Speaker 1: Hello, and welcome to another episode of the markma Show,
Speaker 1: where we talk about each and every week. We talked
Speaker 1: about the decentralized Revolution. Of course, we're talking about the
Speaker 1: way the world is changing rapidly right before a very eyes,
Speaker 1: and we look at it through the lens of politics, finance,
Speaker 1: and technology, those three things coming together and converging. Of course,
Speaker 1: through all of history, it's technology that changes the world
Speaker 1: the most, and of course the technology today is bitcoined
Speaker 1: the decentralized technology. I try to bring to you each
Speaker 1: and every week, you know, some education to help you
Speaker 1: see things and understand things a little bit better. Of course,
Speaker 1: some of the latest breaking news to keep you up
Speaker 1: to date because this is a fast moving market, and
Speaker 1: of course also bring some of my friends in so
Speaker 1: you can listen to some other interesting people besides just
Speaker 1: me all the time. And so I am in the
Speaker 1: studio right now with Joe Consorti. You can find them
Speaker 1: on Twitter at Joe Consorti. Joe, thanks for joining me absolutely,
Speaker 1: thanks for having me Mark Round to round two. Uh,
Speaker 1: we're we're laughing. We had a little mixed up in
Speaker 1: the studio before, so we're getting it going again. But
Speaker 1: if you've been following me on YouTube. Well, first of all,
Speaker 1: you're non following me on YouTube? What are you doing?
Speaker 1: Just go to YouTube search Mark Moss and hit that
Speaker 1: subscribe button and that bell notification. The algorithm doesn't always
Speaker 1: like what I'm talking about, so, uh, you know, I
Speaker 1: need that help. Go hit there, Go check that out.
Speaker 1: And check out Joe on YouTube as well, at the
Speaker 1: Bitcoin Layer. And I said that, right, Joe the Bitcoin Layer, Right. Yeah,
Speaker 1: We'll make sure to link that down in the show
Speaker 1: notes below. Joe has been helping me out do some research,
Speaker 1: helping me dig up some charts and graphs and share
Speaker 1: this stuff with you guys on YouTube. He's a wizard
Speaker 1: on those things. So check those out for sure. But Joe,
Speaker 1: you know, we we've been going back and forth. We've
Speaker 1: been sharing a bunch of data back and forth. I
Speaker 1: thought would be great for us just to kind of
Speaker 1: like talk about it, discuss it. We haven't really got
Speaker 1: a chance to do that, and why not do it
Speaker 1: on the radio here. So a lot going on in
Speaker 1: the financial world. Um, you know, I've been doing content
Speaker 1: on YouTube since and I'm sorry, yes, since I started,
Speaker 1: uh kind of writing that bear market when it started
Speaker 1: and by the man, there was like nothing to talk about.
Speaker 1: It was just like dead, you know, and then March
Speaker 1: and then it got really excited again. And that's kind
Speaker 1: of where we're still at today. But a couple of
Speaker 1: things that I think, uh that will dive through um
Speaker 1: topics that you and I have talked about extensively. But
Speaker 1: maybe let's start with the first one, which is this week,
Speaker 1: everybody was excited, well maybe not everybody, but a lot
Speaker 1: of people are waiting to see what this new CPI,
Speaker 1: this new consumer price inflation number was gonna be and
Speaker 1: is inflation still going up or is inflation going down?
Speaker 1: And it looks like a year over year it went
Speaker 1: down in month over a month, it went down. What's
Speaker 1: the take on that? Of course, so a lot of
Speaker 1: eyes were on the CPR report coming into the July
Speaker 1: CPR report. Obviously, it gets released in August, and estimates
Speaker 1: were looking at it and saying that it was going
Speaker 1: to decelerate. It was gonna go from nine point one
Speaker 1: in June to eight point seven in July, and it
Speaker 1: actually fell even further than that, it fell down to
Speaker 1: eight point five, which was a huge relief. Um, you know,
Speaker 1: looking at what the FETE has been doing. They have
Speaker 1: been raising interest rates at a higher rate of change
Speaker 1: than they have since the nineties, and so, you know,
Speaker 1: everybody was sort of expecting markets to blow up. People were,
Speaker 1: you know, thinking that they would have to hike even
Speaker 1: you know, further than where they are now. But it
Speaker 1: looks like we're already seeing the fruits of the FEDS labor.
Speaker 1: It looks like inflation is already coming down and sort
Speaker 1: of responding to all these tightening interest rates across the board.
Speaker 1: Month over month, the biggest driver of the CPI basket,
Speaker 1: it's actually energy. So if you take a look at food,
Speaker 1: food prices actually increased slightly a month over month. Good
Speaker 1: prices stay the same, uh, services prices stay the same,
Speaker 1: but energy dropped, and that that basically made up entirely
Speaker 1: for um the point six per point six percent down shift,
Speaker 1: and cp I was basically entirely energy prices, which is
Speaker 1: good because you know that's sort of what's hurting Americans
Speaker 1: the most. And when when you say energy, you're talking
Speaker 1: about gasoline. Yeah for the most part, Yeah, for the
Speaker 1: most oil, but really it's aso and that's what people buy.
Speaker 1: People buy gas, they don't buy well, so gas dropped
Speaker 1: quite a bit, which, of course after going up by
Speaker 1: those astronomical rates, to get a little bit of a pullback,
Speaker 1: I guess is pretty good. You know, one thing I see,
Speaker 1: like you've seen probably the stickers all over the gas
Speaker 1: pumps of Biden saying I did that, right, And so
Speaker 1: if like he's out there now saying I did that,
Speaker 1: I lowered gas prices, does that mean he has to
Speaker 1: be your sponsor for gas prices going up to like
Speaker 1: you can't take credit for dropping him if he didn't,
Speaker 1: If he doesn't take credit for them going up, right,
Speaker 1: I mean, that's what politicians do. They're they're selective about,
Speaker 1: you know, just about everything. All the bad things that
Speaker 1: was the last guy, and then all the good things
Speaker 1: you gotta take credit for. Yeah, right, right. So I
Speaker 1: like to call cp I, which again for those listening,
Speaker 1: is the consumer price index. It's prices going up, you
Speaker 1: know how much you pay for as he's as Joe
Speaker 1: saying here, gasoline going up, your state going up, and whatever,
Speaker 1: your milk, whatever the stuff is that you buy. Um.
