What Is The Dot Plot?

DANO WEIR: Happy Friday, June 5th, 2026. A beautiful Friday in Northern California, if you're here or wherever you're listening to On The Markets. My name is Dan O'Weir. I'm the Marketing Director for Fremont Advisors in our private wealth arm, Sonoma Wealth, and joined shortly by our Managing Principal, Darren Blonsky, to talk about something you may not have even known about.

DANO WEIR: The Fed may soon scrap a tool called the DocPlot. It has quietly shaped every mortgage rate bond yield and retirement projection in the last 14 years. And yet rumors are indicating that the new Fed Chair wants it gone by this month's Fed meeting. What will happen? What could happen?

DANO WEIR: Should it disappear? Also, the all-time high breakout in the S&P cooled today. Why Darren sees a potential double top forming, but his words, not all hope is lost. We'll look at those charts. And a key Bitcoin owner sold off this week. Why Bitcoin is sitting at critical support and where Darren sees it going. Let's get going right now.

SPEAKER 2: The stock market. The economy. Your money. What's the latest and what could be next? Find out now with Fermata On The Markets. Straightforward financial market updates for the brands of Fermata Advisors, Sonoma Wealth Advisors, Fermata 401K, and Fermata Tax. On The Markets starts now.

DANO WEIR: Maybe we should start here, Darren. You want to look at this graph first? Because this might be the most important graph of the week. What are we looking at right here?

DAREN BLONSKI CFP®: You know, for our basketball fans out there, this is the price of the ticket to attend a Spurs and Knicks game. And we've been seeing a lot of signs coming in, and we call them canaries in the coal mine, that a lot of FOMO going on out there, a lot of hype about SpaceX, a lot of hype about...

DAREN BLONSKI CFP®: Various, items that make you feel cautious. And this is one of them when people are paying this much for one ticket to watch the Nixon Spurs beat up on each other on the basketball court. You have to wonder if there's not too much dumb money floating around in the economy.

DANO WEIR: For our listening audience, we are staring at a seat sheet chart from Madison Square Garden and the cheap seats. Way, way, way up where your nose is going to start leaking blood. It's $8,035 for one of those. And courtside is $45,000. This is on the secondary market. And Darren, I will tell you that when in 2010, when the Giants made the World Series, it had been the first time in a long time, my buddy Matt Wagner and I.

DANO WEIR: I saw standing room only Giants tickets for the World Series for 500 bucks. And I said, buddy, this is the cheapest championship ticket we're ever going to get. And we went and they won. So just this is a little bit of a different scenario.

DANO WEIR: But just as a comparison, $500 for standing room only at the Giants in 2010, $8,000 for the worst ticket to the Knicks and Spurs in 2026. So, Darren, today we're talking about the Dot Plot, which is. Something I had never heard of before, and I'm still kind of new in the world, in the investing world. Can you explain to me what your knowledge of it is for people who don't know, like me, what the Dot Plot is?

DAREN BLONSKI CFP®: So there's lots of debate out there among the Federal Reserve chair and chairman. So every part of the country is broken up into Federal Reserve districts, effectively. So there's like a San Francisco Fed, a St. Louis Fed, a Dallas Fed.

DAREN BLONSKI CFP®: And each of those Fed chairs, they more or less vote on where they think interest rates should be or an end or where they're headed. And that's supposed to telegraph to the market, the mortgage market most in particular, but overall the whole economy, where interest rates are headed because everything is priced off of that as a derivative in some sense.

DAREN BLONSKI CFP®: A lot of people like it because it's communication. It's the Fed saying, hey, here's where we think things are. In recent history, that hasn't It's been the case that the Fed is more communicative. But in the past, that has not been the case. The Fed does what the Fed does. The market tries to figure it out.

DAREN BLONSKI CFP®: The last couple Fed chairs were very communicative and believed in communicating to the economy. It seems that Mr. Walsh feels differently. And by getting rid of this, you lose some of that predictability. You lose some of that transparency.

DAREN BLONSKI CFP®: I think it definitely will impact the market on some level and it will make the market feel less confident.

DANO WEIR: So if you can see our live stream, we've got a, or if you're just listening, this is the 19 up to 19 Fed presidents giving their estimation of where they feel interest rates should be, not only now, but into the next few years. The history behind this, as Darren alluded to, the Fed previously had been secretive in the 90s and before, very secretive.

DANO WEIR: And in 2012, they released this Dot Plot as a response to the failures of the great financial crisis in 2008. So with rates near zero, the Dot Plot was designed to prove that, hey, we're keeping rates low and we're keeping them low for a while. Here's a whole graph of how long we think it's going to be that rates are low for a while.

