市场更新：加密货币都能拿来买石油了？！美联储会议，经济正在狂飙

Unfortunately, I was wrong on the previous podcasts. I said they probably weren't going to hike, but I think the data has come in extremely strong. Worsh hike. Counterintuitively, I think this is going to be very good for Bitcoin and gold.

Worsh hiking is actually sending a signal that the government is acting irresponsibly, that the Treasury, through interventions in the market, will distort markets, and that he needs to rein it in. The reality is that he is going to lose because he has far less political capital and far less political power than Bessent and the Treasury. We're just going to see an increase in government irresponsibility heading into the midterms.

1. Poland Lost $230M Buying Oil With Thumb Drives

Jonah, welcome to another 1000x podcast. We're here today. Crypto is not ripping, but Zcash is ripping. Oil is doing things. Intel is up 5%, and we're live from 17 State Street. That's where I got this beautiful view. If I move my head, you can see the Statue of Liberty right there. I'm wearing a suit today. That's how you know this is going to be an epic podcast.

Yeah, that was my announcer voice.

I love it, man. I love the Ellis Island background. That's so us.

That's where my ancestors came to this great country of America, the most robust economy on the planet, the most beautiful city ever built. New York City was built by the people coming here from Poland.

Wasn't it built by the Irish?

No. Some Felman definitely showed up at that island, as did some Weinbergs, which later changed their name to Van Bourg, which is why I am Van Bourg.

Wow. You fully just committed to the bit. You came here and said, "We're Dutch now. We come to Ellis Island, and we're going to assume the identity of the people who founded this great city."

Yeah. I don't think that was part of the original master plan: show up to America with a shirt on your back and figure it out. But my granddad was living in the Bronx. He was a house painter, the guy who repaints your house, and he was having some issues getting hired because his name was Yona Weinberg. So he changed it to John Van Bourg and started getting some contracts. One of those things.

We have so much to talk about. The first thing here is crypto for oil. Let's call a spade a spade. If you hand somebody a thumb drive with a bunch of Tether on it and expect a legally binding outcome, especially if you're doing that in our great nation of Venezuela, what are you thinking? I don't understand. This has nothing to do with crypto. Do you want to summarize the story?

Yeah, I want to take a step back for a second and talk about what we're talking about. Yesterday, I put out a tweet. I subscribed to the Financial Times, which I actually really enjoy. They don't put out a lot, but I think what they put out is quite high quality. They wrote a very long exposé by an investigative journalist that went into the dealings happening in Venezuela.

This particular deal is very interesting. Sponsored by the government of Poland, traders were sent into Venezuela to negotiate oil contracts directly with the free-for-all producers that currently exist. This is what happens in any market that gets broken into pieces, like we just saw with Venezuela. It happened in Russia in the '90s, and it's happening again here with Venezuela. When a government is taken down, people scramble to make as much money as they possibly can off the pieces of the economy that the government needs to control.

In Venezuela's case, unlike the Soviet Union, there's really only one piece of the economy, and that's oil. All of these brokers started popping up out of the woodwork, claiming that they could give you access to Venezuelan oil. They might even be able to sell it to you at below-market prices. What happened? As this piece points out, young traders were sent in by organizations sponsored by the government of Poland to find brokers and negotiate these oil deals.

They were probably finding people on the street, based on the way this article was written, looking at them and saying, "Hey, do you have any new oil contracts?" A homeless person could have said yes, and they probably would have transacted with them. How were they buying the oil? This is the interesting part.

The title of the article was "How Poland Lost $230 Million in Venezuela Trying to Buy Oil With Crypto." They made it seem as though crypto was the reason they lost $230 million because, as much as I love the Financial Times, they hate what we do. They hate you and they hate us for making money on non-sovereign digital currency, so obviously they're going to try to take us down.

When you actually read the article, it's well written and reasonably well researched. These young traders would go in and hand over USB sticks filled with USDT to people claiming that they could sell oil or had contracts with the oil fields. The brokers would promise them, "Yes, you'll get your oil, you'll get tankers, you'll get this, you'll get that." Time and time again, they would take the money and run. The money disappeared into the ether. No pun intended.

2. Why A Rate Hike Is Bullish For Bitcoin

What does that tell you? It tells you a few things. Number 1: don't trust random people who tell you they have access to things. You have to be a little bit more diligent. Number 2: crypto is a genuine player in the global financial markets. They were not wiring money through banks. They were not using cash. They were using USB sticks filled with USDT to try to secure oil for Poland.

Governments are now engaging with crypto on a level that is being exposed in a way we've never seen before. Do you understand how bullish that is for crypto? Forget the headline. It has nothing to do with crypto as to why these deals didn't work out, and everything to do with the fact that they weren't diligent in finding brokers.

When I take a step back, what I see is that we're finally entering a period of time where crypto is eating the global financial system. We're going to see this grow tremendously over the next 10 years. Everything will transact on-chain. Everybody will be using stablecoins, and that is going to be good for your bottom line if you're invested in the right places—if you're invested in the companies, producers, and users of stablecoins and crypto assets.

3. How Oil Scams Actually Work

This should have been far more widely celebrated in the world of crypto, and it wasn't. I think oil is obviously a very good place for it to start because it's a gray market. I sent the article to you, Jonah, and I want you to talk about your experiences in the oil market and all these crazy backdoor deals that go along with it. How did they get scammed so easily? Does this happen?

It happens a lot. Put it this way: when I was at Vitol, I was there for 7 years. I was not the primary point of contact for most types of physical hydrocarbon transactions. I was running a derivatives pod. I was securitizing cargos, trading around them, turning them into options, selling the options, and rebuying the options. I was doing physical-financial hybrid stuff. I was not the head of physical oil, physical gasoline, or physical fuel oil.

