YouSaid · the spoken record

Luke Gromen

lines on the record: 94
first: 2022-10-26
most recent: 2022-10-26
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“The 1% chance we don't have a plain vanilla, plain vanilla recession next year, and that it actually does impact inflation across the economy, which I think it should. This is what I think the policy Plain vanilla recession historically has been 20% decline in tax receipts. That's just like plain vanilla, yawn, oops, GDP's down, then we go back up. This is not like the system's collapsing like in 20 or 08, which are the two of the last two recessions. 20% decline in receipts.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So I don't know, when I say I don't know if the yield curve conversation changes with the higher inflation, I don't think so, but what I feel very strongly is that if we have a recession next year, let's say we just have a plain vanilla recession.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I'm talking, oh, yeah. Like, you could have mortgage rates at eight and a half in a month. I mean, and I think that's ultimately where this is going. I think we're going to see the 10-year Treasury go from four to six in three weeks, four weeks at some point this fall or this fourth quarter.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And you look at what the yen, like I put up a chart on Twitter yesterday. You look at yen dollar and the 10-year treasury yield.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And that's the other part of the reason why I think partly the Fed is weaponizing is they know this. You can go Google long and variable legs on monetary policy and you'll find 16,000 things where it's like, hey, yeah, monetary policy works on a leg. Like they know this And so, yeah, I do think it's probably partly a little bit of an ego thing. I mean, Harold Malmgren had a great tweet earlier this year where inferring that, you know, like you said, like that Powell didn't want to be the next Arthur Burns, that he was embarrassed by how wrong he was. And he's going to be wrong again because his choice can.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Not with rates having done with gone from two and three quarters to seven and a half. The equity's not there mark to market. But hey, which again speaks to this whole like Okay, I'm going to put the deck on. And then it's like, hey, let's move. And then they're going to go, okay, well, we're going to lose all that money on this and we're going to get a small, like, it's just going to stop.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And I think we're seeing a little bit of it. I think people are comforting themselves that it's been a transition from goods to services. And we've had this huge fall off in goods and retail and this inventory buildup. Order cancellations. And I think it's going to, I think unless the Fed comes in and basically reoses this whole thing in the fourth quarter, which I don't think is happening now, I think we're going to get this air pocket in the first quarter of where it's just like the world stops because boomers can go, oh God. Not as afraid of dying, and at any rate, if I keep this up, like, you know”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Was like they know that's what's causing it. And so I think that's why it's this weird cycle. So, you know, the first question is, in treasury market problems or unemployment first, well, that's easy. It's treasury market. But I think there's an important corollary to this, which is there is a moment coming. There is an air pocket coming of employment, GDP, spending. And I don't know what month it's coming, but it's probably in the December or third week of January. Boomers are going to spend more money on Christmas. We're all going to spend money on Christmas. And if this fourth quarter goes the way I think it will if the Fed doesn't step in with QE, they're all going to get their statements and go, stop spending, like not slow spending, like stop.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And the first time I got a set, like I had written a bit about this wealth effect dynamic throughout my writing going back eight years. But the first time I had a sense. When you had Zoltan and then Credit Suisse, and then you had Bill Dudley, the former New York Fed president, both say we need to crash stocks to get inflation down”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So, these boomers fast forward 40 years, these boomers have $35 trillion net assets. And then you scare them. They're going to die like way sooner than they thought. So now you've got $35 trillion in assets. And a generation that is putting on the biggest YOLO trade in the history of the world. Like, I might die in two years. Let's get on a plane. Let's go to a restaurant. Let's order a steak. Let's go fix the house. Let's fix the house again. I don't like that deck. Rip it down. My kids need a house. Let's get them a house. Let's get that kid a house. And so this, when you hear, oh, well, it's services inflation. Well, there's $35 trillion trying to cram itself out of the asset markets into the real economy by virtue of this YOLO trade.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“U.S. government deficits were sterilized in asset markets by virtue of U.S. government policies to defer compensation into asset markets, right? So when you think about the average baby boomer, say they made whatever, for 40 years, 35 years from 1980 to 2015, they made X dollars. of those X dollars that they would have made in cash comp and spent into the economy generating CPI inflation and instead put it into the asset markets we'll give you a tax break you you can take it off your taxes it will grow tax free and then we'll tax you at the back end IRA, same thing, four, three B's. It's all been one giant exercise in sterilizing U.S. government deficits in the asset markets. And then we don't count asset inflation as inflation, right? That was inflation. It was just deficits going to the ass.