Yesterday I had Luke Gromen on the podcast for the first time. It was a great conversation on a bunch of topics, from the Fourth Turning to where financial markets are likely headed. We covered oil, precious metals, Bitcoin, and the potential chain reaction we could see from AI. If you’re interested in any of those big picture topics, you will definitely have something to think about. For anyone that isn’t familiar with Luke, you can find him at Forest For The Trees and on Twitter.

Podcast Summary

* His view on how the Fourth Turning and how things will play out for the US.

* How wealth inequality and elite overproduction will lead to rapid changes in our politics and culture.

* The crosscurrents between rates, wages, inflation, immigration, and reshoring the industrial base.

* Why long-term bonds have been, and will continue to be, certificates of confiscation.

* The potential centralization of Bitcoin, and why Gresham’s Law has made Bitcoin less common for transactions.

* Gold’s growing role in the financial system as a reserve asset.

* The China vs. US power struggle, and why it leads to a lower dollar relative to the yuan, and a higher gold price.

* Gold to oil, and why he thinks that ratio will continue the trend of the last 15 years.

* The potential to use gold in exchange for oil, with an example of how China might use gold to buy oil from Russia.

* How drilling activity in the US is tied to the manufacturing indices, and the increasing manufacturing intensity to produce a barrel of oil.

* His view on silver and platinum.

* The stock market as a key driver of US tax receipts.

* The AI capex ticking time bomb, the depreciation timeline for equipment, and why the hyperscalers might be too big to fail.

* The disruptions that AI will create with labor, what happens when AI models are no longer subsidized, and what could happen with energy costs.

* How the media environment could have an impact, and how social media has decentralized the narrative.

* Book Recommendations: End Times by Peter Turchin & Lords of Finance by Liaquat Ahamed.

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Kontrarian Korner #67 - Luke Gromen

Kontrarian Korner