The Julia La Roche Show
#240 Michael Howell: 'We're in a Liquidity Air Pocket' as Hidden Stimulus Fades
Mar 6, 2025
Michael Howell, CEO of CrossBorder Capital and author of "Capital Wars: The Rise Of Global Liquidity," dissects the current liquidity landscape. He warns of an impending 'air pocket' as hidden stimulus fades, emphasizing the risks from the U.S. Treasury's bill-heavy financing strategy. Howell also discusses the potential for Trump to revalue U.S. gold reserves for a massive fiscal boost, while advocating for caution among investors as 2025 approaches. He suggests a pivot to real assets like gold amid these economic uncertainties.
52:47
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Quick takeaways
- Michael Howell reveals we're entering a liquidity 'air pocket' due to fading hidden stimulus and risks from U.S. Treasury financing strategies.
- Howell emphasizes the potential for gold and real assets to outperform in the uncertain economic landscape leading up to 2025.
Deep dives
Understanding Global Liquidity Cycles
The current state of the global liquidity cycle is pivotal for understanding the economy and asset prices. Liquidity has shown an upward trend following a low in October 2022, but recent signs indicate the presence of an 'air pocket' in liquidity. This turbulence arises from two key factors: China's tightening monetary policy and the fading effects of prior stimulus efforts in the U.S., initially meant to support the Biden administration. As the hidden liquidity previously injected dwindles, markets are reacting, leading to a cautious outlook for economic growth.
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