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And the reason they're extraordinarily inflationary is sort of a historically unique reason, which is if you go back as of last summer, the boomers according to the Wall Street Journal had $35 trillion in net assets. And how they acquired those net assets was in no small part policy that really began being implemented in the 70s and definitely in the 80s was”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Oh, it's a treasury market. It's a treasury market. This is a weird cycle. And it's something I had thought about ahead of it. And again, it's one of these things where it's like, okay, yeah, I think this is really happening. I think it's the treasury market already has an issue and it's going to keep getting worse. And it's going to keep getting worse almost without fail for a number of the things we've talked about already, unless the Fed steps in with more QE. But I say the thing that might be the weirdest thing about this cycle has been the contrary behavior of American boomers, right? If you ask almost any theoretician out there academic, old people, are they inflationary or deflationary? And the answer is almost without fail. They're deflationary. They're past the peak in their spending. The peak spending is in the 40, 45, and then they just, their deflationary spending. And the difference is that the boomers are extraordinarily inflationary.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Getting obliterate. Yeah, you can't stand in. I saw last week that marked to market, the Fed would take $720 billion, has lost $720 billion year to date on their bond portfolio. There's no hedge. I don't know the numbers, but I would suspect that's probably close to as big as the entire hedge fund industry. Like they can't take that, right? So they have shareholder or they have general partners. They have to make money. So yeah, you've got this situation where will the treasuries get bought? Of course they'll get bought at a price. Of course. The problem is not will they get bought at a price. The problem is. That price can the US government afford that price. And the answer is”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“So that sets you up in a situation where if your marginal creditors are too many hedge funds, then you see the 10-year treasury, you'll start to trade like hedge funds are trading it, which Take a look back. Over the last people saying treasury evolves up. Why is treasury ball up? Probably partly because a lot of hedge funds buying it.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Which is encouraging, and I would put an asterisk next to it because it's, I think it was $170 billion in foreign buying in August. And it was the two biggest buyers were the UK and the Cayman Islands, which is hedge funds and hedge funds. And so, again, that's fine. But when you have gone from borrowing foreign central banks who are very price insensitive and can take losses, do not mark to market. They buy for political reasons as much as anything. And then you move down to foreign private insurers and pension funds. And they are marginally more price sensitive than central banks, but still very long dated, et cetera, et cetera. By the time you get down to the hedge funds who are financing you, they are fickle creditors and they are very price sensitive and they don't like to lose money.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Foreign central banks, like they left in 2014 by and large, Fed and U.S. banks largely picked up the slack. And when they don't, the dollar goes up a lot and something breaks and then they come back. And they're gone now between the Fed, obviously, for all the reasons everybody knows and banks. There are regulatory constraints to their balance sheet in terms of what many treasuries they can own because for regulatory purposes, a treasury counts as against that regulatory score. And again, I'm not the right guy to talk to about how to calculate that, et cetera. But suffice it to say there's a balance sheet constraint there. So they can't buy as many. And certainly they can't buy what is needed to, particularly with the Fed adding to the issuance. And so you have seen in the recent months a big uptick in private foreign private buying.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, there was a great, it was something we've been talking about for a while, which has been three biggest marginal buyers of treasuries over the last, I guess, really eight years in different sequencing has been in particular since 2017, really, has been U.S. banks, foreign central banks, and the Fed.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“It goes back to a point and Brent Johnson's famous interactions on the dollar I'm sure you can Google search and find me saying at some point in the last two years, like, yeah, could the dollar go to 160 or 200? Absolutely. And the ironic thing is there will be gas shortages. You will be waiting in your car in a gasoline shortage. And I remember people on Twitter are going, how could that be? And yet here we are with the DXY at 113 as we talk. We're talking about the Northeast running out of natural gas. And we're talking about diesel down to 25 days. And that's with Dixie at 113. At 150, are you kidding me? I don't think people have thought through what that implies. Like, yeah, the dollar is going to be strong. And you're going to need a shotgun to sit in your car with you while you pump your gas if the gas is delivered that day.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And it's a trillion five for energy, infrastructure, ENP, all of it. And we're printing it all. Fed's going to print it all. That's what has to happen here.