Global Liquidity Update with Michael Howell: The Case for a U.S. Gold Revaluation Is Building

— M2 is outdated as a liquidity metric because it measures only retail bank deposit liabilities, missing the bulk of financial system flows that now occur between institutions through money markets and repo facilities.

— Asset-based liquidity (credit) drives financial asset prices more accurately than money supply, as it reflects actual credit creation and deployment in financialized markets.

— Risk appetite, not liquidity, is currently pulling crypto lower, with a sharp reversal visible in 2025 as investors shift from risk assets into safe havens like government bonds.

— The U.S. faces a critical funding problem requiring Treasury yields to fall; Besant must refinance 30% of outstanding debt this year, creating medium-term pressure on bond markets.

— Bank reserves are approaching critical scarcity thresholds around mid-2025, forcing the Federal Reserve to resume QE unless policymakers are deliberately tightening to slow the economy and lower rates.

— Gold revaluation could inject ~$1 trillion into the Treasury, starving coupon markets and pushing yields lower without explicit QE, mirroring Nixon-era monetary restructuring.

— Monitor central bank liquidity injections and bank reserve levels closely, as the mid-year 2025 reserve scarcity threshold could trigger Fed action (QE) or market stress; this will likely benefit risk assets including Bitcoin once reserves stabilize.

— Track gold revaluation discussions and bond market dynamics as primary drivers of Bitcoin's macro backdrop, since a $1 trillion Treasury windfall from gold revaluation would radically alter liquidity conditions—more impactful than Fed rate decisions alone.

— Expect tactical volatility if the Fed is forced into QE by summer 2025, but frame it as a structural positive for long-term Bitcoin holders, as it will reverse the current liquidity drain and risk-appetite compression.