly if they want to have some semblance of savings. Welcome to All Things Markets. I'm Anthony Scaramucci. And I'm a red-looking Mike Novogratz. All right, Mike, you're in Europe right now. You're on your way to Asia. So I'm just back from Davos. Lots to discuss. We've got to start with Davos. All right. We've got to start with Davos. All right. So let's start with Davos. I'm going to give you three points and get you to react to them.

3:05Michael Novogratz:You weren't there. I was there. So I may be too biased. But I sort of felt like Ray Dalio's messaging was underreported. And what was Ray Dalio's messaging? He basically is saying that fiat currency and debt are losing their roles as trusted stores of value. If you go to Truflation.com as an example, the dollar is down since January of 2020, approximately 31%. And he feels like we're heading into a debt super cycle where we're going to be borrowing money to pay the interest on the money and printing money. And that's why he feels so strongly about gold, Bitcoin and other assets. So let's start there because I felt like that was underreported, Mike, and people are indifferent to this.

3:54Michael Novogratz:What do you think is going on? I think that is a great place to start. Listen, I think to raise point, you have to add Mark Carney's speech very broadly said, hey, the old world order is dead and there's a new world order that is going to emerge. Add it with Pierce Stommer's comments, the UK prime minister who broadly said, you just can't trust treaties and deals and arrangements anymore. You just can't trust the United States. Right. You added to those two things and literally. Is that a Trump-centric thing, though, Michael? It is a Trump-centric thing. And when you add that extra fuel to the fire, I actually was sitting there and I bought a ton of calls on the euro and bought more Aussie.

4:45I just said, oh, my goodness, here are the start of the dollar unwind, accelerate. Acceleration happens. And yesterday, the United States actually came in on behalf of the Bank of Japan and what's called they checked currency rates. They didn't sell any dollars, but they called the dealers and said, hey, where would you be for? That means they're either going to prepare to sell dollars for the Bank of Japan because the yen keeps weakening or for themselves, most likely for the Bank of Japan. but it's signifying they're okay with the stronger yen a weaker dollar and we had one of the biggest down days in the dollar uh that i can remember in years uh i looked like you know i was short dollar and every time i looked at my little p l meter on my phone i my smile got bigger and bigger uh gold of course continues its move it's you know right at 5 000 at this point um silver's at 100 And so we're having this acceleration of that thesis that Ray had.

5:51What's interesting is while rates have sold off some, right, the U.S. 10-year rate has sold off. And, you know, full disclosure, I'm short that. I expect rates to go higher. They haven't started kind of selling off with any kind of pace that would get you really worried. But I think we're in that. That's the narrative that happened last year. And if you were a trader that just stayed in those trades, you know, Ray Delio is no longer at Bridgewater. But his old shop had those trades on and they were the best performing macro fund last year up 35 percent or something like that. And I think that's this year's thesis as well.

6:33Michael Novogratz:Right. So we have to be worried. OK, concomitant to his remarks. I picked out a few things that I wanted to speak to you about this morning from Davos. Brian Armstrong, somebody you and I know very well, CEO of Coinbase. He says, you know, we're seeing the birth of a new monetary system. He said that the Bitcoin standard is coming. OK, so you've got Ray Dalio saying the the you're you're you're back at the Wolf of Wolf. His lips to God's ears. But but but Michael, what does that mean, though, for the average person? It's going to be good for you or me because we're long Bitcoin and we believe in what's going on and we actually see the tea leaves in terms of the destruction of the value of the dollar.

7:17Michael Novogratz:What does it mean for the average person? All right. So let me be really, really clear. The Bitcoin, right, is a technology platform. But really the value of Bitcoin isn't the technology platform. It's the narrative. it's i believe this is a store of value i believe this is digital gold and if i believe it and anthony believes it and ray dalio believes it and larry fink believes it and people all over the world believe it then it is right gold's got a 3 000 5 000 year history bitcoin has a 2009 to whatever we are 15 16 year history um it has not performed the way we want it to uh the way we would have thought it would have alongside of gold in the last year.

8:07And Brian is thinking and saying, you know, CZ, the, I don't know, the 20th richest man in the world, the biggest player in crypto by a long shot, the CEO of Binance, he came out and said, hey, we're getting ready for a Bitcoin super cycle.