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Push comes to shove? Go back, read the books about 1971. It's our currency, it's your problem. It's our energy. It's your problem. You're cold? Sorry. You made a bad choice. And that's harsh. And to me, it has huge implications for the euro. It has huge implications for the pound. It has huge implications for markets. Because look, I mean, yeah, is it going to send the dollar up if we do that? Absolutely it is. Is that going to be good for markets? No. Is it going to be good for the treasury market? No. Is it going to be good for energy? Yes. And so we're sort of, until we get some adults in the room that say, listen, if we want sovereign debt to win against energy, we need to kill sovereign debt paradoxically. We need an adult to come out and say, all right, we're going to print two trillion this year. And yeah, we're going to do the 50. It's not 50 billion for semiconductors. It's 500 billion for semiconductors. And the Fed's monetizing it all at 2%.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Derivative thought is I feel bad for Europe because these European leaders, especially the Atlanticist ones, I kind of shake my head. And I think they must have never read American history. Because how do they think this is going to go? Do they really think that with the Northeast running tight on LNG and with US running tight on diesel? We've already heard it floated out. Well, we're not going to do the export ban. We're not going to do the export ban. Why do you think that's being floated out? Has it dawned on Europe yet? Why that's being floated out? It's being floated out because that's what we're going to do this winter.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And that can't be run down to zero. I don't know how much further it can be run down, but it can't be run down to zero because no one knows at the bottom is at the bottom these giant soul caverns. It's likely sludge of some description and probably unusable. And no one knows how far up the sludge goes. So when you talk about the diesel thing, we talk about the natural gassing. I look at it from two things. Number one, again, setting the battlefield stuff aside, the economic stuff is not going well. We're not winning that the sovereign debt side is not winning. Energy is winning, number one, which suggests the policy response shouldn't be Biden getting angry and talking about the refiners cutting prices. It should be industrial policy, Fed funded, print the money and build the infrastructure and screw inflation. Let it go. Who cares? Screw the bondholders. That's not been the response. The second.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“If this is a battle between energy and Western sovereign debt, right, this Bretton Woods 3 concept that Zoltan Pozar talked about, some people agree with, some people don't, this, what's the primacy? What's the king? Is it King Treasury or King Oil? Is it king energy? And we did a chart that shows UK guilt, you know, inverted UK guilt yields, inverted 10-year U.S. Treasury yields just for effect, you could do the price, but it's just for effect. The USSPR inventories and the price of oil. And that's our scoreboard. Who's winning, right? We can talk of who's winning, who's the economic war, who's winning. And the answer is energy's winning. Guilts have gotten killed. Treasuries have gotten killed. Oils basically flat from the day they invaded. It's up a little bit. And that's what the US, having run its SPR down to the lowest levels in 40, 40 years.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And Putin says it's energy, and the West says its sovereign debt in the US in particular, says Treasuries, treasuries, treasuries. Putin six months ago had no leverage. Everyone told me he had no leverage. Even today, I can't get on any Twitter mainstream website. And all I get is how bad Russia is getting their ass kicked. And maybe they are on the battlefield. I don't know. But I also know at USDA inventories or at all-time lows, I know one of the most populous regions of the United States are looking at much more expensive gas because they need to compete with the Europeans for natural gas on global LNG markets, and they might not be able to get enough. And I can see this SPR. We did a chart, I may have sent it to you, in terms of just if we think about markets tell us what's happening, right?”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“If it's me and I know that grocery stores take delivery from diesel fuel trucks and grocery stores only have three days of food, best case in good times at normal throughput rates, you're not the scary yet, but you can see scary from here in terms of the implications. So when you, and like I said, I think it's a refinery issue, but I'm not the right person to talk to on all those logistics. When you marry that with the SPR, When you marry that with an article from two days ago that I think was in the journal that New England is looking at possible shortages of natural gas this winter, so they'll have to shut down. It starts setting up for very interesting and very con-narrative outcome, right? If we're looking at what has transpired this year, it is ultimately a battle between energy. Western sovereign debt, which is the real value here.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I think there is an element of, okay, well, we're in for a penny, we're in for a pound, right? We're getting overrun. Bomb inside the wire. Weaponize it. Just keep going. Just keep going. Just keep going. That's really the genesis of it. It's just watching them not react to some of these sovereign markets combined with the economic warfare things that have happened in the last three weeks. So we'll see.