Epic Meltdown! Global $60 Trillion in Wealth Lining Up to Exit—Will Your Assets Be the Next Generation's "Bag Holder"?

The Global Uncertainty Index compiled by the International Monetary Fund has recently surged to its highest level since its inception in 2008. Policy and trade sectors lack clear direction and coordination, market sentiment has significantly worsened since the previous peak, and this trend is likely to intensify. The fragile old alliances in the Middle East are caught up in conflicts, while the rapid proliferation of index technologies like artificial intelligence confuses both experts and the public: productivity-driven deflation versus credit-driven inflation in the monetary system—how can they coexist?

The private credit market is undergoing an epic collapse, having previously supported this fragile capital supply chain by distorting capital prices and sacrificing liquidity. Several events have occurred in the past week: Iran appointed a new Supreme Leader; U.S. crude oil prices surged nearly 40% in a week—the largest increase since 1983; an AI company sued the U.S. Department of Defense over supply chain risks; BlackRock set a 5% redemption cap on its $25 billion direct lending fund, while investor redemption demands nearly doubled that cap.

No one can precisely predict the trajectory of these complex issues because they are unprecedented. At this moment, we need to step back and focus on the core: not entangling ourselves in the unknown, but anchoring ourselves to facts you are absolutely certain of—facts that are direct causes of the events above. As Sherlock Holmes said, eliminate all impossibilities; whatever remains, however improbable, must be the truth.

In the next decade, I believe there are three truths with 100% certainty. The only uncertainty is the timing and severity, but their catalysts are destined to appear within our lifetime. Anchoring these indisputable facts can turn a general sense of helplessness into firm confidence in facing the future.

First certainty: the global population pyramid is reversing, and the asset classes built upon it will collapse accordingly. In 2019, the World Economic Forum declared that the number of people over 65 exceeded those under 5 for the first time. Seven years later, after a global pandemic, societies worldwide are feeling the pressure and consequences of this trend—and this is only the beginning.

Global fertility rates are dangerously approaching below replacement levels, already a reality in developed markets. The decline in birth rates combined with aging populations will create the highest dependency ratios in human history. The elderly in developed countries will eventually need to liquidate assets to finance their increasingly long lives. This results in a massive intergenerational wealth transfer: an entire generation’s accumulated financial assets must exit the capital system en masse.

The scale of this capital is staggering. The U.S. stock market’s total market cap is about $69 trillion, with the Baby Boomer generation holding over $40 trillion. U.S. residential real estate adds another $50 trillion, and although Boomers and earlier generations make up less than 20% of the population, they hold over $20–25 trillion of assets. Nearly $60–70 trillion of wealth must exit the capital asset system, while the income and disposable wealth of the next generation are shrinking.

When this aging cohort is finally forced to sell, long-term asset deflation becomes almost inevitable. The fundamental logic of the stock market reflects demographic trends. The collapse of private credit markets valued at $2 trillion is a vivid example—like a ticking time bomb hidden within pension funds and insurance companies. Once the younger generation realizes they are becoming the “liquidity exit” for their elders, they will choose to stay out of the market. No one will voluntarily buy assets that are in long-term decline.

This also explains policies promoting children’s investment accounts and the U.S. push for stock tokenization—to make it easier for foreign capital to acquire U.S. stocks. These measures are attempts to delay the inevitable: when the Baby Boomer generation begins non-elastic selling, unless forced by mandates, foreign capital or machines to step in, there will be no buyers.

The real estate sector will see even more pronounced effects. Generations have accumulated fixed supply assets over decades, using duration effects to disconnect housing prices from local economic productivity. For most residential and commercial properties, “affordability” has become a falsehood. Young people whose wages cannot keep pace with rising home prices will not buy at current prices. The math is brutal and unavoidable: a significant deflation in real estate prices is certain.

Fiscal pressures will accelerate this process. The shift of real estate from an investment asset to a consumption good, combined with rising property taxes, will increasingly tie housing prices to government spending inflation. Increasing property taxes in New York City is not an isolated case but a sign of the coming “inertia capital asset tax” era, especially in cities where wealth inequality makes the current situation unsustainable.

This leads to the second certainty: wealth inequality will reach a breaking point, and wealth taxes will become the unpredictable answer. Beyond the vertical demographic collapse, there is a more concerning horizontal fissure—income and wealth inequality. The top 10% of the global population owns 76% of global wealth, and this is not just between nations but within every country, accelerating.

The issue is not only income but wealth. Throughout human history, such a high proportion of wealth has never been concentrated in the top 1%. In the U.S., the top 1% holds nearly one-third of the total net wealth. Wealth is “static money”: when highly concentrated, it ceases to circulate, choking the velocity of money necessary for economic activity.

In a context of stagnant productivity growth, despite ongoing controversy, wealth taxes will inevitably become the result of fiscal nihilism. The only feasible way to rebalance is to tax wealth itself. Wealth taxes can be viewed as a mirror of social security—both are levies on unrealized value, just in different directions.

Wealth taxes are already underway. The Dutch House of Representatives passed a bill to impose a 36% annual tax on unrealized gains from stocks, bonds, and cryptocurrencies. It is likely to pass the Senate. Morality, mathematical rigor, or legal enforceability no longer matter; the core question is: what will happen when other countries follow suit?

In the U.S., support for wealth taxes is nearly universal among all demographic groups except college-educated men. Capital account liberalization is not an inherent feature; when nations choose, capital can be restricted at any time. Historically, taxing a single country’s capital leads to capital flight, but as global fiscal pressures mount, collective arrangements will become inevitable.

