NGDP growth running white-hot. The setup is obvious:
AI capex tsunami
Easy money conditions
Fiscal still wide open
Private sector levered light, locked in cheap
Wealth effect driving consumption
Nominal bonds getting destroyed. TIPS and cash bleeding slowly. Commodities, stocks bid. Gold and $BTC holding.
That's the regime. Policymakers could kill it but aren't trying. Treasury actively suppressing the long end — turning cash from bad to catastrophic, feeding the inflation loop.
As long as this runs: buy dips in commodities, equities, gold. Sell rallies in bonds.
How does it end?
Hike until something breaks
Let the long end reprice naturally
AI takes longer to deliver than expected
Private sector financing taps out
Valuations get parabolic, oxygen thins
Inflation forces fiscal consolidation to calm the crowd
Probably some mix of all at once.
Until then: own beta.
AI capex tsunami
Easy money conditions
Fiscal still wide open
Private sector levered light, locked in cheap
Wealth effect driving consumption
Nominal bonds getting destroyed. TIPS and cash bleeding slowly. Commodities, stocks bid. Gold and $BTC holding.
That's the regime. Policymakers could kill it but aren't trying. Treasury actively suppressing the long end — turning cash from bad to catastrophic, feeding the inflation loop.
As long as this runs: buy dips in commodities, equities, gold. Sell rallies in bonds.
How does it end?
Hike until something breaks
Let the long end reprice naturally
AI takes longer to deliver than expected
Private sector financing taps out
Valuations get parabolic, oxygen thins
Inflation forces fiscal consolidation to calm the crowd
Probably some mix of all at once.
Until then: own beta.