• Bitcoin cyclical peaks and bottoms

• Equity liquidity sensitivity

• Credit/liquidity stress transitions

• Treasury refinancing pressure

• QE / stealth QE transmission effects

• Macro risk-on / risk-off transitions

The underlying script integrates liquidity, volatility, debt rollover requirements, credit impulse data, and macro risk metrics into a blended probabilistic forecasting system.

1. Core Purpose of the System

The framework attempts to answer:

“Where is systemic liquidity flowing, how strong is it, and which assets are likely to respond next?”

The model is effectively treating:

• liquidity as the primary fuel source,

• volatility as a suppressor/amplifier,

• debt refinancing as future liquidity demand,

• and Bitcoin/equities as downstream liquidity expressions.

The system combines:

• Global liquidity

• Stealth QE

• Yield Curve Control pressure

• China Credit Impulse

• Treasury debt rollover requirements

• MOVE volatility conditions

• Global risk appetite

into dynamic wave structures.

2. What Each Wave Represents

A) Liquidity Wave (Purple)

What it is

Derived from:

• Global liquidity

• Shadow monetary base

• Smoothed yearly liquidity impulse

• MOVE-index-adjusted liquidity acceleration

The script:

1. Calculates YoY liquidity growth

2. Applies volatility dampening via MOVE Index

3. Uses EMA smoothing layers

4. Converts into normalized z-score wave structures

What it indicates

This is the system’s:

• primary macro liquidity pulse,

• central bank balance sheet expansion effect,

• broad global monetary expansion signal.

Historical relationship observed

The Liquidity Wave tends to:

• lead BTC major rallies,

• align with broad risk-on conditions,

• deteriorate before liquidity contractions.

Current indication

The forecast region into:

• 2027–2031

shows:

• flattening,

• reduced acceleration,

• lower liquidity expansion velocity,

• slower cyclical growth conditions.

That implies:

• weaker speculative liquidity,

• slower BTC upside velocity,

• potentially longer consolidation structures.

B) Stealth QE Wave (Green)

What it is

Built from:

• Treasury issuance effects,

• stealth liquidity injection,

• QE-like Treasury refinancing mechanics,

• debt rollover liquidity gaps.

The model assumes:

Debt refinancing pressure eventually forces liquidity creation.

This becomes a synthetic QE pressure wave.

What it indicates

This wave is effectively:

• Treasury QE necessity,

• hidden balance sheet expansion,

• refinancing stress response.

The system projects it dynamically into the future.

Historical observation

This wave:

• aligned extremely well with the 2020–2021 BTC expansion,

• anticipated several liquidity accelerations,

• remained elevated during Treasury-heavy refinancing periods.

Current indication

The system is projecting:

• continued Treasury liquidity requirements,

• periodic liquidity injections,

• but with declining effectiveness after ~2028.

That implies:

• liquidity may continue being injected,

• but diminishing marginal asset impact may occur.

This resembles late-cycle debt saturation behavior.

C) China Credit Impulse Stealth QE Process (Yellow)

What it is

Derived from:

• China-Bloomberg-Credit-Impulse-Index

• shifted forward by +9 months

The script intentionally:

• shifts China credit conditions forward,

• because Chinese credit expansion historically impacts global liquidity later.

What it indicates

This acts as:

• global manufacturing/liquidity forward impulse,

• emerging-market credit expansion signal,

• global cyclical reflation indicator.

Historical relationship

The chart suggests:

• China impulse often precedes BTC acceleration,

• aligns strongly with cyclical bottoms,

• influences reflation trades globally.

Current indication

The forward curve shows:

• weakening impulse strength,

• flattening credit expansion,

• less aggressive future reflation.

That implies:

• weaker commodity reflation,

• lower global manufacturing acceleration,

• slower speculative expansion cycles.

D) Blended Wave (Blue)

What it is

The most important system component.

This dynamically combines:

• Liquidity Wave

• Stealth QE

• YCC Wave

• Debt-Liquidity Wave

• China Credit Impulse

• Risk-Love influence

using:

• dominance weighting,

• rolling momentum influence,

• volatility-adjusted weighting.

The weighting changes dynamically depending on:

• which liquidity source dominates at the time.

What it indicates

This is the:

• master macro liquidity composite,

• system-wide probabilistic cycle indicator,

• highest-confidence liquidity forecast engine.

Historical observation

The Blended Wave:

• closely tracked BTC macro cycles,

• aligned with major cycle peaks/bottoms,

• anticipated broad liquidity transitions.

It appears strongest during:

• synchronized liquidity expansion environments.

Current indication

The blended projection suggests:

• post-2026 liquidity deceleration,

• weakening cyclical upside,

• liquidity normalization into 2028–2030,

• potential transition into slower macro growth regime.

The wave flattening implies:

• reduced excess liquidity,

• weaker speculative excess,

• more range-bound macro behavior.

E) Global Risk-Love Wave Inverted (Pink)

What it is

Built from:

• Global-RiskLove-Composite

• MOVE Index suppression adjustments

Then inverted.

What it indicates

This measures:

• macro risk appetite deterioration,

• stress-sensitive positioning,

• crowd risk aversion.

Historical behavior

It:

• often peaks near BTC tops,

• weakens during liquidity contractions,

• helps identify risk-off transitions.

Current indication

The system suggests:

• elevated but unstable risk appetite,

• increasing fragility,

• potential volatility-sensitive environment ahead.

F) Debt-Liquidity Requirement Wave (Cyan)

What it is

This is one of the most advanced parts of the system.

The script:

• models Treasury rollover obligations,

• projects refinancing requirements,

• estimates required liquidity stock,

• compares required liquidity vs existing liquidity.

The model assumes:

Debt requires liquidity expansion to remain serviceable.

It integrates

• Treasury Bills

• Notes

• Bonds

• rollover cycles

• interest burden growth

• Fed liquidity capacity

What it indicates

This wave measures:

• future liquidity necessity,

• systemic refinancing pressure,

• probability of forced QE/Treasury support.

Current indication

The charts suggest:

• structurally rising liquidity requirements,

• ongoing refinancing dependency,

• continued pressure toward stealth QE.

This is effectively a:

debt sustainability stress indicator.

G) YCC Wave (Orange)

What it is

Represents:

• Yield Curve Control pressure,

• bond market stress,

• suppression requirements on long-term rates.

What it indicates

It reflects:

• interest-rate suppression necessity,

• sovereign debt stress,

• policy intervention pressure.

Historical observation

YCC conditions:

• aligned with macro stress periods,

• often preceded liquidity injections.

Current indication

The system implies:

• ongoing structural rate suppression pressure,

• but weakening cyclical influence relative to prior years.

3. BTC Correlation Observed

The framework is heavily BTC-centric.

The script:

• computes rolling correlations,

• directional hit rates,

• turning-point hit rates,

• lead/lag structures.

It attempts to identify:

• which wave currently dominates BTC.

The top-left diagnostics panel:

• “Impact winner”

• “Peak driver”

• “Bottom driver”

shows:

• which liquidity engine currently has strongest predictive influence.

In the screenshots:

• Stealth QE Wave dominates.

This implies:

• BTC is currently more responsive to Treasury/liquidity-gap mechanics
  than traditional liquidity expansion.

4. Equity Correlations

The system overlays:

• SP500 12m change

• NASDAQ 12m change

• Russell 2000 12m change

to compare:

• liquidity transmission into equities.

Observed behavior

SP500

Tracks:

• blended liquidity conditions relatively closely,

• especially during low-volatility expansion regimes.

NASDAQ

Appears:

• more sensitive to liquidity acceleration,

• stronger during QE expansion phases,

• more correlated with speculative liquidity.

Russell 2000

The Russell shift (+5 months) suggests:

• small caps lag liquidity conditions,

• delayed transmission into domestic risk assets.

This is consistent with:

• liquidity first reaching large-cap/speculative assets,

• then filtering into broader domestic equity markets later.

5. MOVE Index Role

The MOVE Index is critical.

The script uses it as:

• volatility suppression coefficient,

• liquidity effectiveness dampener.

High MOVE:

• reduces liquidity effectiveness,

• suppresses macro wave expansion.

Low MOVE:

• amplifies liquidity impact,

• enhances speculative responsiveness.

This is important because:

liquidity alone does not move markets equally under all volatility regimes.

6. Forecasting / Forward Projection Logic

The system projects:

• debt rollover needs,

• Treasury issuance structures,

• refinancing composition,

• future liquidity gaps,

• QE necessity.

The model assumes:

• debt compounds,

• refinancing creates liquidity dependency,

• Treasury issuance structure changes future macro liquidity sensitivity.

This creates:

• projected future liquidity waves into the 2030s.

7. Overall Macro Interpretation

The chart system overall suggests:

2020–2021

• massive synchronized liquidity expansion,

• strong QE + stealth QE alignment,

• powerful BTC/equity reflation.

2022

• liquidity contraction,

• rising volatility,

• risk-off macro regime,

• BTC collapse alignment.

2023–2025

• stealth QE and Treasury liquidity increasingly dominant,

• liquidity support returns,

• speculative assets stabilize/recover.

2026–2030 projection

The system projects:

• slowing liquidity acceleration,

• structurally persistent refinancing pressure,

• continued need for stealth liquidity support,

• but declining marginal speculative effect.

That implies:

• slower BTC cycle velocity,

• more muted equity upside,

• liquidity dependency without explosive expansion.

8. What the System Is Ultimately Attempting

The architecture is attempting to build:

• a macro-liquidity operating system,

• a dynamic market regime engine,

• a liquidity-to-asset transmission framework,

• a probabilistic cycle forecaster.

It combines:

• monetary expansion,

• debt mechanics,

• volatility,

• credit expansion,

• Treasury refinancing,

• and risk appetite

into a unified macro wave framework.

The system is effectively treating:

Bitcoin and equities as downstream reflections of global liquidity physics.

Script open-sourced here.

I’ve just landed back home after a weekend away—actually the second in recent weeks. It struck me that I seem to be travelling more again, which reminded me of life before Covid. Back then, it wasn’t unusual for us to head to Hong Kong for a weekend, Bali for a longer break, or Bangkok for food and time with friends.

Covid was an inflection point. Even prior to it, our lifestyle had already begun to shift, but the pandemic seemed to cement a more permanent change. Previously, we would spend October through to January or February in Switzerland, returning again between May and June. We travelled to Africa at least once a year, and in between we filled the gaps with shorter trips—overnight visits to Singapore for cocktails with friends, or quick flights to Kuala Lumpur for Chinatown.

Looking back, it’s clear how little time we actually spent at home. Life was structured around movement—travel, work commitments, and social connections. Then Covid, followed by having children, altered not just the travel itself but the continuity of experiences and the memories tied to that way of living.

Catena Capital

Henrik Zeberg - Doesn't understand the Liquidity Cycle drives all Cycles as its downstream of the Refinance Cycle.

I’ve been on walkabout — and, frankly put, lost access to my company’s operations along the way, thanks to a cascade of security devices imploding, likely from voltage swings in the middle of nowhere…

Read more

10 months ago · Catena Capital

In September, I wrote about the need to simply go with the flow. At that point, it was already evident that we would need to adapt—either by bringing people and systems to us, or by resuming travel. However, after less than a year of ongoing disruption driven by the political and economic environment at the time, I reached a point of exhaustion. I made a conscious decision to step back from the day-to-day intensity and focus instead on my children during what I consider their most formative years, adopting a more measured and detached approach.

When we returned from East Africa and Ceylon, we settled into a routine that, while familiar, was more constrained. Ongoing repairs and construction at home, with Burmese workers living onsite for an extended period, effectively anchored us in place.

That began to shift in January, when I travelled to Bangkok for a meeting. We visited our usual area in Siam and ended up staying overnight. On the return flight, we both remarked that it had been unexpectedly enjoyable and that perhaps it was time to start doing this again.

A few weeks later, we returned to Bangkok and extended the trip into a couple of days. It felt refreshing. Then, this past week, we went back once more—this time for a long weekend, with the children. We revisited places we hadn’t been to in six to eight years, reconnected with friends, and explored new restaurants and bars. One venue in particular stood out, with a lift traveling 76 stories at approximately 440 meters per minute, where I found myself having what was described as a tea-based cocktail—surprisingly refreshing.

With respect to the Iran conflict, I have largely taken a step back from the day-to-day narrative. My focus has been on understanding the situation at a high level and incorporating the associated risk dynamics across the short, medium, and longer term. On a personal level, however, it is not entirely abstract—we had anticipated the likelihood of escalation, and I have close friends currently deployed, including one flying the E-7A Wedgetail and another operating the KC-30A MRTT.

As a result, I place limited weight on official claims of “success,” whether they originate from the Trump administration or from Iranian sources. To date, that instinct has broadly held. Similar to the experience of the Ukraine–Russia conflict, there is often a significant divergence between public messaging and underlying reality. Over time, it becomes clear that what is presented externally rarely reflects the full extent or nature of events on the ground. Observations and firsthand accounts tend to provide a more sobering perspective, reinforcing the need to treat all sides’ narratives with a degree of caution—an approach I am applying equally to this emerging conflict.

What i do need to recognize is the impact, and that potential seepage into the following.

As you can see in the above, my prior suggested ‘offloading’ or ‘onloading’ either direct implicit message, or via my articles -> was following this system i created, it points to a peak in July / August

Which is showing a max upside of 130% - for $BTC - based on available liquidity but its all based on whats happening (Trump, War, Bonds, Oil, Dollar etc).

BTC 12m Log % the percent move in Bitcoin in a logarithmic chart

Global liquidity today has impact down the line - so it moves forward and creates a roadmap,

As you see Bitcoin follows that roadmap within the deviations of the liquidity flow

Note: Blended wave starts moving up in Dec 2026 BUT stealth QE wave actually has it overall moving down (suffocates Blended) which is a mix of both.

So optimistic into July/August (may get front run up/down) or peter out based on the war impact on liquidity, bond volatility, dollar, liquidity overall being suffocated, however Dec 2026 is looking like a bottom before a move up kinda like a inverted H/S pattern however when you overlay Stealth QE Wave over Blended which actually is made up in part on the impact of Stealth QE you see its moving down (will know more in a month or so).

