BREAKING: Richard Heart Arrested! Transcript, AI Summary & Key Points

00:03 Richard Hartke. So you've got Bitcoin down.  You've got altcoins red. You've got gold. Gold was down 1.72%. You've got yields spiking. Look  at that five-year yield or the 10-year yield, up above 5.3%. You've got the NASDAQ, slightly  down. In general, the market is not liking the slightly, and I'm talking slightly,  slightly, slightly higher interest rates.

01:34 There's another concern: tomorrow we have PPI.  So tomorrow we have PPI. I think the problem with CPI was that CPI not only was slightly above  the forecast, but if you look at the last reading, the last reading was 3.4%. So there's a clear  increase in inflation. We went from 3.4%, to a forecast of 3.6%, but then we  got 3.7% on the inflation numbers.

02:02 So why? What's driving that? I mean,  it's not a surprise. You look at the war, and since the beginning of the war in Iran,  this is how much things have basically gone up. European natural gas is up 163%.  Sulfur is up 89%. Heating oil is up 80%. Jet fuel is up 80%. Diesel. Okay, now,  diesel and petrol are the two killers, right? I don't know where you live in your  country, but I can tell you in South Africa, a liter of petrol costs, what, 30 bucks?

02:28 Almost 30  bucks. So it's almost $2 for one liter of petrol, which means for a gallon, we're paying like $9  or $10. Let me know how much you guys are paying in the comments. But that's the part  that's basically starting to kill. And if you look at where the US now lands up with  a 3.6% inflation rate, you've got Argentina, then Turkey, then the Philippines, then Russia, Spain,  India, Brazil, South Africa at 4.4%.

02:57 And so this is where it would land up, between the Eurozone  and Portugal. So the inflation is a problem. And now the market's concerned that the  Fed will raise rates. Well, is the market concerned? So I did a bit of a... oh, come on.  I didn't refresh this page. Their website's so slow. Oh man. I wanted to refresh it live with  you guys. But anyway, let's refresh it here.

03:28 Here we go. So now, woo, woo, woo, woo.  We just swung in favor of a rate hike. Now, I don't think we're going to get a rate hike.  I don't think we're going to get a rate hike. But today, it was at 80%. You can see this chart  over here. It was 78% no rate hike, you see? And now we just refreshed it together, and  now there's a 53% chance of a rate hike.

03:50 I don't think there's going to be  a rate hike on the 28th of October, which is in two weeks exactly, because the midterm  elections happen just after. Now, this is the big problem. The big problem is that we're going  into midterm elections. You've got inflation numbers that look like this. You've got diesel  that looks like this. Now, diesel is what people feel at the pumps.

04:06 This is what people start  complaining about, right? $7 a gallon. Actually, much more expensive in South Africa. It's a big  problem, right? So yeah, it's a big problem. And now we're going to start worrying about  what happens in the midterm election. Right now, there's a 64% chance that the Democrats  take the Senate and a 91% chance that they take the House.

04:32 And this is according to  Polymarket, and the elections are happening in 19 days. So Trump's going to have  to really pull a rabbit out of a hat. The problem with this is that the Democrats  are already licking their lips about what they're going to do in their first hundred days  when they come back. Democrat leader Hakeem Jeffries, who's in line to become  the House Speaker if the party wins, said the Democrats will be united right out  of the gate on reinstating the Affordable Care Act.

05:02 Basically, they've got this whole  thing that they want to do, like reverse the Trump tariffs. And they expect to do this in  the first hundred hours of the new Congress. So it's like they haven't even won  yet, but they're really sitting there and they're planning exactly. You  know what it's like? I'll tell you what it's like. It's like when I enter a meme coin  at a $150,000 market cap and I start planning what I'm going to be doing when this thing  gets to a hundred million dollar market cap, right?

