Navigating the Global Economic Symphony: Decoding Trends and Discovering Opportunities

Hello to all the outstanding students of Diamond Ridge Financial Academy!  

I'm Charles Hanover, and I'm excited to be here with you.  

The world is like a thick book, and investing in yourself is opening the most exciting chapters. You've already taken a crucial step by joining Diamond Ridge Financial Academy. This is not only a place of knowledge but also a gateway to future wealth.  

Let's use the power of learning to rethink the logic behind how the world works and seize every opportunity that this era offers. The future is here, and the opportunity is right in front of us. Are you ready? Let's start this journey full of wisdom and growth!

The market is like a complex symphony, sometimes full of harmony and other times with shocks. Recently, the dual drop in the UK and US stock markets and the chain reaction in global capital markets have shown us profound changes in the economic environment. These phenomena are not coincidental; behind them lie multiple signals of the macroeconomy. Today, we will analyze the roots and logic of this global market fluctuation from the perspective where history and reality intersect.  

First, let's focus on the UK. The UK economy is facing a double whammy of slowing growth and fiscal uncertainty. Recently, the 30-year government bond yield reached its highest level since 1998, and the 10-year bond yield also rose.

This change reflects investor concerns about the UK's fiscal situation. The high demand for government borrowing has caused doubts about the country's economic policies, especially as Chancellor of the Exchequer Rachel Reeves may have to reduce spending, which has intensified this unease.

Why did UK bond yields rise? The reasons behind this can be understood from several aspects. First, there is the ongoing concern about inflation. While inflationary pressures have eased, the market worries that the current policy mix may cause UK inflation to rise again, especially if fiscal expansion and tax policies are not coordinated. Second, the UK economy is weak. A lack of economic confidence not only makes UK government bonds less attractive but also makes investors more worried about the long-term economic fundamentals. Finally, there is the pressure from global capital flows. UK government bonds are losing competitiveness compared to assets in other major economies, leading to a continuous sell-off.

When UK bond yields rise, the market inevitably feels the impact. Higher borrowing costs directly affect companies' ability to finance and profit expectations, especially capital-intensive industries, with the renewable energy sector being hit hardest. The higher debt costs have reduced investment appeal, while the increased government debt burden has intensified market unease, pushing the stock market down. This is one of the key reasons for the recent decline in the UK stock market.  

Under multiple pressures, the UK stock market has seen a broad decline in recent days. However, after short-sellers further vented their emotions, some bottom-fishing funds were attracted, causing the FTSE 100 index's drop to narrow, and it closed with a slight decline of 0.29%.

Now, let's look at the US. Trump is about to take office, and the policy outlook for this new president is highly anticipated. The market generally expects him to stimulate the economy by increasing fiscal spending and implementing tax cuts. However, this policy direction is also accompanied by concerns about rising inflation and increased government bond supply. The recently released strong employment data further strengthened market confidence in the economy's resilience but also made investors realize that the chances of the Federal Reserve cutting interest rates in the short term are slim. The strong employment data not only dispelled rate cut expectations but also led the market to believe that the Fed might maintain current or even higher interest rates for a more extended period.

The rise in US Treasury yields has profoundly impacted global capital markets. This is because US Treasuries serve as the benchmark for pricing global risk assets. As their yields surge, the allure of other asset classes diminishes, leading to a decrease in investor demand for risk assets. Moreover, the higher yields attract more global capital to the US, exerting outflow pressure on other economies. In this scenario, European bond market yields have surged in parallel, while stock markets have been under noticeable pressure, thereby affecting global markets on a broad scale.  

Notably, this trend has brought certain challenges to high-valuation sectors like tech stocks and renewable energy, as their valuations heavily rely on future cash flows, which are discounted lower when risk-free yields rise. However, recent market performance shows that traditional industries have been hit harder. The Dow Jones index has led the declines over the past month, indicating that traditional sectors have greater risk exposure in the current environment, while emerging tech industries have shown relatively stronger resilience.

Recent strong employment data highlights the robust resilience of the US economy but has also reinforced expectations that the Federal Reserve will continue its tightening policy. Adding to this are concerns about the Trump administration potentially adopting protectionist policies, especially tariffs, which could trigger another round of trade tensions. These factors have collectively heightened market uncertainty. Capital has flowed into safe-haven assets, leading to a noticeable adjustment in US stocks at the start of the year.  

