I Let ChatGPT Design My Macro Portfolio (And You Might Too)

Last week, I paid $0 for macro analysis that hedge funds charge $250,000 a year to access. How? I asked ChatGPT to design a portfolio for the next 40 years. What came back was brutal, somewhat brilliant, and more concise than any fund manager report I’ve seen. We covered (almost) everything: why rates can’t normalize, which assets survive financial repression, and the exact ETF or futures trades to execute. This AI even identified the 10x opportunity that most funds are missing. Your move, Ray Dalio.

Here’s the complete conversation, the prompts I used, and the ETF and futures portfolio ChatGPT designed.

AI Prompt #1: From 1980 to 2020, interest rates in the US and around the world declined steadily. Why?

Interest rates didn’t fall continuously from 1980 to 2020, but they did trend dramatically downward over that 40-year period. Here’s why:

Starting Point: The Volcker Shock (1979-1982)

• Fed funds rate peaked at 20% in 1981
• 10-year Treasury yields hit 15.8%
• Paul Volcker crushed 1970s inflation with extreme monetary tightening

The Great Moderation (1980s-2007) Key drivers of declining rates:

1. Inflation conquered – From 13.5% (1980) to 2-3% target range
2. Globalization – Cheap labor from China/emerging markets = deflationary pressure
3. Technology – Productivity gains kept prices down
4. Demographics – Aging populations save more, spend less
5. Debt accumulation – Higher debt levels made economies more rate-sensitive

Financial Crisis Acceleration (2008-2020)

• Central banks went to zero (ZIRP)
• Quantitative easing pushed long-term rates down
• Europe/Japan went negative
• “Secular stagnation” – structurally lower growth potential

The Feedback Loop: Lower rates enabled more debt -> More debt required lower rates -> Central banks couldn’t raise rates without crushing the economy. By 2020, the 10-year Treasury hit 0.5% (pandemic low). The 40-year bond bull market was the defining macro trade of multiple generations. The trend reversed violently in 2021-2022 with inflation’s return, but that’s outside your timeframe.

AI Prompt #2: During this “defining macro trade”, what macro assets were the best and worst to hold?

The Winners (1980-2020):

1. Long-Duration Bonds – The purest play

• 30-year Treasury total return: ~11% annualized
• Starting yield 10%+ -> ending yield <2%
• Price gains + coupon = generational wealth creator

2. US Equities (especially growth/tech)

• S&P 500: ~11.5% annualized
• NASDAQ (1985-2020): ~12.5% annualized
• Lower rates = higher multiples, especially for long-duration growth

3. Real Estate

• REITs: ~12% annualized
• Direct property ownership leveraged at 70-80% LTV printed money
• Cap rates compressed from 10%+ to 4-6%

4. Private Equity

• Top quartile funds: 15-20% net IRRs
• Cheap leverage + multiple expansion = the golden age

The Losers:

1. Cash – Death by a thousand cuts

• Average yield fell from 10%+ to 0%
• Lost ~2-3% annually to inflation
• Opportunity cost: catastrophic

2. Commodities

• Gold: Only ~5% annualized (saved by 2000s bull run)
• Oil: Negative real returns
• Agricultural: Crushed by technology/productivity

3. Japanese Assets (1990-2020)

• Nikkei: -50% from peak, still not recovered
• JGBs: Positive but minimal returns despite ZIRP

4. Value Stocks

• Massively underperformed growth
• Banks/utilities/industrials left behind

The Leverage Multiplier: Any leveraged long position (real estate, PE, levered equities) crushed unlevered positions. The cost of capital collapse was THE trade. The hard truth is that if you held cash or “stayed defensive” waiting for rates to normalize, you got destroyed. The Fed put was real, and fighting it was financial suicide.

AI Prompt #3: The defining feature of current developed economies is that governments and individuals have built up extreme debt. Does this mean that interest rates will never rise to the levels seen in 1980? What other macro overlay will define the next 40 years?

You’re right – we can’t go back to 1980s rates. The math doesn’t work.

