David Rutherford Show: "Buckle Up!" — Anthony Pompliano On Bitcoin, Oil, and How Iran Could Collapse The Markets

3/16/202649 mincomplete

Transcript

0:00This is an iHeart Podcast.
0:02Guaranteed human. Oil was $77 five days ago.
0:06It went to almost $120.
0:08Then it went back down to $77.
0:10And now it's at $92.
0:11I mean, this thing is all over the place.
0:13And normally, if something like the Iran conflict kick off, the U .S.
0:18and Israel are bombing, the Shredder Hermoses closed, you know, all these kind of complexities,
0:22oil would be at $120 or $150.
0:24And so the question then becomes, okay, you can do certain things to mitigate a
0:29skyrocketing oil price, but how long can you do that?
0:32And so I think the question around what is the impact of oil on inflation
0:36is really just like how long does the Iran situation happen and how long is
0:41that Shredder closed for? If it's, you know, four weeks, it's not going to be
0:45fun, but hey, it's not going to have a massive impact.
0:48If we start talking six months, buckle up.
1:00Welcome back to the show, everybody.
1:03Today's guest is someone that I've really been excited in preparation to come on, Mr.
1:08Anthony Pompliano. Jordy, our producer, worked with Pomp for about five years and speaks with
1:16such a high degree of respect for him.
1:19And after being introduced and getting familiar with his content, I believe he's probably the
1:24best person on Bitcoin that's out in the industry right now.
1:30And so, but what's really phenomenal is his comprehensive understanding of the markets, what's taking
1:37place in geopolitical events. So we're just going to jump right in and get straight
1:42to the heart. Mr. Pompliano, thank you so much for coming on, sir.
1:47Yeah, well, Dave, thanks for having me.
1:48And obviously I think very highly of you and of Jordy.
1:51So I appreciate the invitation.
1:53Awesome, awesome. All right, let's just jump right into this.
1:56There's a tremendous amount of volatility taking place.
1:58And I think it really began last April with Trump's announcements of tariffs and what
2:06we saw, how it hit the bond market and other places.
2:09We've had a massive fluctuation in Bitcoin, a massive fluctuation in oil, gold.
2:16Across the markets, we're seeing volatility.
2:20You recently had a guy on named Jeff Park that I thought was pretty fascinating
2:25because he began to use a phrase called wartime Bitcoin.
2:31Can you describe what he means by that in the greater context of what we're
2:35seeing geopolitically right now? Well, look, I think that Bitcoin has gone through a very
2:41large evolution, if you will.
2:42So if you go back 15 years ago, frankly, the only people who were interested
2:46in Bitcoin were nerds, crazy people, or criminals.
2:49And if you didn't fit in one of those three buckets, you probably weren't into
2:53Bitcoin, right? The thing was trading for pennies.
2:57It was kind of a wild idea.
2:59There was not a lot of exchange or venues where you could go and acquire
3:02it. It required some degree of technical understanding for you to be able to custody
3:07this thing. And there was a lot of questions around, is it going to survive?
3:10Will it thrive? Is there going to be some sort of government crackdown?
3:14You know, all of these things.
3:16Over that, maybe the next seven or eight years, you then started to get into
3:19what I call like the early adopter phase.
3:21And in that early adopter phase, that was people who like, okay, maybe I'm not
3:24as crazy. Maybe I'm not a criminal, but I have a little bit of technical
3:28understanding. I'm intellectually curious, and I like to be first, right?
3:31I like to be early to things.
3:33And so, you know, as we kind of went through this, now, if you fast
3:35forward to today, well, that evolution has got, you know, Larry Fink from BlackRock talking
3:39about this, Jamie Dimon, the mainstream media, Fidelity, you know, all these folks are into
3:45Bitcoin. And so I think that what you've really seen is you've seen Bitcoin go
3:48from, you know, kind of a newborn child to now it is a full -fledged
3:52adult that's ready to stand on its own.
3:54Now, during that 15 years, we've had a lot happen in the world.
3:58If you think about, you know, coming out of the global financial crisis when Bitcoin
4:01was built, there obviously was kind of the decade -long run in software and technology
4:07where Bitcoin thrived. Then you had COVID where there was really what I would consider
4:11kind of the first big test in terms of a kind of global event that
4:15Bitcoin had to weather and then come out the other side of.
4:17And then it even was able to survive the hiking of interest rates, you know,
4:22at the fastest pace in history in 2022, 2022, and we get to today.
4:25And so as you navigate all of that, you know, one of the things in
4:28America that, you know, you would understand probably better than most is we for 20
4:32-something years had the persistent backdrop of we were at war.
4:36You know, there's very few years where the United States has not been at war.
4:40But historically, Bitcoin has been in the market while war was already going on.
4:45So kind of, you know, war started, years went by, and then Bitcoin was introduced.
4:49I think what we're watching right now is really Bitcoin has now done two things.
4:54One, it is big enough where people are paying attention.
4:56So it's, you know, trillion and a half to $2 trillion, depending on the price.
5:00But two is it's held by people who are not just the crazy people on
5:04the internet anymore. When it was a crazy thing on the internet that was held
5:07by individuals, those people don't really care what interest rates are.
5:10They don't care what's going on geopolitically.
5:12They just say, look, I'm buying Bitcoin.
5:13When I earn more money in my next paycheck, I'm buying more Bitcoin.
5:16And no matter what you tell me, I don't like the government.
5:18I don't like the central bank.
5:19I'm buying Bitcoin. Well, now if you have macro hedge funds or large financial institutions
5:24that are holding... Bitcoin, they're looking at a portfolio.
5:27And so maybe they have one, three, 5 % in Bitcoin.
5:30But if all of a sudden the Strait of Hermos gets closed and gas prices
5:34start to go up because oil prices are going up and there's worries about certain
5:37impact on the economy, well, maybe they start to go risk off.
