Lyn Alden: How to Survive The Gradual Print Era — Fed Chair Warsh, Gold & Bitcoin

I've been terming this the gradual print, which is to say that we are away from, you know, Fed balance sheet reduction. We've shifted toward gradual Fed balance sheet increases. I tend to take the under on those that are calling for like major printing this year or next. There are scenarios where it could happen, but those aren't in my base case. And with this new nominee, I have to look at the other side of the scenario, which is, you know, what are scenarios that could reduce the balance sheet? because we have potentially new leadership in place. Lynn Alden, it is so great to have you back on Banklist during these chaotic times. I actually want to start with a tweet that my co-host David Hoffman said really spoke to his heart. We talked about this last week. Okay, here it is. It's a tweet from somebody online. We'll include it. Who's this from, David? I just saw it on Twitter. Hungry Ponds X. Hungry Ponds X. It reflects the sentiment we're all feeling. I honestly have no idea if we're close to a crash, a melt-up, World War III, an industrial revolution, a mother of all short squeezes, a depression, a recession, or aliens. But it sure feels like all of them all at once. Lynn Alden, what is happening in the world? And maybe that's a little too broad of a question. What in all of this noise and chaos should investors be paying the most attention to right now? Good set of questions. I mean, I think we are basically in the fourth turning, which I'm not the first person to say that. But the way I break that a little differently, because I look at things a little bit more quantitatively, which is to say we're on the rough side of the long term debt cycle. And with a long term debt cycle tends to come other things along with it, which is why I always feel like everything's happening all at once. So sovereign debt crises tend to lead to more war and war also can lead to sovereign debt crises. So these things kind of feed off each other. it also tends to lead to like you have decades of debt building up and then you usually have debt like decades of like laws building up and kind of like this this entropy in the system and there's usually some sort of clearing event that happens which can be a pretty dangerous or challenging time because kind of the shields are down for all the norms people are used to there's also kind of a institutional cycle that goes along with that which is to say many of the institutions that are kind of put in place by one generation and last for you know 75 or 100 years or more kind of in their form they are they're no longer in kind of the built for the technological era that we're in anymore they're no longer built by the same people that are alive anymore in most cases trust in them is generally broken down things have moved on but there's there's this kind of transitional period and these all tend to feed on itself especially when you're going through that a longer term debt cycle and this time you know compared to Prior, you know, historical things, we can add demographics issues, like for the first time kind of ever. You just got like future generations that are smaller than prior ones, kind of as far as the eye can see. At least, you know, any sort of like forecastable time horizon. Social media, of course, adds chaos. Like instead of happening, you know, at the rate of newspapers and TV, it happens at the rate of like real time, you know, peer to peer communications. So you can meme about the downfall of empires in real time. and so I think that's why it generally feels like everything happening all at once. Obviously, what you should focus on is more like what's in your wheelhouse to do anything about. So I think to some degree, basically as people, we have to have some degree of broad awareness, ideally, of multiple things, but you generally want to have your 80% focus, I'd say, on things that are in your area of expertise, things that affect your employment, your business, your family, your hobbies and interests. That's where I think people should be focusing. Now, that will include like AI for a lot of things. That'll include macro for a decent chunk of things. And then it kind of goes less from there as you get into kind of the long tail of other issues where they might be very important issues, but there's very little that a given person can do about them or that those things will directly affect them that they can prevent in some way. But it depends on where they live in the world. I'm generally talking to kind of a Western audience here on average, but it obviously depends where you live. So we certainly do live in crazy times. And a lot of this is quantifiably crazy. In 2024, emerging markets generated over $115 billion in annual yield for investors, with yields ranging between 10 to 40%. These are some of the highest, most persistent yields on Earth. The problem? DeFi can't access them. Bricks changes this. Built on mega ETH, Bricks takes emerging market money markets and sovereign carry and turns them into composable primitives you can access straight from your wallet. While DeFi investors earn 3-6% on stablecoins and T-bills, institutions have been harvesting 10-50% yields backed by sovereign monetary policy. Bricks connects these worlds with institutional gray tokenization, local banking rails, compliance across jurisdictions, and real-time stablecoin settlement. Bricks does the heavy lifting so DeFi can finally access real collateral and structured products on top of real world yield. Even the best carry trades can be within reach. Bricks brings DeFi's promise to the emerging world and brings emerging market yield to your wallet. Let the yield flow with Bricks. Few people in crypto put real skin in the game when they make public top or bottom calls. The DeFi report is one of them. The week before the October 10th flash crash, Michael from the DeFi report emailed his entire newsletter saying he's going aggressively risk off and sold the majority of his book from crypto into cash. This is when ETH was about $4,000 and Bitcoin was $110. Michael runs the DeFi Report, an industry-leading research platform built on data, cycle awareness, risk management, transparency, and most importantly, skin in the game. We like Michael at Bankless. We like his analysis, and that's why you hear him on the Bankless podcast about once a month. And the DeFi Report is giving Bankless listeners one free month of access to the DeFi Report. So if you're looking for some sharp, data-driven analysis to make better informed decisions around your portfolio, you can learn why and how Michael called the top and what he's doing next, all in the DeFi Report Pro. Check it out. There is a link in the show notes. I'd like to just take a moment and really define, illustrate what you mean by the fourth turning. We're in the fourth turning. This is kind of an intergenerational phase change concept popularized by Michael Howell, I think his name is his name. Neil Howell. Neil Howell. Neil Howell, yeah. It's pretty similar to Ray Dalio's long-term debt cycles, but it puts it into a framing of cross-generational, intergenerational roles that they play across about 80 years. So when you say a fourth turning, there's four chunks of an 80-year period, and 80 years is one big cycle. And what you're saying is we're kind of at the end of one big cycle, and it's a pretty big deal to be at the end of an 80-year cycle of a fourth turning of Ray Dalio's long-term cycles. And maybe to really illustrate that, we're on the other end of what came post-World War II, the world order that came post-World War II, which was, you know, 40s to 60s, a great era for the world. Like lots of prosperity, lots of growth, lots of growth all over the place. And what you're kind of illustrating is we're on the downside of that. That world order is kind of coming to a close. It's a big phase change across generations. and it's one of the most chaotic times to be in if you believe in this fourth turning cycle concept idea. Maybe, Lynn, you can kind of just like illustrate a little bit more about what does it mean to be inside of the downside, the chaotic side of a fourth turning? Yeah, that's a good way of putting it. And, you know, the criticism of fourth turnings, let's start with those, is that people will say it's kind of like astrology in a way, like demography generations, kind of like, you know, cultural woo-woo. And I think that there's truth in that, which is why I tend to focus on the more Dalio side of that topic, which is the parts we can quantify. I generally find that Neil Howe and his partner's framing of it is useful because the social aspects are less close to my area of focus, but I find them useful. But the parts that I find the most interesting are that historically, the kind of the sovereign long-term debt cycles match up with the fourth turnings, which I don't think is an accident. because kind of part of going through fourth turning is having a sovereign debt issue. And these things kind of, they have cause and effect. It's not like these things randomly pop up every few decades. It's that these things kind of build and they can only kind of go on so long. So the economic cycle, the debt cycle, is that you have kind of structurally falling interest rates. You have rising debt as a percentage of GDP. And for a while, that's both private and public debt. So every time there's a crisis, they cut interest rates. to try to restart the debt engine, the fractional reserve bank lending engine, the sovereign debt engine. And you'll get these little periods of deleveraging, but you never deleverage back down to the earlier part of that particular kind of five or 10 year cycle. And you start building up from there. And when you string enough of those together, you get to very high debt levels and you get intrates all the way to zero. And then you have basically maximum fractional reserve in the system. And what happened both in the 30s, this last time that happened, as well as the 2008 crises, those were kind of the peaks of the private debt cycle bubbles. And what happens when you get private debt maxed out as a percentage of GDP, you can't really cut into rates meaningfully lower. That's when they generally shift toward printing money and then gradually shifting the debt from the private sector more toward the public sector. So that happened throughout the later 30s and into the 40s. Obviously, there are other factors going on, but they were interlinked. And then we've seen that over the course of the 2010s here in the 2020s, that more of that shift from where we're not as leveraged in the private sector as we were in the eve of the global financial crisis in kind of the U.S. and many developed countries, but that's been put toward the sovereign. And when it's on the sovereign level, it can't really go anywhere other than currency devaluation, because most sovereigns, at least the ones that have their own currency, will rarely ever default nominally. So they'll default through purchasing power, debasement, sometimes trimming prior guarantees about retirement or things like that. They'll make a series of kind of smaller defaults, more invisible defaults to deal with that. And that's kind of the stage we're in now and we've been going through. And then, like I mentioned, these things tend to coincide with legal resets in a way, changes in the social contract, loss of faith in institutions that were built in like, you know, the prior four generations ago. Obviously that exact timeframe can differ. I mean, some institutions like the U.S. Constitution obviously will persist through multiple of these massive cycles, whereas other ones might only persist through one. But basically there's, when you look across the board at public trust in media, public trust in Congress, public trust in big corporations, they're all, you know, especially the first two, they're all really kind of low end. You know, there are some institutions like military or small businesses and things like that that people have more trust in. But there's really kind of big structures people have less trust in, I think mostly for good reason. And so everything's kind of on the table when you're going through a sovereign debt crisis, while people also don't trust the government or don't trust some of the institutions that we've kind of had in place for many years. There's rising polarization. And so a lot more big outcomes can happen. And then in addition, when you have that kind of rotation from the private sector to the public sector of debt, you tend to get more of a centralization. And so in the 1930s to 40s, you had the whole FDR centralization. You had really big industrial policy. Obviously, whenever there's a massive war, there's going to be sovereign centralization. But even without that, you just have that more industrial policy, that more top-down capital allocation that tends to happen. And we've been seeing that generally more recently. Obviously, who to bail out in