Bretton Woods 2.0 Begins, What Happens To Bitcoin, Gold Next? | Jim Thorne
Summary
Investment Outlook: Jim Thorne predicts that Gold and Bitcoin will outperform real estate over the next 5 to 10 years, with Bitcoin potentially reaching $500,000 and gold $5,000.
Market Trends: A capex super cycle is anticipated, driven by 100% tax deductibility on capital expenditures until 2031, with a focus on artificial general intelligence.
US Economic Policy: The Trump administration's supply-side economics and fiscal policies, including deficit reduction and tax incentives, are seen as beneficial for economic growth and market performance.
Cryptocurrency and Stablecoins: Thorne discusses the potential for stablecoins backed by US Treasuries to create demand for treasuries, supporting the US dollar's dominance in a new Bretton Woods 2.0 framework.
Monetary Policy: The Federal Reserve is expected to cut rates and stop quantitative tightening, which could boost asset prices, particularly in interest rate-sensitive sectors.
Global Trade and Tariffs: The ongoing trade tensions between the US and China are seen as a temporary issue, with expectations of a resolution to support market stability and growth.
Canadian Economic Challenges: Canada is advised to focus on natural resources and AI to improve its economic position, with potential impacts on the Canadian dollar and real estate market.
Banking Sector Insights: Thorne dismisses fears of a systemic banking crisis, emphasizing the need for traditional banks to innovate in response to competition from digital assets and stablecoins.
Transcript
Gold and Bitcoin will probably outperform real estate over the next 5 to 10 years. We are going to have a capex super cycle. The holy grail is going to be artificial general intelligence. Gold has taken the front page right now. I think it's going to pause and other asset classes are going to take the mantle. I think we go to 74 to 7500 by the spring. >> Which has more upside right now, Bitcoin or gold? And I would suggest to you that >> our next guest is Jim Thorne. He is the chief market strategist at Willington Altis Private Wealth. He's returning to the show once more to give us his update on market conditions, current market conditions. Jim is calling for $5,000 gold. And previously on my show, he said Bitcoin's going to $500,000. We'll find out when and how and uh what's currently going on with investor sentiment right now. Jim, welcome back to the show. Good to see you. >> Good to see you, Dave. It's been too long. >> It's uh it's been too long. Time flies when the market's flying as well. Let's talk about this market flying. There seems to be some profit taking the precious metals today. We'll talk about that. But broadly speaking, just back up a minute. Why are you so bullish on alternative assets? >> Well, I think go back to the first conversation we had, it's almost a year ago where we said that if Trump gets elected and he doesn't put in a good secretary of the Treasury, we have a real shot at a financial crisis. And what President Trump did is he put in Scott Bent, who's probably going to go down as one of the top uh secretary of the treasuries that we've ever had. And so what are we getting from him? We're getting supply side economics and we're getting a deficit that's starting to decline. And so we're starting to see evidence that the Trump administration is deficit friendly. We see the four the the 10-year yield dropping below 4%. Remember Dave, a lot of people were calling for 10%. And so we've got a situation where, you know, the fears from last year are being put aside. And then I would add to you is that look, we are in a technology wave. The Fed is going to start cutting or continue to cut rates. And in the big beautiful bill, Trump or President Trump has said that he's going to do 100% tax deductibility on capex up until Janu 2031. So we are going to have a capex super cycle. The holy grail is going to be artificial general intelligence. We've got to grow electricity capacity somewhere between 90 and 100 gaww. David, a nuclear reactor is one gigawatt. So, we're very very early on in in this theme. 7,000 for the S&P was my target coming into this year. We're just chugging along. I've haven't changed my target. And, you know, now what I would think suggest is going to happen is, you know, parabolic moves are to be sold. I would suggest to you that they're sell going to sell gold and they're going to buy Bitcoin and we're going to climb the wall of worry higher. >> The issue is when at what point in the parabola, so to speak, should we start booking profits? How do you make that decision when something's rising parabolically? At what point or what indicators do you as an investor look at to make a stop? >> Well, it would be the chart right now. I mean, you look at what gold and gold stocks are doing right now. And really, nothing has changed in the narrative. Let me be totally clear. I am still a long-term bull on gold. I do not suggest you buy parabolic moves. So, what I would suggest you do is is look at I think there's going to be a retracement back to the Fibonacci level of 61.8. That's about, you know, in gold that's about, you know, 3,700, you know, and so or go back to the 50-day moving average. We're going to have a pullback, a grind sideways, and then a move higher just like Bitcoin has been going through right now. A very, very frustrating consolidation pattern. So, in terms of the long-term thematics, nothing has changed. Where I will push back, David, is if I hear too many people saying that this is the end of the US dollar and this is the end of the US Treasury. uh and I completely disagree with that point of view. >> There's a theory circulating on the internet um I think it started with uh with uh a Russian economist that the US is trying to devalue away its debt, its $ 37 trillion worth of debt by issuing stable coins. Now, I I I don't know if there's any credence to that theory, but essentially if the Genius Act mandates that new US Treasury, sorry, new stable coin issuances have to be backed by US treasuries, well, essentially they're creating demand for treasuries, basically forcing people to buy off their debt. That kind of makes sense when you think about it, doesn't it? >> Yes. And you know, I mean, uh, uh, Paul Ryan, former, uh, vice president candidate and former speaker of the house, he wrote an oped about this last year. I mean, it makes complete and total logical sense that if you have stable coins that are backed or, you know, let's legislate stable coins the same way we legislate money market funds, we we create a demand for treasuries and and in fact, stable coins are now a very large purchase of treasuries. So, you know, we're moving into a digital payment system and as we talk about as we're talking about a recording today, the Federal Reserve is having a symposium on crypto and Bitcoin and the payment system and they are now seeing the light saying that we they need to open their system up to Bitcoin and crypto. So the evolutionary process is happening and to me is you know how this evolves is is is along the lines that the US dollar and the US treasuries are going I would rather own them than the euro or the 10-year French bond or the German bond or the Greek bond. I think it's, you know, you want to say it's it's it's the best house in the bad neighborhood, fine. But the narrative of of of excessive levels of debt needing to be inflated away has been a a a theme that's been around for decades and it's not profound. True, David. They're going to run it hot and they're going to get nominal GDP going. What's isn't it interesting this time around with the with the gold rally? We're not seeing any changes in margins, right? We're not seeing any gold being sold by central banks. I think the central banks that are holding a ton of gold are very happy with the appreciation of gold. It's gives their balance sheet help. So, I think this is just a stepbystep move where we're going to reflate our way out of this and gold has taken the front uh uh page right now. I think it's going to pause and other asset classes are going to take uh the mantle and I would suggest to you that right now the best guess would be Bitcoin and Ethereum. >> Which has more upside right now, Bitcoin or gold? Bitcoin to the for the next six months, Bitcoin has more upside than gold. >> Okay. Are you then also saying that stocks have more upside if we're making the assumption that Bitcoin is still correlated with stocks? >> Yes. I mean, typically speaking, the fourth quarter is very is the weakest quarter for gold. So I I am very comfortable with stocks going into the spring and Bitcoin running and gold having a let's add silver and gold and silver having a very healthy consolidation pattern and it grind for a bit. That doesn't mean that the that the rally is over. It's not over. But let's just they've gone way too far