A Macro take on Russia’s Gambit, Oil, Gold, Bitcoin and more with Luke Gromen

Oil prices spiking. Wheat at new highs. A bid in Bitcoin. Russia’s invasion on its neighbor, Ukraine, got the world’s attention and moved all sorts of markets. While our human side rallies around the Ukrainian people, our financial minds turn to wondering what is going on and what impact this chaos will bring on? To get a clearer global picture, @LukeGromen, a research pro focused on the macro picture and CEO of Forest for the Trees (FFTT, LLC), joins us for a unique discussion of what he is seeing and the outlook for oil wheat, ruble, gold, treasuries, and more!
We’re getting into the trenches with Luke and talking what Putin’s grand gambit may be, including the danger to the U.S. dollar, new methods of financial warfare, who becomes the reserve currency in the end (the big $64,000 question), MMT, Gold, Oil, and Bitcoin. Stay tuned and discover where the delineation between the narrative and facts takes us!

About Luke Gromen:

Luke Gromen has become one of the most respected names in the global research sector. Having been in the industry for 20+ years and earning a reputation as a client-focused analyst with an unparalleled ability to make broad connections between increasingly siloed industry news and drawing conclusions that help investors understand the bigger picture. Luke offers unique and insightful research derived from a wide variety of sources that provide a clearer picture of global macroeconomic, thematic, and sector trends.

Find the full episode links for The Derivative below:


Check out the complete Transcript from this weeks podcast below:

A Macro take on Russia’s Gambit, Oil, Gold, Bitcoin and more with Luke Gromen

Sara Smith  00:19

As Russia’s invasion on Ukraine continues to capture the world’s attention, our financial minds are left wondering what’s going on. Oil prices are spiking, we are setting new highs and there’s been a bid in Bitcoin macro pro researcher and CEO of force for the trees. Luke Grohmann joins us to provide a unique outlook. And we’re getting into the trenches to talk things like what Putin’s grand Gambit may be, including the danger to the US dollar, the new methods of financial warfare, who becomes a reserve currency in the end MMTs, gold, oil and more. Stay tuned and discover what the delineation between the narrative and the facts take us. This episode is brought to you by our CMS team of advisors that help investors research and access hundreds of professional managers in the alternative space. Check out everything that our RCM does at WWW dot RCM alts.com And make sure to check out our newly released trend following white paper while you’re there. Just click the Education tab and then white papers back to the show.


Jeff Malec  01:29

Okay, we are here with Luke. I saw one of his tweets on the US weaponizing treasuries to fight Russia being like the Orient Express, which caught my eye then ended up ended up on his website where I saw the nice plug from Grant Williams. So that was all good enough for me to say. Let’s get him on here. And let’s chat. So welcome, Luke.


Luke Gromen  01:46

Thanks for me out. It’s great to be here. Jeff.


Jeff Malec  01:49

pleasure to meet you. We were just chatting for a second there. You’re in the Cleveland area. Yes, sir. And are you in the forest or the trees today?


Luke Gromen  01:58

Most days, I’m in the trees. We have a little we have a little property out this way. So a few acres of woods, which is a nice, a nice respite of peace given everything else that seems to be going on in the world these days.


Jeff Malec  02:11

I hear Yeah. This is a unique we’ll get into it later, but a unique company name forest for the trees. Thank you. Um, so let’s dive right in and talk Russia and Ukraine, as you said everything that’s going on the world here. Tell us what you’re looking at what you’ve been writing about oil we ruble gold treasuries. Whichever one of those. Do you want to start with let you take? Sure. I


Luke Gromen  02:36

mean, to me, I think there is. I think there’s a bigger game going on here. And I think that there’s a lot of question a lot of people asking what’s, what’s the grand strategy? What’s what’s Putin’s grand strategy, and I think it’s really a grand strategy between Putin and Xi in China. And I think the grand strategy is effectively a giant one big Gambit. And I think the gambit is we’re in a peak cheap energy world. In other words, we’re not running out of oil and gas, but we’re running out of cheap oil and gas. And you can see that pretty clearly in the in the data. And so effectively, I think the gambit that Putin is making is one, if you subtract my oil and gas, from the peak cheap energy world, the world will be drastically short oil and gas that, in turn, will send the price of oil and gas to levels that will send the US and the West broadly into a recession, possibly a severe one. And three, or I guess, you know, three, that a recession is not a policy option in the West, because of how high us sovereign debt is because of how bad us deficits are, because of how high sovereign debt is in the West, broadly speaking, basically, the fiscal situation of the US and the EU in particular, are so bad as a result of the last 20 years that a recession will put a will force one of three or four choices, the US can slash defense spending, the US can slash spending on Treasury treasuries, basically, they can default on treasuries, since they can’t cut rates any further, they can cut entitlement pay goes not going to happen. Or they can have the Fed print more money. And so basically,


Jeff Malec  04:37

I think we’re gonna be doing number three, then


Luke Gromen  04:40

it’s going to be the last, the Feds gonna have to print more money into an inflation spike. And so what I think what I think the gambit is is I don’t think this is a I think it is only nominally an attack on Ukraine. I think there are some near term geopolitical objectives. He is trying to achieve visa V NATO and border regions and things he’s long complained about. We have not in his eyes heard him on. I think that’s sort of the the the tactical game. I think that’s the battle, I think the war is about the dollar, I think he is effectively launched an attack on the dollar with the bet that basically his energy cannot be subtracted without blowing up the financial system. And the last part of that Gambit is as long as China stays on his side, and we’ve clearly seen signs, China’s been asking for a new currency system since 2009. As long as China stays allied with him, as a clearinghouse of spare energy basically just buys enough energy from him to keep him from utterly collapsing to be able to, you know, clear his minimum bills, if you will. I think the gambit might work, I think it actually might work.


Jeff Malec  05:53

So the gambit you think may work, what does that look like? years, months? decades?


