Can AI Actually Grow America Out of Its Debt? | Jeff Ross

24:17I think the idea of growing your way out of debt was almost a question that was like ridiculed in some ways. Like it was seen as a non-starter. If you think this can really be an option, that seems like the best solution that we could possibly have. The other options just aren't really politically palpable. They're never going to happen. So growing your way out of debt is cool. I hope we can do that. But what are the issues that deflation caused for the government? Like, what will we see on the other side of this if that happens?

24:45Jeff Ross:Yeah, the problem is, so the whole dollar-based system is a debt-based system, right? It's credit. And so as a credit-based system grows, it has to keep growing. You can't slow down the growth because what happens then is it sort of implodes. It just eats itself from the outside in. And that's terrible for the government, right? It literally can bring down the system. So that's why the government talks so negatively about deflation. And they're like, oh, it's very good to have a, you know, we're shooting for 2 % inflation. Like they're always looking for at least minimal growth because you have to continue to grow the monetary supply.

25:22Jeff Ross:You have to continue to expand debt. It just doesn't work in reverse very well as a government, which is the exact opposite, by the way. And most people, it's really funny to me to hear how many people don't really make a distinguish or distinguish between the two that what's good for government isn't necessarily good for people and vice versa. So what's good for people for the rest of us is that prices go down. We don't like seeing our grocery bill go up to unaffordable levels like it is right now or restaurants or gas or whatever. We want to see prices come down over time. That's actually awesome.

25:54Jeff Ross:That's why we're such huge proponents of Bitcoin. You want to have scarce money because it makes an abundance in the rest of the things that we want to buy with that money. So what's bad for government is good for people and vice versa. And I think that's going to be the problem going forward, ironically, is the government's going to be struggling with this deflationary or disinflationary at the least kind of setup that we have with AI and robotics being fully integrated throughout our economy. And the rest of us are just going to be partying because we're going to be like, sweet, everything is getting cheaper.

26:24Jeff Ross:Our food's getting cheaper. You know, technology is getting cheaper. Everything is going to be getting cheaper. And that actually leads to a higher quality of life for the rest of humanity. So again, leaves me very bullish. Government officials may have a different opinion of it, but I'm bullish. So, I mean, that seems like the only real solution to the ever expanding K-shaped economy as well, which we need for just society. But the question is, like, if this is bad for governments, will they let it happen? or will they even have an option? Like, is this just going to happen and they're going to have to deal with it?

26:58Jeff Ross:That's what I think is so remarkable at this time period. You know, we've talked about before where I think we both kind of think we're in a fourth turning type of view, but I also think we're in a much larger sovereign individual kind of 500 year cycle for humanity, where because of we're moving from the analog age to the digital age, this is the first time in history we're going to be able to diffuse and decentralize. And that's allowed for, because of the internet, because now intelligence will be a commodity. Basically, it'll be free for everybody to have as much intelligence as you need. You can work from anywhere.

27:33Jeff Ross:You can think as well as any other person in the world.

27:40Jeff Ross:It's increasingly making irrelevant central nation state governments and their monopolies on power. So I think we've reached peak nation state. I think America was the last greatest empire with the most power. And I don't think we will see that again, probably for 500 or 1000 years again. I think it's setting the stage for everything to just sort of diffuse. So why do I bring this up is because it's it is not good for centralized nation state governments, they're not going to be able to keep this system together, because the system wants to, if you we want to have this entropy, you want to see things start to diffuse and spread out.

28:17Jeff Ross:And so again, I think that's very good for humanity. You know, as we have more abundance of goods and more abundance of services for people, it's again, it's going to increase quality of life. It's increasing the pie for everybody, the quality of life pie. And there just won't be such a need for governments going forward. You know, they're going to be competing at least this is the thesis of the sovereign individual. They're going to be actually competing for us to come live, you know, in their little jurisdiction or whatever that is, because they're going to want to be actual servants of the people like they're supposed to be instead of the rulers of the people.

28:50Jeff Ross:It just gives much more power to the individual itself, himself or herself, and takes it away from these centralized entities. So to me, that's, again, I'm very optimistic about that, very excited. I think it's going to be an ugly transition phase for sure, especially for America, because no nation state wants to give up its power. And the hegemony that America has achieved over the last 80 years, they're not going to want to give that up willingly. So it's going to be ugly and it's going to be kind of painful to watch. It's like watching people like argue over in the corner. You don't really like to watch it, but you kind of look at it, but you don't, you don't really want to.

