The refinance cycle insights are incredibly interesting, and I think do a fantastic job of explaining how we got here. It strikes me as the financial repression many predicted through perhaps less heavy-handed means versus YCC, credit rationing, etc. However, I’m less convinced that will be the exact playbook going forward, and in turn, how that shapes the market implications. You do allude to it throughout the article, but much of the consequences of those monetary policy decisions are also the result of fiscal/regulatory policy decision (or indecision). For example, China’s big tech names were moving in near lockstep with the US until policy intervention by Xi caused those to diverge dramatically in 2021. Couldn't potential shifts in fiscal/regulatory policy cause market outcomes to deviate from those of the preceding ~15 years?

Hi Raoul I love the debate of so many topics that this is going to inspire. In your equation for GDP Growth, may I suggest the term Debt Growth would be better explained via M2 Growth, that is, an increase in the money supply to fund/finance GDP Growth. It is my understanding that we need an increase in M2 of about 5% per annum to obtain 2% growth in GDP. This helps to explain the debasement of Fiat as an essential part of our economic growth/system. Clayton

Hey Raoul, Struggling to get my head around "The debasement will continue" I am with you pre-covid, the fed was unexpectedly able with monetize debt service without any significant consequences (except maybe asset price inflation?). "We have reached economic Nirvana." The US was able to borrow and print and consume more than it produced without repercussions. My concern is that this paradigm has changed and the fed can no longer monetize debt without causing CPI inflation. The way I would this this plays out is in demand for treasuries - at some point there are no buyers. Yes the fed could step up QE/YCC etc, but then the question would be would this continue to result in asset price inflation, or has this migrated to goods and services inflation? If the later, does the fed have a different problem? CPI inflation I would think would have highly negative consequences for political stability, inequality, etc?

Quite possibly the greatest work of fiction ever written....

Thanks for this. You’ve been building the dialogue for some time not and it’s great to see it all put together. As a long time subscriber I should probably know the answer to these questions but anyway: Why has the % of working age population grown recently? You show varied starting dates on the trend charts. How much do the shapes of the trends change as you adjust the starting points? Where do we find evidence as to the Fed’s intentions in line with the thesis as they have ‘purposefully engineered rates? And of the Central Banks’ combined intentions? How does USD strength and Eurodollar funding lead to a fall in US banks and risk to SIBs? Thanks

Thanks Raoul, well articulated and lots to think about

Is there any data regarding number of robots in the workforce and should that not be factored into the demographics component.

Great report Raoul. This looks like it aligns with the scary scenario being pushed by Klaus Schwab and his cronies at WEF who seem to be dictating to the government elite on how to control the plebs going forward.

Perhaps a silly question: but given what is laid out here, that the market is pricing its P/E differently now because each side of the equation is reflecting different things (Debasement/M2) - how is it that this (RV) is the only venue where the thesis has been laid out in this way? Like if this is what the market is doing, why isn't anyone in the market articulating it?

Great insights Raoul. Those who have seen the extreme examples of debasement in effect (Zimbabwe) and the 'positive' impact on scarce stocks on the local exchange can relate to this. It was best to buy a car (held its value) and then put your cash into a bank account.

How is FED injected liquidity calculated?

Thanks Raoul, super helpful. As a Swiss, I am of course very flattered about your comment about the SNB geniuses. Don't forget that SNB is structured as a corporation and even listed on the Swiss Exchange, and they are very much expected to distribute profits to their shareholders, 3/4 of which are the Swiss public sector Cantons and Cantonal banks. So you could make the argument maybe they are maybe not geniuses but rather really well-informed insiders. I am not 100% sure, but I doubt any of the other central banks have this unique setup? In any case, watch what the SNB does!

Anybody care to explain what is financial debt ( pág 10? Specially the difference between family debt, government debt, Corporate debt and financial debt? Thanks

This is mind blowing Raul. I am new to pro Macro and thought it was all about liquidity, this is amazing. I also read from Concoda he has an even more sophisticated model for net liquidity and monetisation. Assume accounting for gold, reverse repo's and the TGA of each central bank? Big Q is so how do we use this model predictively to be able to get closer to the bottom and top??? :):)