Luke Gromen  05:59

No, way sooner, way sooner? months, maybe at month is that the long end? It’s either gonna work or it’s not. And in particular, the acceleration of the Game Over the weekend, right where the US and EU sanction Russia’s central bank from their FX reserves, which was an unprecedented step. I think it really lit the fuse on something that could very quickly get out of control now, because that will force I think, it’s an act of financial warfare that I think will force Putin and turn to s re escalate from that step. The Gambit is really can Europe survive without Russian energy? And the answer is they can’t. They can’t. You’re already seeing I mean, how long will bondholders hold boots yielding basically zero with German inflation at five and going higher? The bet, you know, there’s some portion of global sovereign debt ownership, particularly here in the US that is regulatory, right? You have to own the banks have to own some money, markets have to own some, you have to have some for collateral markets. It’s a big chunk of the market. But there is also a part of the market that has actually made a discretionary decision to to hold bonds because they think that inflation is transitory. And based on what has happened over the last week, I just don’t see how that is going to that that’s going to play out. So basically, the gambit is is in with a system as highly levered as it is. Now, if Europe goes into a severe recession, Russia is already in a severe recession, then what those two will be enough to trigger given the leverage in the system, in my opinion, though, they should be enough to trigger a global recession, a global financial crisis, probably pretty quickly. Now, the politics can change that still, at this point, I think. And I don’t know exactly what that looks, you’d have to have some sort of big de escalation, I suspect from one side or the other. Right. So if if Putin backs off and goes home, I think that de escalates if the US or Ukraine, Ukraine signs a peace deal agrees to be neutral, and then they sort of work things out. I think that the escalates. But if there’s no de escalation, I think things are going to get we I mean, we had a messy day to day. You’ve had the ruble collapse against the dollar, you’ve had the dollar collapse against oil, gold, Bitcoin or having very good weeks already, I think that’s likely to continue. And I think it’s broadly good for commodities as well. And so it’s really it’s really in the hands of the hands of the politicians at this point. If they stay on this path and don’t de escalate. I think we have weeks until things get incredibly messy


Jeff Malec  09:01

and back up for a second and just explained by what you meant by the financial warfare and what exactly the US did there that the world did against Russia to trigger some of these things.


Luke Gromen  09:13

So yeah, they they they eliminated Russia from they put the kicked Russia out of Swift but not their energy, right. They exempted energy and they used energy broadly defined. Even with them not kicking out energy, it is getting harder to move Russian energy because there is there is indecision or there is opaqueness regarding exactly what sanctions will eventually do. And so basically a bunch of traders who don’t want to go to jail, ex ante for moving Russian oil today if the rules change in a week.


Jeff Malec  09:49

Know those traitors even if they do move oil, can they actually pay for it? Can they get their payment into Russia, or that sort of saying it was swift was broken on purpose? If it was payment for oil,


Luke Gromen  10:01

the US as of late last week was saying they did not they were specifically structuring the sanctions not to interfere with global energy markets, which in and of itself is a very powerful statement, right, that tells you who has the leverage there, right. It’s not as much leverage as we were advertising. As much as consensus was saying now, it has since gotten a bit more difficult to move Russian energy and Wall Street Journal’s had some articles about it. China is effectively waving some of it in, but the logistics of it make that difficult to take all of it. So the big thing though, I think that that what the US and EU did over the weekend was sanction. Russia’s Russian Central Bank FX reserves. So basically, the dollars and the euros that the Russian Central Bank had, these are basically surpluses they had earned through trade over years, decades. were seized, they were they were frozen by US sanctions.


Jeff Malec  11:03

And they converted a lot of that before they attacked.


Luke Gromen  11:07

They had not come No, they had not converted them. They they had been sitting in those reserves. I mean, they have 130 100 $50 billion in gold. So the Russians have been building a big balance sheet of gold. But I don’t know that they the Russians were expecting this. So this is unprecedented. Historically, my understanding, per the Financial Times is that FX reserves at the central bank level had historically enjoyed sovereign immunity. And so this is something new. And again, this is why it’s sort of touches off this fuse of the financial system is now if FX reserves can be seized, anytime you anger the Americans, there’s really not a country on the planet who’s not angered the Americans at some point. Right. We’ve been at war with everybody at some point. Some it’s been a lot longer than others. But you know, basically over the last weekend, you know, the central banks of the US and EU, the ECB ran a gigantic advertisement for gold and Bitcoin.


Jeff Malec  12:08

Yeah. When and or your china or your any of these countries like, hey, let’s talk about diversifying these reserves a little bit if they can just be seized that easily. But at the same time, it’s not that easily to diversify, right. Like, we’re still the world’s number one economy, we still have the money currently flows through but that’s we’re saying that’s the end gambit of stopping that flow. But what does that look like? Even if we’re second place, third place fourth place? Or is it? Is it just a tipping point, right? Is it your view that it will just tip the other way? And then you’ll be and then what would the reserve currency beat?


Luke Gromen  12:43

Well, that that’s that’s that’s the 64,000 question. And I think I think sort of the consensus view is, is where else are they going to go? And there isn’t, the markets aren’t big enough for that. There’s no neutral, there’s not enough news, you know, eu sovereign debt, there’s not enough Chinese sovereign debt. Now, it’s not well understood that over the last two years, three years, 10 years, Chinese government bonds have outperformed treasuries. I learned that last week blew me away, back. But that markets not liquid enough. However, gold can be made liquid enough, there’s plenty of gold, and it says there’s not enough, I assure you, there’s enough gold. You know, if if it’s all done in physical in particular, and I think that’s where this movie is going, which is they’ll say, Fine, we’ll just buy gold, we’ll just put it all in gold. And you will see gold rip. And that’s basically inadvertently advertently what the US and EU may have done over the weekend with that is force a change to the global financial system, whereby you’ve already been seeing Central Bank’s mean, since we’re in our work, we’ve showed that over the last eight years, global central banks have bought three times more physical gold, and they have US Treasury bonds on net. So there’s already been a slow shift into gold. This should turn that slow shift into an avalanche. And if it does that, as I expect that it will over time, it’s probably gonna be really good for the gold price, because again, you’re a central bank, if you have $7 trillion, you know, so the global FX reserve pool pile per the IMF is about 12 or $13 trillion. Call it 65 70% of that’s in dollars. So say there’s seven $8 trillion in FX reserves globally. If you have $7 trillion in Dollars, and zero and gold, or zero in dollars and 7 trillion in gold, do you really care coupons the same? They’re both yielding zero. Yeah, except the treasuries aren’t going to do nearly as well and inflation as gold is going to do. And so I think we may have seen Yeah, but yeah, yeah, in theory, in theory, but you know, you get to $7 trillion bidding for gold. I mean, that’s the entire gold market.