the global financial crisis was a pretty centralized decision. And then how to bail out, who to bail out during the whole lockdown crisis was another set of kind of decentralized control. And then in more recent times, as we see just kind of, you say, trade issues coming ahead and these big imbalances that have been building for a long time, again, based on institutions that were set up during this, like the earlier part of this kind of structural cycle that we're in, the dollars is reserved currency and all the mechanisms that support that. we've got more like top-down industrial policy around rare earths or around semiconductors, around AI to some degree, around trade, basically saying that, you know, we're going to do this, you know, supposedly for the country rather than free trade, for example. And these things tend to come together. Like they don't tend to happen in isolation. A sovereign that's in a major imbalance rarely just says, well, we're going to let the market do what we're going to do. They start using the tools that they have available to try to contain or redirect that issue, with the difference, of course, being that compared to the last time that developed countries went through this, which was the 40s, that, you know, the 1940s, you had obviously major war at that time. We also had very centralized media. So now it's everything moves faster, the information moves faster. So that obviously introduces a lot of complexity as nation states try to go through this, while people can kind of, in some ways, figure out more quickly what's happening. I mean, it is incredible to see the symmetries here to the last fourth turning, which lasted from 1929 to 1945. That was sort of that chaotic period, right? And now the fourth turning now, if you kind of line the dates out, would have started around 2008 and last until about 2030 to 2033. It is interesting that both forth turning on the social level, and maybe you read that as horoscopes or some do, that lines very nicely with Dalio's long-term debt cycles. It's kind of an equivalent period of time. But I like what you've been saying, Lynn, because this really rings true, I think, for me and probably for many listeners, that we sort of generationally, by kind of the fourth generation, we tend to forget why we set up these institutions in the first place. They atrophy in many ways too. They become prone to corruption and we just like forget the purpose of them. Maybe one of those institutions that has been essential in the world order that we have lived in since 1945 and beyond is the Fed. And that nicely ties kind of, I guess, forth turning types of events. And then also they are at the center of debt cycles as well. I reached out and asked you to come on Bankless as part in trying to understand what was going on with the Fed, in particular Fed independence. On January 11th, the Fed Reserve Chair, Jerome Powell, had this announcement and he put it out on Twitter. It was a video announcement and he said that he was under criminal indictment by the Trump administration. He said the stated reason was that they were accusing him of lying about budget overruns in a Fed building construction. But then he said the actual reason, and he went right to the American people with this, right? He said the actual reason was that Trump wanted him to lower rates, and he didn't do it. He preserved Fed independence. Your tweet above this clip was just simply, whoa, like, this is new. Whoa, what happened? And then you followed up and you said, this was the most direct clash between the Fed and the executive branch since 1951. The 2020s equals the 1940s thesis is still on track. We've had you on in the past, and I know you've talked a lot about the 1940s being similar to where we are now. And you are so well-adversed in the history. I'm wondering if you could map that out. Why was this a whoa moment? Why was this like the 1940s and what happened in 1951? Sure. So basically after the Great Depression began, so throughout the 1930s and then especially in the 40s, the Federal Reserve lost a lot of its independence. I mean, it started basically with the Treasury taking its gold, giving it gold certificates in place of its gold, which is a non-redeemable certificate. It's basically a meme coin. It's like, here's some gold meme coins that legally will shore up your balance sheet. and we're going to actually take the actual gold. So the Fed had some gold sitting on its balance sheet and Treasury went, yoink, we're going to take that and we're going to give you IOUs instead. Yeah, IOUs, which they still hold, by the way. They basically plugged a hole in their accounting that was massive at the time that is now tiny because of how nominally everything grew. But they still have those gold certificates on their balance sheet. And so we had kind of a more Treasury takeover of things. And that was also at a time, of course, when it was banned for individuals to own gold, which is crazy to think about. In land of the free, you couldn't own gold for like decades legally at scale. It was literally like the executive order at that time was literally if you have gold, bring it in. You have to force sell it to the government at a haircut, at like a 40, 50% haircut discount, something like this. Well, the way they did it was you could sell it at that price, which was pegged. And then as soon as they had their kind of deadlines met, then they went and devalued the dollar relative to gold. So it's like people didn't know that that haircut was about to happen. So it was a little bit of a rug pull. Yeah, it's like old school analog rug pulls going on. And I mean, Britain did kind of similar stuff around World War I. So that was basically when you have a world, like a total war scenario, that happened in multiple countries. And that was kind of the U.S.'s particular history. And so really starting from the 30s, the Fed was severely weakened. Basically, they increased the monetary base with this kind of gold revaluation. They kind of shore up the commercial banking system. You know, it's not like these things are done in isolation. They pick enemies and say there are people hoarding gold. There are people hoarding XYZ. For the sake of public well-being, we're going to have to do all these things. We have to ban the gold hoarders. We have to centralize things. So we do that. Now, obviously, most places you can be living in the world, like America was one of the best places you could be living. It's like in many ways, a lot of places went kind of full-on authoritarian. and the U.S. only went like halfway there. It was kind of the logic at the time. So we did all that. And then, of course, as you're going through the whole Great Depression in multiple countries, this was in some ways still a hangover from World War I. I mean, a lot of the imbalances that World War I caused then fed into the Great Depression, kind of created these bubbles that then popped. Then we're going through the Great Depression. Obviously, when you have a bad economic environment, political extremism grows in multiple places. This in multiple ways contributes to World War II. It's not the only factor, but it's a factor. World War II happens. And then there's basically another reason to centralize everything, which is we have to go, it's like a total war. So both in the US and the UK and elsewhere, you're doing price controls. You're doing supply shortages saying like, Americans can't have this because they need it for the war effort. And then part of that was the Fed was totally captured by the Treasury. So they did yield curve control. They said, look, we have to rack up all this debt to go fight this war, but we can't have market clearing interest rates when we have all this inflation happening, when we have 100% debt to GDP going on. So the Fed was forced to do yield curve control. So they held the short end of the curve at just over zero, just over 0%. They held the long end of the curve at 2.5%. And they just held that pretty much firm. They made little micro adjustments as they needed. But then throughout the 40s, the peak inflation officially was like 19% year over year. The average inflation, even outside of the peaks and the valleys, was very much above target. It was like the 70s. While all the yields were pegged, it submerged below the inflation rate. So if you were holding currency or bonds, you just got absolutely killed. You'd really want to be in equities, real estate, or bootleg, precious metals, which were illegal, or fine art maybe, kind of these scarcer assets. And then the Fed was in the later period, after World War II ended, the Fed's like, hey, can we have our independence back? And then, you know, the Treasury's like, well, we still got to rebuild stuff, guys. So it's like, who wants to give up power, right? So there's, you know, there was like this legal wrangling going on. And eventually they passed the Treasury-Fed Accord, which more formally separated them. It kind of gave the Fed a significant view of independence, which, of course, you know, no central bank is entirely independent because the, you know, the officials are picked by the government. In some capacity, it will differ by country. In the U.S., you can kind of think of almost like a fourth branch of government, kind of like the Supreme Court in a way where the members are nominated and then confirmed, and then they have these fairly long terms. The Fed, of course, it's a public and private hybrid, so we're talking about the Federal Reserve Board of Governors here, including the chairman. So there's this kind of staggered thing, which is saying, okay, it is serving the government, but it's not as though it's easy for administration to say cut interest rates right before the election and things that are kind of very short-term oriented. It's supposed to basically be a kind of a black box that they can't really touch too much unless there's some extreme reason that could lead to impeachment or just removal for cause, which is in the modern environment becoming more relevant. And so what was kind of interesting about this recent one is that we've had more outspoken criticisms of the Fed's policy, sometimes in the right by Trump and sometimes on the left by like the Louis Warren, for example. And in this environment, you know, Trump's made no secret of the fact that he would like lower rates. For better or worse, I mean, people can agree or disagree with the decision. Powell's kept them higher, even though he has been cutting them. And of course, it's not just his decision. It's the entire 12-member FOMC at the Fed. And what's interesting is that, you know, when Powell's been criticized in the past, he would generally kind of roll the punches a little bit or kind of legalize his way through it. you know, when asked if he's going to step down, he'll say no directly. But like other than that, what made this one more interesting was that they kind of, he kind of took the scorched earth response, which was, you know, not only he's like basically, you know, not even like avoiding it, he's saying this is going on, but also here's what I believe the heart of it is, going after Fed independence. And so it's by no means the type of capture that happened in the 30s and 40s yet. But generally speaking, whenever you have debts this high, you start to usually get some degree of soft capture at least. So I wouldn't say that the Bank of Japan has true independence. I wouldn't say that the ECB is immune from political influence given what's going on in Europe. And I wouldn't say that the Fed has true independence at this point, even though they still have some degree of control. And the further we go into fiscal dominance, kind of the tools of the Fed start to narrow themselves, even if they're not captured, and then they do risk outright being captured, either because they kind of, the administration could put new board members in over time that are more, you know, less about kind of the historical reasons why you might hire razor low interest rates and say, okay, well, now we're going to do things, you know, the way that the president wants, for example, or sometimes more legal attacks. You can say, well, we're going to try to legally see if we can remove these members, see if this counts as for cause so that we can accelerate our changeover of the board. Because generally speaking, to fully remove control would go through Congress, which would be harder. So then it's like, well, how can you around the edges get soft control? This is what's so fascinating. So you're saying in the 1930s and the 1940s, the Fed really had no independence. It was kind of an arm of the Treasury and the Executive Branch. and maybe with that legislative act in 1951, it started to establish more independence. And that's the regime we've been in until kind of these modern times. And now we're in somewhat of a hybrid where it's unclear how independent the Fed really acts. And I want to run one theory of the case by you with respect to like kind of Trump because he is a central