Bitcoin Soars, Japanese Bonds Buckle | Andreas Steno and Mikkel Rosenvold | Macro Mondays: October 6, 2025

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1:05Thanks a lot.

1:33Hello out there. Welcome to another edition of Macro Mondays. My name is Mikkel Rosenwald. I'm your usual host. And as usual, I'm joined by you, Andreas. Welcome to the show. Thanks very much, Mikkel. What a glorious day to be something like. I mean, it looks great when you're looking at screens at the moment. Yeah, lots of greens out there. It's been a great weekend, great last week, or at least what's the end of it for Crypto. Lots of great stuff to talk about, Andreas. We're going to talk a little bit about Bitcoin, talk about some of the numbers coming out of the U.S. economy, some of the numbers not coming out of the U.S.

2:07economy, talk Japan, take a list of questions or two. So do keep up the list of questions. We're trying to get into a bit of an improved rhythm of taking those up on the show. But if not, we'll bring them on next time. So no problem there. Remember, this is a sneak peek into all the research and all the analysis that we publish on Real Vision with the ProTier. So we'll get back to a little bit more sneak peeks of that. But just our usual disclaimer that even though we try to be as actionable, as accurate as possible, our trade suggestions might be. Sometimes it may be good. Sometimes it may be shit.

2:46And Andreas, I especially wanted to do the disclaimer this week because it's always good to have the disclaimer when you are doing more good than shit. So let's just bring up the chart on our portfolio return here, Andreas. You run a portfolio on Real Vision for the ProTier. It's been doing quite okay. We're up close to 75 % on the year. Satisfied so far? Well, I guess unless you're like a complete crypto degenerate, I think this is satisfying for the year in many ways. Of course, we've been on a roll since, say, late summer this year. Some of the thematics that we've been highlighting have performed incredibly well, at least within the drone technology space, also within AI and related bets.

3:34Also, a couple of the bets that we took on because of the weak labor market reports that we've received. And some of those trends are actually pretty puzzling to a lot of economists out there. And I generally think that we've seen a year of almost extreme humiliation of the economists as a class or working class, if you know what I mean. They've really struggled to keep up pace with everything that's been ongoing. And they've also struggled to understand some of the regime shifts that we've seen, especially since Liberation Day. So you need to stay on top of all of the thematics. you need to stay on top of all of the political themes as well, because a lot of the returns in this portfolio have been driven by stuff coming out of the Trump administration, stuff coming out of the European Commission, stuff coming out of the Japanese administration, etc.

4:27So it's a bit of a mixed bag of goodies that we've made money on, but it's been all right. Returns always count, Andreas. We'll get back to the portfolio a little bit later. We did something for reshuffle towards the end of last week to get the full picture of that. All the stock names, all the suggestions go to Real Vision Pro for more on that. We'll get back to that a little later, Andreas. I want to get on to the laugh of the week. And it might be a little bit cynical to call this the laugh of the week. I'm not sure if this is legit, but you sent me this, Andreas, last week. That a Washington contractor allegedly hired an undocumented worker for a construction job and then called on ICE to avoid paying them.

5:10I'm not sure if this is legit in there Andreas but this probably goes to show you that things are changing in the American job market and the entire dynamics of that we are absent the most recent job numbers we are getting some indications but the job market is changing in the US I don't know whether we could pull this off in Europe Andreas no we probably couldn't for a lot of reasons Especially since we will kind of limit ourselves in many ways in terms of the legislative backdrop of doing stuff like this. Calling it the laugh of the week is probably a bit cynical, yes? The point is incredibly relevant from a macro perspective since we obviously received the first month-on-month negative payroll print from the private payrolls ADP job number last Wednesday.

6:08And interestingly, the market is just firing on all cylinders despite this weakness in the labor market. And I think we've been banging the drum on this for at least a quarter running, also ahead of everyone else starting to talk about this topic. But when you orchestrate such a dramatic change to the migration policy and when you, by force, shrink the labor force, as is currently the case, as we can see with this ICE effort here, You know, we're talking about an economy that is probably currently in a mismatch between the supply and demand side for labor. We're talking about an economy that doesn't necessarily need to create a lot of jobs per month.

6:55We're talking probably less than 25K at this juncture a month to sort of keep everything stable from an unemployment perspective. So, sure, I mean, you'll always have month-on-month volatility in hiring. And if we have slightly weaker than average month, we'll get below zero now. You just need to get accustomed to that. Because given the shrinking labor force, given the migration reversal and all of that, it's just what's needed for the economy. You obviously cannot create a couple of hundred thousand jobs a month if the labor force shrinks. That would swiftly lead you into trouble. So this is a very, very different labor market to the one that we had during the Biden era and one that has been misunderstood by many.