DANO WEIR: Prior to, as I said, the great financial crisis, the Fed had been famously secretive, and there was a public belief that the secrecy played into the ultimate results of 2008. So the creation of this thing in the first place was a response of trying to get the country through a really tough time.

DANO WEIR: Darren, we've got a slide here, a breakdown for people. How has something like this, the Dot Plot, just an estimation though, how does that impact the average investor or the average retiree?

DAREN BLONSKI CFP®: Well, I think it's a secondary impact, right? So I think there's probably very few investors who sit there and study the Dot Plot in any meaningful way. But like I said, the bond Markets are cued off of all this, right? And the stock market to some degree too. So based upon where interest rates are expected to go, I think we say it a lot on this show.

DAREN BLONSKI CFP®: It doesn't matter so much. What direction the market's headed for portfolios because portfolios can address it. It's how fast they move in any one direction. Even when the market moves up really quickly, that's concerning, right?

DAREN BLONSKI CFP®: Because if it moves up really quickly, and in fact, we've been talking about this the last couple of weeks where the stock market shot up and you're like, oh, that's coming back. Because it doesn't work that way. It's like a rubber band. It's going to snap back. So if it snaps down quick, it's going to snap up quick. If it snaps up quick, it's going to snap down quick.

DAREN BLONSKI CFP®: We forget that. The Markets like steadiness, they like predictability, they like understanding of all the variables. Well, if you take away one of the key pieces of information in which signal to the stock market and or the bond market, that becomes problematic for projecting out into the future. People feel less secure.

DAREN BLONSKI CFP®: It's the same reason that in an election year, the Markets tend to be more volatile because everyone's trying to figure out, well, are the Democrats going to control it? Are the Republicans going to control it? What's going to happen in the future, the less information we have, the more guessing we have to do. And when we have guessing, you get overreactions in both ways.

DANO WEIR: So as you've said, it is an indirect effect, as are many things in finance. But impacts include, it can impact mortgage and auto loan rates. It can alter credit card and savings account returns. And as Darren alluded to with bonds, it can impact 401ks and retirement portfolios.

DANO WEIR: So the potential change is that there is a new Fed Chair, Kevin Warsh, and got an article from Reuters, and there's been a few others that have written up on it. But article quote, the irony is Warsh's distaste for so-called forward guidance may see him well try to scrap the Dot Plot entirely. So the sense from rumors and his statements is that Walsh feels the Fed has been too communicative for that.

DANO WEIR: He would have plenty of support for that, including his predecessor, Jerome Powell, who remains on the board. So it's possible that this piece of data could be falling off of the board. Does that drastically change everything? No. But as Darren said, less data means less predictability. Just my personal perspective.

DANO WEIR: It has felt like since the great financial crisis, the Fed's been a little high on itself in its ability to control the market, or maybe they've just been doing their thing and the market has keyed off of them too much. But Darren, I mean, prior to 2008, were we ever talking about the Fed? Certainly not with the level that we are now.

DAREN BLONSKI CFP®: Well, we've certainly developed in the... Market watchers world people who pay attention to all these things a culture of hanging to every word and everything the Fed says and the Fed since 2008 really has used some questionable tactics in intervening on the economy and the Markets. On the one hand, you could be critical and point and say, well, aren't we supposed to have free Markets?

DAREN BLONSKI CFP®: Isn't this supposed to be capitalism? And these individuals are literally during COVID buying index funds. They were buying the ETFs that us retail investors buy, right? And one has to question, do we truly have a free economy or a free market if... The Fed is buying ETFs, BlackRock ETFs, nonetheless.

DAREN BLONSKI CFP®: So I think it plays into the whole narrative that we talk about a lot on this show. And again, it's a narrative. We don't know exactly what's going to happen, but when you watch the dollar getting printed as massively as it is, I say this over and over pretty much every week, Dan, I think, that the Fed can't stop printing.

DAREN BLONSKI CFP®: Government can't stop printing. It doesn't matter if it's Republican or Democrat. They have to keep printing because the only way to keep this whole, I guess we could call it a Ponzi scheme of the dollar in some ways going.

DAREN BLONSKI CFP®: But if you're an American, that's a great thing, right? Like that gives us the ability to project power around the United States. It gives us the ability to have the lifestyles we have. There's a lot of people around the world that don't like it. And as long as we're printing the dollar, then.

DAREN BLONSKI CFP®: We can keep perpetuating this debt cycle that we're in. The Fed has gotten, has had to get more and more and more active. And so there's this kind of push coming through the current administration to be, hey, let's be a little bit less active per se, but it's just not a reality. It's just not going to be the government, the Fed, they're going to have to be active because we're just printing too many dollars.

