Gcn

@RayDalio It’s better to be described as “war world”

I have been asked by several people what I meant when I said “we are in a world war” in my most recent note. To be clear, I didn’t mean to convey that I expect a shooting war between the U.S. and China (or any of the great powers) anytime soon. What I meant is that we are in the phase of the Big Cycle when major powers are in military wars and that the various wars happening now are interrelated, hence we are in a “world war," with the sides lined up as I described and with the implications for each of the main players and the whole unfolding in relatively classic interrelated ways that I describe as a progression of the Big Cycle. For example, it is now widely believed that if the U.S. fails to open the Strait of Hormuz to have free shipping and to protect its Gulf Allies from attacks, countries all around the world (most importantly in Asia) will conclude that the U.S. might not be the strong ally and countervailing force to China that they thought it would be. which will lead some to tilt economically and geopolitically more toward China in a number of ways - e.g. to buy less U.S. debt (which is what happened to the British in the Suez Crisis, bringing about the ultimate end of their Empire) - and it could lead others to build up their military capabilities.  As I complete my nearly three-week trip in Asia, I can convey that what I am saying is based on a lot more than conjecture. The reason I do not expect a U.S.-China military war soon, but I do expect a lot of brinksmanship, is because both nations realize that such a war would be devastating and that it would be impossible to fully win over the other, at the same time as they won’t want to give much.  Also, each country believes in its own economic and political systems and that the outcomes of those systems will determine their relative powers. And both nations have critically important domestic issues to deal with.  Some people in leadership positions, especially in China, believe that the relative health, wealth, and power levels between countries is not as important as their own absolute health, wealth, and power levels, and that helping each other build these rather than tear them down is most important. For example, they believe that the world will be a dangerous place if the U.S. and China don't have AI cooperations and controls, and they are concerned that AI can be weaponized. Most countries know that most wars in history were won by one of the sides secretly developing new technologically advanced weapons and showing them to their opponents. So, I believe that both sides think that their wars will be non-military wars that will yield evolutionary changes in relative powers.  As for how the Chinese will fight, and how the world order related to it will evolve, it will probably look more like the type of war described in the “Art of War” (which I suggest you read if you haven't), and for how the new international world order will evolve, to the extent that it is influenced by the Chinese, it will evolve to be more like the tribute system (which I suggest you understand if you don’t) than the existing world order. At the same time, I expect that there will continue to be trade, capital, technology, cyber, and geopolitical influence wars between these great powers and that both will continue to have justifiable fears of being cut off from essential goods, services, and capital that will necessarily will greatly reduce imbalances and interdependencies as well as efficiencies in production and trade of goods, services, and capital. I also believe we will increasingly see these two powerful nations pressure each other because there is no other way to resolve disputes now that the rules-based multilateral world order has been replaced by a power-based, self-serving world order. Said differently, I expect that China will be very strong in its defense without being very aggressive in its offense.  That is not just for tactical reasons; it is also because China has strong cultural inclinations to be that way. I hope this is helpful in clarifying my thinking and as always I'd be happy to answer any other questions or hear your thoughts. Ray

@AndreasSteno Jpmorgan is bullish

Every single official and big institution is bearish. Typically a good counter-indicator

@carlworker a sign that America truly want to backdown soon

China, China, China. Desperate for a scapegoat to explain the US failure against Iran.

@gbrew24 US has less and lesser control on SoH and countries are negotiating with Iran on their own.

Seems fairly straightforward, but in case anyone thought otherwise: no, Iran will not be reopening the strait. And no, the US doesn't seem able (or even interested) in forcing it open. So long as it remains closed, oil prices will rise. reuters.com/world/middle-e…

@Rory_Johnston then when？

I still think Trump will TACO—because he *has* to TACO. Oil loss it too big, too politically untenable. While the damage is already extensive and recovery will already be a months-long ordeal, it can get so, so much worse and this is fundamentally a crisis of lost time. People will push back and say it isn't up to Trump anymore. But while there are two other major parties in this war, Trump remains the 1) most important, and 2) most movable by external pressures (like, say, oil prices), so it's gotta be him.

@SanderTordoir Thanks to America

Second China shock to Europe in full motion. Europes policy response is weak, fragmented and haphazard. Buckle up.

@BlockShaolin @KyleSamani Much better to use local model for privacy concerns

"Apple is building these chips for a world where your laptop runs a 70-billion-parameter model." om.co/2026/03/03/app…

@0xSero how about flash 3 on vibe coding?

I have been using Gemini-3.1-Pro for the last few days in Droid and my conclusion on it and Flash is very different than it use to be. I really disliked the 2.5-Pro variant because it was incapable in Cursor, the Gemini cli sucks as you all know and the models are unreliable outside of pure context crunching. I think there's too many issues around the service layer, including how you pay for it, and where you use it that has created a void around these models. There's many highly intelligent people daily driving Codex/Claude and they've shared enough about the model and where it shines/sucks that people tend to have better experiences. Gemini has been super consistent in Droid, it doesn't fall flat when calling tools as it does with most providers outside of Cursor. It's massive context is very useful for data crunching, as we know. Give it large datasets and let it build out plots and charts, recommend ways to refactor, etc.. The Flash version has been great as a Q&A model, it's very fast and works really well with summarize.sh as wall as in the Google search AI section. I think this model has tremendous potential to completely lead everything else. The writing style is the least cringe of any top lab. Very little negative contrasting "it's not x it's y", it uses more complex words often seems to produce very little em-dashes — I think this could be a staple.

@Mayhem4Markets where is japan?

Research from Goldman shows that rising oil prices hurt emerging market economies as a whole. While emerging markets typically depend more heavily on commodity exports compared to developed markets, they also use a greater share of commodities relative to their GDP. This makes them vulnerable to the indirect consequences of higher oil prices, such as slowed global economic growth. Noteworthy exceptions include Brazil and Russia.

@TaviCosta more figures for other metals?

For the first time in recorded history, global data show zero gold discoveries in two consecutive years. This has never occurred before. And this is not unique to gold. Major discoveries across most metals have fallen into the single digits, with no meaningful projects in the pipeline capable of materially altering the global supply curve. This is the real barometer of where we are in the mining cycle. Still early.

@RushDoshi products of iRobot are not competitive if you take look at any product show on tiktok

The death of iRobot (due to PRC dumping) and the transfer of its technology and user data to China is a canary in the coal mine. Do we want America to win the technologies of the future? Do we want American data to be protected? If so, now is the time to act.

@Brad_Setser Huijin didn’t buy stocks directly. It supports the market by buying index ETFs.

Interesting. China is explicitly acknowledging that its "national" team intervenes directly to support the local stock market. Perhaps in due time China will recognize that it also has a "national team" helping to manage its currency? 1/2

@taoray 加上最终目的地是美国的出口量不少，这次底气可能来自美国确实很难自己制造那么多消费品了

中国为什么能跟美国硬刚。原因一：中国对美直接贸易只有11%，美国对全球其它国家放软以后，转口贸易的窗口又大开。原因二：产业链转移需要数年时间，大量日用品日用品和资本品会立刻涨价，直接冲击美国民众，而中国采购的美国农产品是政府国企主导，打击的是美国农民。所造成的短期民意冲击力度不同。

@michaelxpettis @ForeignAffairs The Americans have to build their factories before imposing tariffs to the world.

In my latest piece for Foreign Affairs, I argue that the failure of the Smoot-Hawley tariffs of 1930 tell us nothing about how they would affect the US economy today. foreignaffairs.com/united-states/… via @ForeignAffairs

@Brad_Setser Why did the US not diversified away from China?

Really woud like to see those arguing that China has "diversified" away from the US b/c of all its exports to SE Asia (which are inputs into ASEAN's exports to the US that get around the tariffs) explain just how China runs a $2 trillion manufacturing surplus 1/2

@lidangzzz a4

@nasijia96 so beautiful

Моїм кращим рішенням в 2023 був зал👌🏻

山谷中撞見一隻正在游泳的貓頭鷹！《國家地理》雜誌 youtu.be/cDovr9Jo6S0 来自 @YouTube

@manyapan how to add you on wechat？

I became WeChat friends with a very nice Xi'an taxi driver with whom I discussed Europe and China and all sorts of things for an hour (in Chinese). He now wants to practice English but I don't think this is going to work out. 😂

@ddjvu 我微信炸号了，也不敢说啥了