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The Honest Money Show is your guide to understanding what money really is — and why today’s system isn’t working. Hosted by Anja Dragovic, this show cuts through the noise to explore how money shapes our lives, where it’s gone wrong, and what a better future could look like. Along the way, you'll discover how Bitcoin fits into the bigger picture — not as hype, but as a serious response to a broken system. Whether you're curious, skeptical, or already down the
Speaker: Welcome to Honest Money.
I'm your host, Anja, and today's
episode is brought to you by hard block.
Anja: Joining me today is James Lavish.
Uh, most of you'll know him, but for those
who don't, uh, he's a chartered financial
analyst and a Reform hedge fund manager.
Welcome to the Honest Money James.
James: Well, thank you for having me,
Anja, and uh, I appreciate you having me
on and look forward to talking to you.
Anja: Yeah, I appreciate you coming on.
Obviously, you know, it matters
a lot to smaller, you know,
podcasters to have big names.
So I really, really appreciate you, uh,
putting time aside and I'm very excited
because I reached out to the community to
ask some questions and obviously people
have a lot of macro questions for you now.
So maybe let's start with gold and silver.
What is driving this surge?
James: Good lord.
Did you see it today?
So gold over the last, uh, 20 hours has
gone basically, um, since yesterday.
Yesterday morning it went from
5,200 all the way up to 5,600
all the way back down to 5,100.
I mean, uh, this is like meme
stock activity, you know?
I've
Anja: never seen anything
like this in my life.
James: Yeah, it's, it's, uh, it's crazy.
Silver's doing the same thing.
Marched up to one 20 all the way back to
a hundred back, and now it's up to 1 0 5.
Um, they're trying to find some levels
here and, uh, so what is going on?
Well, we're seeing, uh, the, you know,
clear evidence of the world is rushing
into what's called the Debasement trade,
and that is something I just wrote about.
Uh, I just wrote a paper about it.
So we will put a link up, uh, in
the show that people can go find it.
But, uh, so.
I did that with, with, uh, Unchained
Capital, but, so, you know, what
is that the Debasement trade?
You, you may have heard
Ray Dalio talk about it.
You may have heard people like, uh,
Stanley Druckenmiller talk about it.
Um, some of the biggest, uh,
investors in the world are, they're,
they're making it known that, uh.
Investors have a risk.
And that risk is that they, whatever
their, their investment is and, and
if it's denominated in US dollars,
solely, like if you're in cash or if
you're in, uh, short-term treasure that
are not paying you enough, um, then I.
You're at risk of having your,
um, your assets inflated away.
And it's basically, there's the,
the debasement is that the US has
so much debt and, um, the debt
is piling on top of debt That.
This requires more and more and
more and more fiscal spending.
And because of that, interest
rates are just going, they're
going to stay perpetually high.
Um, we may have a drawdown, you
know, in a, in some sort of flight
to safety to US treasuries, but
that would be short-lived because.
The US Treasury has little choice
but to print money on you to keep up
with this, they have to print money
in order to, um, do exactly what
Japan has been doing for decades now.
And that's to, um, make sure
that we can meet our expenses.
And, you know, this is the US government
is, they're the ones who are spending,
um, just, uh, in insane amounts of money.
But when you look at it structurally,
the problem is that we have
mandatory expenses, and then
you have discretionary expenses.
And the mandatory expenses are
things like social security,
Medicare, medicaid, you know, they're
not, they're not up for debate.
Uh, we're going to continue to pay those.
And because of the structure of, of
social security, it's not like you and I
paying into Social Security for decades.
Then they take that money along the way,
they invest it and make sure that they
have enough money to pay us back later.
No, what they do is they spend it and
then they, they just continue to tax
more and really just borrow more in
order to meet those, um, all of those
obligations to people who are retiring
now who had been paying in for decades.
And so, um, this all
gets us to the point of.
We have a problem and
it's the entire world.
It's not just the us, it's the entire
world Is, uh, who the, any, um, any
country that is on a fiat standard,
meaning they are, uh, they issue debt and
in a currency they can debase, they will
debase that currency in order to, uh,
make sure they meet their obligations.
And so that just means that
the, the currency gets worth
less and less and less.
And so, you know, if you had a
hundred dollars in the bank in 2020,
according to the official estimates,
that's worth 75 cents now to you.
So it went down in value.
And especially if you held it in something
like a, a Citi Citibank or a, you know,
a Chase or Wells Fargo 'cause they don't
give you interest on your deposits.
If you just left it there, it melts away.
And that is the easiest way to
understand that this inflation means
that the the dollars are getting worse.
They're getting worth
less and less and less.
It's not that your home is worth more,
it's not that gold is worth more.
It's not that Bitcoin or any other
thing is worth more, it's that the, the
dollar is worth less and it requires
more dollars to buy those things.
And so, and that's called
the debasement trade.
And we're seeing, so in essence, what
we're seeing in these metals is this
rush from primarily central banks and
large institutions to go buy some gold.
As a starter to, uh, you know,
protect themselves against this
debasement of the currency.
And then on top of it, you've got
things like silver and copper and
platinum, which have strong utility
in this, in, in the world for, for
certain, uh, manufacturing processes.
So things like, uh, solar panels,
uh, EV batteries where they're
making silver solid state batteries.
