On My Radar - Game of Thrones III

Written By Steve Blumenthal

September 5, 2025
By Steve Blumenthal

“One more such victory and we are lost.”

— King Pyrrhus of Epirus (319-272 BCE)

A few weeks ago, I wrote “The Modern Day World Order is a Game of Thornes.” This past week, China hosted the Shanghai Cooperation Organization Summit in Tianjin. It was followed by a massive military parade in Beijing on September 3rd, marking the 80th anniversary of victory over Japan.

The gathering brought together over 20 world leaders, including Russia's Vladimir Putin and India's Prime Minister Narendra Modi.

Putin, Xi Jinping, and Kim Jong Un appeared together in an unprecedented show of unity. The symbolism was hard to miss. The events send a clear message that China is positioning itself against the West. Not new to long-time OMR readers. We’ve been writing about this since 2019.

This was Modi's first trip to China in over seven years. The summit highlighted the strength of the China-Russia partnership, but analysts note this is a relationship in which Russia will increasingly play the junior role.

The Thucydides Trap is when a rising power (challenger) grows strong enough to threaten the dominance of an established power (hegemon). The rising power becomes frustrated by the existing order and seeks to reshape it to serve its interests better. The established power feels increasingly threatened and may act preemptively to maintain its position. Both sides face a security dilemma where defensive moves appear aggressive to the other.

China is positioning itself as the standard-bearer of a multipolar world, in contrast to the U.S.-led Western narrative of a Unipolar world order.

In our modern-day story, Emperor Xi Jinping pulled off what can only be described as Daenerys Targaryen's most ambitious moment yet. The Shanghai Cooperation Organization Summit, followed by Beijing's massive Victory Day parade, was a theater designed to announce China's claim to global leadership.

Grab your coffee and settle into your favorite chair. There is more to the story.

On My Radar: 

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Game of Thrones Part III - Our Dollar, Our Problem

Three weeks ago, I wrote that our modern world order resembles George R.R. Martin's Seven Kingdoms. Since then, the game has accelerated dramatically.

Emperor Xi has made his boldest move yet for the Iron Throne, while King Donald's Alaska summit with Tsar Vladimir has reshaped the northern threat. The dragons are circling, the Night King has shown his hand, and winter feels nearer.

Here is how I see our real-world Game of Thrones unfolding.

The Dragon's Gambit: Xi's Power Play

The Shanghai Cooperation Organization Summit in Tianjin, followed by Beijing's massive Victory Day parade, was theater designed to announce China's claim to global leadership.

The gathering brought together over 20 world leaders, with Xi, Putin, and Kim Jong Un appearing together in an unprecedented show of unity. Picture this: the Dragon Queen flanked by the Night King and his most loyal lieutenant, standing before the world as they take center stage at China's military parade.

The symbolism was unmistakable. China is casting itself as the standard-bearer of a multipolar world, set against the Western narrative of a US-led liberal international order. Just as Daenerys positioned herself as the liberator of slaves while building her power base, Xi is presenting China as the champion of developing nations while systematically challenging American hegemony.

But here's where the Game of Thrones parallel becomes even more compelling: analysts note this is a relationship in which Russia will increasingly play the junior role. The Night King, for all his menace, may find himself serving the Dragon Queen's greater ambitions. It is Xi who stands in a superior position to take the Iron Throne. Russia is not the rising power.

The King in the North Bends the Knee... Partially

The most fascinating subplot was Modi's first trip to China in over seven years. In our Game of Thrones framework, this represents Jon Snow (Modi) engaging with Daenerys (Xi) in a delicate diplomatic dance.

Modi's participation signals India's recognition that the old order is shifting, but it doesn't represent complete capitulation to Chinese power. Like Jon Snow, Modi maintains his independence while acknowledging the changing dynamics of the realm. India's strategic calculus recognizes that isolation serves no one when dragons are reshaping the world.

The Alaska Accord: When Kings Meet

Meanwhile, King Donald's summit with Tsar Vladimir in Alaska provided the perfect counterpoint to Xi's grand theater. Where Xi chose spectacle and mass demonstration, Trump opted for direct negotiation.

