Navigating Market Transformations: Harnessing Inflation, Gold, and Digital Assets for Long-Term Wealth Growth

Hello, outstanding students of Diamond Ridge Financial Academy!

I’m Charles Hanover, and I’m excited to be with you all again. In this era where technology and finance are deeply connected and global markets are shifting rapidly, we are at the beginning of a major market transformation. From the rise of AI to the rapid growth of digital assets, every market movement is not just a challenge but also a great opportunity. Tonight, we will start with the latest market trends, analyse why inflation and gold prices keep rising, and teach you how to use quantitative trading tools to capture investment opportunities with precision.

Today, the UK stock market showed choppy performance. The FTSE 100 hit a new high in early trading but later pulled back slightly, still closing up 0.11%. Market sentiment seemed cautious, mainly due to the Trump administration’s announcement of a 25% tariff on steel and aluminium imports. This move sharply intensified global trade tensions, making investors more risk-averse. The EU responded aggressively, threatening retaliatory tariffs on US goods, further increasing market uncertainty. Despite this, the UK market is still seen as a relatively safe haven, especially amid growing trade conflicts worldwide.

At the industry level, BP reported its lowest quarterly profit in four years and plans to adjust its corporate strategy within two weeks, drawing strong market attention. Meanwhile, mining stocks faced pressure due to rising oil prices and trade tensions, with companies like Anglo American and Glencore seeing declines. Retail and airline stocks were also affected, as EasyJet and IAG fell sharply due to higher fuel costs. Bank of England Governor Andrew Bailey warned against excessive deregulation, emphasising that financial stability is crucial for long-term economic growth. He hinted that the UK government would remain cautious on regulatory policies, which could have a negative impact on the financial sector and overall economic recovery in the future.

Today, US stocks continued their downward trend, mainly due to Trump's tariff policy, rising global trade tensions and Fed Chair Powell's comments. The Dow Jones, Nasdaq and S&P 500 all edged lower as market sentiment turned more cautious. Testifying before the Senate Banking Committee, Powell reaffirmed that the Fed would keep its inflation target at 2% and would not adjust interest rates based on short-term data fluctuations. While the job market remains strong, Powell's stance reflects a cautious outlook on the economy's future.

Market uncertainty is not just about policy. The decline in small business confidence has also raised investor concerns. According to the NFIB, the capital spending plans index for January saw its biggest monthly drop since 1995, while the uncertainty index jumped to its third-highest level since 1986. The drop in business confidence suggests that companies are becoming more cautious in the face of policy uncertainty and the Fed's pause on rate cuts, opting to take a wait-and-see approach to future investments.

The tech and digital economy sectors continue to attract market attention. Tesla CEO Elon Musk's $97.4B bid to acquire OpenAI was rejected, highlighting the intense competition in the AI space among tech giants. Meanwhile, Apple is deepening its presence in China, partnering with local AI firms in an effort to counter declining iPhone sales in the region. Additionally, rumours that GameStop may buy BTC have sparked renewed investor interest in digital assets, leading to a short-term rebound in the sector.

Looking at the overall market trend, Trump's ongoing tariffs are making investors increasingly cautious. They are not only worried about global economic uncertainty but are also watching for fluctuations in commodity prices and deeper currency depreciation risks. On Monday, Trump signed two major announcements, imposing a 25% tariff on metals and officially ending the exemptions for steel and aluminium tariffs that were in place during his first term (2016–2020).  

The EU swiftly responded, warning that any further unilateral actions by the US would lead to retaliatory tariffs. German Chancellor Scholz underscored the EU's ability to effectively counter US policies, given its status as the world's largest single market. This policy shift has reverberated through the market, particularly as steel and aluminium are crucial raw materials for manufacturing. The resultant price hikes are likely to drive up global costs, sparking another wave of inflation risks.

