Simplified Summary:
A year-end review revisits the five most-read insights from 2025, which together drew nearly 500,000 views. Each explored an under-the-radar economic risk or trend, and here’s how those predictions have aged—along with key updates and lessons.
Major Points:
1. Global Currency Reset
Thesis: Lasting U.S. trade rebalancing requires a global currency shift, not just trade deals.
Update: China shows early signs of allowing a stronger yuan (supported by Xi and economists), which could help U.S. manufacturing but risks hurting China’s export-driven model.
Watch: Currency policy as the next front in trade wars.
2. China vs. EU: The Silent Trade War
Thesis: As U.S.-China trade fades, a new conflict is brewing with Europe due to China redirecting subsidized exports.
Update:
EU deficit surged; tariffs and retaliations have begun (e.g., EVs, dairy, pork).
Outlook: A fragile stalemate likely to flare up in 2026, impacting global markets.
3. BRICS Currency: Not Killing the Dollar Yet
Thesis: A common BRICS currency remains unlikely due to member disparities.
Update: BRICS is exploring “the Unit”—a gold-backed (40%) trade settlement tool, not a consumer currency.
Takeaway: This is more about avoiding sanctions than replacing the dollar, but gold’s role is notable.
4. Shrinking Bank Reserves & Liquidity Crunch
Thesis: Rapidly draining liquidity (“Unholy Trinity”) would pressure markets and force Fed action.
Update: The Fed indeed intervened with rate cuts and a $40B/month Treasury purchase program (“QE-lite”).
Lesson: Reserves fell fast, but the Fed acted before markets broke.
5. China’s Structural Economic Trap
Thesis: China’s problems (housing, debt, aging) are deeper than trade wars, leading to “involution”—overcapacity and falling returns.
Update: Beijing is now curbing overproduction (“anti-involution”), which has helped inflation turn positive.
Risk: Transition will be rocky, especially if a stronger yuan hurts exports.
Bottom Line:
Markets humbled some forecasts, but tracking these themes—currencies, trade tensions, liquidity, and China’s slowdown—remains critical for 2026. The goal isn’t to be right every time, but to learn from what reality tests.