8:21Michael Novogratz:So him and Brian are saying - What is a Bitcoin super cycle? Tell our viewers and listeners what a Bitcoin super cycle would mean. We go from 89 ,000 where we are today to 200 ,000, 250 ,000, where the entire mindset shifts again and we start printing it out. And what would catalyze that other than CZ's comments? I think the only things that would catalyze that is, A, the U.S. has to pass the Clarity Act. We can get to that in a second. Yeah. Because I've got some updated thoughts. be Trump picks a Fed governor, whoever it is, Warsh or Reeder, who seem to be the two favorites, who are both Wall Street guys that we know well, who have been conservative, who changed their tune and cut rates to 2%, even though everything in the market is saying, you know, cutting rates when gold is going to gapping up every day is generally not what you want to do.

9:18Cutting rates when your currency is weakening every day is generally not what you want to do. And so if we're cutting rates into this because the boss man wants to, or because they believe something that I don't, it's going to accelerate gold and maybe Bitcoin then becomes the big catch-up trade.

9:39Michael Novogratz:So let's go to the Clarity Act. We were very sanguine on the Clarity Act passing. It feels like the Clarity Act is moving with Rick Reader. It was down, and now Rick Reader is at 58%. And now you told me yesterday, you're at 66 % or two-thirds likely that the Clarity Act. Tell us why. Listen, last week when I was on, I had been in DC. I had done a lot of work, and it felt pretty good. There were a few smaller issues, mostly around the interest on banks. an interest on stable coins with banks uh that i thought would get worked out in a in a compromise brian armstrong who has you know he he's the big dog in the room in the u.s uh he basically said no no we're not we're not going to compromise on the stable coin interest piece of this and that alongside the huge effort of lobbing by the banks just put it on hold the way the Senate rules and process works, the Senate Banking Committee, who had been in the lead of getting this done, said, too much heat.

10:57We're going to go pens down. We're going to deal with some other issues and come back to this. And in essence, they pitched the rugby ball to Cory Booker and Senator Bozeman from Arkansas, the Republican in the Ag Committee, who has a piece to lead on this right now. And so all eyes on the Ag Committee. I've spoken to many senators on that committee since. Democrats and Republicans. In this case, on the Ag Committee, just Democrats. But my other contacts in D.C. at both the White House and the Treasury are in touch with the Republicans nonstop. And our consultant is playing both sides, are our lobbyists.

11:43And it went from really disappointing and, oh shit, this is not going to happen to, hey, we see light all of a sudden. And so again, this stuff is very emotional. I want to stress the problem you have is a lot of these senators, they have a lot of issues to think about from Venezuela to Iraq, Iran and in, you know, the budget and should we keep the government open and the knowledge around the more minute issues around pieces of the clarity act just isn't there. And so as hard as it was to get the banking committee up to speed on everything, the ag committee isn't nearly as up to speed on some of these issues.

12:28And so there's a big education game going on right now. And I don't say this to kind of demean senators' intelligence by any stretch. It is a hard job to have knowledge about a lot of stuff. And crypto is a complicated one, right? Most of the bank CEOs didn't get it for years. They're like, oh, no, it was hocus pocus. Right now, they're all focused on it. I think it's going to probably still happen because both sides needed to happen. The Dems needed to happen because they don't want this to be a political issue. But I tell you, with every week that ICE gets worse or the perception of us being an isolationist versus what we had traditionally been, right, leaving the world order, that's not a Democratic desire.

13:17It gets harder for Democrats to say, hey, we're supporting Trump. And they feel like crypto supporting Trump. And so that's the behind the actual issues energy. But I think both benefit from getting this done. So I think it will get done.

13:35Michael Novogratz:Michael, in addition to all of that, that would be very good for Bitcoin. And maybe the world does need a new currency standard, given everything that's going on. I think it's going to be very disruptive if that happens. Oh, let me tell you, I said, Anthony, over and over, I don't want Bitcoin at a million anytime soon. Because that means we have lost control of our financial system and that means we start losing civil society. And what does that mean? If you go to any country that's experienced hyper deflation, corruption goes up, violence goes up, you literally see the fabric of what you're so used to start breaking down.

