June 4, 2026
Most modern investing frameworks were built in a period of expanding globalization, broad institutional trust, disinflationary growth, and U.S.-led geopolitical order.
However, for years now we have been moving into a more fragmented environment: fiscal dominance, trade conflict, AI-driven information disorder, and weaker international coordination.
This newsletter issue discusses the “Wild West” period that the world has entered, and what it means for investors.
And for those who enjoy fiction, in my prior newsletter I announced the publication of my sci fi novel. For this issue, I’m happy to say that the dual-narrated audiobook is now available on Amazon, Audible, and Apple Books. Walker and Carla did a tremendous job with the voice acting:
The Prior Era of Linear Progress
Although the idea of publicly-traded equities goes back over 400 years, the “modern” period of investing goes back to around the late 1970s or early 1980s.
The earlier part of the 20th century had mutual funds and other investment vehicles, but they were generally used by the wealthy. Stock ownership prior to the Great Depression was often speculative in nature and narrowly-owned, and the 1930s-1960s decades were more characterized by savings accounts, pensions, bonds, insurance, and mortgages to build home equity, rather than stock accounts as a widespread thing.
It was in the 1970s that US Individual Retirement Accounts (aka IRAs) were created, along with index funds and the concept of the discount brokerage. 401(k) accounts were introduced in the early 1980s, and online discount brokerages emerged in the early 1990s.
This period ushered in the modern period of investing where owning stocks became considered a core financial activity that most middle class people in the US do by default, which also became the case throughout other portions of the West broadly.
Humorously, the infamous 1979 “death of equities” magazine cover basically marked both the generational bottom in equities and the beginning of this mega-trend in equity ownership.
The concept of an “emerging market” fund was coined in the 1980s, and by the 1990s was an increasingly standard portfolio allocation as well.
The general narrative arc that people became accustomed to, from the end of WWII into the 2000s, was mostly one of linear progress, either real or perceived.
This accelerated when China began opening up to the world in the 1980s, and when the Soviet Union fell, which together resulted in many countries adopting freer economic models and integrating with the rest of the world. The introduction of the euro in the late 1990s represented an unusually tight bond between European countries that had a long history of rivalry and war, and was a very optimistic time for the continent.
Globally speaking in the post-WWII decades, child poverty decreased, lifespans increased, active war was kept to a pretty small percentage of the world at any given time, equal treatment under the law regardless of race and sex expanded in many parts of the world, communist areas trended toward economic liberalization, and technology kept finding ways to make things easier, with new gadgets always in the pipeline.
And as one can imagine, that made for a pretty good time for investing. From chaos to order, from war to peace, from poverty to wealth, from oppression to freedom, from legal inequality to equality, the world was never a utopia but most people viewed it as heading in the right direction from one decade to the next.
And the US, as the global hegemon, of course had its many problems, but not many people would say that it acted any worse for the world than prior hegemons such as the British Empire, Dutch Empire, Spanish Empire, or Roman Empire.
All of this is not to say that the world was always peaceful or fair, but rather that the dominant narrative was that institutions, technology, trade, law, and living standards were gradually improving decade by decade.
The Communications Sweet Spot
Sometimes the introduction of a technology gives us a long stretch of things being “really bad” or “really good” until another technology comes along and balances it out.
As an example, the introduction of farming ironically reduced human lifespans compared to pre-agricultural communities. Agricultural communities became more powerful than their tribal counterparts due to sheer numbers, but on a per-capita basis, things weren’t pleasant. I’ll let Gemini summarize:
It took all the way until the harnessing of hydrocarbons and the deployment of electrification and running water to clear out the biggest problems of the densely-populated agricultural age. Tractors boosted the productivity of farmers by 10x, while electricity, running water, and modern medicine helped clean out waste and raise the standard of living. After that point, human lifespans greatly expanded, and greatly surpassed those of history.
I contend that our communication systems went through an opposite scenario. The order of technology gave us an usually clear window into the world, but it only lasted until later technology took it away.
Specifically, the introduction of widespread photographic and video technology made it far easier to document what was happening around the world. It didn’t mean reporting was perfect or that forgeries weren’t possible, but it asymmetrically boosted knowledge that people had about events around the world.
Decades later, AI kind of takes that asymmetry away. It’s becoming as easy to generate a fake video as a real one. There may be ways to prove real vs fake (such as cryptographically verified metadata from the source), but those methods often involve effort. And then add countless AI bots on social media that are nearly indistinguishable from people.