figure in this fourth turning in many different ways. But one idea behind Trump is Trump is the guy that just says the quiet part out loud And he is just saying something out loud basically like I control the Fed I can fire the Fed if I want But it has been the case at least until 2008 with all of the intervention that the Fed did in the aftermath of the great financial crisis in 2008, that the Fed really wasn't independent at that time, that it was a political entity. Now Trump is just coming on the scene and he's just, you know, calling it like he sees it. He is just saying the quiet part out loud. And the idea, I guess, is that the Fed hasn't been independent since 2008. What do you make of that? And what do you make of the idea that that's kind of what Trump is doing right now with the global order? He's effectively just saying the quiet parts out loud. I think that's a pretty fair characterization. I mean, I would say it depends on the particular part of the global order we're talking about. I mean, I think in some areas he's accelerating it more than just saying it out loud. In other parts, he is saying it out loud, things that have already been building for a while. So sometimes saying them out loud accelerates them, or sometimes the goal is to accelerate them. In the Fed's case, there's kind of multiple factors here. So I do agree that really ever since the run-up to the global financial crisis, you had much less Fed independence. And what made it kind of a more invisible type of connection there is that there generally was a lot of agreement between the Fed. and the executive branch, which was they both said, okay, this is a really big crisis. We hit kind of peak fractional reserve bank lending. So we're going to be super dovish on things. And there really wasn't any disagreement. And so when you don't really have disagreement, there's really no test about independence. It's only when you have some degree of disagreement, do you have, you know, kind of a more overt potential test of those independents. And so, you know, in Trump's first term. Toward the later part of his term, Powell and the Fed were raising rates. Trump was not thrilled about that. They started to cut them in late 2019 when we had more recessionary indicators even before everything had happened in 2020. They obviously were super dovish in 2020 and 2021. It's kind of another moment where they all agreed on what they're, you know, in hindsight, there's pain from it. But at the time, there's really no disagreement at the moment. But as we got into 2022, it was kind of like that moment in, say, the 40s where like the war is over. and the Fed's like, okay, so we're going to get a little more hawkish now. And then the executive branch says, well, not yet. So we had the Fed try, they said, okay, we totally misjudged inflation. I mean, they were really, they did not expect inflation to occur. They had forecasts for low rates when inflation did occur, which many of us were kind of pointing out that it very much likely was going to occur. But they started to then rapidly turn more hawkish. And this was during the Biden administration, but then they kept it up. in the Trump administration. And, you know, Trump's very outspoken about wanting more dovish policy. And I think there's also, whenever you have a period of higher uncertainty about what policy should be, I mean, this is like, you know, central bank rates are literally price controls on like the price and time of money. So there's some ways the most important price controls around. Most people, if you say, should this thing have price controls on it? Most people would say no, but that's how central banking works. You have price controls on money and time. And so you have on one hand, you have still above target inflation, but it's mostly outside of the Fed's wheelhouse because it's not excessive bank lending that's causing the inflation. It's more fiscal deficits that have been causing it in this cycle. So it's different than the 70s and rates don't really affect that. And two, you have big variables like AI, where very experienced people can have very different assumptions for how deflationary AI might be due to how rapidly its productivity gains might impact the economy and how spread out or concentrated those impacts might be. And so, for example, the new Fed nominee, the new chairman nominee is saying that AI is likely to be so disinflationary that we can probably cut rates and not risk inflation because you have other deflationary force. And that is, I mean, there are a higher number of kind of variables than normal. So you can get pretty divergent views on what the best policy rate should be right now. Should they be hawkish trying to curtail still above target inflation? Or should they be more dovish in expectation of productivity gains? And that's where, you know, there's a disagreement right now. And that's where that Fed independence is more tested. And I would say, again, it's still way more independent than it was in the 30s and 40s. But it's just, it's being challenged in a way. It's being chipped away at to some periphery degree right now. Powell is on his way to phasing out, of course. So you mentioned the new nominee. His name is Kevin Warsh. Let's say he gets through the process and he gets confirmed by Congress. Kevin Warsh was picked, of course, by Trump, right? So that's an interesting element of the independence, of course, is the executive branch does pick the Fed chair. I can't quite figure out what Kevin Warsh wants to do. I mean, and I think there's two questions here. There's one is what's his bias and what are his proclivities? And then the second question is what can he actually do in the position? Like how long is his leash? Even if he wants to do a particular thing, is he too constrained and is the path at some level already laid out for him so that he can't do what he wants? Some people are talking about him as a hawk. talk. Indeed, like, what was it, 2010, 2011, he was on the FOMC and he like rage quit because of quantitative easing. So that's interesting. But then he also talks a little bit like a populist. So he talks about the last 15 years of the Fed and talks the way we talk, which is basically like, hey, the Fed had some irresponsible monetary policy and pumped up asset prices. And that was great for Wall Street, but it kind of sucked for Main Street. And Trump populism fixes this, right? And so you have that element of what he's saying. And then there's the other element that just feels very much like Trump is going to pick, no matter who he picks, he's going to pick someone who's going to cut rates. I mean, that's why he's been hammering Powell. So I have no idea what to make of Kevin Warsh. Like, what do you think he's going to do when he gets in there? And like, maybe it's a moot question. Maybe there's not very much he can do. Maybe he's just another arm of treasury as the Fed was in the 1930s and 1940s. How do you think about this nominee? Yeah, I'm not sure anyone could tell you the full story or what's definitely going to happen. It's more like there's a set of variables we can point to that can help us predict what might happen. So I think the first starting point is that although the chairman is powerful, He's just one of 12 members on the FOMC. So he's still working within a kind of institutional apparatus that he doesn't have full control over. And so his ability to kind of unilaterally change things is somewhat limited. And so that's kind of the first point. Given his historical record and given his kind of latest commentary and who nominated him, my assumption is that he will be a leading dovish on interest rates, likely using AI and other kind of productivity forces as a kind of a catalyst for that or reasoning, while probably attempting to be a little bit more conservative on balance sheet growth. So these are kind of the two main tool sets that the Fed has. Maybe the third main tool set is that they can either unilaterally or in many cases with other federal agencies, they can affect regulations on banks. So using these kind of the three kind of major tool sets they have, I'd probably lean a little dovish on rates and a little hawkish on the balance sheet. But that's in the confines of two main things. One is that he's only, you know, he doesn't have unilateral power. And then two, he's got, you know, kind of uncomfortable things to try to manage. So one is that without major regulation changes, it's very hard to meaningfully reduce the balance sheet from current levels. The Fed has been predicting for about two years that this is roughly when they'd hit their bottom and we started to get liquidity shortages show up in the past four months and they indeed hit their bottom. Myself and other kind of like Fed watchers and macro analysts have been also kind of predicting around this time. And so without kind of major regulatory changes, it's really hard to get below the current floor after these years of quantitative tightening. There are things they can do that could trim the balance sheet somewhat, but they generally require a lot of consensus buy-in to do it. and they wouldn't necessarily impact markets as much as people think because they just kind of change where liquidity is. So, for example, if you make it easier for commercial banks to hold treasuries without affecting their various kind of regulatory ratios and things like that, then it potentially allows the Fed to own a little bit less and stick a little bit more of them in the banks on fractional reserve, which is not that different than the Fed having its own printed reserves to hold treasuries. In addition, the Treasury Department has been in a rough spot because they want to keep longer-term rates down. So all this talk about interest rates doesn't necessarily affect longer-term rates, which is where most house financing happens, for example. And one of the things the Treasury's been trying to do to some extent is that they shortened, that they issued more T-bills and less long-duration bonds to try to have less supply of the longer-term bonds so they don't drive interest rates up too much. Now, this ironically has somewhat of an effect on the Fed balance sheet because by shortening the average duration towards T-bills, they have to refinance it a lot, which means they need to hold a bigger cash balance and that's at the Fed. And so one thing that the Treasury could do is they could kind of work with the Fed and say, well, we're going to reduce our average cash balance from $800 billion to $400 billion. And to do that, we're going to term out our debt more. We're going to issue fewer T-bills and more long-term debt. That's an option. But then they risk putting pressure on the long end, which they don't want. And even, you know, Secretary Szent has been in this troubling thing where he criticized his predecessor, Yellen, for, you know, having such a high ratio of T-bills and has been slow to tackle this. I think because it's a politically sensitive thing to tackle, to do things that might put pressure on the long end of the curve. And so I think that once you're in the position of operating with all these constraints, the overall outcomes are kind of maybe less divergent from what's happening now than we think. Even though around the margins, it could shift things to the right or the left a little bit compared to what they were otherwise going to do. And I've been terming this the gradual print, which is to say that we are away from Fed balance sheet reduction. We've shifted toward gradual Fed balance sheet increases. I tend to take the under on those that are calling for major printing this year or next. There are scenarios where it could happen, but those aren't in my base case. And with this new nominee, I have to look at the other side of the scenario, which is what are scenarios that could reduce the balance sheet because we have potentially new leadership in place. Again, they'd be somewhat outside of my base case, but they've somewhat increased in odds because of this. Okay, so you think Kevin Warsh is going to orchestrate with the Treasury and the rest of the administration something that you're calling the gradual print. I think, you know, David and I were sort of under the impression that whoever Trump picks, it's going to be like cutting cut face. You know, he's just going to like shave rates all the way to zero because, you know, Trump wants he wants election results and he's going to take shortcuts if he needs to. He's, you know, that type, that's his proclivity. And he wants a high Dow, high NASDAQ, high S&P. And he's just going to print money like tomorrow. At least if you gave him total charge of the Fed, that's what he would do, unconstrained. But you're saying basically there are all of these constraints in place, including the long end of the yield curve that make that like impossible or something breaks or the market starts coughing up blood and Trump gets an undesired result. So you see the future as being somewhat of a gradual money print