Luke Gromen "print the money or trigger the revolution"

Vance Crowe [00:00:05] So I ran a book club during COVI, and Mandibles was one of those terrifying reads that makes you go like, oh, man, it, it actually could work out that way. And now here we are almost a decade later, and it is happening that way. It's

Luke Gromen [00:00:17] Happening. It's, it's absolutely happening, right? You can see every day on x the economist, you know, the uncle, you know, I mean the uncle that's like, oh no, this is fine, this is fine. And you can see central banks are buying gold, which is, and, and, and pricing commodities outside the dollar, which is the bank core thing within it. You know, sadly, you know, the one girl, you know, the daughter of the economist who's, who's all of a sudden comes into a bunch of money and like the kid's, like I, I think she's turning tricks to make money. And like, like sadly, OnlyFans is like literally just a version of that where you're reading about, you know, girls, you know, doing OnlyFans and making a lot of money doing so. It, it never perfect. But there's a lot of things that are rimming with that book. People should really read it. It's a good read.

Vance Crowe [00:01:04] Well, I think what's so fascinating is they show how slowly and pernicious inflation is and how it rips out the value of everything, right? It's just like all of a sudden you go to the hardware store and you're, you're buying a doorknob for $30. And it doesn't make any sense. And I remember when we were reading this, people thought that couldn't happen here. That's something that happens somewhere else. But you look at prices today and they're insane.

Luke Gromen [00:01:27] Yeah. That's, that's it. It is, it sneaks up on you. And it, it, you know, there's a book The Raven of Zurich by the memoirs of Felix Somary, and he was called the Raven of Zurich because basically he can, he consistently got so much right, and he and his memoirs are basically his journals from, you know, the early 19 hundreds through after the end of World War ii and, and given the circles he was running in, in Zurich, he was at very high levels, like pre-war meeting with the King of England and things like that. He was very high level. And one of the things he said about inflation was that, you know, after the First World War, he said, the best thing you should have just done is just devalue the debt overnight in a flash, rather than trying to inflate it away slowly, because you do it once and it's over, and you can start to recover immediately. But inflation is like poisoning the blood of society. It's pernicious, like you said, it lead it, it, it, it destroys value systems, it destroys trust. And unfortunately, we made the choice, you know, it's, it's human nature, right? Because politicians don't want

Vance Crowe [00:02:37] To do

Luke Gromen [00:02:37] The short, expedient, painful thing on their watch. They wanna play for time. And, and after World War I, they played for Time and Poison Society, and it led to World War ii. And then, you know, in, in the aftermath of oh eight, and again in COVID, the politicians have played for time. The central bankers have played for time, and they are, you know, we're starting to frighteningly see, especially in last month or two, a lot more of the, the more frightening aspects, the more pernicious aspects of poisoning the, poisoning the blood via, you know, of society via inflation, sustained inflation.

Vance Crowe [00:03:10] Welcome back to the podcast. I'm glad you're here Today we have Luke Gromen. Luke is a well-respected economist and runs a financial firm in Ohio. And I sat down with him because he is in the Bitcoin tribe, one of probably two of the biggest names that are talking about how Bitcoin gold, different finite commodities impact the economy. And it is a fantastic honor that he was able to come on the show. During this podcast, we're gonna talk about the economy, we're gonna talk about China, and we're gonna talk about Gold's unique place in the future of our economy. We're gonna get to that interview in just a moment. But first, if you're somebody that is thinking about a Christmas gift, something that is truly special for your parents, I would encourage you to think about getting a legacy interview. This is where I sit down with your loved ones to discuss their lives, to get them to open up and share some of those memories that made their life the rich and interesting thing that it was, we can do it online or in our studio here in St. Louis. And it is a profound experience for the person doing the interview. But even more than that, when you get a chance to watch the interview, when your children or grandchildren get to sit down and hear these stories, we've heard from so many guests that this was one of the best moments that their family shared together. Because the video will prompt more questions, it will get engagement in a way that you might not get if you are just chatting over the holidays.

Vance Crowe [00:04:44] So if you are interested in getting your loved one, a legacy interview, go to Legacy Interviews dot com to find out more. As you look at central bankers and the actions that they're taking right now, are they behaving rationally? Like, hey, they know, they understand what's going on, or are they on a totally different playbook and operating from old rules that they shouldn't be?

Luke Gromen [00:05:07] They understand what's happening here and they understand the risks. They are stuck in a political situation that they can't win. I I, you know, I, I re I actually really empathize with, with Jerome Powell for example, you know, and back in 2022, you know, 2021, when people ask me, what would you do if you were Powell, right? I'd say, I would resign, you know, I would resign

Vance Crowe [00:05:34] Because there's no, like,

Luke Gromen [00:05:36] He was named like a hero on the cover of I think Barron's or, or Institutional Investor Magazine in 21 or late 2020. I'm like, that's as good as it's gonna get for him. There's, you know, from a sort of how he's remembered, unfortunately, because on one hand this is, this is, this is why a debt-based system ultimately ends the way it ends once the debt gets too high, if the debt is taken on for unproductive things like war, like bank bailouts, like STEMIs that largely go into consumer goods versus things that have the ability to, to earn back a positive rate of return over time, right? So the Eisenhower highway system or the internet, it, you know, some of these, you know, if we would've, if we would've invested in high speed rail or industrial base, these things, but when you run up debt on unproductive things, so, and, and the debt backs the currency, right? That's the key. We're no longer on a gold based system that's essentially the debt backs the currency, his choice w at, at some point stops being, do I want inflation or not inflation, and just how do I want to trigger the inflation? There's a great quote from the book Lords of Finance, which I would highly recommend everybody read. I've been recommending that for years and years. It is, it's a biopic of the four central bankers of, of the us England, Germany and France after World War I.

Luke Gromen [00:07:06] And it reads like literally like another one of these how to, you know, roadmaps of what's, what's been happening in the west and around the world. And there's this great quote about Rudolf von Havenstein who was the, the central banker of Germany who famously hyperinflated the currency. And I'm not saying that the United States is going to Hyperinflate and you know, and certainly not like there, but he, the choice he was faced with was, you know, print the money or trigger the revolution. And that's the choice that Powell's been faced with, which is print the money or trigger the revolution. It's what the western central banks, all these central banks are faced with, print the money or trigger the revolution. What do I mean by that? The United States, which I focus on, number one, that's, that's my area of expertise. Number two, it's the center of the system. We're the reserve currency issuer. The treasury bond has the, been for 50 years the primary reserve asset of the entire system, which means treasury bonds, back banking system across the west. When we look at the United States, we have record treasury or treasury receipts of about five and a half trillion dollars. We are spending about 70% of, of that record receipts on entitlement payments to the baby boomers and the silent generation. And yes, they earned some of that, but they didn't earn all of that. They are, they are taking out way more than they put in, in nominal terms by far.