29:24Jeff Ross:I think that's what we're going to see for the next like five, 10, 20 years or so. But in general, we're going to see this de-globalization, decentralization, good for humans, not as good for centralized governments going forward. So it's a little bit like Balaji's city-state idea. Cause we've already seen that like with Dubai and Abu Dhabi and Singapore and, you know, El Salvador now, places like I, and those are the places, places like Panama that I can see really trying to adopt this because they have a huge incentive to try and bring people in. And for the people that are willing to move, that's going to be great.

29:54But I'm really unsure what it means for America. Do you have any kind of idea? I know you say it's going to be ugly, but what does it mean?

30:01Jeff Ross:It just depends. It depends on how much the leaders embrace it. And, you know, it's kind of like what was going to happen to the UK after World War II, when they clearly were losing their grip on the world and their imperial dominance, it can be painful or it cannot be painful. So if you can get some humble leaders who can be like, okay, and maybe see the future, like this is actually good for humanity. I'm actually a public servant. I'm going to do what's good for humanity and not just to consolidate my own power. That could be a good thing, right? If you have somebody who's willing to do that.

30:34Jeff Ross:And that's what kills me about people like people who like the Elizabeth Warren types who just like hate Bitcoin. They hate the idea that people could like actually know what to do with their own money and can be sovereign over their lives. Right. Like they just they think they believe that they are born to be to rule over the rest of us. Those kind of people. And if enough of them are in charge, it's going to make this whole process painful. I think they can't stop it. Just like I think the Neoluddites can't stop the growth of AI and these data centers being built out. They may help push some of it up into orbit, which I think is coming as well, which is super interesting.

31:08Jeff Ross:But you just can't stop this movement. And so I think this whole decentralization movement can't be stopped. It can be ugly or it can be kind of beautiful as well, depending on who the leader is, depending on how humble people are. I think it's going to be pretty ugly in the US. I think it's going to be really ugly in communist states, right? So if you have a communist country that just wants to have complete authoritarian control over its people, they're not going to like that. So I think we're going to see some battles between the authoritarian AI versus the freedom fighting AIs, and they're going to be clashing.

31:41Jeff Ross:And that's just going to be this whole kind of new world in the digital age. it's going to be very interesting and almost unrecognizable to how it is today. This is totally false turning stuff. Just to bring it back to Bitcoin a little bit, I think I understand your take on you expect the next bull market to be a grind, because if you think this AI sort of trade, whatever you want to call it, has another couple of years in it, that's presumably where the fast money is going to stay. Is that why you think that Bitcoin is just going to grind higher in the next bull market? Yeah, I think until we see some evidence that liquidity is really overflowing outside of...

32:17Jeff Ross:So right now, everything is being directed into this. So into, and not just AI, but AI, energy, base metals, rare earths, military industrial complex. Like basically that whole sector is where all of the dollars are being funneled right now. And we've seen it. And the red flags we've seen are, the hyperscalers have basically used up all of their free cashflow to help support this and help the build out. But then they tap the debt markets for hundreds of billions of dollars already. We've seen that. And that's the public debt markets. Then they started tapping the shadow banks. So the Apollos and KKRs and Blackstone, BlackRock, those kind of places.

32:56Jeff Ross:That's great. But they're going to run out of capital there pretty soon. And then I think we're going to see a jolt in the system. Like, OK, we're just sort of running out of capital. And then that's going to force the government in. So I don't know when that's going to happen. To me right now, it's looking like we're going to have sort of smooth macro sailing through 2026, at least here in the US. It looks like we may see some of our first jolts in early 2027. So I don't know. You know, that's just a guess. I'm not predicting anything. But if we see something happen that jolts the system, that forces the Fed or forces Besant to come in and start doing some serious, like, real quantitative easing, and I think it's going to come in the form of just basically yield curve control.

33:39Jeff Ross:They've been doing like kind of pretend yield curve control so far. I think it's going to turn into actual yield curve control, basically because they need to flood the system with more dollars. And so we're still not seeing that. And so that's answering your question indirectly. I'm waiting for that to happen where we have an actual flood of new money coming in because they can keep doing these little patches along the way. Like that's why they're pushing for the whole Clarity Act, right? And stable coins. They want to push just a ton of T-bills into the stable coin market as well. And that's another place to put them.

