Podcast Notes| From Federal Reserve debt to AI unemployment shocks, how can investors seize the golden window in the capital market in the next five years?

In a worst-case scenario, Bitcoin’s year-end price could reach $250,000.

Compiled and compiled: Deep Trend TechFlow

Guests: Raoul Pal, CEO of Real Vision;James Connor, Managing Partner of BloorStreet Capital

Source: Raoul Pal The Journey Man

Original title: Raoul Pal s 2025 Market Predictions ft. @BloorStreetCapital

Broadcast date: February 4, 2025

background information

In this podcast, Raoul Pal from Real Vision had an in-depth conversation with James Connor from Bloor Street Capital, and the two discussed Shaping cryptocurrencies, stocks,AI and key trends in the global economy.Can Bitcoin break the $500,000 mark? Is AI replacing human work faster than we expected? Where will interest rates, inflation and the dollar go next?

(Shenchao TechFlow Note: Real Vision Real Vision is a company focusing on finance and investment education, providing high-quality financial content and analysis. Its goal is to help investors better understand market dynamics and investment opportunities.

Bloor Street Capital is a company focused on connecting companies with the right investors. Help companies connect with investors through webinars, one-on-one meetings, and lunch demonstrations.)

topic covers

• Bitcoin and cryptocurrency price forecasts

• The future of AI and automation technology

• Stock market outlook and S & P 500 trends

• Inflation, interest rates and the Federal Reserve’s next steps

• Trump’s economic plan and global trade

• Why is this a golden bull market for investors”

Bitcoin Market Outlook and Price Volatility Analysis

James Connor：

Speaking of market performance, I know you are very optimistic about Bitcoin’s long-term prospects, but I learned from your recent interview that you think Bitcoin will perform well this year, but with large fluctuations.Can you explain your views in detail for us?

Raoul Pal：

Bitcoin’s performance is not only driven by global liquidity, but also closely related to the popularity of new technologies.This year we can confirm that it is a“liquidity easing”In the year 2000, especially because countries need to roll over large amounts of debt, which is often very favorable to the cryptocurrency market.

However, in the past few months, global liquidity has tightened to a certain extent due to policy adjustments by the Federal Reserve and the Treasury and the strength of the US dollar. This change has had a short-term negative impact on the performance of cryptocurrencies. But this situation will not last long in terms of time or price, and once liquidity is re-injected into the market, Bitcoin’s performance will improve accordingly.

Looking back at 2021, we can see that the epidemic caused the global economy to stagnate for a while, but then rebounded quickly, and the business cycle peaked early in April 2021. Typically, in years of the presidential election cycle, the business cycle peaks at the end of the year. Bitcoin’s performance in 2021 is very complex, but the current market environment is closer to what it was after Trump was elected in 2017. At that time, due to continued liquidity injections, the market rebounded quickly after experiencing a sharp correction of 25% to 30% at the beginning of the year and remained strong throughout the year. The main driving force for that round of liquidity injection did not come from the United States, but was led by China. I believe that this year China may once again play an important role in global liquidity injection.

Therefore,Although many investors are still worried about the market volatility in 2021, when Bitcoin experienced sharp fluctuations of rapid rise, collapse, rise again, and collapse again, I think this year’s market trend is more likely to be similar to the pattern of 2013 and 2017. So, yes, I remain optimistic about all risky assets this year, including Bitcoin.

Future predictions of Bitcoin prices

James Connor: If Bitcoin reaches $100,000, do you think it willcallback25% to $75,000 and then continue to rise?

Raoul Pal：

I don’t think Bitcoin will see a significant 25% decline. Now that the market is more mature, coupled with the launch of the Bitcoin ETF, market volatility has decreased. If the price of Bitcoin pulls back from $100,000 to $90,000, I think this is a reasonable adjustment range and the price may stabilize around this level.

In the worst-case scenario, I think Bitcoin’s year-end price could reach250,000US dollar; in a benchmark case, it could rise to US$350,000. If the market experiences explosive growth similar to 2017, the price of Bitcoin could even exceed $500,000. Of course, there are great uncertainties in this kind of forecast, so I usually analyze different possibilities through probability trees and list the probabilities of each price range.

Overview of the current state of the global economy

James Connor: How do you view the current global economy? Do you have any concerns when you look at various regions of the world, whether in Asia, Europe or North America?

