Worried about global liquidity decline, experts: Debt refinancing crisis is forming 250901

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In this episode of Macro Voices, host Eric Townsend and Patrick Ceresna invited Michael Howell, CEO of Cross Border Capital, to delve into the global liquidity cycle and its impact on the markets. Michael Howell's company specializes in credit market analysis and emphasizes the central role of liquidity in the financial system. He pointed out that the global liquidity cycle is approximately a 65-month cycle, which is crucial for asset market movements. Michael believes that the current financial system has evolved into a debt refinancing system, meaning most financial transactions involve debt refinancing rather than new credit creation. This perspective challenges traditional economic textbook theories, highlighting the actual workings of the market.

During the episode, Michael also discussed the impact of U.S. and Chinese monetary policies on global liquidity. He noted that the uncertainty of the Federal Reserve's policies and the liquidity injection strategies of the People's Bank of China have had profound effects on global markets. Particularly in China, Michael believes the country is implementing a deliberate policy of increasing liquidity to address its debt issues, which may lead to a depreciation of the yuan relative to gold.

Regarding the gold market, Michael views the rise in gold prices as a result of increased global liquidity and predicts that gold may continue to rise in a future inflationary environment. However, he also warns that the current parabolic rise could end with a sharp correction.

Source: "XQ Global Winner" Terminal