I’ll keep this mercifully short. One commenter in my Friday night econ news post asked, in a kind of oblique way, what would I do in this environment.
Okay, I’ll play — but not without stating firmly and loudly that I am not dispensing investment advice, nor am I licensed any longer to do so. We clear on that?
A liquidity crisis is already here. But this may not be like your father’s ’08 crisis. In ’08, the USD rose — counterintuitively — against every other major currency. Why? The need for USD to cover credit losses was global, and NYC became a literal blackhole for USD. I made an absolute killing on the USD during the ’08 crisis, and afterwards even more on the banks and zero coupon bonds. I made several people fortunes they still retain.
But the crisis now unraveling doesn’t look like one of confidence, it looks like an animal out of a medieval grotesque, certainly not something the Fed can backstop.
Fire in the hole!
Sure, the Fed might do QE. But Congress can’t do a bailout with almost $1trillion in interest payments on US debt imminent and Trump offering $2k bribes to every citizen in America. It’s impossible. What would one call inflation with QE?
What would you call that?
Hyperinflationary?
It’ll be damned ugly whatever happens; whatever you want to call it.
Were I still advising investors I’d be putting them in Yuan interest bearing accounts, I’d be buying silver on the dips, JPY, SKW, and buying way out of the money puts on S&P 500 and NASDAQ. In short, if you can find an affordable way to buy puts on things that are impossible to happen, buy them, because one or two will hit big, and you’ll rake in the money.
Silver’s in what’s called a secular bull market, not a cyclical one — cyclical means three to five year cycles, whereas secular means, “We don’t fucking have any idea how long ‘dis bitch is going up or down.” This particular secular bull is being driven by a massive externality: China’s draconian export controls of the metal. The problem, right now, from a technical trading perspective, is a failed double-top breakout. This is bearish in the near term, so an under $40 buying opportunity might be realistic. As a side note: China has a VERY long history with the white metal, but not so much the yellow one. I can recommend a good book if you are interested.
You can invest in the Yuan in several US banks/investment firms. Some accounts are interest bearing, others are just a pure play on the currency. If you want specifics, send me a DM. But the current T-bill replacement is silver, but buy it under $45 if you can. Under $40 is best.
But, for fuck’s sake, avoid paying premiums for silver. What does that mean? If you buy silver coins, buy 99 percent silver grade coins — not the overpriced ones from the US Mint. Buy the off-market ones. Otherwise, the US silver cartel will clean out your gains before you even begin.
spud
also something to think about. in a deflating economy, cash is king. and if you are heavy in investments, and metal is a investment. you might be forced into selling low to gain scarce dollars.
you are right, this might be worse than even 1929. guns, food, water, candles, a way to heat etc. might be good investments also.
Sean Paul Kelley
@spud: will there be deflation? Yeah, probably. It’s already happening in China. But our crisis will be a hybrid-crisis, like stagflation was a hybrid crisis. Regardless, it’s gonna be nasty.
Jack
What is the title of the book you mentioned in the article?
Sean Paul Kelley
@Jack: Empire of Silver: A New Monetary History of China. It is positively eye-opening.
KT Chong
Over the weekend I posted about something that almost no one in the West seems to be paying attention to: China is now entering the next phase of its economic-growth engine — humanoid robots.
And just like with EVs, the shift is happening fast, quietly, and with the same pattern: Chinese companies industrialize before Western analysts even realize it’s begun.
UBTech, Unitree, XPeng — they’ve all started mass-producing and delivering humanoid robots. This is not “prototype hype” or “lab demo” stuff anymore. It’s real machines getting shipped to real factories, hospitals, and even homes. China’s humanoid sector is going to be the next multi-hundred-billion-dollar growth curve, and the West is, once again, completely oblivious.
Frankly, IMO it’s already too late for the West to catch up.
Anyway, my point here today is… the Unitree G1 Ecosystem.
KT Chong
While reading deeper, I found something much more important: a lot of these new humanoid startups aren’t building from scratch. Instead, they’re standing on the Unitree G1 frame and layering their own proprietary AI on top. That means Unitree has quietly become the default hardware platform for China’s humanoid boom — like the Android of robot bodies.