Raoul Pal：I use the Institute for Supply Management’s ISM survey as the best guide for the economic cycle, and the overall performance is flat. Although we have seen strong performance in the stock market and others, the economy is still in a downturn. Normally, in a growing economy, the ISM index should be above 50. Although GDP performed relatively well,The manufacturing sector is still weak。As a result, the economic cycle remains relatively slow, which has led to a divergence between technology stocks and the traditional economy. The performance of technology stocks is not based on debt dynamics or real-world expenditures, but rather relies on a very independent cash flow. The traditional global economy still appears weak, Europe has not yet recovered, the situation in the UK is relatively chaotic, and Canada is also slowing down.

China’s economic difficulties and debt deflation (Debt Deflation)

Raoul Pal：

China is currently facing a serious debt deflation problem, with bond yields falling sharply. Due to the weak RMB, it is difficult for China government to implement effective economic stimulus policies and is reluctant to lose control of the currency. At the same time, there is widespread hope around the world that the United States can weaken the dollar, because the current strong dollar has put pressure on the economies of many countries. Normally, a stronger dollar slows down the global economic cycle.

He also mentioned that Trump is likely to adopt policies similar to the last time after taking office to try to weaken the strength of the dollar. This is because the United States needs to balance its economy by exporting goods, and a strong dollar will reduce the international competitiveness of American goods, thereby exacerbating the trade deficit problem.

At present, the global economy seems to be in a no-man’s land, and overall development appears to be sluggish. However, based on liquidity injections and changes in financial conditions over the past six months, many forward-looking economic indicators point to a significant recovery in the global economy this year.

The profound impact of demographic changes on the economy

Raoul Pal：

As mentioned before, the US dollar needs to depreciate moderately, and China also needs to free up policy space to implement economic stimulus measures, otherwise it will be difficult to effectively boost the economy. Currently, China’s debt deflation problem is similar to the challenges faced by many countries around the world:Excessive debt levels and agingpopulation structuresuch that GDP The growth rate is not enough to cover debt repayment needs.

This situation has caused a series of serious problems. China’s real estate market is experiencing difficulties similar to the 2008 U.S. subprime mortgage crisis and the 2012 European debt crisis. In addition, China’s banking system faces similar structural problems. At the same time, rapid demographic changes have further exacerbated this situation, with aging and declining fertility leading to a sharp decline in the population, putting greater pressure on economic growth and debt repayment capacity.

U.S. economic conditions The impact of interest rates on economic growth

James Connor：I observed that the economic situation in the United States seems to be somewhat similar to that of Canada, showing a polarized situation. On the one hand, some people are living quite well; on the other hand, many people are facing difficulties. Although the government claims that economic or GDP growth remains between 2.5% and 3%, and inflation is under control, the S P and NASDAQ stock indexes are close to historical highs, but they still feel that the economy is not as strong as it appears.Do you have any other concerns about the U.S. economy? What do you think of this year’s economic trend?

Raoul Pal：

I do have some concerns about the U.S. economy, especially since the current polarization is very obvious. It is true that some people live in an economically prosperous world, but many more ordinary people face the pressures of reality.“” Especially for those who run small local businesses, their cash flow situation is still not optimistic. This is in sharp contrast to the booming development of large technology companies.

In addition, although official data shows a decline in inflation, the cost of living remains high. For example, when eating out, doubling the price makes people feel the impact of inflation intuitively. This high price environment puts great financial pressure on ordinary families. Therefore,I think policy measures such as lowering interest rates are necessary,This can alleviate the debt burden of ordinary people and stimulate economic activity. Ultimately, we need to rely on economic growth to solve these fundamental problems.

For me, growth means:Interest rates need to be lowered, the dollar needs to be devalued, the U.S. economy needs to be stimulated, and economic regulation needs to be deregulated.

The implementation of these policies will inject more impetus into the future economy, although GDP growth may not increase significantly. Currently, trend GDP growth is around 2% or slightly below this level, but recent trends show some signs of improvement. So, will the U.S. economy accelerate further? Is it possible to have several periods of high growth of 3.5%? This is not impossible, especially when a new government takes office and usually takes stimulus measures such as tax cuts. Considering Trump’s high priority on the economy, I am optimistic about the future economic prospects.