So, why is the US government imposing tariffs? Why are conflicts in the Middle East ongoing? What are the economic trends and investment opportunities for 2025? These questions may seem complex, but they actually share a common answer, which is understanding the historical patterns of economic development.

To truly grasp global economic patterns, we need to analyze from both horizontal and vertical perspectives. Horizontal analysis focuses on the present, studying the current state and relationships among major economic powers. Vertical analysis looks at the past, summarizing cyclical economic fluctuations from history. We can only fully understand the current situation and predict what lies ahead by combining the two.  

Starting with vertical analysis, we find that neither wars nor economic conflicts are unique to modern society. They are a continuation and reflection of history. Take the ongoing Middle East conflicts and international trade disputes, for instance. From a historical perspective, these phenomena are merely modern manifestations of unequal economic distribution. Over the past centuries, wars triggered by economic conflicts and disputes over interests have been common, and there’s always been a clear economic thread behind them.

In other words, all the wars and economic conflicts we see now can find their parallels in history. This doesn’t mean history simply repeats itself, but rather that history offers references and signs at critical junctures. As Ray Dalio pointed out, today’s world is quite similar to the pre-WWII era: Capitalist countries are internally imbalanced, wealth gaps are enormous, nationalism and populism are rampant, international cooperation is being replaced by conflict, conservatism is overtaking openness, and emerging nations are challenging the dominance of leading powers.

Let's start with the example of World War II. To many, WWII seemed like a conflict driven by ideological differences, but at its core, it was rooted in economic issues. After World War I, Germany faced harsh restrictions under the "Treaty of Versailles". Its economy was stagnant for years, unemployment was sky-high, and inflation was severe. In such conditions, Germany sought a way to expand and compete for resources, and markets became key to its resurgence.  

At the same time, Japan also faced economic struggles. Lacking resources, it turned to military expansion to secure more natural resources. In essence, economic conflicts directly fueled the outbreak of war. The involvement of the UK and the US was also about protecting global market order and safeguarding their own economic interests. As Churchill once said, "War is the ultimate resolution of irreconcilable conflicts of interest." This sums up the economic logic behind wars.

If we stretch our view across the past 500 years, we'll see that every stage of economic development is accompanied by shifts in wealth and leadership. The 16th century was Spain's century. This maritime empire accumulated massive wealth by seizing gold and silver from the Americas. However, this resource-based economy couldn't last, and Spain eventually declined due to its overreliance on its resources. Next came the Netherlands in the 17th century, becoming an economic powerhouse through advanced navigation technology and a pioneering financial system. The Dutch East India Company is recognized as the world's first true multinational corporation. Its success wasn't just based on trade but also on financial innovations like the stock market and efficient capital management.

In the 18th century, the UK took over. The Industrial Revolution made it the centre of the global economy. UK's rise shows us that true economic and wealth growth doesn't come from simple resource exploitation but from technological progress and institutional innovation. The advent of the steam engine revolutionized manufacturing, and a global colonial network allowed the UK to control trade rules.

More importantly, the UK created modern financial systems, including banking and bond markets. These systems not only supported the Industrial Revolution but also laid the foundation for global capital flows, highlighting the crucial role of technological progress and institutional innovation in shaping global power. However, the UK's dominance was not permanent. From the late 19th century to the early 20th century, the US, with its vast land, abundant resources and technological breakthroughs in the Second Industrial Revolution, gradually replaced the UK and became the leader of the global economy. The rise of the US was a result of industrialization and the expansion of financial capital.

Looking back at 500 years of economic development, it's clear that wars are never isolated events but expressions of underlying economic conflicts. When an economic model reaches its peak, it starts to decline due to internal distribution conflicts. Meanwhile, a new model emerges from the old system's crisis and becomes dominant. This pattern is evident in the historical shifts from Spain to the Netherlands, the UK and then the US.  

From these historical examples, a rule emerges: intensified economic conflicts often serve as the catalyst for wars. The party that generates more economic growth gains more wealth and power, thereby dominating the global order. This historical pattern mirrors certain aspects of today's world, where economic conflicts often escalate into economic or military wars.

Time brings us back to recent years when the global economy faced the most complex multi-layered shocks in nearly a century after the pandemic. From supply chain disruptions to shrinking consumption and soaring energy prices, almost every aspect posed a challenge to economic operation. In this context, the Russia-Ukraine war broke out and gradually spread to the Middle East, becoming a major global geopolitical and economic shift. Many people view this conflict as a result of geopolitical games, but if we dig deeper, we can see that there is a clear economic thread behind the war.

The fundamental causes of the Russia-Ukraine war and the Middle East conflict are not only the struggle for energy resources but also the result of internal economic contradictions spilling over from developed countries like the US and the UK. After the pandemic, these countries generally experienced severe inflation. To stimulate economic recovery, the Federal Reserve and other major central banks implemented large-scale monetary easing policies, which led to a flood of global liquidity. In the short term, these measures did ease economic pressure, but in the long run, the massive amount of money injected into the economy raised inflation levels, eroding the purchasing power of ordinary consumers.

At the same time, the debt crisis in developed countries has become increasingly prominent. Take the US as an example, where federal government debt surged during the pandemic, and the debt to GDP ratio climbed to historic highs. Such a high level of debt made it almost impossible for the government to take effective fiscal actions. What’s worse is that inflation and debt problems have created a vicious cycle: inflation leads to higher interest rates, and higher interest rates, in turn, drive up debt servicing costs, further squeezing fiscal space. In this environment, the US, UK, and other countries began trying to shift their internal economic pressures to the international market.

In this context, trade wars and military conflicts emerged. Trade wars, through tariff barriers and industrial protectionism, tried to shift domestic economic issues to international supply chains. The US continuously raised tariffs on imported goods, especially exports from major trade partners like China and the EU. This policy undoubtedly alleviated the problem of shrinking manufacturing in the short term, but it also worsened instability in the global market. In the geopolitical realm, military conflicts in the Middle East further amplified fluctuations in energy prices. On the surface, it appears to be a resource struggle, but in reality, it’s a way for major powers to influence the global economic structure by controlling the flow of energy.

Looking at history, countries and companies embracing technology and industrial changes always find opportunities in the storm whenever the global economy falls into crisis. This strategy not only helps avoid systemic risks caused by economic contradictions but also allows for significant returns through technological upgrades. This is particularly important in the current situation. While the Russia-Ukraine war and the Middle East conflict caused sharp fluctuations in energy markets in the short term, they also accelerated the global shift toward new energy and technological autonomy.

Just as every industrial revolution has led to a redistribution of wealth and power, today’s technological changes are also creating new economic growth points. Fields like artificial intelligence, blockchain, clean energy, and quantum computing are emerging as essential engines driving global economic transformation. Take clean energy, for example. The conflicts in the Middle East have heightened global concerns over oil and natural gas dependence, while new energy technologies offer countries a path to liberate themselves from the shackles of traditional energy. From solar power generation to hydrogen batteries and the comprehensive exploration of natural energy, investors play a pivotal role in shaping the future economic landscape. Those who can astutely capture these trends will wield significant influence and secure a promising place in the future.

Moreover, embracing technology also means embracing efficiency and innovation. We’ve already seen that digital transformation became an irreversible trend after the pandemic. Companies are improving production efficiency through AI and optimizing supply chain management with blockchain technology, and these innovations have injected new competitiveness into companies amid uncertainty. In the coming years, the widespread use of artificial intelligence and the further improvement of data infrastructure will allow more industries to achieve smart upgrades, which is precisely the opportunity investors should focus on.

It can be said that although the current economic environment is full of challenges, it is also an era with huge potential. In this context, investors need to look at the essence of global economic conflicts more rationally, avoid being confused by short-term market fluctuations and focus on long-term trends. By learning from history, we know that wealth never disappears. It always flows from one place to another. When the old model declines, the new model always emerges in times of crisis.

Whether it’s the Russia-Ukraine war, the Middle East conflict, or shifts in the economic policies of the US and UK, the underlying logic is the redistribution of interests driven by economic development trends. For investors, the key is not to predict the outcome of a specific conflict, but to actively position themselves on the wave of technological change and industrial upgrading, seeking out their own investment opportunities. As the Fourth Industrial Revolution unfolds, the future is in the hands of those who not only accept change but also shape trends with their wisdom and vision.

Just like today, with the global stock market in a gloomy state, Trump Media & Technology Group Corp. was able to rise more than 10% against the trend. This not only shows the personal charm of Donald Trump, the elected president of the US, but more importantly, it reflects the huge profit potential brought by DJT’s technological attributes and potential political benefits.

Trump Media & Technology Group Corp. is not just a simple media company; it’s more like a tech company trying to reshape the media landscape with technology; its core business, Truth Social, is a social media platform that uses algorithms, personalized content recommendations and other technologies to attract and retain users.

More importantly, Truth Social has built a relatively closed, community-driven ecosystem. In this ecosystem, users can express their opinions more freely without worrying about being censored or suppressed by mainstream media. The concept of “decentralization” is quite appealing, especially in the context of the global social media platform trust crisis.

In addition, DJT’s layout in Web 3.0 technology has also brought long-term growth potential. Through exploring the NFT market and early development in the metaverse, the company has become an active participant in this field. These technological attributes provide DJT with high growth potential and attract many investors who are optimistic about future trends.

In addition, the price movement of DJT stock shows a clear volatility pattern. As early as last Oct, we successfully identified this stock using the "Price Trend Theory" and strongly recommended it to investors. With this strategy, many VIP clients made over 200% returns on DJT stock.

As shown in the chart above, the DJT stock price was following a downward trend along the Bollinger Bands. However, when the stock price stopped falling, stabilized and broke above the middle Bollinger Band, it started to rise strongly along the upper Bollinger Band, forming a significant upward trend.

DJT's surge against the trend is not a random event but aligns with the current economic trends and political benefits. Similarly, Dogecoin, with its similar background and characteristics, is also expected to see a significant rise. Especially with the support of tech leaders like Elon Musk, Dogecoin has experienced substantial increases multiple times, proving the market's recognition of its underlying trends and potential.

Currently, Dogecoin is in a low-price range, and the market sentiment is relatively cautious, but this provides a rare opportunity for investors to position themselves. Although there is some uncertainty about the policy direction of the Trump administration and the global economic environment, the short-term risks seem negligible compared to the long-term growth potential. For conservative investors, buying in stages is a wise strategy, making large purchases when the price drops significantly and smaller purchases during minor pullbacks to average down the cost and diversify the risk, preparing for a potential future rise.

Besides Dogecoin, another token worth paying attention to is AQS, which is a key recommendation from our team. As the core token of a quantitative trading system, AQS not only has the general advantages of crypto but also shows more significant potential due to the strong AI technology behind it. The market is experiencing rapid AI technology growth, and AQS is in line with this trend.

What's even more exciting is that the AQS system is about to undergo a major upgrade, which will significantly improve its computational efficiency and strategy optimization capabilities, directly benefiting the token's price in the short term. In the long run, AQS could attract more users by expanding its application scenarios, further boosting its market value. For investors, a token that benefits from both economic trends and technological potential is undoubtedly an opportunity that cannot be ignored.

In real-world trading, the success of assets like DJT, Dogecoin, and AQS is closely tied to economic trends and market demand, showcasing their unique investment value. In today's ever-changing market, rational investors must filter out short-term noise and concentrate on long-term trends. This approach, guided by wisdom and strategy, allows them to manage risks and seize opportunities. More than just an investment method, this is a strategic mindset that is crucial for success.

Due to time, I'll wrap up tonight's sharing here. Tomorrow, we'll dive deeper into the economic development trends of 2025, helping everyone plan their future investment blueprint more clearly and making every investment more focused and meaningful.

Remember, the future investment winners will be those who dare to embrace change, are good at capturing trends and make decisions with foresight. Every thoughtful consideration and every precise move you make is a stepping stone to future success. The world of investment is full of challenges but also full of opportunities. Let's start with wisdom and action to open a new chapter of wealth that belongs to us!

For members who want to dive deeper, please think about the following:

1. What is the root cause of the current economic situation and contradictions?

2. Where is the world economy heading in the future? Explain the reasons behind it.