Bitcoin may reach a million dollars, but you need to endure a severe Bear Market first.

From the outbreak of World War II to 2024, we have experienced an unprecedented super bull market. This prolonged rise has shaped generation after generation of passive investors, who habitually believe that "the market will never have problems" and "the market only goes up." However, this feast has come to an end, and many are about to face liquidation.

How did we get to this point?

The super bull market from 1939 to 2024 is not a coincidence, but rather a result of a series of structural changes that have completely reshaped the global economy, with the United States always at the center.

Emerged as a global superpower after World War II

World War II pushed the United States to become the undisputed leader of the "free world." By 1945, the U.S. produced more than half of the world's industrial output, controlled one-third of global exports, and held about two-thirds of the world's gold reserves. This economic hegemony laid the foundation for growth in the decades to come.

After World War II, the United States actively embraced the role of a global leader, promoting the establishment of the United Nations and implementing the "Marshall Plan," injecting over $13 billion into Western Europe. This was not merely simple aid—by investing in the reconstruction of war-torn countries, the United States created new markets for its products while establishing its dominant position in cultural and economic terms.

Labor Force Expansion: Women and Minorities

During World War II, approximately 6.7 million women entered the labor market, resulting in a nearly 50% increase in the female labor participation rate in just a few years. Although many women left the workforce after the war, this large-scale mobilization permanently changed society's view on women's employment.

By 1950, the trend of married women entering the workforce on a large scale became increasingly evident, with labor force participation rates for women of most age groups rising by an unprecedented 10 percentage points. This was not just a wartime exception, but the starting point of a fundamental shift in the American economic model. The "marriage ban" (the policy prohibiting married women from working) was abolished, part-time jobs increased, innovations in household labor emerged, and higher education levels all contributed to women transitioning from temporary workers to long-term participants in the economic system.

A similar trend has occurred among minority groups, as they gradually gain more economic opportunities. This expansion of the labor force effectively enhanced the productive capacity of the United States, supporting decades of economic growth.

The Victory of the Cold War and the Tide of Globalization

The Cold War shaped America's political and economic role after World War II. By 1989, the U.S. had formed military alliances with 50 countries and stationed 1.5 million troops in 117 countries around the world. This was not just for military security, but to establish America's economic influence globally.

After the dissolution of the Soviet Union in 1991, the United States became the world's only superpower, entering an era many view as a unipolar world. This was not only a victory for ideology but also the opening of global markets, allowing the United States to dominate the global trade landscape.

From the 1990s to the early 21st century, American companies expanded significantly into emerging markets. This was not a natural evolution, but a result of long-term policy choices. For example, in countries where the CIA intervened during the Cold War, the volume of imports from the United States increased significantly, especially in industries where the U.S. had no clear competitive advantage.

The victory of Western capitalism over Eastern communism was not solely reliant on military or ideological superiority. The Western liberal democratic system is more adaptable and was able to effectively adjust its economic structure after the 1973 oil crisis. The "Volcker Shock" in 1979 reshaped America's global financial hegemony, turning the global capital markets into a new engine of growth for the U.S. in the post-industrial era.

These structural changes—the rise to superpower status after World War II, the entry of women and minorities into the labor market, and the victory in the Cold War—have collectively fueled this unprecedented super bull market in financial assets. However, the core issue is this: these changes are one-time events that cannot be repeated. You cannot have women re-enter the labor market again, and you cannot defeat the Soviet Union again. And now, both parties are pushing for de-globalization, and we are witnessing the last support of this long-cycle growth being withdrawn.

What will happen next?

However, unfortunately, everyone is praying for the market to return to historical norms. The market consensus is: the situation will worsen, then the central bank will ease again, and we can continue to make money... but the reality is: this group of people is walking towards the slaughterhouse.

The bull market of the past century has been built on a series of non-reproducible events (making it impossible to continue the bull market), and some of those factors are even reversing.

• Women will not re-enter the labor market on a large scale: In fact, as pro-natal elites push for an increase in birth rates, female labor participation may decline.
• Minority groups will not be significantly absorbed into the labor market again: In fact, the Democratic Party's position on immigration policy is almost as tough as that of the Republican Party, which has become a bipartisan consensus.
• Interest rates will not decrease again: In fact, every elected leader is well aware that inflation is the greatest threat to their re-election. Therefore, governments will do everything possible to avoid cutting interest rates and reigniting inflation.
• We will not further globalize: in fact, Trump is pushing in the completely opposite direction. Moreover, I expect the Democrats to replicate this policy in the next election (don't forget, most of Biden's policies are directly copied from Trump's first-term policies).
• We will not win another world war: in fact, it seems we might even lose the next war. In any case, I do not want to verify this conjecture.

My view is simple: all the global macro trends that have driven the stock market up over the past century are now reversing. What do you think the market will do?