As for Europe, the challenges they face are very different. Europe is currently adopting the opposite strategy of the United States, continuously increasing regulation and taxation, which has undoubtedly increased people’s living burden. However, because Europe has a different social protection system from the United States, its economic structure is also different.

In addition, the performance of China’s economy is also crucial. China is not only an important market for U.S. exports, but also a major buyer of global goods. If China’s economy is in trouble, its import demand is bound to decline, which will have a ripple effect on the global economy. Therefore, we need the global economy to be revitalized.

On the one hand, the United States needs to implement Trump’s economic policies; on the other hand, China also needs to find solutions to its own problems to promote global economic recovery and growth.

Forecast of future inflation trends

James Connor: Some people think that the biggest risk in 2025 is that inflation accelerates again. I suspect their concern is that tax cuts, tariff increases, deregulation and deportation of immigrants could add to inflationary pressures. What do you think of this issue?

Raoul Pal：

I don’t think inflation will be a major problem in the future. Indeed, as the business cycle recovers, there may be a certain level of inflation, such as the impact of factors such as rising oil prices. But overall, the impact of inflation is relatively limited. The main problem we are facing right now is currency devaluation, a trend that has pushed up asset prices and continues.

At the same time, I think there will be a wave of technology in the future, and this technology has a strong deflationary effect. We may not yet fully understand the far-reaching impact of this technology on the economy. So, although the business cycle may bring short-term inflation, I expect inflation to fall below 2% first during the current cycle, and then may briefly rise back to around 4%, but eventually fall back.

The deflationary effects of AI and robotics How automation affects the job market

Raoul Pal：

I think we are experiencing the most deflationary period in human history, and this trend is closely related to the development of robots and artificial intelligence.We are creating unlimited labor resources at near-zero cost. Take Amazon as an example. The company currently uses more robots than human employees. As one of the largest employers in the United States (probably second only to the Postal Service), Amazon’s robots can work 24/7, without complaining or taking a break.

The robot has no emotional problems, does not complain, and does not require additional costs such as human resource management.From an economic perspective, this means that companies are motivated to rely more on technology than human resources.This has become an indisputable fact. For example, in Tesla’s factory, almost all operations are performed by robots; the situation is basically the same in other modern factories. Therefore, even if manufacturing returns, an issue that the Trump administration has strongly advocated, companies will not hire large numbers of human employees. After all, this is not the 1950s anymore. In today’s world, as long as technology is cheaper and more efficient than human resources, companies will not hesitate to choose technology to replace human resources.

Financial environment and debt cycle

James Connor: What do you think of the 10-year Treasury note?Recently, the 10-year Treasury note has performed very strongly, with yields rising from 3.60% in September to currently between 4.64% and 4.70%. All this happened against the backdrop of the Federal Reserve cutting interest rates three consecutive times.What does this mean? Are you concerned about the rise in 10-year yields?

Raoul Pal：

I do worry because it showsThe financial environment is becoming more tense。In addition, the rise in 10-year Treasury yields has been decoupled from inflation expectations, which suggests that the problem is not inflation itself.

In fact, every four years, major governments around the world need to refinance their debt, and we are in such a cycle. I call this the Code Cycle of Everything. Back in 2008, the world experienced a debt amnesty because interest rates were lowered to near zero. This low-interest rate environment allows governments to pay little interest for a while, providing a respite for debt. In other words, the policy at the time was like telling governments: Don’t worry about interest rates and just focus on handling the debt. rdquo; As a result, countries restructured their debt to a three-to-five-year maturity.

This also means that every four years or so, we enter a critical point in debt refinancing. Since 2008, this four-year cycle has become a regular cycle that has had a profound impact on the global economy.

But this time the situation is a little special. Due to the impact of the epidemic and inflation,The timing of interest rate cuts has been severely delayed.Typically, at this stage of the economic cycle,Interest rates should be lowered to close to GDP The level of growth trend,Say 2%. But the reality now is that they cannot do this. result isDebt is accumulating through new debt,Because governments have to issue new debt to repay old debt. This debt-for-debt model is brewing a debt crisis, which is why they urgently need to lower interest rates.