way too fast. You have too many short ter uh term traders in. Let them get out. let the system flops like with Bitcoin the leverage has been taken out of the system in blit Bitcoin so I think that's a much more attractive trade on a tactical basis but David look in the long frame looking at a 50,000 ft gold and Bitcoin are the manifestation of the same trade so trade your bucket of Bitcoin and gold accordingly >> the notion that stocks and risk assets may still have momentum to the upside. Is that predicated on a economic growth, b Fed loosening policy, uh c fiscal policy, all the above or none of the above? >> Oh, so you've got you've got a brand new sheriff in town in terms of fiscal policy. So, we're just introducing supply side economics into into uh our our genre. We're moving away from Keynesianism. That's one. The Fed's going to cut. The Fed's going to stop QT. So that's another and you know you've got this period of time whereas if you've got a 100% tax deductibility on capex and you've got a need for energy you're going to see earnings growth in particular areas of the economy. >> Let's talk about the trade war. The ongoing trade war with China, US and China is now ratcheting up. 100% tariffs on China now announced by Trump expected to take effect November 1st. if no deal is reached before then, Jim, what's going to happen to the global economy and more importantly uh for US and Canadian audiences, the Western North American economies once this takes effect, if it does, >> well, if it does take effect, it's going to be very painful. I just think what we're doing is we're we're we're living the art of the deal where where Trump and and and and she are doing their dance. Uh everybody needs to live with each other. Trump and and uh she are going to cut a deal and they're going to live the fight another day. Look at Trump needs the market to be much higher by the midterm elections. He's going to temper his his his rhetoric. I think we go to 74 to 7500 by the spring, a normal little correction, and then 8,000 by the end of next year. So, I'm really not, you know, I, you know, I am not getting head faked away by the tariff fear like so many other people are. And it's, you know, since April, it's it's, you know, our clients at Wellington have been taken um have been have been very been treated very handsomely by taking that tap. >> Okay, we have to look at this week's inflation numbers. Uh, it's coming out Friday. CPI is coming out Friday. People are watching for it and waiting for it. Uh this leads back to tariff discussion. Are you expecting the inflation number uh this uh week to come out even hotter than the previous month? In other words, are you expecting tariffs to finally show its impact on inflation numbers? >> I think you may see a little bit of an uptick. But David, if you if you input market-based real estate numbers into the CPI and PCE, you've got very low uh inflation and you've got very low PCE. You know, I mean, LAR in their last quarter said, you know, year-over-year new home sell selling prices are down 9%. You know, the Cleveland Fed rent, new rent uh index is s significantly negative. Even up here in Canada, everything that's been driving the CPI number is shelter, which is a lag flaw variable. So I think people are going to see beyond that and re realize the fact that the that the economy is also the real estate mark sorry the the employment market is not balanced. It's slowing and we're in this period of time where the Fed's going to stop QT stop NBS sales and bring rates down to 275 the neutral rate. That's our trade between now and the middle to end of 26. >> With interest rates coming down to that kind of a level, what do you think asset prices will do in response? >> They'll go up, right? And I think the interesting thing you're call I think you're you're you're uh you're recording from Vancouver and I'm in Toronto. I think the interesting thing for us is going to be I think the Bank of Canada has to get their interest rates down to about 1%. Will the real estate market in Vancouver and Toronto, which are very expensive on a relative global basis, do we start to see a bounce or not? That will be the question. Just on that note, uh since you've touched on Canadian real estate, uh much of the real estate in Vancouver, um the the valuation has been propped up over the last 15 years uh by by foreign buyers in uh in the Middle East, in Asia, China in particular. How much of that is going to be sustainable? Right now, we're seeing a bit of a dip. I'm not sure about Toronto, but in downtown Vancouver, for example, uh rent starting to slide. Um condo prices have been sliding for more than a year now. And with tensions between China and the Canadian government, not great. Uh I wonder how much of um foreign support is going to be given to the real estate market going forward or if that's even an important variable. How do you assess that? >> Yeah, I think it's a knock-on effect of the global financial crisis when the Canadian banks didn't blow up. And when that was the case, I think you know, foreign foreign capital said, you know what, Canada is a safe place to be to be to to have some money. And the and and the way to do that was through buying real estate, whether you were from from China or from other areas of the world. I still don't think see that going away. Yeah. And you know, could you have a little bit of a pullback here or there? Yes. But I think Dave, the more importantly, it's going to be very interesting to see how real estate as a whole in the in a global framework competes against gold and Bitcoin and other assets as interest rates come down. Will they have the leadership position that they had in Canada after the global financial crisis? I say no. But it might go back to their traditional appreciation and and I think at with that then I think gold and bitcoin will probably outperform real estate over the next 5 to 10 years but I am not calling for a real estate crash. >> There's some regional banking uh problems that's happening in the US right now. Zion's bank corp fell. um Western Alliance Bank shares fell and uh JP Morgan, Jamie Diamond, I believe, uh told the media that he thinks regional banks are cockroaches. Is uh is this is this is this a precursor to a larger systemic banking crisis that we're seeing right now? >> No. And and I guess, you know, I I I wish I wish Jamie Diamond would just I think his franchise in terms of pro prognostication on the markets is is getting a little bit extended. Look, there's going to be criminals or malfusions in in our market all the time. So, we had a we had a a a situation where a loan a loan portfolio was pledged a number of times. That has I I get it and that's bad and it's serious. It has nothing to do with the global financial crisis. Okay? The global financial crisis was caused because of near-term money instruments. We couldn't settle and the money market funds broke the buck. Okay? That's what happened in September and it was a settlement issue. It's a shame that a leader of a major money- centered bank would actually say something as I'll call it as lazy as that. So in in investing, you know, in in any financial institution, the United States, Canada, money centered banks in Canada or the United States, there's always a problem that their loan process, you know, doesn't do a good job in terms of due diligence. Fair enough. We have write offs for that. I get it. But that doesn't mean that we're going to have a global financial crisis. I mean, David, that's where I think it we we for whatever reason because of social media, people selling books or people selling news, you know, newsletters. Every every event that we deal with, we take it to the, you know, 11 to use Spinal Tap where it's a global financial crisis or the US dollar is never going to be used again. It's great for selling subscriptions and books, but as long-term investors, I mean, I would sit there and take the other side. I think there are very good regional banks that are on sale right now. And Scott Bent has said that he wants to deregulate US banking specifically specifically the regional banks because the money center banks were not getting money into Wall Street I mean sorry into Main Street. So, I think it's on a case-byase basis. It's not the global financial crisis. Let it settle out. And again, Mr. Diamond is giving a an extrapolation. I I just don't I don't see it happen. Remember, he hated Bitcoin. Now, he loves it. >> Uh I want to come back to Bitcoin just a minute. Okay. So, which of the Trump administration's policies regarding either trade uh or business development or deregulation um have benefited American businesses most? In other words, uh let's identify the most pro business policies that he's enacted so far and which sectors in particular have benefited the most from these new policies. >> Well, I would say right now the one that everybody