Tariffs, Trump's Economic Endgame, Market Chaos, Bitcoin Reserve, CoreWeave IPO

Trump has just said he's not looking at the stock market. I'm not sure I believe that, but okay.

Well, if we are incentivized, if the government of America is incentivized to implement policies that crack the equity markets, it's actually really good in some ways. Number one is, if you deflate asset prices, you also deflate inflation.

So I think disinflation is very important, and I think we have to find some way to get there. Chamath may be right that it's worth hitting assets to get to disinflation, that's something that Scott could be working on because of all the debt

I do think that he is aware, and I would imagine the administration generally with Besant and others in kind of key leadership positions are trying to make the case that if we can get rates down, we have an opportunity to kind of refinance this $10 trillion that's coming due in the next 12 months and get ourselves into a kind of more sustainable financing position.

It's really interesting what they did is they locked down the full supply of tons of data centers, tons of the power they needed, tons of the chips. They're very, very thoughtful. I mean, they're effectively, they're traders and they're very economic. And I think they have a lot of the stuff well.

And so I worry a little bit about a business like this, where there's four or five companies that are each doing 80 billion dollars of CapEx this year to create infrastructure that effectively starts to replace what these guys are effectively offering out as a service. ... If I was to do diligence on this business, that's where I would spend a lot of my time is like, guys, what's the capacity going to be in a year or two? Sort of like when broadband hit the Internet, you didn't need speed doublers anymore.

Open AI dropped GPT-45, and I think it was not really that well received.

Let's talk about this ChatGPT. I guess they came out with 4.5. It was such a dud. I didn't even realize that they launched it.

That will unleash the workforce and it will counterbalance the inflation that we're experiencing. So there's a lot of inflation because of tariffs. And by reducing government spending, that's the offset to inflation.

And what I would say is the other side of the tariff knife is that if there are markets, though, where you're making something that's fundamentally innovative, where you are but one maker, the problematic part of where tariffs really affect the US consumer is then the price of that product, of which there are no competitive alternatives, can go very, very high. And that's inflationary. And I think that that slows down consumption.

I buy LED lights in my greenhouse, and the price of the LED lights just went up by 25 percent. This week, I actually spoke with the CEO of an LED company, and I was like, why don't you guys make the LEDs here? And there starts to become a crossover point where it actually makes economic sense for the company to make the LEDs here instead of sourcing them from Asia. And there's 100,000 examples of this.

Here's where tariffs make a lot of sense. If you have markets where there are domestic alternatives and or where things are fundamentally commodity, there's no reason why tariffs can't work to create the incentives to re-domicile economic productivity inside of the United States. That's a slam dunk, I think.

In China and Indonesia and all these other countries, they are just shitting over the environment as they make things. I think tariffs are very reasonable in that case. It's not fair to make it more expensive for us because we're doing it well, and then we outsource it for them to destroy things.

But the other part of the IRA, this narrow part is what it did to reinforce tax incentives and tax equity, which is a $200 billion market that incentivizes that 90% of energy generation. So my point is that when you start to get into the details, when the house, ways and means community has to figure out what part to put back, this is going to be hard because it's like, hold on, if you got the whole thing, now all of a sudden you take 90% of the incremental energy generation incentives out of the market, you don't have enough electrons.

Let's take a million workers out of the consulting class around DC, out of the paper pusher class around DC, and let's actually deploy them to the actual productive economy.

We want to talk about software and waste. 35,855, according to Doge, breaking news, ServiceNow licenses on three products only being used by 84 people.

Listen, Trump's negotiating, right? ... He's using this to negotiate. ... And I think it's a reasonable thing to use to negotiate and force them to do that.

I think what tariffs allow us to do is rebase the long-term reliance on the US dollar. It allows us to rebase our ability to fund our own deficits. And it allows us to rebase the long-term ability for American companies to be economically vibrant.

Tariffs aren't being done in isolation. They're being done along with a coordinated policy effort to reduce income taxes and another policy effort to reduce government spending. So those are three actions, three legs on a stool. So tariffs, reduced income taxes, reduced government spending, and they are related to each other.

And to Chamath's point, this has all got to become predictable. You cannot put tariffs on off every week or else how does your friend, Dave, who wants to do the LED lighting where you're encouraging to do LED lighting, know if they should build a factory and invest 10 million in that?