Jeff Malec  14:59

And then on Bitcoin Are you a Bitcoin bull? Where do you stand on Bitcoin? Or just I


Luke Gromen  15:03

like Bitcoin? Oh, yeah, I like Bitcoin a lot. I think it’s a Yeah, I think it’s a neutral reserve asset for the people basically. I think when you look at it all, I think, I think the two most important investment themes of today is we’re in the first bursting global sovereign debt bubble in 100 years. And US fiscal situation is really unprecedented for where we are in the cycle or period. And that is to say, what we call true interest expense, Treasury spending plus entitlement pay goes, the United States is spending 65% of tax receipts alone on entitlement PAYGO, so 2.7 trillion last year, just on Social Security and Medicare. When you add Treasury spending, on top of that, it takes that number to about 100% of tax receipts. So basically, and that’s with tax receipts at all time highs, benefiting from nominal GDP growth of almost 12% last year, and inflation of seven and a half percent. So you’ve got almost like peak tax receipts. And we’re still barely covering just the VIG on our you know, on our on our true interest, which is the interest on the entitlements effectively in the interest on Treasury spending in total, that’s interest plus some of the stimulus stuff they’re still doing. So that doesn’t include defense that doesn’t include national parks, labor, education, Veterans Affairs, all of it then gets layered on top of that,


Jeff Malec  16:29

and I stand on MMT is like, who cares? Let’s just move some more zeros and take that stuff, right.


Luke Gromen  16:35

I think that’s what’s going to happen. And I think that ultimately ties back to the initial point of Putin’s Gambit, right? Which is, who cares? You know, who cares, if you’re an oil producer with a finite amount of oil, you care a lot, you’re sitting on a bunch of dollars, if they’re going to print $100 trillion to pay for all those boomers, I care a lot. Basically, you will have stolen my oil from me. So I want to change the system into one with a neutral reserve asset whose value will rise a lot with with the money, the money, you’re printing something like gold before you do that. So I think MMT we ran it de facto last year. I think that’s really the only politically palatable option. I think it’s very inflationary over time. And I think that’s I think that’s what I think that’s what we’re going to continue to move toward, I think we’re ending up this period that started call it second quarter last year, where the Fed job owned, tightening, we’re going to raise rates, right? I mean, two weeks ago, the Fed was going to raise rates seven times eight times this year, I think, like one and a half times in two weeks. So obviously, no one a lot of people, myself included, did not forecast that Putin was actually going to go. I did not think he would. But it speaks to this dynamic of the gamut, which is the yield curve inverts, we head into our session, and oil is 110. What’s the Fed do? Yeah. Because they can’t they’re not covered tax receipts. They’re gonna have to print the money.


Jeff Malec  18:10

And what do you think of a just, we get together with the EU throw in maybe Australia somewhere else? And we just say there’s a sovereign debt reset? Right? Like, if we would punish a lot of pensions, probably other things, but if we kind of made the investors, the non government investors whole, and just reset a bunch of that debt. I mean, we can just come up with it ever changing, right? If upon ifs upon, if so, what they might do, but


Luke Gromen  18:41

I think it’s we’re heading in that direction in some way. I ultimately, look, if we wake up, you know, in six months and gold’s $10,000 An ounce that’s a reset of sort, right? sorts, right? They can, there’s a mechanism by which they can do that. But I think that is a it sitting down with everybody to work it out, is starting to look much less possible, given the interests of the party at the table, right? I mean, it’s, we might be able to get along with the EU maybe, but minds are being drawn right lines are being drawn, the Chinese and the Russians probably aren’t going to agree with a lot, you know, because again, it’s it’s it’s this, this decision that we went through in the aftermath of World War One, which is who loses on a real basis bondholders or the debtors, right, you got you’ve got you’ve either got a or excuse me, the, you’ve either got to write down the debt. You’ve got to write down the debt one way or another, but you can write it down via restructuring, or you can write it down beat inflation, or you can try to implement austerity, but austerity, that ship has sort of sailed for any number of reasons, right. So it’s either the creditor pays with austerity, or the debtor pays via austerity or the creditor pays via inflation or restructuring right down. And I think the austerity is no longer really a political act. anymore.


Jeff Malec  20:00

And it sounds like you’re saying it doesn’t even matter what necessarily what we decide because oil rich nations might just say, Hey, this is now $1,000 A barrel. Right? If you’re going to start to wipe that dead off over there, we’re gonna just keep raising this price until it reflects the value of this commodity. Well,


Luke Gromen  20:16

I think it’s even away from them raising the price of that. I mean, they certainly could. We saw that in the 70s. But, and it gets us there’s this fundamental supply demand issue, which is, you know, you were running into supply issues in 2007 2008, you saw the price go to 100 $150 a barrel. US shale came on board and sort of bought us 1013 years of time. We’re producing a whole lot of oil, but it’s remains poorly understood in sort of, I think, the general public that and even the general investing public that us the big four fields of the US shale, so the Bakken, the Permian, the Nyah Bharara out in Colorado, and then the rough are not rough in for the it’s down, it’s down in Texas. Something for shale? I can’t think of any way.


Jeff Malec  21:10

We’ll look it up later. Yeah, yeah, at any rate, there’s


Luke Gromen  21:13

a there’s a fourth big base, but the gist of it is, is the existing production there is declining at a five to 6% per month rate. So you’ve got to increase production by five 5% per month, just to stay flat on a really big base of production. And they’ve really high graded a lot of their production. So it’s the point is, is that it’s going to be pretty hard and require a much higher oil price over time to continue to grow that. And so you’re in this, this resource area where that, okay, let’s just print the money. Okay, we can, the problem is is that, that require either printing or either either finding a lot more oil supplies, which are getting very hard or some sort of productivity gains, so that you can use that energy more efficiently have alternative sources of energy. So you can still print that. So you’re in this very, very, I would argue it’s a an economic time that really has never, you’ve seen things like this before, but you’ve never seen a collection of things like we have in the scale that we have them when you talk about a sovereign debt bubble, when you talk about declining energy return on invested energy, you know, Peak Cheap energy, when you talk about the weaponry available, when you talk about just some of the you know, the technology and how fast how technology involves information flow, weaponry, war, in every facet, there’s just a combination of things that are very unique throughout history.


Jeff Malec  22:48

And what do you what are your thoughts? Few of the podcasts I’ve listened to this week are like, Oh, this is over. We’ve frozen the oligarch stuff or repossessing their yachts. They’re right. Like the thought that these rich oligarchs are going to go back to Putin and be like, Hey, knock this off. You know, they’re messing with my house and st to pay. Right? Like, it seems a little too cute to work to be true. But what are your thoughts on whether that can work?