should focus on is the 100% expensing of capex. So I think that is going to drive the hyperscalers and anybody in capex to basically invest within the United States that is a tangible thing. So companies like me like for I'll just use Meta or or these companies that are generating huge amounts of free cash flow now have a h have a question to ask when they're determining what they're how they're going to distribute. Are we going to buy back stock, pay a dividend, or are we going to spend money to basically go for the holy grail, which is artificial general intelligence, right? And if we get that, then I think that's where the growth comes from. And I think that's great. And so that's where I think you're going to see earnings growth for the for the markets go. So that to me, that's the most important. We still have to come on, you know, we still have crypto deregulation. We still have a lot of other deregulations within the energy industry that are going on. But you know to be clear it's these progrowth supply side policies that happened in the 1990s as well right even under even under Clinton and Gore that generated fantastic economic growth and at the same point in time brought King dollar back to the forefront. And I think that is the trade that people or the positioning people have to have to um you know square the circle with. We could be in an episode for the next five years where the dollar has a mat a substantial strong counter trend rally and is strong. Even though maybe the long-term theme is that there's going to be a weaker dollar. I suggest to you that people have to start thinking about this as opposed to just saying that the dollar is done and dusted. >> Let's talk about the new Bretton Woods 2.0 that you mentioned to me in December 2024. You were on the show after that. >> I think people are missing the larger picture going back to bet in the sense that we are going to renegotiate Bretton Woods 2.0. Paul Ryan wrote a very interesting op-ed in the middle of the summer and and I'm just going to bore you for a sec here, David. What people miss is that when we take a $1,000 and convert it into our a digital wallet, then we buy Bitcoin, there's an intermediate step which is we convert it or called digital transformation where we convert it into a stable coin. Okay? They're going to legislate stable coins to be backed by US Treasury. Okay? When you do that, what we have just done just because of that simple little step, the bill is on President Trump's desk. What is going to happen is you are going if Bitcoin goes to 20 trillion or the same size as gold you have just created a massive demand for US treasuries and you know what that means that whole narrative of fiscal dominance that interest rates have to go higher to finance the debt go down it gets flushed down the toilet but I want to bring up that particular interview it was a rather preaching call because what happened post December 2024 was a series of new policies and legislations the Genius Act I've mentioned. Let's go back to the Genius Act one more time. What definitively would you have to see to to to validate your thesis that treasuries and stable coins in particular are going to be the new backing for a new Bretonwoods 2.0? What landmarks and um and goalpost do we need to get? We'll get through that act, get through the clarity act, and then and then just allow this technology to start to permeate throughout society, right? And and you know, just you know, we want it right now. We want it, you know, in just in time or sorry, we want it today. the policies are now set in place to anchor the US dollar and US treasuries within within the stable coins. And so from that, let's allow the evolution of the technology to reach our global economy and take care of it. And as it does that, there's going to be a demand for US treasuries and the US dollar. Now, is it going to supplant it? No. But at the same point in time, it's it's the beginning. and let's let this evolutionary process begin. So, look, it Trump's the Bitcoin or the crypto president. And so, you know, the Fed is finally getting on side. You know, blockchain is going to evol revolutionize Wall Street. I mean, when you think about Wall Street and New York finally recognizing that New York City should be the crypto financial center of the world. and they do. Imagine what type of innovation is going to start to come through with tokenizations and with these large financial institutions finally putting the back end of our financial markets on the blockchain. So, it's already happening, David. There's not going to be one definitive aha moment, but it's going to be slowly and surely we're going to see this technology take hold. This is from the treasury website dated last October, a year ago. Digital assets and the treasury market. Um in this presentation, an interesting statement here. Increased inclusion in demand, tokenization can make treasuries more accessible to a wider range of investors, including smaller retail investors through fractionalization and those in emerging markets. Let's unpack this. They're going to fractionalize treasuries through the blockchain. um and hopefully gain access to a much wider investment pool. Uh first of all, let's talk about the second order effects on the US dollar itself and the term premium. >> I just think it's when you think about what this means is things are being put in place for the US dollar to hang around and be a major player. Then when you start to fractionalize something, think about you you can purchase $35 worth of a US treasury. You don't have to sp buy a hundred thou a thou sorry $1,000 if your broker will give it to you or you have to buy an ETF or or an actively traded fund. You can basically invest in directly in a proportion of a bare asset. So it's going to change everything. It's going to change settlement. It's going to change the way profits are determined on Wall Street. It's going to change how we settle trades on Wall Street. So, it's a massive revolution which I would suggest to you that Wall Street has been through regulatory capture has been trying to put off. And I think what the Trump administration has done is basically said we're going to allow evolution to happen, right? And then David, so it's going to happen. Now, let's see how this evolves and who the winners and losers are. And I would suggest to you on Wall Street, those people and those institutions that do not embrace will be left behind. Is this going to start some sort of mini banking crisis? Let's suppose stable coins can start issuing yields. So, you you buy a stable coin, you put in your wallet, and you're earning a yield. Well, why am I putting my money in a bank then? That's going to spark a huge massive bank run, isn't it? In theory, >> they better start innovating, right? I mean, you Yeah. I mean, think about what's happening with Michael Sailor and Micro Strategy, right? I mean, think about what's happening with Tom Lee and and his Ethereum trust. Yeah. I mean, look at there's there are there is billions and billions of dollars of stranded capital on Wall Street. And now you've allowed innovation and competition for it. So this is why traditional banks have to innovate or they go away. And that means those banks that do innovate and evolve should get a higher multiple, shouldn't they? And that's why when you look at Michael Sailor and and you look at strategy, you should look at their Bitcoin holdings as pristine collateral. You just asked me a while back about, you know, what about, you know, Jamie Diamond saying there's a cockroach theory and and yada yada yada. Well, here's what I know about Micro Strategy and their collateral and their capital. It's pristine and it's on the blockchain and it's 100% transparent. How many banks can you say that about their book? they better be careful because the wave of innovation is coming and unfortunately or fortunately depending on how you are as an investor the average investor hasn't woken up to this and you know it's the Jim Chain of oh we're going to we're going to do what you do and we're going to basically we're going to short Micro Strategy and buy Bitcoin without even taking the long-term view. What is Sailor going to do with all that Bitcoin? He's told you he's going after the stranded capital on Wall Street that that that Wall Street banks have had to themselves for decades. That is the battleground. And if you can provide yield, safe yield, then you've got a competitive product that goes against the status quo on Wall Street. >> All right. Well, let's uh finalize the um portfolio allocation aspect of the conversation here. So given everything we've talked about, what do you overweight right now? >> I like I uh still like growth. I still don't think the AI bubble is anywhere close to popping in my bucket of let's say the uh the basement trade between having a bucket of let's say Ethereum, Bitcoin, gold and silver. I have been you know for the last month banging pots and pans saying get out of gold and silver and buy Bitcoin and Ethereum. I think that's a great trade. And I also think you really have to start sniffing around interest rate sensitive areas in the market because the Fed is going to stop QT and they're going to cut rates. So you're going to and and the bond vigilantes will have to finally wake up to the fact and they are that the long end of the curve is coming down. The United States has the flattest curve. So, you've got to understand and wake up to the fact that all of these Cassandra that have been sitting there screaming that the US debt market is is is toxic and going to blow up is absolutely 100% wrong. Where are they now? You don't hear them. Six to eight months ago, David, what did we hear daily? 