05:28 That's what the Democrats are  doing now with the election results. Look, I do think that the Democrats  do have a chance of winning both now, unfortunately. Because Trump's basically  managing two wars, and they're both energy wars, right? That's the problem. They're both  energy wars. You've got the Ukraine war, which is an energy war. You've got the Russia war,  which is an energy war.

05:50 That's the problem, right? All right. So the probabilities of an interest  rate hike now spike to, as we said before, let's go back here, they now spike to,  see, they keep changing, a 53.7% chance of a rate hike. Now, this is where Ray  Dalio's warning is starting to come in. So I saw this tweet over here, and it basically  says the following. It says the Fed may have to go further than expected to slow down activity,  as hikes don't have the same effect as before.

06:25 So what this is basically showing is  that when we increase interest rates, the hikes aren't having the same  impact as they were having before. Now, why is that? Because this is  not a problem of interest rates. This is not a problem of economic growth being  overheated. This is a supply shock problem. Now, unfortunately, the only tool that the Fed  actually has is to increase interest rates.

06:54 That's the only tool that they have. But  it's the wrong tool for the job, because they're trying to slow down the economy because of  wars that are going on spiking up energy prices. Now, obviously, if you slow down the  economy, prices will start coming down. But it might not offset the amount  that prices go up because of the oil spike. And so that's the problem that the economy  is starting to face now.

07:17 The interest rate hikes aren't having the desired impact, and  therefore the concern is that they're going to have to raise rates higher and  higher to get the desired outcome, right? So think about it. Think about this in a car.  You've got a brake and you've got a handbrake, right? Now, imagine trying to stop  the car using the handbrake. Okay, it's the wrong tool.

07:40 You should be slowing  the car down by pressing the brakes, right? The problem is they're using the wrong  tool. Yes, the car will stop, but you're going to have to do a lot more work. You're going to  have to pull up the handbrake, and the car's going to go crazy. That's how you've got to think about  it, right? The only tool we have is the handbrake, but you should be using the brakes.

07:57 And that's  basically what's going on right now with the Fed. So look, we have the Fed going out. Chris Waller  is going to speak, I think today. Is it today? I think 10 a.m. I think he's speaking today or  tomorrow. I don't think he's expected to say much, which is why I don't think it's  really that consequential, right? More consequential is this thesis that's written  by Ray Dalio, because now Ray Dalio is really sounding a warning.

08:30 Now look, when Ray Dalio  writes, unfortunately he writes a lot. Just look at how much he wrote. Just look at how much  he wrote, right? I'll summarize it for you. This is how much Ray Dalio wrote. I mean,  even Claude, when I asked Claude to read it, Claude's like, you've got to be joking. Do you  want me to read this whole Ray Dalio article? I'm like, please, Claude.

08:50 I beg you, Claude.  Claude said, sure, I'll do it, but I'm going to charge you more credits. So yeah, Claude  said he'll do it, but with more credits, right? Let me quickly summarize what Ray Dalio  said, because I don't think that you guys want an economics lecture. He says the  US is borrowing more money than lenders actually want to give it, so the price  of borrowing continues to go up.

09:13 Okay, so basically, the US needs money. No one  wants to give the US the money anymore. Not the local guys and not the foreigners.  Therefore, interest rates are going to go up, and when interest rates go up and up and up  and up, eventually stocks will feel the pain. And if you look at the interest rates,  they're actually going up and up and up, and eventually we'll get to a point where it's so  attractive to invest in debt, which is risk-free, that people will take money out of the stock  market, right?

09:41 Also, don't forget that a lot of the AI development is being funded through  debt. And when the cost of debt goes up so much, a lot of the AI development will be slowed down.  So we've got to be super careful around that. All right, so let's just quickly go through  Ray Dalio's article. One is that the US wants to borrow more. There are two problems here.

10:01 You  have more IOUs for sale than people want to buy, and then you've got bigger debt repayments.  If you look at the US debt repayment, it is crazy. As a percentage of GDP, it is now  122% of GDP. That is the debt repayment, right? And so American households are starting to have to  absorb this. Today, the average debt per American household is $240,000.