A few examples:
1. A-Bots Robotics (Shenzhen, 2024)
• Focus: precision assembly, modular SDK
• AI layer: Baidu Ernie-ViLM for object manipulation
• Notes: 150+ units in Foxconn trials; ~$22k package; tuned for fragile electronics
2. HPDrones Tech (Guangzhou, 2023)
• Focus: warehouse logistics + drone hand-off automation
• AI layer: proprietary SLAM + multi-floor routing
• Notes: partnered with Unitree; 500-unit rollout for e-commerce warehouses in Q1 2026
3. LeRobot Labs (Beijing, 2024)
• Focus: open-source robotics + reinforcement learning
• AI layer: embodied datasets, tool-use improvisation
• Notes: hacked 20+ G1s for universities; GitHub repo exploded; expanding to eldercare
4. Weston Intelligence (Hangzhou, 2023)
• Focus: healthcare — vitals scanning, bedside conversations
• AI layer: Tencent Hunyuan conversational model
• Notes: deployed in Shanghai hospitals; sub-$20k price; measurable patient-compliance benefits
5. DexAI Dynamics (Shenzhen, 2024)
• Focus: dexterity — folding fabric, micro-adjustments, teleop self-supervision
• Notes: $80M raised; 100 units deployed in garment factories; arguably the best hands in China now
And then there’s MindOn — the one that caught my eye earlier — using the G1 frame to build a full butler/housekeeping robot (“MindOne”). One of their engineers even said they eventually want their own frame, but that’s the point: everyone is starting on Unitree first.
KT Chong
Unitree has locked down the humanoid robot ecosystem
All these startups — even if they eventually design their own skeletons — are still tying their early models to:
• Unitree’s frames
• Unitree’s actuator supply chain
• Unitree’s low-cost motor ecosystem
• Unitree’s software layer and APIs
Once you build your first few generations on someone else’s chassis + firmware, you’re effectively locked into their ecosystem. Switching costs explode. You’d have to rewrite half your AI stack.
So Unitree has already achieved what Western robotics companies wish they could do:
Become the default hardware substrate for an entire national robotics industry.
This is exactly how China overtook the West in EVs — standardized hardware, cheap mass manufacturing, and dozens of startups building on top of the same base.
Unitree is still a private company.
Given everything above, the most obvious question becomes: When does Unitree IPO?
KT Chong
On 15–16 November 2025 (literally this weekend), Unitree completed its pre-IPO regulatory tutoring with CITIC Securities — an unusually fast four-month process that normally takes 6–12 months.
The company publicly stated in September that it expects to submit the formal prospectus and listing application to the Shanghai STAR Market between October and December 2025.
Market sources still quote a targeted valuation of up to US$7 billion (≈50 billion RMB).
Once the prospectus is accepted (usually 2–4 rounds of CSRC questions), the actual listing can happen remarkably quickly in a hot sector — sometimes inside 3–6 months. A Q1/Q2 2026 listing is the base case, but a very late-2025 listing is still possible if the regulator fast-tracks it the way they have the tutoring.
Sean Paul Kelley
@KT Chong: it’s fucking Skynet. Kill me now, please.
KT Chong
What About America?
Meanwhile… America’s Great White Hope Elon Musk is already behind.
Elon Musk promised that the U.S. would lead the humanoid robot race with Tesla Optimus — but the timelines have slipped, and the window has basically closed. By the time Musk’s robot is actually ready for real-world deployment — 2 years from now? 3? — China’s robotics companies will already be deep into mass production, with tens of thousands of units deployed across factories, warehouses, homes, hospitals, and service industries.
And let’s be real — we all already know this:
Tesla will NOT be cost-competitive.
Not even close.
China has already hit the sub–$20k price point for serious humanoids. Several G1-derived platforms will likely break below $15k. Meanwhile, Tesla Optimus — if it gets out of prototype limbo — will land somewhere between $20k–$40k+, before customization, localization, or integration costs. It’s the exact same pattern we saw with EVs, solar panels, drones, lithium batteries, telecom gear — the U.S. builds one expensive proof-of-concept; China builds ten factories and ships globally.
So yes, Tesla’s robot may survive inside the U.S., but only through:
• tariffs,
• import bans,
• national-security excuses,
and whatever industrial-policy tool Washington can wield.
It won’t survive on merit.
It will survive on protectionism.
But step outside the U.S.?
Why would any ASEAN, Middle Eastern, African, or Latin American country buy a Tesla robot when Unitree, UBTech, XPeng, and others are offering machines that are:
• cheaper,
• and available now — not in 2027,
• generations ahead and more advanced by 2027.
You think Indonesia, Malaysia, Brazil, Mexico, Turkey, or Saudi Arabia is going to pay double the price for a worse robot just to keep Washington happy? You think they’re going to turn down a $12k Unitree or $16k UBTech because Trump tries to bully them into paying for a $35k American robot instead?
The U.S. will absolutely try to pressure, coerce, or outright threaten developing countries into “buying American” — the same way it pressures them on telecom, semiconductors, energy infrastructure, ports, and industrial policy. But this time I don’t think most countries will obey.
They have options now.
By the time the U.S. finally ships its first commercially deployable humanoids in 2–3 years, the rest of the world will already be locked into the Chinese robotic ecosystem — Unitree frames, Chinese actuators, Chinese SDKs, Chinese AI integration, Chinese supply chains.