10 years going to 10%. It's under four, Dave. It's under four. >> Okay. Uh interest rates. Let's talk let's talk about the 10 year uh into 2026. Where is it going? >> Next stop 350. >> Okay. >> 350 3. But it could and all these things you could overshoot because of the craziness that's happening, right? I mean the problem with the the high sorry the fixed income market is is hedge funds are now a predominant player. So you could get overshoots to the upside and the downside. I think, you know, around I think the other interesting thing is going to be is when the Fed stops contracting their balance sheet, they're going to stop selling mortgage back securities, which means mortgage rates are going to come down faster than the 10-year. >> On the economy, we've talked about the US. Let's let's close off in Canada and the US now because we're uh we're both based in Canada. You've argued that uh Canada lacks perhaps a cohesive industrial policy. It lags behind the US on on tech and AI. Uh the CAD weakness in the past has maybe reflected productivity. Now what is Canada's playbook to turn this around? Canada has to basically recognize that Trudeau and Freedelland's economic policy for the last 10 years have been an absolute catastrophe and they have to start working back. And I think that's what Carney's going to do. And if you think about what Carney's trying to do, what are the short-term solutions? Look, David, let's be honest. We don't have a big enough economy here to have an auto industry. Okay? Doug Ford here in southern Ontario is freaking out. We don't have it. We've got to get to our competitive advantage and start exploiting it and that is natural resources and then pivot and become an AI superpower. So I would expect the keystone to be built. I would expect you know and Carney has the power but at the same point in time it's going to take a long period of time for Canada to get back on its feet again. the United States is in a much better place. So I think Canada is going to go through a balance sheet recession. I think the Bank of Canada's lag. I think the United States is in a different position because the US consumer is not as bad off. And then if you bring rates down dramatically, you could get the consumer really starting to support the economy along with the capex. So I think the United States is the place to be in terms of economic growth. That's why I think all the Fed has to do and I wish they would have done it because monetary policy has such a lag. If they get fed the Fed fund rate down to let's say 275 250 and stop QT I think the US economy is going to kick in and be okay. I can't say the same for Canada. >> Carney used to head the Bank of Canada. Do you think he's putting on the same amount of pressure to lower rates on the Bank of Canada as Trump is with the US Fed? I think I but you know he's a central banker but he's also a Wall Street veteran and and I think that he understands the decision that needs to h I I think he clearly understands the difficult position that Canada is in and I think he really understands also that that that shall we say um how we feel as a community up here is we are tired with the climate change narrative And we know that because according to Angus Reed, 60% of Canadians want pipelines. So I think we have got he's going to put in place on starting November 4, he's going to use the government balance sheet, which is in a much better position than the Americans, to basically support the economy. I think he's got to deal with his his cabinet, which are basically Trudeau acolytes. and but at the same point I think he understands what he needs to do and he will do it. The question is how long will it take for Canada as an economy to recover and then Dave I think the other question is how does global capital respond to it right I mean it will global capital respond positively I think they will but here's the thing Dave gold is 13% of the TSX right now right the only thing that's really saved the TSX this year was having a massive weighted gold so you know I think, you know, I think the big run in the TSX relative to the S&P is over because the big run in gold is over. Like, you've made your money. The big money in Agniko Eco has been made, right? The big money in gold has been made. Now, with the pullback, everybody's going to rush in to make their portfolios look good because they're going to have two to three% in gold. >> Are you bullish on the Canadian dollar then? In other words, are you bullish on Carney's policies? No, I think I think can the Canadian dollar is going to hang here for a period of time. I think if he doesn't embrace changing and understanding that the industrial policy of Canada lies in Quebec and doesn't lie in Quebec and Toronto, but it lies in Alberta, Manitoba, and Saskatchewan. Once the industrial policy moves west, then I think we're going to be okay. If he does not do it, David, then the dollar is going to go the CAD's going to go under 70 like down to 65 to 63. He has to do this and he's a smart guy. He's pragmatic. He'll live to fight another day. But the the question really comes is what does a TSX do? What are the risk assets up here in Canada? Are we going to get a commodity super cycle? Canada has a ton a ton of rare earth that we haven't developed. We've got LG in New Fallon that hasn't been developed. You know what does it look like when we build pipelines to Churchill and make Churchill a 12-month tidewater report? Uh a tw tide water port. What are you know he can build and spend money and and and also kill two birds with one stone by developing his commodity resource economy and also satisfying the 5% he needs to spend of GDP on NATO. So it's going to happen. He's very smart. How do risk assets respond? And I would say to you that, you know, with 13% of gold now in the TSX, that's typically significantly too much and we need a pullback. And then let's go back to our conversation about real estate. David, what does the Toronto and Vancouver real estate look like at 1% Bank of Canada overnight rates in the spring? Okay, that's one, right? Because I'm thinking Canadian banks. And two, listen to what Carney says when he's in the Oval Office with the president. There's a lot a lot that that happens between the United States and Canada that they agree on in terms of trade. There are areas of competition. David, one of the areas of competition is financial services. Canadian banks can overearn up in Canada because they are regulatory. They are protected by the regulators. Earn overearn up in thei Canada and take that excess capital and take it to compete in the United States. I think that is going to be up for discussion between Carney and and Trump in the sense that you know so what's up for competition? uh dairy farmers in Quebec, telecommunications. So that would be Rogers, airlines, and uh shall we say banks. And I honestly think that the financial services industry is they're going to sit down and they're going to figure out how to be 100% free in terms of competition. And the and when I say and I'll say this, I say read to a lot of people, read the room. And here's the thing I'm so surprised about, Dave. Mark Carney before he became prime minister was the head of Brookfield. Brookfield moved their head their head office to to New York City. Brookfield's a US company. >> I rest my case. >> Did this happen before this happened before Carney took office, right? >> This is the one of the last things he did when he was ahead of Brookfields. Yes. >> Yeah. Let's wrap it up here. Um, great talk. We'll follow up more on the Canada US situation and uh I'm just Yeah. I let's just see how Carney and Trump's relationship develops. It's only his first year in office. Both of them actually. Um so well Trump's second term, but you know what I mean. Thank you. Where can we follow you Jim? >> Uh Dr. Dr. J Strategy. It's onx or Wellington altus.com. >> Okay. We'll put the links down below. Follow Jim there. And uh don't forget to subscribe to this channel. Stay tuned for more. And uh we'll see you next time. Thank you, Jim.