Seems to align / not-align with:

• Raoul Pal ~ Liquidity hitting

• Cross Border Capital (Dr Michael Howell). - doesn’t align with, he’s firmly against risk, but also suggests buying BTC when two standard deviations oversold...

• TechDev - doesn’t align with, he believe one more low (upper 50’s) - would align with in context the liquidity deviations are there to support a push down before up.

• Henrik Zeberg - believes one blow off top is loading.

Until next time ~ we intended to go into the Indian Ocean or Pacific Ocean for a long jaunt but Jet Fuel is running out in this region now ;)

Just looking at the following, aside from a potential plunge flush that’s too quick, i’d hazard (accepting that if Trump shits himself and/or global markets again it would change things).

Global Liquidity Total Liquidity is rising, Bitcoin is massively offside.

We've technically bottomed nearly on the Power Law side.

We've been here before... 2021... first top drawdown.

We live through acts carried out in the past... loosening on a scale not seen before...

Blended liquidity BTC is monthly 12m so we've likely hit our bottom point and will see that 1st March plotted.

If i were investing for the future - i’d be scooping up here, if i were shorting, i’d be buying spot here and closing shorts.

The new script takes into consideration Shadow Monetary Base Impacted by MOVE volatility, Blended Liquidity Wave Impact (historical/regression), Power Law into one composite for Exiting BTC, i.e look-ahead approach.

Accessible here : https://crons.catenacap.xyz/Master_BTC_Outlook.php

Power Law Decay Normalization Deviation is nearing it’s bottoming zone.

Shadow Monetary Base Move Impact on BTC points to a 52k Range Move (44/48K)

Blended Liquidity Wave Impact is pointing to a liquidity air-pocket into March.

Note liquidity is rising (still) but it’s momentum has declined rapidly, additionally the partial % impact wave that flows into BTC is technically being starved.

Whats more as Dr Michael Howell has stated routinely lower rates don’t mean more liquidity, either hypothecation (banks) or forms of QE/YCC do, and there’s talk it will be “supportive” opposed to “driving” which ultimately means a likely grind and churning before something breaks.

However — according to this we should have bottomed already or be in it.…

You will have numerous noises about Greenland, you will have numerous noises about tariffs, yes the world order that we’ve lived under since world war II is breaking down, its every nation for itself, the middle-sized powers will need to combine into a block of sorts to compete with the new regional hegemonies, as much as America is perceived as the hegemony, its entire supply chain is predominantly serviced from its adversaries China) or its competition (EU), and its navy as large as it is has been receding since the days of the so-called ‘sand-rat campaign’ commonly referred to the Houthi Hunting Club (Yemin) where the US was unable to to quell the forces.

Yes they’ve had success in Venezuela (hmmm cash bribes) but its been widely known the US is pivoting towards its own shores since the Biden era, because frankly, China, Russia, even Iran (less so) has the capabilities to sink the US Naval Fleet subject to hypersonic weapons the US doesn’t have a defense against.

The UK found out the hard way (same as Sweden) when Russia dropped a hypersonic on a building hosting Swedish Military Missile Training Team and the UK’s SAS Brigade that was in Ukraine when one dropped on their head - the king of Sweden apparently went blue…

Its also been known for sometime, that Ukraine lost millions, it’s also been disregarded as loosing hundreds of thousands until a leak recently of the Ukraine military records put it at ~1.7m personnel dead, in the early days we were seeing pallets of slabbed parts from humans as if meat… that number is probably half the value as MIA isn’t DIA.

Ukraine has been a huge financial loss for the Europeans/UK, the contracts that were signed basically meant the following.

• British banking (City of London) would get control of the Ukraine banking system

• EU would get control of land mass for agriculture (whilst persecuting their own farmers)

• US Financial Firms would invest in and be involved in the redevelopment and its mining firms involved in the extraction of resources.

Western tax payers subsidized the costs (i.e socialize the cost, privatize the gains).

Well this didn’t end well, thus the West now realizes (US) they need to look inwards, and Nato is itself not something they can protect, i.e we can talk about the military capabilities of the US, but they stand no chance against hypersonic in a hot war (naval, air-bases) and if you send men — they get slaughtered by drones.

So the rules based order is breaking (or rather the hegemonic US) is breaking apart from the West on its terms to protect itself, unfortunately our (UK, EU) Governments are too thick to recognize whats happening (because they are administrators not leaders) — apart from Mark Carney (bright spark), and reality is yet to hit the lower power countries, or rather the scramble for what or who is their new overlord is yet to be determined.

The meme currently doing the rounds is closer to the truth, obviously Europe will look to North Africa (i.e Italy securing North Africa for energy) and recreating some form of colonialism, the world is fracturing, there’s a lot of impact of this downstream — hence Gold rapidly rising, as overnight your currency may become worthless…

Von der Leyen admitting this reality (mind she’s just another administrative criminal), however reality is hitting, and the EU and ECB are recognizing they need to de-risk, and re-shore, otherwise the EU will be no-longer a mere vassal for the US, but under the spheres of influence for the US, Russia, China… thus a push for renewal of Europe as its own power that is able to push its own sphere of influence against smaller players is now hitting home.

Now past the geopolitical changes — onto the economic impacts, Japan inherently has been a canary in the coal mine, as the carry trade currency into the US, this is now unravelling as Japan needs to re-shore, re-arm as the defense umbrella can no longer be counted on, thus its own economic changes are now showing themselves in the bond market.

Bitcoin as the canary in the coal mine as the currency that trades 24/7 follows through with…

Naturally this spills over to the US, thus Bessent speaks to his counterpart, only to cause less volatility, they understand this needs to occur, i.e as a frog slowly boils, its not noticing the changes, but as it rapidly boils it jumps out of the pan, in this case, US bonds/assets etc — great unravelling… thus orderly explosion.

Most of this was already picked up offshore in the Eurodollar Markets, or shadow Monetary Base impacted by the collateral multiplier, i.e (in-part yen carry trade), thus.

As liquidity flows and tightness/loosening occur over time but take act after time, i.e the flow through assets react not immediately but downstream of events previously occurred, this was already baked in — we track this in the Blended Liquidity Wave… i.e see there the drop ahead, thats now occurring i.e we’re moving into it now — that tightness.

You’ll notice we come out the other-side (rising), and this should be treated as the area to accumulate… perhaps it goes to 78,000$ or ranges here… but we’re still in the bottoming part of the cycle… and the liquidity is rising, and the geopolitical mess isn’t the cause, the cause is a liquidity drain, and in a world of breaking hegemonic to multipolar, it’s best not to be exposed to one region or the collapsing/re-adjusting regions currency…

Chart’s are accessible - click.

Standard.

Logarithmic.

If you follow Raoul Pal, he believes Bitcoin is on the road to 230,000$

If you follow Dr Michael Howell, he believes Bitcoin is going to be range bound, and for every 1 standard deviation to trend you should on pull backs add to your stack.

In September 2024 I started advising our partners it would be prudent to de-risk towards the end of the year due to the decline in Liquidity, specifically the US side of YCC-not-YCC and QE-not-QE being drained (~6T$), we see similar in Global Liquidity Market(s) in June 2025, and in September 2025, actually in December 2025 liquidity commenced a up-trace however momentum is low…

Then we come to the Parabolic Supports which you can see below, here, if there’s a lack of bar(s) greenish then its a weak move, i.e the conditions liquidity impulse wise are just not there.

It should be noted Impulse Wave(s) of liquidity provide subject to localized/macro conditions overall, the firepower for Bitcoin to rip, though Bitcoin is at the bottom of its wave and looks are up, its still in a declining trend

If we look at the SMB Impact (Shadow Monetary Base) impact chart → note Dr Michael Howell will be providing data back to 2010 in the near term, so this should enable us to run this backwards through time, provides a band (squeezing) but with a top ratios of around 100,000$.

Likewise if we see the Power Law chart below which historically has been the most accurate provisioner of intelligence on what part of the cycle we are in, we are firmly within the decline with about 75% of the move achieved (to a bottoming zone) — i.e closer to the bottom than the top.

Which brings me to the following, my top/bottom oscillator chart, the following move in the oscillator leads to around 99,000$

Typically this would signal as a better view —> 99,000$ before a new marginal low, followed to a new high…

Overall chart.

Which brings me to the following chart which would align… though the price levels are not certain for their corrective to ~Z → my gut at least feels a road map similar to this will play-out based on liquidity and the power-law structure breakdown.

However with Trumps DOJ now going after Powell, things could change fast…

Something to be aware of, the Liquidity Wave points to a bottom and a run up but in a downtrend, momentum is declining, power-law is closer to the bottom than the top, Shadow-Monetary-Base points to a squeezing zone being created with a top around 100,000$ in the current run, and the Top/Bottom Oscillator points to 99,000$ before a resumed downtrend before a uptrend…

Additionally Total Global Liquidity (Global Liquidity & Shadow Monetary Base).

What i wanted to do was look at the Liquidity Impulse(s) and the ‘Wave’ impact those have on Bitcoin.

First i came up with the following (rudimentary) in hind-sight which covered Total Global Liquidity.

However what you can clearly see is the ‘wave’ impact on BTC (rising width = explosive growth/tightening etc), note BTC is shifted forward 5 months as this is the impact period, i.e Liquidity Leads.

But this would be a foolish to assume just Total Global Liquidity would be sufficient (wave wise) i.e at the moment BTC should be exploding but it isn’t so we need to factor in various other elements.

These include YCC-Not-YCC (Yield Curve Control) that the US Federal Reserve uses to sedate the Convexity of the 30Yr MBS as a 10Yr so as to control the MBS Bond market whilst not so concentrating on the 10 Yr → i.e people have been calling for a recession since 2022 whereas parts of the country has been in recessionary conditions others have not, this is all downstream of YCC-Not-YCC and QE-Not-QE.

The following chart(s) represent this (YCC) to sedate the “Synthetic 10” part of the Convexity of the 30Yr MBS, whereas the “10 Yr” rate itself inverted, thus various aspects had blow-outs but the MBS side didn’t thus the collateral base didn’t.

You’ll also note YCC downstream impact is on the Dollar (DXY) also which is why I have been dismissive of various “Macro heads” claiming the Dollar is going to explode to 120, because the Federal Reserve is actively pushing the Dollar down as shown here whilst Trump(s) Treasury/Rhetoric supports that.

Now coming back to the Wave side, this meant I should also factor in YCC - Not - YCC we call it this because the market doesn’t realize its YCC and keep claiming the US will need to do YCC in the future without realizing that YCC is always on-going, just behind the scenes and knowing where to look for it, as evidenced above.

So i come to the following Chart prior to that, BTC Driver(s) - Stacked Impact Share (Lag-Adjusted) — What you have is Total Global Liquidity, Stealth QE (QE-Not-QE/Treasury QE) and YCC Suppression (YCC-Not-YCC) where its a Rolling R2 Weighted Impact Accessor, i.e Whats driving Bitcoin(s) performance (Pearson R).

Ok, so Stealth QE-Not-QE is an area we need to concentrate on considering the US Economy (below) as represented by the Bitcoin Implied ISM — as Bitcoin benefits from Liquidity, but it also needs liquidity flow to outperform in it’s huge volatile upwards momentum periods, and this is driven by Main-Street and Wall-Street having additional risk tolerance, as well as additional funds, i.e for Main-Street when you are no longer worried about putting food on the table, you either spend into the economy (consumerism) or invest, when you invest as currency is debased assets optically rise, and when some assets rise more than others — allocations are made, i.e BTC with a fixed supply absorbs marginal flow of funds which supports the liquidity induced optical rise and thus you have explosive growth whilst liquidity momentum and economic momentum are in the Goldilocks zone, naturally liquidity/funds flow downstream into ETH, Solana and other less honorable shitcoins chasing returns and this give’s us our booms and busts within the Crypto Ecosystem.

The chart above shows that the US ISM Index (survey of the business cycle) has only gone above 50 (briefly) twice since 2022 which aligns with the K-Shaped economy (asset holders aloof, ‘wage cucks’ treading water) — which comes back to the Synthetic 10’s-2’s (YCC) enacted, i.e collateral base hasn’t collapsed but the economy is ‘sick’ or rather was ‘sick’ i.e the Biden-Harris Presidency was all about ‘hiring people into the federal government, using YCC-Not-YCC and QE-Not-QE to give the facade everything was ok, reality was ‘wage cucks’ were treading water, and the economy was just about to roll over as they drew down the 6T$ of Fuzzy-Wuzzy QE-Not-QE and YCC-Not-YCC just as Trump entered office (starting in September 2024) i.e they didn’t mind fucking the plebiscite as long as Harris got into office, and when Trump won they set it up for a huge fall… naturally Bessent actually knows how to trade the Fuzzy-Wuzzy and was at first against it (Emerging Market Economics / Failing State Economics) but was forced to re-activate whilst looking for a way to shift the risk of running it hot elsewhere…

Which brings me to the SLR Changes which i won’t go into detail about but are pretty much below…

US regulators are finalizing changes to the Supplementary Leverage Ratio (SLR) for large banks, proposing to tie it more closely to risk, especially for Global Systemically Important Banks (GSIBs), aiming to free up capital, improve Treasury market liquidity, and reduce disincentives for holding low-risk assets like government bonds, with final rules expected soon for adoption in 2026

Note : Considerable Short-Term Rollovers are being directed into Stablecoins (pulls in some of the Shadow Monetary Base hypothecation into a non-opaque system (Eurodollar is opaque) — its expected 1/2 T$ which will alleviate the need for changes as the US can use that process to “run-it-hot’ and inflate away its debt i.e the more stablecoin demand + lower rates (they control the short-end) enables them to push their debt debasement off to the masses opposed to ring-fenced overseas nations.

Note part of a thread/conversation I had with Raoul Pal last week reference Liquidity — and his view eSLR (SLR).

