Some ideas are so compact that they read like a koan. “Liquidity moves markets” is one of them. It compresses a century of experience into a single operating rule: prices are set at the margin, and the marginal buyer is funded by liquidity. Yet slogans can seduce. The craft is to take the mantra and forge it into rules you can audit—a composite of observable inputs, a regime map that sets expectations, and a sizing framework that protects capital when the tide goes out.

TL;DR (Placed Inside the Article, By Design)

When net liquidity expands (policy + bank credit + shadow funding), risk premia compress and carry/momentum work. When it contracts, respect cash/duration and cut gross. Track the tide, not just the waves.

What We Mean by “Liquidity” (and Why You Need a Composite)

Liquidity is not a single switch. For practical portfolio decisions, break it into three interacting channels and observe the rate of change in each:

• Policy liquidity: policy rates, balance-sheet operations, standing facilities, forward guidance, and collateral regimes. It sets the pricing backdrop for risk premia and the funding curve for all assets.
• Bank credit creation: standards and realized loan growth, deposit mix, and term funding costs. It determines how much purchasing power is created by the commercial banking system.
• Shadow funding: dealer balance sheets, money-market flows, repo haircuts, cross-currency basis, and collateral quality. This is the plumbing that often turns first—quietly, and then suddenly.

At Serapis Global, we fuse these into a small, robust composite. Each channel contributes a score (−1 / 0 / +1). The composite doesn’t chase precision; it disciplines behavior: expand, neutral, or contract. Complexity lives inside data engineering; decisions stay simple.

Why the Mantra Works (When It Works)

Multiple expansion is financing math. When funding is easy and balance sheets are elastic, investors can pay higher multiples for the same cash flows, and carry premia compress. That’s why risk assets often levitate before fundamentals catch up.

Transmission beats narratives. Markets are flow-to-stock machines; the marginal unit of funding frequently leads valuation regimes. Traders who respond to observable transmission mechanisms—rather than to ex-post stories—tend to survive the long run.

Risk management is cyclical. The same idea that is reckless in a liquidity contraction is acceptable—sometimes optimal—when liquidity is expanding. The mantra is less a price forecast than a risk budget governor.

Where It Fails (and How to Guard Against It)

Liquidity isn’t destiny. Earnings, supply shocks, and fiscal dynamics can overwhelm a mushy liquidity read for months. When this happens, price verification (momentum) and positioning must temper your conviction.

Optical proxies can lie. A single central-bank balance sheet chart is not “the tide.” Use a basket: policy stance ROC, bank standards and realized loan growth, funding spreads/collateral signals. Build redundancy; avoid false comfort.

Lags and path-dependence bite. Plumbing stress appears first in obscure places (basis, haircuts) before it bleeds into spot prices. Your process needs tripwires that force de-gross even when narratives still look benign.

The Serapis Playbook: From Aphorism to Action

We translate the quote into four programmatic components: composite, regime map, sizer, overlays. Each component is auditable and deliberately parsimonious.

1) Liquidity Composite

• Policy: rate-of-change in stance (policy rate bands, balance sheet net flows).
• Bank credit: standards (survey) + realized loan growth.
• Shadow: funding spreads, collateral haircuts, cross-currency basis.

Each channel maps to −1 / 0 / +1. The sum defines the state: expanding (+1 to +3), flat/ambiguous (−1 to +1), or contracting (−3 to −1).

2) Regime Map

We don’t forecast a specific price; we classify the environment across a small set of macro regimes. Liquidity is a conditioning variable that adjusts playbooks in each regime (reflation, disinflation with growth, tightening slowdown, stagflation, etc.).

3) Sizer (Risk Budget Governor)

Gross exposure scales roughly from 0.6× to 1.0× as the composite moves from contracting → expanding. Net exposure stays conservative in contractions (|net| ≤ 0.25). Position sizes are volatility-scaled (vol parity) with pre-committed drawdown caps.

4) Overlays (Tripwires)

• Plumbing stress override: if funding spreads or haircuts breach thresholds, auto de-gross a fixed percentage regardless of PnL or narrative.
• Time stops: stale trades exit even without price violation; opportunity cost is a risk.
• Crisis cash: a standing cash reserve redeploys after plumbing normalizes; don’t try to be a hero during dysfunction.

