Original Article Title: Macro Tops: the multi-decade bear market
Original Article Author: mikeykremer, Messari Research Analyst
Original Article Translation: ChatGPT

Editor's Note: The author reflects on the period from the outbreak of World War II in 1939 to Trump's re-election in 2024, during which the U.S.-led global economy experienced a super bull market driven by one-off events such as the U.S.'s rise to a superpower after World War II, the entry of women and minority groups into the workforce, and the victory in the Cold War. However, the author believes this feast has ended due to trends toward deglobalization, non-repeatable labor force expansion, and the inability to further lower interest rates. The future will involve financial asset liquidation, capital controls, and fiscal repression, with traditional markets struggling to replicate their past glory. Gold and Bitcoin, as uncontrollable non-traditional assets, will become safe-haven choices, especially Bitcoin, which may rise in small and medium-sized countries due to its digital advantages, ultimately reaching a million-dollar market cap, but it must first undergo the test of a bear market.

The following is the original content (slightly reorganized for readability):

TL;DR

· Globalization has ended, and your financial assets have been liquidated.

· Non-traditional assets are your redemption.

· Bitcoin may reach a million dollars.

From the outbreak of World War II in 1939 to Trump's second election victory in 2024, we witnessed an unparalleled super bull market. This sustained rise shaped generations of passive investors who habitually believed that "the market can never go wrong" and "the market will only go up." However, I believe this feast is over, and many are about to face liquidation.

How Did We Get Here?

The super bull market from 1939 to 2024 was not accidental but was due to a series of structural changes that fundamentally reshaped the global economy, with the U.S. always at the center.

Rise to a Global Superpower After World War II

World War II propelled the U.S. from a middle power to the indisputable leader of the "free world." By 1945, the U.S. was manufacturing over half of the world's industrial products, controlling about a third of global exports, and holding roughly two-thirds of the world's gold reserves. This economic dominance laid the foundation for growth over the following decades.

Unlike the post-World War I isolationism, post-World War II America actively embraced its global leadership role, driving the establishment of the United Nations and implementing the Marshall Plan, injecting over $13 billion into Western Europe. This was not just aid—it created new markets for American products through investment in post-war nations, while solidifying its cultural and economic dominance.

Labor Force Expansion: Women and Minority Participation

During World War II, approximately 6.7 million women entered the labor force, leading to a nearly 50% growth in the female labor force participation rate within a few short years. Although many women left the workforce after the war, this large-scale mobilization permanently changed societal views on women's employment.

By 1950, a significant trend of married women's widespread employment became more apparent, with most age groups of women experiencing an unprecedented 10-percentage-point increase in labor force participation rates. This was not just a wartime exception but a starting point for a fundamental shift in the American economic model. Policies such as the "marriage bar" (which banned married women from working) were abolished, part-time work increased, household labor underwent technological innovation, and higher levels of education all contributed to women transitioning from temporary laborers to long-term participants in the economic system.

Similar trends also occurred within minority communities, gradually providing them with more economic opportunities. This labor force expansion effectively boosted America's production capacity and supported decades of economic growth.

Cold War Victory and the Wave of Globalization

The Cold War shaped the political and economic role of the United States in the post-World War II era. By 1989, the U.S. had formed military alliances with 50 countries and stationed 1.5 million troops in 117 countries globally. This was not just for military security but also to establish American economic influence on a global scale.

After the dissolution of the Soviet Union in 1991, the United States emerged as the world's sole superpower, entering an era that many considered a unipolar world. This was not only an ideological victory but also the opening up of global markets, allowing the U.S. to dominate the global trade landscape.

From the 1990s to the early 21st century, American companies aggressively expanded into emerging markets. This was not a natural evolution but rather the result of long-term policy choices. For example, in countries where the CIA intervened during the Cold War, the U.S.'s imports increased significantly, especially in industries where the U.S. did not have a clear competitive advantage.

The triumph of Western capitalism over Eastern communism was not solely based on military or ideological superiority. The Western liberal democratic system proved to be more adaptable, being able to effectively adjust its economic structure even after the 1973 oil crisis. The "Volcker Shock" of 1979 reshaped America's global financial dominance, turning the global capital markets into a new engine of growth for the U.S. in the post-industrial era.

