Will Gold Price Collapse Continue? Lyn Alden On Market’s Next Big Moves
Summary
Precious Metals: Alden remains long-term constructive on gold, silver, and platinum despite a sharp pullback, noting prior structural undervaluation and the loss of asymmetry after parabolic moves.
Bitcoin: She sees near-term headwinds (weak external demand, broader crypto overvaluation, quantum-risk concerns) but still favors dollar-cost averaging with potential outperformance into 2026-2027.
Critical Minerals: Project Vault highlights a shift to industrial policy; Alden supports strategic stockpiles (uranium, rare earths) and is structurally bullish on commodity-linked supply chains.
Deglobalization: Expect flatter or declining globalization with more redundancy and resilience, implying less disinflation from supply chains and supportive dynamics for real assets.
Multipolar World: She expects a US- and China-centered order with other regional poles, which favors sovereign preference for metals over financial assets and supports decentralized settlement like Bitcoin.
US Equities: The US market remains a global leader given large, diversified, tech-heavy firms; she anticipates continued relative strength while keeping a diversified allocation.
Rates and Bonds: Post-2020 fiscal dominance suggests choppy-sideways yields rather than a renewed secular bond bull, making long-duration bonds less attractive versus real assets.
Transcript
we've been really in like a 50-year debasement trade. When you could buy silver in the teens, I I view that as pretty asymmetrical cuz it's hard to really kind of structurally go much lower than that. That I think that the the broader crypto space um there's like a trillion in market cap in the broader crypto space outside of Bitcoin. And I still think a lot of that's overvalued. We're entering a more multi-polar world. I I've been writing about that since at least 2020, probably, you know, somewhat before then. We're entering a world that's centered, you know, partially around the US, partially around China. Huge sell-off in commodities and market rotation happening right now on the 2nd of February as silver had its worst single day drop since 1980. It's now down 40% from its top on January 26th. Meanwhile, gold is down something like 20% from its top in January. So, what is next for the metals? What is next for Bitcoin? Bitcoin is also seeing a huge sell-off today. While stocks on the other hand are holding up quite well. What's next for the Fed and monetary policy after Kevin Walsh was nominated for the Fed chair. Next, Lynn Alden, founder of Lin Alden investment strategy, is back with us to dissect what's going on in the current market action and what is next with stocks, metals, Bitcoin, and much more. Lynn, welcome back to the show. Good to see you as always. >> You as well. Always happy to be here. >> Uh, let me just start with this tweet tweet uh that you made. So, uh, the happy Hawaiian has gold ever tanked 9% in an hour before. This was January 29th. When things trade like a meme coin to the upside, they are also at risk of doing so to the downside. If gold is a meme coin, then I guess silver is what you may call a super meme coin. Um, if there is such a thing, because silver is down literally 40% from its tops just a week ago. So Lynn, the question is why this trade is happening right now. Uh previously on your newsletter on December in December, you talked about the debasement trade happening in 2026. We'll talk about that. I wonder if that's still in because in the disbed the basement trade thesis, you had called for gold and silver and Bitcoin to do well and you have been so-called correct so far correct in 2026 for gold and silver. Now it's starting to unwind and you kind of called this unwind on Twitter last week as it was just about to happen. So just tell us from a macro perspective why this is happening right now. >> Yeah, good set of questions. I would separate these two concepts, the debasement trade and then this specific action uh in precious metals. And one of the kind of the the key takeaways I had in my debasement trade uh newsletter piece. Um, so I called it the so-called debasement trade and I was being a little sarcastic about it because that was like the new term that people were talking about. And my main point there is that we we've been really in like a 50-year debasement trade. Uh, and that, you know, outside of CO, there's not really a ton more happening now debasement wise. We are in fiscal dominance. So the source of debasement is more tied to fiscal deficits than it is to bank lending. So there's been an inversion of that. Uh and so some of the underlying mechanisms change over time and industries kind of lose their effectiveness uh in some ways. Um but so basically it's saying that we're still in the debasement trade that we've been in for for quite a while. Uh and so uh as it relates to precious metals, my my view so I've been bullish since 2018 um on on gold, silver, and platinum for a while. Platinum was kind of the the dog of the portfolio kind of going absolutely sideways uh for a frustrating number of years. Um, sometimes predicting the time in these things uh can be surprising. So, you know, for a while I was calling for gold to hit 3,000. Uh, and if you asked me would it hit 4,000 and 5,000 in such a rapid, you know, short period of time after hitting 3,000, it wouldn't have been to my base case. Same thing with silver. You know, I was looking to see $40 and $50 silver. I would not have guessed we touch $120 silver not that long after. Uh, so the rocket ship that these things went on uh was remarkable to me. So they they've they've crashed down to levels that were are still above a year ago if you asked me what I think they'd be right now. Right? So when uh when assets go vertical in price, uh you know, when when this these things are soaring, everybody on on Twitter X is just talking about it. Um everybody has opinion about either the top uh or that the idea that it can it can double again. Uh but everyone's talking about it either way. Uh that's when risk is super elevated. I mean relative strength indices uh like in measuring overbought status about as high as you get with these things uh or really almost any asset. Uh and so whenever you have that kind of extreme upside potential you risk extreme downside potential. It's it's kind of washing out momentum euphoria sometimes leverage. Um I right now I think you want to see the dust settle because these things have such a wide band that they can trade in because you know we talk about these being multi-trillion dollar assets uh in terms of like their their kind of estimated market cap that's above ground refined gold and silver and that's true but a fairly small amount of trading volume can really kind of dramatically change the price if traders get too much on one side versus the other side. Uh so I think the trade got over its skis. Um long term uh I I think you know I don't think this was a bubble in the sense that I don't think you know they deserve to be low. They soared up uh and then it's purely a bubble and they go all the way back down. Um but I do think that they got over the skis. The way I've been describing it is I think they've been structurally undervalued for a while. Uh they finally got kind of the recognition that they deserved. I think they've kind of traded back up closer to to you know fair value. Um, but now they're less asymmetrical. So when you could buy silver in the teens, I I view that as pretty asymmetrical because it's hard to really kind of structurally go much lower than that. Um, but as you've seen, there's plenty of upside potential. And the same is true for for gold and platinum, you know, to varying degrees. But when you've already soared quite a bit, um, there's both upside and downside potential. I I was on a um a podcast uh some maybe a month ago or so, some a while ago. I think I think silver was like 60 at the time. And they said, "Well, what do you think's first? 404 $40 silver or $100 silver?" And I said, "I literally don't know." When it's when it starts to go up that quickly, it can go either way. But the point is that when you already have gone that quickly, that asymmetry is gone. So, the fact that you don't know and it becomes a coin flip is is part of the risk compared to when you could you could buy it much cheaper. Let's take a look at the charts. It seems like gold may be responding maybe I'll let you comment on this maybe responding to some violent action in the dollar as well. The DXY had a rapid rebound and you tweeted about this um before it rebounded a breakdown in the dollar and seems pretty intentional. Many people will sens sensationalize it but it's still in the longer range for now uh in its longer range for now. Sub90 gets interesting. This was posted on the 27th of January when actually at the time it was at its then low. So you posted that at the low of the DXY. Since then it's been rebounding uh back up and coincidentally gold and silver um have been moving in the polar opposite direction which you would expect gold trading uh you know inversely to the DXY. Uh help us explain this pattern Lynn. >> Well yeah so on average they tend to move inversely. Obviously you can see from the chart there's other variables there. They're not perfectly uh inversely correlated. I think the the main underlying uh issue here uh is likely tied to the the the nominee of the the next likely Fed chair. Um uh the uh President Trump has selected who uh you know who's widely considered the more hawkish pick among the various picks he could have made both in you know historically in terms of interest rates and also recently in terms of of say um recommended balance sheet size uh by the Fed. Uh and that can affect things like liquidity. Um now there have been kind of push back on the idea that he'll be super hawkish um because he's also talked about you know how AIdriven technology can can create kind of productivity deflation uh which allows for lower rates. Uh so he probably won't be as hawkish as he was in the past. Um but it's certainly among the candidates that could have been selected at least his historical track record leans on the hawkish side. I think that that spooked markets a little bit. I think to some extent the market was kind of pricing in uh the idea that they'd have a Fed chair that just does whatever Trump wants. Uh kind of like a a super dove in a sense. Uh kind of a a breakdown between um you know Treasury and Fed independence. Uh and uh I think what they got is they they have a somewhat you know more serious uh candidate uh that that still might operate you know monetarily as as as they've kind of done in the past. uh which means some degree of independence uh some degree of kind of data dependence as they like to say uh and that they might not get as doubbish as kind of the extremes that they might have been pricing or might have been expecting on on the the far end. Um, but I think that that's probably likely the main variable for for and I don't think that's novel insight that we've seen, you know, sell off in precious metals, sell off in Bitcoin, uh, jump in the dollar from these low levels, uh, timing wise tied to, um, you know, this this more hawkish uh, Fed nominee. Before we continue with the video, a quick note from our sponsor today, Coinbase. If you're in Canada and interested in crypto, Coinbase is one of the simplest ways to get started. They are the first international exchange registered in Canada and they follow the same regulatory standards you would expect from a publicly traded company. You can buy and sell more than 200 coins in seconds and funding through Interact e transfer or EFT has zero fees. If you prefer a long-term approach, Coinbase also supports staking on selected assets. You can earn rewards directly inside the app without needing a wallet or advanced setup and you can pause anytime. For traders, Coinbase Advanced is available at no extra cost and offers Trading View charts, real-time order books, and spot or futures trading with competitive fees. Create your account today using my link in the description or scan the QR code here and get $10 Canadian in Bitcoin for signing up. Yeah. And at the same time, Trump joked at a conference or a press event two days ago that he would sue Worsh if he doesn't lower the interest rate right away. So, you're going to nominate somebody and then maybe threaten to sue him if he doesn't do what he ask you asked him to do. Uh, this is a joke, of course. I don't think he's actually going to do that. I don't know. We'll see. But the point stands that the market still believe, like you said, that Worsh is probably going to be more hawkish than probably some other picks. And the CME Fed watch tool certainly doesn't think that anything's going to happen to the Fed funds rate even by April. And if you look at the curve, it goes out and the probability expands um towards the summer. But is there a reason for why just fundamentally for why the Fed should be a little more hawkish than what some people might expect them to be? >> Well, so two things there. One is uh if if he does become Fed chair, which it seems likely. I mean, he's supposed to get uh confirmed and everything, that would be in May. Um and then even then he, you know, the chairman doesn't unilaterally set rates uh in other forms of policy. uh he he basically gets the the most important of of 12 votes on the FOMC and kind of you know guides the discussion and really has a