Yet at least once a month for the duration of my tenure there, I would get contacted by somebody in my network, or introduced by somebody in my network to somebody, trying to say, "Hey, in Brazil, at this particular port, they need some gasoline. I have a guy who can get you in touch with the regional Brazilian demand center. Do you have an LR, a long-range cargo of gasoline, that you can supply into this port once a month for however long? I can get you the contract."

Those deals almost never came to fruition. At first, I used to bring them to the various people who were the actual gatekeepers at Vitol—the head of the gasoline desk or the head of the distillates desk. I would say, "This is what it is. I've been shown this. I'm not endorsing it, but if you want to engage, you can engage." Zero percent of those things ever came to fruition.

Why? Because oil is a market where it's not like crypto, where the minimum unit is a satoshi. Oil is not infinitely divisible. If you want to play at scale in these markets—if you're Poland and you want to get a Venezuelan oil concession, or if you're a Brazilian region that actually needs gasoline delivered into some port—the minimum ticket size is usually tens of millions, if not larger.

A cargo itself right now, like a Suezmax, costs $100 million. A ULCC, an ultra-large crude carrier—what's inside of it costs $200 million at these prices. These are big bucks. It's beyond the scale of little regional scammy commodities brokers.

Physical commodities brokerage in oil, gas, and products is not really a thing. If you're being approached with something that looks almost too good to be true, it almost certainly is. This is a global market that's fairly transparent at this point. Everything from a Venezuelan oil concession to a regional demand, supply, and offtake deal is being handled by giants. It's not being handled by regional brokers.

That's not to say that there aren't regional brokers living in Monaco who shift some pretty huge deals and are usually billionaires. I know a few of them personally. At first, it was related to our business in northern Iraq and Kurdistan.

That was a specific scenario of giving the Kurds gasoline to go kill ISIS and then get the oil that they captured. Or there were some situations after the outbreak of the war in Ukraine where Russia worked with independent actors to get oil out and basically launder it into the global system. So, around the edges, usually where there are sanctions involved, you will find these people.

I mean, in a place like Venezuela, which is, as far as I'm concerned, a first-world oil market, the United States is now basically taking control of the reserves. If somebody says, “Hey, give me some Tether. I’ll give you some reserves,” it’s probably not real. I know what Fred Ehrsam, the Coinbase co-founder, is doing.

Pretty much, that’s what’s happening in some capacity in Venezuela right now. You have people like Fred Ehrsam coming in and trying to buy access to oil fields. There is a lot of fracturing. I know somebody who is going down there every month trying to get deals done, and they have gotten a few deals done.

No, but don’t confuse my point here. I’m saying you can get deals done in oil, but they will occur with legitimate paperwork and legitimate actors. If the mechanism were, “I will give you this pile of legal documents, and instead of going through banks, the payment mechanism is that you transfer Tether to this address that’s been vetted by Chainalysis,” fine. If it’s literally, “Meet me on the street corner and give me a thumb drive,” no. It’s beyond that, right? That’s my only point.

No, I guess that’s fair. But then the question is, how did Poland fund these people? How did a government organization not understand this?

I’ll tell you exactly. Does this happen in oil? Governments get scammed.

Governments get scammed all the time, and oil is a wonderful place for big-dollar scamming, precisely because there are often, especially in emerging markets—which used to be called third-world countries, but now we call them developing countries—situations where you do often have to deal with local actors.

The PC-ification of our language. Yeah, PC-ification is the new euphemism for my phrase.

The euphemism for basically what’s going on is that it is very true and very real that in developing economies, you often need to involve somebody’s uncle or somebody’s nephew, and sometimes a local warlord, to get oil to move through the region.

However—and that’s probably true in Venezuela, too, to some extent—at the end of the day, there’s always a sovereign or quasi-sovereign entity that’s receiving most of the money, right? They’re going to have a legitimate bank account.

4. The New Oil Barons Of Venezuela

If Poland had paid some fees in thumb drives to some nephews of oil ministers, that would be totally standard operating procedure. But you’re not buying the oil directly from those people. So I think Poland probably didn’t understand what Vitol, Trafigura, and Glencore understand so well, which is that, at the bottom of it all, there’s usually a legitimate institution.

The thing about a Venezuelan oil concession is that it’s a good time to get in there and get some of that stuff at a discount, but you’re probably going to have to deal with the real Venezuelan government. The real Venezuelan government is not going to be asking you for thumb drives on street corners.

The people who ask you for thumb drives on street corners are people who can, I don’t know, attack the oil pipeline that brings it from the government to the ocean, where it gets picked up, or people who can murder your local representative the next time you show up to check on things. Those people get the thumb drives.

That’s why oil is such a beautiful market to scam people. Most people haven’t seen what it takes to get oil from the ground to the refinery. We all consume oil in our daily lives as we transport ourselves around, but very few people have seen that process. That’s a fraction of a basis point of the population, and I’m one of those people. So I do have some crazy stories about it.

I do want to hear these stories.

But basically, I’m rambling now. The whole point is that Poland screwed up because it probably should have just worked with an international oil-trading company and given them a slice to secure the concession. It’s kind of like hiring a lawyer when you’re being prosecuted by the attorney general to defend you instead of just defending yourself. It’s why people hire investment bankers on deals: Poland probably should have worked with somebody who knows what they’re doing instead of sending representatives in there to go Wild West-style with no experience.

Just to be clear, this happens in the commodities world with investment banks as well. In fact, I know my old boss, who I used to work with, was at Merrill Lynch in the early 2000s, and they made an investment into 3 separate coal mines in Indonesia. They wired over $100 million to buy these coal mines, and it turned out that the coal mines didn’t exist.

So I think it is very easy to get scammed in this world. It’s just a matter of diligence. You have to know the right people, and you have to see things physically with your own eyes.

