BYD/CATL/Tesla built empires on LFP patents invalidated (basically stolen) in China. Michel Armand, who enabled China's LFP boom via nanocoating tech, now leads polymer solid-state battery development at Basquevolt (Europe) with ironclad global patents. Chinese giants locked out of next-gen tech. Tesla pivots to robotaxis/robots, unable to compete. Ford allies with Renault/Ampere for access. Chinese battery valuations face severe correction if they can’t find an answer quickly on solid state.
Four years into the AI surge, the promised productivity boom is exposed as an asset-backed consumption binge, characterized by rising trade deficits and massive imports of hardware and power infrastructure. Instead of exporting high-margin APIs, the U.S. is financing this consumption by selling off financial assets, creating a scenario where spending consistently exceeds domestic production.
Drawing on Henry Thornton’s theory of credit, this piece argues that sovereign credit depends on trust, legal security, and respect for property. Policies aimed at expanding US oil production by pressuring major creditor nations such as Norway, the UAE, and Saudi Arabia risk undermining that trust. A debtor cannot strengthen its credit by threatening the interests of its creditors; doing so weakens confidence and ultimately damages the credibility of the United States itself
Britain’s 1820s debt “coupon recuts” reduced government bond yields after war-driven debt surged, pushing investors into speculative bubbles before a banking panic followed. Today, Fed monetization, distorted inflation metrics, and weakening credit markets are seen as a modern parallel, fueling excess speculation in AI, crypto, fintech, and space stocks. As private credit deteriorates and losses emerge, the risk of a broader liquidation cycle continues to rise.
Markets reward truly extraordinary businesses with premiums far above book value — but today, everybody seems “extraordinary.” Humans struggle to accept absurdity and instead rationalize contradictions. Increasingly, LLMs do the same: rather than confronting irrational valuations, they manufacture coherence. If you refuse to “fudge the absurd,” you eventually end up living mentally on the other side of the mirror. Laugh or cry, your choice.
War embargoes trigger a recurring cycle: supply shocks drive price spikes, speculation surges, trade routes shift, and liquidity tightens. The Civil War cotton crisis mirrors the 1970s oil shocks and today’s energy markets—featuring demand destruction, falling real incomes, and cost-push inflation. These booms end in crashes, as capital misallocation and banking stress unwind the speculative excess.
Solid-state batteries may disrupt lithium-ion more than markets price in. They use lithium-metal anodes and solid electrolytes, boosting energy density, safety, range, and charging speed. But success depends less on chemistry than new manufacturing: continuous ceramic or roll-press processes, not legacy liquid-electrolyte lines. The thesis argues incumbents like CATL face retrofit and scale hurdles, while Honda and QuantumScape may hold undervalued final-size production advantages.
The text challenges three beliefs: rising gas prices, renewables increasing costs, and higher renewable penetration raising German prices. Data from Spain and Germany shows renewables lower prices via the merit-order effect. Germany is moving toward similar outcomes, aided by rapid storage expansion (batteries, sand, molten salt). Seasonal storage and low marginal costs reduce gas dependence, stabilize prices, and improve energy sovereignty, with full decoupling expected by 2027–2030.
In the 1820s, post-Napoleonic UK cut gilt coupons. Investors, denied real yield, chased returns in speculative ventures, funding dubious projects. Gilt demand collapsed, causing banking instability; the Bank of England injected liquidity. Today's parallel: US yield repression fuels risk-taking, lower-quality credit, Fed monetization. Gundlach warns a Treasury coupon cut could repeat this: yield-seeking bubble, credit deterioration, contraction. Lesson: cheat on debt, get a bubble, then a bust.