DAREN BLONSKI CFP®: And that's... Going to create more and more problems as we get further and further, deeper and deeper into debt. And the debt isn't going to stop. Like him, hate him. Elon Musk was trying to change that, right? He went in there and said, I'm going to cut all these programs because our spending is out of control. Now I get it, trigger alert.

DAREN BLONSKI CFP®: He probably cut programs that people who listen to the show don't like, or they do like. But the reality is if the government doesn't spend less than it makes, or spend, if the government doesn't start hat. Operating without a deficit, we're in trouble. And the Fed is going to have to step in and intervene and they're going to have to use tactics and ways to do that that will be counter to a free market economy.

DANO WEIR: I was just going to say, having a stance of more hands-off Fed, but then probably what's coming around the corner, coming around the bend is the exact opposite. It's a little bit like running an entire department that's supposed to cut government spending and then also announcing you're building a ballroom. So we shall see what ends up happening with that. I did want to give a quote out here.

DANO WEIR: A friend of the show was an intern at one of the feds, and I just pinged his opinion of it. And he said, quote, I think it's a bad move. I'm a fan of the increased transparency between the Fed and public slash traders. Removal of little tools like that just makes their decision making process more opaque. So there's an opinion on that from someone who worked there more than you and I did, Darren. So let's.

DAREN BLONSKI CFP®: This is a guy who literally was working at the Fed.

DANO WEIR: Yeah.

DAREN BLONSKI CFP®: And he's saying, well, wait a SEC. And that's exactly like if you take away the tools to understand what the Fed's doing. All of us have to guess more. If we have to guess more, it's more likely that our guesses are bad guesses.

DANO WEIR: Let's take a look at how this news and others may have impacted the market. You mentioned a bit of a cooling today. So I am seeing a long red line heading down. What happened in the S&P today?

DAREN BLONSKI CFP®: Well, I think look no further than semiconductor AI sell-off, right? And this is, we talk a lot about this. This is problematic. Now, this is the heat map of the S&P 500. It's showing the largest 500 US-based stocks. There's a lot of hype out there about SpaceX. For those who are interested, you could reach out.

DAREN BLONSKI CFP®: We did a whole webinar on it this week for clients. Happy to share that with you if you haven't got it. But it's a big thing coming out, and there's a lot of questions being asked out there about how long can this go on. We're seeing a lot of... Clients who are very conservative call us in and say, am I missing out?

DAREN BLONSKI CFP®: Those are kind of canaries in the coal mine for this cycle. The other thing is, I don't think a lot of retail investors realize this, but all IPOs are not a function of altruism. Let me say that again. Ipos are not a function of altruism, right?

DAREN BLONSKI CFP®: Ipos are investors who already owned that company trying to find a way to sell their shares in that company or that company trying to create a way to generate more cash because they're running out of it or need a lot more to achieve the plans thereafter. That doesn't mean they're a bad investment because surely if you bought NVIDIA back when it IPO'd, you're a happy camper.

DAREN BLONSKI CFP®: But the reality is, be careful because there's going to be a lot of volatility and we're definitely long in the tooth. And the fact that we've got SpaceX IPO and we've got Anthropic coming into IPO potentially, we have OpenEye now potentially coming in to IPO.

DAREN BLONSKI CFP®: There's a lot of people who bought these companies early on who are now looking for liquidity. In their investment. So the question is why? Well, and everyone goes, well, how to be fine. This big AI company, it's one of the biggest ones, but I would just cite where's NetSuite, where's AOL online.

DAREN BLONSKI CFP®: I do think there's going to be big winners with the AI space. There's going to be some massive companies created. I just don't know which ones. And I just don't know if it's any of the players we know already. Right. Because who, who would have thunk that AOL online, one of the first companies to dial us up to the internet is now.

DANO WEIR: Abysmally gone or some like distant patent in some other conglomerate at this point and the company who was in the company who was making my graphics card so that i could play quake 3 at a much higher frame rate that's the most valuable company in the world you cannot predict that yeah.

DAREN BLONSKI CFP®: And that is i mean we talked about this last week the was it is monster monster energy has been like one of the top performing stocks next to NVIDIA of all times monster energy that's right the drink you get in the gas station that tastes like radiator fluid you like it you you're a white monster guy you are a white monster you know Disneyland let's talk about disney Dan because you love i got a bone pick with Disneyland because all they sell at Disneyland is white monster so when it's two o'clock and your tires you're standing in line and you trying to convince yourself that you like being a dad at Disneyland, you drink a white monster because that's all they have there in a way of caffeine for you.