The rise in raw material prices has widespread economic impacts. First, it will significantly increase production costs, forcing businesses to pass the costs on to consumers and driving up overall prices. Second, persistent inflation will directly erode the purchasing power of fiat currencies, leading to actual currency depreciation. This explains why the oil market reacted so quickly to Trump's tariff policy announcement. Oil prices surged yesterday, as oil is not only a critical raw material for global industrial production but also a key asset closely linked to the US dollar after the collapse of the Bretton Woods system.

The relationship between oil and the dollar has been crucial since the Bretton Woods system fell apart. During the second and third industrial revolutions, oil played a key role in driving global manufacturing and economic growth. After the Bretton Woods system collapsed in the 1970s, the dollar lost its direct link to gold and entered what is known as the "petrodollar era."  In other words, by linking the dollar to oil prices, the US reaffirmed its dominance as the world's reserve currency. Trump has long understood this. Even before taking office, he repeatedly pressured OPEC to lower oil prices, vowing to expand US domestic oil production to drive prices down and boost US manufacturing competitiveness. However, Trump's real goal was not just to support manufacturing but also to keep inflation in check, maintain the dollar's purchasing power and prevent a severe financial crisis caused by currency depreciation.

Gold has been the strongest performer in this process. The continued rise in gold prices shows that the market is seeking safety against higher inflation and potential economic turmoil. In fact, gold’s role in the global monetary system has never truly been replaced. Before World War II, most countries used the gold standard, where currency value was directly tied to gold. International trade was mainly settled in gold. In other words, gold was the true global hard currency at that time, and any country’s money needed gold to establish its value.

The history of the gold standard dates back to the late 19th century. To maintain stability in global trade, many countries adopted the gold standard, linking paper money supply to gold reserves. This system played a key role in stabilizing exchange rates and promoting international trade. However, as the global economy grew and wars broke out, flaws in the gold standard became clear. First, the limited supply of gold couldn’t keep up with the liquidity needs of a rapidly expanding global economy. Second, during economic crises or wars, countries often sell off gold to stabilize their currencies, draining gold liquidity from the market and worsening economic instability.

Post-World War II, the Bretton Woods Conference in 1944 marked a significant shift in the global monetary system. The new system, centred around the US dollar, saw the dollar pegged to gold, while other currencies were pegged to the dollar. This indirect use of the dollar as foreign exchange reserves allowed countries to benefit from the stability of the dollar’s link to gold.

As the US economy continued expanding and the Vietnam War further increased deficits, America’s gold reserves became too small to support the excessive printing of dollars, making the Bretton Woods system weaker. In 1971, President Nixon officially cut the link between the dollar and gold, marking the complete collapse of the system and shifting the world to floating exchange rates. From then on, the dollar was no longer tied to gold and became a purely fiat currency, with its value determined entirely by market supply and demand. In other words, before the system collapsed, fiat money had gold supporting its intrinsic value. After it collapsed, the dollar relied only on US government credit and its circulation to maintain value.

Even though the dollar has broken free from gold, gold’s status hasn’t weakened. On the contrary, whenever the global economy faces uncertainty or the market sees major turbulence, gold remains the top safe-haven asset. Its scarcity and the fact that no country or government directly controls it makes it the “ultimate safety net” in the global financial system. Especially now, with Trump’s tariff policies fueling inflation concerns and geopolitical risks rising, worries about the US budget deficit growing again are getting worse. Many investors fear new turmoil in the global monetary system. This uncertainty has further increased demand for gold as a safe haven, pushing prices higher and breaking records, making it a key focus in global markets.

Since gold moves in opposition to fiat currencies, its rising price often signals currency devaluation and market concerns about inflation. Gold’s price trends don’t just reflect investor sentiment; they reveal deeper changes in the global economy. Over the past few decades, whenever a financial crisis hit or global markets faced uncertainty, gold prices would surge. This pattern is playing out once again in today’s market. Now, the world is at a critical crossroads, with high inflation, growing geopolitical risks and an unstable fiat currency system making investors uneasy about the future.