These structural shifts — the rise to superpower status after World War II, the entry of women and minorities into the workforce, and the victory in the Cold War — have collectively driven this unprecedented financial asset super bull market. However, the core issue is: these shifts were all one-time events and cannot be repeated. You can't bring women back into the workforce, you can't defeat the Soviet Union again. And now, both parties are pushing for deglobalization, and we are witnessing the last support of this ultra-long cycle of growth being withdrawn.

What Will Happen Next?

I like Tom; he is my TradFi sentiment indicator in the Crypto world.

However, unfortunately, everyone is praying for the market to return to historical normalcy. The market consensus is: things will get worse, then the central banks will flood liquidity again, and we can continue to make money... But the reality is: these people are heading to the slaughterhouse.

The bull market of nearly a century was built on a series of events that cannot be repeated (bull market cannot continue), and some of these factors are even reversing.

· Women will not re-enter the workforce on a large scale: In fact, as Musk and the pro-natalist elite drive efforts to increase the birth rate, women's labor force participation rates may decline.

· Minorities will not be absorbed into the workforce on a large scale again: In fact, the Democratic Party's position on immigration policy is almost as tough as the Republican Party's, creating a bipartisan consensus on this issue.

· Interest rates will not fall again: In fact, every elected leader is acutely aware that inflation is the biggest threat to their re-election. Therefore, governments worldwide will strive to avoid rate cuts and reignite inflation.

· We will not further globalize: In fact, Trump is pushing in the complete opposite direction. Additionally, I expect the Democratic Party to replicate this policy in the next election (remember, much of Biden's policies directly copied Trump's first-term policies).

· We will not win another world war: In fact, it seems we might even lose the next one. Either way, I don't want to verify this speculation.

My view is simple: all the global macro trends that have driven the stock market up over the past century are now reversing. How do you think the market will fare?

Goblin Town

When an empire is in decline, times can be really tough - just ask Japan. If you bought at the historical peak of the Nikkei 225 index in 1989 and held until now, 36 years have passed, and your return is approximately -5%. This is the typical "buy and hold, endure the pain" scenario. I believe we are walking down the same path.

Even worse, you should be prepared for capital controls and financial repression policies. Just because the market isn't going up doesn't mean the government will accept reality. When traditional monetary policy fails, the government will turn to more direct financial control measures.

Upcoming Capital Controls

Financial Repression refers to giving savers a return lower than the inflation rate so that banks can provide cheap loans to businesses and governments and reduce debt repayment pressure. This strategy is particularly effective in government currency debt resolution. In 1973, economists at Stanford University first used this term to criticize policies in emerging markets that were hindering economic growth, but today, these strategies are increasingly appearing in developed economies such as the United States.

It may sound like a joke, but you should seriously think about why the Monero candlestick chart looks so perfect right now.

As the U.S. debt burden surpasses 120% of GDP, the likelihood of repaying debt through traditional means is diminishing. The "playbook" of financial repression has already begun to be implemented or tested, including:

· Direct or indirect government debt and deposit rate restrictions

· Government control of financial institutions and the establishment of competitive barriers

· High reserve requirements

· Creating a closed domestic debt market, forcing institutions to purchase government bonds

· Capital controls to restrict cross-border asset flows

This is not a theoretical assumption but a real-world case. Since 2010, the U.S. federal funds rate has been below the inflation rate for over 80% of the time, effectively forcibly transferring savers' wealth to borrowers (including the government).

Your Retirement Account: The Government's Next Target

If the government cannot rely on printing money to purchase bonds, lower interest rates to avoid a debt crisis, they will set their sights on your retirement account. I can fully imagine a future where tax-advantaged accounts like a 401(k) will be increasingly mandated to allocate more and more towards "safe and secure" government bonds. The government won't need to print more money; they'll just directly expropriate existing funds in the system.

This is exactly the script we've seen play out over the past few years:

· Asset Freezing: In April 2024, Biden signed a law authorizing the government to seize Russia's reserves in the U.S., setting a precedent for the government to freeze foreign reserves at any time. In the future, such actions may not be exclusive to geopolitical adversaries.

· Canadian Freedom Convoy Protest Event: The government froze about 280 bank accounts without court approval. Financial officials admitted that this was not only to cut off the flow of funds but also to "deter" protesters and ensure they "make the decision to leave." When asked how the account freezes affected innocent families, the government's response was: "They just need to leave."