lot of leeway but he's still uh not not unilateral. Um so you know a different Fed chair or you know kind of a minor shakeup of the governors um doesn't necessarily massively change policy. So I think that actually it is rational to not rapidly repric things uh based on these expectations uh especially anything before May because again uh uh Powell will be you know unless he's removed for cause uh he'll almost certainly be in there uh through May. Um you know when we go forward from there uh I I you know the the argument that I've seen him make is that um basically uh technologydriven growth can allow for lower rates. Uh when we think about where price inflation comes from, there's kind of there's there's multiple factors, but it really kind of comes down to two main ones. One is debasement. So the growth of the money supply over time uh has this kind of upward pressure on on most prices. And then that's partially offset by the fact that we get more productive, better technology at making those things. Uh and but that's uneven, right? So we're not way better at mining gold. You know, we get we do get somewhat better at mining gold, but we don't get like remarkably better at mining gold. Whereas, for example, we do get remarkably better at making televisions, right? The the the cost of like a, you know, a television has absolutely collapsed over a 25-y year period. It's a very deflationary thing. Most electronics are like that. Uh, anything you can kind of automate offshore. Um, these are pretty deflationary prices. Uh, so they won't necessarily grow in line with money supply. So, if you're growing money supply by 7%. um but you're getting 5% more productive at making things every year, their price might only go up by by 2%. And so what he what that argument is basically saying is that we'll have enough productivity that even when you have you know 6 7% money supply growth that the the price increases at least the way they measure it in his estimation would be on the lower end might be 1 2 3%. and that therefore they don't have to curtail inflation as much as they would be the other side of the mandate which is promoting job growth. Um you know the push back against that is that we you know we we've been in a long period of like zero rate policy uh that it is healthy to have a price of money uh you know to to kind of root out malinvestment uh wherever it takes hold uh and you know more broadly that the market could you know should set prices but having just kind of centrally administered uh interest rates is itself a problem. Sometimes they can be too doubbish sometimes they can be too hawkish. It's just basically a centrally controlled price fixing. Um but that's you know that's the world we live in. So I think it makes sense to assume some degree of doubbishness. I I I think it would string credul to think that um President Trump would nominate someone who he's not already discussed, you know, kind of intermediate term expectations with um you know, so I I think that whoever kind of is selected here and it so far unless something changes last second before, you know, it's kind of formally put forth, um you know, I think you can assume some degree of kind of upfront doubbishness, but that's no guarantee that they're going to be doubbish for the rest of say President Trump's term in office or that person's term uh as chairman. >> People have been tweeting about true inflation uh consumer price inflation uh as measured by real-time prices. Is that a measure that you follow because the price chart has been trending down in contrast to the actual CPI? >> Uh it is one of the ones I follow. Uh there's no there's no one that I just take as like gospel. Um they're all useful data points. Um when you you know inflation has hydonic adjustments in it which of course have um you know challenges. Uh the basket can change over time you know so something becomes expensive people rotate and consume you know something else in its place using something slightly lower quality that hasn't really experienced that. Um, if you kind of take a pretty static basket of like the kind of American dream basket, you know, single family home, uh, healthy food, good health care, you know, two cars in in your driveway, that kind of thing, uh, you know, high high quality education, that basket has generally gone up higher than than average CPI. Uh, because CPI is of course weighed down by all these deflationary electronics and and manufactured goods and stuff. Um the really big component in in recent years has been uh basically rent. Uh so rent of course surged uh during the the money printing uh period from a few years ago and really since then there's there's been this kind of gradual you know kind of decline in in rents and a lot of that kind of goes on a lag. Um so I do think there's merit to say that um you know the way they measure it inflation is lower probably in this current period than maybe the headline suggests. uh but that there are other periods of time where it was higher than headline suggests that the basically the headline was slow to take into account things that happening. So there's m there's multiple different measures to look at. I think they're all reasonable. Um I I think the part I I have issues with some people will be inconsistent. So you'll see people that are, you know, kind of rooting for like much uh like they're always complaining about artificially low interest rates. Uh but now some of the same same people are saying that they're shockingly too high right now. They need to be way lower. Um and I I just think you know people kind of can can it's funny how people can pivot over time uh so quickly. >> Okay. I want to just take uh your perspective on economic growth. Uh Howard Lutnik uh uh secretary of the commerce secretary at Davos uh a week and a half ago at the WF said that he expects 5% GDP growth. Very optimistic especially given the last quarter read 4.3 I believe. Um and so that kind of growth may portend higher uh rates of hiring and job growth overall which may point to the fact that the Fed may not need to lower rates. Can you just comment on Howard's Howard Lennick's prediction and your assessment of the job market overall? >> Uh well two things there. One is that the job market doesn't always go in line with GDP. I mean hypothetically if you had almost all the GDP growth created by AI for example uh you can get flat to downward jobs uh while you know measures of the economy go up there's also a challenge where uh you know the GDP calculation it includes deficit spending so in many ways the the you know the bigger deficit you run it pumps GDP numbers now as long as you're talking real GDP it offsets their measure of inflation um I you know my estimate is that 5% sustained real GDP growth is optimistic. Uh I I'd pick a lower um figure than that. Um but I do think that we are in a somewhat run hot environment. Uh right now we're not really oil price constrained. Uh so you know supply and demand uh has has some flexibility. Uh so we're not seeing high prices there. Uh which which doesn't really kind of hold up growth in the way that sometimes in some environments it does. Um I do think that AI is giving us over time substantial productivity changes. Uh it also gives some challenges obviously for for people that are on kind of all sides of it. Um uh but I you know I would take the the the under on 5% personally. Uh even though I do think that we're we're probably above the the 2010s and and early 2020s um baseline average. any signs of significant labor market weakness that may incentivize the Fed to cut more aggressively? >> Uh so we have inched up from the low point on unemployment. Um uh some of the Fed uh members have talked about how they would like to see it, you know, maybe half a percentage lower. Um there's no firm target. there's no like hard number that they're aiming for. As long as uh the the inflation, the way they measure it is on, you know, the controlled, they're able to, you know, be a little bit looser. Uh I think and one of the problems I've highlighted both on your program and others is that this this entire kind of period of of higher rates and lower rates, um it wasn't even fully targeting the issue, right? So it when we think of like high rates and inflation we normally think of the 70s uh you know Paul Vulkar uh and all that and in the 70s most of the money supply growth was driven by bank lending. So there's a there was like the historically a very high rate of bank lending and that was in large part tied to demographics. The very large baby boomer generation was entering their home buying years for a sustained you know period of time and so it's kind of peak credit formation peak bank lending uh and all that. is when you raise rates, you dramatically increase borrowing costs and you generally slow down that rate of bank lending. One of the problems we've had uh you know since since 2020 and really even a little bit before then is that uh we're now in a period where most of the money supply you know basically that is is more funded by fiscal deficits that were you know our demographics are now quite aged. We have this kind of very topheavy entitlement system topheavy defense and then now interest expense as well. So we have very large fiscal deficits and rather subdued lending. Uh so when they kind of raise rates to try to contain inflation, uh it's not really targeting the core issue because you know bank lending was it wasn't like excess bank lending caused the inflation. The the large monetized fiscal deficits did. Um out of all of the the Fed candidates um uh Rick Reer uh was the one that kind of highlighted that point the most. He's kind of the most um I think uh knowledgeable and fiscal dominance. uh specifically. Um, but I think that's that's kind of the environment that we're in that there's there's actually a pretty big range of interest rates that you can argue that makes sense because interest rates are not even targeting kind of the the core thing that has driven inflation in this particular cycle which is the the fiscal deficits. Uh, and if anything, higher rates actually slightly increase the deficits because you you blow out interest expense. Um, so yeah, I I think that there are there's a very wide range of credible estimates that someone could say for what is like the ideal target interest rate at the moment. Uh, both in terms of targeting maximum unemployment and trying to keep inflation in check because bank lending is not the issue and that's that's really what the Fed targets. >> Okay. Speaking of interest rates, uh, let's go back to debasement trade. the five decade debasement trade that you were talking about that transpired since the beginning of the 70s uh coincided with a multi-deade bull uh run in the bond market as you can see the 10-year yield and of course the long end of the curve 30-year as well uh collapsed from double digits all the way down to basically zero um and then now we've getting a bit of a rebound in the yields ever since 2021 are we at a structural inflection point where we have a multibeck multi-deade bare market in treasuries Lynn >> so I think we are at at a structural inflection point. Um I wouldn't necessarily say that we are in a kind of prolonged bare market in the sense that you know if you if you have me estimate our interest rates going to go structurally up over the next say 10 years I would say probably not. Uh my base case would be choppy sideways for quite a while. So I I think we the part that we have changed is that we're no longer in a structural downtrend. There's really no not much further to to go compared to how we already were. Um but that doesn't mean we're in an uptrend either. And one of course one of the challenges with bonds is that if you just go sideways uh in interest rates, their returns aren't that good. Uh so we had this kind of 40-year period of of good returns because bond holders got both uh you know higher rates uh and they got that increasing price action from falling rates. Uh you know lower high lower bond uh yields means higher bond prices. Uh and so in when you kind of hit zero and then you kind of just bounce around after there and you just go head in a choppy sideways range um then bond holders are pretty much just getting paid that kind of low to moderate interest rate and they're not really unless they're trading uh very skillfully they're not really making kind of you know price gains uh from those bonds. Uh so I I would say it's a mild bare market in the sense that just a sideways rate market is is not great for bonds. Uh but yeah, I I don't think that we're going to just keep dramatically nominally uh losing on on bond price. I think the the past five-year period is one of the worst periods on record in like history uh for for US bonds. Uh and while I'm not very optimistic on the asset class, I I I don't think we'll see a repeat uh anytime soon of this kind of 5year period. >> Okay. And uh the what we learned from the Japanese JGB uh yield spike in the last 2 weeks uh was that the same some say the same could happen to the US if we have fiscal uh deficits widening uh debt skyrocketing. The prime minister of Japan announced new fiscal measures which some say was partly responsible for the spike in the JGB yields. Is that a foreshadowing, should we say, of what may happen to the US if Trump's administration continues to spend and increase budgets on a lot of things, including defense, for example, $1.5 trillion proposed. Uh