This situation has led to mass issuance of debt, and at some point problems will erupt, forcing the government to take action.In fact, this is not only a problem for some countries, but a global problem. For example, interest rates in the UK have climbed to record highs in 30-40 years. In highly indebted economies like the UK, such high interest rates cannot be sustained for the long term, so governments must take measures to respond.

One possible solution is to implement“rate of returnCurve Control (Yield Curve Control). This means that the government will not completely waive interest payments on debt, but will instead set the government by setting the governmentbondsInterest rate caps to control debt costs.In addition, they may have to restart quantitative easing (QE) policies to inject more liquidity into the market. The current liquidity crunch has led to a decline in market demand for bonds, which is why a large amount of debt cannot be absorbed by the market.

Another problem is that the strength of the dollar has allowed countries such as Japan, China and Europe to buy itUS Treasury bondsThe cost has increased significantly.As a result, the high valuation of the dollar not only exacerbates the debt problem, but also forces them to take measures to devalue the dollar and lower interest rates. I think this will help relieve the pressure on 10-year Treasury yields. Trump has publicly stated that current interest rates are too high, and I believe Scott Baison’s top priority is to solve this complex challenge.

Link between interest rate policy and Trump’s economic agenda

James Connor: So how do you think interest rates will change? 10-yearTreasury yieldsWill it reach 5%? If it does, what impact will this have on the stock market?

Raoul Pal：

If we talk about the fragmentation of the stock market, I think rising interest rates will have little impact on companies like Google, Apple, Meta and OpenAI. These companies have a compound annual growth rate of up to 30%, and even if interest rates rise to 5%, it will not be a problem for them. More importantly, these technology giants hold large amounts of cash, and rising interest rates can actually make them more, which is often ignored. Therefore, I am not worried that these companies will be affected.

Of course, if inflation rebounds, the discounted value of these companies ‘cash flows may need to be reassessed, but a simple increase in interest rates will not be a problem. It is the ordinary economy that is really affected, which has caused market differentiation. I expect the 10-year yield could climb to 5% or even 5.5%. Therefore, I think Trump may take steps to put pressure on this situation as soon as possible.

Another complicating factor to consider is Trump’s desire to renegotiate trade deals with various countries, including Canada, China and Europe. The strong dollar is the main tool he uses to suppress other countries. Because these countries also hold large amounts of dollar debt, the strength of the dollar will increase their debt repayment costs. Trump may use this to exert pressure while offering some rewards. For example, if these countries agree to adjust tariffs or reduce trade deficits, the United States will provide certain benefits by lowering the dollar exchange rate. This strategy can not only strengthen the United States ‘negotiating position, but also help relieve domestic economic pressure.

The trend of the US dollar and its impact on trade agreements

James Connor：

I really can’t understand why the U.S. dollar is so strong, especially compared to the Canadian currency. The Canadian dollar is currently at a 22-year low, falling 10% in 2024 alone. So, how should the United States devalue the dollar?

Raoul Pal：

In fact, if the United States clearly sends a signal that it hopes to devalue the dollar, it will usually have a certain effect. Another approach is to provide swap lines to inject liquidity into countries such as China and Japan that hold large amounts of dollar debt. This is equivalent to directly providing U.S. dollar support to these countries, which can use to buy back U.S. Treasury bonds. The way this mechanism works is thatThe United States provides dollar loans to the global financial system through the Federal Reserve System to alleviate the dollar shortage of these countries.Eventually, these countries will put their dollars back into the U.S. Treasury market, creating a win-win situation.

You may ask, since there is such a mechanism, why does the United States not promote it? Why is the dollar still so strong? The answer is,The United States currently wants to maintain a strong dollar. The main purpose of a strong dollar is to take the initiative in trade negotiations, especially when renegotiating trade terms with other countries.

Trump Economic Policies Inflation Risk

James Connor：

I thought Trump would do his best to keep it safe after taking officeeconomic growthBetween 2.5% and 3%, pushing the S & P 500 and Nasdaq closer to historical highs while stimulating the development of the real estate market. But at the same time, he also plans to implement tax cuts, tariff increases and deregulation, policies that could in theory lead toinflationary pressures。Assuming these policies are indeed inflationary, this could lead to higher interest rates and a stronger dollar. However, Trump againHope the dollar will depreciate to attract manufacturing back to the United States, and further promote economic growth. There seems to be a contradiction between these goals. What do you think?

