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The financial system is currently undergoing a tectonic shift from paper assets to hard assets. And this has the potential to create life-changing profits for those who invest accordingly.

There are two reasons for this tectonic shift:

1. The AI technology race is now a matter of strategic importance to the U.S. As such, the Trump administration will NOT be reining in its fiscal spending/ capital allocation as doing so opens the door to China winning the AI “arms race.”

2. The Fed has no option but to “inflate away” the U.S.’s debts via currency devaluation/money printing. The Trump administration’s fiscal spending means the U.S. is now adding $1 trillion in new debt every 100 days. If the U.S. is to avoid a debt crisis, the Fed will have to print money and use it to buy the U.S.’s debt.

Regarding #1, it is now clear that the Trump administration views the development of AI technology to be a kind of tech “arms race” between the U.S. and China. The President has consistently emphasized the importance of American leadership in AI for maintaining the nation’s economic and national security.

This is not simply a talking point for the Trump administration. The President has introduced the America’s AI Action Plan which contains 90 policy pillars designed to establish and maintain the U.S.’s dominance in AI technology. These include cutting regulations, greenlighting new proposals, and of course, infrastructure spending.

President Turmp has also signed an Executive Order (the Genesis Mission) aimed at building “integrated AI platform to harness Federal scientific datasets… to train scientific foundation models and create AI agents to test new hypotheses, automate research workflows, and accelerate scientific breakthroughs.

In very simple terms, the Trump administration is “all in” on spending/ doing whatever it takes to win the AI “arms race.” If this means running large-scale deficits while signing off on hundreds of billions if not trillions of dollars’ worth of deals, so be it.

All of this is HIGHLY inflationary. Which brings us to #2 in our list above: the Fed has no option but to “inflate away” the U.S.’s debts via currency devaluation/money printing.

The U.S. never returned to its pre-pandemic levels of government spending. In fact, the Trump administration is running Crisis-like deficits DESPITE the U.S. bringing in hundreds of billions of dollars in tariff revenue.

Put another way, despite higher revenues, the U.S. continues to overspend to the point that it is running the type of deficit usually reserved for major recessions/ crises. Indeed, as the below chart shows, the current U.S. deficit is nearly as large as a percentage of GDP as what it ran during the Great Financial Crisis!

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Add it all up, and the U.S. is fully committed to spending/ printing money by the trillions of dollars. This means higher rates or inflation/ currency devaluation. The U.S. dollar has already lost a third of its purchasing power since 2008. It would not surprise me for the USD to repeat this feat in the next 10 years.

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Those investors who are correctly positioned for this could generate life-changing returns. We’re talking about hundreds of billions if not TRILLIONS of dollars in capital moving out of paper assets and into hard assets like gold as the USD drops like a brick.

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