The Bitcoin Layer
Global Liquidity Update with Michael Howell: The Case for a U.S. Gold Revaluation Is Building
Mar 8, 2025
Michael Howell, founder of CrossBorder Capital and author of Capital Wars, dives deep into global liquidity trends. He argues that M2 is becoming obsolete and emphasizes asset-based liquidity as a crucial metric. Howell discusses the U.S. debt spiral and the pressure on the Fed to resume quantitative easing, while also spotlighting China's growing influence. A gold revaluation emerges as a potential solution to inject liquidity into the market. Ultimately, he posits that liquidity—not interest rates—will dictate market movements.
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Quick takeaways
- The shift from M2 to an asset-based liquidity index reflects a more accurate assessment of monetary flows in today's financial markets.
- A potential U.S. gold revaluation could alleviate liquidity issues and lower debt service costs, enhancing economic recovery amidst rising debt levels.
Deep dives
Understanding Liquidity Metrics
The podcast discusses the differences between global liquidity measures, specifically contrasting global M2 and an asset-based liquidity index. Global M2, which counts retail deposit liabilities, is deemed an outdated measure due to the shift towards financial markets, where liquidity flows occur primarily through asset-based transactions. In contrast, the asset-based index captures actual credit levels in financial institutions, making it a more accurate reflection of monetary flows. The episode emphasizes that understanding these distinctions is crucial for analyzing real financial activities in today's economy.