Speaker 1: I like to call it instead of CPI, called cp
Speaker 1: LIE because it's like so heavily manipulated and they can
Speaker 1: almost show you whatever they want. And so if you
Speaker 1: dig into that data, a couple of things that look
Speaker 1: that kind of stand out to me. One right off
Speaker 1: the bat, I actually posted on Twitter earlier today. If
Speaker 1: you're not following me on Twitter, then what are you
Speaker 1: even doing? Check it out at one Mark Moss. That's
Speaker 1: just the number one Mark Moss, and check out Joe
Speaker 1: while you're there at Joe CONSORTI UM, but I put
Speaker 1: out on Twitter today. UM, year over year rents are
Speaker 1: up on average nationally twenty six point eight percent nationally
Speaker 1: in some areas even way higher than that, some some
Speaker 1: as much. UM. That's that's year over year. UM. And
Speaker 1: also there's an article that was out on Bloomberg that
Speaker 1: says that that home that rents are so tight that
Speaker 1: it's that I've run about a nineties six or nineties
Speaker 1: seven percent occupancy rate. People aren't moving out, Um, They're
Speaker 1: staying where there are, And so we have this crazy
Speaker 1: high year over year inflation in rates. Homes are extremely tight,
Speaker 1: there's none opening up, and that makes up twenty five
Speaker 1: cent of the basket. And I think they showed somewhere
Speaker 1: around like five or six percent for shelter. Do do
Speaker 1: you know anything about that, right, Yeah, So when it
Speaker 1: comes to when it comes to like home price inflation
Speaker 1: and these rents, a lot of these are a lot
Speaker 1: more I wasn't talking about home price inflation. I was
Speaker 1: talking about the rent rent the rent rent price inflation, right, Yeah,
Speaker 1: so a lot of these are more sticky for the
Speaker 1: same exact reason that you mentioned. Um, you know, these
Speaker 1: are life's necessities. This is where people live, and so
Speaker 1: the likelihood of people moving out and deciding to become homeless, right,
Speaker 1: that's sort of the last you know, leg down in
Speaker 1: demand instruction that you see. That's sort of the last
Speaker 1: decrease across the board and prices that you see is rent,
Speaker 1: right because people can you know, they can forfeit all
Speaker 1: of their different luxury goods, they can forfeit going out
Speaker 1: on the weekends. But you know, it's a lot more
Speaker 1: difficult to find a place, you know, that's cheaper than
Speaker 1: the place you're already living. Um for families, that's more difficult, etcetera, etcetera.
Speaker 1: And so definitely like the last leg down we're gonna
Speaker 1: see when it comes to this demand destruction, price is
Speaker 1: going down across the board. Chances are it's it's it's
Speaker 1: going to be rent that generally lags behind everything else.
Speaker 1: M M yeah, I just uh so, so you're absolutely right,
Speaker 1: and I think we haven't even seen the worst of
Speaker 1: it yet because to your point, it's sticky. So people
Speaker 1: typically sign one to your leases, etcetera. And it's not
Speaker 1: until they move out that they can then raise those rents.
Speaker 1: And so we're seeing all across the nation. We're seeing
Speaker 1: um when people move out as a fort increase, you know,
Speaker 1: in a lot of cases, and so a lot of
Speaker 1: that will be happening as we go go along. But
Speaker 1: I'm just saying we saw almost uh and it's the basket,
Speaker 1: but somehow they showed like five percent. So that's why
Speaker 1: I call it cp lie um. But that's under this
Speaker 1: new FED guideline of being data dependent right there looking
Speaker 1: at that. Another thing they're looking at is the jobs report,
Speaker 1: and you and I we did some work on the
Speaker 1: jobs report, and that number is super manipulated. One of
Speaker 1: the things that people need to know about that is
Speaker 1: that there's well, okay, so how do they get the data?
Speaker 1: Always always look at the data, like where do they
Speaker 1: get the data? So with the with the with the
Speaker 1: rent price, where do they get that data. Will they
Speaker 1: do a survey and they ask homeowners, what do you
Speaker 1: think you could get for your house if you rented
Speaker 1: it out? Well, I don't know who they survey. They
Speaker 1: didn't survey me. And if you look at rent nationally,
Speaker 1: you'll see some places a percent, some places went down. So, uh,
Speaker 1: depending on where they get that sample size, they get
Speaker 1: a bunch of different answers. UM. Now, going to this
Speaker 1: job's data, they also run two surveys right to get
Speaker 1: that jobs data. Yeah, absolutely so, I mean there are
Speaker 1: several several different surveys. UM. You know, you have initial
Speaker 1: jobless claims, and then you have unemployment data, UM, non
Speaker 1: farm payrolls, all these different things. UM. You know, basically
Speaker 1: all of it is survey data. UM. One of the
Speaker 1: things that was especially surprising about the jobs data that
Speaker 1: released this last week, UM was non farm payrolls data.
Speaker 1: So unemployment is the tightest it's ever been. Uh, you know,
Speaker 1: in the last couple of decades three point five percent.
Speaker 1: It hasn't dipped below three point five percent, and you
Speaker 1: know several decades this has sort of been in the bottom.
Speaker 1: And you've got uh, non farm payrolls data coming in
Speaker 1: at over double what the expectation was. And so the
Speaker 1: labor market right now is a lot stronger um, you know,
Speaker 1: than than the FED would like. We've or so it seems.
Speaker 1: Hold that thought, Joe, we gotta take a break. You're
Speaker 1: listening to the Markma Show. We're talking about the decentralized Revolution.
Speaker 1: I'm in the studio with Joe Consorti. We're talking about
Speaker 1: the FED data and of course we're gonna talk about
Speaker 1: what it means for markets moving forward and what it
Speaker 1: means for bitcoin. We've got a lot of ground to
Speaker 1: cover in a short amount of time, so you do
Speaker 1: not want to miss this. We're gonna come back finish
Speaker 1: talking about that thought. Um, you're listening to the Markma Show.