How It Shows Up in Positions

In expanding phases, we favor quality carry and trend sleeves in assets with benign funding tails: major equity indices with supportive breadth, curve-sensitive duration where appropriate, selective FX carry with hedged tails, and commodity structures where roll yield is positive. Take-profit bands are looser; diversification still matters.

In contracting phases, we shrink gross and hunt convexity with tight risk: higher-quality duration/cash, defensive factor tilts, relative-value spreads with known plumbing exposure, and a bias towards shortening holding periods. We reduce correlation across sleeves and demand cleaner catalysts.

Case Studies (Abstracted, Principle-First)

Liquidity upswing without perfect growth data. The composite turns positive before consensus upgrades. Trend confirmation across equities and credit says “press,” carry premia tighten, and realized volatility falls. The playbook allows higher gross and looser profit-taking bands. The lesson: funding conditions often lead improvement in multiples.

Plumbing stress during a narrative lull. Official policy reads neutral, but cross-currency basis and repo haircuts spike. Tripwire triggers, gross is cut, and exposure skews to duration and cash while waiting for normalization. The lesson: the plumbing can ambush risk; if the pipes rattle, step away.

Checklists You Can Use Tomorrow

• Composite sanity: do at least two of the three channels agree on direction?
• Positioning: is the intended sleeve crowded or capacity constrained?
• Funding & roll: are carry and financing costs aligned with the thesis (esp. FX/commodities)?
• Stops: do you have a price, time, and plumbing-trigger exit?
• Correlation: does the current book collapse to one macro bet in a shock?

Limits & Failure Modes (Intellectual Honesty Section)

Liquidity can be tight while markets grind higher. Profit growth or fiscal impulse can offset funding headwinds for a time. Solution: run smaller, not zero, and shorten horizons.

“Abundant” liquidity with adverse supply shocks. Energy, shipping, or geopolitics can invert typical asset betas. Solution: rotate to beneficiaries (e.g., select commodities or shipping exposures) instead of blanket risk-on.

Composite complacency. Any index can fail. Maintain a small set of out-of-distribution alerts (e.g., simultaneous curve re-steepening with credit widening) that force a reassessment.

FAQ

Is earnings irrelevant if liquidity rules?
No. Liquidity sets valuation bands. Earnings and growth determine where within those bands prices settle. We treat liquidity as the conditioning variable, not the destination.

Should we anticipate policy or wait to see it?
We classify regimes from observable data and react. Anticipation invites overfit and narrative drift; pre-committed reaction accelerates decisions and reduces regret.

Can one metric summarize the tide?
No. Use a compact basket—policy stance ROC, bank standards + realized loan growth, and funding/collateral signals. Redundancy beats precision here.

Figures (Drop-ins)

• Figure 1: Liquidity composite vs 3-month forward returns (equities, duration, commodities).
• Figure 2: Lending standards vs HY spreads (lead/lag example).
• Figure 3: Funding-stress tripwire vs portfolio de-gross timeline.

Host images under /assets/insights/liquidity-101/.

Internal Links: Methodology, Regime Map, Liquidity (Glossary), Investors, and the structural explainer Permanent-Capital vs Hedge Fund.

Request our Macro Regime Dashboard
Quarterly updates + a one-page explainer. For informational purposes only; not an offer to sell securities.

Disclaimer: Educational content, not investment advice or a solicitation.

September 27, 2025 | Kevin D. Fulton

1. Global Growth

A Fragile Recovery Amid Diverging TrajectoriesGlobal GDP growth is projected to hover around 2.8-3.2% in 2025, slightly below pre-pandemic averages, with significant regional divergence. The U.S. continues to outperform, driven by robust consumer spending and technological innovation, though growth is expected to moderate to ~2.0% as fiscal stimulus wanes. The Eurozone, grappling with energy transition costs and demographic headwinds, is likely to see growth stagnate at ~1.2-1.5%. China’s recovery remains uneven, with GDP growth forecasts at 4.5-5.0%, constrained by property sector deleveraging and weak domestic consumption, despite aggressive stimulus measures.Emerging markets (EMs) present a mixed picture. India and Southeast Asia are bright spots, with growth rates of 6.5% and 4.8%, respectively, fueled by infrastructure investment and digital adoption. However, debt distress in frontier markets and currency depreciation risks in Latin America (e.g., Brazil, Argentina) cloud the outlook. Investors should monitor EMs for selective opportunities, particularly in technology-driven economies with stable policy frameworks.

