We’ve Already Defaulted

This weekend, I made an appearance on the Zero Hedge Podcast—a platform I’ve long loved to read and have been a friend of. The full video is below.

At the outset, I explained why I’ve mostly stepped back from doing my own podcast. “I feel like I don’t have anything of dire importance to say anymore,” I said. “Whatever I do have to say, I shoot out on my [Substack] and that’s about it. I’ve kind of done a cease and desist on my podcast.”

I feel like the truth is, a lot of what needs to be said has already been said—repeatedly.

Government overspending, monetary manipulation, and systemic fragility aren’t new topics. They just keep getting worse. And the commentary starts to feel futile when the cycle never changes.

“You have control over nothing,” I said on the podcast. “At some point it becomes fruitless.”

On the New Spending Bill: Same Movie, New Scene

We opened with the recently passed spending bill. My view was simple: it’s more of the same.

“I don’t think I can offer anything new that most Zero Hedge readers or Austrian thinkers don’t already know,” I said. “Every four years, we rack up debt faster. We spend more money than we have quicker.”

I touched on how both parties campaign on cutting the deficit and then, once in power, punt. “This bill is no different, sadly,” I said. “There’s still this fantasy that we’re going to grow our way out of the debt problem.”

“I know they’re at least thinking differently about money,” I said, referencing the Trump camp and rumors of eventual gold-back treasury bonds. “But then politics and pork always seem to prevail.”

And then there’s the absurdity of actual government spending. “At one point I was reading they gave Rashida Tlaib $5 billion to manage a program on subsidizing refrigerators. I’m like—what the f*** are we doing? What qualifies her to manage $5 billion, let alone $5?”

On Inflation: People Finally Get It

One thing I said I’m hopeful about is that average people now feel and understand inflation. “A couple years ago, if you were an Austrian talking about how the government’s stealing your money through inflation, no one wanted to hear it. It was esoteric,” I said. “Now, people feel it at the grocery store. They go home and ask themselves: Why am I getting half as much cereal for twice the price?”

That real-world impact is pushing people to ask deeper questions. And ironically, Bitcoin has played a big role in that education. “You can’t understand Bitcoin without understanding monetary policy,” I said. “It forces the conversation. What’s fiat? What’s sound money? Why does it matter?”

That’s why, despite my preference for gold and silver, I give Bitcoin a lot of credit. “It’s like a gateway drug into monetary theory,” I joked. “You’ve got kids in their 20s—tattooed freaks—mainlining monetary policy because it helps them understand crypto.”

On Trump’s Fiscal Pitch: Wait and See

When asked about Trump’s pitch—tax cuts plus tariffs to generate growth—I didn’t have a definitive take. “I don’t really contend with it,” I said. “We’ll see what happens. I trust that guys like Scott Bessent are smart. I think they know how out of whack the fiscal house is.”

I said I’m in a “wait and see” mode, largely because the macroeconomic compass is broken. “Bad news is good news some days. Good news is bad news other days. Nothing makes sense anymore,” I said. “We’ve distorted things so badly with money printing and QE. There’s no true signal anymore.”

Said another way: it’s f*cking impossible to predict what will happen next. (Please do not forget to renew your paid subscriptions).

On Bond Markets: Watch the Canary

I also emphasized that the bond market is the most important place to watch to see whether or not our fiscal plans are feasible. “Don’t pay attention to stocks the way you would to bonds,” I said. “The bond market will tell you the truth.”

I pointed out the strange behavior of yields rising even as the Fed eases. “It’s not normal,” I said. “We’re seeing equities and bonds sell off together. That’s something you see in emerging markets—not in the country with the reserve currency of the world.”

I also warned that nobody really knows who’s buying the debt at auctions.

“I wouldn’t put it past the Fed or Treasury to create the illusion of demand where there isn’t any,” I said. “A lot of this demand is showing up through shadowy offshore entities, I read — Cayman Islands shit. And that’s sketchy.”

What Breaks First?

I was asked what part of the market might crack first. “It could be anything,” I said. “Private credit, commercial real estate, auto paper, regional banks—there are rakes everywhere you step.”

I talked about how systemic risk often hides in plain sight, covered up by accounting games and delay tactics. “We don’t learn about it when the CFO finds it,” I said. “We learn about it when the market forces someone to confess.”

And I warned that a black swan could come from anywhere. “It could be some guy who notices an error on a receipt at Dunkin Donuts in Belgium. He goes to complain, and it reveals 20 years of fraud.”

How I’m Allocated: Hard Assets, Patience, and Boring ETFs

I also talked a bit about my personal asset allocation—not as financial advice, but just how I’m trying to navigate this mess. For the 25 names I’m watching this year, read my market update from last week here.

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