A Few Predictions About U.S. Treasuries and SpaceX

# A Few Predictions About U.S. Treasuries and SpaceX

Predictions on U.S. Treasuries

Forecasting the future of U.S. Treasuries has always been an extremely sensitive topic. The deeper your understanding becomes, the more cautious you tend to be. Once politics enters the discussion, things become particularly difficult because too many interests are involved. When your conclusions begin to affect the interests of powerful players—especially major institutions and large capital holders—you simply cannot speak freely.

For that reason, many observations can only be shared after the market has already reached a broad consensus. Even then, some ideas are better left as “Easter eggs” for readers to think through on their own. The discussion in this article may ultimately concern your personal wealth, so after reading it, you should draw your own conclusions.

Disclaimer: This article does not constitute investment advice.

The unsustainability of U.S. debt has already become a widely accepted view, so there is little point debating it further. Likewise, it is broadly recognized that the current U.S. administration came into office with a debt restructuring framework—commonly referred to as the Mar-a-Lago Pact. That, too, is no longer a controversial point.

What Is the Mar-a-Lago Pact?

Put simply, the credibility of U.S. government debt can be reduced to a straightforward Debt-to-GDP equation. The objective is simple: increase the denominator (GDP) while reducing the numerator (debt), or ideally accomplish both at the same time.

There is no need to become distracted by the complicated explanations offered by many Wall Street analysts. Complexity often makes the underlying logic more difficult to recognize.

After all, the concept originated from an economic paper written by former White House economic adviser Stephen Miran. Anyone who has studied economics knows that economic papers are among the most difficult forms of academic writing—not because they are mathematically more complex than Einstein’s theory of relativity or quantum mechanics, but because physics can ultimately be validated through observation and experimentation. Economic theories, by contrast, face a far greater challenge in proving both their assumptions and their philosophical foundations.

Once you understand the Mar-a-Lago Pact, nearly every policy introduced after President Trump returned to office becomes much easier to interpret—including the conflict between the United States and Iran. Simply apply the same framework, and many seemingly unrelated events begin to fit together. There’s little value in following the daily headlines asking whether there will be war or peace.

More importantly, avoid falling into the trap of “market consensus.” Consensus often becomes the mechanism through which retail investors provide liquidity for others. I discussed this concept previously in Will Artificial Intelligence Cause Unemployment?. Readers who haven’t seen that article may find it worthwhile.

The real issue is that consensus itself cannot explain why U.S. debt has become unsustainable.

The statement that U.S. debt is unsustainable is not a consensus—it is an observable phenomenon.

The real consensus concerns something else entirely: **when** the imbalance will finally emerge.

I already have my own estimate regarding that timing, but it is not something I intend to publish. As another “Easter egg,” readers may wish to apply the consensus framework themselves. If your own reasoning leads you to the same conclusion, the exercise may prove valuable far beyond this article.

Ultimately, everything comes back to the debt restructuring formula:

**Reduce the numerator, increase the denominator, or accomplish both simultaneously.**

Predictions for SpaceX

How Much Is SpaceX Worth?

The reason for jumping directly to SpaceX’s valuation is simple: SpaceX represents a practical implementation of the very formula discussed above.

Today, SpaceX is valued at approximately **US$2 trillion**, making it the largest IPO in history. Such an offering naturally absorbs enormous amounts of U.S. dollar liquidity from global financial markets.

The interesting part is that before going public, SpaceX’s financial statements still showed approximately **US$5 billion in annual losses**.

Why would a company still operating at a loss proceed with an IPO?

One news report provides an important clue:

> “NVIDIA’s newly launched Vera central processing unit (CPU), designed specifically for AI agents, has already been adopted by OpenAI, Anthropic, and Elon Musk’s SpaceX.”
>
> (Reprinted from Lianhe Zaobao: https://www.zaobao.com.sg/news/china/story20260601-9137011)

In other words, the capital raised by SpaceX ultimately flows throughout the AI ecosystem. It supports hardware manufacturers such as NVIDIA while simultaneously funding AI companies like Anthropic, the parent company behind Claude.