The Debt Trap Reality:

• US debt/GDP: 50% (1980) -> 130% (2024)
• Corporate debt: $3T -> $13T
• Household debt: $1.4T -> $17T
• At 10% rates, US interest expense alone = 50% of tax revenue

Rate ceiling is probably 5-7% before something breaks. We saw this in 2022-2023:

• UK pension crisis at 4.5% gilt yields
• Regional bank failures at 5% Fed funds
• Commercial real estate implosion beginning

The Next 40-Year Overlay: Financial Repression 2.0

1. Negative Real Rates Forever

• Inflation allowed to run at 3-4%
• Nominal rates kept at 2-3%
• Stealth debt debasement: -1-2% real yields

2. Yield Curve Control (YCC)

• Japan model goes global
• Central banks cap long-term rates
• Financial markets become policy tools, not price discovery

3. Currency Debasement Race

• All developed markets debase together
• Real assets (property, commodities, Bitcoin) become monetary refuges
• Wealth inequality explodes further

4. Geopolitical Fragmentation

• Dollar hegemony challenged
• Multiple currency/trading blocs
• Higher structural inflation from deglobalization

5. Demographics Doom Loop

• Aging populations = more entitlements
• Fewer workers = higher wages = inflation
• Immigration becomes economic necessity

The Trade for Next 40 Years:

• Long: Real assets, emerging markets, commodity producers
• Short: Currency, bonds at par, pension promises
• Variable: Equities (winners/losers diverge massively)

Bottom Line: We’re Japan with worse demographics and no social cohesion. Rates can spike temporarily (like 2022), but the debt math forces them back down. The next crisis won’t be inflation – it’ll be currency/sovereign debt confidence. Prepare for financial repression, not rate normalization.

AI Prompt #4: Under this scenario, what macro asset classes will outperform? What asset classes should I hold long and short?

Core Longs (Leverage These):

1. Residential Real Estate – 70-80% LTV

• Governments will protect this at all costs (votes)
• Fixed-rate mortgages = free inflation hedge
• Supply constrained in tier-1 cities
• Target: 15-20% IRR with leverage

2. Commodity Producers – 1.5-2x leveraged ETFs

• Energy (XOM, CVX) not just oil futures
• Copper/Lithium miners for electrification
• Fertilizer (NTR, MOS) – food inflation inevitable
• Own the equity, not the commodity

3. Emerging Market Local Currency Debt – 2-3x via swaps

• Brazil, Mexico, India
• 8-12% yields while USD debases
• EM central banks can actually raise rates

Tactical Longs (No Leverage):

1. Bitcoin – Unlevered only

• Sovereign/currency crisis hedge
• Digital gold thesis plays out
• 5-10% portfolio max

2. Infrastructure/Utilities

• Government-guaranteed returns
• Inflation pass-throughs built in
• Boring = beautiful in chaos

3. Defense Contractors

• Geopolitical fragmentation = spending boom
• LMT, RTX, NOC print regardless

Core Shorts (Use Options/Structured Products):

1. Long-Duration Sovereign Bonds

• German Bunds, JGBs, USTs >10yr
• Asymmetric risk/reward at these yields
• Use put spreads, not outright shorts

2. European Banks

• Negative rates killed their model
• Deutsche, Credit Suisse analogs
• Demographic/regulatory death spiral

3. Traditional Retail REITs

• Structural decline + leverage = death
• Malls, office (excluding prime/converted)

Currency Pairs:

• Long: NOK, AUD, CAD (commodity currencies)
• Short: EUR, JPY (demographic disasters)
• Use 3-5x forex leverage max

The Barbell Structure:

• 40% Real assets (leveraged)
• 30% EM/Commodity equity
• 20% Cash-flowing defensive
• 10% Convex hedges (puts, bitcoin)

Critical Execution Rules:

1. Never leverage rates-sensitive assets
2. Roll fixed-rate debt eternally – never pay it off
3. Own cash flow, not promises
4. Geographic diversification mandatory

What Dies:

• 60/40 portfolios
• Investment-grade bonds
• European equities
• Pension funds (short pension-heavy cos)

The Uncomfortable Truth: You’re not investing anymore – you’re front-running policy. The best trade isn’t finding value; it’s positioning where governments MUST inject liquidity. Act accordingly.

