This Is The End Of The Dollar System | Jeff Ross

23:15That

23:15Jeff Ross:also increases the liquidity blob. Cause as we know, when banks lend, they're basically just creating dollars out of thin air that increases the size of the liquidity blob and that is all moving into the economy so that's very healthy so all of those signs are actually very healthy for the economy in general so i mean we first talked about that was a long i've got so many questions but we first talked about this maybe nine months ago and probably the strongest call that you made out of that was that you did think manufacturing was going to come back in a real way And I think the last three months have been positive and it's looking really good there.

23:49Obviously, there's still the risk of high rates, high oil, high dollar price that could impact that. But is that the most bullish thing you're seeing right now?

23:58Jeff Ross:That's the most encouraging thing I'm seeing. So you wouldn't think that as a fund manager, you'd think I just want stock prices to go up and Bitcoin to go up. But I want to see our economy be healthy again because it's been so unhealthy and sick. We had that. It was actually heading into a depression as COVID hit. And then COVID just, you know, thumped it, just crushed the whole world and all the decisions the government's made, shutting down all businesses around the world, which I think was a crazy decision. And then they, you know, stimulated like crazy fiscally and monetarily and caused that massive inflation.

24:30Jeff Ross:So asset prices spiked and then also inflation ended up spiking in 2022. The markets have literally just been trying to recover from that assault basically for the last four years or so. So what I see now are signs of the market actually recovering again, that the cycle is finally coming back, that manufacturing is finally coming back. And that's good. We want to see and not just in America, we want to see all countries start to increase. Now, China is its own story. They've been on their own treadmill for quite a while. But the rest of the world, basically, especially the rest of the Western world, has been stuck in this malaise basically since COVID.

25:05Jeff Ross:And I would like to see healthy growth. So I am bullish on that. And I'm bullish because, you know, from a sound money standpoint, from a Bitcoin and gold standpoint, they tend to do well in these periods. And these types of periods, what you see is inflation runs hotter because you get this structural inflation. Like as we try to bring back manufacturing to all of our countries and build up military and do all this stuff, it's expensive. And somebody has to pay for that. Right. And so the way the governments do is they borrow and they borrow and they borrow. And inflation runs kind of hotter and hotter, not crazy hot.

25:37Jeff Ross:I'm not saying like out of control inflation, but but higher inflation than we're used to. And then what they try to do is they try to manufacture lower borrowing rates. And so that, you know, that's called yield curve control. That's something I think is going to be coming here in the next couple of years and probably coming to most Western nations where they're just going to have to borrow a crazy amount of money where all of the spending that they're doing is going to cause a rise in inflation. And if they can hold down rates, basically the bondholders get shafted. They're losing their purchasing power and they're actually losing money in real terms.

26:12Jeff Ross:It's good for the government because they can actually inflate their debt away. That's where that term comes from over time. And it kind of feels good because the economy can sort of run hot. And then as long as people are in a good enough mood and not trying to overthrow the government, it actually can sort of work well for everybody. So that's what I think is probably going to come unless we get into, unless World War III gets really hot, if that's what's happening. And that's a whole different story. So wars are tough to predict what's going to happen because you don't know who's going to win or lose and you don't know who's going to attack whom.

26:46Jeff Ross:um but uh man i'm i'm going i'm kind of going down a bunch of rabbit holes too so i'll try to stop just stop me anytime i'm loving it i've got honestly about a thousand questions for you at the moment but let's talk about the yield curve control first because you just brought that up because they've tried that in japan it worked for a long time until it didn't is that not a real negative and just more sort of centralized control over the monetary system if we get that Yeah. So it is. It's absolutely central control. And it definitely shafts the citizens. So the last time we did that in earnest in the U.S.

27:19Jeff Ross:was after World War II. We had these massive debts. But after World War II, people were kind of enthusiastic, right? We're like, hey, we won. We won. We won the war. And we don't have to rebuild like Europe has to rebuild. It's probably going to work out pretty well for us in general. And so Americans didn't like it, but they were kind of okay with it. They're like, I guess I can see why we're doing this. Like we have to pay off these debts now. At least we won the war. At least we're in a way better spot than Japan and Europe is. So that's OK. This time around, it's very different. And I would argue, by the way, that we're already starting to do some yield curve control here.

27:52Jeff Ross:The Treasury is already doing a kind of operation twist. They're already not issuing as many bonds on the long end, and they're issuing way more T-bills. All of that, all of these little things they're doing is they're kind of quietly behind the scenes keeping the rates down on the long end of the spectrum, especially the 10 years, you know, Scott Besant said early on, watch the 10 year yield. And I believe that he's just been focused like a hawk on the 10 year yield. And they're doing little tiny tricks to keep that rate down, right? So if you don't keep issuing a ton of 10 year yields, then you artificially suppress this, if you're keeping the supply down, then even if there's not much demand, that'll keep the prices down in general.

28:32Jeff Ross:So they're doing things like that, issuing a lot of T-bills short end kind of stuff. And all of this stuff is, I would say, a form of yield curve control already. When they officially announce it, that will be a much more traumatic thing. Do you think they will actually officially announce it and call it yield curve control? I think if we get into, I think if the hot war increases over the coming years, which I think it will, I think we'll be forced to do that. And I think they're going to try to get America on board with, look, we just need to do this. you know they'll say things like we can't let the bond market spin out of control we have to borrow this for this great cause of this war or whatever thing we're fighting so let's all just kind of get on board with this and and i do think by the way this is a huge reason why besant and the trump administration in general is so supportive of stable coins i think what they want to do is let the world uh embrace tether and usdc and in like you can all have that and then And what they do then is they issue all of this debt, these short term T-bills, and they can inflate away their debt to the world.

