# The Government Is Engineering a Business Cycle Surge Into 2026 w/ Andreas Steno Larsen

Source: https://www.youtube.com/watch?v=hIjEo5YrHDk
Recap page: https://rapidrecap.app/video/hIjEo5YrHDk
Generated: 2026-02-05T16:07:03.275+00:00

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## Quick Overview

Andreas Steno Larsen argues that the US administration's geopolitical actions, such as sanctioning Russian energy exports and potentially forcing a rollback of the 2017 tax cuts, are deliberately creating a business cycle surge into 2026 by favoring domestic US production over global supply chains, particularly concerning critical minerals like rare earths and copper, which he believes will benefit US-centric sectors like domestic solar/battery companies.

**Key Points:**
- The US administration is engineering a business cycle surge leading up to 2026 by prioritizing domestic over global supply chains, especially for critical minerals.
- Steno Larsen suggests that the US is deliberately trying to decouple from China and support domestic clean energy/battery sectors.
- The recent ISM Manufacturing PMI data showed a strong uptick (50.1 in January, the sharpest since 2018) but this is being viewed suspiciously by some due to political maneuvering.
- The author notes that the current political environment makes the Fed less likely to reverse course on quantitative tightening, despite potential economic strain.
- The geopolitical conflict is forcing a shift away from relying on global supply chains (like those dominated by China and Russia for rare earths/energy) towards more resilient, domestic/allied supply chains.
- The speaker is personally heavily invested in rare earth and copper miners, citing their potential outperformance due to this geopolitical realignment.

![Screenshot at 00:03: Andreas Steno Larsen introduces the concept that the business cycle analysis has become a geopolitical sport, setting the stage for his argument about US policy influencing supply chain shifts.](https://ss.rapidrecap.app/screens/hIjEo5YrHDk/00-00-03.jpg)

**Context:** The video features an interview between John Gillen of Milk Road Macro and guest Andreas Steno Larsen, an economist and financial strategist known for his expertise in macroeconomics, geopolitics, and cryptocurrency. The discussion centers on Larsen's recent analysis suggesting that current US administration policies are intentionally shaping the business cycle to favor domestic industries, particularly those involved in domestic energy and critical mineral supply chains, leading to a potential surge in these sectors by 2026.

## Detailed Analysis

Andreas Steno Larsen argues that the current geopolitical environment is intentionally being manipulated by the US administration to engineer a domestic business cycle surge, particularly benefiting sectors like solar energy and battery production, potentially peaking around 2026. Larsen points to the administration's actions, such as sanctioning Russian energy exports and supporting domestic critical mineral supply chains (like rare earths and copper) over global ones often tied to China, as evidence of this strategic decoupling. He notes that while the ISM manufacturing data showed a recent uptick, he remains cautious, suggesting the Fed will likely maintain tight policy until the election cycle concludes in 2024/2025, as the current political narrative favors domestic strength. Larsen explicitly states his personal portfolio is heavily weighted towards gold and copper miners, which he believes will benefit from this geopolitical shift, contrasting them with the software sector which he believes is currently overbought. He stresses that the US is trying to avoid the supply chain vulnerabilities exposed during the pandemic and the war in Ukraine by incentivizing domestic sourcing, even if it means accepting some short-term economic friction.

### Geopolitical Cycle Analysis

- Business cycle analysis has become a geopolitical sport
- Models using energy prices/yield curve are being re-evaluated
- The current cycle is breaking norms set since 2008.

### US Policy and Decoupling

- US administration pushing for decoupling from China; Russian resource weaponization highlights supply chain risks
- Biden administration nominating an official who was hawkish on China/Russia.

### Investment Opportunities

- Larsen is heavily invested in rare earth miners (like Greenland-based projects) and copper due to their critical role in domestic supply chains and electrification. He contrasts this with the overbought software sector.

### Fed and Policy

- Larsen suggests the Fed is unlikely to ease policy soon and is acting hawkishly to support the domestic narrative, even if it causes market stress or a short-term slowdown.

![Screenshot at 00:00: John Gillen hosts Andreas Steno Larsen for the discussion on geopolitical macro trends.](https://ss.rapidrecap.app/screens/hIjEo5YrHDk/00-00-00.jpg)
![Screenshot at 00:24: A graphic illustrating the concept of 'Endless Developer Hours' related to software/infrastructure.](https://ss.rapidrecap.app/screens/hIjEo5YrHDk/00-00-24.jpg)
![Screenshot at 00:49: A graphic showing the interconnected flows between USD and stablecoins like USDC across the globe.](https://ss.rapidrecap.app/screens/hIjEo5YrHDk/00-00-49.jpg)
![Screenshot at 02:36: Andreas Steno uses hand gestures to illustrate a point about the highly concentrated nature of the market cap sector.](https://ss.rapidrecap.app/screens/hIjEo5YrHDk/00-02-36.jpg)
![Screenshot at 21:25: A slide highlighting the features of the 'SUMM' crypto tax calculator: Full Support for DeFi, NFTs, Staking, and Airdrops.](https://ss.rapidrecap.app/screens/hIjEo5YrHDk/00-21-25.jpg)