10:30 In two years, it'll be  $270,000. I mean, that is absolutely crazy. Now, the other problem is that the  countries that held the most US debt don't want US debt anymore. Countries like  China and Japan are starting to offload their debt. And so who's buying?  The Fed is buying the debt. Okay, so you've got the Fed buying it. It's a bad  thing, but for us, it may be a good thing.

10:59 The worst part is that because  interest rates are so high, the old loans are being swapped for  new, expensive loans. They used to pay 3.5% on the old debt, but now to  refinance themselves, it's costing 5.5%. So this is the summary here. This is the  punchline. The punchline is where Ray Dalio basically says: in summary, it appears to me  that we're in the part of the cycle that follows relatively big interest rate increases, but  before the previously mentioned adverse effects on the markets and

11:26 interest-rate-sensitive  parts of the economy occur. At this stage, interest rates tend to continue to increase until  the supply-demand imbalance starts to shrink towards sustainable levels, which shows up in  the weakness of interest-rate-sensitive markets. Basically, what he's saying is this is the part  of the cycle where interest rates have to go up a lot to basically have an impact.

11:42 Okay, so that  is effectively the Ray Dalio warning to societies, basically saying, look, you're at the part  of the cycle where you're going to have to increase interest rates a lot before it has  the desired effect. And then the problem is that that's going to slow down the economy  eventually. It will eventually stop the car. But The problem is it could crash  the stock markets first.

12:06 Yeah, and Ray Dalio has been quite vocal about  this, and he gets more and more and more vocal about it. So that is the Ray Dalio  story, right? That is the Ray Dalio story. I want to switch to the other big story quickly,  and that is that our friend Richard Schueler, or Richard Heart, as Pulsicans and Hexicans actually  call him. Whether you believe in Pulse or Hex, if you've been here for a while, Richard Heart  is very much a part of crypto history and cryptocurrency.

12:37 He's a very, very early Bitcoin  investor. He's a very early crypto investor. He launched Pulse. He launched Hex. I think he  launched a couple of other products as well. Anyway, in an operation conducted by National  Intelligence in Istanbul, in Besiktas in Turkey, Richard James Schueler, nicknamed White Whale,  who was wanted by Interpol with a Red Notice, was detained at a luxury address.

13:00 $4  million in cash and 64 luxury watches have been seized. He has his passport  for KYC purposes. That's the watches, and in the safe, and four million. Look  at all those watches. He used to stream, and when he used to stream, the watches  used to spin like this in the back. Let's phone Kyle and find out if he's  heard about the Richard Heart news.

13:28 Let's phone Kyle. But Kyle's in Dubai, so  I wonder if he'll put on a VPN. Let's see. Anyway, while we're waiting, it says: Dawn  operation by MIT and police against crypto whale. Richard James Schueler, known  by the alias of White Whale and wanted by an Interpol Red Notice, was captured in  an operation. Nothing we don't know here. Okay, now here is where I did read something  that I think is worth reading.

13:52 Okay, the dawn raid we know about, the Rolex watches we know  about. It says Richard Heart's legal troubles stretch back to when Finnish authorities, people  in Finland, investigated him over allegations of aggravated tax evasion and assault, and eventually  secured an arrest warrant. The tax investigation concerns alleged unpaid obligations associated  with substantial cryptocurrency-related income.

14:23 The separate assault allegations involve a  2021 incident concerning a minor. Finnish investigators previously seized 20 luxury watches,  as well as $2.6 million in a property in Espoo. The investigation eventually placed Heart on  Europol's most wanted list. Across the Atlantic, American regulators also took aim at  his cryptocurrency ventures. The SEC, in 2023, accused Heart and Heart-related  entities, Hex, PulseChain and PulseX, of conducting unregistered securities offerings  of more than one billion dollars.