rather than a massive injection of additional liquidity for, you know, whomever Trump picks. Yes, I would add a couple of caveats. So one is that industry policy and balance sheet policy could be quite separate. So you could have them be quite dovish on industry and say, you know, we're going to cut by 150 basis points rapidly, for example. but then they also might say, we're not gonna increase our balance sheet for the next six months. And we're gonna try these other regulations to let banks hold more treasuries, for example. And then interest rates, there are some environments where interest rates are the bottleneck and that they are what is, say, holding back bank lending, which would contribute to broad money supply growth. And there are times where they're not the bottleneck. And so you can have a situation where you cut interest rates and it's not that impactful because they weren't the bottleneck. So that you cut short-term interest rates and maybe long-end rates just stay flattish. You know, there's in their range up and down depending on, you know, macro conditions, not really going any, trending in any direction. And you can cut interest rates by a decent amount and the house financing doesn't really get any easier. And so that more affects, you know, currency differentials. It can have an effect on more shorter-term, you know, kind of business borrowing, which is relevant. It's just not massive. And so I would generally think that whoever he picks is going to be pretty dovish on rates. I think that's been pretty much set in stone. Balance sheet is a little bit more of a question, but I generally think balance sheet is kind of gradually up and to the right. And I think that the combination of rates and balance sheet will keep the broad money supply kind of gradually up and to the right for the next couple of years. So I generally am fading more of the extreme ends on either side. We have gone through a shift more toward that balance sheet increases. And kind of the note on Fed independence, because we've gone back and forth about this a little bit, it's like the set of circumstances sharply narrowed with the global financial crisis. And that's why in many cases, it's kind of seemed like Fed independence has gone away because there's the number of options they have has shrunk. And so there's generally been this case where the government and the Fed are moving in the same direction. And it seems like capture, which I think is partially true, but it's also that it's not really captured if they both agree anyway. They're just both going in. It's like the circumstances have captured them. The high debt levels have captured them. If their shadow mandate is maintain financial stability, by extension, it means maintaining treasury market stability, which means even as treasury markets blow out, you have to sometimes print money to keep them stable. So the circumstances have kind of reduced the number of options they have over time. And then only in kind of recent times have there been more overt challenges to independence, which is that we're not in an extreme environment right now. We're not in a global financial crisis. We're not in a lockdown scenario. So there's somewhat competing opinions around what policy should be. And that's where that actual independence is kind of challenged for the first time really ever since this era. Even throughout the global financial crisis, there were only little mini challenges to it. I mean, Trump in his first term did a little bit of a mini challenge on it, but this is a more overt challenge on it. This conversation about Fed independence has been a reoccurring theme. Lynn, every time we have you on, there's always some flavor of this conversation that's relevant into just a macro conversation. And this seems to be kind of just like the latest rendition of that. two, three years ago, we were talking about post the Russia invasion of Ukraine, and then we froze a bunch of Russian bank accounts. We talked about how that kind of just impacts the nature of the dollar as a global reserve currency, and whether or not other countries want to even trade in that currency, if that's what we are proven to do. That was another rendition of a pretty similar conversation. I think even before we had you on to talk about that current event, we talked about how Trump was kind of downstream of the Triffin dilemma, about how we've hollowed out manufacturing domestically. And that's because we have this exorbitant privilege of the United States global reserve currency of the dollar. Every time we have you on, there's some sort of conversation pointing towards what I think we kind of illustrated at the very beginning of this episode is like this fourth turning, this phase change of the monetary order. And now it kind of seems far more real than it ever has in the past. There's that famous internet gif of like the van rushing towards this wall and it's going to crash into the wall, but right before it does, it cuts. And then it's rushing towards the wall again, but then it cuts. It never seems to actually crash. When gold does what it's done over the last, you know, months, maybe six months, it actually starts to, when it shows up in financial markets, it really starts to feel present. And I want to ask you about like, well, we had that Powell talking about how he's being persecuted by Donald Trump. How could it be any more real than that? You know, gold is actually running. How could it be any more real than that? Can I want to ask you about just like the price run of gold and other precious metals and how related it is to the subject we just talked about and many of the other subjects we've talked about? Maybe is it finally time for a lot of the inputs that we've been talking about every time we have you on over the years to show up in gold prices? Or if not, then what's the deal with gold? Why is it doing the thing that it's doing? Yeah, I think these things we've been talking about are a big factor in this. So I mean, we talked about trade years ago, and now we are seeing more extreme trade policy around the severe imbalances that it's gotten. And then in addition, we talked about inflation, money supply growth, how the war and confiscation of reserves could impact the desirability of the dollar and the treasury. And now we see precious metals soaring and kind of central bank accumulation. So these things are accumulating and there is kind of cause and effect here. When you have major entities like Citadel, for example, talking about threats to the dollar and things like that, obviously Dahlia has been talking about it for a while. I've seen personally over the past several of years that, you know, the topics of fiscal dominance and things like that have just become more of a known variable among major, you know, Wall Street institutions. Whereas, you know, back in the 2010s, this would have been more in like the gold bug newsletter community, right? It's like the periphery, maybe people that were really earlier sensationalists on average, it's kind of that an industry might be known for, has become, we've kind of reached the point where it's becoming real in a sense, reaching into major institutions and sometimes within government itself. And it's more addressed outright. And so I do think that we are seeing pretty tangible things. China over time is holding less treasuries. There's a little bit of a financial cold war going on between the United States and China, which is very different than the 2000s and the early 2010s. And it's, of course, accelerated in recent years. Then there's a, you know, with the whole kind of war in Eastern Europe and what can happen to reserves. There's just more countries saying, well, maybe I want to hold some gold more than I have been. Or maybe I want to diverse my reserves a little bit. And then when you add a trade war on top of that, when just the United States can say, well, we don't like you, so we're going to tariff you 50%. Or if you don't do this, we're going to... So it's like they just want more options. They want a little bit more wiggle room on when just things that they assume won't happen but then suddenly do. it's like, well, how reliant are we? It's like if an individual has 100% of their money in a bank account and it's just frozen and you realize they had no alternatives, they didn't have any gold and silver stashed in their stock drawer, they didn't have any Bitcoin or stable coins or whatever else they might like on their multi-sig or whatever the case may be, they didn't have any other kind of sovereign options. They only had this like permission thing. That's how sovereigns are kind of acting right now. Now, Wall Street tends to, and retail investors tend to make momentums out of things. So I think that the fact that it's all happened in this six to 12-month period kind of exaggerates the issue in some sense, because once something's rising in price, it can just rise in price because it's rising in price and more people want to be on that. So that can take a life of its own, which is far larger than the actual issue. So I've been of the camp that these things will still be playing on for quite a while. In fact, one of the criticisms of the fourth turning is that it kind of puts these time frames on things, which I think are somewhat arbitrary. This fourth turning has already kind of gone on longer than their original base case was. And I think that's probably going to continue to play out, which is that the whole situation in Japan is going to last longer than people think. You know, the people that think it's going to blow up tomorrow or next year, I think are going to keep not seeing that for quite a while. I think the dollar, while it has weak years and has inflation and has debasement, it's not going to blow up in kind of the near term. And I think these things are going to go on for quite a while. But it doesn't mean that the consequences wait to hit. They start hitting already. The political polarization we've seen is partially a consequence of all this. The inflation that happened after the shutdowns and the money printing was a consequence of this. The diversification of central banks toward gold was a consequence of this. and the trade war is a consequence of this. These are imbalances we've been building for a very long time that many of us have been talking about and they come in bursts and they are growing and it is real. It's just that the most sensationalist takes are rarely correct and that they generally take longer to truly play out than people think even though they are punctuated by these little exclamation points here and there. Yeah, one of the exclamation points I feel like is the gold price in the last just week or so. The volatility has been crazy. trillions has been going in and out of the gold market and valuation just in just seemingly a few hours. Is there anything to that other than just like it's getting frothy and the market's euphoric and despite gold being the largest asset in terms of market cap in the world, it doesn't really matter because herd mentality is going to be a herd no matter what? Or did something acute and noteworthy happen beyond just investor psychology? Or maybe it was just like a bubble and it's volatile and that's just what it is. Do you have any takes there? I think, short answer, I think both happen, which is that when you have a bubble, it only takes a small reason for that bubble to eventually pop, at least temporarily. Now, I'm on record saying, I don't think precious metals that structurally are in a bubble. I think that this has mostly been a revaluation from undervalued, more toward fairly valued. But in the near term sense, I think it clearly got overbought. So it's like a more local bubble rather than like structural bubble. And when you have that kind of, at least local bubble, you're prone to, if you're that volatile upside, especially when you don't have a great reason why it's just kind of momentum built like that, you don't have a great, you don't need a great reason for it to come down, you know, a quarter of the way or a third of the way and give up, you know, some of those gains. Now, there have been analysis that I've seen where, you know, a fund in Asia, you know, got damaged by one trade and then shifts into another trade. So you can often point to bodies that float to the surface or entities that have been a kind of a last mile cause in a particular daily volatility event. But those end up still being symptoms of the kind of momentum that built it in the first place. The other kind of big structural thing that people talk about is the yen carry trade, which is that, you know, Japan has been a, you know, they had a structural trade surplus. They still have a current account surplus. They, you know, they build up all these assets. And then many other entities say, well, if you're going to be very dovish in your monetary policy, I'm gonna borrow yen, and I'm gonna use it to buy other assets. So Japan, both directly and indirectly, is a really big funder