5:41And if they go risk off, then they may sell some assets like a Bitcoin.
5:44What's unique though, is that Bitcoin has not sold off.
5:46Actually, Bitcoin is held in there really, really strong.
5:49And so it tells you that maybe people are expecting a little bit higher levels
5:52of inflation. And they think that Bitcoin could be a good inflation hedge.
5:55But I think that's the complexity now.
5:57This went from kind of a luddites win, where just buy Bitcoin all the time,
6:01regardless of the cost of capital or what's going on in the world, to now
6:05you have a lot more people holding Bitcoin that are trying to figure out, where
6:08does this fit in a portfolio and how should I think about my capital allocation?
6:12Thank you. That's a great introduction to it from my audience.
6:16You know, I think one of the interesting things that I'm seeing mostly with the
6:23volatility of the markets right now is everybody's super focused on oil.
6:29And they're saying if we get over, what, $120 to $150 a barrel, we're guaranteed
6:38recession. People are talking about a potential depression if we hit 200, right, because of
6:43all the residual impacts of how it's going to affect the supply chain out of
6:49China. If China's struggling to get more oil or India or wherever it might be,
6:55the reverberations of that pinch is going to have long lasting deep impacts.
7:02I've heard you describe your confidence that if this war or conflict, however you want
7:10to describe it, is what the administration is saying it's going to be, which is
7:14another four to six weeks and then over, that you don't believe it's going to
7:19have as great an impact as as people are predicting.
7:23Is that true? Well, one way to think about, you know, impacts on inflation is
7:28things take time to work through the economy.
7:30So let's go to tariffs, maybe as an example, and then we can talk about
7:33oil. You know, when the tariffs got levied in April of 2025, I think that
7:38people immediately thought inflation was just going to spike, you know, overnight.
7:41But if you think about how this works is when those tariffs get levied, there's
7:45already a bunch of products that are on ships or cargo planes on the way
7:49to the United States. And so do they get here before the tariffs actually get
7:53put in place or do they not?
7:55Well, that depends on what is the price change going to be, right?
7:58There's contracts that are already in place where prices haven't been adjusted yet based on
8:02the new, you know, kind of economic policies.
8:04And so I think that as you see these policies work their way through the
8:09economy, you can then say, okay, maybe over a six month period or 12 month
8:13period, then you really start to see the impact of it.
8:16If you look at those tariffs, one of the things that was really interesting was
8:18I continued to say, hey, tariffs are not inflationary, they're deflationary.
8:21That was not a very popular thing to say, but I think now the data
8:23is pretty overwhelming that that's true.
8:25But people didn't finally conclude, okay, maybe the tariffs aren't going to be as inflationary
8:29until kind of the end of Q3 last year.
8:32And that's because they knew, well, if you put the tariffs in place in April,
8:35the inflation start to hit in Q3.
8:38Oh, wait, the inflation is not here, right?
8:40And so it took a while for people to kind of conclude there.
8:42Now, if you go to the oil market, what is unique is actually gas at
8:46the pump has significantly increased already.
8:49We have seen gas in America increase by about 62 cents since February 28th.
8:53So $3 .60 a gallon as of this morning.
8:57And the reason why that's important is because actually oil is much, much more sensitive.
9:02Now, I think what is happening in the market is people are trying to figure
9:05out, well, what should the price of a barrel of oil be, right?
9:08You know, I was looking this morning at oil was $77 five days ago.
9:13It went to almost 120.
9:15Then it went back down to 77.
9:16And now it's at 92.
9:18I mean, this thing is all over the place.
9:19And a reason for that is normally if something like the Iran conflict kickoff, the
9:25US and Israel are bombing, the Shredder Hermoses closed, all these kinds of complexities, oil
9:31would be at 120 or 150.
9:33But the United States went and took Maduro out of Venezuela.
9:37And so we've got, you know, kind of access to even more oil than what
9:40we produce ourselves. But on top of that, we also have gotten some of the
9:44leading developed nations around the world.
9:46You can think of this as like Western nations who have now come out and
9:50said that they are willing to release over 400 million barrels into the global supply.
9:55And so the question then becomes, okay, you can do certain things to mitigate a
10:00skyrocketing oil price, but how long can you do that?
10:03And so I think the question around what is the impact of oil on inflation
10:07is really just like, how long does the Iran situation happen?
10:11And how long is that straight close for?
10:13If it's, you know, four weeks, it's not gonna be fun, but hey, it's not
10:17gonna have a massive impact.
10:19If we start talking six months, buckle up, right?
10:22I think, you know, oil goes much higher than I think that the inflation conversation
10:25definitely does become a bigger part of, you know, what everyone's worried about.
10:29You know, to hit that, the inflation aspect, obviously, Powell is probably on his way
10:36out. I mean, Trump's tagged another guy.
10:39You know, do you think we need a rate cut in order to stabilize this
10:45if it does lengthen out?
10:46Or what would your prediction be?
10:49Because I mean, obviously, we had a pathetic jobs.
10:52number report that came out earlier this week.
10:55And so how would you move?
10:58If you were all of a sudden tagged to be ahead of the Fed, what
11:01would you do? Well, I think that there are two real jobs that the Fed
11:06has, right? One is to maintain some degree of like maximum employment and then also
11:12to steady prices. And I think what people are always looking at the Fed and
11:18frankly, incorrectly critiquing them for is they are looking at the Fed and they're saying,
11:23what is the static thing in the moment in time?
11:25So what is the CPI metric or what is the monetary policy or what is
11:31going on with economic policy, et cetera?
11:33What is much more important in my opinion is looking at the direction of travel
11:37of these things. And so if you look at the government metrics, I pretty much,
11:41when I hear the Bureau of Labor Statistics put out a metric, I immediately just
11:45say, stop listening. There's no way that that thing is accurate, right?