Raoul Pal：

A core of Trump’s policy is its energy relationship with Canada,This is actually closely related to oil. Trump knows that Scott Besson’s strategy is working. Although current oil prices are not high, low oil prices are crucial to the operation of the economy. They hope Canada can increase oil production as much as possible, including advancing key energy projects such as cornerstone pipelines. These energy policies can not only promote U.S. economic growth, but also relieve the pressure brought by the strength of the US dollar to a certain extent.

First, there are many variables in the economy. Some factors can trigger inflation, some issues take a long time to resolve, and others can be dealt with through simple means. For example, stimulating asset markets through the Federal Reserve or the Treasury to increase liquidity is a more straightforward and easily controllable solution.

Governments may relax regulations to promote economic growth, but at the same time they need to avoid excessive increases in inflation. To this end, they may try to regulate commodity prices to achieve this goal.

As the economic cycle recovers, a return to inflation seems inevitable. The key question is thatDoes this inflation occur in a non-cyclical, structural form (such as the long-term high inflation of the 1970s that is often mentioned), or is it just a normal business cycle, in which inflation will rise in the short term and then gradually fall back?

Looking back at similar policies adopted by Trump when he took office, the dollar fell sharply in the second week of January, while bond yields rose for the same reason. These phenomena all have certain inflationary characteristics, but then bond yields gradually fell over the next 18 months. This shows that the market often misjudges due to early expectations of policies.

One of the key points you mentioned is, when will the large-scale tariff policy actually take effect? Typically, the implementation of such policies takes a long time, which may take 18 months to two years. Therefore, tariff increases are usually gradual rather than one-time. Although many people believe that these policies will take effect immediately, this is often not the case.

Market liquidity and stock market trends

James Connor：2023 and 2024 are two very good years. The S & P 500 has risen by 25% to 30% respectively in these two years. Your investment will also perform very well in 2024, with a return of up to 150%.Do you think the S & P 500 may have a third eye-catching year?

Raoul Pal：

I think the answer can be found in the performance of Nasdaq. The 97.5% correlation of Nasdaq’s trend is driven by liquidity, indicating that the core driving force of the market comes from policy actions of the Federal Reserve and the Treasury, such as the Treasury’s general account, reverse repo operations and balance sheet adjustments. In addition, the policy measures of national governments are equally crucial. Therefore, global liquidity is a key factor driving the market.

If we knew that there was 8 trillion to 10 trillion yuan in debt that needed to be rolled over this year and the bond market was already under pressure, the government would have to inject liquidity to ease the situation. From a probability perspective,We are likely to see a lot of liquidity entering the market.In addition, Trump has always supported high asset prices, which means there is a good chance that the stock market will continue to perform strongly this year. Of course, the market may be volatile, even more violently than last year, but this trend will not change as long as the government continues to roll over debt. Countries such as Europe, China and Japan are also facing similar debt pressures and need to deal with them by injecting liquidity.

For the government, the top priority is to roll over debt, which is the key to maintaining market stability. ifbondsIf the market collapses, the entire financial system will fall into crisis.To this end, the government needs to inject more liquidity, which will further push up asset prices and enhance the government’s image to a certain extent.

NVIDIA and market valuation

James Connor: What do you think of valuation issues? For example, Nvidia is one of the representative companies in the current market. As far as I know, it will increase by as much as 170% in 2024. Are you concerned that Nvidia or other companies are overvalued?

Raoul Pal：

Overall, the P/E ratio has been rising. The reason behind this is mainly the impact of currency devaluation. Although prices continue to rise, the growth rate of corporate profits is often limited by the performance of GDP. For example, if the currency depreciates at an annual rate of 8% and the annual GDP growth rate is only 2%, then the company’s earnings growth rate may be only 2% or even lower, assuming a nominal GDP growth rate of 5%. This means that the currency is devaluing faster than earnings are growing, causing the price-to-earnings ratio to continue to rise. Therefore, evaluating the market based on price-to-earnings ratios alone may not be completely accurate.

Also,People may be interested AI There are too high expectations for the impact of other technologies on corporate revenue.Looking back 10 years ago, Amazon’s P/E ratio was as high as 600 times, but it still proved to be an excellent investment case. Therefore, the key lies in the growth rate of the company, not a single valuation indicator.