of assets globally. And that can include US treasuries, US stocks, that can include just private equity in country XYZ, I mean, across the board. So when they get more hawkish there can be these little pockets that no one was looking at that just kind of blow up one day And they could be long the asset you like and they got to deleverage And again I would fade the idea that it's like this big unwind that's like happening this month, you know? But it is a real issue behind the scenes that as Japan gets a little more hawkish, like the bond market kind of revolts a little bit from very low levels, anyone is kind of like, the financial term is swimming naked, basically. It's like you don't really know who's not covered until the tide goes out in some way. So Japan getting more hawkish is like a little bit of the tide going out. In the U.S., quantitative tightening was like a little bit of the tide going out. These little tides go out sometimes. And sometimes that causes a little bit of implosion somewhere, which can be really big in the moment. But it's still just kind of an exclamation point that months or years later, it's just one of many along the path. Hey, Bankless Nation, it's David. If you're hearing this, that's because you are listening to the free Bankless podcast feed. Did you know that there is a premium Bankless RSS feed? The premium feed has extra interviews that I do for my own personal research and just deeper questions that I want answered about the crypto industry. Questions that I want to answer so I can be more informed as an investor, both at Bankless Ventures and also just in my own personal portfolio too. Also, there are no ads, which means if you listen to the premium feed instead of the free feed, you'll get about 20 hours of your life back every year because you choose to support Bankless directly. So if you're interested in getting extra content all while skipping the ads, or you just appreciate what we do here and want us to keep doing it, we'd appreciate it if you signed up for Bankless Premium. And there is a link in the show notes to get started. Cheers to a good 2026. What if you could trade gold, forex, and global markets with the same tools and speed that you use for crypto? That's exactly what BitGet TradFi unlocks. After strong beta demand, including over $100 million in single day gold trading volume, BitGet TradFi is now live for all users. Inside of your existing BitGet account, you can trade 79 instruments across Forex, precious metals, indices, and commodities, all settled directly in USDT. No platform switching and no fiat conversions. This is BitGet's universal exchange vision in action. Crypto and traditional finance side by side. You get deep liquidity, low slippage, and leverage up to 500x, letting you apply crypto strategies to macro markets. New to TradFi? Start with gold. The gold USD pair is liquid, macro driven, and a familiar natural bridge between crypto and traditional markets. Try trading gold on BitGet now at BitGet.com. Click the link in the show notes for more information. This is not financial advice. So as we see many central banks just diversify into gold, we also see Donald Trump explicitly saying he wants the United States to step back from being the global power. And, you know, it's like a new world order. United States is going to take after itself. Europe, you got to take after yourselves. You know, you do you, we're going to do us. Do you think China sees an opportunity here? If the United States is leaving a power vacuum of sorts, you know, China is the next largest economic force in the world. Do you think China has any interest in stepping into the fiat currency that is the world reserve currency? Or does China not want that curse either? Yeah, good question. I would answer it in two parts. So for the first part, I think it's a little bit more complex than us stepping back. I think that's one of the solutions we could have picked. If anything, I think it might have been a more elegant solution. But instead, we've kind of been trying to have our cake and eat it too, which is we still want countries to use the dollar. We want countries to kind of come to all these trade deals with us while also stepping back in a way. So it's like we're almost, again, it's kind of the quiet part of loud. It's almost like we're saying we want the world to pay tribute to the empire in a way. And I think it's untenable. I think it's adding volatility. I think it's unlikely to kind of work in the longer run, even though I do think that some of the causes, like I do think it's a noble goal to try to fix the trade deficit. There are just more elegant and less elegant ways to do it. And there are ways to kind of acknowledge that you're overstretched military-wise, you know, currency-wise, economic-wise, and to pull back. I think we're kind of trying to pull back, but also not pull back, which is messy. So I think that's part of, that's adding to the volatility. That's adding to the fourth turning. It's kind of like the institution debating with itself. Because even within one administration, like the Biden administration, or especially the Trump administration, there are factions. It's not as though the whole administration moves as one. And so you can have one faction that wants more free trade, another side that's really on board with team tariff. Then there's other ones saying, you know, we could really use a dollar devaluation. It would really help with our trade, you know, deficit issue. And the other side is saying, no, we want strong dollar policy. And so you have these kind of competing factions where the end result is messy and therefore maybe less impactful than it could be if it was more aligned. So that's the first part. The second part is, I think China only wants to go halfway. I've seen all the analysis I've seen, which is that they want to reduce their dollar requirements, meaning that they want to have their own currency system strengthened. They want to have their trade partners increasingly accept it as payment and contracting for almost anything. They want to be able to buy commodities and energy in their own currency. They want to keep their currency stable enough so that entities can then hold it, knowing that they can then trade it for a lot of Chinese goods and services in the future, or can exchange it for gold on their exchange. And so they have these kind of mechanisms to try to make their bonds more attractive. And I think all that is real. But I don't think that they want to recreate the Triffin dilemma issue that the U.S. has had over the past several decades. I think that that's at this point somewhat common knowledge. They say, well, you know, we don't want all, we don't want to extend that far. In addition, you know, China's obviously got a long history of human rights issues, but it tends to be pretty localized around their region. They've got certain areas that they say are theirs and they've got certain mandates they say they can and their people. But in terms of like wanting to project force over long distances, that's not really culturally in their wheelhouse. As I think it's a fundamentally different way of looking at things. So I think that my take is that they want to go halfway. They want to have their own ecosystem. They obviously want to be like the center of their ecosystem because they've got the economy that can do that, you know, potentially. But they don't want this kind of world empire, Trifon dilemma situation that the U.S. has kind of found itself in. So what I think a lot of people are trying to figure out is what happens next? What is the next monetary order? I mean, that seems relevant for investors. And we're in a world where the U.S. dollar or let's say treasuries, U.S. bonds is diminishing as the world reserve asset. while the dollar is still the world reserve currency from a medium of exchange perspective, treasuries and U.S. bonds, dollar-denominated assets are going down, in particular relative to gold. And Michael Howell has this framework of capital wars, basically. And he sort of positions China and the U.S. engaged in a capital war. Of course, there's other factions, other players, but those are the two big players right now. And there's very much a question of what China wants, let's say, or what the rest of the world wants as the store of value of reserve assets. So there's this idea maybe that China is helping with the gold price, buying lots of gold, of course, because they don't want treasuries, US treasuries to be the world reserve asset. They want gold to be the world reserve asset. They don't want the yuan to be the world reserve asset though, but they're stacking that. And then maybe they pull off a central bank digital current payment type of network as well. So they get the medium of exchange in their currency, but their store of value is gold. Now, the US, of course, has enjoyed, they're coming from an incumbency position where they've enjoyed dollars, treasury assets as the world reserve asset. But maybe that's not tenable any longer. And some of those factions within the Trump administration somewhat win. And so maybe they're swapping out the model too, where, I mean, the US does have a lot of gold. So I guess a gold standard would be okay. But then they also have a crypto stack too. Maybe Bitcoin becomes a reserve asset as part of gold as a store of value. And then of course, a lot of investment in the stablecoin stack, right? So you could imagine that being sort of the medium of exchange in a way for Besant and future Fed chair to sort of export dollars across the world. So it's almost like two stacks are emerging, China and gold versus, and maybe their central bank digital currency thing, payment network thing versus the US and gold a little bit, but then crypto assets and stable coins. Which do you think, or do you accept this kind of, we're trying to forecast what the world's going to look like in the 2030s and the 2040s. What do you think? Do you think one of these visions win? Do you even agree with that framing of things. I would say I mostly agree with that framing. I do think the more multipolar side wins, which is more of the China side, like the more that they get some degree of kind of dollar independence and neutral reserve assets like gold get elevated. But that's not even necessarily bad for the US. It's good back to my prior point around Trifid's dilemma and things like that. It depends how the US plays its cards while this is happening. So I've read a couple pieces on this. One was back in 2020. We talked about the rise of this kind of multipolar world happening. And then, of course, I featured it in Broken Money in 2023, this kind of shift toward a more multipolar world. And, you know, I can't say exactly what's going to happen, but there's kind of a couple options you can lay out. So one kind of point there is that there's really no currency in the world, including the dollar. Let's say no fiat currency in the world, including the dollar, that's big enough to serve the whole world anymore. So when this dollar system was established, I mean, the U.S. was over 40% of global GDP. We were the only thing standing after World War II. And we had all the gold, we had all the manufacturing, we had 40% of global GDP. We could run the ledger. Over decades, Triffin Dilemma has poisoned that well to some degree. In addition, China, India, Europe, they've kind of recovered from the whole period of colonialism that happened, the whole period of total war that happened. we've kind of gotten closer to historical GDP ratios where these big population centers are rising back to their kind of normal place as pretty big economic powers. And there's really just no currency block big enough to solve the whole world without Trif and Dilemma being a really big deal. So even China is not big enough. The U.S. isn't really big enough. And so that means you generally need one of two things. Either you need diversification. So maybe you have two really big hubs. You have the U.S. and China has two really big hubs. Maybe Europe, it's kind of its own third smaller hub. And so no ledger is trying to serve the whole world. The challenge there is that money has network effects. It tries to trend toward one, but liquidity begets more liquidity. And so, you know, it just puts pressure on that diversified model to some degree. And then the other option, the part that kind of alleviates that is neutral reserve assets. So you can have a diversifying of the ledgers, but then also these neutral things that bridge them. Gold being the incumbent neutral reserve assets, the obvious first choice is the one that central banks already hold. It's the one that almost everyone in the world can understand to some degree. It's got this multi-thousand year track record with the main caveat being that it's really slow and expensive to audit. So it's great as savings. It's not great as settlement. Like when Germany wanted to repatriate part of its gold, it took years and they finished ahead the schedule and it still