29:39Jeff Ross:So everyone in the world who's holding dollars, even in the form of USDC or USDT or whatever stablecoin they want to hold, they're going to get inflated away. It's over the short term, so you definitely don't notice, but they are still getting inflated away. And I think that's why our government is pushing stablecoins so much. But if we get true yield curve control, that's the government essentially either buying or selling its own bonds to keep it like a target rate right so is that just a is that the big print essentially yes yeah so that that's when the larry leppard big print comes into play so so i don't think we're super close to that like unless we have a major calamity in the near term um that's not going to happen um but but maybe if the war escalates at some point and i think by the way i'll just answer your question right now yes i think we're in world war three i think i think it's basically the seeds were sown in the great financial crisis in 2008 2009 i think china realized that um this is a rotten deal the u.s dollar financial system so they in 2014 started doing tangible things like they quit buying u.s treasuries uh actively and they started stockpiling things mainly rare earths um you know plus oil plus coal they they've ramped up all of their production of everything they are the manufacturing powerhouse of the world and the energy powerhouse of the world now, not unlike America back in the 1930s.

31:01Jeff Ross:They've been kind of mentally preparing for this. And then Russia, when we cut them off from their treasuries when they invaded Ukraine, they're like, OK, we're in. No more of this nonsense of us being on the dollar base, you know, the petrodollar system. So they've been preparing since then. And then all of these little proxy wars, at least for me as a guy who studies history and economic history, this is just like the 1930s to me. It's just like when, you know, Japan invaded China in the 30s and, you know, Germany invaded Poland in the late 30s. And here in America, we think World War II didn't start until Pearl Harbor in 1941.

31:34Jeff Ross:But it had been going on long before that, depending on where you live. And so I just think this is the same thing. And to me, what will officially mark the start of World War III when it's like, OK, this is for real, is when China officially gets involved. And we're not there yet. And I pray that it doesn't happen. But I think it will probably happen. and I think that will be when it's like okay this is for real like the whole world is now officially at war and this is going to get ugly. Okay so World War III that's scary. What do you think it looks like if this is World War III because we obviously have had like the proxy war with Russia and Ukraine this is not a proxy war the US and Iran but it's like war from a distance there's no troops on the ground like how does this escalate from here?

32:19Jeff Ross:So first so it's April 14th. So things change by the day. So I'd like to be clear about this. Right now, where we are is we have put a blockade on the Persian Gulf, right on the Strait of Hormuz. And we say we're clearing the mines so that the nations can all freely trade oil. I think that that's, and this is going to sound like a conspiracy, but I think what we're doing is we're getting ready for phase two of this war. We have, I think, three aircraft carriers in the area. Lots of Marines are either there or almost in the Persian Gulf area. We've got paratroopers in place. I believe France has an aircraft carrier close by, even though they're denying that they're helping in any way.

33:02Jeff Ross:I think we're going to make a play for the islands in the Persian Gulf and especially for Karg Island, which is like the main hub, the control center for Iran's oil. I think 90 % of their oil goes through Karg Island. I've noticed we've bombed Karg Island twice us and I believe Israel jointly, and we haven't destroyed any of the oil facilities. We've only destroyed basically their defenses and their runway. I will be surprised if within the next week, so let's say by, you know, Wednesday of next week, which would be April 22nd, I will be very surprised if the U.S. doesn't have a presence on Karg Island, or at least has not tried to have a presence on Karg Island.

33:45Jeff Ross:I think we will have troops on the ground. And I think it will come to light that more nations are supporting the U.S. than are currently admitting that they're supporting the U.S. So that's conspiracy theory enough. But I think that the plan is to kick the hornet's nest here in the Persian Gulf to bring Europe in to form a coalition and basically control the Persian Gulf and the Strait of Hormuz going forward, I think that eventually, years from now, the U.S. will have pulled back out of the Persian Gulf, pulled back even from the first island chain, which is fencing in China right now, which we've been doing basically since World War II, also kind of the 70s and 80s where it got more real.

34:31Jeff Ross:And we're focusing on the Western Hemisphere. And I'm not getting this from just being a crazy guy. I'm reading the military policy of the United States government, and this is basically what they're saying. They're acknowledging that Europe is the former center of everything, of the economy and of the military strength, and they are no longer the center. It was the U.S., and they're basically admitting it's now China and Southeast Asia. And I think what they're trying to do is pull back, but keep their foot in the door because for the next hundred years, that's where the center of commerce of the economy is going to be.

35:07Jeff Ross:And we want to keep our relations in the new multipolar world. So I think we're going to focus in the US on the Western hemisphere, but keep our foot in the door through the Persian Gulf and through kind of, you know, the Taiwan region with what's going to come over the next decades. Do you want to pay less in taxes and stack more Bitcoin? Of course you do. Well, by mining Bitcoin with Blockware, you can. Under section 168k of the US tax code, Bitcoin mining servers qualify for 100 % bonus depreciation. This means every dollar you spend on miners can directly offset your income in a single year.

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37:59Is it to have a sort of bargaining chip and a bit of control over China?

38:04Jeff Ross:So if we have, so yes, that's part of it. So it's not lost on me that Trump and Xi are supposed to meet in mid-May. we have almost no leverage over China right now, right? And most people know that. Literally, our whole military is built on Chinese products right now. They have the huge ace on their sleeve, which is control of rare earths. And they've been cutting the US off of most of that. Anything military grade, they've been cutting off Japan as well and other Western allies. I think from the US perspective or from Trump's perspective, we think, look, if we can sort of have the control, Well, because because what one thing China doesn't do well is produce its own oil.

38:44Jeff Ross:They have to import. And they have, by the way, imported an amazingly huge amount of oil. So they have huge reserves. But at some point, that could be an issue for them. So I think from Trump's perspective, he thinks a way to at least match them and negotiating ability is one, we have a very powerful military, obviously, still. And two, if we can sort of cut off their easy access to oil, that would be a very strong card. So maybe we trade easy access to oil for some of the rare earths. It's a really interesting, and I'm sure you read Luke Groman, and I know you've probably had him on your show.