Now, um, the circuitry that goes into the
chips that are, uh, that are necessary
for all this, uh, ramp up in ai.
Um, and then copper, the same thing.
You've got this rush towards those,
but what has happened is it's just been
a feeding frenzy and they, they're,
they're moving almost in a parabolic
nature, uh, which is pretty surprising to
somebody, uh, who's been investing for.
Decades for over three decades now.
This, these moves are, are, um,
you know, this is not normal.
And, uh, and it's a strong signal that
something is breaking in the system.
And I would argue that, that
something is just the sheer amount
of borrowing and debt in the
world and it's kind of coming due.
And this all comes all the way back around
to what, what I said in the beginning was.
Japan started this decades ago, and we're
starting to see those, you know, those
chickens come home to roost from, from
that modern monetary theory playbook.
And it's a problem for them, and it
may cause problems around the world
when they get, when, now that they're
cornered, they've painted themselves
into such a tight corner that it, it
may cause problems for everybody else.
Anja: Yeah, I've got so many
different directions I wanna
take this conversation in, but
James: the problem is you asked me
one question, I might just talk for
10 minutes, so please interrupt me.
I
Anja: mean, that's great.
That's exactly what I want.
But yeah, like I feel like at the
moment there's a lot of emotions in
the market and yesterday I was having
coffee with one of my girlfriends
and we were kind of tracking.
Gold and silver prices last year, and
I hadn't even looked at it again until
yesterday and it just keeps going up.
And my girlfriend was like, should I
have diversified into gold and silver?
Like you?
It's, it's,
James: and that's a tip off when
you have typical everyday people who
are not investors start asking you.
And I, I was getting, I've been
getting text messages from friends, you
know, they're not investors, they're
professionals, and they're like,
Hey, should I be buying silver here?
And this is when silver was at $112.
I'm like, you know, that's just a, it's
a signal that, okay, you're starting
to get this FOMO feeling out there
that this is something that I need
to get, get involved in, you know?
But really what it comes down to,
Anja, and this is why you're gonna
get these questions, and everybody
knows they have a sense about it.
They, they know that everything
is going up in price.
They don't typically the person
that your typical person doesn't
understand why it's not their fault.
You're not taught this in schools.
You're not taught in high school, college.
You're not even taught,
taught about it properly.
In business school.
You're just not.
And so your typical person
just sees the prices go up.
They feel their wages are not keeping
up with them, or they lag so much that
they're not keeping up, and then they're
lied to about the actual inflation.
They hear the fed say something.
It's printed in the paper.
It's on the news that, oh, inflation
was two and a half percent this year.
That's absolute nonsense.
You know it.
I know it, everybody knows it.
That that's, that's just nonsense.
And the part of the problem is
they're not measuring things like
in, in real life and the way they
categorize and, and weight things.
You're not seeing that insurance is
up so dramatically, whether it's home
insurance or car insurance or health
insurance, it's up so dramatically that
it completely wipes out any conversation
about where inflation really is.
And so, but they feel that, and
so that puts them in a position.
This is what's so insidious about
this whole system and this is what
frustrates me and I try to teach
people about so they can understand it.
'cause we're not gonna change it.
Not yet, but they can understand
the system and that is that.
You are forced as a worker to go out
and take the hard earned money that
you've made, find a way to budget
in a way that you've got a surplus.
So you can take some of that and put
it away and put it in in investments.
But here's the insidious part about it.
You can't just put cash in the
bank 'cause of what I just said.
It'll melt away.
If you have, if you had a dollar that
you put in, in, let's say you put a
hundred dollars in the bank in, in 1971.
It would be effectively worth
about $12 now, 12 or $13.
That's it.
That's all it's worth.
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James: And so it forces us to take
risk, to go out and take risk in
the markets, to buy things that
we may or may not know about.
The s and p, you know, the Mag seven
stocks, Nvidia buying Bitcoin, buying
gold, buying silver, buying anything.
Buying anything that you can protect
yourselves against this inflation.
It's insidious because then you take
the risk and then your reward for
being right and doing well on that, you
get taxed on the gains on that risk.
So it's, it's a, it's a,
it's stacked against people.
They feel it, they're frustrated by it.
And that's why we get these, these, you
know, text messages and, and emails.
It's like, Hey, should
I be involved in this?
'cause everybody, it's not necessarily,
people are looking for a lottery ticket.
They're just trying to keep up, you know?
But then on the other side of
it, when you see these fomo,
parabolic price, you know, rises.
Well, that's when, that's when you've
got people who are out on the risk curve
and just looking for that lottery ticket.
Just gimme something, gimme something.
And so, and that's kind of where we're at.
And, uh, so that's, that's
causing all of this angst and,
and these crazy price moves.
Anja: Yeah.
It, yeah.
I, this, I guess while we're here.
Um, but on the Debasement trade,
um, you know, that obviously was
the theme of 2025, and we can
assume it's going to continue to
be for the remainder of this year.
Um, but do you see the US
dollar sliding further?
And if so, what?
Where do you see the US dollar
Index in a year from now?
James: That's a good question.
You know, um, you, you heard, um, you
heard Trump say that he's not worried
about the, the, the dollar and, and
the reality is that a weaker dollar,
it, it helps us with exports, you know.
