How Stocks Go Up, but Eggs Go Down in 2026
Can The U.S. Pull it Off?
When you look back at 2025, you wouldn’t think it would be possible, but looking ahead to 2026 we may be staring at one of the most volatile years for markets since 2020.
All of this reminds me of the words and writing of Ray Dalio in his book, The Changing World Order. He highlights 5 forces that lead to the rise and fall of an empire and therefore the changing of a world order throughout history. Those 5 forces are:
Economic forces
Internal Order & Disorder
Geopolitical Power Shifts
Innovation and Technology
Acts of Nature & Conflict
Some of the most prominent economic forces at play today are swelling sovereign debts (debt-to-GDP ratio) around the world and rising inflation. Something that leads to rising long-term yields and an inability for governments to borrow money in the future without creating an even worse overall debt burden. With the interest on U.S. debt already swelling to significant portions of the country’s yearly budget, passing that of defense spending, the U.S. is essentially in what Ray Dalio calls a debt death spiral. This occurs when a country is compelled to borrow money to repay its debt, but only to cover the interest on that debt. But if yields are rising and the country is borrowing more to pay off old debt, then it can only get further and further into debt at even more disadvantageous rates.
When it comes to the internal disorder, the U.S. as the “dominant power” of today, has internal disorder with the democrats calling foul on the Trump administration’s moves. You also have disorder among the republicans themselves. All of this is leading to social unrest with protests in the streets in some of America’s largest cities. So far we haven’t seen anything as bad as what we saw in 2020/2021, where things turned a bit more destructive, but we have seen some outbursts of violence in these protests.
Externally, you have geopolitical conflict escalating in the western hemisphere, with U.S. President Donald Trump threatening nearly the entire region. Ok, fine, it was just Cuba, Colombia, and Mexic(an cartels). But, in all seriousness, tensions are heating up, and although it looks like this is all about the U.S. and Latin America, it seems that some of this is also an extension of the proxy wars that the U.S. has been fighting with China and Russia over the past few decades as well. With China and Russia having an interest in the Latin American region for oil and for strategic proximity to the United States, it may be that the Trump administration is signaling to that side of the world that the U.S. has control over the region. One sign of this has been China’s vocal response to the U.S. action in Venezuela, with the Chinese government calling for the release of Venezuelan President Maduro. This all also came no more than a week or so after China swarmed Taiwan with Warships and fighter jets after the signing of an $11B arms deal between the U.S. and Taiwan. China came out and said that there is no stopping the reunification of China with Taiwan. I got the message about that, I KID YOU NOT, the morning after I had made it up in my mind that I was going to Taiwan to go and study Mandarin the night prior. Well, not this year. I truly do believe that we are likely to see China make an aggressive move on Taiwan while the U.S. does the same in Latin America. This meme is a joke, but I do think it fully encapsulates what 2026 may look like regarding geopolitics.
When it comes to innovation and technology, we have AI. This technology has the potential to rapidly displace work, while technologists claim that it won’t be so bad. They say it’ll be fine we will create new jobs. But what we can potentially expect is that we get massive replacement BEFORE we get new jobs that eventually come about. But I’m no expert on any of this, and really, I think only time will tell. But this also plays into the points of the geopolitical scene, with a potential battle for Taiwan coming up. Considering that Taiwan is the place where the majority of the world’s most advanced semiconductors are made, this is not only a battle for the place that China calls its territory but also for the future of Ai.
Finally, we have acts of nature and conflict, and while we certainly cannot easily predict any sort of natural disasters, we do have to consider that almost everything above also involved conflict. Since we got absolute fireworks on nothing more than the 3rd day of the year, I do truly believe that conflict will be the theme of 2026.
With all of this said, we know that war can sometimes lead to inflationary pressure on goods with trade routes being disrupted and uncertainty around supply, but for the United States in particular, we know that the U.S. strategically gone after Venezuela for its oil reserves, which happen to be the largest in the world.
The U.S. has announced that it plans to increase oil production from the nation and that it will sell the nations oil to other countries. This could lower the price of oil and therefore, lead to a softening in inflation numbers and potentially the excuse necessary for lower short term interest rates within the U.S. If the U.S. is able to get lower short term interest rates then investment into AI and the rest of the economy can increase while the risk assets such as stocks and crypto also catch a bid with excess cash flowing to risky assets.
This could lead to a massive opportunity for risk assets in 2026. This would lead to a massive win for the Trump administration heading into midterms, where power could change hands to create a more favorable environment for the Trump administration.
All in all, I’ll find it important to keep all eyes on oil prices, short term interest rates, and long term interest rates to see if the U.S. is able to pull this off without spooking the long term bond markets to send long term yields higher on increased long term inflation expectations. But if the U.S. is actually able to execute on its plan to use Venezeulas (and others’) oil to keep inflation in check while lowering short term interest rates, then we may have a scenario where the price of stocks go up, but the price of eggs goes down.
 | A guest post by
|
I do think people overestimate Russia’s influence. He is not popular, he does care a lot about his people and is orthodox Christian which is very unpopular in Western Europe. Energy wise, yes the EU is secretly fueling the war by still purchasing their oil because they need it and not to mention the nord stream pipeline that blew up a few years ago which has made it a lot harder for oil to flown and destroyed Germanys manufacturing. The US still has major control through the central banking cartel as they all work for each other in the end. All US presidents have taken the Monroe Doctrine out of context and never showed reciprocity towards other regions of the world like the Middle East and especially with NATO which was made to stop the Soviet Union but it collapsed in ‘91 and has still been expanding on Russias border (I guess we forgot about the Cuban Missle Crisis)and all of the CIA covert wars that exert regime change all over the world to get countries subverted to IMF debt. It will be very interesting to see what will happen as we move into a multi-polar world which is a global shift that is happening right in front of our eyes.