MacroVoices #467 Jim Bianco: The Mar-a-Lago Accord
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This is Macro Voices, the free weekly financial podcast targeting professional finance, high net worth individuals, family offices, and other sophisticated investors. Macro Voices is all about the brightest minds in the world of finance and macroeconomics telling it like it is, bullish or bearish, no holds barred. Now, here are your hosts, Eric Townsend and Patrick Ceresna.

Macro Voices episode 467 was produced on February 13th, 2025. I'm Eric Townsend. Bianco Research founder Jim Bianco returns as this week's feature interview guest.

Jim and I will discuss the Mar-a-Lago Accord. That's the name being given to a completely new monetary world order, which Jim and others speculate might be under consideration by the Trump administration. The gist of it is that other nations' central banks would be required to invest in a special new long-duration, zero-yielding treasury bond.

where the nation's loaning money to finance the U.S. government would receive continued military defense support in lieu of any financial return on their investment, thus dramatically reducing the United States' cost of borrowing and lowering the value of the dollar relative to other currencies. Put another way, the United States would offer protection in lieu of paying any interest on its foreign borrowings.

and i'm patrick ceresna with the macro scoreboard week over week as of the close of wednesday february 12 2025 the s p 500 index down 15 basis points trading at 6052 the market remains pinned in an incredibly tight range we'll take a closer look at that chart and the key technical levels to watch in the post game segment the us dollar index up 24 basis points trading at 107 spot 88

After the $1.10 peak, the dollar has stabilized in a tight trend.

The April WTI crude oil contract up 71 basis points, trading at 71.24. The short squeeze is over and oil is quickly reverting back to the trade range it established in the fourth quarter of last year. The April RBOB gasoline up 132 basis points, trading at 231. The April gold contract up 121 basis points, trading at 29.28.

Old dips keep being bought as gold works its way higher. Copper up 586 basis points, trading to 470. Copper price action has started to show new sustained accumulation. Uranium down 293 basis points, trading at 68 even. And the U.S. 10-year Treasury yield up

18 basis points trading at $4.62. The bond yields edging higher after a hot CPI number. The key news to watch this Friday is the U.S. retail sales. And next week we have the Flash Manufacturing and Services PMIs.

This week's featured interview guest is Bianco Research Founder Jim Bianco. Eric and Jim discuss tariffs, national debt, global trade, and more. Eric's interview with Jim Bianco is coming up as Macro Voices continues right here at MacroVoices.com. And now with this week's special guest, here's your host, Eric Townsend.

Joining me now is Bianco Research founder Jim Bianco. Jim, it's great to get you back on the show. I want to talk about a topic that I know you've been spending a lot of time on in the last couple of weeks, which is, look, the Trump administration's making all kinds of bold moves, but the big elephant in the room is the national debt of $36 trillion.

it's tempting to say they don't even have a plan for it. Actually, there is a plan forming. It involves people like Zoltan Pozar, the very well-respected economist who used to work for the Fed, then Credit Suisse. I think he's moved on to another firm now. Who are the players? Let's start with that. How are they seeing the problem? Do they have the president's support? Let's just start at that level and then we'll dive into, okay, what are they going to do about it? Yeah, so

There is a plan, and it starts with, I think, Stephen Mirren. He was in the Treasury Department under Steve Mnuchin right at the end of Trump 1.0, and he moved on to Wall Street. He worked for Hudson Bay Capital. And now he's been appointed the Council of Economic Advisers chairman for Trump 2.0. In November, he wrote a piece about global trade.

And he wrote a piece about dealing with all of these issues. The fingerprints all over that report were Zoltan Posnar's fingerprints. As you pointed out, he's moved on to his own and he used to be at the Fed and formerly at Credit Suisse. Both of these guys have the ear of Scott Bassett.

And Scott Besson has been giving policy type speeches going back a year now that sound very similar to what they're saying. And some of what Trump has been talking about is also very consistent with all of this. So that's the players. And so now the question is, OK, what is it that they're talking about? It's a three pronged process.

Number one is about tariffs. Now, that's the thing that is eating up all the oxygen in the room, is that Trump is tariff man. Tariffs have two potential meanings.

Number one is they're used as leverage or a club to get something. The great example of that is what recently happened with Mexico and with Canada. You know, I'm going to put tariffs of 25% on all your products unless you put 10,000 troops on the border or point to borders are in Canada and do something about the flow of fentanyl and illegal immigrants. So that's the club part of it. I need you to do something else because we in Trump's

thinking have an unfair relationship. And so therefore, I'm going to use this club to try and balance it out. The other one is to put tariffs on for the sake of raising revenue. And, you know, famously, Trump has said it's the most beautiful word in the dictionary and that he wants to start an external revenue service and, you know, an ERS to collect tariffs as opposed to the internal revenue service, which collects income taxes.

So tariffs is the first one and it gets all of the oxygen and everybody knows about that. The second one is fairly new and that's the sovereign wealth fund that they came up with. Now, officially, Trump last week signed an executive order to establish a United States sovereign wealth fund. Scott Besant was asked, how's it going to work? He said, we're going to monetize the assets of the United States.

No one quite knew what that meant, but it was in the report what that could possibly mean. The U.S. has a lot of assets that are not being fully appreciated. The big one that has been pointed to is gold. Between Fort Knox and the basement of the New York Fed, the U.S. owns about eight tons of gold. It is valued at $42. Price of gold the day we're recording went over $2,900.

If you were to take that eight tons of gold and revalue it for $42 to $2,900, that's about eight or $900 billion of assets. Okay. There's eight or $900 billion of assets for the sovereign wealth fund. Bitcoin. A lot of people in the Bitcoin community are getting excited that there's going to be a Bitcoin reserve or Bitcoin's going to go into the sovereign wealth fund or the government's going to buy Bitcoin. Let's be careful.

Because these terminologies all mean different things. Now, if they want to put Bitcoin in the sovereign wealth fund, that's really easy. Over the many years, the Justice Department has had fraud investigations that has led to them owning 207,000 Bitcoin or about $12 billion worth of Bitcoin.

They haven't been able to really figure out who the owners of these are because they've acquired them through fraud investigations. And, you know, if you're on the blockchain and, you know, you don't know who the owner is. So they could take that thumb drive, hand it to the sovereign wealth fund. There's another $12 billion worth of assets.

Now, let me stick on that for a quick second. That's just a transfer. There's no actual buying of Bitcoin that's going on there. What about a Bitcoin reserve? What a reserve means is that you're backing the U.S. dollar, which is a pure fiat currency, by something like gold reserves or in this case, Bitcoin reserves.

We don't back the dollar by any reserves. We back the dollar by the full faith and credit of the United States government, which, as some people have said, is really the United States military. That if we were to start to back it by something, the idea that the Federal Reserve or the Treasury Department would buy Bitcoin and say that every dollar in your pocket has some percentage ownership of Bitcoin would

could make it extraordinarily volatile because as the price of Bitcoin gyrates around, so would the value of that dollar in your pocket. And the U.S. Treasury or the Federal Reserve has no ability to control the price of that Bitcoin. It's not a good idea for them to go back the dollar by it.

Could the sovereign wealth fund buy it or could the treasury buy it as a naked speculation on the price? Look, you know, Michael Saylor says it's going to go to 13 million. Tom Lee says it's, you know, in 20 years. And Tom Lee says it's going to 250,000 this year. Why don't they just buy it as a naked speculation betting on that? OK, but the problem there is they would have to borrow billions of dollars in the treasury market to do it.

At a time when interest rates are up and people are complaining about mortgages costing more because of the higher interest rates, you're going to increase the supply of 10-year notes or 5-year notes so you could buy a speculative asset on the idea that maybe it'll 2x or 10x.

or something and then be able to pay off that debt and in turn a profit for the government. One, I don't think that's the purpose of what government is, is to speculate. That's the private sector's job is to speculate on the price of assets, not the government's job.

to speculate on those assets. So I don't think that that's a good idea. So ultimately, I think that the sovereign wealth fund will have some Bitcoin. It already exists. They'll just be handed the thumb drive and it'll go into there. The third part of this program is the most controversial and the least discussed. And Mirren just laid it out in his paper in November about global trade.

And that is the 80 years since post-World War II security arrangement that the U.S. has with the rest of the world. The U.S. Navy has patrolled the high seas, has allowed for free trade around the world for, like I said, nearly a century, hasn't charged anybody for it. There's no bill that goes to any country. But what they've asked is that you align yourself with us

the West, the democracy, free-thinking people, and not with the Soviets and the communists from prior to 1990, and maybe today the Russia, China, Iran, North Korea axis. And we'll give you this security arrangement. Well, Trump has been railing against the security arrangement. On January 23rd, he gave a video speech to the crowd in Davos.

And what he said in that speech was he said, we're basically done being the patsy, that he is going to demand that the NATO countries now spend 5% of their GDP on defense. And presumably some of that will flow back to defense contractors in the United States. But I don't think he's done there because what Mirren said in his paper is, you owe us so much for the last 80 years.

that what we want to do is a debt swap. Those NATO countries have trillions of dollars of debt. You're going to swap it for a hundred year or perpetual zero coupon, non-marketable treasury security. So you're going to swap $10 billion worth of treasuries for a $10 billion zero coupon century bond. Won't mature for a hundred years, won't get any interest on it. Why would any country do that? Because if you don't,

We'll have to revalue the security arrangement. Maybe the U.S. Navy won't protect your ships. Maybe when Article 5 of NATO is triggered, you could send your troops and your money to the front line. The United States won't be there to back it up. You've got to start paying for it. And Trump has been very clear about paying for it. Well, doesn't this, that these countries have $10 billion of treasuries, now they've got $10 billion of this non-marketable thing, doesn't that put them at a worse financial position?

The Federal Reserve comes in.

They can offer a lending facility. You give me a billion dollars par amount of those bonds, I will give you a loan, a repo loan for a billion dollars if you need liquidity. It will be at par. There will be no unrealized or realized loss. It will be available anytime. Will the Federal Reserve go for it? That's why Trump has been bashing, one of the reasons why he's been bashing J-Paul and the name Kevin Warsh keeps popping up

that could be the next Fed chairman, and he's very open to this kind of idea. So it's kind of a cram down on them. And look, in every restructuring deal, there's a cram down. When you restructure to debt, somebody's got to lose. Trump's argument is, for the last 80 years, that loser has been the guy in Peoria. We've gone into the global trade organizations. We've hollowed out his industries because we've sent them overseas.

We've worsened his standard of living. Now people are saying, no, the fix is we have to raise the retirement age to 75 or 80 so that we could get rid of the unfunded liability of Social Security. And Trump's argument is, no, that guy in Peoria always loses. Those people that have had the free security ride for 80 years, it's time that they pay for it. And if they don't, if the French say something like, you know what?

We'll just pay protection money to Putin to leave us alone rather than pay you. Then Trump's got tariffs and he'll come back and he'll punish them with tariffs. Let me conclude this explanation of where Trump is. Most people, I listen to your podcast a lot and people that are on your podcast, and there's a widespread agreement

that the debt situation is unsustainable. I agree with that. Jay Paul has even said in December, he gave a speech and he said, it's unsustainable. We got to do something about it. Let me restate that. It's a crisis. We have to do something about the debt situation in a crisis. And in a crisis, we expect bold and brash thinking. This is bold and brash thinking.

Oh, but this is not what we want. And if I could dare say, oh, I know what we want. We want go to that faceless guy that you never interact with and you don't know in Peoria and screw him. Just don't screw me or my friends. But that's not the thinking that Trump has. Witness what he even talked about last week with his new tax deal that he wants to permanently make the temporary Trump 1.0 tax increase tax cuts permanent, excuse me.

He also talked about getting rid of carried interest and getting rid of the exemption for sports teams. So, you know, Trump is a very populist kind of guy. He's not necessarily, I want to make sure that all the billionaires are taken care of. He's also, you know, he's been a builder and he understands these guys and he wants to take care of them too. So I think what's been not appreciated

is this broader, bolder thinking. People like Mirren and Zoltan Pozar and Scott Besant, and you're starting to see the beginnings of this program in some of the language and some of the policies that Trump has been promoting, like the Sovereign Wealth Fund. Jim, there's so many dimensions of this that just...

just bring all kinds of questions to my mind. But let's start with a very simple one, the definition of a sovereign wealth fund. Now, as I understand this, what a sovereign wealth fund is, is for a creditor nation. In other words, a nation that is actually in possession of wealth.

The Arab oil states, for example, the Saudis have what they call the public investment fund. The Emiratis have what's it called Abu Dhabi Investment Authority. The idea is they've got a lot of wealth left over from selling their oil. What are they going to do with it? They have a fund to structure their investments.

It doesn't make any sense to me to say that the biggest debtor nation in the history of the world would have any use whatsoever for a sovereign wealth fund if you don't have any wealth.

And it seems to me when you describe this idea of monetizing the unrealized capital gains on the gold in Fort Knox and so forth, okay, you just came up with a trillion dollars. It doesn't sound to me like a time to create a sovereign wealth fund. It sounds to me like time for a great celebration where you say, hey, that $36 trillion of government debt we thought we had, maybe it's only $35 trillion.

That's great news. I see that argument. How do you get to a sovereign wealth fund?

Well, part of you're right. Let me say that on the first part of it, that there is really no debtor nations that have sovereign wealth funds. You know, Norway is another one that has a sovereign wealth fund. In the United States, Alaska actually has a version of a sovereign wealth fund called the Alaska Permanent Fund that it gets its oil revenues from and actually sends a check to all the citizens of the state of Alaska every year based on their funds.

The way is now, to be clear, Trump signed an order to say we should create a sovereign wealth fund. Bess had said we're going to monetize the assets of the United States. No one knows what that exactly means.

Mirren, Pozar, more Mirren than Pozar, kind of said what that means in their paper, you know, that we revalue some of these assets so that they become collateral that they could borrow against to buy investments that should outperform the interest rate that they're borrowing on. You know, Trump has said the sovereign wealth fund might be able to buy TikTok.

Well, this is a levered hedge fund. It isn't that we've got oil revenues that are churning out money that we could then, you know, turn around and invest in. So this is a very different type of thing. And the problem there is, you know, leaving aside whether or not the government running a leveraged hedge fund, borrowing to buy TikTok, borrowing to buy this, borrowing to buy that,

is necessarily a smart idea. You know, and leaving off this idea of the fact that maybe they get it wrong and we just get a bad manager and they make bad decisions and they wind up losing money, you're going to subject the public, which is already complaining about high interest rates, to, don't worry, we have to borrow more money, drive interest rates even higher, but don't worry, the government's going to make a lot of money off of this.

And they're thinking to themselves, fine, but I got a mortgage I got to pay at the end of the month. I don't have 10 years to wait for you to tell me how much TikTok would be worth in 10 years if you bought that or you bought some other assets. So that's the kind of the problem, at least with a typical creditor nation sovereign wealth fund. They're not imposing a high interest rate on their country. They're just saying this money just comes in the door and we just buy things and then they go up in value. So this is a very different type of thing.

Again, they haven't laid out how it's going to work, but Besson said they want to monetize the assets of the United States. I think this is what he means when he says monetize the assets of the United States. They'll have a paper out later this year to try and explain it. But there's not that many options when you're a debtor nation and you want to start a sovereign wealth fund.

Yeah, I mean, it doesn't make a lot of sense to me. The other thing that I just don't understand about this is it sounds like they're saying, OK, look, we're giving away the protection of the U.S. military to other nations for free. We're not getting back anything in exchange for it. We need to start charging for it.

I don't think that's true at all. What I would say is there's always been a massive quid pro quo. The way this has worked is that we, the United States of America, act like global dictators. We tell the rest of the world what they are and are not allowed to do because we're the global police force and we're in charge of everything. We're going to tell everybody else what to do.

The rest of the world puts up with that and doesn't object to the fact that the United States has no legal jurisdiction or authority over anybody outside of its own borders. Why do they put up with that? Because they need that protection and they can't afford to alienate the United States.

It seems to me that if you had this massive change of policy that you're talking about, a lot of other countries that have for many decades felt frustrated by the United States telling everyone else what to do is going to say, wait a minute, we're not getting any free military protection. We don't have to be subordinate to them anymore. We'll just give them the middle finger and say, you know, whatever.

Mr. Trump, take it and stick it where the sun doesn't shine. We're going to ignore you. We're not going to do what you want. And yeah, well, if we're going to be forced to spend five percent of our GDP on defense, then we'll build our own defense industry. And we're not going to pay American contractors to build weapons for us. We'll build them on our own soil and use our own citizens in order to do that. And frankly, you know,

You know, it's not hard for me to understand why they would feel that way. So isn't this, you know, it seems like there's more to this than meets the eye.

No, no, there is. Again, I would emphasize, do you think or don't you think we have a debt crisis? And debt crisis could require bold and brash thinking. And by the way, I'm not supporting this program. I'm explaining it here. I think by my own views, we'll get to those in a second. But I think that, you know, we've seen this with Trump's uber aggressiveness. He wants Greenland. He wants Canada to be the 51st state. He wants Panama. He's even now talked about potentially taking Gaza.

So if you think that the U.S. is, you know, there's been a quid pro quo that you've put up with the U.S., his attitude is you are going to have to put up with the U.S. and now pay for it. Remember his famous line the week before recording when he was asked about, you know, the United States taking Gaza. He was asked at the press conference, he said, but all of the countries that would take the Palestinian refugees,

I've already said, no, they don't want the, they won't take them. And Trump matter of factly said to the reporter, yeah, well, they won't say no to me is basically what he said. So Trump is prepared to be very aggressive in saying that the United States has a lot of power

And the United States will impose that power. And his argument would be the guy in Peoria or the guy in Franklin, Tennessee, that has lost his job because of globalization, that has wound up seeing industry after industry disappear. His standard of living has gone down. He is the guy that is done paying for this. This is Trump's thinking.

It is now time for somebody else to pay for it and that somebody else is not going to be an American. This is part of the different thinking that we have going on. And again, I'll ask the question, do you think that the debt situation is a crisis? If you think it is, if you think it is unsustainable, there has to be bold, brash thinking.

And that bold, brash thinking is to turn that guy in Peoria and go, OK, Social Security will kick in at 80 now so that we can get rid of some of the unfunded liability. You have to pay more of your Medicare payments every month so we can get rid of that unfunded liability. Trump is saying, no, he's done paying.

Somebody else has to pay for this. So, yeah, this is going to be ugly. It's getting ugly with Greenland. It is getting ugly potentially with Canada. Over the weekend before we recorded, Justin Trudeau was caught on a hot mic talking to business leaders in Canada saying, no, Trump is not just trolling when he says he wants Canada to be the 51st state. He's serious that he wants Canada to be the 51st state.

This is the type of thinking that we have right now. It is different and it is it is unlike anything we've seen. So that's why I thought it's worth bringing this up to make people understand there's a bigger thing going on. This is not about I want to troll Soudo about, you know, Canada and maybe take Greenland and play golf at Mar-a-Lago for three years.

I have got a bigger thing in mind. And speaking of Mar-a-Lago, by the way, this whole security arrangement debt swap deal, the other idea is that this would help lower the dollar's value to make the U.S. more competitive. And so...

Such agreements have always been named after the resorts that they have been crafted at, like Bretton Woods and Plaza. This is being referred to as the Mar-a-Lago Accord, where that they would do this debt swap. What would be the result of the dollar? The dollar would fall in value. It would become less valuable. But that's what we want. It would make our exports more competitive. And so that is part of the bigger whole of what they want out of this program.

Those kinds of accords, like the Bretton Woods Accord, tend to have profound and deep impact on the global economy for decades to come. Certainly that was true of the Bretton Woods Accord. Is that the scope of what you think this Mar-a-Lago Accord is potentially going to become? Something that changes the world order and the way that nations think about their relationship with other nations and the economy of the world? Is it that big of a deal?

Yes. And it is that big of a deal in one of two things, because Trump is thinking that big. And if he is thinking that big, he is going to do something bold and brash. Now, maybe the result is a fracturing of the world order and that there becomes defensive tariffs and everything in the world gets much worse.

or maybe that there's, there is a Mar-a-Lago or court and it lowers the dollar. They pay for their security arrangements and we, and we do the debt swap and we all come across either way. This has the potential of being a defining moment on court, on par with the Plaza agreement or Brenton Woods or closing the gold window in 1971 or something along those lines. Again, again,

I'll emphasize what I'm trying to get across here. He's thinking very big. And he is thinking very big because he is thinking that there is an immediate and acute problem that needs to be addressed. No more tinkering around the edges. No more blue ribbon committees giving reports, you know, like the Grace Commission in the 80s to fix the debt problem or the Gore Commission in the 90s and put us out a big report about 831 steps.

that we need to do to help make the government more efficient and bring down the deficit. And three of them get done and everything else gets forgotten. He's not thinking along those lines. He's thinking about doing something big right now.

Well, and clearly his other policy actions are really big. And it seems clear to me that there's one of two outcomes here. He either continues to get the momentum and the support of the people behind him, as has been happening so far with a lot of public support for his very bold policy actions around Doge and cleaning up government waste and USAID and so forth.

or, you know, the deep state fights back and eliminates him somehow. So it seems to me like the stakes are incredibly high. And I could take that even to another level, which is to say, I could see one way that this Mar-a-Lago Accord plays out, which is the Eurocrats look at it and say, there's no way we're going to bow to this and we're going to basically swap

all of our... You're basically saying you're asking other nations to take all of their interest-paying reserve assets that they hold as central bank reserves and swap them for non-interest-paying reserves. What do they get in exchange for that?

a continuation of something that they're used to having for free and which they expect to have for free because in their minds they are already paying for it by deferring to the U.S. being in charge of so many global policy issues. So I could see a massive, massive backlash from the EU policymakers. Just absolutely EU won't deal with

with Trump or with the U.S. on any level, and it's a huge breakdown. I could see it go that way, or I could see this as the beginning of maybe a populist revolution where it starts with Trump in the U.S., and then it's Nigel Farage in the U.K., and then it's Alice, I've forgotten her name, the AFD party in Germany, and you see a lot of

of those Eurocrats being kicked out of office the same way people are being kicked out of office. You know, the establishment Washington people, what is it, 60,000 of them or something have already resigned. How do you think this plays out, Jim? Because it just seems to me like this is massively, massively huge and how it plays out, I can just imagine a huge array of possibilities.

First of all, let me go back to Doge and what's happening with Trump. Trump could make this and the rest of the world won't. The rest of the NATO countries won't like it. Well, what else is new? He's already got a 5 percent approval rating among those countries. But he's got, according to the latest CBS poll, a 53 percent approval rating among the American public, the highest it's ever been. More.

much higher than anything we saw in Trump 1.0. And all of these programs, whether it's Doge and everything else, is getting somewhat favorable reviews. And even tariffs are not necessarily getting terrible reviews. So it's one thing for them to say they're going to push back. But what if you're sitting there pushing back against a president pushing these policies that's got a 53 to 55 percent approval rating?

The American public is behind him to do this. It would be one thing if his approval rating, if his approval rating crashes into the low 30s and he's trying to push this. That's a different story. But if he's 53 to 55 percent where he is right now, continues to stay, even if he's 48 or 49, continues to stay in that range.

The Republicans, who are the majority, will stay united behind him on this program. If you want to fracture Congress, you've got to get his approval rating down. And right now, the Democrat Party will remake itself. Parties always do, but they're kind of don't have a solid opposition voice. So he's got that pushing against him. Second of all, as you pointed out, you've got

It's Alice Weigel in AFD in Germany. It's Nigel Farage in the UK in the Reform Party. It's Le Pen with National Rally in France. You've got a lot of the far right parties that are pushing along those same lines in Europe. They want to be anti-immigration, that they might find an ally in a guy like Trump who

because not only will we pay the security arrangement, but maybe you can help us with the immigration problem that we have, which is where the far right parties might go with the military. There's all kind of like Trump is. He's a dealmaker. Give him a deal. And he'll start talking to you about that kind of deal. So either way, there's big, big changes coming. And at the centerpiece of it is what

You know, Basson said yesterday, we don't care what the Fed does. We want to get the 10-year yield down. Well, how are you going to get the 10-year yield down? We got to get less of it, less 10-year notes out there in the world. And this is a potential plan that they have to do this.

Let's go back to the 12 billion in Bitcoin that you described. I agree with you that the U.S. government is in possession of that Bitcoin. I don't think that means they own it. So far as I know, there haven't been any judicial actions that, you know, the government has successfully seized the ownership of those Bitcoins because a

Yeah.

Yeah, that's a good question. And, you know, to be fair, you know, some of those assets like the Mt. Gox fraud investigation assets have been redistributed back to their owners because those investigations were about a centralized exchange.

And so they had lists of names and addresses and ownership so that when they seized those assets that were, and then they went to give them back, you know, the Terra Luna thing could be something similar to that. Potentially FTX could be something similar because those were centralized exchanges. You can give those back. But when they acquired some of these other assets through non-centralized exchanges and they don't know who the ultimate owner is,

Those are, you know, remember, this is Bitcoin. They're sitting on a thumb drive at the literally, literally sitting on a thumb drive at the Justice Department right now. And there is no way for them to know who owns them. And those owners, for whatever reason, have either been unable to prove that they own it or don't want to show that they own it.

In some cases, you know, it might be because their effective cost basis is like zero and they got this giant tax liability or maybe they just don't know how to prove it or are not aware of it or something, or maybe they're just lost assets. So whatever the case is, those assets are held and have been held for years by the U.S. government. And so there has been this idea that maybe

Maybe those assets could go, you know, they're already in the Justice Department right now. Moving them to the sovereign wealth fund is just literally handing them the thumb drive. Nothing changes in that regard. But that needs to be worked out. What happens if a credible owner of those assets shows up? How do they make a claim on that? That needs to be resolved.

Jim, you said before that you were explaining, not necessarily agreeing with this whole plan. I appreciate that. But let's talk about how viable it really would be, because it seems to me like you're really playing a card game here of just

shuffling things around in name. If you say, well, look, we didn't get any new gold. We just took the gold that we already had. We're going to market to market. And all of a sudden, it seems like we've made some money. Well, you didn't make any money. You had an unrealized gain that you've now realized. That gold that maybe we weren't carrying on the government's balance sheet at full value, that was probably

partially offsetting the fact that the government's balance sheet also does not realistically account for the entitlement obligations of about $200 trillion between Social Security and Medicare and so forth. If you look at the unfunded obligations,

If you were to say, let's do the honest thing and recognize that that is, in fact, a liability and let's account for that liability on balance sheet, that would take your $36 trillion national debt to about $236 trillion.

They're not doing that. So they're not they're not doing the other side of it and saying, let's show all our liabilities. They're just saying, what could we take that's an asset and, you know, monetize it and put it on the on the balance sheet as an asset? What comes next? Are we going to take the air asset?

over the United States that we breathe and say, hey, we need that to breathe. It has great value. So let's calculate per cubic foot how important it is that we have it to breathe, put a dollar amount on it and call it an asset, put it on the balance sheet.

You know, that's a good question. You're right that they're not going to be properly accounting for the liabilities. They are going to be properly accounting for the assets. I would argue to you that, of course, you know, this is informed speculation on what they're going to do. We're still waiting for the ultimate plan as to where the policies potentially go.

could go from here. The other argument that Trump has made is that in the future, whenever they give a tax break to a company, like he said, let's give tax breaks to companies that are in AI.

But now we want a piece of the company. We're going to give you a great tax break, OpenAI. We're going to give you a great tax break, Google. We're going to give you a great tax break, XAI. But we want 10% or 15% or 20% of the company so that when you're 100x worth more in 15 years because you've revolutionized the world because of AI, the United States taxpayer gets to join in on it. Now, that I have real problems with because Trump won't always be president.

And maybe even a Republican won't always be president. And we might have a left of center president in the future that might say, great, now that I've got all of these ownership pieces of these companies, I can now dictate policies within these companies. I could tell them how to run their companies to a degree that you can't do right now because the government doesn't own pieces of those companies. So that's very concerning as well too. But like I said, I'll come back to

Do you think it's a crisis? And crises require bold thinking. Or do you think that we just want to say that the debt situation is unsustainable, but not really act on it, not really do anything about it? This is, you know, you told me it's a problem. Okay, I'm fixing it. No, not like that is what everybody's like to say. Well, then it's not a problem because there isn't a scenario where I will fix it and no one will notice it will magically go away and hurt nobody.