The individual governments of Europe are vibrant and powerful. The European Union itself was created almost without any real teeth. And so what happened is the folks there started to pass inordinate numbers of laws. And that has made it really complicated to be a European company, a European citizen. And that has to get sorted out.

I have someone who works with me, their spouse, was a real estate agent, and they are having a really tough couple of years because the industry has spiked up. If you get the industry down again, there are so many different places in America where people start making money again, with the title companies, with brokers, there are so many things that happen with that.

because the way it's worked for 20 years, like EPROS, you could just raise $250 million this week. It's a great company.

I mean, to me, collectibles are not securities, but if it's a collectible, you got to disclaim that, look, this has no intrinsic value, right? That's a collectible. Think about a baseball card. A baseball card is a piece of cardboard. It has no intrinsic value, but the value comes from basically other collectors being willing to buy it from you.

I think there should also be some nuance that you could work on specifically with this group of being clear that when you have a ticker symbol associated with something, or you do charts associated with something, you know, it starts to smell like a duck, it looks like a duck, it's quacking like a duck, but then in the terms of services, it says, hey, this is a collectible.

We had a big contest four years ago, L3, Raytheon, Northrop. These guys, in and out of government for decades, they've gotten tens of billions of dollars to the same technology area. When we went head to head with them, we didn't just beat them by a little bit. We shot down the hardened drones nine and a half times farther away. Same size, same power, nine and a half times. Completely wiped the floor.

And it's a really important point also that we should mention, is that the last four years, the economy has looked OK. But part of that is because government's been hiring like mad.

I don't have equity in any of these companies. I own Google in the public markets, but I don't own the other two.

But also, I think Google just said that they're going to drop an AI button right into the front door core search page.

So we have the reserve and we have the stockpile. So the reserve is just Bitcoin. The goal is long-term preservation. Think of it as like a digital Fort Knox for digital gold. We want to put the digital gold in there. We want to keep it secure. We never want to sell it.

The direct employees of federal agencies is a fraction of people that are employed indirectly by government spending. This is super important. Because as we all know, many government agencies write checks to large contractors, subcontractors, and third party service providers that do the work for them.

If it was equal to what Elon was doing, it'd be at least five trillion dollars. And I push a bunch of them. They say, Oh, the Congressional Budget Office and all these things. I'm sure there's some tough things there. But like, this is crazy. We need to see what these cuts need to be on Doge. And we need to cut five trillion. And none of these people have the balls to do that. It's not the political will to do it, is my interpretation.

And then the markets have just been going, I think, the craziest I've actually seen in 20 years of following the markets. And specifically, you're seeing the Mag-7 compressed towards the rest of the S&P 500

OK, if you ordered one today, the fastest that you can get it turned on is 2030 The fastest that you can get nuclear turned on is 2035 So we don't have the ability to generate incremental electricity very quickly, but for renewables.

There is a bill that passed the last Congress in the House, but Biden basically, he didn't veto it, but he basically, he and the Democrats stopped in the Senate, the Democrats did. It was called FIT 21 And it was authored by French Hill, who's now the chairman of the House Financial Services Committee. So we expect that he will be introducing a new version of his bill, probably in the next few weeks. I don't think I'm breaking any news by saying this. I think people expect it. And that's going to provide the framework for market structure.

Quen, which is the open source Alibaba, dropped a Rev, which seems actually really best in class. So that was really interesting.

We have $10 trillion we need to go out and borrow in the next nine months. And so if we can pay 3%, 3.8%, 4%, we save ourselves trillions of dollars versus if we had to pay 4.5%, 5%, 5.5%.

So when Alibaba pushes Gwen this week, it was an exceptional model. It's probably one of the better open source, if not the best open source model out there. Deepseeks I think is also quite good. It doesn't get any press anymore. So I think we're starting to get to this place where there's such abundance, that actually people are just kind of like overwhelmed with all the choice and they don't know how to differentiate.

We know that AI needs a tremendous amount of power. And whatever you thought you knew, actually, you had to re-underwrite because what Elon has shown is actually you need to now create these mega clusters, 100,000 GPUs going to a million GPUs. All of the power forecasting that we have is miscast. It doesn't even account for this, number one. Number two, there are 35,000 applications into FERC to get approved to generate electricity. 35,000, that's going to meander through some administrative rigmarole. There is a five-year delay to get a gas turbine into America and online.

But I do think you have to look at the earnings of these companies and question where's all of these