Bretton Woods 2.0 Begins, What Happens To Bitcoin, Gold Next? | Jim Thorne
Summary
Transcript
Gold and Bitcoin will probably outperform real estate over the next 5 to 10 years. We are going to have a capex super cycle. The holy grail is going to be artificial general intelligence. Gold has taken the front page right now. I think it's going to pause and other asset classes are going to take the mantle. I think we go to 74 to 7500 by the spring. >> Which has more upside right now, Bitcoin or gold? And I would suggest to you that >> our next guest is Jim Thorne. He is the chief market strategist at Willington Altis Private Wealth. He's returning to the show once more to give us his update on market conditions, current market conditions. Jim is calling for $5,000 gold. And previously on my show, he said Bitcoin's going to $500,000. We'll find out when and how and uh what's currently going on with investor sentiment right now. Jim, welcome back to the show. Good to see you. >> Good to see you, Dave. It's been too long. >> It's uh it's been too long. Time flies when the market's flying as well. Let's talk about this market flying. There seems to be some profit taking the precious metals today. We'll talk about that. But broadly speaking, just back up a minute. Why are you so bullish on alternative assets? >> Well, I think go back to the first conversation we had, it's almost a year ago where we said that if Trump gets elected and he doesn't put in a good secretary of the Treasury, we have a real shot at a financial crisis. And what President Trump did is he put in Scott Bent, who's probably going to go down as one of the top uh secretary of the treasuries that we've ever had. And so what are we getting from him? We're getting supply side economics and we're getting a deficit that's starting to decline. And so we're starting to see evidence that the Trump administration is deficit friendly. We see the four the the 10-year yield dropping below 4%. Remember Dave, a lot of people were calling for 10%. And so we've got a situation where, you know, the fears from last year are being put aside. And then I would add to you is that look, we are in a technology wave. The Fed is going to start cutting or continue to cut rates. And in the big beautiful bill, Trump or President Trump has said that he's going to do 100% tax deductibility on capex up until Janu 2031. So we are going to have a capex super cycle. The holy grail is going to be artificial general intelligence. We've got to grow electricity capacity somewhere between 90 and 100 gaww. David, a nuclear reactor is one gigawatt. So, we're very very early on in in this theme. 7,000 for the S&P was my target coming into this year. We're just chugging along. I've haven't changed my target. And, you know, now what I would think suggest is going to happen is, you know, parabolic moves are to be sold. I would suggest to you that they're sell going to sell gold and they're going to buy Bitcoin and we're going to climb the wall of worry higher. >> The issue is when at what point in the parabola, so to speak, should we start booking profits? How do you make that decision when something's rising parabolically? At what point or what indicators do you as an investor look at to make a stop? >> Well, it would be the chart right now. I mean, you look at what gold and gold stocks are doing right now. And really, nothing has changed in the narrative. Let me be totally clear. I am still a long-term bull on gold. I do not suggest you buy parabolic moves. So, what I would suggest you do is is look at I think there's going to be a retracement back to the Fibonacci level of 61.8. That's about, you know, in gold that's about, you know, 3,700, you know, and so or go back to the 50-day moving average. We're going to have a pullback, a grind sideways, and then a move higher just like Bitcoin has been going through right now. A very, very frustrating consolidation pattern. So, in terms of the long-term thematics, nothing has changed. Where I will push back, David, is if I hear too many people saying that this is the end of the US dollar and this is the end of the US Treasury. uh and I completely disagree with that point of view. >> There's a theory circulating on the internet um I think it started with uh with uh a Russian economist that the US is trying to devalue away its debt, its $ 37 trillion worth of debt by issuing stable coins. Now, I I I don't know if there's any credence to that theory, but essentially if the Genius Act mandates that new US Treasury, sorry, new stable coin issuances have to be backed by US treasuries, well, essentially they're creating demand for treasuries, basically forcing people to buy off their debt. That kind of makes sense when you think about it, doesn't it? >> Yes. And you know, I mean, uh, uh, Paul Ryan, former, uh, vice president candidate and former speaker of the house, he wrote an oped about this last year. I mean, it makes complete and total logical sense that if you have stable coins that are backed or, you know, let's legislate stable coins the same way we legislate money market funds, we we create a demand for treasuries and and in fact, stable coins are now a very large purchase of treasuries. So, you know, we're moving into a digital payment system and as we talk about as we're talking about a recording today, the Federal Reserve is having a symposium on crypto and Bitcoin and the payment system and they are now seeing the light saying that we they need to open their system up to Bitcoin and crypto. So the evolutionary process is happening and to me is you know how this evolves is is is along the lines that the US dollar and the US treasuries are going I would rather own them than the euro or the 10-year French bond or the German bond or the Greek bond. I think it's, you know, you want to say it's it's it's the best house in the bad neighborhood, fine. But the narrative of of of excessive levels of debt needing to be inflated away has been a a a theme that's been around for decades and it's not profound. True, David. They're going to run it hot and they're going to get nominal GDP going. What's isn't it interesting this time around with the with the gold rally? We're not seeing any changes in margins, right? We're not seeing any gold being sold by central banks. I think the central banks that are holding a ton of gold are very happy with the appreciation of gold. It's gives their balance sheet help. So, I think this is just a stepbystep move where we're going to reflate our way out of this and gold has taken the front uh uh page right now. I think it's going to pause and other asset classes are going to take uh the mantle and I would suggest to you that right now the best guess would be Bitcoin and Ethereum. >> Which has more upside right now, Bitcoin or gold? Bitcoin to the for the next six months, Bitcoin has more upside than gold. >> Okay. Are you then also saying that stocks have more upside if we're making the assumption that Bitcoin is still correlated with stocks? >> Yes. I mean, typically speaking, the fourth quarter is very is the weakest quarter for gold. So I I am very comfortable with stocks going into the spring and Bitcoin running and gold having a let's add silver and gold and silver having a very healthy consolidation pattern and it grind for a bit. That doesn't mean that the that the rally is over. It's not over. But let's just they've gone way too far way too fast. You have too many short ter uh term traders in. Let them get out. let the system flops like with Bitcoin the leverage has been taken out of the system in blit Bitcoin so I think that's a much more attractive trade on a tactical basis but David look in the long frame looking at a 50,000 ft gold and Bitcoin are the manifestation of the same trade so trade your bucket of Bitcoin and gold accordingly >> the notion that stocks and risk assets may still have momentum to the upside. Is that predicated on a economic growth, b Fed loosening policy, uh c fiscal policy, all the above or none of the above? >> Oh, so you've got you've got a brand new sheriff in town in terms of fiscal policy. So, we're just introducing supply side economics into into uh our our genre. We're moving away from Keynesianism. That's one. The Fed's going to cut. The Fed's going to stop QT. So that's another and you know you've got this period of time whereas if you've got a 100% tax deductibility on capex and you've got a need for energy you're going to see earnings growth in particular areas of the economy. >> Let's talk about the trade