What is' Great Beauty 'in a picture? What does the bill contain? Why is it because of this bill? Musk has announced that he will use 5% of his personal assets of 390 billion, or $19.5 billion, as a fund to establish a third political party, the American Party. one ️⃣ What content does the final version include? 1) The debt ceiling has increased by $5 trillion, and the current debt to GDP ratio is around 120%; 2) The extension of the 2017 tax reduction bill, which is set to expire at the end of this year, includes individual provisions for child tax credits, corporate provisions for research and development expenditure deductions, and a total tax reduction of 4.5 trillion yuan. 3) Cancel Article 899 (taxation on investment income of countries and companies that adopt "unfair taxation towards the United States") to alleviate concerns about overseas capital outflows. 4) Reduce expenses on electric vehicles, healthcare, and food stamps two ️⃣ How big is the impact of the deficit? The final bill is expected to increase the basic deficit by $3.4 trillion over the next 10 years, with a total deficit including interest expenses of $4.1 trillion, higher than the earlier version in the House of Representatives (basic deficit of $2.4 trillion). According to CBO's forecast, the deficit will increase by approximately $479 billion in fiscal year 2026. However, thanks to the annual tariff revenue of $300-400 billion, which can offset most of it, the deficit ratio will slightly increase from 5.2% in fiscal year 2025 to 5.9%, and will not significantly increase. three ️⃣ What is the impact on the US economy? The credit cycle in the second half of the year may be repaired on a month on month basis. Although the overall fiscal expansion is not significant (mostly due to the continuation of previous tax reforms rather than new additions), in terms of month on month changes, compared to the low base in the first half of the year, the fiscal pulse improved to 0.6% in the second half of the year. In addition, with the continued acceleration of AI investment and the repair of traditional private sector demand (such as real estate) after the Federal Reserve's interest rate cuts, the US credit cycle will continue to recover from the low point in the first half of the year. This is also a widely accepted and grand narrative based view of "de dollarization", and it is suggested to pay attention to the possibility of the US dollar strengthening in the fourth quarter and the possibility of the US stock market outperforming again in the second half of 2025: a consensus based "de dollarization" outlook. The recent record high in the US stock market is also strong evidence that the US stock market has returned to a historic high. In fact, it was the same in 2017. Although the introduction of policies and key milestones are not entirely consistent, there are similarities in the overall path: Trump's deal heating up (November 2016 February 2017) → deal reversal (healthcare reform failure in March 2017) → deal restart (tax reform passed in September 2017). four ️⃣ What is the meaning of the main assets? After calculation, the resolution of the debt ceiling and the addition of new deficits will bring about a demand for bond issuance of around 9000-1 trillion yuan from July to September (with a bond issuance scale of 1 trillion yuan in July September 2023). In addition, with inflation rising in July and August due to base and inventory factors, it cannot be ruled out that interest rates will rise. The US stock market is also similar, after rebounding at the bottom and returning to a historical high, it may also be disturbed by interest rate hikes and tariff negotiations. But we are still not pessimistic, it's just that the position is uncomfortable and there are these disturbances, but the occurrence of fluctuations can actually bring allocation opportunities. Both US stocks and US bonds are related to the relationship between the US dollar and US stocks. five ⃣ The 'Great Beautiful Act'=Financial Revolution+Tax Revolution+Industrial Counter Revolution The reason why this bill is called the 'Big and Beautiful Bill' is because its original meaning in English is' Big and Beautiful Bill '. 'Big and beautiful' is too vulgar, replacing it with 'big and beautiful' obviously has a more humanistic atmosphere. The text of this bill is thousands of pages long, so there is no doubt that it is "big enough". As for whether it is beautiful, it's hard to say. Trump thought it was beautiful, but Musk thought it was ugly (and very evil), so there was no consensus. However, whether the bill is beautiful or ugly, the significance of the bill itself must be extraordinary, so that many people cannot help praising Trump for his good work. From this perspective, the level of translation as' big and beautiful bill 'is obviously more than N times higher than that of' big and beautiful bill '. Although the bill, spanning thousands of pages, is massive in scale, its main content can be summarized into three aspects: two revolutions and one counter revolution: the financial revolution (US debt ceiling), the tax revolution (tax reform), and the industrial counter