One of the potential side effects of this trend is that it may ironically reduce our sense of global interconnectedness. The combo of 1) sophisticated bots, 2) realistic AI videos, 3) a broad lack of trust in major news corporations, 4) influencers that can be paid to create false narratives, and 5) centralized algorithms that prioritize sensationalist content, creates a situation where people have massive information overload and an uphill battle at separating what is real versus what is fake, and what is even worth prioritizing their limited attention on sorting out.
One way to think of this is as an information bell curve, which kind of represents the worse case scenario:
-For most of human history, before the widespread sharing of videos, people were pretty isolated. They knew what was happening in their village but had little knowledge of what was happening far away. Prior to telegraphs and prior to the printing press, things were even more isolated. It’s all about the speed of basic information, with videos being the most credible and self-evident types of information in many cases.
-As we got deep into the 20th century, trusted news corporations and widespread video technology helped share high-bandwidth information and evidence of what was happening in the world at a rate that was difficult for suppression techniques or forgeries to keep up with. This can be thought of as the Walter Cronkite era. As Wikipedia summarizes:
Walter Leland Cronkite Jr. (November 4, 1916 – July 17, 2009) was an American broadcast journalist who served as anchorman for the CBS Evening News from 1962 to 1981. During the 1960s and 1970s, he was often cited as “the most trusted man in America” after being so named in an opinion poll.[2][3][4] Cronkite received numerous honors including two Peabody Awards, a George Polk Award, an Emmy Award, and the Presidential Medal of Freedom.
Cronkite reported many events from 1937 to 1981, including bombings in World War II; the Nuremberg trials; combat in the Vietnam War; the Dawson’s Field hijackings; Watergate; the Iran Hostage Crisis; and the assassinations of President John F. Kennedy, civil rights pioneer Martin Luther King Jr., and Beatles musician John Lennon. He was also known for his extensive coverage of the American space program, from Project Mercury to the Moon landings to the Space Shuttle. He was the only non-NASA recipient of an Ambassador of Exploration award. Cronkite is known for his departing catchphrase, “And that’s the way it is,” followed by the date of the broadcast.
-The further we head into the 21st century, technology is pulling us back apart. Although smartphones give us more capacity to document things around the world, the institutional trust in professional journalists is down, and social media algorithms dominate attention and pull people into tribal echo chambers. Fake AI videos are already tricking some people, and given some time will likely become nearly indistinguishable from reality. We’ll ironically have less of a shared set of facts about what’s happening in the world than in the middle era where video was common but AI and social media did not yet exist.
A second way to think of this is that it inverts Plato’s Cave.
In the famous allegory, people exist in a cave, with shadow-illusions playing in front of them, keeping them in ignorance. Once they realize their situation, the people can start climbing out toward freedom, where they see the real truth of things as a sort of enlightenment.
If we apply that mainly to knowledge of world affairs (rather than philosophical enlightenment), then realistic AI videos, realistic AI bots, and social media algorithms muddle the waters. In that sense, people were in the cave of world knowledge prior to widely-shared videos, started to climb out of the cave during the period of videos but before false AI videos (and thus reached peak world knowledge at that middle stage), and then upon exiting the cave they don’t know if they’re in another illusion or not, and thus they don’t get the information enlightenment they expected.
There’s no firm date for when the post-WWII era of perceived linear progress ended. Rather, it was chipped away at.
The events of 9/11 were certainly a big milestone, which then resulted in the Patriot Act and a two-decade multi-trillion dollar war on terror that ended without a clear victory.
The global financial crisis of 2008 and its aftermath was another massive hit, where bankers were perceived as blowing up the economy, getting bailed out, and leaving homeowners and workers out to dry. The rise of the Tea Party on the political right and Occupy Wall Street on the left were populist responses to perceived corruption at the core of the system. Meanwhile, over in Europe, multiple indebted Eurozone countries were on the brink, putting the whole euro project into question.
The wealth divide kept growing in the US, as those who own assets and short fiat currency gained tremendously over those who primarily rely on their labor-time. With improved telecommunication systems and the economic liberalization of many emerging markets, corporations could perform geographic arbitrage, replacing high-income developed market workers with low-income developing market ones.
