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“Invert. Always Invert.” – Charlie Munger

Source: Luke Gromen FFTT | Date: January 12, 2026

Key Takeaways

  • We're entering a bond bear market in real terms (gold-adjusted), not dollar terms - bonds are "collapsing" when priced in gold (TLT/GLD ratio)
  • The real power shift is from money printing ability to physical production capacity - China/Russia focused on making real things while US pursued dollar control
  • AI deflation is happening faster than expected, showing up in jobs data, but sustained deflation is impossible in debt-backed currency systems
  • "Invert, always invert" - investors must examine both sides of every geopolitical/market narrative to avoid getting blindsided
  • For average investors, use the Jacob Fugger portfolio (25% each: gold, equities, productive real estate, cash) to survive fat-tail risks

Market Views

  • Gold expected to rise significantly as China recycles trade surpluses into gold rather than US bonds
  • Bond bear market will manifest through higher gold prices rather than dramatically higher interest rates
  • Bitcoin still trading like high-beta tech stock - could see COVID-style crash (similar to March 2020 drop) during AI-driven deflation before eventual recovery
  • Japanese bond yields rising uncomfortably fast; potential debt crisis or yield curve control ahead
  • Real estate initially falls to cash value in hyperinflation as mortgage markets freeze

Assets Discussed

  • TLT/GLD ratio: Recommended trade showing bonds collapsing vs gold
  • Gold: Primary beneficiary of Chinese surplus recycling and currency debasement
  • Bitcoin: High conviction long-term but vulnerable to deflation cycles first
  • Japanese Government Bonds (JGBs): Identified as weak spot, yields rising dangerously
  • US Treasuries: Connected to JGB performance, vulnerable to inflation

Notable Quotes

  • "Invert. Always invert" - Critical investing principle for navigating current environment
  • "I can't eat percentages. I need food... I can't build a factory with percentage returns... I need metal. I need rare earths" - On the hard bifurcation between paper and physical assets

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