11:49Especially because every like two months later, they downgraded or adjust the numbers so dramatically.
11:55Well, so there's adjustments, but like I'll maybe highlight a couple of issues with the
11:59inflation calculation as maybe just one example.
12:02So in the country, we have something known as a CPI metric, which is inflation.
12:07And that is the consumer price index.
12:09And the way that that is calculated, it basically requires them to go get data,
12:14bring that data in. They then calculate the methodology that they have, what should the
12:18inflation number be? And then they present that to the public and to the central
12:21bank. Now, when you look at how they collect the data, it is insane.
12:25So a couple of examples are they send physical people into physical stores with physical
12:34tablets and say, go find the Campbell soup with low sodium and no salt.
12:40And I always say that if we said to your audience, which are obviously very
12:43intelligent, good looking people, for all of them to go do that, somebody will make
12:47a mistake. Because if I was told to go into the grocery store and find
12:50all these different products, right?
12:51My wife sends me to do that sometimes and I still make mistakes and I
12:55don't even have to find the exact perfect one.
12:57And then they got to manually input the price and they're doing this all across
12:59the country. So obviously there's some issues there.
13:02The second thing is they will call people on the phone and they'll say, Hey
13:04Dave, you know, you own your house.
13:07What do you think you could rent it for?
13:08Well, on Friday night, when you're hanging out with your buddies, ask them what they
13:11think they could rent their house for.
13:12You'll hear some pretty wild numbers, right?
13:15And so people just, they don't have a clue.
13:17They just make it up.
13:18And so I think there's some issues there.
13:20Instead, I look at metrics like the truflation measurement.
13:23Truflation is a real -time alternative inflation metric that basically says, look, rather than do
13:28all this crazy stuff, why don't we just look at guaranteed verifiable data?
13:33So they take 14 million data inputs from 40 different independent data providers.
13:38And they basically calculate what they think is inflation on a daily basis.
13:42Oh, wow. And the reason why that's interesting is because the government is telling us
13:45inflation is 2 .4 % right now.
13:48Truflation is telling us it's half of that 1 .2%.
13:50And so if you're the central bank, if you're looking at 2 .4, you're saying,
13:54well, that's above our 2 % target.
13:56If you're a truflation and you're saying it's 1 .2, well, now we're below the
14:00target. Maybe we should be cutting rates.
14:02So I think that the data is always going to be a big issue.
14:04Now, if I was the Fed chairman, the first thing I would do is I
14:06would go in and I would cut rates immediately.
14:08The reason I would do that is tell everyone, hey, we're serious.
14:10And the second thing is that people, again, in that direction of travel, drastically underestimate
14:16the deflationary forces that are swallowing the US economy right now.
14:19And so I continue to say that tariffs are deflationary, deportations are deflationary, AI and
14:26robotics are deflationary. So you think of deportations is last year we had a negative
14:292 million net migration in the United States.
14:32If you take 2 million people out of the population, well, guess what happens?
14:35There's less people competing for homes.
14:37There's less people competing for certain resources.
14:39And so those prices go down because the demand is not as high as it
14:42was before. If you look at things like AI and robotics, you see all of
14:46these little anecdotal examples, you know, Lemonade, which is big in car insurance provider, they
14:52have come out now and said that if you are driving a Tesla and you
14:56have full self driving engaged, you will pay 50 % less on your insurance policy.
15:01And the reason why is because the data shows that it is safer for full
15:05self driving to be driving versus the human.
15:07Well, that's deflationary. If you drop car insurance by 50%, then that obviously is going
15:12to bring prices down. And so I just think that we continue to look at
15:16things like oil or short -term movements and we ignore the fact that there's this
15:21like, you know, Elon Musk calls it a supersonic tsunami of deflation that's coming.
15:26And I just think that that is a much, much bigger risk than, you know,
15:29short -term inflation expectations or anything like that.
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17:22Lenovo, Lenovo. That is the talk of the town, right?
17:27We've seen a lot of news stories relative to AI, its infusion into geopolitics, our
17:36military -industrial complex. Zero Hedge, as I said, just posted an article suggesting that we're
17:43almost out of rare earth minerals, which we put into our missile systems, our autonomous
17:48vehicle systems, right? And that China controls the majority of that.
17:53The other reality is AI and the Super 7, right?
17:58How long do those continue to kind of prop up the S &P 500 in
18:05the markets right now? Because with right around a 40 % balance of the overall
18:11markets, is that sustainable? And does AI continue to have a deflationary impact?
18:22Or does the tsunami, as he said, cause so much disruption in high -wage earning
18:29jobs, i .e., you know, white -collar jobs, I heard you talk about this a
18:34little bit. Does that then, right, reduce high -paying jobs, which reduces, right, which increases
18:41the job list numbers, which then wants to drive those inflationary numbers higher?
18:46How would you, how do you look at AI as a disruptive impact on inflation
18:51as well as the economy?
18:53Yeah, you know, what's really interesting is, um, I can talk about maybe my personal
18:57experience running, uh, running businesses, right?
18:59So, um, I think people hear artificial intelligence and they think that, oh my God,
19:03everyone's going to lose their job.
19:04Well, what we actually find is twofold.
19:07One, we are actually not hiring net new roles in certain cases.
19:11We're still hiring in many roles, but in certain cases, we are not hiring net
19:14new roles because those entry -level type jobs can now be replaced by artificial intelligence.
19:19And so no one lost their job because of it, you didn't gain a job
19:24in the economy because of this artificial intelligence.
19:27The second thing is my expectations for productivity for people in our companies has grown
19:32substantially. You know, if all of a sudden I give you superhuman intelligence, which means
19:37that now you are smarter than you were six months ago, shouldn't you be able
19:40to be more productive? Shouldn't you be able to create more things, right?