DAREN BLONSKI CFP®: And it's awful. It is like radiator fruit.

DANO WEIR: We both know our soft spots. Keep going.

DAREN BLONSKI CFP®: Yes, indeed. All right. So NVIDIA, you can see not particularly awful. I mean, it was flattish for the day. Microsoft, Google.

DAREN BLONSKI CFP®: Selling off hold on this is aftermarket let me go there we go that's better see this is what happened today now that feels better i'm like wait a SEC lay an NVIDIA down six percent i mean look at these all these chips companies intel smacked by 11 so i'll just say that i was talking to a client earlier and client was telling me they were out at golf outing and The person they were eating lunch with says, hey, I'm buying lunch for everybody because I just made $100,000 in the stock market.

DAREN BLONSKI CFP®: Well, I said, well, this individual probably owns a semiconductor company or one of the companies that feeds things into semiconductor companies and easy come, easy go, right? And none of these individuals who are bragging about their fabulous stock picks are telling you about the one they're about to get cleaned out in. So be very careful right now, everyone.

DAREN BLONSKI CFP®: The barbecue indicators, I call it, that's the dude at the barbecue bragging about his stock picks is live and well, and we're in peak moment. Peak moment, like Greg Gatsby moment. Peak moment for those investors that like to walk around and brag at the parties about how great investor they are. Those are the investors that will never tell you about the ones they lost.

DAREN BLONSKI CFP®: We're seeing a lot of FOMO.

DANO WEIR: Can I throw in an image to articulate FOMO?

DAREN BLONSKI CFP®: Yeah, let's do it.

DANO WEIR: So this is a slide from a prior show. Maybe I'm just too proud of it. But we've got side by side, we've got a SpaceX rocket launch, and we've got a Blue Origin rocket launch, which is Jeff Bezos' space company. And this, to me, is two portfolios.

DANO WEIR: And when you're feeling FOMO, you need to look at the Bezos launch and ask yourself if you're okay with that happening to your portfolio. Because in peak FOMO season, either of these outcomes are possible. It's always possible, but in peak FOMO season, I feel like this is palpitable.

DAREN BLONSKI CFP®: Well, the other thing, did you catch that SpaceX headline today that they released that Google is, is it Google buying 900 or no? SpaceX is selling $920 million a month of compute to Google. Or was it the other way around?

DANO WEIR: SpaceX is buying $920 million a month of compute from Google. And yet Google owns. A big chunk of SpaceX anyways. So it's, it's the passing of, you know, the P and at the end of the bag, at the end of the day, we've all got a full bag of peas somehow, even though there's only one.

DANO WEIR: So there's a lot of, and there's a whole other, you look up, look up NVIDIA and XAI and Valor. That's another one to look up. You know, there's a lot of purported earnings and purported assets that are being moved around, which is someone we've. Haven't talked about him for a couple of months, but someone like Michael Burry, famous for the big short, he's been saying this for half a year now.

DANO WEIR: So maybe it all, you know, ends up leaving orbit and taking off just fine. And maybe, you know, just visually, visually look at this image and tell yourself, ask yourself if you're okay with one of these outcomes, if you're feeling FOMO.

DAREN BLONSKI CFP®: So let me get this straight. So Google owns SpaceX. So one of the ways you can play the SpaceX IPO, it's not advice, but it's just the reality out there is Google owns some of SpaceX. So technically, if you own Google, you own part of SpaceX.

DAREN BLONSKI CFP®: And that's available on the market today.

DAREN BLONSKI CFP®: Google is buying compute from SpaceX.

DANO WEIR: No, I think SpaceX is buying compute from Google.

DAREN BLONSKI CFP®: Correct. So SpaceX is buying from Google.

DAREN BLONSKI CFP®: It feels a little circular to me, Dan.

DANO WEIR: Exactly. That's what I'm saying.

DAREN BLONSKI CFP®: My finger on it.

DANO WEIR: And we get to put revenue on our books.

DAREN BLONSKI CFP®: That's right.

DANO WEIR: So Joe Blow can make his bonus. I mean, so we can have a great business relationship.

DAREN BLONSKI CFP®: Right. So, I mean, this is like peak euphoria cycle type stuff, right? And as our astute partner, Chris, would always say, in hindsight, it's going to make perfect sense.

DAREN BLONSKI CFP®: And I think we're already starting to see some hindsight-like behavior where you're like, okay, this is out of control. And I hate to be the wet blanket on it all, right? Like, come on, why can't we just get excited about the euphoria that's out there? But here's the reality of it. Easy come, easy go. So I'm not saying it's over. So let's look at the S&P.