Me - FYI Dr Michael Howell says liquidity has peaked

RP - We just don't see that but time will tell
Me - I’m hopeful - Chinese / PBoC debasing debt is increasing 1-2t$ same source, US liquidity (yours, his says increasing also). Sometimes hard to derive meaning because statements counteract. Either way there’s not enough juice for rollover so they’ve got to do something or allow the system to blow. So following your hunch/theories.

Raoul believes SLR changes will inject liquidity (credit creation within the banking sector) into the economy (Business Cycle Running It Hot), whilst Fed QE (marginal) will support minor liquidity constraints, and Rates Decline will enable re-hypothecation / refinancing.

I agree with this, only issue I have (mentioned in 2022 — cycle has changed i.e 2yr liquidity impulses at the time i said followed by year decline then 2yr liquidity impulse, with the debt refinance cycle, liquidity cycle and business cycle all out of delayed-sync we have constraints popping up).

Thread/conversation with Dr Michael Howell.

Me - Is this factoring in the US Liquidity kickstarting again from Jan (SLR) and of-course long-roll-over to short (Treasury QE) increasing alongside Rate Declines (May and possible forced QE Increases). I.e will the US Liquidity Cycle peak or will momentum decline whilst a sideway liquidity push occurs.

Dr Michael Howell - I still think Fed policy is acting as a 'put' on the repo market. In other words it is consistent with a range bound market in risk assets

Me - 1) Next year they need 7T$ for debt refinancing this implies they need to generate that via Banking, or QE or some form which should imply that liquidity will flow next year - correct?

2) In respect of BTC (it lags) so that would imply (now - tomorrow onwards) the peak in the liquidity should start to be expressed in BTC - Correct?

3) Gold feedback loop into BTC would imply that BTC would benefit as the liquidity gushes out of Gold/Silver into other markets would provide additional run-way for BTC - Correct?

I.e the “Risk off” would likely be in Q1 2026 - likely mid Jan due to Gov shutdown, and dependent on how the US introduces enough liquidity (or doesn’t) determines re-entries, if they don’t then its like 08 etc and then they will be forced to re-start open QE at a larger scale, if they do that should in theory support (lift markets optically)?

Dr Michael Howell - The liquidity balance will be the interplay between the Fed/ treasury in US and PBoC in China. The PBoC and US Treasury 'QE' push liquidity more towards real economy. The Fed is the backstop for financial markets but it is likely to be reactive and only inject cash when repo tensions build. Q1 may be a time of tension. Overall, note pace of US NGDP. This high clip doesn't seem consistent with strong financial assets, but should favour commodities. Oil is out-of-favor, tech remain in favor. I'm suggesting the opposite switch. Timing BTC in this environment is tricky. I accept your points and note the paradox of strong gold/ weak BTC can easily reverse ST.

So Raoul believes the changes will induce liquidity (credit) whilst also running it hot will drive the economy / risk, Dr Michael Howell believes the changes will be supportive but isn’t convinced that the market will run to new highs, this is where you have to go down the middle, the Market is driven by speculation and a-symmetric risk taking, whereas its underlying is driven by math (debasement).

I.e I take a similar approach with using the Spread between SP Global US ISM PMI and the US ISM PMI to determine where we actually are i.e % feedback % speculation driven on where we are going, it’s worked out ok…

However as i’ve pointed out — the market already peaked — in late 2024 even though prices have optically risen driven by Stealth QE / QE-Not-QE since, hence, Bitcoin rising but Shitcoins being in a depression as the Economy didn’t rise just asset(s) did as there was more credit/hypothecation on-going domestically and within the shadow-monetary-base (Eurodollar Markets), whilst Risk (Move Index) has been sedated.

Conversation is to determine where the funds flow, i.e i need to derive/confirm as Raoul believes ~7T$ of liquidity will be generated out of the changes ahead, i need to know if a larger % of that is going into my back-pocket, or is a larger % of that going into the ‘wage cucks’ back-pocket, i.e am i betting on the correct horse, as these changes are different from the current prior structuring of liquidity flow.

So now we return to the eSLR (SLR) changes below.

The US Has a problem it’s rolling over long-term debt into short-term debt that needs to continuously be rolled over, this is as mentioned above EME/FSE — So the US is lowering the SLR (basically depositor backing) so the banks can hold more short-term debt (inflationary) as they need to then put the funds to work (depositors) to earn a higher yield and they are currently not keen to keep adding long-term debt onto their balance sheet due to hold-sell = loss, hold-maturity = profit (nominally), i.e below Unrealized Gains (losses) for US Banks currently (Silicon Valley i.e Bail Outs but at 400-600B$ if they are forced to liquidate).

So the banks can now scoop up the short-term debt as the long-term debt is rolled over, but now there is the issue where to put that capital to work, Trump is pushing for it to be invested in the US Economy (Infrastructure/Tech roll-out/Military etc) whereas the banks were looking to generate credit lines (think preemptive 08 style), however with this recent tweet…

https://www.theguardian.com/us-news/2026/jan/10/trump-credit-card-interest-rate-cap

This would in theory curtail that — by forcing banks to de-risk, i.e he’s demanding (socialism) lower rates for credit card interest for consumers — banks would instead reduce their riskier client base thus not entice credit-consumerism and redirect their hypothecation capabilities elsewhere into the economy (if credit isn’t one place it has to be in another), thus into the real economy, thus generate actual real-GDP growth, rather than optical credit GDP growth which seeps in-part into Real-GDP.

Which brings me back to the following, the second iteration of the Liquidity Wave Index, which has YCC-Not-YCC Wave, Total Global Liquidity Wave, QE-Not-QE (Stealth/Treasury QE) Wave and then finally a blend… it wasn’t perfect but it provided an insight into the lag/lead times such had.

This provided the insight into one that was dynamically adjusting/calculating and a blended version (4th chart) above that factored in the dynamic over-time lag/lead impacts of the various waves.

Providing a roadmap all the way to June 2028 for the Bitcoin 12m Change Logarithmic wise.

I.e see the following you have Bitcoin 12m Change Log % within the Dynamically Blended Wave (QE-Not-QE/YCC-Not-YCC/TGL) which self determines the impact these forms of liquidity have over-time and with what lags/leads, then constructs a “Blended Wave” - BTC has to be shifted back to 0 from a 5 Week Lead, the Blended Wave shifted back 31 Weeks and you have your roadmap ahead — if there was more SMB data we could do this back to 2010.

Which more importantly provides the band points that the market provides for Bitcoin (solely on forms of liquidity not including Business Cycle — however respects the -4 to +4 band radius generally over time) provides a insight where its at the base of it(s) run and has a potential -12% to 60/80% lee way ahead (upside) through June / Sep, with liquidity (blended) declining Oct 2026 through to May 2027… note momentum is something you also need to consider.

There is something else to consider, highlighted below — the Blended Waves are declining however it is expected two things to occur.

• Trump Tariffs considered unlawful - supreme court allows him to keep the loot but force him to follow the law (good for liquidity and business investment/cycle).

  • Trump introduces tariffs via other means (impactful but less volatile)

• Trump uses Tariffs to provide direct stimulus to the plebes (good for liquidity/consumerism / business cycle)

Hope that helps.

The chart below represents the US Federal Interest (T$) v Gold and Total Global Liquidity (T$).

Gold represents Financial Conditions (Raoul Pal determined) and this lags Federal Government Interest T$ by approximately 36months (34months we have as).

As Global Liquidity (part debasement, part hypothecation part credit et al) is needed (balance sheet capacity) to refinance debt(s) these in return lag the trend of Fed Interest by approx. 30/34 + (lag gold) 12months (42/46 months) so lag gold in essence by 12m.

This would imply ~August 2027 / ~May 2028 a peak in Gold at around ~7,000$ an ounce before dropping to around ~5,400$ an ounce, note personally I believe Gold will see ~5,000$ however we will work on the assumption that Gold will retain a correlation lagging future Federal Government Interest (T$) — we also know that China will debase their debt an additional ~1-2 T$ (buying up gold swapping their US Reserves/Treasuries into Gold whilst retaining relative currency range with the $ (offshore Yuan), this would bring Gold conceivably towards ~5,000$ so for arguments sake it can be agreed that the US and rest of worlds motions could conceivably bring Gold to the value(s) above, ~June 2028 would mark the bottom in gold based on the above, allowing it to rise to ~9,000$ in 2031 which would align with the debt/gold ratio trend-lines historically.

I won’t put charts up showing how gold was repressed you can simply login to Terminal and do that yourself.

What i wanted to show is that, in essence i don’t believe people grasp just how much gold will move in the future (nominally - you’ll just be able to buy the same shit approx.).

The following chart is US Debt (Federal) as a Ratio to Gold, you can be forgiven to recognize that main-street (US) hasn’t really entered the Gold markets, its been driven by a number of factors

• China debasing it’s domestic debt (whilst maintaining a range with the Dollar on its currency).

• US Federal Deficit/Debt & concerns about the Weaponizing of US Treasuries/Equities/Dollar.

• Emerging War (driving up allocations to metals and wealth preservation).

Which is following the demographics issue in the US i.e see the following article and apply to the US, or this article as similar all just playing out on different timespans, as you can see below NA (incudes Canada, Mexico) Births YoY inverted and shifted forward 9 Yrs vs Gold YoY.

Now looking at the Chinese side (main catalyst), first we go at Debt/Gold YoY (%)

And side by side with China’s GDP (Fred)

Now we look at China Government Debt / Gold (ratio), you’ll notice they’ve over the years since the GFC attempted to contain a trend in a specific range without allow it to surpass (come out of that trend, during Covid that broke — first down then up violently, to which they’ve in 2022 commenced a debasement of the Debt in Yuan (CNY - onshore) by buying up gold

Here we have China Central Bank Gold Reserves and the YoY% as you can see historically China buys Gold when it needs to debase its debt to revitalize its domestic economy or debase its debt - 2008, 2015, 2022.

In the following chart you have CNY/USD inverted v’s Gold USD

As you can see in the following chart PBoC Liquidity (China Central Bank) lags Gold Price $ terms, the Chinese Yuan above v’s US Dollars has broken down (up as its inverted) whilst Gold has broken up.

In the following chart you have Chinese GDP (YoY) vs PBoC Assets (YoY) with the Credit Impulses (liquidity injections) leading.

What you have is Debt → Buy Gold → Onshore Yuan debt debased against Gold → offshore Yuan range retained in commodity terms onshore Yuan destroyed (= productivity rises due to cost to market goods cheaper exports) → Assets on PBoC Balance Sheet rise lagging Gold, debt deflation, economic productivity increase, maintain range in currency export ($).

In essence the US goes through a range of debasing the $ against Gold or Strengthening against Gold — the Ying, the Chinese use the same approach to buy up Gold with a closed currency account debase their internal debt (and currency — supported by the US debasing its currency) to revitalize its economy — starve off deflation, and have a productivity boom by reducing their export cost(s) — the Yang.

Or depicted below how the Global Economy function(s) in the context of the Ying, and the Yang.

So Gold will continue to rise but it will also revert within its debt/gold ratio, but then it will revert again, for the cost of storage and a outlook of 10,000$ an ounce over the next decade, it would be prudent to continue stacking.

Just do not have the same conviction in silver as thats a industrial metal, there’s a shortfall, the demand is rising, but there’s speculation there so be careful not to hold a hot potato.

So I ride the storms, and sit in a port between them. A storm is best represented by liquidity. Sure, there are people that go out to work every day that believe they are having a productive input into the GDP of the country and that their sacrifice is respectful. The reality, of course, is governments debase at ~10.3% per year and inflation adds an additional 2–4% on top, whilst the GDP of the nation is ~5%, so in essence the state is ‘printing’ ~9% on top of the 5% of output. This basically means the lives the average person works, not only is the state being hollowed out, but the average person is becoming poorer in real terms, bit by bit, every day.

This is, of course, due to the debt, and naturally the state prints the difference, so the debasement rises year on year just a little bit extra to accommodate the debt rollover periods — call it compounded misery.

Now for most people, they don’t even want to contemplate this or use their neurons to work through the math, or cursory have it go through their head: “Did you catch the game last night?” So in essence the vast majority of people get wiped out either slowly (historically since ’07) or all at once (2022, → in the future). But for those of us that sat there and worked it out, then verified it over and over via different benchmarks, it’s provided a fruitful return.

Which brings me to the current ongoing market — close but no cigar. Now it might fall; if you’ve had assets you’ve done pretty well since October 2022 (when liquidity started to roll upwards), but I am sure you’ll also know non-asset holders who’ve been hollowed out and are on the breadline — I do. Fuck, the amount of support I’ve provided would have been enough to cover my own overheads for life. Instead, those around me evidently are struggling both financially and mentally; there’s a breaking point eventually…

I think back to a few areas where others recognized the issues. I.e., one person once asked a central bank worker offhandedly: if you are just printing the money (liquidity) to juice the system to create an environment for commerce, to generate GDP to roll the debt over, why don’t you just print the money and clear the debt? To which they responded: “the need for illusion.” This basically meant that if the government(s) were to do this, people would question why they paid taxes and would demand the government(s) support them with printed funds rather than productivity, which would break the system and result in social breakdown. So the process of gradual debasement-repression enabled the illusion to continue.

Then I think back to Raoul (Raoul Pal) post-’08 wanting to establish a full-reserve bank after the ‘bail-ins’ in Cyprus — trotting around the globe speaking to various central banks. One such (US) said it was a great idea, but he’d never get the license — they need fractional-reserve lending to inflate the currency (via lending into existence). Otherwise, they’d steal all the banking as people flood into their bank and starve the system of credit creation (monetary inflation).

Peter Schiff likewise tried this —> his bank was attacked for money laundering, years after there’s never been a case of-such and depositors are still waiting for their funds back.. Peter tried it offshore, they still (5 nations) attacked him from all different angles - should have just bought BTC Peter…

The reality is the system can’t change, for if it does, it breaks the illusion. The illusion is Western supremacy and American hegemony — but it’s all fake. And this fakery is what ‘steals’ wealth from non-Western nations.

