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Raoul Pal & Julian Bittel: Making Sense of Everything (Masterclass)
Raoul Pal: The Journey Man
Liquidity is the Key to Market Dynamics
Liquidity plays a central role in financial markets, influencing both performance and correlation among assets. The current economic environment demonstrates that governments and central banks prioritize maintaining liquidity to prevent debt crises. This strategy often involves currency debasement, which can artificially sustain asset prices during downturns, as seen in 2020. However, this does not equate to real economic growth; rather, it imposes a 'debasement tax' on the public through inflation. Importantly, the inflation reflected in consumer prices does not stem from money printing, as most narratives suggest, but rather from supply and demand for goods and services. Therefore, it is crucial to distinguish between the impacts of currency debasement and actual inflationary pressures, as they influence different aspects of the economy.
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