Luke Gromen [00:08:41] And then you look at the rest of that five and a half trillion, 70 percent's going to entitlements, and about 30% is going into interest. So we are literally spending a hundred percent of all time record receipts on our, on, on things that are interest or interest like obligations, right? There is very little functional difference between the German war reparations after World War I that had to be paid in gold. And so the Germans, it was not a currency. The Germans could issue and entitlements to the baby boomers in silent generation. We don't owe them dollars, we owe them hips, we owe them knees, we owe them pharmaceuticals, we owe them dollars time, all of which are inflation adjusting just like gold was. The more money we print, the more the cost of those in entitlements, those, those that off balance sheet debt's gonna rise. And so you're faced with then when you add in, you know, defense spending's another 20%, 25% of receipts and going higher, now print the money or trigger the revolution, you know, with the federal government at 25% of GDP in terms of their annual spending as a percent of GDP nearly. And with the stock market, based on the policies we have pursued, offshoring and the financialization of the economy, the stock market is now a critical driver to marginal US consumer spending. And therefore, tax receipts. You tell me what the stock market is doing today, I will tell you what stock receipts are going to do, or, or excuse me, tax receipts are going to do in six months.

Luke Gromen [00:10:17] It is like clockwork. And so if the stock market just falls and stays down 15 to 20%, which in historical terms has nothing, the US will have its interest and, and its entitlement obligations well above receipts and find themselves in a print or default on entitlements of receipts. And so they have created the, the, they've created a doomsday machine of sorts for themselves, right? They have CR created a situation, print the money or trigger the revolution. Do you, you know, you either have to print the money to pay for this stuff, and you need to keep inflating and keep chasing it higher as your costs go higher. And the hope is that you can sort of, and this is, this is harsh, it doesn't make me happy to say, but basically delay deny claims, right? If you can sort of, yeah, we're gonna take care of you, Mr. Baby Boomer, just wait six months, just wait six months and hope they pass on while they're waiting for care. That's what they may try to do. But if you outright cut, you're gonna trigger the revolution, right? You can't, you can't have bailed out Wall Street multiple times and then turn around and slash entitlements by what you would need to slash them by, which is roughly you, you would need to cut defense spend. Because the only the, when you look at what we're spending money on, there's only three things that matter. Entitlements, interest, defense, that's it.

Luke Gromen [00:11:49] Everything else is a rounding error compared to those three. And so when I say print the money or trigger the revolution, you either have to cut, you know, to get deficits down to where scent and the Trump administration have said, we're gonna get deficits to 3% of GDP by the end of our term, we're at seven today. You need to cut four points of G-D-P-G-D P'S 30 trillion. You need to find 1,000,000,000,002 in spending to cut today permanently. Okay, well, you can't cut interest rates because that'll touch off inflation, right? Print the money. So set that aside. Okay? You need to pull 1,000,000,000,002 out of entitlements, which is 3.5 trillion and defense, which is about a trillion. So 1,000,000,000,002 divided by 4.5 trillion, about 30%, 25, 30%. So you would have to cut entitlements and defense by 25 to 30% permanently today, immediately trigger the revolution. And oh, by the way, doing that would likely trigger a decline in the economy, a decline in receipts, and that would actually send res the deficits higher. And so you'd actually have to cut more and then chase your cutting or, or you gotta cut rates. That's, you cut rates and you get the Fed back into QE with inflation where it is. And when you look at those two, print the money or trigger the trigger, the revolution, you know, especially in what we have seen over the last six to 12 months in terms of the political stability of this country, they're gonna have to print the money, they're gonna have to print the money, and that's what they always do.

Vance Crowe [00:13:29] Well, we see what you're talking about in the ag world is going on right now and maybe on a smaller size, but ag has been getting bailouts right now, if you look at the typical farm, 13.5% of their in income comes from government. They call 'em transfer payments, but it's, you know, it's, it's bailout money. And certainly a huge percentage of that is going to the largest landholders, which are all baby boomers. And what they're doing is continuing the same system. The people that already own the land continue to get the money from the government. And just like that cantilever effect, like those are the first people that get the money sent to them in a check. They go spend it, input prices, land prices, equipment prices, labor prices all go up. And then that, that increase has to be handed down to consumers. And I don't think consumers have any concept for how expensive farming is getting. It is so wildly outta control that people, when they go to pencil out their, their loan, if they do not include the government is going to give me money, they won't make it.

Luke Gromen [00:14:34] You know, it's, it's fascinating. We were talking about before we jumped on that, I, I owned a a hundred acre farm as an investment property that I rented to a friend and his family who were third, fourth generation farmers. And this was 2011, 2012. And this is out here in Ohio, west of west of Cleveland. You know, I think I, I think I paid, you know, your, your, your listeners are gonna think this is cute. I think I paid 4,300 an acre, right? Which is, you know, and it was decent land. It's not, we've got really good land. If you go further west, that's like, you know, it's not quite Iowa land, but it's, it's getting there. But where Iowa is, it was more sort of, you know, eh, but $4,300 ground. And I think I sold it two, two or three years later for 6,000. But my point is, is that the math, when I bought it at 4,300 didn't make sense, right? Because I got my loan through, I think it was Ag credit, right? So I get my loan through Ag credit and I had to put 30% down because they don't play the game that they, that, that all the banks play with residential housing, right? So I gotta come up with 30% down, I float the rest, and then when I float the rest, I think rent on the, on it was, I think, you know, I, I gave him a bit of a sweetheart deal 'cause he was a friend and because I wanted to help him kind of, you know, get, he was a younger guy and wanted, and, and I wanted it to be mutually beneficial, you know, I didn't wanna just basically, you know, be the rentier guy, just, you know, making a guy share crop effectively.

Luke Gromen [00:16:08] But I think it was getting two 20 that first year, and this was, if you remember, this was the year that was the big drought the next year was, right? So we raised rent the next year. 11 I think was the big drought. And we did really well. Somehow. We, we had like, God, we had like 210 bushel an acre corn in Ohio that's doing pretty good because we were, because we were like, we, it was better lucky than good. Like it was supposed to be planted early and it was like a huge drought. And then the, we were supposed to be planted early, but the loan was delayed. And then there was a huge drought like nationwide. And for whatever reason, like we got the crop in late. So we used sort of short season corn, and then we got like the perfect mix of rain. And so like, we were the only people around with any corn, and they hadn't hedged it out because they weren't sure they were gonna plant it. So we got like, so we raised rent a little, but my point is, is that even when we raised the rate a little bit the next year, the, the, the rent, the, a little bit the next year, when you looked at the interest on the note relative to the rent from the land, I was still massively negative cashflow negative as the landowner. And, you know, corn, I wanna say was right around five or six bucks. Then beans were probably nine or 10 here. And the point is, is that over the next, from 1213, whenever over the next however many years prices went down and I'm like, oh, land will start coming down again in price. And the land just kept going up in price, even though the, you know, the yield asset, the, the crops kept going down and, and fertilizer kept going up and all the inputs.

Luke Gromen [00:17:48] So like, I just have been watching that as, as a, you know, not every day, but every now and then I'll check in and I'll just go, that doesn't make sense. Like that is a, a sign of a broken system where the land is going up, the inputs are going up, crop prices are like, and the crop prices weren't covering the note on the land 13, 14 years ago. And so you end up with this situation where I think what you're describing, right, which is the big land owners are probably largely, they're older and they're probably largely outta debt. And then the, the younger guys are probably all wildly in debt. And yeah, it's, you know, it's, it's a, it's a tough situation. It's a, it's a symptom of the system.