The timing was crucial. As Beijing showcased its ambition for a new global security and economic order that poses a challenge to the U.S., Trump was simultaneously working to potentially neutralize the Russian threat through diplomacy rather than confrontation.

This echoes the strategic brilliance we saw in later Game of Thrones seasons: sometimes the smartest move isn't to fight every enemy at once, but to divide potential alliances before they fully form.

The Maesters Weigh In

Experts see fissures despite Xi, Putin, and Kim's show of unity, suggesting that, like many alliances in Westeros, this Eastern coalition may be built more on mutual opposition to Western power than genuine shared interests.

The geopolitical maesters are noting what any Game of Thrones fan would recognize: alliances of convenience rarely survive success. If the Eastern powers achieve their goal of displacing American hegemony, their next challenge will be deciding who truly sits on the Iron Throne.

Winter's Approach: Economic Realities

While Xi stages grand summits and Trump negotiates with Putin, the economic winter I warned about continues its approach. The debt crisis that Ray Dalio describes as inevitable grows more pressing with each passing month. Like the White Walkers advancing on the Wall, inflation continues its relentless march despite all the political maneuvering.

The irony is Stark (pun intended): while world leaders play their great game for global dominance, the mathematical certainty of a debt crisis threatens to make any victory won at too great a cost - a Pyrrhus victory.

History suggests that when economic winter arrives, it often reshuffles the deck entirely.

It may be a good time to reread Neil Howe’s prophetic book, The Fourth Turning Is Here: What the Seasons of History Tell Us about How and When This Crisis Will End.

The Game Accelerates

What we witnessed in these past weeks: Xi's grand summit, Trump's Alaska diplomacy, and Modi's careful positioning, represents the acceleration phase in our modern-day Game of Thrones. The careful maneuvering is giving way to bold moves and clear declarations.

The symbolism is hard to miss. The events send a clear message that China is positioning itself against the Western narrative. But symbols and spectacles, while important, don't change the underlying economic mathematics that drive historical cycles.

As I write this OMR Game of Thrones update, several key developments bear watching:

  • How will Xi leverage the momentum from his successful summit?

  • Trump's Alaska summit suggests a potential strategic realignment. If successful, it could fundamentally alter the Eastern coalition dynamics.

  • Despite all the political theater, the debt crisis and inflation continue building pressure. Like the White Walkers, economic mathematics don't negotiate or make alliances - they simply advance.

Investment Implications

For those of us managing family wealth through this transition, the lessons remain consistent with what I outlined three weeks ago:

Currency Debasement Continues

Central banks worldwide face impossible choices between political pressure and economic reality. Most countries will attempt to print more money and exert more effort to control interest rates. They’ll win on the short end of the curve but lose on the long end of the curve.

Watch for the bond vigilantes to rise in force. Higher inflation and higher free market interest rates remain the probable outcome.

Conclusion: The Game Never Ends

The events of recent weeks confirm what I wrote in August: we are living through a real-world Game of Thrones, complete with shifting alliances, bold power grabs, and looming existential threats.

Xi's summit was masterfully orchestrated theater, but theater doesn't change economic fundamentals. Trump's Alaska diplomacy may prove strategically brilliant, but it doesn't solve debt mathematics. Modi's careful positioning shows wisdom, but wisdom doesn't stop winter's approach.

As any reader of Martin knows, in the game of thrones, you win or you die, but the game itself continues regardless. The Thucydides Trap concept fits perfectly - it's precisely what's playing out between Emperor Xi and King Donald. The world holds its breath.

The question isn't whether our current players will succeed in their immediate objectives. The question is who will still be standing when economic winter passes and spring returns to reshape the global order once again.

Winter is coming. Prepare accordingly.

Some ideas:

Watch the dollar, SOFR and long-term bond yields.

  • Asset allocation becomes critical: Traditional 60/40 portfolios may prove insufficient with valuations near record levels and persistent inflation. Think of inflation is the match that lights the fuse.