14:15And you can look at Weimar Germany or Venezuela or even in places like Nigeria recently, which is doing well in some parts of it, but their currency gets weaker and weaker. And it just makes it more and more difficult for the average person, man, woman, young, old, to have any confidence about their future. You work your whole life. I mean, that's why this Iranian revolution isn't happening because the United States wants it to. It's happening because their currency got the living hell kicked out of it. And shopkeepers said, I've worked my whole life for this shop to feed my kids and my grandkids and have a future.

14:54And it just evaporated. And so F you to the government. F you to the Ayatollahs. Yeah.

15:01Michael Novogratz:That's why the revolution is happening. Listen, it's super scary because your currency should be a store of value. And we don't have it as a store of value anymore. People have to get rid of the currency pretty quickly if they want to have some semblance of savings. So that's a scary thing. But I want to go to Howard Lutnick for a second, Secretary of Commerce. Again, I picked these out to address with you this morning. And this is basically his central quote, globalization has failed the West and the United States. But Michael, when you look at the statistics, that is actually not true. globalization has done more for the West, lifted billions of people out of poverty, better distribution, lower cost manufacturing.

15:50Michael Novogratz:I could list off statistic after statistic, but the culture war that's running, pitting each of us against each other in social media is suggesting that the globalization is dead. What say you? Globalization dead? Larry Fink doesn't think so. I'm just wondering why Howard is so locked in on this. Well, to start with, I would say there's no country that's done better in the last 15, 20 years than the United States. Our stock market's on the high, our percent of GDP, global percent of GDP is on the high. Yeah, and just to interrupt you for a second, in the last five years, our percentage of global GDP went from 24 to 26.2.

16:37Michael Novogratz:Okay, so that is an extraordinary increase. Moreover, coming out of COVID, we've grown our economy faster and better than any other place. And we're almost double the European economy now. So go ahead. It looked like 20 years ago, we were kind of, it was Europe and we put all Europe together. They were roughly the size of the US economy. And now we're almost double that. And so America has been winning, period. Now, where Howard is right is globalization failed the working class and the middle class in the West, both in the UK and in the US and in most Western places. And that first was really noticed here in the UK with Brexit.

17:222015, we were like, how in the hell? What? What? And of course, it was the young people that voted for it. The old people, no, no, the young people didn't vote at that point, I remember. But there was a whole controversy, did enough people care? Did they understand it? Did they vote? But that was an emotional response to globalization. And then we got Trump the first time. And so what has failed in the West is the political and business class understanding that when the world shifted and the winds were all coming to the top, How do you redistribute those in an effective and in an ethical way? Right.

18:02In some ways, you can say the billionaire class has failed the West. And I and I'm not blaming and saying, oh, boohoo for the billionaires. I'm saying you got such a good gig. It's working so well for your families, your companies and your country. be smart enough to understand that if you take, let it get, you get too greedy, you let it go too far, you break the system. And that's where we're at. And that's why, you know, Mondami and AOC have such gravitas when they speak to people because they're speaking to exactly what Trump's speaking to on the other side. And what Howard ironically is saying, you failed.

18:46Yeah. You rich to say that when your company and your group is benefiting more than anyone.

18:56Michael Novogratz:So, I mean, again, I just want to, because this is a show on macroeconomics, show on business and so forth. They want to give these stats to everybody so that they know since 1990, the United States, GDP per capita plus 68 percent, real wages plus 34 percent, infant mortality down 42 percent, Life expectancy, we've added four years to life expectancy. Non-farm employment, plus 46%. We added 50 million jobs. Median household wealth, plus 128. And believe it or not, our industrial capacity in the last 35 years, plus 76%. So when Howard is saying that globalization has failed, I understand the angst.

19:41Michael Novogratz:And I do understand that half of the country is struggling, Michael. I'm not suggesting that, but I'm just wondering if this is a need for improvement as opposed to blowing up the whole system. So, yeah, I would – that would be my political backing to say, okay, how do you take the good and adjust? Right. Exactly. And it's interesting. The – we're in this really awkward – or not awkward, confusing period. American excellence is flexing in some ways with all the big innovations in AI coming out of Silicon Valley. You think about it. China's got its own piece, but we're dominating AI at this point, right?

