Original article by Tulip King, Messari Analyst
Original translation: Luffy, Foresight News
Alpha First:
Maximize your human capital: Find a high-paying job and work hard. Your career is your best hedge against inflation these days.
Shift assets away from traditional finance and toward uncorrelated alternative assets. The stock market could remain flat or decline for decades.
Hoard gold for stability and hold Bitcoin for appreciation. In an era of deglobalization and financial repression, both will outperform.
The legendary bull market is over
We just experienced the longest bull run in history, from the ashes of World War II all the way to Donald Trump’s victory in 2024. This epic bull run conditioned generations of passive investors to believe that “nothing will happen” and that “markets can only go up.” Unfortunately, the good times are over, and many are about to get burned. The structural tailwinds that fueled this decades-long boom are not only stalling, they are reversing dramatically. The populist revolution is here, and it will make labor great again at the expense of capital.
Populists take control
The globalist neoconservative political project ushered in by the Clinton→Bush→Obama→Biden presidencies is officially over. Trump killed it, and its remains will never be resurrected.
By the way, the shift toward populism is not unique to the United States.
There is a whole new populist political project in the United States. Today, Trump has full control of the Republican Party in a way that he didn’t in 2016. Meanwhile, the Democratic Party is going through the kind of intraparty strife that the Republican Party just ended, and you can expect the populist wing to eventually defeat the globalist wing.
Populist politics is fundamentally different from globalist politics. You need to update your view of the goals of both parties. There will still be differences between Republicans and Democrats, but they will increasingly converge on the core populist agenda:
The promotion of blue-collar jobs. Both sides are now competing to see who loves factory workers more. The era of learning to code is over.
Reindustrialization. Everyone wants factories, supply chains, and key industries to return to the United States.
Tariffs. The next president, whether Republican or Democratic, is expected to continue a foreign policy centered on tariffs.
Free trade has become politically toxic.
Nationalism. The distinction between citizens and non-citizens is returning with greater force. Both parties will continue to restrict immigration and deport illegal immigrants. The difference will be in scope and speed, not direction.
The elite consensus that drove policy from Reagan to Obama promised prosperity under American leadership through free trade, open capital flows, and globalization. For financiers and tech moguls, that delivered spectacular results. But for large swaths of the country, especially its industrial heartland, it delivered hollowed-out communities, stagnant wages, and the spread of fentanyl. Populism was not an accident; it was a predictable phenomenon.
The value of labor
Two powerful forces are converging to drive wages sharply higher:
Reindustrialization has caused a surge in labor demand. Even with automation, reshoring factories and supply chains will create a huge demand for workers. Every new semiconductor factory or electric vehicle battery factory needs engineers, technicians, construction workers, and logistics personnel. The CHIPS Act and the Inflation Reduction Act alone have injected hundreds of billions of dollars of opportunities into domestic manufacturing.
Immigration restrictions also shrink the labor supply. Whether through border controls, deportations, or reduced visa approvals, the influx of new workers has been limited. Republicans want to deport all illegal immigrants; Democrats are at least conceding to deporting illegal immigrants with criminal records. Either way, the trend is clear: Fewer workers are entering the job system.
Review the supply and demand curves in the basics of economics
This is basic economics: when the demand for labor increases and the supply contracts, wages must rise. This is not a temporary phenomenon, but a structural shift that could last for decades. For the first time in many years, you will see wage increases exceeding inflation and the returns on financial assets.
This is true even in an inflationary environment. I expect inflation to be between 3% and 9% over the next decade due to deglobalization, tariffs, and labor shortages. But if your wages are growing 5% faster than inflation each year, rising prices won’t keep you up at night. You’re growing in real wealth while asset owners watch their portfolios stagnate.
What this means: Now is the time to go all in on your career. Work hard and learn valuable skills, especially in areas related to domestic production and physical infrastructure. Your human capital (your ability to earn money) is appreciating. This is a generational opportunity to build wealth through income rather than asset appreciation.
Wall Street is doomed
Wall Street was the most important interest group during the period when the United States pursued its globalist political project. Their interests were considered equal to the national interests. Free capital flows, deregulation, and bailouts when necessary, Wall Street enjoyed them all. It seemed that every Treasury Secretary came directly from Goldman Sachs.
Today, as deglobalization progresses, Wall Street is rapidly falling out of favor politically and publicly. The financial elites don’t realize it yet, but they no longer have the allies and power they had 5-10 years ago. They are like dinosaurs looking up at a strange bright light in the sky, not understanding that their time is coming to an end.
This idea (that the Feds shift to rate cuts is inevitable) is wrong. The Fed will not turn
Because Wall Street has yet to recognize its own decline in status, they still expect the Fed to come to their rescue when they get into trouble. They assume that the famous Fed put (the central banks implicit promise to cut interest rates to save the market) is still valid. But it is not.
Since 2021, every politician has learned one key lesson: If you are an elected leader and there is inflation in the country, you will lose reelection. Its that simple. This has completely reversed the political incentives around monetary policy. Savvy politicians are now pressuring the Fed to keep interest rates high because cutting rates risks reflation, which would cost them their jobs.
Even if the market plunges, the current political calculation is to prioritize fighting inflation rather than saving asset prices. Wall Street can cry all it wants, but in a populist environment, their tears will not buy votes. In fact, many voters will cheer for Wall Streets setbacks. This reality has not yet been reflected in market prices.
Depression of financial assets
It’s time to stop pretending that the stock market and the real economy are the same thing. It’s entirely possible for your wages and quality of life to rise while financial assets and the stock market fall. For people under 30, this is actually the ideal situation, as you finally have the opportunity to use your rising wages to buy homes and stocks at reasonable prices.
You may never see Apples stock price hit a new all-time high again
Take Apple as an example. In the fourth quarter of 2024, Apples price-to-earnings ratio is about 40, and its gross profit margin is about 46%. That is to say, if Apples revenue per share is about $100 and its profit per share is about $46, its stock price will be about $1,960.
Now assume they have to repatriate production and labor to the US. Their profit margins will compress due to less efficient domestic production. Gross margins fall to 20%, and in a high interest rate environment the market will no longer appreciate such an aggressive P/E, so the P/E falls to 25 (still above the historical average). Assume that over the next decade, since Apple is still a superior company, they manage to double their revenues. By 2035, they have revenues of about $200 per share, but earnings of only $40 per share, and a stock price of $1,000.
This is how financial assets can get stuck in a secular bear market (10+ years) while companies are still making profits and giving their employees raises. Even though business activity is growing and wages are rising, stock prices can actually fall by 50%.
This is not just a theory, but what really happened in Japan after 1989. That year, the Nikkei hit nearly 40,000 points and then collapsed. Today, 36 years later, it has not fully recovered. If you bought Japanese stocks at the peak and held them for a generation, you would still be losing money in real terms. This is what happens when a financialized economy built on easy money and globalization has to adapt to new realities.
U.S. financial assets could easily fall into a “lost decade” (or even two decades). Passive investment strategies that worked well for baby boomers could deliver dismal returns for the next generation. For index fund believers, this would be nightmare territory.
So, who is the loser?
Here is a useful reference on how much the baby boomers have profited from the globalist political agenda
At this point, you might be wondering who will be the unlucky ones in this new political and economic landscape. There are two main groups:
Large companies with high profit margins. Companies that have enjoyed the benefits of globalization (outsourcing production, optimizing global supply chains, and paying extremely low wages) face painful adjustments. Reshoring of production means rising costs, labor scarcity means rising wages, and tariffs mean higher input costs. All of this has compressed their previously high profit margins. They will still make profits, but with less profits, and investors will give lower valuations to these reduced profits.
Baby boomers who are too old to benefit from wage growth. The real victims are retirees and those nearing retirement, who are asset-rich but income-poor. After decades of policies catering to their interests, the boomer advantage is over. They have dropped out of the workforce, so rising wages dont help them. Their retirement accounts are heavily invested in stocks and bonds, and those assets may remain stagnant or decline for years. Meanwhile, inflation eats into their fixed income. Its a triple whammy: falling assets, rising costs, and the inability to earn more income.
This isnt just an economic issue; its an issue of intergenerational equity. Baby boomers enjoyed the fruits of the post-World War II boom, bought homes at low prices, watched their stocks rise 10% per year for decades, and then burned their bridges. Now, when they try to cash in on those gains, theyre finding fewer buyers. The massive intergenerational wealth transfer that many expected may not be as bountiful as they thought.
So, who is the winner?
In this new paradigm, the winners are clear:
The labor force, especially blue-collar workers. Electricians, plumbers, welders, mechanics, construction workers, anyone who makes or repairs physical things, stand to gain greatly. These jobs cannot be outsourced, are essential to reindustrialization, and face less competition for labor. For these workers, the era of wage stagnation is over. They will receive high wages and regain their social status.
Young people entering the workforce. If you are in your early twenties, this shift is in your favor. You will earn higher wages over the course of your career. You will eventually buy assets (homes, stocks) at more reasonable valuations after asset prices have fallen. You have decades of earning time to benefit from a pro-labor environment. This is a much better situation than when you entered the workforce in 2010, when wages were stagnant but assets were already expensive.
People who hold uncorrelated assets like Bitcoin and gold. As financial repression grows and traditional assets struggle, alternative assets outside the system become increasingly attractive. Gold has been a classic inflation hedge and safe haven for thousands of years. Central banks around the world are already hoarding gold at a record pace. Bitcoin, as digital gold, provides a similar role with greater upside potential. Both thrive in an environment of financial instability, currency debasement, and geopolitical tensions.
Central banks are buying gold
Let me be clear about Bitcoin: It was created for moments like this, when trust in traditional financial institutions is shaken and governments are taking increasingly desperate measures to manage their debt. Bitcoins fixed supply is extremely attractive when everything else is losing value. I expect Bitcoin to eventually reach $1 million, but you need patience. This is not a get-rich-quick trade.
New Economic Order
We are witnessing a historic turning point: the end of the neoliberal globalist order and the rise of populist nationalism. This is not a small policy adjustment, but a fundamental reshuffling of economic winners and losers.
For decades, capital dominated labor, financial assets outperformed wages, and Wall Street called the shots in Washington. That era is over, and we are entering a period in which labor regains influence, wages outpace asset returns, and economic policy prioritizes workers over investors.
This transition will not be smooth, markets will experience sharp declines, inflation will persist longer than most people expect, and geopolitical tensions will increase as countries prioritize their own interests over global cooperation.
But amid this turmoil lies opportunity. Focus on learning skills that will earn you high wages in the new economy and move away from overvalued financial assets toward uncorrelated alternatives. Prepare for a world where paychecks, not portfolios, are the primary vehicle for wealth accumulation.
The populist revolution is not just changing politics, it’s rewriting the rules of economics. Those who recognize this shift early and plan accordingly will reap the rewards. Those who cling to old strategies will struggle. This is not the end of prosperity, it’s the redistribution of prosperity
