September: What Might Go Right?

AI-driven productivity, coordinated debt management, dollar weakness and resilient real-asset collateral could produce a more favorable market outcome than investors currently price.

• The article argues that markets focus excessively on the risk of higher yields while overlooking a positive scenario in which stronger productivity and Treasury-Fed coordination improve debt sustainability; CBOE analysis suggests an AI-led productivity boom comparable to the 1950s or internet era could push debt-to-GDP well below 100%.
• GPU prices are presented as a test of the AI credit cycle: the A100, launched in May 2020, has remained near $5,000 since late 2025, while H100 and B200 prices have increased, implying that compute collateral is not undergoing the depreciation expected by skeptics.
• If financial repression emerges, the likely adjustment is weaker dollar performance and higher hedge ratios rather than widespread liquidation of U.S. assets; gold and bitcoin should benefit from rising money supply and constrained supply.
• Bonds may provide less reliable diversification when sovereign debt and currency debasement are sources of risk, supporting a strategic reassessment of real assets; Norway’s sovereign wealth fund says bond protection depends on the nature of the crisis.
• Historical precedent is offered from 1997-1998, when a single 25-basis-point Fed hike coincided with productivity gains, continued economic expansion and a fall in the 10-year Treasury yield from about 6.9% to below 4.5%; the article also highlights Shanghai crude above $110 per barrel as a sign of renewed Chinese demand.

Takeaway: Investors should monitor the positive tail from AI productivity, stable compute collateral, possible dollar weakness and Chinese oil demand, while recognizing that today’s fiscal conditions differ materially from the 1990s and that the article is an author’s view rather than official investment advice.