19:43Shouldn't we drive more revenue or more profit in our businesses because now we have
19:46superhuman intelligence? And so I think that that's actually maybe one of the more interesting
19:50stories here is now, if you look at big companies, a lot of them were
19:54bloated already. You know, it's kind of the example of Elon going into Twitter and
19:58firing 80 % of the staff and almost nobody noticed type thing, right?
20:02So some companies are already bloated.
20:04But what I do think is maybe more likely is if you look at something
20:08like Palantir, Palantir constantly keeps saying, hey, we are going to grow at the same
20:11rate or faster, but we're going to do it with 800 less employees.
20:14And so there, they're basically saying that technology is going to have an impact on
20:19this stuff. Now, what I find maybe in terms of the inflation conversation is the
20:25reason why AI and robotics is so deflationary is because ultimately it drives down the
20:30cost of things. So a good example is if you look at, okay, if I,
20:37let's say humanoid robots become popular, right?
20:41I can go and I can hire 10 humans to do something, or I can
20:45hire three humanoid robots, which one do you think is going to be cheaper?
20:48Well, in the very, very short term, the humanoid robots may be more expensive, but
20:52over time, technology will drive the cost down.
20:54And a great place where you can see this is like a big screen TVs.
20:58I remember when I was like a teenager, a big screen TV was like a
21:02crazy luxury item, right? I mean, you know, 1200, $1 ,500, you would like beg
21:08your dad, like, please, will you, you know, get this?
21:11We want to play video games or, you know, whatever.
21:13And he's like, are you guys insane?
21:15It's, you know, $1 ,500 at Best Buy or whatever.
21:18Now you can go on Amazon and order a 65 inch screen TV for like
21:22300 bucks, right? And by the way, the technology is better.
21:26The sound system is better.
21:28The, you know, imagery on the TV, all that's better, but it's cheaper.
21:32How did that happen? Well, it's because of the deflationary nature of technology.
21:36And so I think that is, you know, kind of what you're going to see
21:38show up. And the last thing I'll say here is I do think that technology
21:42in general shifts the way that we do things.
21:45And so if you think about, you know, solve.
21:48Driving cars, maybe as a great example, it used to be that you needed a
21:53individual to go and drive their own car.
21:58But the wealthiest people in the country, they had a driver.
22:01Well, when they had a driver, guess what was really popular?
22:04Uber and Lyft came around and said, well, what if we could give you a
22:06driver just for this one trip?
22:08And so they democratized access to having a driver.
22:11People loved it, right? Because now maybe I don't need to own a car or
22:13I can go to a city and I don't need to drive myself around and
22:16do all these things. Well, self -driving cars is just democratizing it a step further
22:21and saying everyone's going to have their own driver all the time and it's going
22:24to be safer, better, whatever.
22:26That is the trend of technology.
22:29And so that pushes prices down.
22:31And you can almost think of it as like how much does it cost per
22:34mile to move a human?
22:36Well, we are already substantially lower than we were 10 years ago.
22:39And I think that that's going to continue to fall.
22:41And so all of this is very, very deflationary for inflation over a medium to
22:45long term period. All right, let's shift gears a little bit and let's talk about
22:49the private credit pullbacks that we're seeing right now.
22:52Over the last couple of weeks, we've seen Blackstone, BlackRock and JP Morgan talk about
22:58not a canceling of access to profit, but certainly a reduction or restrictions on some
23:05of their funds, it seems like.
23:07How does this affect an economy that might be moving into definitely a bear market
23:15in terms as well as a low growth period?
23:19And as with the AI disruption that you talk about, right, there's going to be
23:24a considerable amount of need for an influx of finance to come in to adapt
23:31to the emerging technologies, right?
23:34Initially, an outflow of investment to integrate these types of technologies.
23:40Does private credit challenges, do they last a long time?
23:45And how do you predict, you know, what's taking place now?
23:49Is this going to be long term or short term thing?
23:52Yeah, so to understand private credit, you have to understand maybe how private credit became
23:56so popular, right? And if you go back pre the global financial crisis, basically most
24:02lending was done by businesses.
24:03If you were a small or medium -sized business, you went to your local bank
24:06or your national bank and said, hey, here's my business plan.
24:09Maybe here's my, you know, P &L, my balance sheet.
24:11This is what I need the money for.
24:12And somebody underwrote you and they gave you a loan.
24:15But during the global financial crisis, there was some passage of legislation, specifically the Dodd
24:21-Frank Act, which really hampered the ability for banks to go and do this type
24:25of lending. And so if the banks are basically sidelined, well, guess what?
24:29The businesses still need to borrow capital.
24:31And so what do they do?
24:32They go and they look for it somewhere else.
24:34And this gave rise to private credit.
24:36And it basically allowed financial institutions, whether they're large or small, to show up and
24:40say, hey, you know, if you need a loan, well, we got money and we'll
24:43lend it to you just like the bank used to.
24:44But we may be able to do it faster or cheaper or maybe more expensive
24:48or, you know, have different terms to it or whatever, but we'll lend you the
24:51money. And so for the last, I don't know, 12 to 15 years, private credit's
24:56exploded. You know, today it's estimated to be somewhere between $3 to $4 trillion in
25:00total size that is being lent out to, you know, these small, medium -sized businesses.
25:05Well, if you're lending money, just like in the global financial crisis, and you lend
25:09it to bad companies, you don't get paid back.
25:11If you don't get paid back, then that causes problems, right?
25:13Right. And so in the private credit world, I think the question right now is,
25:18you know, who were you lending the money to over the last, you know, couple
25:21of years and how good are those businesses?
25:23And one of the things that I think is really unique about private credit is
25:27you don't have to mark to market every single day.
