The Silent Revolution: How Asset Inflation & Monopolies Redefine Wealth in the 21st Century
Author: William Moulod
A Look at Recent Performance
Just over three months ago, on March 28th, 2025, I outlined a straightforward investment perspective: focus on the dominant Big Tech companies. My argument was simple yet powerful: these aren't just businesses; they are the foundational infrastructure of the digital age, fortified by significant competitive advantages and positioned for the ongoing AI revolution.
For those who considered that perspective, a look at the short-term performance since March 28th, 2025, to yesterday's close (July 3rd, 2025) offers an interesting glimpse:
Amazon (AMZN): Closed around $192.72 on March 28th, 2025. As of July 3rd, 2025, it closed at approximately $223.41. This represents a gain of roughly 15.93%.
Microsoft (MSFT): Closed around $378.80 on March 28th, 2025. Yesterday, it closed at approximately $498.84. This shows a gain of about 31.68%.
Alphabet (GOOGL Class C): Closed around $154.33 on March 28th, 2025. Yesterday, it closed at approximately $180.55. An increase of approximately 17.00%.
These figures are more than just favorable market results. They highlight a profound, ongoing economic restructuring. Understanding this broader context is vital because, in today's financial landscape, simply "making money" isn't enough; you must actively strategize to preserve your wealth from silent erosion.
The Unseen Hand: How Monetary Expansion Fuels Asset, Not Just Consumer, Inflation
When economists and policymakers discuss "inflation," the public often thinks solely of rising prices for everyday goods and services, reflected in metrics like the Consumer Price Index (CPI). While consumer inflation has certainly been a factor, a far more impactful and persistent form of inflation has been silently reshaping wealth: asset inflation.
The sheer scale of money creation by central banks, particularly the U.S. Federal Reserve, since the COVID-19 pandemic has been unprecedented. The M2 money supply, a broad measure of money in circulation, surged dramatically from roughly $15.4 trillion in February 2020. The latest available data shows M2 reaching an all-time high of $21.94 trillion in May 2025, indicating a continued expansion of liquidity. This vast pool of liquidity isn't sitting idle; it's actively seeking productive homes.
Here’s why this floods into assets rather than just consumer goods:
Demand for Real Assets: When central banks effectively increase the supply of currency, the purchasing power of each unit of that currency tends to decrease over time. Individuals and institutions, seeking to preserve wealth, naturally gravitate towards "real assets" such as shares in profitable companies, real estate, or certain commodities, which offer a tangible store of value. More dollars chasing a relatively fixed supply of these desirable assets inevitably bids up their prices.
Low Cost of Capital: Accommodative monetary policy typically involves keeping interest rates low. This makes borrowing cheaper for corporations and investors. Businesses are incentivized to take on debt for expansion, mergers and acquisitions, or share buybacks, all of which funnel capital into markets and contribute to asset price appreciation.
Legislative Incentives for Investment: Furthermore, recent legislative frameworks in the U.S. have, directly or indirectly, propelled more capital into the market. Measures like the "Global Investment in American Jobs Act of 2025," introduced in February, aim to increase U.S. global competitiveness in attracting foreign direct investment. Additionally, ongoing discussions around extending and modifying programs like Opportunity Zones are being considered, with proposed changes in June 2025 designed to make them more attractive to long-term investors by enhancing tax incentives. Such policies encourage capital deployment in ways that boost corporate valuations and broader market activity.
The consequence is a stark divergence: for those whose primary wealth is in cash savings or fixed-income assets that don't keep pace, their purchasing power is silently eroded. Conversely, those whose wealth is invested in appreciating assets see their net worth inflate. In this environment, merely earning a good income is no longer sufficient to guarantee economic security. To "stay rich," or even maintain your current economic standing, it's increasingly imperative to be strategically invested in assets that actively outpace this relentless asset inflation.
The Age of Concentration: Why "Picking Winners" is the New Diversification
The investing playbook of the last century emphasized broad diversification: spread your capital thinly across many different companies and sectors to mitigate risk. While this approach has merits, it's becoming fundamentally ill-suited for the structural reality of today's market.