Overall, I think this year will be a good year.Market valuations may rise significantly. However, liquidity usually tightens after the debt rollover is completed, as inflationary pressures may re-emerge. This tightening of liquidity often triggers a correction in the market.

In this case, the market may undergo some adjustment and then re-enter the growth cycle. I expect valuations to reach a higher range for this cycle, although there may not be a significant correction, butThe market may straighten sideways for a while or experience a decline of about 15%.

In the next cycle, cutting-edge technologies such as AI, robotics, autonomous vehicles and Mars missions will gradually demonstrate their potential. These technologies will become the core driving force for a new round of market prosperity and lead us into a complete bubble cycle. At that time, we can further think about how the market will evolve after the bubble bursts. I think this gold bull market will last at least until the end of the century.

Analysis of gold market trends

James Connor: So what do you think of gold’s performance?

Raoul Pal：

The performance of gold is also affected by currency devaluation. However, unlike other assets, gold does not have a technical adoption curve, so its gains are usually not as significant as risky assets. However, in the current liquidity cycle, countries need to devalue their currencies to repay their debts, which is a positive factor for gold.

Therefore, I remain optimistic about the market prospects for gold. I think gold will continue to perform well in the next market cycle. Especially when the dollar starts to weaken, this will further push the price of gold higher. Overall, I think the current market is not only a very good gold market, but also a good market environment for most risky assets.

Outlook for investment and financial opportunities over the next five years

James Connor：

You mentioned in many online interviews that we still have five golden years to seize opportunities to make money. I remember you mentioned this point when talking about topics such as artificial intelligence and robots. What exactly do you mean?

Raoul Pal：

As a macro investor and analyst, my job is to look to the future and try to predict the direction of the world. Since 2000, I have been using an analytical framework that focuses mainly onDebt,deflationandpopulation structure。This framework helped me stay on the right track during the financial crisis and the European debt crisis, and allowed me to better understand the logic of the global economy.

However, I did miss the rise of technology early on. When I re-examined, I found that our economic modelLong driven by scarcity。As the economy shifts from manufacturing to services, the importance of professional knowledge has become increasingly prominent. This is also why salaries in professional fields such as lawyers, accountants, financial consultants, and doctors remain high, because the supply of these services is limited but the demand is strong.

AI’s disruptive changes to traditional industries

Raoul Pal：

However, artificial intelligence is completely changing all this. The development of AI is significantly reducing the marginal value of knowledge. Although many people do not yet realize it, knowledge itself is becoming cheaper and cheaper. For example, as a content creator, building a media company in the past might require a lot of resources, but now it is no longer necessary. Similarly, the cost of film production may drop from $100 million to $5 million or even $2 million, a typical example of AI reducing production costs.

In manufacturing, the introduction of robotic technology is replacing human power. The most expensive part of manufacturing is labor. So, will labor be completely replaced in the future? The answer is that although AI does lead to the loss of many jobs, the supply and demand relationship in the labor market will be balanced due to the aging of the global population.

My more concerned question is, when AI starts replacing us, what does this mean for your business or my business? If artificial super intelligence (ASI) emerges in the future, what impact will this have on financial markets? As investors, will we be replaced when AI is more efficient and precise than us? Will financial markets continue to be driven by human emotions, or will they be taken over by the logic and algorithms of machines?

Moreover, we are now living in a revolution in which software is consuming the world. With the popularity of SaaS software, this trend has become very close to reality. For example, if you have developed a perfect platform to provide financial advice, I can copy your platform in just a few minutes and adjust it to a version that complies with Indian market regulations. The convenience and efficiency of this technology are revolutionizing the industry landscape.

The far-reaching impact of AI technological progress on the economy

Raoul Pal：

What models do we have in business? What are the models for getting paid for knowledge? These models can be extended everywhere. As a result, humans can always find new ways to make a living. I think online communities may be one of them, because humans are essentially social creatures and they need to interact and communicate with others.

However, the world is undergoing fundamental changes in ways we cannot imagine. In fact, we have never been at the top of the intellectual pyramid. If you observe the development of artificial intelligence, the IQ of AI increased from 90 to 157 last year, almost doubling. If it doubles again next year, its IQ will reach 300, surpassing any human intelligence record. In the next few years, it may continue to double, reaching 600, 1200 or even higher.

