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Did maybe the Fed take too long to uh get to its cuts in September? Uh what what is what's your read on this? You can't run the most sophisticated economy in the world if you have data that is completely unreliable in either direction. What Trump has done is clean the decks and allowed them. There are already two competing versions of the truth.
One group of people are trying to paint the jobs report as everything is working. There's nothing to see here. Extract that out. the jobs numbers is actually negative. The problem with this jobs report is which one is actually better in terms of where we want to be right now going into a rate cut cycle and their approach is incredibly brittle.
It doesn't work but the dollar complex has stabilized I think because of tariffs. So there's been some real positives. Whoever is president over the next, you know, 5, 10, 15, 20, 30 years, it's going to be very hard to justify why you would undo this. Now, billionaire investor and CEO Chamath is sounding the alarm on the US economy, pointing to tariffs and rising recession fears as key drivers of market volatility.
But despite the challenges, he believes a major rally could be just around the corner. Chamath, a longtime supporter of Bitcoin, says the cryptocurrency is positioned to surge as markets recover. He views it as a risk asset that will climb alongside traditional markets during a rebound. However, he also warns that uncertainty remains a major factor.
With Bitcoin trading just under $111,400, short-term pressure is likely, but Chamath expects a strong rally in the coming week. Chamath here's the chart. Tar Trump's tariffs were meant to help manufacturers. Do manufacturing firms think they're helping? Here, negative impact. 72% of manufacturers. 3.7% think it helped and uh 17% said no impact.
Your thoughts on tariffs? They're obviously unpopular with people in retail manufacturing in those businesses, but as Axe points out, hey, maybe the American people like them and they like the idea of a new revenue stream. What are your thoughts, Jim? I think that the tariffs on balance are a pretty smart master stroke of strategy.
I think that we did not understand what the impact of tariffs would be except for hypothetical econ wonk talk. And so that hypothetical econ wonk talk basically said that tariffs were always going to be a disaster. And if you ask them, well, what is the actual practical data that you would point to?
They didn't have any. It was just more hypothesis. But what is the practical data now? I think that the United States is going to book probably close to half a trillion of of incremental revenue. It's actually forced a stabilization in the dollar which I think that people were always very concerned with.
What's going to happen to the dollar complex? Everybody always screams like with a going to be an incredibly important one. Well, and also it's not just the fact that the revenue is very important. You rais a great point which is the US government's going to become dependent on that revenue, but also just workers.
I think the tariffs are very popular with blue collar workers. Certainly the auto workers really like it. Well, here's what I was going to this the pie chart that you showed is not accurate. And the reason it's not accurate is that the investment cases that you would underwrite because of tariffs and the big beautiful bill haven't happened.
So, I'll give you an example. I am a person that started a business that is building a factory to make batteries in my specific example in Michigan. So to delever away from China for the battery supply chain and what I will tell you Jason is after the big beautiful bill and because of tariffs it is much easier now for me to underwrite.
Why? Because I have 100% depreciation across all my capex. It's a complete changer on the IRRa of these projects. So before where I would have to raise billions of dollars from outsiders, I can subsidize a lot more of it internally because I can actually underwrite to a better gain because the the tax savings are so meaningful.
Same thing for this data center that I'm building in Arizona. So in all of these cases, I think that a you have this uptick in revenue because of tariffs on the short term and b the important thing is to redo this pie chart in probably a year. Like for example, our groundbreaking in Michigan will be in July of next year.
It'll be online 2 years after that. The real story, Jason, of all of this will be really known in that period. But right now, what I'll tell you is the underwriting case for putting a ton of money into the United States has changed to the positive because of these because that 100% depreciation. It's a huge deal.
As you can see, in 2021, they missed it by 1.9 million, uh, which was about 15%. 2022 they miraculously nailed it. 2023 they were off by 10%. 2024 it looks like they were off again by 10%. All this is revising down by the way in the first half of this year. Let me just finish the chart. First half of this year initial reading 985, first revision 732, second revision 497.
So they were off by 50% so far this year alone. This chart is itself inaccurate. the table is and and it's because it's coming from the same people that measured. So you're asking the people that measured to grade themselves and I suspect that the answer is actually much worse than all of this. Now what is the implication of it?
The implication of it is if you take the most positive view possible, it's that the people that then control the levers of the economy don't actually have accurate data. So they'll be hesitant to act until the data is overwhelming. The most important lens of that will be the Fed and what they do with rates.
Everybody's like, "Oh, wow. There's a 99% chance of a 25 basis point cut." That may be wildly, wildly, wildly conservative in terms of the the total amount that they need to be thinking about and how they should phase that in. But how would I actually prove that to you? I can point to a whole litany of private data,
but the problem is the federal actors use public data. And this data is not useful. And I think that when you get private data into your hands, which I know that other folks have, hedge funds, banks, the White House, what they see is different than what the Fed sees. So what I would tell you from this jobs report is it's going to start again this clamor of what is your plan?