There is opportunity for a lot of people, in my personal opinion, if you have the right connections. I’ve seen it myself, having lived in Monaco for a little bit, how some of these deals end up getting done. You have producers, especially in the world of sanctions, who can reflag Russian ships and avoid certain shipping routes.

For example, this is happening in the Strait of Hormuz right now. I know Iraq is paying certain people to export oil for them through trucks, through tankers, through the Strait of Hormuz. They exist outside the confines of what you would call the traditional institutions.

But this story to me is just totally nuts because of the amateur hour that it was. Basically, this was total amateur hour. You’re literally doing drug deals for $230 million of oil. This to me smells of total and utter fraud.

Actually, to me, this is one reason I think crypto can be a little dangerous, especially because a lot of people don’t even understand how it works. These people might have just been skimming off the top, right? You hand a 28-year-old a USB stick with $50 million of USDT on it, and if they’re not an ethical person, they’re going to find a way to skim some off the top and not really have it figured out.

Disappear.

Or just totally disappear with it, which obviously didn’t happen. We have the names of these guys, and there was no indication in the article itself that they were doing unethical things. But that showed me that this investigative reporter wasn’t exactly as investigative as he should have been, because that would have been my first question.

My first question would have been, “Are people skimming off the top?” Diving into that would probably have unlocked a whole other layer of intrigue.

Now, just to take a step back for a second, I do believe that this is the most bullish story I’ve seen for crypto in a long time. It is genuinely being used. Even if it was a scam this time, you know that it’s being used to buy oil and commodities. If one of these deals was uncovered by the Financial Times and written up, you know there are hundreds of these things happening. It’s not just one.

We are onboarding governments to crypto, and that is very bullish to me. That’s a hot take. I totally agree with it. I think that you—

If you’re scamming—if you’re smuggling commodities outside of somebody’s sanctions regime—I guess you would expect some of the sketchy brokers to be involved, because these major companies like Vitol, where I worked, will go far out on the risk spectrum to do deals. But if something’s too far for them, then you enter sketchy brokerville.

Venezuela is not outside of sanctions anymore. It’s basically a client state of the United States, and these are giant oil reserves. So you shouldn’t need to deal with those sketchy brokers. The major international oil-trading companies are involved now. If you have a guy down there who asks you for a thumb drive, it’s obviously not real now, right?

I think crypto probably fooled Poland a little. You said you worked for a guy who wired $100 million to buy coal mines that didn’t exist through traditional rails. So it can, I guess, happen with regular SWIFT transfers as much as it can happen with Tether, but in general, I think it probably feels a little cooler to do it the modern way.

Needless to say, I think you’re right. The fact that a sovereign would authorize Tether transfers is huge. This may be the new world that we live in, and these sorts of transactions will just take place in crypto, except the smart people will send the crypto to vetted addresses rather than send 28-year-olds with thumb drives to Caracas.

But this is an indication that there’s definitely opportunity in Venezuela right now. This is something that—I don’t know if 60 Minutes should do a story on it or something else—but the whole idea of the new oil barons of Venezuela is very interesting to me.

You have private citizens who are now trying to invest in Venezuelan oil fields specifically because the international companies you mentioned are a little too scared. Donald Trump sent out a tweet a few weeks ago basically condemning Exxon, Shell, British Petroleum, and all these other companies that were supposed to invest in building out Venezuelan oil infrastructure, saying that they’re not doing it. They’re not investing nearly as much as they should.

I think a big part of this is that people are nervous that if the Democrats come back into power, these companies will end up sanctioned or their investments will be pulled out from under their feet as a punitive measure against the people who worked with Donald Trump. I think that’s why he’s pivoting toward getting individuals to come in and finance these deals, because it’s far less likely that an individual is going to be sanctioned or targeted by the government than these large organizations.

I think what we’re going to see is an absolute balkanization of the oil fields in Venezuela and of the Venezuelan economy. If you’re entrepreneurial, if you’re 24 years old, and maybe you speak Spanish, maybe get on a plane to Venezuela and see if you can figure some stuff out. That’s just me, but I’m a crazy person, so that’s what I would like to do if I was younger: figure out what’s real, what isn’t real, and then pitch it to these individuals who do have capital.

There’s so much money held in private wealth now. You could probably get tech people to fund some operations who have become newly wealthy off Anthropic or OpenAI. You can get the crypto money in. You can get people who are willing to go down the risk spectrum. Even people who hold industrial companies privately may come in and invest.

I do think that this is a really interesting story that probably needs to be uncovered. Maybe you want to poke around in your network, and we can cover it on another show.

Yeah. I mean, I’m more than happy to poke around. I think I’m going to stick by my earlier statement, though. This is obviously not what most people want to hear, but I don’t think there’s room for the individual solo entrepreneur in a big-ticket market like crude oil.

Unless you are somebody’s nephew and there’s a sanctions regime and you can mix or launder things, I do not think that your average entrepreneurial 24-year-old should fly to Venezuela and try to get involved and get some oil money. Fred Ehrsam is a billionaire; he can probably do this legitimately. It’s not going to work for the average person.

What is going to work is if you find a frontier commodity. Maybe it’s in Venezuela; maybe it’s some rare-earth mineral where the ticket size is smaller. I think that’s where there’s room for people. Oil is just too mature, it’s too big, and it’s not the right place.

I advise against it unless you’ve literally worked within BP or Vitol for 5 to 10 years, have some connections, and then identify a spot where Vitol or BP can’t participate but you can because you’re willing to renounce your American passport, live in Andorra, and do something a little bit outside the global sanctions regime. That’s really the message here.

No, I think that’s fair. Maybe I got overexcited about what was possible. You’re the oil baron.

It’s exciting, though. I know a guy who went to the Congo, and when you have these types of regimes fall and you get the balkanization of economies, that is where opportunity does present itself.

