Raoul Pal The Journey Man

The big bazooka might be coming...

4 weeks ago | [YT] | 413

Raoul Pal The Journey Man

So now the US Gov has reopened, what's next?

Expect a few days for TGA spending to begin to significantly add to liquidity and should persist for several months.

Obviously, QT ends in Dec and the balancesheet will crawl higher.

We should see the dollar begin to weaken again.

The next key step is to avoid a Year End funding squeeze. Expect several "temporary" measures to add liquidity. Term Funding and SRF operations are most likely.

That will eventually morph into the desperately needed changes to the SLR to allow banks to absorb more issuance and re-lever their balance sheets. This is a big liquidity bazooka. Expect in Q1.

SLR should lower rates as banks buy more bonds.

Also expect CLARITY Act for crypto to begin to get finalised.

There will also be stimulus payments and the Big Beautiful Bill fiscal goosing.

China will contonue balance sheet expansion. Europe will add fiscal stimulus or extra spending.

The debts must be rolled and the Gov wants to super heat the economy into the Mid-Terms.

This is the Liquidity Flood.... the spice must flow.

1 month ago | [YT] | 743

Raoul Pal The Journey Man

So it appears crypto markets liquidated anyone with greed and now want to grind down anyone with hope 🤣😭

Yup, it's been frustrating and this grind is longer than expected but it is what it is and this too shall pass and the spice (liquidity) must flow.

Don't Fuck This Up.

1 month ago | [YT] | 1,317

Raoul Pal The Journey Man

On Energy and AI:

We are all aware of the urgent need for massive new energy infrastructure for data centres and other general needs. The grid is old and the supply is constrained.

Investor capital is pouring into nuclear soluations, new gas plants and other opportunities and the bottleneck will be better solved in 5 years+

However, the need for the extra energy is URGENT and IMMEDIATE...

The AI race is the most important technology race that will ever occur. It is not just about hyperscalers and their profits, but about the game of nations.

There is only one energy solution that can hyperscale in 12 to 24 months and that is solar. China has shown this by adding more than the total amount of energy created by Solar elsewhere globally, in one year. The rise of solar in China is one of the great exponentials. China knows the game here. Everyone else has to play catch up.

The Kardashev Scale is the correct way to think about this. The sun is 99.9% of the mass of the solar system and we are harnessing <1% of its energy that hits earth.

1 sq mile on the earths surface receives 2.5 gigawatts of solar energy. Yes, solar panel efficiency is low and usable daylight hours is restricted but the amount of solar panels required in relative terms of the surface size is small.

Solar is not yet perfect as the supply of energy is intermittant (nights/bad weather etc) and efficiency is low (but rising as tech improves) but costs are collapsing exponentially, even taking into account panel replacements and no subsidies (it doesnt require them).

Some of the issues are offset by batteries which currently solve for 4 hours of extra storage. Tesla's Megapacks are growing at 50% to 70% per year and other players are also scaling fast. Battery tech will only imporve from here too.

Just the use of solar + batteries reduces demand on the exisiting grid by upto 65% (you only need to use the grid load for perdiods of time). This helps massively in this rapid scaling to avoid an overload of the grid. Solar + batteries also allows for localised, decentralised energy grids for specifc use - factories, datacenters, etc.

The load on the grid will be reduced after 2 years or so when new localised gas plants are built to balance the loads. Gas plants are the cheapest, cleanest and fastest of the fossil fuel solutions but it takes longer to scale than solar and requires a lot of gas pipelines.

Weirdly, solar seems to be politicised, but its going to become an economic imperative as nothing else can solve the needs of the massive data centers in the next 1 to 2 years, and no one can afford to be leftr behind in the race to AGI and beyond.

AI is the most important technology humanity will ever develop as it replaces us as the apex intelligence on earth and is vastly more energy efficient than humans at compute/intellgence output.

The core metric for the universe itself is:

Intelligence per unit of energy

For this to scale exponentially, AI will replace humans as the primary source of intelligence and the sun's energy is most of the energy on earth. Even oil is just biologically-stored sun energy with finite supply.

In terms of investability, there are two opportunities that stand out as long-term plays:

The Solar ETF TAN is down 84% from its high, has formed a perfect base on both the log chart and the regular chart.

TSLA is the other obvious play as it dominates the large battery sector and batteries account for 10% of total revenues and are growing rapidly and will continue to do so. The Tesla chart is one of the best in the Exponential Age.

Anyway, I know because solar is politicised that people will rush to fight in the comments but don't bother unless you can solve the urgent energy needs for AI in the next 1 to 2 years by any other method.... you can't.

And yes, dear troll, we all understand that there are lithium, copper and other needs, and yes, there will be an investible bull market in those too (amongst other major commodities) as the business cycle and the Capex cycle heats up... and yes, there will be supply issues if you havent carefully planned/hedged.

But you need to warm up to solar... its going to get hot.

(Time horizon is now and for the next 5 years+).

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2 months ago | [YT] | 552

Raoul Pal The Journey Man

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2 months ago | [YT] | 76

Raoul Pal The Journey Man

All said and done, regardless of what sparked it, Friday was a "Flash Crash". Flash crashes usually recover in V-shapes back to their prior price/range and usually go on to make new highs shortly after.

In this case, we entirely wiped out all accumulated leverage too.

Higher.

2 months ago | [YT] | 1,313

Raoul Pal The Journey Man

You can't miss this!!

2 months ago | [YT] | 16

Raoul Pal The Journey Man

Same thing happens all the time... the crypto market is focused on a big breakout, gets levered long ahead of it, it fails at first attempt so everyone gets liquidated... only then does the actual breakout occur, leaving everyone sidelined.

3 months ago | [YT] | 1,178

Raoul Pal The Journey Man

Patience is key to everything (and no leverage)....

3 months ago | [YT] | 719

Raoul Pal The Journey Man

Observing the development of AI and many mid-curve takes on it, slowing down or not being smart enough (or too expensive or too much energy or not enough chips or too many data centers, etc), I think it's helpful to use the mental model of child development.

Imagine seeing a toddler trying to walk and drawing the conclusion that its legs are not made for working and it's too stupid to do this simple task.

Until it just does it.

Imagine waiting for your child's first words and suggesting that it's too stupid to learn to speak or its mouth to does work properly or it's just saying gibberish. Even into its next few years the child struggles to get speech right.

Until it just does it.

Riding a bike... well your kid will never master it. Its legs are too short, its had no awareness of the road and has no balance. Until it just does it.

Reading, writing, maths, etc.

They just do it.

These AI models are infants (albeit with superpowers in some areas vs human kids, and are massive underachievers vs other areas versus human kids).

Infants learn fast. Before you look back, that baby that couldn't work is now married with kids and has acquired vast skills in life and continues to do so.

They just do it.

Humanity has given collective birth to a new child, a Super Being. It will absorb all of humanities knowledge as its foundation, and then will create entirely new knowledge and ultimately new Super Consciousness.

Try not to midcurve this.

This is the largest change to humanity in all history and we've only just started. We have birthed a new species that will prove to be infinitely more intelligent than us, in time.

There will be periods when we are impressed at the speed, other periods when we get frustrated with how it struggles, but all the time it is exponentially compounding.

And then it just does it.

‪@RealVisionFinance‬

3 months ago | [YT] | 487