What happened in this episode?
Tom Bilyeu interviews macro investor Raoul Pal on how AI-driven capital expenditure, banking liquidity and crypto market structure intersect. Pal argues that AI represents an unprecedented “race for intelligence” between the US and China, with spending plans extending towards 2030 and the largest build-out in history constrained by power and permitting. He attributes crypto’s muted performance to liquidity being “not enough yet”, describing an environment where US authorities want commercial banks to create more liquidity but a relatively flat yield curve is discouraging lending.
Pal claims Treasury Secretary Scott Bessent is supportive of scaling stablecoins to the trillion-dollar range, portraying stablecoins as both a mechanism for extending dollar usage globally and a potential buyer base for short-term US government debt. He also says that some Middle Eastern sovereign wealth funds are already using AI as a voting participant on investment committees.
The discussion ranges across valuation risk, market cycles and leverage. Pal rejects “dollar collapse” narratives as chronically costly to investors in opportunity terms, while still advocating diversification (cash, some gold, technology equities and crypto) and avoiding leverage. On downside scenarios, he predicts that a major AI-lab failure would be strategically backstopped, because the US cannot afford to lose momentum in AI. Pal also outlines a longer-horizon view in which productivity from AI agents and robotics lifts GDP growth and reduces debt burdens relative to output, though the near-term still requires policy management to keep the system stable.