Um, and, uh, so he's, he, the, the issue
here though is that investors buy bonds.
Okay, and they buy these bonds, the US
treasuries, they hold them, and then later
on, if the dollar is worth less, they get
dollars for those bonds when they mature.
So if the dollar gets weaker,
it's not so great for them.
So on the other side of it, you've
got the new treasury secretary,
Scott Bessant saying, oh, no, no.
We care about the strength of the dollar.
We do care about it.
But in reality, they don't,
they don't really care about it.
So where do I see the dollar going?
It's really hard to say, you know,
that may be a function of what?
What kind of, um, agreements,
global agreements, geopolitical, uh,
geopolitically driven agreements on buying
oil around the world are structured in,
are they structured in dollars or not?
And we're seeing countries
move away from that.
So I don't expect the dollar to
get back to the levels that we
saw it, you know, back in, in.
Twenty two, a hundred fourteen,
you know, or earlier than that.
Like if you go back to the, back to
the eighties, I mean, the dollar index
was, it was up in the one fifties.
So do I expect it to get there?
I don't.
Um, so, but again, it really
depends on, on, on other currencies.
And it depends on, on the
failure of other currencies.
Does Japan pull through this
somehow in the next 10 years?
I don't know.
They are in a very, very tough position.
And the reason they're in that tough
position is because they've been
printing money just, uh, hand over
fist for, uh, for years and years now.
And what they've been doing
is they've been holding their
interest rates down artificially.
So what happened, which is part of
what you and I were talking about a
little bit before the show about Japan.
Well, what happened in Japan?
Well, we saw something called the carry
trade start to blow up last year, uh, or
a little over a year ago in August of 24.
And so, um, and what happened was, you
know, you had interest rates rise to a
point that it's in, in Japan, that it
started getting some traders offside.
Well, what, what's going on in Japan?
Because Japan keeps their
interest rates so low.
It's, it's effectively been.
Almost free money for the rest of the
world for years and years and years
and years where you could borrow yen.
How do you do that?
Well, you can, you can
short the jbs, right?
Which are, which had interest
rates down near zero.
And you're, so what you're doing is
you're, you're, you're getting yen for
that, and then you're turning around.
And buying dollars with that yen.
So you're turning into dollars and
or Euros or anything else, and you're
going and buying risk assets for that.
So you're basically borrowing
money for, for almost nothing.
And so that's, and that's
been happening for many years.
And the way, so how do they do that?
Well, they're printing money
and buying their own bonds.
In order to keep that, keep
that whole charade going.
Okay.
And so, because they want to keep
those interest rates low and, and keep,
you know, try to get their economy
going by keeping interest rates low.
Well, that all ended and.
If now that the, the Japanese government,
they, they own over 50%, right?
About 50% of their bonds.
Now, it used to be over 50%.
It's about 47 or eight 48% now, of
all jbs of all government bonds.
They, the, the government itself
is the largest holder of them.
There's something
structurally wrong with that.
The world is waking up to it and
they're saying, you know what?
We need to be paid more for the risk
of holding these long-term bonds.
And so.
The buyers moved away.
And so now you, you saw the, the
10 year, the 20 year, the 40 year
Japanese, um, JGB spike up over
4% for the first time in decades.
I mean, the, it was, and it
was a violent move, and so.
And that has, has come to the attention
of many investors around the world
that, hey, the free, the, the free
money system in Japan is over.
And that's causing some angst.
And people are wondering are, are
risk assets not gonna sell off?
Because people now have to
reshore those, those dollars back
into Yen or wherever they are.
In order to, uh, in order to settle out
some of those trades, and now you're
seeing Japanese investors, institutions
saying, well, why am I gonna go take risk
on the dollar, you know, uh, the US dollar
and buying US treasuries when I can just
buy JBS now and I can buy the JBS and get
a good, good return and have it based in
the yen, which is what my, my liabilities
are in if I'm a pension fund out there.
Those are my liabilities.
Why would I go and, uh, you
know, offshore my, my investment.
I'll just keep it here now
that I can get a return here.
So it's all playing into this
and it's making the entire
world a little bit nervous.
And then finally, the, the other, the
other part of this whole situation has
to, again, with geopolitical risks.
So if you're, if you're
a country out there.
And you're a central bank and you
watched the, the US government make
their catastrophic trading mistake,
their catastrophic treasury mistake.
Unfortunately, back when Biden froze the
Russian assets and seized their treasuries
and then kicked them off the Swift
network, that basically just signaled to
the world that, hey, look, if you're not
in, you know, complete agreement with
the United States, if you do something
we don't want you to do, if you're not
a really tight partner with us, well we
may take those treasuries away from you.
How stupid was that?
Because we need the world
to buy our treasuries.
We're running multi-trillion
dollar deficits.
We literally need the world to buy
these treasuries so we can continue
funding, funding our trillion
dollar per year defense machine.
And yet at the same time, now you've got
central banks around the world buying
more gold than they have in many years.
And so now they're buying a thousand
tons on average per year, which is.
Mindboggling, it used to be 500 and
they expect to continue to do it.
And, and that's, that's part of the issue
is that they don't wanna own treasuries.
They don't want to own something they,
they can see as being debased that's been
downgraded by all three ratings agencies.
