AI development is not just a commercial trend but a military arms race akin to the Cold War. National security imperatives will drive massive energy consumption for AI, overriding economic or public concerns about rising energy costs and creating an inevitable energy crisis.
While nuclear energy is the ideal long-term solution for AI, its long development timelines are misaligned with the immediate needs of hyperscalers. Natural gas plants, which can be built much faster, will be the essential interim solution, creating a major investment opportunity in the sector.
To combat survivorship bias, a robust trading strategy must be continuously tested against reality. Alex Gurevich’s approach involves republishing his original book with new annotations detailing where his principles succeeded and, more importantly, where they failed, creating an 'intellectual cockpit' for readers.
The growth in computational demand is so relentlessly exponential that it will overwhelm all other energy needs. Even optimistic scenarios for new energy sources like fusion cannot keep pace, making energy availability the key constraint on civilizational progress for the next few decades.
While China's rapid, state-directed build-out of nuclear and renewable energy appears formidable, history shows that such "by decree" projects in communist countries often fail. They can become dysfunctional, obsolete, or result in a failed state, despite looking terrifyingly effective in the short term.
Contrary to the consensus view of explosive AI-driven growth, AI could be a headwind for near-term GDP. While past technologies changed the structure of jobs, AI has the potential to eliminate entire categories of economic activity, which could reduce overall economic output, not just displace labor.
In the early stages of a Fed easing cycle, short-term rates fall while long-term rates remain sticky, causing the yield curve to steepen. The rally in long-dated bonds only occurs much later, after investors get comfortable with low rates and begin chasing carry trades.
Japan's current market conditions—a very weak currency, low front-end rates, and a steepening yield curve—are creating a potential macro inflection point. This setup is analogous to the 2014 US market, which preceded a major rally in the dollar and bonds, suggesting a compelling long yen and JGB trade.
Different precious metals (gold, silver, platinum) have distinct, multi-year cycles that do not move in tandem. Gold's cycle started earliest, followed by silver's explosive catch-up. Platinum has been dormant the longest and, despite a recent correction, may still be in the early stages of its bull run.