Core Viewpoint - Nvidia has reached a market capitalization of $4 trillion, making it the first company to achieve this milestone, surpassing the total market capitalization of several countries [1][2] Group 1: Market Context - The current economic environment is characterized as a global downturn, making it crucial to focus on risk aversion rather than chasing bubble assets [2] - Nvidia's stock is viewed as a bubble asset rather than a quality safe-haven asset, which raises concerns about its valuation [1][2] Group 2: Pricing Logic - The concept of pricing logic is emphasized, highlighting that many investors fail to understand the underlying monetary value behind asset prices [2][3] - The transition to a fiat currency system since the 1970s has led to the devaluation of the dollar, impacting the perceived value of assets like Nvidia [3][4] Group 3: Inflation and Asset Valuation - Inflation is identified as a result of the declining real value of currency, which can lead to rising prices of assets without a corresponding increase in their actual value [4][5] - The dollar has depreciated significantly against gold, with a 94.6% decline since the abandonment of the gold standard in 1971, indicating that Nvidia's market cap may not reflect its true value [5][6] Group 4: Future Outlook - The expansion of the U.S. debt and the potential for further dollar devaluation could lead to inflated asset prices, including Nvidia's stock, which may not be sustainable [6][7] - A multi-currency system is emerging, which could challenge the dollar's dominance and lead to a revaluation of dollar-denominated assets [6][7] Group 5: Investment Strategy - Investors are advised to focus on defensive assets that provide stable cash flow and interest income, rather than chasing high-flying stocks like Nvidia [7] - Long-term investment strategies should prioritize low P/E ratios and undervalued companies with strong cash flow, while maintaining risk management practices [7]

Core Viewpoint - Nvidia has reached a market capitalization of $4 trillion, making it the first company to achieve this milestone, surpassing the total market capitalization of several countries [1][2] - The article argues that Nvidia's stock is a bubble asset rather than a quality safe-haven asset, especially in the current global economic downturn [2][4] Group 1: Market Context - The current economic environment is characterized as a downturn, where the focus should be on risk aversion rather than chasing bubble assets [2][6] - The article emphasizes the importance of understanding the pricing logic behind assets, which many investors overlook [2][3] Group 2: Currency and Inflation - Since the 1970s, the U.S. dollar has entered an era of fiat currency, leading to unlimited money printing and a decrease in the real value of money [3][4] - The article highlights that inflation is a result of the declining real value of currency, which affects the perceived value of dollar-denominated assets [4][5] Group 3: Valuation of Nvidia - Using a gold standard for valuation, the dollar has depreciated by 94.6% since 1971, indicating that Nvidia's $4 trillion market cap may not reflect its true value [5][6] - The article suggests that the current valuation of Nvidia is inflated due to the ongoing devaluation of the dollar and the expansion of the money supply [6][7] Group 4: Investment Strategy - Investors are advised to be cautious and consider defensive assets that provide stable cash flow and interest income, rather than chasing high-flying stocks [7] - The article encourages a long-term investment approach focusing on low P/E ratio companies with potential, rather than speculative investments in trending sectors [7]

Core Viewpoint - Nvidia has reached a market capitalization of $4 trillion, making it the first company to achieve this milestone, surpassing the total market capitalization of several countries [1][2] - The article argues that Nvidia's stock is a bubble asset rather than a safe-haven asset, especially in the current economic downturn [2][4] Group 1: Market Context - The current global economic environment is in a downturn, making it crucial to identify safe-haven assets rather than pursuing bubble assets [2][6] - The article emphasizes the importance of understanding the pricing logic behind assets, which is often overlooked by investors [2][3] Group 2: Currency and Inflation - Since the 1970s, the U.S. dollar has entered an era of fiat currency, leading to unlimited money printing and a decrease in the real value of money [3][4] - The article highlights that inflation is a result of the declining real value of currency, which affects the perceived value of assets [4][5] Group 3: Asset Valuation - Using a gold standard for asset pricing, the dollar has depreciated by 94.6% since 1971, indicating that the real value of assets like Nvidia's stock may be inflated [5][6] - The article suggests that even when using oil prices as a benchmark, the dollar has depreciated by approximately 31.5% since 1971 [5][6] Group 4: Future Outlook - The expansion of U.S. debt and the potential for further dollar depreciation could lead to inflated asset prices, including Nvidia's market cap [6][7] - The article warns that if the dollar loses its status as the dominant global currency, it could lead to a significant devaluation of dollar-denominated assets [6][7] Group 5: Investment Strategy - Investors are advised to focus on defensive assets that provide stable cash flow and interest income, rather than chasing high-flying stocks [7] - The article encourages a long-term investment approach, emphasizing the selection of low P/E ratio companies with strong fundamentals [7]