potentially, I mean, I of course in context, Japan's yields are lower than ours. So, they they've increased at a kind of extraordinarily rapid rate, but from an unusually low level compared to most other countries in the world. Um it you know it is true basically uh you know they are in more fiscal dominance than any other country. I mean you know over 200% uh you know sovereign uh uh debt to GDP let alone the debt in their in their private sector which actually has been over the long term reduced on a percentage of GDP basis. It's it's kind of gradually transferred from the private sector to the to the public sector over in Japan. uh and they are in fiscal dominance meaning that that interest rates don't really help them contain it anymore because if they uh raise interest rates they just blow out their their their government expense their interest expense even faster than they could you know cail other things. Um so I think I think basically what we're seeing in Japan is some degree of normalization. Uh they've been in this unusually low rate environment and now finally um bond holders are saying we actually want some yield. uh and the central bank in order to not have just just unchecked currency loss uh has stopped doing yield curve control. Um I I think the Japan story is going to be playing out for a long time. I don't think they're you know I don't think they're going to blow up this year. I don't think they're going to blow up next year. Um you know every country can have these little mini crises. Uh I think generally uh Japan uh has a very long runway ahead. Uh and it's large part because they have so much foreign exchange reserves. Uh so in many cases when a country gets that indebted they face the very tough choices of do you let bond yields keep going up but then just blow out interest expense and then have like a fiscal spiral or do you do yield curve control uh and keep the interest expense under control uh but then you your currency value compared to other currencies gets killed because nobody wants to hold your your currency your bonds. Uh and they have a third option uh where they can sell some reserves and buy back their own currency. So whenever too many people short their currency uh they can they can kind of blow that trade out um and and slow it down for a period of time. So I I think they have a lot of tools to extend this um well into the 2030s is my estimate. Um and I do think that you know much of Europe, the United States, uh you know uh Canada, we're all on a kind of similar trajectory as them. Uh but some of us don't have the strengths that Japan has either. Japan has a very harmonious culture. uh they've had a a structural you know current account surplus for a very long time uh and a lot of other countries are kind entering this this period with way more political polarization uh especially in in you know many European countries than in the US uh and in the US's case we're entering this kind of period with a structural trade deficit so we have we have a larger twin deficit than Japan has um so uh it is true that anytime you have a government that that puts forth a budget that is viewed as kind of irresponsible responsibly large deficit. Um you're more likely to get a a sell off in bonds. Uh this of course happened. This was the list Liz Trust moment uh back in the during the guilt crisis a few years ago in the UK. Um that that that budget spooked uh the bond market. Uh look at the Bank of England they they had to cancel a speech on balance sheet reduction and come in and do emergency QE to to like keep their own yields from like uh spiraling uh cuz they you know from the levered holders. Um you see similar things happen out of Japan where they you know they announce kind of a running hot type of of budget and then that you know mildly spooks bond holders but again from very low levels. Um and you know in the US if we actually start pushing very large um much larger fiscal deficits. Yeah you could see a little bit of a a bond selloff. Um I would separate kind of statements about what we're going to do versus actual budgets. So, a $1.5 trillion military budget, uh, that, you know, that has supposed to go through Congress, uh, and everything. And I think that by the time it actually gets through, it'd be different than just kind of what we what is kind of mentioned on True Social or in in interviews. Um, so I I do think that over time, US fiscal deficits will be will be flat to up at a pretty high level. Um, but I'm not necessarily expecting any sort of blowout in the next year or two. Uh, and you know, if we do get it, then yeah, that that contributes to a run hot environment. So, I'm not exactly a a bond bull here. I just think that a lot of the damage is already done. >> Okay. Now, speaking of uh the Japanese uh uh yen, I I brought this up partly also because people have noticed that there has been a relationship at least in the last two years between the straightening of the US dollar versus the yen and the S&P 500. Maybe this is just a spirious spirious correlation. Maybe there's more to it. Can you comment on this? Yeah, I mean I these things can can change over time. I don't have any kind of major um input on that at the moment. Um you know I do think that for for quite a while uh US stocks have been the place to be globally. Uh now there certain other markets like Canadian real estate, Australian real estate uh until the until the um uh Chinese real estate bubble popped also Chinese real estate. There are these pockets where where other things were interesting to to investors. Uh but for the US specifically, it tends to be our stock market. Um we have the the largest, most diversified companies. We have a pretty big tech focus. Um and I, you know, I expect that to to continue for some time. Um uh and you know, as investors kind of got, you know, um spooked out of Japanese bonds, um they've been going into US stocks, but they've also been going into Japanese stocks. I mean, you know, the Nikkay has has had a really good run really ever since 2012. um they've had a you know they're one of the better performing uh stock markets out there uh let alone in their own currency but even when translated back into dollars uh Japanese stocks over the the multi-year long term have been doing pretty good. So uh I I do think investors are kind of shifting where they have focus. Um but yeah, I would let others kind of talk more about that specific correlation. >> Okay. Well, I I'll comment on another correlation here. Bitcoin and the NASDAQ or the stock market overall. uh you can see this divergence becoming very stark and it's been it's been widening ever since basically November. Um and today's selloff was exacerbated by I guess the nomination of Kevin Walsh selling off alongside metals. Let's comment on that first before we talk about uh Worsh in more detail. Why has Bitcoin been selling off when the rest of the stock market has not over the last month and a half, let's say? >> Well, so in short, there's not there's not been a lot of external demand. uh few people woke up in the past few months and decided I want to own Bitcoin. They'd haven't owned Bitcoin already. Uh so there's very little like new capital uh coming into the space as far as I can tell. Uh you know this this past summer uh there were a number of treasury companies that got very overvalued. Uh there were ones trading at you know three times uh net asset value, other ones trading at at eight eight times or more uh of their net asset value. Uh and so a lot of that had to come out of the market. that excess valuation had to come out of the market that that enthusiasm. Uh so yeah, there has been kind of selling pressure. Then I think there's a little bit of a self-fulfilling pro prophecy of the four-year cycle. Uh that basically people said, well, whatever it hits in in quarter 4 of 2025, that's going to be the the peak for a while, so they want to get out. Um, I don't think the four-year cycle really has any more credibility to it in the way that it did in in kind of Bitcoin's uh more inflationary earlier uh years where the having cycle was a much bigger factor. Um, but I still think it has a psychological impact. So I think that contributed to this. Um, we've also seen uh you know many um software names are down. Uh so even though uh the NASDAQ is doing well uh a lot of that recently is hardware driven. Yeah. uh as as well as you know kind of the big hyperscalers um and you know kind of these these more pureplay software companies have have really gotten killed uh they're they're off you know they were expensive previously and now they're kind of viewed as potential um potentially being disrupted uh by AI to varying degrees uh and it's possible that Bitcoin is kind of caught in that trade. I mean I know that that there were some people spooked about quantum for a while uh the quantum risk. Uh I think that is um overblown in any sort of investment time horizon but I have heard from a number of credible institutional sources um that basically it used to be to say 5% of institutional allocators would would ask about quantum as a risk and that that had jumped to like 30%. Uh o over the past uh several months. Uh and the way that works is even if an institutional investor thinks there's a low risk of a quantum computer uh disrupting Bitcoin security, if they say, well, it's a five or 10% chance in say a 5year timeline, then they they calculate that in their expected value outcome. Uh so you you expect you if there's a 5% chance you get zeroed out or nearly zeroed out by some sort of like, you know, tech that comes out of nowhere, then that kind of disrupts your whole pricing mechanism. So, I think there's been a bunch of factors uh that have done this and I think Bitcoin has to work through this. Um but yeah, my my timelines tend to be longer than what happens in a given month and a half. Um but I do think that it is cheap here is how I would view it. >> Is there any relationship whatsoever between Bitcoin's uh demand and gold and silver and uh as a matter of fact the commodities overall their demand? Well, so one of the thesis I've seen put forth is that once gold and silver sold off, it would allow Bitcoin to catch a bid. Kind of like how Bitcoin doing pretty well might have previously sucked some of the enthusiasm out of say the silver market because if someone is interested in kind of hard money and and particularly likes the the more volatile hard money um then you know previously that would have been people interested in silver and they've been you know in into Bitcoin or kind of broader crypto. And it's possible that as you know, gold and silver and platinum have done really well, uh, that kind of same, you know, hard money crowd says, well, why would I own Bitcoin or crypto? We're not going to own the metals that are soaring. Uh, now, as we've seen, at least in a in a very small sample, as as we've seen a sell off in the precious metals, uh, you know, it's not been to the benefit of Bitcoin. Bitcoin also, uh, sold off. Um, so I'm not sure that I would link them much here. Um, I would say that I think I think a correlation that does matter is that I think that the the broader crypto space. Um, there's like a trillion in market cap in the broader crypto space outside of Bitcoin. And I still think a lot of that's overvalued. Uh, so I I've been a kind of a long-term bearer on most crypto outside of Bitcoin and stable coins. Uh, and I still think that's a big overhang. Uh, and and there are many entities that cross. So they'll own a multiple different cryptos and they'll own Bitcoin. Uh and if those other cryptos start doing poorly, they might have to just delever or degrowth their portfolios in Bitcoin as well. In addition, it's bad for the, you know, it's at least in the short term potentially bad for the narrative because there's just more negative news to focus on in the bit in the crypto space. You know, you can talk about uh the negative uh impacts of memecoins. people can talk around uh corruption associated with with President Trump's uh memecoin and and associated um you know crypto ventures uh some some of the news that has kind of come around around that. So it it kind of tracks all these negative headlines that Bitcoin can get lumped into, you know, if Bitcoin is like virtually separate from that. In the long run, I think it's healthy for Bitcoin for all these other crypto things to kind of stagnate down to closer to the like total adjustable market, which I think is pretty small. Um but in the in the you know near term the intermediate term while they do kind of melt and stagnate uh you know it's hard to envision that it doesn't uh you know pull down Bitcoin to some extent. Uh now I I still think that you know over the next couple years global liquidity uh and overall just the ongoing you know so-called debasement trade um likely contributes to to Bitcoin upside. Uh so I I you know I'm still a buyer. I still think it's good a dollar cost average into it. I think it's probably, you know, if you if you check in two years from now, it's probably higher than it is now. Um, but there are some headwinds. Um, and I think one of those is the the kind of the stagnation of the broader crypto space. Uh, but do you think just from a portfolio allocation standpoint, even if global M2 money supply does grow and makes a bid on Bitcoin, would stocks still outperform Bitcoin like they did in 2025? Especially what we're seeing today. We're seeing uh gold, silver, platinum sell