The global mobility of capital will be revoked, replaced by a “Schrödinger’s visa.” Local restrictions on capital will only increase demand for “external funds” that can bypass compliance layers. Welcome to the era of price and species economies supported by hard currencies.

According to David Hume’s 1752 framework, modern investors have long viewed “external funds” as sovereign assets like gold or $BTC. But four centuries later, a new class of “external funds” is emerging—redefining comparative advantage: concentrated productive AI infrastructure—computing power, data, and model rules. Capital will flow toward AI hegemony. This leads to the third certainty.

The third certainty: artificial intelligence will destroy the relative value of labor and redefine capital’s value in a purpose-driven economy. Karl Marx once described capital as “dead labor,” surviving by siphoning active labor. But his key mistake was believing capital itself lacked vitality. With the rise of credit and AI, we are entering a new paradigm: “vampire” capital that is fully autonomous, capable of bypassing human labor and profiting solely from energy consumption.

The trend of increasing capital income share and decreasing labor income share has been brewing for over a decade. AI will push this past an irreversible inflection point. Since 1980, the share of labor income in U.S. GDP has fallen from about 65% to below 55%. Goldman Sachs estimates that generative AI could automate 300 million full-time jobs. AI is a capital-intensive, labor-disrupting technology.

As labor costs and computing costs converge, a new “capital war” will erupt globally. In this world, capital will dominate; asset ownership will be the only barrier between dignity and the lower classes. The IMF predicts that in an AI-driven economy, the tax base will shift from labor income to corporate profits and capital gains.

Capital itself will be redefined. AI industries depend on another more precious element than energy: data. Specifically, your daily data footprints provide the context for models’ reasoning. The world is moving toward a new paradigm: human thoughts, behaviors, and intentions will become highly valuable. When intent itself becomes capital, a fundamentally different economic order will emerge.

Smart agent systems are already equipped with cryptocurrency wallets, autonomously paying for computing power and data. In a world where value flows seamlessly between agents, this is an inevitable reality. Historically, financial assets have been within clear regulatory boundaries. But as assets evolve into “active attributes”—your data footprints as collateral, intent as monetizable output—AI systems will blur regulatory boundaries from all directions.

When no single entity can define clear boundaries for “financial assets,” the definition of money will become the most contentious geopolitical issue of this century. Welcome to the era of intelligent currencies.

Population collapse, wealth inequality, and AI-driven labor substitution are three forces converging logically. The demographic pyramid is collapsing vertically, bottom wealth levels are tearing apart, and a technology revolution favoring capital is amplifying both. Many investors attempt partial solutions to local problems.

The most compelling counter is technological optimism: AI-driven productivity growth will rapidly expand the wealth pie enough to offset population decline. Historically, the speed and fairness of productivity gains have never been fast enough to prevent inequality-driven political splits. The Industrial Revolution created total wealth but also sparked labor uprisings. The key is that AI, by its architecture, is inherently a concentrator of capital. Every bit of productivity it creates will first and most durably accrue to those who control computing power, data, and models.

When you take a macro view of these irreversible global phenomena, the direction becomes clear: global aging and contraction are 100% certain; wealth inequality will trigger worldwide capital restrictions—also 100% certain; and AI will structurally favor capital—again, 100% certain. The common core of these three is: they are global. Intergenerational demographic shifts, asset allocation, and capital costs have never been so interconnected and intensifying in history.

This creates the most critical collective bargaining problem of our time: the intergenerational liquidity prisoner’s dilemma. When young generations see the command to “take over for their elders,” will they still voluntarily participate? When the wealthy turn to tax planning, will top billionaires still willingly bear high taxes? When competitors ignore capital costs and expand, will AI firms slow down voluntarily?

A Nash equilibrium will form: all participants rationally choose to betray while seeking liquidity exit. These liquidity events should not be seen as tail risks but as the most predictable large-scale coordination events in human capital markets history.

Some say holding bonds or AI stocks in a deflationary environment is wise. But my core principle is simpler: hold assets that won’t turn you into someone else’s liquidity exit buyer. Under this framework, the assets you should avoid most are: real estate, bonds, and U.S. stocks. These are all duration manipulation tools—some of the greatest intergenerational wealth transfers in history.

Conversely, ideal assets should meet three inverse conditions: those currently with the lowest ownership in demographic terms but likely to become the highest in the future; those most likely to serve as safe havens outside jurisdictions when capital mobility is heavily taxed or restricted; and those closest to autonomous intelligent worlds, capable of seamless use and production without intermediaries.

In the 15th century, when the Ottoman Empire captured Constantinople, Byzantine merchants lost all assets valued in imperial credit. But those carrying manuscripts, gold, and knowledge migrated westward, igniting the Renaissance. A scholar named Bessarion, fleeing with several chests of Greek manuscripts, created one of the earliest public libraries, whose collection directly sparked the printing revolution, leading to the Reformation, Scientific Revolution, and Enlightenment.

This portable, autonomous, jurisdictionless capital, carried by Bessarion and others over five centuries, nurtured Western civilization. Capital that can cross time and space persists; that which cannot, fades away. The ultimate conclusion: what you truly need to hold is nomadic capital.

This capital can freely migrate across demographic shifts, political borders, and native AI ecosystems, bypassing the “Straits of Hormuz” of currency. In the 21st century, nomadism equals digitalization. Specific investment tools vary by individual, but if you carefully follow these three conditions, the outcome is no longer prediction but inevitability.

Uncertainty will eventually become certainty. After all, there is only one disruptive asset that has met all three conditions since its inception—code. For highly proactive individuals, this step is already straightforward. The rest is just a matter of timing.

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