Speaker 1: Don't go away, We're gonna be right back. All right,
Speaker 1: Welcome back. You are listening to the Markma Show. We're
Speaker 1: talking about the decentralized revolution each and every week. Of course,
Speaker 1: we look at it through the lens of politics, finance,
Speaker 1: and technology. We're talking about the technology of bitcoin, and
Speaker 1: I'm in the studio today with Joe Consorti. We're talking
Speaker 1: about the FED UM and so we again politics, finance
Speaker 1: and technology. We're talking about this finance piece specifically right now.
Speaker 1: And so Joe, Uh, sorry for the abrupt change into
Speaker 1: the commercial, but you were talking about these non farms
Speaker 1: payroll um reports that came out and how it looked
Speaker 1: like the jobs market is extremely strong, and everybody was
Speaker 1: patting themselves on the back over that. Right. Yeah, that's
Speaker 1: exactly right, And and some of these numbers are very
Speaker 1: miss leading, especially non farm payrolls. Many people who I
Speaker 1: follow have been saying, uh, you know, people like Jeff
Speaker 1: Snyder have been saying that non farm perils have lost
Speaker 1: their credibility through time and taking a look at something
Speaker 1: like Okay, there's a you know, there's a literally non
Speaker 1: farm payrolls were expected to come in with a two
Speaker 1: fifty dollar edition. They came in over double that at
Speaker 1: five eight thousand dollars. Uh, you know. But at the
Speaker 1: same time that initial jobless claims are taking higher and
Speaker 1: higher and higher every single month, right. Uh. The you know,
Speaker 1: the biggest report you probably want to keep an eye
Speaker 1: on when it comes to leading indicators is as to
Speaker 1: how the job markets doing. Is initial jobless claims and
Speaker 1: continuing claims. You don't want to take a look at, uh,
Speaker 1: you know, things like the unemployment rate that lag. You
Speaker 1: don't want to take a look at non farm payrolls,
Speaker 1: which have you know, lost their reliability over the last
Speaker 1: decade or so. Um, you really want to look at,
Speaker 1: you know, who is filing for unemployment, who is filing
Speaker 1: these initial jobless claims. For me, that's that's sort of
Speaker 1: the highest signal indicator. Um. Of course you'll you'll never
Speaker 1: hear the people in the mainstream highlight that, but as
Speaker 1: of right now, you know, it's been taking up pretty
Speaker 1: steadily since March. Yeah, so what I want to really
Speaker 1: get to is if the FED is being data dependent
Speaker 1: because everybody unfortunately I had uh I think I talked
Speaker 1: about on the radio a couple of weeks ago, which,
Speaker 1: by the way, if you missed, you can always catch
Speaker 1: my back episodes on the podcast. Just search Mark Mosh podcast.
Speaker 1: You can find it on any podcast player. But I
Speaker 1: I kind of talked about how insane it was for
Speaker 1: us to sit there and watch the FED to come
Speaker 1: out and tell us what the price of money will be,
Speaker 1: and how it's almost as insane as trying to watch
Speaker 1: some groundhog come out of the ground and tell us
Speaker 1: what the weather is going to be. But yeah, here
Speaker 1: we are and so everybody wants to hang on the
Speaker 1: word of the Fed. What are they going to do?
Speaker 1: And so looking at those two data points that the
Speaker 1: inflation rate, the CPI and now, so we have lower inflation,
Speaker 1: which is what they want. They're they're making positive progress
Speaker 1: down UM, which would then make you think maybe they
Speaker 1: could ease off of their tightening program. We'll call it
Speaker 1: that raising rates UM. But then but then we also
Speaker 1: have this strong jobs report which is manipulated and we
Speaker 1: believe it's false, but they've got it, which then gives
Speaker 1: them room to increase. So we kind of have these
Speaker 1: two different data points that let them now go either way.
Speaker 1: Now we're kind of like inconclusive. Almost Yeah, that's exactly right.
Speaker 1: So I actually, and this is the benefit of of
Speaker 1: writing your your newsletter literally the day as the economic
Speaker 1: releases come out, because I was writing a newsletter before
Speaker 1: the end, before CPI came out about how the feds
Speaker 1: runway was extended because with a strong jobs market, if
Speaker 1: their goal is detain inflation and the jobs market is
Speaker 1: extremely strong, then they got the green light to extend
Speaker 1: their hiking runway. You know, well passed three, well passed
Speaker 1: neutral under restrictive territory. That gives them the green light.
Speaker 1: But then with the CPI release coming in lower than anticipated,
Speaker 1: that gives them the red light because it shows that
Speaker 1: they're tightening is working. There's no real need to continue
Speaker 1: slamming on the yeah, if inflation is already decelerating, right,
Speaker 1: So you know, it's sort of this, it's this, it's this,
Speaker 1: it's this odd game. At the same time, with the
Speaker 1: strong labor market, they can continue tightening, but with fighting inflation,
Speaker 1: they can't tighten too much. Deflation is already accelerating, and
Speaker 1: the last thing they want is deflation. The last thing
Speaker 1: they want to do is go too far and send
Speaker 1: markets into a huge deflation. Are deflation? Are eavent? So? Um?
Speaker 1: I did a video reason I'm um, maybe it was free.
Speaker 1: I do so many of them. But I was talking
Speaker 1: about the difference of deflation versus disinflation. And so that's
Speaker 1: two words that are thrown around a lot of people.