That's not an option. If it was, that would have been done years ago. So in some kind of restructuring, somebody's got to lose. And he's arguing not Americans anymore. And that he is American first America first policy has made it very, very clear.

Jim, so far, you've done a fantastic job, as you put it, of, hey, you're not necessarily endorsing this yourself. You're just explaining it to our listeners. Let's shift gears now and go on to, OK, Jim, what do you think about all this? I think two things. I think, one, you're right.

that, or Trump's right, or the consensus is right, that that situation is close to being unsustainable and something has to be done about it. And that something is not easy. If it was easy, we would do it and we wouldn't be talking about it, not just in this recording, but anywhere. We'd just do it and it'd be done and that'd be the end of it. I see one of two ways of this playing out. I see way one is a fracturing.

The French, you know, would say, no, we're not going to pay. F you. I'll pay Putin protection money. Trump will say, fine, then I'm going to put a 50% tariff on every French product that comes into the United States. And this could end very, very badly.

then, you know, he would remind the French, yeah, you do that and you mess it all up, you're in power. The way do you see how popular, you know, National Rally and Le Pen gets if you attempt to play that game, you know, cozy up and pay Putin, but won't pay the United States and then be subject to those kind of pot tariffs. That could be a very ugly scenario if it goes down that road. You know, road number two is that they do

kind of, you know, wind up paying. They give a little bit, they wind up seeing the dollar's value fall, seeing the U.S. become even more dominant. And then what do they do? What do they do in the process? Then they do what the Mario Draghi report talked about with the competitiveness of Europe. Europe is, you know, the old line is the U.S. innovates and Europe regulates. And that is really in an era of AI innovation.

really showing up that Europe is really struggling. There are no, I shouldn't say no, most of the innovative companies are in the United States. There's only a couple of them in Europe, but not enough to move the needle on their economy like those companies are here in the United States. And they need to start to innovate. Otherwise, the evolving world is going to change. So maybe a security arrangement with the U.S. and a lower dollar. Fund

finally forces Europe to stop regulating as much and start innovating more, then that could be a potential win. On that scenario, the risk that I also see on the winning side, the losing side is a fight, tariffs, you know, and everything gets ugly, recessions and the like. The winning side could be if Europe does that and everything works out positively, we really ramp up growth.

And with that, we ramp up inflation. And with that, we ramp up interest rates. And so the good news is you could get a decent paying job anywhere you want. And the economy is booming and assets are going up in price. But the problem is mortgages are 8%. Mortgages are 7.5%. You know, that high yield borrowing is approaching 9% and 10%. You're not going to be able to get cheap money anymore. Cheap money is what we needed through the 2000s and the 2010s

because of stagnant growth and fear of deflation. But if this is going to unleash an era of stronger growth and higher inflation, higher nominal growth, it will unleash an era of higher money, more expensive money. So where that all goes is

you know, profound one way or the other. I tend to think more towards the inflationary side on this than anything else, because even in the downside scenario, they'll pay Putin to leave them alone or they'll pay Xi and China to leave them alone. And we put tariffs. That could also be some kind of an inflationary story. But at the end of the day, I think what

won't be the status quo is that we just continue to muddle along the way we are. The other positive that could come along with this that we haven't really mentioned, which is really not part of this plan, the Mirren plan per se, is Doge.

that does Doge actually deliver on the promise of cutting a trillion or $2 trillion out of the budget because of fraud, waste, and abuse? The good news is they'll bring down the deficit. They'll bring down the borrowing costs as well. The bad news is, hate to say it, but you could say that there's a strong correlation between government spending and growth in the United States. And even if that is

spending that is being done fraudulently, it is still economic activity. And it might be inefficient economic activity. And I agree that longer term, it's not good. But shorter term, that could have profound implications on the government as well. So I guess what I'm trying to say is my biggest concern is inflation. And my biggest concern is what that does for interest rates.

And my other bigger issue is, as I look at what I've been watching with the Trump administration and with these plans and the way that they've been talking, they've got huge plans under wraps. These are plans. These are not policies. So the ultimate policies won't necessarily look like we have described, but

But the ultimate policies are going to be radically different than anybody thinks. And I just think that a lot of economists say, well, when we raise tariffs, the inflation goes up and this is what happened during Smoot-Hawley. You only think about one tenth of the story here. You got to think about the broader concept of what's going on here. Remember,

Trump was out of office for four years and he's had a long time to think about what he wants to do. He has signed over 200 executive orders in his first three weeks. He didn't think those up after he won the election. He thought those up over the last four years. So this is all part of the bigger plan that he's got going right now.

Jim, you're talking about this Mar-a-Lago Accord being potentially on the scale of Bretton Woods. If I think about how...

long and persistent the economic trends that both the Bretton Woods Agreement and then the eventual breakdown of the Bretton Woods Agreement, what those things meant to markets. It's really, really huge asset moves over long periods of time. If we can figure those out, those can be very profitable. So the first thing that comes to my mind, if you're talking about bringing

the dollar down substantially is part of this, and you're doing it in a way which potentially heightens a whole lot of geopolitical tensions around the world between the United States and everything else. How is that anything other than incredibly bullish for gold? It is bullish for gold, and that's what you've seen with gold. And I think that, you know,

Do you think this is what's driving the last couple of weeks of strength in gold? Or the last year or so in gold that, you know, I think that, you know, the whole Bretton Woods era of fiat currencies.

And it might have gotten to either their tipping point or close to their tipping point right now. And that's what you've seen with gold. And I think that you're continuing to see with gold and that the markets are recognizing gold being the leader in that, that there's something more than just a guy that wants to throw on a couple of tariffs and troll Justin Trudeau about being the 51st state and then play golf for three years. He's got bigger plans. And you could argue again that,

Maybe we should have bigger plans because of the situation that we're in. So I think it's very bullish for gold. I think it's bearish for bonds. I mean, it means higher interest rates for bonds. But again, this is a four-year plan. This is not bonds are going to be higher, you know, by, you know, the Ides of March. That maybe they are, maybe they aren't. But that the four-year trend, four years ago, five years ago, bond yields were under 1%.

or 10-year yields were under 1%. Now they're, you know, four and a half to five. And that process will continue as we go forward. Inflation, for all of the Fed's talk that they're strongly committed to their 2% target,

Core CPI has spent over 45 months above 3%, 45 consecutive months above 3%. And they still keep talking about it going to 2%. They can't get below 3% right now, let alone it going below 2%, over almost four years now that it's been that way, that we are in an era of higher inflation right now.

And so I think that those are some of the broader trends that you might be seeing in some of these markets. The stock market, the problem with the stock market is you're starting this new era with sky-high valuations and potentially higher interest rates. Unless you can make the case, which I cannot, that the average corporation is just going to see absolutely booming earnings

then I think what you're going to see is a period of multiple contraction. And that doesn't mean the stock market's going to go down and stay down. It's going to be something terrible. It's that it's going to just have middling types of returns only because it's not starting from an era of very low yields. Now, I mean, very low valuations. If you actually want to look at markets that have very low valuations, you might want to look at Europe. Maybe this 4%.

forces in the positive Europe to accept the security arrangement, to accept that they have to change, to accept that they have to start to deregulate and innovate. And maybe we start to see new innovative companies listed on the German stock exchange and on the French stock exchange and on the London stock exchange and not all on the NASDAQ like we see right now. And then those cheap companies in Europe might very well benefit from that kind of thinking.

