#269 Luke Gromen: The Fiscal Situation Is Completely Cooked - Powell Faces Impossible Choice, Get Out of Government Bonds Into Hard Assets

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