Latest / The Paul Barron Crypto Show / Fed Rate Hike WARNING?🚨AI Mania vs Crypto?🚀

Transcript

Fed Rate Hike WARNING?🚨AI Mania vs Crypto?🚀 · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Rate hikes are rising, and today we'll break it down
• 0:02
  Speaker 1: for you. This could be a possibility where the Fed
• 0:05
  Speaker 1: restructures everything.
• 0:07
  Speaker 2: You want to understand this. Let's get into it today.
• 0:09
  Speaker 1: I do want to thank our sponsor, and that is Tangent,
• 0:11
  Speaker 1: where you guys can get into self-custody.
• 0:14
  Speaker 2: Jump over to the Tangent website.
• 0:15
  Speaker 1: You can get currently 50% off your second wallet. Actually,
• 0:20
  Speaker 1: it's a good idea to start to do that. You
• 0:23
  Speaker 1: can put these wallets in different places security-wise. This is
• 0:27
  Speaker 1: the easiest self-custody wallet there is out there. So make
• 0:30
  Speaker 1: sure and use our link. It's going to give you,
• 0:32
  Speaker 1: of course, a little bit of an additional discount as well.
• 0:36
  Speaker 1: So use that and begin your journey right here. C-List
• 0:39
  Speaker 1: by design. And this thing is amazing in terms of security.
• 0:43
  Speaker 2: So check it out.
• 0:44
  Speaker 1: Let's go over to a couple of points I want
• 0:46
  Speaker 1: to lead off with here. And that is PC inflation
• 0:48
  Speaker 1: for July was 3.7, slightly worse than the expected, and
• 0:53
  Speaker 1: it's still close to a three-year high.
• 0:54
  Speaker 2: So that's one issue.
• 0:55
  Speaker 1: The bottom line is that the war in Iran and
• 0:59
  Speaker 1: its impact is still having a major effect. And I
• 1:02
  Speaker 1: think inflation is not going to get any better until
• 1:05
  Speaker 1: we start to see either some pullback from that or
• 1:08
  Speaker 1: something materially different in terms of economic structure. That's where
• 1:13
  Speaker 1: Besant comes in, and I'll explain that in a second.
• 1:16
  Speaker 1: You're also having the PCE supporting the Fed's hold for now.
• 1:20
  Speaker 1: If you look at that, though, the annual core inflation
• 1:23
  Speaker 1: is at 3.3 and economic remaining.
• 1:25
  Speaker 2: Pretty much strong.
• 1:27
  Speaker 1: The firm still believes that a higher rate may eventually
• 1:30
  Speaker 1: be necessary. This coming in, I think, from an angle
• 1:33
  Speaker 1: of some of the analysts that are looking at what
• 1:36
  Speaker 1: the Fed should do next. Now, remember, Kevin Warsh is
• 1:38
  Speaker 1: going to be speaking later this week, and he'll be
• 1:42
  Speaker 1: talking about this. And I think there may be some
• 1:45
  Speaker 1: indicators that come in from what we're seeing here in
• 1:48
  Speaker 1: the rate hike odds, because if you look at the
• 1:51
  Speaker 1: current state, The Fed's September rate hike odds now are
• 1:55
  Speaker 1: above 40%. And then just a week ago, remember, that
• 1:58
  Speaker 1: was at 30%.
• 1:59
  Speaker 2: So it's up significantly.
• 2:00
  Speaker 1: And if you look at Polymarket, it's up a lot
• 2:03
  Speaker 1: because now it's setting at a 56% chance for a
• 2:07
  Speaker 1: rate hike in 2026. Primarily, that's targeting the December meeting.
• 2:11
  Speaker 1: But still, the point is, is that rate hike odds
• 2:14
  Speaker 1: are definitely in potentially the narrative here going forward. Now,
• 2:19
  Speaker 1: some of this goes into... some other issues that are
• 2:22
  Speaker 1: really centered around GDP. GDP grew 1.5 in Q2, in
• 2:26
  Speaker 1: line with expectations, but below last year's pace. And if
• 2:30
  Speaker 1: you look at one of the statements that Bull Theory
• 2:32
  Speaker 1: was getting at, the Fed is not going to be
• 2:34
  Speaker 1: able to cut and staying still risk falling further behind.
• 2:39
  Speaker 1: So if they pause, this could just elongate this situation.
• 2:44
  Speaker 1: If they cut, it really is kind of antithesis of
• 2:48
  Speaker 1: what Besant is trying to do with the Treasury.
• 2:51
  Speaker 2: So they're kind of in a rock and a hard spot.
• 2:53
  Speaker 1: And I think the issue right now is that either
• 2:57
  Speaker 1: inflation is going to have to have a major inflection
• 3:00
  Speaker 1: point or we're going to have to have a major
• 3:02
  Speaker 1: economic macro headwind. And most likely that would come from
• 3:06
  Speaker 1: something out of the Iranian conflict.
• 3:08
  Speaker 2: So hopefully that will be the case.
• 3:10
  Speaker 1: Here's Jeff Curry because he's saying, all right, with all
• 3:12
  Speaker 1: this happening, We're looking at debasement as kind of the
• 3:16
  Speaker 1: cornerstone and Bitcoin as gold is telling you everything.
• 3:19
  Speaker 2: Take a look.
• 3:20
  Speaker 3: Wouldn't a couple of rate hikes sort of be built
• 3:24
  Speaker 3: into at least the way you view the world right now, Jeff?
• 3:28
  Speaker 4: Well, I mean, part of the problem about it, as
• 3:30
  Speaker 4: we saw with Besson last week, they can't afford the
• 3:33
  Speaker 4: higher rates, you know, because of the, you know, take
• 3:36
  Speaker 4: out the interest payments of somewhere around $ 1. 1 trillion. And
• 3:40
  Speaker 4: if they had to roll all that debt forward, you
• 3:42
  Speaker 4: could be sitting there as high as $ 1. 5 trillion. To reprice,
• 3:45
  Speaker 4: you take all the debt right now, it's priced around 3.2%.
• 3:47
  Speaker 4: You roll it all forward, you're at like 4.5%. Your
• 3:49
  Speaker 4: inflation outlook sounds.
• 3:54
  Speaker 5: Not great. No.
• 3:58
  Speaker 4: By the way, gold is in agreement with me. We've
• 4:00
  Speaker 4: come off the lows of $ 4, 000. We're back to $ 4, 700.
• 4:03
  Speaker 4: We're going to retest the highs of $ 5, 500. It could
• 4:06
  Speaker 4: happen before the end of September. And I think that
• 4:10
  Speaker 4: the precious metals markets, Bitcoin, they're all telling you, this
• 4:14
  Speaker 4: is pretty serious right now.
• 4:16
  Speaker 2: All right.
• 4:16
  Speaker 1: So you can kind of see metals, Bitcoin, dollar debasement
• 4:20
  Speaker 1: is really what boils down to this. And even Balsunis
• 4:23
  Speaker 1: kind of touched on this. Gold and Bitcoin ETFs have
• 4:26
  Speaker 1: both combined for $ 7 billion in inflows.
• 4:29
  Speaker 2: That's one week old, guys.
• 4:31
  Speaker 1: That's by far a record for a five-day period as
• 4:34
  Speaker 1: the debasement trade is now stealing the spotlight, I think,
• 4:38
  Speaker 1: from AI. And that might be the biggest narrative going
• 4:42
  Speaker 1: forward is we could be in a rotational pattern right
• 4:45
  Speaker 1: now coming out of the AI trade. Now, granted, there
• 4:48
  Speaker 1: will be some stuff here from NVIDIA that we'll talk about,
• 4:50
  Speaker 1: but I think the point you've got to look at
• 4:52
  Speaker 1: right now Metals now hitting its most overbought level since January,
• 4:57
  Speaker 1: and that was in its all-time high phase. So are
• 4:59
  Speaker 1: we at that point right now where it's kind of
• 5:01
  Speaker 1: a carry-on trade going up to maybe a $ 5, 500 gold?
• 5:06
  Speaker 1: And does Bitcoin continue to push against it? Remember, the
• 5:09
  Speaker 1: last time gold was moving, Bitcoin was not. So it's
• 5:12
  Speaker 1: going to be interesting to see how those two assets
• 5:14
  Speaker 1: play out. If you look at the chart, let me
• 5:17
  Speaker 1: kind of just roll on this. You've got this is
• 5:19
  Speaker 1: the weekly right now. So entering a second high week.
• 5:23
  Speaker 1: for Bitcoin holding at 78.1 at time of recording. And
• 5:27
  Speaker 1: if you go down and look at gold, kind of
• 5:29
  Speaker 1: a similar move that we have been seeing over the
• 5:32
  Speaker 1: past few weeks. Gold led this out, though, when you
• 5:36
  Speaker 1: look really of it coming off its floor at around 4,000.
• 5:39
  Speaker 1: So to Curry's point, the debasement trade is fully intact.
• 5:43
  Speaker 1: And I think the key here is going to be
• 5:45
  Speaker 1: how does this rotate out of assets that are currently
• 5:48
  Speaker 1: in the market, maybe centered around AI.
• 5:52
  Speaker 2: Besant.
• 5:53
  Speaker 1: That's how all of this is connected. Besson is now
• 5:56
  Speaker 1: resorting to seemingly desperate measures to bring down long-term rates.
• 6:00
  Speaker 2: And remember that what he's.