They don't wanna hold those.
Why would they, that's risky to them.
They'd rather hold something that's hard
money that can't be debased like gold.
And we're seeing it in real time.
Anja: So as this unwind picks up.
Which we pretty much
all expect that it will.
Do you see any big entities and
sovereigns at risk or even potentially
standing to gain from this?
James: Well, I mean, uh,
this all takes time, right?
It's to have, um, a, a currency blow up.
It's a, that's a monumental,
um, you know, event.
That's a, that's a, that's a large
event, so it's hard to say what, what
would tip something like that off.
But I can say that.
We're always walking this edge, and
the reason we're always walking this
edge is because the entire world is, is
levered and in, in this crazy debt, um,
you know, based monetary system where
we're borrowing so much from the future
that, you know, if, if one country,
one massive company, if they get off
sides, it could tip off what we call
contagion and spread across the world.
And that's something that we experienced
in full back in 2008, 2010, during
the great financial crisis, and
that started in the housing market.
But this has been kicked
up to the sovereign level.
That's what happened back then.
They took all that risk off the bank
sheets and all of that contagion,
and they, they consolidated it
onto the central bank sheets and to
their, and to their balance sheets.
And now that's why you've got all
of these central banks offsides
and we're running massive deficits.
That just can't be stopped right now
because we, we borrowed so much money.
Anja: I have a speculative question.
Well, a lot of these are, but like if
there was to, uh, be a crack in the system
somewhere and then every, like Domino's,
just countries kind of follow suit, do
you think it would be bigger than the GFC?
If, if something were to crack now,
James: well that's the problem is that
mathematically it has to be because back
in the great financial crisis we, we,
we printed about a a trillion dollars
in order to save the, the US banking
system and to avoid a, a, a global
meltdown of the global financial markets.
Fast forward to 2020.
We had our lockdowns and we did not
need to print this much, but they did.
They printed $5 trillion.
The the Fed printed $5 trillion.
Which brings us around to your
question about Powell and his stance
and the stuff he's been saying.
Well.
I mean, where do I even start with this?
What, what a monumental mistake that was.
So all this bluster you heard about, oh,
you know, inflation's just transitory.
It's because of supply chain issues.
It's 'cause we've been in lockdowns.
People need goods that we don't, that we
didn't expect they would need Nonsense.
Absolute nonsense.
The reason that prices went up
and we had inflation over 9% in
the United States is because they
printed 5 trillion F-ing dollars.
That's why, that's the, that's the reason.
It, it first principles, if there's more
money chasing the same amount of goods,
the goods are gonna go up in price.
Period.
End of story.
Stop arguing about this.
It's just, it, it's just,
it's simple economics.
Okay.
Oh.
Now you print 1 trillion, then you
print 5 trillion, and you try to get
those, the 5 trillion off your books.
They, they've gotten about a trillion off.
And you know, the Fed
assets are as of today.
I mean, if I, if I just pull up Fred and
where the Fed assets are as of today,
they're still sitting at $6.59 trillion.
So almost $6.6 trillion.
Okay, so they got, they got it down.
They got it down from
8.9 to 6.9, so apologies.
They, they, they got 2 trillion
off my, it's been a long week.
Um, but that's it.
They stopped QE or qt quantitative
tightening, meaning they stopped
selling these in the market.
It's over.
They're now, they're
gonna go, go back to qe.
What we're doing now is QE light,
which is buying short-term treasuries.
Uh, the Fed is out there
buying short-term treasuries.
They, they, they call, they say it's
not qe because technically it's not,
you're not buying long-term treasuries
and dumping cash into the system.
What you're doing is you're, you're
adding cash to, to bank reserve
balances, which they're trying to shore
up so they don't have a, a crisis, um,
um, you know, in the banking system.
We can talk about that in a minute.
It's a, it's a repo system, but, and
we've seen that before, but let's
go back to your original question.
Would they need to, would, would this be
bigger than the great financial crisis?
And depending on what the, what
the event is or what it could
be, the answer is absolutely.
And just mathematically you can
just see it, you know, um, if
you look at the chart of where.
The where the Fed balances were and then
where they went in the great financial
crisis, and then the next hump, and
where they went in the, in the, um, the
COVID, you know, money printer go Burr.
And then you, you just look at it,
it's just gonna be a factor of that.
So what happened?
Well, here's, there's just so many
issues here with where Powell is and
what, what he's saying to the market.
And you know, Powell is trying as hard
as he possibly can to protect his legacy.
And what do I mean by that?
Well, you know, he's trying to be the
guy who engineered a soft landing.
So when he leaves office, everybody
remembers, wow, what a great guy.
He engineered a soft landing.
They don't remember that.
What an idiot.
He printed $5 trillion.
What was he thinking?
You know?
So that's what he's trying to reverse.
The reality is he made a huge mistake.
And, you know, it's easy for me
to sit here and, um, backseat
driver to, uh, to criticize it.
But he, you, you know, this is not,
this is something they've seen before
in, in, you know, different measures.
And you know, he's working with
Janet Yellen, who used to be the
fair, the, the, the Fed chair.
She knew better and they, they
made a number of mistakes here.
First mistake printing $5 trillion.
Well, actually, let's back up.
The first mistake was Janet
Yellen didn't term out the debt.