Gold Confiscation and Surveillance

It's no surprise, the U.S.'s history is rife with similar actions:

In 1933, Roosevelt (FDR) issued Executive Order 6102, mandating citizens to turn in their gold under threat of imprisonment. Despite limited enforcement, the Supreme Court upheld the government's authority for gold confiscation. This was not a "voluntary purchase program" but a "mandatory wealth expropriation," just dressed up as "fair market value" transactions.

The government's surveillance capabilities rapidly expanded following the 9/11 attacks. The FISA Amendments Act gave the NSA nearly unfettered power to monitor international communications of American citizens. The Patriot Act allowed the government to collect the phone records of all Americans daily. Section 215 even permitted the government to collect your reading records, study materials, purchase history, medical records, and personal financial information without any suspicion.

The question is not whether "financial repression is coming" but rather "how severe it will be." As the pressures of deglobalization on the economy intensify, government control of capital will only become more direct and harsh.

Gold & Bitcoin

The monthly gold chart since 1970 is currently the world's strongest candlestick chart.

Based on the process of elimination, the most suitable financial asset to buy has become quite clear — you need an asset that is uncorrelated with the market, hard to confiscate by governments, and not under the control of Western governments. I can think of two, one of which has increased its market value by $6 trillion in the past 12 months. This is the most obvious bull market signal.

Global Gold Reserve Race

Countries such as China, Russia, and India are rapidly increasing their gold reserves in response to the changing global economic landscape:

· China: Increased gold holdings by 5 tons in January 2025, with net purchases for three consecutive months, reaching a total holding of 2,285 tons.

· Russia: Controls 2,335.85 tons of gold, becoming the world's fifth-largest gold reserve holder.

· India: Ranks eighth globally, holding 853.63 tons and continuing to increase its reserves.

This is not arbitrary behavior but strategic positioning. After the Group of Seven froze Russia's forex reserves, central banks worldwide took note. A survey of 57 central banks showed that 96% of respondents view gold's reputation as a safe-haven asset as a motive to continue investing. When dollar-denominated assets can be nullified by a single freeze, physical gold held within the country becomes highly attractive.

In just 2024, Turkey increased its gold reserves by 74.79 tons, a growth of 13.85%. Poland saw a rise of 89.54 tons in its gold reserves, nearly a 25% increase. Even small countries like Uzbekistan added 8 tons of gold in January 2025, bringing their gold holdings to 391 tons, which represent 82% of their forex reserves. This is not coincidental but a concerted effort aimed at escaping a potentially weaponized financial system.

Nations trust gold the most as they have established systems to use it for reserves and trade settlements. The total gold holdings of BRICS central banks represent over 20% of the global central bank gold holdings. As the Chairman of the National Bank of Kazakhstan stated in January 2025, they are transitioning to a "currency-neutral gold purchase" in order to increase international reserves and "shield the economy from external shocks."

Bitcoin

This era dominated by gold may continue for several months or even years, but eventually, its limitations will become apparent. Many small and medium-sized countries lack the banking infrastructure and navy to manage the global logistics of gold, making them potentially the earliest adopters of Bitcoin as a replacement for gold.

· El Salvador: In 2021, it became the first country to adopt Bitcoin as a legal tender. By 2025, its Bitcoin reserve had grown to over $550 million.

· Bhutan: Using hydropower for mining, its Bitcoin reserve has exceeded $1 billion, accounting for one-third of the country's GDP.

As the world becomes more chaotic, countries are less likely to trust their gold to allies. The risk of confiscation is too great, as evidenced by Venezuela's failed attempt to repatriate gold from the Bank of England. For smaller nations, Bitcoin offers a compelling alternative—it can be stored without a physical vault, transferred without ships, and secured without an army.

This transitional period will propel us into the next stage of Bitcoin adoption, but you must remain patient. The world will not change overnight, and neither will the monetary system. By 2025, we have already seen the beginning of this shift, with countries like Argentina, Nigeria, and Vietnam seeing increased Bitcoin adoption as people seek protection against inflation and financial instability.

The path forward is clear: first gold, then Bitcoin. As more countries realize the limitations of physical gold in an increasingly digital and fragmented world, the proposal of Bitcoin as digital gold becomes more enticing. The question is not whether this shift will happen, but when—and which countries will lead the way.

A $1 million Bitcoin is on the horizon, but you must remain patient. Prepare yourself for a severe bear market first.

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