off, copper sell off, hard, you know, the hard metals having having a coordinated selloff in reaction to the news we discussed. Bitcoin selling off as well. The resilience of the stock market in light of what we talked about. Does that make you more optimistic on equities in 2026 than on Bitcoin? Let's say uh I say 2026 is a toss up. If I say 2026 and 2027, my estimate would be Bitcoin outperforms. Um, I certainly could be wrong on that, but that'd be my base case. Uh, what the way I would put it is that when Bitcoin moves, it tends to move rather decisively, right? So, in in in lately that's not been good because it's been decisively kind of down. Uh, but when it does when it does catch a bottom uh, and shake out some of these weaknesses, so maybe people get over the the quantum risk for a period of time and they get past the four-year cycle risk and they get past kind of the broader crypto contagion. Um when Bitcoin does run uh I it can run kind of like what we saw gold and silver do uh over the these past 6 to 12 months. Uh so when it does run I think probably would outperform stocks. The question is does that run happen in 2026? Does it happen in 2027? Does it kind of split the difference and you know start happening in late 2026 and then go into 2027? I don't I don't really know about that timing. Um so I mean my approach has always been to be diversified. So I own uh equities both in the US and globally. Um I've generally uh avoided long-term bonds in favor of precious metals uh which is which has served me well. Um to the extent that I have bonds, I generally keep it shorter term, you know, just for a little bit of cash liquidity, dry powder. Uh and then I I've had a you know a multi-centage slice uh in Bitcoin. Uh and that's over a very long period of time that's done quite well even though it's been weak uh lately. And I generally find that rebalancing is help helpful. So when you know precious metals are absolutely soaring uh and they become overweight in your portfolio, it's nice to kind of trim those back a little bit. When stocks are soaring, I trim those back a little bit. When Bitcoin is soaring, I kind of trim that back a little bit, at least in my liquid portfolios. And that allows kind of structural growth without kind of getting caught up too much in any one asset class. Moving on now to critical minerals. Just today on the 2nd of February, Trump announced the creation of a critical minerals reserve. Today we're launching what will be known as Project Vault to ensure that American businesses and workers are never harmed by any shortage. What does that look like in practice? You know, you can't just turn on a critical minerals mine overnight. Um, so that's part of the question. The second part is whether or not this announcement has any impact on your investment thesis overall. >> Well, for the most part, no, because this is less of a macro scale um, you know, thing. uh it's more of a kind of a commodity specific thing. Uh I I'm structurally bullish on most commodities in general. Uh so certainly doesn't really hurt uh any of the thesis uh that I'm operating under. Uh obviously people uh you know many people in your audience or your investor base are more specifically in mining and mining stocks. This can be very dramatically uh important for many of those. Um I would zoom out and say it broadly speaking we are now an industrial policy. Uh meaning that we're not really operating on free market principles. We're operating more on like u mercantalism and we're operating more on some degree of kind of top down uh you know things that are happening now. Um and that's that often happens during fiscal dominance. So that happened back in the in the 40s and 50s. Um, and I think that's really kind of what the what the 2020s and probably the 2030s end up looking like is that there's some kind of just more top down strategic stuff happening. So, they've been taking stakes in in uh, you know, kind of mineral companies. This this, you know, the whole tariff policy has been kind of very kind of top down, you know, trying to uh, fix the trade deficit uh, and and things like that. Uh, so I do think this kind of thing is going to keep repeating. I also I do think it's rational for any large country to try to have uh stockpiles of um you know critical minerals that can last a long time. Uh I think they should have stockpiles of uranium. They should have stockpiles of of many types of of rare earths. Um uh because you know the the trend that we've been operating under has been this trend of globalization. Uh it's kind of this view of like the end of history. uh especially after the fall of the Soviet Union, it's like okay we're we're kind of operating under this this new uh kind of a u you know rule of law in the world. Um but as certain imbalances kept growing uh and as certain powers kind of grew uh we are entering a period now where um you know both policy makers and uh those who run corporations uh are interested in more resiliency in their supply chains uh redundancy uh which is on average costlier because you know globalization and single points of failure uh while they work are disinflationary uh but then when you have to you know, uh, building kind of, um, duplicate systems and you have to assume a more adversarial mindset, uh, and things kind of get rapidly shut off, uh, potentially. Uh, that's more inflationary, more redundancy. Um but I do think that's a that's a direction that the world is heading in and I think that that you know it should head in in the sense that if you're if you have any sort of meaningfully um impact on running a country uh I I do think it's relevant to have stockpiles of things that that your economy really can't live without for any any material amount of time. >> Two more questions let you go Lyn. So that leads me to my final point which is globalization. So as you probably heard during the Davos uh conference at the world economic reform the uh several world leaders including Mark Carney of Canada announced that perhaps globalization is fading and a new world order is going to happen in which there's going to be less of it. Now what happens when there's less globalization? We talked about disinflationary impacts from globalization being an impact uh that may be fading. What is are we talking about the reverse then where we have more inflation? Are we talking about investing in you know domestic manufacturing? What what does that mean practically for the investor? >> Well, so it means less disinflation from globalization. So less disinflation from supply chains. uh you know it tends to be more efficient to just say okay we're going to put all of our manufacturing in this country and they're going to specialize in manufacturing and this other country is going to specialize in this and everyone's you know you have single point of failure everywhere as long as it's working that's a very efficient system uh but of course it's fragile uh so when you build a more um uh redundant system it's less hyper efficient but it comes with more resiliency and I do think that's the world that we're heading toward if you measure globalization as percentage of annual annual kind of world trade as a percentage of world GDP. Um I I do think we're going to enter a period where that is more flat, not increasing as the way that it has been. It could even it could even decrease for a period of time. But let's just say even even flat means you're not necessarily deglobalizing, but you're not really globalizing uh anymore. And that is a that is a trend change. Kind of like how we talked before about if bonds go from, you know, the yields going down to just going sideways. That is a structural change. And I think we could see a similar thing with globalization. Um uh now there's still other other uh parts of of disinflation that can happen. We talked before about how AI can be you know disinflation on some areas kind of like how blue like bluecollar uh you know automation of manufacturing and globalization those have been disinflationary mostly on goods. Uh and you know where we're likely going to increasing see AI disinflation show up is like decreasing um cost of like kind of services uh you know white collar types of of services and things like that um can sometimes be just iterated way faster in AI not necessarily replacing workers but making so that each worker can do way more uh of what they can do kind of like how automation let's a you know one train kind of car maker instead of making cars by hand you're overseeing the robots making cars. Uh, and so per worker, you have more cars coming out. I think that accounting services, editing services, translation services, you people become more like managers of the automation doing a lot of those things. Uh, which is disinflationary in a good way. Uh, but of course it can be disruptive. So I think you can get one type of disinflation slowing down uh like disinflation of like hardware. you know, we've seen soaring in many cases electronic prices because of bottlenecks. Uh that that period of disinflation could be, you know, partially behind us, but then other types of disinflation like software disinflation and things like that can still be with us. Uh so I I think it it changes the um categories uh where we're going to see disinflation. And I do think that we are we're entering a more multipolar world. I I've been writing about that since at least 2020, probably, you know, somewhat before then, that we're entering a world that is not just entirely centered around the US. We're entering a world that's centered, you know, partially around the US, partially around China. Um, if you asked me a few years ago, I would have said Europe, but they kind of handicap themselves on the energy side. So um really kind of the two big polls are are the US and China uh with a handful you know India and and Brazil and and to some extent Europe were also you know sizable uh poles in all of that. Um but I yeah I do think we're entering a more multipolar redundant uh world uh with more adversarial thinking uh tied into it which is also that contributes to why precious metals are attractive uh because instead of sovereigns around the world holding treasuries some increasingly say well I want to hold something that can't just be shut off with a stroke of a pen I want to hold metal in my own borders. Um, and Bitcoin is still a small market, but Bitcoin also has that trait where it's a decentralized network. So, it can make for decentralized settlement uh and uh self-custody. So, I do think that we're in a world where you want to kind of think about these things uh rather than kind of assuming that systems work as they always have. I have one final question for you. I promised you two final questions. My last one is you have a sci-fi book coming out. Um, you can tell us a little bit about that, but more broadly, I'm curious to know which, I guess, sci-fi predictions from either the current time or I guess from your childhood and my childhood are you most looking forward to seeing come to fruition >> at some point, if they ever do. >> Uh, yes. So, I I have I have a sci-fi book coming out in in March, so people can check that out. I'll have announcements on social media and my website when it's when it's >> You have a name for it yet? Not yet. >> Uh, the Stoleg Guard Incident. >> Okay. Uh, so it's it's near it's near future. So it's not a space opera. It's set in our planet. Um, one of the technologies I kind of focus on a lot, it's funny because the the recent news of all these AI agents kind of talking to each other on on social media. Um, that's common place in my book where basically the the you know kind of the internet is flooded with bots not just in the spam sense but in the sense that just bots become a more commonplace part of of our life. Um I you the the part that the book explores that's more on the cutting edge there is more like gene editing. Uh so so bioengineering soldiers and things like that that's kind of a spookier stuff uh that the book explores. But I think the more baseline stuff is um just AI becoming more commonplace. In fact part of why I kind of got myself to write it. I've been putting it off for a very long time just because I I've had my hands full with with everything else. But because I see the that whole technology area growing so rapidly, I was like, if I don't write my book, it's going to become historical fiction. It's not going to be sci-fi. So, it's like I have to get it out at a reasonable time frame. Uh for me, I you know, I think that in addition to seeing just AI in general help us with a lot of things and and increase our productivity, um I I like the return of hardware. uh basically uh kind of this renewed interest in the the physical side of of computation. So I've been happy to see the you know the kind of the renewed interest in GPUs now that more more recently the renewed interest in in in memory. Uh personally I would like to see more aerospace stuff. I've been excited about the the work that SpaceX does. Um, also I've been excited to see uh, especially out of China, some of the the flying cars, uh, you know, the these kind of technologies that have kind of >> finally kind of catching up to things that we might have been thinking about when when we were kids, right? >> Uh, and, uh, I, you know, I think that at a commercial scale, it's still somewhat a bit away, but I do think that over the the coming decades, we'll see a little bit of a return to to some of these more hardware focused things and not everything's just so software focused. Yes, I am looking forward to the liveaction version of the Flintstones, but without CGI. So, let's let's let's see let's see if that happens soon. All right. Well, thank you, Lynn. Besides your upcoming novel, uh where else can we follow your work? >> Uh people can check that on lindalton.com. Uh and they can also check out Broken Money on Amazon or elsewhere. >> Okay, good. We'll put the links down below. So, check out Lynn's work uh in the links in the description. Thank you very much again, Lynn. We'll speak again soon. Take care for now. Thank you for watching. Don't forget to like, subscribe,