Vance Crowe [00:18:37] One of the things that's been hardest for, you know, anybody that's in water, it's hard to know that you're swimming in water, right? It's that, it's that kind of fish analogy. You don't know what you're in. And I think that Bitcoin has given a way to be able to say, well, what are land prices really doing? Because if you're just measuring it in dollars, then you're just like, Hey, look it, it went up another 20%. Look how much more we can leverage. We can go to the, the bank and get more for this because we're able to value it for hire. But when you think about what could you do with that money if you weren't buying land, the purchasing power of that land goes down, but until Bitcoin, or you can compare it with gold, people have only just now recently started doing it. Land prices are not going up at all. They're going down each week. I do, on this podcast, I have called the ag tribes report, where we compare how much Bitcoin would it cost to buy that land, and a year later I'll do an interview with the same guest and you'll see, you know, the price of Bitcoin is appreciated by 50% or a hundred percent. Well, the land, the price of land has not. And so to me, Bitcoin is demonetizing land. It is pulling that monetary premium out and people don't realize it because they're still valuing their land in dollars.

Luke Gromen [00:19:51] It is such a great point. It's such an important point. I I, I'll send you the chart if you didn't see, you probably saw it on, on X, but a, a couple of weeks ago, I had a post that went pretty viral. I mean it had over a million views and it was a chart that showed that since COVID, it showed a chart of the s and p 500, the Nasdaq and US home prices as defined by the Case-Shiller home price index, priced in dollars, priced in gold, and priced in Bitcoin. And it was astonishing, right? You had, you know, NASDAQ and, and, and s and p were up over a hundred percent in dollars and home prices were up, I think 60%, 70% since COVID in dollars in gold, the s and p 500 is down 20% since COVID. Nasdaq I think was up 7% in gold's, probably flat after the performance of gold last week. And home prices were down, I think 30 or 35%, maybe 40% in gold terms since COVID and in Bitcoin terms, which is simply an energy, you know, Bitcoin is just an energy derived digital gold. It's, you know, in Bitcoin terms, the s and p was down 75% since COVID Nasdaq was down 68% and home prices are down 85%. And my point is, is that I think if we would add farmland to that, we would see the exact same. But I'm not even gonna think, I know for a fact if I would've run off farmland, farmland would've looked like home prices.

Luke Gromen [00:21:25] Because absolutely. Part of the reason, not even part of a big, the reason farmland prices, if not the major reason, if not the entire reason that farmland prices have, have, have separated from the underlying commodities the way they have over the last 10 to 15 years. And the way I described that I saw personally, you know, from, you know, what I was just describing is because the cantillon effect, right? The people who get the money first, it's, it's happening. Which is to say there was an article in the Wall Street Journal two weeks ago, which highlighted that Treasury Secretary Bessent owns, I wanna say he owns like 39,000 acres in South Dakota or something. Yeah, I

Vance Crowe [00:22:14] Remember seeing that. Yeah, right?

Luke Gromen [00:22:15] Dakota, I think it's North Dakota. That's, that's a big holding of land, right? Maybe it was 3,900, but it was, it was like big boy, big boy land holdings. Now he ain't running that land, he's, he's farming it. What did he do in his prior life? He was a hedge fund manager for 30 years. And okay, fine, whatever. I'm not judging, but I'm simply describing why farmland prices are doing what they're doing, which is, if you run a chart of farmland prices against the US M two money supply, it's a very, they correlate extremely well. And so what you're having is a recognition of people who touch the money first, New York City hedge fund managers, et cetera. Even guys like myself and CMOs, you know, I wasn't looking to run that land. I understood that, okay, this is gonna be inflationary, I'm gonna buy some farmland and I'll rent it to a friend who knows what they're doing. That's been happening for 10, 15 years. And it's why, and that's why you've seen farmland do what it's doing. And it's why Bitcoin is so important, I think, for farmers to own some, because, especially younger farmers, because what Bitcoin allows you to do is basically cut in to cut to the front of the line of the canon effect. When they create the money, Bitcoin goes up first and fastest by virtue of its 21 million unit cap. And now your Bitcoin goes up faster than land and you can step in front of the line. So when they print more money and Secretary Bessent or who or Luke Gromen shows up to buy more farmland, you can't, you, you can outbid them because your money is, is rising faster than theirs.

Luke Gromen [00:23:50] And that's why I think it's so important.

Vance Crowe [00:23:53] Yeah. And it's one of those things that you're just now starting to see ag get into this, but it was only a few weeks ago, I was at K State University and I made the case, those who are engaging with Bitcoin today will be the landowners tomorrow. This is like shocking and appalling and difficult because if you don't own Bitcoin and the idea of like going out and buying it, it, it just doesn't make sense. And there are a lot of guys in there that are probably holding gold, but the idea of holding Bitcoin is anathema to, to their sensibilities. What's the difference between gold and Bitcoin?

Luke Gromen [00:24:31] So there's a few things. So the way to the, the way to think about Bitcoin is, so gold is simply stored energy. Let's start with gold because I i, if you can understand gold, then it's, you know, and I I i, it's, it's easier, it's very easy to understand Bitcoin once you kind of have it described through a gold lens. That's exactly sort of how I got there. Well,

Vance Crowe [00:24:55] 'cause you're a gold guy, right? You, that, that was your starting position, would you say?

Luke Gromen [00:24:59] That's right? Yeah, I started from gold and once you understand gold you can get to Bitcoin. So gold is simply stored energy, that's all it is, right? It takes a bunch of, you know, it takes a bunch of energy expended to get gold out of the ground, refine it, process it, melt it, whatever. And, and that's how gold is. Gold is simply a store of energy in metal form gold isn't used for anything. People say, well, gold's not used for exactly all it does, all it serves as a, as a storage of energy over time, as a currency unit moves around it. And so farmers

Vance Crowe [00:25:40] Understand, oh man, when I, when I try and say that people are like, no, no, gold has utility. The reason it's so valuable is because of its utility. And I mean, I completely disagree with this, but there are a lot of people that believe, no, the reason that gold is intrinsically valuable is you can put it in some kinds of electronics. It is in jewelry, whereas a Bitcoin, you can't wear it and you can't put it in electronics. So to them it's like one has utility value, the other one doesn't.

Luke Gromen [00:26:05] No, and I, you know, I've seen that argument made and I think there's some validity to it, and that's, you know, gold has a small usage for that. But there's other things you can use gold for. And certainly, you know, you can, you can, you can use other metals. They're rather than gold for most of those applications. What gold's main is main usage is, is for preserving purchasing power. It is for devaluing sovereign debt or recapitalizing sovereign balance sheets after they get too much debt. And it does that because it is essentially somebody expended a whole bunch of energy to get that gold outta the ground and here it sits. And if the price of gold gets too cheap, no one's gonna expend the energy because they can't make money doing it. And so mining comes down. So gold is a store of energy. Bitcoin is a store of energy as well. It's digital though. And the reason it is similar is because there, there's only number one, Bitcoin is harder than gold, right? So when, when the price of gold goes up, more supplies gonna come online, right? Because gold miners are gonna be incentive to, to get more and the price and gold gold's, you know, supply goes up, I don't know, 1% a year anyway, but it'll go up faster as the price goes up. You know, all, you know, if gold was a million dollars an ounce, you know, you'd have people out there, you know, going out in the ocean and literally pulling the tiny bits out of the, out of the ocean that, that sit there.