We do not fully understand how these changes will reshape the world, and as we enter this era of dramatic change, societies can experience turmoil.But at the same time, it will also bring huge opportunities that could take forms that we don’t yet understand.

Wealth accumulation strategies before 2030

Raoul Pal：

In my opinion, if the global economy still relies on debt rolling, currency devaluations and driving asset prices up, then we should seize this window to accumulate as much wealth as possible. As we enter the early 2030s, the world will change in ways that we cannot understand, and even traditional economic research methods may no longer apply. By then, we will need enough wealth and security to cope with the unknown business environment, because we cannot even predict what the future business model will look like.

This high degree of uncertainty may be huge pressure for many people, but we are in the midst of the largest macro venture investment opportunity in history. Especially in the fields of technology and cryptocurrency, which are at a critical stage in the technology adoption curve and are closely related to the trend of artificial intelligence replacing humans. It can be said that we are actually investing in our own decline, but it has also created huge wealth opportunities for us. Although there will be cyclical fluctuations and risks, this will allow us to better adapt to upcoming changes.

How do college students plan their future career development? How to respond to industry changes when choosing a career?

James Connor: What advice would you give college students?

Raoul Pal：

First, when choosing a career,It is better to enter industries that follow the trend rather than go against the trend.I chose to enter the banking industry and focus on serving hedge funds. It was the 1990s, the peak of the financial bubble and the golden age for the development of hedge funds. I captured two important long-term trends that have shaped my career. Now, if you choose the finance or consulting industry, you will face headwinds, because many positions in these areas may be replaced by technologies such as artificial intelligence. Therefore, I recommend choosing industries with long-term growth potential, such as artificial intelligence, robotics and cryptocurrencies.

Also,I also suggest that young people face the uncertainty of the future and travel more and explore different cultures and groups of people.Because in a machine-dominated world, the most important skill is humanization. This experience will help you better understand the importance of relationships, and interpersonal skills will become critical in the future. I believe that the more humane people are, the more likely they are to find their place in a rapidly changing environment, because the future business model will undergo tremendous changes.

If you want to get into business and have big goals,Choose industries that grow at an annual rate of 100%.These industries are full of opportunities and worth investing in, while industries with stagnant growth are not recommended to enter. Of course, if you want to open a restaurant, this is also a good choice because catering is part of the human experience. Similarly, areas such as tourism and travel embody the core values of the human experience.

To sum up,Either choose an industry that is closely related to human experience, or devote yourself to the technology field.Try to avoid middle areas that have neither growth potential nor human value, because their prospects are no longer clear.

Potential risks to global financial stability

James Connor: Overall, you are very optimistic about the U.S. economy, the U.S. market and Bitcoin. But if you were to talk about a potential risk that many people ignore, what do you think it would be? After all, when the market experiences a significant retracement of 25% or more, it is often due to some unexpected factors. If there is such a risk, what do you think it will be?

Raoul Pal：

I thinkThe potential disintegration of Europe’s political system may be a major risk that is ignored.We have observed that the political systems of many countries are gradually rejecting traditional politicians, and this trend has also begun to appear in countries such as Canada. Will this force structural changes in the EU itself? And how will this change affect global trade? This is a very important issue, but few people think deeply about it. In contrast, like some oft-mentioned, they are known risks and are not my biggest concern.

In fact, when faced with these crises, the response strategies of governments and central banks are almost always to solve the problems by printing large amounts of money. Whether it’s the collapse of China’s economy, China’s invasion of Taiwan, another global epidemic, or Europe’s chaos, the solution seems to always inject liquidity into markets and reduce the possibility of extreme negative events (i.e., left-tail risk). Looking back, the most shocking event was the global shutdown within two to three months due to the epidemic. How did the market react? Although there was a sharp decline in the short term, it quickly rebounded due to the huge injection of funds by the government. This model proved effective in both the 2008 financial crisis and the 2012 European debt crisis.

As a result, we now live in a completely new financial environment. In this environment, investors are forced to hold risky assets because the government effectively eliminates long-term downside risks by injecting liquidity. Of course, this does not mean that the market will not experience fluctuations. For example, in illiquid years, Nasdaq could fall by 30%, and long-term assets could fall even more. But this retracement usually does not last long, as the government moves again to inject liquidity and boost market recovery.

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