Luke Gromen  23:16

I don’t have a great feel for the internal political dynamics between Putin and those guys. And in particular, how much pain they’re willing to take. And so I think it could possibly work. But I just don’t know enough to say with any degree of conviction that that’s going to break this because to me, the key is what did this, how much Solidarity was there between Putin and those guys, when this started? And what is the real reason if, if this is all just about him losing his mind, and he wants Ukraine back and he wants to be Peter the Great and, and he wants some neutral? neutral territory there, then I think that something like that probably is very, very effective. Yeah. If this is what I think it is, which is they understand the Americans are about to print $100 trillion, for entitlements. And basically in by virtue of doing really relegate Russia’s relative power, basically, sort of, you know, inflate away some of their historic asset values, right? Or if they’re, if they truly feel threatened by this, what we’re doing around their country and what the currency system will ultimately do to them. The dollar system will ultimately do to them or allow us to do though to them, then the solidarity might be much stronger and they may be willing to take that pain. I just I just don’t know. They might be Yeah, they might be totally down to go listen, we were we were in we burned the boats. Let’s go right I just don’t know. And I’m not the right guy to talk to on that. But it’s, I do think it’s a very savvy a very elegant strategy on the part of the West in the US to do that.


Jeff Malec  25:16

Let’s shift gears from it, we missed your background, we jumped right into it. So give us a quick, quick little bit on your background, how you got into this game and all that good stuff.


Luke Gromen  25:27

Sure. Yeah. So I spent started off in investment research, moved to institutional equity sales. With a regional brokerage firm, regional investment research firm, here in Cleveland. Known for doing real bottoms up fundamental research, I was one of the founding editors of a weekly piece that connected the most interesting dots that we found our most interesting information pieces we found in our fundamental bottoms up work and marry that with the top down and thematic work I was doing on my own, and ended up being a very popular piece that was read by a lot of the clients of the firm both there and at the the next firmware as a partner at both places. So did that for 15 years or so. Now, I guess more than that, almost 20 years. And as he was helpful to clients into the great financial crisis, in the aftermath of the great financial crisis, it was increasingly apparent to me that it was a much more macro and central bank driven world I was spending more of my time doing that went to my partners at the time and 2013. And so I’d love to do macro thematic full time and they said, that’d be great. I said I one caveat, I want to have complete creative control to write whatever I want to write because I feel like it’d be really important to have that creative freedom. And from a marketing merchandising standpoint, we kind of had a hard time figuring out how to place that because they’re known for really deep in the weeds bottom up fundamental research, so we parted ways, amicably I remain friends with them. And I hung up my own shingle in 2014. So it’s ever since 2014, it has definitely been good to be able to have the complete creative control to write whatever I want to write, because it’s crazy, I thought things had a chance of getting they’ve pretty consistently been crazier than I would have thought. So that’s the that’s the nickel tour of my background.


Jeff Malec  27:21

And what are your thoughts on even since 2014, right, the landscape has totally changed. And there’s AI that can go grab and analyze research and do the data poll, and the age of like, discretionary macro traders seems like it’s going away. And it’s more systematic guys these days. So kind of, do you feel that still that need for that macro research?


Luke Gromen  27:44

Absolutely, absolutely. I think the there’s become more and more data has become more and more commoditized. But the ability to interpret and put that data together, I think has become the value add, the ability to aggregate that data in a unique manner and make it usable, make it actionable, is remains very valuable, particularly given the increasingly geopolitical nature of it right. There’s, there’s a lot of game theory to it game theory, you kind of lay those things out. And so I think it’s I not even I think I know, just based on, you know, our client base the growth of our business, there’s still a lot of interest in


Jeff Malec  28:37

  1. And do they take it as sort of like, okay, this is something I need to be thinking about, right? Do they kind of do their own game theory with the research of like, got it understand that this is a risk, or this is a possible reward? And then I’m going to work that into my model versus like, oh, he thinks this is this Gambit, we’re going short do it right, we’re doing a massive trade just based on this. We tend to be at


Luke Gromen  28:59

it tends to be more the former have a very consultation or relationship with with clients of listen, here’s, here’s the thought process, and we in our writing style in my writing style, we share the whole range of outcomes, right? It’s all right, here’s what’s happening. Here’s point ABCD. Here’s when we put these together what we think the range of potential outcomes as here’s my base case, here’s where else it could go. Here’s how we would position for it. But like I said it with our client base, it tends to be very confrontational in nature.


Jeff Malec  29:38

And then a lot of these research folks have gotten a bad rap since oh nine, right of like, printed way too much money. This is going to be a next leg down. How are we going to pay for all this? Right and had the massive one of the best rallies in the history of the US market. So how do you kind of weigh weigh those two factors of when the research doesn’t match up with the reality so to speak? Not that you weren’t calling for that back in the day? No, no, I


Luke Gromen  30:04

that’s been one of our successes is I think then you know, there’s there’s there’s a, you know, it’s a great quote I think by Arthur Schopenhauer along lines of it’s your The trick is not to see what no one else has yet seen. The trick is to think but no one else has yet thought about that which everybody sees, right. So we’re all seeing proseal We’re seeing send me it’s been really watching through this the United States through this balance of payments lens through this effectively, the US government has a fiscal problem. And and for reasons that have been very different now versus any other time in last 40 years, 50 years, 100 years. And it’s been very clear to me for this entire most of this eight years that that’s the case, and there have been very distinct signposts along that way. Have there just got to keep printing more money. Right? It’s it’s, it’s a very the United States is going through a process that at most emerging market investors would be very familiar with, which is, oh, the government’s running a twin deficit. They don’t have enough external financing. What do they do first? Okay, well, they make their domestic banking system by the sovereign debt, US has done that, then they make the domestic pension funds do that we’ve done it with money market funds, we’ve done that. Then when that happens, they tried to do some austerity or tax hikes we’ve done that Obamacare was effectively austerity, a tax hike to basically push government spending out of the American people, then when that causes the economy to slow, they try to raise rates and defend the currency. But if I did that, then eventually what ends up happening is the central bank comes in and prints a difference. And we’ve been seeing that ever since. And so it’s been this dynamic of understanding that it’s, it’s not different this time. You know,


Jeff Malec  31:51

it’s work. That’s my, it’s my work, right? Like, it all looks terrible. It does look terrible for 10 years, but it’s work.


Luke Gromen  31:58

Oh, it’s absolutely Oh, it’s absolutely worked. And they’re still the key is for me, it says, Listen, I want to be I want to be I want to own equities. I don’t want to own treasuries, right, it’s not that I wouldn’t short treasuries. But since 2008. The US s&p is up five or 6x, against treasury bonds. If you shorted treasuries and bought s&p, you’re up five or 6x. Right. You know, gold is worth bitcoins work. commodities have worked, its houses have worked. It’s sort of, you know, to me, the question of, Do I want to own the dollar against the euro, or the dollar against the yuan? It’s a lot less interesting than this slow moving, but rapidly accelerating now rapidly accelerating, at least, US fiscal problem, because it’s never different this time. They either default restructure or print. And now there are it’s important you have to adjust this, as you know, the US is not some small little country, it’s it’s a very diversified economy, IT and IT issues the reserve currency and it has this euro dollar market is offshore dollar market, that also messes with things and tends to actually make the results exactly opposite, right. So when, when foreigners stopped buying enough treasuries ago, oh, God, it’s terrible for the dollar. No, it’s actually great for the dollar. Well, if it’s great for the dollar, it’s great for stocks, no, it’s actually terrible for stocks, and vice versa, right. So there’s an terrible’s to straw. But there have been, the longer this goes on, and the factors are all shifting, right, the higher the debt goes, the less high the dollar can go before something breaks, you know, the higher the debt goes, the higher the deficit goes, the less leeway there is. So it’s been, you know, basically evaluating the US through a balance of payments lens with making adjustments for the Euro dollar market, the reserve currency status has been, it’s been a very good indicator for shifts in liquidity intra year while still acknowledging and honoring this, you know, basically this post 2008 2009 That Listen, when put every time when push comes to shove, they’re going to print the money, they don’t have a choice. And and once you start there, then it’s just about managing your chips.


Jeff Malec  34:10

Do you think we’ll get off the my pet theory is once we started with the COVID stimulus checks, like that’s game over, right? There’s going to be a temper tantrum in Congress every time that the people need more money, and we’re just going to keep annually sending out these checks. Got any thoughts on where there’ll be fiscal or or policy driven? Or fiscal stimulus? Yeah, yeah,


Luke Gromen  34:35

I mean, there is arguably not enough fiscal that was the debate right is that the the fiscal is gotten held up you need the crisis, we might have the crisis now to do more fiscal, we’ll see. If push comes to shove, will they do the fiscal? Absolutely. They’ll start spending money again. I think they absolutely will. They’re not gonna have a choice. Because again, the other alternatives is, hey, you’re gonna have to slash defense you’re gonna have slash entitlements, you’re gonna have to take rates below zero. but you really can’t, because it’s the reserve currency, or you’re gonna have to print the money. And so I think they will continue to do that. But I also think it’s under appreciate. And that’s something we’ve written about for a long time is there was $100 trillion fiscal stimulus package passed by FDR in 1937, called Social Security. It’s called a 50 trillion and another $50 trillion stimulus package passed by Lyndon Johnson in 1968, called Medicare Medicaid, that they’re gonna spend $2.7 trillion this year alone on those that is literally handing money to Baby Boomers. And those programs have been growing when you pair them together, they’ve been growing like between six and 9% CAGR nominally for years and years and years. Well, when your GDP is growing for


Jeff Malec  35:52

the liabilities or the assets, you


Luke Gromen  35:54

know, I’m talking about the liability. I’m talking about the not even the liability, the, you know, the pay as you go, right, just the the present the present liability, the current liability, not even the full future life,


Jeff Malec  36:06

the check if the right makes exactly


Luke Gromen  36:08

right, the annual check just keeps growing by six to 9% CAGR. That that’s that’s a lot of fiscal right. I mean, because that is the very definition Ben Bernanke. He called a helicopter money, right. It’s fiscal spending monetized by the central bank. Well, you know, if the Fed does, whatever, 1.5 trillion in QE, and we spent 2.7 trillion in entitlements. It’s basically the Fed printing 1.5 trillion and handing it out to the US people through Social Security, Medicare, all it is. So the question is, of course, marginal, what’s on the margin? What’s on the margin? And that’s where you can see moves in that. And that’s something we watch, but that’s a risk. But I think, ultimately, to your question, they’re gonna have to, every time things get soft, they’re gonna have to keep doing more where I think we’ve crossed the Rubicon.


Jeff Malec  36:53

And do you think they’ve gotten the thing now of, hey, we need to give it to the young people that are going to spend the money and juice the economy, not just the, to the retirees and the boomers in the form of social security?


Luke Gromen  37:06

I mean, they certainly did that with UBI. Effectively, I think they will eventually maybe have to do it via UBI. I don’t know there’s different ways you can sort of get that to them. I mean, certainly when you look at who owns the student loans, it’s generally it’s mostly the federal government. I mean, that’s literally just a pen stroke. That is certainly one way you could do that. Conceivably. But again, it’s another one of these things where you’re, you’re opening a Pandora’s box of of sanctity of debt contracts, etc, that, you know, I think they’ll probably eventually get there. But I think it will require more of more of a crisis.


Jeff Malec  37:42

Was it to the larger that pool of people that own college debt, the greater the incentive for some presidential candidate to be like, Let’s wipe that out?


Luke Gromen  37:50

I’ve got, yeah,


Jeff Malec  37:51

I’ve got 10 million votes right there. Yeah.


Luke Gromen  37:53

Biden talked about it, but he hasn’t done it right.


Jeff Malec  38:01

So tell me about over your left shoulder, the Mr. X interviews, you wrote two books there. Yeah, two books.


Luke Gromen  38:07

They are started out as a series of reports we did that. Basically, a client, one of my best relationship relationships on Wall Street said you should you should put your thoughts together in a second, you know, in a Socratic method, you know, question and answer of using a fictional sovereign creditor of the US and and so it’s me interviewing a fictional sovereign credit, or the US that’s Mr. X. Just about events going back, the first series was early 2016. The second book starts I want to say in early 2018, maybe late 2017. So I’ve got to work on number three, it goes through 2019. But it’s been, they’ve been they’ve been fairly, I would say they’ve been more right than wrong, in terms of predicting where things would go. So we’ll see we’ll see from here, but yeah, they’re, they’re available on Amazon. And that’s, that’s the background on them.


Jeff Malec  39:08

I’ve got the third book for you, you just throw in AI on the end, so interviewing Mr. G of China, right? And have it be all China focused and right, because really, was that the mindset you’re in? I’m just thinking of China as our largest creditor.


Luke Gromen  39:22

Yeah, I was a blend between China oil, you know, Middle East creditors, you know, I would say is a blend between sort of Europe energy China in terms of how they think about the world. And and you know, it’s helpful when you put yourselves in those set of shoes. You look at the world very differently, right. It’s, it’s, you know, when you say, well, we’ll just print the money, it starts to sound very, very different, right? It’s then then when you’re the American saying, oh, we’ll just print the money.


Jeff Malec  39:57

Right, really wait, well Talk to us a little bit about your process before you’re sending out your research. Are you mentioned talk with some people on Wall Street? Are you like getting going down into the trenches and talking with people to get info? Or you’re just reading the tea leaves looking at prices? And how do you kind of get to where you want to be there?