Key Risks:

• A sharper-than-expected U.S. slowdown could ripple through global trade.
• China’s structural challenges, including deflationary pressures, may suppress commodity demand.
• Geopolitical shocks (e.g., U.S.-China tensions, Middle East instability) could disrupt supply chains.

Opportunities:

• Overweight exposure to India and ASEAN equities, particularly in tech and consumer sectors.
• Underweight Eurozone industrials, given energy cost pressures and weak export demand.

2. Inflation and Monetary Policy

The Tightrope Walk ContinuesGlobal inflation has moderated from its 2022-2023 peaks but remains sticky, with core CPI in major economies averaging 3.0-3.5%. Supply chain normalization and declining energy prices have eased headline pressures, but services inflation, driven by wage growth and housing costs, persists. The U.S. core PCE is projected at ~2.8%, above the Federal Reserve’s 2% target, while Eurozone HICP is expected at ~2.5%.Central banks are navigating a delicate balance. The Federal Reserve, after pausing rate hikes in mid-2025, is likely to maintain rates at 4.5-4.75% through Q4, with a potential 25-50 bps cut in 2026 if labor markets soften. The ECB, facing weaker growth, may cut rates by 25 bps before year-end, though fragmentation risks (e.g., Italy’s fiscal challenges) limit its flexibility. The PBOC’s easing cycle continues, with recent stimulus injecting ~1 trillion CNY into China’s economy, though efficacy remains uncertain.

Key Risks:

• Sticky inflation could force central banks to delay or reverse easing, pressuring risk assets.
• Currency volatility in EMs due to U.S. dollar strength, driven by Fed hawkishness.
• Policy missteps in China could exacerbate deflationary risks.

Opportunities:

• Short-duration, high-quality fixed income (e.g., U.S. Treasuries at 4-5% yields) offers attractive risk-adjusted returns.
• Inflation-linked bonds in developed markets as a hedge against persistent price pressures.
• Selective exposure to Chinese bonds, given PBOC easing and attractive yields.

3. Geopolitical Dynamics

A Fragmented World OrderGeopolitical risks remain elevated, with implications for trade, energy, and capital flows. U.S.-China decoupling continues, with tariffs and tech restrictions reshaping global supply chains. The CHIPS Act and EU’s Critical Raw Materials Act are accelerating onshoring, boosting domestic investment in semiconductors and green tech but raising costs for multinationals. Middle East tensions, particularly around Iran and OPEC dynamics, pose risks to oil prices, with Brent crude projected at $75-85/bbl in Q4, barring major disruptions.The Russia-Ukraine conflict, now in its fourth year, continues to disrupt grain and energy markets, though adaptation (e.g., rerouting of LNG flows) has mitigated some impacts. Meanwhile, populist movements in Europe and Latin America are challenging fiscal discipline, with implications for bond markets (e.g., widening spreads in Italian BTPs).

Key Risks:

• Escalation in U.S.-China trade tensions could trigger equity market sell-offs.
• Energy price spikes from geopolitical flashpoints (e.g., Strait of Hormuz disruptions).
• Policy uncertainty in EMs due to elections and populist surges.

Opportunities:

• Defense and cybersecurity stocks, given rising geopolitical tensions.
• Commodities (e.g., lithium, rare earths) tied to green tech and onshoring trends.
• Diversification into neutral markets (e.g., Switzerland, Singapore) to hedge geopolitical volatility.

4. Technological Disruption

AI and Energy Transition as Game-ChangersArtificial intelligence (AI) continues to reshape economies, with global AI investment projected to exceed $300 billion in 2025. AI-driven productivity gains are boosting corporate earnings in tech-heavy indices (e.g., Nasdaq, up 18% YTD), but regulatory scrutiny (e.g., EU AI Act, U.S. antitrust probes) poses risks to valuations. Investors should focus on AI infrastructure (e.g., cloud computing, semiconductors) rather than speculative AI startups.The energy transition is accelerating, with renewable energy accounting for ~30% of global electricity generation. However, supply constraints for critical minerals (e.g., copper, cobalt) and grid infrastructure bottlenecks are driving cost pressures. Green bonds and ESG-focused funds are seeing inflows, though returns depend on policy support and technological breakthroughs (e.g., next-gen batteries).