The EU, Australia, Japan, South Korea, and Taiwan — effectively U.S. satellites — may follow Washington’s orders and switch to American robots. Maybe. If their economies in two years can still afford it.
Everyone else?
Forget it.
KT Chong
Forcing U.S. factories and businesses to buy “American-only” humanoid robots — which will be more expensive and less advanced — will cripple U.S. competitiveness across the board.
If American companies are stuck paying $30k–$40k per unit for less capable Tesla or U.S.-made robots, while factories in China, Malaysia, Indonesia, Brazil, Vietnam, Mexico, Turkey, and everywhere across the Global South are deploying $12k–$18k Chinese robots at scale, the cost gap between U.S. and foreign manufacturing will explode. And it won’t stop at robotics — it will cascade downstream into every single sector that depends on automation:
• logistics
• warehousing
• construction
• agriculture
• textiles
• electronics assembly
• packaging
• even retail, service, and hospitality
If U.S. firms are locked into a high-cost, low-capability robotic ecosystem while the rest of the world uses cheaper, better, faster machines, then every American industry that relies on automation gets structurally handicapped. That’s not just a disadvantage — that’s YUGE and permanent.
So Trump’s protectionism will actually accelerate the decline of U.S. manufacturing competitiveness. Because the battlefield is no longer labor cost — the battlefield is automation cost.
And China will win that fight by orders of magnitude.
This is also why I doubt even America’s closest aligned countries will follow U.S. orders when Washington eventually demands they drop Chinese robots and buy American ones. Unless they’ve developed a death wish for their own industries, they simply can’t afford to sabotage themselves like that — especially when their economies will likely be in even worse shape two years from now.
Except Europe. Europe will probably obey, because their heads are shoved so far up America’s arse they can’t even think straight — and then there’s that incessant, obnoxious demand of theirs: “You must stop be friend with Russia first or we won’t play with you!”
Yeah, okay. Whatever.
Sean Paul Kelley
@KT Chong: I gotta be honest. If anyone I know ever buys one of these, American or Chinese made, I’m taking a baseball bat to the fucking thing. I’m sorry. This kind of shit is just insane.
KT Chong
IMO: China will eventually move toward some form of universal income or redistribution. Once robots replace most human labor, the state will simply “tax” robotic productivity — in whatever form it chooses — and channel that output back to the population. China can do that because the government actually has the authority, the ideology, and the political structure to redistribute.
After all, that’s the logical endgame of communism, isn’t it? A fully automated productive base supporting human welfare.
America? No such luck.
In the U.S., the elites — the top 5%, or really the top 1% — will own the robots. They’ll own the factories, the logistics chains, the land, the means of production, and the automated labor force. Everyone else below them will get… nothing. No jobs, no prospects, no future, nada. Just a growing underclass structurally locked out of the new automated economy, where human labor is obsolete and redundant.
And unlike China, the U.S. government can’t — and won’t — redistribute. It won’t tax robots because it won’t tax the ultra-rich. It won’t implement a universal income. It won’t structurally rebalance anything. The millions displaced by automation will simply be left to rot — not because the technology is bad, but because the political system is incapable of adapting to it.
And if there’s one thing I’ve learned comparing Americans and Chinese: Americans are astonishingly ideologically rigid, stubbornly wedded to outdated principles even when reality punishes them. The Chinese, by contrast, are pragmatic — willing to bend, adapt, and change. That adaptability will matter a lot when robots replace human labor and make capitalism, as we know it, obsolete.
That’s why you’re panicking. You know you can’t adapt.
Ian Welsh
KT,
I’d like to elevate those comments on humanoid robots to a post. You OK with it?
Ian
KT Chong
Of course, you’re welcome to combine, edit, or rewrite them.
ventzu
Sean, when the QE starts it will focus on the long end of the yield curve – essentially funding the government debt. So I’d assume that this will just pump more liquidity into financial markets, with only a slow trickle through into inflation.
So the question is whether the dollar would collapse under that scenario – except that if every other country is doing the same . . .
So couldn’t this can be kicked further down the road?
KT – on the China robots. My understanding is that there is already high youth unemployment in China. Further automation is going to make this worse – and potentially in the longer term, erode engineering skills just as deindustrialisation did to the US. Yes they could do UBI, but inequality and wealth concentration will inevitably worsen. For all the triumphs of China post-revolution, I worry that this next period is going to be the most challenging.
Sean Paul Kelley
@Ventzu: assuming your assertion is correct, how does the Fed backstop the shadow banking system, i.e. private credit shops, off-balance sheet SPEs, and the like? It simply can’t. And Congress can’t either. QE would collapse dollar hegemony for good, in my opinion.
ventzu
Sean,
There are perhaps 3 separate issues here.
