Geopolitical conflicts keep raising sticky inflation
The spiral debt of US.Gov needs to be tracked
As you see in the above graph, the highest point except recent all-time high of US Gross Federal debt was in the 1940s which was right after "The Great Depression and World War II". During this period, the US gov reformed unemployment and built a recovery economy by generating GOV debt. Compared to the 1940s, the Current US Gov debt is way higher than that period right after the "Great Depression and World War II". The current situation is quite not similar to 1940s but The only thing that is similar to the 1940s is that we are under geopolitical conflicts on russia-ukraine and Israel and Iran vs World War II. This means the US Gov needs more war suppliers to support those geo-political conflict areas by initiating US bonds and keeping Fed interest higher for a longer level. Current sticky inflation is not coming from the market but from Gov. increasing spending to support geo-political conflicts and rewrite global supply chains such as AI, semiconductors, and EV cars and batteries by reshoring in the US.
The biggest transition is coming from all sorts of sectors
We are in the middle of the biggest transition in history such as AI, autonomous robotics, EV energy transition, etc. Every transition needs cost and investments to transform our system of society. For investors, This is the biggest opportunity to invest in that transition. But you should be careful not to invest in overpriced stocks or assets. This will make a bubble on those assets. I do think the bubble has not even started but every overpriced asset will create a bubble on the market and everybody says "We should buy it" As you look back in history, every technological and societal transition came along with the market bubble. I do think a bubble is inevitable to transform our society. As you are a smart investor, you should be a smart player in the market by staying away from overpriced stock and assets.
Sticky inflation never ends until the end of the transition what US want
The US Gov will keep generating treasury bonds to support geo-political conflict and transformations on AI, semiconductors, etc, and also to rebuild cutting-edge manufacturing supply chains in the US by reshoring them. But the thing we have to monitor is the spiral debt of US Gov. And also the US and China have stayed against each other and then China keeps selling US treasury bonds in the market. This means the US Gov will keep looking for buyers for US Treasury bonds. Defi and RWA in the crypto market will come into the market and play a role in channeling assets into the US Treasury bond pool. This is the reason why we should keep looking at the crypto market.