Luke Gromen  40:18

Yeah, you know, I I’ve always equated to being like, like a giant catfish sitting down at the bottom of the river waiting for stuff to kind of float down. And I spend, I don’t know how many hours a week I probably spend, I think I have the best job in the world, I probably read five or six hours a day, maybe more most days, books, online, government data reports, fed data reports. And I don’t know what I’m looking for. I don’t necessarily read with an agenda I have, you know, I have a starting point of here’s what I think is happening. And I think the way my mind works is I’m looking for things that confirm, and I’m looking for things that deny. And so I’m looking for. And so I always think about where I am, where consensus is, and sometimes All right, I’m right on top of consensus, sometimes I’m not. And then within that, I’m looking for pieces of data, that supplement, confirm, deny, totally deny, and where I get really excited, and I just aggregate these I send these data points I create construct what I call a cutting room of, of information. And then when it’s time to write my reports, we publish a report every Thursday or Friday, I look at what I have, I look and see what’s because a lot of times I’ll send myself stuff, it might not even be relat. Here’s where I am, here’s where consensus is. It might just be I don’t know why I think this is interesting. But this is interesting to me. And I grab it and I put it in the cutting room. And it’s so interesting how many times when I do that, it’s like, oh, wow, this actually fits in. This is really important. I didn’t know it at the time why I thought it was interesting, but it’s really almost intuitive in a way of just trusting that intuition that gut feel of like, that’s important. I don’t know why it might be important, it might be important. And there’s gonna be something


Jeff Malec  42:05

is weird is like, Apple had said sales or something. Right?


Luke Gromen  42:10

It could be anything like that. Exactly. I mean, it can be bottoms up data like that it can be you know, currency movements, right. So like, you know, the PBOC is loosening policy, the Fed is tightening policy, the yuan is rising against the dollar every day. Why shouldn’t happen? shouldn’t be happening. But it is. Right. So there’s okay, why and then right. So these are the types of things I’m looking for in terms of just putting pieces together. You know, somebody can be at, hey, Apple Sales, you know, Apple Sales here a great, you know, well, you know, we don’t do independent or individual stock recommendations, it’s all sector and thematic. It’s it’s really just trying to divine what’s happening, and then where that could go from there. And we publish those reports every Thursday, every Friday, a couple different couple different types of reports for our clients.


Jeff Malec  43:04

And how do you view I read on the side of the you view sectors way more important than individual stocks? As you said, to me, I’d much rather I’m much more interested in one level up in the asset allocations, man, that’s what you mean by thematic, right? But right, you may not want to be in bonds at all. So it doesn’t really matter what sector corporate or international or us if you don’t even want to be in that asset class, though. So kind of how do you how do you bridge that gap between recommending the different sectors and recommending the asset classes overall?


Luke Gromen  43:36

Yeah, it I do I kind of go between those worlds, I would almost lump them two together as I use them. I mean, I know that’s not the right thing to do, technically, but that’s how I use them. Right? In terms of, you know, for me, I think there’s value in Nietzsche bonds michy, particularly sovereign bonds, there’s an itchy areas that I think are interesting. But broadly speaking, we’re in a part of the cycle and a part of geopolitical history, where they don’t make a lot of sense to me. Because, you know, we had a bubble in 2000. We kicked it upstairs, a burst, we kicked it upstairs to the banking system by creating a housing bubble, it burst, we kicked it upstairs a sovereign level. So we’ve created a sovereign debt bubble, the only place to kick a sovereign debt bubble upstairs to you know, unless we’re gonna kick it to Mars or something. Yes, a space, right is the currency, right, the currency has to be devalued. And so when you’re at the part of the cycle, where the currency has to be devalued, these are very political things. So I don’t know when it’s going to happen.


Jeff Malec  44:39

But everyone’s playing the same game, right? So they all want to devalue it, that they all want to devalue


Luke Gromen  44:43

it exactly. Right. And that’s where it gets into this whole point before of like, okay, well, if everyone devalues it, then it’s my job as an analyst to say okay, well, where’s Where’s Where’s where’s the Right Sector? Is it is it about making a call on the dollar versus the euro? There are times we do that. And then it’s interesting, but where it’s really interesting is this, like, look, they’re all in the same boat, they all have to devalue. And okay, I want to own, you know, I want to stocks I want to commodities, I want to own real estate, I went on gold, I went on Bitcoin, I want to own things that are going to do well, where I don’t have to make a wager, I don’t have to take a position on who’s going to devalue faster, I don’t really care, they’re all gonna devalue, you know, and from time to time, it gets really out of whack. And it’s like, okay, that’s the dollar gets too strong, things are falling apart, alright, they’re gonna have to Feds gonna have to do more. But ultimately, to me, the biggest investment story, the biggest macro theme is this. It’s the first bursting sovereign debt bubble in 100 years. And, and the reserve currency issuing nation can’t cover its true interest expense. without help from the central bank. I mean, it is such a monumental thing that we’re living through. It’s fascinating. And it was fascinating before the last week with what’s happened with the geopolitics, now we layer this on top of that, it’s, it was a highly unstable system to start, you layer a war on top of an already highly unstable system and sanctions on the world’s biggest energy exporter. And, you know, Europe, Europe, which is one of the biggest economies in the world running into energy spikes, followed by us, it’s incredibly destabilizing, but it makes for sadly, it makes for a lot of things to write about, and for investors to be aware of, and to possibly position for and benefit from.


Jeff Malec  46:36

Have you ever just popped in my head, but you ever had the siren song and be like, Hey, I’ve made all these great calls, I should be managing the money and start a hedge fund and, and make all these calls, earn two and 20. You ever get the urge,


Luke Gromen  46:50

you know, I manage my own money, broadly and sector stuff, I’ve had a few offers to start managing some pools of money or be associated with an investment manager based on some of what we’re doing. And I in the I’ve evaluated and closely and and obviously extremely flattering, in the end, I’ve chosen not to do that simply because, for me, at least, it’s two different parts of my brain. And so this part of sort of coming up with, you know, these unique analyses, and what to do is very different for me, at least that it might be for everybody, I don’t know, then the part of your brain that you have to be when you’re running that money, because you have to be much more mindful and overweight, risk, man, you know, the risk management side of it, right is okay, what are my daily limits? And what’s the ball doing and what’s and all these things. And these two things in my brain, at least are not conducive to doing either one. Well, so basically, like, I love doing this, I feel like I’m good at this. I feel like I help my clients doing this. If I overlay this, I feel like I’m gonna be sort of, at best mediocre at both. I think if I did only this, maybe I could maybe I wouldn’t. I don’t know. But that’s sort of been my thought process on it is is just basically, you know, stay with stay with what I say with what I’m doing well, and where I’m helping my clients. So I’d never say never. But you know, it’s, it’s, I’m really having a lot of fun now.


