Recent episodes
AI May Be the Biggest Bull Case for Bitcoin | Joe Consorti
- Short-term macro risks (next 3 months): War in Iran, oil shock (20% of world supply), elevated inflation (3.8% CPI in April), and potential recession if the Strait of Hormuz remains closed past mid-June. - 18-month outlook: Two scenarios both lead to strong asset prices—either a recession triggers monetary stimulus, or avoided recession drives bull market on AI capex strength. War likely ends by midterms due to political incentives; asset prices expected to reach new highs. - Equity valuations and old models breaking: Equity risk premium deeply negative (−1.4%), yet stocks rally. Traditional valuation metrics (forward PE, cyclical indicators) are losing signal because monetary debasement drives valuations more than fundamentals; "money printing will cause equities to rip largely forever." - K-shaped economy widening: Asset owners benefit from monetary expansion; non-asset holders suffer. AI productivity gains may help by reducing incentive to offshore labor, but deflationary AI impact will be offset by monetary expansion to maintain 2% inflation target. - Bitcoin as AI-era hedge: Bitcoin cannot be disrupted by AI, decouples from software stocks over time. Capital fleeing disrupted software equities flows to disruptors (Nvidia, OpenAI, Anthropic, SpaceX) and non-disruptible assets (Bitcoin, gold). - Bitcoin cycle analysis: Four-year cycle likely broken due to passive flows (IBIT accumulation, dollar-cost averaging) dominating market structure. Bottom likely set at $60K (marginally below prior cycle high); new all-time high expected Q1 2026 unless macro risks materialize.
Global Macro Update: Is Japan Breaking the Bond Market?
- Bond market stress: Global bond markets experiencing significant selloff driven by rising inflation expectations, with Japanese and German yields leading the move. U.S. Treasury yields rising above 4.5% on the 10-year, but showing relative stability through a flattening curve rather than bear steepening. - Oil shock and inflation driver: War in Iran and Persian Gulf supply chain disruptions pushing crude oil prices higher, creating demand-driven inflation expectations globally. ISM manufacturing prices paid spiking well before recent geopolitical tensions, indicating CapEx-driven demand inflation in the U.S. - Bitcoin price and technicals: Bitcoin down 27% trailing 12 months but even with S&P 500 over five years (both +79%). Trading near 200-day moving average with declining slope; TBL Liquidity indicator turned green in early April near $70k lows. Bitcoin to Gold ratio at 17x, defending low teens despite gold's strong run. - U.S. economic strength vs. global risk: Labor market solid with rising initial jobless claims downtrend and job hiring spike (JOLTS data). Atlanta Fed GDP Now at 4% expected growth. Housing rent inflation bottoming signals underlying demand strength. AI/CapEx boom driving nominal growth, making debt service more manageable for the U.S. - Global financial crisis risk: Potential crisis brewing outside the U.S., not within it. Rising U.S. dollar pressuring non-U.S. debtors forced to service debt in dollars while local revenues stagnate. G7 finance ministers produced no resolution. Corporate credit spreads tight with strong bond demand. - Liquidity and safe-haven flows: SOFR rates declining toward policy floor, money market fund inflows spiking—signs of flight to safety rather than U.S. financial stress. Treasury market showing demand for short-term safety instruments.
