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October 7, 2025

Gold trades above $4,000 today.
 
Yesterday, we talked about how the run in gold is outpacing even the hot tech trade (Nasdaq).  And more broadly, in recent days we've talked about the outperformance of hard assets relative to paper assets this year — a setup that looks like 1972
 
What was important about 1972?  It was a rare occurrence where gold was up at least 30%, and stocks (S&P 500) up 10% or more, and bonds were positive.  And it came as there was a significant shift in the global monetary regime.
 
We have the same conditions today, including a significant monetary regime shift.
 
The monetary system is becoming programmable. 
 
As we discussed, the U.S. is pursuing private, regulated stablecoins.  And much of the rest of the world is moving down the path of central bank digital currencies (CBDCs).
 
Both raise the issue of trust.  But, unique to CBDCs, centralized money on a government-run, programmable ledger creates the risk that activity could be surveilled, and access could be restricted or frozen.
 
On the latter, we have a current example, which may be the biggest driver in the global capital flows into gold.  
 
 
Here's the timeline in the gold chart above:
 
1: The European Union (EU), the G7 countries (US, UK, Canada, Japan, etc.), and other allies take coordinated action to block or freeze the assets of the Central Bank of Russia (CBR) held in their jurisdictions.
 
2: The EU officially approves a plan to use the net profits/interest generated by the frozen Russian assets.
 
3: The EU makes the first transfer of €1.5 billion of proceeds generated by the immobilized assets available to Ukraine.
 
4: "EU floats 'creative' new way to send billions of euros of frozen Russian assets to Ukraine"—The key debate is now about using the full capital, not just the interest.
 
5: EU leaders meet and formally discuss the new proposal for a €140 billion loan to Ukraine, to be repaid only if and when Russia pays war reparations.
 
If a nation's money can be confiscated, the trust that underpins all fiat currency (a government IOU) is weakened.  Gold is the safe haven. 
 
 

 

 

 

 

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October 6, 2025

As one of the great hedge fund traders of all-time, Paul Tudor Jones, has said in the past: "the last third of a great bull market is typically a blow-off, whereas the mania runs wild and prices go parabolic.”
 
Today he equated the current environment to October 1999, when the tech stock mania was running wild and stocks went parabolic, doubling before topping in March of 2000, and subsequently crashing.
 
Here's a look back at that period …
 
 
So, are we starting another "blow-off/last third" tech rally and then bust?
 
There are some similarities.  But this cycle’s winners are highly concentrated in dominant tech giants with moats, double-digit earnings growth, margin expansion, and valuations that are reasonable relative to that mix.
 
Add to this, in gold terms, the Nasdaq isn't as rich. 
 
 
As you can see, we're nowhere near the peak Nasdaq-to-Gold ratio of the late 90s bubble.  Moreover, the ratio has rolled over. 
 
The first peak was late 2021, when Jerome Powell finally signaled a tightening cycle and began chasing four-decade high inflation.  Stocks fell sharply, leading the Nasdaq/Gold ratio lower
 
Then, last year, gold broke out — and the rise in gold has since outpaced the rise in the Nasdaq.
 
The Fed was telegraphing an easing cycle into record debt and deficits and record Treasury issuance, just as the Bank of Japan ended negative interest rates, yield curve control and ETF purchases (emergency policies) removing a key source of ultra cheap global liquidity to the world. 
 
So, what is the Nasdaq/Gold ratio telling us? 
 
In gold terms, your dollars and your stocks buy less than they did three years ago.  The market is sniffing out dollar (and fiat currency, in general) debasement
 

 

 

 

 

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October 02, 2025

It was less than three years ago that OpenAi launched ChatGPT.
 
That "moment" crystallized how large language models (with the computing power of Nvidia chips) would translate to a product and service.  
 
Six months later, Jensen Huang, Nvidia's founder/CEO, declared the "ChatGPT moment" as "the beginning of a major technology era."
 