DAREN BLONSKI CFP®: I'm just saying, hey, it's time to be careful. It's time to think about trimming your exposure to growth or at least be very comfortable with the. Possibilities of outcome, the possibilities of return that could come your way if you're overexposed to growth stocks that are participating in the AI boom. So if you look at what's in front of you, you see the S&P 500.

DAREN BLONSKI CFP®: The S&P 500, again, is the largest 500 US-based stocks. This here is a pattern, what we call double top. I talked last week about this breakout. We came in to test it, and then we failed today. But all hope is not lost because we did land on this long-term support line. You can see that goes all the way back to COVID. So we landed right there.

DAREN BLONSKI CFP®: We settled out there, meaning that buyers stepped in there and said, oh, I like that price. I'll take that price right there. And then that's held up the market. And so it did okay there. I mean, I guess you could say all hope is not lost because we didn't lose that. If we lose that area. Then you need to start looking at 711 down in this area. If we come down into that zone, you would be another, say, 3%.

DAREN BLONSKI CFP®: But Dan, I think we've talked about it. It wouldn't be shocking in this season to see Markets sell off. We're going into summer, June, July, getting a little odd, things getting a little more difficult to interpret. August, they're yucky. Maybe September, they're yucky going into the midterm.

DAREN BLONSKI CFP®: I think from here on out, we just see a fair amount of volatility. We've had a good run over the last few months since April, really. That bottom, we ran out. We've come hard and fast. And what happens if we go hard and fast one direction, hard and fast back the other direction.

DANO WEIR: Now, I want to pin you on this because last week and the week before, you were optimistic and certainly said risk on. Things are based on the performance you were feeling like were heading higher. So is it specifically that we lost that line of support this week that you've got you feeling differently?

DAREN BLONSKI CFP®: Yeah, exactly. So risk on, we broke above this support. Or this resistance line last week.

DANO WEIR: And that resistance line again is what?

DAREN BLONSKI CFP®: See this red line? So that's where people, there would have been a lot of sellers saying, hey, at that price, I'm too expensive. I'm selling, I'm selling, I'm selling, right? And then we're above this 20-period moving average. So that's risk on. And then we trade it up over that. And then you can see Friday, Thursday, Wednesday.

DAREN BLONSKI CFP®: Tuesday, Monday, we came in, we saw green on Monday, Tuesday, and then that was it. And then we went down, 760 became resistance. So this is now resistance. What that means is if the market trades up into that area, that it is likely to, there's likely to be people that say, ah, I made enough money, I'm taking my chips off the table.

DAREN BLONSKI CFP®: You could argue if this is a double top and we hold, it isn't a double top. If we hold this area. And this neckline right here, we trade back up next week. We're doing this ascending triangle, which often can end in an upward breakout. And that's why I say not all hope is lost on this chart.

DAREN BLONSKI CFP®: But there's definitely some AI spook out there today. And because we're so heavily concentrated in these big dogs, if AI sells off, the whole market gets whacked. Not in... Awful looking rest of the market. There's a lot of green on that screen, but these guys are so big and there's such a concentration in the market that we're just really susceptible to what they do.

DAREN BLONSKI CFP®: And that's part of the issue with this market because it's gotten so concentrated. That's part of the issue with SpaceX being put into the NASDAQ 15 days after issue, not profitable, because it's going to be a big part of the overall index for just basically a brand new company.

DAREN BLONSKI CFP®: So when we look at NVIDIA, you could argue now with NVIDIA that we just broke a triple top, which is a topping pattern. So you see that there's the left shoulder, the head and the right shoulder. And then there you can see that neckline that we broke out down below. That's particularly ugly for NVIDIA. And the problem with that is NVIDIA is such a big part of the overall market that that could bring some downside.

DAREN BLONSKI CFP®: Interesting though that it found support right in this area, which is back in November we were in that area and that's around 205. So 200 I think zone is acting as support. What do I mean by support? I just mean that that's at 200 there's a lot of people in the market that would say, oh, I'll buy it right there. That's cheap. What a discount.

DAREN BLONSKI CFP®: So that's NVIDIA, right? And NVIDIA being the biggest stock in the S&P as it goes, so too does the S&P.

DAREN BLONSKI CFP®: It would take a lot of other stocks to do very well to keep that one up. Let's take a look at oil because oil is kind of that one we're watching, right? Pretty important, especially going into summer for all our travels with our families, etc. And you can see we're still in this descending wedge. Too hard to say if it's going to drop down or go out, but it's getting closer and closer to resolving itself.

