Green Rocket

I wanted to give everyone something meaningful, a gift… This comes from Global Macro Investor (GMI) and a deep, long-running body of research developed by @RaoulGMI and myself. Many of you already know The Everything Code, which is our framework for understanding the macro landscape and why major central banks are debasing their currencies to manage aging demographics and overwhelming debt loads. I call this a gift because these four charts, while only scratching the surface of The Everything Code, give you the big-picture context you actually need in moments like this. They stop you from getting lost in every Bitcoin pullback and explain why Raoul and I never panic, even when, to borrow one of his expressions, everyone’s acting like monkeys throwing poo at each other. Once you understand The Everything Code, you stop trading short-term noise and expand your time horizon. You cannot unsee it. The starting point is what we call The Magic Formula: GDP growth = population growth + productivity growth + debt growth. Population growth and productivity growth have been falling for decades. Debt growth is the only thing filling the gap. The private sector has been deleveraging since 2008, mainly households, but debt levels are still around 120% of GDP. The public sector sits at roughly the same level. Here’s the problem… If the government is running debt at 100% of GDP and the private sector is sitting on another 100%, and for simple math we call rates 2% even though they are really closer to 4%, then the entire 2% trend growth of the economy is being consumed by servicing private-sector debts. That is a completely unproductive use of GDP. And then there’s the issue of public-sector debts. There’s just not enough organic growth to service the existing debt load. To understand why this dynamic persists, you need demographics. Birth rates peaked in the late 1950s and have been declining ever since. This shows up about sixteen years later in the labor force participation rate as each generation enters the workforce (chart 1). That means the labor force participation rate is not going to rise any time soon. It is set to keep drifting lower. This is a structural problem. Aging populations, falling birth rates, and rapidly expanding automation make the backdrop even more deflationary. AI and robotics are replacing humans at scale, and we are only at the beginning. This reinforces the need for ongoing stimulus to keep the system functioning. With weak population growth and sluggish productivity, the only way to keep GDP expanding is through debt. Now here’s where it gets interesting… Government debt growth is completely offsetting the demographic decline and policymakers know exactly what they are doing (chart 2). And what happens next? All debt growth in excess of GDP gets monetized (chart 3). Basically, since 2008, magic money has effectively been paying the interest. Governments issue new debt to cover old interest, and once rates fall enough, central banks absorb it onto their balance sheets. So to wrap this up, demographics drive the decline in the labor force. Governments offset that decline with more debt. That debt eventually gets monetized through quantitative easing (QE) style operations, not always directly by the Fed, but through the coordinated ecosystem of the Fed, the Treasury, and the banking system. And the bottom line is that there’s still a massive wall of interest that needs to be monetized, far more than GDP can ever cover. Liquidity is literally the only game in town. And what thrives in a world of perpetual debasement? Bitcoin (chart 4). I know this correction has been painful, but it’s all part of the journey. These periods feel brutal in the moment, then they fade and the trend resumes. This too shall pass… To quote Walter White from Breaking Bad, later echoed by @LynAldenContact, nothing stops this train. MOAR COWBELL (liquidity) = number go up over time. Zoom out and be more bullish…

🧠 ALPHA TIME: Debt cycles & Liquidity masterclass!! The Everything Code Update ft. @RaoulGMI & @BittelJulien Enjoy!

@Ripple has purchased Rail, a Toronto based stablecoin payments company. #PayAttention

The #Altcoin bull market is around the corner --> I'm all-in. It's difficult to understand why the markets haven't been moving upwards. Well, is it? There hasn't been retail interest. Solely dedicated towards $ETH and $BTC. Times are changing, that's why I'm all-in altcoins. The reason for that is that everyone tries to time the peak of the bull market and I think that 90% will be wrong. The prime reason for that is that people are still expecting the 4-year cycle to be alive, while, realistically and statistically, we can argue that there isn't a case of the 4-year cycle taking place anymore. I've asked myself the question whether I should be selling my #Altcoin portfolio, watch the update here to get the latest information: youtube.com/watch?v=Whyo_v… The reasoning behind the case that we're likely not even in the bull cycle is that it's just not depending on the halving at all. It's more or less depending on macroeconomic factors, the business cycle, and more of those real factors rather than solely on a Web3 factor. The constant inflow of Web2 institutions have provided a case where the markets are having a long-term vision and that has resulted into a case where Bitcoin has gone down in their volatility. Yes, we do have corrections, but we've also been seeing stagnant periods for months and months before a new leg upwards. Critically: - None of the bull cycle peak indicators signal that we're at the top. - Neither does the sentiment provide a case that we're overvalued. - Nor does the EMA's indicate that we're getting close to a peak. The more interesting part is that we're actually in such a correction where people anticipate that we're peaking, or start questioning it, when, in reality, we're building up for the next big breakout. I do recall one single moment in time when we had the same: - The crash from $3K to $1.8K in 2017 or $5K to $3K a few months later Yes, I'm already in the space since then. More than eight years. Regardless, those two moments where frustrating or painful for anyone involved, as Bitcoin was swimming in new ATHs and new regions of valuations, through which the question was raised whether or not we were peaking, and given the harsh correction, a lot of people anticipated that we did. But we didn't, we went to $20,000. That's the same status as we're currently in and that's why I keep coming back to: build a portfolio based on portfolio and risk management, not on time. What about altcoins? Altcoins are an interesting factor. They haven't been moving, and especially, the haven't been moving since Q4 of 2023. That was a while ago and that was the last, kind of, altcoin run. However, given that, since Dec '24, the macroeconomic table didn't go in the way that we wanted it to go, it resulted into a massive crash on the altcoins. That massive crash provides us a case that we're not expecting altcoins to do anything at all anymore. Is that real? No, it's not. We're actually at the end of the bear market, as we're also at the end of the bear market for the business cycle and we're going to be in a bull run. Every bull run is longer than the previous one and every bear market is therefore longer too. In my theory, it wouldn't be strange if we go in 1-2 bull years from year, resulting into the Dot.com type of bubble for crypto & #altcoins, after which we'll have a longer bear market.