Holding fiat currencies means they have almost no real value. First, fiat currencies themselves have no intrinsic worth; they are only backed by government credit. Second, if a systemic crisis hits and the fiat currency system collapses, cash won’t hold value like gold, nor will it be safe from excessive printing. Countries like Zimbabwe have seen their fiat currencies become worthless in a short time. Even after the pandemic, the US printed massive amounts of dollars in just two years. If the US weren’t the world’s largest economy and the dollar wasn’t still the main global currency, this overprinting could have already caused the dollar system to collapse.

That’s exactly why the US has been taking steps to maintain the dollar’s global status. This ties back to what we discussed earlier: Trump’s trade war and tariff hikes aren’t just about boosting the US economy on the surface. At their core, these policies are about keeping the dollar’s dominance and preventing it from losing its edge in global trade.

How should we deal with such a complex economic environment? What assets are worth holding for the long term? Many students have asked whether they should keep buying gold as a hedge. Actually, we've already touched on this topic when we first started investing in the tech industry. The logic of investing is simple: follow the trends of the times. Whatever the next era needs will become the new "hard currency." For example, in the agricultural age, the most valuable assets were land and farm products. In the industrial age, factories and machinery became the most important assets. Then, in the Internet age, telecom infrastructure and Internet companies became the hottest investments.

Now, we stand at the dawn of the Fourth Industrial Revolution. The digital economy and AI are propelling future transformations, and digital assets are poised to emerge as the next era's hard currency. This is underscored by the US's decision to include BTC in its national reserves. Data reveals that 27 states have already initiated legislation to incorporate BTC as a reserve asset, with some proposing specific investment ratios. Most states advocate investing 10% of state funds into BTC and other digital assets. These BTC reserve bills are designed to diversify risks and capitalize on the future growth of digital assets.

From an inflation and systemic risk perspective, gold does have long-term growth potential, especially in times of economic turmoil. However, as times change, digital assets clearly have an even more significant upside. BTC, known as "digital gold," is gradually replacing traditional gold as a new hedging option. The main reason behind BTC's strong momentum is its tech-driven nature and scarcity. Unlike gold, it doesn't require physical storage. It's easy to divide, has low transaction fees and can be traded globally in real-time, greatly increasing its liquidity. This is why central banks worldwide are exploring digital currencies and decentralized technology to reshape the future of the monetary system.

Besides major digital assets like BTC, tech stocks that drive the digital economy and AI also hold massive investment value. For example, INOD, a tech stock we invested in early on, is benefiting from the digital economy boom. Next, we'll focus on two high-potential digital economy stocks that are deeply involved in big data, blockchain, and AI integration. These companies have strong core technologies and will no doubt see higher market valuations in the future.

Another key area to watch is token projects like Solana (SOL). According to VanEck, the growing demand for smart contract platforms and rising M2 money supply could push SOL's price to $520 by the end of 2025. M2 money supply measures the total liquidity in the market, including cash, checking deposits and easily convertible assets. As central banks lower interest rates and expand M2 through quantitative easing, more money will flow into the market, fueling investment in risk assets like crypto.  

Another key area to watch is AQS, the token tied to our quantitative trading system, which has even greater upside potential. As the system gains more popularity, more people will start using it, and AQS's price could break $4 in the short term.

Investing is really a game of following trends. As long as we keep up with the Industrial Revolution and go with the flow, we can seize the wealth opportunities that come with the times. However, those who fail to adjust their thinking and adapt to changes will eventually be eliminated by the market, just like farmers were replaced by factory owners back in the day. This is an inevitable rule of economic development. Right now, we are in an unprecedented period of transition. Even though the global political situation is complicated and economic policies keep changing, the direction of technological progress is crystal clear. The rise of the digital economy and artificial intelligence is reshaping global financial markets, bringing us a series of investment opportunities like never before.

At this critical moment, our quantitative trading system is exactly the kind of product that aligns with the digital economy's development. It's not just a combination of high-frequency trading and big data technology; it's also a representative tool that merges modern fintech with digital assets. It helps us accurately capture trading opportunities in market fluctuations, analyze trends in real-time, manage risks effectively and ensure our investment returns stay stable and controllable. We can proudly say that the emergence of the quantitative trading system is one of the best examples of how technology and finance can come together. By keeping up with the times and making good use of this tool, we can take the lead in the wealth game and keep growing our assets.