took, it took years. It just took fewer years than they thought. And that's, I mean, you know, whereas like, you know, a Bitcoin transaction, you could, you could get six confirmations in an hour on average. And so, you know, that's, it's just like a different world. Now, Bitcoin is, I mean, it's a settlement rails and it's a store of value. It's got 17 years of track record now, but it's, you know, we're talking, depending on if you're in a bull or bear market at the moment, it's a one to $2 trillion asset. So it's still small on the network effect scope, even though it's got reasonable liquidity, it's still pretty small on the liquidity spectrum. And then there are people that just don't understand it. There are people that are saying, well, I mean, is it prone to risk XYZ, let's say quantum, for example, in a 5, 10, 15, 20 year time horizon, which sovereigns are going to think in. So I think that's a rising contender, but I think this is a very long game. And really not until, you know, Bitcoin has like an extra zero on it. would it like its market cap, would it be like a contender at the scales of dollars and Chinese currency and gold? And when we look at stable coins, that goes back to the prior issue of an administration or a country that wants multiple things. So the widespread use of the dollar is historically good for Washington and New York, because it lets us sanction anyone, all the stuff's kind of priced in our currency, it lets us kind of see everything. And we can generally makes our currency overvalued. So it lets us project power and military bases pretty well. But the downside, it's not great for Main Street. It's not great for industrial USA. It hurts our export competitiveness. And over decades, it can get so imbalanced that even Washington struggles to benefit from it. And as we previously talked about, we have seen this shift away from sovereigns, away from treasuries, especially as a relative part of their stack. Now, what stablecoins potentially do is say, well, even if sovereigns aren't buying, people still might want to buy the dollar. Like on the streets of Cairo, in black market, currency markets, it's the dollar that people want. It's not Chinese currency. It's not Brazil's currency. It's the network effects of the dollar for the most part. And that's true for many, many countries around the world. And they say, well, there's that bottom-up demand that technology can potentially let us meet. And there's truth to that. I've been bullish on stablecoins for many years. A couple challenges is that one, I think you do hit a ceiling at one point, which is that people only want so much non-interest-bearing dollars, for starters. Two, some countries will push back with regulations and crackdowns or at least add frictions to it. They can't stamp it out entirely, but you could push it toward the gray market or just kind of fracture the liquidity in some partial way. And then two, it actually still, the U.S. still has a tripping dilemma issue, which is if you do manage to get stable coins into more hands, it's hard to fix your trade deficit because you're trying to fight two battles. You're saying we want to pull back and focus on ourselves, but we also want to keep our currency dominance that's more in the Washington and New York camp. So I think that's part of why this takes so long is that not only are there big factions competing against each other, but then there are internal factions competing within themselves too. let's talk more about bitcoin because we do have the debasement narrative and full effect and you write that that has moved from kind of gold bugs who used to talk about it in you know the 2000s 2010s to now it's mainstream right now the big financial houses are acknowledging it talking about it and gold has been a massive beneficiary of this some people look at gold and then they compare bitcoin and they say this was bitcoin's moment to shine and it is underperforming and And I mean, obviously, we've had you on and talk about broken money. And they might say, well, Dalio was right. Lin Alden was right. Money is broken. But the solution doesn't seem to be Bitcoin. Are you disappointed with the way Bitcoin has performed relative to gold? And does that shake any of the thesis you've had around Bitcoin, the long-term thesis that you've had? So I've been in the camp that as I see this world get more multipolar, it's hard to know the timeframes that these things happen on, which is funny because some Bitcoin proponents really don't like gold. Some gold proponents really don't like Bitcoin. I've been in the camp that likes and is long both. So I've been. That is an option, by the way. Yeah. You can be bullish on more than one thing. Yeah. It's been an option. In fact, I've been long precious metals longer than Bitcoin because initially my thesis, okay, this is all happening. I'm going to go own gold. And as I learn more, I'm like, well, okay, I'm going to add Bitcoin to this thesis too because it's many ways better. So it has, you know, it's been out, you know, Bitcoin's outperformed during that time, even though it's underperformed more recently. And to answer the other question, I have been, you know, Bitcoin has underperformed my expectations in this particular cycle. I started out with conservative expectations, which was the, I thought the 2021 cycle, I thought we'd get to a trillion market cap. We did. Once we got there, I was like, yeah, I could see us hitting 100K this cycle. We did, and we only got to like 69K. So my kind of revised bullish take wasn't quite met. Even my first one was. Then we go into the bear market. Then I basically said, I'm not really going to try to make a price target this cycle, but when pushed, I would say anything under 150K is kind of disappointing. And we only got to 126. So I would say it is kind of a second, you know, kind of a lackluster cycle. I think treasury companies took some of the euphoria out of it. So some of the money that might otherwise have gone into, say, just cold storage Bitcoin goes into, you know, levered shares of these treasury companies that are trading at X times, you know, MNAV, which takes some of the price action out. So I think maybe without those, you could have gotten a little higher. But then they also they were also partially fueling the buying of it to some degree, especially MicroStrategy. So yeah, I think the overall, this was a somewhat disappointing cycle. It doesn't change my long-term thesis about it. That basically a decentralized ledger is still very valuable. It's the only way to do, that we know of to do permissionless payments and portable, secure savings. And then the second part of the thesis is, well, that these things have network effects. So you pick one that you view as decentralized, secure, and is likely to win the, basically the liquidity war, the network effect war. Obviously, we had disagreements around, say, Bitcoin versus Ethereum and others. I've been in the Bitcoin camp, which is, okay, so a decentralized ledger is valuable. That's the largest, most liquid one. It's kind of the one that's kind of geared towards simplicity and kind of maximal decentralization. And so the thesis is that would continue holding up. And also has bullish on stable coins along the way as well, even though they run on largely other rails. And I would say in this cycle, Bitcoin is still dominant cryptocurrency. So 17 years in, I think that part of the thesis continues to hold up well. People have their views on quantum and other factors that contribute over the next five, 10, 15 years. But so far, I'd say that part of thesis is on track. And the part that's going slower than expected is just the demand for any decentralized ledger, which is, I still think it's valuable, but I do think the world's kind of maybe a little slower to recognize its use. and a monetary asset, unlike if you're out of oil, you have a problem like that day. Whereas if you haven't recognized good money yet, a lot of people, they're just not harmed by not, it takes time. It's not like someone can have a Bitcoin shortage. So unless you're in exchange or something, like basically it's like, there are people that are blocked from making payments and they get around in other ways sometimes. Maybe they haven't found the best way yet. There are a lot of other people that say, well, debasement's happening, but my payments aren't shut off. So as long as I own AI stocks and gold and stuff like that, I'm fine. So I think these things can take quite a while to play out. So I think the long-term thesis is intact. But it is true that it's underperformed my expectations this cycle. And the softening blow is that I have been in the camp that you can own multiple things. Also, I mean, my history more starts with equity analysis. So I'm also long stocks to a very significant degree. So when you have stocks, gold, Bitcoin, you know, and some cash liquidity, you generally get through these things pretty well. I was going to say, Lynn, if you were disappointed with Bitcoin this cycle, you should try being an Ethereum bull because I think it's been pretty painful from that perspective. Maybe we could talk about that in just a minute. But somewhat I wonder if the adoption around Bitcoin, it's very clear for individuals why Bitcoin has a lot of benefits versus a store of value asset like gold. But then when you kind of scale up and you get to kind of central banks and nation state level, right, it's fairly easy for them to buy gold in abundance and to secure it and to even transport it. And it's a massive liquid market. And it's much larger than Bitcoin. It seems like we're sort of hitting a little bit of a ceiling. Maybe that's a temporary ceiling. But with respect to Bitcoin adoption at the nation state level, I mean, the nation states haven't yet started buying campaigns. I mean, the best they're doing, even with the Bitcoin strategic reserve in the US, is they're just holding, you know, crypto assets that they've seized. So maybe we have to get through that first. I want to ask you, though, about four-year cycles in crypto. Like, are you a believer in that? Because one explanation for all of this, the Occam's razor type explanation, I think, is that it's always played out in four-year cycles. It's named itself into existence. Yeah. And basically, it's now a self-fulfilling prophecy. Maybe there's things tied into liquidity, which also happens on like four global liquidity, which happens on four to six-year cycles. But anyway, it was just Bitcoin's time. It's, I mean, the fourth year and a four year, we have a, it's time for a bear market. So we're going to have a bear market. And that's why this is happening. Yeah, the way I look at it is that, so in the early stages, obviously the four-year cycle was impactful because the supply, the new supply was so large and meaningful that a half reduction in that new supply really affected market dynamics and could be a catalyst for the next bear market, I mean, bull market until that euphoria gets overdone. Now, as the new supply has gotten so small relative to other factors like the rate of OG selling or not selling, the rate of big new buyers coming in, these are all much bigger factors than the new supply that comes from Bitcoin in a halving. And so fundamentally, I don't think there's any reason to have the four-year cycle expectation in play. I do think that behavior tends to change with a lag from fundamentals. So even though the four-year cycle, I don't think it mattered fundamentally this cycle. And I think last cycle still probably wasn't the biggest factor, but was a little bit more of a factor than this time. I think it takes a couple cycles for the psychology to catch up. And so I do think that there was some self-fulfilling prophecy, which is that people say, well, if Bitcoin's only going to get this far in the cycle, and then I'm risking a two-year bear market, might as well get out now and see if I can buy back later. And if enough people think that, then you get that happen. And then of course, when it's down versus expectations, you have some people panic sell or get liquidated if they were leveraged. So then it fees on itself and you clean out pretty much anyone who owned it for the wrong reasons or that owned it on too much leverage. The one part that I have been careful of is, it was about this time last year, I would get on podcasts all the time and people say, well, what do you think about the sovereign Bitcoin reserve? And that's the part I would kind of push back on and say, any of my models are not going to include it because I'd rather be surprised at the upside than surprised at the downside. My default view was, okay, they're probably going to ring fence the Bitcoin they already have, which they've largely done, but that I wouldn't bet the farm that they're going to go out and buy a half million coins regardless of what some of the proposals were just because the status quo for governments is no change. Now, obviously, in a Trump administration, there's more variables. We just