What do I mean by that?
I mean, she didn't, she
didn't start issuing.
10 year, 20 year, 30 year treasuries
back when interest rates were down around
half a percent and she could have gotten
away with really low interest rates.
Long-term borrowing for the United States.
No, she was, she didn't
move out on the curve.
She stayed right where they were
and kept issuing more T-bills.
And so that means that those mature
pretty quickly, and every time
they mature, you gotta reissue 'em.
And where do you reissue 'em?
You're issuing them like right
above the Fed funds rate.
Well, then Powell goes and,
and prints all that money.
She's not doing anything.
He's printing all this money.
She didn't do anything.
Lo and behold, what happens?
You get to a 9% plus inflation rate.
The Fed starts panicking and they
then they start jacking rates up
at a, a pace that we hadn't, we
haven't seen, at least in my career,
I hadn't seen in a very long time.
And so they're jacking rates
up and what does that do?
It causes the, the, the interest
expenses of the treasury to skyrocket.
So she missed her shot.
That was the first, those were like a,
just a series of mistakes that they made.
And so during the last election period,
you heard Scott Besant, the treasury,
the new treasury sector, come out and
say she should have turned out the debt.
She should have turned out the
debt and really criticizing her.
Well, he was expecting, as
we all were, that the Fed was
gonna start lowering rates.
Why?
Well, they lowered rates twice before
biden WA before Trump was elected before
that election, trying to come out and
say, oh no, we conquered inflation.
Everything's good.
We're gonna start lowering
rates and you know, get to
where we feel is a neutral rate.
And then they just stopped.
Trump won and they stopped and they
said, no, we're not lowering rates again.
And so that was kind of what, why.
Okay.
And so you've seen some weird
things going on in the market.
You then we had the, the tariffs and
there's just been a lot of noise in the
markets, but there's no question that the
economy is slowing down for most people.
That's another thing that we can
get into about the the, there's two
economies going on, but essentially
going back to Powell first, he's
looking at this and he's saying, I
want to go out with a legacy that.
I did great.
We've conquered inflation,
everything's good.
The, you know, the economy is
strong and he's only got a few
more months left here on you.
And then he's done, his term is over.
So that's what he wants to,
he wants to hand it off.
Well, um, here's the issue.
The issue is we do have a khap economy.
And what is that?
That means there's, there's two separate,
um, there's two separate consumers.
In this nation, you know, and
two separate demographics.
One that is doing very well
because they're asset owners.
Their assets have risen in value.
Why?
Because they printed
so much fucking money.
And then you've got the other
half, uh, not the other half.
You've got 90% of people.
That's like the top 10%, maybe
top 20, but closer to top 10 is
really the, that's, that's where
most of the spending is going on.
Then the rest of the nation is struggling.
Why are they struggling?
Well, their, because their
wages took so long to catch up
that they can't spend anymore.
They've been spending and spending
and spending on insurance, on rent,
on cars, on gas, on food, on eggs.
Like it, like everything is more
expensive, far more expensive
than, um, anybody expected it.
So they've been struggling to keep
up and they don't have assets.
And so you've got two economies going on.
If you talk to any normal person out
there, they're like, yeah, it's not, it's,
this has not been a great period for me.
You know, any normal person, you
know, you go out and talk to the,
you know, the, the billionaires like,
yeah, it's great, you know, we got ai.
It's, uh, things are going great.
Anja: Yeah.
James: You know, I don't like
the, the California taxes.
I'm gonna move to Las
Vegas, or, you know, Austin.
But other than that, life's good.
You know, but it's a completely
different world out there for the, for
the, the two different demographics.
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James: And so that's frustrating.
And it's, and it's uh, you know, on, on
one hand it looks like everything's great.
On the other hand, you know, you've
got people who are struggling and
again, you have to own assets.
'cause right back to the debasement
trade, goes right back to it and
goes right back to the, the money
is broken, it's absolutely broken.
And because of.
The Cantillon effect, which I, I also
wrote all about in my newsletter recently.
People can write, they, they can
read about because of that, what's
called the Cantillon Effect.
You know, he, he who is closest to
the money spigot benefits the most.
It means where they print the money.
If you're close to that, if you're
a congressman and you can get and
share of those, you know, those
special loans that were forgiven
during COVID or you're a banker.
And, you know, or you're, uh, an
asset owner, a a, you know, a large
company, A-A-C-E-O or something
get, can get credit pretty easily.
You're close to the money spigot.
You can, you can go out and you can do
very well and go and buy up assets and
have them rise before other people.
And then it trickles down very
slowly and sometimes barely makes
it down to the bottom level at all.
And so the people at the bottom who
are not near this spigot, the, you
know, the wage earners, not the asset
owners, they're getting hurt by it.
And that Cantillon effect has, has,
has, has really done a number on the
us And what it has done is it's created
an economy that looks so much more,
it looks much more like one of the
legacy Latin American co economies
that I used to study about back
in, uh, when I was at Yale in 1993.
That's what this looks like.
Now, the, the separation of wealth is
astounding and it's only gonna continue.
Anja: He's done a number
in Australia as well.
So my family came here in 1997 and
I remember, you know, the average
person, the average Australian
back then lived quite well, like
a, you know, upper middle class.
Yeah.