20:32And AI is going to be the dominant theme of how the world changes. And so, like, we have four companies over$4 trillion, I believe. China doesn't even have its first trillion-dollar company. It's one reason I actually own a bunch of Alibaba and Tencent. I just think that doesn't intuitively make sense to me. But our stock market is dominating. And so you have this American excellence piece. And at the same time, we are saying, no, we don't want to be part of the global society in the way the rules used to be played, right? Trump and Howard, and they believe, hey, we got a bad deal. I'm like, we got a good deal.

21:14They think we got a bad deal because we have big trade deficits. Trump constantly says, my God, look at all this stuff we're buying from you guys. I was like, yeah, we're buying it with IOUs, $39 trillion of IOUs that that same group of people were funding for us. And so we're in a very dangerous place saying, hey, you guys are stealing our money. You guys are cheating on us. And they're going to say, give us our IOUs back. You owe us$39 trillion. And so I think it's a dangerous game we're playing. You know, Scott Bessett knows the game. Rick Reeder knows the game. Kevin Wors knows the game. and so they think they can play it and win it.

22:01The market right now is not giving them that report card when you look at the price of gold. And the acceleration of the price of gold is saying, hey, these guys are starting to lose this game. That's the only way you can look at it.

22:15Michael Novogratz:Bitcoin on a relative basis, the last six months is down 45 % relative to gold. It's up three times since the Sam Bankman-Fried debacle, Bitcoin. And obviously, if you looked at it over a two-year period, it's outperformed. I'm not trying to cherry-pick time periods. But what would you say to galaxy investors, Bitcoin investors about the three and a half months of treading water while other currency debasement assets are going up? You know, I think Brian Armstrong did something that was really smart and really important this week. it didn't get reported because there was so much else being reported he said hey we're setting up an institute to focus to both on the understanding of how quantum would impact bitcoin to make sure it doesn't impact bitcoin and the education around that issue the single largest issue facing a lot of the old bitcoin whales is people are worried about quantum computing coming in and wrecking the whole Bitcoin system.

23:22And their narrative is this AI is getting so damn smart. He had Novogratz and his friends can never figure out quantum, but maybe Superbrain can figure out quantum. And that would be the end of the Bitcoin ecosystem. And that narrative is picked up. And that is the narrative that's getting a lot of the big giant whales to say, let me just take some chips off the table. And so at the same time, Bitcoin's being adopted by guys like Larry Fink and all their clients and now Morgan Stanley, you have this distribution coming from people that are worried about quantum. It was interesting. Someone literally minutes before Brian's announcement came out to me and said, God, Michael Saylor owns more Bitcoin than anyone on the planet.

24:11He should launch and put a bunch of money into this. And I was like, Brian beat him to the punch. I think you're going to see a lot of talk from the Bitcoin community about, guys, this is a lark. It's not going to ruin Bitcoin. While you're getting quantum, you're going to get quantum resistant as well. And the Bitcoin community has a huge vested interest in voting for those changes. What you would have to do is you'd have to change the Bitcoin code. It is hard to change the Bitcoin code because you have to get agreement amongst all these very religious keepers of the flame, if you would. I just think faced with an existential crisis, they'll make those changes.

24:56Michael Novogratz:Okay, so you're not super worried about it, but you think there is a group of people that are worried about it that's causing some selling right now. Yeah, this is the only thing I can come up with

25:09that explains how poorly Bitcoin has done in the last four months relative to gold is we start we crossed a hundred thousand that felt like we won the marathon uh i gave people the the right in essence in their mind to say let me take some chips off the table so i can buy a boat or buy a sports team or buy a house or buy something and then quantum picked up and that was like, yeah, well, it's been a good run. Maybe, maybe. And so I think you're seeing people take ships off the table. Most of those are from big old stacks. I don't want to under, undersell or under explain how hard it is to own something and hold it for 15, 16, 17, 18 years.

26:03You know, there's all this every once in a while you see on Twitter, Bill Gates would have been the first trillionaire if Warren Buffett never convinced him to sell any Microsoft. And that's true, right? The great fortunes of the world are made in trend and people have made great fortunes in Bitcoin in trend. Why they deserve all the praise from every speculator that you can come up with is because the market was liquid enough for them to sell the whole time. We're going to see an equal fortune in SpaceX owners when it goes public, right? Made that you saw in Bitcoin holders. If SpaceX gets to$1.5 trillion, which they're talking about, and then goes up, you're going to have created$2 trillion of wealth.