I’m personally betting on a monster inflationary spike after the upcoming deflationary crunch.

The Fed seems set on higher for longer. My view is that they will only reverse when something big breaks (don’t fight the Fed).

These higher rates are causing corporate bankruptcies, stress on bank lending, etc which will reduce the supply of goods and services.

Higher rates are also injecting a ton of fresh cash into the system through the Fed’s reverse repos and the govt’s accelerating fiscal deficits as interest rates stay higher for longer.

Lower supply of goods and services and higher money supply should goose CPI when the Fed reverses.

So far it seems the US Treasury has been refilling its TGA from the short end of the curve, which is positive for short-term market liquidity but at higher interest rates and worse long-term fiscal deficits.

The US seems to be in a classic debt spiral and can no longer pay for interest and entitlement payments out of tax revenues.

Interesting to see Yellen last week acknowledge the gradual decline in the dollar's share of global reserves. Also interesting to see BlackRock’s spot bitcoin ETF filing. I’m betting it will be approved because of the new institutional bitcoin exchange backed by Schwab, Fidelity, and Citadel.

While high inflation and institutional adoption are positive for bitcoin’s price, sadly most investors will be lured by corporate marketing and convenience into buying paper bitcoin and giving up their independence and privacy.

Tell your friends and family not to take the bait. Stay sovereign. Use multi-institutional custody solutions if they are unable to take self custody.