That is no longer the case.
That is no longer the case.
James: How many people did you
know when I was growing up?
A handful of my friend's moms worked.
A handful.
Most of them didn't work.
And we were, we were, we
were firmly middle class.
We had to climb up there
over a number of years.
Like I did not grow up wealthy.
We were just firmly middle class.
Okay.
Um, you know, and eventually
my mom had to start working.
It was just, it was just too expensive
while I was, when I got to about 10 or 12
years old, my mom was working full time.
Before that, before, you know,
and this all started in 1971, when
Nixon took us off the gold standard
for good, closed the gold window,
and then they could just print.
You know, add infinitum.
And they started to, and by 1980
we started feeling the effects.
So I was born back in, uh, you know, 70.
And by, by the time I was 10
years old, we started feeling the
effects hard, you know, and, uh,
the 1980 was a brutal time for us.
And I'm, and you know, you weren't
alive then, but you, it was not
great for your country either.
So it was pretty rough.
And, uh, but think about that.
There's no way you, like, I don't How
many people do you know who, who, whose
family are not double wage earners now?
Anja: Not many.
James: Not many.
Anja: Not many at
James: all.
Not many.
Yeah.
Yeah, I know, I know.
Like there's some, there are hedge
fund managers that I know and some
very wealthy people I know, obviously.
Um.
Rock stars, some movie stars.
I mean, everybody else has double arm.
Like everybody else has to work.
Everybody has to work.
The mom and dad, it's crazy.
Anja: Yeah.
And then they don't even believe, like
majority of people, probably around 60%
don't even believe that working full-time
will actually lead to a good life anymore.
Like even if two people,
there's just, yeah,
James: they're losing hope, which
is, which has pushed them further on
the risk curve to take more risks.
Well, what if, what if
this goes up a hundred x?
That's why, you know, one of the reasons
that that Bitcoin has fallen out of favor
a little bit here is that people are like,
man, it's already at a hundred thousand.
It's at 90,000.
Like I. I missed it when it was,
it was, it was a hundred dollars.
I and I, I could have bought some,
or it was a thousand dollars.
I could have bought some, but I missed it.
That's what I hear from people
when I talk to 'em about Bitcoin.
They're like, oh, I've
already missed that.
What's the next one like,
should I be, should I be buying
the Z Cash or this Dogecoin?
Should I be buying that?
Like that's only 11 cents.
That might go up to
like a hundred dollars.
Then I can make all that money so that
they're looking for the lottery ticket.
Anja: Yeah.
Yep.
That's the behavior that's incentivized.
So yeah, unfortunately.
Um, yeah.
Okay.
Well let's talk about Bitcoin then,
because I did get some community
questions and this one I think,
believe it came from a quant, so
it's a very serious, um, question
when the spelled WEN bitcoin pump?
James: Good question.
If I know, um, well look.
I, okay, so I'm a co, a co-managing
partner of the Bitcoin Opportunity
Fund, and we are on a Bitcoin standard.
And so that means we own Bitcoin
instead of dollars, even though we're
domiciled here in the United States.
So our, our treasury is, is in Bitcoin
and it's al it always has been.
And so we look for opportunities that
are Bitcoin denominated, you know,
public and private opportunities.
And we are.
Short term, very wary because of the price
activity that we've seen the last few
weeks, it has been pretty ugly actually.
Um, you've seen gold just and silver in
these metals ballooning to new highs.
The Nasdaq and the s and p continuing
to march higher or stay where they are.
And then Bitcoin has has, you
know, it's retreated 30% or
so from, its from its highs.
And so, um, and it's, it's been
trading in a range and lower, and
even today it's down 5% right now.
So how can you
Anja: check what
James: Yeah.
And so does that, does that worry me?
The answer is no, because
I have a long-term horizon.
You know, I, I'm not worried about
the price today, and in fact, I mean,
to be truthful, I would actually, I
wouldn't mind because of this hedge
fund, because of the way that we're
positioned and we can do things.
I wouldn't mind seeing a
six handle on, on Bitcoin.
I wouldn't mind seeing it in the sixties.
Draw down another, you know, 20, 30%.
And the reason for that is twofold.
I can see that happening because
the s and p and Mag seven has mar
they have marched so high right
now, they're trading at multiples.
That, that seem absolutely absurd.
Um, can that continue?
Well, um, sure it can continue for
a lot longer than people expect.
So if you're shorting those things,
be careful, you know, um, who knows?
And so, uh, but like I said before,
we are teetering on all this
leverage that if, if, you know,
we large hedge fund blows up, it
could take a number of them with it.
It could take a bank with them,
you know, and I've watched
that movie play out before.
Um.
You know, back in 1998 when
I was trading arbitrage on a,
on a, a big hedge fund desk.
And we watched the collapse of
Long-Term Capital Management.
This, uh, hedge fund that was founded by
two Nobel Laureates, uh, that, you know,
they, they created what was, uh, known
as the option pricing model Black Shoals.
And they won a Nobel, uh, prize for it.
And they created this hedge
fund that had so much leverage.
They got off sides when the
Russian ruble was devalued and,
uh, credit spreads blew out.
They, they got blown up because
they were basically short them.
And, um, so.
And it almost took down the
entire financial system.
There were emergency meetings.