Speaker 1: You don't understand what they are. But deflation is the
Speaker 1: opposite of inflation. So inflation now, first of all, I
Speaker 1: reject the definition of inflation. Inflation is the monetary supply
Speaker 1: going up. That's the Austrian definition of it. Trying to
Speaker 1: use that as consumer prices going up is a little
Speaker 1: bit wrong. But anyway, Um, if if inflation is consumer
Speaker 1: prices going up, then deflation would be the opposite, which
Speaker 1: is prices going down, whereas disinflation is still having inflation
Speaker 1: but as slow or rate. And so what we're seeing
Speaker 1: right now is disinflation. Instead of going up at nine
Speaker 1: point one percent, it's down to eight point five. But
Speaker 1: nothing goes up and down in a straight line. So uh,
Speaker 1: A lot of people are asking the question has inflation peaked? Um,
Speaker 1: what do you say about that? Of course, so for
Speaker 1: me potential and and I guess I should say, I
Speaker 1: should say over what time frame? You always have to
Speaker 1: ask that question today. Has it peaked for this year
Speaker 1: as it peaked for this this decade? Yeah? For me,
Speaker 1: I think it's I think it's it's peaked this year,
Speaker 1: or at least for this cycle. The reason I say
Speaker 1: that is because, um, energy is what's really what really
Speaker 1: drove these these increases. And of course when you're making goods,
Speaker 1: energy is an input in that. And so basically taking
Speaker 1: a look at commodities, especially commodities that are used in
Speaker 1: end products, talk about copper, A lot you and I
Speaker 1: have talked about copper before because it's used as an
Speaker 1: input in so many end products. You can sort of
Speaker 1: look at this as the bell weather of Okay, our
Speaker 1: our price is going to increase across the border, decrease
Speaker 1: across the boarding. That's gonna look like. And since June,
Speaker 1: copperas fell very precipitously. I don't know the exact percentage,
Speaker 1: but it's it's really fallen off of its highs. And
Speaker 1: so what that tells me is, Okay, if a lot
Speaker 1: of this inflation that we've seen since the start of
Speaker 1: one has been driven by huge increases in energy energy prices,
Speaker 1: which in my mind, you know, that's that's a supply issue,
Speaker 1: and we're starting to see the commodities that caused that,
Speaker 1: um consumer price inflation to come down that I think
Speaker 1: that's leading and telling me personally that yeah, for now,
Speaker 1: consumer price inflation this year has peaked and is headed
Speaker 1: back down. Mm hmm. Now I do want to make
Speaker 1: a note again. I put this on Twitter the other
Speaker 1: day to again follow me on Twitter at one Mark
Speaker 1: Moss and follow Joe at Joe CONSORTI um, but I
Speaker 1: put on Twitter, I said, they just remember for everyone
Speaker 1: who's not not so sure. Uh, just if inflation comes
Speaker 1: down from eight points eight point five now to five
Speaker 1: point five, doesn't mean prices that's the disinflation versus deflation.
Speaker 1: Doesn't mean prices are coming back down. It means they're
Speaker 1: still going up, just at a just at a slower rate. Um,
Speaker 1: I might I might agree with that. I think maybe
Speaker 1: we've seen the height of inflation for this cycle, although
Speaker 1: like I said, it's like completely false anyway, because to
Speaker 1: the point of I made of of of the shelter category,
Speaker 1: which is of the basket is up by and we
Speaker 1: also saw foods up ten percent, So I mean, like,
Speaker 1: how is food up ten percent? Shelters up? But somehow
Speaker 1: gas brought it all the back down. So anyway, it
Speaker 1: is what it is. But um, i'd think maybe maybe
Speaker 1: for the rest of this year we might see that.
Speaker 1: But I've also gone out and said that I think
Speaker 1: this might be some of the lowest inflation we see
Speaker 1: for the decade. And so back to this kind of
Speaker 1: nothing goes up and down in a straight line. I think,
Speaker 1: you know, we're we're we're retreating, but I think we're
Speaker 1: still going to go higher over over time. I think
Speaker 1: it's the only way. I don't know, what do you
Speaker 1: think about that potentially? I mean there are two narratives.
Speaker 1: There's this narrative of you know, this consumer price inflation
Speaker 1: sort of on like this endless path to infinity because
Speaker 1: you know, high for inflation is the only way. We
Speaker 1: have way too much debt right now. Um, if you
Speaker 1: take a look, if you plot uh gross domestic product
Speaker 1: against all of publicly held liabilities, you can see, okay,
Speaker 1: So so our debt that we have to pay interest
Speaker 1: on is climbing rapidly. In our GDPs is not even
Speaker 1: remotely close. So there's this school of thought that we
Speaker 1: have too much data as of right now. The only
Speaker 1: way out is through this implicit default of of printing
Speaker 1: in order to pay for it. There's that school of thought.
Speaker 1: And then there's a school of thought that the inflation
Speaker 1: we're seeing now isn't necessarily the It is, of course
Speaker 1: the sim that I'll be better in my words, the
Speaker 1: consumer price inflation we're seeing now, um might be partially
Speaker 1: the symptom of you know, injecting the economy with fourteen shilling,
Speaker 1: but also partially supply driven. And I think you know,
Speaker 1: we were going to see some relief and cp I
Speaker 1: purely because that supply driven component seems to be alleviated
Speaker 1: for the time being. But I think in the long run,
Speaker 1: um the you know, the debt levels is going to
Speaker 1: be a real concern and I think, you know, one
Speaker 1: of the ways out will be through this continued implay
Speaker 1: and default of inflating the money. So we're gonna talk
Speaker 1: about that because we've got some some discussion there when
Speaker 1: we get back in a second. You're listening to the
Speaker 1: Mark ma Show. I'm in the studio with Joe Consorti.
Speaker 1: We're talking about the decentralized revolution, politics, finance and technology
Speaker 1: coming together and bitcoin. We've got a lot more to discuss.
Speaker 1: Don't go away, I'll be right back, all right, Welcome back.
Speaker 1: You are listening to the Mark Mos Show. If you're
Speaker 1: just tuning in, I'm in the studio right now with
Speaker 1: Joe Consorti. You can find them on Twitter at Joe Consorti.
Speaker 1: Of course I am at one Mark Moss And of course,
Speaker 1: as always, we're talking about the world changing right before
Speaker 1: our very eyes, as we swing, as the pendulum swings
Speaker 1: from centralization to decentralization. We are in the middle of
Speaker 1: a decentralized revolution that will chart out over the next
Speaker 1: hundred two hundred years UM. So before we took the break,
Speaker 1: we were talking about has inflation peaked or will it
Speaker 1: go higher? The question that you always have to ask
Speaker 1: is over what time frame bonds are horrible, bonds are great?