Luke Gromen [00:27:44] But Bitcoin has a hard cap. There's only 21 million that are ever gonna be mined, and that is coded into it. And that's above my pay grade for why that is. But I interact in that world and it has been, you know, you know, very, very, very bright coders, et cetera. They, like, they're all saying the same thing. Like, it, it, it, it's a hard cap at 21 million. Now what a lot of people denigrate Bitcoin about, which is look how much energy it uses, that's actually, you know, that's not a flaw. That's, that's the feature that is the equivalent of, you know, basically bitcoins. You know, when I say gold is a store of energy, Bitcoin is a store of energy. If you look at the price of Bitcoin over time, the amount of, you know, the value of of Bitcoin is supported by the amount of electricity it takes to create a Bitcoin. And that is essentially very similar to the amount of energy it takes to mine an ounce of gold. And the difference of Bitcoin is number one, there is never gonna be more than 21 million. Number two, the pace of mining does not change. So Bitcoin goes from 50 to a hundred thousand like it did last year. It's not like the Bitcoin miners all of a sudden start mining way more gold or Bitcoin, excuse me, as fast as they can there it gets, the amount of mining continues to be regulated relative to the amount of as mining put to the system to mine Bitcoin, and I won't get more complicated than that, but it's basically algorithmically limited based on the amount of resources being allocated to mining Bitcoin.

Luke Gromen [00:29:28] So again, better for maintaining purchasing power in energy terms. The other ways, you know, gold, if you had to go to another country, you know, you can't exactly pack it up. And you know, if you had to, I'm not fleeing the us I suspect a lot of your listeners like Uhuh, you know, I've been here 3, 3, 4, 5 generations, my dad, my grand, they're not leaving either. But if you had to move it, if you had, there was, so Bitcoin is way easier. I could you put a QR code up on the screen right now as we're talking. I literally could move you millions of dollars of Bitcoin using a QR code over a Zoom call. Obviously you can't do that with, with gold. So it's much more volatile than gold for now. I think as over time Bitcoin acceptance and price and market cap and the network effect happen. I think Bitcoin's volatility will continue to decline over time. But ultimately, if I was a, if I was a farmer who already understood and owned gold and I, I would, I would put, you know, start by putting 2% in, start by putting 5% into Bitcoin, put an amount in where you're like, it's enough to watch it, right? You're watching it, but you're not, you've got some skin in the game, but you're not, it's not gonna wreck you either way. And you'll start to understand it. You start to pay more attention, then you can buy more, you can buy less, whatever. But I think just getting, you know, two to 5%, 10%, especially for the younger farmers putting that money into that because you know, it is, I think over time gonna outperform gold given it's that it is, it's a harder cap given it's, it's easier network effects.

Luke Gromen [00:31:19] So yeah,

Vance Crowe [00:31:19] That's, that's what I would say.

Luke Gromen [00:31:20] Let,

Vance Crowe [00:31:21] Let's talk about the price of gold. Somebody's accumulating it, somebody's buying an awful lot of gold 'cause the gold price is going up. Like it's never gone up in my lifetime. Who's buying all this gold and what are they planning to do with it?

Luke Gromen [00:31:35] I think the reason gold's going up the way it is, is we have reached a critical tipping point of oil in particular, but commodities more broadly being priced outside the US dollar. So most of your audience will be very familiar with the Petrodollar system where oil only priced in dollars post 1971 and commodities more broadly around the world only priced in dollars. Beginning around 10, 12 years ago, China began advocating for shifting some of their commodity import bill into Chinese. You want, they did this not because they hate the dollar or they wanna tip over the dollar or they necessarily hate the us. They did this for a very practical reason, which is they were, they, they were certain to have a commodity crisis like we saw in Southeast Asia in the late 1990s if they did not start to buy more of their oil and other commodities in Chinese yuan. Why? Because China is growing and China has a finite stockpile of dollars, right? They have a certain amount of dollar reserves, their economy's growing, their oil usage is growing, the price of oil was going up over time. And so you could just do the math and say, okay, well if we have fixed number of dollars, economy grows, population grows, oil use grows, oil price grows, we're gonna run outta dollars to buy oil sometime in the next X years.

Luke Gromen [00:33:07] And when we run outta dollars to buy oil to buy, we are going to have to do one of two things. We're either gonna have to significantly shrink our economy political, no-no, you know, collapse our economy, use less oil, or we're gonna have to devalue our currency, which will then send our price of oil and overall inflation up. And that is also a no-no. That'll be, you know, a, a currency crisis, a political crisis. And so what the Chinese decided on was we need to be able to buy oil in our own currency in the Chinese you want. The problem with that is twofold. Number one, we need to find someone willing to sell it. And number two, how do we get people to trust the Chinese yu want, you know, how do we trust, how do we get oil producers to trust taking the Chinese yu want? Because, you know, nobody trusts the Chinese yu want. And what they arrived at was setting up a system where they will, you can settle on a net basis any yuan surpluses you end up with as an oil exporter in gold. Nobody trusts the yuan more than the dollar, but everybody trusts gold more than the dollar witness witness farmers holding gold. And so what they have done is essentially, now who did they find to sell? Well, started with Russia, and Russia has been doing this for 10, 12 years. I think it has factored very heavily into US foreign policy decisions relative to Russia, but we haven't been able to do anything about it for a number of reasons.

Luke Gromen [00:34:45] And so I think what we're starting to see in gold markets is a tipping point where you're seeing other oil exporters doing this. Iran, for example, Venezuela also coincidentally enough added to the, you know, sort of, you know, top five list of regimes we would like. The regime change we're, last week we saw BHP Billiton, the gigantic Australian iron ore miner say that they had agreed to price 30% of their iron ore in the spot market in Chinese yuan. And so as this system gains traction, this makes great sense. If you're an oil exporter, right, it's literally what we're advising farmers to do, right? Buy, if you own gold or Bitcoin and you're a farmer and you're taking some of your farming surplus, the dollars you earn every year and you roll it into gold, guess what happens? The world keeps getting cheaper to you. Well that's literally what China and Russia have been doing for the last 10 to 15 years, which is alright if there's net surpluses left over from us selling you oil, we're Russia's gonna end up with Yuan, they can change some of Yuan into gold Russia and gold reserves go up as Russian gold reserves go up and the price of gold goes up. Russia is effectively using their commodity production to bid up the price of gold and recapitalize their FX reserves. And the, it's not the issue. But the reason I think why gold, you know, has begun going up on every day that ends in y it seems is that we've reached a tipping point on this, it accelerated after we seized Russian FX reserves in 2022, right?

Luke Gromen [00:36:23] I imagine if you're a farmer, imagine if the US government came to you and said, you know what, we don't like your political views. We're gonna take, you know, all the money you have in the bank and dollars we're taking. That's what we did to Russia in 2022. I'm not saying we sh you know, I'm not not making a political statement here. I'm just telling you the facts of the case. And if you're China, if you're Saudi Arabia, you go, wait a second, that could be me. And so what did the Russians do? They bought gold. What did central banks do? They bought gold. And so this trade is getting momentum. The point here is that as we sit today, if we took the total, you know, 105 million barrels of oil per day, produced times, where are we at? $62 a barrel times 365 days a year. And then we compare that to global gold mining production every year of, call it 3000 metric tons, $4,200 an ounce. Today, the oil market alone is still probably six to eight times the size of the global gold market. So you're basically trying to fit the oil market, which is six times, six to eight times bigger than the gold market into the gold market. What's gonna happen to the price of gold as that happens? It's gonna go up now factor in iron ore, copper, gas, all these other commodities, global commodity markets as they begin being priced also in Chinese yuan and another bricks currencies. But it's, I think it's made primarily the yuan, even the Indians last week were reportedly buying oil in Chinese yuan from Russia.