There's a great book about it by
Roger Lowenstein called When Genius
Fails, these two Geniuses failed.
And, uh, I highly recommend it for
anybody who wants to understand
leverage and how, how one hedge fund
could take down the whole system.
Um, that's what people are worried about.
Do I think that's going to happen?
No.
But I've seen it happen
and it could happen.
It doesn't have to be a hedge fund.
It could be something else.
It could be something that we, that's
why they call them black swans, because
you have no idea where it's gonna
come from or how it's gonna happen.
But if it does, make no mistake, this
will be, and everything correlates to
one trade, meaning everything will go
down, including gold and silver, in my
opinion, unless there's a black swan
that, that favors them in some way,
which I, I can't think of right now.
But, um, I. Everything will go down.
So just, you know, everybody's
gotta be careful, but what you want
is you want to have assets that
are uncorrelated to each other.
But in that case though, Bitcoin
will go down too, in my opinion.
Um, and so, but that's short term
because long term, think about what
we talked about earlier in the show,
the Debasement trade, and here's
where the, it's kind of a misnomer.
It's not a trade.
This is the a debasement positioning.
Okay.
This is not about should I get in
and out, like when should I buy
gold and buy solar and get out?
No.
This is about positioning for long,
long, long term debasement of your
currency no matter where you are.
It's happening in Australia,
it's happening in New Zealand,
it's happening in Europe.
It's happening here.
You're being debased.
And so it's not a trade at all.
It's a position.
And so I'm not worried about Bitcoin
because it's going to benefit from that.
Meaning it's not going to
be hurt by the debasement.
It's going to go up in value.
Or like I said before, it's
gonna be the reverse of that
debasement of the US dollar.
It's gonna take more US
dollars to buy one Bitcoin.
And so I'm very comfortable
with that long term.
I still think that, um, I'm highly
confident that Bitcoin will be trading
at a million dollars in the early 2030s.
You know, whether it's 20, 31, 32, 33,
somewhere in there, it will get there.
And that's because of this, just, just
relentless printing of money that we're
seeing around the world and expansion
of, of liquidity, expansion of leverage.
And so, um, I. You know, uh,
where do I think it'll go?
I think at some point here it does
reverse and we see higher highs over the
course of the next year to 18 months.
But if something happens where the
entire market melts down, and like I
said, we get the, everything correlates
to one trade, this will go lower.
So, uh, we have ways of having
powder to take advantage of that.
And, um, but you know, it's, uh, it,
it, it's the people need to just adjust
their time horizons and, uh, and be
metered about how they approach it.
I would not take on leverage
in Bitcoin in these areas.
It's, it's, you know, this is, you've been
consolidating here and Bitcoin likes to do
things that people don't expect it to do.
So if it looks like it's consolidating
and looks like it's a massive short and
it's gonna go down to, you know, $50,000,
I mean, Bitcoin would like to just
go ahead and go to 120 in their face.
It's just the nature of this thing.
So, um, and it's gonna
continue to be volatile until.
More people understand exactly what it
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Anja: I don't really know what to
expect with Bitcoin because you
know, part of me is like, do I want
it to go lower so I can stack more?
Or do I want it to have its silver
moment so that I can feel validated?
James: Right?
And that's, uh, well it
depends on your horizon.
If you're not planning retiring this
year, then having it go lower so you
can stack more is probably a good thing.
You know, if you don't need the capital
that you have invested in it right now.
But remember, it's not always like that.
If we go back to what happened in Silicon
Valley Bank and when that, when, when
that, uh, had its meltdown and, uh,
and you know, people were, they were
thinking that, well, Bitcoin would, if
you think back, you would think, oh,
Bitcoin must have gotten annihilated
there when the whole market sold off.
No, Bitcoin was up 20 or
30% over those two months.
Why?
Because the nature of that event was.
Oh my God.
They may, they may take my assets
that are sitting in the bank.
I've gotta get it outta the bank,
and it's something they can't seize.
And so they watch, you know, the United
States government seize treasuries.
They've seen the ECB uh, go and seize,
um, bank deposits for Greece when
Greece, when their, when their, uh,
national Bank was, was, uh, melting down.
They saw that happen.
And that was a test case, and they
know that that can happen here.
You're protected a little bit.
You're protected on your FDIC
insurance here, which will protect
you up to a quarter million
dollars in in your account.
But if you have more than that, good
luck And in reality, think about it.
If you have a quarter million dollars
in your account and they need to pay
everybody a quarter million dollars,
that has that to, to shore up a bank
to protect it, especially if it's a, a
gsib, a globally, uh, globally systematic
and important bank, the money that they
would've to print to do that would make
the those dollars worth a whole lot less.
So where do you wanna be?
And so Bitcoin did go
up in the face of that.
So again.
There's always a caveat, you know,
it really depends on what the event
is, but I'm prepared either way.
Anja: Yeah, that's, I mean,
that's a great outlook to have.
Um, but there's a gentleman in Australia
called Scott Phillips and remotely full,
and he's, a few people in the community
are really trying to orange pill him.
He's read a number of Bitcoin books and
he's starting to understand Bitcoin,
but he's still in the position of like.
Well, I get it.
I appreciate it.
I just don't un like he can't
make a bet on it going up.
So that's just what makes him
still stay away from this asset.