34:08Jeff Ross:They want to get this supplementary leverage ratio going for banks so that they can just jam more treasuries into banks. That's another place. So I think Besson is just cleverly trying to like, OK, we can put some in here and let's put a few hundred billion here and we'll put 10 billion over here. And we'll just sort of keep doing that and keep the system going while we have these higher interest rates. And then at some point, though, something should happen that will cause the system to be like, look, it's just too much stress right now. They have to come in with like serious guns. You know, maybe that's Larry Lepard's big print at that point.

34:38Jeff Ross:Something that happened where we see excess liquidity. And at that point, if that happens, then I will get bullish that we're going to see like an actual kind of exponential, more hockey stick move in the price of Bitcoin. Until that happens, though, I think we just get that kind of slow grind higher. so generally bullish but not like not like off the charts bullish like we're gonna you know double in in a month that kind of thing every bitcoiner eventually has to answer one question if something happened to me would my family know what to do could my wife or parents recover my bitcoin and would my children inherit the bitcoin i spent years stacking that's where anchor watch builds bitcoin custody models to protect you and your family against real life accidents errors kidnappings and even your own death.

35:20Every AnchorWatch custody solution includes their inheritance protocol. Designed so when the unthinkable happens, your Bitcoin reaches the people you intended it for. Whether you're a self-custody expert or want multi-institutional support, your Bitcoin estate plan shouldn't be an afterthought. Bitcoin is only generational wealth if it can actually be passed down through the generations. So make sure they can access in the future what you've built today. AnchorWatch is your custody, your way. Visit anchorwatch.com to get started. that's anchorwatch.com You wouldn't reuse a Bitcoin address so why does your phone broadcast the same identifier for life?

35:53Every sim has a static ID and carriers, ad networks and bad actors all use it to track you The big carriers have been caught selling that data over and over again CAPE is America's privacy first mobile carrier Their identifier rotation feature changes your ID every 24 hours so you look like a different subscriber every single day And sim swaps are off the table Your number can't move without a 24-word phrase that only you hold. There's also no name at sign up, no social security number, and there's no profile to build on you. If you're a Bitcoiner in America, I honestly don't know why you'd use any other network.

36:26You can head over to cape.co forward slash WBD and use the code WBD for 33 % off your first six months. That's C-A-P-E dot co forward slash WBD. Okay, I've got two questions on that. The first one, you said that you think at some point the government's going to have to step in. What would force them to step in? Is it because this is driving all economic growth and they need to prolong that? Or is it the sort of national security issues and implications of AI? And is it almost like a bank's too big to fail moment again?

36:58Jeff Ross:Yeah, so I've said that in other episodes as well. And I don't know with you, but with other folks that I think AI is officially too big to fail. And I think they're signaling that. In fact, Besson just made another comment today where he basically said, look, we have to win the AI race. And by the way, I take exception to that. I think they're sort of doing this marketing to lay the groundwork that, look, we have the back of AI and we are going to flood the system with liquidity if the time comes. And I think he sees that at some point the time will come where we're running out of capital. Right.

37:26Jeff Ross:When you when you're done, we don't have any more free cash flow. When you can't issue more shares. When you have tapped the public debt markets, you've tapped the shadow bank debt markets. you're kind of running out of sources. And then it finally goes up to the sovereign level. So at some point, the sovereign, the government is going to have to backstop this whole AI build out. Again, like I said, I think that is inevitable that it will happen. I just don't know when it's going to happen. So that's what I'm waiting to watch for. It looks to me like that we could see the first hints of that in kind of early 2027 where maybe things get scary for a month or two or something.

38:00Jeff Ross:And then they do some move where they're kind of flooding with liquidity, do some sort of more robust quantitative easing of some kind or yield curve control of some kind. And then that reignites the bull market again for risk assets. And that would reignite Bitcoin as well. So that's kind of what I'm waiting for. I don't know what specifically it will be, but it will be something to the effect of the government is backstopping AI and they will frame it as it is imperative for our survival that we have to beat China, our enemy, which they, you know, China's our, which I can't stand any of this talk, but that's what they're saying.

38:36Jeff Ross:And by the way, I disagree with this because they're making it sound like this is a race we have to win. I think that's disingenuous and actually just not true. What is more important is the diffusion of AI. So even if we continue to be ahead of China, if China diffuses their models across the world, that's way more significant and important than us just winning and having the fastest horse. You have to see, well, how many people are using it? Do we just have 350 million Americans using it? Or does China have 6 billion people around the world using their open source models? That really matters.