Goblin Town

When an empire enters decline, life can be really tough – just ask Japan. If you bought at the historical peak of the Nikkei 225 index in 1989 and held on to it until now, after 36 years, your return would be approximately -5%. This is the typical "buy and hold, suffering endlessly" scenario. I believe we are on the same path.

Worse still, you should be prepared for capital controls and fiscal repression policies. Just because the market isn't rising doesn't mean the government will accept reality. When traditional monetary policy fails, the government will resort to more direct financial control measures.

Upcoming Capital Controls

Financial repression refers to the practice of providing savers with returns that are below the inflation rate, so that banks can offer cheap loans to businesses and governments, thereby reducing the pressure of debt repayments. This strategy is particularly effective for governments in clearing domestic currency debt. The term was first used by economists at Stanford University in 1973 to criticize the policies of emerging market countries that suppress economic growth, but today, these strategies are increasingly seen in developed economies, such as the United States.

As the U.S. debt burden exceeds 120% of GDP, the possibility of repaying debts through traditional means is increasingly diminishing. The "playbook" of financial repression has begun to be implemented or tested, including:

• Directly or indirectly restrict government debt and deposit interest rates
• The government controls financial institutions and establishes competitive barriers.
• High Reserve Requirements
• Create a closed domestic debt market, forcing institutions to purchase government bonds.
• Capital controls, restricting cross-border asset flow

This is not a theoretical assumption, but a real case. Since 2010, the federal funds rate in the United States has been below the inflation rate for over 80% of the time, which is essentially forcibly transferring the wealth of savers to borrowers (including the government).

Your retirement account: The government's next target

If the government cannot rely on printing money to buy bonds and lower interest rates to avoid a debt crisis, they will target your retirement accounts. I can easily imagine a future: tax-advantaged accounts like 401(k) will be mandated to allocate more and more "safe and reliable" government bonds. The government will no longer need to print money, but can simply directly appropriate existing funds in the system.

This is exactly the script we have seen over the past few years:

• Frozen Assets: In April 2024, Biden signed a law authorizing the government to seize Russia's reserve assets in the United States, setting a precedent for the government to freeze foreign exchange reserves at any time. In the future, this practice may not be limited to geopolitical opponents.
• Canada’s Freedom Convoy protest: The government froze approximately 280 bank accounts without court approval. Financial officials admitted that this was not only to cut off funding but also to "deter" protesters and ensure they "make the decision to leave." When asked how the frozen accounts affect innocent families, the government’s response was: "They just need to leave."

Gold Strong Enforcement and Monitoring

This is not surprising, as American history is filled with similar actions:

In 1933, Roosevelt issued Executive Order 6102, mandating citizens to surrender their gold or face imprisonment. Although enforcement was limited, the Supreme Court supported the government's right to confiscate gold. This was not a "voluntary purchase program," but rather a "forced wealth expropriation," merely packaged as transactions at "fair market prices."

The government's surveillance capabilities rapidly expanded after the 9/11 attacks. The FISA Amendments Act granted the NSA almost unlimited power to monitor the international communications of American citizens. The Patriot Act allows the government to collect the phone records of all Americans every day. Section 215 even permits the government to collect your reading records, study materials, purchase history, medical records, and personal financial information without any reasonable suspicion.

The question is not whether "financial repression will come," but rather "how severe it will be." As the economic pressures of de-globalization intensify, government control over capital will only become more direct and severe.

Gold and Bitcoin

The monthly gold chart since 1970 is currently the strongest candlestick chart in the world.

Based on the process of elimination, the most suitable financial asset to purchase has become obvious — you need an asset that has no historical correlation with the market, is difficult to be confiscated by the government, and is not controlled by Western governments. I can think of two, one of which has increased by $60 billion in market value over the past 12 months. This is the most obvious Bear Market signal.

Global Gold Reserve Competition

Countries such as China, Russia, and India are rapidly increasing their gold reserves to respond to changes in the global economic landscape:

• China: In January 2025, increased gold holdings by 5 tons in a single month, net purchases for three consecutive months, with a total holding of 2,285 tons.
• Russia: Controls 2,335.85 tons of gold, becoming the fifth largest gold reserve country in the world.
• India: Ranked eighth in the world, holding 853.63 tons and continues to increase its holdings.

This is not a random act, but a strategic layout. After the G7 froze Russia's foreign exchange reserves, central banks around the world took notice. A survey of 57 central banks showed that 96% of respondents viewed the credibility of gold as a safe-haven asset as a motivation to continue investing. When dollar-denominated assets can be frozen with a single stroke, physical gold stored within one's own borders becomes extremely attractive.

In just 2024, Turkey increased its gold reserves by 74.79 tons, a growth of 13.85%. Poland's gold reserves increased by 89.54 tons, with a growth rate close to 25%. Even small countries like Uzbekistan have also increased their reserves in January 2025.