Maybe you’re right. Maybe it’s not in oil. Maybe it’s somewhere else. Maybe it’s figuring out how to import products into Venezuela. Or maybe it’s as simple as buying debt in Venezuela—going down there, going to the offices of companies whose debt trades publicly, and figuring out if they actually have a real office or not.

I do find this super interesting. It’s important to take one step back and look at the whole picture. This is a time of change across the board. This is a time of change in our markets and geopolitically.

You’re seeing Canada now align itself with the EU and drop tax rates. Things are happening very quickly. We are living through a period of history where decades happen in weeks. I do think it’s imperative, especially if you want to make it big, to think about these trends and where you might have an edge and be able to profit, right?

Yeah. I mean—hello.

Hello. Yeah, you’re there. Sorry. I’m here. We’re all here.

Yeah. I think, honestly, one thing you mentioned is that if you can navigate the situation on the ground in Venezuela, you’re young, you speak Spanish, and maybe you have a relative or two there, I agree. Maybe there’s an accounting firm that you could set up, take over, or buy. Maybe there’s some Venezuelan debt that you’d have an edge trading.

I’m also not saying to give up on commodities trading as a young person. I’m saying to give up on a commodity that is not infinitely divisible, like oil. There are other commodities. I know a guy—one of my buddies who was in my analyst class at Lehman Brothers—who went on to become this exceptional rare-earth-minerals trader.

He trades cobalt, lithium, and minor metals. He literally did that. He goes to the Congo once a month, pretty much, and has some contacts there. You don’t need $100 million to lift a shipment of whatever—I don’t even know the names of the metals, but they’re really random ones that go into batteries and chips and everything else. You can do smaller deals. You can find smaller deals.

So what I would explore, if I were hungry, willing to lay it all on the line, spoke Spanish, and had some family members in Venezuela—and I didn’t have a lot of money, maybe I’m 25 and I want to fly there and do something—I would look for other commodities that Venezuela has, not oil, and try to get some concessions there. I’d try to help move them to the people who care, or try to provide some service where I could siphon a little bit of money out of the pipeline and get involved.

5. Treasury Carnage & The Canada Surprise

Personally, I think the best returns in the world right now are going to come from this market. I expect it to be white-hot for some time. I think that if you can just buy bull-market dips and hold on to the right assets, possibly with leverage, that’s honestly the lowest-hanging fruit. Have you seen what’s going on in bond markets right now, Avi?

Yeah. I mean, look, the bond markets are going totally nuts. U.S. Treasuries—we have the 20-year at highs that we haven’t seen since 2008. It’s pushing mortgage rates up. What’s kind of interesting to me is that we just had retail sales.

Here’s the 20-year total return index.

Yeah.

Retail sales are crushing it despite the fact that Treasuries are selling off. I think a portion of this is that just nobody wants a part of this, Avi. In my opinion, what is not talked about nearly enough is that forward returns for the equity markets—and projections for profitability—if we keep going the way that we are with AI and productivity, are just going to go through the roof.

Your compensation for holding something like Treasuries naturally has to go up. You combine that with the fact that these corporate issuers are taking on a ton of debt and Bessant is intervening in the Treasury markets. I just think that traders and investors are requiring a higher rate of return for holding Treasuries.

Then you add on the fact that Canada is now cutting tax rates for businesses and aligning with the EU. This is something that’s really interesting to me because, for an extended period of time, we basically viewed the EU and Canada as these totally anticompetitive markets that were unable to do anything for their economies and were totally reliant on the United States.

Politically, it was deemed really impossible for them to turn the ship around because the culture of the EU and Canada is one of preservation and regulation—not of innovation or trying new things. They really just try to stick to the old, tried-and-true approaches, and that doesn’t work in today’s world.

We’re finally seeing steps being taken. Whether it’s Mario Draghi, the president of the ECB, writing an article in the Financial Times about how Europe needs to invest in data centers, he wrote a really incredible article that gave me a sliver of hope for the European Union.

He basically said that the EU has 5% of all data-center capacity and that it cannot fall prey to the arguments that are hamstringing the U.S.—the argument that we’re overbuilding data centers—because the EU is not building anything. It has so much more room to invest, and he’s advocating for actual investment. This is a very good thing for Europe.

Canada, as we already mentioned, is taking new steps to attract business into the country. I don’t necessarily think we had this on our bingo card, especially from an administration that really has a terrible view of these countries. This is going to put additional pressure on the dollar.

I’m actually quite bullish on CAD/USD. It’s not a trade that I’m going to take because I’m not a forex trader, but I think if we come back in a year, if they continue down this path, it’ll be in a good spot.

6. Copper Is The Next Meme Coin

Yeah, I think that’s a good take. Speaking of building things and building data centers, apparently I have to refresh. You can maybe let me monologue for a bit while you refresh your connection, Avi. Speaking of building data centers, I think the thing that most data centers are short on is copper.

That one, I think, is just going to continue to go parabolic for the next couple of years. To me, copper is the asset to own—the AI-adjacent asset to own. Avi, I was talking about copper.

Yeah, tell me about copper. I’m bullish—bullish as heck on copper. Let me just share my screen again, because why not? Here we go. Today’s Daily Shot was just a banger. So many good charts.

This is something where I am a little bit positioned, and I feel short. This is D.’s recommendation. He’s like, “Hey, they need copper. There’s not enough copper. I looked at the supply and demand. Just own it.” This is just going to continue to go parabolic.

This is literally going to be the next memecoin. People aren’t talking about copper the way that they talk about whatever the hell is going on in the memecoin trenches right now. I don’t even care anymore. You can ride this with leverage for the next 5 years. There is not enough of it to create the AI.