39:16Jeff Ross:Those kind of things actually matter. And so I just think the way it's all being framed is just in a way, it's just, it's unfortunate, it's disingenuous. And it's basically they're using this to set it up so that when it needs more liquidity, the government can step in and just open the flood dates and give it more liquidity. Is essentially what you're saying there, they'll use the national security thing as a narrative, but really this is all going to be about the economy? Yes. Yeah. That makes sense to me. You know, when you look at, like, you sound very positive on AI, and so am I. Like, I think it's incredible.

39:46I think it will drive so much productivity. It makes, like, it democratizes intelligence, essentially. Do you look at it as like a utopian view or can you see the argument for like the dystopia of it and the control system

40:01Jeff Ross:yeah for sure i mean there are definite downsides to this that you can we can create a dystopia and you know i think um think about all the things like look at palantir is a great example right palantir uses ai to get the bad guys who are anti-american and and it does if you're in a war with the country you want palantir on your side right you want them to go and have use ai to figure out what people are going to do and say and think and how to stop cybersecurity events and to go get the bad guys and pinpoint where they are. So that's awesome if you're in a war and you have them on your side. Now, what about though, if that same technology gets used against you?

40:42Jeff Ross:And what if China has a Palantir coming at us and knows exactly where we're going to be and what we're going to say and how to take us out? And what if China can somehow send in a million drones to the US, lethal drones, and just, you know, go out and take out their primary targets, like, well, that would really suck, right? And so like, this is how the world is changing. And so we have to be prepared from an offensive standpoint, and from a defensive standpoint. And I hate both of it. I don't like thinking of either, but that's how the world does work, right? I want to be like, I want to have a peaceful world.

41:13Jeff Ross:And I want to help create like a better world, a utopia, even though I don't really believe in utopia on earth. But that's the goal I'm looking for an abundance mentality, a better world mentality. But there's bad guys and there's good guys on either side that are battling each other. And so we have to figure out how to navigate in between. Yeah. One of the little hints of dystopia here in Australia, one of the big supermarkets, Coles, uses Palantir technology to like track people in the store, which is just so gross. Like, I understand you want to stop pickpocketing, but I don't want to be trapped by Palantir every time I go into the supermarket.

41:46Right. This is the stuff I think people need to be aware of like it because i think if everyone knew the implications of that i don't think anyone would like it i just think people aren't aware of what's exactly happening but at the same time

41:57Jeff Ross:right if if if you're in a life or death situation though you would be glad that you had it so like yeah that's true if palantir are using like they can prevent your family from getting murdered because some bad guys just drove into your neighborhood you'd be like sweet that was a good application and so there's this constant tug and pull right give and take between security and freedom. And so I see people like, you know, in America, they're chopping down the flock cameras and they're all, you know, getting rid of those. And like, I side with that. But on the other hand, flock will show you data that's like crime goes way down in communities where they're being used, right?

42:31Jeff Ross:And so in China is just like, yeah, you know, because we have our massive surveillance system, we have like zero crime and blah, blah, blah, you know? And so it's just like, it's this give and take for everything. And if it affects you personally, you'll be really glad you had a police officer or a security camera or whatever, you know, on your side. But otherwise, you don't want the something to be taking away your freedom like that. Like it's disgusting, and it's dystopian, and it's terrible. And so that's just that's what a day in the life of 2026 is. And that's only going to get worse as we go forward.

43:03Yeah, I'm going to butcher the quote, but I can't remember who it was that said if you trade off freedom for security, you deserve neither.

43:09Jeff Ross:I think Ben Franklin, I think said something like that. Yeah, I agree. And so But we may not have a choice, right? If the internet is pervasive and AI is everywhere, and surveillance is everywhere, and it pretty much is, you drive around town and there's cameras everywhere, right? Like, there's no private public space anymore. And I would argue that even what we think are private spaces, our computers are not private. Like if people want to, if the government and Palantir want to use our own stuff against us that we think is private, like we're living in fantasy land right now. But so do you shut everything down and go live in the forest or in a cave or do you like deal with it?

43:49Jeff Ross:You know, and so that's what I you were asking me about earlier. But like I every day I change, like some days I want to be all in on like being online and doing these shows and talking on X about stuff. And then other days, I'm like, I want to just pull the cords out of everything, destroy everything and go live in the woods and, you know, live in a cave somewhere and just get away from all this technology. It's just, it's a love-hate relationship. No, I feel that. If we get this long economic recovery that you talk about, Bitcoin goes to a million dollars, I think I'll go and find a farm somewhere.

