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Luke Gromen & Darius Dale: Which Inning Are We In?

Adam Taggart | Thoughtful Money® Sep 13, 2026 1:50:12

Summary

Gromen and Dale argue US true interest expense at 105% of receipts already signals a fiscal crisis several innings along.

Dale's Paradigm A to E framework tracks fiscal dominance into debasement and political realignment; a bond market crisis could trigger Paradigm D by 2028.

Fair value on the 10-year sits around 5.87% per Dale's models, but life insurers cannot rotate from private credit into Treasuries at any yield.

Both guests see AI capex driving a productivity boom and major risk-asset gains before a bond reckoning forces yield curve control.

Allocations lean into scarce assets: Gromen targets roughly 40 percent gold and gold miners with about 15 percent electrical-infrastructure equities; Dale expects bubbles in equities, gold, and Bitcoin.

Luke Gromen's takeaways

  • Top takeaway Argues the US is further along in the game than Darius suggests — specifically at the 6th-8th inning for a bond market crisis — because 'true interest expense' (interest plus entitlements plus veterans affairs) has already hit 105% of receipts and is heading toward 115% per the Q3 TBAC report, putting the country in a print-or-default regime.
  • Frames the US fiscal problem as a Weimar-style reparations trap: roughly 60% of annual outlays are owed in currencies the Fed cannot print (Social Security cost-of-living adjustments plus Medicare/Medicaid/VA hips, knees, pharma, doctor time), so every dollar they print accelerates the price of the things they owe faster than their own inflation.
  • Expects Bessent's $6 billion Treasury buybacks to escalate to $8-10 billion as the long end runs away, viewing that reflexive upsizing as an explicit 'whatever it takes' signal — and instructs investors to 'buy gold, buy stocks, buy anything that is finite' and 'sell dollars' whenever it appears.
  • Believes the Fed loses the long end no matter what it does — hiking accelerates growth via boomer consumption, widens the deficit, and pulls in foreign selling of US duration; cutting signals surrender on inflation into an 8% nominal-growth economy and also pushes yields higher.
  • Recommends a portfolio of roughly 15% cash, 40% gold and gold miners, 15% electrical-infrastructure equities, 5-7% Bitcoin, and the balance in blended large-cap equities, framing cash as 'ballast' to lean into the volatility he expects from the political, inflationary path ahead.

Adam Taggart's takeaways

  • Top takeaway Recalls that in a previous interview Peter Turchin told him the US ranks highest on his tracked-country list for probability of revolution, reinforcing the discussion's framing of paradigm E as a base-rate outcome.
  • Frames the practical takeaway for viewers as 'this is not a time to go it alone,' urging DIY investors to either hire a financial advisor or subscribe to a research service like 42 Macro or FFTT, given the unusually wide distribution of probable macro outcomes.

Darius Dale's takeaways

  • Top takeaway Outlines a five-stage Treasury paradigm framework — A (fiscal dominance / too many bonds), B (stasis), C (grow/run it hot), D (default via debasement / money printing), E (major political realignment and total war) — placing the current moment in the 3rd-4th inning of C and the 7th-8th inning of a bond-market crisis he expects to trigger D by end of 2027 / sometime in 2028.
  • Calculates a 10-year Treasury fair value of 5.77% as the mean of five models — yield curve 5.20%, inflation expectations 5.74%, term premium 5.99%, real yield 6.13%, and nominal-GDP spread 6.27% — arguing Bessent is 'panicking' at current 4.7% levels and that AI hyperscaler debt financing will accelerate the drift toward that fair value.
  • Expects a simultaneous equity, gold, and Bitcoin bubble through roughly mid-2027 to mid-2028 as Paradigm D is pulled forward by the bond reckoning, accelerating annual debasement rates to 10-20% for stocks and gold and 45-50% for Bitcoin versus the dollar.
  • Argues the Fed should hike rates now to preserve Paradigm C, but ultimately expects it to lose the long end and resort to yield curve control via balance-sheet expansion, dismissing stablecoins as a solution — either they strengthen the dollar and compound the problem, or they fail to attract enough foreign surplus capital to matter.
  • Notes that roughly 85-90% of US federal tax receipts come from workers (63% individual income taxes plus 33% payroll), so AI-driven labor displacement will shrink the tax base and likely trigger redistributive policies — including AI capex taxation — coming out of the 2028 election.