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“It's been the weapon of choice. And, you know, the gambit was we're going to raise rates and we're going to knock down oil and we're going to break the world and everyone's going to buy treasuries and we're going to hyperinflate the ruble. And they didn't hyperinflate the ruble. The ruble was defended effectively because Russians knew it was coming because we've done it over and over. And they had the ability to do that. And objectively, the oil market is where it was in February and the treasury market's gotten hammered. And so it hasn't worked. Relative to expectations. And I think that's part of it too, where when you are an empire and you're used to running this playbook and you run it and it blows up in your face, the oil market didn't blow up, the treasury market blew up.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Right. But it's these other things overlaid on top of it, these economic war and aspects that I think when I look at it, and then someone's just a little bit of a sort of a feel, right, of like, hey, we got to get oil down to B Putin. We got to, you know, he's weaponizing oil. He's weaponizing oil. He's weaponizing oil. Well, what can we do? Weaponize a dollar. Weaponize the dollar. How do you weaponize the dollar? You raise rates.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“The relationship between the US and Saudi that has been in place for 80 years. That to me, when I put all those things together, when I layer that onto the rate, that's where I would say between the change in the, because with what was happening in markets, yeah, the core CPI numbers still, but you can see where it's, and maybe it's just dogma. Maybe they're just idiots. It's entirely possible. What's the phrase, don't ascribe to motive. You can ascribe to stupidity.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“NATO aligned people did it. I can make a credible case that the Russians did it. I can make a credible case. The Ukrainians did it. In the end, it doesn't really matter who did it. It's a huge, there's, that to me was a signal that there's a warfare component. That was signal number one. Signal number two was sanctioning the surprising aggressiveness of these Chinese sanctions to your point. That was like a bomb and it was not messing around. You worked for them. You were no longer an American citizen. I was like, whoa. So when I see that and then I see OPEC cut production the way they did. And then I see the American response the way they did where you have high-level national security congresspeople talking about passing the NOPAC Act, talking about changing the”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“It's totally so. But I think the part of the evolution of this weaponization thought process, when I look at whoever blew up the Nord Stream pipelines, that sabotage, that caught my attention. That was a burning the boats moment for Europe. And I can make a credible case that”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think his core, the other thing I would say that has really changed my view toward the weaponization has been everything that has happened, the weaponization of the Fed in these rate hikes, has been the escalations we've seen in what I would call economic war in the last two, three weeks, right? Little bit of a separate discussion”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“I mean, you know, when you, to me, I think there is an element of defense of what I would call dedalarization of global energy markets, where you've seen China continue to buy Russian energy in their own currency. You've continued to see India talk about buying oil in their own currency. Some of it could, I guess, just be the try to be gentle. I really like when you come back to it and say, all right, well, we need to, what's driving the inflation in Europe? It's all energy. It's all energy. It's energy and money printing.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“The way they're breaking in foreign sovereigns. It's only a matter of time till it comes back. When you see the Treasury marketing market acting the way it is, these are things they would respond to in the past and they simply haven't. And so that's why, to me, I think there's a real shock that the pivot ain't coming because, yes, they did break things the way they did them. They broke on my time horizon. But what I thought was a 5% chance that they were being weaponized against Russia might be way higher.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Thinking, well, maybe it's not a 5% chance that this is about weaponizing the dollar against oil and against Russia. Maybe it's 10. Maybe it's 20. And then really post August, where, again, you saw this rollover in inflation expectations. You saw this rollover in the data. You saw the rollover in oil. You sort of saw all these boxes that you could check to say, okay? And they said, no, we're going to do another 75. That's when it really, I would say, you know, if there was a chart showing Luke's estimate of what the Fed is really doing is being weaponized against Russia, it would have gone, you know, maybe at that point it was up to 10, 15%, 25% chance. I went 30, 40, 50. And I think now we're really at this level where it is my base case. I think it's 50, 60, 70% shot. I think that that's what's going on here because in my view, when you see things breaking.