AI Prompt #5: For the above recommendations, tell me the exact ETF or leveraged ETF to hold.

LEVERAGED LONGS:

Real Estate

• XLRE – Real Estate Select Sector (1x base)
• URE – ProShares Ultra Real Estate (2x)
• DRN – Direxion Daily Real Estate Bull 3x

Commodity Producers

• XLE – Energy Select Sector (1x base)
• ERX – Direxion Daily Energy Bull 2x
• GUSH – Direxion Daily S&P Oil & Gas 2x
• NUGT – Direxion Daily Gold Miners 2x
• COPX – Global X Copper Miners

Emerging Markets

• EEM – iShares MSCI Emerging Markets (1x base)
• EDC – Direxion Daily Emerging Markets Bull 3x
• EMLC – VanEck EM Local Currency Bond

UNLEVERAGED LONGS:

Bitcoin

• BITO – ProShares Bitcoin Strategy
• GBTC – Grayscale Bitcoin Trust
• Or just buy actual Bitcoin

Infrastructure/Utilities

• IGLB – iShares Global Infrastructure
• XLU – Utilities Select Sector
• TOLL – Direxion Global Infrastructure

Defense

• ITA – iShares US Aerospace & Defense
• PPA – Invesco Aerospace & Defense

SHORT POSITIONS:

Long-Duration Bonds

• TBT – ProShares UltraShort 20+ Year Treasury (2x inverse)
• TTT – ProShares UltraPro Short 20+ Year (3x inverse)
• TBF – ProShares Short 20+ Year Treasury (1x inverse)

European Banks

• EUFN – iShares MSCI Europe Financials (short this)
• EPV – ProShares UltraShort FTSE Europe (2x inverse)

Retail REITs

• SRS – ProShares UltraShort Real Estate (2x inverse)
• Or short SPG, MAC, SKT directly

CURRENCY PLAYS:

• UUP – Dollar Bull (short this for dollar weakness)
• FXA – Australian Dollar Trust (long)
• FXC – Canadian Dollar Trust (long)
• FXE – Euro Trust (short)
• FXY – Japanese Yen Trust (short)

Portfolio Construction:

• 40% URE/DRN + owned real estate
• 20% ERX/GUSH/COPX
• 15% EDC/EMLC
• 10% IGLB/ITA/XLU
• 10% TBT/TTT
• 5% Bitcoin

Warning: Leveraged ETFs decay over time due to daily rebalancing. Use them for 3-12 month trades, not buy-and-hold. For core positions, use 1x ETFs with margin or options for leverage. The play is to own things governments can’t print. Short things they must debase. Use their leverage against them.

AI Prompt #6: Which asset class or ETF play has the greatest upside potential?

Greatest Upside Potential: Uranium

Here’s why uranium crushes everything else:

Supply/Demand Violence:

• 200M lbs demand vs 140M lbs production
• 60M lb structural deficit
• No substitutes, reactors MUST buy

Price Dynamics:

• Spot: $100/lb (was $20 in 2020)
• Utilities need $150+ to incentivize new supply
• Last cycle hit $140 (2007)

The Kicker: China building 150 reactors, US/Europe reversing nuclear policy, data centers need baseload power for AI

The Plays:

• URNM – Sprott Uranium Miners ETF (1x)
• URA – Global X Uranium ETF (1x)
• CCJ – Cameco (largest producer)
• SRUUF – Sprott Physical Uranium Trust (owns physical)

Asymmetric Risk/Reward Ranking:

1. Uranium – 5-10x potential over 5 years
2. Bitcoin miners – 3-5x if BTC hits $200k
3. EM local currency debt – 3x with carry
4. Turkish/Brazilian equities – 3-4x
5. US residential real estate (leveraged) – 2-3x

The Contrarian Take: Everyone’s worried about rates/recession. Nobody’s positioned for an energy supercycle driven by:

• AI power demand (each ChatGPT query = 10x Google search energy)
• Electrification mandates
• Deglobalization (energy security)

Maximum Violence Portfolio:

• 30% URNM
• 20% MARA/RIOT
• 20% ERX
• 20% EDC
• 10% TBT

Reality Check: Leveraged ETFs are weapons, not investments. If you can’t handle 50% drawdowns, stick to the barbell approach I outlined earlier. This either makes you rich or you blow up spectacularly. No middle ground.