39:16Jeff Ross:I agree with his take in general. I think it's a really weird situation to be in where we're basically begging China for rare earths to build weapons that we would use against China. It's just so awkward. But that's the situation we're in right now. So I think they're trying to do what they can do to gain some type of leverage over the coming months. And I do think that we don't really care about control over the Strait of Hormuz, I would say, in the U.S. I think part of us, we want Karg Island, which is where 90 % of the oil flows through currently. If we can control that, we can basically control Iran sort of politically.

39:55Jeff Ross:So basically, if you don't open the Strait of Hormuz for our allies, we're just going to shut you off from your profits from Karg Island. And, you know, a guy who's done really good work on this is a guy named Charlie Garcia. He has a sub stack and I would recommend anybody who hasn't read him to go and read him. He's done a good job. He calls Carg Island like the thermostat. You can turn it down and you can put a ton of pressure on Iran if they're not doing what we want them to do. You don't even need a regime change. You can kind of pressure them to do stuff financially. And if you cut them off from all from I think I think their oil revenue is about 50 percent of their country's revenue per year.

40:30Jeff Ross:So if you can basically shut that down to zero through controlling this thermostat called Karg Island, you can make them do a lot of things diplomatically, even without a regime change. And then you can dial it up as they become more compliant over the long term. Then you turn up their access and they gain much more profits from that. So I think that's the play that the Trump administration is doing right now. But we'll find out in the in the coming weeks, I think. Do you think this potentially escalates to being a war between the US, like a direct war between the US and China? Because I'm sure you saw the press conference that Trump did, where he was talking about the big one and obviously referring to China.

41:06And in the past, we've spoken about a potential hotspot with China trying to take Taiwan back. Do you think that is on the cards?

41:16Jeff Ross:I've spent a ton of time thinking about this. And I think that part of the reason why we are pulling back. So we have all these commitments, especially to the first island chain nations, right? So South Korea, Japan, down to the Philippines, Southeast Asia, that whole area, where we've kind of sworn to protect them, especially Taiwan in the face of Chinese aggression. I personally think, and this is not a popular view, that we have realized it would be very difficult for us to protect Taiwan from China and keep China penned in as we've fenced them in and call it what it is. We've been fencing them in for many decades through that first island chain line of defense.

42:02Jeff Ross:I think we're pulling back and I think we're doing everything we can here in the U.S. to get with the whole reason Taiwan is important to us is semiconductors, right? The high end semiconductors. We are doing everything we can to to build fabs, whether it's Elon Musk or Taiwan semi here in the US or partnerships with Intel, NVIDIA, all of these people, they're doing everything they can right now to ramp up production of high-end semiconductors in the US as fast as possible. If that happens, then Taiwan suddenly isn't as important to us. And so I think if we could fast forward 10 years from now, 10 years from now, I think Taiwan and China will be much friendlier with each other.

42:43Jeff Ross:And China will be free to travel into the Pacific Ocean, won't be fenced in anymore. Whether we come to war over that, I could see kind of a minor war where we're just like, both sides are like, look, we really don't want to just go at it with each other because we might just destroy the whole world. So let's sort of leave well enough alone. I still think there were some backseat, non-disclosed handshake deals between Trump and Putin and Xi where it's like, we know we're moving multipolar. We're going to slowly pull back from everywhere. We're going to focus on the Western Hemisphere. I think that's why they didn't make that big of a stink when we went in and took Maduro out of Venezuela.

43:22Jeff Ross:And they're not making that big a deal about it, even though China has been investing for the last several decades into South America and Central America and Russia as well. I think they're letting us sort of take this area over and they're going to focus on the Eastern Hemisphere. And it sounds like conspiracy theory, but I think if we can look back 10 years from now, that's what the world will look like. It's pretty scary. It's real forth-turning stuff. If this happens, if this does escalate even further, everything we've said about how you expect the macroeconomy to play out, is that just thrown out the window then?

43:56Is that gone? Or does it just accelerate the same situation?

44:01Jeff Ross:It depends. So America is used to attacking people on the other side of the... The American military is used to attacking people on the other side of the world and not worrying about the homeland. I think if something happens where we actually are attacked here in the 48 states, the continental U.S., that would be a whole different story and one that nobody is really expecting. And I'm kind of expecting that in the next five years, some sort of Pearl Harbor type event, but actually here on the continental United States. But we'll see. That's just a guess. that would definitely unify Americans in the war.

44:37Jeff Ross:And instead of fighting each other and having this little civil war that seems to be coming up a little bit right now and is very disturbing and we're seeing civil wars kind of all around the world right now, that would be a way sort of like 9-11 or sort of like Pearl Harbor that would unify Americans to look outward. If there's a massive war and if there's a lot of damage in the US, yeah, like everything just goes out the window. But if we can manage to keep it contained where it's like, OK, that's all happening over there in the Persian Gulf primarily, and it's now Europe fighting over the Strait of Hormuz and maintaining control over it, and the U.S.

45:12Jeff Ross:can pull back and get out of the bases there and start focusing on the Western Hemisphere and get out of Taiwan and pull back and start focusing on the Western Hemisphere, then we could kind of get out of this without too much damage. and the markets themselves might actually do okay. Like, and in fact, the end of world, excuse me, the end of the depression was basically once for us here in the US, World War II got underway in 1941. That's basically when the stock market bottomed in gold terms. And then US manufacturing and production started to really pick up the economy, really started to pick up the government was just, you know, pouring tons and tons and tons of money into the economy.