25:30You know, if you hold a public stock, if I hold Apple stock, well, if
25:33I ask you how many or how much is 10 shares of Apple worth, you
25:37just go look at the stock market and say, well, what's 10 times the share
25:39price? And that's how much it's worth.
25:41In private credit, you kind of guesstimate, right?
25:45You say, hey, I gave you a loan.
25:46Maybe I lent you a million dollars.
25:48You've been paying me back.
25:49I think that this is still worth a million dollars, or maybe I think it's
25:52worth 1 .1 million. Well, if all of a sudden those businesses that I was
25:57lending the million dollars to are having trouble, their ability to pay me back may
26:02be withering away, and I may not know it yet.
26:04Or maybe I do know it, and I don't yet reflect it in the marks
26:07for that loan. And so now what we're starting to see is that some of
26:10these companies go under, and there's some very big examples, Tricolor and some people in
26:15the automotive space. That then pulls into question to the private credit guys, who are
26:20you lending the money to, and are you likely to get paid back or not?
26:23And so naturally, if you're an investor in a private credit fund, then you say,
26:28you know, this private credit thing I'm reading about in the headlines, I see the
26:31oil thing going on, I want my money back.
26:35And so you go to the private credit manager, and you say, you know, I
26:37want to redeem my capital, keep my money back.
26:40Well, if too many people do that at the same time, then the private credit
26:43managers got to ask themselves, well, all the money has been lent out.
26:47What do I do? And so that's where you're hearing about these funds that are
26:51basically, you know, some of them are selling off their loans and saying, hey, let
26:54me raise capital so I can pay back some of my investors.
26:56Some of them are doing something called gating.
26:58They're basically saying, hey, you can't get the money back right now.
27:00I'll give it back to you later, but that's where you're hearing these rumblings of
27:04private credit. Now, $3 trillion is a big number, but to give you a sense,
27:10it's only twice as big as the Bitcoin market right now, right?
27:12So it's big, but the global equity market.
27:15It is, you know, hundreds of trillions of dollars.
27:18And so it's still relatively small compared to, you know, asset classes like that.
27:22But what ends up being really important is if all of a sudden there's these
27:26cracks in private credit and these people not only can't extend more loans, but they
27:31have to pull back their loans, you get a credit contraction.
27:34Well, the US economy is built on credit expansion.
27:36More and more money getting lent out means we grow.
27:38So there's a credit contraction.
27:40That means that the businesses that we're borrowing, the small and medium -sized businesses, they
27:44come under pressure. They start to fire people.
27:46They start to have, you know, issues in their business.
27:49And that's where you can start to get some recessionary effects.
27:51It's not so much the private credit guys as much as the people that the
27:56private credit guys were giving money to, they come under the pressure.
27:58And that's where it shows up in the US economy.
28:01And so we're not there yet, but definitely I think, you know, all eyes on
28:05private credit at the moment because if these issues are real and bigger than maybe
28:09we anticipate, then yeah, you're gonna get some cracks throughout the system.
28:13And people will just wanna understand, you know, what is the contained area of this
28:16pressure and how pervasive is it compared to maybe what we previously thought?
28:21There's an idea out there.
28:24It's not an idea. It's a reality that over the next 10 years, you know,
28:28all the boomers are gonna be starting to pass away.
28:31They have more assets accumulated than any other generation in history.
28:37And those assets will be transferring to their offspring or to whomever.
28:42And that some estimates are, you know, low, like 35 trillion in assets, people high
28:49end or 80, 85 trillion in assets are gonna transfer into these, this new generation
28:55of young people. How do you think Bitcoin's gonna play a role in the future
29:02of that wealth transfer? Obviously, I heard you talk a lot about the younger generations
29:10kind of moving away from that traditional 60 -40 portfolio.
29:16What are you suggesting with the people that are beginning to receive some of that
29:22transfer of wealth from their parents or their grandparents?
29:27How are you directing them towards Bitcoin and why?
29:31Well, I think that Bitcoin is an important part of a portfolio, but I don't
29:36believe that Bitcoin should be 100 % of most people's portfolio, right?
29:40And so I think that you've got to look at it in terms of if
29:43you take a more traditional portfolio and you put some allocation to Bitcoin in there,
29:48it usually is a diversifier.
29:50It allows you to really kind of smooth some volatility and it ends up being,
29:56you know, usually non -correlated.
29:58It also tends to increase your Sharpe ratio and do certain things.
30:02But the real problem with the 60 -40 portfolio is basically that 40 % of
30:07that portfolio is really, really under pressure right now in terms of bonds.
30:11So global equities, you know, most people, if they're 60 -40 in the United States,
30:15they're going to put 60 % in American equities.
30:18And whether that is the S &P, the NASDAQ, or maybe they, you know, think
30:21that the next Warren Buffett want to go pick individual stocks, they're going to go
30:24and they're going to put in equities.
30:25And as long as you're not, you know, insane and put, you know, 30, 40
30:29% of your portfolio on a single stock that maybe doesn't have a good chance
30:32of being durable, that 60 % should go up into the right over a long
30:36period of time as the government debases the currency.
30:38Now, the 40%, though, I always say that bonds are the only thing guaranteed to
30:42lose value in your portfolio.
30:44And people don't like to hear that.
30:45But, you know, whenever I hear that the financial advisor community is telling people, you
30:50know, cash is safe or bonds are safe, treasuries are safe.
30:55I say, look, yeah, sure.
30:56If you're thinking on a timeline of a couple of days, weeks, months, maybe, but
31:00over multiple years, you know, these assets lose enormous amount of value.
31:05And if you look at something like TLT, which is the iShares 20 -year treasury
31:09fund, it is down 36 % over the last five years.
31:14It's just holding treasuries, right?
31:15But it's losing value because the currency is being devalued so quickly.
31:19And so when you look at that, I do believe that that 60 -40 portfolio
31:23is something that worked for a long time and it became kind of the safe
31:26thing. You know, nobody gets fired for going to use IBM.