Luke Gromen [00:37:56] You're gonna be trying to fit 10 to 15 pounds of commodities into a one pound bag of gold, right? It's what happens, you know, what happens when you try to find 10, 10 pounds of crap into a one pound bag? The bag better expand or it's gonna blow up. What we're watching with Gold's price is essentially the expansion of that bag as the commodity market tries to fit into it, driven by a enlightened self-interest of the parties involved, which is we cannot afford to only buy commodities in dollars. And this has been going on for 10, 12 years. And more recently, the we cannot afford to have our, our savings in dollars because the, if we do the wrong political thing, the Americans will freeze it.

Vance Crowe [00:38:47] And when you see this runup of gold, I think there are a lot of Bitcoiners that are sitting there being like, why would you trade into Yuan? Now you're trading one devil for another when you could move into a currency that that isn't expanding and isn't controlled by somebody's central government. What, what do you think? Is it this, it's not a time, it's not been enough time to develop, or do you think this is because the Chinese don't want Bitcoin? Where do you think about that?

Luke Gromen [00:39:15] Well, I, I have been told that they've been stockpiling it for three years, quietly multiple different sources that don't know each other. I don't know how much they have. I'm told that, you know, so for example, I have a a of a good friend who's been there for 30 years and you know, we were on a Zoom call and you know, he is an American and, and you know, he's been trying to get the Americans to like wake up to what's happening and he like, look, here's my phone, right? Here's the Chinese internet, here's, you can go on the Chinese internet and buy Bitcoin. Like if they didn't want the populace buying Bitcoin, this wouldn't be here. So, you know, they're like standing and shouting all over, Hey, by Bitcoin. By Bitcoin. But you know, I've heard credible rumblings that the government has bought some and the government is, you know, not encouraging, but encouraging, you know, by virtue it being there to buy some. So I think there's, I think there's some of that. I think gold has a, you know, Bitcoin is still young, right? Bitcoin is unproven, gold has a 5,000 year history, and China has a culture that very much abides by, you know, history and sort of Confucian common sense infused with whatever else, you know, this capital o communist central arc. It's a weird place. So I think that's, I think it is happening a bit on Bitcoin there. You've seen Russia and Putin talk about Bitcoin, so there is some openness to it.

Luke Gromen [00:40:48] I just think there's, they are being prudent as I was, as I am in terms of my own holdings, right? I I have not sold all my gold to buy Bitcoin I own, I own both and, you know, and they're both, you know, pretty good sized positions. So yeah, so I mean that's, I think that's, that's, that's I think how it is being handled.

Vance Crowe [00:41:08] So another big confusing thing for a lot of people is they hear Bitcoin, they hear about crypto, and I'm, I'm this show we clearly dismiss, you know, there's only one true Bitcoin, all the rest are are shit. But there is this other thing that's come onto the scene more and more, which is stable coins. And this floats into an idea that I, I think I first heard from you where what we're attempting to do do with these stable coins is to issue them to other countries. And those countries are saying, I don't really want this Egyptian with a ira. I'd rather have access to US dollars, so I'm gonna buy stablecoin. What's going on here? Am I getting that right?

Luke Gromen [00:41:50] In essence, yes, I, the the, the goal or the gambit, right? So stable coins, I think there's two important things for the audience to take away. Number one, stable coins is a gambit that we're trying, because essentially we can no longer sell the amount of long-term debt that we need to sell at rates that wouldn't blow up the debt market and the broader economy, right? So we can't, we can't, our deficits are now so big and foreigners are not buying nearly enough long-term bonds. And so we can't issue it out there without sending yields to, to levels that blow, blow up the economy in the

Vance Crowe [00:42:32] World. So, because if people don't buy it, just so for people that aren't familiar, you go out to buy a treasury, if they sell 'em and people aren't buying 'em, then the interest rate goes up, up, up, up, up, up, up. And then the amount that the US government has to pay out in order to be able to borrow that money goes way up. So the US does not want to have treasury auctions that don't sell out because it just increases the amount that they have to pay.

Luke Gromen [00:42:53] Correct. And that 10 year treasury rate, as, as you know, is also the base rate for farm loans, home loans like the entire financialized economy. So as the US government's borrow rate goes up, everybody else's borrowing rate is going to go up plus 200 basis points or 300 basis points above that rate commensurate. So that's why it would blow up everything. So the solution, the attempted solution, I don't know if it's gonna work or not, it might, it might not. The stable coins are an attempted solution at fixing this, which is what the, all they're doing is shifting issuance to the front end. There's a lot more demand because of our financialized economy. For t-bills for short-term paper, for a whole number of different reasons, stable coins have been per the genius act can only be backed by t-bills, bank reserves dollars. And so essentially they are trying to use stable coins to create enough demand for t-bills to finance the deficits. This is basically financing our deficits at near cash and near cash markets, which is secularly inflationary. Forget about this reading that reading month to month over time, it's going to add to the inflation rate, which I think is very important for people to take away as it relates to foreigners. Yes, there's a whole lot of different countries out there that would say, yeah, all else equal, you know, the Nigerian Nera right? Is, is down, you know, the dollar's up 300% over the last, you know, I dunno, year, two years, three years against the Nigerian nera.

Luke Gromen [00:44:26] And if you're in Nigeria and you have a smartphone, which is American technology, there, you would much rather have dollars. And so this is essentially a way to get countries to, you know, to ditch their own currency. You know, they're, they're people to ditch their own currency to hold dollars and finance our deficits. And that's, that's the thesis of it. Could it work? Yeah, for a time the question becomes if the dollar starts rising rapidly against everything else, that's going to create problems down the road. But we'll, we'll set that aside. But ultimately, if you are ni, if you're in Nigeria and you go, oh gosh, the NI narrows down a bunch against the dollar last three years, I'm gonna move into dollar stable coins, great. But then you're gonna go one step further in all likelihood and go wait dollar's down, you know, the Bitcoin's up 4600% against, against the dollar over the last, you know, five years, three years, whatever. It's right. And so the stablecoin gambit relies essentially on foreigners being stupid on some level, right? Like that they're going to buy dollars and that they're never gonna, you know, that they're sort of not smart enough to figure out that, hey, I could take a quarter of my dollar balance and put it in Bitcoin and so it's going to undermine other currencies. It's going to undermine the dollar as well. But it's really good for Bitcoin utilization ultimately.

Luke Gromen [00:45:58] And the higher Bitcoin goes, the more stable coins there will be, the more stable coins there are, the more TBI demand there's going to be. So it turns it into a very virtuous cycle for the treasury's eyes, right? Oh my gosh. As Bitcoin goes up, it's gonna drag along stable coins and it's gonna drag along tbu demand for the average person who doesn't own Bitcoin. It's gonna be a vicious cycle because the more t-bills we issue, the more, the more inflationary it is over time. And it, it's another reason why it's so important to have some Bitcoin. You know, your purchasing power will improve markedly in Bitcoin terms as this happens, but it'll fall markedly in dollar terms as it happens.

Vance Crowe [00:46:37] Man, I love it. You, you are always willing to say the quiet part out loud. That's the way I've always felt about stable coins, which is like, if you have access to get to a stable coin, which I would have to go pretty far outta my way to find it, and then you might as well buy Bitcoin, which isn't going to be, I mean, how many stable coins are out there? Well, as many as they want to issue with the dollar back, there's no, it's nothing in, in comparison. So you look at this, you look at the, the amount of gold that Asia is amassing, you look at the price of Bitcoin, you look over to Europe and they are still saying speculative asset, I wouldn't hold any of it. You know, we, we'd rather have our own central bank currency. These people seem either dumb or they're playing dumb or something because their strategy seems to be obviously going to fail. Where's the weak point in, in what I'm saying here?

Luke Gromen [00:47:34] Well, there,

Vance Crowe [00:47:35] There is no weak point there and you know, I would

Luke Gromen [00:47:37] Typically point out the same people, the same people that thought it was a good idea to shut down their nuclear power plants on the advice of a 14-year-old teenage girl, and they're coal

Vance Crowe [00:47:50] Plants and they're

Luke Gromen [00:47:51] On the advice of a 14-year-old teenage girl and go to windmills and go to solar to run their industrial factories. And then sheared, as you know, who knows, Keyser Söze blew up the Nord Stream two gas pipeline that fed cheap gas that made their industry competitive. Are the same people that are saying, no, Bitcoin is bad. I'll leave it to your judgment. Right? It, I I think they have demonstrated a level of strategic stupidity is one option or a level of political capture slash corruption that is so great that if those people say sell Bitcoin, you should buy Bitcoin.

Vance Crowe [00:48:39] Yeah. You know, I I I lived in Kenya for a while and one of the things I realized when I was in Kenya is it is a, a a ruling class will let their people live in destitute poverty if that's what allows them to succeed. And like if you think like, no, they couldn't possibly sink our entire economy just for themselves, like that is exactly what happened in Kenya. They're, they're total, the elites are completely willing to rip all the value out of the walls and, and leave you there with a, with a husk. So to me, watching I'm exactly with you, the more they say don't buy Bitcoin, the, the more, the more likely you should.

Luke Gromen [00:49:19] No, absolutely. I mean I've, I've seen, and I've preached it here in, you know, the US rust belt for years and years and years, which is, you know, they hollowed us out for economic, you know, purposes, right? They, the economic policy of the United States government since roughly 1982 has been subjugate the US middle and working classes in order to support the bond market in Wall Street. And, and that's, that's been our economic policy in a nutshell. We need to send factories and jobs to, to Asia to keep inflation low, to support the bond market, to, to allow the US government to run deficits, to support Wall Street. We will do that, we'll do it over first they'll go to Mexico, then they'll go to China. Whatever we have to do, we will do that. And so absolutely like the there is, there, they, they, they will do exactly what you said. They are doing exactly what you said, right? It it is, you know, the old apocryphal, it's the old apocryphal Thomas Jefferson quote. There's, there's some question about whether he actually said it or not, but he's, it's attributed to him, right? Where, you know, if you allow, you know, banks, private banks to issue the money of the country, you know, at first by inflation, then by deflation you will wake up homeless in the land. Your father's, you know, your father's conquered your, the land your father's, you know, developed. And that's what's happening when we go back to the first point of the conversation around, hey, why farmland just keep going up when crop prices are like,

Vance Crowe [00:50:49] Nah,

Luke Gromen [00:50:49] And inputs are up. That's, it's literally what is happening is the, to the Thomas Jeffers, the apocryphal Thomas Jefferson quote.

Vance Crowe [00:50:58] So it appears to anybody that's looking that electricity generation and transmission is absolutely the most important thing that's gonna happen, right? In order to run any of the ais, the robots, the cars, the Bitcoin mining, you are going to need unparalleled amounts of, of energy. Does this mean, you know, hey, average guy can just go buy some energy ETFs and ride this wave to the future.

Luke Gromen [00:51:29] I think there are certain company ETFs that you can own, right? So there's, there's electrical infrastructure type industrial companies that stand to benefit from this, you know, for me and I, and I think that's part of a, a good diversified portfolio. You know, for me ultimately,

Vance Crowe [00:51:46] You know,

Luke Gromen [00:51:47] My favorite way to play energy is golden Bitcoin. They're just stored energy and with the kicker of, you know, we know there's too much debt, we know they face a choice of print the money or trigger the revolution and they're gonna choose print the money. So if I look at, at, at the intersection right, of a Venn diagram of, you know, a lot more electrical infrastructure and spending in this circle and a whole lot of print, the money to avoid the revolution in this circle, like the intersection of those two things,

Vance Crowe [00:52:15] In my opinion,

Luke Gromen [00:52:16] Our golden Bitcoin. And I think AI fits into that too. Something that we've said a lot in our, our reports is ai, if it does even close to what it is expected or what the optimists say it's gonna do, is fundamentally incompatible with our debt-based monetary system. Because ultimately what's gonna happen is AI is going to create a rise in unemployment amongst white collar workers, similar to what China did to blue collar workers throughout the two thousands, after China went into the WTO. And when that happens, those white collar workers are gonna start defaulting on mortgages, on car loans, on credit card loans. And once that starts to happen, the banks are gonna run into trouble. And when the banks run into trouble, the banks hold treasury bonds as their reserves. They don't hold gold, they don't hold dollar, they hold treasury bonds and they're gonna start selling treasury bonds in a recession to offset credit losses. And when they do that in the next recession, rates are gonna go up and then that only accelerates the spiral. And ultimately that cycle will happen for only as long as it takes until the Fed comes in and prints money again. And so AI paradoxically, which is on the surface, extraordinarily inflation or deflationary, excuse me, which it absolutely is, will force not just the Fed, but western central bankers to essentially fully reserve the global debt market and the global debt market's about 130, $140 trillion they're gonna have to print AI will force them to print so much money to keep banks from defaulting, from, from banks, from collapsing after ai, which drives job losses, drives credit, consumer credit losses.

Luke Gromen [00:53:56] And that's why I say it too, to me, one of the best, you know, sort of chicken plays of, of, of AI is Bitcoin and gold. Because ultimately, like I can't figure out, I'm, I'm a fairly well educated man, I don't have enough education to know which AI is winning better. This, that, the other, it's, it would be a full-time job just to figure that out. But what I'm a hundred percent sure is if it is, if any of them are successful, the pace of job loss, deflation, credit losses, bank issues, fed printing, it is going to drive, I, I am highly confident it's gonna be very good for Bitcoin and gold. And so I think the more you see on ai, I think that's another factor driving gold. I think there are more people understanding like, oh my gosh, I need to own an asset that is nobody else's liability, which at gold is, and if you own Bitcoin, self custody often exchange Bitcoin also is,

Vance Crowe [00:54:51] So this leads me to something that I kick around in my mind

Luke Gromen [00:54:54] A lot.

Vance Crowe [00:54:55] We were talking about the boomers before that in nominal terms, the amount of dollars that your stocks are worth or that your house is worth just keeps going up, up, up, up, up. But if this inflation cycle continues and, and we just, it keeps rising up, who will be able to buy these things that are, you know, the, that are the store of wealth, that is the baby boomers. I mean like the people that say, Hey, my house is worth two and a half million when I bought it for 500,000. There's not that many people out there that can buy it for two and a half million. What happens when you have an entire market where the older people as they go to get out, there's nobody there to buy it?

Luke Gromen [00:55:38] I don't know, I just thought I've had from, you know, frequently as well, right? I think about it in terms of markets, right? Robust markets of, you know, in farm, in my experience, farmers understand markets better than, than than most people. Oh,

Vance Crowe [00:55:50] 'cause they're dealing with it every day. Yeah.

Luke Gromen [00:55:52] Oh, and they're, they're so wise because they're not trying to get every tick, right? It is a matter of life and death for them, right? So it is all about cutting, you know, making that, that margin of safety for them. So they, they tend to be very wise investors. And I look at the bid esque spread on those houses, right? To your point, right? There's a whole lot of, you know, McMansions for sale sometimes, you know, there's 70, 65 million boomers, whatever, right? All their houses are expensive relative to history. And the boomers control the boomers in silent generation. Total control, I wanna say around two thirds of the total wealth of this country. So, like, I, I don't know, I think, you know, there's I think sort of two versions of the way this goes, which is at least two, but, but two, two most likely I guess, which is, you know, as the, as the older generation, you know, goes into retirement homes, et cetera, and downsize and sells their houses, you know, I think that the market will stagnate to decline in terms of pricing in certain key markets where they're most inflated because their kids just don't have the balance sheet, as you noted. Now, as they die, you know, there's gonna be a whole bunch of houses and a whole bunch of sort of stock portfolios, retirement portfolios in theory, right? If they are not consumed by the government in some sort of Medicaid spend down, which is a, a separate but somewhat related issue. But let's assume, you know, the house, the, the, the, you know, boomer dies house stock portfolio all goes to the kids.

Luke Gromen [00:57:29] Well, if I'm the kid, I already got my own house, I got the stock portfolio, I probably sell the house for whatever I can get for it. 'cause it's all, it's found money, right? It's a lottery ticket, it's probably co completely paid off renting it is like, eh, it's not kind of what it's cracked up to be. 'cause rental housing has the same problem increasingly, you know, VRBO is et cetera as farming does, right? Which is the price of the underlying asset has gotten so high that the yield is like not worth, you know, it's not saying it's not worth it, but it's, it's, it's a very competitive that side, right? I think in some cases in rental, you know, it is not worth it because, you know, in farmland the land is still there, right? You lay a fallow, you fertilize whatever away you go in a couple years, like you rent a house, someone come and trash a joint, and now you gotta, you know, put a bunch of your last year's profits into, into fixing the house. So, point being is that ultimately I think, you know, I've, I've said this is I think the game of like, hey, buy a house 'cause, you know, buy a house to get rich. I think it's over. I think that's over buy a house because you know, you like it. It's in a good school system, it's a place to raise a family. It's safe, it's whatever you like, the location. But I just, I don't s particularly when we overlay, you know, sort of the demonetization of housing of that Bitcoin is doing right, which is younger generation. I've been advocating to my, my sons, they all own some Bitcoin. Been advocating it for five years.

Luke Gromen [00:59:00] Buy some Bitcoin, buy some Bitcoin, buy some Bitcoin. That Coinbase ad that was on tv, it was a 32nd ad in, during NBA game back in May was mind-boggling. Same house that was a thousand Bitcoin in 2016 was 10 Bitcoin in 2020. And now it's, you know, two Bitcoin. And that house is going to one Bitcoin in the next five years. And five years after that it's gonna be half a Bitcoin and five years after that, it's gonna be a 10th of a Bitcoin. And that's my base case. And so you have this demonetization of housing. So I, I think home prices are probably flat to down for some, for some time.

Vance Crowe [00:59:44] Earlier in the conversation you mentioned like, you know, you either print the money or you have the revolution and the slow printing of money is poisoning the, the bloodstream and it, it just, everything just continues to decay. The other option then is to just print as much as you can in a very small amount of time and have, you know, rip the bandaid off. Is this an option that you think the US would, would actually consider?

Luke Gromen [01:00:11] Yes, I do. That's

Vance Crowe [01:00:14] Terrifying.

Luke Gromen [01:00:15] There is a provision, there's something called the financial accounting manual for Federal Reserve Banks. This is basically like the instruction manual or the, the rules for sort of, you know, fed and treasury interactions. And in section two point 10, it is provided for that the treasury secretary can instruct the chairman of the Fed to revalue US gold. And that would then create a deposit into what is essentially the treasury's checking account, free and clear. It's called the treasury general account or TGA right now. Now, this is important because we still hold the gold on our balance sheet at a statutory rate of $42 an ounce that it

Vance Crowe [01:01:01] Was back in 1971.

Luke Gromen [01:01:04] So at $4,200 an ounce. And we, if assuming we have all the gold we say we do, which I, I think we probably do, but let's just keep it simple at $4,200 an ounce on our 8,100 tons of gold today, if we revalued the gold, if, if, if Powell Bessent called a pound and said, okay, revalue it, treasury would have a windfall free and clear of about $1.2 trillion deposited into their checking account with which they can do whatever, whatever he wants within reason. Now, the problem is, is we have $27 trillion, you know, the, the, the treasury market's $25 trillion in debt, 37 trillion overall, I think the treasury market is, is 27 trillion in size. So like that's a whole 4% of the treasury market. It's not big enough. Now if gold was $20,000 an ounce, that would be about 5 trillion. Gold was $40,000 an ounce. You know, that gets you about 10 trillion. He could literally wade into the treasury market with that $10 trillion windfall. It's, which is essentially just straight money printing using the gold. We would not have to sell a single ounce of gold to do that. It's just an accounting creation gimmick. And he could buy back, you know, $10 trillion on $27 trillion treasury market, $25 trillion treasury market. That's 40% of the market. Now, our debt to GDP is not 120%, it's 80%. And oh, by the way, the monetary multiplier of printing that much money and injecting it essentially into the economy, right?

Luke Gromen [01:02:40] Because if you own treasuries, now you got cash, you're gonna spend it, you would, GDP would probably grow 20, 30% for two or three years, fed would've to cap rates. But the net of it would, would be after two, three years, we would have debt to GDP, probably 25%, 20%. And now the Fed can act independently manage the monetary system, et cetera. No, I think it's really important. Those numbers sound preposterous, but if you look at the market value of US official gold, just the market price times our 8,100 tons as a percentage of the foreign held portion of US treasuries outstanding today with the massive run we've had in gold, that is at 11%. Now, by way of comparison, in 1989 when the Berlin wall came down, it was 20%. So gold would've to almost double, just to get back to 1989 levels on that metric, the long-term average is around 40%. So gold would've to quadruple

Vance Crowe [01:03:41] From

Luke Gromen [01:03:41] 4,200 an ounce just to get back to the long-term average. And in 1980, when we had an honest to goodness dollar crisis, that percentage was 135%. So in 1980, foreigners could have brought all of their foreign debt to the us, demanded gold, taken gold, and we still would've had a third of our 35% of our gold left over. That is a gold bubble. Our, our foreign debt was 135% gold back. Today it's 11. So now if Bessent revalued it unilaterally, he would've to make that market, I think, which is a whole lot of money creation. And that's tricky. But if they're able to pursue policies that let the market value the gold up to those numbers, you know, for 20%, you know, double from here, four times from here and then did it, that's the market. And there are steps we could take, right, where, you know, there's nobody better being a bull in a China shot than Trump, right? He can go in there and start breaking stuff and people go, oh God, I need gold. And if everybody bids up gold for him, they could do it. They could do it. I mean, it's, that is a way to do it fast.

