Cem Karsan: The Big Print Is Coming and the Government Will Buy Stocks

— U.S. government will likely begin buying stocks directly within three to six months as part of a sovereign wealth fund strategy to manage markets, support the dollar, and compete with China.

— The S&P 500 is structurally fragile: 60% of stocks are in bear markets even at index highs, the top 6% hold enough value to reach 2023 levels if the bottom 94% went to zero, and earnings growth is largely circular (driven by market gains, not operational fundamentals).

— A 25–35% market crash is coming—probably post-midterms—before the government deploys its QE and stock-buying apparatus; this will be a sharp V-shaped decline lasting one to three months, not a prolonged bear market.

— The U.S. has strategically closed the Strait of Hormuz and controls global oil flow to underpin dollar hegemony and block China's alternative currency arrangements.

— Bitcoin benefits from coming debasement (printing and negative real rates) but faces long-term headwinds because governments prioritize control over currencies and will not allow Bitcoin to replace fiat without regulatory capture.

— A two-month rally in April–May created $50 trillion in new collateral—5× the scale of all COVID QE ($10 trillion) and fiscal stimulus ($10 trillion) combined.

— All earnings growth in 2024 is attributable to market valuation increases, not operational cash flow; 90% of the S&P has negative earnings growth and declining free cash flow.

— Yields on the long end of the curve are rising due to debt refinancing waves (2021 debt maturing 2026–2027) and structural inflation from protectionism and supply-chain shifts, not foreign selling alone.

— Gold has corrected recently; calls (options) on gold are attractive hedges. Gold will be volatile but will be the best-performing asset over the next 12–15 years during debasement.

— A market crash of 25–35% is the base case, though downside could extend to 40%; recovery will be swift (V-shaped) once government facilities are deployed, likely within one to three months.

— Position for asymmetry: buy out-of-the-money equity puts (especially on concentrated AI names like those in the Magnificent Seven) to define downside while maintaining convex upside; avoid being overextended into year-end.

— Hold cash, but not in dollars: consider commodity-backed currencies (Swiss franc, Norwegian krone, Australian dollar, Canadian dollar) and gold/precious metals to hedge currency debasement; Bitcoin is a debasement hedge but faces regulatory capture risk after a crash.

— Identify and buy structural inflation beneficiaries (negative working capital businesses, real estate brokers, financial intermediaries, telecom, railroads, asset managers) post-crash; these 25% of the S&P will outperform over the next five to ten years as the government monetizes debt and inflation accelerates.