At the same time, SpaceX is targeting one of humanity’s most ambitious long-term goals: harvesting Helium-3 from the Moon as fuel for next-generation nuclear fusion.

AI’s demand for electricity has grown dramatically. Conventional nuclear power plants remain highly efficient, yet even a very small accident can lead to catastrophic consequences. Chernobyl and Fukushima remain lasting reminders. Are today’s nuclear power plants safe? Certainly—perhaps 99% safe.

However, Helium-3 fusion offers several theoretical advantages. It promises higher energy efficiency, produces virtually no radioactive waste, and results in effectively zero environmental pollution. Conventional nuclear plants still have no ideal solution for disposing of nuclear waste beyond long-term underground storage.

If realized, this technology would not only provide the energy required to sustain AI, but could also elevate human civilization to an entirely new stage.

—Of course, at the moment, this remains an exceptionally ambitious vision.

Because SpaceX occupies both the upstream and downstream segments of the AI ecosystem, its valuation also serves the broader objective of expanding the GDP denominator alongside the growth of AI. At the same time, the overall narrative—the “grand vision,” if you will—appears almost flawless. Given the United States’ position in the global financial system, this narrative has the potential to attract an enormous amount of global capital while accelerating the K-shaped distribution among retail investors.

What Is the K-Shaped Pattern for Retail Investors?

It essentially divides retail investors into two extremes:

1. Allocate capital to stocks such as NVIDIA. The expected return may be around 4.53%, while the 10-year U.S. Treasury yields only about 4.3%. Meanwhile, NVIDIA shares still offer potential capital appreciation, whereas U.S. Treasuries are widely expected to lose value over time (according to the prevailing consensus). And if AI eventually replaces your job, perhaps the best strategy is simply to join it by owning the companies benefiting from its growth.

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2. Assume U.S. Treasuries will eventually become unstable. Keep your money in the bank, hold cash, avoid making major investments, and postpone buying a house. If unemployment arrives, at least you’ll have savings to rely on.

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As this K-shaped divergence accelerates, many retail investors who choose the second path may simply feel they failed to understand AI early enough and missed the opportunity. SpaceX then becomes the vehicle they rush into in an attempt to catch up.

Those who choose the first path often have little cash remaining. As a result, they may begin using leverage to continue purchasing SpaceX shares.

**Now that’s where the real risk begins.** (I’ll leave this as another Easter egg for readers to analyze.)

Institutions themselves largely fall into the first category. After all, institutions are run by people as well. Naturally, they evaluate risk more carefully and may not necessarily rely on leverage. However, they frequently reallocate capital from existing positions—robbing Peter to pay Paul—in order to concentrate their investments in SpaceX.

From the perspective of the U.S. government, however, the equation looks very different.

Beyond expanding GDP, ownership of SpaceX shares potentially generates capital gains, dividend income, and tax revenue from stock transactions.

Compared with continuously issuing additional debt, that appears to be a far more attractive proposition.

This is rarely discussed publicly, yet it is one of the core reasons why the SpaceX IPO has absorbed such an extraordinary amount of market liquidity, as well as one of the fundamental reasons why a company still reporting losses was nevertheless able to move so quickly toward a historic public offering.

At this point, one might think the analysis is complete because the outlook for SpaceX appears straightforward.

The narrative seems magnificent. The market consensus appears strong. The future looks incredibly promising.

And yet, this brings us back once again to the theory of **consensus**.

If SpaceX already carries a valuation exceeding **US$2 trillion**, then by definition it has already become one of the strongest consensus trades in the market.

Doesn’t that directly contradict the theory discussed earlier?

I would very much like to continue writing from here.

After giving it some thought, however, I’d rather leave this as another Easter egg for readers to work through on their own.

First, let me state once again:

This article does not express either a bullish or bearish opinion on SpaceX.

How these ideas should ultimately be interpreted is entirely up to each reader.

This is where I have chosen to stop.

The remainder of the analysis is something I cannot continue writing—not because there is nothing more to say, but because I simply do not have the courage to continue.

Perhaps that makes me a coward.

Publishing the rest might turn me into a martyr.

Saying less at least leaves open the possibility of having a quiet conversation over tea.

Provided, of course, that the events being discussed have not yet taken place.