7:42And I think the overall conclusion here is that everyone's still too pessimistic on the broader CapEx cycle because, you know, obviously you need to automate a lot of things when the labor force shrinks. You're kind of forced to. So this whole automation, robotics, CAPEX cycle is one that is just getting started in many ways. And I'm talking in a broader sense than just the AI data center push that we're obviously again seeing today with news coming out of OpenAI. Yeah, it's interesting how long this will remain sort of the main focal point of the Fed. So I know that's a very, very long-term discussion, but at what point does job creation become less important than other topics for them?

8:31Yeah, but I think they're – to be honest, I think they're scared about this. It's part of the reason why they started cutting interest rates again. And with the ADP job numbers last week, they certainly received more fuel for their current narrative around the labor market being at risk of getting out of balance. And I think the Federal Reserve will continue to cut interest rates into this environment since better safe than sorry is probably the key word here or the key words when you see such payrolls numbers coming out. You obviously cannot fully discard the potential for a negative spiral in the job market, given what we see.

9:13And the Fed will just, given its mandate, need to respond to that. But it seems like sort of the reaction function is a little bit distorted because when they cut rates, companies invest all the money in data centers. They don't really create jobs from that. So there are some interesting dynamics to that long-term. Okay, a little bit of a shift to interest. We're receiving a lot of questions, a lot of speculation, obviously, online on where are we on the banana? Where are we in the cycle? I want to present you with three hot takes from X this week and see if any of them make sense to you. I want to start with two estimations of where we are in the cycle and then an interesting bit of logic here.

9:56So the first one is this one from Jamsey, he's called. He's calculated that from all-time low in 2015 to all-time high in 2017 was 1 ,064 days, 364 days from all-time highs to lows. So that should put us exactly today, the 6th of October, 2025, should be the all-time high. And then we're in for 1 ,000 days of – no, we're in for 364 days of a slight turn all-time low. Is there anything to this, Andreas? You live in a simulation, as he suggests. Michael, I'll have to run early because I have to close my portfolio as far as I can see. I haven't seen this, to be honest. Well, wow. I guess we're living the matrix if this is true, right?

10:43We just need Lawrence Fispern to pop up on the screens in a moment. I guess, are you taking the green and the red pill, Michael? That's the question now. Okay, on a slightly more serious note, we're almost halfway into the show. So time for me not to post Mimi stuff here. Jonah hears, I'm not selling Bitcoin until the country's bubble becomes as big as the retail bubble is today. The point being here that the countries and governments account for less than 2.5 % of Bitcoin ownership, at least on paper here. Do you buy this? How much tailwind is there still in governments buying up Bitcoin, or is it too early for that?

11:28This is a really good question, because if you look at the gold buying currently, we're talking about a lot of institutions from the global south buying into the gold rally. And we're talking about much less clear participants from the retail crowd. So there's this vast divergence between gold and Bitcoin in terms of who's buying, even though they kind of go hand in hand in this cycle when you look at the correlations to everything that's been ongoing in macro. So I think this is a valid point. What I struggle with is, first of all, the Western participation in this. I still think it's very, very early days in this, and I'm not even sure that it will be in this cycle that we see the true Western governmental participation in this.

12:15We've obviously seen participation from non-Western governments mostly, while if you look at the Bitcoin reserve in the US, for example, we're mostly, if not fully, talking about Bitcoins that have been confiscated through various events over time. So I think there's some merit to this. I think it's a cycle to really talk about the true adoption, especially from the Western governments here. Okay, interesting. This is my absolute favorite. We've been talking about this all day. It's sort of like, you know, we always love this bell curve of IQ where the low and high end of the IQ curve are thinking the same way.

12:53This is kind of that in some way, even though he calls himself average crypto guy. So his point is, if I put in$1 ,000 into Bitcoin today, Bitcoin goes to$200, a huge scenario, I only make$600. Okay, nobody's going to get rich. And my first reaction was that this is completely ludicrous logic, but it's kind of true. It is true. Yeah, it is true. It's obviously preposterous that you would get rich from investing$1 ,000. But still, it's what people are somehow expecting out of Bitcoin, and it's important. And I know all the people listening to this show knows this, but it's just an interesting dynamic that you have a lot of people out there thinking like this.

13:36Yeah, but if you want to get rich out of$1 ,000, you need to buy some Bitcoin, anus coin, I don't know. It's not going to happen from Bitcoin overnight, right? We're too far into the, you know.