talked about how just rapid things can be. So if you ask me, would the tariff war have gotten this elevated a year ago? I probably would have said, it wouldn't be my base case, right? So that hit kind of the unusual levels, but the sovereign Bitcoin reserve didn't. So I think it is right to be cautious on expecting one big pool of money to come in and save a cycle. It nice if it happens see the upside if you long but I wouldn bet on that Instead I think you want to have conservative expectations and be more you know just like prudent with expectations I think that the we generally seen like so obviously there career risk right So if you're a central banker and you buy Bitcoin and the Bitcoin goes down, you probably lost your job. Same thing if you're a corporation. So generally speaking, the ones that do it are ones that operate like an individual or a small company. It's because some owner, like some CEO is like either the founder or a major, major shareholder, unlike most corporations where the ownership is pretty diffused. So someone like a sailor, someone like a Bukele, that they have kind of a higher than normal level of control of the entity that they're overseeing and that they can make maybe not fully unilateral decision, but closer to unilateral decision to do something the way that a small business or an individual might operate, where it only takes you or you and your spouse to make a decision. And I think that that's kind of the cycle we're in. Now, no one followed strategy really in that first cycle they did it. Obviously, we've had more imitators this cycle, for better or worse. So I think these things take time to catch on. So every cycle, I think you probably would get more of them. But I wouldn't bet the farm on like any one giant one saving a whole cycle. So I think it pays to be kind of prudent with expectations. On Bitcoin, are you worried about strategy? Are you worried about digital asset treasury companies and them going perhaps belly up during this bear market? and then also how about quantum? Is that a worry for Bitcoin for you? So I would separate strategy from most other treasury companies and I probably would put MetaPlanet in the more stable one too, which is that there are several of them that I'm worried about. I mean, basically I think they got way overdone, didn't structure themselves super well, expected the bull market to go on longer. Strategy, obviously the share price taken a massive hit. If you look at their actual debt ratios, they're still pretty reasonable even after the sell-off of their collateral. And I think one of the best decisions they made was they made that dollar reserve, perhaps somewhat ironically, but they have this dollar reserve that can cover currently approximately two and a half years of their preferred dividend payments. And then their convertibles are a pretty small percentage of their asset base and are not due for a number of years either. So they've kind of structured themselves for a pretty big drawdown. And I mean, I've gone on two of their earnings calls as an analyst. The one was six months ago and I asked about stress testing like downside scenarios. You're right at the euphoria phase. And I was like, well, if everyone's gonna ask Bullis questions, I'm gonna ask the Bears questions. How are you thinking about stress testing this? So they, and they basically said they were trying to gear toward 80 to 90% drawdowns and still be, you know, solid. So we'll test that. But, you know, so far it's gone down pretty far and they're still functioning. And I don't really see anything breaking them in the next few years now, especially now that they have this kind of dollar reserve. Obviously, if you were to have like a five-year plus bear market, you know, if you fast forward to like early 2030s and we're sitting at like $40,000 per Bitcoin, they're probably in massive trouble. But I don't see them any in sort of near-term trouble. But then I would separate that from like weaker ones, weaker ones that have just not structured themselves, that don't have the liquidity network effects of microstrategy, that maybe haven't termed themselves out with like long-duration convertibles or preferreds, or they got over their skis in other ways. As far as quantum goes, so my view is that, you know, fundamentally, I'm not worried about it in any sort of investable time horizon, call it five, 10 years. Bitcoin being rather decentralized tends to upgrade slowly and take a lot of consensus. And of course, it's a complicated problem because quantum resilient signatures take up a lot more space. So when you have a pretty limited block space, I mean, this is a trade-off. And then there's debates that are way higher than my technical pay grade, What is the best signature scheme in quantum to make it, what is the most efficient way to do it or the best blend of security and efficiency? And that's still being determined and litigated over time. Now, I'm personally bullish on both. I think it's going to take quite a while for quantum computers to attack Bitcoin. And I do think that Bitcoin has plenty of kind of there are people in place already trying to figure this out. And I do think that as it becomes, if it becomes more urgent, I think they would figure it out. That being said, I've got a lot of contacts in institutional firms. and over the past six to 12 months, the quantum risk has hit them in a way that it wasn't, you know, maybe a year ago or more. So it does, I would say it has affected their buying or selling decisions, at least around the margins. And one way of thinking about that is if they say there's a 10% chance that, you know, something happens in the next 10 years, and they'll say, I don't even know how to handicap that. I don't know if it's 5%, I don't know if it's 2%, I don't know if it's 15%. they say there's this kind of variable there that is just outside of our technical pay grade to know. And so when you build an expected value model, like a lot of firms will say, here's our bull case, base case, and bear case. They can make their bull case and base case the same as they were, all for the macro reasons and all for these other things. But then in their bear case, they say, well, let's say an X percent chance we get zeroed out or X percent chance to some like messy chain split where one's trying to be quantum resilient and the other one's not, and then this all hits and we lose 80% of our value, they have to fatten that left tail bear case, which then brings down their average price target or makes them say, well, we might've put in a 5% position, but now we're gonna put in a 3% position. Or maybe just it doesn't get past committee and you would have had five out of nine votes to get it in there. And now you've only got three or four votes, so it doesn't go in. So I do think that even though I think that the technical threat is able to be mitigated, I do think that it actually has impacted price this cycle. Well, Lynn, I think it was 2022 when we had you on actually for a debate with Justin Drake. And the episode, I think it's called the proof of work versus proof of stake debate. Great episode. Yeah, it was a fantastic episode. The topic was two experts debate, which is better, proof of work or proof of stake for creating a global crypto money system. So Justin Drake, of course, on the Ethereum side is a big proponent of Ether, the asset as a store of value, as a money. And so has historically, you know, David and I have been with Bankless. And I think you've been pushing against that. I think your reasons are Bitcoin has the network effect. It was kind of the original chain. Also, you really tend to like proof of work and it's tie into kind of energy. Now, I want to fast forward through another cycle to 2026, where we are right now. And I want to congratulate you so far on being more correct. At least the market has dictated that you've been more correct on that side. I will point out that it's not over yet. This will play out over many years and many decades. And I'm sure there will be things that come into play for both of those networks in the future. So I personally haven't given up, but one has to look at that and it has to look at the Bitcoin to ETH ratio and basically say, okay, like Bitcoin won this cycle as a store of value asset for certain versus Ether and the Ethereum position, I would just catch up to Bitcoin right away and then flip it as a store of value asset that has not played out so far. So first of all, congratulations. And you deserve a victory lap. I know you're too humble to take one. But I want to ask the question, why do you think the Ether as a store of value asset has not played out as well? Or any other crypto asset for that matter, not just Ethereum versus Bitcoin? Yeah, I think, I mean, I put in a couple major arguments. One is that network effects really matter. And that once you have a liquidity network effect, once you have a security network effect, brand network effect even to some degree, it needs a, you can't just be marginally better. You have to be way better to dethrone it. And then the second one is that in protocol design, generally simplicity wins, which is, you know, if you're going to build the whole internet, you want to build it on a pretty simple substrate and then complexity, you want to push to the edges. Same thing with like simple mail transfer protocol and ethernet, many other things like that. So my general view is that this is the protocol of money and that I've been in that more layered design camp, which is I want the foundation or I expect that the winning foundation will be this kind of simple dumb one that is kind of maximizing for pretty tight bandwidth requirements, pretty tight storage requirements, minimal governance or governance-like things to keep it going, to keep the wheels on the cart. also I do like proof of work more than proof of stake, at least for the most robust, you know, not to say that you can't use proof of stake for like a stable coin chain or some sort of like function like that. But then for like the money for enemies type of one, I've been more in the proof of work camp and people can, I guess, go back and watch that debate. You see their take on it or watch any of the other people that debate on it. But I think those are the factors that really combined to keep it going. But like you said, it's not just been a theorem. It's really, it's the thesis that outside of just the usefulness of stablecoins, that basically all this kind of broader altcoin stuff, I've been kind of structurally bearish on it, which is that these cycles happen, but that they're unlikely to accrue kind of multi-trillion dollar market caps. And I continue to hold that thesis. Now, obviously, even the Bitcoin one's been tested in this cycle, which we just mentioned, we had kind of two, at least somewhat disappointing cycles, at least we got higher highs, but still just kind of a little bit slower to catch on than many of the bulls would think. And I tend to be in the Bitcoin camp, I tend to be more of a bearish bull, which is that people have very high price targets. And I'm like, okay, let's take out the sovereign reserve. Let's do this. Let's hit 150K before we talk about, you know, 250K. And so even the Bitcoin side is like a little bit just slow to catch on. But I continue to hold that the broader space outside of stable coins, outside of some degree of tokenization and things like that, I tend to be pretty structurally bearish across the board for the most part. 2026 is certainly shaping up to be an interesting year in financial markets. And I think a lot of investors in crypto probably are following in my footsteps, which is there's kind of a lot of stuff to be invested in to have exposure in outside of crypto. So maybe I should ask some of those questions. I have some of my theses. I'm really interested in companies that are producing some pretty strong monopolies on some pretty core components of what makes the world. Like Google is trying to, you know, commoditize intelligence. Same thing with Anthropic or OpenAI, but Google's really doing it and they have a lot of excess resources in order to make that monopoly happen. SpaceX trying to do a similar thing with energy. AI data centers in space sounds futuristic, but Elon Musk is the man behind that. Tesla trying to produce a monopoly on labor with robots. It seems like the future is here in 2026 has a lot of these events that are going to be some of the early ways to get exposure to that, especially with the open AI IPO, the SpaceX IPO, some very big things are happening in 2026. With all of the current events and the modern technologies that are unfolding, what are you looking forward to in 2026 to have exposure to some of these very promising, very nascent technologies? Good question. I mean, I shared your opinion about Google Alphabet. I was long that one for quite a bit. There was a time when people thought AI would disrupt them. My view was it could disrupt part of them, but then they've also got these other things. And I also