Speaker 1: Well over what time frame you know, UM, And so
Speaker 1: you're gonna have to look at that like bullish on
Speaker 1: bitcoin or barrass on bitcoin, Well over what time frame? UM?
Speaker 1: And so if as I believe that we're in this
Speaker 1: d centralized revolution, so the pendulum swings on tune and
Speaker 1: fifty year time frame, and we've maxed out centralization. And
Speaker 1: what we've seen is that over the last really you know,
Speaker 1: hundred years, maybe more spectically fifty years UM, we've had
Speaker 1: massive inflation as an Austrian definition of increase in the
Speaker 1: money supply, which is inflationary more money chasing, limited goods UM.
Speaker 1: To offset that, in the United States specifically, but most
Speaker 1: of the developed world, the West, we've off shored all
Speaker 1: of our manufacturing, all of our high paying jobs. So
Speaker 1: now job is eight thousand dollars offshore or hundred dollar
Speaker 1: parts Now eight bucks, you know, made off shore, and
Speaker 1: so We've had this deflation because we've been able to globalize.
Speaker 1: But if the world starts to deglobalize, which is already
Speaker 1: happening and I believe will continue to happen, and we
Speaker 1: have to now on shore those jobs again and on
Speaker 1: shore that manufacturing again, which again is already happening. They
Speaker 1: see this with the with the chip manufacturing, and even
Speaker 1: with mining and things like that. Even the US is
Speaker 1: sourcing out lithium I'm sorry, uranium in the US. We're
Speaker 1: starting to see all this happening. So that continues to happen,
Speaker 1: all of the benefits of the globalism and the deflation
Speaker 1: will then reverse and then we'll have inflation. So that's
Speaker 1: kind of my statement on that. I don't know if
Speaker 1: if you have a comment on that, of course, yeah,
Speaker 1: I think what you know, bringing a lot of these
Speaker 1: industries back to the United States and in d globalizing,
Speaker 1: we're definitely on the track to that. You're seeing what
Speaker 1: happens when you have too much dependence on one entity.
Speaker 1: You're seeing it in Europe, and you know proliferates everywhere else,
Speaker 1: um you know, in in several other nations, and obviously
Speaker 1: that is inherently inflationary. And it's a type of inflation
Speaker 1: that is more entrenched as well. It's a type of
Speaker 1: inflation that doesn't just go away like uh, you know,
Speaker 1: consumer driven inflation or CPI inflation that you can just
Speaker 1: you know, get away with the snap of a finger,
Speaker 1: with a with a little bit of demand destruction. Um, yeah, No,
Speaker 1: I definitely agree with you there. Yeah, And and you
Speaker 1: know again, I mean the reason why I reject the
Speaker 1: prices going up is because there's there's trillions of prices,
Speaker 1: and there's trillions of reasons why those prices could go
Speaker 1: up on certain things or down. Like Walmart now is
Speaker 1: trying to change over their inventory. They realized they bought
Speaker 1: all the wrong inventory. Now they want to get rid
Speaker 1: of a lot of their durable goods and they want
Speaker 1: to move back to kind of consumer staples for example.
Speaker 1: And the CEO announced that they're gonna basically fire sell
Speaker 1: all the inventories just to clear it out. So like, well,
Speaker 1: the prices just got marked out on that, Like that
Speaker 1: wasn't on the BINGO card, Like I didn't. I didn't
Speaker 1: expect that prices will go down because they overbought and
Speaker 1: run category and they need to fire sell it, right,
Speaker 1: So like there's a trillion prices, there's a trillion reasons
Speaker 1: why prices could go up or down on any of
Speaker 1: those trillion things. Um, Which again it's a little bit crazy,
Speaker 1: but again they try to classify in two areas. Right, So,
Speaker 1: demand pull or cost push. So when the costs go
Speaker 1: up to the points that you made about commodities, when
Speaker 1: when the cost to get the commodities out of the ground,
Speaker 1: the commodities goes up, transportation all that those pushed the
Speaker 1: cost of costs of things up. And then there's demand pull.
Speaker 1: When there's too much demand, then it pulls the price
Speaker 1: up as well on the cost push side. And back
Speaker 1: to the jobs report. Um, if the Fed seems to
Speaker 1: be trying to crush demand, which is basically what they're
Speaker 1: trying to do, They've they've said it, I've talked about
Speaker 1: it many times. They want to crush the stock market
Speaker 1: asset prices to kind of do this reverse wealth effects,
Speaker 1: we don't spend as much money. Um. Would you, first
Speaker 1: of all, would you agree that that they I mean
Speaker 1: they said that right there, trying to demand crush demand, right? So, Um,
Speaker 1: then you have this job support that came out very
Speaker 1: strong and actually wages went up by zero. So wages
Speaker 1: going up is actually the opposite of what they want,
Speaker 1: because wages going up leads to inflation. So it almost
Speaker 1: seems like the Fed, what the Fed and the government
Speaker 1: want is for our wages to actually go down, which
Speaker 1: is the opposite of what we the people would want.
Speaker 1: That's right, Yeah, in order to I mean we talk
Speaker 1: about this demand demand pull inflation in when we had
Speaker 1: all this fiscal and monetary stimulus. Now is not only
Speaker 1: is the labor market rip roaring, but everybody has all
Speaker 1: of this income to go out and spend it um
Speaker 1: and so that was a component alongside these supply shocks
Speaker 1: which led to this multi decade high and inflation. Now,
Speaker 1: what will continue to allow this to happen a strong
Speaker 1: labor market. Right, if the labor market continues being strong,
Speaker 1: then you know, inflation may stay entrenched. And so what
Speaker 1: the Feed is looking for is the reason they're doing
Speaker 1: this so aggressively is partially to break the back in
Speaker 1: the labor market, to increase the amount of people who
Speaker 1: are out destitute on the street. Uh. And so taking
Speaker 1: a look at a strong labor market with like you mentioned,
Speaker 1: average hour only Erney's going up month over month point
Speaker 1: five percent year over year five point two percent. That's huge.
