🥛 Raoul Pal's wildest thesis yet 🤯

GM. This is Milk Road, the crypto newsletter that turns a firehose of crypto takes into a neat little espresso shot of insight.

Here’s what we’ve got for you today:

✍️ ‘The Universal Code’ explained.
🎙️ The Milk Road Show: Stop Watching Bitcoin: The 3 Biggest Opportunities in Crypto Right Now w/ Jeff Dorman.
🍪 Banks should be terrified.

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RAOUL PAL’S ‘UNIVERSAL CODE’ EXPLAINED 🪐

This week’s outlook is pretty thin when it comes to ‘potentially market-moving events’…

Macro data releases are few and far between.
No big, crypto-adjacent companies are reporting earnings.
Significant votes for crypto legislation aren’t on the schedule.

It’s pretty much December’s Personal Consumption Expenditures (PCE) data on Friday, and a few other scraps (relevant to crypto at least):

Source: @KobeissiLetter

So instead, we thought we’d wrinkle your brain by covering Raoul Pal’s latest thesis: ‘The Universal Code’.

We’ve tried to boil it down into a cohesive, mostly market-focused summary - but that said, it’s still a DENSE little fella!

So chug some omega-3s and inhale a plate of leafy greens - anything you can do to increase your cognitive processing for the next 3-5 mins (you’re going to need it).

Ready? Good - let’s go!

When you hear ‘The Universal Code’ - think: a unified framework connecting physics, markets, AI, and the future of human value.

(Don’t say I didn’t warn you! DENSE.)

Jury's out on whether psychedelics were used in the writing process of the original article, but the core idea is this:

Everything is computation (not metaphorically, but literally). 👇

Source: @RaoulGMI

And the universe evolves to maximize intelligence output per unit of energy - where the systems that extract more intelligence from the same amount of energy survive:

Life is more ‘intelligence-efficient’ than chemistry → civilization more than biology → AI more than civilization → this is why progress accelerates.

And it’s also why everything feels like it's breaking right now - the pace of change exceeds what our biological, institutional, and monetary systems were built to handle.

Politics, education, media, and labor are all ‘compression engines’ designed for slower cycles:

Politics: compresses the conflicting needs, opinions, and demands of millions of people into (semi) manageable sets of policies, laws, and representatives.
Education: compresses the sum of accumulated human knowledge into a structured curriculum.
Media: compresses the chaos of global events into narratives.
Labor markets: compress the distributed skills, output, and economic activity of an entire workforce into prices.

And what looks like social collapse is actually intelligence migrating out of old structures and into new ones.

(Is your brain wrinkling yet? Mine is.)

Which brings us to markets…

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RAOUL PAL’S ‘UNIVERSAL CODE’ EXPLAINED (P2) 🪐

Markets are measurement instruments:

They compress vast amounts of distributed information into price - think of capital as stored energy, and markets as how that energy gets directed.

Modern economies are constrained by two slow-moving forces: demographics (which are shrinking) and debt (which is * checks notes * phwoar! RISING, and then some). 👇

Source: USdebtclock

Demographics dictate how much labor, consumption, and risk appetite an economy can sustain, while debt dictates how much future energy has already been borrowed.

This is why policy keeps getting more interventionist:

As demographics deteriorate and debt accumulates, organic growth weakens. So to keep the system functioning, more cash injections are needed (being applied earlier and more aggressively as things accelerate).

In response, capital is flowing towards software, networks, and automation because that's where intelligence compounds the fastest.

Source: TradingView

Labor is being measured against a benchmark it was never built to meet - not because workers are failing, but because intelligence changed its medium.

This points toward what Raoul calls ‘The Economic Singularity’:

The moment intelligence becomes so abundant and scalable that the relationship between labor, capital, and value permanently breaks.

For the first time ever, civilization can scale intelligence without scaling population.

Autonomous agents and robots become the new demographics… they work without rest… they don't retire, vote, or consume in the human sense.

And with this new reality:

Economic growth decouples from population → productivity decouples from employment → capital accumulation decouples from human labor → and markets gradually recede into the background of human life.

Think of it like a ‘human repositioning.’

As intelligence becomes abundant, ‘meaning’ becomes scarce.

And as we all know: scarcity defines value (just look at BTC, bottom to top, it’s up 1.2B percent over the last 15 years or so). 👇

Source: TradingView

In this process, the things that resist the new wave of compression will move to the center of human life - think: creativity, care, connection, and shared experience.

We’ll leave the machines to optimize intelligence, while humans specialize in meaning.

(Yep, psychedelics were definitely used here.)

The idea being - the economy stops being where humans prove their worth and becomes infrastructure supporting human experience, with a waterfall effect that goes something like this: