The dollar could initially strengthen if Europe enters a direct military conflict in the Ukraine war, as capital would flow from Europe to the US as a perceived safe haven, but this perception of US safety will not last.

When the dollar declines, emerging markets will face economic problems because they are export-dependent on the US and other major economies, and stronger emerging market currencies will reduce their export competitiveness, while global recession will also reduce demand.

Japan has a major debt problem, but most is held domestically; however, the primary risk for Japan is geopolitical (squeezed between China economically and US for security) and demographic (aging, declining population), which creates an impossible trade-off between satisfying China and the US.

The world is transitioning from a unipolar geopolitical order dominated by the US to a multipolar order, and the US is unable to hold its position, leading to increased conflicts, wars, and sanctions that are inflationary.

Europe is in major decline, China is in secular rise but trapped in a long deflationary cycle, and the US is performing well due to easy money and a capex cycle driven by new technology, representing the late stage of a boom cycle.

The late-stage boom cycle in US markets will peak sometime between Q3 2024 and Q1 2025, followed by a bear market with 30-50% decline driven by both valuation contraction and recession, not valuation alone.

The enormous debt accumulated by the world and especially by governments will create dislocations and systemic problems in the next down cycle in markets and economy, resulting in a 'big mess'.

Financial repression will intensify and expand with new forms and rules, with governments changing the rules mid-game, and the window for declining bond yields in recession will be much shorter than historically, with 10-year Treasuries likely declining only ~150 basis points for ~6 months before the repressions restart.

At the short end of the rate curve, central banks will push rates down as deep as they can to save the financial system during crisis, but secular uptrend in bond yields will persist.

Felix is turning very bearish on the dollar for next year (2026-2027) on a secular basis, but not this year (2025), because capital flow dynamics and SWF behavior have shifted structurally.

The gold movement over the past cycle was primarily driven by China buying, and Western investors (particularly ETF investors) came in very late and missed most of the move or bought at the peak, while the secular bull market in gold is continuing.

Governments across Europe and Western democracies are being challenged by rising populist and protest parties (France's Le Pen, Germany's AfD, UK Reform) as old establishment parties decline dramatically (UK: old parties down to 10% in polls), driven by austerity, inflation, and perceived unfairness.

The private equity and private credit boom of end-2021 has led to policy interventions where banks and insurance companies may be forced to buy more Treasury bonds and government bonds, and eventually central banks will have to take over many bank balance sheets to keep the system functioning.

Governments are trying to fix an unsustainable system piece by piece (hole by hole in a leaking boat) rather than addressing root causes, which will fail because they're patching symptoms instead of fixing the underlying solvency problem.

In bubble cycles, leading stocks (AI stocks, semiconductor stocks) typically double in the last 6 months before the peak; technically, the semiconductor stocks (those 'selling the shovels') will turn over first, losing momentum before hyperscalers do. Watching semiconductor momentum is the key timing signal, not fundamentals.

Some private credit companies will disappear, but private credit as an asset class will not disappear; rather, it will consolidate, with weaker players failing.

Zulauf is fully in agreement with the secular uptrend in bond yields, having written a report in June 2020 titled 'The Sale of a Generation for Bonds' predicting this shift.

The Iran deal signed by Vice President Harris is a capitulation document that is a catastrophe for the US image and Israel, resulting in Iran becoming the new dominant regional power, while Saudi Arabia, Pakistan, Turkey, and Egypt are forming a new military-industrial organization to reduce US dependency.

Europe is playing with fire by its aggressive rhetoric against Russia regarding Ukraine; Russia is losing patience and could extend war activity into European NATO countries (Baltic Republics) via missiles and drones, which the US will not defend due to nuclear risk to NYC.

Gold cycles suggest a peak coming in the late 2020s, which fits well with the next major crisis Zulauf expects to begin in 2027.