The Great Reset: Middle Game of a New Cold War Between U.S. and China
The Beautiful Bill-->This could shift power from corporations to individuals—a quiet revolution in how we build wealth.
It’s clear the global economy is undergoing a transformation as profound as any in history. The U.S. and China are locked in a middle game of a new Cold War, reshaping money, power, and progress. The data woven into this piece—total government debt, 20-year bond rates, M2 money supply, net oil imports, industrial robots per 10,000 workers, and China electricity demand by province—tells a story of two nations betting big on automation and energy. Trump’s “Beautiful Bill” is a bold U.S. gamble to rewrite the financial rulebook, but the U.S. trails China in automation, and a growing rift, including the “American Party” linked to Elon Musk opposing its spending, adds tension. TSLA (Tesla, Inc.) could be the wildcard to win this end game, with Full Self-Driving (FSD) and humanoid robots like Optimus at its core. Let’s dig into the numbers, the history, and the human quirks driving this moment—because that’s where the real lessons hide.
The Debt Dilemma: A Weight We Can’t Outrun
Debt is the elephant in the room, and it’s gotten massive. The global load sits at three times GDP, a number so big it’s hard to fathom paying it off. The total government debt graph shows the U.S. at over $25 trillion, pulling ahead of Japan’s steady $20 trillion and China’s peak near $20 trillion before it leveled off. The 20-year bond rates graph reveals a stark divergence: U.S. rates are climbing, reflecting inflationary pressures and investor concerns, while China’s rates are decreasing, signaling deflationary trends and a flight to safety. Politicians could default like Russia, reschedule like Greece, or squeeze citizens with higher taxes and delayed retirements—think potholed roads and underfunded schools—but none of that flies with voters. Inflation in the U.S. has surged, lifting housing prices until it cost Biden his seat, while China exports deflation through subsidized cheap goods, a dynamic intensified by Trump’s tariffs. It’s a Band-Aid for the U.S., a deeper challenge for China.
Enter the “Beautiful Bill,” Trump’s swing-for-the-fences plan to reset everything with stablecoins, backed by U.S. Treasuries, turning regular depositors into “super senior creditors” to dodge zombie bank fallout. The FDIC can’t cover the mess, so pension funds and insurers take the hit. The idea? Shield the have-nots, grow out of past bailouts without new taxes, and ride an AI wave—Sam Altman’s “Gentle Singularity.” But here’s the catch: it might add $3.3 to $5 trillion to deficits over a decade, a figure that’s sparking fights.
Pensions could suffer, and if we’re not careful, a new elite might lock in power. It’s a bet on tomorrow, funded by today’s uncertainty.
A Lesson from the Past: Tally Sticks to Tech
History has a way of repeating, but with better tools. In 1834, Britain ditched tally sticks—wooden debt trackers—for paper money to handle war debts, accidentally burning down Parliament in the process. That messy pivot kicked off the Industrial Revolution. Now, stablecoins and Bitcoin, convertible to dollars and offering creditor perks, are the U.S.’s new move under the Beautiful Bill. It’s about torching zombie banks and assets, then using tokenization to fund the “workhorse” businesses Wall Street ignores. This could shift power from corporations to individuals—a quiet revolution in how we build wealth.
China’s Play: Money and Machines
China’s got a different playbook. The M2 money supply graph shows its cash pile hitting over $40 trillion, dwarfing the U.S.’s $25 trillion. That money props up electric vehicles and solar panels, undercutting global rivals and triggering Trump’s trade pushback. Overcapacity is a risk, but deleveraging—think Evergrande’s fall or EV/solar cuts—shifts focus to high-tech. The digital yuan aims to rival the dollar, targeting emerging markets. China might pivot to AI or biotech, spread yuan use via Belt and Road, or boost domestic spending with digital welfare, though overinvestment or unrest could trip it up.
Their automation edge is real. The industrial robots per 10,000 workers graph shows China jumping from 50 to over 400, outpacing the U.S.’s 300. The International Federation of Robotics says China installed 276,000 robots—51% of the global total—while the U.S. added just 37,587, down 5%. China’s robot density hit 470 per 10,000 employees versus the U.S.’s 295, thanks to “Made in China 2025” and state backing. The China electricity demand by province map flags Guangdong, Shandong, and Jiangsu (each over 500 TWh) as energy giants, while U.S. hubs like Texas, California, and Florida can’t keep pace.
The Energy and Automation Gap
The net oil imports graph shows the U.S. cutting imports from 12 million to under 4 million barrels daily, while China’s rise to 14 million leans on Russia and Iran. But oil isn’t the story—electricity is. China’s 1.7 million robots, mostly in electronics, overshadow the U.S.’s 1 million, mostly in autos. The U.S. needs four times more power to compete, but red tape stalls gas and nuclear projects. China’s edge in humanoid robots—over 60 makers versus the U.S.’s 30—builds on its EV chains. The U.S. shines in AI software, but China’s hardware rollout wins on scale.
TSLA’s Shot to Win: FSD and Optimus
Here’s where it gets interesting. TSLA could be the U.S.’s ace, with Full Self-Driving (FSD) and Optimus humanoid robots poised to tip the scales. Why? Let’s break it down:
FSD’s Data Edge: TSLA’s FSD, trained on billions of miles from its fleet, plans an unsupervised launch in Austin by mid-2025, with potential nationwide spread. This isn’t just about cars—it’s a platform for AI that could slash transport costs and emissions. Its vision-only system, honed on millions of vehicles, beats radar-heavy rivals, offering a scalable, cost-effective edge over China’s subsidized EV push.
Optimus’s Workforce Revolution: Optimus aims for thousands of units in 2025, with costs potentially dropping below $20,000. Built on TSLA’s battery and motor tech, it can tackle repetitive, dangerous jobs, easing labor shortages China’s overcapacity model can’t solve. Competitors lag in production scale, and TSLA’s manufacturing know-how could dominate.
AI Synergy: TSLA’s Dojo supercomputer ties FSD and Optimus into one AI ecosystem, a feedback loop China’s fragmented efforts can’t match. This could supercharge the “Gentle Singularity”
The American Party Twist: Spending Pushback
The “American Party,” launched by Elon Musk, throws a wrench in the works. The Beautiful Bill passed with Trump’s backing, extending tax cuts, boosting defense, and cutting Medicaid and SNAP, but Musk’s group hates the $3.3 to $5 trillion deficit hike. He calls it a “disgusting abomination,” clashing with Trump’s growth story despite White House spin on deficit cuts. Musk’s Department of Government Efficiency roots fuel this rift, weakening U.S. unity as China marches forward.
The Bigger Picture
This middle game pits the U.S.’s Beautiful Bill—risky innovation—against China’s state-driven might. The data show U.S. debt woes and an automation gap, with China leading in money printing, robots and energy. The American Party’s fight over spending muddies the waters, but TSLA’s FSD and Optimus offer a path to victory if the U.S. can harness them. The End Game : Artificial General Intelligence, Automation and Unlimited Energy.
Thanks for reading,
Guillermo Valencia A
Cofounder of MacroWise
Barcelona, Spain