war. The ongoing trade war with China, US and China is now ratcheting up. 100% tariffs on China now announced by Trump expected to take effect November 1st. if no deal is reached before then, Jim, what's going to happen to the global economy and more importantly uh for US and Canadian audiences, the Western North American economies once this takes effect, if it does, >> well, if it does take effect, it's going to be very painful. I just think what we're doing is we're we're we're living the art of the deal where where Trump and and and and she are doing their dance. Uh everybody needs to live with each other. Trump and and uh she are going to cut a deal and they're going to live the fight another day. Look at Trump needs the market to be much higher by the midterm elections. He's going to temper his his his rhetoric. I think we go to 74 to 7500 by the spring, a normal little correction, and then 8,000 by the end of next year. So, I'm really not, you know, I, you know, I am not getting head faked away by the tariff fear like so many other people are. And it's, you know, since April, it's it's, you know, our clients at Wellington have been taken um have been have been very been treated very handsomely by taking that tap. >> Okay, we have to look at this week's inflation numbers. Uh, it's coming out Friday. CPI is coming out Friday. People are watching for it and waiting for it. Uh this leads back to tariff discussion. Are you expecting the inflation number uh this uh week to come out even hotter than the previous month? In other words, are you expecting tariffs to finally show its impact on inflation numbers? >> I think you may see a little bit of an uptick. But David, if you if you input market-based real estate numbers into the CPI and PCE, you've got very low uh inflation and you've got very low PCE. You know, I mean, LAR in their last quarter said, you know, year-over-year new home sell selling prices are down 9%. You know, the Cleveland Fed rent, new rent uh index is s significantly negative. Even up here in Canada, everything that's been driving the CPI number is shelter, which is a lag flaw variable. So I think people are going to see beyond that and re realize the fact that the that the economy is also the real estate mark sorry the the employment market is not balanced. It's slowing and we're in this period of time where the Fed's going to stop QT stop NBS sales and bring rates down to 275 the neutral rate. That's our trade between now and the middle to end of 26. >> With interest rates coming down to that kind of a level, what do you think asset prices will do in response? >> They'll go up, right? And I think the interesting thing you're call I think you're you're you're uh you're recording from Vancouver and I'm in Toronto. I think the interesting thing for us is going to be I think the Bank of Canada has to get their interest rates down to about 1%. Will the real estate market in Vancouver and Toronto, which are very expensive on a relative global basis, do we start to see a bounce or not? That will be the question. Just on that note, uh since you've touched on Canadian real estate, uh much of the real estate in Vancouver, um the the valuation has been propped up over the last 15 years uh by by foreign buyers in uh in the Middle East, in Asia, China in particular. How much of that is going to be sustainable? Right now, we're seeing a bit of a dip. I'm not sure about Toronto, but in downtown Vancouver, for example, uh rent starting to slide. Um condo prices have been sliding for more than a year now. And with tensions between China and the Canadian government, not great. Uh I wonder how much of um foreign support is going to be given to the real estate market going forward or if that's even an important variable. How do you assess that? >> Yeah, I think it's a knock-on effect of the global financial crisis when the Canadian banks didn't blow up. And when that was the case, I think you know, foreign foreign capital said, you know what, Canada is a safe place to be to be to to have some money. And the and and the way to do that was through buying real estate, whether you were from from China or from other areas of the world. I still don't think see that going away. Yeah. And you know, could you have a little bit of a pullback here or there? Yes. But I think Dave, the more importantly, it's going to be very interesting to see how real estate as a whole in the in a global framework competes against gold and Bitcoin and other assets as interest rates come down. Will they have the leadership position that they had in Canada after the global financial crisis? I say no. But it might go back to their traditional appreciation and and I think at with that then I think gold and bitcoin will probably outperform real estate over the next 5 to 10 years but I am not calling for a real estate crash. >> There's some regional banking uh problems that's happening in the US right now. Zion's bank corp fell. um Western Alliance Bank shares fell and uh JP Morgan, Jamie Diamond, I believe, uh told the media that he thinks regional banks are cockroaches. Is uh is this is this is this a precursor to a larger systemic banking crisis that we're seeing right now? >> No. And and I guess, you know, I I I wish I wish Jamie Diamond would just I think his franchise in terms of pro prognostication on the markets is is getting a little bit extended. Look, there's going to be criminals or malfusions in in our market all the time. So, we had a we had a a a situation where a loan a loan portfolio was pledged a number of times. That has I I get it and that's bad and it's serious. It has nothing to do with the global financial crisis. Okay? The global financial crisis was caused because of near-term money instruments. We couldn't settle and the money market funds broke the buck. Okay? That's what happened in September and it was a settlement issue. It's a shame that a leader of a major money- centered bank would actually say something as I'll call it as lazy as that. So in in investing, you know, in in any financial institution, the United States, Canada, money centered banks in Canada or the United States, there's always a problem that their loan process, you know, doesn't do a good job in terms of due diligence. Fair enough. We have write offs for that. I get it. But that doesn't mean that we're going to have a global financial crisis. I mean, David, that's where I think it we we for whatever reason because of social media, people selling books or people selling news, you know, newsletters. Every every event that we deal with, we take it to the, you know, 11 to use Spinal Tap where it's a global financial crisis or the US dollar is never going to be used again. It's great for selling subscriptions and books, but as long-term investors, I mean, I would sit there and take the other side. I think there are very good regional banks that are on sale right now. And Scott Bent has said that he wants to deregulate US banking specifically specifically the regional banks because the money center banks were not getting money into Wall Street I mean sorry into Main Street. So, I think it's on a case-byase basis. It's not the global financial crisis. Let it settle out. And again, Mr. Diamond is giving a an extrapolation. I I just don't I don't see it happen. Remember, he hated Bitcoin. Now, he loves it. >> Uh I want to come back to Bitcoin just a minute. Okay. So, which of the Trump administration's policies regarding either trade uh or business development or deregulation um have benefited American businesses most? In other words, uh let's identify the most pro business policies that he's enacted so far and which sectors in particular have benefited the most from these new policies. >> Well, I would say right now the one that everybody should focus on is the 100% expensing of capex. So I think that is going to drive the hyperscalers and anybody in capex to basically invest within the United States that is a tangible thing. So companies like me like for I'll just use Meta or or these companies that are generating huge amounts of free cash flow now have a h have a question to ask when they're determining what they're how they're going to distribute. Are we going to buy back stock, pay a dividend, or are we going to spend money to basically go for the holy grail, which is artificial general intelligence, right? And if we get that, then I think that's where the growth comes from. And I think that's great. And so that's where I think you're going to see earnings growth for the for