Waves of populism against what was seen as a corrupted establishment grew across the US and Europe, with ebbs and flows that kept building momentum.
Presidents like Dwight Eisenhower and John Kennedy at the dawn of this post-WWII era were widely viewed as credible leaders even by their opposition, whereas the same hasn’t been the case for late-stage Joe Biden and Donald Trump. US politics once worked in such a way that people disagreed about the best way to run the country but would acknowledge that there were at least capable adults in charge, whereas now we exist in a time where dementia and reality-TV-star behavior became the defining characteristics of US presidencies to many people.
China, meanwhile, began a period of partially closing off with the rise of President Xi starting in 2013. Decades of economic liberalization in the 1980s, 1990s, and 2000s started to partially reverse in the 2010s and 2020s. Hostility between the US and China grew, as China greatly surpassed the US in industrial capacity, and partially caught up in other areas (with the US still well-ahead in terms of capital markets and certain other metrics). The US, rather than taking this gently, has pushed back rather strongly.
And increasingly, US policymakers have argued that in order to beat China, the US has to be more like China. Specifically, many politicians have now argued for “industrial policy”, meaning that the US government should take an active role in industry and guide a desired outcome of industry, rather than let market forces and private capital primarily determine the ideal direction of investment. This approach was common back in the WWII era, fell away during the era of post-war linear progress, and is ramping back up in the era of the Wild West.
For decades, the US ran structural trade deficits in order to operate the world reserve currency. This is because in order to use the world reserve currency, the world has to have access to that currency in large amounts, and the US primarily supplies that currency by running trade deficits year-in and year-out with the rest of the world. This can work for a long time, but eventually leads to industrial stagnation of the hegemon, and results in greater and greater foreign ownership of US assets as they reinvest their surplus dollars into financial interests. This collectively contributes to a “hollowing out” of the country, and the downsides of the system start to outweigh the upsides, fueling calls for change.
Then of course there was Covid, followed by the Russian invasion of Ukraine.
Back in the 1990s, after the fall of the Soviet Union, Ukraine was the third-largest nuclear power (at least in terms of warheads, not in terms of usage capability), but agreed to give up its nuclear capabilities with the Budapest Memorandum in exchange for border sovereignty and protection. That’s now violated.
The United States then initiated trade wars on dozens of countries, including many allies. It served as a wake-up call for countries like Canada and many others that they have become too intertwined, too reliant, on the United States.
People throughout the West generally trust their governments less than they used to, and the governments of various countries trust each other less than they did at the peak. Rules can change swiftly. Outright unilateral invasions have occurred by major powers; coups and attempted coups that used to happen behind closed doors behind the façade of peace are now carried out in the open, more brashly.
Military technology shifted as well. Along with the nuclear bomb, the carrier group emerged as a dominant form of power projection in WWII, and that lasted for decades. But the emergence of hypersonic weapons in the theoretical sense, or asymmetric drones in the practical sense, have weakened that capability. It’s cheaper to close the Red Sea or the Strait of Hormuz with large numbers of inexpensive drones than it is to open it with small numbers of expensive ships and missiles from half-a-world away.
Self reliance is the new game in town. Global rule of law is seen as broken, and perhaps as always having been somewhat of a temporary illusion in the first place. There is no world cop. Treaties can switch on a dime. Over-specialization is risky and supply chains require backup plans. Drones can hold their own vs weapons 100x more expensive. Even agreeing on a shared set of facts is harder in a world of AI bots and AI-generated videos.
And as I wrote in my prior newsletter, this all feeds into fiscal insolvency. The slow kind:
A Flywheel of Chaos
Unfortunately, sovereign debt crises and wars tend to occur in clusters. One tends to lead to the other, in both directions. War is expensive and thus leads to high sovereign debt levels, and high sovereign debt levels can also lead to more severe political decision-making and ultimately, war.
Back in 2020 I wrote one of my foundational articles, A Century of Fiscal and Monetary Policy. In that piece, I highlighted how huge financial imbalances, built over decades, tend to lead to rising levels of populism and outlier political outcomes. The longer imbalances go structurally unaddressed, the more things simmer and risk coming out in ways that aren’t necessarily productive.
In multiple newsletters, articles, and in chapter 19 of Broken Money, I covered the topic of the long-term debt cycle. In summary, debt tends to build up over multiple credit cycles in the private sector, until it reaches its absolute limits. At that point, rather than mass defaults occurring, money usually gets printed and the debt starts to get rotated up onto the sovereign level via much larger fiscal deficits. Then, when debt builds up significantly on the sovereign level, the next release valve is through inflationary currency debasement and major political resets.