  • Geographic diversification gains importance: When empires shift, having exposure to multiple regions and systems provides protection.

  • Real assets maintain appeal: Gold, real estate, and productive assets often preserve wealth through major transitions.

  • High free cash flow businesses that pay high dividends.

  • Innovative companies with exponential growth potential. The period ahead favors active stock selection, not a passive buy-and hold index investing.

  • Avoid long-duration bonds. Trade the cyclical trends. Don’t buy and hold. A 4.3% 10-year Treasury is likely to lose value to inflation and will lose value in a rising interest rate secular cycle. Not worth the bet when other investment alternatives provide much higher yield profiles.

The views are mine. I seem to be pounding the table more aggressively as we advance. Sadly, it’s how I see our current state.

But know too that it can be navigated - both in terms of our mental state and our wealth. There is no guarantee my views are correct. I pray I’m wrong, I fear I’m right. I want to be positioned to navigate the period successfully regardless of the outcome.

It is now Our Dollar, Our Problem. More on this as time steps forward.

Not a recommendation to buy or sell any security. Total recommendation to buy an ice-cold IPA.

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A Few Good Charts

Before we jump in, Mauldin Economics summed up Peter Boockvar’s comments on this morning’s unemployment data - short and to the point:

US payrolls grew just 22,000 in August, while the two prior months had combined downward revisions of 21,000.

  • Headline unemployment ticked up to 4.3%. More significantly, the all-in “U6” rate rose to 8.1%, its highest since October 2021.

  • At 34.3 hours, the average workweek is near its lowest point since 2010.

  • The average duration of unemployment rose to 24.5 weeks, compared to 24.1 weeks in July and 23 weeks in June. This is the highest since 2022.

  • The manufacturing sector shed jobs for a 4th consecutive month.

  • Treasury yields fell in response as the bond market now projects 100% odds of a rate cut this month and a slight chance it will be an extra-large 50 basis points.

Bottom Line: Investors wondering “what to do” with this data should note, as Boockvar does, that gold is at a fresh record high and the US dollar is weakening further.

Chart 1:

Sorce: Apollo

Chart 2:

Source: @McClellanOSC

Chart 3:

The Fed has no other liquidity options but to cut rates. This is really important:

Source: End Game Macro

Chart 4:

Source: @KobeissiLetter

Chart 5:

Source: Fortune, @StealthQE4

Trade bonds, don’t buy and hold bonds. We seem to be nearing a recession (though specific industries are already in recession). McDonald’s said the low-income segment of its market is cutting back. McDonald’s is a place to go for low-cost meals.

The Treasury’s General Account has been tapped—no juice to inject via that tool. Cutting the Fed Funds rate is next. And what is likely to follow is more printing and spending from the government. We are caught in a trap.

Chart 6:

I share this next chart in Trade Signals each week. It has been signaling lower interest rates. I find the Weekly MACD trend signal to be a good tool to trade the intermediate-term trends. Not perfect. Nothing is.

The green arrow in the lower right section indicates the current trend in interest rates. The yellow zone is where I believe the yield on the 10-year is heading - Probable Target Zone in Next Recession. Then I believe the government juices the system again.

Source: CMG Investment Research, StockCharts.com

The views expressed herein are solely those of Steve Blumenthal as of the date of this report and are subject to change without notice. Not a recommendation to buy or sell any security.

Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. Current viewpoints are subject to change. Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. 

 

Bright Spots - The Yamanachi Factor

I was listening to the All In podcast last weekend and came across something exciting regarding longevity health.

At around the 1 hour and 12 minute mark, David Friedberg explained the "Yamanachi factor" protein breakthrough. Click here to go streight to the discussion. This is a significant breakthrough in aging and cellular reprogramming research.

Essentially, the Yamanaka factors (Oct3/4, Sox2, Klf4, c-Myc) are a group of protein transcription factors that play a vital role in the creation of induced pluripotent stem cells. Pluripotent stem cells can develop into any cell in the body, often referred to as iPSCs.