• 6:03
  Speaker 1: Trying to do has a lot of similarities to what
• 6:06
  Speaker 1: Janet Yellen did do. And this was, of course, thrashed
• 6:11
  Speaker 1: against the situation back then. I think now people are
• 6:15
  Speaker 1: looking at it in a different light, but it still
• 6:17
  Speaker 1: has the same result. And the push now that we're
• 6:20
  Speaker 1: going to be dealing with is What is his current
• 6:24
  Speaker 1: credibility opportunity here when you look at the potential between
• 6:28
  Speaker 1: rotating capital out of AI, what our current macro headwinds are,
• 6:33
  Speaker 1: and how all this comes into Fed rate cuts?
• 6:36
  Speaker 2: Take a look at this.
• 6:37
  Speaker 5: Best to anyone who's in finance looks like a fool.
• 6:40
  Speaker 2: Literally, 18 months ago, we're.
• 6:42
  Speaker 5: Telling us how Janet Yellen is the biggest idiot around,
• 6:46
  Speaker 5: and you're doing exactly the same things that she did,
• 6:49
  Speaker 5: if not a bigger size. So, His professional credibility has
• 6:53
  Speaker 5: been destroyed by the fact that his boss wants to
• 6:56
  Speaker 5: print a bunch of money. And if he wants to
• 6:58
  Speaker 5: stay the treasury secretary, he needs to find a way
• 7:00
  Speaker 5: to pay for it.
• 7:01
  Speaker 3: Remember Warren Buffett used to say, like, he bets on
• 7:03
  Speaker 3: things that don't change. That was like his whole thing.
• 7:06
  Speaker 3: It feels like we're kind of almost headed back there,
• 7:08
  Speaker 3: but now from a asset allocation that is really, really
• 7:12
  Speaker 3: focused on just like let the money printer run and
• 7:15
  Speaker 3: I'll hold these things. They're not going to get disrupted.
• 7:17
  Speaker 3: And that's how I'm going to make my money.
• 7:18
  Speaker 5: I think that Bitcoin got the stick because AI took
• 7:21
  Speaker 5: all the credit.
• 7:22
  Speaker 2: So I think that as more and more liquidity is.
• 7:26
  Speaker 5: Pushed in the eye to basically prove that the politicians
• 7:28
  Speaker 5: didn't make a massive fuck up by supporting this as
• 7:31
  Speaker 5: government policy, that money is going to find its way
• 7:34
  Speaker 5: into crypto. And so Bitcoin is going to do very,
• 7:36
  Speaker 5: very well.
• 7:36
  Speaker 2: All right.
• 7:38
  Speaker 1: So money finding its way into crypto, definitely the rotation angle. Now,
• 7:42
  Speaker 1: one thing, though, that Tom Lee talks about, and he
• 7:45
  Speaker 1: kind of goes the opposite direction here in terms of
• 7:48
  Speaker 1: the position for was Besant right?
• 7:51
  Speaker 2: To do this, or at least to start this. Listen
• 7:53
  Speaker 2: to what he had to say.
• 7:55
  Speaker 6: I actually think the Treasury buyback was a wise thing
• 7:59
  Speaker 6: to do. I don't think it's any different than a
• 8:02
  Speaker 6: company saying, hey, look, there's some things that are getting
• 8:04
  Speaker 6: investors nervous about my stock, but it's things that are
• 8:08
  Speaker 6: not related to my company. And I think that's what
• 8:10
  Speaker 6: the Treasury signal was. And so I don't think it's manipulation.
• 8:15
  Speaker 6: It's really an indication of value. And I think just
• 8:17
  Speaker 6: trying to put some signal.
• 8:19
  Speaker 3: Out from the noise.
• 8:20
  Speaker 2: What if it doesn't work?
• 8:22
  Speaker 6: Well, if it doesn't work, they have more dollars to
• 8:24
  Speaker 6: put to work. So I do think, you know, the
• 8:28
  Speaker 6: Treasury Department does have a lot of resources available. So
• 8:31
  Speaker 6: I assume it's going to work.
• 8:34
  Speaker 3: All right.
• 8:34
  Speaker 1: So to his point, all of this kind of leads
• 8:37
  Speaker 1: to one position, and that, of course, means money printing.
• 8:39
  Speaker 1: And whether you want to go through the Fed or
• 8:42
  Speaker 1: you want to go through the Treasury, the issue is
• 8:45
  Speaker 1: that we are talking about a major shift in where
• 8:48
  Speaker 1: the rotation of capital is going to start to move.
• 8:51
  Speaker 1: This is kind of an interesting point, too. And I
• 8:54
  Speaker 1: don't know that it's a key trend to watch, but
• 8:56
  Speaker 1: BlockRock did something pretty crazy. What they did was they
• 9:00
  Speaker 1: cut in-kind conversion for a minimum of iShares Bitcoin Trust.
