I love Arthur Hayes' analysis.
I excerpt this chart from his latest analysis because it is just great.
The green line is the Federal Reserve interest rates.
The white line is the MOVE index which measures the volatility of the US bond market. I love that you have exposed this index as it is one of the few I use. The MOVE index is important because we can measure through it the liquidity of the dollar system. A high bond market volatility, high MOVE, can indicate lack of liquidity, on the contrary, a low MOVE is synonymous with liquidity in the markets and stability.
For Bitcoin to rise the perfect storm is:
Liquidity in the dollar system (Fed Balance Sheet - (TGA +RRP)) + rising global m2 + falling MOVE.
Now comes the good stuff. The next indicator that the chart incorporates is a combination of excess bank reserves held at the Fed and other deposits and liabilities, the ODL which as Arthur indicates is a good indicator for commercial bank loan growth.
Unfortunately this indicator is only found on Bloomberg terminals and is key to bitcoin growth as it can measure commercial bank lending which is the other important leg of money creation, although such growth is included in the m2 (as loans end up in deposits or bank accounts), it is not isolated.
What Mr. Arthur explains is that the dollar system needs low volatility in its bond system in order to be saleable and to be able to finance itself, that leads us to need to print more and more money each time.
As you can see, from 2008 onwards the previous story gets smaller, the amount of credit needed to stabilize the system (low MOVE) is brutal. Again in 2020 we move up a level, and now in 2024 we find ourselves with high MOVE volatility that has to be reduced to stabilize the system.
We are on the verge of another Brutal money printing.
https://m.primal.net/LCeV.png
Wen Arthur on Nostr
He is too busy promoting shitcoins 😂
I remember subscribing to Arthur's sub stack on the back of your recommendation a few months ago. There was absolutely no need though, as I've usually read your take on it before I've had the chance to read it myself😂😂. Also, your review can sometimes be a little more concise and easier to understand than Arthur's posts😬🫡.
I only post Arthur's analysis that I find interesting, I appreciate that you like my viewpoints too!
So where do you think interest rates will be toward the end of the decade?
Interest rates no longer matter, what matters is liquidity, Bitcoin is a proxy for liquidity, if you notice, bitcoin has risen with the highest interest rates in the last decade because while interest rates were rising money was being injected with the BTFP bank bailout program.
In the first moment I read Artur Hayek :d
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