Jeff Malec  48:22

I love it. And then you’re remind me a lot of we’ve had been on on the podcast couple times. Right? In some of your stuff, you might say none of that matters, right? It’s all the narrative about what people think is happening. What are your thoughts on, on that delineation between the narrative and the and the fact so to speak?


Luke Gromen  48:39

I love I love Ben stuff. He I think he’s brilliant. And I agree with him. It’s to me where we’ve where we’ve had the most. Really, I think, fundamentally, what I do is is is find what the narrative is. And then where I get super excited is when the narrative is here. And I have high conviction that the exact opposite is going to happen, right? I mean, there have been cases like that, where the narrative was, hey, that, you know, I remember this in late 2014, early 2015, perfect example. The narrative was that the Fed was going or excuse me, we were going to have a consumer was going to boom, because there was a gas savings, right, gas prices had collapsed. And so you wanted to you know, sell on data treasuries, because growth was going to accelerate GDP using accelerate, you want to consumer names, and I’m picking up all this data from the healthcare side. I’m just again, it’s all out in the open. It’s right there. You know, the stories are right there. Obamacare premiums up 40 5060 70%. Yeah. And I’m looking at the so I started just did an analysis again, using government data. It’s like, if you take the average consumers income statement, which is available median income, stay where they spend their money on, and you take gasoline down 40% And you take health care up 40%, what you found is the consumers were like, way behind, right there, they weren’t gonna spend more, they were gonna spend way less. And so you wanted to do the exact opposite of what the narrative was. And so we wrote a lot about that at the time, that’s the kind of thing we get really excited about. 2019 is another example of it, where mid 20, you know, late 2018, early 2019, consensus, Feds gonna keep raising rates, etc. And we’re like, they’re gonna have to cut soon, they’re gonna have to cut and they’re gonna have to start growing their balance sheet again soon. And, again, it was one of these things where we were helping our clients position for, you know, when they do that, you’re gonna have a melt up and for q 19. Right, in summer 19, we were heading towards a recession. And we were saying, Listen, you might get a 10% down, but then you’re going to get a melt up, and you don’t want to miss that. And that’s what happened. And so we long winded way of saying I pay very close attention to narratives. I think the narratives are very, very important, very, very powerful. And particularly, constantly balancing the narrative against the reality. And there are different reality factors that are more powerful than, you know, the numbers, right. Right now the narrative is the Ukrainians are winning, they might be what if they don’t? Yeah, that when that reality if that becomes a reality they didn’t, what are the implications of that? Right? You know, the, the narrative right now is the United States is absolutely crushing Russia and the currency war. I think that’s fair, at this moment. What happens if oil goes to 151 80, the Dow goes down 30%, Treasury markets star yield start going up and that down in a stock market crash, then what, which I think is actually, you know, something like that directionally could happen, right? But those are the types of things where we look at the factors driving these things. And these narratives, it’s like, Okay, here’s the narrative, is it right? Sometimes the narrative is right, in my view, you know, sometimes we find out like, Yeah, I agree with that, like a great and, and sometimes that’s good for trends, sometimes it’s or whatever. But where I get most excited to share with my clients is, hey, here’s the narrative. And, like, there’s no freakin way that the narrative is totally wrong. And here’s why it’s wrong. And here’s when it’s going to be wrong. That’s when you have the you know, it’s wrong, here’s why it’s wrong. And here’s when it’s going to be wrong. That’s the holy grail of a piece of research to help clients and that’s when I get most excited as you can probably tell, I’m getting quite animated about it.


Jeff Malec  52:39

I’ll finish it up with new samen dizzier what would you invest in? So I’m gonna ask you 10k 100k 1 million 10 million, and then you can weave in I never asked you like, how do you position yourself for this game, but and everything. So you can weave that in if you’d like. But, um, so why would you invest in 10k 10 a day? Yeah, that’s all you got. That’s your investable capital. 10,000 bucks.


Luke Gromen  53:02

If I had 10,000 bucks, I would do. I do. What’s what’s my time horizon? This is i in terms of you know, is this like you as


Jeff Malec  53:14

you exist here today? Yeah,


Luke Gromen  53:16

it’s I exist here today. 10 ks I would do. I was a


Jeff Malec  53:18

balding. 22 year old.


Luke Gromen  53:23

Bless you, and balding for sure. That’s okay. 22 What do you do against it? I would do I would do 20% Gold? I would do probably 10% Bitcoin? I’d probably do. 10% gold miners? I probably do. Let’s see, that gives me a 40 I would do like 20% cash. So that gets me to 60 and then I would probably do probably another 20% in sort of industrial and commodity related equities primarily here in the US. And I don’t know what I would do. That’s 80 I don’t know what I would do with the other 20 I’d probably do some sort of I don’t know.


Jeff Malec  54:17

I put you on the spot. Yeah, yeah. You only got four, three, more than two. So how did that change? Has your brain change? Now? You go to 110 Same allocation. Are you starting to add other pieces?


Luke Gromen  54:30

You know, I probably keep you know, especially this week? Yeah, probably keep that allocation or I keep the you know, I probably bumped the gold up 5% Maybe or maybe I bumped the gold miners up 5% and I bumped the cash up by 10 or 15% just to maintain that optionality. Because again, I to me, so that work yeah, works. I would probably you know, 20% gold, probably 30% cash. Probably 10% If maybe 15% Bitcoin


Jeff Malec  55:05

even though your thesis is that cash is going to get the bad,


Luke Gromen  55:08

even though I can absolutely because really when you look at currency system transitions we there’s this great chart by my friend Dan Oliver and murmur CAN Capital brilliant guy, and it shows the price of gold overall. And then the month over month moves in the price of gold in Weimar Germany, in German reichsmarks from 1918 to 1923. Right. So this is one of the great hyperinflations of all time currency goes to zero, right gold goes to a trillion reichsmarks in a little over three years really. Now, you would think that the right trade is is borrow as much as you can and buy gold? Yeah. And that’s what the overall chart now for a while I actually thought that but then this chart from Dan was so enlightening because you’re looking at the volatility was so face peeling, you would have lost all of your levered gold in the one of the great hyperinflations of all time. Yeah, wiped down. You got wiped out four or five or six times because it’s such a political thing. of, you know, hey, the Feds gonna Qt Oh, oops, not know, the Feds gonna keep you know, the underlying trend is very clear. But this political dynamic of you know, there were five or six times where people don’t gold to buy reichsmarks in Germany, as the currency was dying, literally dying. Now, I’m not saying that the dollar is going to be the German Reichsmark I don’t think we’re hyper inflate and like the extremes inform the means. I’m simply saying, for me, pigs get fat Hogs get slaughtered. Right? Yeah, I have no visibility on this political process. There is a way where they de escalate and you know, gold goes down, Bitcoin goes down. You know, I still think there’s some structural stuff where in commodities are going to be probably really good place to be. That gives me some some optionality. I I’m not I don’t trade my own stuff a lot. You know, I would if I did, I would consider probably having a tail piece maybe I would take 3% of that 2% of that. And and sort of rolling maybe not even that much one to 2% and rolling calls on like equity volatility or things like that as my hedge


Jeff Malec  57:26

now you’re talking my language Yeah. And then my last one is 100 million will jump up to 100 million so where does your Where does your mind change?