Similarly, as I highlighted in chapter 13 of Broken Money, wielding the global reserve currency comes with significant and ever-growing imbalances for capital flows and trade (often known as the Triffin dilemma). That’s basically the growing cost, the dwindling fuel, of maintaining such a dominant ledger for the world to use. And when the system becomes greatly imbalanced, it’s not that it necessarily breaks suddenly, its that the costs of maintaining the status quo exceed the benefits in aggregate, and so populism, resentment, and economic stagnation tend to start rising within that reserve currency country.
A nation state does not normally “go gentle into that good night” during these periods, especially if they’re the incumbent power. Empires don’t voluntarily downsize. Instead, they tend to take the mask off, lash out, and aggressively seek other places to offload those problems. In other words they “rage, rage against the dying of the light.”
However, normally the core problems are too structural to just offload to others, and thus those problems keep coming back to hit at home until a true crisis and a more significant realignment occurs.
I don’t think we’re there yet. This is a process that can take many years to play out. But we’re in that type of environment, where the US is encumbered by both fiscal dominance and the Triffin Dilemma, and thus needs structural reforms. And so the state becomes a bigger force in domestic and global affairs, as it seeks to protect itself, but is unable or unwilling as of yet to tackle the core issues. And that’s in part because voters don’t want to tackle the core issues either.
What all of this points to is that US fiscal deficits will continue to run hot for the foreseeable future. Nothing stops this train, and a handful of things, such as major war, can potentially accelerate it.
-March 2026 Newsletter
Investing in the Wild West
As previously mentioned, most of our modern investing frameworks emerged in the era of perceived linear progress. To continue to be effective in more of a Wild West type of environment, they need some tweaking.
In my prior newsletter, I wrote about how I continue to be a long-term bull on scarce and high-quality assets that trade for reasonable valuations.
Overvalued equities (like certain defensive stocks or the frothiest AI names) and high-sentiment pricing (as gold and silver encountered recently, or bitcoin encountered last year) can put temporary negative pressure on otherwise good assets (let’s call them group A).
On the other hand, major supply growth (like currency and bonds) make for inherently weak assets (let’s call them group B) that are risky over the long run to have too much exposure to, but can occasionally make for a good trade.
Thus, I continue to emphasize group A, and within that group try to lean in toward assets that are under-owned and not very expensive, with gradual rebalancing over time away from over-owned assets. Within Group B, to the extent that I have exposure to currency or bonds, I prefer assets that are closer to the currency side of that spectrum (such as cash or short-term bills/notes) rather than bonds, since those assets are at least useful as a volatility shock absorber for crisis moments and pullbacks of other, superior assets.
Summarizing that strategy, I continue to use what I refer to as a three pillar portfolio:
I have been recommending what I have called the “three pillar portfolio” during this period of fiscal dominance. It has been a cornerstone concept of how I have been investing in the macro sense. For me, the three main pillars consist of 1) profitable equities 2) commodities/producers and hard monies and 3) cash-equivalents.
Profitable equities do the best when there is a period of disinflationary economic growth. Commodities and their producers do the best when there is a period of inflation or stagflation. Cash-equivalents hold up well during disinflationary credit contractions, when almost everything else is falling relative to society’s unit of account that most debts are denominated in.
-April 2024 newsletter
A typical 60/40 stock/bond portfolio underweights or avoids the commodities/producers and hard monies category, and thus relies mainly on disinflationary conditions with abundant raw materials to do well. Stocks do well during disinflationary growth, bonds do well during disinflationary contractions, but the portfolio has no answer for stagflationary conditions with shortages in energy and raw materials.
That’s why it’s useful to have some commodities/producers and hard monies as well, and over a sufficiently long period of time (and with appropriate position sizes) that pillar historically boosts the risk-adjusted performance of the overall portfolio relative to a pure 60/40 strategy.
But in addition to asset class selection, investors have to increasingly think about tail risk scenarios. What if the legal ownership of their investments gets nationalized? Rather than just happening to smaller and less stable economies, the odds of such an event may increase even for large economies in certain areas. Careful jurisdictional selection or diversification, and self-custody or distributed-custody of certain types of assets where possible, are likely to rise in importance.