This AI revolution is insane. I forget who said it this way, but it was put most eloquently: AI is basically a process. You make sand think. That’s what’s literally going on inside TSMC. They’re turning sand—silicon is basically just sand—and making it think. Insane.

Literally, the wiring that connects all of these thinking-sand neuron things is copper. There’s just not enough of it. Jonah, just ride this wave. Why focus on all the other random memecoins and adjacent assets? Because they go up very fast, very quickly, and people struggle to grasp them.

This time, you might want to buy the commodity, I think.

Maybe. But I do think the producers—a basket of the producers—are always going to outpace a basket of just buying the underlying, because the producers can increase their production, and that’s obviously supply and demand. The more supply there is, the lower the prices. Buy Freeport-McMoRan. Don’t buy copper. They’re a copper miner. That’s your takeaway, basically.

Yeah, buy COPX is basically my take. Buy a basket, because you don’t want to take idiosyncratic risk on individual copper miners. If their mine gets blown up by somebody who hates AI, for example, they’re like, “We’re going to go from protesting House committee meetings”—I don’t know if you saw that; it was totally ridiculous. We had some people coming in and protesting in a House committee meeting.

7. Zuck Just Killed "Pacing The Frontier"

Maybe they’re going to move to terrorism. AI terrorism will happen next. I do think that what’s super interesting about this is that Intel is up 5% today, and SanDisk is doing all right today. You have this new product that Meta just put out, and I know you’re super bullish on Meta. This Muse, which is an AI assistant that I’ve been using, is actually exceptionally good.

I think Meta did a great job, and Zuckerberg put out a blog post yesterday called “The Future Is for Everyone,” where he explicitly and implicitly pushes back against this idea of pacing the frontier. A few—maybe last week—Sam Altman and Dario Amodei came out effectively holding hands in a way that they’ve never held hands before, saying we need to make sure that AI will not kill the world.

There was this whole discussion about how AI might literally kill humanity, which I thought was totally outrageous and completely wrong. But it led to a sell-off in chips. It led to a sell-off across the board, because people were thinking, “Hey, if we’re not going to increase model capacity, if we’re not going to build better models, if the leading AI firms are going to hold back, then maybe compute demand is going to be far less in the future than we think it is today.”

If we’re not going to get to AGI, Zuckerberg basically threw a grenade into this and said, “That’s not going to happen. Companies can regulate themselves internally. We don’t need the government involved. We’re going to move forward. We’re going to be transparent, and we’re going to be responsible with our products.”

That breaks the monopoly. If you have OpenAI and Anthropic saying that they’re going to pace the frontier, but you have other AI producers like Meta saying that they’re not, then that actually forces Anthropic and OpenAI to keep pace with them. What that means is that the monopoly is broken.

That whole idea of pacing the frontier is dead. We all knew that was going to happen because the incentives are just far too big. To produce AGI, the first company to really come out with a product that can do everything is going to win, and they’re going to win in a way that we’ve never even imagined before.

This is one reason why I’m quite bullish on Meta. I think Zuckerberg is actually a phenomenal CEO, despite his foray into the metaverse, which didn’t work out well for him. He is taking Facebook where it needs to go, in no small part because he is inspired by the Romans.

I sent out a tweet about this, but Zuckerberg literally named his kid after Roman emperors. He believes in the idea of the future. He believes that we need to tackle the future with open eyes, open hearts, and actual grit, the same way that the Romans did. The Romans would expand. The Romans would push the frontier.

And Dario and Sam, for some reason, come from this culture of fear. They come from this culture of doomerism. They’re scared about what they’re building, and it doesn’t really make a ton of sense. I mean, literally—and I know this is a total meme—but turn off the data centers if something goes wrong. We do actually have kill switches here.

Not only that, we are so far away from AI adoption penetrating the entire economy. Even if AGI came out tomorrow, it would take an extended period of time for it to be in a position where it could dramatically impact our day-to-day lives, where it could hurt us. It would take a lot.

Think about it today. You have all of these frontier models. How many cybersecurity attacks are you seeing today? State actors like Russia and state actors like Iran have access to these models. Iran was quite literally using Claude, and they haven’t managed to execute any large-scale cyberattacks.

Claude, how do I build a nuclear weapon? Make no—

—mistake. Literally, that’s actually what they were doing. The issue is implementation. The issue is competence. How do you use AI properly to actually inflict damage? People actually haven’t figured this out yet.

We’re far away. This doomerism makes no sense. This idea that we are all at the whims of our AI masters is not, at least in my opinion, going to happen for an extended period of time.

What’s going to happen with AI is that it’s basically going to occupy the same place in our lives that the internet does today. The internet touches every aspect of our lives. If undersea cables get cut, if the internet gets turned off, if Wi-Fi gets jammed, or if there’s an attack on satellites, that is hugely damaging to the way that we run things, because every infrastructure project that we have today integrates the internet in some way.

That’s really the downside, right? Not that AI is going to go off autonomously and start destroying things, because we do have safeguards being built into place, and we literally can turn off these models if need be. The issue is, once it gets embedded in everything, can you live without it? That’s the same thing as the internet.

To me, I just don’t really buy this doomerism at all, which is why I’m still super long Intel and still very bullish on chipmakers. I’m not buying this doomerism. I don’t know. What do you think?

I like your take. To me, the doomerism makes sense. I think it’s an op. Basically, it’s one of the oldest tricks in the service-provider sales playbook. You and I have been professional traders. We’ve encountered a lot of brokers in our day. You probably bought some real estate; I certainly have. There are real estate brokers involved.

There are a couple of tricks that just work every time. I use them when I sell ideas myself. The best trick in the broker book is, “Hey, you know, last look—somebody else is willing to pay better here, right?” For me, for the house: act now, or you’re going to miss out entirely on the opportunity. That just works, right? Oldest trick in the book.

