Alexander Campbell
· Campbell Ramble
· May 11, 2026 at 11:55
· ⏱ 22 min read
| Read on Substack ↗
Summary
The dollar's reserve status hinges on the security architecture that channels East Asian savings into dollar assets, and Taiwan is the linchpin. If China takes Taiwan, the automatic claim on AI tigers' surpluses breaks, threatening America's fiscal model. The trade is long TWD/KRW vs INR, using FX risk reversals or retail USD/INR options, betting that the equity rally in AI tigers has priced in regime change but FX has not yet caught up.
•Taiwan, Korea, and Japan generate $500B+ annual current account surpluses from AI-driven exports; these surpluses are growing rapidly and are four times larger than two years ago.
•China cannot challenge the dollar peacefully because its capital account is closed, banks are insolvent, and there is no deep liquid asset market for foreign holders of RMB.
•The plumbing of dollar recycling has shifted from central banks (30-year horizon) to private institutions (quarterly hedging), making flows fragile — TWD moved 5% intraday in May 2025 on a hedge book wobble.
•China's de-dollarization is a press release: its state sector holds over $4T in dollar assets, more off the books than on, and it remains the largest dollar accumulator.
•Beijing’s strategy is to convert manufacturing dominance into regional balance-sheet dominance by taking Taiwan, capturing AI tiger surpluses to recapitalize its broken banks ($5-10T hole), then open the capital account.
•India's IT services surplus ($180B) is being eroded by AI coding assistants, and a doubling of oil prices would push its current account deficit toward 5% of GDP — 1991 territory.
Read time22 min
Length22,524 chars
Categoryfinance
Trade Ideas
Alexander CampbellFounder & CEO, Rose AI; ex-macro investor, Bridgewater
Short Indian rupee via long USD/INR options to profit from India's structural current account deficit worsening due to energy price spikes and AI displacing IT services exports.
Alexander CampbellFounder & CEO, Rose AI; ex-macro investor, Bridgewater
The article explicitly names Infosys, TCS, and Wipro as examples of Indian IT services whose labor arbitrage moat is being replaced by AI coding assistants. It notes 'coding assistants are already rep
The article explicitly names Infosys, TCS, and Wipro as examples of Indian IT services whose labor arbitrage moat is being replaced by AI coding assistants. It notes 'coding assistants are already replacing entry-level ticket work' and that pricing pressure is appearing in contract renewals, weakening India's services surplus.
Risk: Potential upside if AI adoption is slower than expected or Indian firms pivot successfully.
Alexander CampbellFounder & CEO, Rose AI; ex-macro investor, Bridgewater
The article cites Korean memory prices doubling (SSD) and NAND up 47% in a month, highlighting the surge in AI-driven memory demand. Micron is a major player in DRAM and NAND, and the AI tiger surplus
The article cites Korean memory prices doubling (SSD) and NAND up 47% in a month, highlighting the surge in AI-driven memory demand. Micron is a major player in DRAM and NAND, and the AI tiger surplus story directly benefits memory manufacturers.
Risk: Memory cycle turning or geopolitical disruption in Korea/Taiwan.
Alexander CampbellFounder & CEO, Rose AI; ex-macro investor, Bridgewater
TSMC is the linchpin of AI chip production and Taiwan's massive surplus — the article notes Taiwan ran a $181B current account surplus in 2025 (20% of GDP) and calls Taiwan 'the most pivotal country i
TSMC is the linchpin of AI chip production and Taiwan's massive surplus — the article notes Taiwan ran a $181B current account surplus in 2025 (20% of GDP) and calls Taiwan 'the most pivotal country in the world for the future of the dollar.' Any disruption would be catastrophic, but the ongoing AI demand supports TSM's central role.
Risk: Geopolitical tail risk of Taiwan blockade/invasion could collapse TSM equity.
This newsletter, published May 11, 2026,
features Alexander Campbell
discussing USD/INR, INFY, MU, TSM.
4 trade ideas extracted by AI with direction and confidence scoring.