But if they want to go down the road of, you know, F you to Trump, we'll pay protection money to Xi and Putin. We won't do this. And we'll fend off, we'll have to fend off the far right movements in Europe.

well, then they're cheap for a reason, those companies, and they're going to stay that way. So I think that, you know, there's going to be big, big changes here that are coming, or at least the attempt at big, big changes. And maybe what's different now than other presidents have come in, even under Trump, one, he tried big changes. You know, Bush tried big changes. Clinton tried big changes. Obama tried big changes. Now,

We've got a president. Maybe we're at, if I want to do a Neil Howell and say we're at a fourth turning moment. And maybe this is the moment where the fourth turning ends and that we're maybe going into or this is the catalyst to get us out of the fourth turn into the first turn or something like that. And that this is the type of action because now we're

It has to be done. The debt cannot continue. The status quo cannot maintain. Bush couldn't get it done. Obama couldn't get it done. Clinton couldn't get it done because as much as they wanted to change things, the status quo could hold.

But maybe now the status quo cannot hold. So big changes have to come. That's what happened with Bretton Woods. That's what happened with closing of the gold window. It's kind of what happened with the Plaza Court in 85. The status quo just couldn't maintain anymore. And something had to give. And maybe we're at that point right now.

It sounds like the 1970s in a lot of ways. Is that a good analog? Because, you know, in the 1970s, there wasn't really a massive crash. It was just really lousy equity returns for a full decade. Gold and hard assets was what performed. Almost nothing else did. Stagflation. Is that what we're headed to? Could be. And I would caution, though, against

The idea that when you say the 70s, that means 20% inflation. It might not mean 20% inflation because remember in the 1970s, the barriers to international trade were huge. You know, as the old joke used to be, you know, a six hour drive throughout Europe, you would have to change languages four times in five currencies and go through five different, completely different sets of rules on how a company would operate. That's not the case anymore in Europe. That

That's not the case, at least among countries, even within the United States to Europe. While they've got too much regulation and stuff, the differences of running a company in the US versus Europe is far closer and far more amenable than it was in the 70s.

It was in the 70s. We didn't have the communication. We didn't have things. So does it mean more inflation? Yes. But I think it means more 3% or 4% inflation. Remember that the entire decade of the 70s, CPI averaged 7%. I know we all think it was 20. It was 20 at its peak, but it averaged 7. I'm saying that we're going to go from under 2% inflation

to something like 3% or 4% inflation. And as I point out, we've already been at 3% inflation for 40 months in a row. Well, okay, the stock market did fine under that. Yeah, but now with the CAPE, the cyclically adjusted Shiller-Pee ratio at 37, one of the highest levels in 150 years,

It's going to be hard for the stock market to continue to move higher with that level of valuation if interest rates are going to continue to go up. It doesn't necessarily mean that the stock market has to fall 50% and stay down like it did in the 70s. Maybe it winds up returning you 5% or 6% for the next decade. And bonds return you 5% or 6% for the next decade. You know, that type of scenario I think is more likely this time around.

I want to close by asking you to clarify a point that was very hotly discussed in your Twitter feed or X feed, I should say these days, which was the role of Bitcoin and the creation of a strategic Bitcoin reserve. Despite the fact that in this interview, you've said a lot of things about how, you know, we don't really have the wealth for us, sovereign wealth fund and so forth.

at least the way I was reading your tweets, I had the impression that you felt, you know, you, Jim, felt pretty strongly in favor of a strategic Bitcoin reserve. Was I reading too much into that? And what do you think the role of Bitcoin should be in the government managed financial system going forward? Oh, you definitely read too much into it. I'm the opposite. I don't think that it has...

a role in that. I don't think that a strategic reserve, again, words matter, strategic reserve is, those words are the Federal Reserve or the U.S. Treasury is backing the value of the U.S. dollar with Bitcoin, like they used to with gold until 1971. I don't think that that is an appropriate use of a cryptocurrency. As far as the government buying Bitcoin,

I don't know if it's a good idea that the government borrows money to buy a volatile asset.

Even if you want to make the case that it will go up in value, should the government then speculate in the S&P 500? Should they speculate in the real estate market? You know, do we really want to have the government in the private sector? One of the hallmarks of our capitalist system that's worked so well is precisely that they haven't been involved in it. And when they do buy those companies and when they do buy that and a left of center government comes in the future and there will be one in the future.

they might look very much like what the Biden administration was doing. And they're going to impose rules and regulations and censorships on a lot of these things. And they will have the power to do it because of their ownership role. So I don't think that that's a very good idea. What I have argued about Bitcoin is,

The majority of the planet lives in Southern Asia, Africa, Latin America, in the Middle East. They live in countries with shaky currencies that get devalued all the time and with unstable financial systems. They put their money in the bank, the bank fails, they don't get anything out of it. They could use a better alternative, a global digital alternative like Bitcoin, maybe a DeFi system around it with borrowing and lending and trading.

can be, can be that alternative. And when the digital crowd or the crypto crowd is working towards that goal, I'm all in. I'm all in. I think that that would be brilliant.

But when they lose focus and they all start to say, no, we're building the world's biggest casino, a number go up. And Tom Lee says it's going to be 250,000 at the end of the year. And Michael Saylor says it's going to be 13 million in 20 years. And you all have to get in now, have fun staying poor. If you don't buy it, I'm going to buy a Lambo when I make all of this money. When you've reduced the idea of an alternative financial system to just one

ranked speculation of hoping that you throw craps at the table of the Bitcoin casino, then I'm not in on that. And I'm afraid more and more we've been pushing towards that casino aspect of cryptocurrency. So what is it? What is it supposed to be? And the answer I would give you is if you think it's supposed to be something different, a store of value, protect you against fiat currencies and all that other stuff,

It can't, if you're at bended knee begging the very organizations that caused the problem in the first place, the Treasury, the Fed, the government, to be the buyer to push it up for you in the first place. You're supposed to be the alternative to them, not be captured by them. And so that's why I'm not for...

The strategic reserve, if you want to move the thumb drive into the sovereign wealth fund, fine, that doesn't do anything. But I'm not for borrowing money to buy. I'm not for backing the dollar against these things. I am for them saying, no, we want to build something completely different from them and be a competitor to them, not consumed by them.

Well, Jim, I want to thank you for another outstanding interview. I always enjoy our talks. But before I let you go, please tell our listeners a little bit more about what you do at Bianco Research, which is a boutique institutional research firm. So the day job is not quite as big picture thinking as this, but this podcast is the perfect place to kind of, you know, lay out some of these ideas.

We do macro research with a fixed income bent at BiancoResearch.com. It is an institutional product. So, you know, that's kind of hints to what the price is. But I am very active on social media at Bianco Research, both on X, YouTube, and my name, Jim Bianco, on LinkedIn. We also run a total return fixed income ETF program.