revolution (anti new energy revolution). I have mentioned the financial revolution several times before. The "Beautiful Bill" is only the first step of Trump's financial revolution, clearing the legal obstacles for the unlimited issuance of US bonds. There will be a second step in the future, which is to continue promoting the so-called "genius bill" to create legal protection for stablecoin issuance. The simultaneous adoption of these two bills is the legal infrastructure of Trump's "abandoning the dollar and relying on the US debt". Later, the breathtaking US debt dollar will expand rapidly in the way of "the big bang of the universe" relying on the so-called stable currency, and then the fall of the Federal Reserve. The US debt, the US dollar and the stable currency will go crazy together until the final collapse. The essence of this financial revolution is to use stablecoins to bind high-quality companies to endorse US bonds in the absence of US credit, in order to continue expanding debt and the US dollar, playing the final crazy game. The final madness comes to an end, of course, with the complete collapse of US bonds and the US dollar, but this does not necessarily mean that the United States will perish. When Trump is determined to promote this financial revolution, he and the forces behind him must have figured out a way out. For example, by issuing various stablecoins and digital virtual currencies to raise money, and then purchasing physical or tangible assets, one can be prepared to redefine currency and rebuild the US financial system in the event of a complete collapse. Everyone has seen the tax revolution, which involves increasing tariffs and reducing income tax. I have mentioned many times before that the essence of this tax reform is to rob the poor and help the rich. The reason is very simple, tariffs are paid by the entire population, while income tax only benefits wealthy people who need to pay income tax. The purpose of Chuanpujia tariff and income tax reduction is very clear, attracting international capital back to the United States. This is certainly something only wealthy people would consider. There is little hope that Trump's tax revolution will succeed. The ultimate outcome of the tariff war will undoubtedly be another surge in US prices. The current prices in the United States are all supported by the Federal Reserve's refusal to cut interest rates. Once interest rates start to decrease, prices will immediately soar, at least adding to the cost of tariffs. In terms of industry, Trump is clearly not engaged in revolution, but counter revolution. The current industrial revolution of humanity is mainly represented by the digital technology revolution represented by AI, and the most critical factor determining whether this revolution can succeed is the energy revolution. The core of AI is computing power, the core of computing power is electricity, and the core of electricity is the new energy revolution. It is common knowledge that traditional energy sources cannot guarantee the electricity demand in the era of computing power. However, Trump emphasizes both traditional industries and traditional energy. The "Great Beauty Act" has abolished all support and subsidies for new energy and instead vigorously developed the thermal power and traditional automobile industries. This is not only a reaction against the current trend of human industrial revolution, but also a reaction against the trend of energy revolution. In the mutual tear between Trump and Musk, Musk focused on the issue of treasury bond, while Trump accused Musk of subsidizing new energy, even discrediting and attacking him personally by taking drugs. Both sides seemed to be avoiding the heavy and taking the light, and did not fully expose the internal logic of the life and death of the United States. Musk's main industries include three major areas: new energy, AI, and aerospace. If Musk can tolerate the two revolutions (finance and taxation) implemented by the "Great Beautiful Act," he clearly cannot tolerate the counter revolutionary tendencies of the bill in the fields of industry and energy. The reason is simple, tolerance is suicide. Musk has announced that he will use 5% of his personal assets of 390 billion, or $19.5 billion, as a fund to establish a third political party, the American Party. This is, of course, a declaration of war against both parties in the United States at the same time. His future road must be even harder than Trump's. However, if Musk is serious, his American party may either fail or create a whole new era, just like his Tesla and SpaceX. From this perspective, it must be Musk, not Trump and anyone else in the United States who can really save the United States. Only by understanding the essence of the "Beautiful Bill" can we understand the root cause of Trump and Musk's mutual tear. Some people interpret their mutual tearing as a "double reed" because they cannot understand it, which is probably more of their own lust. At least Trump doesn't have the cultivation and acting skills of "acting double reed". He only plays solo, which is the kind of "the whole world counsels, but only I can".