45:49Jeff Ross:And that was very healthy from an economic perspective. And so I think we're going to have something similar this time around as well. It feels kind of wrong to ask about markets in this situation because it is such like a bleak situation. But what do you think happens to Bitcoin? Like, is Bitcoin built for this, essentially? Like we have the fragmenting of the world, multipolar world, like a money that doesn't require trust seems like it should do very well in that situation. So those of us who understand Bitcoin would say it's basically built for this. Right. I mean, I think and this goes back to what we talked about, whatever, three months and nine months ago and the last few times we've talked.

46:26Jeff Ross:Basically, we're in that sector where stocks and financialized assets have rolled over relative to gold. And now you want to own sound money and you want to own hard assets. For those of us who get Bitcoin, it's the hardest money. It's the soundest money. And so it should technically do really well. But a couple of things that give me pauses. One is Bitcoin has only existed since 2009. So we have no idea. You know, I would have loved to have seen, well, how did it do in the 1970s? So that would have told me a lot. But obviously, we can't say that. Two, Wall Street is very heavily invested now in Bitcoin.

47:00Jeff Ross:And as you've probably seen, and maybe your other guests have talked about this, it's basically tracking software stocks right now. So most people think of Bitcoin like a software stock. That's very frustrating for me, you know, as a Bitcoiner. Like, come on, you guys, like, figure it out. Like, it's better than gold. And it's not just digital gold. It's so much better than gold. Gold was the best money for it during, you know, thousands of years during the analog age. But Bitcoin is clearly the best form of money for the world during the digital age. so if i had to bet i would say it's probably going to do pretty well in this stage so if we do get financial repression if we get this massive liquidity blob and the government's just just pouring tons and tons of money into the you know manufacturing sector and the manufacturing base of the u.s that should be bullish in general for the price of bitcoin but honestly we don't know we'll just have to we'll have to wait and see wait and see mode um so at the very start of the show I asked a question that I don't think you actually answered about Bitcoin being used in the straight at the moment.

48:02So the Iranian government came out and said, I think you can pay in Chinese yuan stable coins or Bitcoin to actually go through the straight. That feels like a really big moment to me. But again, like there's always recency bias in this stuff. And I don't know if people are actually using Bitcoin yet or if they are just using the Chinese yuan. But do you see that as a pivotal change?

48:22Jeff Ross:I think it's less of a big deal for Bitcoin and more of a big deal for the end of the petrodollar system. And that's like what all of this is revolving around. So basically, those two not kind of intrinsically linked, though, like if they are, yes, so yes, and it means that we're moving to a more multipolar world. And the fact that the US isn't going after every country and especially isn't attacking China, because of people are, you know, paying you on to get through the Strait of Hormuz, that means a lot as well. And I would have said 20 years ago, if somebody would have tried to pay Chinese Yuan for oil to go through the Strait of Hormuz, we would have probably attacked China directly back then.

49:01Jeff Ross:But I think now what this shows is we respect them and their military and who they are as a nation. I don't think, even though we talk, even though Trump talks all the time, like, we're the best, we have the strongest military, nobody's better than America, blah, blah, blah blah. I think that they do respect how far China has progressed. And I think they do realize that we're kind of in a bit of a bit of a pickle here. And we can't just go after China and try to shut that down. So I think we are intentionally, I don't know if allowing is the right word, but we see this happening and we are not being aggressive because of that.

49:38Jeff Ross:And we are allowing oil to finally be traded in something other than a dollar. And that's a first, basically, since the early 70s. So that is very telling. So I think the yuan, I think it's being traded for gold as well, directly or indirectly. Bitcoin, you know, it'd be really stupid for nations, especially for like smaller nations, rogue nations to use Bitcoin because the government can track it and figure out who did it and they can hunt them down. So everybody knows that like it's, you know, it's not completely private unless they're using mixers. The government will find out who did it and they'll be able to track them down.

50:11Jeff Ross:So there are better things to use than Bitcoin if they want to be sneaky about it. Bullish for Wasabi wallet, though. Yes. So a little earlier in the show, you said you think we're going to go through a period of like, let's take the war potential out, because I think that kind of throws a spanner in the works for everything. But we're going to go through a period of living under high inflation. I want to know what you mean by high inflation. Are we talking like 5%, 10 %? Where does that kind of range fall? It depends what oil does. So if we just have structural inflation, and when I say that, I mean, if we are just bearing the costs of bringing manufacturing and energy production back to the US, building data centers, ramping up rare earth capabilities, that all costs money and it's money we don't have.

51:00Jeff Ross:We're already heavily indebted. We're already spending more on debt than we are on military. That's already a very bad sign. And it also marks kind of the end of hegemonies too. I'm sure you've talked about that with other people. I don't know if I have talked about that. That's interesting. Oh, okay. Well, there's some dude who came up with that theory back in like the 1700s who noticed that countries that are global hegemons, once they start spending money, higher amounts on their interest of their debt payments than they do on war on their military, that kind of marks the beginning of the end of their global hegemony.

51:33Jeff Ross:and you can go back like all the way like 1600 1700s all the way till today that's happened over and over again so it's not a good sign for the u.s it definitely shows that we have kind of peaked and we're on the decline i hope not just on a gut check that seems right i can totally believe that right yeah of course if you're spending more you can like for any individual if you see them just being drowning in their debt payments you're just like it's not going to end well for that person so the empire's over yep not going to end well for the country either um inflation so so if you have high structural inflation, I think of it more like kind of in the 3 % to 6 % sort of CPI range, not crazy out of control, but not pleasant either.

52:15Jeff Ross:And then if you have war where you see these oil spikes, that can spike it up to the 8%, 9%, 10 % range, or even a little bit higher in the US. And then on top, so balancing that out, we're pushing really hard for AI and robotics. Once Once you finally get that ubiquitous and especially robotics automation throughout your country, that's highly deflationary. And it's super interesting to watch from my perspective because I like tech and I follow this stuff pretty closely. China is having severe deflationary problems right now, which is really interesting. And it's because they are so automated.

