Best of 2023: The Everything Code
Raoul Pal: The Journey Man
Business Cycle, Quantitative Easing, and Debt Structure
The chapter discusses the author's discovery regarding the business cycle and the relationship between peak ISM, quantitative easing, and the debt structure. They explain how every three and a half years since 2008, there has been a peak in ISM followed by quantitative easing, which was fueled by excess GDP growth. The author also highlights the correlation between the interest payments made by countries and the amount of quantitative easing happening three and a half years later. They argue that global central banks agreed in 2009 to crowd out the private sector through debt monetization, leading to ongoing financial crises. The chapter concludes with the author's insights on predicting central bank balance sheets and the impact on asset prices.