Key Risks:

• Overvaluation in AI-related equities, with potential for a correction if earnings disappoint.
• Supply chain disruptions for critical minerals, impacting EV and renewable energy sectors.
• Policy reversals in major economies (e.g., U.S. post-election) could derail green investments.

Opportunities:

• Semiconductors (e.g., Nvidia, TSMC) and data center REITs as AI infrastructure plays.
• Copper and lithium ETFs, given long-term demand from electrification.
• Green bonds in markets with strong policy frameworks (e.g., EU, Canada).

Conclusion:

Positioning for ResilienceThe global macro outlook for Q4 2025 demands a disciplined, risk-aware approach. While growth remains resilient in pockets, sticky inflation, geopolitical headwinds, and policy uncertainty warrant caution. Investors should prioritize diversification, focus on structural trends (e.g., AI, energy transition), and maintain flexibility to capitalize on volatility. By balancing defensive and opportunistic exposures, portfolios can navigate this complex landscape while capturing long-term growth.

The global economy is entering one of the most turbulent and uncertain periods in modern history. After more than a decade of artificially suppressed interest rates and extraordinary central bank interventions, the long-standing equilibrium in capital markets is breaking down. The assumptions that once underpinned portfolio construction and asset allocation are being shattered by structural risks that cannot be ignored.

At Serapis Global Inc., we believe this is not a time for complacency or blind faith in outdated models. It is a time for resilience, adaptability, and contrarian clarity.

The Global Macro Landscape Today

1. Interest Rates and Liquidity

The era of zero interest rates is over. Central banks have tightened aggressively to combat inflation, but government and corporate debt burdens remain historically high. This leaves policymakers in a trap: raise rates further and risk financial instability, cut rates too soon and risk renewed inflation. Liquidity conditions are volatile, with commercial bank lending tightening even as shadow banking channels continue to fuel speculative flows.

2. Inflation and the Cost of Living

While headline inflation has moderated from its post-pandemic peaks, structural drivers remain: energy transition costs, supply chain re-shoring, demographic pressures, and wage demands. Inflation is no longer the cyclical anomaly of the past two decades—it is a recurring structural headwind.

3. Geopolitical Realignments

From war in Europe to U.S.–China rivalry, global trade is fragmenting into competing blocs. Energy markets, commodities, and currencies are increasingly weaponized. Investors must recognize that geopolitical risk is no longer a tail event—it is central to the investment equation.

4. Asset Valuations and Market Psychology

U.S. equities remain at elevated valuations, driven by narrow leadership in technology and AI-related sectors. Meanwhile, credit spreads are artificially tight, masking hidden risks in private credit and leveraged finance. Investor psychology swings between euphoria and denial, leaving markets vulnerable to sharp corrections when reality intrudes.

The Risks Ahead

• Debt Sustainability: Advanced economies face rising debt-service costs with limited fiscal flexibility.
• Banking Fragility: Commercial banks are under stress from duration mismatches, while shadow banking channels remain opaque.
• Commodity Volatility: Energy, agriculture, and metals are increasingly subject to both cyclical pressures and geopolitical disruption.
• Currency Instability: The dominance of the U.S. dollar is being questioned as new payment systems and reserve currency alternatives emerge.
• Systemic Shocks: The next crisis may come not from where it is expected but from the intersections—liquidity shortages, derivative mismatches, or capital flight.

How Serapis Global Is Positioned

1. A Systems-Engineering Investment Methodology

We view markets as dynamic ecosystems, not static machines. Our methodology integrates liquidity analysis, global money flows, intermarket cycles, valuation, and sentiment. By mapping these drivers, we anticipate turning points that others only recognize in hindsight.

2. Risk-First Portfolio Construction

Survival is the prerequisite for compounding. We maintain crisis reserves and design positions for asymmetric payoffs: small controlled risks with the potential for large gains. This ensures that even in systemic downturns, we remain not just solvent but opportunistic.