Just days after Nvidia's May 2023 earnings, we launched our AI-Innovation Portfolio.
 
Since then, we've been positioned for the phases of this AI revolution: with exposure to the chipmakers, the tools that design the chips, the equipment and hardware that make the AI "factories," the platforms that turn it into revenue, early autonomy/robotics, and the energy that powers it all.
 
I said in my first AI-Innovation Portfolio note, "prepare for the era of (more) multi-trillion dollar companies … the generative AI impact will mean bigger companies, in a bigger economy."
 
At the "ChatGPT moment," Nvidia was worth about $400 billion.

 
Today it's worth 10 times more — $4.6 trillion
 
And OpenAI was said to be valued at $20 billion just after ChatGPT launched.  Today it's worth 25 times more — $500 billion .  
 
Jensen said last week, he thinks OpenAI will be the next multi-trillion company.
 
As we also discussed back in the summer of 2023: "this technological revolution is productivity enhancing for the economy.  And it will grow the economic pie (and the size of the stock market).  It should fuel a boom-time period in economic growth." 
 
The U.S. stock market is $26 trillion larger today, than it was the day before ChatGPT launched (>50% larger).
 
However, real U.S. GDP is only $1.5 trillion larger (below trend growth).
 
What's missing?  The productivity boom.
 
It's coming. 
 
The automobile is to mobility, as AI is to productivity.
 
And high productivity growth is a driver of a higher long-term potential growth rate of the economy.
 
We averaged just 1% productivity growth for the decade prior to the pandemic, and just 0.9% since the fourth quarter of 2020.
 
If we look back to the 90s boom-time economy, driven by the early stages of internet adoption, productivity ran 2.7% over the second half of that decade.  Economic growth averaged 4.5% a year, stocks averaged 26% a year over a five-year period, and inflation averaged just 1.6%.
 
If you want to own the stocks of the companies building the infrastructure to power AI, the companies delivering the capabilities of AI to hundreds of thousands of businesses, and the companies that will best leverage the productivity enhancements from AI, you can find them in our carefully curated AI-Innovation Portfolio.

 

If you haven't joined us yet, now is a good time (click here, get signed up and get instant access to the portfolio). 

 

 

 

 

 

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September 30, 2025

As we close the month and quarter today, let’s take a look at asset class returns for the year.

What’s the takeaway?  Precious metals lead the way with huge gains, while the VIX (also known as the market’s ‘fear gauge’) is down big.

Stocks are at record highs and the VIX is tame.  The run-up in hard asset prices is not about fear.

It’s about the capex boom around AI, and the retooling of trillions of dollars of global computing (i.e. datacenter build-out).

And it’s about owning hard assets as insurance against currency debasement, driven by debt and deficits.

Related, it’s also about a weaker dollar (down 9%), and about a new tech-influenced monetary order — digital currencies.

NYU keeps a table of historical asset returns dating back to 1928.  If we look back at the years when gold was up 40% or more, we get only four years of the past 96 years — 1972, 1973, 1974 or 1979.

If we look at years where gold was up at least 30%, and stocks (S&P 500) up 10% or more, and bonds were positive, it only happened twice — 1972 and 1979.

So we have the 70s, and 1972 is particularly interesting as it involves a new monetary order — the shift to the post-Bretton Woods era and floating exchange rates.

Today, there is a shift.  The monetary system is becoming programmable. 

And policy paths are diverging.  As we discussed yesterday, the U.S. is pursuing private, regulated stablecoins.  And much of the rest of the world is moving down the path toward central bank digital currencies (CBDCs).

The uncertainty on how it plays out is reason alone to hold hard assets as a hedge.  Moreover, those on the CBDC path have to be contemplating the risk of having the government turning their money off.

PS:  If you know someone that might like to receive my daily notes, they can sign up by clicking below …      

 

 

 

 

 

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September 29, 2025

We've talked about the global central bank coordination of the past fifteen years — and why the coming regime change at the Fed will likely end it.
 
That said, the Trump administration has also rejected the UN agenda 2030, which is designed around a globally coordinated climate and social agenda.
 
That was clear last week, in Trump's speech at the UN. 
 
What was also clear, other Western world leaders (and the UN Secretary-General) followed that speech by doubling down on the agenda.
 
Even China announced its first formal targets for reducing emissions.
 
Add to this, while the U.S. has rejected central bank digital currencies (CBDC), opting for private, regulated dollar stablecoins.  Much of the rest of the world seems to be racing forward to launch central bank digital currencies — 137 countries representing 98% of global GDP are exploring a CBDC.
 
The Trump administration has also rejected federal digital ID initiatives.  The UK's Prime Minister said on Friday that a digital ID is coming:  "You will not be able to work in the UK if you do not have digital ID." 
 
This all ties in with the climate agenda, so we should expect mandatory digital ID and CBDCs to come for other major U.S. trading partners.
 
With that, if we thought the tariff strategy alone was enough to re-align the world with the U.S., the past week suggests the opposite: the world is wiring up two systems. One attracts capital, around abundance (energy, industrialization, innovation).  The other demands compliance, controlling access to money and markets, delivering managed scarcity. 
 

 

 

 

 

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September 25, 2025

The final reading on the second quarter GDP was revised up this morning, to a 3.8% annual rate.
 
Related to this, let's talk about some comments made by KKR's Henry McVey this morning, one of the most influential capital allocators in the world.
 
He said "productivity numbers are going to go through the roof." 
 
Why?
 
Trump policies are driving a boom in capex.  Meanwhile, the job growth numbers have just taken large downward revisions.  And this formula will result in a jump in output per worker (fewer workers/hours in the denominator) — higher productivity. 
 
On that note, back in July, one of Trump's Fed Chair candidates, Kevin Warsh, said "we are at the front end of a productivity boom."
 
And as we've discussed often in my daily notes, hot productivity gains promote wage growth, which is needed to reset wages to the increased level of prices (which restores quality of life). 
 
High productivity can fuel wage growth without stoking inflation.
 
And Jerome Powell himself presented back in 2016 at the Peterson Institute (here), that higher productivity growth is a driver of a higher long-term potential growth rate of the economy.
 
If we look back at the late 90s boom, which was fueled by a technology revolution (the internet), we were in a productivity boom.  Economic growth averaged 4.5% a year, stocks averaged 26% a year over a five-year period, and inflation averaged just 1.6%.  
 

 

 

 

 

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September 24, 2025

As we discussed yesterday, the metals complex is broadly leading global asset class performance for the year.  It's wartime behavior. 
 
It's also behavior that tends to be associated with global uncertainty about dollar liquidity
 
On that note, that topic has bubbled up in recent days.
 
In times of uncertainty, global banks tend to scramble for U.S. dollars, to meet dollar-denominated liabilities.  In Argentina, there's an economic and currency crisis underway.  The peso has lost about 40% of its value (vs. the dollar) since April, making foreign currency denominated debt more expensive. 
 
Scott Bessent said yesterday that the U.S. Treasury "stands ready to do what is needed within its mandate to support Argentina," which, importantly, includes providing access to U.S. dollars (via currency swaps).
 
South Korea is also asking for a currency agreement (currency swaps) with the U.S. to pair with its commitment to make significant dollar investments in the U.S., as part of a U.S./South Korea trade deal.  To do the deal, they need access to dollars, without taking risk on how the exchange rate might move. 
 
In the above, "access to dollars" becomes a bargaining chip for the Trump trade team.  In the case of Argentina, the Trump administration is supporting a leader they align with, one that's reversing the globalist agenda. 
 
It's leverage.
 
That said, dollar swap lines are typically the domain of the Fed (where the real firepower is), not the Treasury.
 
This dollar liquidity solution was a very key step in repairing stress in the global financial system back in the Global Financial Crisis.
 
By providing these currency swaps with other central banks, the Fed helped to inject dollar liquidity into banks around the world — shoring up solvency and confidence, and stabilizing the global banking system.
 
As we've discussed the past several months, major global central banks have done nearly everything in coordination for the better part of the past 15-years (since the Global Financial Crisis), which has included implicit, if not explicit Fed support (including access to dollars/swap lines when needed).
 
But the coming regime change at the Fed means the era of coordinated global monetary policy is likely over
 

With that, let's revisit an excerpt from my August 5th note:

 

"… the focus would quickly turn to Europe, where fragile sovereign debt markets have been explicitly backstopped by the European Central Bank since the summer of 2022.

 
If the Fed no longer has the European Central Bank's back, then the ability of the ECB to backstop European sovereign debt will be tested.
 
And it probably won't go well.  Remember, these EU member states have large scale deficit spending coming down the pike, to fund defense and AI commitments.  And the ECB will be, almost certainly, back in action to tame the bond yields of the fiscally vulnerable countries.  Without global coordination, they will lack the firepower.   

 

 
 

 

 

 

 

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September 23, 2025

Trump's new appointee at the Fed made his case publicly yesterday for a much lower neutral rate and Fed Funds rate. 
 
If he had his way, he'd take policy there quickly. 
 
And it would do nothing to alter any tax effect of tariffs on end consumer prices.
 
That said, the current restrictive policy that has been vigorously defended by the Fed over the past eight months is also doing nothing to alter any tax effect of tariffs on end consumer prices.
 
It's only slowing the economy, most clearly harming the housing market, and now the job market. 
 
Both only make the cost burden for the consumer higher.  Meanwhile the Fed claims to be positioning policy to curb costs.
 
It doesn't add up.
 
The Fed Chair was on a stage today with an opportunity to counter Miran's quantitative case for why the policy rate should be in the mid 2s.  It would be nice to hear a point-by-point rebuttal of Miran's speech yesterday, given it is so disconnected from where the rest of the Fed is.
 
It didn't happen.
 
He had five minutes of prepared remarks, and 35 minutes of Q&A — not one mention of Miran, his divergent views on the policy decision last week, nor the case for the (low) neutral rate he made yesterday. 
 
He reiterated much of the same stuff we've heard over the past month. 
 
Let's revisit the gold/silver ratio … 
 
 
As we've discussed in past notes, when this ratio is around these extreme levels, it has historically been associated with extreme moments of safe-haven demand.
 
And in the past cases, the gold safe-haven demand leads … pushing the ratio to extremes. 
 
Silver later follows (higher) on both industrial demand (in war time) and relative value (as a safe haven asset). 
 
And in these prior peaks, it's the outsized rise in silver that pushes the ratio back down.
 
The metals complex is broadly leading global asset class performance for the year.  It's wartime behavior (platinum up 58% ytd, silver up 44% ytd, gold up 36% ytd, palladium up 34% ytd).
 
With that, as the UN leaders are meeting in New York, the escalation rhetoric is heating up on Russia/Ukraine.      
 
 
 

 

 

 

 

 

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September 22, 2025

Trump's Fed governor appointee, Stephen Miran, gave a detailed speech today at the Economic Club of New York.
 
As we discussed last week following the Fed decision, he was the lone dissenter, voting for a 50 basis point cut.  And he was obviously the low dot on the Fed's dot plot – which suggested he is pushing for a fast recalibration, to get the policy rate near the neutral level.
 
With that, today he laid out why he believes the appropriate Fed Funds rate is in the mid-2s — roughly 200 basis points lower
 
Up to last Wednesday, the Fed's pause in the easing cycle has been driven by Trump policies — specifically, the Fed's assumptions that tariffs would be inflationary
 
Miran's framework is also tied to Trump policies, but he makes the case that they are disinflationary.
 