Will Gold Price Collapse Continue? Lyn Alden On Market’s Next Big Moves
Summary
Transcript
we've been really in like a 50-year debasement trade. When you could buy silver in the teens, I I view that as pretty asymmetrical cuz it's hard to really kind of structurally go much lower than that. That I think that the the broader crypto space um there's like a trillion in market cap in the broader crypto space outside of Bitcoin. And I still think a lot of that's overvalued. We're entering a more multi-polar world. I I've been writing about that since at least 2020, probably, you know, somewhat before then. We're entering a world that's centered, you know, partially around the US, partially around China. Huge sell-off in commodities and market rotation happening right now on the 2nd of February as silver had its worst single day drop since 1980. It's now down 40% from its top on January 26th. Meanwhile, gold is down something like 20% from its top in January. So, what is next for the metals? What is next for Bitcoin? Bitcoin is also seeing a huge sell-off today. While stocks on the other hand are holding up quite well. What's next for the Fed and monetary policy after Kevin Walsh was nominated for the Fed chair. Next, Lynn Alden, founder of Lin Alden investment strategy, is back with us to dissect what's going on in the current market action and what is next with stocks, metals, Bitcoin, and much more. Lynn, welcome back to the show. Good to see you as always. >> You as well. Always happy to be here. >> Uh, let me just start with this tweet tweet uh that you made. So, uh, the happy Hawaiian has gold ever tanked 9% in an hour before. This was January 29th. When things trade like a meme coin to the upside, they are also at risk of doing so to the downside. If gold is a meme coin, then I guess silver is what you may call a super meme coin. Um, if there is such a thing, because silver is down literally 40% from its tops just a week ago. So Lynn, the question is why this trade is happening right now. Uh previously on your newsletter on December in December, you talked about the debasement trade happening in 2026. We'll talk about that. I wonder if that's still in because in the disbed the basement trade thesis, you had called for gold and silver and Bitcoin to do well and you have been so-called correct so far correct in 2026 for gold and silver. Now it's starting to unwind and you kind of called this unwind on Twitter last week as it was just about to happen. So just tell us from a macro perspective why this is happening right now. >> Yeah, good set of questions. I would separate these two concepts, the debasement trade and then this specific action uh in precious metals. And one of the kind of the the key takeaways I had in my debasement trade uh newsletter piece. Um, so I called it the so-called debasement trade and I was being a little sarcastic about it because that was like the new term that people were talking about. And my main point there is that we we've been really in like a 50-year debasement trade. Uh, and that, you know, outside of CO, there's not really a ton more happening now debasement wise. We are in fiscal dominance. So the source of debasement is more tied to fiscal deficits than it is to bank lending. So there's been an inversion of that. Uh and so some of the underlying mechanisms change over time and industries kind of lose their effectiveness uh in some ways. Um but so basically it's saying that we're still in the debasement trade that we've been in for for quite a while. Uh and so uh as it relates to precious metals, my my view so I've been bullish since 2018 um on on gold, silver, and platinum for a while. Platinum was kind of the the dog of the portfolio kind of going absolutely sideways uh for a frustrating number of years. Um, sometimes predicting the time in these things uh can be surprising. So, you know, for a while I was calling for gold to hit 3,000. Uh, and if you asked me would it hit 4,000 and 5,000 in such a rapid, you know, short period of time after hitting 3,000, it wouldn't have been to my base case. Same thing with silver. You know, I was looking to see $40 and $50 silver. I would not have guessed we touch $120 silver not that long after. Uh, so the rocket ship that these things went on uh was remarkable to me. So they they've they've crashed down to levels that were are still above a year ago if you asked me what I think they'd be right now. Right? So when uh when assets go vertical in price, uh you know, when when this these things are soaring, everybody on on Twitter X is just talking about it. Um everybody has opinion about either the top uh or that the idea that it can it can double again. Uh but everyone's talking about it either way. Uh that's when risk is super elevated. I mean relative strength indices uh like in measuring overbought status about as high as you get with these things uh or really almost any asset. Uh and so whenever you have that kind of extreme upside potential you risk extreme downside potential. It's it's kind of washing out momentum euphoria sometimes leverage. Um I right now I think you want to see the dust settle because these things have such a wide band that they can trade in because you know we talk about these being multi-trillion dollar assets uh in terms of like their their kind of estimated market cap that's above ground refined gold and silver and that's true but a fairly small amount of trading volume can really kind of dramatically change the price if traders get too much on one side versus the other side. Uh so I think the trade got over its skis. Um long term uh I I think you know I don't think this was a bubble in the sense that I don't think you know they deserve to be low. They soared up uh and then it's purely a bubble and they go all the way back down. Um but I do think that they got over the skis. The way I've been describing it is I think they've been structurally undervalued for a while. Uh they finally got kind of the recognition that they deserved. I think they've kind of traded back up closer to to you know fair value. Um, but now they're less asymmetrical. So when you could buy silver in the teens, I I view that as pretty asymmetrical because it's hard to really kind of structurally go much lower than that. Um, but as you've seen, there's plenty of upside potential. And the same is true for for gold and platinum, you know, to varying degrees. But when you've already soared quite a bit, um, there's both upside and downside potential. I I was on a um a podcast uh some maybe a month ago or so, some a while ago. I think I think silver was like 60 at the time. And they said, "Well, what do you think's first? 404 $40 silver or $100 silver?" And I said, "I literally don't know." When it's when it starts to go up that quickly, it can go either way. But the point is that when you already have gone that quickly, that asymmetry is gone. So, the fact that you don't know and it becomes a coin flip is is part of the risk compared to when you could you could buy it much cheaper. Let's take a look at the charts. It seems like gold may be responding maybe I'll let you comment on this maybe responding to some violent action in the dollar as well. The DXY had a rapid rebound and you tweeted about this um before it rebounded a breakdown in the dollar and seems pretty intentional. Many people will sens sensationalize it but it's still in the longer range for now uh in its longer range for now. Sub90 gets interesting. This was posted on the 27th of January when actually at the time it was at its then low. So you posted that at the low of the DXY. Since then it's been rebounding uh back up and coincidentally gold and silver um have been moving in the polar opposite direction which you would expect gold trading uh you know inversely to the DXY. Uh help us explain this pattern Lynn. >> Well yeah so on average they tend to move inversely. Obviously you can see from the chart there's other variables there. They're not perfectly uh inversely correlated. I think the the main underlying uh issue here uh is likely tied to the the the nominee of the the next likely Fed chair. Um uh the uh President Trump has selected who uh you know who's widely considered the more hawkish pick among the various picks he could have made both in you know historically in terms of interest rates and also recently in terms of of say um recommended balance sheet size uh by the Fed. Uh and that can affect things like liquidity. Um now there have been kind of push back on the idea that he'll be super hawkish um because he's also talked about you know how AIdriven technology can can create kind of productivity deflation uh which allows for lower rates. Uh so he probably won't be as hawkish as he was in the past. Um but it's certainly among the candidates that could have been selected at least his historical track record leans on the hawkish side. I think that that spooked markets a little bit. I think to some extent the market was kind of pricing in uh the idea that they'd have a Fed chair that just does whatever Trump wants. Uh kind of like a a super dove in a sense. Uh kind of a a breakdown between um you know Treasury and Fed independence. Uh and uh I think what they got is they they have a somewhat you know more serious uh candidate uh that that still might operate you know monetarily as as as they've kind of done in the past. uh which means some degree of independence uh some degree of kind of data dependence as they like to say uh and that they might not get as doubbish as kind of the extremes that they might have been pricing or might have been expecting on on the the far end. Um, but I think that that's probably likely the main variable for for and I don't think that's novel insight that we've seen, you know, sell off in precious metals, sell off in Bitcoin, uh, jump in the dollar from these low levels, uh, timing wise tied to, um, you know, this this more hawkish uh, Fed nominee. Before we continue with the video, a quick note from our sponsor today, Coinbase. If you're in Canada and interested in crypto, Coinbase is one of the simplest ways to get started. They are the first international exchange registered in Canada and they follow the same regulatory standards you would expect from a publicly traded company. You can buy and sell more than 200 coins in seconds and funding through Interact e transfer or EFT has zero fees. If you prefer a long-term approach, Coinbase also supports staking on selected assets. You can earn rewards directly inside the app without needing a wallet or advanced setup and you can pause anytime. For traders, Coinbase Advanced is available at no extra cost and offers Trading View charts, real-time order books, and spot or futures trading with competitive fees. Create your account today using my link in the description or scan the QR code here and get $10 Canadian in Bitcoin for signing up. Yeah. And at the same time, Trump joked at a conference or a press event two days ago that he would sue Worsh if he doesn't lower the interest rate right away. So, you're going to nominate somebody and then maybe threaten to sue him if he doesn't do what he ask you asked him to do. Uh, this is a joke, of course. I don't think he's actually going to do that. I don't know. We'll see. But the point stands that the market still believe, like you said, that Worsh is probably going to be more hawkish than probably some other picks. And the CME Fed watch tool certainly doesn't think that anything's going to happen to the Fed funds rate even by April. And if you look at the curve, it goes out and the probability expands um towards the summer. But is there a reason for why just fundamentally for why the Fed should be a little more hawkish than what some people might expect them to be? >> Well, so two things there. One is uh if if he does become Fed chair, which it seems likely. I mean, he's supposed to get uh confirmed and everything, that would be in May. Um and then even then he, you know, the chairman doesn't unilaterally set rates uh in other forms of policy. uh he he basically gets the the most important of of 12 votes on the FOMC and kind of you know guides the discussion and really has a lot of leeway but he's still uh not not unilateral. Um so you know a different Fed chair or you know kind of a minor shakeup of the governors um doesn't necessarily massively change policy. So I think that actually it is rational to not rapidly repric things uh based on these expectations uh especially anything before May because again uh uh Powell will be you know unless he's removed for cause uh he'll almost certainly be in there uh through May. Um you know when we go forward from there uh I I you know the the argument that I've seen him make is that um basically uh technologydriven growth can allow for lower rates. Uh when we think about where price inflation