3. Unconstrained Global Reach

Where others are constrained by benchmarks, mandates, or asset-class silos, Serapis Global operates across equities, commodities, credit, currencies, and alternatives. This breadth allows us to rotate capital into the pockets of opportunity created by macro dislocations.

4. Permanent Capital Structure

Our corporate design eliminates the redemption pressures that force many funds to sell at the worst moments. Permanent capital means we can act decisively when volatility creates generational opportunities—buying when others are forced to sell.

5. Contrarian Discipline

We embrace the psychology of the crowd as a signal to do the opposite. When markets are euphoric, we prepare defenses; when panic dominates, we deploy capital. This is not just theory—it is a principle proven time and again throughout market history.

6. Structural Advantage

Serapis Global Inc. is a holding company built for an era of structural change. We were established to solve a single, recurring problem for institutional capital: how to generate absolute returns while preserving capital across regimes where conventional models fail. Our answer combines disciplined global macro portfolio management with a permanent capital structure that enables multi-decade compounding and deliberate expansion into real assets and credit.

Thriving in the Turbulence

The coming years will not be kind to those who cling to outdated models of diversification or who rely on the illusion of passive safety. Volatility, cycles, and systemic fragilities will define the era. Yet within crisis lies opportunity.

At Serapis Global Inc., we do not fear volatility—we prepare for it. Our methodology and structure are designed not only to withstand shocks but to harness them, turning instability into asymmetric absolute returns.

The investors who thrive in the next decade will not be those who chase consensus trends. They will be those who recognize reality as it is, act decisively at turning points, and build structures resilient enough to weather any storm.

That is the Serapis Global advantage.

Navigating a World in Flux: The Serapis Global Advantage

We are living through an era of extraordinary financial turbulence. Debt burdens are mounting, demographics are shifting, and the global balance of power is being redrawn. Markets no longer move solely on fundamentals but on the tides of liquidity, the whims of central banks, the convulsions of geopolitical risk, and the reflexive feedback loops of crowd psychology.

In this environment, the traditional playbook of investing—anchored in passive indexation, outdated portfolio theory, and linear assumptions—has failed to deliver. The institutions that dominate the landscape are constrained by rigid mandates, short-term redemption pressures, and layers of bureaucracy. For investors seeking true capital preservation and long-term growth, the need for a different approach has never been clearer.

That is where Serapis Global Inc. stands apart.

A Methodology Forged in the Fires of Global Macro

At Serapis Global, we do not view markets as static machines to be modeled, but as living, evolving ecosystems. Our methodology is grounded in a systems-engineering approach to global macro investing—one that integrates:

• Liquidity and Money Flows – tracking central bank actions, commercial bank lending, shadow banking, and cross-border capital shifts.
• Cycles and Intermarket Relationships – mapping recurring patterns in equities, commodities, credit, currencies, and volatility.
• Valuations and Sentiment – combining deep value metrics with behavioral finance to identify extremes of fear and euphoria.
• Risk First Discipline – anchoring all strategies in capital stability, crisis reserves, and asymmetric positioning.

This framework allows us to cut through the noise and identify the true drivers of market regimes, positioning our portfolios not just to survive volatility but to thrive on it.

Absolute Returns Across Asset Classes

Where others are bound by benchmarks, we are bound only by opportunity. Serapis Global seeks to deliver asymmetric absolute returns across asset classes, industry groups, geographies, and timeframes.

Our strategies embrace flexibility:

• Equities: deep value, tactical hedging, and volatility harvesting.
• Commodities: spreads, structural plays, and cyclical positioning.
• Currencies and Rates: capital flow analysis and crisis hedges.
• Alternatives: opportunities where traditional allocators cannot go.

In each case, the objective is the same: capture upside while rigorously controlling downside.

Stability Built on Permanent Capital

We believe enduring success requires more than clever trades—it requires a stable foundation. That is why Serapis Global is designed around permanent capital rather than short-term funding. Our structure eliminates redemption risk, aligns incentives with long-term value creation, and ensures we can act decisively when crises unlock generational opportunities.

Company Structured For Expansion Into Alternative Investments.