Speaker 1: Wage price inflation is one of the parts of inflation
Speaker 1: that they hate the most, and that's one of the
Speaker 1: ones that they're targeting with this. That's let me just
Speaker 1: let me just reiterate what Joe said there. The wage
Speaker 1: price inflation is the one they hate the most. So
Speaker 1: that means your pay going up is what they hate
Speaker 1: the most. That's what they have to stop. So, um,
Speaker 1: the prices of goods are going up. Congratulations, there they
Speaker 1: went down. Inflation slowed a little bit, so now it's
Speaker 1: only going to buy eight point five percent, but your
Speaker 1: pay went up by zero point five So that means
Speaker 1: that your cost of living is going up with your
Speaker 1: pay isn't keeping up. So you know, that means that
Speaker 1: that that your quality of life goes down. That means
Speaker 1: you buy less things. At eight point five percent, that
Speaker 1: means on the average, the average American it costs him
Speaker 1: about three dollars per month to have the exact same
Speaker 1: lifestyle they had the month before. So if you make
Speaker 1: thirty two dollars an hour, that's ten extra hours in
Speaker 1: the month you have to work just to have the
Speaker 1: exact same lifestyle. That you had the month before. Those
Speaker 1: are ten hours that you could have spent with your
Speaker 1: wife or your kids. Ten hours you could have spent
Speaker 1: in the gym with Joe. I know Joe loves to
Speaker 1: be in the gym. Ten hours you could have been
Speaker 1: going to school to increase your education, to start aside business.
Speaker 1: That's your life that's been stolen because of the inflation.
Speaker 1: It's that insane. All right, Let's let's reframe this a
Speaker 1: little bit, Joe. Um, because other than a couple of
Speaker 1: nerds like me and you, Um, what the heck do
Speaker 1: most people care about CPI? Right? What does that mean?
Speaker 1: They know that prices went up, like that's all they
Speaker 1: really care about, or probably more people that are tuned
Speaker 1: into this. They they're trying to figure out where the
Speaker 1: market is going because markets are forward looking, right, so um,
Speaker 1: discounting mechanisms as they're called, Right, So what does this
Speaker 1: mean for my retirement account, my stocks, my my house,
Speaker 1: my assets? Based off of this information? Does the Fed? Uh?
Speaker 1: Does the FED have this more neutral position? And now
Speaker 1: maybe there's this soft landing they're able to kind of
Speaker 1: thread the needle to like maybe their backs aren't as
Speaker 1: forced as people thought. They were, so potentially that's coming
Speaker 1: off of the CPI report, especially, we saw a lot
Speaker 1: of moves in forward looking interest rate markets. And I'll
Speaker 1: explain this in a way that that makes it so like,
Speaker 1: you know, why should you care about all of this? Well,
Speaker 1: what the Fed is doing right now is they're they're essentially,
Speaker 1: in the simplest terms, they're removing liquidity from the economy
Speaker 1: by making it more expensive to borrow um you know,
Speaker 1: at in in very lay in terms, and so one
Speaker 1: of the things more extensive to borrow by pushing their
Speaker 1: straight higher. Yes, And so basically there are these futures markets,
Speaker 1: particularly federal funds futures, which let you take a look
Speaker 1: at the market is pricing in that the Fed is
Speaker 1: going to do basically, and so Fed funds futures originally
Speaker 1: they were at a much higher terminal rates, so they
Speaker 1: were predicting the Fed would have to hike much higher
Speaker 1: uh and that it would be much further out. So
Speaker 1: not only would would it be a higher terminal rate,
Speaker 1: but it will be a slow grind to get there.
Speaker 1: And now with the CPI report, basically the markets are
Speaker 1: saying the Fed is looking at slowing consumer price inflation
Speaker 1: and they're understanding that to some extent, they're cooling the economy,
Speaker 1: which is what they want. And so interest rate futures
Speaker 1: markets are telling us now that they're going to be
Speaker 1: able to get to three point five percent roughly as
Speaker 1: a terminal rate. Right now, we're at two and a
Speaker 1: half percent FED funds and that terminal rate will be
Speaker 1: reached late this year or Q one next year, which
Speaker 1: means as of right now. Because markets are forward looking,
Speaker 1: risk markets are forward looking. There taking a look at
Speaker 1: what these futures markets are saying because rates are also
Speaker 1: forward looking. But essentially the reason risk assets have bottomed
Speaker 1: and they've risen, the NASDAC is up sixteen from the lows.
Speaker 1: The reason bitcoin seems to be catching a bit of
Speaker 1: a bid is because the markets are understanding that the
Speaker 1: FED is going to pause late this year early next year,
Speaker 1: and that's what the data is saying. I'm not making
Speaker 1: outlandage predictionous that are, you know, not based on data.
Speaker 1: The reason let's let's let's hold let's let's hold that
Speaker 1: thought right there, and then I want to come back
Speaker 1: and let's we'll talk about bitcoins specifically. You said it's
Speaker 1: catching a bid. There was something from a Bloomberg analyst.
Speaker 1: I came out today that I want to talk about
Speaker 1: as well, Um, and so we'll come back with more.
Speaker 1: You're listening to the Mark ma Show. Of course, we're
Speaker 1: talking about the decentralized Revolution. I'm in the studio with
Speaker 1: Joe CONSORTI. Check them out on Twitter at Joe Consorti.
Speaker 1: We got a whole lot to cover when I come back.
Speaker 1: Don't go away, We'll be right back, all right, Welcome back.
Speaker 1: You are listening to the Mark Moa show where we
Speaker 1: talk about each and every week the decentralized revolution, the
Speaker 1: way the world is changing right before our very eyes
Speaker 1: through the lens of politics, finance, and tech not ology.
Speaker 1: Of course, that technology being Bitcoin, the decentralized revolution technology.