31:30Well, nobody gets fired for doing the 60 -40 portfolio as a financial advisor or
31:34as an investor. And so I think that really what you're starting to see is
31:37people question, well, what should I put in that 40 %?
31:40And I've got some friends who are, you know, 60 % equities, 20 % gold,
31:4420 % Bitcoin. I've got some friends that are, you know, 60, 20, 10, 10,
31:48where maybe it's 60 % equities, 20 % bonds, and 10 % gold, 10 %
31:52Bitcoin. I have friends who, you know, they put real estate or whatever.
31:56And so it really comes down to what are you trying to accomplish?
32:00And I think that, you know, somebody who is 75 years old has very different
32:04goals and situation than somebody who's 25 years old.
32:07And if we know one thing, I think that the world has woken up to
32:11the fact that the case -shaped economy is driven by the people who hold assets
32:15and the people who don't.
32:16And so it's less about, you know, tax rates and all this other stuff.
32:19And it's just like, hey, did you learn at some point did somebody tell you
32:23buy assets, don't hold cash?
32:25And what I find very fascinating about that is the US government is now stepping
32:30in and saying, hey, let's help people here.
32:31And, you know, I'm generally pretty skeptical when the government says that they're going to
32:36help with something. I tend to think that they are value destructive.
32:40You know, they're very good at spending money and doing it in...
32:43sane, you know, ways that don't create value.
32:46But this idea of these invest America accounts, or people call them Trump accounts, where,
32:51you know, we're going to give newborn babies $1 ,000, and then people in that
32:55baby's life can go and contribute more money.
32:57And it's going to compound over time.
32:59It's pretty interesting, right? If you give people a stake in the capitalist system, then
33:04one, they're likely to end up with capital, right, you know, over 18 or 25
33:08years. But two is they're probably gonna like capitalism, they're not gonna be, you know,
33:12running around telling everyone how socialism is amazing.
33:15And we should take all the money from, you know, people and redistribute it.
33:18Because I think that, you know, two things about the the socialism conversation that always
33:23cracks me up is there's a famous saying, you know, the problem with socialism is
33:27you eventually run out of everyone else's money.
33:30And then the second one is Javier Malay down in Argentina recently gave a speech.
33:35And when he gave the speech, the the socialist party refused to clap for him.
33:39And he looked at them and he said, you know, socialists can't clap because they
33:42got their hands in everyone else's pockets right now.
33:45And so, you know, I think that capitalism is a pretty good system.
33:49And when you think about portfolios, you know, stocks obviously will still continue to do
33:53well as productive assets, but people are really questioning what's going to go in that
33:5640%. And I think young people are less likely to hold, you know, treasuries and
34:01other types of fixed income compared to maybe their parents or grandparents.
34:04I, you know, it's always interesting.
34:06I, you know, you're trying to get a, an idea because Gen Z is going
34:11to be one of the most significant generations in history, right?
34:14They're the ones that are going to go through this massive shift in the geopolitical
34:20hierarchies, right? There's a monster shift to power going right now.
34:24The, the old order of things is, is pretty much in, in massive question.
34:31You know, I see polling for Rubio peaking and going past, uh, uh, Vance just
34:37yesterday for the first time in terms of the future.
34:40And I think, you know, the old guard is pushing that because they, they want
34:45to try and get back to that, the, the stability of that, what we'll call
34:51it the, the old school, uh, monetary policy, geopolitical policy.
34:59And, and as we kind of move into the, the, the, the, um, it seems
35:05to be that uncertainty and, and kinetic actions overseas and, and, and volatility within the
35:13markets is the new norm.
35:15Um, why do you, is, are you talked about correlation?
35:21Uh, and I know a lot of people are constantly trying to correlate Bitcoin to
35:25gold or correlate Bitcoin to, uh, the S and P or correlate it to whatever,
35:30but we continue to see that that's not exactly the case.
35:34What is Bitcoin correlated to and, and how can people regain after, you know, what
35:41took place a couple of weeks ago and going back down to the bottom of
35:4463, how can you, what, what do you have to say to people about what
35:49Bitcoin is correlated to and why it's a great long -term asset?
35:54Yeah. Well, I think there's a couple of things here.
35:56So Bitcoin historically has been non -correlated.
35:58So, you know, people, when they see a high correlation, they get nervous.
36:01And when they see a negative correlation, they think, uh, that could be, you know,
36:05nerve wracking at times as well.
36:06The reason that non -correlation is really, uh, fascinating and advantageous is because if you
36:11put a bunch of non -correlated assets in a portfolio, then you have the ability
36:15to be resilient, right? And Bitcoin, I think has always been thought of this like
36:18resilient asset. Yes, it's volatile, but there's a deep seated confidence that over a long
36:22period of time, it is very resilient.
36:25Now that has changed in the last, you know, I don't know, 18 months or
36:29so. Bitcoin right now is very correlated to software stocks in particular.
36:33It's kind of been a risk on, you know, high beta trade, uh, to software.
36:38And the reason why I think that that is occurring is we've basically had a
36:41transfer of Bitcoin ownership from the individuals who didn't care about macro environment or interest
36:46rates or, or what's going on in the stock market to now you've got these
36:49institutions that are holding Bitcoin.
36:50Some of it's through the ETF, some of it's directly.
36:53And they're saying, well, when I want to go risk on, I want to be
36:56in NVIDIA and I want to be in Amazon and Palantir and Bitcoin and Tesla.
37:01And these all things kind of get lumped together, right?
37:03Yeah. Um, and so when they go risk off, they sell all that stuff and
37:06that's where you get the correlations.
37:07Now, what I do find interesting is Bitcoin and gold, they used to be very
37:11correlated. They are not so correlated right now.
