Luke Gromen, founder of FFTT, joins the Julia La Roche Show for episode 269 for his latest macro update. Gromen argues the US government is in fiscal dominance, spending over 100% of tax receipts on entitlements and interest payments alone. He says Fed Chair Powell faces a binary choice between crushing the dollar through inflation or crushing the bond market through higher rates. Gromen notes that funding currency relationships between the yen and dollar have broken down, signaling both central banks are cornered. He advocates getting out of government bonds and into hard assets like gold and Bitcoin, predicting that retail investors holding long-term Treasuries will be the biggest losers. Gromen believes Trump officials are "begging" for rate cuts because they know the fiscal math doesn't work without negative real interest rates.
Sponsors:
Monetary Metals: https://monetary-metals.com/julia
Kalshi: https://kalshi.com/julia
Links:
website: https://fftt-llc.com/
Twitter/X: https://twitter.com/lukegromen
00:00 Introduction and welcome back Luke Gromen
01:01 Funding currency relationships breaking down
07:58 Meta trade: exit government bonds, buy hard assets
12:27 Gold still early - central banks driving demand
14:47 Trump officials begging for rate cuts - Fed cornered
16:56 Stablecoin plan requires much higher Bitcoin
20:33 Dollar/bond correlations broken - foreigners selling Treasuries
27:11 Powell's binary choice: crush dollar or bonds
34:14 Fiscal dominance: interest expense >95% of receipts
37:08 DOGE failed - needed dollar devaluation first
39:25 Portfolio: overweight gold, Bitcoin
45:18 Two scenarios: Powell cuts vs. doesn't cut rates
48:54 Retail investors stuck holding long-term bonds
52:04 Closing remarks
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