The Bitcoin Layer
Explaining Michael Howell's Global Liquidity Framework
May 21, 2024
Michael Howell, founder of CrossBorder Capital, discusses his global liquidity framework in this episode. Topics include Treasury bill monetization, duration's impact on financial markets, and why global liquidity matters for Bitcoin. The conversation delves into how asset prices are influenced by fund flow, the role of central and commercial banks in determining liquidity, and the relationship between Bitcoin and global liquidity trends.
41:10
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Quick takeaways
- Michael Howell's global liquidity framework measures money flow through bank balance sheets, impacting asset prices.
- T-Bills play a critical role in financial system monetization, transforming treasuries into cash for investment.
Deep dives
Overview of Michael Howell's Liquidity Framework
Michael Howell's liquidity framework focuses on the flow of funds through the financial system, particularly emphasizing the size of balance sheets in commercial and central banks. His global liquidity index, a cornerstone of the framework, measures the quantity of money available to move through the system. This index encompasses cross-border capital flows from banks worldwide, including China, a significant player in global money supply. By analyzing balance sheet sizes and collateral utilization, Howell's framework provides insights into liquidity's impact on asset prices.
