I have been emphasizing for many years that liquidity is what moves the markets, now I am seeing that many are beginning to realize it, in the same history of my posts you can see it.

If I had to explain the phenomenon, I would say that the FIAT system evolves and goes through different phases.

When the gold standard was abolished in 1971, for example, technical analysis stopped working, technical analysis tries to predict the behavior of prices but prices from then on were dictated by interest rates and interest rates are dictated by a hidden oracle of people, this can not be predicted, simply assets began to follow the price of money, the price of assets began to dictate the central bank.

From 2008 onwards we entered another phase, where the balance sheet of the central banks became more important than private credit.

In 2022 we enter another phase, where interest rates no longer matter, only liquidity matters, which is no longer linked mainly to interest rates.

We could say that we have moved from a more “predictable” system where fundamentals and technical analysis could work, to a system where asset prices are largely influenced by monetary policy decisions, central bank balance sheet expansions and liquidity flows which, in this last phase, seem to be decoupled from traditional interest rates.