BRIEFING Mensuel - La Crise de Valeur ACTIVEE

The speaker provides a long-term market brief, emphasizing his role as a risk management strategist who predicts future market levels based on technical analysis, rather than an economist. He acknowledges that his technical strategies have a high failure rate (70%) but stresses the importance of understanding market movements and their potential real-world impacts. He cautions against confusing financial markets with the global economy, as he is not an expert in economics or macroeconomics. He references models from Ray Dalio and Martin Armstrong to position current events within economic and macro cycles. According to these models, a market peak was anticipated around June of last year (2024), driven by technical saturation signals in the S&P 500. While a decline in sentiment did occur, it did not translate into a market downturn, with markets continuing to rise due to speculative bubble formation. Ray Dalio's model suggests that the United States is in an inevitable decline of economic dominance, having experienced positive effects and now facing negative ones, including debt explosions, monetary printing, and phases of revolution and war. This aligns with Armstrong's "Cycles of War," which indicates a global increase in tensions since 2014, peaking around 2028-2029. This suggests ongoing geopolitical conflicts, including in the Middle East, are likely to persist. The speaker also discusses potential internal issues in the US, predicting that if Donald Trump loses the midterm elections in November, impeachment proceedings will likely resume. This could further radicalize his base, leading to both external wars and internal uprisings in the US. Regarding Europe, the speaker believes it is primarily burdened by the Russia-Ukraine conflict, which is expected to peak around mid-2026, leading to a sustained de-escalation. This de-escalation could be catalyzed by Trump's potential withdrawal from NATO, which the speaker views as almost inevitable. The current market situation is characterized by a speculative bubble, particularly in the US, that has been building for the last 20 years, decoupling valuations from reality. This bubble is distinct from currency-driven market increases seen in Asia. The speaker attributes the final stages of this bubble to market mania, especially since Trump's first presidency, fueled by media attention and post-COVID monetary injections. He notes that while some of the post-2021 speculative bubble has deflated, markets have continued to rise, driven by "greed and delusion" and the AI speculative bubble. The speaker argues that a recession is approaching, delayed for two years, and will likely be stagflationary in the US, characterized by rising prices due to a devaluation of the dollar. This leads to his three-part thesis for the coming years: dedollarization, fragmentation of financial markets, and currency wars. He predicts a competitive devaluation of the dollar, potentially without the agreement of partners like Europe and Japan. This could lead to a political rift between the US and Europe, as a stronger Euro due to dollar devaluation would harm European industry. The speaker believes Trump will prioritize lowering the dollar, even if it hurts allies. The devaluation of the dollar, coupled with ongoing wars and internal unrest, will strain US budgetary spending and debt refinancing. He foresees the Federal Reserve inevitably intervening to support US debt through "Yield Curve Control," further devaluing the dollar. Foreign investors are expected to lose trust in the US financial system, viewing it as a weapon, and will divest from US debt and assets, leading to a fragmentation of international markets. Japan, facing its own debt refinancing challenges and high energy import costs, will likely sell its US debt to support its own currency. Europe, while less affected than Japan, will also face challenges from a stronger Euro. The speaker forecasts a significant drop in the USD/JPY pair, potentially by 25%. Oil prices are expected to remain volatile, likely staying between $90 and $140, with an average around $100-$110, rather than reaching $200. The fragmentation of financial markets, or "financial protectionism," implies direct intervention in currency markets and capital controls for political reasons. This will impact Japanese pension funds, which are heavily invested in volatile US tech assets, as the US tech bubble is set to burst. The speaker warns against continued investment in US mega-cap tech stocks, predicting a "venomous return to the mean" and possibly beyond. He notes that the real US economy (Russell) might fare better than the S&P 500's tech giants, though it will still face challenges from high consumer debt and default rates. The speaker reiterates that the US faces debt explosions, political restructuring, wars, and popular uprisings. This will lead to a falling dollar and a sharp decline in US markets, especially in AI and mega-cap tech stocks. He warns of a non-linear decline, including bull traps and a "trench warfare" phase in geopolitical conflicts. For investors, he strongly advises disengaging from US markets due to the double whammy of falling asset valuations and a devaluing dollar. He sees foreign investors as having a clearer perspective than US investors, who are "inside the bubble." He recommends using USD/JPY for hedging, as it has already shown sell signals. For gold, he advises extreme caution, noting it is still expensive and may see further drops before becoming an attractive buy. Finally, regarding cryptocurrencies, he acknowledges a technical correlation between US tech stocks and crypto assets, but emphasizes that this correlation is biased and not necessarily causal. He points to the "American-centric cronyism" around crypto, with figures like Michael Saylor buying Bitcoin on credit. While Bitcoin saw a pump, he notes a lack of follow-through in true blockchain innovation, with centralized cryptos favored over decentralized ones. He concludes that Ethereum, as a decentralized, neutral network that executes unalterable code, is the biggest winner of the "crisis of value" (2024-mid 2028). Despite market consolidation, institutional investor disengagement, and geopolitical turmoil, Ethereum's utility is "inevitably destined to grow" as political interference in markets increases, making it a necessary "haven of peace."