44:19Jeff Ross:Well, let me know where it is. I'll come join you. Yeah, you can be on the list of the people that know where it is. so in terms of like this long economic recovery that you talk about do you think that then i know this is a very sort of small framing with when we're talking just about bitcoin here but do you think that destroys the four-year cycle narrative that we've had for so long now so well first of all if the four-year cycle narrative were still alive we should have a bottom in october right that's that's it should be 12 months that's that's historically what it's done is 12 months after the peak, we see the bottom.

44:52Jeff Ross:And so it looks like that's already destroyed. So, and Bitcoin loves to destroy its narratives that people just believe. Like it used to be that Bitcoin could never go lower than its previous all-time high. And then it did that back in whatever, 2022. So there are no rules. So it looks like from a technical standpoint that the bottom is already in. So that part of the four-year cycle is dead. Like I said, we used to have four-year cycles, But I think, yes, it could have been based on the halving cycle, but it was also the presidential cycle. It was also the economic cycle and the manufacturing cycle in the US and the liquidity cycles as well.

45:31Jeff Ross:They all were sort of in sync with each other. And COVID just changed everything. It just distorted all of these cyclical markets. And now we're seeing more and more government intervention in the markets. So a lot of people are very angry and sort of turning far left, like socialist, communist, because they think this dirty capitalist system is just terrible. And look what it's doing to America. And look how bad it is. We do not have a free market capitalist system in America. We have a heavy government intervention system. And it's just being manipulated. And it's not just in the US. It's all around the world.

46:06Jeff Ross:So it's hard to say what's going to happen cyclically because there's so much human intervention. And when they come in, when Besant comes in and does things, when the central banks come and do things, they just smash it like with this tidal wave of liquidity or with, you know, the interest rates bombing them higher, lower, whatever. And that really distorts the markets and it takes away sort of the natural rhythm of these free markets. And so it's just impossible to predict. And then when you throw in things like, you know, war, geopolitical tensions, things like that, it just also changes the dynamics of everything.

46:38Jeff Ross:I just think it's very, very difficult to predict. Totally. Okay. So before we move on, I've got two things I want to bring up with you. Is there anything in terms of what you're seeing in the economy right now that you want to cover? Well, I guess the main thing would be what we've touched on is I'm very bullish. I think at least from the US perspective, things are looking good. I see a lot of people who are freaking out about things and they're talking about how these higher interest rates are going to destroy the economy. And I understand what they're saying. But for me, I believe that these long term treasury rates are a result of future growth and inflation expectations.

47:18Jeff Ross:Inflation expectations are actually kind of under wraps right now. They're not too serious. And so basically what the long end is pricing in, I think, is mostly economic growth. And I think what we're starting to see is, look, we're going to have a boom in our economy and all of this stuff that the groundwork is being laid, the capital expenditures are being spent right now, the buildings are being built, and we're going to have, I think, a boom in manufacturing and a boom in the economy heading forward. And to me, that's just very bullish for Americans in general and for the Western world in general.

47:49let's go um okay so in previous shows we've talked about two things that i want to do a check-in on one of them being the s &p chart in gold i don't know if you have that there but this is something that you've been you've been sort of playing with a lot what's that looking like yeah let me um

48:05Jeff Ross:pull it up i just posted it on twitter not that long ago um i will say by the way one thing everybody brings up every time i post it is they get upset because it's not including dividends and there actually is a chart that shows that the S &P 500 including dividends, but it only goes back to 1988. And so the thing I like about the chart that I show using trading view is that it goes all the way back into the late 1800s. So it's just much more comprehensive. And it doesn't look, and for the people who bring this up to me, just so you know, it doesn't really look very different. Like, yes, dividends do matter.

48:46Jeff Ross:It's good to reinvest your dividends, but it doesn't really make the chart look any different. It just barely moves things over just a little bit to the right. So it's a good point to bring up, but it doesn't really matter. So what I posted recently on Twitter is, you know, we have our normal peaks. And I like to look at where the S &P 500 priced in gold is today based on the fact that it's on the decline. So meaning the S &P 500 has peaked in gold terms and is starting to fall. And you can look at momentum indicators to show that it's clearly on the descent. And so a lot of people will be like, well, it might just spike up again.

