2025 State of the Union

~~James West, Midas Letter

It is said that it is a common perception among older people is that they are living in the “end times”. Martin Luther in the 14th century, Issac Newton in the 1700’s, Ronald Regan and a long list of others dating back thousands of years all believed the end was nigh.

And yet, here we all are. Another year, another set of hurdles to leap, opportunities to explore, relationships to maintain or end or start. Funerals to go to. Weddings. Parties. Concerts. Vacations. A full list of life’s events that fill the days until the days come to an end. Every day, some shuffle off this mortal coil, while others begin.

What is remarkable to me is that we spend so much of our lives in vain pursuits of that which ultimately we acknowledge is meaningless, often ignoring the most meaningful and ultimately valuable experiences, or taking them for granted.

The best passage of a life, that passes in the blink of an eye, is to arrive at the point where you can put yourself in the midst of all that you truly value, and that is valuable from the perspective of your physical, emotional, financial, spiritual and mental well being without having to compromise the important relationships and associations that make life truly interesting, and fill it with meaning.

Love, after all, is the only thing that you take with you into the next realm when you die. You leave it behind, and it lingers in the air among those who you knew and who knew and loved you. So one could argue that love is the only worthwhile pursuit.

All that aside, we are unfortunately cursed with the day-to-day requirement to make money, and thus, as somebody who only seems to care about money when I run out, I am rolling up my sleeves for yet another turn at the trough, elbowing my way into the fray to attract sufficient wealth that I can return to my bucolic and pastoral country existence where I am surrounded by all that matters.

So, now we look around the world in 2025, consider some of the news tools on the scene, like AI and crypto, and ponder the best use of energy to achieve the required income.

Where will the money flow?

That is what we want to know.

Obviously, the opportunities inherent in the explosion of AI and all the computing resources that implies – electricity, chips, water, real estate, talent – stands out as a worthwhile segment to consider.

xAI, Open AI, Anthropic (now essentially Amazon AI). All present opportunities to deploy capital and harvest a profit at some point in the future.

As a service provider to the masses of publicly traded and funded companies out there, I gravitate toward where the capital is gravitating, because thats where budgets for content production and distribution are being spent.

Following the money. Like Cariboo following the grass.

From an investment perspective, it’s confusing as ever to get a sense of which direction the market is going to go. With the wild card of Donald Trump bringing the highest possible degree of unpredictability into the mix, a forecast is impossible.

So, as usual, we can look at what we know, acknowledge what we don’t know, and consider that against what has the highest potential to occur.

~~James West, Midas Letter

So, now we look around the world in 2025, consider some of the news tools on the scene, like AI and crypto, and ponder the best use of energy to achieve the required income.

Where will the money flow?

That is what we want to know.

xAI, Open AI, Anthropic (now essentially Amazon AI). All present opportunities to deploy capital and harvest a profit at some point in the future.

Following the money. Like Cariboo following the grass.

So, as usual, we can look at what we know, acknowledge what we don’t know, and consider that against what has the highest potential to occur.

~~James West, Midas Letter

Trump and Powell are no buddies. They’ve been fighting over rate cuts all year—Trump demanding more, Powell holding back. Even after cutting twice, Trump called him “grossly incompetent” and said he’d “love to fire” him. The tension has been building for months.

And Trump now seems ready to install someone who shares his appetite for lower rates and easier money.

Trump has been dropping hints for weeks—saying on November 18, “I think I already know my choice,” and then doubling down last Sunday aboard Air Force One with, “I know who I am going to pick… we’ll be announcing it.”

He was referring to one Kevin Hassett, who—according to a recent Bloomberg report—has emerged as the overwhelming favorite to become the next Fed chair.

Here we sit — investors, analysts, retirees, accountants, even a few masochistic economists — gathered beneath the leafless monetary tree, rehearsing our lines as we wait for Jerome Powell to step onstage and tell us what the future means.

Spoiler: he can’t. But that does not stop us from waiting.

Tomorrow, he is expected to deliver the December rate cut. Polymarket odds sit at 96% for a dainty 25-point cut.

Trump, Navarro and Lutnick pine for 50 points.

And somewhere in the wings smiles Kevin Hassett — at 74% odds this morning, the presumed Powell successor — watching the last few snowflakes fall before his cue arrives.

With U.S. stocks trading at about 24 times forward earnings, plans for capital growth have to go off without a hitch. Given the billions of dollars in commitments by AI companies, financing to the hilt on debt, the most realistic outcome is a hitch.

On a valuation basis, global markets will likely show better returns than U.S. stocks in 2026.

America leads the world in innovation. A U.S. tech stock will naturally fetch a higher price than, say, a German brewery. But value matters, too.

As copper flowed into the United States, LME inventories thinned and backwardation steepened. Higher U.S. pricing, tariff protection, and lower political risk made American warehouses the most attractive destination for metal. Each new shipment strengthened the spread.

The arbitrage, once triggered, became self-reinforcing. Traders were not participating in theory; they were responding to the physical incentives in front of them.

The United States had quietly become the marginal buyer of the world’s most important industrial metal. China, long the gravitational center of global copper demand, found itself on the outside.

And Trump now seems ready to install someone who shares his appetite for lower rates and easier money.

He was referring to one Kevin Hassett, who—according to a recent Bloomberg report—has emerged as the overwhelming favorite to become the next Fed chair.

Spoiler: he can’t. But that does not stop us from waiting.

Tomorrow, he is expected to deliver the December rate cut. Polymarket odds sit at 96% for a dainty 25-point cut.

Trump, Navarro and Lutnick pine for 50 points.

And somewhere in the wings smiles Kevin Hassett — at 74% odds this morning, the presumed Powell successor — watching the last few snowflakes fall before his cue arrives.

On a valuation basis, global markets will likely show better returns than U.S. stocks in 2026.

America leads the world in innovation. A U.S. tech stock will naturally fetch a higher price than, say, a German brewery. But value matters, too.

The arbitrage, once triggered, became self-reinforcing. Traders were not participating in theory; they were responding to the physical incentives in front of them.

The United States had quietly become the marginal buyer of the world’s most important industrial metal. China, long the gravitational center of global copper demand, found itself on the outside.