Alternative Investment Verticals

Serapis Global extends beyond liquid macro to build durable, real-asset verticals that compound capital over decades. Explore our verticals:

• Energy & Infrastructure
• Agriculture & Timberland
• Physical Commodities
• Distressed Debt
• Private Credit

A Philosophy of Contrarian Excellence

At the heart of Serapis Global is a contrarian spirit. We do not follow the crowd; we study it. History shows that the greatest gains are made not by conforming to consensus but by recognizing when consensus has lost touch with reality. Whether in technology bubbles, commodity booms, or currency crises, it is the ability to see through mass psychology—and to act boldly at the right moment—that separates mediocrity from mastery.

Why Serapis Global?

In a world where investors face systemic risk, distorted markets, and eroding trust in conventional models, Serapis Global offers:

• Unconstrained Global Perspective – no artificial limits on asset class, sector, or geography.
• Rigorous, Quantitative Discipline – engineering principles applied to capital markets.
• Contrarian, Cycle-Aware Mindset – prepared for both booms and busts.
• Capital Stability and Risk Management – a structure designed for endurance.

We are not building just another investment firm. We are building a resilient platform for the age of uncertainty—a firm capable of protecting and compounding capital through the most turbulent decades ahead.

The Serapis Global Vision

Our vision is bold yet simple: to redefine what it means to invest in global markets. To stand as a fortress of stability amid storms, a generator of asymmetric opportunity, and a partner to those who seek not just returns but resilience.

The world has changed. The old models no longer work. The future belongs to those prepared to adapt.

At Serapis Global Inc., we are ready. SerapisGlobal.com – contact@serapisglobal.com – Contact Form.

Serapis Global Inc. — Business Qverview

1. Executive Summary

Serapis Global Inc. (“Serapis” or the “Company”) is a Delaware corporation headquartered in Asheville, NC, structured as a global macro investment holding company. The Company deploys a contrarian, systematic methodology combining quantitative analysis of global liquidity, money flows, cycles, intermarket relationships, valuations, and sentiment with absolute-return strategies across equities, bonds, commodities, currencies, and derivatives.

2. Mission & Vision

Mission: To deliver consistent asymmetric absolute returns through a risk-first global macro framework engineered to thrive in all market regimes.

Vision: Serapis Global Inc. will stand at the intersection of institutional-grade asset management, financial technology innovation, and proprietary intellectual capital — scaling to $1B+ AUM within five years while maintaining lean, efficient, technology-driven operations.

3. Investment Methodology

• Contrarian & Systematic: Rooted in variant perception and cycle recognition.
• Quantitative Liquidity Analytics: Tracking central bank balance sheets, shadow banking, cross-border flows, and private credit creation.
• Intermarket Relationships: Equity, bond, FX, and commodity correlations across cycles.
• Valuation Metrics: Proprietary deep value and asymmetry-based analytics.
• Sentiment & Crowd Psychology: Applying behavioral finance, mass psychology, and reflexivity models.
• Risk First: Stable reserves and crisis-capital pools for generational opportunities.

4. Market Opportunity

• Systemic Failures of Legacy Mandates: Pension funds, endowments, and allocators locked into outdated models (EMH, passive indexing, long-only mandates).
• Global Macro Relevance: Heightened volatility, sovereign debt saturation, de-dollarization trends, commodity supercycles, and monetary regime shifts.
• Institutional Demand: Growing appetite for absolute-return, crisis-hedged, liquidity-aware strategies.

5. The Serapis Global Structural Advantage

Serapis Global Inc. is built on a sound foundation of stable capital not subject to outflows or redeemption pressure. Protects our proprietary Liquid Global Macro Portfolio & Provides us with the ability to scale seamlessly into additional alternative investment verticals in real assets, including:

• Energy & Infrastructure
• Agriculture & Timberland
• Physical Commodities
• Distressed Debt
• Private Credit

Serpis Global Inc.

For Additional Information Please Contact Us, Thank-you.

contact@serapisglobal.com

The Rotation From Equities and Bonds to Real Assets Has Begun

The 17.6-Year Cycle: Why Investors Cannot Ignore It

Cycles have long been an underappreciated yet recurring feature of markets. History shows that the rise and fall of asset classes, industries, and even entire economies follow identifiable rhythms. One of the most powerful and empirically grounded patterns is the 17.6-year cycle, a recurring sequence that has governed capital markets for centuries and continues to shape our present and future.

