The End of Globalization and Financial Asset Settlement: Non-Traditional Assets May Become the Redemption

From the outbreak of World War II to Trump's second election as president, we have experienced an unprecedented super bull market. This decades-long upward trend has shaped generations of passive investors who habitually believe that "the market is always good." However, this feast seems to have come to an end, and many are about to face liquidation.

The Historical Roots of the Super Bull Market

The super bull market from 1939 to 2024 is not a coincidence, but rather a result of a series of structural changes that have reshaped the global economic landscape, with the United States always at the core.

Became a global superpower after World War II

At the end of World War II, the United States produced more than half of the world's industrial products, controlled one-third of global exports, and held about two-thirds of the world's gold reserves. This economic hegemony laid the foundation for decades of growth thereafter.

The United States actively embraced its role as a global leader, promoting the establishment of the United Nations and implementing the "Marshall Plan," injecting huge amounts of aid into Western Europe. This was not just simple assistance, but also created new markets for American products while establishing its own dominant position in cultural and economic terms.

Expansion of the Labor Market: Women and Minorities

During World War II, approximately 6.7 million women entered the labor market, leading to a nearly 50% increase in female labor participation rate in a short period. This large-scale mobilization permanently changed societal views on women's employment.

By the 1950s, the trend of married women entering the workforce became more pronounced. The policy of the "marriage ban" (, which prohibited married women from working, ) was abolished. The increase in part-time jobs, innovations in household labor technology, and the improvement in educational levels all contributed to women transitioning from temporary workers to long-term participants in the economic system.

Minority groups have also experienced a similar trend, gradually gaining more economic opportunities. This expansion of the workforce has effectively enhanced the production capacity of the United States, supporting decades of economic growth.

The Victory of the Cold War and the Tide of Globalization

The Cold War shaped America's political and economic role after World War II. By 1989, the United States had formed military alliances with 50 countries and stationed 1.5 million troops in 117 countries around the world. This was not only for military security but also to establish America's economic influence globally.

After the dissolution of the Soviet Union in 1991, the United States became the world's only superpower, entering an era of unipolarity. This was not only a victory of ideology but also an opening of the global market, allowing the United States to dominate the global trade pattern.

From the 1990s to the early 21st century, American companies expanded aggressively into emerging markets. This was not a natural evolution but rather the result of long-term policy choices.

The victory of Western capitalism over Eastern communism was not solely due to military or ideological advantages. The Western liberal democratic system is more adaptable, effectively adjusting its economic structure even after the oil crisis of 1973. The "Volcker Shock" of 1979 reshaped America's global financial hegemony, turning the global capital markets into a new engine of growth for the United States in the post-industrial era.

These structural changes have collectively driven this unprecedented super bull market in financial assets. However, the core issue is: these changes are one-off events and cannot be repeated. You cannot make women re-enter the labor market, you cannot defeat the Soviet Union again. And now, both parties are pushing for de-globalization, we are witnessing the last support of this super long-term growth being withdrawn.

Future Outlook

However, unfortunately, many people are still expecting the market to return to historical norms. The market consensus is that the situation will temporarily worsen, then the central banks will reintroduce liquidity, and we will be able to continue profiting... but reality may not be that simple.

The bull market of nearly a century has been built on a series of non-reproducible events, some of which are even reversing:

• The female labor force participation rate may decline.
• Employment growth among ethnic minorities slows.
• Interest rates are unlikely to decline significantly again.
• The process of globalization is reversing.
• Cannot win another world war again.

In short, all the global macro trends that have driven the stock market higher over the past century are now reversing. This means that the market outlook may not be optimistic.

economic recession period

When an empire enters decline, the situation often becomes very dire. Take Japan as an example; if you bought at the historical peak of the Nikkei 225 index in 1989 and held it until now, 36 years later, the return rate would be around -5%. This is a typical case of "buy and hold, suffering endlessly." We may be repeating a similar history.

Worse still, we should be prepared for capital controls and fiscal repression policies. When traditional monetary policy fails, the government may turn to more direct means of financial control.

Upcoming capital controls

Financial repression refers to the practice of providing savers with returns that are lower than the inflation rate, allowing banks to offer cheap loans to businesses and governments, while reducing debt repayment pressures. This strategy is especially effective for governments in clearing local currency debts. Nowadays, these strategies are increasingly appearing in developed economies, such as the United States.