In other words:
- Prefer assets with low reliance on political promises.
- Avoid excessive dependence on long-duration fiat claims.
- Own productive securities and scarce assets, and with sufficient liquidity.
- Err toward expecting “run it hot” fiscal environments broadly.
- Diversify custody and jurisdiction where practical.
Additionally, I expect tangible, real-world experiences to grow in value over time. As digital experiences and digital capabilities become far more abundant, it’s the physical goods, services, and locations that become scarce. The ability to disconnect for stretches of time becomes the luxury, and the social flex.
Portfolio Updates
I have several investment accounts, and I provide updates on my asset allocation and investment selections for some of the portfolios in each newsletter issue every two months.
These portfolios include the model portfolio account specifically for this newsletter and my relatively passive indexed retirement account. Members of my premium research service also have access to three additional model portfolios and my other holdings, with more frequent updates.
M1 Finance Newsletter Portfolio
I started this account in September 2018 with $10k of new capital, and I dollar-cost average in over time.
It’s one of my smallest accounts, but the goal is for the portfolio to be accessible and to show newsletter readers my best representation of where I think value is in the market. It’s a low-turnover multi-asset globally diversified portfolio that focuses on liquid investments and is scalable to virtually any size.
And here’s the breakdown of the holdings in those slices:
Changes since the previous issue:
- No recent changes.
Other Model Portfolios and Accounts
I have three other real-money model portfolios that I share within my premium research service, including:
- Fortress Income Portfolio
- ETF-Only Portfolio
- No Limits Portfolio
Plus, I have personal accounts at Fidelity and Schwab, and I share those within the service as well. Premium reports come out every two weeks.
Final Thoughts: Combining Bitcoin with Cashflows
Those who have read my work for a few years know that I’m a general partner at Ego Death Capital, a bitcoin-focused venture firm that has led seed-stage and Series A venture deals across the bitcoin ecosystem since 2022.
The Ego Death team is now launching a company called Orange Juice. Accredited investors with at least $250k to invest can email my partner Nico Lechuga via nico@egodeath.capital for more information.
(Legally speaking, the Interests will be offered and sold in the United States under the exemption provided by Rule 506(c) of Regulation D under the Securities Act, which allows ORANGE JUICE to engage in general solicitation and general advertising. More legal details and risk disclosures about the company are available here.)
Joining us to run the day-to-day operations of Orange Juice is a combined military/finance veteran who we will be revealing soon. He’s a U.S. military academy and Oxford graduate who spent ten years in special operations, then went into equity research and M&A banking at bulge bracket firms, and most recently has served as the head of a billion-dollar private family office.
Orange Juice will be designed to acquire profitable small and mid-sized businesses at low multiples, optimize their operations with AI where applicable to keep them competitive, and compound their retained earnings into bitcoin as a treasury asset. Unlike a private equity fund that buys and re-sells businesses, Orange Juice will be designed as a permanent capital vehicle that will seek to buy and hold the businesses it acquires.
Where it fits into the market
Privately-held businesses in the United States are collectively worth trillions of dollars, and demographically speaking, they have an aging set of owners who are seeking liquidity as they explore how to pass on what they’ve built.
-Private equity funds have an expected end-date, so they’re designed to buy, optimize, leverage, and re-sell private businesses. Orange Juice instead will seek to hold the businesses it acquires for the long run, which is more like what Berkshire Hathaway, Illinois Tool Works, and other permanent capital vehicles (i.e. companies) do. This incentivizes the team to optimize for business sustainability and durability.
-Pure-play bitcoin holding companies exist, but their cash-flowing operations tend to be small or non-existent, which makes them persistently reliant on external capital and this adds a significant speculative element to their strategy (which can feel good or bad depending on the market cycle). Orange Juice instead will emphasize building a strong and diversified base of cash flows, with most of the retained earnings of its businesses collecting into a bitcoin treasury. Use of external capital (i.e. issuance of debt or equity by the company) can therefore be opportunistic, rather than persistently required.
Is it a replacement for self-custodial bitcoin? No. Especially not in this Wild West era. But for bitcoin-bullish investors, it’s a way to reinforce the balance sheets of value-oriented companies with a debasement-resistant liquid asset, and to arbitrage the expected performance differential between scarce assets and abundant fiat currency over time.
Best regards,