Clapping is not a strategy. So a 25 basis point cut to a $32 trillion economy is not a strategy. And I think that the reason they don't know what to do exactly is because they have extremely faulty data. For months, he has been telling investors that the necessary factors are lining up for a powerful rally with prices set for parabolic upward move.
However, that outlook is now facing challenges as tariff concerns rise and investor hesitation grows, creating uncertainty in the market. Even with these short-term pressures, he points out that Bitcoin may see cyclical ups and downs within a broader trend. Yet, the bigger picture, he argues, still favors significant gains ahead as the overall setup continues to support long-term growth despite current headwinds.
Some big news came out Friday with the uh soft jobs report. Pretty much bad across the board. jobs came in super light. 22,000 added versus 75,000 expected. Most of the gains came from part-time jobs. US lost 357 full-time jobs while gaining 597,000 part-time jobs last month. And uh this is after a bunch of revisions.
You guys remember we talked about here a couple of times with these revisions. And we'll show up some uh charts with long-term revisions. July revised up slightly by 6K, 73,000 to 79. In June was revised down significantly. Remember that impacted the market by 27,000. This makes June the first month with a net loss of jobs since July of 2021.
So my general commentary is the following. The BLS and their approach is incredibly brittle. It doesn't work. I think commerce has taken the first right step which is to start publishing useful economic data into the blockchain. I think we need to figure out a way and this is where Congress should get their act together and pass an incentive or a requirement for certain parts of the critical economic infrastructure of America to report their data in an anonymized way into a broad set of blockchains.
And the reason is that you will have very astute and precise pricing oracles help distill that information. So if you're ADP, if you're American Express, if you're Stripe, there's an imperative now for you to contribute the information you have into a broad collection of information so that we have an accurate sense of what the hell is actually going on.
Because I can't react to this number because I don't know how it's going to change. It could literally swing by 200,000 in either direction. And Jason, well, we had 22,000 jobs added in August and yet while the number of jobs went up, unemployment rose, like you said, from 4.2 to 4.3%. Which is a little bit of a contradiction, but that happened because more people started looking for jobs.
Yeah. But there are huge error bars around this data like Jamal said. I mean, like you showed, there's roughly 50% revisions to all of this data over time over the course of a year. So we don't really have great visibility in what's going on and that's why you see such huge disparities in how people are interpreting this data.
You've got Moody's economist Marandandy. He says we're on the precipice of a recession and he has a bunch of reasons why people on poly market are strongly betting against a recession this year. I think the numbers at about 8%. So it appears that most people still feel like the economy is doing well.
And remember, we just had a 3.3% GDP growth rate for Q2. So I I'd be surprised if if there's a recession. I think there's a lot of factors against it. But what you're seeing is a repatriation in a way of jobs within the economy. The other thing that's happening is a reprivatization of the economy. So in August, the federal government shedded about 15,000 jobs and there's been a 100,000 federal jobs lost over the course of the whole year.
So that makes the overall numbers look worse than they are. But I a lot of us would argue that having fewer federal workers is a good thing for the economy. So you've got those factors. Then you've got blue collar real wages are rising the second fastest in history. You had 3.7% wage growth this year versus 2.7% average inflation.
So you have a net 1% wage growth. I think several factors which would make me optimistic about the economy moving ahead. You've had massive investment in the US by both private companies and foreign governments. You know, according to these new trade deals, I think roughly $8 trillion of new investment.
You've got this AI boom you're seeing. And that's going to land over the next year, right? That hasn't actually been dumped in. So we should see that in 2027, maybe late 2026. Yeah. Yeah. This is the outlook for 2026 and beyond. I mean, this would be the bull case is number one, $8 trillion of of new investment in the US economy by private companies and by foreign governments.
Number two, the AI boom. You've got this massive build out of data centers and AI infrastructure underway. And that includes energy and the manufacturing sectors are going to boom alongside tech. The Chamath believes the crypto market is on the verge of a meteoric surge with Bitcoin potentially racing towards six-figure target.
He points to history where each having has pushed Bitcoin up nearly 10x, suggesting 2024 could be the year it jumps from $10,000 to $100,000 with mass adoption accelerating. He sees this as a once- in a generation opportunity for investors and speculators to ride the wave. But Shamath also warns of deeper problems in the US economy.
He argues that central banks and the Federal Reserve have fueled a debt crisis through endless money printing, leaving the country vulnerable to either hyperinflation or a deflationary depression. In both cases, quality of life deteriorates. Interestingly, he notes that even political leaders are now discussing Bitcoin as part of the solution, hinting at a shift toward a Bitcoin- centered financial future.
Do you think Bitcoin can realistically reach $100,000 in the next cycle? Could Bitcoin truly be the answer to the US economic crisis? Let me .
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