As the U.S. debt burden exceeds 120% of GDP, the likelihood of repaying debt through traditional means is increasingly diminishing. The "playbook" for financial repression has begun to be implemented or tested, including:

• Directly or indirectly restrict government debt and deposit interest rates
• The government controls financial institutions and establishes barriers to competition.
• High reserve requirements
• Create a closed domestic debt market that forces institutions to purchase government bonds.
• Capital controls, restrictions on cross-border asset flows

This is not a theoretical assumption, but a real case. Since 2010, the U.S. federal funds rate has been below the inflation rate for more than 80% of the time, which is effectively forcibly transferring the wealth of savers to borrowers ( including the government ).

Retirement Accounts: The Government's Next Target

If the government cannot rely on printing money to buy bonds and lower interest rates to avoid a debt crisis, they may target retirement accounts. In the future, tax-advantaged accounts such as 401(k) may be required to allocate more and more "safe and reliable" government bonds. The government no longer needs to print money, just directly divert existing funds in the system.

This is exactly the script we have seen in the past few years:

• Frozen Assets: The government is authorized to confiscate the reserve assets of specific countries in the United States, setting a precedent for the ability to freeze foreign exchange reserves at any time.
• Canada Freedom Convoy Protest: The government froze approximately 280 bank accounts without court approval.

Gold Expropriation and Surveillance

American history is filled with similar actions:

In 1933, Roosevelt issued Executive Order 6102, which forcibly required citizens to surrender their gold, or face imprisonment. The Supreme Court upheld the government's right to confiscate gold.

After the 911 incident, the government's surveillance capabilities rapidly expanded. Multiple bills granted the government almost unlimited powers to monitor citizens' communications, collect phone records, reading records, study materials, purchase history, medical records, and personal financial information, without any reasonable suspicion.

The question is not "Will financial repression come?" but rather "How severe will it be?" As the economic pressures of de-globalization intensify, government control over capital will only become more direct and severe.

Gold and Bitcoin

The monthly gold chart since 1970 is one of the strongest candlestick charts in the world today.

Based on the process of elimination, the most suitable financial asset to purchase has become evident -- you need an asset that has no historical correlation with the market, is difficult for governments to confiscate, and is not controlled by Western governments. Gold and Bitcoin may be the two best options, with Bitcoin having increased its market value by $60,000,000,000 in the past 12 months. This is a clear bull market signal.

Global Gold Reserve Competition

Countries such as China, Russia, and India are rapidly increasing their gold reserves to respond to changes in the global economic landscape.

• China: In January 2025, increased gold holdings by 5 tons in a single month, with net purchases for three consecutive months, bringing the total holdings to 2,285 tons.
• Russia: controls 2,335.85 tons of gold, becoming the fifth largest gold reserve country in the world.
• India: Ranked eighth in the world, holding 853.63 tons, and continues to increase its holdings.

This is not a random act, but a strategic layout. After the G7 froze Russia's foreign exchange reserves, central banks around the world took notice. When dollar-denominated assets can be frozen with a single stroke, physical gold stored within the country's borders becomes highly attractive.

Governments around the world are most at ease with gold, as they have established systems for using gold for reserves and trade settlements. The total gold holdings of the central banks of BRICS countries account for more than 20% of the global central bank gold holdings.

Bitcoin

This era dominated by gold may last for a while, but ultimately, its limitations will become apparent. Many small and medium-sized countries lack sufficient banking systems and navies to manage the global logistics of gold, and these countries may become the earliest adopters of Bitcoin as an alternative to gold.

• El Salvador: Became the first country to adopt Bitcoin as legal tender in 2021, and by 2025, its Bitcoin reserves had grown to over $550 million.
• Bhutan: Mining with hydropower, Bitcoin reserves have exceeded $1 billion, accounting for one-third of the country's GDP.

As the world becomes more chaotic, countries are less likely to entrust gold to allies. The risk of confiscation is too great, as evidenced by Venezuela's failed attempt to retrieve gold from the Bank of England. For smaller countries, Bitcoin offers an attractive alternative—it can be stored without a physical vault, transferred without ships, and protected without an army.

This transitional period will propel us into the next phase of Bitcoin adoption, but patience is required. The world will not change overnight, and neither will the monetary system. By 2025, we have already seen the beginnings of this shift, with Bitcoin adoption rates steadily increasing in some countries as people seek protection against inflation and financial instability.

The path forward is clear: first gold, then Bitcoin. As more and more countries realize the limitations of physical gold in an increasingly digital and fragmented world, the proposal of Bitcoin as digital gold becomes more compelling. The question is not whether this shift will happen, but when it will happen—and which countries will lead the way.

The price of Bitcoin may reach 1 million dollars, but before that, we may need to go through a severe bear market. Investors need to maintain patience and a long-term perspective.