The private credit bubble, which given economic strains looks unstable. So that may well pop, with knock-on effects on PE and the banking system.
Public debt – which does not look healthy, but this is where the Fed has the ability to kick the can down the road – with the risk to the dollar.
And then there is the AI bubble, which is also borrowing significant from public and private markets. Open AI and Nvidia have been floating the idea of a government backstop, which could keep the bubble going for a bit longer.
In the long term I think you are right though.
spud
china needs to do what the new dealers did, radically shorten up the work week, then brag about it.
showcase workers under socialism working a mere 24 hour, four day work week, then showcase its at the same pay, same medical, welfare, housing and time off to enjoy the fruits of their labor.
this will drive the cranks and charlatans to become even more extreme and paranoid. this behavior of course will collapse the mess even quicker that was made from 1993-today.
it will really open the eyes of the duped who were taught milton freidman, hayek, and ayn rand were economically and historically accurate.
a bonus might be musk and the other parasites might panic, and attempt to flee to mars.
elkern
Thx, SPK, I was hoping for some advice on how us peons should move our money around to deal with the looming Crash. Unfortunately – for me – it appears that you are in a different (higher) bracket than I am.
As a retired person with total (net?) assets in the low 6 figures (I’m a Lakh-aire?), I’m not gonna start playing any markets now. Most of my pile is in a 401k, mostly in Bonds (I’ve never trusted the Stock Casino).
I’ve been thinking of taking out a bunch of that to (1) pay down (or off) my Mortgage, (2) invest in other physical assets (new furnace? better car?), and (3) just get it out of the 401k before Fidelity (or whatever shell bank *they* hide my money in) goes under.
I should prolly also get a pair of them fancy new Titanium knees (cartilage long gone, been bone-on-bone for years), and a mouthful of new teeth.
On a more paranoid note (Civil collapse, not mere Financial Crash), maybe I should be chasing Estate sales, looking for good (= old) hand tools?
Free advice would be appreciated, if not necessarily followed…
Failed Scholar
Ahh good old silver. Reminds me of Max Keiser back in the day exhorting people to buy silver to sink JPMorgan, lol.
I was also wondering what the hell one can do to try and mitigate the incoming SHTF moment. Anyone remember what those old long running threads Ian used to repost every month with homesteading/downsizing/preparing for collapse type advice?
I like reading Wolf Richter’s “Most Splendid Housing Bubbles in Canada” series, but he hasn’t updated it since June. I wonder how far this sucker might fall, I think we are at 2022 price levels last I checked. How far can that slide even with the immigration demand push?
Jorge
SWK: Swedish Steel? (SSAB AB)
SKW: Stanley/Black&Decker tools?
Note: am wearing a black Stanley T-shirt I bought on liquidation. Nice shirt.
different clue
@ Failed Scholar,
Yes, I remember Ian Welsh’s weekly re-hoisted thread offered for people to give comments about surviving hard times. When people stopped adding to it, he stopped rehoisting it. It is now hard to find. Perhaps if it was given a “category title” in the “categories by title or name” section on the upper right side of the homescreen, people might find it easier.
It can still be found by typing the exactly correct words into the Yahoo All-the-web search engine, but how long will that last for? So . .. Here it is.
” Preparing for Bad Times Thread ”
https://www.ianwelsh.net/preparing-for-bad-times-thread/
It grew to 372 comments long before people stopped coming and adding anything.
I would note that Ian Welsh still offers the weekly Open thread. People could offer survival advice there with header titles on their comments so that other people could know what the comment will be about before deciding to read it or not. And people wanting to find things could go back through all the Open Threads and look at all the comments to see which ones might be “survival relevant”.
Failed Scholar
@ different clue
Apologies on the delay. Thanks for bringing that up, that’s the exact thread I was thinking about, and I see that Ian’s bumped it up again for our perusal and/or dooming 🙂
different clue
@Failed Scholar,
Well, we can do more than just doom-scroll. We can offer actual ideas, resources, information, links etc. to make survival more likely, even make it more worth surviving.
And even just thinking of possible doom-vectors might allow us to think about how to mitigate them or avoid them with enough advance preparation. Fore-warned is fore-armed. Or maybe eight-warned is eight-armed if you are an octopus.
I have been seeing videos exhorting FBAs to join in a Black Friday Blackout meant to last from Black Friday to Cyber Monday. If enough of them join in that movement, can they actually make the sales graph-lines go down and stay down over those 5 days as a demonstration of measurable power and demonstrable discipline? This video I just ran across makes me think about that as something to watch out for, one way or the other.
” Maga Billionaires PANIC: Black Holiday Boycotts Just Went Viral ”
https://www.youtube.com/watch?v=mrp6gVGTIPY