I am no expert on this. I did some searching and share with you a few bullet points on what makes this so significant:

What they do: These factors restore a cell's epigenome, the marks found on DNA, which essentially reverse aging. Changes to our epigenome age us. They're like traffic lights inside our cells that regulate gene activity.

Recent advances: There have been several major studies in 2024 showing promising results:

  • In vivo cyclic overexpression of Yamanaka factors restricted to neurons reverses age-associated phenotypes and enhances memory performance (published May 2024)

  • Yamanaka factors rejuvenate neurons, increasing synaptic connections and stabilizing metabolism. The study showed improved motor and social behaviors in mice.

  • The research suggests that the ectopic induction of the Yamanaka factors OCT4, SOX2, and KLF4 (OSK) in mammals can restore youthful DNA methylation patterns, transcript profiles, and tissue function, without erasing cellular identity - essentially reversing cellular aging while maintaining cells in their intended type.

This represents a potential path toward actual age reversal, rather than just slowing the aging process, which would be revolutionary for treating age-related diseases and extending a healthy lifespan.

David Friedberg was asked about his best estimate of the timing. He said it would be 7-12 years before it is approved in humans. Probably earlier in other countries. No guarantees, of course, but it sure is a potential giant “bright spot” for humanity.

Hope to share more with you next week. Please let me know if you have anything super positive I can share with everyone.

 

Trade Signals: Update - September 4, 2025

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The views expressed herein are solely those of Steve Blumenthal as of the date of this report and are subject to change without notice. Not a recommendation to buy or sell any security.

Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. Current viewpoints are subject to change. Please note that the information provided is not recommended for buying or selling any security and is provided for discussion purposes only. 

 

Personal Note: NY, Florida, Arizona

Eagles - Cowboys. The game was interrupted by lightning, the teams vacated the field, and the fans were instructed to shelter in the concourse. Step-son Kieran and I rushed to the Broad Street subway line, picked up my car from a garage in downtown Center City Philadelphia, and headed home.

My Birds pulled it out, but they certainly didn’t look in good form. Yet, the fun begins, and a new NFL season has started.

A special hat tip to Ryan H.

Turning to soccer, Malvern Prep’s high school soccer team secured a 1-0 victory on Thursday, a good win against a strong opponent - an emotional win following a heartbreaking event on Tuesday. One of the boy’s classmates, a junior, passed away in a tragic car accident en route to school.

A wise young boy spoke to his schoolmates, “I know this reflection comes at a hard time. Look at the person on your left…now look to the person on your right. Admire them, be grateful for their presence. That’s what makes Malvern different: none of us walk through life alone, and none of us face challenges by ourselves. We are a brotherhood, and in this brotherhood, we carry each other, especially in moments of pain.”

Something worth remembering for all of us.

I can’t begin to imagine the pain the family is feeling. Welcome home, young KD. You and your family are in our prayers.

Stonewall

Pictured next are a group of great friends, which includes some industry giants and several clients. The sunset setting behind the 14th hole on the Stonewall North course was spectacular. That’s Andy McOrmond in the yellow shorts. He’s been working on his quads.

Stonewall - Wallach Beth, CMG Client Event September 2025 (Elan, Hayden, Steve, Ben and Jared lower left)

NY, Florida, and Arizona

I will be in NYC next Tuesday for a dinner with my favorite bio-agriculture company. Then to Tampa later in the month for a due diligence event and to Phoenix for a meeting focused on expanding the Family Office components of our business.

We are better together. We are better together. Ever forward.

Kind regards,

Steve

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Stephen B. Blumenthal
Executive Chairman & CIO
CMG Capital Management Group, Inc.
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Stephen Blumenthal founded CMG Capital Management Group in 1992 and serves today as its Executive Chairman and CIO. Steve authors a free weekly e-letter entitled, “On My Radar.” Steve shares his views on macroeconomic research, valuations, portfolio construction, asset allocation and risk management. Author of Forbes Book: On My Radar, Navigating Stock Market Cycles.

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On My Radar - Our Dollar, Your Problem