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“The mortgage market, all these markets that the Fed has quickly jumped in to reverse themselves, the data get weaker. The Fed has quickly jumped in with almost Havlovian response with more liquidity in the post-GFC era, ever since 2008. They hopped to it and they start fixing these things. And I couldn't help but notice they're not jumping in to fix it. And people say, well, it's just inflation. inflation expectations are rolling. You can see the inflation data when you extend it out and the comps start to get easier. The base effect goes away. You can have some idea what their preferred metrics are going to be and it's coming down fast. And so the more they didn't respond the way they had for the prior 14 years to these things starting to break in the way they are, the more in my own mind I was”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“And I would say all things considered pretty accurate. I mean, the US Treasury Secretary last week said she's concerned about illiquidity in the Treasury market. We've seen the guilt market have issues, et cetera. So from a purely economic standpoint, not bad. However, if you would have asked me in April, Luke, what are the odds that what the Fed is doing is not purely about fighting inflation, or if it is about fighting inflation, that's actually code for we need to break oil. We need to break Russia. We need to break the world, to break oil demand, to break Russia. I would have assigned a 5% chance to that maybe. That's a tail risk. What has proceeded with sort of each passing month? And in particular, after August, where we saw inflation expectations roll over, where we saw oil roll over, where we saw the treasury market, the guilt market, debt markets.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Grid of they're now doing things that are going to start breaking stuff. They needed to let inflation run hot for a lot longer than one year to get debt-to-GDP down to 70 to 80 percent from 125%. And if they tried to tighten too soon, they were going to break things. You were going to see this dollar up rates up until things start pulling apart. They started tightening. They had not gotten debt the GDP down. And so our view was that you were going to see, my best guessmate back in April.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“nominal GDP with 8% CPI, everything goes up, party on Wayne Party on Gars. If you're in any of the other three areas, you're going to get strong dollar. The U.S. government is going to start crowding out global dollar markets. You're going to see dollar up rates up, everything break. And that's what we've seen. And so when we came into this year earlier this year, we started to see that happen. Back in April, I wrote a report. I think it was April 27th. The title of the report was Why We Think the Fed will pause with, we'll stop right, we think the Fed will stop hiking rates by the end of 3Q22. September 30th, 2022. At that point in time, that was far off out in terms of the reservation, in terms of the Overton's window of discussion of when the Fed was going to stop. And the reason we wrote that was tied back to that point.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Sure. So you go back in time to last year and when the Fed started talking about raising rates and even going back to before the election of 2020, we said, look, there's sort of a grid of four outcomes. Treasury spends enough, Treasury doesn't spend enough. Fed monetizes enough. Fed doesn't monetize enough. And as you ran through those four grids or outcomes, basically, unless you stayed in the grid of Treasury spends enough Fed monetizes enough, you're going to get a weak dollar and you're going to continue to get sort of economic growth. And you're going to get 2021, you know, 11%.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Twitter thread that you referenced refers to as a decapitation of effective immediately of the mid and high-end Chinese semiconductor industry. The bottom line is, to me, it's a really big deal. To me, it is reminiscent in some ways of the United States embargoing Japanese oil industry or oil imports, excuse me, in the summer of 1941, where it's a big, I think it's a very big deal. I think it's an escalation. It's an escalation or it's a retaliation for something we don't know about yet, but we're about to find out. It's kind of how I'm thinking about it. And I don't know which it is. But either way, I think it's a really big deal.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“AI, et cetera, type related stuff that can also be used in defense industries. If you're an American citizen and you're working in the Chinese semiconductor industry in these areas or abroad, I don't know, but you have a choice. You either continue working there, in which case you must give up your American citizenship or you must resign, I believe, by this Friday. And so it's apparently supportedly leading to a mass exodus of American brain power and talent, engineering talent out of the Chinese semiconductor industry at these mid and high level. There's a bunch of other sanctions. You can find stuff about it. CSIS has a really good article about it. It's working on redirecting some of the high-end shipment manufacturer chip machines made by ASML and some of the others away from China. And it's the articles, one article in the FT says, quoting an analyst, it basically puts China back to the Stone Age.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so it caught me by surprise as well. Someone pointed it out to me, and I apologize for forgetting who that was that pointed it out. But the second I wrote it, or the second I read it, excuse me, it immediately hit me as a really big deal. And there was a thread on Twitter last week by, I think a gentleman named John Schneider perhaps. But the point of the sanctions are that the Biden administration is actually up the sanctions on Chinese semiconductor manufacturing, the Chinese semiconductor industry. My understanding is it's the mid and higher level type stuff. And I'm not the right guy to talk to on that sort of the nitty gritty of that. But the punchline is the thing that really made me drop my jaw when I read it. It is demanding, I believe, as of Friday of this week, the 21st of October, if you are an American citizen and you are working in the Chinese semiconductor industry. I don't know if it is the entire industry or if it's just these mid and high level chips.”
2022-10-26 · We Study Billionaires · BTC101: 4th Quarter Macro Overview w/ Luke Gromen (Bitcoin Podcast) · IDENTIFIED FROM THE TRANSCRIPT