For example, using dollars to buy oil: countries such as Kenya have to produce something (a product), which is then sold on dictated terms by an overseas purchasing corporation, paid for with dollars. Those dollars are, in essence, generated at whim (Fed, Treasury, banking sector) at low interest rates (prevailing, etc.) and exchanged for the goods. Kenya then uses these dollars to buy oil.

Whereas in the US, for example, the company either used its revenues to obtain those dollars or borrowed (credit) to obtain them for the purchase at a rate of, say, 5%. In Kenya, they borrowed closer to 20% (downstream via various loans) and then committed real man-hours (human life) into production. In the US, it’s packaged and then sold to the consumer at a much higher cost.

This benefits the US and creates the cycle of enrichment the US has enjoyed as the hegemon, as dollars are always in demand. Countries need to sell something real for something created to service their own needs, be it their own growing debt pile (commercial, state, etc.) denominated in dollars, or their energy requirements priced in dollars.

But this illusion cracked.

China is on the rise. The sanctions and the ‘theft’ of Russian reserves have forced countries to reconsider their exposure to the US. Economic issues globally have forced countries to look at other ways to tax their populace to obtain wealth, which is then exchanged for their own social programs or the needs of the state (dollar-denominated debts, etc.).

Then throw in liquidity games (Biden era), where trillions of dollars were flooded into the US economy via YCC-Not-YCC and QE-Not-QE in an attempt to re-win the election, before being drained just as Trump came into office. This has created a bifurcated economy, or business cycle. Couple that with debt being termed out (≈$9T in 2026) and you have a problem — that problem is evident most in Crypto.

At a time when liquidity (from the Fed) is needed, the Fed hasn’t played ball, forcing the Treasury to do so (QE-Not-QE). This is basically issuing longer-term debt as shorter-term as it comes up for rollover. The problem now is they need to push this shorter-term debt to someone. SLR changes allow that to be the banks, but the banks need to earn a yield, so they will lend against it into the markets — that’s inflationary, both monetary and variable. By contrast, Fed QE is primarily monetary inflation, as it gets captured in assets, whereas Treasury QE gets captured on Main Street and, to a lesser degree, in assets.

The US ISM above has pretty much been in recessionary settings since 2022. It has, in modern history, never been this long (though it should explode higher). In the chart below, you have the US central bank balance sheet (this is what we track, in part, for US debasement annually). As you can see, it’s gone below its trend line; below, the oscillator is turning up, and the YoY change will follow. This is achieved by QE being enacted (≈$500 billion due) and QT ending (it went too far).

This doesn’t necessarily mean assets will explode higher. I.e., the Trump administration are looking to do Treasury QE, which inflates away the debt (cost of living rises), rather than Fed QE (assets rise), because Americans are priced out of assets — juicing Main Street. At the same time, they recognize that unless they ‘somewhat’ juice the financial system, there won’t be enough liquidity, causing friction and blowouts. Therefore, they are pushing for lower rates (which helps Main Street) and slightly higher, but controlled, Fed QE (which loosens financial conditions).

It’s important to do both. As many claim, Debt/GDP is important, but the reality is Debt/Liquidity is what matters. Liquidity is too tight, and if it’s too tight, you get deflation.

Deflation, for a government, is worse than inflation. You need just enough inflation to debase debts and ‘steal’ from the populace (domestic and international), whilst starving off deflation. Deflation in the US now would result in the wealth of the nation being popped and America losing its hegemony.

As I remarked from the beaches of Africa, the dollar was toxic as it was losing value. In a deflationary world, the dollar would rise, and governments in servitude to the need for dollars would be forced to change the system. Therefore, the US wouldn’t be able to export its inflation (as mentioned above) based on demand, because nations wouldn’t be able to obtain said dollars. Wars would then pop up, and the US would lose its hegemony — it’s a consumer market that, without China, can’t even fight a war.

On the other hand, deflation would be good for the youth, i.e it would wipe out the asset ‘optical’ value for the wealthy asset holders, allowing the youth a bite of the apple, but at great national cost.

Trump, since entering office, has been pushing the $DXY down and oil down. But now there’s an issue: the market (financial conditions) has loosened, and this takes approximately nine months to impact the business cycle (ISM). We’re now entering a ‘deflationary’ scare — hence his commentary — whilst also pushing the Fed to lower rates, as well as provide QE.

Deflation is worse than inflation. Inflation results in political upheaval, whereas deflation leads to systemic societal and government collapse — i.e., the wealth of the nation is lost, and the cost of servicing debt rises due to declining asset valuations to tax, or insufficient GDP growth to refinance into.

On the other hand, China is devaluing its debt against gold, whilst trying to retain a range in dollars for its currency so exports continue, but in doing so its debt is effectively destroyed.

Chart above is China Government Debt/Gold, Chart below is Chinese Gold Imports, and below that CNYUSD with the ideal range.

Which has driven up demand for gold — which likely has some way to run (a couple of hundred dollars). But over the long run, due to the US need to debase and the Debt/Gold ratio, prices of $10,000–$15,000–$25,000 per ounce aren’t out of the question (over the decades to come).

And as gold runs, silver generally runs after — and much more ferociously (in both directions). Thankfully, as I’m rid of ours now — purchased a decade and a half ago to ‘show capability to support a family’ at a traditional Asian marriage.

I was happy and fortunate to be relieved for Silver is a widow maker in my view, silver is driven by a few areas, industrial, military (check how much silver goes into each missile) and strategic reserves (US) — then add in speculation… can it go optically higher, sure, but for me this is pure speculation currently thus I advise liquidating that — and not being left with something that can sit there for a decade or more — underperforming currency debasement by a wide margin.

Which brings me to the market(s). Depending on who you listen to, Henrik Zeberg is in the deflation camp, Raoul Pal is in the debasement camp, and I’m in the “Let’s get out, pay any debt, and buy a farm” camp. The reality is there are so many spinning plates — from domestic (US) to offshore (carry trades, Eurodollar, etc.) — that at some point they will lose control.

Trump is saying “deflation is worse than inflation”; he’s correct. He has Bessent saying this in his ear. But they are powerless as long as the Fed doesn’t play ball, leading toward a catastrophe that will ultimately result in even more debasement (the liquidity hose) due to being late — yet again. Others believe we’re going to collapse into a deflationary spiral because the Fed is late and the business cycle is entering a recession.

Arguably, we’ve already been in that recession. And if there’s one asset that sniffs out the economic situation, it’s Bitcoin — for it is a barometer not just of the economy, but also of macroeconomic liquidity conditions — hence its relative flatness since 2022 (regardless of price appreciation).

But as you can see, that’s entering a bottoming zone, above which it will either spring up and then roll over for a final bottom, or break out.

Likewise below, versus gold, it either follows a similar path (taking gold to ~$4,700 an ounce?), or it breaks out in the near term.

In the following chart you have Total Global Liquidity.

This is rolling down. It usually goes to around −2 standard deviations. Even if the Fed pumps liquidity in now — and other states do as well — it won’t have an impact for months unless they literally buy markets directly (i.e., equities, private debt, etc.). Otherwise, it follows the traditional route (government debt, MBS), which allows those markets to receive a flush of liquidity. That liquidity then enables hypothecation via “deep, liquid” markets and gradually flows into the system — a process that typically takes 9–12 months.

Thus, the US is using alternative methods.

Trump Accounts (direct stimulation): giving eligible children born between X and Y $1,000 of S&P 500 exposure (with claims of $1,000 growing to $600,000 by retirement, assuming ~10.3% per year).

Trump Tariff Rebates (direct stimulation)
Up-to 2,000$ per tax payer providing a direct stimulus cheque.

Trump Troops Bonus

Each Trooper will receive $1,776 before Christmas

What you are seeing is not only populace politics (buying his base), but flooding the market where he can with stimmies — because there is a real threat of deflation from a two-pronged direction.

The economy is dire; the ‘peasants’ need cash to service their existence. That props up businesses, which generates GDP, which generates taxes, which in turn enables, in part, the rollover of debt — some $9 trillion in the coming year. This is direct, as it’s the firehose, whilst he’s waiting for the tanker (the Fed) to come under his control: lowering rates (freeing up liquidity) and increasing QE (indirect liquidity injections).

Is it enough? Perhaps. But it’s certainly inflationary. We like monetary inflation…

We do not like variable inflation. Variable inflation has no monetary hedge — i.e., the cost of living rises and assets decline. With monetary inflation, assets rise and the variable component is controllable. He is doing both.

• First variable inflation (direct stimulation into the consumers hands)

• Second monetary inflation (debases currency, provides liquidity, supports hypothecation)

Which brings me back to BTC as the canary in the coal mine. This chart shows that, regardless of the lack of a blow-off top, the market peaked in 2024 — even though prices have risen.

This is because of various forms of indirect QE, which we call “Treasury QE”. It’s enough to keep assets elevated as long as risk isn’t rising in the rehypothecation process (which it has), but not enough for a full-blown market run.

However, as shown below, parabolic support is rising. Bitcoin is underperforming gold (but showing signs of bottoming). It’s also underperforming global liquidity (total global liquidity), the momentum of which is rising; when that momentum turns up from declining, BTC normally goes on a tear.

The Power Law Decay is approaching a bottoming.

My thoughts are it’s going to do this — $150,000 max. This is my gut. My systems say $180,000. My gut is usually right: it was right in May 2019, Feb 2021, June–October 2022, March 2023, Dec 2024, and unfortunately for me — October 2025.

I think the system(s), though factoring in the macro, are not factoring in the damage — or rather the rhetoric and damage — of Trump’s management of the US economy and the global economy. I recognize he tried to starve it of oxygen (liquidity) to stop the market exploding higher and then collapsing into a full-blown recession during the mid-terms. But by doing so, he’s destroyed a lot of capital that could or would have been deployed, whilst creating havoc globally.

I believe the markets will rise into early 2026. I believe that, with all these stimmies, inflation will occur, and at the same time the US will be freeing up Fed QE, which will create more liquidity and cause markets to explode. But during the inflationary scare, and at a time when so much debt is rolling over, I suspect oxygen (liquidity) will be suffocated from the room.

So I’d say use BTC as your positioning barometer, and hedge — at least partially — over the course of this run into something that will almost certainly be eaten by inflation (cash/bonds), but will at least provide some liquidity during a volatile period. I’d also suggest holding that cash in reserve, or rather not in the banking system unless it’s secured — being considerate of bail-in laws — as Trump is trying to steer super-tankers on a path that is fraught with wild storms.

I close this (hopefully until the new year — markets dependent — hopefully my final post will be within Q1 as the markets come to a reasonable position that we feel confident to alleviate ourselves of ever looking at a financial chart, or data again, concentrating instead on seeds and vines…

Until then — happy holidays.

Instinctively, I knew this period would not be pleasant. Yet with responsibilities, pressures, and competing forces — kids, lions, hyenas — we had no choice but to operate within reality and allow the digital landscape to unravel along the trajectory it appeared destined to follow.

During that period, a sequence of liquidity-providing entities within the ecosystem collapsed following another Trump-driven disruption. The result was a market pushed into the highest-risk end of the spectrum, with the thinnest liquidity structure seen in years. The collapse of that float exposed a deeper truth: a catalyst was simply waiting for its moment. The top was effectively in during late February 2024, and true peak exhaustion occurred by early Feb 2024. Regardless of price pushing higher afterwards, the structure — not the optics — was the meaningful signal. Momentum was already deteriorating.

The next structural peak formed in August 2025. Yet price continued to make new highs into early October 2025, coinciding precisely with the beginning of my field trip and the consequential hit to our wider macro position.

Now the focus shifts to the structure itself — because it’s clear. And this clarity is why I remain cautious about the potential gap ahead.

Incorporating external perspectives

I want to frame the broader landscape by including the views I’ve absorbed from others, and then present my own warning.

Raoul Pal

• Positions us at the bottom of the business cycle.

• Expects liquidity to return.

• Emphasizes debt refinancing as the dominant macro driver, noting approximately $10T that must be financed.

Michael Howell

• Argues we are at the end of the liquidity cycle.

• Suggests liquidity will remain on life-support via Treasury QE.

• Anticipates a bubble-style collapse event akin to historical precedents.

• Recommends BTC as a long-term hedge against monetary inflation.

• Views inflation as the only viable exit from the political and fiscal imbalances created by widespread populism.

Henrik Zeberg

• States we are approaching the end of the business cycle.

• Believes “liquidists” will be wiped out, consistent with his broader cycle thesis.

My perspective on these viewpoints

Raoul Pal is deeply — almost entirely — committed to crypto exposure. By his own statements, 100% of his liquid-net-worth sits in the market, concentrated notably in SUI. His macro framework and major calls so far have been correct, but his positioning remains extremely high-risk, especially given that chains such as Solana, Ethereum, and Bitcoin represent very different levels of durability and network security. Conventionally, it would be prudent to allocate no more than 10% of a portfolio to speculative-high-beta assets. I remain hopeful his view proves right — but the risk profile is substantial or absurd.

Michael Howell, with his deep specialization in liquidity, cannot simply be dismissed. His framework is coherent and historically grounded. However, the scenario he outlines is one the Western hegemonic system is structurally incentivized to prevent. Each time the system has approached a breaking point, a mechanism has ultimately been engineered to stabilize it. Allowing markets to unravel fully would amount to voluntarily ceding strategic and monetary influence to rising powers — especially commodity-rich nations with internally controlled debt dynamics, primarily China and Russia.

Henrik Zeberg’s Framework — and the Core Flaw

Henrik Zeberg argues that the business cycle is ending and that liquidity is insufficient to generate a cyclical upswing. The problem with this logic is that 2020 disproves the premise outright. When policymakers directly inject liquidity into main-street rather than restricting it to the financial system, the business cycle can and does turn upward — albeit at the cost of inflation.

One could also argue that the business cycle has only barely lifted itself above the 50-line since its brief poke in 2024. Functionally, the economy has been operating in a K-shaped, quasi-recessionary or quasi-depressive state since 2022. A system that remains in that condition eventually has to resolve — and resolution tends to come through expansion supported by policy, not through a voluntary collapse.