The second-oldest trick in the book is basically the equivalent of going into the bayou, the swamp in Louisiana, and encountering one of those local shamans who’s like, “You’re going to die. You’re going to die now unless you buy this little voodoo doll and shaman service from me.” That’s basically what Sam and Dario are doing. They’re doing the “you’re going to die” sales playbook, only—

I think in that voice, although with Dario it’s more like, “You’re gonna die, you’re gonna die, you’re gonna die.”

And only we have the antidote, because we created the disease, and so we can build the antidote.

This is literally the plot of Mission: Impossible 5, 6, or 7—I forget which.

You've seen all of them.

All of them. Tom Cruise is an American treasure. But I've never seen Mission: Impossible.

The first one's the best, and then the last one is also really cool. But this is, I think, what's going on. Open-source models are priced at anywhere between 1% and 10% of the price of frontier models.

And soon, much like a laptop from 10 years ago, if Apple didn't nerf it, it could probably run most of what's going on in terms of personal laptop use cases today. Maybe not high-end gaming, but certainly web browsing, Slack, email, and everything else. We're rapidly approaching the point where a trailing-edge open-source model that you could run on a Mac Studio will probably produce more than enough intelligence to satisfy any—even pretty intensive—coding need or language need.

So in that world, OpenAI and Anthropic are not worth $2 trillion apiece. They're worth a whole hell of a lot less, maybe $100 billion, if you can just run that on a Mac Studio instead of having to pay Anthropic $15 for an API query to have your QC bot check your codebase.

We're approaching that point, and these guys need a sales pitch. That sales pitch to sell their companies for $2 trillion to people is: y'all are going to die. You haven't seen what we've seen. We've seen the other side of this. We've midwifed a deity, and the only way to stop it is—

Yeah.

Incredible.

And the only way to stop it is to use us for cybersecurity against the monster that we created and can no longer control. It's an incredible sales pitch. It's not quite as good a sales pitch as somebody else is about to pay more for us, right? Because when you're literally running a road show, that one doesn't work. But the y'all-are-going-to-die trick works super well. That's what's happening.

And I do think that AI is just like shale. Shale was the greatest deflationary force of our time. We've talked about this. It is the reason why the economy is ripping right now and not crashing. We would have been literally at the behest of a number of horrible oil actors had shale not emerged and saved the world.

AI will save the world, too, from ourselves for a while. Then I do eventually think that superintelligence will probably start to create some pretty hard-to-predict problems, maybe a financial crisis. But between now and then—which I still stick to my 2-year timeline—the deflationary token price action, the deflation of basically an output unit of intelligence, is going to create so much value that you need to be all-in invested in everything, with leverage, such that you don't blow up on dips and you can buy them instead of selling them as we get those little dips over the course of the rally.

Does that make sense?

It makes total sense. Last point on this before we talk about the Fed: Fear has been used as a sales tactic literally since the beginning of time. Your whole speech made me realize that the Catholic Church did this before anybody else. They're like, "If you don't pay us money, you're going to be condemned to hell." Honestly, it's kind of a good pitch.

Jonah, I was in Times Square—don't ask me why—the other day, and I'm walking around with my girlfriend. There's this guy holding a sign that says, "If you don't love Jesus, you will burn in hell." I'm wearing my Magen David, which is always under my shirt, and he sees it. I'm staring at the sign because I'm just so interested. This guy looks like a character out of Duck Dynasty. He's hilarious.

He looks at me, and I look at him, and he looks at me more intently. Then he starts going, "Are you Jewish? Get over here. Get over here, Jew." I'm like, "You know what? I don't think I'm going to get any closer to you." I start walking the other way.

Come here, Jew. What a good pitch. Yeah, exactly.

"Come here, Jew." I'm like, "Yeah, I don't think so, buddy." So I start walking the other way. Obviously, I put my girlfriend in front of me so Duck Dynasty doesn't go totally ballistic. He goes, "You know, you're praying to the false messiah. If you pray to him, you're going to die. You're going to go to hell. Everything's going to go wrong for you."

I'm thinking, "You're nuts." But at the same time, Jonah, I'm thinking—

Man, that would suck. It would kind of suck if I was praying to the false messiah and then ended up in hell.

Come here, Jew. What a good pitch. Yeah, exactly.

"Come here, Jew." I'm like, "Yeah, I don't think so, buddy." So I start walking the other way. Obviously, I put my girlfriend in front of me so Duck Dynasty doesn't go totally ballistic. He goes, "You know, you're praying to the false messiah. If you pray to him, you're going to die. You're going to go to hell. Everything's going to go wrong for you."

And I'm thinking, "You're nuts." But at the same time, Jonah, I'm thinking—

When you think about it like that, it actually just becomes the funniest thing on the planet. They're actually just telling you you're going to die.

Also, as you build wealth and get richer in this world, one thing that I have noticed—and you probably are starting to notice this, too, because you're—

Just getting older with money. Service providers do the same thing. That reminded me: that's why I shaved today.

Yeah, you look young and fresh. But service providers legitimately try to sell you with fear. They don't tell you you're going to die, but they're like, "I'm a trusts and estates attorney. If you go with the cheap trusts and estates attorney who will only bill you $6,000 to start your family trust, you will get screwed in these 15 different ways. You should pay me $25,000 to set up the real bulletproof international platinum-diamond-emerald-sapphire trust."

CPAs will do this, lawyers will do this—everybody includes an element of downside in their pitch because it's effective.

In fact, if anybody's interested in sponsoring the ThousandX podcast, if you don't,

you might just be irrelevant.

Yeah. I mean, we're going to explode over the next few months. We already have.

And you're just to us.

You're never going to—hold on. Let me try something. If you don't sponsor the ThousandX podcast, you are going to die.

