TFTC: A Bitcoin Podcast #606: The Ratio That Signals Every Crash with Michael Howell
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Apr 14, 2025 
Michael Howell, Managing Director at Crossborder Capital and expert in financial market analysis, dives into a looming liquidity crisis. He highlights flaws in the Federal Reserve's predictions and discusses the risks tied to rising corporate debt. Howell delves into the implications of recent monetary policies and the fragile state of the financial system. He suggests gold and Bitcoin as potential hedges against inflation and emphasizes the need for innovative financial solutions amidst escalating global economic pressures.
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Collateral-Based Liquidity
- Global liquidity is highly dependent on collateral, mostly treasury bonds.
- Disruptions in collateral markets, like the repo market, cause global liquidity disruptions.
Financial System Fragility
- The financial system relies on safe assets like public debt for stability.
- Over-regulation of banks pushes activity to less stable shadow banks dealing with private debt.
Repo Market Tension
- Repo market tension signals liquidity problems, shown by spikes between SOFR and Fed funds rates.
- 90% of these spikes since the end of 2023 occurred since last July, indicating growing liquidity issues.