14:50 The agency also alleged that at least 12 million was  diverted towards luxury purchases, but that civil case was dismissed over insufficient  jurisdictional connections to the United States. Okay, so he managed to dodge a bullet there.  He managed to dodge a bullet there. Here's the video footage of allegedly Richard Heart being  arrested. I wonder how he's going to get out of this.

15:16 I suspect he will get out of this, but  I wonder how he will actually get out of this. Cool. Another thing that's probably worth talking  about is this. The OCC says that the nine largest banks in the USA officially had policies from  2020 to September 2025 with crypto amongst the industries facing restrictions. So JPMorgan Chase,  Bank of America, Citibank, Wells Fargo, US Bank, Capital One, PNC Bank, TD Bank and BMO Bank are  all officially now exposed to have had crypto debanking policies.

15:52 Can you believe that? So  when the Democrats were in power, these guys had crypto debanking policies. So yeah, that's  what happened when the Democrats were in power. What else? Let's look at the altcoins quickly.  So here are the altcoins. Obviously we expect red. There are one or two that are moving up.  Pearl is moving up. As I said the other day, it's because there are exchange listings  happening this week.

16:12 I'm not going to spend too much time on Pearl. We did  already. Obviously, Pulse is down. Oh, look at Sonic. Sonic is down. 5.6.  Okay, still not in my buy zone area. The ones that I have seen going up: I saw Pons  going up and Cash Cat going up. The reason why the Robinhood chain tokens are moving is exactly  what I said to you yesterday. Remember I told you yesterday, but now it's confirmed, that  there's a 9,000-plus Robinhood grants program that is coming live very soon.

16:42 Now,  when is soon? When is soon? Well, there are Robinhood results at the end of the  month, right? There are going to be Robinhood results at the end of the month. And during  results, companies want to show off or deflect from what's actually going on in the company.  So I think that in time for, or just before, the Robinhood results, we're going  to get the Robinhood chain going up.

17:05 Now, the question is, with this grant being  offered, what's it going to do to the chain? It's going to encourage more building and more  migration onto Robinhood chain from some builders. And so the question is, how do you actually  get exposure to it? That's the problem, right? We know there's a grant, but how do you actually  get exposure to the ones that are going to move?

17:23 Look, unfortunately, there aren't that many  good projects on Robinhood chain. There aren't. There are a lot of projects, but I think the  two, well, three, if you want to bet on them: one is you can buy Robinhood equity. I don't think  so. I think Robinhood equity is not overpriced, but it's just not cheap. So I don't  think we should rush into doing that.

17:42 If you want to take a punt, if you really, really  want to take a punt, then I would say maybe look at Pons. And again, this is if you want to take  a punt. I'm not doing it. I'm not taking a punt, because if my thesis is that the market's going to  go down and that there's going to be a correction, I've got to weigh that against how much Pons  is going to run relative to the market.

18:00 And I don't think that the differential is so big.  So for me, I'm not really taking this trade, but if you are looking to trade the alphas, Pons is  one of those alphas. Cash Cat is the other alpha. One that I see moving today is  Walrus. Walrus is Sui's storage layer. I'll tell you why that's going  up: because they acquired Story Protocol, the old Story Protocol.

18:22 So there's a lot going  on. There's a lot going on with Sui. I'm going to release a Sui video with a Sui founder.  It's absolutely mind-boggling how much is actually going on at Sui. But I think it's  worth it for you guys to actually look at. Okay, now I'm going to show you how not  to trade. For the next part of the show, this is a very important part of the show.

18:43 It's  called How Not to Trade. This is a series that I'm starting to do. It's starting today;  today's the first day of How Not to Trade. The first thing is where  you should trade. Now here, this is important. Remember I said to you  that we have been trading on Variational. Variational is now the largest on-chain  venue for volume in RWA derivatives.

19:02 Okay, this is important. Why is this important?  Because Variational is going to launch in Q4 this year. We're already in Q4, but  you can still farm the points. Guys, tell Johnny to put in the points farming thing.  You can still farm the points on Variational. Variational is a perpetual DEX like Hyperliquid.  It has zero fees, as you can see, zero, and you can trade all the assets.

