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A new chapter in global competition is unfolding. On one side, the United States, home to the world’s most valuable technology companies and still the issuer of the global reserve currency. On the other, a rising China, determined to leapfrog American dominance in artificial intelligence, robotics, and chipmaking, willing to deploy every tool—from industrial policy to intellectual property “recycling”—to win. And in the middle sits the global economy, perched atop a stock market more concentrated, and more fragile, than at any point in history.

Financial Sense recently spoke with Doomberg, the anonymous financial analyst at Substack whose green chicken avatar has become one of the most influential—and contrarian—voices in finance. In a recent podcast with Jim Puplava, Doomberg unraveled the complex web connecting Wall Street, Washington, Beijing, and Main Street. The picture that emerges is both fascinating and sobering: a world where technological arms races, economic policy, and even the fate of the middle class are linked in ways we’re only beginning to grasp.

Listen to the full podcast: Doomberg: China Striking at US Big Tech | Financial Sense

The Stock Market’s Double Life: Fiscal Backstop and House of Cards

When most people think of the stock market, they think of 401(k)s, IPOs, maybe the odd meme stock. But as Doomberg explains, the stakes are much higher: “The US stock market now basically backstops the US treasury market.”

What does that mean? In plain English, the government’s ability to fund itself—especially as deficits balloon—depends on Wall Street’s health. Capital gains taxes, driven by rising stock prices, flow into federal and state budgets. When the market tanks, deficits explode. “Any sort of meaningful decrease in stock prices would blow deficits wide open,” Doomberg warns. “That would cause the treasury to have to sell more bonds and bills in order to paper over that gap. And in so doing, rates would go higher and basically we would reach what [strategists] call fiscal dominance.”

Fiscal dominance (definition): When a government’s need to borrow and cover its spending forces the central bank to keep interest rates low or buy government debt, even if this risks higher inflation. In this situation, the central bank’s main job becomes helping the government pay its bills, rather than focusing on controlling inflation or keeping the economy stable.

This scenario, once reserved for “emerging market debt spirals,” is now squarely on the table for the world’s reserve currency issuer. The problem is made worse by the extreme concentration of market value: “The six big companies—Nvidia, Microsoft, Apple, Alphabet, Amazon, and Meta—had a combined market cap of over $19 trillion... more than a third of the entire value of the S&P 500. Stocks have never been so concentrated.” This means that if just a handful of companies stumble, the whole edifice could shake.

Doomberg sums it up starkly: “We are in a pretty precarious situation.”

AI: Mania, Transformation, and the Bubble No One Can Ignore

Artificial intelligence isn’t just the latest tech fad—it’s the new battleground for global supremacy. Doomberg sees AI as genuinely revolutionary: “AI is transformative. It will ultimately be far more impactful than the Internet.” He’s betting on it, too: “Full disclosure, we are actively investing in private AI startups and have a keen ear to the ground as to what's going on.”

But he’s also clear-eyed about the bubble forming in the sector. “There’s a bubble blowing, just like there was in the dot-com era. And both things can be true simultaneously. AI is going to change everybody’s life. Fortunes will be made and lost trying to exploit the new technology and winners will emerge. Selecting those winners now is difficult because the technology is really fundamentally changing at an exponential rate.”

Doomberg sees all the hallmarks of mania: “Companies renaming themselves to put AI in their title, all the standard sort of stock pump and dumps that come with such a mania. But we're in a mania. That doesn't mean that real change in society isn't going to happen and that fortunes can't be made.”

The difference this time is that the AI bubble is more deeply integrated into the fiscal and geopolitical trajectory of the US. The big six tech companies aren’t just speculative darlings—they’re strategic assets, and their stock prices prop up tax revenues, political narratives, and even the US Treasury’s credibility.

China’s Industrial Playbook: “Free” AI and the Art of Disruption

If the US is riding a bubble, China is building a battering ram. Doomberg’s most pointed warning is that China isn’t just catching up or taking a lead in AI, robotics, and chips—it’s actively trying to upend American dominance by dumping large language models (LLMs) and AI services onto the global market for “free”.

“China is rapidly creating its own domestic capabilities to compete with these Big Six,” Doomberg explains. “Our experience in competing with China, when they put the full weight of their national resources towards a strategic economic objective, is they usually achieve it.”

But it’s not just about catching up or taking the lead. It’s about undercutting as well. “China is doing the same thing [they’ve done in other industries like solar or steel] and they're going to release their version of that free,” Doomberg says, referring to cloud and AI services. “How are these large companies going to justify, you know, half a trillion dollars spent on building AI centers if they can't make money off it?”

This “free dumping” strategy is a familiar Chinese playbook, perfected in industries from solar panels to EV batteries. The idea is simple: flood the market with subsidized or free products, force Western competitors to lower prices or go out of business, and seize global market share. In AI, this means Chinese tech giants—backed by government support—can offer LLMs, cloud inference, and developer tools at minimal cost, undercutting the likes of Microsoft, Google, Amazon, and Meta, who are spending billions on data centers and proprietary models.

Doomberg warns, “No expense will be spared, no intellectual property respected. When the Communist Party of China decides it’s going to take an industry, it usually does.” He notes that attempts to sanction and restrict Chinese access to cutting-edge tools (like ASML photolithography machines or Nvidia chips) are unlikely to work long-term: “Sanctions against strong companies never work. All shortages, in this case artificially created ones, are soon followed by gluts. And China will overinvest in replicating these technologies up to and including outright theft of them.”

And the consequences for American big tech are dire: “If China eventually gains parity and then eventually exceeds the Big Six in technical capabilities—chip making, AI training, inference, computing—what does that mean for the value of these companies compared to the extreme valuations the market is currently giving them?”

Debt, Gold, and the End of Dollar Omnipotence?

As if technological and industrial disruptions weren’t enough, Doomberg sees storm clouds gathering in global finance. America’s deficits—now running at over $2 trillion a year—are, in his words, “uncharted territory, sort of ‘Fourth Turning’ type stuff.” If a recession or bear market hits, deficits could spiral to $4 trillion or more. “Ultimately the numbers stop making sense,” he says.

The surge in gold prices is an ominous sign: “When the price of gold doubles... that's usually not a good sign. That usually means significant changes coming: wars, defaults, hyperinflation.” Gold’s rise, he says, signals a loss of faith in fiat currencies and a drift towards a multipolar world where the dollar’s role is diminished.

Here, too, China is ahead of the curve—building reserves of gold as a “neutral reserve asset” for settling international trade, especially as Western sanctions have weaponized the dollar and euro. “If you make something a financial weapon, it can't be described as neutral. And global trade requires a neutral reserve asset. And since gold is nobody's credit, it serves that purpose incredibly well.”

Doomberg concludes that efforts to sanction or isolate strong economies like Russia or China typically backfire: “Sanctions against strong countries never work. The sort of blowback—unanticipated blowback—of this whole approach is such that Putin comes out ahead.”

What’s Next? Prepare for Shockwaves—and Opportunities

Doomberg’s analysis is a wake-up call: AI, energy, and financial power are colliding in ways that could remake the world order. China’s willingness to “dump” AI for free is not just a commercial tactic—it’s a strategic move on American tech hegemony. The US must confront not only external challenges but also its own internal divisions, bureaucratic inertia, and fiscal excess.

Yet, amid the uncertainty, Doomberg remains pragmatic and even optimistic for those willing to adapt. “There's always a bull market somewhere,” he reminds us. The winners of tomorrow—in business, technology, and society—will be those who can read the signals, embrace new skills, and position themselves for change.

The future is up for grabs. How will you seize it?

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