52:48Jeff Ross:And one of the reasons is because they're so incredibly automated right now. They basically can't print money fast enough to keep up with the deflationary effects of how well they're producing things. So they're just spitting out goods and services, you know, way faster than the economy can even bear it. And since the U.S. has basically shut them off, like we don't buy their products so much anymore because of policies of the Trump administration, they don't have that many people to sell them to. So it worsens the deflation. So it's very interesting. So I think that's coming for the U.S. and it's coming for the West.

53:19Jeff Ross:But we're so far behind China from an automation perspective. that might be kind of like in the three to five to 10 year time period where we start seeing those deflationary effects. But in the short term, I think we get that structural inflation in the three, four, five, 6 % range. See, that seems like the almost the most dangerous range to me because it's like three to 6 % is damaging for just the people of a country, but it's not really high enough to cause people to actually revolt against something. Right. It's, oh man, it's going to be interesting. I kind of want to talk about the Fed, although it seems so trivial compared to talking about World War Three.

53:56But we spoke about this last time. And obviously, Walsh is meant to be coming in in a month's time. I know there's been delays and whether he'll actually be in by then is kind of up in the air right now. But so last time we spoke, we said he's been dealt a really tough hand. And that hand has only become much tougher since then, because he's battling this higher inflation with oil prices going up. Inflation is likely going to continue to rise. is he still going to come in cut rates and be accommodative to the things that trump wants he's he is in a tough spot i i don't think the the central bank is relevant for now i think the

54:37Jeff Ross:treasury through besant has basically neutered the fed and they don't rule the markets like they used to. I think they're actually going to allow this runoff to like, you know, they've been letting, they were allowing the runoff and now they've been buying a little bit. So there's really, really slow kind of QE. I think that's probably the baseline situation that we're going to continue seeing. And I don't think it really matters if they raise or lower or keep steady the federal funds rate right now. I don't think they'll really matter until we start, until we need financial repression, which I don't see happening unless the war escalates out of control in the next couple of months.

55:19Jeff Ross:So probably not until Q4, somewhere in that range, or in 2027, something like that. So I know he's been given a rough hand, but I almost feel like he's a lame duck central banker for now. I think they'll come back into play once the government's like, look, we're in a full on war with whoever, maybe China, maybe whoever, we have to borrow so much money and we're going to put hundreds of billions or even a trillion dollars into military things. And I know people aren't willing to buy it. So we need the central bank, the Fed to step in and do financial repression, basically to buy all of the bonds that we want to issue so we can borrow all this money.

56:00Jeff Ross:That's how I view the Fed right now. I don't really care what they do. And I don't think it's really relevant what they do in the near term. You don't think it's relevant because you don't think actually they can do anything that's impactful enough? Correct. Not until they do the big print, basically not until the borrowing is so massive that no one else is left to buy it. So they have to step in and monetize all of that debt through financial repression, but through yield curve control, basically. And I don't see that happening anytime super soon. so with the like mini qe they're doing with the reserve management operation um which i think is that about 25 billion i think so is that right um i think it was 40 and i think they just lowered it to 25 okay so you don't see that escalating and becoming a larger amount of money throughout the like the next 12 months or so no and for and for now to their credit like people are still like the boomers are still eating up these short-term high yields you know so a one to three month uh t-bill is still yielding like 3.7 percent like boomers love that it's money market rates are high they're like sure just keep dishing these t-bills out so until the market starts to say you know what we don't want your dollars anymore then we'll see rates start to go higher at that point um then that's when it will be a problem so that's why i think besant you see him he's like pushing really hard he almost sounds kind of like stressed out like you guys have to push through the clarity act you have to make stablecoin you know you have to get this stuff figured out because we're going to dump just billions and billions of dollars worth of T-bills on people through these stable coins.

57:35Jeff Ross:So he's really hoping that they get this done and they get it done quickly, because I think that's the next step for where this issuance goes. Okay. So this escalating, like if the war escalates, there's the potential for financial oppression, yield curve control, that kind of thing. On the flip side, if this ceasefire is real, everything starts dying down, what happens then? then i think we just kind of go back to normal for a little bit i think uh oil will go back down to maybe the 60 or 70 dollar a barrel range uh cpi will come back down we'll say well that was something you know and and uh um inflation won't be that big of a deal um the economy could run hot again i could see them you know possibly trying to do that to run the economy hot into the midterm elections it's possible we'll see that um so yeah but but i don't think it's the end of it, I think that's my thing.

58:24Jeff Ross:This is just, there's much more to come in this fourth turning. And I think by the end of it, the days of imperial America as the global hegemon will be drawing to a close or will be absolutely like people will know that it's done at that point. And I think it will be a much more multipolar world. And I think nations will be able to buy oil with basically any of the major currencies, including the dollar, by the way, the dollar is not going to go away. It just won't be nearly as powerful. Gold will play a larger role. I think Bitcoin will play a larger role. The yuan will definitely play a larger role.

58:59Jeff Ross:And I just think there's more to come, unfortunately. I just want to make this clear, by the way, because I think I can sound kind of callous when I talk about this stuff. I hate war. I hate the thought of people dying for stupid government plans. People have these whims and they want to do stuff and actual young men and women die because of that. I hate that. It's just a waste of human life. not to mention and then from a financial standpoint it's just a total waste of capital so you're just destroying energy plants you're destroying manufacturing and data centers and desalination plants like all these kind of things that like help people just to live regular normal good lives and war just ruined all of that and so that's terrible and i hate all of it i just kind of want to caveat everything i'm saying with that i think people know you well enough jeff to know that you're you're not supportive of this stuff um the the financial asymmetry in this war is pretty interesting though in that like the us are dropping billions and billions hundreds of billions of dollars on iran and they're kind of fighting back with cheap drones that must like change the way that any war in the future is going to be viewed like do you think there there is like what i don't understand fully in this situation is what world war three looks like because i know you're saying there may be troops on the ground at some point it's not going to be hundreds of thousands of troops, I wouldn't imagine.