DAREN BLONSKI CFP®: So what this would be telling you is that there's potentially some kind of big decision coming down the pipe. Given that we're going into midterms, I would venture to guess that Trump and his clan will do whatever they can to quiet it down.

DAREN BLONSKI CFP®: And as I say all the time, it's the economy, stupid, like Clinton used to say. And I can't imagine the Republicans and the Trump group wanting to go into the midterm election with high oil prices.

DAREN BLONSKI CFP®: So then we take a look at Bitcoin, because we mentioned Bitcoin. Bitcoin's kind of the front end of that risk curve. We've said this many times, it tends to sell off first. The fact that we're seeing pretty decent sell-off in Bitcoin. I talked last week how we were breaking above this 200-day, and it could look good, and then that failed.

DAREN BLONSKI CFP®: And it came down. And then Michael Saylor, who owns a company called MicroStrategy, that owns more Bitcoin than just about anybody. They sold 32 Bitcoin this week. I don't know why it was 32, but that spooked the whole market. And you can see pretty significant sell-off.

DANO WEIR: Can you describe him for people who don't know what he's doing and the leverage he has?

DAREN BLONSKI CFP®: Yeah, so basically Michael Saylor runs this company called MicroStrategies and he used his balance sheet at MicroStrategies to gobble up as much Bitcoin as he possibly could. And took out debt on the company to buy more Bitcoin.

DAREN BLONSKI CFP®: I think Chris would be very happy. If micro strategies just, it was, some would argue very irresponsible. And Chris is a very responsible human. He doesn't like risk and, and in meaningful, well, he likes very structured, thoughtful risk. And what Michael Saylor has been doing, many would argue is naive slash just arrogant.

DAREN BLONSKI CFP®: And you can see we traded right down into the 200-week moving average and found support. That's a big line of support for Bitcoin. We lose the 200-week moving average, and then I think you probably see some more downside. Where would it go? Well, there's certainly a fair amount of support right here at 48.

DAREN BLONSKI CFP®: You could argue down into the 38 range, this range as well, things got really ugly. But look how fast in one week it moves. And that's the thing with Bitcoin. And that's the thing with any of these investments, like the one that's getting a lot of headlines lately is MU, Micron Technology.

DAREN BLONSKI CFP®: It's one of those stocks that people bought like $10,000 in and then, you know, it went to the moon. You know, this week, I mean, think about this. This week, Micron at one point was worth $1,085 a share and closed up the week, $870 a share.

DANO WEIR: Wow.

DAREN BLONSKI CFP®: So those, those people go into the golf, the golf game and shouting in the clubhouse, I made a hundred grand. Amazing. Like, well, go talk to him a few hours later.

DANO WEIR: Well, yeah. I mean, you, you made a hundred grand to just sell today.

DAREN BLONSKI CFP®: Yeah, exactly. Money, money that way. Right. So it's, I mean, it's great if you make it and can get out, but you know, then it's coming back.

DANO WEIR: Can you go back to Bitcoin for a second? Because you're someone who I know believes in the fundamentals of Bitcoin, not a maximalist per se or an evangelist per se, but you're someone who understands it very well. So from that perspective, do you still feel that way? Or has the narrative in the last couple of months, maybe this year to date, changed for you?

DAREN BLONSKI CFP®: No, I mean, why I've always liked the idea of Bitcoin. I'm always open to the possibility that it doesn't come to fruition. But the idea of Bitcoin is when you're in a world that's printing debt, and we're just printing dollars like a drunken sailor, that eventually, eventually, we don't have the ability to just print money like this anymore.

DAREN BLONSKI CFP®: Eventually, our ability to force our ability to print the dollar on the world and to denominate the world economy on the dollar, it comes to an end. If our guns aren't big and our boats aren't strong and our soldiers aren't tough, we lose this ability.

DAREN BLONSKI CFP®: Because any other country in the world would love the ability to be able to print money and make up money out of thin air and then go buy anything around the world. And this is why we're powerful as a country.

DAREN BLONSKI CFP®: But like I think I've told you before, Dan, I remember right before COVID, I was in New York City.

DAREN BLONSKI CFP®: I'm actually taking my son there next week for his ninth grade trip with his class. I get to chaperone that, it'll be fun. But there's a debt calculator.

DANO WEIR: 17.

DAREN BLONSKI CFP®: It was at 19 and now it's at 39. So in 2019, it was at 19 trillion, and now it's at 39 trillion. So basically from 2019 to today, we've doubled the U.S. Debt.

DANO WEIR: So from that lens, this is not advice at all. I'm just your personal opinion. You almost see Bitcoin as a defensive strategy.