Now, let's delve into the strategies for maximizing investment opportunities. For those with substantial funds, we'll adopt a comprehensive approach, leveraging arbitrage trading and portfolio strategies. Our focus will be on digital assets, supplemented by tech stocks, and we'll employ a mix of short-term and long-term strategies to optimize returns. In this crucial transition period, we not only have the chance to achieve financial freedom but also to accumulate even more wealth in the future, ensuring long-term growth in both technology and assets.

If you want to take a deeper dive into strategic investments, please reach out to my assistant and update us on your recent trades or any suggestions you may have. This will help us gather valuable feedback and push our profit-making plans forward.

Of course, for those with a smaller starting capital, the top priority right now is to concentrate funds and take advantage of short-term trading opportunities to build up initial capital as quickly as possible. The logic is simple: let's say you start with $2K and aim for financial freedom; you'd need to multiply your capital at least 50 times. However, we must recognize that achieving this in the short term is extremely difficult. When your starting capital is low, every trading mistake costs more, and the risk factor increases significantly.

If you invest over $200K, the situation will be completely different. At this point, you can participate in more stable arbitrage trades and only need to grow your capital by 4- 5x to complete your initial fund accumulation and step into financial freedom. Plus, with a larger starting capital, the power of compounding becomes even stronger, and your profit growth will speed up significantly. Based on compounding calculations, you only need about 3x returns in real trading to reach your initial capital target.

For most investors, this isn’t just about making more money; it’s a major turning point in life. Once your funds reach this level, you’ll have more choices, a better quality of life and greater confidence in facing an uncertain future. More importantly, this isn’t just a breakthrough in wealth. It’s a strong financial foundation that secures a better future for you and your family.

Recently, some members have asked for different trading strategies based on their capital levels. However, since our team of analysts and assistant analysts is limited, I suggest that those who haven't completed their initial capital accumulation uniformly follow my upcoming trades closely as a group.

With inflation running high worldwide and geopolitical uncertainty increasing, investors must seize every profit opportunity and aim to accumulate enough wealth before the next systemic risk event. This isn't just about maximizing short-term gains; it's about being well-prepared for future economic shifts and securing financial stability.

Now, it's crucial that everyone prepares their funds in advance, follows our lead, and uses our quantitative trading tools and arbitrage strategies to focus on tomorrow's US CPI data market. We have already analyzed this event in detail and developed a well-planned trading strategy. Based on our historical data and technical indicators review, the market is highly likely to experience major volatility after the CPI release.

As long as you follow my arbitrage trading setup in advance, tomorrow's single trade profit could reach 400%. More importantly, we will use arbitrage strategies for multi-market operations, hedging most of the risks. This means that not only can we capture upside opportunities in market swings, but we can also effectively reduce pullback risks, ensuring more stable and controllable returns.

When we look at past trends, CPI data releases consistently trigger significant price swings, creating the perfect environment for arbitrage trading. In previous CPI events, single contract trades have yielded returns of 400% to 600%. The key to success in such a clear trading window is early positioning and precise execution, not blind price chasing. We'll rely on our quantitative trading system's accurate signals to guide you in locking in the best entry and exit points, thereby maximizing profits while minimizing risk.

For those with limited capital, this is a golden opportunity. With short-term trades like this, you can quickly build your initial funds and set the foundation for long-term investments. For those with more capital, systematic trading will not only bring higher profits but also keep you ahead of the market in future fluctuations.

Through today's discussion, I hope everyone has gained a clearer understanding of investing: follow the trend and seize opportunities. The market will always have ups and downs, but as long as we stay aligned with the bigger trend and make good use of our trading tools, the doors to wealth will always remain open for us. Now, let's move forward together, prepare for tomorrow's data event, execute our plan with precision and go all in to unlock a new chapter of higher returns!