Core Viewpoint - The current international monetary system is undergoing profound changes due to the long-term disorderly expansion of U.S. public debt, the "weaponization" of the dollar during the Russia-Ukraine conflict, and various policy proposals during the Trump 2.0 era, which erode the credibility of the dollar as the world's reserve currency [2]. Group 1: Triffin Dilemma Misinterpretations - The "Triffin Dilemma" has evolved into two versions post-Bretton Woods: one concerning the current account and the other regarding "safe assets," both of which contain significant misunderstandings [4][13]. - Misconceptions include confusing net capital with total capital inflows, mixing "earned" and "borrowed" foreign exchange reserves, and conflating bilateral with multilateral capital flows [17][19][20]. - The supply of dollar liquidity is not necessarily linked to the U.S. current account deficit, as the U.S. maintained a current account surplus for about 30 years after becoming the primary reserve currency [14][21]. Group 2: U.S. Stocks as Safe Assets - Overseas funds have shifted from U.S. Treasury bonds to U.S. stocks, leading to the disappearance of the equity risk premium in the S&P 500, indicating that investors now view U.S. stocks as safe assets [5][23]. - This shift is driven by declining safety perceptions of U.S. debt and the stable long-term growth of U.S. stocks, with significant capital inflows into the U.S. stock market [26][30]. Group 3: U.S. Reserve Currency Status - The U.S. is unlikely to relinquish its status as the world's reserve currency due to the substantial benefits it provides, including the international seigniorage revenue [6][32]. - The unique asset-liability structure of the U.S. allows it to benefit from dollar depreciation, effectively transferring payment burdens globally [36][39]. Group 4: Declining Economic Share vs. Rising Financial Dominance - While the U.S. share of the real economy is declining, its share in international finance is increasing, primarily due to the offshore dollar being the most important financing currency and onshore dollars being viewed as safe assets [7][40][44]. - The expansion of cross-border capital flows has outpaced trade growth, reinforcing the dollar's financial position [46]. Group 5: Dollar Cycles - The dollar exhibits cyclical characteristics influenced by fundamentals, policies, and capital flows, with positive feedback mechanisms amplifying these cycles [8][48][52]. - The dollar's appreciation impacts global economies asymmetrically, benefiting the U.S. while constraining other economies [53]. Group 6: The Dollar's Global Impact - The U.S. often emerges unscathed from global crises, with the adverse effects disproportionately affecting non-U.S. economies due to the asymmetrical impact of U.S. monetary policy [56][58]. - The dollar's status as a reserve currency provides the U.S. with unique advantages, including lower financing costs and the ability to conduct fiscal stimulus without immediate repayment pressures [57]. Group 7: Need for an International Monetary System - The current trend towards a multi-polar world raises questions about the necessity of an international monetary system, with the dollar still playing a central role in global trade and finance [62][63]. - A multi-currency system may be preferable to a non-system, as it allows for currency competition and provides space for emerging currencies like the renminbi [64]. Group 8: Transitioning to a Multi-Currency System - Transitioning from a dollar-centric system to a multi-currency system requires policy coordination among major currency issuers and flexible exchange rate arrangements [11][65].

Core Viewpoint - The global monetary system is undergoing significant transformation, with discussions around "de-dollarization" and the role of the Renminbi (RMB) in the future monetary landscape gaining traction [1][2][3]. Group 1: Global Monetary System Challenges - The U.S. dollar, as the cornerstone of the global monetary system, is facing historic challenges, particularly due to unilateral policies from the Trump administration, which have undermined the dollar's credibility as a trade settlement and reserve currency [2][3]. - The yield on 10-year U.S. Treasury bonds peaked at 4.5% and 30-year bonds surpassed 5%, indicating volatility in U.S. debt markets [2]. - The dollar index fell below 99 for the first time since April 2022, reflecting a shift in market sentiment [2]. Group 2: Emerging Market Responses - Emerging market central banks are increasingly diversifying their reserves by accumulating gold and adjusting asset allocations to reduce reliance on the dollar [3]. - The trend of increasing gold reserves among central banks, including China, has been amplified by geopolitical uncertainties and dollar volatility [3]. - Although the dollar still constitutes 60% of global foreign exchange reserves, the transition to a new financial order is anticipated to take decades [3][4]. Group 3: Potential Competitors to the Dollar - The internationalization of currencies like the RMB and Euro is progressing, positioning them as potential competitors to the dollar [5][6]. - The RMB has made strides in global settlement, although it is not yet fully convertible; its internationalization is supported by initiatives like the Belt and Road Initiative and the Asian Infrastructure Investment Bank [6][8]. - Experts suggest that the Eurozone needs to establish a fiscal union and enhance financial integration to bolster the Euro's position [6]. Group 4: Future Pathways for Global Monetary System - There is a call for a multilateral mechanism to reshape the international system, potentially leveraging regional institutions like the Asian Infrastructure Investment Bank [7]. - Experts advocate for gradual reforms, suggesting that the International Monetary Fund (IMF) should consider expanding the Special Drawing Rights (SDR) basket to include more currencies, thereby increasing the RMB's weight [8]. - Balancing competition and cooperation among major economies is essential for a stable transition to a multipolar monetary system [8].