Vance Crowe [01:04:52] And what would it be like for the, the normie that's just out there working a regular job, you know, living life and, and this process gets implemented by the government.

Luke Gromen [01:05:04] I think at first they don't notice at all. They would notice a couple things right away. They would notice that the s and p 500 is limit up today, tomorrow, the next day, the next day. And all of a sudden their 401k has like doubled in a month. They're like, oh, this is great. And if they own gold, boom, they're, they're great. I think they would see Bitcoin like, wow, Bitcoin is $600,000 an ounce. It was 110 just like a month ago. That's weird. About four or five months after that, not even, they would start to see prices in the stores rise a bit. You would see help wanted ads all over the place. You know, all of a sudden, You know, skilled trades would be, you know, there would be a story in the Wall Street Journal about welders making $500,000 a year in more than starting investment bankers. And you would see wealth inequality on a lag like collapse in this country. You know, because basically the wealthy classes, which are Wall Street and the el and the elderly, where the elderly have most of their money, it's in bonds. They just, they just, we just, it will have amounted to a tax increase on the elderly to pay for what, to actually pay for what they're using, you know, entitlements in terms of their generation. The real cost of it is much higher than, than what they paid in over the course of their working career, thanks to the inflation.

Luke Gromen [01:06:35] And so it would be inflationary, but it, it, it's, that's where this is going.

Vance Crowe [01:06:40] I see a smile on your face. Is this something you want to see happen?

Luke Gromen [01:06:45] I am smiling not 'cause it necessarily, it doesn't make me happy in any way, but I, this is the only way out people, like we're still in this bargaining phase, right? We we're, we're in the bargaining phase and we can do this, right? And, and sort of, you know, historically, when nations find themself in this position, you know, they print, you know, they, they first prefer to pagan on somebody, you know, pin it on somebody outside, right? We go to war, let's go to war. That'll paper over it. Well, that's why what has happened with these Chinese rare earths over the last week, two weeks, four weeks, four months has been so important. We can't go to war. The offshoring of our industrial base over the last 40 years has gotten so extreme that critical parts of the US military are now made in China. We literally ran down 10 to 15% of our high-end air defense missile inventory in 11 days of medium combat in the Middle East this summer. We would run out of stuff in a month or two because we shored too much. We financialized too much. So the point here is like, okay, well if we wanna avoid having to inflate ourselves this way, then, you know, let's go to war and we'll beat somebody else up and they'll have to take the paint. I I, maybe we can push the Europeans underwater for a bit with some of the things we're trying to do, but ultimately, like there's not gonna be a war to get out of this because everybody needs China to make all the stuff for the war.

Luke Gromen [01:08:16] China's not interested in making weapons for the US that the US is gonna point at China. So, you know, you can read chapter and verse, what is it? It, it's in v mesis, you know, the, the inflationary systems always end. You either have to voluntarily with, you know, get away from it or the currency system has an issue. And what we're talking about is the currency system collapsing against gold. And, you know, 100% of fiat currency systems in history always end by collapsing against gold like this. This at least allows us to redirect, right? If Besson ends up with 2 trillion, 5 trillion, $10 trillion, now he can go, okay, we are going to subsidize an education program for the skilled trades. We are going to build up a new generation of young farmers. We are going to rebalance the economy, we're gonna build productive assets, whether that be farmers, welders, industrial capacity, the electrical grid with some of this money. That's a good outcome. Is it inflationary? Sure. Do bond holders get killed on a real basis? Sure, but that's in the cake. That's the good outcome of the currency collapsing against gold. The good out the bad outcome is you pretend like none of this is true and you don't proactively do some of the things I just said. And then when the currency collapses against gold, you have no ability. You have no ability because you know, when people are scrounging for food or whatever, they don't go to work, right?

Luke Gromen [01:09:50] This is like a Russia 1998 type scenario, right? It takes you a long time to rebuild from that in some sort of leader. So, and that's a situ, like they, that's a really bad outcome. And that's, I, you know, I wish it was, these weren't our options, but I really wish we wouldn't have gone to Iraq on a lie. I really wish we wouldn't have shored our industrial base and, and subjugated the US middle and working class for 40 years to support the bond market in Wall Street. And I really wish we wouldn't have bailed out fraud in 2008, which is what we did. And I really wish we would've been more strategic with how we handled COVID and I, but I didn't make those policies, right. So, you know, those, those are in the cake and, and it's, you know, it's not some sort of happy thing. It's, and I guess why are you smiling then Luke? You know, sometimes when you want to cry all you can do is laugh. So

Vance Crowe [01:10:37] Luke, we just jumped straight into this conversation, but you are not just a, a Titan in the Bitcoin world just doing podcasts. You run a company FFTT

Luke Gromen [01:10:47] And

Vance Crowe [01:10:48] Why don't you tell us a little bit about that and, and what, what do people come to you for?

Luke Gromen [01:10:53] Sure. So FFTT stands for Forest for the Trees. It is a consulting firm. I started 11 years ago doing, trying to see the forest for the trees, essentially connecting dots in macro and thematic investment research for individual investors, mass market investors, high net worth institutional. We have a range of product availability and people are interested in learning more about that. They can go to fftt-llc.com for more information and you know, if they're interested in hearing more what I have to say about various things or my thoughts on things. Also on x at, at Luke Gromen, L-U-K-E-G-R-O-M-E-N.

Vance Crowe [01:11:33] Well, Luke, it was a huge honor that you would come on. I, I've been listening to your stuff when I, I am a, a pretty discerning person when it comes to who I listen to about Bitcoin and the larger macro world. And I would say you and Lynn Alden are what we call up the graph. You are seeing things long before other people do. And I have, I'm so grateful you were willing to come on and have a chat.

Luke Gromen [01:11:58] Oh, I appreciate you having me. Like I said, I've got a, a very soft spot for the farm community as, as somebody that was a, you know, a wannabe farmer for a moment in time. And as someone who has, you know, in, in a semi-rural community and has a lot of, has a number of different friends in that business, you know, it's a, it's, it's an important, it's an important group of people to me and I and I, I always find farmers to be just so great to talk to 'cause they're real and they're just, you know, they, they, they get it. They're real. There's no bullshit. And so the honor's all mine, I appreciate you having me on.

Vance Crowe [01:12:33] Alright, that's gonna do it for our conversation with Luke Gromen. I want to thank him for coming on the show. What an honor it was to have somebody with such a rich band of knowledge that thinks about the world so differently. I hope you enjoyed the show. If you're somebody that is thinking about their professional career and you're starting to wonder what can I do that will give me an edge, a way to express my ideas so that other people understand me or that you are better able to prompt other people to talk and share what they're thinking about, then you may be interested in my interest-based communications class. This is a five session course where I go through everything from interest-based negotiating to introducing yourself, having great conversations by learning how to ask better questions and not interrupt people. We'll also talk about conflict and how to manage difficult situations. And we finish with an entire session on how to become a better presenter when you're presenting to a room full of people maybe that are not gonna like what you have to say, but how can you put it in a way that they'll understand it and engage with your ideas. If you're interested to learn more about communications, go to VanceCrowe.com and look up interest based communicating. Send me a little note that you're interested either as an individual or for your organization and we'll get a call set up to figure out a way for you to do this course. Alright, that's gonna do it for the show. We'll be back later. Ah.