thought that disruption would go slower than people think because, you know, the things that it, like, AI disrupts a lot of Google searches about non-transactional things. Like if you're looking up, you know, what is Napoleon Bonaparte's wife's name? You can ask AI instead of Google, and Google doesn't care because they don't make money from that search. Whereas if you look up plumber near me, that's the search that Google wants to make money from. So my view is, okay, it chips away at their irrelevant searches first and it gives them plenty of time while they're literally building their own AI stuff. And so they've done that. Now, as they've gotten pretty expensive and then as they've increasingly had to invest in CapEx, I've been more concerned. I've kind of de-vested part of my position to some degree. I've kind of stopped leaning into that the way that I was before. It's not that I'm bearish on it, but I'm more like neutral on it compared to previously having that kind of bullish view. I think, so throughout the 2010s, a lot of the value occurred in these big network effects. So social medias and, you know, search engines and things like that. And I think one of the interesting things going forward is that a lot of the value will accrue in the hands of people using it. So there are investments that people can make. But I do think that the value capture at the corporate level is going to be thinner. than the whole capital light social media era because they had to put very little capital in. They got these network effects that were very hard to dislodge and they could take all that free cash flow and just plow it into buybacks or dividends. And it was just this flywheel that was just monstrous. And whereas now they are in so much competition with each other that they have to plow back into CapEx. And when they kind of do all that, the winner ends up being the end user. So the loser is someone who, all this productivity growth is happening and they're not using it and they're caught off sides. Like they're getting disrupted by it without benefiting from it. The winner are those that are harnessing it, being ahead of the curve, you know, making use of it, as well as obviously those that are at the bleeding edge of getting it out there, but they're in heavy competition. And in some ways, I like some dumb investments. Like I have been in AI, I have been in Bitcoin, I have been in these more technological things, But I, you know, I've also been in like natural gas pipelines, you know, to say, well, I want this other thing that just grows like clockwork, maybe at a slower pace. I don't have to think about and just hold it for five, 10 years. I've been enjoying that kind of trade. My view throughout the 20, all of 2025, I was bullish on like Latin American banks. And it's like who had on their bingo card that during a trade war, Latin American banks would do well, but they had this pretty explosive year. so maybe they're a little overdone but I still think there are like emerging market investments out there where they have like regulated, you know, monopolies or they're doing real world stuff like they're, you know, producing something of it's hard to interrupt with AI. So I partially think on the other side which is okay, I'm long all this stuff but because I think that the value capture is going to be thinner and it's still with more risk that in some ways I'm pretty selective with my investments. You know, I was in AMD and then it soared and I was like out of AMD. I was, you know, I'm still in Taiwan semi, but it's just, it's got, you know, it's run pretty well. So I like to buy these things on corrections, but then I also like to buy just real world stuff. So I've been more bullish on financials than the average person. It's funny, I'm on bankless right now. So it's- You're betting on the banks. Kind of shilling a little bit. And we're like, you know, on a value type basis. I mean, I'm in the Bitcoin to the Ablecoin camp and I'm still, you know, long some financials. and the energy, I think, obviously, it's a necessary component of compute. And so I'm bullish on things that are real-world assets, but that have the balance sheet to withstand volatility. So I didn't expect that oil would get quite as cheap as it did, but my energy stocks held up quite well because they were geared toward that possibility. And that's why I picked them. So long kind of real-world assets that also have the balance sheet and the strength to kind of support it. Another example I've been long, like Warren Buffett bought all these Japanese trading companies. And they have a, trading company is a different term there, but basically they're these kind of like conglomerates that are involved in a lot of real world assets. And I analyzed that back in 2020 and went long as well because the thesis was so strong. And these things have just been explosive. So like Japan's having all their, you know, long-term currency issues. And it's like, one of the best ways to play it is these corporations are, they borrow in yen. So they're short the yen and then their own real assets. They generate free cash flows and they're cheap. So you just let them run for like five, 10 years. And again, like the trades, I think partially played out already. So I'm not really putting new capital there, but I'm not selling. And I'm always kind of on the lookout for like, what is the next thing like that? So in a world of AI, when people think, okay, what AI stack wins? I think it's a very invalid question, but it's also what is still here in 10 years that is like short currency and long all the stuff we're still going to want in 10 years. And that is like trading at 12 times earnings because no one is thinking about it right now. So that's like a lot of where my attention is outside of some of these more tech spaces. So Lynn, can you translate that into like a Lynn Alden 2026 portfolio in terms of, you know, percentages? So you have like Bitcoin, you might have some, you know, gold, you know, precious metals, maybe you have commodities. I think a lot of listeners are trying to figure out what to do with maybe their US equities portfolio? Like what's that going to look like in 2026? Is there an AI bubble or not? Anyway, how do you think about your own portfolio when it comes to kind of categories and percentages right now in 2026? Yeah, obviously you would adjust that based on age and it can give individualized advice. I have one portfolio that's public in my newsletter. I generally have that three pillar approach. So one pillar is high quality, mostly profitable equities. Another pillar has been kind of the- Is that U.S. equities then? It's a blend. It's U.S. and foreign. I have been over the past couple of years a little bit leaning more foreign. Okay. Just because of the partial evaluation difference and partially because of the capital flows that can weaken the dollar and kind of start a flywheel in the other direction. So like Latin American banks. And you're picking stocks there in sectors or are you doing indices? So I pick fewer stocks internationally. I pick some. I play it a little bit more with ETFs than I do in the US. So for me, it's a blend of ETFs and stocks, or at least certain sectors. And I'll pick kind of the leading stocks in that sectors without trying to get too complicated, just because it's not my market. India had a rougher year in 2025 relative to other emerging markets. I could be wrong, but my base case is that India probably does better than the average emerging market in 2026, or let's say the combined 2026, 2027 two-year period to give myself a little bit more room. So I do think that there are pretty good investment opportunities in India. That's the first pillar. Yeah, that's one. It's just kind of broad equities, including having an international focus on things that you think will be pretty resilient to disruption and that are maybe just under-owned. So all they have to do is not die and then they have a good return because they're kind of priced for half death and then they just don't die and then you get a good return. Another long-term pillar I've had is just hard assets. So that's a combination of hard money. So for me, it's been gold, silver, platinum, and Bitcoin, and then various energy producers and occasionally some other commodity producers. I still like that camp. With the precious metal surge, I'm a little bit less enthused on that side. In almost any other interview, I would have loved that side. Now I'm a little less enthused. With the Bitcoin sell-off, I like that quite a bit. And then also I do like the energy infrastructure quite a bit. So like boring things like natural gas pipelines, you know, there's things that are just trading pretty cheaply and that often just pay cash flows, things like that, kind of the boring value type investments. And then I've been structurally bearish on currency and bonds, but I do like having some dry powder. So the third pillar is just cash equivalents. And I'm less bearish on long duration bonds than I used to be. I still don't think they're a good investment, but I think the five-year carnage we've had in that space, it's been so devastating. I used to be a super bear on bonds and now I'm just kind of a neutral, lukewarm bear on bonds. And I do think that at times they can be, if you're going to buy Costco at 50 times earnings or a US Treasury bond, I might pick the US Treasury bond. I don't know. There's certain valuations of equities where I think that even at the fundamentals as equity goes pretty well, it's just valued to do even better. So I almost rather want to own the treasure bond in some cases. So for me, it's diversified equities, a little bit of an international and value focus, Bitcoin. And then whenever some of these more AI type of investments, the hardware makers and things like that, whenever they have this kind of sell off, people say the whole thing was a bubble. That's when I generally like to get back in. So I try to fade the spikes up and I try to lean into the spikes down. I haven't played that as well as I wish I did and kind of make the bets as big as I wish I did. But that's kind of my approach so far. I have a question about the cash. You always want dry powder, right? There's opportunities. Mr. Market comes knocking at the door and one day he offers you $61,000 Bitcoin and you want to have the cash to be able to take that deal. My problem, Lynn, and I think probably a lot of bankless listeners, is that I just like taking deals and then I run out of cash and I'm just fully exposed most of the time. Which is like, you know, as somebody who has a podcast that's living in a side of a very financial ecosystem, I'm happy to be fully exposed. But like also at the time of sometimes, I just don't have the dry powder to have to take access of deals. So I'm kind of wondering, how do you maintain a strategy there? So when Mr. Market comes knocking and you deploy your cash and your cash position goes down, what's your strategy to keep it topped back up? Like where do you, from what pocket do you decide to pull from to keep your cash actually available at all times? Yeah, I mean, it depends on someone's liquidity. I tend to try to keep that more 5% to 10% level available so that if you have like a major sell-off or a major opportunity come your way that you can pull on it. You know, obviously, if you have a large stock portfolio, you can take out a small margin loan, like a very low loan-to-value ratio. Yeah, but then you take out again and again. And then all of a sudden, your small margin loan turns into a big margin loan, and then you're in trouble. Yeah, I agree. Well, that's, yeah, I just, I tend to be always kind of cautiously bullish, which is I tend to have probably a little more liquidity than I need, less leverage than I could have, just because my personality is more geared that way. And then it just depends on someone's lifestyle. Like I have many people dependent on me in various ways that I have to be a financial rock for, a liquid financial rock. So that kind of keeps me, I think, a little bit, I have to be pretty stable in that regard. And so if we do get a curve ball like 2020 or some major opportunity, I tend to have a little bit of spare liquidity that I can pull out of things. I'll just add for David, sometimes you got to sell things on the way up, man. Sometimes you got to sell a little, okay? That's where the dry powder comes from. Lynn Alden, as always, this has been absolutely fantastic. I feel like I know so much more about the current environment than when I started. I bet a lot of listeners are the same. Thank you so much for joining us today. It's been a pleasure. Thanks for having me. Always happy to come back. Guys, we'll have resources to everything where you can tune into Lynn Alden, all of her writings, her Twitter, everything else in the show notes. Got to let you know, none of this has been financial advice. Crypto is risky. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the Bankless Journey. Thanks a lot. Thank you.