With the current configuration — Trump’s assertive direction over the Federal Reserve, Treasury QE revitalizing the banking sector, and targeted mechanisms that stimulate lending and liquidity transmission — the more probable path is upward, not a plunge into an abyss. In practical terms, we are already over the cliff, and the policy response is pushing from behind rather than allowing gravity to finish the job.

Revisiting the Cycle Structure: 2000–2021, 2019, 2023, and the Current Setup

The 2000–2021 rally showed two major expansions before forming a decisive bottom in late 2022. But the periods that matter most for the present cycle comparison are 2019, 2023, and the unfolding structure from 2024 to now. When viewed beneath the main structural chart — specifically through the Top Gauge Oscillator — the parallels become harder to ignore.

2019 → mini rally

A sharp, reflexive move higher after severe overshooting to the downside, followed by a fade and a new structural reset.

2023 → mini rally

A similar compressed upswing driven by liquidity impulses and post-FTX reflex recovery, before rolling into another corrective phase.

2024–present → the third analogue (early 2026)?

The oscillator, and the broader structural context, point to two plausible paths:

1. A move toward ~108,000, followed by a substantial drawdown marking the true bear-market base; or

2. A 2019/2023-style rally, after which the bear phase begins in earnest.

Given the ETH structure — particularly the double top followed by a retreat to around $1,500 — the 2019/2023 analogue looks cleaner. Under that path, Bitcoin could reasonably extend into the $140,000–$180,000 range. Even so, prudence suggests de-risking into the $100,000–$105,000 region for BTC, and $4,500–$6,000 for ETH, while still keeping partial exposure in case the market behaves exactly like the 2019/2023 pattern.

Whichever path unfolds, the Top Gauge Oscillator still places us closer to a bottom than a top. A full cleansing bottom — if it occurs — would most likely form somewhere in the $40,000–$75,000 region depending on macro conditions and policy reaction functions.

Raoul Pal’s structural view (see this) — that the market could bottom here and transition directly into a new multi-year expansion into 2026 — is theoretically appealing but historically unprecedented in crypto. No cycle has ever transitioned into a new structural advance without first clearing out malfeasance, leverage excess, and risk-layer fragility. That cleansing process seems unavoidable, and I expect it to arrive.

The Macro Backdrop: Mind the Potential Gap

This leads back to the macro environment. A gap — should it appear — is less a risk than an opportunity. The dominant policy path is debt monetization via Treasury short-end QE, because financial repression has failed to discipline political behaviour. This is the replay of the post-WW2 template:

• the 1940s–60s phase is effectively done,

• and the system is now entering the 1960s–80s analogue.

In this phase, those who are leveraged are likely to lose their shirts. Those who sit in cash as that leverage detonates may find they lose their underpants through inflationary erosion. It is musical chairs now; positioning correctly before the music changes is essential.

Bitcoin’s sell-off following its break below the rising wedge has been severe, but unusually fast. In power-law decay terms, a move that historically unfolds over 7–12 months has compressed into roughly 1–2 months — assuming the decline continues. The structure is abnormal, but the broader context explains why.

Signs of strain were clear. Under typical conditions, the 2022Q3–25 cycle would have produced a classic blow-off top in Bitcoin and a pronounced alt-coin season. Instead, political and policy dynamics interrupted the process:

• In September 2024, the outgoing administration wound down QE-Not-QE.

• The Federal Reserve simultaneously suppressed YCC-Not-YCC.

• Together, these moves effectively withdrew an estimated multi-trillion-dollar liquidity wave, finalizing just as the new administration entered office.

• Once in office, Treasury operations pivoted back toward short-end refinancing — effectively a form of Treasury QE — but the damage to the cycle structure was already done.

Bitcoin benefited early from ETF-driven flows, and alt-coins caught a smaller rally into early 2025. But the absence of the usual liquidity blow-off meant the true cycle top passed quietly.

The business cycle was already softening. With liquidity tight, collateral scarce, and the Fed refusing to assist, the environment became fragile. This fragility contributed to the April–May market break, amplified by Trump tariff-related volatility.

Alt-coins — which rely heavily on surplus liquidity and momentum alongside a strong business cycle — never saw the broad, speculative season normally accompanying a mature cycle.

A second potential blow-off window opened in October 2025. It also failed. A sudden policy-driven shock — delivered during a period when only crypto markets were open — caused significant losses and several crypto institutional blow-ups/outs. The disruption effectively reset market psychology and reinforced the cycle bottoming process.

The business cycle appears to be forming a base. But the liquidity cycle is (or should be) peaking, with major refinancing needs ahead:

• Roughly $10T of debt must be refinanced.

• Some arguments suggest $6T could be absorbed by banks with the SLR constraints ease, enabling renewed credit creation.

• Stablecoins may purchase $1–2T in short-term Treasuries.

• The remaining ~$2T source is unclear.

• QT (~$20B/month) is ending; QE (~$20B/month) is beginning — but the size is modest relative to systemic needs.

Any liquidity flowing directly into the real economy will support wages, employment, and domestic activity, though these gains will likely be eroded by cost-of-living increases. Fed-driven QE typically inflates asset prices more than everyday expenses, whereas Treasury-driven QE tends to lift both, often more painfully.

Rather than a conventional recession, the March–April–May period functioned more like a feedback shock — a compressed, liquidity-driven contraction without the classic employment or credit-flow characteristics. Under this interpretation, the recession has already occurred.

From our perspective, markets remain closer to a bottom than a top:

• The true top was in December 2024.

• Subsequent highs were distorted by Treasury QE.

• Global liquidity has risen through 2025.

• More Treasury QE and mild Fed balance-sheet expansion lie ahead.

However, the new environment — monetization of debt, monetary and variable inflation, and the absence of financial repression — likely means slower Bitcoin upside relative to past cycles. A recovery is expected, but without the explosive dynamics of earlier eras.

A bottom is most plausible in Q1 2026.

As for Alt-coins…

The alt-coin market has been brutal since mid-2022. Many projects are barely afloat. But if more liquidity reaches main-street and economic activity rises, investment into functional alt-coins with real utility should grow. Those with genuine use-cases may integrate more deeply into the economy and benefit from organic demand.

However, tokens without substance — which previously rose simply because liquidity rose — will likely be abandoned en masse. The era of “rising tide lifts all ships” may be ending.

In essence as long as there is enough liquidity flowing in from the Central Banks, then there is enough juice going into the Financial System and Economy, therefore we just keep pilling up the debt but at the same time we starve off the recession as the liquidity is like a injection of smack, therefore we debase it, but we have enough to keep refinancing it…

Robin Williams pretty much lays out the cycle we’ve gone through, and currently are at a juncture, i.e liquidity cycle is coming to a close, but the economy, and the markets (dependent) have not performed due to the lack of liquidity flowing in, i.e starved...

Though markets are optically up, Bitcoin was repressed from 2023-2025, Gold was repressed from 2013 to recently, meaning they’d underperformed liquidity growth (debasement) other asset classes naturally have underperformed i.e SP500 was flat, Property 2.3%

Whilst some are calling for a deep recession and the collapse of the Everything bubble, though this is only possible if the spice doesn’t flow, i.e Covid the entire economy was closed, yet spice flowed and well… life went on, assets rose, because well, debasement, i.e optical growth offsets the collapsing mechanisms… until it doesn’t, the following will go into why a recession is unlikely, in the terms of a global reset…

Why Some Analysts Argue Traditional Recessions May Not Occur Anymore

This view isn’t about economic strength; it’s about how the system has changed, and how downturns manifest differently due to high liquidity dependence, extreme leverage, and state-engineered market support.

The modern economy may avoid classical recessions (like 1982, 1991, 2001, 2008), but only by replacing them with different forms of instability.

Below is the structure.

Liquidity Dominates the Cycle, Not Output

In classical macro:

• recessions = declines in production, jobs, consumption

• expansions = rising output

In the post-2008 liquidity regime:

• liquidity injections, not productivity, drive cycles

• asset prices and credit conditions become the “true economy”

• central banks intervene at any sign of instability

This means downturns often get neutralised before they meet the technical definition of recession.

Mechanism:
When growth slows, central banks increase liquidity or pause tightening → asset prices stabilise → credit flows don’t collapse → GDP dip is shallow or brief.

But this creates:

• suppressed volatility

• higher systemic fragility

• dependency on intervention

• “liquidity recessions” instead of output recessions

Debt Levels Are Too High to Allow a Classical Recession

Global debt ≈ 350%+ of GDP.
High leverage makes the system sensitive to any drop in cash flow.

A traditional recession would cause:

• mass defaults

• bank impairments

• bond market collapses

• collateral chain breakdown

Governments and central banks cannot tolerate this anymore.

Therefore:
Policy is forced into “permanent anti-recession stance.”

Whenever contraction appears:

• QE

• YCC-style interventions

• liquidity injections

• fiscal stimulus

• regulatory forbearance

• backstopping collateral markets

This prevents the recession — but at the cost of growing fragility.

Collateral Chains Cannot Be Allowed to Break

The modern system relies on:

• U.S. Treasuries

• high-grade collateral

• repo markets

• derivatives collateral

• money-market fund flows

A recession triggers:

• asset price declines

• falling collateral values

• margin calls

• forced deleveraging

• systemic freeze

To prevent this, authorities support asset valuations almost mechanically.

This is why downturns turn into:

• liquidity crisis → immediate QE or swap lines

• asset wobble → instant policy reversal

• bond market stress → stealth YCC

Thus you get “non-recession recessions”: GDP doesn’t fall deeply, but underlying fragility intensifies.

Demographics Make Growth Too Weak to Withstand Classical Recessions

Explainer here

Ageing economies (EU, China, Japan, U.S.) have:

• lower birth rates

• higher dependency ratios

• low productivity

• high social obligations

An ageing population:

1. cannot sustain long periods of unemployment

2. requires constant fiscal support

3. relies on asset prices for pensions

A classical recession — with falling asset prices and rising unemployment — becomes politically and socially untenable.

Thus the system shifts into:

• permanent stimulus

• liquidity cushioning

• managed cycles

• very shallow contractions

Dollar Hegemony Changes the Rules

Because global finance runs on USD:

• when USD liquidity tightens, the world struggles

• when USD liquidity flows, global growth “returns”

The U.S. can export liquidity through:

• Fed swap lines

• Treasury issuance

• MMF flows

• offshore banking

• stablecoins (increasingly)

This gives the U.S. the ability to prevent global recessions by easing offshore dollar stress, even if domestic GDP contracts.

So instead of a recession, we see:

• rolling currency crises

• sovereign debt stress

• asset bubbles

• EM liquidity shortages

• short, sharp slowdowns

• “technical recessions” that don’t behave like historical ones

The U.S. doesn’t need to avoid recession for the world to avoid one — it just has to keep offshore USD liquidity flowing.

Governments Shift to “Financial Repression” Instead of Recessions

To manage the debt overhang without recessions, states use:

• inflation > interest rates

• yield curve anchoring

• liquidity support

• fiscal deficits monetised by markets

• regulatory pressure on banks to hold sovereign bonds

• pension-system forced buying

• credit guarantees

This “represses” the economy slowly rather than allowing a sudden contraction.

It avoids:

• mass unemployment

• mass bankruptcy

• political collapse

But in exchange it produces:

• slow productivity

• high inequality

• recurring asset bubbles

• zombified corporates

• long periods of low real returns

The System Doesn’t Eliminate Recessions — It Transforms Them

Instead of:

Classical recession:
GDP falls, unemployment rises, defaults rise.

You get:

Modern recession substitutes:

• liquidity recessions (markets crash while GDP holds)

• collateral recessions (Treasury market stress like 2019 & 2020)

• stealth recessions (households squeezed despite positive GDP)

• demographic recessions (labour shortages + slow GDP)

• balance-sheet recessions (Japanification)

• rolling sectoral recessions (housing → manufacturing → tech → services)

• inflationary recessions (real incomes collapse)

The real “economy” is now financial liquidity, not production output.
So policymakers manage liquidity, not GDP.

This is why some claim “recessions no longer happen” — not because the economy is healthy, but because the system cannot survive one.

Since the Global Financial Crisis, many jurisdictions have re-written the rules of financial rescue. The traditional taxpayer-funded bail-out model has increasingly been replaced with bail-in frameworks. These give governments, regulators, and resolution authorities the legal ability to impose losses on private creditors — and, in some cases, certain classes of depositors or policyholders — to stabilise distressed banks, insurers, pension schemes, or sovereign balance sheets.

The underlying logic is simple: governments are now too indebted, and financial systems too large, to be rescued by public funds alone. The cost is pushed inward, into the balance sheets of citizens and institutions.

What follows is a high-level informational exploration of:

• which assets can be subject to bail-ins,

• how this varies by country or region,

• and why USD stablecoins — backed by short-term US Treasury bills — may be perceived by some as comparatively insulated.

What Is a Bail-In?

A bail-in occurs when a financial institution in distress recapitalises itself by forcibly converting or writing down liabilities — instead of receiving external funding.

Mechanisms Include:

• Forced conversion of bonds to equity

• Write-down of subordinated debt

• Haircuts on uninsured deposits

• Seizure or freeze of certain investment assets

• Suspension of withdrawals or redemptions

Governments implemented these frameworks largely through post-2008 legislation: EU BRRD, UK Banking Act amendments, US Dodd-Frank Title II, Canada’s Bail-In Regime, Australia’s Crisis Resolution Powers, etc.

2. Asset Types Potentially Subject to Bail-Ins

Below is a general mapping. Every bullet is unless otherwise marked.