We had a very good year in the first year. You can find out more about that at its symbol, WTBN, Wisdom Tree, Bianco. Wisdom Tree is our partner. Wisdom Tree, Bianco. Nancy is its symbol. Or Bianco Advisors, not Bianco Research, Bianco Advisors.com is the website that details what we're doing there. Patrick Ceresina and I will be back as Macro Voices continues right here at MacroVoices.com. ♪♪♪

Now, back to your hosts, Eric Townsend and Patrick Ceresna.

Eric, it was great to have Jim back on the show. Now let's get to that chart deck. Listeners, you're going to find the download link for the postgame chart deck in your Research Roundup email. If you don't have a Research Roundup email, that means you have not yet registered at Macrovoices.com. Just go to our homepage, Macrovoices.com and click on the red button over Jim's picture saying looking for the downloads. Okay, Eric, what are your thoughts here on the equity markets?

The S&P 500 has been consolidating since mid-December, almost two full months now. We're still above most of the moving averages, but the 100-day moving average, which has supported this market for well over a year, save for a brief three-day dip below it last August, is fast approaching.

More and more pundits are expressing the view that retail traders are the only people still buying and that the market is headed for a downside reversal. But for now, we're still above all the major moving averages.

Eric, I have to agree with your assessment. I want to look deeper into this though. On page two, we have that chart of the S&P 500. You can clearly see that trade range. What needs to be considered is that the MAG7, which are huge in these market cap weighted indices, are almost all struggling beyond, let's say, meta. And this trend, if it continues, is going to be a drag that is going to really not allow the S&P to make any meaningful progress.

When you then go look at the broader markets, such as, let's say, the Russell 2000 small caps, they fail to, in any meaningful way, rally and have already rolled over. And when you look at even the broader market in terms of the breadth, we still only have 50% of stocks above their 50-day moving averages on the S&P 500. So we have a market that...

lacks breadth and mag seven participation and small caps are not contributing. So you have an issue of flows. This makes the market very tired and heavy here. Now, if you want to be bullish, that would mean that you have to believe that this oversold state of the mags

And the fact that the market breadth has not been there will all return and drive that next impulse. I'm sort of a wait and see perspective, which is I'd want to see that developing for me to take a bullish stance. Otherwise, a very tired and heavy market like this has increasing risk of correcting. And therefore, I'm watching to see whether breakdowns of the 5950 to 6000 level on the S&P futures breaks down, which would

really, in my mind, be the first signal that some sort of bigger corrective phase is underway. Now, Eric, let's move on to the dollar. What are your thoughts here? No change from last week, Patrick. We're still trading sideways in a consolidation pattern. A sustained move above 110 or below 107 on the Dixie would be the tell for the next directional move.

Yeah, after hitting 110, we've been in consolidation. The consolidations held the 50-day moving averages. But overall, other than a very strong yen move, which has now reverted almost all the major cross currencies, whether the euro, the pound sterling, the Aussie dollar, and even the Canadian dollar, all continue to be structurally weak and distributive in nature. So unless we see certain currency pairings start to show some meaningful strength, that

could lead to a bigger, deeper U.S. dollar correction. I would want to approach this that the dollar primary bull trend is still intact. And if this consolidation in any way finishes playing out this way, you would expect that the next move is still for dollar bull continuation on the upside.

All right, Eric, let's touch on oil. Well, Patrick, after a brief upside reaction to the Gaza policy-related geopolitical risks, we're back down to cycle lows along clustered moving averages right around $71 WTI. The 100-day moving average at 70 spot 11 on WTI is the big line in the sand. And if that doesn't hold, there's not a lot of obvious support below it until the low 60s.

It's still hard to make a directional call here with any conviction because the news flow is changing by the hour, particularly with uncertainty around what Trump is going to do next on Gaza-related policy.

Follow Dr. Anas Al-Hajji on Twitter. That's at Anas Al-Hajji, who's been giving excellent updates on the Middle East geopolitical situation as it pertains to the crude oil market. Well, Eric, on page four, I have that crude oil chart. And one of the things that we were trying to determine is whether or not the rally in crude oil was just a short squeeze because there were too many shorts in the market or whether it was a meaningful bull turn.

And the way that I always framed it was the fact that it would be all about the way the bulls behave during an oil pullback that would be the tell. And so as oil pulled back toward its moving averages and toward Fibonacci zones, if it was in fact...

a new bull phase in oil, we should have seen the buy-on dips come in relatively quickly and the crude oil get back quickly to that $75 to $77 range to really signify a new accumulation cycle. Instead, we've fallen right back into the trade range that was established

in the fourth quarter of last year. That doesn't mean that there's a big downside move on oil, but we're sort of stuck in this trade range purgatory again. And that means that the entire next major move in oil might be pushed into the second quarter of the year. Whichever way you want to frame it, at this point, oil is very quiet and there's a lot of other markets that are moving in this environment.

Alright Eric, on page 5 I have that chart of gold. What are your thoughts on this big ripping rally? Gold has been an easy call until now and it's been a great ride for all of us on the long side of that trade.

But on Tuesday, we put in a perfect test of both R1 resistance at 2963 and channel resistance, which was co-located just above it at 2965. That level was rejected hard to the downside on Tuesday, putting in a shooting star candle suggesting that the rally might be ending, at least in the short term.

So a technical argument can definitely be made that Tuesday's high could be at least a short to intermediate term top. And with channel support now co-located with the 100-day moving average just above $2,700, a $250 correction from here wouldn't be at all out of place and wouldn't violate the long-term uptrend.

All these factors should have caused technical traders to take profits and brace for a downside correction. But the market had held up surprisingly well as of Wednesday's close, and in early trading on the Thursday overnight session, it was holding up remarkably well, looking like it wants to rally back up towards those same highs that it tested on Tuesday.

And the reason that that might be happening could very well relate to the Mar-a-Lago Accord that Jim Bianco described in today's feature interview. Now, remember, the strongest fundamental driver for gold is real interest rates because gold competes with treasuries.

Both are considered ultra-safe assets, and the more treasuries yield in real terms, the more attractive they are compared to gold. And what really causes gold to soar is when real interest rates go negative as treasury yields fall below the rate of inflation.

Normally, we analyze this in terms of marketable treasury yields. In other words, if I chose gold as my safe haven asset rather than buying treasuries on the open market, well, how much yield would I be giving up by choosing gold, which has no counterparty, over treasuries, which pay a yield?

But if the hypothetical scenario that Jim described in today's interview actually came true, well then at least for central banks, which are the biggest buyers of safe haven assets, they'd be choosing between zero yielding gold and zero yielding treasury paper, and gold would be the obvious choice.

But the flip side of that coin is that any favor that that might tend to give to gold would be usurped by the fact that the U.S. would presumably demand that foreign central banks hold a certain percentage of their GDP in those new zero-yielding treasury bonds or else face loss of military defense protection.

So they would presumably forego gold in favor of getting that military support, but only to the extent that they were forced to.

If I put myself in the shoes of a foreign central banker, if I thought any of this stuff were really and truly actually about to happen, well, I'd rather enter that negotiation with a larger gold position and a smaller treasury position just in case current holdings came into the equation for how much each nation would have to be required to invest in these new zero-yielding Zoltenbonds or whatever we're going to be calling them.

