2025-04-16XQuote

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Moreover, we are moving from an era of logarithmic tech innovations (initial growth spurt that fizzles out over time) to an era of exponential growth where growth accelerates over time for decades to come. In a world of exponential growth first mover advantages (US ahead) compound over time and imply that second movers (China) never fully catch up to the first mover US even if China will do quite well too.

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To paraphrase Mark Twain: the reports of the US Dollar demise/death are vastly exaggerated as Tech Trumps Tariffs! While a slew of recent articles - in the NYT, FT, FA and now the Economist - warn about the risks of de-dollarization - driven from capital flight from the US assets and the dollar - given the totally reckless trade policies of Trump, these analyses fail to recognize that over time equity capital will continue to flock from Europe and the whole rest of the world to the US to finance the biggest capex boom in recent US history as AI and other technologies/industries of the future will boom in the US. Thus, the net foreign liabilities of US - NIIP - will become more sustainable as they will be increasingly driven by equity flows (both portfolio and FDI). The short term market noise of the Trump tariffs doesn’t matter as much over time as, in spite of Trump’s Tariff Tantrums, today and over time Tech Trumps Tariffs! Tech Trumps Trump Too over time. US potential growth will rise well above 3% and possibly as high as 4% by 2030 regardless of US trade policies given the 12 technologies of the future where the US is dominant in at least 10 of them. Thus , the AI driven capex of the last two years will continue and even accelerate apart from the current year noise. The 12 technologies/industries of the future are : AI/Gen AI, ML, Causal ML leading to AGI by 2030; robotics and automation including massive emergence of humanoid robots; bio-med research and synthetic biology; quantum computing and its merger with AI; space exploration and exploitation; AI-led semi-autonomous weapon systems for a new era of warfare and related defense tech; Ag-tech; fusion energy that more than renewable will help to resolve climate change; green tech, mobility revolution and new frontiers of geo-engineering; fin-tech with most of it not based on DLT; new material science leading to new materials and types of manufacturing; cybersecurity and new forms of cryptography. US is and will remain #1 in most of them with China being a modest #2; while Europe and the rest of the world are way way behind by a 10X order of magnitude as the chart below shows! So remember, over time: Tech Trumps Tariffs! Tech Trumps Trump Too! Dollar Domination Defies Dumb Decisions by Donald!
Nouriel ↗