The financial tsunami triggered by the collapse of the US housing market in 2007 swept the globe, but in the following decade or so, the world seemed to have developed an immunity to risk—neither the ravages of the COVID-19 pandemic, the sharp rise in global inflation, nor the sudden bankruptcy of Silicon Valley Bank in 2023 triggered systemic financial turmoil.

Behind this lies the fact that the global financial system has successfully averted danger thanks to increasingly sophisticated regulatory mechanisms and timely policy responses, and it also demonstrates the self-repairing capabilities that modern financial markets are gradually developing.

However, as the global economy enters a new cycle, some localized structural risks are quietly emerging, showing a transmission trend from the "asset side to the liability side" and from the "economic level to the political level".

This does not mean that a systemic collapse is imminent, but rather it suggests that the global economy is entering a critical period of adjustment, with four interconnected risks outlining the deep challenges currently facing the global economy.

Asset Side: The "Healthy Dehydration" of AI Valuation Bubble and the Starting Point of Risk Transmission

The current surge in capital investment in artificial intelligence (AI) has led to high valuations for some related companies due to excessive market enthusiasm, constituting the first localized risk point in the global economic adjustment.

In essence, this is a normal phenomenon in the early stages of a technological revolution, but the underlying transmission logic has gradually emerged: if the implementation of AI technology or the conversion of performance falls short of expectations in the future, the excessively high valuations will face a rapid correction—whether it is a rational correction like "healthy dehydration" or a deep adjustment—it will directly impact the balance sheets of related companies, venture capital, and related financial institutions, becoming the first domino to trigger subsequent risks.

It is worth emphasizing that this valuation correction is not a signal of a market crash. On the contrary, it can squeeze out speculative bubbles, prompting funds to shift from conceptual hype to practical application and promote the AI industry to settle in a more sustainable direction.

However, as the starting point for risk transmission, the valuation restructuring on the asset side has laid the groundwork for a "shift in gears" in the global economy.

On the liability side: Sovereign debt pressure and the test of "anchor of safe assets"

Potential volatility on the asset side further amplifies the already existing sovereign debt risks.

The current US federal government debt as a percentage of GDP has exceeded 120%, and the country will face long-term structural budget deficits in the future. This "growing pain" poses a serious challenge to fiscal discipline.

As the world's largest and most liquid "anchor of safe assets," the core position of US Treasury bonds is difficult to replace in the short term. However, market sentiment fluctuations caused by asset-side risks have exacerbated the sensitivity of US Treasury yields—geopolitical changes or casual policy pronouncements can trigger frequent yield fluctuations.

From the perspective of risk transmission, the valuation correction on the asset side may lead to a decline in global capital's preference for risky assets, and thus a shift towards traditional safe-haven assets such as US Treasuries;

However, in the long run, if the growth of US debt far exceeds the economic carrying capacity, the pricing logic of US Treasury bonds will face a fundamental test. This challenge to the sustainability of liabilities will in turn affect the confidence of global capital allocation, forming a transmission chain of "asset volatility → liability sensitivity → capital hesitation".

The current fluctuations in bond yields are more like a signal to policymakers to make minor adjustments, reminding them that fiscal policy needs to smoothly transition from a "crisis expansion mode" to a "refined management mode" in order to cope with the pressure transmitted from the asset side.

Structural aspects: Global capital circulation imbalances and vulnerability during transition periods

The sovereign debt pressure on the liability side further exposes the structural imbalances in the global capital cycle.

For a long time, the global capital flow has been supported by a cyclical model of "manufacturing giants exporting goods, bringing back funds to buy US Treasury bonds/US deficit financing, and then importing in reverse." However, this model is now facing adjustment, with tariff wars and anti-globalization putting pressure on the world economy.

This structural imbalance, compounded by risks on both the asset and liability sides, presents a more pronounced vulnerability: the allocation logic of global capital has shifted from a past "long-term heavy holding" of US Treasury bonds to "pursuing returns and diversified allocation".

This transformation is not a panic flight of capital, but rather an optimization of asset portfolios in a new phase of globalization. However, during the adjustment process, the global financial architecture has become significantly more sensitive to fundamental fluctuations. Valuation corrections on the asset side and debt fluctuations on the liability side may amplify their impact through the capital cycle, leading to increased cross-market liquidity volatility and making the global economy face more uncertainties during the "gear shift".

Policy Perspective: The Struggle Between Political Failure and Monetary Policy Independence

Faced with economic challenges, the election cycle, geopolitical realities, and other factors have created significant obstacles and limited room for the government to promote structural fiscal reforms, resulting in a "political failure" dilemma.

In order to avoid short-term pain, administrative forces tend to choose a low-cost path—pressuring the central bank and pushing for interest rate cuts, similar to the Burns era in history, where monetary policy was used as a tool to alleviate economic pressure. Studies have shown that when the US government has less to do for the economy, it begins to put pressure on the Federal Reserve.

The risk of this policy choice is that if the market interprets monetary policy as politically driven rather than data-driven, it could trigger a negative feedback loop of soaring risk premiums, rebounding inflation, or capital outflows.

Many European countries (such as France) also face similar risks of policy chaos due to budget and election cycle adjustments.

Summary: New opportunities arise amidst adjustments.

As institutions such as the International Monetary Fund have pointed out, future policy coordination will indeed face more geopolitical challenges.

We are standing at an inflection point of economic paradigm shift. The risk transmission chain of AI bubble (assets) → sovereign debt (liabilities) → global imbalance (cycle) → policy intervention (politics) clearly outlines the structural challenges of the current global economy. However, this is not an irreversible crisis, but if it is not handled properly, a problem in any link could evolve into a serious crisis.

If US Treasury bonds or global debt run into problems, global funding costs will rise, which will cause issues with the prices of long-term precious metals and AI companies. Price problems and resulting selling pressure will then affect market liquidity, and so on, creating a chain reaction of problems.

This means maintaining good reading habits, conducting rational analysis of data, and tracking minor adjustments and issues so that traders can make reasonable trading decisions before they escalate into major problems.