Luke Gromen  57:35

Yeah, that changes a bit um then I think you have once you start getting these really big numbers, then I think you have to start thinking about politically acceptable inflation hedges and politically unacceptable inflation hedges.


Jeff Malec  57:51

Hmm. What do you mean by that?


Luke Gromen  57:54

I think you want to own you know if I have $100 million I probably put I probably put 10 to 15 million maybe 20 million still in physical bullion but I geographically sky I have some here I have some I have some in Singapore I probably also still have 10% in Bitcoin but then I have to start thinking about those are I would call golden Bitcoin I would call those politically unacceptable inflation hedges there’s those are things central bankers hate policymakers hate they make them look bad, right? These are at that against them. Yeah, they’re right. There are these are these are assets that they don’t like to see go up. And there are things you could see. There will be there, there’s possible you will see state attacks against them in you know, defect or outright. And so then you think about things at that level of wealth of what are politically acceptable inflation hedges, right. It’s the house and central pay, you know, houses and things.


Jeff Malec  59:03

Unless you’re Russian. That’s the problem. If you’re Russian,


Luke Gromen  59:07

you know, or if you’re a Canadian trucker, right, like, yeah,


Jeff Malec  59:10

right. Sorry. You know, you in offsides, we’re taking your house.


Luke Gromen  59:15

Right exactly and that’s what I mean about sort of polite you know, it’s right it’s it’s it’s it’s champagne problems, Uptown problems of trying to figure out how you structure yourself that way to avoid that but real estate I think you’d probably have, you know, 20 million gold 10 million Bitcoin I got 70 million left. I probably have 10 million in I probably have so 30 70 million left, I probably would have 40, I would have 30 I would have 20% in cash. So I would still have that 20% cash. So now I’m at 50 mil. I would take probably the remaining 30 or 35 mil and I would have them in some sort of diversified vied array of industrial commodity and probably some some big cap cartel like names, right, and you know, Facebook, Google, Amazon, that type of stuff. And then I would take the balance and I would have sort of these what I would call Bitcoins, Bitcoin or gold, like real estates, right? Real estate properties, right? Where they’re your irreplaceable, unique, finite, you know, Lake houses, oceanfront houses and real estate centric things where there is a pretty good liquid market for me to sell right? In, in politically safe dollars. Less than


Jeff Malec  1:00:44

25 feet above sea level so you don’t get washed out.


Luke Gromen  1:00:47

You don’t get washed out. Exactly right. So veil London, you know, maybe Miami, maybe Miami is the Homestead Act is the nice thing to have. Right? These these these are these are again, Uptown props you have to think of when you got 100 million in the bank.


Jeff Malec  1:01:04

And then you on the Bitcoin piece just to finish off, like what are your thoughts here of we’re basically saying, Hey, you got to turn over the Russians. And the exchanges are pushing back a little I didn’t see what news came out of that today. But do you think that breaks Bitcoin or that’s good for like, what what’s the end result there in your mind?


Luke Gromen  1:01:23

I’m waiting to see them do that. I think they probably will. Ultimately I think US authorities have to be very very careful with this. Because there’s really nothing they can do about Bitcoin. They can they can shut the on and off ramps they absolutely can do that. And so I think for the Bitcoin that’s why the scale of it like 10% for me at that size, especially is more than enough to hedge, you know, catastrophe in and if gold doesn’t work, or bitcoin does that kind of thing. Right? Okay. But it’s also not so big. I think you have to scale Bitcoin positions now based on the world as it exists now versus even two, three weeks ago, of the authorities could say, That’s it, we’re not letting you have Bitcoin, we’re shutting down and off ramps, we’re not going to chase you down. We’re not going to track addresses, but you just you know, you need to be comfortable with that amount of money ain’t going to move for 10 years, 20 years, you know, like they did with gold, right? They it was illegal for American citizens to own gold from 33 to 74. So should we I think they could do something like that again, but when I say they have to be careful once eart again and in Turkey started going after dollars started going after gold. That’s a sign that’s like a starting gun. That’s admitting you have a problem. So it’s this fine line between we want to fight and I’m on an anti money laundering know, your know your client on you know, the AML KYC stuff, they got to do that I understand that I respect that. There’s a fine line between that and between trying to defend your currency and Tippett, you know, yelling, which, which can be like yelling fire in a crowded theater, right? of, hey, you know, bitcoins bad. And, and, like the other thing, too is the dollars the global reserve currency. The dollars job is to have an open capital account, you start shutting capital accounts to trillion dollar assets. Yeah, you’re gonna find some other reserve currency. And that’s why I think it’s important to maintain that diversification of gold, Bitcoin, politically acceptable inflation hedges, because and then to keep your leverage low, right, per my point is is I, I, at this point, especially post COVID, especially now with this war. I think the end game is increasingly clear, it’s increasingly upon us, they’re going to have to inflate, you want to be there, you just got to get there, right? You have to manage your chips in a way without too much leverage to make sure that, you know, look, if we have a crash, you don’t want to get wiped out because you’re levered. You just want to be because they’re going to have to come support unless they’re going to be willing to default on sovereign debt, in which case, you know, half of your assets can go away the gold and the Bitcoin are going to more than offset anything you lose and things like equities, etc. Love it.


Jeff Malec  1:04:07

We came full circle to the end game. Back to Grant Williams. Well, that was fun. Luke, any last thoughts? Tell everyone where they can get the book already said Amazon, the website where they can sign up for your stuff?


Luke Gromen  1:04:20

Absolutely. We the books are on Amazon and you can find us at FFTT dash llc.com Frank Frank tom, tom dash llc.com updates on what we’re up to different research product offerings at the institutional and mass market level. And I’ve got an active Twitter feed that as you alluded to, before it at Luke Grohmann, Liu K E. Gr. O. And he is


Jeff Malec  1:04:43

awesome. We’ll put that all in the show notes for everybody and appreciate it. That was fun.


Luke Gromen  1:04:48

Absolutely. Thanks for me. I was great talking to Jeff I appreciate it.

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