We may be standing at the starting point of a historical reenactment
The recent market environment always reminds me of 2011.
Whether it’s the economic environment, changes in asset prices, or policy directions, it all feels familiar. This is not a coincidence; it seems more like the financial cycle has returned to a familiar scene.
History does not simply repeat itself, but it often bears striking similarities. If we can find patterns in past scripts, we may understand the present more clearly and prepare for the future in advance.
The peak of gold is very reminiscent of those years
Let's first talk about gold.
Gold prices in 2025 have already shown signs of a peak, and this trend is almost identical to that of 2011. That year, gold prices peaked after a surge, then consolidated for several years before breaking through again much later.
At that time, it was exactly when the Federal Reserve ended its second round of quantitative easing and paused 'flooding'.
Now, the Federal Reserve's balance sheet is also showing subtle changes— the pace of balance sheet reduction has clearly slowed down, and there are even signs of a 'pause'. This often indicates a shift in policy and suggests that the next round of easing may not be far off.
Geopolitical conflicts are an old play being performed anew
Do you remember the 'Arab Spring' in 2011? The Middle East and North Africa experienced consecutive upheavals, global risk aversion soared, and gold and oil prices surged.
The superficial reason at the time was political issues, but the deeper logic was that the US was also facing a credit crisis, needing to leverage external events to find a reasonable justification for its 'flooding'.
Today, the location of conflict has changed from Russia-Ukraine to the Middle East and the Taiwan Strait, but the underlying effect seems to remain the same: through geopolitical conflicts, global attention is diverted while also creating a favorable environment for the depreciation of the dollar.
US Treasuries: Credit is 'actively eroding'
In 2011, US debt first exceeded the total GDP, and S&P rarely downgraded the US sovereign credit rating, significantly undermining market confidence in the dollar. The surge in gold prices was a true reflection of that time.
Today, the level of US debt is far beyond what it was in the past, with the fiscal deficit growing increasingly large, and the 'fiscal cliff' drama playing out repeatedly. Market trust in US Treasuries is being consumed bit by bit.
Some argue that the US is consciously weakening its own credit, creating a scenario where 'others actively sell off dollars' to pave the way for future flooding. This may not be an accident, but rather part of the script.
Why self-destruct credit?
This sounds quite strange: shouldn't the US maintain its financial credibility? Why would it actively 'stir things up'?
The logic is quite simple—if you want to flood on a large scale again, you must first allow global capital to 'return' the dollars; otherwise, it will lead to inflation or even a crisis of confidence.
So how do we make others willingly sell off dollar assets? Of course, it cannot be stated outright; we can only create seemingly 'reasonable' reasons, such as credit rating downgrades, political chaos, fiscal deadlocks...
Once market confidence is shaken, the dollar will naturally flow back. This is the first step towards reopening the floodgates.
Cryptocurrency assets: A potential new direction for capital
Speaking of asset prices, let's take a look at the US stock market and the crypto market.
In 2011, as gold peaked, the US stock market also experienced about a 20% correction. However, with the introduction of a new round of easing policies, the US stock market embarked on a decade-long bull market.
Today's US stock market has also experienced a similar level of adjustment. If history repeats itself, the next round of increases may already be on the way.
However, compared to the already expensive valuations of US stocks and gold, the size of the crypto market is still quite small, making it more capable of 'absorbing massive amounts of capital'.
Once the dollar depreciates again and funds surge back into motion, cryptocurrencies like Bitcoin may become the new 'safe haven'.
Bitcoin: The next gold?
The characteristics of Bitcoin are clear: scarcity, decentralization, global liquidity.
These attributes make it a more flexible 'new safe haven tool' in an environment of currency depreciation. Especially when the traditional financial system is under pressure, the appeal of digital assets will be even stronger.
From 2011 to now, gold has increased by less than twice, while Bitcoin's increase has exceeded a million times. Although the future will not fully replicate this magnitude, once a new round of 'zeroing' begins, Bitcoin's potential for growth is still worth noting.
Final Thoughts
The situation we face now is increasingly reminiscent of 2011:
• Gold is experiencing high-level fluctuations
• Dollar credit is unstable
• Ongoing geopolitical conflicts
• US Treasury ratings under pressure
• Market volatility is intensifying
If the next step back then was flooding, now, we may also be standing at the same crossroads, and we should seize the opportunities in May.