BREAKING: CME Launches Compute Futures, The New Oil
- AI compute as economic fuel: AI tokens function like oil and gas for the digital economy. Spending at OpenAI and Anthropic is accelerating, making token compute servicing a primary driver of global economic growth for years ahead. - CME launches compute futures market: The Chicago Mercantile Exchange created a futures contract market for computing power, signaling financialization of compute as a critical input cost across all industries. This validates compute as a core asset class. - Inflationary pressures from AI capex: Hyperscalers are funding massive capital expenditure through bond issuance, creating new money in the system. Demand for inputs like RAM is crowding out availability for consumer devices, raising costs and eliminating low-margin phone production. - Bitcoin supported by AI-driven liquidity expansion: Bitcoin will be bolstered over the AI revolution's lifespan because liquidity growth from increased production and spending will raise aggregate demand for scarce assets. - Return of geopolitics and gold: Deutsche Bank's "Return of History" thesis describes a shift from post-Cold War certainty to geopolitical uncertainty. Central banks buying gold signals the end of dollar hegemony stability. - US-China economic cooperation amid competition: Trump's delegation of major CEOs visiting China indicates pragmatic economic engagement despite ongoing tech races, military buildup, and potential Taiwan conflict. Both cooperation and competition can coexist.
UAE QUITS OPEC: The Offshore Dollar Era Is Changing with Matt Dines
- UAE leaving OPEC signals dollar system restructuring, not de-dollarization. The move reflects a realignment toward direct central bank swap lines with the Federal Reserve rather than offshore dollar arrangements, indicating countries are plugging into a reformed U.S.-led dollar order centered in New York and Washington. - Money market un-inversion marks late-cycle economic inflection. The three-month and six-month Treasury bill spread has been inverted for 130 weeks—four times longer than any period since 1991—and recently cleared, signaling entry into a reflation phase where all funding trades carry positive carry and credit expansion accelerates. - Bank of Japan held rates steady as cooperative geopolitical signal, deliberately avoiding rate hikes despite inflation to prevent money market stress during commodity supply chain tightness. This supports the broader dollar system coordination and demonstrates central bank alignment amid conflict dynamics. - UK sovereign debt crisis worsens despite global ceasefires. Unlike prior conflict ceasefires that eased yields, UK gilt yields are rising toward 5% despite recent Iran ceasefire, reflecting structural constraints: the UK lacks manufacturing capacity, domestic growth potential, and commodity access to compete in tightened global trade. - Geopolitical conflict escalation directly impacts sovereign debt markets. The five major ceasefires (Gaza, Israel-Hezbollah, Iran) show diminishing returns in yield relief, with UK gilts behaving opposite to expectations—a warning signal that structural pressures on certain players exceed conflict-resolution benefits. - "Pax Silica" vision represents cohesive American-led global order built on semiconductors, AI, energy, critical minerals, stable coins, and Bitcoin as foundational layers. This contrasts with competing degrowth narratives and positions the U.S. as senior partner in global trade franchise for the first time in modern history.
The Money Printer Is Back On with Lyn Alden
- AI Impact on Employment: AI is suppressing white-collar job creation and enabling automation, similar to how manufacturing automation affected blue-collar work in the 80s-90s. One person can now oversee work previously requiring five, but physical robotics adoption remains slow (Roomba example cited). - Software Stock Repricing: SaaS valuations face structural pressure due to AI competition and reduced switching costs. Companies built on recurring revenue models are being repriced downward; not obsolete, but less certain and thus warrant lower multiples (30x to 10-15x earnings). - Government-AI Relations: Anthropic rejected Pentagon contracts over two red lines: no mass surveillance of US citizens and no autonomous kill decisions. Pentagon shifted to OpenAI; geopolitical and ethical tensions around AI deployment are escalating. - Fiscal Deficit Trajectory: US debt will grind from ~$40 trillion to ~$50 trillion over five years. Pressures against deficit reduction are structural (aging population, defense spending, entitlements). Interest payments consume an increasing share of tax revenue. - Monetary Policy Shift: Central banks are transitioning from balance sheet reduction back to gradual expansion in line with nominal GDP growth. The Fed may use yield curve control as a last resort; softer methods (standing repo facilities, liquidity provision) are more likely near-term. - Money Supply & Inflation Distribution: Broad money supply growth (~7% annually, offset by ~3% productivity) produces inflation concentrated in scarce assets (Bitcoin, gold, real estate, waterfront property) rather than abundant goods (electronics, automatable services).
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