1:00:15Or is that the kind of future that you see?

1:00:18Jeff Ross:No, I don't. I don't see that, at least not from the U.S. and not from the Western nations, probably. I do think it's going to be a more technological war and a more autonomous war, and that's good and bad. It can mean less lives, but it's also hard to predict, I think, as well. I always tell people, like, the U.S. is by far the strongest and best military if we have to refight world war ii we would just dominate and crush world war ii the problem is is we're not going into world war ii we're going into the next war so you got to like fight the next war um so yeah to your point right they're using these shaheed drones that cost about thirty thousand dollars a pop and we're we're dropping multi-million dollar missiles to to intercept and destroy them you can't do that for too long before you basically just run out of money so in a war of attrition the u.s definitely loses we can print all the treasuries and dollars we want but at some point we're going to run out of the supplies and the capacity to make more of these really high-tech weapons.

1:01:13Jeff Ross:So a couple of things are, I do know that lots of these sort of our military companies, both like the legacy defense or defense or offense contractors, whatever you want to call them, and the upstart ones are developing anti-drone technology as well as our own drone technology for pretty cheap. So, you know, Eric Schmidt's company, they recently came out and they produced these sort of basically reverse Shaheed drones that can do the same thing and we can send them back at them. We also have like these microwave tools where if a swarm of drones is coming at, say, a ship or maybe an island called Karg Island or something, instead of trying to shoot them down one by one, you can blast them with microwave and it actually can, it's sort of like an EMP and it just causes them to lose their power and their abilities.

1:02:04Jeff Ross:And so there are ways to fight this and we're learning quickly sort of i think a lot of nations like on both sides whether you're the western allies or the crinks i call them so china russia iran north korea i think that's better than bricks and more appropriate so the crinks so they both are learning a lot from the russia ukraine war and it's kind of turned into a drone against drone war in many ways and so when you're in a war and your life depends on it technology tends to move pretty quickly and it adapts very quickly. And so I think the whole world is watching that and has learned a lot. So right now we're sort of sitting ducks.

1:02:41Jeff Ross:You don't want to be a huge, you know, multi-billion dollar ship and have a fleet of little drones coming at you that can sink you or be a underwater mine. But we have that we're developing quickly the technology to fight and counter that. Yeah. It's interesting as well that another big shift in this is that it's gone from the US being the country where that exports the most guns. If you're going to war, you're probably going to be buying guns from the US to now if you're going to war, you're probably going to be buying drones from China. That's another huge power shift. Oh man, it's a mess. This is quite bleak, Jeff.

1:03:16Yes. And I'm not really a bleak person.

1:03:21Jeff Ross:Sorry, go ahead. No, exactly. You're a very positive person. And it sounds like you don't really see a world where some kind of war like conflicts, little hotspots around the world doesn't escalate. Yeah. And, you know, it's probably because I just believe in the whole fourth turning cyclical theory of history. And I just think we're at that point right now where and I've been telling my friends and family this for a couple of years, like it's going to get worse before it gets better. And these wars are going to escalate. And we're going to and even here in the US, I'm like, you watch like we're going to start escalating towards a civil war and people like like three or four years ago, they're like, you're crazy.

1:04:01Jeff Ross:There's no way we'll get into a civil war. And now, in recent polls, more than half of Americans think we're headed towards a civil war. And that's just not in the US. It's all around the world. And so it's like things that were unthinkable even five years ago are now kind of commonplace. And then what's on top of this, and we haven't even talked about all this. So the whole jobless recovery and the whole AI taking over and basically displacing white collar workers and all of the issues that that's causing. And the way that gutting the blue collar economy, the manufacturing economy since about the year 2000, because we put it all overseas and gave it all to China and the Asian nations, that just decimated the middle class in the US and the working class and the blue collar class.

1:04:46Jeff Ross:That's now happening to the white collar class. And it's just starting. And people are starting to get fearful about that and be like, what do we do? And the most concerning part of that, and I went back, I've literally been reading economic history and geopolitical history for the last 3 ,000 years. And whether you're talking about Ray Dalio's big debt crises or Neil Howe's fourth turning, they're all the same. It's always at this point where basically income inequality is so wide that the majority at the bottom here gets so angry and upset and they get desperate. and they either, you know, so, so things like, you know, alcohol and drug abuse start spiking, suicide and homicide start spiking.

1:05:28Jeff Ross:Um, and then people start doing crazy things. Uh, and because they're like, something has to change. And you always get to this point in history where something has to change. Um, and, and that's just where we are right now. And so like, you have to kind of be blind to not see that, that we're at that point right now. And it doesn't just end. It almost never ends peacefully. I think there was one episode like in Athens, maybe in like, I'm going to get these dates wrong, but 600 BC or something where the ruling class, the plutocrats, the rich and wealthy ruling class thought, you know what, this is looking pretty ugly.

1:06:02Jeff Ross:Maybe we should do things like basically, and people, whenever I bring up ideas, by the way, I get called a communist and I get called like a libertard and all these different things. And I'm like, look, I'm like the staunchest free market capitalist out there. But during times like this, when people are desperate, you have to do something to give relief to people who are desperate, or they will do something to you to change the system and overthrow the system. And so I just think we're very close to that point right now. And unfortunately, like going back to this whole wartime and World War II, it was awesome because we got all of the Americans behind, and this happened all around the world, you know, in Europe as well.