Speaker 1: I'm in the studio with Joe Consorti and Um, Joey,
Speaker 1: I kind of cut you off. Um, you were talking
Speaker 1: about the way that No. Now the market sort of
Speaker 1: thinks the FED will probably raise into next year, and
Speaker 1: risk on assets, or I should say risk risk on
Speaker 1: assets are starting to catch a bid. Bitcoin has been
Speaker 1: catching a bid. It's up from well as low as
Speaker 1: seventeen thousand now too. I think about twenty four is
Speaker 1: um range um. And so the NASDAC is also pumping
Speaker 1: back up, which is also one of those risk on assets.
Speaker 1: So you're starting to see that it is coming back
Speaker 1: to life. UM. I think a question a lot of
Speaker 1: people are asking, um, we're back into bull market territory
Speaker 1: that we were. We went went into bear market therey,
Speaker 1: now we're supposedly we're back into bull market territory. Um.
Speaker 1: Is this one of those just deep bull bear market
Speaker 1: fake outs? So in my purview though, it is, and
Speaker 1: I think we you know, probabilistically, of course, there is
Speaker 1: a scenario where, you know, probably probabilistically that's the key word. Yes,
Speaker 1: he says, we can never be definitive. You know, we
Speaker 1: always got to give both scenarios. There's a situation right
Speaker 1: now where the FED comes out later this August Rum
Speaker 1: Powell is going to do some forward guidance. He's speaking
Speaker 1: at Jackson Hole. UM. And there there is a scenario
Speaker 1: where he says, labor markets too strong. Right now, the
Speaker 1: market's interpreting our our you know, our FED speak as dubbish.
Speaker 1: We're not dubbish. We're we're committed to going to three
Speaker 1: five and beyond. If that happens, then you know, this
Speaker 1: is a bear market rally and risk you's a little bit.
Speaker 1: But if you know, let's say, uh, September, CPI again
Speaker 1: comes in low fed speak is dubbish once again, then
Speaker 1: you know we could see again a pause late this
Speaker 1: year early next year. And that's what that's what rates
Speaker 1: markets are telling us. So I'm leaning towards the ladder
Speaker 1: where this is more of a trend shift towards risk
Speaker 1: on than a bear market rally. But of course, you know,
Speaker 1: we we've always you got to be probabilistic about these things. Now,
Speaker 1: bitcoin has been trading like a risk on asset. It's
Speaker 1: basically been moving just like almost in lock step. Um.
Speaker 1: Correlated with the nasdack. Um. You know, we've talked about
Speaker 1: this quite a bit. But Um, there was an article
Speaker 1: I saw of there was a Bloomberg analyst that came
Speaker 1: out and said that he thinks that bitcoin is likely
Speaker 1: to transition to a risk off asset at the second
Speaker 1: half of two. He said it's a likely rally. Bitcoin
Speaker 1: will likely rally alongside golden treasury bonds. According to Michael Glone,
Speaker 1: a senior commodity strategy at Bloomberg. UM, what do you
Speaker 1: say about that? So over at the Bitcoin Lair on
Speaker 1: YouTube and on substack. One of the things that I
Speaker 1: talked about three or four weeks ago was bitcoin tracking
Speaker 1: very closely with global liquidity and sort of moving in
Speaker 1: and out with global liquidity. Um. One of the way
Speaker 1: that bitcoin is traded by the guys with all the money, right,
Speaker 1: you know, we we like to think that that you
Speaker 1: and I trade inside and we moved the bitcoin price,
Speaker 1: but we don't. Ultimately, it's these huge funds that are trading.
Speaker 1: We call that. We call that the difference of dumb money,
Speaker 1: which is Joe and I and you whoever is listening,
Speaker 1: and then the smart money that's the big money. Right,
Speaker 1: that's right. And so right now, this is sort of
Speaker 1: an informational arbitrage. You and I see bitcoin as debasement insurance,
Speaker 1: where we understand that you know, this, this FIAT system
Speaker 1: is sort of program to, you know, debase because of
Speaker 1: our debtloads and FIA and bitcoin is absolutely fixed, programmatically scarce.
Speaker 1: So we understand it as debasement insurance. Big funds don't
Speaker 1: trade it that way yet, and so there's this informational
Speaker 1: arbitrage that we've been able to catch on for the
Speaker 1: last twelve years. The bitcoin is how a price subscribed
Speaker 1: to it. But the reason that tide might start to
Speaker 1: change is you start to see institutions coming into the
Speaker 1: mix and potentially viewing bitcoin, uh, you know, as something
Speaker 1: they like to allocate to as well. You saw black
Speaker 1: Rock partner up with coin based specifically to offer not
Speaker 1: crypto bitcoin to your clients through private trust, and so
Speaker 1: I think it's a key peace right there, not crypto bitcoin.
Speaker 1: That's exactly right. I think through time that window will
Speaker 1: close and bitcoin will transition into a risk of asset
Speaker 1: because ultimately more people are going to catch on. Uh
Speaker 1: you know, one of the end games is highly inflationary
Speaker 1: for the dollar, and I think over time, more people
Speaker 1: are gonna catch on that bitcoin is the solution to that.
Speaker 1: And slowly but surely that gap is starting to change
Speaker 1: from bitcoin being risk on to bitcoin being risk off. Yeah,
Speaker 1: I would agree. And one thing that you said I
Speaker 1: think is super crucial for everyone to grasp onto is
Speaker 1: that our informational arbitrage and so um, you always need
Speaker 1: to have an edge. If you want to compete in sports,
Speaker 1: or you want to compete in business, or you want
Speaker 1: to compete in and investing, you have to have an edge, right,
Speaker 1: one little thing that makes you better in one area
Speaker 1: than somebody else. If you don't know what you're investing edges,
Speaker 1: that means you don't have one. And what what I
Speaker 1: think Joe is referring to is as information arbitrage. Is
Speaker 1: Joe and I we spent a lot of time studying bitcoin,
Speaker 1: and so we have an edge. We see what bitcoin
Speaker 1: is or could become, while most people don't, and so
Speaker 1: that gives us a little bit of an edge or
Speaker 1: an advantage there. And so that just think about that,
Speaker 1: and I would agree with you, Joe. I mean, I think, Um,
Speaker 1: to your point, we've already seen it as that. And
Speaker 1: to the one of this Bloomberg analyst, he's saying the
Speaker 1: same thing, UM that in a severe recession, bitcoin will
Speaker 1: shine and people start to see that it's this um
Speaker 1: risk off asset moving from risk on risk off, and
Speaker 1: I say, it's it's been trading like a NASDAC stock,
Speaker 1: but it's not that. Um. One more thing I want
Speaker 1: to talk about. We have a couple minutes left. Um,
Speaker 1: have you did you look at that new uh stable stats?
Speaker 1: I know you do. You guys do a lot of
Speaker 1: research into the lightning and stuff like that. Have you
Speaker 1: looked at the El Salvador stable coin that they're trying
Speaker 1: to release. Not extensively, I've heard of it. I've seen
Speaker 1: a couple of headlines, but not extensively. Yeah, so they're
Speaker 1: doing something like perpetual swaps, like is what bit mix used,
Speaker 1: so um, if you traded on on bit mix. I'm
Speaker 1: not even sure if they're around anymore. I know they're
Speaker 1: closed off to American consumers a while ago. But basically
Speaker 1: they had like x btc, so it was like a
Speaker 1: synthetic BTC and it was like somehow set the price
Speaker 1: off the synthetic purp swaps. I don't really know a
Speaker 1: lot about it. I guess you don't. You don't know
Speaker 1: that much about it either. Yeah, no, not a whole lot.
Speaker 1: I mean, ultimately, the more the more on ramps and
Speaker 1: the Bitcoin, the better. I think. The development you're seeing
Speaker 1: across Bitcoin Lightning as of right now is quite remarkable.
Speaker 1: You know, over at Lightning Labs of a protocol coin
Speaker 1: called Taro. It's an active development that would allow you
Speaker 1: to issue assets such as stable coins over Bitcoin and Lightning.
Speaker 1: So somebody in the country like El Salvador would be
Speaker 1: able to hold dollars in bitcoin in the same exact wallet,
Speaker 1: like benefiting from the privacy the security of the bitcoin network.
Speaker 1: There are numerous numerous things going on in bitcoin right now. Um,
Speaker 1: that are you know, again slowly inching us towards this
Speaker 1: future where bitcoin is is potentially a base layer money, right. Yeah.
Speaker 1: One of the things I mean I think about with
Speaker 1: Taro is like before the Internet. I mean, I don't know,
Speaker 1: I need to do some research on this club and
Speaker 1: talk about quite a bit. But um, you know, somewhere
Speaker 1: in the seventies or eighties, I'm guessing stock certificates were
Speaker 1: actually still certificates that they would send to you. Before
Speaker 1: the Internet, we had like actual bearer instruments, um, and
Speaker 1: I would have the stocks. I remember, I remember having
Speaker 1: stock certificates. Um, I'm not that old. I would have them.
Speaker 1: And then as a bearer instrument, if I want to
Speaker 1: give you this stock certificate, do you have it? And
Speaker 1: so like you could almost see like stocks being issued
Speaker 1: on that Tarot blockchain, and then I could have custody
Speaker 1: over that stock certificate and then I could exchange it
Speaker 1: with you over that lightning layer, which is a layer
Speaker 1: above the bitcoin network. Something like that that's right. Yeah,
Speaker 1: there's a future where that's conceivable. And the and the
Speaker 1: great thing about that is people who don't have access
Speaker 1: to traditional financial rails will now have access to all
Speaker 1: these different instruments that are you know, issued over bitcoin.
Speaker 1: Anybody who has bitcoin while it has access to these
Speaker 1: um and even if you're not a fan of these
Speaker 1: other assets, even if you don't want, uh, you know,
Speaker 1: the doom scenario where people start issuing you know, n
Speaker 1: f t s and things on bitcoin. Any increase in
Speaker 1: demand for a transactional capacity, right, will come with an
Speaker 1: increase in liquidity on bitcoin. So let's say the United
Speaker 1: States tratesury begins issuing, they start, you know, doing treasury
Speaker 1: options on bitcoin. There's a structural demand for United States treasuries.
Speaker 1: That liquidity will now come onto bitcoin. And it might
Speaker 1: not be somebody like the United States Treasury. Wuld be
Speaker 1: a corporation that decides to issue uh, you know, their
Speaker 1: their bonds the top the bitcoin blockchain through something like
Speaker 1: tarot that whatever demand there is for those bonds, which
Speaker 1: I can tell you there's a lot of the United
Speaker 1: the United States dollar capital market is the largest capital
Speaker 1: market in the world. That would come with increased demand
Speaker 1: for bitcoin liquidity, and with that, you know, price goes up. Yeah,
Speaker 1: the rising pride and the rising tide lifts all the
Speaker 1: boats at that point, and I would agree. I mean,
Speaker 1: I know a lot of people in the bitcoin space
Speaker 1: specifically think it's like anything else in the bitcoin is ridiculous.
Speaker 1: That's the only asked you need to own. But the
Speaker 1: reality is is that we still need progress in other areas,
Speaker 1: and we still need other types of businesses. We still
Speaker 1: need goods and services, and so people always be willing
Speaker 1: to invest into those those goods and services, and so
Speaker 1: we need a way to figure that out as well.
Speaker 1: I've also seen some stuff about even some governments issuing
Speaker 1: their currencies on it, so potentially like a Japanese gan
Speaker 1: or like a euro or something like that, and then
Speaker 1: it could move their own currency could move over a
Speaker 1: bitcoin rail but still keep their currency in place, which
Speaker 1: is pretty amazing to think about. And if you think
Speaker 1: about the dollar as just a payment network, um, then
Speaker 1: you can start to see how that works out. Anyway,
Speaker 1: that's a whole different conversation. You're listening to the markma show.
Speaker 1: We've been talking about the decentralized revolution, how the world
Speaker 1: is changing from centralization and decentralization, of course, being led
Speaker 1: by Bitcoin. I've been in the studio with Joe CONSORTI
Speaker 1: choke him out on Twitter at Joe CONSORTI say what's
Speaker 1: up that you heard us here? Of course I'm Mark Moss.
Speaker 1: That's what we got for you today. Thanks so much
Speaker 1: for listening.