• 9:05
  Speaker 1: This is iBid from 25 mil. In other words, if
• 9:07
  Speaker 1: you had 25 million in Bitcoin, you could convert that
• 9:10
  Speaker 1: to iBid for pretty much no capital gains tax. They've
• 9:13
  Speaker 1: knocked that down to $ 1 million. So fundamentally, it's pretty
• 9:17
  Speaker 1: much all the high net worth Bitcoin holders could easily
• 9:19
  Speaker 1: convert Rotate capital into iBet. This continues to put it in.
• 9:24
  Speaker 1: And of course, it avoids taxable realization events. So that's
• 9:27
  Speaker 1: a major. Imagine what this will do for security, physical risk,
• 9:32
  Speaker 1: all the issues that have kind of been plaguing Bitcoin
• 9:34
  Speaker 1: here recently.
• 9:36
  Speaker 2: This could start to move.
• 9:37
  Speaker 1: What happens if this were considered around Ethereum? How would
• 9:42
  Speaker 1: that play out? These are the kind of things that
• 9:44
  Speaker 1: Wall Street essentially is doing right now.
• 9:47
  Speaker 2: Preparation for, we'll take all your Bitcoins.
• 9:49
  Speaker 1: Maybe they'll take all your Ethereum in the future and
• 9:52
  Speaker 1: do it in a way in which it basically de-risks
• 9:55
  Speaker 1: you from a taxable event as well as maybe other
• 9:58
  Speaker 1: risks that could be in the market.
• 9:59
  Speaker 2: So big deals out there for sure.
• 10:02
  Speaker 1: SEC, of course, has submitted their proposal to overhaul crypto
• 10:06
  Speaker 1: custody rules for registered investment advisors. So RIAs now have
• 10:12
  Speaker 1: a new scenario that this plays into.
• 10:15
  Speaker 2: Now, remember, BlackRock just made their move.
• 10:17
  Speaker 1: You've got RIAs now in a position where They are
• 10:20
  Speaker 1: going to be basically safeguarding client assets. This means they're
• 10:25
  Speaker 1: going to be looking for Wall Street solutions. And I
• 10:27
  Speaker 1: think the point that we're going to get at is
• 10:29
  Speaker 1: this starts to lock up traditional finance and it starts
• 10:33
  Speaker 1: to rotate capital into crypto. And I think that's the
• 10:36
  Speaker 1: point that even Arthur Hayes was kind of getting to
• 10:38
  Speaker 1: eventually at all points down there. The other thing that
• 10:41
  Speaker 1: kind of could point to this is what you see
• 10:44
  Speaker 1: from some of the analysts.
• 10:45
  Speaker 2: And here's Bernstein. He's going out there.
• 10:48
  Speaker 1: They are going out there saying we could see Bitcoin
• 10:51
  Speaker 1: recover to a new record of 150K by mid-2027. Bitcoin, guys,
• 10:58
  Speaker 1: right now is at 70 to 80K.
• 11:01
  Speaker 2: All right.
• 11:01
  Speaker 1: You're talking about doubling inside of a year and then
• 11:05
  Speaker 1: potentially reaching 300K by 2029. We've seen this before where
• 11:12
  Speaker 1: you've seen analysts on Wall Street continue to push this out. Remember,
• 11:16
  Speaker 1: who watches these TradFi analysts. Usually it is traditional finance,
• 11:21
  Speaker 1: high net worth, family offices. They're going to look at
• 11:24
  Speaker 1: putting capital to work. And this means rotation in a
• 11:29
  Speaker 1: very short time. The other thing that could play into
• 11:31
  Speaker 1: this is what's going on with Nvidia. It is earnings day.
• 11:34
  Speaker 1: Watch Nvidia and what happens today. I would also look
• 11:39
  Speaker 1: at post 5 p.m. tonight. This could be one of
• 11:42
  Speaker 1: the biggest technological events in modern history in the sense
• 11:46
  Speaker 1: of what we could see, because this would mark nearly
• 11:49
  Speaker 1: a $ 90 billion in revenue growth compared to Q2 of 2020,
• 11:55
  Speaker 1: if in fact they actually.
• 11:56
  Speaker 2: Meet those numbers.
• 11:57
  Speaker 1: So this is a significant leap forward in where the
• 12:01
  Speaker 1: market is going to be heading in the next few months,
• 12:04
  Speaker 1: possibly within the next 12 months, and maybe the bull
• 12:07
  Speaker 1: run is actually beginning. If you like this video, hit
• 12:18
  Speaker 1: like and subscribe, drop a comment down below, and also
• 12:21
  Speaker 1: join our free private member group.
• 12:23
  Speaker 2: The link is in the description.