1:06:38Jeff Ross:People all banded together and created this robust manufacturing sector and industry to support the war efforts. This time around, most of the growth in manufacturing and energy and data centers and all these, it's jobless. It's humans aren't doing the majority of the work. So more and more humans are being job displaced and are starting to get more and more desperate and can't pay their bills and are getting more in debt. And that's a huge problem. And so what is the best place if you can't find work, if you've been like, you know, on Indeed all day looking for a job or, you know, whatever, pick your thing and you've been working just trying to support yourself and your family, suddenly the military starts looking like a pretty good option.

1:07:17Jeff Ross:What if you're 22 and you're a college grad and you have debt that you can't pay and you don't have a job and you're living in your parents' basement or who knows what you're doing? And the military comes in and says, we'll take your debt and we'll forgive it. We'll give you a stipend and you'll have a lifetime annuity and free healthcare forever for you and your family if you join the military. That's a pretty tempting offer. And then if you pair that with a 9-11 or Pearl Harbor type event suddenly unite America and suddenly it gets patriotic and exciting to join the war and go get the bad guys uh and then life is suddenly good from a military perspective and so I actually think all of that is coming and I think it's coming probably in the next couple of years not just in the U.S.

1:07:58but throughout most of the world terrifying um like I I'm with you though I I think something we'll have to give here um and I've been called a commie for this take as well, because when you see what happened to blue collar America, when all the work went to China, like huge amounts of drug abuse, suicide, like it was just an economy of despair at that point. And, and I do think that's coming to white collar everywhere, like not just America, but if that hits the coast and lawyers can't find jobs, accountants can't find jobs, like software engineers, especially lower level, because I think AI is going to make people extremely productive, but just fewer people will be more productive.

1:08:36What happens? And I always say, like, I can't see a way out apart from some kind of UBI type scheme. And people have raged at me in the comments about how UBI is terrible. And I agree, but I just don't know what other alternative there is.

1:08:51Jeff Ross:Right. And that's actually a tangent I was going to talk about, but I didn't. So I'm glad you brought it back to that. So I'm a staunch free market capitalists. And I'm also not a Democrat or a Republican. I'm like a fierce independent. I never vote for, I rarely even vote. So I'm not either of those. So if you're going to label me one of these, that's fine. But that's not, I'm not talking to you, Danny, but the people in the audience. So here's what I talk to people about. Free market capitalism is the best human system. But what if the people you're competing with is an AI who's literally 10 ,000 times smarter and faster than you and better in every way.

1:09:29Jeff Ross:So say as a doctor, I used to be a radiologist, say AI is able to do radiology 10 ,000 times better, faster, and less expensive than I can do it. As a radiologist, I'm not going to have a job. Who would pay for that? If you have to pay a radiologist, whatever, several hundred thousands of dollars to do the work, or you could get a plug-in from, you know, Claude and have AI do it for your whole hospital system for whatever they pay for a subscription, which isn't very much. You're going to choose that eventually, that option, even though you have the Luddites and the new Neo-Luddites who are very against all of this technology coming, like you can't stop a technology or an idea whose time has come.

1:10:08Jeff Ross:So they'll resist it, but it's going to win eventually. That's my take. I think to your point that you have to do something. If I were the plutocrat class right now, if I were Elon and Bill Gates and, you know, and all the politicians, I would be having a meeting right now today. What are we going to do to help the working class, especially these 20 somethings who just graduated and have all this debt and they can't afford a house and they have no job and they're getting angrier and angrier. And they're starting to think it's cool to go kill CEOs and do crazy things like that. Like you have to do something and you have to do something soon.

1:10:44Jeff Ross:And I know that that sounds communist. But when you're competing against AI and robots, I'm sorry, but you're not going to win. I don't care how smart you are as a human or how talented you are. You can't compete with AI. And so you don't want to have a system, a capitalistic system that's built on competing with AI. That means you're always going to take second or you're always going to lose. And so you're going to be the creative destruction while AI gets all the gains. So I think what makes the most sense and trying to be so positive spin. These AI companies are just killing it. Like Anthropic and OpenAI are killing it.

1:11:20Jeff Ross:They're growing faster in revenues, faster than any company that's ever existed. It's unbelievable. I think the run rate on Anthropic is going to approach$100 billion in 2026. They think it could get to a trillion dollars of revenue run rate in 2027. Unbelievable amounts of money. Insane. And so what makes sense to me is you can call it a government tax on these companies. You can call it, some people have said like a technology dividend or something to put a positive spin on it. But at some point, you got to take all of that money that's getting centered to AI and going to AI or these companies that are using AI and firing all of their employees and now their operating margins are through the roof because they don't have to pay people to do what they used to pay people for.

1:12:03Jeff Ross:You have to do something as a government to get money to the people. And so there's people who have ideas of universal basic services, food, water, electricity, compute, and then shelter. You could do something like that. Like right now in America, you can walk in any street, you can find public drinking fountains with safe water to drink for the most part. That's a public utility. You have electricity, the lights are on, things like that. And so you could expand all that. That's one way to do it. or you can just give everybody money. That's the easiest and quickest solution. And normally I would be super opposed to all of that with any other human system, but because the world is changing so quickly, I think that's the only option right now because we could have this abundant world on the other side of this.

1:12:49Jeff Ross:And I think we probably will if we could fast forward 10 years. But in the meantime, getting there, you actually have to survive for 10 years and you can't survive if you can't pay for food and you can't keep your lights on in your house and you can't support your family. So if I were government officials or the plutocrats, I would be thinking right now today of a solution for the coming like months and quarters or things are going to get really ugly. Yeah, and I totally agree with that. And it's not that I support it. It's that because I'll be one of the people that has to essentially pay for that through either inflation or tax.