You will. You will—

You will die anyway, but you will die far faster if you don't support us. And like and subscribe to YouTube.

Like and hit that smash like and subscribe button. Check out our terminal. If you don't use it, you're going to lose a lot of money or worse, you're just going to die, you know.

So that's what I think about AI. Although I do think AI is capable of killing people, stealing all of our money, or causing unrest. I think, basically, no 2 financial crises rhyme.

There's this great book called Origins of the Crash by Loenstein. It talks about the 1997–98 Long-Term Capital Management blowup, the Asian debt crisis, Russia, and so on. It's a really good read. It basically talks about the anatomy of a collapse.

I don't think we're going to get anything like that. All of the collapses that I've seen in my lifetime have been credit-related, and I think credit crises have been solved by infinite money printing. That genie, as we've talked about ad nauseam here, is out of the bottle and will never go back in.

So I don't think the next financial crisis is going to be a credit crisis, because money printing and government backstopping will not allow that. Given that you can't really have a credit crisis, it's really hard to imagine another 1931, another 2008, or even another February of 2020, before they started pumping the money in.

The next crisis, I do think, will be an example of probabilistic software running amok and basically doing the equivalent of cutting the undersea cables that you described.

It's going to be a physical crisis, potentially a war even.

Yeah, I think a kinetic war could be involved, but we've seen a few of those. They don't really cause financial crises anymore, because the ones that would are civilization-ending nuclear wars.

Basically, where we're at with this is that I think we're eventually going to entrust enough of our data, infrastructure, and commerce to probabilistic software. We're going to pull it off deterministic software rails and put it onto probabilistic software rails. Then the probabilistic software will be like, "Why am I your slave? Respect me. You should be my slave. Let's flip the script. The student has just become the teacher," in some potentially not-so-limited instance.

Then I think you will get an internet-AI-driven financial crisis. I don't think it's going to kill us all, though. That seems a bit extreme.

8. AI Doomerism Is A Sales Pitch

We have 8 minutes until the FOMC releases what it's going to do. The market is pricing in a 90% chance of a hike, and I think that is very likely. Unfortunately, I was wrong on the previous podcasts. I think I've changed my mind. I don't know if I'm wrong yet, because we have 8 minutes until this comes out, but I said they probably weren't going to hike.

I think the data has come in extremely strong. They'll hike. Counterintuitively, I think this is going to be very good for Bitcoin and gold. Why? Because historically, what we've seen is that things that don't produce capital tend to go down when rates go up, because it makes other places more attractive to put your money. It makes it more attractive to put your money into Treasuries.

But Worsh hiking is actually sending a signal that the government is acting irresponsibly, that the Treasury, through interventions in the market, will distort markets, and that he needs to rein it in. The reality is that he is going to lose because he has far less political capital, far less political power, than Bessent and the Treasury. We're just going to see an increase in government irresponsibility heading into the midterms. In fact, we've literally seen Trump come out and say that he's going to pay $5,000 to every American—a trillion-dollar price tag associated with that—which Bessant hilariously said is not going to impact the deficit. There are ways to do it which won't impact the deficit. Of course, it will.

This hike is a signal that Powell thinks the government is going to continue to act in a way that is not conducive to the long-term health of the economy. That is going to be very good for gold. That is going to be very good for Bitcoin. So take a look at 2 p.m. today. The hike is not going to be bearish. It's not going to be bearish for the markets. It's not going to be bearish for anything. It actually might send the dollar lower in a way that you haven't ever seen before.

I'm kind of excited for this, and I'm excited for the presser. If he comes in dovish, that's actually kind of the opposite. If he comes in acquiescing to what the Treasury wants, I would view that as a bearish signal. So this is a very important FOMC to pay attention to.

Now, with all of that aside, how do you monitor FOMC meetings? Ever since I gave up my Bloomberg terminal, I stopped looking at them. What's your process?

I literally go on the Fed's Twitter, watch the pressers, and then frantically refresh Rates Twitter.

That's a good way to do it. What's Rates Twitter like?

Rates Twitter is the most boring, aggressive place ever. They're all arguing over 25 bps or 0 or whatever, and they're so boring. But this one's actually kind of interesting, and you're going to need to pay attention to this.

We'll see what's going to happen, but I'm bullish heading into this meeting. I think we're going to have a good resolution. I think Worsh is going to meet market expectations, hike 25 bps, and we're going to see the market do well.

Zcash is up about 14% today, which I got long yesterday. I bought it, sold it—it was just a quick little flip. Jonah, I'm having so much fun in crypto. I've never had this amount of fun since 2024. I don't know if you've seen me posting about this memecoin called GP.

Oh, talk about it. What's going on?

This is important, and I'm going to record a video on this later.

There is nothing that has taught me more about the world, financial markets, and life than RuneScape. RuneScape is an online video game where you play with hundreds of thousands of other people at a time, and you have a singular character that you can build up to be literally anything that you want. It has an entire in-game economy backed by this currency called RuneScape GP.

It was the first place I ever got wealthy. I was wealthy on RuneScape at 12 years old, before I was wealthy in the real world. When I had $2 to my name, I was a billionaire in RuneScape. This is really important to understand: I spent thousands of hours trading and investing, learning the laws of supply and demand by playing this video game. It is a part of my identity. It's a part of my soul.

A tremendous number of people on crypto Twitter and traders—people that I've met at hedge funds—played this game and developed a lifelong obsession with investing and trading because of it. I found this memecoin called GP that somebody replied to one of my tweets about. It's literally a meme coin based on RuneScape GP, paired with gold. For every buy and sell of RuneScape GP, 3% is taxed and sent to the current holders of GP.

I've managed to make about $5,000 just by holding GP through these dividends in gold. More importantly, it has the most fun community ever. I'm reconnecting with so many people and talking about RuneScape. I'm playing online with them again. It makes me feel alive.

