The US government's backing of stablecoins is a strategic financial maneuver, not just a nod to crypto innovation. By promoting stablecoins backed by US Treasuries, it creates a new, frictionless global distribution channel to sell its debt at attractive rates to a worldwide audience.
Facing a severe population decline, Japan is making a conscious cultural and economic choice to invest in robotics to fill labor gaps rather than opening its doors to mass immigration. This strategy prioritizes maintaining cultural homogeneity over traditional demographic solutions.
Despite the perception of independence, the Federal Reserve historically yields to political pressure from the White House. Every US president, regardless of party, has ultimately obtained the monetary policy they desired, a pattern that has held true since the Fed's creation.
Despite crippling debt, the US is not facing imminent collapse like other nations. It is uniquely protected by its geography (two large oceans), weak neighbors, and self-sufficiency in food and energy. These factors provide a powerful buffer against the hyperinflationary spirals seen elsewhere.
The rise of user-friendly stablecoins and DeFi platforms, distributed by Big Tech and major banks, will lead to the demise of smaller banks. Consumers will abandon institutions with clunky technology for superior, 24/7, AI-assisted digital finance, causing a mass extinction event for traditional local banks.
When Japan repatriates its trillions in foreign assets, it will create a massive capital hole in US and European markets. Rather than allowing a painful credit contraction, the Fed and ECB will respond predictably: by printing more money to fill the gap, reinforcing the global inflationary cycle.
The current massive capital expenditure on AI infrastructure, like data centers, mirrors the railroad boom. These are poor long-term investments with low returns. When investors realize this, it will trigger a market crash on the scale of 1929, after which the real value-creating companies will emerge.
While investing in government-supported sectors like AI and semiconductors seems safe, it's a long-term risk. A government's priority is political—winning elections and preserving jobs—which will eventually conflict with an investor's goal of maximizing profit, leading to poor returns as seen in China.
China's aggressive adoption of AI and robotics has led to high youth unemployment alongside cheap, high-quality services. This scenario, sustained by family savings and cultural homogeneity, may offer a blueprint for how Western societies could function in a post-AI world with fewer traditional jobs.