So bottom line, the technicals say that this gold rally is long in the tooth and should be ending here. Either the top is already in or we'll get a test of round number resistance at 3000 before reversing downward and eventually retesting that bottom channel support line, which is down around 2700 right now.

But if this market breaks out with momentum above $3,000, that would say to me that central bankers see the Mar-a-Lago Accords on the horizon and are positioning for a whole new monetary negotiation with the United States.

If that actually happened, we could easily see $4,000 gold in the next few months. But that's only if the scenario that Jim laid out actually became policy as opposed to just a speculation of what they might be thinking about. Well, Eric, on the short term, that $3,000 is definitely the upside target for this move.

But overall, there is the case for a very bullish gold going into the end of the year and into next year. There's all sorts of big upside targets you can have. But I want to look at it purely from a technical perspective on the very short term, which is

As we approach 3000, typically the first test of these kind of areas would offer resistance, which is that that would have some sort of consolidation or pullbacks. So I look at it here that gold is in a primary bull market that is very clearly being bought on dip on almost every pullback. So therefore, you have to respect that the bulls are definitively in control.

But at some stage, there will be enough resistance where gold will once again consolidate. And it might pause for a month or two like we've seen in the past.

along those levels, if that price action remains generally accumulative in that consolidation phase, that would be the springboard from which to launch a much more bullish move maybe into the second half of the year. I think on the short term, we're going to start reaching some resistance levels, but that doesn't make it bearish by any means.

All right, Eric, let's touch on uranium. Well, we had another week of overwhelmingly bullish nuclear news flow, ranging from Justin Trudeau endorsing large-scale nuclear to several comments from U.S. Energy Secretary Chris Wright talking up the nuclear renaissance. Yet still, in the face of all that, the price of uranium and uranium miners is dragging along at cycle lows.

So I'm going to spend a little bit longer than usual on uranium this week to see if we can get to the bottom of what the problem is and also to propose a solution of my own design for what I think the problem is.

I got a lot of feedback on X and in private emails and DMs from last week's episode with Guy Keller and my comments in that episode in the postgame segment when I said that I was on the hunt for a good explanation for why spot uranium prices have diverged from enriched uranium prices and why that's persisted since early 2024.

Nick Lawson over at OceanWall was kind enough to publish a new chart in reaction to our episode last week, and you'll find that chart in this week's postgame chart deck. I want to thank Nick for supporting us with this chart, and I definitely recommend AtOceanWall2 as a must-follow on X for anyone who's interested in the uranium market.

As you can see from Nick's chart, the real story on uranium prices is being told in private by the term contracting market shown in orange, which continued to move higher in a consistent uptrend all year long throughout 2024.

The only thing that was down in 2024 was the spot uranium market, shown in blue, which Guy Keller described as the most dysfunctional commodity market he's ever encountered in his entire career.

Cameco's CFO Grant Isaac made similar comments in another podcast interview last week, reiterating our friend Justin Hune's view that the spot market, as shown in blue on Nick's chart, has so little volume that it basically doesn't even matter and isn't relevant, and that the term price, shown in orange, is the only one that we should even bother paying attention to.

Well, that's all fine and well, but the problem is the orange term price is only reported once a month, and even then, you need a paid subscription to UXC or another uranium market data provider in order to even know what's going on with the term price. The only price the investing public sees is the spot price of uranium as shown in blue on Nick's chart, which isn't a meaningful indication of what's really going on in the term market, which is where all of the

where all the volume is. So it's easy to jump to the conclusion, well, okay, this could only mean that there must be some evil conspiracy among the fuel buyers to manipulate the spot price lower in order to break the spirit of uranium bowls. And it's tempting to say that there's actually several other plausible explanations. And quite frankly, I don't think the fuel buyers are that sophisticated. But I do think this market is very badly broken because of a lack of

of transparent market data to the market that actually matters, which is the term pricing market. So I'm going to propose a solution in hopes that our audience can make it happen by talking this problem up on X and elsewhere until someone takes action to fix it.

Cameco and the other big producers obviously have a vested interest in having an orderly market that pays them full price for their product. So I'm going to argue that it's very strongly in their interest to make the term price data public somehow. A big producer like Cameco could just start their own price index based on their own term contracts and make it free to the public so that everybody sees those term prices. Or

or they could cut a deal with a uranium market data provider like UXC to subsidize the cost of UXC taking what's now proprietary data, changing their policy and instead giving it away for free for the sake of creating a more transparent uranium market. Now,

Now, obviously, UXC deserves to be compensated for their work, and I don't mean to suggest that they should become a charity. My point is simply that the producers who sell uranium for a living would all benefit immensely from more transparency of the pricing in this market. And they could accomplish that by subsidizing USC, providing them with funding in order to make what is now a proprietary data series public.

All we have that's publicly visible for now is the official spot price. And as Nick's chart so beautifully illustrates, it's actually a source of misinformation about the real price of uranium. And it seems clear that that misinformation is probably what's stopping the bullish fundamental news flow from translating into inflows into the stocks of those producing companies. It's very much in those companies' interest to

to fix this problem, even if it costs them a few bucks to do so. Somebody needs to fix this broken market. I think the solution is to make the term price data public and ideally publish it more than just once a month. The stakeholders with a vested interest in being paid full price for the uranium need to figure out how to make that happen.

Well, Eric, broken market or not, observing simply the price action that we continue to see in uranium, it is distributed. And on the short term, we do see a pattern of selling as whoever was holding the yellow cake is certainly hitting the bid.

At some point, obviously, that divergence will reconverge and maybe it's a big opportunity. But on the short term, this is a market that's not attracting any capital and it's a very quiet market and will be interesting to see when that transitions into a new accumulation cycle. So finally, Eric, I wanted to just touch on the chart on page seven, which is that Eurostock 50 index. And

And while many people are seeing this distribution in some of these Mag7s and in the S&P 500 and small caps and wondering where the sector rotation would go as in that there are other areas that would take it, but it looks and feels far more like a rotation globally, particularly as money is finding the European stock markets at a cheaper currency and better valuations.

And so the Euro stock 50 has been ripping like it's a new bull market and certainly continues to gain more and more traction on the upside. It'll be interesting to see whether or not we can see a big global equity divergence like this continue, where, for instance, the U.S. equity markets go through some sort of correction and the

net benefactor from flows actually could be that the continuation of the European stock market's rising in that light. That's certainly a trend that I want to continue to observe whether that continues. Folks, if you enjoy Patrick's chart decks, you can get them every single day of the week with a free trial of Big Picture Trading. The details are on the last pages of the slide deck or just go to bigpicturetrading.com.

Patrick, tell them what they can expect to find in this week's Research Roundup. Well, this week in the Research Roundup, you're going to find the transcript for today's interview, as well as the chart book we just discussed here in the postgame, including a number of links to articles that we found interesting. You're going to find this link and so much more in this week's Research Roundup. So that does it for this week's episode. We appreciate all the feedback and support we get from our listeners, and we're always looking for suggestions on how we can make the program even better.

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at Eric S. Townsend. That's Eric spelled with a K. You can follow me at Patrick Ceresna. On behalf of Eric Townsend and myself, thanks for listening, and we'll see you all next week.

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