37:13You know, the, the numbers are moving on a daily basis, but Bitcoin is down
37:17about 20 % to start the year and gold is up about 20 % to
37:20start the year. So it's been, you know, kind of an alligator jaw, completely different
37:24directions here. Um, and so the question is, do those things ever converge?
37:28Do they ever close? I think that they will.
37:30The question really is just, when does that happen?
37:33And does that mean that gold goes down and meets Bitcoin or does that mean
37:35Bitcoin goes up and meets gold?
37:37Um, I don't know the answer to that, but, but I think that that's probably
37:40one of the big things right now is if Bitcoin can break the correlation to
37:43software stocks and return back to, you know, having a correlation with gold, then I
37:48think that that'll end up being very good for the Bitcoin holders.
37:52Awesome. Yeah. I, I, I, I, I would love to see its independence continue.
37:58I love that. It's an asset that really is a, uh, has a mind of
38:03its own, so to speak.
38:04I think that's where the, the real long -term value is in it.
38:08So, um, all right, last question.
38:10Um, What are you paying attention to right now?
38:14What are you telling your listeners to focus on?
38:18And do you have any short -term outlooks that people can pay attention to you
38:25that some consistent, some of the underlying consistencies in the volatility that can clear away
38:34the noise for people? My number one message to people right now is artificial intelligence
38:39is very real. And there is a jump ball situation that they should take seriously.
38:43So if we go back, you know, my experience with Bitcoin, I heard about it
38:47in 2012. I literally have a DM with an individual and I'm basically like, you
38:52know, you sound insane, essentially.
38:56In 2014, I was working at Facebook.
38:59We hired David Marcus, the president of PayPal, came over and he kept talking about
39:02Bitcoin. He sat maybe 100 feet from me and I asked an engineer, I said,
39:06what's he talking about? And the guy said, you know, it's stupid.
39:09Didn't do anything. And it was only in 2016 did I say, hey, maybe I
39:12should, you know, take some time to look at this.
39:14And my wife always tells a story of she came home one day and I
39:17was sitting there and I literally had books and papers and, you know, I basically
39:21looked like a math nerd who was like, you know, cramming for a test.
39:26And she said, look, if there's one thing I know about you, you did not
39:29do any of that in school.
39:30So what are you doing?
39:33And I said to her, I said, you know, I'm trying to learn about this
39:36thing. It seems like this is going to be important.
39:39And so I went and I did the work for it and I wish I'd
39:42done it earlier, but eventually I did do it.
39:44AI to me feels like that's the moment right now, right?
39:47It is go and learn how to do this.
39:49Understand how do the LLMs work.
39:51Understand all these product releases that are coming out.
39:53Understand what people are doing with this stuff.
39:55Because if you are a young person, there are two things you can do with
39:59AI. You can go and you can create product services and companies, meaning that you
40:03can kind of be on your own.
40:05You can serve people, solve problems and use AI to do it.
40:08But also if you have a job, the single most coveted spot over the next
40:12five years inside big corporations is going to be the young person that is deemed
40:16to be the AI expert.
40:18That's right. If you're the person who understands how this technology works and you work
40:20in a big bloated bureaucratic organization, they are going to love you.
40:24You are going to get way more credit than you deserve for even understanding how
40:27to spell AI, let alone how to use it.
40:29And so I think that that's probably one big aspect.
40:32Now, the second thing is that people should be using this in their day -to
40:34-day life. And so as I went down this rabbit hole and really started to
40:38get better at it and understand it better, one of the things I wanted to
40:41do is I wanted to be able to use AI for my investing portfolio.
40:45And so I went to ChatGPT and Gemini and Grok, all these things.
40:49And one of the problems that I found was I was using the superhuman intelligence
40:53through the LOMs, but every time I'd ask it a question, I'd get generic advice
40:56back. And the advice was essentially just didn't have my context.
41:00And so we actually built a product called CFO Sylvia that you come in and
41:05you attach all your accounts and, you know, provide all this context around what are
41:10the assets you own. And then when you talk to Sylvia, you're talking to a
41:13model. But what that model is doing is it's essentially allowing us to feed the
41:18context of your portfolio with every query.
41:20So if you ask something, for example, you know, what is going to be the
41:23impact on the market in my portfolio if oil prices are higher for a longer
41:27period of time? Sylvia will come back and explain to you what's likely to happen
41:30in the market, but then go asset by asset in your portfolio and explain exactly
41:34what is likely to happen.
41:35Wow. And so that's where I think AI becomes really interesting is you start to
41:40use the superhuman intelligence plus the context of your personal life.
41:44And, you know, we've seen people do some pretty crazy things.
41:47We saw one guy who told us he wanted to do something.
41:50We ended up actually turning this into a feature, but he was uploading his tax
41:54return and asking Sylvia to tell him how to get his tax rate down.
41:57Right. And so, you know, going and understanding everything about his life and how his
42:01income worked, et cetera, and then going and explaining that.
42:03And so I just think like that's the area where AI to me is really
42:07going to be valuable is, you know, the context of your fitness or your health
42:11records and stuff like how do I get healthier?
42:14You know, what food am I eating?
42:15What does my portfolio look like?
42:17What is my day to day?
42:18What's my email? You know, how do you apply AI to these different areas?
42:21And so, you know, we're pretty focused because of my interest in investing on CFO
42:26Sylvia and applying it there.
42:27But I think this is going to become pervasive across the economy.
42:30And I think that people who can go and learn these skills, learn this technology,
42:34they're going to end up in a much better place than maybe the people who
42:37otherwise are going to kind of sit back and say, you know, I don't know
42:39if that thing is real or not.
42:41Yeah, one of the most prominent questions I ask and, you know, in my speaking,
42:47I generally am speaking to financial advisors on a regular basis.