DAREN BLONSKI CFP®: Correct.

DANO WEIR: In the event that the dollar blows up. This isn't your aggressive play for, you know. For growth per se. It's your dollar blow up strategy.

DAREN BLONSKI CFP®: Yeah. I mean, I think you have to be diversified through all kinds of assets and all kinds of environments, right? It's also why, you know, people own gold, right? Because if you look at what gold is a hard physical asset, right?

DAREN BLONSKI CFP®: And, you know, in one idea is that, well, if gold, if the dollar implodes, then you at least you own the physical gold. Gold is looking precarious. At this moment, looking like we're going to fall through $4,300 an ounce.

DAREN BLONSKI CFP®: But that's another play, right? And some would argue, well, no, that's just funny money Bitcoin. Maybe it is, but some would argue that the dollar is funny money too. And it all comes back to the network effect, right?

DAREN BLONSKI CFP®: If we all accept gold to be worth something, if we all accept the US dollar to be something, if we all accept Bitcoin to be worth something, it's worth something, right? At one point in history, tulips were a form of currency in some degree.

DAREN BLONSKI CFP®: Or the Miwok Indians here in Northern California used to trade shells. As dollars and money. So the network of fact is what we all agree is money. And throughout time, every empire has come and fallen. And we all like to sit around and think, oh, this time is different. The U.S. Will never fall.

DAREN BLONSKI CFP®: But that's just not a truthism. That's not a reality. At some point, the dollar will lose its ability to project power and its ability for us to just keep printing. Nonsense-ically. And if we've doubled this, we've literally doubled our U.S. National debt since 2019 when I was in New York Times, New York Square, and I'm going to go back next week and we'll be approaching $40 trillion.

DAREN BLONSKI CFP®: Well, are we going to double it in the next five years again? Because if we are, then you really need to start thinking about your dollar diversification. Because at some point, it's not worth anything because there's too many of them. Yeah.

DAREN BLONSKI CFP®: Doesn't mean though, just like we talked earlier in the show that the U.S. Government started buying ETFs like crazy during COVID. They can change the game, right? And they will change the rules of the game. And so this Kevin Wurst thing with the plot map, the reason you start doing stuff like that is because you're getting ready to change the game.

DANO WEIR: That's kind of why I advocated for it to be the theme this week, the Dot Plot, is because it felt...

DANO WEIR: And again, I'm just, I'm new still, you know, I'm not you, but it just, in what I've been able to read in the narrative, I'm just like, this feels like an indicator of change. You know, it feels like something different. So I think that's why I wanted to discuss it today. I'm glad we got into it.

DAREN BLONSKI CFP®: Well, if you're going to change something, you've got to pull back on the transparency, right? You can't sit there and be uber transparent while in the middle of change. In order to re-engineer the change, you have to start doing things. Otherwise, you'll just unsettle the whole market.

DAREN BLONSKI CFP®: So overall, then let's go to the 10-year. 10-year went up. You can see just shot up today. And then kind of stayed elevated looking like a massive bull flag, meaning it goes up. So the market didn't like that at all.

DAREN BLONSKI CFP®: We had a solid jobs report come in. And when you have the solid jobs report, that's going to allow, say, oh, we can't lower rates.

DAREN BLONSKI CFP®: And one of the ways we perpetuate the AI boom is we make more cheap money. Because I think in reality, the AI companies are starting to run out of cheap money. And that's why they're IPOing, because they need to get more money in the system.

DAREN BLONSKI CFP®: It's getting too expensive to...

DAREN BLONSKI CFP®: Create the kind of energy and compute you need. A counter thesis to the AI boom is the idea that it's actually cheaper to hire people than compute. Right now, it's cheap to hire compute, but perhaps in the near future, if energy gets too constricted and there's too much demand on compute, compute price goes up and it's actually cheaper. That's the irony maybe to hire humans.

DANO WEIR: Yeah, and I find it interesting, too, that a rocket company is the one that we've got rockets and AI. And what a perfect example of an extremely expensive way to do something. So to your point about it might be cheaper to hire humans, we put that in a rocket context. I could take a SpaceX rocket from here to my mom's house in Texas.

DANO WEIR: That would be a very expensive way to get there. I could also just take a train, which is already built. And that would be the human being or an airplane. So that may be the sense, that may be a similar case when it comes to AI asking it to do certain things which are menial tasks for it and very expensive to do so.

DAREN BLONSKI CFP®: Yeah. So I think there's room to have a counter thesis to the AI takes over the world. I still hold to.

