After a decade of zero rates and QE post-2008, the financial system can no longer function without continuous stimulus. Attempts to tighten policy, as seen with the 2018 repo crisis, immediately cause breakdowns, forcing central banks to reverse course and indicating a permanent state of intervention.

Holding cash is a losing strategy because governments consistently respond to economic crises by printing money. This devalues savings, effectively forcing individuals to invest in assets like stocks simply to protect their purchasing power against inflation.

Contrary to popular belief, the market may be getting less efficient. The dominance of indexing, quant funds, and multi-manager pods—all with short time horizons—creates dislocations. This leaves opportunities for long-term investors to buy valuable assets that are neglected because their path to value creation is uncertain.

Following George Soros's theory of reflexivity, markets act like thermostats, not barometers. Rising AI stock prices attract capital, which further drives up prices, creating a self-reinforcing loop. This feedback mechanism detaches asset values from underlying business fundamentals, inflating a bubble based on pure belief.

Wagner's strategy shifted from buying statistically cheap companies to requiring a clear catalyst for value realization. He found that without a catalyst, even correctly underwritten cheap stocks would continue to decline due to factors like technological disruption, making the old "cigar butt" approach obsolete.

A condition called "fiscal dominance," where massive government debt exists, prevents the central bank from raising interest rates to cool speculation. This forces a flood of cheap money into the market, which seeks high returns in narrative-driven assets like AI because safer options can't keep pace with inflation.

Unlike the 2008 crisis, which was concentrated in housing and banking, today's risk is an 'everything bubble.' A decade of cheap money has simultaneously inflated stocks, real estate, crypto, and even collectibles, meaning a collapse would be far broader and more contagious.

Companies like Tesla and Oracle achieve massive valuations not through profits, but by capturing the dominant market story, such as becoming an "AI company." Investors should analyze a company's ability to create and own the next compelling narrative.

The money printing that saved the economy in 2008 and 2020 is no longer as effective. Each crisis requires a larger 'dose' of stimulus for a smaller effect, creating an addiction to artificial liquidity that makes the entire financial system progressively more fragile.