The United States is entering a new economic paradigm driven by technological breakthroughs and aggressive fiscal policies, characterized by high growth and low inflation We will conduct in-depth analysis from four core dimensions: one ️⃣ Macro Paradox: Rolling Recession under Strong GDP Despite strong GDP growth in the United States (exceeding 4% in the third quarter and estimated to reach 5% in the fourth quarter), the underlying economy is in a highly imbalanced "rolling recession". Rolling recession refers not to the entire economy falling into contraction at the same time, but to different sectors of the economy experiencing recession alternately at different points in time. -Long term downturn in the manufacturing industry: The Purchasing Managers' Index (PMI) for the manufacturing industry has been below 50 for three consecutive years (contraction range). This long-term contraction is very rare in history, and fluctuations in the manufacturing industry are usually severe and short-lived. -The freeze in the housing market: Affected by the Federal Reserve's interest rate surge from 0.25% to 5.5%, the activity of the housing market has dropped to the recession level of the 1980s and 2008 financial crises. -Negative consumer sentiment: Despite the seemingly low unemployment rate, the unemployment rate for the younger generation (16-24 years old) is as high as 12%. Meanwhile, the confidence index of low-income individuals is even worse than in 2008. two ️⃣ Policy Engine: Extreme Fiscal Stimulus Reshaps US Competitiveness -10% effective corporate tax rate: This makes the United States the country with the lowest tax rate among developed countries, even lower than many emerging markets, aimed at attracting a large amount of foreign direct investment. -Accelerated Depreciation (OB3 Act): This policy directly shortens the depreciation period of manufacturing facilities from 30-40 years to 1 year. This means that companies can receive huge tax refunds in the first year. These cash flows can be directly used for reinvestment, increasing employee wages, or enhancing global competitiveness through price reductions. This policy significantly increased the return on investment capital (ROIC) of the United States, making it more attractive compared to other regions of the world, thereby driving the US dollar into a strong cycle similar to the early 1980s. three ️⃣ Deflationary Forces: Why Inflation Will 'Unexpected Downward' -Soaring productivity: Last quarter, US productivity growth reached 4.9%, while unit labor cost growth was only 1.2%, far below the levels of the 1960s and 1970s. The AI driven productivity improvement means that companies can achieve unit growth while lowering product prices. -Commodities and Energy: Oil prices have decreased by 15-20% year-on-year, and with the possibility of Venezuelan oil flowing into the United States, oil prices may further decline, playing a role similar to "tax cuts",. -Loose housing prices: New housing prices have been experiencing negative growth for three consecutive years (dropping by about 7-8% from their peak), and as developers (such as KB Home, Lennar) start to directly lower prices instead of just subsidizing interest rates in order to compete, existing housing prices will also be under pressure. -China's export deflation: China's investment to GDP ratio is twice that of the United States, and its excess production capacity (such as BYD's $25000 electric vehicle) is experiencing "export deflation" globally. four ️⃣ The new logic of asset allocation: Bitcoin's' fiduciary responsibility ' -Bitcoin vs. Gold: The current ratio of gold prices to the money supply (M2) has reached extreme levels during the Great Depression of the 1930s and the inflation peak of 1980. Bitcoin has almost no correlation with other assets such as bonds and real estate trusts (REITs), and its correlation with the S&P 500 is also very low. Asset allocators have a fiduciary duty to include Bitcoin in their portfolio, as low correlation assets can increase the overall unit return of the investment portfolio without disproportionately increasing risk. In short, the current economy is like a high-speed racing car undergoing engine replacement. Although old engines such as manufacturing and housing (old economic sectors) have stalled due to high interest rates (rolling recession), the injection of new fuel through extremely low tax rates and accelerated depreciation, coupled with the productivity explosion brought by AI (new engine), is driving the US economy into a new track of high growth and low inflation. The above content is compiled from @ CathieDWood's latest Youtube sharing of Mortgage Rates and Falling Oil Prices