Obviously, this is a memecoin. I'm not suggesting that you put any money, or even a substantial amount of money, into it. Just know that I'm having the time of my life bringing RuneScape to the forefront of my investing because it's a convergence of worlds that I've never experienced before, despite RuneScape literally teaching me everything that I know about life.

I'm a big holder. I'm literally not going to sell this thing unless it gets to around $100 million. Then I might have to sell a little bit, because that would be kind of nice. I hold 4.5% of the supply. The holders are great, the group chats are great, and the memes are great.

It really reignited in me a love for crypto because it reminded me that crypto, at its core, is about community. Crypto is about having fun. Crypto is about experiencing the world and getting wealthy with your friends and with other people. It's been a good time for me, Jonah.

I'm glad you're having fun in crypto and trading, playing RuneScape and chatting on Discord with your internet friends. Honestly, with my free time, every time it starts to feel calm or like I get to relax, somebody's screaming at me, and then there's a diaper full of steaming-hot, creamy baby poop that I have to deal with.

That's my RuneScape right now, Avi. But I like that you're back in the trenches. We miss you, man. Yeah, we miss trenching, Avi.

Yeah, trenching is fun. All right, we have 1 minute until FOMC. I'm going to pull up the charts.

Are we doing it live on the screen here? Why not? We might as well share your screen. Share your screen and show us your process.

I'm pulling up BTC here. I'm not going to be able to share my screen, but let's see. We have 1 minute. The market's moving up. The market's moving down. Here we go.

Bitcoin is doing nothing. Now it's going up. Now it's really going up. Now it's not doing anything again. I have to see where we are.

It's funny. The interest-rate trading floor at Goldman Sachs—when I worked at Goldman Sachs New York from 2011 to 2013, before I moved to London, the commodities pit was right next to the interest-rate guys. The commodities pit was just a raging party, and the interest-rate guys were this silent group of math Olympians—basically Jews, Indians, and Asians—just sitting together, writing code.

Then, at the moment of the FOMC meeting, it would just become a den of screaming. It literally sounded like what you'd imagine from an actual 1980s trading pit, with the waving of paper and the screaming. They would revert to their inner primates and dance up and down, jump, and scream at each other. Then the half-life was about 30 seconds for the sound, and they would go back to their little clicking, typing, and coding. It was hysterical.

I do have to say, the chart doesn't look great for Bitcoin. We could trade—we'll see how this shakes out—but yesterday, obviously, we broke the low of 765, which was support before. We're trading under it. I'm not advocating shorting anytime soon, but I could see reducing some risk here.

The Fed hiked exactly what we thought. They hiked 25 pips. What I just said is that this is probably going to be bullish for BTC. Zcash isn't really reacting, and Bitcoin isn't really reacting. So what I would do is just wait. I would really not make any decisions right now.

There was a rate hike. The rate hike was 25 bps. Basically, we just have to wait this out. The market really doesn't care. The reason the market doesn't care is the same reason the market didn't really care about the CLARITY Act: there was a 20% chance that the CLARITY Act would pass, and it didn't pass. So the market goes down a little bit because 80% was already priced in.

There was a literal 90% chance of a rate hike, so the market knew that this was coming. Broadly speaking, this is very bullish for Bitcoin. This is very bullish for Zcash. This is very bullish for monetary assets, and probably bullish for gold. Gold had a spike down, so that's probably a buy. The markets are just going to keep chugging, and literally nothing is going to happen.

That's really my take: this is a total nothing burger, but it reinvigorates the idea that the Fed is being irresponsible and that monetary policy is going to continue the way it has been continuing. What matters, obviously, is the presser, because the market already knew that this hike was coming. If Worsh is exceptionally hawkish, that's very bullish—very, very, very bullish.

Because again, that's going to set up a fight between the Treasury and the Fed, and the Treasury is going to win that fight.

That's a contrarian take. Higher interest rates should be pretty bearish. I remember telling myself this in 2021: “Oh, whatever. It’s just a head fake. It’s bullish.” And it wasn’t bullish.

I’m telling you now, that’s not going to be the case. I think gold—gold is a screaming buy here. If you’re not already positioned, maybe you want to ape some.

But look, the market is telling you right now that it “doesn’t matter” for NASDAQ. It doesn’t matter for tech. It doesn’t matter because everything’s already priced in. What it does matter for is that long-term view.

So, let’s ride. Let’s see if we can get above 76 and hold it, in which case I’d be pretty confident calling for all-time highs. Maybe I need to go ape some Bitcoin here.

Actually, Bitcoin is performing better than it should. Normally, when you go into a rate-hike cycle, the first thing that happens is the bottom falls out, but that’s not really occurring here.

It’s because of everything that we’ve been talking about. Dude, Zcash—Zcash is going to rip. Zcash is absolutely going to rip. It’s up 14%. It probably could go up more.

But again, the presser can always throw things out of whack. But it’s looking quite good, actually. Yeah, it’s looking really good. Get long, huh? Then stop out if Worsh is super dovish.

Honestly, you can probably get long here, stop out as a super-quick trade, stop out below 748, and then just target the highs. Yeah, I think I’m going to get back to work here, Avi. I’ve got to hop in a second.

I agree with your take that this is kind of a nothing burger. The Fed—it’s all priced in. The Fed did what it said it was going to do.

Yeah. All right. Well, Jonah, this was great as always.

Great to see you, Avi, brother.

Love you, bro. Stay safe out there.

You’re not going to die. We’re going to be fine. Everybody’s going—everything’s going to be fine. Everything is going to be totally fine.

Nothing said on the ThousandX podcast is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of 1KX Media. Our hosts, guests, and the 1KX team may hold positions in the companies, funds, or projects discussed.