The Everything Bubble Is Over: Michael Howell’s Warning for 2026

— Liquidity cycle peaked Sept–Oct 2024 and is weakening; cyclical top already in place, distinct from recent geopolitical shocks

— Money flows downstream: economies depend on liquidity/money flow; $10 oil increase reduces global liquidity ~3%; geopolitical events are secondary to monetary cycles

— Debt-to-liquidity matters more than debt-to-GDP because debt must be refinanced; a 2x debt-to-liquidity ratio is equilibrium; breaches trigger crises

— Two refinancing legs: (1) collateral markets turning debt into liquidity via repo; (2) direct debt refinancing—both stressed by rising MOVE index, widening spreads, declining term premia

— Debt maturity wall approaching: ~$45 trillion of advanced-economy debt needs refinancing by 2030; AI capex and government spending are sucking liquidity from financial markets into real economy

— Fed will eventually return to support bond markets (timing unclear, likely 2027+); private sector cannot absorb scale of refinancing alone

— MOVE index spike during Iran tensions temporarily helped, but doesn't reverse underlying downtrend; every 10-point MOVE rise subtracts ~4% from global liquidity

— Bond term premia falling: investors fleeing risk, bidding duration for safety—not a sign of strength but of increasing financial stress

— Yield curve leading liquidity by 9 months: expect flattening mid-2026; term premium collapse signals demand for safety and refinancing difficulty

— Yuan gold price now the key signal; China monetizing debt at ~$1 trillion/year; gold in yuan terms bottoming around 30,000, targeting 35,000+ (Bitcoin would mirror if China allowed buying)

— Fed balance sheet growth already slowing despite RMP; projected to flatten—"monetary policy for a flatlining market, not a bull market"

— S&P 500 closely tracks Fed liquidity (advanced 25 weeks); recent equity weakness reflects falling Fed liquidity support

— Own, don't trade, Bitcoin and gold as core holdings—they are monetary inflation hedges essential as governments monetize debt; medium-term outlook positive despite near-term volatility given China's and eventual Western monetization

— Watch the four warning signals: MOVE index spikes, SOFR spreads widening, term premia crashing, and credit spreads blowing out—any major breach suggests Fed must intervene; liquidity cycle likely bottoms in 2027

— Position for liquidity scarcity through 2026–27: expect continued equity vulnerability and financial stress in private credit (illiquidity risk, not yet insolvency); consider that bank deregulation + high Fed balance sheet (2027+) could create a liquidity upside surprise