Current Macro Position
As of March 2025, the US and every major G7 economy plus China are in the late stages of their Big Debt Cycles. Debt/revenue ratios are at or near post-WWII highs; central banks are net buyers of sovereign debt at scale (MP3); no major sovereign bond market functions as a true safe haven. a-00271
Bottom Line (March 2025)
“By my measures the US and most major countries (the other G7 countries and China) are overindebted, in the late stages of their Big Debt Cycles, and have to frequently rely on Monetary Policy 3 (i.e., big fiscal deficits that are funded by central banks buying the debt). As a result, the probability of an unwanted major restructuring/monetization is significant.” — a-00271
Five-Force Status
- Debt/Money: Late-stage globally. US debt/revenue at 583%, G7 all MP3-dependent.
- Internal Order: High political polarization in US and Europe. Post-WWII institutional order strained.
- International Order: US-China conflict intensifying; multilateralism declining.
- Acts of Nature: Climate/pandemic risks rising, poorly resourced to address.
- Technology: AI is the most powerful productivity force in history — the primary upside wild card. a-00124
US Risk Dashboard (March 2025)
| Indicator | Value | Risk Level |
|---|---|---|
| Debt / Revenue | 583% | Very High |
| Debt / Revenue (2035 projected) | 648% | Very High |
| Long-term risk gauge | 2.4z | Near WWII high |
| Annual borrowing need | 39% of revenue | High |
| Rollover risk scenario | 239% of revenue | Extreme |
| Fed net worth | Negative | Yellow flag |
| Unbacked money / GDP | 71% | Elevated |
The Technology Wild Card
“While the trends of the first four forces appear to be worsening, the technology force has never, in the whole history of humanity, been more powerful than it is now and will be over the next few years.” — a-00124
AI-driven productivity raises g (growth) relative to r (interest rates), improving the debt sustainability equation without requiring restructuring. This is the scenario that extends the cycle rather than forcing a crisis.
Positioning Implication
“What I don’t know is much greater than what I do know, and as I write this in early March 2025, I am at a maximum point of uncertainty.” — a-00276
Tension
Maximum uncertainty → barbell positioning: short-duration safety assets (short bonds, gold) + high-optionality exposure (technology, productive real assets). The barbell underperforms if AI-driven growth extends the cycle cleanly. But the failure mode of a concentrated bet is catastrophic if fiscal crisis and monetization play out. Asymmetric downside favors the barbell. a-00276