2.1 Bank Liabilities

• Tier 1 capital instruments

• AT1 / CoCos

• Tier 2 subordinated debt

• Senior unsecured bonds

• Uninsured deposits (amounts above deposit-insurance limits)

• Certain wholesale funding instruments

• Large corporate deposits

• Interbank loans

2.2 Insurance Company Liabilities

• Policyholder funds in participating funds

• Annuity products depending on jurisdiction

• Insurer-issued bonds

• Reinsurance receivable streams

• Cash-value insurance accumulations (specific to local law)

2.3 Pension Funds

• Ability to suspend indexation

• Ability to convert defined-benefit promises

• Ability to haircut accrued rights in distress

• “Stability levies” or compulsory allocations into government debt

• Forced investment guideline changes (e.g., shifting into sovereign bonds)

2.4 Government Debt Crises

When sovereigns themselves face stress:

• Capital controls

• Forced conversion of foreign-currency assets into local currency

• Limits on withdrawal of cash or foreign exchange

• Mandatory purchases of sovereign bonds by pensions or banks

• Taxes on financial assets

• Restrictions on moving assets abroad

3. Country / Region Summaries

3.1 European Union (BRRD – Bank Recovery and Resolution Directive)

Hierarchy subject to bail-ins:

• Equity

• AT1

• Tier 2

• Senior unsecured debt

• Corporate deposits

• Deposits above €100,000 (retail or SME)

• Derivative close-outs

Exemptions:

• Insured deposits under €100,000

• Secured liabilities (covered bonds)

Insurance and pensions:

• Insurers can be subject to resolution but the mechanics vary

• Certain pension schemes can be forced to de-risk or suspend indexation

3.2 United Kingdom

Bank bail-ins under the Banking Act / PRA powers:

• Equity, AT1, Tier 2

• Senior unsecured

• Large corporate and institutional deposits

• Deposits > £85,000 (FSC-protected limit)

Insurance:

• The PRA/FCA can ring-fence with-profits funds

• Potential reduction of bonuses in participating funds

Pensions:

• Defined-benefit schemes may be “rescued” via PPF, often with reduced benefits

3.3 United States (Dodd-Frank, FDIC OLA)

Bank liabilities subject to bail-in:

• Equity

• Subordinated debt

• Unsecured debt

• Wholesale funding

• Deposits above the FDIC insurance limit ($250,000)

Insurance:

• State-regulated; guarantees vary widely

Pensions:

• ERISA limits hard seizure; cuts usually come through PBGC takeovers

Sovereign insolvency:

• The US is unique: it can issue currency and has deep capital markets.

• Political or financial stress can manifest through inflation rather than seizure.

3.4 Canada (Bail-In Regime)

Assets subject to conversion/write-down:

• Equity

• Subordinated debt

• Senior unsecured debt issued after 2018 (NVB – Non-Viability Bail-In instruments)

Deposits:

• Deposits under CAD 100,000 insured

• Deposits over limit remain theoretically bail-in-able

3.5 Australia

• APRA’s crisis-resolution powers allow conversion/write-down of bank capital instruments

• Debate exists around whether deposits can be frozen or “transferred”

3.6 New Zealand (Open Bank Resolution – OBR)

One of the clearest bail-in systems.

Potentially haircut:

• Any uninsured deposit

• Business accounts

• Investor cash accounts

• Wholesale deposits

Exempt:

• Deposits covered by deposit protection scheme (newly introduced)

3.7 Japan

• Resolution tools similar to EU

• Life insurers have legal precedent for cutting guaranteed returns during crisis

3.8 China

• Resolution powers allow seizure, merger, or transfer

• Capital controls can be imposed rapidly

• Corporate deposits at risk in stress scenarios

• Insurance and pensions subject to government direction

3.9 Switzerland

Switzerland has one of the most explicit and powerful bail-in regimes in the world, strengthened after the Credit Suisse failure.

1.1 Assets Subject to Bail-In

• Equity

• AT1 / CoCo bonds

• Tier 2 subordinated debt

• Senior unsecured debt

• Large institutional deposits

• Deposits above CHF 100,000 (uninsured portion)

• Interbank liabilities

• Derivatives (subject to close-out)

1.2 Exemptions

• Insured deposits up to CHF 100,000

• Secured liabilities

• Covered bonds

• Client custody assets held off balance sheet

1.3 Insurance & Pensions

• Swiss insurers can be restructured; policy benefits can be reduced

• Swiss pension funds (2nd pillar) can adjust conversion rates, reduce future accrual

1.4 Special Feature — Swiss “Too Big To Fail” TBTF Rules

Switzerland enforces extremely high capital requirements for UBS (and formerly CS), but also grants regulators sweeping conversion authority.
The Credit Suisse event in 2023 demonstrated that AT1 holders can be wiped to zero ahead of equity, which was highly unusual globally.

3.10 Singapore

Singapore has a very strict and well-defined bail-in architecture (MAS: Monetary Authority of Singapore).

2.1 Bail-In-Able Instruments

• Equity

• AT1 capital securities

• Tier 2 capital securities

• Senior unsecured bonds (that meet bail-in criteria)

• Wholesale funding

• Large corporate deposits

• Deposits above the insured limit (SGD 75,000)

2.2 Deposit Insurance (SDIC)

• Up to SGD 75,000 insured per depositor per bank

2.3 Exemptions

• Secured liabilities

• Covered bonds

• Client custody assets

2.4 MAS Powers Over Non-Banks

• Insurers may be subject to forced run-off or portfolio transfer

• Pension system (CPF) is government-backed and effectively captive; member balances may be subject to changes in rules, where the government can alter interest, access, withdrawal, or allocation rules

3.11 Europe — Full Continental Overview

Europe as a whole is governed by the EU Bank Recovery and Resolution Directive (BRRD I & II).

This is separate from the broader political term “Europe” including non-EU states, so this will include:

• EU BRRD countries

• Eurozone specifics (ECB SRB powers)

• Non-EU Europe (Norway, Iceland, etc.)

EU BRRD (All EU Member States)

(Examples: France, Germany, Italy, Spain, Netherlands, Sweden, Denmark, etc.)

Bail-In Order

1. Equity

2. AT1 capital

3. Tier 2 capital

4. Senior unsecured debt

5. Large corporate deposits

6. Retail/SME deposits above the €100,000 insurance threshold

7. Derivatives (subject to close-out)

Deposit Insurance (EDIS / national schemes)

• €100,000 insured per depositor per bank

Target for Minimum Bail-In Buffer (MREL)

All EU banks must hold a minimum percentage of liabilities that can be bailed-in.

3.1.1 Insurance Sector

• Solvency II gives regulators authority to reduce benefits in failure

• Participating fund bonuses can be suspended

• Insurance bonds subordinated to policyholder claims may be written down

3.1.2 Pensions

• EU occupational pensions can adjust benefits

• Indexation can be suspended

• Certain cross-border pension funds may face forced de-risking

• Governments can impose forced allocation to sovereign bonds in stress

Eurozone (ECB + Single Resolution Board)

Covers: Germany, France, Italy, Spain, Netherlands, etc.

Extra Powers

• The SRB can impose bail-ins without national government approval

• Can override national deposit insurance schemes

• Can transfer assets and liabilities to a “bridge bank”

• Can freeze deposits during the resolution weekend

Non-EU Europe

Norway

• Bail-in powers similar to BRRD

• Deposit insurance: NOK 2 million

• Senior debt and uninsured deposits can be bailed-in

Iceland

• Post-2008 framework allows full depositor bail-ins if necessary

• Capital controls historically used

• Priority deposits are protected but others can be written down

Liechtenstein

• Harmonised with EEA and EU BRRD

• €100,000 deposit insurance threshold

Sweden

• BRRD equivalent

• Deposits over SEK 1,050,000 can be bailed-in

4. Why Governments Prefer Bail-Ins Now

• Public debt levels are too high to support bail-outs.

• Banking systems are too large relative to GDP.

• Policymakers want to avoid political backlash from taxpayer bail-outs.

• Regulators prefer “automatic stabilisers” over discretionary fiscal rescue.

5. Why Some View USD Stablecoins as Relatively Insulated

5.1 Structure of Leading USD Stablecoins

Many regulated USD stablecoins (USDC, PYUSD, USDP) claim to hold:

• Short-term U.S. Treasury bills

• Reverse repos with the Federal Reserve or primary dealers

• Cash at regulated banks

A bank deposit is a liability of a bank, which can be bailed-in.
A stablecoin reserve (USDC, PYUSD, etc.) is invested in short-dated U.S. Treasury bills.

This shifts risk from:

• Bank resolution → to U.S. sovereign credit

T-Bills Are Far Above the Bank Hierarchy

• T-bills are senior sovereign obligations

• They sit outside bank capital structures

• They cannot be bailed-in by a bank resolution authority

Liquidity: T-Bills Are the Global Benchmark

• Deepest market

• Full fungibility

• Daily settlement

• Institutional-grade collateral

Capital Controls & Access

Stablecoins in self-custody wallets cannot be seized as easily as bank deposits:

• No bank holiday

• No bail-in hierarchy

• No guaranteed haircut

• No forced conversion into local currency

This does not eliminate regulatory risk, only bank insolvency risk.

5.2 Comparative Risk vs Banks or Insurance Companies

• Bank deposits are liabilities of private banks, exposed to bank resolution frameworks.

• Insurance cash values or annuities are liabilities of insurance companies, exposed to insurer solvency regimes.

• Pension assets are subject to political risk, funding rules, and forced allocation.

• Government bonds held in a stablecoin reserve are obligations of the U.S. Treasury, not of a commercial entity.

• The U.S. government can issue currency and roll over debt, reducing default probability relative to private financial institutions.

• Holding a stablecoin backed by T-bills shifts exposure from commercial banks to sovereign debt markets.

• Bail-in rules apply to banks; owning a stablecoin backed by T-bills avoids being a bank creditor entirely.

5.3 Liquidity Advantage

T-bills are:

• Fully fungible

• Deeply liquid

• Easily redeemable

• Globally accepted collateral

Many see these as a safer underlying than bank deposits subject to bail-ins.

5.4 Capital Controls

• Stablecoins, when self-custodied, are difficult to subject to domestic capital controls

• Bank accounts can be frozen; crypto wallets cannot (unless custodial)

The world has shifted from taxpayer bail-outs to depositor, bondholder, and policyholder bail-ins. The legal frameworks giving governments and regulators these powers have been quietly implemented in virtually every advanced economy.

Because of this shift, some analysts argue that USD stablecoins — whose backing consists primarily of short-term U.S. Treasury debt — may represent a comparatively insulated vehicle, as they move the underlying risk from banks to the sovereign debt of the United States.

This does not eliminate risk — it simply changes it:
from private-sector insolvency to sovereign-level monetary, regulatory, and liquidity dynamics.

The Illusion of “Government-Backed” Protection

The term government-backed creates a comforting psychological anchor. It invites the public to believe that their deposits, policies, or pension assets are ultimately guaranteed by the state. In practice, this confidence is built on layers of assumptions — many of which may not hold during a systemic crisis.

Deposit Insurance Funds Are Insufficient

Deposit insurance schemes such as the FDIC (United States), FSCS (United Kingdom), SDIC (Singapore), and EU national guarantee systems do not hold anywhere near the capital required to cover even a medium-sized banking failure, let alone a cascading systemic event.

• The FDIC’s Deposit Insurance Fund is only sized to cover a tiny fraction of U.S. deposits.

• The UK FSCS and European equivalents operate similarly — small pools relative to the total deposit base.

• “Government-backed” in this context effectively means: the government promises to step in if the fund runs out, not that the money exists today.

Governments Must Raise Money They Don’t Have

If multiple banks fail at once, the government’s theoretical support becomes a practical challenge:

1. Raise funds by issuing new government debt
   The state must sell new bonds into a market that is simultaneously observing:

   • banking collapses

   • deposit seizures

   • bail-ins

   • collapsing trust

2. Hope there are willing buyers
   When confidence collapses, global investors often:

   • dump the sovereign debt

   • demand higher yields

   • retreat to cash, commodities, or foreign currencies

3. Or print the money
   If buyers refuse or yields spike too high, the state may resort to monetisation:

   • central bank purchases of sovereign debt

   • emergency liquidity injections

   • expansion of the monetary base

Printing Money During a Crisis Creates Its Own Spiral

If governments respond to banking failures by expanding the money supply, the sequence may become:

• Loss of confidence →

• Depositor bail-ins →

• Run on banks →

• Sovereign forced to print →

• Currency debasement →

• Public flees to safety (foreign currency, commodities, crypto) →

• Further weakening of sovereign bonds and the local banking system

In other words:
the very act of “backstopping” the system can accelerate the loss of trust in that system.

The Safety Net Is Not Pre-Funded — It Is Confidence-Funded

Deposit insurance only works so long as:

• the public believes it will work

• investors keep buying the sovereign’s bonds

• the currency retains credibility

But a bail-in event is, by definition, a breach of trust.
When a government seizes deposits or forces losses on citizens’ financial assets, confidence — the real foundation of “government backing” — evaporates.

This Is Where USD Stablecoins Enter the Discussion

Some analysts argue that stablecoins offer an alternative exposure:

• They are not dependent on deposit insurance funds.

• They are not claims on a commercial bank.

• Their backing is short-term U.S. Treasury debt — the deepest, most liquid sovereign market in the world.

• They avoid the bail-in hierarchy entirely by shifting from:

  • private-sector liabilities
    to

  • sovereign short-term obligations

This does not eliminate risk — it reframes it.
But for many, shifting risk from:

• the solvency of a private bank
  to

• the credit of the U.S. Treasury
  is seen as a more stable anchor, especially in environments where governments might be forced to seize, freeze, or haircut citizen assets to stabilise failing institutions.

This cycle has not behaved like a textbook liquidity wave. It has been shaped by an unprecedented interaction between Treasury-driven QE, quasi-YCC suppression, and a stop-start stimulus profile that is unlike anything seen in prior BTC cycles.

The evidence becomes clear when you examine both the stimulus decomposition and the Top Gauge cycle map.

2024 Was Not a “Normal” Bull Market — Treasury QE Drove It, Not the Fed

Throughout 2024, markets were supported primarily by Treasury QE, not Federal Reserve liquidity.

Michael Howell’s work makes this explicit: total stimulus peaked early in the year, but the bulk came from Treasury bill funding, reserve creation, and duration absorption by the Treasury, while the Fed remained in a pseudo-YCC stance — YCC-not-YCC — suppressing volatility without injecting net liquidity.

By September, Treasury QE slowed, and this shift had immediate market effects. Liquidity weakened sharply into the Trump presidency, and the artificial support mechanism propping markets began to fade.