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15:15So if you want to get rich fast, you simply need a better lottery ticket than Bitcoin here. Yeah, exactly. And my point is simply that if this logic is spreading, if it gets out there, then we're heading into a stronger old season, essentially, because that is where you need to look. So just a little bit of a psychological point here, Andreas. so a quick break in your regular programming if you're serious about your future grab my free report called prepare for 2030 i think you've got five years to make as much money as possible and this guide will help you navigate what's coming the link is in the description download it now so anywhere uh anyway we we're we're still at a good point in this cycle you're not buying the 6th of October, doomsday scenario.

16:07So what I dislike about such a study, even though it looked compelling with these exact mirror images of earlier cycles, is that each cycle is different. So this is obviously not orchestrated by Rothschild or whatever entity driving these cycles. It's driven by the macro landscape. And I think we got another week of evidence last week of that. The macro cycle is not necessarily firing on all cylinders yet. We're starting to see emerging signs of green shoots in sort of the cyclical picture, especially also outside of the US, which is very, very interesting. while, for example, the ISM manufacturing still prints roughly around 50, which is typically not where you see a cycle peak, right?

17:00The cycle peak in 2021 happened when ISM got above 60. So this simple study would suggest that the cycle is much longer this time and slower than what we saw in 2021, to take that example. Interesting, Andreas. Your article this morning, Andreas, Steno Signals, focuses heavily on Japan, getting a new prime minister. Takaichi, I think the name is. Sorry if I'm butchering that. No expert in the Japanese language. You had some interesting point on Japan and maybe a shift on to more of a fiscal dominance policy. I'll bring up the first chart here on private money creation. What are you seeing out of Japan, Andreas, and how is this moving, Mark?

17:44You know, I'm not an expert in Japanese politics either. But from what I can gather from both the local and global coverage of this new likely prime minister in Japan, I should say, it's still likely. I think it's the 16th of October that we'll get confirmation. But she's at least rhetorically a big fan of Margaret Thatcher. We've heard that before, obviously, from all the female prime ministers across the globe. If you look at her policy mix, I'm not really sure I get the Fetcher analogy because we're talking about a big spender. We're talking about a candidate willing to put pressure on the central bank.

18:26We're talking about a candidate that will move the fiscal budget in a populist direction. And I mean that mostly in a positive way. so so i think she lines up or aligns very well with the trend that we've seen in the us the trend that we've seen in italy um and the trend you know it's actually more or less a global trend by now uh we're just waiting for the elections for example in france uh and elsewhere to sort of get us there uh but the trend is the same uh more or less um no matter whether you look to asia europe or the us right now that we're moving rightwards uh we're moving towards uh the fiscal budget being used actively.

19:04We're moving towards the central bank losing control of the situation in many ways that they're not able to control the narrative to the extent that they were in the 2010s. So I think it's safe to say that everything that we see globally right now in the macro space is very aligned across continent. It's a very uniform direction of travel, which for once makes me kind of upbeat that we'll see returns in every region. We've seen those scattered returns for a long while, but we're currently seeing returns in Asia. We're seeing returns in Europe. We're seeing returns in the US. It's almost too good to be true, right?

19:45You cannot really make any mistakes, right? At least you'll get some positive returns. And that's a really, really interesting dynamic, which reminds me a lot about 2005 to 2007. It's the last time I can recall such a uniform shift and such a uniform credit creation globally. And what's interesting with this chart of mine on the screens currently is that over the past two years or three years, we've obviously seen Bank of Japan stepping away from their intervention. It's not that they're not involved, but they're involved to a much lesser extent than they were just a handful of quarters ago. And the typical takeaway from most economists, which would probably have been, okay, this is going to slow down things because Bank of Japan is now no longer actively intervening and buying up ETFs and what have you, right?

20:36But instead, we've actually gotten a very pro-cyclical environment out of this because the private market in Japan has been allowed to do the heavy lifting again. And I actually think that's a positive, especially after years of bizarre Uber intervention in the Japanese yield curve. And I think the simple reason is that when you allow the yield curve to function again, So long-term bond yields rise versus short-term bond yields. It allows the typical private credit creation process to restart. And that's basically what we've seen in Japan. We're seeing the private system creating money again after a decade of zero money creation by private commercial banks in Japan.

21:20And I think this is a scenario that you should prefer relative to the central bank just creating the money because a central bank creating money will just channel the money in one direction, basically, while a private commercial banking system that is once again lending out, riding the carry on a steeper yield curve, will send money in, if not all directions, then in the directions that matter. So I think the capital allocation will be better than it was during the past decade. And it's apparently good for Japan. I mean, Nikkei was up 5 % this morning. Jesus Christ. The movement there, Andreas.

