Geo-Economics

Key Assumptions Although the likelihood of the U.S. implementing a YCC policy is currently high, there have been no clear official signals. This article analyzes the potential impacts solely from a macroeconomic perspective. Should the Federal Reserve formally introduce YCC in the future, a more precise analysis will require consideration of the specific timing of its implementation—which could occur after a change in the Fed’s leadership or during a liquidity crisis in the U.S. Treasury market. ...

I. The Fundamental Contradiction of Trump’s Economic Reforms The “small government, big business” reforms promoted by Trump represent, in essence, a complete reversal of the U.S. economic development model of the past 17 years. Following the 2008 subprime mortgage crisis, the U.S. economy became heavily reliant on federal government debt-fueled stimulus, achieving economic growth through the excessive issuance of government bonds. During the COVID-19 pandemic in 2020, this “big government, small business” model was taken to its extreme. ...

The Ideals and Reality of the Pennsylvania Plan The United States’ vision for the Pennsylvania Plan essentially centers on achieving economic revitalization through the reshoring of manufacturing, aiming to replicate China’s path of high growth, high inflation, and high income from the 1990s. The core logic behind this vision is that restoring manufacturing capacity will enable the replication of China’s economic miracle of that era. However, whether analyzed from the supply side or the demand side, this goal is simply impossible to achieve. The global economic landscape of the 1990s was entirely different from today’s: the world before 2008 was an era of extremely robust demand and severe supply shortages. In particular, after China’s reform and opening-up, the entry of one billion people into the global market generated an unprecedented surge in demand. At that time, a large portion of the population had not yet achieved a moderately prosperous life, and demand for industrial goods such as home appliances and automobiles was in an explosive growth phase. The scale of this growth is something the current world cannot replicate. ...

The Pennsylvania Plan: The Ultimate Framework for U.S. Debt Management The Pennsylvania Plan is the current ultimate debt management framework the U.S. is using to address its fiscal and trade twin deficits. It was first proposed by analysts at Deutsche Bank, and its name derives from Pennsylvania Avenue, where the U.S. Treasury is located. Simply put, this plan aims to adjust the structure of U.S. Treasury bond holdings, reduce reliance on foreign capital, and instead rely on domestic capital to carry out debt restructuring. ...

Assessing Long-Term Trends in Major Asset Classes We are bullish on three core asset classes over the long term: A-shares, gold, and commodities. It is important to note that this refers specifically to long-term trends, not short-term trading advice. The core premise of investing is to distinguish between long-term and short-term logic, as the investment strategies differ entirely. U.S. stocks are currently overvalued and will only offer long-term investment value after a deep correction brings them back into a healthy valuation range. ...

The Core Contradiction of the Global Economy: Artificial Overheating of Demand vs. Actual Shortage of Demand Currently, global economies—including the United States—are universally facing the dilemma of insufficient effective demand. While the market presents the illusion of artificial demand overheating, there is in fact a severe oversupply on the supply side. What the U.S. economy needs most at present is capacity reduction, not policy stimulus that encourages businesses and households to increase leverage and expand production capacity. Trump’s current policy direction not only undermines the service sector—the backbone of the U.S. economy—but also encourages industrial firms to increase leverage and expand capacity, a strategy strikingly similar to policies of the Hoover era. ...

Purpose and Background of the Bill On July 5, 2025, the Trump administration’s “Big and Beautiful” tax cut bill officially entered the implementation phase. Contrary to most media reports, this is not a routine fiscal policy adjustment, but rather the most disruptive attempt at social transformation in the United States since the end of the Cold War. Its core objective is to completely reverse the “big government + small business” development model that has persisted for half a century, shifting toward a new “small government + big business” framework that transfers the driving force of the U.S. economy from the federal government to the business and household sectors. ...

The True Nature of the Tariff War: Chaos Is Exactly What Trump Wants Recently, global markets have been paying increasing attention to the tariff war. One moment a country is negotiating with the U.S., the next another is—any related news story can sway global market trends. But most people fail to realize that this current state of chaos is precisely the outcome Trump wants most. The more attention people pay to the tariff war, the greater the significance of tariffs as bargaining chips becomes—and the easier it is for Trump to lead them by the nose. In fact, this logic was already crystal clear long before Trump’s election victory last year: once Trump took office, he would inevitably use tariffs as a key bargaining chip to negotiate global interests. Tariffs are always merely a means to an end, not an end in themselves. ...

The Core Framework of Trump’s Economic Agenda Since the campaign began, Trump’s economic policies have consistently revolved around three core elements: tax policy, debt management, and interest rate control. The ultimate goal of these three elements is highly aligned: to reverse the United States’ long-standing twin deficits in trade and the budget. Tariff and income tax reforms directly address the trade deficit, while the combination of debt and interest rate policies aims to alleviate pressure from the budget deficit. These three elements influence and depend on one another, forming a relatively comprehensive yet internally contradictory policy framework. ...

Stablecoin Series: Understanding the Underlying Logic of Global Finance Through the Essence of Money Today is May 31, 2025, and we’re wrapping up the final installment of our stablecoin series. Unlike the first two episodes, which focused on the micro level, this episode shifts to the macro level to discuss fundamental issues related to money—no matter how many new digital currencies are issued or how many new financial instruments are created at the micro level, these most basic principles will remain unshaken. ...