the markets go. So that to me, that's the most important. We still have to come on, you know, we still have crypto deregulation. We still have a lot of other deregulations within the energy industry that are going on. But you know to be clear it's these progrowth supply side policies that happened in the 1990s as well right even under even under Clinton and Gore that generated fantastic economic growth and at the same point in time brought King dollar back to the forefront. And I think that is the trade that people or the positioning people have to have to um you know square the circle with. We could be in an episode for the next five years where the dollar has a mat a substantial strong counter trend rally and is strong. Even though maybe the long-term theme is that there's going to be a weaker dollar. I suggest to you that people have to start thinking about this as opposed to just saying that the dollar is done and dusted. >> Let's talk about the new Bretton Woods 2.0 that you mentioned to me in December 2024. You were on the show after that. >> I think people are missing the larger picture going back to bet in the sense that we are going to renegotiate Bretton Woods 2.0. Paul Ryan wrote a very interesting op-ed in the middle of the summer and and I'm just going to bore you for a sec here, David. What people miss is that when we take a $1,000 and convert it into our a digital wallet, then we buy Bitcoin, there's an intermediate step which is we convert it or called digital transformation where we convert it into a stable coin. Okay? They're going to legislate stable coins to be backed by US Treasury. Okay? When you do that, what we have just done just because of that simple little step, the bill is on President Trump's desk. What is going to happen is you are going if Bitcoin goes to 20 trillion or the same size as gold you have just created a massive demand for US treasuries and you know what that means that whole narrative of fiscal dominance that interest rates have to go higher to finance the debt go down it gets flushed down the toilet but I want to bring up that particular interview it was a rather preaching call because what happened post December 2024 was a series of new policies and legislations the Genius Act I've mentioned. Let's go back to the Genius Act one more time. What definitively would you have to see to to to validate your thesis that treasuries and stable coins in particular are going to be the new backing for a new Bretonwoods 2.0? What landmarks and um and goalpost do we need to get? We'll get through that act, get through the clarity act, and then and then just allow this technology to start to permeate throughout society, right? And and you know, just you know, we want it right now. We want it, you know, in just in time or sorry, we want it today. the policies are now set in place to anchor the US dollar and US treasuries within within the stable coins. And so from that, let's allow the evolution of the technology to reach our global economy and take care of it. And as it does that, there's going to be a demand for US treasuries and the US dollar. Now, is it going to supplant it? No. But at the same point in time, it's it's the beginning. and let's let this evolutionary process begin. So, look, it Trump's the Bitcoin or the crypto president. And so, you know, the Fed is finally getting on side. You know, blockchain is going to evol revolutionize Wall Street. I mean, when you think about Wall Street and New York finally recognizing that New York City should be the crypto financial center of the world. and they do. Imagine what type of innovation is going to start to come through with tokenizations and with these large financial institutions finally putting the back end of our financial markets on the blockchain. So, it's already happening, David. There's not going to be one definitive aha moment, but it's going to be slowly and surely we're going to see this technology take hold. This is from the treasury website dated last October, a year ago. Digital assets and the treasury market. Um in this presentation, an interesting statement here. Increased inclusion in demand, tokenization can make treasuries more accessible to a wider range of investors, including smaller retail investors through fractionalization and those in emerging markets. Let's unpack this. They're going to fractionalize treasuries through the blockchain. um and hopefully gain access to a much wider investment pool. Uh first of all, let's talk about the second order effects on the US dollar itself and the term premium. >> I just think it's when you think about what this means is things are being put in place for the US dollar to hang around and be a major player. Then when you start to fractionalize something, think about you you can purchase $35 worth of a US treasury. You don't have to sp buy a hundred thou a thou sorry $1,000 if your broker will give it to you or you have to buy an ETF or or an actively traded fund. You can basically invest in directly in a proportion of a bare asset. So it's going to change everything. It's going to change settlement. It's going to change the way profits are determined on Wall Street. It's going to change how we settle trades on Wall Street. So, it's a massive revolution which I would suggest to you that Wall Street has been through regulatory capture has been trying to put off. And I think what the Trump administration has done is basically said we're going to allow evolution to happen, right? And then David, so it's going to happen. Now, let's see how this evolves and who the winners and losers are. And I would suggest to you on Wall Street, those people and those institutions that do not embrace will be left behind. Is this going to start some sort of mini banking crisis? Let's suppose stable coins can start issuing yields. So, you you buy a stable coin, you put in your wallet, and you're earning a yield. Well, why am I putting my money in a bank then? That's going to spark a huge massive bank run, isn't it? In theory, >> they better start innovating, right? I mean, you Yeah. I mean, think about what's happening with Michael Sailor and Micro Strategy, right? I mean, think about what's happening with Tom Lee and and his Ethereum trust. Yeah. I mean, look at there's there are there is billions and billions of dollars of stranded capital on Wall Street. And now you've allowed innovation and competition for it. So this is why traditional banks have to innovate or they go away. And that means those banks that do innovate and evolve should get a higher multiple, shouldn't they? And that's why when you look at Michael Sailor and and you look at strategy, you should look at their Bitcoin holdings as pristine collateral. You just asked me a while back about, you know, what about, you know, Jamie Diamond saying there's a cockroach theory and and yada yada yada. Well, here's what I know about Micro Strategy and their collateral and their capital. It's pristine and it's on the blockchain and it's 100% transparent. How many banks can you say that about their book? they better be careful because the wave of innovation is coming and unfortunately or fortunately depending on how you are as an investor the average investor hasn't woken up to this and you know it's the Jim Chain of oh we're going to we're going to do what you do and we're going to basically we're going to short Micro Strategy and buy Bitcoin without even taking the long-term view. What is Sailor going to do with all that Bitcoin? He's told you he's going after the stranded capital on Wall Street that that that Wall Street banks have had to themselves for decades. That is the battleground. And if you can provide yield, safe yield, then you've got a competitive product that goes against the status quo on Wall Street. >> All right. Well, let's uh finalize the um portfolio allocation aspect of the conversation here. So given everything we've talked about, what do you overweight right now? >> I like I uh still like growth. I still don't think the AI bubble is anywhere close to popping in my bucket of let's say the uh the basement trade between having a bucket of let's say Ethereum, Bitcoin, gold and silver. I have been you know for the last month banging pots and pans saying get out of gold and silver and buy Bitcoin and Ethereum. I think that's a great trade. And I also think you really have to start sniffing around interest rate sensitive areas in the market because the Fed is going to stop QT and they're going to cut rates. So you're going to and and the bond vigilantes will have to finally wake up to the fact and they are that the long end of the curve is coming down. The United States has the flattest curve. So, you've got to understand and wake up to the fact that all of these Cassandra that have been sitting there screaming that the US debt market is is is toxic and going to blow up is absolutely 100% wrong. Where are they now? You don't hear them. Six to eight months ago, David, what did we hear daily? 