21:59Very interesting. I just want to touch on, get back a little bit to our portfolio update from this Friday, Andreas. We don't always remember to show our regime model on the US, But this is obviously a lot of the backdrop of what caused our changes in the portfolio as well later this week, Andreas. Obviously, if you don't remember our regime models, this is our proprietary regime model that calculates the probability of rising growth, inflation, and liquidity. And we're seeing a huge drop-off in the probability of inflation actually rising from very high levels, Andreas. Why do you think this is?

22:40I would probably have expected somewhat of the opposite of late. Yeah. So remember, this is always calculated relative to where we are, both in forward pricing terms and in spot terms and inflation. So the current expectation is that we'll print it around, say, 3.5 % soon in the U.S. inflation number, which is, I guess, a reasonable expectation. but I've always said that the forward-looking expectations for inflation since Liberation Day were too high. And I think that's finally what's showing up in this model. I mean, we've been waiting and waiting and waiting for this big inflation spike. It is slowly but surely showing up, but it's almost at a snail pace compared to what was expected.

23:26It's not accelerating. That's what this chart tells us. Exactly. And I think the underlying dynamic here is that, take the example of many of the metals that have been targeted with tariffs. Take copper as a prime example of that. If you look at the statistics on the copper warehouse in the U.S., we're talking about an explosion that is completely out of proportion with anything I've ever seen before. So, of course, it was not like executives were sleeping under a rock during this entire process up until Liberation Day and the subsequent tariffs on metals. you obviously insured that your supply chain was moved forward in time.

24:20You insured to fill up your warehouses ahead of time. So we have a big inventory of copper, to take that example, in the U.S., imported without duties. And when you have such an anomaly, it probably takes upwards of a year to massage this effect through the system. because one thing is if you can work your way through a typical inventory cycle, but we're talking about an inventory cycle that is now much longer since you had this material front running. We also saw that in the GDP data, right? With the import spiking ahead of the tariffs implementation. So the point here is that tariffs take time and they will be massaged in very slowly but surely into 2026.

25:09And therefore, you know, You don't get that immediate spike. You get that spike massaged over time. And I think that's where the market has gotten all of this wrong. Okay, Andreas. Expanding just on the copper case, because that is one of the trends that we've implemented into the portfolio last week. This chart really, really, really stuck with me. A shift in industrial production in China, away from sort of the classical construction cement over to more of an expansion of the electrical grid. all that, which is very much copper. So what makes of this change while we're seeing this and how did you translate this into an investment thesis?

25:50Well, I think the first answer here is EVs. So that's a big part of it. I'm personally surprised by the magnitude of this shift in China. They've really made a swift change to their vehicle strategy overall. They're also exporting a lot of EVs. They've managed to export them also to markets that were ahead of them a handful of years ago on this topic. We see a lot of Chinese EVs in Europe now, which, again, is a major surprise to me, but it's not really slowing down. Rather, the opposite. And a piece of anecdotal evidence I spent all of Sunday looking at EVs, and I actually think they do a good job, the Chinese EV makers.

26:39I'll probably not end up buying one, but it's just because I'm a stubborn bastard in that sense. I want to drive a German car or a Range Rover, right? But they cannot even create an EV. That's, by the way, hilarious. Germans can't either. Sorry. No, but at least they sell some. So that's the first part of this, this big push towards EVs and their export markets. I think they saw it coming that they would lose control of the export market in the US. So they've now shifted into these, for example, EV supply chains to also cater for the European market. Then you look at solar, obviously. I don't know why I included wind because that's actually not particularly important in the light blue here.

27:24Solar is the big addition to this from, say, 2023 late and onwards. And that's obviously an AI exercise. nothing more nothing less it's all it's all ai uh it's the only feasible way that you can uh you know grow the operational grid size uh in a pace that's needed uh this is a trend that will come to the us it's a trend that will come to europe um it's even a trend that will come to our neck of the woods where we like wind a lot um because it's needed yeah and it's it's one of the most fundamental super trends right now, Andreas, and we've looked into that on the portfolio as well, that it seems like for AI, I don't know who came up with that quote, that right now the bottleneck, it's not GPUs as we've talked about for several years, it's electricity.

28:14Something as simple as that is energy. And that is going to be the bottleneck. And we are seeing an acceleration in the global electricity demand, which is incredible, the level we're seeing that at. So, Nikola, I saw, you know, a state-by-state statistics on the data center usage of the total electricity consumption state-by-state in the U.S. And we have a couple of states with a 40 % data center usage of the entire electricity consumption on a daily basis. That's absolutely bizarre. We also have states, you know, with much less, but some of those states obviously have to do something about that.