On immigration, he thinks we could see net outflow of as many as 2 million illegal immigrants by year end.  Lower population growth leads to lower labor force growth which, as he says, has historically resulted in a low neutral rate (i.e. the policy rate that is neither restrictive nor stimulative).
 
On tariff revenue, which is tracking well north of $300 billion/year (representing about 1% of GDP), he cites a study that estimates each percentage point reduction in the deficit-to-GDP reduces the neutral rate by 4/10ths of a percent.   
 
So, the Fed has been marking UP its projection for the long-run neutral rate, since the post-covid inflationary spike — moving it up to the current 3% level this year.  Miran's view on a much lower neutral rate would mean the Fed policy is even tighter than they think.
 
On inflation, he ties in de-immigration to falling rents, which have already been in negative year-over-year growth since the summer of 2023 — orange line below (private market data).  It just hasn't caught up in the stale government data yet — the blue line.  When it does, given the heavy weighting it gets in the inflation data, it will slash a full percentage point from CPI
 
 
With all of the above in mind, we've talked about the coming regime change at the Fed for several months.  It's starting with a powerful dissenting voice inside the Fed. 
 
This public analysis from Miran should give comfort to market bulls, and discomfort to the (relative) hawks at the Fed.  
 

 

 

 

 

 

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September 18, 2025

Elon Musk has been saying for the past year that with humanoid robots, there will be “no meaningful limit to the size of the economy.”

What does he mean?

If labor is no longer scarce… if every human can be matched with two or three autonomous robots doing physical work… then the economy’s productive capacity is virtually limitless.

He calls it the coming “age of abundance.”

And he thinks Tesla will dominate it.

Tesla has the most valuable proprietary data on real-world conditions, behaviors, environments, and scenarios (billions of miles driven). And it knows how to manufacture at scale. That’s why Elon sees Tesla as the leader in humanoid robots.

Now the board has put this vision into writing.

They just filed a proxy for shareholder vote on the boldest compensation package in corporate history.

It could make Elon a trillionaire

But he only gets paid if he delivers:

  • One million robotaxis in commercial operation.

  • One million humanoid robots.

  • Earnings nearly 30x higher than his last plan.

  • And a $7.5 trillion increase in Tesla’s market value.

Elon has already said Optimus, Tesla’s humanoid robot, could make Tesla worth $25 trillion.

This all lines up with what Nvidia’s Jensen Huang has been telling us. After generative AI and agentic AI, the next wave is physical AI: robots in the real world.

He says it will reshape $100 trillion worth of global industry.

So let’s connect the dots: Elon says humanoid robots will remove the cap on economic growth. Jensen says robotics will be the biggest technology industry in history. And Tesla’s board has written a comp plan that only pays Elon if he makes it happen.

That’s why we own Tesla in our AI-Innovation Portfolio. Tesla isn’t just an EV company. It’s the company with the world’s largest fleet of AI-driven robots (its cars), the deepest proprietary data on real-world behavior, and the ability to manufacture at scale. 

Tesla is the bridge between digital AI and physical AI.

And remember, when we launched this portfolio in June 2023, we said AI would grow the economic pie. We said the age of multi-trillion-dollar companies was coming. Nvidia became one soon after. Tesla has now joined that club. More are coming.

If you have yet to join our AI-Innovation Portfolio, it’s still early.

Our AI-Innovation Portfolio has returned 31% annualized since inception. And this 25 stock portfolio is even better positioned now, than it has been over the past two years, because of the scale of this coming physical AI wave.

If you’ve been reading my notes over the years and waiting on the sidelines, now is the time to get involved. My AI-Innovation Portfolio is the easy way to do it — and you’ll be in good company. Our subscriber base spans from C-suite executives and entrepreneurs to hedge fund managers, financial advisors, engineers, doctors, lawyers, academics, and discerning individual investors.

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If Elon is right, the economy — and the markets — are about to get much bigger.