comes from, there's kind of there's there's multiple factors, but it really kind of comes down to two main ones. One is debasement. So the growth of the money supply over time uh has this kind of upward pressure on on most prices. And then that's partially offset by the fact that we get more productive, better technology at making those things. Uh and but that's uneven, right? So we're not way better at mining gold. You know, we get we do get somewhat better at mining gold, but we don't get like remarkably better at mining gold. Whereas, for example, we do get remarkably better at making televisions, right? The the the cost of like a, you know, a television has absolutely collapsed over a 25-y year period. It's a very deflationary thing. Most electronics are like that. Uh, anything you can kind of automate offshore. Um, these are pretty deflationary prices. Uh, so they won't necessarily grow in line with money supply. So, if you're growing money supply by 7%. um but you're getting 5% more productive at making things every year, their price might only go up by by 2%. And so what he what that argument is basically saying is that we'll have enough productivity that even when you have you know 6 7% money supply growth that the the price increases at least the way they measure it in his estimation would be on the lower end might be 1 2 3%. and that therefore they don't have to curtail inflation as much as they would be the other side of the mandate which is promoting job growth. Um you know the push back against that is that we you know we we've been in a long period of like zero rate policy uh that it is healthy to have a price of money uh you know to to kind of root out malinvestment uh wherever it takes hold uh and you know more broadly that the market could you know should set prices but having just kind of centrally administered uh interest rates is itself a problem. Sometimes they can be too doubbish sometimes they can be too hawkish. It's just basically a centrally controlled price fixing. Um but that's you know that's the world we live in. So I think it makes sense to assume some degree of doubbishness. I I I think it would string credul to think that um President Trump would nominate someone who he's not already discussed, you know, kind of intermediate term expectations with um you know, so I I think that whoever kind of is selected here and it so far unless something changes last second before, you know, it's kind of formally put forth, um you know, I think you can assume some degree of kind of upfront doubbishness, but that's no guarantee that they're going to be doubbish for the rest of say President Trump's term in office or that person's term uh as chairman. >> People have been tweeting about true inflation uh consumer price inflation uh as measured by real-time prices. Is that a measure that you follow because the price chart has been trending down in contrast to the actual CPI? >> Uh it is one of the ones I follow. Uh there's no there's no one that I just take as like gospel. Um they're all useful data points. Um when you you know inflation has hydonic adjustments in it which of course have um you know challenges. Uh the basket can change over time you know so something becomes expensive people rotate and consume you know something else in its place using something slightly lower quality that hasn't really experienced that. Um, if you kind of take a pretty static basket of like the kind of American dream basket, you know, single family home, uh, healthy food, good health care, you know, two cars in in your driveway, that kind of thing, uh, you know, high high quality education, that basket has generally gone up higher than than average CPI. Uh, because CPI is of course weighed down by all these deflationary electronics and and manufactured goods and stuff. Um the really big component in in recent years has been uh basically rent. Uh so rent of course surged uh during the the money printing uh period from a few years ago and really since then there's there's been this kind of gradual you know kind of decline in in rents and a lot of that kind of goes on a lag. Um so I do think there's merit to say that um you know the way they measure it inflation is lower probably in this current period than maybe the headline suggests. uh but that there are other periods of time where it was higher than headline suggests that the basically the headline was slow to take into account things that happening. So there's m there's multiple different measures to look at. I think they're all reasonable. Um I I think the part I I have issues with some people will be inconsistent. So you'll see people that are, you know, kind of rooting for like much uh like they're always complaining about artificially low interest rates. Uh but now some of the same same people are saying that they're shockingly too high right now. They need to be way lower. Um and I I just think you know people kind of can can it's funny how people can pivot over time uh so quickly. >> Okay. I want to just take uh your perspective on economic growth. Uh Howard Lutnik uh uh secretary of the commerce secretary at Davos uh a week and a half ago at the WF said that he expects 5% GDP growth. Very optimistic especially given the last quarter read 4.3 I believe. Um and so that kind of growth may portend higher uh rates of hiring and job growth overall which may point to the fact that the Fed may not need to lower rates. Can you just comment on Howard's Howard Lennick's prediction and your assessment of the job market overall? >> Uh well two things there. One is that the job market doesn't always go in line with GDP. I mean hypothetically if you had almost all the GDP growth created by AI for example uh you can get flat to downward jobs uh while you know measures of the economy go up there's also a challenge where uh you know the GDP calculation it includes deficit spending so in many ways the the you know the bigger deficit you run it pumps GDP numbers now as long as you're talking real GDP it offsets their measure of inflation um I you know my estimate is that 5% sustained real GDP growth is optimistic. Uh I I'd pick a lower um figure than that. Um but I do think that we are in a somewhat run hot environment. Uh right now we're not really oil price constrained. Uh so you know supply and demand uh has has some flexibility. Uh so we're not seeing high prices there. Uh which which doesn't really kind of hold up growth in the way that sometimes in some environments it does. Um I do think that AI is giving us over time substantial productivity changes. Uh it also gives some challenges obviously for for people that are on kind of all sides of it. Um uh but I you know I would take the the the under on 5% personally. Uh even though I do think that we're we're probably above the the 2010s and and early 2020s um baseline average. any signs of significant labor market weakness that may incentivize the Fed to cut more aggressively? >> Uh so we have inched up from the low point on unemployment. Um uh some of the Fed uh members have talked about how they would like to see it, you know, maybe half a percentage lower. Um there's no firm target. there's no like hard number that they're aiming for. As long as uh the the inflation, the way they measure it is on, you know, the controlled, they're able to, you know, be a little bit looser. Uh I think and one of the problems I've highlighted both on your program and others is that this this entire kind of period of of higher rates and lower rates, um it wasn't even fully targeting the issue, right? So it when we think of like high rates and inflation we normally think of the 70s uh you know Paul Vulkar uh and all that and in the 70s most of the money supply growth was driven by bank lending. So there's a there was like the historically a very high rate of bank lending and that was in large part tied to demographics. The very large baby boomer generation was entering their home buying years for a sustained you know period of time and so it's kind of peak credit formation peak bank lending uh and all that. is when you raise rates, you dramatically increase borrowing costs and you generally slow down that rate of bank lending. One of the problems we've had uh you know since since 2020 and really even a little bit before then is that uh we're now in a period where most of the money supply you know basically that is is more funded by fiscal deficits that were you know our demographics are now quite aged. We have this kind of very topheavy entitlement system topheavy defense and then now interest expense as well. So we have very large fiscal deficits and rather subdued lending. Uh so when they kind of raise rates to try to contain inflation, uh it's not really targeting the core issue because you know bank lending was it wasn't like excess bank lending caused the inflation. The the large monetized fiscal deficits did. Um out of all of the the Fed candidates um uh Rick Reer uh was the one that kind of highlighted that point the most. He's kind of the most um I think uh knowledgeable and fiscal dominance. uh specifically. Um, but I think that's that's kind of the environment that we're in that there's there's actually a pretty big range of interest rates that you can argue that makes sense because interest rates are not even targeting kind of the the core thing that has driven inflation in this particular cycle which is the the fiscal deficits. Uh, and if anything, higher rates actually slightly increase the deficits because you you blow out interest expense. Um, so yeah, I I think that there are there's a very wide range of credible estimates that someone could say for what is like the ideal target interest rate at the moment. Uh, both in terms of targeting maximum unemployment and trying to keep inflation in check because bank lending is not the issue and that's that's really what the Fed targets. >> Okay. Speaking of interest rates, uh, let's go back to debasement trade. the five decade debasement trade that you were talking about that transpired since the beginning of the 70s uh coincided with a multi-deade bull uh run in the bond market as you can see the 10-year yield and of course the long end of the curve 30-year as well uh collapsed from double digits all the way down to basically zero um and then now we've getting a bit of a rebound in the yields ever since 2021 are we at a structural inflection point where we have a multibeck multi-deade bare market in treasuries Lynn >> so I think we are at at a structural inflection point. Um I wouldn't necessarily say that we are in a kind of prolonged bare market in the sense that you know if you if you have me estimate our interest rates going to go structurally up over the next say 10 years I would say probably not. Uh my base case would be choppy sideways for quite a while. So I I think we the part that we have changed is that we're no longer in a structural downtrend. There's really no not much further to to go compared to how we already were. Um but that doesn't mean we're in an uptrend either. And one of course one of the challenges with bonds is that if you just go sideways uh in interest rates, their returns aren't that good. Uh so we had this kind of 40-year period of of good returns because bond holders got both uh you know higher rates uh and they got that increasing price action from falling rates. Uh you know lower high lower bond uh yields means higher bond prices. Uh and so in when you kind of hit zero and then you kind of just bounce around after there and you just go head in a choppy sideways range um then bond holders are pretty much just getting paid that kind of low to moderate interest rate and they're not really unless they're trading uh very skillfully they're not really making kind of you know price gains uh from those bonds. Uh so I I would say it's a mild bare market in the sense that just a sideways rate market is is not great for bonds. Uh but yeah, I I don't think that we're going to just keep dramatically nominally uh losing on on bond price. I think the the past five-year period is one of the worst periods on record in like history uh for for US bonds. Uh and while I'm not very optimistic on the asset class, I I I don't think we'll see a repeat uh anytime soon of this kind of 5year period. >> Okay. And uh the what we learned from the Japanese JGB uh yield spike in the last 2 weeks uh was that the same some say the same could happen to the US if we have fiscal uh deficits widening uh debt skyrocketing. The prime minister of Japan announced new fiscal measures which some say was partly responsible for the spike in the JGB yields. Is that a foreshadowing, should we say, of what may happen to the US if Trump's administration continues to spend and increase budgets on a lot of things, including defense, for example, $1.5 trillion proposed. Uh potentially, I mean, I of course in context, Japan's yields are lower than ours. So, they they've increased at a kind of extraordinarily rapid rate, but from an unusually low level compared to most other countries in the world. Um it you know it is true basically uh you know they are in more fiscal dominance than any other country. I mean you know over 200% uh you know sovereign uh uh debt to GDP let alone the debt in their in their private sector which actually has been over the long term reduced on a percentage of GDP basis. It's it's kind of gradually transferred from the private sector to the to the public sector over in Japan. uh and they are in fiscal dominance meaning that that interest rates don't really help them contain it anymore because if they uh raise interest rates they just blow out their their their government expense their interest expense even faster than they could you know cail other things. Um so I think I think basically what we're seeing in Japan is some degree of normalization. Uh they've been in this unusually low rate environment and now finally um bond holders are saying we actually want some yield. uh and the central bank in order to not have just just unchecked currency loss uh has stopped doing yield curve control. Um I I think the Japan story is going to be playing out for a long time. I don't think they're you know I don't think they're going to blow up this year. I don't think they're going to blow up next year. Um you know every country can have these little mini crises. Uh I think generally uh Japan uh has a very long runway ahead. Uh and it's large part because they have so much foreign exchange reserves. Uh so in many cases when a country gets that indebted they face the very tough choices of do you let bond yields keep going up but then just blow out interest expense and then have like a fiscal spiral or do you do yield curve control uh and keep the interest expense under control uh but then you your currency value compared to other currencies gets killed because nobody wants to hold your your currency your bonds. Uh and they have a third option uh where they can sell some reserves and buy back their own currency. So whenever too many people short their currency uh they can they can kind of blow that trade out um and and slow it down for a period of time. So I I think they have a lot of tools to extend this um well into the 2030s is my estimate. Um and I do think that you know much of Europe, the United States, uh you know uh Canada, we're all on a kind of similar trajectory as them. Uh but some of us don't have the strengths that Japan has either. Japan has a very harmonious culture. uh they've had a a structural you know current account surplus for a very long time uh and a lot of other countries are kind entering this this period with way more political polarization uh especially in in you know many European countries than in the US uh and in the US's case we're entering this kind of period with a structural trade deficit so we have we have a larger twin deficit than Japan has um so uh it is true that anytime you have a government that that puts forth a budget that is viewed as kind of irresponsible responsibly large deficit. Um you're more likely to get a a sell off in bonds. Uh this of course happened. This was the list Liz Trust moment uh back in the during the guilt crisis a few years ago in the UK. Um that that that budget spooked uh the bond market. Uh look at the Bank of England they they had to cancel a speech on balance sheet reduction and come in and do emergency QE to to like keep their own yields from like uh spiraling uh cuz they you know from the levered holders. Um you see similar things happen out of Japan where they you know they announce kind of a running hot type of of budget and then that you know mildly spooks bond holders but again from very low levels. Um and you know in the US if we actually start pushing very large um much larger fiscal deficits. Yeah you could see a little bit of a a bond selloff. Um I would separate kind of statements about what we're going to do versus actual budgets. So, a $1.5 trillion military budget, uh, that, you know, that has supposed to go through Congress, uh, and everything. And I think that by the time it actually gets through, it'd be different than just kind of what we what is kind of mentioned on True Social or in in interviews. Um, so I I do think that over time, US fiscal deficits will be will be flat to up at a pretty high level. Um, but I'm not necessarily expecting any sort of blowout in the next year or two. Uh, and you know, if we do get it, then yeah, that that contributes to a run hot environment. So, I'm not exactly a a bond bull here. I just think that a lot of the damage is already done. >> Okay. Now, speaking of uh the Japanese uh uh yen, I I brought this up partly also because people have noticed that there has been a relationship at least in the last two years between the straightening of the US dollar versus the yen and the S&P 500. Maybe this is just a spirious spirious correlation. Maybe there's more to it. Can you comment on this? Yeah, I mean I these things can can change over time. I don't have any kind of major um input on that at the moment. Um you know I do think that for for quite a while uh US stocks have been the place to be globally. Uh now there certain other markets like Canadian real estate, Australian real estate uh until the until the um uh Chinese real estate bubble popped also Chinese real estate. There are these pockets where where other things were interesting to to investors. Uh but for the US specifically, it tends to be our stock market. Um we have the the largest, most diversified companies. We have a pretty big tech focus. Um and I, you know, I expect that to to continue for some time. Um uh and you know, as investors kind of got, you know, um spooked out of Japanese bonds, um they've been going into US stocks, but they've also been going into Japanese stocks. I mean, you know, the Nikkay has has had a really good run really ever since 2012. um they've had a you know they're one of the better performing uh stock markets out there uh let alone in their own currency but even when translated back into dollars uh Japanese stocks over the the multi-year long term have been doing pretty good. So uh I I do think investors are kind of shifting where they have focus. Um but yeah, I would let others kind of talk more about that specific correlation. >> Okay. Well, I I'll comment on another correlation here. Bitcoin and the NASDAQ or the stock market overall. uh you can see this divergence becoming very stark and it's been it's been widening ever since basically November. Um and today's selloff was exacerbated by I guess the nomination of Kevin Walsh selling off alongside metals. Let's comment on that first before we talk about uh Worsh in more detail. Why has Bitcoin been selling off when the rest of the stock market has not over the last month and a half, let's say? >> Well, so in short, there's not there's not been a lot of external demand. uh few people woke up in the past few months and decided I want to own Bitcoin. They'd haven't owned Bitcoin already. Uh so there's very little like new capital uh coming into the space as far as I can tell. Uh you know this this past summer uh there were a number of treasury companies that got very overvalued. Uh there were ones trading at you know three times uh net asset value, other ones trading at at eight eight times or more uh of their net asset value. Uh and so a lot of that had to come out of the market. that excess valuation had to come out of the market that that enthusiasm. Uh so yeah, there has been kind of selling pressure. Then I think there's a little bit of a self-fulfilling pro prophecy of the four-year cycle. Uh that basically people said, well, whatever it hits in in quarter 4 of 2025, that's going to be the the peak for a while, so they want to get out. Um, I don't think the four-year cycle really has any more credibility to it in the way that it did in in kind of Bitcoin's uh more inflationary earlier uh years where the having cycle was a much bigger factor. Um, but I still think it has a psychological impact. So I think that contributed to this. Um, we've also seen uh you know many um software names are down. Uh so even though uh the NASDAQ is doing well uh a lot of that recently is hardware driven. Yeah. uh as as well as you know kind of the big hyperscalers um and you know kind of these these more pureplay software companies have have really gotten killed uh they're they're off you know they were expensive previously and now they're kind of viewed as potential um potentially being disrupted uh by AI to varying degrees uh and it's possible that Bitcoin is kind of caught in that trade. I mean I know that that there were some people spooked about quantum for a while uh the quantum risk. Uh I think that is um overblown in any sort of investment time horizon but I have heard from a number of credible institutional sources um that basically it used to be to say 5% of institutional allocators would would ask about quantum as a risk and that that had jumped to like 30%. Uh o over the past uh several months. Uh and the way that works is even if an institutional investor thinks there's a low risk of a quantum computer uh disrupting Bitcoin security, if they say, well, it's a five or 10% chance in say a 5year timeline, then they they calculate that in their expected value outcome. Uh so you you expect you if there's a 5% chance you get zeroed out or nearly zeroed out by some sort of like, you know, tech that comes out of nowhere, then that kind of disrupts your whole pricing mechanism. So, I think there's been a bunch of factors uh that have done this and I think Bitcoin has to work through this. Um but yeah, my my timelines tend to be longer than what happens in a given month and a half. Um but I do think that it is cheap here is how I would view it. >> Is there any relationship whatsoever between Bitcoin's uh demand and gold and silver and uh as a matter of fact the commodities overall their demand? Well, so one of the thesis I've seen put forth is that once gold and silver sold off, it would allow Bitcoin to catch a bid. Kind of like how Bitcoin doing pretty well might have previously sucked some of the enthusiasm out of say the silver market because if someone is interested in kind of hard money and and particularly likes the the more volatile hard money um then you know previously that would have been people interested in silver and they've been you know in into Bitcoin or kind of broader crypto. And it's possible that as you know, gold and silver and platinum have done really well, uh, that kind of same, you know, hard money crowd says, well, why would I own Bitcoin or crypto? We're not going to own the metals that are soaring. Uh, now, as we've seen, at least in a in a very small sample, as as we've seen a sell off in the precious metals, uh, you know, it's not been to the benefit of Bitcoin. Bitcoin also, uh, sold off. Um, so I'm not sure that I would link them much here. Um, I would say that I think I think a correlation that does matter is that I think that the the broader crypto space. Um, there's like a trillion in market cap in the broader crypto space outside of Bitcoin. And I still think a lot of that's overvalued. Uh, so I I've been a kind of a long-term bearer on most crypto outside of Bitcoin and stable coins. Uh, and I still think that's a big overhang. Uh, and and there are many entities that cross. So they'll own a multiple different cryptos and they'll own Bitcoin. Uh and if those other cryptos start doing poorly, they might have to just delever or degrowth their portfolios in Bitcoin as well. In addition, it's bad for the, you know, it's at least in the short term potentially bad for the narrative because there's just more negative news to focus on in the bit in the crypto space. You know, you can talk about uh the negative uh impacts of memecoins. people can talk around uh corruption associated with with President Trump's uh memecoin and and associated um you know crypto ventures uh some some of the news that has kind of come around around that. So it it kind of tracks all these negative headlines that Bitcoin can get lumped into, you know, if Bitcoin is like virtually separate from that. In the long run, I think it's healthy for Bitcoin for all these other crypto things to kind of stagnate down to closer to the like total adjustable market, which I think is pretty small. Um but in the in the you know near term the intermediate term while they do kind of melt and stagnate uh you know it's hard to envision that it doesn't uh you know pull down Bitcoin to some extent. Uh now I I still think that you know over the next couple years global liquidity uh and overall just the ongoing you know so-called debasement trade um likely contributes to to Bitcoin upside. Uh so I I you know I'm still a buyer. I still think it's good a dollar cost average into it. I think it's probably, you know, if you if you check in two years from now, it's probably higher than it is now. Um, but there are some headwinds. Um, and I think one of those is the the kind of the stagnation of the broader crypto space. Uh, but do you think just from a portfolio allocation standpoint, even if global M2 money supply does grow and makes a bid on Bitcoin, would stocks still outperform Bitcoin like they did in 2025? Especially what we're seeing today. We're seeing uh gold, silver, platinum sell off, copper sell off, hard, you know, the hard metals having having a coordinated selloff in reaction to the news we discussed. Bitcoin selling off as well. The resilience of the stock market in light of what we talked about. Does that make you more optimistic on equities in 2026 than on Bitcoin? Let's say uh I say 2026 is a toss up. If I say 2026 and 2027, my estimate would be Bitcoin outperforms. Um, I certainly could be wrong on that, but that'd be my base case. Uh, what the way I would put it is that when Bitcoin moves, it tends to move rather decisively, right? So, in in in lately that's not been good because it's been decisively kind of down. Uh, but when