AI Prompt #7: For the above recommendations, tell me the exact futures market trades to make.

LONG POSITIONS:

Energy/Commodities (Instead of XLE, ERX, GUSH):

• CL – WTI Crude Oil: $10/barrel move = $10,000 per contract
• NG – Natural Gas: $0.10 move = $1,000 per contract
• RB – RBOB Gasoline: $0.01 move = $420 per contract
• Position size: 2-3x your normal futures allocation (matching leveraged ETF exposure)

Precious Metals (Instead of NUGT):

• GC – Gold: $10/oz move = $1,000 per contract
• SI – Silver: $0.50/oz move = $2,500 per contract
• Use 2:1 ratio (2 gold to 1 silver)

Industrial Metals (Instead of COPX):

• HG – Copper: $0.05/lb move = $1,250 per contract
• This is pure copper exposure vs mining equity beta

Emerging Markets (Instead of EEM, EDC):

• EMD – MSCI Emerging Markets Mini: $5/point move = $250 per contract
• More liquid than full-size EM futures
• Match 3x ETF exposure with position sizing

Bitcoin (Instead of BITU, miners):

• BTC – CME Bitcoin Futures: $5/point = $25 per point move
• MBT – Micro Bitcoin: $5/point = $5 per point move
• Use MBT for precision sizing

SHORT POSITIONS:

Bonds (Instead of TBT, TTT):

• ZN – 10-Year Treasury Note: SHORT 2-3 contracts per $100k
• ZB – 30-Year Treasury Bond: SHORT 1-2 contracts per $100k
• ZT – 2-Year Treasury Note: LONG as spread hedge
• Classic steepener: Long ZT, Short ZB

Currencies (Direct plays): LONGS:

• 6A – Australian Dollar: $100k AUD per contract
• 6C – Canadian Dollar: $100k CAD per contract
• 6N – NZ Dollar: $100k NZD per contract

SHORTS:

• 6E – Euro: $125k EUR per contract
• 6J – Japanese Yen: ¥12.5M per contract
• DX – Dollar Index: SHORT for broad USD weakness

FUTURES-ONLY MACRO PORTFOLIO:

Core Positions (40% margin):

• LONG 2 CL (crude oil)
• LONG 1 GC (gold)
• LONG 1 HG (copper)
• LONG 2 MBT (micro Bitcoin)
• SHORT 2 ZN (10-year Treasury)

Satellite Trades (20% margin):

• LONG 1 6A (Aussie dollar)
• SHORT 1 6E (Euro)
• LONG 3 EMD (emerging markets)

Spread Trades (Lower Risk):

• Calendar spreads on CL (long far month, short near)
• Intermarket: Long HG/Short GC ratio
• Crack spread: Long 3 RB + HO, Short 2 CL

CRITICAL EXECUTION NOTES:

Margin Management:

• Initial margin: ~$5-15k per contract
• Keep 50% excess margin for volatility
• Never exceed 40% margin utilization

Roll Strategy:

• Roll 2 weeks before expiry
• Use calendar spreads to reduce cost
• Never hold into delivery month

The Uranium Problem: No direct uranium futures exist. Your options:

1. Trade uranium miners via equity futures (ES/NQ exposure)
2. Use UX spot market (requires special broker)
3. Stick with URNM/CCJ in equity account

Maximum Leverage Setup:

• 30% Crude oil (3 CL)
• 20% Precious metals (2 GC, 1 SI)
• 20% Bitcoin (4 MBT)
• 20% Bond shorts (3 ZN short)
• 10% FX plays

Warning: Futures give you 10-20x leverage built-in. One CL contract controls $70,000 of oil with $7,000 margin. This is a double-edged sword. Size accordingly or you’ll blow up. Most of these futures markets trade 23 hours a day. No ETF decay. No management fees. Pure, direct exposure. But also no forgiveness for bad risk management.