“Invert. Always Invert.”

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NDX

RUT

Oil

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USD

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Management Consulting
Luke Gromen .0

“Invert. Always Invert.” – Charlie Munger

metals

They're probably going to buy more gold and drive gold prices higher. Gold's going to be the desired rebalancing metric. Bonds are going to continue collapsing in gold terms, but I think it's mostly going to happen vis-a-vis higher gold. Gold works either way and I think that's why gold is outperforming so much right now. Central banks (especially China) recycling surpluses into gold due to realpolitik, fiscal deficits, and as a hedge against both inflationary and deflationary tails. The 'paper vs. physical' bifurcation favors hard assets.

6 calls

+22

more right than wrong, with meaningful gains

11/14/2025 8:00:54 PM	long term sharp up	60 days later	+33.85%	+50.78%
10/24/2025 8:00:10 PM	long term sharp up	60 days later	+30.90%	+46.35%

yields

Argues the US moving too fast to rebuild industrial capacity would 'trigger inflation that blows up the bond market,' implying higher yields. Also discusses JGB yields rising 'uncomfortably fast' due to potential inflation from US orders and Chinese export controls, forcing yield curve control. The focus is on yield pressure from fiscal/monetary dynamics, not yields going down.

Luke Groman

The bond bear market is now beginning on a real basis, not a dollar basis. Look at bonds priced in gold - they have begun collapsing.

US debt-to-GDP is 120%, deficits are 6% of GDP, and true interest expense is over 100% of receipts. The bond bear market in dollar terms might be over technically, but in gold terms it's collapsing and likely to continue.
Luke Groman

Bonds will continue collapsing in gold terms, mostly via higher gold prices, not significantly lower bond prices (higher interest rates).
Luke Groman

China will likely recycle its trade surplus into buying more gold, driving gold prices higher, and stockpiling raw materials.

US questions around Belt and Road recycling mean if you don't have military control, you don't control the recycling. Gold becomes the desired rebalancing metric - a neutral settlement asset at the central bank reserve level.
Luke Groman

The US spent 40 years pursuing control of dollar printing as power, while China/Russia focused on making real things. The paper world and physical world are splitting.

The US is trying to reverse this mistake (e.g., Trump nationalizing/investing), but moving too fast triggers inflation that blows up the bond market, forcing yield curve control which crushes currencies vs. gold.
Luke Groman

You must invert everything - look at the other side of the ledger. The US can't go to war without Chinese factories.

If US uses weapons on Apple's factories in China, US stock market and California real estate crash. Russia already reacted with strikes on Kiev. Why didn't US air defense stop them? Invert.
Luke Groman

The Jacob Fuger portfolio (25% cash, gold, equities, productive real estate) protects against fat tails: hyperinflation and great depression-style deflation.

We're at the end of a 100-year debt cycle, 50-year monetary system, with accelerating great power competition and AI deflation. Trading as an average investor is dangerous.
Luke Groman

We could have a period of deflation because of AI, which is happening faster than people realize.

Shows up in jobs data. But you can't have sustained deflation in a debt-backed currency system - debt defaults shrink the currency's denominator, leading to high inflation then hyperinflation as people flee to assets not backed by debt.
Luke Groman

Gold works either way (inflation or deflation), which is why it's outperforming. Bitcoin still trades like a high-beta tech stock and could drop in AI-driven deflation before printing resumes.
Luke Groman

Felix Somary would say: either devalue currency, redistribute wealth to bottom 50% and commodity producers, or get world war/systemic collapse. Buy gold because leadership doesn't understand.
Luke Groman

Japan helping US with robotics/weapons could trigger Japanese inflation, making JGB yields rise uncomfortably fast, creating a debt crisis or forcing yield curve control.

Chinese export controls on dual-use goods to Japan (up to 40% of exports) could cause inflation. If US places huge orders, inflation takes off, JGB yields spike. Chinese are watching this weak spot in the bond market.
Luke Groman

In 2026, it's critically important to invert everything - look at the other side, the dogs that didn't bark - otherwise you'll get whipsawed.

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