Yet prices continued higher temporarily. Why?

The Cycle “Should” Have Topped in December 2024 — But Trump Re-Started Treasury QE

Technically, the liquidity cycle topped in December 2024.
Under normal conditions, that would have marked the end of the bull market.

However, Trump ordered the renewal of Treasury QE, pulling forward stimulus that otherwise would have been absent. This extended the top formation, creating an “optical price illusion” — markets appeared stronger on the surface than the underlying liquidity justified.

But that illusion cracked in October.

October’s Crack: Market Reality Finally Re-Asserted Itself

The downturn into October was not random. It was the moment the liquidity mismatch caught up with price. Multiple variables converged:

• Treasury QE slowing

• Fed YCC-not-YCC effects fading

• Deterioration in private-sector liquidity

• Lower global liquidity (per Howell’s GLI data)

• Risk appetite collapsing simultaneously

Liquidity flows determine Bitcoin cycle peaks and troughs — price just mirrors it with a lag.

Once Treasury QE lost momentum, price behaviour finally converged with cycle positioning. October’s crack was simply the “catch-up.”

Where Are We Now? Bottom of Cycle — But Outcomes Depend on Liquidity From Here

According to the stimulus chart and the Top Gauge cycle oscillator, Bitcoin is at the bottom of the current liquidity cycle window.

Historically, these windows are where:

• liquidity resets,

• positioning clears,

• and the final expansion phase emerges before a structural cooldown.

If liquidity flows rise from here, we move into the final upside segment of the 2024–2025 macro cycle.

If liquidity falls further, a gut-wrenching drop becomes possible — consistent with how all previous cycles behave when liquidity fails to re-accelerate at the “cycle floor.”

This is the binary moment.

Historical Alignment: Prior Cycles Show This Exact Pattern

Looking at previous BTC cycles through the Top Gauge and liquidity overlays:

• 2016–2018 cycle → final run, rollover, mini bull, consolidation

• 2020–2021 cycle → final run, rollover, mini bull, consolidation

• 2024–2025 cycle → currently mirroring the same structure

What follows the end of each major bull market is:

1. A final extension,

2. A retrace to the base,

3. A mini-cycle lasting ~6–9 months,

4. A full structural reset,

5. Then a new multi-year cycle begins.

The chart clearly anticipates a 2026 mini-bull market followed by a major new cycle beginning around 2027.

This is entirely consistent with what’s happening today.

Bottom Line: The Bull Market Is Not Over — But the Illusion Phase Is

The apparent market strength of late 2024, and through 2025 was not organic. It was a Treasury-driven optical extension.
Once that faded, price reconnected with fundamentals.

Right now:

• we are at a cycle floor or close,

• price has reconnected with liquidity reality in part,

• the next move is entirely liquidity-driven,

• and historical cycles strongly imply there is one more leg before the 2026 mini-cycle and the full 2027 reset.

If liquidity flows rise from here → the bull extends into early 2026.

If liquidity stays depressed → a severe correction (partially offset by Treasury QE) comes first.

Either way, the final resolution of the 2024–2025/6 cycle is still ahead — not behind us.

Michael Howell — Capital Wars, one of our data providers has mentioned numerous times since the middle of the year — “its getting long in the tooth” — a video about the cycle can be found here.

It’s not hard to disagree with him in many respects, but from a refinancing perspective, it’s very hard to agree with him, for context the US alone needs to refinance 10T$ of debt, to do this they need an environment where they can achieve this, considering the Business Cycle is downstream of the Liquidity Cycle and Liquidity has been starved, one needs to ask how the US achieves this, i.e without having a catastrophe due to lack of liquidity to roll into.

In the above chart you can see clearly when there’s a lack of liquidity then you have refinancing tensions, as it stands based on his forward estimates we will breach the buffer zone and have a catastrophe, but you have to ask yourself how that is possible today, Governments are fully aware, debasing = alleviates catastrophes and if the US were to have one now it would wipe out the collateral base underwriting its entire economy and wealth — at a time of demographics issues, debt issues, essentially cascaded implosion, not 08 but worse, one they couldn’t come back from, i.e hegemonic risk.

Naturally when you observe Global Liquidity (Central Bank input).

The 6-m Flow clearly shows the World, and specifically the US seem to be anti-liquidity, i.e we’ve come only 1 and retraced since in the year 2025.

I.e specifically the US side, we’ve spent pretty much most of 2025 in a liquidity rut, with a mere period early into the year above.

Globally even though there’s been growth, we are still under performing in November the average by quite a wide margin.

Whilst momentum continues to hover in the 10-40% range.

Whilst Trump claims there’s investments into the US, whereas actually the flow of funds out of the US is roughly on-par with the UK, which has been a cluster fuck of a economy itself.

Hence from a investment (risk) perspective it’s been pretty much neutral the entire year with some volatility up and down.

The key naturally to a risk on period is ‘liquidity & business cycle growth’, as mentioned — long in the tooth liquidity cycle, but actually we’ve only around the 0 region even with growth compared to historical, we also know there isn’t enough liquidity to roll the debt, and certainly the business cycle regardless of the admin claims is in the bin — '“its so good they won’t even release economic data”.

I spent some time looking over some experimental charts i was working on previously.

At first i came across the following (eye-balling it) - Blended Liquidity Index (i.e Fast, Slow = Impact).

Then i worked on re-compiling that with additional indicators.

Realizing BTC had been financial repressed between 2022 and 2024 — even though the price rose, BTC has recently come above that and re-testing.

Clearly shown here:

Likewise i compared this to gold, which we know underperformed debasement roughly by 2.3% per annum.

That’s finally broken above.

This gave me some confidence, they were unable to keep BTC (ball) underwater…

Now as for the future, i think BTC is above Fast/Slow/Blended debasement and testing it, Gold has finally broken above and retesting… we’re in a new dawn of fiscal dominance, where they have no choice but to debase to refinance (they never repay their debt)

So the liquidity for the past few years — tempo has been too slow, so we’re reliant on hypothecation, bank lending and various other methods, as the Trump admin do not wish to grow the central bank balance sheet like before (foolish) but issue (posed) 6 Trillion $ via banking system, 2 Trillion $ via stablecoins, and the other 2 Trillion $ via other methods, it appears to me this will cause constrained liquidity where the real economy is competing with the Government for liquidity, but it is what it is…

Either-way this is the period to be cautiously optimistic, i.e Global Liquidity is still rising but momentum is fading.

Historically (average 100 days stating at 100 for each asset post Global Liquidity Declining) we have the following % loss in BTC/Altcoins

At the same time we know QT is going to be curtailed, therefore we should have a bull run in Altcoins.

Following is a mixed basket of commodities, crypto, green, tech, space.

Thats a multi-year inverted head and shoulder, inside a megaphone.. up against Global Liquidity, each cycle (i.e the drop earlier on is liquidating and restarting.

The Business Cycle being reset (2+yrs pretty much recessionary) is setting 2026 up for a explosive year..

Copper (good for Altcoins) — setting up for a explosive outbreak.

So Copper looking to break out, ISM sedated for years, bottoming BTC, QT ending (the need for QE being apparent), volatility in CCC, BBB junk debt, 2025 reminds me a lot of 2019 in many respects, we got hopeful, after the collapse of 2018 and see all the growth disappear (much like October to current), whereas the data is pointing to an emergency ahead, and bottoming business cycle readying to rally (hard).

So I am optimistic for 2026 (through to May-August), but would certainly say pair down exposure as returns grow, as its also dangerous out there with a lot of problems currently hidden in toxic private debt…

Additional commentary…

Lack of US Economic Data continues.

Trump admin David Sacks admitting the US is screwed unless they continue…

The MOVE index which impacts collateral bases in hypothecation processes which essentially provides/removes liquidity had a V-Shape bottom, and it’s rounding on the top-bottom indicator.

Which would say we are due a period, of collateral based trust issues, but ironically is generally looking at it, the time to get long (in-context of volatility —downside, followed by a rampage in the market to a peak).

This market has been long-in-the-tooth, we’ve been in it since June 2022, it’s now mentally tiring i.e specifically in late (Sep 2024) I informed those close to me, that it would be prudent to exit the markets in December 2024 as this would / should be the exit, Trump naturally won and although the Administration commenced immediately to start injecting forms of Liquidity that the Biden Admin had commenced withdrawing in Sep 2024 completing in early Jan 2024 — some 6 Trillion $ it meant there would be a drawdown, Trumps aspirations naturally enticed the market to speculate, and well, it eventually hit in Feb-May 110,000$ → 74,000$ another gnarly run.

Trump had already commenced re-shoring liquidity, and the tariffs essentially stopped the market peaking (as it should have in Q4 2024 / Q1 2025) the following chart is the ISM (US Manufacturing PMI) — a barometer for the US Economy, which essentially means the Global Economy, Trump has ‘purposely’ wreaked havoc in the markets-global-economy, as he was inheriting a economy which was about to enter its blow off top, as a manner of speaking, Harris would have inherited a recession, but team blue would be in power for 4 yrs… and she could blame it on the demented lemon that was in power for the prior 4 yrs…

There’s two important aspects of the chart above… top one is the US ISM, historically the peaks in the ISM since 1988 have been around the 60’s, prior to 1988 they were around the 70’s this was the US being more productive, more kids, and well the 80’s all that changed (see my articles on UK, Thailand as examples, the same applies to the US — and as you’d see in CT there’s quite a few schools of thought, one we’re in the early innings of a business Cycle (Raoul Pal et al), or in the late stages of a business cycle (Henrik Zeberg et all), or you can look at the chart above (top part) and we’ve been in Recessionary conditions in the US for 2 + yrs, but notice the bottom chart (Top-Gauge Oscillator) that’s in the 70’s a few times, where as Trump has whipsawed it back with his rhetoric, bringing it to the 40’s/50’s —> now consider if you will the ISM used to peak in the 70’s then productivity declined, then it started peaking in the late 50’s → 60’s range, and since covid stimmie period it’s been essentially around the 50’s yet the oscillator is pointing to it being in the peak zone… we’ve had a regime change if i trust my gut, the system has changed…

I am going to go on a school of thought, that both Henrik and Raoul are right, because the data shows this… and i suspect the peak zones and recessionary zones perhaps will be changing, the chart below provides an insight from 1948 onwards, notice the volatility prior 1981 this likely was a data capture issue.

Adoption of AI and its impact is incalculable at this time (trackable), boomers finally retiring, digital economy, mass deportations, something says to me the business cycle is changing much like it did in the late 1980’s.

Now, we don’t specifically trade the business cycle, i.e we don’t value invest (you loose value) we don’t invest in the ‘real-economy’ as you loose value… we invest in Debasement, we trade/live debasement, we need enough growth that when shit gets real (tightening, liquidity, variable inflation growth etc) our monetary debasement (inflation) growth allows us to loose some value (15/25%) whilst we wait for the next liquidity cycle to commence (bottom)

In simple terms (this chart avove from Capital Wars) which is out-dated (2022) but the best example, when liquidity bottoms (grey area) that’s when we go long, on what ever is the fastest adoptive asset thus the most speculative, when its reaching towards 80 from 60 that’s when we observe momentum as liquidity (debasement) is going to tighten as there’s fear of variable inflation growth due asset appreciation and goods/services increases, this is when we’re looking to get out of a position, knowing that on the way down, even sitting in currency or assets ($ for example) we should accept to loose 5-15% either in spending power (inflation) or assets having their underlying prop up (liquidity removed) — example 2021 → 2022 June a 25% in real / nominal spending power loss forced us back into the market.

This is something people that don’t have wealth management don’t quite grasp, even if you have ‘generational wealth’ i.e say you had 100m$ this gets debased annually by 12% pre-tax(s) in spending power and when there’s events like Covid, GFC, Asian Financial Crisis, et al in those periods you loose 15-25% spending power, so even if your digits are rising you are getting poorer due to compounded debasement.

Which is why I was forced back in to understand the plumbing changes in 2022… best depicted in this clip my feelings.

Debasement is ‘soft-defaulting-debts’ and as you are probably aware debts are rarely if ever settled, they are refinanced and over years these become cheaper to service as long as the economy is growing… looking above as you can see the ISM chart, generationally the economy is declining, and debasement is rising as we’re now having issues not just with the debts but the interest, hence Debt/GDP is irrelevant for a stable economy, whereas Debt/Liquidity is paramount, when there’s not enough liquidity (debasement) = higher prices for assets for the plebeians then the entire system collapses and for the West this would be akin to the dark ages…

Trump has tried to re-balance this concentrating on Main Street —> these are the people that work in the economy but do not build the economy (non-innovators, entrepreneurs) but white collar workers, management, industrial/agricultural etc problem is the US, Western economy is driven by Debasement, we add liquidity (add assets to the Central Banks Balance Sheets) this creates confidence in the hypothecation markets where commerce happens as the asset is on the Balance Sheet of the Central Bank prodding parties to trust the underlying asset as collateral, price a hair cut based on volatility expectations and generate credit, which is invested, speculated, or put to work, which in return creates the economy, where banks feel they can lend into, this then generates asset appreciation and taxes in the form of productivity capture, and this in return allows monetary generation for the states to refinance their debt into, the process takes years to flow through the system(s) — alas even though Global Liquidity is rising it hasn’t risen enough, and the US as just one example needs to roll circa 10 Trillion $ of debt, and well as you can see above debt/liquidity is paramount, and there’s not enough liquidity, you can see the outcome of events that occurred before where there was a shortfall above.

Naturally the answer is more open QE (Quantitive Easing) and YCC (Yield Curve Control) but the road between is gnarly… you are starting to feel that now because the Fed is behind the curve (fearful of Powells Legacy? Trumps unwillingness to crush his base before mid-terms?).