it does when it does catch a bottom uh, and shake out some of these weaknesses, so maybe people get over the the quantum risk for a period of time and they get past the four-year cycle risk and they get past kind of the broader crypto contagion. Um when Bitcoin does run uh I it can run kind of like what we saw gold and silver do uh over the these past 6 to 12 months. Uh so when it does run I think probably would outperform stocks. The question is does that run happen in 2026? Does it happen in 2027? Does it kind of split the difference and you know start happening in late 2026 and then go into 2027? I don't I don't really know about that timing. Um so I mean my approach has always been to be diversified. So I own uh equities both in the US and globally. Um I've generally uh avoided long-term bonds in favor of precious metals uh which is which has served me well. Um to the extent that I have bonds, I generally keep it shorter term, you know, just for a little bit of cash liquidity, dry powder. Uh and then I I've had a you know a multi-centage slice uh in Bitcoin. Uh and that's over a very long period of time that's done quite well even though it's been weak uh lately. And I generally find that rebalancing is help helpful. So when you know precious metals are absolutely soaring uh and they become overweight in your portfolio, it's nice to kind of trim those back a little bit. When stocks are soaring, I trim those back a little bit. When Bitcoin is soaring, I kind of trim that back a little bit, at least in my liquid portfolios. And that allows kind of structural growth without kind of getting caught up too much in any one asset class. Moving on now to critical minerals. Just today on the 2nd of February, Trump announced the creation of a critical minerals reserve. Today we're launching what will be known as Project Vault to ensure that American businesses and workers are never harmed by any shortage. What does that look like in practice? You know, you can't just turn on a critical minerals mine overnight. Um, so that's part of the question. The second part is whether or not this announcement has any impact on your investment thesis overall. >> Well, for the most part, no, because this is less of a macro scale um, you know, thing. uh it's more of a kind of a commodity specific thing. Uh I I'm structurally bullish on most commodities in general. Uh so certainly doesn't really hurt uh any of the thesis uh that I'm operating under. Uh obviously people uh you know many people in your audience or your investor base are more specifically in mining and mining stocks. This can be very dramatically uh important for many of those. Um I would zoom out and say it broadly speaking we are now an industrial policy. Uh meaning that we're not really operating on free market principles. We're operating more on like u mercantalism and we're operating more on some degree of kind of top down uh you know things that are happening now. Um and that's that often happens during fiscal dominance. So that happened back in the in the 40s and 50s. Um, and I think that's really kind of what the what the 2020s and probably the 2030s end up looking like is that there's some kind of just more top down strategic stuff happening. So, they've been taking stakes in in uh, you know, kind of mineral companies. This this, you know, the whole tariff policy has been kind of very kind of top down, you know, trying to uh, fix the trade deficit uh, and and things like that. Uh, so I do think this kind of thing is going to keep repeating. I also I do think it's rational for any large country to try to have uh stockpiles of um you know critical minerals that can last a long time. Uh I think they should have stockpiles of uranium. They should have stockpiles of of many types of of rare earths. Um uh because you know the the trend that we've been operating under has been this trend of globalization. Uh it's kind of this view of like the end of history. uh especially after the fall of the Soviet Union, it's like okay we're we're kind of operating under this this new uh kind of a u you know rule of law in the world. Um but as certain imbalances kept growing uh and as certain powers kind of grew uh we are entering a period now where um you know both policy makers and uh those who run corporations uh are interested in more resiliency in their supply chains uh redundancy uh which is on average costlier because you know globalization and single points of failure uh while they work are disinflationary uh but then when you have to you know, uh, building kind of, um, duplicate systems and you have to assume a more adversarial mindset, uh, and things kind of get rapidly shut off, uh, potentially. Uh, that's more inflationary, more redundancy. Um but I do think that's a that's a direction that the world is heading in and I think that that you know it should head in in the sense that if you're if you have any sort of meaningfully um impact on running a country uh I I do think it's relevant to have stockpiles of things that that your economy really can't live without for any any material amount of time. >> Two more questions let you go Lyn. So that leads me to my final point which is globalization. So as you probably heard during the Davos uh conference at the world economic reform the uh several world leaders including Mark Carney of Canada announced that perhaps globalization is fading and a new world order is going to happen in which there's going to be less of it. Now what happens when there's less globalization? We talked about disinflationary impacts from globalization being an impact uh that may be fading. What is are we talking about the reverse then where we have more inflation? Are we talking about investing in you know domestic manufacturing? What what does that mean practically for the investor? >> Well, so it means less disinflation from globalization. So less disinflation from supply chains. uh you know it tends to be more efficient to just say okay we're going to put all of our manufacturing in this country and they're going to specialize in manufacturing and this other country is going to specialize in this and everyone's you know you have single point of failure everywhere as long as it's working that's a very efficient system uh but of course it's fragile uh so when you build a more um uh redundant system it's less hyper efficient but it comes with more resiliency and I do think that's the world that we're heading toward if you measure globalization as percentage of annual annual kind of world trade as a percentage of world GDP. Um I I do think we're going to enter a period where that is more flat, not increasing as the way that it has been. It could even it could even decrease for a period of time. But let's just say even even flat means you're not necessarily deglobalizing, but you're not really globalizing uh anymore. And that is a that is a trend change. Kind of like how we talked before about if bonds go from, you know, the yields going down to just going sideways. That is a structural change. And I think we could see a similar thing with globalization. Um uh now there's still other other uh parts of of disinflation that can happen. We talked before about how AI can be you know disinflation on some areas kind of like how blue like bluecollar uh you know automation of manufacturing and globalization those have been disinflationary mostly on goods. Uh and you know where we're likely going to increasing see AI disinflation show up is like decreasing um cost of like kind of services uh you know white collar types of of services and things like that um can sometimes be just iterated way faster in AI not necessarily replacing workers but making so that each worker can do way more uh of what they can do kind of like how automation let's a you know one train kind of car maker instead of making cars by hand you're overseeing the robots making cars. Uh, and so per worker, you have more cars coming out. I think that accounting services, editing services, translation services, you people become more like managers of the automation doing a lot of those things. Uh, which is disinflationary in a good way. Uh, but of course it can be disruptive. So I think you can get one type of disinflation slowing down uh like disinflation of like hardware. you know, we've seen soaring in many cases electronic prices because of bottlenecks. Uh that that period of disinflation could be, you know, partially behind us, but then other types of disinflation like software disinflation and things like that can still be with us. Uh so I I think it it changes the um categories uh where we're going to see disinflation. And I do think that we are we're entering a more multipolar world. I I've been writing about that since at least 2020, probably, you know, somewhat before then, that we're entering a world that is not just entirely centered around the US. We're entering a world that's centered, you know, partially around the US, partially around China. Um, if you asked me a few years ago, I would have said Europe, but they kind of handicap themselves on the energy side. So um really kind of the two big polls are are the US and China uh with a handful you know India and and Brazil and and to some extent Europe were also you know sizable uh poles in all of that. Um but I yeah I do think we're entering a more multipolar redundant uh world uh with more adversarial thinking uh tied into it which is also that contributes to why precious metals are attractive uh because instead of sovereigns around the world holding treasuries some increasingly say well I want to hold something that can't just be shut off with a stroke of a pen I want to hold metal in my own borders. Um, and Bitcoin is still a small market, but Bitcoin also has that trait where it's a decentralized network. So, it can make for decentralized settlement uh and uh self-custody. So, I do think that we're in a world where you want to kind of think about these things uh rather than kind of assuming that systems work as they always have. I have one final question for you. I promised you two final questions. My last one is you have a sci-fi book coming out. Um, you can tell us a little bit about that, but more broadly, I'm curious to know which, I guess, sci-fi predictions from either the current time or I guess from your childhood and my childhood are you most looking forward to seeing come to fruition >> at some point, if they ever do. >> Uh, yes. So, I I have I have a sci-fi book coming out in in March, so people can check that out. I'll have announcements on social media and my website when it's when it's >> You have a name for it yet? Not yet. >> Uh, the Stoleg Guard Incident. >> Okay. Uh, so it's it's near it's near future. So it's not a space opera. It's set in our planet. Um, one of the technologies I kind of focus on a lot, it's funny because the the recent news of all these AI agents kind of talking to each other on on social media. Um, that's common place in my book where basically the the you know kind of the internet is flooded with bots not just in the spam sense but in the sense that just bots become a more commonplace part of of our life. Um I you the the part that the book explores that's more on the cutting edge there is more like gene editing. Uh so so bioengineering soldiers and things like that that's kind of a spookier stuff uh that the book explores. But I think the more baseline stuff is um just AI becoming more commonplace. In fact part of why I kind of got myself to write it. I've been putting it off for a very long time just because I I've had my hands full with with everything else. But because I see the that whole technology area growing so rapidly, I was like, if I don't write my book, it's going to become historical fiction. It's not going to be sci-fi. So, it's like I have to get it out at a reasonable time frame. Uh for me, I you know, I think that in addition to seeing just AI in general help us with a lot of things and and increase our productivity, um I I like the return of hardware. uh basically uh kind of this renewed interest in the the physical side of of computation. So I've been happy to see the you know the kind of the renewed interest in GPUs now that more more recently the renewed interest in in in memory. Uh personally I would like to see more aerospace stuff. I've been excited about the the work that SpaceX does. Um, also I've been excited to see uh, especially out of China, some of the the flying cars, uh, you know, the these kind of technologies that have kind of >> finally kind of catching up to things that we might have been thinking about when when we were kids, right? >> Uh, and, uh, I, you know, I think that at a commercial scale, it's still somewhat a bit away, but I do think that over the the coming decades, we'll see a little bit of a return to to some of these more hardware focused things and not everything's just so software focused. Yes, I am looking forward to the liveaction version of the Flintstones, but without CGI. So, let's let's let's see let's see if that happens soon. All right. Well, thank you, Lynn. Besides your upcoming novel, uh where else can we follow your work? >> Uh people can check that on lindalton.com. Uh and they can also check out Broken Money on Amazon or elsewhere. >> Okay, good. We'll put the links down below. So, check out Lynn's work uh in the links in the description. Thank you very much again, Lynn. We'll speak again soon. Take care for now. Thank you for watching. Don't forget to like, subscribe,