10 years going to 10%. It's under four, Dave. It's under four. >> Okay. Uh interest rates. Let's talk let's talk about the 10 year uh into 2026. Where is it going? >> Next stop 350. >> Okay. >> 350 3. But it could and all these things you could overshoot because of the craziness that's happening, right? I mean the problem with the the high sorry the fixed income market is is hedge funds are now a predominant player. So you could get overshoots to the upside and the downside. I think, you know, around I think the other interesting thing is going to be is when the Fed stops contracting their balance sheet, they're going to stop selling mortgage back securities, which means mortgage rates are going to come down faster than the 10-year. >> On the economy, we've talked about the US. Let's let's close off in Canada and the US now because we're uh we're both based in Canada. You've argued that uh Canada lacks perhaps a cohesive industrial policy. It lags behind the US on on tech and AI. Uh the CAD weakness in the past has maybe reflected productivity. Now what is Canada's playbook to turn this around? Canada has to basically recognize that Trudeau and Freedelland's economic policy for the last 10 years have been an absolute catastrophe and they have to start working back. And I think that's what Carney's going to do. And if you think about what Carney's trying to do, what are the short-term solutions? Look, David, let's be honest. We don't have a big enough economy here to have an auto industry. Okay? Doug Ford here in southern Ontario is freaking out. We don't have it. We've got to get to our competitive advantage and start exploiting it and that is natural resources and then pivot and become an AI superpower. So I would expect the keystone to be built. I would expect you know and Carney has the power but at the same point in time it's going to take a long period of time for Canada to get back on its feet again. the United States is in a much better place. So I think Canada is going to go through a balance sheet recession. I think the Bank of Canada's lag. I think the United States is in a different position because the US consumer is not as bad off. And then if you bring rates down dramatically, you could get the consumer really starting to support the economy along with the capex. So I think the United States is the place to be in terms of economic growth. That's why I think all the Fed has to do and I wish they would have done it because monetary policy has such a lag. If they get fed the Fed fund rate down to let's say 275 250 and stop QT I think the US economy is going to kick in and be okay. I can't say the same for Canada. >> Carney used to head the Bank of Canada. Do you think he's putting on the same amount of pressure to lower rates on the Bank of Canada as Trump is with the US Fed? I think I but you know he's a central banker but he's also a Wall Street veteran and and I think that he understands the decision that needs to h I I think he clearly understands the difficult position that Canada is in and I think he really understands also that that that shall we say um how we feel as a community up here is we are tired with the climate change narrative And we know that because according to Angus Reed, 60% of Canadians want pipelines. So I think we have got he's going to put in place on starting November 4, he's going to use the government balance sheet, which is in a much better position than the Americans, to basically support the economy. I think he's got to deal with his his cabinet, which are basically Trudeau acolytes. and but at the same point I think he understands what he needs to do and he will do it. The question is how long will it take for Canada as an economy to recover and then Dave I think the other question is how does global capital respond to it right I mean it will global capital respond positively I think they will but here's the thing Dave gold is 13% of the TSX right now right the only thing that's really saved the TSX this year was having a massive weighted gold so you know I think, you know, I think the big run in the TSX relative to the S&P is over because the big run in gold is over. Like, you've made your money. The big money in Agniko Eco has been made, right? The big money in gold has been made. Now, with the pullback, everybody's going to rush in to make their portfolios look good because they're going to have two to three% in gold. >> Are you bullish on the Canadian dollar then? In other words, are you bullish on Carney's policies? No, I think I think can the Canadian dollar is going to hang here for a period of time. I think if he doesn't embrace changing and understanding that the industrial policy of Canada lies in Quebec and doesn't lie in Quebec and Toronto, but it lies in Alberta, Manitoba, and Saskatchewan. Once the industrial policy moves west, then I think we're going to be okay. If he does not do it, David, then the dollar is going to go the CAD's going to go under 70 like down to 65 to 63. He has to do this and he's a smart guy. He's pragmatic. He'll live to fight another day. But the the question really comes is what does a TSX do? What are the risk assets up here in Canada? Are we going to get a commodity super cycle? Canada has a ton a ton of rare earth that we haven't developed. We've got LG in New Fallon that hasn't been developed. You know what does it look like when we build pipelines to Churchill and make Churchill a 12-month tidewater report? Uh a tw tide water port. What are you know he can build and spend money and and and also kill two birds with one stone by developing his commodity resource economy and also satisfying the 5% he needs to spend of GDP on NATO. So it's going to happen. He's very smart. How do risk assets respond? And I would say to you that, you know, with 13% of gold now in the TSX, that's typically significantly too much and we need a pullback. And then let's go back to our conversation about real estate. David, what does the Toronto and Vancouver real estate look like at 1% Bank of Canada overnight rates in the spring? Okay, that's one, right? Because I'm thinking Canadian banks. And two, listen to what Carney says when he's in the Oval Office with the president. There's a lot a lot that that happens between the United States and Canada that they agree on in terms of trade. There are areas of competition. David, one of the areas of competition is financial services. Canadian banks can overearn up in Canada because they are regulatory. They are protected by the regulators. Earn overearn up in thei Canada and take that excess capital and take it to compete in the United States. I think that is going to be up for discussion between Carney and and Trump in the sense that you know so what's up for competition? uh dairy farmers in Quebec, telecommunications. So that would be Rogers, airlines, and uh shall we say banks. And I honestly think that the financial services industry is they're going to sit down and they're going to figure out how to be 100% free in terms of competition. And the and when I say and I'll say this, I say read to a lot of people, read the room. And here's the thing I'm so surprised about, Dave. Mark Carney before he became prime minister was the head of Brookfield. Brookfield moved their head their head office to to New York City. Brookfield's a US company. >> I rest my case. >> Did this happen before this happened before Carney took office, right? >> This is the one of the last things he did when he was ahead of Brookfields. Yes. >> Yeah. Let's wrap it up here. Um, great talk. We'll follow up more on the Canada US situation and uh I'm just Yeah. I let's just see how Carney and Trump's relationship develops. It's only his first year in office. Both of them actually. Um so well Trump's second term, but you know what I mean. Thank you. Where can we follow you Jim? >> Uh Dr. Dr. J Strategy. It's onx or Wellington altus.com. >> Okay. We'll put the links down below. Follow Jim there. And uh don't forget to subscribe to this channel. Stay tuned for more. And uh we'll see you next time. Thank you, Jim.