Like are there any particular indicators
that you look at in terms of like
adoption and momentum in Bitcoin?
James: Well, I mean the, the, the greatest
indicators, um, macroeconomically are
who's buying and how are they buying it.
And you know, if you listen
to why they're buying it, so.
Things like, you know, um, you got Warren
Buffet and, and, uh, Jamie Diamond just
blasting Bitcoin years ago, and now JP
Morgan Chase is getting into the game
of offering Bitcoin to their investors.
You had Vanguard absolutely refusing to
allow people on their platform to buy the
Bitcoin ETFs, um, when they were launched.
691 days later, they, they
capitulated and now they're
allowing their investors to buy it.
Harvard, uh, I think they quadrupled
their position in, in Bitcoin ETFs
the last quarter of, uh, 2025.
I think it was the last quarter.
Abu Dhabi, uh, there that, uh.
That central bank, uh, their
central bank, they bought Bitcoin.
Uh, I think they tripled
their position late in 2025.
And so those are key indicators.
Here's the thing, people are getting
nervous, frustrated, uh impatient
with the institutional adoption.
And I mean, these are glacially slow.
Institutions, they don't move quickly.
They've got checks and balances.
They've got committees,
they've got oversight.
They've got, um, you know, uh, they
have boards that they have to answer to.
And, uh, it takes a while for them to
adopt a new asset to enter the portfolio.
I'm not talking about, you know,
just buying a different stock, like
this is really a new class and they,
it, it's taken them time to get
to the point where they understand
it, where they can buy some.
And, you know, you keep hearing
about, oh, institutions are here,
institutions are here because hedge
funds are buying the, the, the various,
um, ETFs, but that's not really true.
The institutions are pensions,
funds and endowments, foundations
like they, and they, these, these
entities control trillions of dollars.
Those are the ones who make investments
and stick with them long term.
They're not playing basis trades and,
you know, um, cash and carry trades.
And those games, like the hedge funds are,
they're buying and holding these things.
You know, they're not buying ibit
and shorting BTC futures, you know,
it's, that's not how they operate.
If they're buying ibit,
they're buying to hold it.
It's the same thing
they would do with gold.
So.
Looking for those signals.
Those are the real macro signals.
You can stare at charts all day long, and
that's great for entry and exit points
for, you know, trading around a position.
There's nothing wrong with that.
There's absolutely nothing wrong
with having a core position in
something and trading around it.
I do it all the time.
Um, and so there's,
there's no shame in that.
Um, but that's what the hedge funds do.
These institutions don't do that.
They'll buy and they'll rebalance.
Um, meaning if the, if the portfolio
gets to a certain size or the
position gets to a certain size, they
rebalance to get it back in line to
the percentage allocation they want.
When they come in earnest, Bitcoin's
price will rise dramatically.
It may not happen overnight.
It may just be this, you know,
wow, this thing just has not
been stopping for, for months.
Now that, that is what I expect is
something more along the lines of,
there's just a continuous demand for,
for more supply, and that may take time.
And again, it's your horizon,
expand your horizon, and, and
I, I believe you'll see that.
Anja: Yeah, really good message.
Um, I'm conscious of time.
Do you have any final
words that you wanna share?
Obviously I'll share all the links
to the report for with unchained in
the show notes, but any final words?
James: No, I think, uh, well,
it's, it's good talking to you.
I'm glad you had me on.
Um, of course, you only asked me I
think, three questions I never shut up.
But, um, the, uh, I think the only
message I really want to hit home
with here is, uh, just be careful with
the leverage of, of Bitcoin itself.
It's okay to have leverage,
um, if you use it.
Um, you know, uh, if you,
if you, if you don't.
If you don't get over your ski tips and
you use leverage responsibly, it's okay.
Um, but I'm talking about buying
Bitcoin and then using Bitcoin as
the collateral for your leverage.
That's pretty dangerous.
So that's one of the just big messages,
number one for the people who are
listening about trading and all that.
And then look, um, it's, I, I do believe
that we're in this, we're in a period
of time here where I. The game is not
up yet, but there, there are warning
signals that are being, uh, that are
flashing now on the current system.
And so be aware of those.
Do whatever you can to, to stack assets.
And, uh, you know, um, I've been saying
buy gold and Bitcoin for a very long time.
Um, I still very much believe in Bitcoin.
It is my core thesis.
Um, and, um, but.
No, I, I appreciate you having me on
and uh, and like you said, I've got my
newsletter called the Informationist.
It, uh, it comes out every Sunday.
And I, and what I do is I simplify
one complex topic, um, for you.
Uh, there's a free version that
you can get once a month and, uh,
and that's been well received.
I appreciate that.
And I really love the community that,
that, uh, we've been building there.
Um, you know, it's got almost 50,000
subscribers now in just a couple years.
So that's been, that's been fun.
And then of, and then of course I've
got the Bitcoin Opportunity Fund.
And if you are an accredited investor
and you want to learn more about
it, you can just go to, uh, bitcoin
opportunity.fund and, um, and we can
set up a call and see if it's something
that would be appropriate for you.
Um, but that's it.
I look forward to, you know,
talking to you again soon and, uh,
and I appreciate you having me on.
Anja: Awesome.
Thank you so much, James.
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