1:13:19But it's more that I just don't see another way out. And I don't think these tech CEOs will be doing this out of the goodness of their heart. They'll be doing it because they know if they don't, then their data centers are going to get bombed. and like there'll be a real revolution against it. Like there's no other way around it. In my opinion, I may be being a doomer there, but I just don't see another way out of this.

1:13:39Jeff Ross:Right, and it's already starting. I'm sure you read the news with Sam Altman. Like somebody threw a Molotov cocktail at his house and somebody shot it up and some politician in I can't remember, Ohio or something, his house got shot up because he was pro data center. And so like I call them the neo-Luddites, like they're the people who are gonna fight this. But this is what happens when people get desperate. And like, you can be a heartless capitalist and I'm actually generally a heartless capitalist, but these, this time period is not a time to be a heartless capitalist because if, I don't know, it's just, it's the world is changing really fast and I think it's going to get worse still.

1:14:14Jeff Ross:I think it's going to get worse before it gets better. As long as it gets better, Jeff, a period of pain, but I hope the world is better for my daughter. It will be better for our kids. We just have to get through this ugly period first. Yeah. Yeah, just like one last question to close out, because this is something I think about quite a lot. You've got young kids. I've got a younger kid than you. Do you think my toddler will ever have a job? Probably. And probably we won't even be able to recognize what it is like. It won't make sense to us because it'll be so different. I don't think they'll have to do hard labor.

1:14:53Jeff Ross:I mean, unless so unless there's a nuclear holocaust, right? So say we have a war, everything changes, and now we're on the other side of that. We're on a new financial system. We're growing again. We're building. I do think that AI and robotics will do most of the labor. I think people will do things like I don't think colleges will really need to exist other than for fun. So people might go to school because it's sort of like, I think, in fact, I think college, the term, and I should have checked this before I said this. It used to just be for wealthy people to go and like it was considered a luxury to go learn just sort of for fun.

1:15:33Jeff Ross:I think back in Athens or something like that. So, again, I'm probably totally off on that. But I think we come back to a world like that because everyone will be able to know whatever they need to know with AI. And you don't even have to know it anyways because AI will know it. if there is work, it will be, it's kind of like if you told a farmer a hundred years ago that you're a podcaster and that you, you know, that you interview people online, they would just be like, what are you talking about? Like, it wouldn't even make sense. I mean, my grandparents don't understand what I do. I've explained it like five times and they just have no idea what I do.

1:16:05Jeff Ross:Right. Right. So I think it's actually going to be worse. So I think if you could fast forward 20 years into the future, we'd be like, what? And they would, they're going to say some just crazy thing and maybe it has to do with like going to the moon or doing something here and you're just like what are you talking about that's what i think it's going to be it's going to be almost unrecognizable um and so so yes i think there'll be work i don't think it will be bad work i think in general you know humanity tend like it life tends to get better over time and easier even though we like to complain about it like we all have dishwashers and refrigerators and we don't have to go to the river to go get water right we have indoor plumbing and that kind of stuff so I think it will get better but I don't really know what work will look like but I think it will be relative to today it will be less work and it'll be easier work than today well that's straight into the first turning then I'm looking forward to that Jeff thank you so much you are one of my favorite people to speak to this has been awesome now you've got a new sub stack you're not on social media anymore so this is the opportunity to shill it tell everyone about what you're doing hey all right well thanks man i love our talk so you're nice to let me i honestly just feel like a tinfoil hat full full-on conspiracy i know but yeah i do too um and people are like just talk about bitcoin quit talking about the geopolitical stuff stay in your lane i always have somebody somebody tells me to stay in my lane anyways as and just so those people know i know i know who you are i'm watching you you're going to tell me to stay in my lane like i'm a macro hedge fund manager like i actually have to know what's going on geopolitically and i have to kind of see around the next corner in order to do well in my fund.

1:17:39Jeff Ross:So that's why I pay so much attention to this stuff. What am I doing, Danny? So thanks for asking. I started in March a new sub stack, so a newsletter basically, and it's called Dr. Jeff's Macro Chartbook. And another thing I want to say is I'm not so vain that I have to have people call me doctor. It's only because that's how people know me online is as Dr. Jeff. And everybody knows the real Jeff of the Bitcoin and macro world is Jeff Booth. So I don't want them to think I'm him. And then there's another Jeff Ross, who's a comedian out there who's way more popular than I am. So if I just say Jeff Ross, then I get lost in the wind.

1:18:11Jeff Ross:So that's why I say Dr. Jeff. It's not because I'm super vain. But what I'm doing is I spend most of my days looking at charts and figuring out things, momentum, and looking at kind of long-term and short-term trends and long-term secular trends. And this notebook, I release an issue every other Thursday morning. And it's basically the top five, at least for now, It's the top five charts that I'm looking at and sort of the macro conclusions I draw from that. And a lot of people want to know, am I going to be giving individual investment advice or like Bitcoin buying advice? And no, I'm not. I can't do that as a fund manager.

1:18:46Jeff Ross:I'm literally restricted to do that because it's considered general solicitation. I can't do that. So it's just my general thoughts, not unlike these kind of interviews, but I like to teach in there and just kind of let people know what I'm thinking about the world. and also kind of my general thoughts as a hedge fund manager. So yeah, it's a lot of fun. So feel free. It's called Dr. Jeff's Macro Chartbook. You can find me on Substack and that's pretty much the only place I'm posting these days. Amazing. I didn't know this existed before today's call, so I will be a subscriber. Next time, Jeff, I'm going to come to you.

1:19:18We should do another one in person, but this has been awesome. Thank you very much.

1:19:22Jeff Ross:Thanks for having me, Danny. I love being on your show. I will make sure the link's in the show for everyone to check out the newsletter and I will speak to you soon, mate. I'm looking forward to it already.