49:25Jeff Ross:And that's true. But in general, momentum begets momentum. And so as things roll over, they tend to continue rolling over until there's a completion. OK, so what this chart shows, and I just love this chart. And every once in a while, I like to look at this to get myself grounded as a fund manager with what's going on. What I'm showing is, OK, this first peak back here. And can you see it when I put my here's my arrow? Yeah, I can see that. Yeah. Okay, so here in 1929, where we are today, we're sitting at 1.74. That's where I have this chart. And actually, the price today is at 1.76, slightly above this.

50:01Jeff Ross:This is the chart I just shared on X a couple days ago, so that's why it's slightly off, but it's basically the same. So the first thing to note is there's multiple peaks. There's one here in 29. There's one here in about 1968. There's a third in 1999. And then a fourth happened here in late, basically December of 2021. And what I show, so I took the price away. So you don't see the actual price because that kind of muddies up the chart. We have two trend lines. The black line is the 15-month moving average. And this yellow gold line is the 50-month moving average. And the only reason I do that is it helps you to see trends much more easily.

50:38Jeff Ross:And it shows you that once you break a trend, like here back in the early 2020s, it basically holds that trend all the way until it peaks and then rolls over. And then in 1929 - The early 1920s, guys. Yeah, exactly. Exactly. And so why do I bring this up? Because we have these long periods where when this chart is going up into the right, that means that US stocks are doing well in general. So, and I term that we're seeing increased financialization. So banks are doing well, the economy is doing well. We're seeing, you know, basically financial products are doing well. That's the time you'd want to work on Wall Street.

51:15Jeff Ross:You want to borrow money and put it all in stocks, you know, put it in tech stocks, things like that. And then when it rolls over, that's basically when you've reached a peak of financialization and now you want to get into hard assets. So things like gold tend to do well, you know, real estate traditionally has done well, base metals, other things, silver does well, those kinds of things. And those, and it's not just for like a trade. It's not like a, a one month or a one year kind of thing. These usually can last for like 10 to 15 years or so. And so where we are today at, you know, we're at 1.74 here on this chart.

51:50Jeff Ross:Here's, where's my arrow? 1.74 or today as we, as we're recording this, it's just slightly higher at 1.76. Why that matters is because the chart has recently peaked and is rolling over just like it was when we were at this level in late 1972, early 1973. People who are old enough may remember that time as being a pretty unpleasant time, right? The Nixon Watergate oil embargoes, long lines for gas. the war Vietnam War was going on very unpopular just a tough time in the US and in the Western world in general that that was basically for that entire decade of the 70s you would have much rather have been long gold and not in stocks and not in financial assets and definitely not in bonds because of the amount of debasement that went on and then that bottom basically late 70s early 80s we had another bottom and then we had a huge wave that kind of started with Reagan and Paul Volcker and those kinds of things.

52:46Jeff Ross:And basically that was the new era of financialization that happened all the way until this massive peak at the end of the dot-com boom. That's when you just basically wanted to be in stocks and especially tech stocks and out of gold and hard assets. And then it rolled over, right? And it peaked and rolled over. And then it got to the level where we are basically today in the first quarter of 2008. Most people who were around in 2008 remember, man, that was when things were starting to look a little bit dicey. And the markets were still doing okay. But if you had your druthers, you would have much rather been out of stocks and just sitting in gold at that point.

53:21Jeff Ross:And then we know what happened after that. And then we had another bottom kind of like in the early, like 2011, 2012 time. And then you wanted to get out of gold back into stocks. Okay. So that was a really long way to say we've recently rolled over in late 2021. And this trend line is now clearly heading lower again to where we are. So So I'm not making predictions. I'm a fund manager. I'm an investment advisor. I can't say anything that would portend to the future, especially about securities. Right. But based on this chart, it would suggest that we're going to see a period of outperformance again by gold, at least relative to stocks.

53:57Jeff Ross:Just a guess. I could be totally wrong. The chart could totally turn and go back up in the other direction. Right. I can't predict the future. but if we were at this exact same point at other times during these past decades, you would have said, man, that would have been awesome if I would have known that and I could have just gotten into more gold and gotten out of stocks and bonds. You would have been doing really well compared to your neighbors whose 401ks and IRAs were getting wrecked. And that's one more thing, by the way, is you can still have gains in these other assets. So you could actually see gains in the stock markets nominally and gains even in bonds, which I'd be surprised, but nominal gains.