DAREN BLONSKI CFP®: The idea that we're all headed with AI for an S-curve of adoption.

DAREN BLONSKI CFP®: And I think we're like somewhere in here right now.

DAREN BLONSKI CFP®: And what an S-curve is, is it's basically just saying that like, oh, everyone's doing it in the perfect example is the dot-com bubble. Everyone's like, oh, it's www this, right? And everyone's using www this. And then we get to a point where it all just falls apart. Because we can't get enough energy, we can't get enough compute, whatever, whatever that.

DAREN BLONSKI CFP®: I think it'll be a constriction on energy, right? Because eventually these companies can't tap into more energy and we can't make more energy. That's why SpaceX is looking at saying, well, shoot, we'll just put, we'll put the compute in space. We can put it in satellites and beam it back to earth. And then we have infinite energy because we can take it from the sun.

DAREN BLONSKI CFP®: But all major disruptive. Technology goes through some level of an S-curve. Now, some S-curves are more like this. Some are more like this. Like, we don't know how steep the S-curve is, but on some level, we're going to hit the S-curve. And then what, right? And then it reconsolidates. And that's when the AOLs and the Netscapes of the AI boom will implode.

DAREN BLONSKI CFP®: We don't know if that'll be SpaceX. We don't know if that'll be Anthropic. We don't know if that'll be OpenAI, right? We don't know which one it's going to be. We don't know who the winner is, but we know some are going to not be the winner. And that's why you have to be really careful about what you're convicted in this period of time.

DAREN BLONSKI CFP®: And then I think we go down economically a little bit because AI, again, it might be a smooth tranche down, might be a big tranche down. I don't know, but... We likely have a pullback. And when that pullback, we really get to find out who's got a good strong balance sheet, who's going to survive that, and ultimately, who's going to become the winner.

DAREN BLONSKI CFP®: And I absolutely believe that whoever is the winner, whether it's China who has the winning company or we have the winning company, they are going to absolutely dominate. So I think it would be unwise for us to back off AI. We need to be full steam ahead, doing everything we can to be the cutting edge. Developing it because that's what's going to create American dominance.

DAREN BLONSKI CFP®: And I'm unapologetically for that and think that anyone who lives in this country should be. But the reality is we have to remain the dominant power in AI. And we've got to keep pushing. And our best shot at that now is getting the IPO so more capital starts flowing into this stuff to mature it and to dominate the landscape.

DAREN BLONSKI CFP®: But the job market's looking strong, and that's why interest rates went up. Interest rates can't go down. Because of that, that doesn't bode well. I think we've missed our window to lower rates for the midterm elections. So I'm sure that the powers that be are scrambling, trying to figure out how to play it correctly now. I think that's also why you saw Trump quiet down about interest rates.

DAREN BLONSKI CFP®: A few months ago, he was all but telling us that Chair Powell is a criminal. It was kind of interesting. You don't hear him saying that anymore because I think now he realizes that you can't, even if they lowered rates tomorrow, it's June. There'd be very little impact carried all the way through to the election.

DAREN BLONSKI CFP®: So this is why we do this show every week, Dan, because last week things were great and they looked wonderful and it just took all but five days to change it and bring us down quite a ways. And we've got to stay on the edge, not trying to predict the market, but just trying to respond to what comes at us each day at a time, each week at a time, each month at a time. And that's what On The Mark is all about.

DAREN BLONSKI CFP®: I think that's all I got today, Dan.

DANO WEIR: If you ever wondered if he was a fiduciary, the same guy who is saying he sees a potential pullback in AI is also unapologetic about us going for it all in. So, we like that kind of dichotomy around here. My name is Dan O'Weir. I'm the marketing director. He is Darren Blonsky. He runs the show.

DANO WEIR: He's the managing principal alongside Chris Sipes and our fabulous team at our Sonoma office. We are Sonoma Wealth Advisors, the private wealth arm of Fermata Advisors. If you've liked what you heard today, if you want to learn more about us, check out SonomaWealth.Com. You can book your wealth analysis there to our clients watching all the way to the end.

DANO WEIR: We love you. Thank you so much. For checking out the show. We hope that it informed and educated you. Wherever you found the show, whether it's on YouTube, Apple Podcasts, or Spotify. You can subscribe. You can also leave us a comment and ask questions. And we will see you next week On The Markets.

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CHRIS SIPES CFP®: We appreciate diligent viewers and listeners. Fermata Advisors, LLC is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered or is excluded or exempt from registration requirements. This content was produced by Fermata Advisors, LLC, DBA Sonoma Wealth Advisors, DBA Fermata 401K, DBA Fermata Tax.

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