I’ve openly stated a few times, additionally as I pointed out above the clip is a good representation of me in 2022, and more recently — I specifically don’t enjoy finance, I specifically don’t enjoy being around greed and am rather loathsome of the burden of coming to understand ‘true economics’, so as such I am trapped by the changes in the US, which impact the Global Economy, and likewise until the mean reversion occurs I am stuck in this ‘game’, the problem is there’s a few glaringly obvious questions, mainly about the business cycle which impacts risk assets, when plebes have funds they spend, they speculate, this drives asset prices, when they don’t they therefore don’t, we’ve been in a period where the ‘has’ cohort has done well, whereas the ‘has-not’ hasn’t done so well… technically speaking the has-not’s will overtime continue to do less well, this is baked in (debasement = debt refinancing) but as the majority, they elect the politicians that do this to them for the candy they are given (optical as it is) so it’s technically their fault, and their responsibility to shoulder, the has-so’s just recognize that they have to protect what they have so invest, some outpacing debasement the majority at least optically feeling wealthier.

Its a tedious game to partake in, and when I come back to the ISM representing the US Business Cycle, i can’t but help something is changing…

I am just unsure what way… If you are in the Raoul camp you think the Business Cycle is just bottoming, if you are in the Henrik camp, you think the Business Cycle is ending….

As I showed above, regimes change through generations… and arguably we were close to ending the business cycle as far as the oscillator was reading regardless of the value, then Trump starved it twice by strangling it with chaos…

If you do various regression analysis you can also see some interesting things…

Polynomial regression - https://en.wikipedia.org/wiki/Polynomial_regression has us in a rising cycle.

Rolling Regression - https://en.wikipedia.org/wiki/Rolling_recession has us in a recession worse than Covid and close to GFC era.

Regression on Maxima -https://www.researchgate.net/publication/349424091_Regression-type_analysis_for_block_maxima_on_block_maxima has the Business Cycle trending down over time, confirming above eye-ball perception.

I am therefore leaning (now) to the Henrik camp (in-part) I think the business cycle as I said the Global Liquidity Cycle was ending in September 2024 (sharply down and momentum rising) which was offset by Trump/Bessent reversing some of it once in office, commencing a new cycle, problem is that was the liquidity side, his tariff tantrums and general chaos was all about cooling the business cycle, so they could defer it into the mid-terms, think of it as two leavers, one leads the other, its like watching a twin engine yacht having reverse pulled on one and forward on the other — zig/zag absolute chaos bringing the ship to a halt.

Which is why you don’t see a business cycle like this ‘normally’ its been a whipsaw, but this is to not say the end is in just that I am leaning more towards the idea that we were peaking as per this…

We’ve since been pulled back and now do something like the late 80’s early 90’s like this, rapid rise with a low overheating period, then collapse into a QE injection akin to 2020… because they can’t allow a ‘proper recession’ and asset deflation as thats the collateral base for the world wide, and western world hegemony.

Which brings me to Techdev’s recent article his belief that the economy is coming out of the bottom would be equivalent to spring transitioning to summer, winter long behind but also not far in the future.

which in return with the liquidity cycle, the impact of actions that have now quite sometime ago occurred, and the business cycle coupled with Trump/Bessent actions leads to his thinking of a Trunk like growth (amazon post .com crash) which is rather gnarly.

Bitcoin is impacted by gold (feedback loop) playing out currently

But with liquidity not flowing and US / Western sanctions forcing adoption alongside being used as a tool in China to debase their debt, Bitcoin/Crypto is proving to be the slower horse (underperforming) against Gold, in-fact one could argue Gold has clearly won the current race (cycle). i.e Bitcoin firmly rejected and retested and rejected in its BTC/Gold chart.

Therefore with a business cycle that looked ‘starved of air’ purposely by the administration which they are now attempting to resuscitate into the mid-terms, Liquidity (Global) rising (crawling) even with a latest reading of 500b less (this week) and slowing momentum, alongside the US attempt to not provide liquidity (wall-street benefit, main-street feels) i’d hazard that until proximity to the mid-terms where they will undoubtably create a method (new) to flood the system with liquidity to starve off a catastrophe (debt refinancing - debt/liquidity ratio creating a national security risk) we may be somewhat approaching a peak, but due to the nature overall the peak will be short-lived but brutal, more brutal than Oct to today… but in the middle of that, we’ll have some time to benefit.

Which is why i am leaning towards Henrik short-term but not agreeing with his argument that BTC will be sub 4k, though i am careful to recognize BTC/Gold ratio shows BTC for now at least is the wrong horse… well, nor right now, but the past year…

Which brings me to the following from the Raoul camp - 150,000$ range, Henrik has 140,000$ range our system(s) had 171,000$ range for blow off top, but 140,000$ range against Global Liquidity, Tech Dev has 110,000$ range OR 150,000$ range dependent on whether you think the 85,000$ was hit this past week.. or proximity to, Arthur Hayes has 85,000$ then 250,000$ but also claims for 1.2m$

Reality being liquidity rising yes, not US side, China side declining, EU rising but going into the Economy not the markets, Frances debt might change that (or disintegrate the Union), still momentum declining and the business cycle looking to have peaked but pull back with a choke hold before it overheated, now being let-loose (revived) this all reads to me as a highly risky period…

It also means therefore i’d be suggesting cash in gains 108-140,000$ holding some BTC in-case incorrect (if holding), altcoins lag BTC but might actually move first — depending on the economy 6.5k ETH - 8.7k and shitcoins just exit on the pumps, consolidate, i’d hazard holding a % just drawing down operational capital and injections, and seeing what occurs, if as suspected it peaks then when it gets ‘gnarly’ they will be forced to intervene and that’s the time to re-enter and just sit in for a number of years…

All roads lead to debasement, its just how the ride is felt, sightseeing can be fun or it can be miserable.

For most of the post-war era, the United States exported its money through banks. Dollars left American shores via correspondent accounts, Eurodollar deposits, and offshore financial centers that multiplied dollar credit far from Washington’s control. This Eurodollar system—a vast, mostly invisible web of dollar liabilities created by non-U.S. banks—became the circulatory system of globalization. It let the world borrow, lend, and settle trade in dollars even when the Federal Reserve never saw the flows.

Today, a new network is emerging that performs the same function with code rather than balance sheets. Dollar-denominated stablecoins—digital tokens designed to trade at one dollar each—have turned the dollar into pure software. A phone and an internet connection now suffice to hold or move a claim on U.S. currency.

That change sounds technical, but it is revolutionary. It is digitizing the dollarization process itself, eroding capital controls, exposing weak governments to market discipline, and—if present trends continue—giving the United States a subtler, wider reach than even the Eurodollar markets once achieved.

The new digital dollar

A stablecoin is simple in idea and radical in implication. A consortium or company issues a blockchain token redeemable for one U.S. dollar. Behind the scenes, the issuer holds dollar-denominated assets—bank deposits, money-market funds, or Treasury bills—as reserves. Anyone, anywhere, can acquire the token from an exchange or a peer, store it in a wallet, and send it globally like an email.

To the user, it functions as a digital bank account in dollars—but without a bank. There are no branch lines, no local KYC clerks, no minimum balances. A factory worker in Nigeria or a shopkeeper in Argentina can hold digital dollars as easily as a New Yorker holds cash.

What began as plumbing for crypto trading has become a parallel settlement layer for world commerce and savings. Stablecoins—whether issued by fintech firms, crypto companies, or banks—now move tens of billions of dollars daily.

Financial freedom at the edge

For people trapped in fragile monetary regimes, this technology is more than convenience. It is escape.

In countries where inflation devours savings, citizens can now store value in digital dollars instead of collapsing local notes. Where capital controls forbid buying foreign currency, stablecoins pass through informal peer networks, priced by demand. Where banks are corrupt or politicized, a self-custodied wallet removes intermediaries.

In effect, financial repression meets its technical nemesis. Governments can regulate on- and off-ramps, but they can no longer seal their borders completely. The dollar seeps through the firewalls as code.

~ Over time, this creates a political inversion: when citizens can opt out of their national currency, governments must offer credibility to keep them. Stablecoins export not just dollars—but discipline.

Digital dollarization and its unintended empire

Traditional dollarization—Ecuador adopting the dollar, Lebanon informally using it—required laws or crises. Digital dollarization spreads by choice. No treaties, no IMF programs, no pallets of cash. It is bottom-up.

The result is a swelling shadow dollar zone where U.S.-pegged stablecoins function as money itself. Merchants accept them; freelancers invoice in them; diaspora workers remit them. In some markets, token volumes already exceed banking-system dollar flows.

For the United States, this represents soft power by software. Each new wallet holding a dollar-stablecoin is another node in the American monetary sphere. The more people transact in tokenized dollars, the harder it becomes for rivals to displace the greenback as the world’s reference point.

It is, in essence, a monetary invasion without boots on the ground. No carrier groups, no coups—just code spreading through phones. Where armies once marched, now blockchains propagate.

The slow eclipse of the Eurodollar system

The Eurodollar age was built on interbank credit. Foreign banks created synthetic dollars by issuing dollar liabilities against dollar assets, producing an enormous offshore dollar credit stack—efficient but opaque and crisis-prone.

Stablecoins are the software heir to that system, with two decisive differences:

1. They settle on transparent ledgers instead of secret balance sheets.

2. Their reserves increasingly sit inside U.S. Treasuries and regulated money-market funds—inside the American perimeter.

While Eurodollars diluted U.S. oversight, stablecoins re-internalize it. Each token implies a dollar-denominated asset custodied within U.S. financial law. The U.S. regains partial control over global dollar flows it once lost to London, Zurich, and Hong Kong.

On-chain analytics give U.S. authorities a visibility they never had. The same opacity that crippled 2008’s funding system could vanish. The Eurodollar’s ghost becomes the On-chain Dollar, transparent, traceable, and—ironically—more American than ever.

From private balances to public debt

Stablecoin reserves are not idle. They are invested, mostly in U.S. Treasury bills and short-term notes. Every issued token therefore represents a small claim on U.S. government debt.

As global demand for digital dollars grows, issuers must buy more Treasuries to back them. In earlier decades, foreign central banks recycled trade surpluses into U.S. bonds. Now retail users—via stablecoin issuers—do the same automatically. The dollar’s periphery supplies savings to its core without ministries or memoranda.

This is how the digital dollar network finances the American state: not by official reserve management, but through the everyday transactions of billions who simply prefer stability.

The global diffusion of U.S. debt

If this trend continues, it creates something historically unique—mass retail absorption of U.S. debt worldwide.

• Each stablecoin equals a micro-claim on a Treasury bill.

• Each wallet, from Nairobi to Karachi, holds a sliver of Washington’s fiscal machinery.

• Aggregated, billions of tiny balances equal a new class of bondholder.

The mechanism is self-propelling: the U.S. issues Treasuries; stablecoin issuers hold Treasuries; users demand stablecoins; the chain completes.

Stablecoins thus turn the Treasury market into a consumer product. The world doesn’t merely trade dollars—it saves the U.S. government. Eight billion potential users become eight billion micro-creditors, financing America’s deficit through habit, not policy.

From Washington’s perspective, this is fiscal alchemy. A payments system doubles as a global debt-distribution network. As long as faith in the dollar endures, the United States can draw liquidity from the entire connected world.

A return of leverage

Stablecoins reinforce U.S. jurisdictional power. Every issuer ultimately relies on U.S. banks and Treasuries. That tether grants Washington switch-control: reserves can be frozen, flows sanctioned, compliance dictated.

As tokenized reserves replace offshore bank liabilities, control migrates back to the U.S. from the Eurodollar centers of old. The empire of credit becomes the empire of compliance, extending U.S. financial law through code.

This is monetary projection without occupation—an invasion of payment rails, not territory.

Consequences for other governments

For emerging markets, this order is both gift and threat.

• It gives citizens stable value and global access.

• It drains deposits, undermines currency sovereignty, and exposes fiscal deceit.

When people can hold digital dollars, inflation taxes fail; forced conversion loses bite. Populist spending financed by printing money faces instant discipline: capital exits digitally.

The world evolves toward monetary Darwinism. Currencies that cannot maintain credibility will die, not by decree but by desertion. One wallet at a time, savers defect to the dollar protocol.

Governments may retaliate—banning stablecoins, issuing national tokens, enforcing controls—but technology tilts against them. The genie of voluntary choice is out.

Controlled anarchy

The architecture is paradoxical. Tokens move peer-to-peer, seemingly decentralized, yet the reserves beneath them rest in the most centralized instruments known—U.S. sovereign debt.

The world is constructing a self-organizing dollar web whose nervous system runs through Washington’s bond market. Every transaction ultimately echoes in the Treasury curve. The larger the web, the deeper the dependence.

The endgame — a planetary Treasury market

Picture the endpoint: every smartphone doubles as a wallet for both digital dollars and tokenized Treasuries. One tap converts spending balance to a three-month bill; another reverses it. Yield flows directly to users—no banks, no intermediaries, no borders.

That would consummate a century-long transformation. The United States would finance itself continuously from the voluntary savings of people it never governs. Its debt would be dispersed across humanity—a planetary bond market of citizens, not states.

No coercion, no colonies—only code, convenience, and faith in the dollar.

Limits and fragilities

This vision still rests on trust. Stablecoins are private promises; de-pegs, hacks, or over-regulation could break them. The same network that empowers dissidents can serve sanctioned regimes, inviting political backlash.

The United States may yet curb the very expansion that strengthens it, fearful of losing monetary control. And rival powers may seed alternatives—digital yuan, digital euro, or gold-linked tokens. History rarely leaves one currency uncontested forever.

Stablecoins are turning the dollar into a global protocol. They replicate what the Eurodollar system once did through bank credit but do it more cleanly—by tying global demand for liquidity directly to U.S. sovereign assets.

They give billions of people an exit from weak currencies while binding them more tightly to America’s fiscal core. They erode repression yet expand U.S. influence.

If the process continues, every non-dollar currency could fade toward irrelevance—not through war or conquest, but through voluntary migration to a system that simply works better. The U.S. would not need to occupy territory to dominate it; it would inhabit every phone.

The age of stablecoins could thus mark the moment when the dollar finally escaped geography. The world’s money would no longer be printed, minted, or wired—it would simply exist everywhere, woven into the digital bloodstream of humanity.
Not by conquest.
Not by treaty.
By code.