54:35Jeff Ross:But when you factor in debasement, the amount of liquidity that's going to come in, the amount of government borrowing that's going to happen to build out all of these data centers to re-industrialize the United States, something has to get sacrificed. And my guess is that what gets sacrificed is the US dollar. And what that means is those of us who are holding dollars and holding dollar-based financial assets are going to get debased. And so your nominal returns might be fine, but your real returns, which include inflation, are probably not going to be good, at least based on what this chart suggests.

55:11Jeff Ross:So that's the whole point of this chart. And again, based on sort of historical performance, these are multi-year trends. This would likely go deep into the 2030s. Yeah. And usually the downtrend is a little shorter than the uptrend for whatever reason. And it looks like it started at the end of 2021, early 2022. So I have sort of earmarked like 2030 to 2033 sort of timeframe, just to guess. But based on past cycles, I would say like in general, if I had to pick either stocks or gold to hold between now and say 2031, I'd actually probably pick gold and just stay out of the stock market. Could be wrong.

55:49I mean, that's super interesting, especially with this wave of AI that it still might not be the play.

55:55Jeff Ross:Yeah, right. And the point is, here's how I look at it, is if you can spend your own money and build this out and get these huge rates of return, so like good ROIs, ROIC, return on invested capital, and you're just using cash flow, in general, you want to be in those kind of businesses. But when the good businesses like the hyperscalers like Amazon, Facebook, Google, Oracle, Core we've, when they have to borrow massive amounts of money because they don't have cash flow, that should be a little red flag to say like, okay, we're over financializing this right now. Especially when you see the government have to come in and bail it out because there's no more debt buyers for this stuff.

56:38Jeff Ross:And it's starting to look wobbly. You see the move index, which is the bond market volatility index start to increase. When you start seeing signs like that, those are red flags that maybe financialization has sort of peaked in the near term. And maybe you should consider hard assets like Bitcoin or gold or something similar. So not investment advice. I got to always be clear about that. But that's how I would interpret where we are today. The interesting thing here with Bitcoin is like it's really only lived in this period of time where investing in high growth tech stocks was a good option, like in terms of it actually having a real price in a real market.

57:15If this flips, well, it already has flipped. If this continues to be in this downtrend against hard assets, it'll be really interesting to see what Bitcoin does and when the market starts pricing it, not like a high growth tech stock and like a hard asset.

57:28Jeff Ross:Exactly. Yeah. Because so far, most people on Wall Street still consider Bitcoin to be like a software stock. And they're sort of right. It is software. It's just a protocol. But so So more people need to understand that it's a hard asset and that it's sound money and not a software stock. So I agree with you. So we don't know. We don't have a historical precedent to compare if Bitcoin is going to act like gold and other hard assets or is it going to act like software tech stocks. We'll find out. Okay. And the other thing that I want to check in on from previous shows is your three burner analogy, which I really like.

57:59It's probably worth explaining exactly what that three burner analogy is for anyone that didn't hear our previous shows. But explain what that is and where we're at with it.

58:06Jeff Ross:So this is how I explain, at least conceptually in my head, like why do we get peaks and troughs in Bitcoin and how we get these big blow off tops in Bitcoin. So the way I look at the price of Bitcoin in a fiat currency, and let's just say dollars for ease. So imagine a big cauldron of soup. We'll call it Bitcoin stew sitting on your stove. It's a big cauldron. And underneath that cauldron, there are three gas burners. You can have electrical burners if that's your persuasion. Three burners. The way to get that pot boiling is you want to have all three burners really going. And so what I think gets the price of Bitcoin going are the three things.

58:47Jeff Ross:One is liquidity. Like everybody knows about that now. Nobody used to talk about that up in like 2021 until like 2022, it started to get popular. But liquidity is number one. You have to have excess liquidity in the system with somewhere to go. Right now, it's all being funneled in one direction, but you have to have it spill over into other assets. And that's usually because of what, usually what central banks are doing. But also it can be a fiscal thing. It also can be just like a strong economy where banks are lending and creating new money. That can be a good source of liquidity as well. That's the traditional source of new money into the system.