19:26 And now you  can trade the largest amount of RWAs. Here's why it's important. If you go to Variational  and you trade these things called swaps, which is the same as a perp, they just call  it a swap, a very similar type of instrument, you get more points. You still have two months  to earn points before they do the airdrop. You get the points every Friday.

19:49 To get points,  all you need to do is trade on Variational. Now this is the part where I teach you how not  to trade, okay? I've got two positions here. I've got a Lighter position, which is down $7,000.  The value is $30,000, down $7,000. And I've got a NEAR position, which is up $200. As you  can see, I've only got $8,000 in the account, so I'm going to deposit more money in the  account because I want to save this position.

20:15 Now, this is the problem with leverage. When you  start defending and defending and defending a position, it's a problem. I'm doing it because  I know that I can carry this small position, but that's not how you're supposed to trade.  But you should be trading on Variational. Why? Someone says, "I told you I  don't like 10X." You're right. If you trade on Variational, then  you will get the points.

20:32 So to me, it's worth trading and farming these points as  much as I can, right? Because I want as many points as possible for the airdrop. The airdrop's  going to be around a billion dollars, okay? Very, very significant, and it's based on how much  volume they actually do. There are still two months. If you want to sign up, sign up. There  will be a link in the description below.

20:51 Johnny, Johnny, okay, we're going to add it now.  There's going to be a link below. If you use the code Omni when you sign  up, you get a 15% points kicker. Also, I want to remind you, remember I said to  you guys that we're giving away, oh, there are 90, so one has been given away already. This is  the iPhone trading device, the new iPhone, right? Because of the dual screen, we think it's  going to be the ultimate trading device.

21:23 If you want to win one, just sign up with any Banter  exchange, and if you've already got an account with a Banter exchange, just log in and go  spin the wheel. You get a spin, I think, almost every day, and every time you do $25,000  in volume, you get another spin. So just keep checking back every single day. Log in with any  exchange that you want: BloFin, Bybit, Toobit.

21:58 Someone says, "Great giveaway." Nick, you get  it, bro. Nick Gasson. Go do it. Sign up with any link and trade. Every time you do $25,000 in  volume, you win a prize, and that's with any one of our partner exchanges. Also, if you sign up on  Variational, you stand a chance to win the iPhone. We do iPhone draws. I did one last week, and I'll  do one again.

22:15 Plus, you actually get those points. "Funding has your back." No, funding doesn't have  my back, bro. Look, I'm in at 30, I'm at 150, tough. Look, don't trade like me here. I'm  trading negligently here. I should have had a stop loss here, but I actually don't mind  this position for the long term. So yeah. Alright, let's see, what else is there today?

22:39 I think that's it for today. Quiet markets, quiet altcoins. Maybe not so quiet  if you are in Besiktas in Turkey; then it wasn't so quiet for you. I wonder how  Kyle Doops feels. We need to phone Kyle Doops. Kyle Doops again, but he didn't  answer. Maybe it's the gym. Actually, no, he's been sick. Kyle's been sick,  Kyle's been sick. All right, my friends.

23:03 Great giveaway. Everyone's talking  about how good the giveaway is. Guys, you want the giveaway? Sign up with any of our  exchanges. Go there, plug in your exchange. Spin, spin, spin, spin, spin, spin. And win.  There's still 19 of these phones left. So do it. There's still 19 of them left. Go and spin.  It's free, you don't pay, you just have to trade.

23:22 The more you trade, the more you  spin. The more you trade, the more you spin. "Ran, pop into Sniper Club." I will, I will pop  into Sniper Club. I've got something amazing coming in the next two or three days. I'm  just waiting to see it. After I've seen it, I'll send it to you guys so that you can see it. All right, brothers and sisters, we shall see you guys again tomorrow.  Until then, trade well, my friends.