We are undeniably living in an age of economic concentration and monopolization. The digital economy, in particular, exhibits strong winner-take-all dynamics. Companies like Amazon (with AWS and e-commerce), Microsoft (with Azure, Office, and enterprise solutions), and Alphabet (with Search, YouTube, and Android) have not merely achieved market leadership; they have built sprawling ecosystems that are becoming increasingly indispensable to global commerce and daily life. Their "moats" derived from network effects, proprietary data, immense R&D budgets, and deep customer lock-in are not just wide; they are expanding.
Recent reports and antitrust cases continue to highlight this trend. For example, 2025 is a pivotal year for antitrust in the technology sector, with Google's remedies trial set to determine potential structural changes to address its search monopoly. Additionally, antitrust agencies globally are sharpening their focus on M&A and collaborations in the AI space, scrutinizing whether Big Tech's control of key inputs like chips, talent, and cloud computing could extend their market power. This ongoing consolidation means that if core economic power and future growth are increasingly in the hands of a few undisputed behemoths, then a strategy of blindly diversifying across hundreds of companies many of which are struggling to compete or are simply cogs in the giants' machines can actively dilute your potential returns.
In this new paradigm, intelligent concentration on a select few, truly dominant winners is the most effective form of diversification. Instead of owning a tiny sliver of every stock, which includes mediocre and declining businesses, focus on acquiring substantial positions in the strongest, most resilient companies. These are the firms uniquely positioned to compound their profits, leverage AI for unprecedented efficiency, and capture the lion's share of value created in an asset-inflated economy. For the long-term investor, conviction in these few extraordinary enterprises becomes paramount.
Your Unfair Advantage: The Power of Ground Level Knowledge Over Academic Theory
The conventional wisdom suggests that individual investors are at a disadvantage against Wall Street's formidable resources. Investment banks boast armies of analysts, cutting-edge algorithms, and exclusive data feeds. However, this perspective overlooks the profound retail superpower at your disposal.
Unlike institutional players, you are not shackled by short-term performance mandates, rigid quarterly rebalancing rules, or a constant need to chase benchmarks. Your investment horizon can be years, even decades. More critically, you possess an advantage that academic financial models and high-frequency trading algorithms often lack: real-world, visceral understanding of businesses and industries.
Many financial advisors, while valuable for planning, often operate from a theoretical framework. Their advice, while sound from a risk-management perspective, might advocate for broad diversification that misses the outsized opportunities in today's concentrated markets. They are often incentivized by Assets Under Management (AUM) and maintaining a low-volatility profile, which doesn't always align with maximizing long-term wealth creation in a rapidly changing environment.
But if you have spent years on the ground building a company, managing operational teams, deeply understanding a supply chain, or innovating in a specific tech vertical you hold an irreplaceable informational and analytical edge. You've personally experienced:
The indispensability of cloud services like AWS or Azure for modern infrastructure.
How Google's search algorithms shape consumer behavior and market reach.
The tangible benefits of AI-driven optimization on efficiency and new product development within real companies.
These aren't abstract concepts to you; they are lived realities. This practical knowledge allows you to discern true competitive advantages and identify secular trends long before they filter into formal analyst reports. This translates into the deep conviction necessary to ride out market fluctuations, because you're not just buying a ticker symbol; you're investing in a business whose fundamental power you genuinely comprehend. This intuitive, experience-driven insight is a potent weapon.
Conclusion: Own the Future, Preserve Your Wealth
The economic landscape is undergoing a fundamental transformation. The dual forces of relentless asset inflation driven by monetary expansion, and the increasing concentration of economic power within a few dominant tech giants, are reshaping how wealth is created, retained, and lost. As demonstrated by the performance since my last post, being strategically positioned matters more than ever.
It's no longer sufficient to merely "participate" in the market through broad, unexamined diversification. In this new era, your retail superpower your ability to think long-term, ignore the noise, and leverage your invaluable real-world experience equips you to identify and concentrate on the enduring winners. This isn't just about maximizing returns; it's the most powerful strategy to safeguard and grow the wealth you already possess in the face of this profound, ongoing economic revolution.