59:20Jeff Ross:So that's burner number one. Burner number two is, and we've touched on this already, but basically what is the manufacturing sector of the world doing specifically of the United States? So is the US manufacturing PMI accelerating or is it decelerating? Does it look like it's peaked or not? When it's expanding and accelerating higher, that tends to correlate quite strongly with the directional moves of Bitcoin. So you want to see that burner. So when that is expanding, it's high and getting higher and stronger. In general, that's good for Bitcoin. That's burner number two. Burner number three then is leverage.

59:57Jeff Ross:This usually doesn't happen until you get to sort of late stages of a bull market. So basically when people are like, dang, I just doubled my money in Bitcoin. But if I would have used 10x leverage, right, I could make 20x my money. So people start getting that bull market zeal, that enthusiasm, the animal spirits, which are really stupid, by the way. And I really don't recommend that. In fact, nobody should use leverage as far as I'm concerned, but lots of people will. when you have that adding on when people start to really lever up their bets and you'll notice that because you'll start hearing the crypto bros come out of the woodwork again they'll start talking about how stupid you are for for buying bitcoin because you could buy this you know ridiculous proof of stake coin and make 100x your money and you'll hear stories of people who have done that and so it kind of gets the fomo going and so when you start feeling fomo for other nonsense like you know penny stocks and crypto things and whatever that's when you're starting to get a lot of leverage in the system.

1:00:51Jeff Ross:That's when that FOMO is starting to run hot. So those are the three burners. And those are when you get those three burners all kind of running on full blast at the end of a cycle. That's when you see that exponential hockey stick move higher in the price of Bitcoin. And that, by the way, is what we didn't have in the fourth quarter of 2025. We had good liquidity conditions, but the US manufacturing sector was still contracting. It never took off. And then we also didn't have a lot of leverage. People just weren't really into it. There weren't animal spirits. There wasn't FOMO. And so there was a little bit of leverage, but not like just off the charts.

1:01:23Jeff Ross:So that burner was like kind of at low to medium. And then the economy, the burner number two, the manufacturing sector was basically turned off. And all we had was the liquidity one turned on. So that's why I think we had that kind of tepid bull market. And going forward, what I'm seeing getting set up is it looks like liquidity is supportive currently, and it's going to get more supportive as we go. And I think we'll have to have some sort of jolt to the system that causes the central banks and Besant to really come in and start sloshing the liquidity into the system. And then we already have the manufacturing sector.

1:01:58Jeff Ross:And I think it's built to last. So we're going to see years of a really strong manufacturing sector in the US. And then as that picks up and as the price of Bitcoin moves into six digits, gets new all-time highs goes above 150 hits like 200k people are going to start piling on leverage at that point exactly at the wrong time of course they're going to start piling late into the bull market and that's when you have potential to see that hockey stick move higher so those are the things i look for if those three burners are going i will be very very bullish at that point but then i'll also start to wonder okay we're going to be hitting a peak pretty soon so there's going to be a time to start turning cautious if we get that and that's that's the three burner theory so bitcoin stew is simmering right now we're not we're not bubbling away but it's looking good we're simmering yep but we're laying the groundwork for another for a strong bull market one and i would argue one that we haven't seen yet because the manufacturing burner number two has been so weak for so long and the foundation for it to just be really cranked hot and i think trump's just going to like say crank and trump and bessen are all on board right they're like we are going to grow this economy out of our debt.

1:03:06Jeff Ross:And they're going to try hard. And whether that's good or bad, people can debate about that. I don't care. I'm just sort of reading the room. If they really let that crank and they get liquidity flowing and just crank up the economy and Trump puts a leash on Warsh and says, no, you can't raise rates, don't raise rates, or you're getting fired or whatever, we have the potential to see either an elongated or a very powerful move higher for the price of Bitcoin. So I think most people are going to be surprised, not to the downside this time, but actually to the upside, which will be the opposite of 2025.

1:03:41I love it. It's been nice to do an optimistic, bullish show. It feels like it's been too long. But Jeff, I always, always love talking to you. Thank you, man. Appreciate the time.

1:03:50Jeff Ross:Thanks for having me on, Danny. I always love talking to you. Of course. Tell everyone where they can go to follow you. You're back on X now. So where can people find you? Yeah, I am for now. We'll see, depending on the day. So my handle is at former Dr. Jeff. And then I run a little small friends and family hedge fund for accredited investors and a qualified client. So if that's you, you can reach out to me on Twitter X and we can talk about that. But yeah, otherwise, I try to just live my life and not be online too much. That's the way, man. Appreciate you, Jeff. Thank you. Thanks, Danny.

1:04:35Thank you.