The reversal of the carry trade could turn into a margin call on the financial system with EVERY asset (most illiquid) tied to that very same financialization and leverage.
That leverage unwind will (if left unchecked) take down major players.
Ie - Massive manipulation of money incoming (liquidity) or deflationary spiral. Likely both (depending on timing and your country)
Good thing there is a protocol stack bounded by energy that is open, decentralized and secure.
#Bitcoin.
The big shakeout of 2024
Uninversion of the yield curve just started, VIX at 65.
Yup - and an order of magnitude larger than 2008 because the system leverage is an order of magnitude larger. People falsely believe the wealth is safe (in their homes and PE funds, banks, etc) but it is only “safe” based on a massive injection of liquidity. (More manipulation)
Do you think we will inject liquidity and kick the can down the road like always? Or could something different happen ?
Going to be an interesting day in the markets for sure....
Bitcoin can’t go bankrupt but their banks can. 😎
Weimar Vibes
You’re scaring me!
1:04 mark @jeffbooth https://youtu.be/T8b0XhAoWxg?si=yG6QbjQ4uxUJeNUc
I think they will get it in check rapidly. Besides,even for the stock market and the major tech players...zoom out just 1y and this is just a minor blip on the radar. We are only back to april/may levels. Nothing really major happening so far other than correcting some AI driven hype over the past months.
Logic is on the side of Dr. Seuss (eventually), but as the Fed’s real mandate is to maximize shareholder value, they’ll do everything they can to exploit this opportunity.
Making it through this really is as simple as staying humble and stacking sats.
Love this explanation. Thanks Jeff 🙏
A great excuse to increase the money supply. JPow gonna make it rain!
