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Forward Guidance

The original memecoin

Forward Guidance Podcast Notes

Position​

Significant concerns about US fiscal and monetary sustainability while highlighting technological innovation (particularly AI) and alternative stores of value (especially Bitcoin) as potential beneficiaries of the coming macroeconomic readjustment.

Capital Outflows from US Markets​

The hosts highlighted a significant shift in global capital flows that's reshaping markets:

  • Foreign capital repatriation: The podcast revealed compelling evidence that foreign investors are withdrawing capital from US assets and sending it back to their home countries
  • Measurable impact: The DAX (German index) is up 27% year-to-date in dollar terms, showing strength in European equities
  • Currency-adjusted returns: US bonds are performing poorly for foreign investors when measured in their native currencies-TLT (long-term Treasury ETF) is down 9% when measured in Japanese yen
  • Deutsche Bank analysis: The US has reached a record negative net international investment position of approximately -100% of GDP, making it increasingly difficult to issue additional debt without yields rising significantly

Bitcoin as the "Clean Trade"​

The hosts positioned Bitcoin as uniquely positioned to benefit from current macroeconomic trends:

  • Decoupling from traditional assets: Bitcoin correlations have detached from stocks, suggesting it's developing as an independent asset class
  • Structural advantage: With its fixed supply, Bitcoin was described as a better alternative to the "Ponzi scheme" of traditional markets
  • MicroStrategy example: Highlighted as being up 37% by "arbing the boomer Ponzi scheme"-essentially monetizing volatility and using Bitcoin as protection against currency devaluation
  • Future potential: One host boldly predicted Bitcoin could become "the chokehold for the next century of economics"

AI as a Productivity Revolution​

The podcast discussed how AI might fundamentally change market dynamics:

  • Exponential growth: The hosts noted AI capabilities are increasing at an exponential rate, potentially creating a "massive productivity boom"
  • Fourth industrial revolution: Compared to historical shifts like going from horses to cars, the AI revolution could transform economics within just three years
  • Big tech advantage: Large centralized players who can utilize AI fastest will likely have the biggest advantage, potentially explaining tech stock resilience
  • Labor market disruption: One host expressed genuine concern about his job becoming obsolete within five years due to AI advancement

US Fiscal Situation​

The hosts painted a concerning picture of US fiscal health:

  • Growing deficits: Current fiscal deficit at 7% of GDP could increase to 8% with proposed legislation
  • Failed austerity: The hosts noted how tariff attempts demonstrated the political impossibility of fiscal discipline
  • Eventual yield curve control: They suggested that managing growing US debt burdens while keeping yields low enough may require yield curve control

Market Structure Evolution​

The hosts described fundamental changes in how markets function:

  • Markets as a "political utility": Multiple times they emphasized markets are no longer free but function as a political utility with interventions occurring when imbalances become extreme
  • Systematic reinforcement: Low volatility periods combined with systematic investors and corporate buybacks create self-reinforcing market movements
  • Generational shift: Traditional investment approaches may be becoming obsolete with the hosts suggesting "the generational trade is short bonds long Bitcoin"