"End Of Empire Feel": QTR On Bitcoin News

What I see now looks like the early innings of something real.

I sat down with Bitcoin News this week for a conversation about where I think the economy is headed over the next year and a half.

I’ve been open that I’m not trying to play an economist—“I’m a tattooed former bartender… not an economist”—but I’ve spent twenty years watching cycles, incentives, and policy. What I see now looks like the early innings of something real.

As I said in the interview, it looks like “we’re in inning two of nine of a real recession,” and it has that “end of empire” feel—not because I want drama, but because the evidence is finally lining up.

I talked through how I got the timing wrong in the past. When the Fed started hiking, I expected an almost immediate implosion under the weight of “positive real rates on the biggest bubble in history.” I didn’t account for just how much post-COVID liquidity and savings were sloshing around the system, or how slow monetary lags can be.

Two years on, the things I thought would show up are showing up: subprime auto lenders blowing up, a Miami luxury developer going bankrupt, “AAA-rated distress in commercial real estate” getting marked down to pennies, freight and heavy-truck sales slowing, and delinquencies rising across credit cards, personal loans, and now student loans.

I noted that the hard data matters, but so does psychology; when the jobs numbers crack, it gives the public a simple, shared story that the economy is slowing, and once sentiment flips, deleveraging feeds on itself.

From there, I laid out the sequence I think is most likely. At some point we get a sharp, SVB-style break—maybe in commercial real estate, maybe in crypto, maybe somewhere we’re not looking—that forces the Fed to move.

“Most of the time you see market bottoms after the Fed has already started cutting,” and I don’t think this time is different. If the long end refuses to cooperate with big deficits and rising debt service, yield-curve control is the next logical trick. That’s just monetization by another name. Saving the day in market terms risks breaking things in price-stability terms; the path of least resistance is another wave of inflation.

We also dug into why the stock market can look fine while the foundation erodes. Passive flows and the “Magnificent Seven” have rewired the plumbing.

“An ETF used to go up because people bought the components. Now the components go up because people buy the ETF,” I told Rob. As long as paycheck contributions keep auto-buying the same cap-weighted names, indexes can levitate even on weak breadth. But if stress in the job market and household finances ever turns those passive vehicles into net sellers, the “incessant bid” can become an incessant offer. That’s the Mike Green risk I flagged: the rug gets pulled just when people assume it can’t be.

Policy sits underneath all of this. The Fed insists it has many tools, but in practice “they have one button—print money.” It props up asset prices while widening the wealth gap and “brutalizing the lower and middle class.”

In 2008—arguably Ben Bernanke’s “Courage to Act” was, as Peter Schiff quipped, actually “a coward’s way out”—and moral hazard has been compounding ever since. Would letting failures fail have been catastrophic then? Yes. Would it have produced a sounder system today? I think so.

Where does that leave me as an investor? I’m anchored first in scarce, unprintable assets: gold, silver, and the miners tied to them. The gold tape has been screaming for a while—“a generational move,” in my view—and it started when gold stopped trading off real rates, which was my tell that something structural had shifted. At the same time, I’ve taken a small, explicit position in Bitcoin. I still see it trading like a risk asset; in a sharp deleveraging I expect it to get hit “more than gold,” and then, in the inevitable liquidity response, I expect it to “skyrocket with everything else.”

Finally, I spent time on stablecoins because I think that’s where a lot of hidden tail risk lives. I was a professional short seller for a decade, and in my opinion, “there’s only one reason people don’t get independent audits.”

As issuers accumulate enormous Treasury holdings while maintaining opaque liabilities, you don’t need a wild imagination to see how a redemption wave could force selling into the bond market at exactly the wrong time. It could be the 2008 playbook all over again: easy money, light oversight, everyone’s getting rich—right up until no one gets out the door.

Watch the full interview here:

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