In this DD I make a case for SPY 130,000 by 2048 and why I'm full porting into SPY at 9:30 AM tomorrow morning at 9:30 AM Eastern to catch this generational opportunity.
The entire world is moving towards paying with equity rather than paying with money. For example, DJT Accounts for kids that are locked into buying only the S&P 500 which will probably replace the insolvent Social Security system.
This makes sense, because you can always dilute equity without affecting central bank balance sheets, and equity can be diluted infinitely with more infinitely inflating newly printed money to chase that equity. Equity is like fiat without the downside of fiat; it never appears on the government's balance sheet.
It's realistic that most employers by 2038 will be paying employees in a basket of equities instead of actual money. Some of which will be dissolving government debt, some of which will be the bloated S&P 500.
This drops non-participation in the S&P 500 to near zero, since you won't have stupid boomers who choose the "pension" option instead of "401k employer match". In fact, there won't be a "401k employer match" at all; the money will be allocated directly to your pre-diversified portfolio of government debt (bonds) and the S&P 500 (stocks).
Gold rehypothecation. It's realistic that in order to make interest payments on the debt, the US Government will mark to market its gold reserves after artificially pumping up the price via the Chicago Mercantile Exchange.
This exchange is a favorite for market manipulation by big institutions in the past. After rehypothecating its gold reserves and inflating the collateral value of that gold, the US will be able to execute Weimar-lite QE to pay the interest on the debt without totally blowing up the bond market, and possibly also use some of that QE to bail out hyperscalers too.
As we know from 2020, QE pushes up stock prices simply because more dollars and chasing fewer goods. With inflation violent enough to enable the Fed to make interest payments on the national debt without pissing off the bond market, it is impossible for SPY not to expand enormously in price.
Hyperscaler bailouts. Currently, between 60 and 70% of all hyperscaler forward earnings growth come from OpenAI and Anthropic.
If OpenAI and Anthropic cannot make the hyperscalers whole, the government will execute a bailout citing national security concerns or whatever excuse they deem necessary. They will likely feed OpenAI and Anthropic hundreds of billions of newly printed money per year which they can then hand to Microsoft, Amazon, Google, SpaceX and Nvidia.
Another name for this constant stream of government cash is Annual Recurring Revenue. We can count the same dollars multiple times: OpenAI gets $800 billion of revenue from the government, it pays Microsoft $200 of that $800, which is another $200 for Microsoft, then it pays energy companies $100 of that $200. Higher revenue for everybody, better earnings reports for everybody, higher stock prices for everybody.
Jevon's Paradox. This infinite and accelerating liquidity from the Federal Reserve is the perfect fuel for a runaway Jevon's Paradox reaction.
The constraint that we in 2026 think applies to AI's Jevon's Paradox, the fact that at some point you simply run out of money to pay for things down the supply chain of making chips, will no longer apply. Rising prices due to inflation simply get countered by more inflation, which means more chips can be purchased, which means more demand will automatically occur for those chips.
At some point, datacenter suppliers may actually outnumber datacenters themselves as the Jevon's Paradox runaway positive feedback loop results in infinite demand and infinite chips, defying the laws of supply, demand and liquidity. And that's great for the S&P which will be tied to the datacenter economy indefinitely, since AI is the future of technology and progress.
**My position by tomorrow 9: