#351 Jay Pelosky: The ‘EMification of America’ — The U.S. No Longer Deserves Its Premium Valuation

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Mar 24, 2026

Jay Pelosky, founder of TPW Advisory and seasoned global macro investor, argues the U.S. no longer merits a valuation premium. He discusses the Tri-Polar World thesis and a global growth long cycle fueled by AI, defense and renewables. Jay explains the provocative concept of the EMification of America and highlights opportunities in China, Latin America, commodities and energy-technology intersections.

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INSIGHT

Global Growth Long Cycle Persists

The global growth long cycle remains intact driven by AI, defense, and climate spending.
Jay Pelosky argues governments and private sectors are investing heavily post-COVID, creating a sustained multi-year earnings cycle supporting equities.

INSIGHT

Oil Shocks Hurt Less Than They Used To

Oil has far less GDP and consumer sensitivity today than in the 1970s, reducing the macro shock from price spikes.
Pelosky cites Ed Yardini's charts showing oil sensitivity is roughly two-thirds lower than late 1970s levels.

INSIGHT

Global Earnings Cycle Supports Non-US Stocks

The global growth long cycle implies a global earnings cycle that supports stocks outside the U.S.
Pelosky connects public/private spending on AI, defense, and climate to rising forward earnings across regions.

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Jay Pelosky, founder of TPW Advisory, makes the case that the U.S. no longer deserves its premium valuation — and that the biggest investing opportunity in decades is happening everywhere else.

Jay's framework, the Tri-Polar World thesis, argues that regional integration across Europe, Asia and the Americas is the dominant force shaping the global economy. Built on 30+ years of global macro experience, his view is that a global growth long cycle — driven by government and private sector spending on AI, defense and renewable energy — remains firmly intact, and that the Iran conflict may actually accelerate it.

His most provocative argument: the "EMification of America." The U.S. is increasingly exhibiting the volatile policymaking, concentrated power and institutional erosion typically associated with emerging markets — and yet still trades at a premium valuation. That, he says, is the disconnect that defines the next decade of investing.

Where does he see opportunity? Emerging markets — particularly China and Latin America — copper miners, commodities broadly, and the intersection of renewable energy and autonomous defense technology. He has held no long duration developed market sovereign debt for years.

Links:

Subscribe to Jay's Substack: https://jaypelosky.substack.com/

Learn more about TPW Advisory: https://pelosky.com/

Timestamps

0:00 — "The US doesn't deserve its premium valuation"

0:26 — Welcome Jay Pelosky

1:00 — Is the global growth long cycle being derailed by Iran?

4:00 — AI, defense & climate as existential government spending drivers

6:30 — Oil price sensitivity today vs. the 1970s — why it's different this time

9:10 — The contrarian take: Iran could actually boost global growth

14:20 — TACO Trump & the search for an off-ramp

18:06 — Why Iran is the best advertisement for renewable energy ever

19:55 — Secular shift: the baton of global equity leadership passing to EM

21:05 — Why 2025 was just year one of US underperformance

24:00 — China, ASEAN & the reduced dependence on the US consumer

25:00 — Europe forced to confront reality: the US is no longer an ally 26:18 — The petrodollar at risk; the yuan's rising role 28:41 — US valuation erosion: gradual, not a crash

32:08 — What is the "EMification of America"?

36:32 — The American investor dilemma: wanting America to win vs. global opportunity

38:45 — China within EM: rare earths, digital & physical power shift

41:00 — China's lead in renewables, embodied AI and automation

42:36 — China defeating deflation; potential US-China rapprochement

43:05 — Portfolio positioning: overweight equities & commodities

44:00 — Specific ETF ideas: COPX, ILF, SMH and China equities

47:10 — Parting thoughts & where to find Jay