42:50I was just in front of a $50 billion RIA in the center part of
42:54the country last week. And I asked the question, how many people have invested at
42:59least 20 hours in legitimate elite level AI training to incorporate in your business?
43:05And it wasn't just, you know, portfolio evaluations or anything.
43:09It was marketing. It was, you know, customer contact, whether, you know, it was across
43:14the board. And at this company, which had a lot of young people, which was
43:20cool, you know, I got probably six hands that went up that were really, really
43:25dedicated. But like, I've been in front of other, you know, other wire houses out
43:29there. And like, these are the biggest producers in their city, in their, you know,
43:33in these firms. And I'd get, you know, 50 people in a room, I get
43:38one per. that raised their hand.
43:40And then I pinned down on them.
43:41All right, what's your training?
43:42They're like, oh, I've watched a few YouTube videos.
43:45And so it's like, there is a division, right, based on demographics who are more
43:52in line with like, oh, I'm past it.
43:54I'm not going to worry.
43:55I'm going to transition. That's why you think, I think you've seen a lot of
43:58people try and dump their books on Younger or, you know, other firms, independents that
44:03are consolidating right now. But I agree.
44:06I really believe the younger generation that is incorporating this system, these systems into how
44:14they assist their clients, right?
44:16It's not, they're not, and those people are not deathly afraid of it overwhelming and
44:22taking over their business. They're like, no, this is going to make me Superman in
44:26my business. And I think that's a really positive, positive attribute to, to what's going
44:31on. All right. You know, last question, I promise.
44:39What would you like to see come out of the, the, the Trump administration in
44:48the next 30 days that could help potentially stabilize some of the market worries or
44:56some of the volatility? What would you like Trump to either say, or what would
45:00you like them to do?
45:01We did see the treasury bought back.
45:03What, what was it? I think it was $16 billion in debt, or, or I
45:07forget what the number was.
45:09But you, you, they're, they're, they're, they've always been hyper -concerned on, on promoting the,
45:15the strong markets that, Hey, listen, the tariffs, we're doing all that, but he's taken
45:19a series of pretty significant economic hits as a result of the Supreme court pushing
45:25back on that. The, the oil prices going high, potentially our, our military industrial complex,
45:32not being up to speed to maintain this long -term.
45:35What would you like to hear the Trump administration say that can be a positive
45:41aspect of, of what we're going to see in the next three to six months
45:45financially? Well, it's not during the Trump administration, but maybe Dave Rutherford becoming president one
45:51day would be a, would be a good one.
45:52But for, for, for this administration, the single most important thing that they could do
45:58is win in Iran and do it quickly.
46:02If they do that, then investors get clarity, they get certainty, they get, you know,
46:06a lack of kind of conflict.
46:08Then I think markets will, you know, rip higher and everyone will, will have amnesia.
46:13You know, I always joke that it's been, I don't know, eight weeks since we
46:16went and grabbed Maduro down in Venezuela and people like already forgot.
46:19Right. It's just, you know, like what, what?
46:21Um, and so I think that, uh, that that's probably, um, the single most important
46:26thing is winning and doing it quickly.
46:28Uh, the second thing is, uh, I think that they've got to continue to, uh,
46:32reiterate their commitment to, uh, one, you know, making sure that oil prices do not
46:37spike significantly higher. Uh, two is, I think that the affordability agenda domestically is very
46:44important. Um, and I think that we've got to be careful that we don't chase
46:48doing, you know, government intervention that is, uh, short -term good, but long -term destructive.
46:53And so how do you go and say to yourself, okay, let's take housing affordability.
46:58Well, like the number one thing we can do in housing affordability is build more
47:01homes, but you can't snap your fingers and build them.
47:04And so you've got to have a long -term plan, but you've got to have
47:07short -term action. And I think that, you know, they've started down that path, but
47:10continue to do that's important.
47:12And then last but not least is, um, you know, this is a little bit
47:15of a weird way to view this, but, but I do think it's really important
47:19is, um, one of the things that I believe the government is most important for
47:22doing is stoking patriotism in the country.
47:26And the reason why I think that that is so important is because ultimately, you
47:30know, America's power has really been in, in its collective belief in a bright future
47:35and in the power and innovation of America.
47:38You know, if you go and you look over the years, people have always believed
47:41like America will figure it out.
47:42America has, you know, got the, the people, the talent, the capital, et cetera, to
47:46be able to do this.
47:47And I think that, um, you know, I'm very fond of, uh, of the saying
47:50of, uh, you know, kind of assimilation in America where you can go to Italy,
47:54but you can't become Italian.
47:55You can go to Spain.
47:56You can't become Spanish. You can come to America and become American.
47:59That's right. Right. And so the ability to do that, I think is really important,
48:03but driving this belief that, hey, we are all more similar than we are different,
48:07uh, is important as long as people are willing to assimilate into the American way
48:11of life and the values and, and kind of what we're trying to accomplish.
48:14And so I do think that the government has unique position to be able to
48:18do that. Um, and so if they're able to kind of three -pronged approach, you
48:21know, win and do it quickly in Iran, have the domestic affordability agenda, and then
48:26also continue to stoke this feeling of patriotism, especially in young people, um, then I
48:31think that, uh, we'll be in good shape.
48:33Outstanding, sir. All right, Mr.
48:35Pompliano, where can people sign up for the newsletter, follow you and, and watch your
48:39daily show? Yeah, I appreciate it.
48:42Um, if you want to listen to, or, or, uh, read the newsletter, just go
48:45to a pompletter .com. And then if you want to sign up for, uh, for
48:49Sylvia, you can just go to C -F -O -Sylvia, S -I -L -V -I
48:53-A .com and you can get, uh, set up there for, uh, for free.
48:57Awesome. Thank you so much, sir.
48:59God bless you and what you're doing.
49:00Thank you guys for having me.
49:11This is an iHeart Podcast.
49:14Guaranteed human.