Origins of the 17.6-Year Cycle

Researchers and market historians have identified a 17.6-year economic and financial cycle, sometimes referred to as a “hard asset cycle,” which reflects the long-term ebb and flow of capital between financial assets (stocks, bonds, paper claims) and tangible assets (commodities, real estate, infrastructure). This cycle has been studied by analysts ranging from economic historians to modern portfolio theorists.

Notably, legendary investors such as Jim Rogers and Warren Buffett have both referred to the approximate 18-year rotation between financial assets and hard assets. Rogers, in particular, has emphasized that long cycles of commodity underinvestment are inevitably followed by explosive bull markets when supply constraints meet surging demand. Buffett, though not a “cycle theorist” per se, has acknowledged the rhythm of asset class leadership, remarking that periods of prolonged equity outperformance give way to hard asset dominance, and vice versa.

The 17.6-year cycle provides a framework to understand these shifts not as random events, but as part of a repeating historical pattern.

Historical Context

• Post-War Boom (1948–1966): Equity markets enjoyed a prolonged expansion, supported by industrial growth, demographic trends, and stable monetary policy.
• Inflationary Era (1966–1982): Hard assets, particularly commodities and gold, vastly outperformed as inflation surged and equities stagnated.
• Financial Asset Supercycle (1982–2000): Deregulation, globalization, and falling interest rates fueled one of the greatest equity and bond bull markets in history.
• Hard Asset Recovery (2000–2016): Commodities, energy, and emerging markets dominated as capital rotated back into real assets, culminating in the 2008 commodity boom.
• Financial Asset Dominance (2016–2024): A period of low rates, massive liquidity injections, and technology leadership extended financial asset outperformance beyond historical norms.

Now, as we enter the mid-2020s, evidence suggests we are transitioning once again toward hard asset leadership.

The Current Backdrop

Several structural forces point to the resurgence of the 17.6-year cycle:

1. Persistent Inflation Pressures
   Despite central banks’ efforts to contain price growth, supply chain restructuring, labor market tightness, and geopolitical shocks have introduced persistent inflationary forces. This undermines the purchasing power of paper assets while enhancing the value of tangible stores of wealth.
2. Stagflationary Regime Risk
   The global economy faces the risk of a stagflationary environment — weak real growth coupled with high inflation. This is a toxic mix for equities and bonds, but historically supportive for commodities, infrastructure, and alternative assets.
3. Political Pressure on Central Banks
   The Federal Reserve and the European Central Bank increasingly operate under political scrutiny. As fiscal deficits mount and social spending rises, the pressure to maintain low nominal rates — even in the face of inflation — will erode the real value of financial assets.
4. Undercapitalization of Hard Assets
   Years of underinvestment in energy infrastructure, mining, agriculture, and timberland have left global supply constrained. As demand rises, these sectors will be positioned for outsized returns.
5. Geopolitical Fragmentation
   The breakdown of globalization and the return of economic nationalism create further tailwinds for tangible assets tied to national security and resource independence.

Investment Implications

If history is any guide, the next decade-plus will mark a secular rotation from financial assets to hard assets. For investors, this means:

• Reducing reliance on traditional equity and bond allocations.
• Increasing exposure to commodities, energy infrastructure, agriculture, timberland, and physical assets.
• Positioning portfolios to withstand inflationary and stagflationary conditions.
• Allocating capital to opportunistic distressed debt and private credit markets, which benefit when financial stress is high.

At Serapis Global Inc., our multi-strategy global macro approach is expressly designed to adapt to such cycles. We view the 17.6-year cycle not as a theoretical curiosity but as a practical guide for portfolio construction and risk management. By combining liquid macro strategies with opportunistic allocations to hard assets and alternative verticals, we seek to position our shareholders on the right side of history’s most enduring patterns.

Conclusion

The lesson of the 17.6-year cycle is clear: leadership rotates, and capital must adapt. Just as past investors who ignored inflation in the 1970s paid a steep price, today’s overreliance on financial assets risks substantial underperformance in the coming cycle.

Serapis Global is committed to preparing for — and profiting from — the return of the hard asset era.

Please reach out for Partnership or Investment Opportunites: contact@serapisglobal.com