What are the “K Shaped Economy” and “Paradigm C”

Darius Dale outlines key themes that are changing the rules of the game.

Key Takeaways:

• U.S.–China Trade Breakthrough: A draft deal to revive rare earth and tech trade could lift global risk sentiment.

• Shadow Fed Watch: Trump may replace Powell with a pro-growth chair—raising the odds of structurally lower rates.

• K-Shaped Economy Deepens (Emphasized):
  Massive federal spending is disproportionately flowing to corporations and capital holders—fueling inequality while supporting markets.
  Dale calls this Paradigm C: a structurally bullish, investor-friendly regime where the top of the “K” thrives through subsidies, tax advantages, and defense spending, while the bottom stagnates. The result? Political volatility and a Fourth Turning dynamic—but still a tailwind for asset prices.

• New Defensive Assets: In this regime, it’s not bonds—it’s stocks, gold, and Bitcoin that offer true portfolio defense.

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