Michael Howell, CEO of CrossBorder Capital, an investment advisory firm, and author of the book, “Capital Wars: The Rise Of Global Liquidity,” returns to The Julia La Roche for episode 161 to discuss the global liquidity cycle and its impact on the economy.
He explains that liquidity is a key driver of asset prices and that the current liquidity cycle is pushing asset prices higher. Howell argues that the focus on interest rates and policy rates is misplaced, and that the long-term rate and liquidity are more important factors. He also highlights the importance of liquidity in the refinancing of debt and warns of the risks of a liquidity shortage. Howell suggests that investors should consider assets like gold, cryptocurrencies, and solid companies on Wall Street as hedges against monetary inflation.
Links:
Website: http://www.crossbordercapital.com/
Twitter: https://twitter.com/crossbordercap
Substack: https://capitalwars.substack.com/
Book: https://www.amazon.com/Capital-Wars-Rise-Global-Liquidity/dp/3030392902
Takeaways
Timestamps:
00:00 Introduction
1:38 Macro view + liquidity cycle
3:07 Interest rates
6:10 What really matters is the integrity of the US Treasury market
07:47 Hedging Against Monetary Inflation
9:16 Gold
11:56 US public debt
15:15 Monetizing the debt
18:06 Gold is the pole star in the financial system
20:40 US dollar
26:29 Inverted yield curve
31:37 Conclusion and parting thoughts
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#110 Marc Chandler: The Dollar's Rally Is, If It's Not Over Yet, It's Nearly Over
#109 Danielle DiMartino Booth: 'It’s Clear That The U.S. Economy Is In A Recession If It Wasn't For Everything That Uncle Sam Is Either Spending Or Fudging'
#108 Chris Whalen On The ‘Silent Crisis’ — The Looming Commercial-Led Recession
#107 Claudia Sahm: The Economy Is At An Inflection Point
#106 Harald Malmgren & Nicholas Glinsman: The U.S. Treasury Market Is The ‘Ultimate Wrecking Ball’
#105 Sam Burns: The Economy Isn't Headed For Recession Any Time Soon
#104 Christopher Zook On Stagflation, Energy, And A 'Generational Opportunity' In Commercial Real Estate
#103 Matt Higgins: The Only Way Out Is A Reckoning
#102 Masha Bucher On The State Of Venture Capital, Investing In AI, And How To Navigate Today's Market
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#100 Bill Ackman On Activist Investing, The Economy, And Learning From Mistakes
#099 Peter Cecchini: 3 Reasons Why We're Headed Toward Recession
#098 Rick Rule: 'Potent And Very Ugly Cocktail' In A Rising Interest Rate Environment
#097 Peter Borish: My Concern Is More Than A Recession
#096 Michael Howell: It's Bonds, Not Banks, That Look Dangerous
#095 Carol Roth: You Will Own Nothing
#094 Todd Gordon: Why We're Not Headed Toward Recession
#093 Neil Howe: The Fourth Turning Is Here — How Will This Crisis End
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