Two wolves: trade is bad vs high yields are bad

Plus, an insane day in markets, China’s threat, and political shifts

“We learn from experience that men never learn anything from experience.” – George Bernard Shaw ||

Hi everyone! Holy cow yesterday was exhausting. I hope you’re all doing ok.

I know that recent newsletters have gone way over my self-imposed word limit (want to be respectful of your time!), but there is so much going on that is important to digest.

What’s happening is not a surprise in form, although it is in feature. Seeing trends is one thing, predicting details is something else. I’ve been writing about the pendulum swing for a couple of years now, and regular readers will be familiar with my thesis of geopolitical realignments and the resulting uncertainty leading to the instability of financial systems and the weakening of individual liberty. “Crypto is Macro Now” was never just about markets and asset prices – those are fascinating, but my deeper interest has been the new tool in the box at times of great change.

That said, the pace of acceleration is quite something. And to understand the role crypto will play in the new landscape, we need to get our heads around how that landscape is forming.

IN THIS NEWSLETTER:

• Two wolves: trade is bad, high yields are bad

• Macro-Crypto Bits: markets, China, Japan, Germany

If you’re not a premium subscriber, I hope you’ll consider becoming one! You get ~daily commentary on markets, tokenization, regulation and other signs that crypto IS impacting the macro landscape. As well as relevant links and music recommendations ‘cos why not.

WHAT I’M WATCHING:

Two wolves*

(*from the fable attributed to the Cherokee about each of us having two wolves inside us, representing opposite forces – the one that triumphs is the one we feed)

There seem to be two camps emerging within the Trump entourage – one destructive, one constructive. Both start from the base that a major reset is necessary, and I agree with that. The US deficit has to get under control, and the rest of the world needs an incentive to depend less on the world’s reserve currency.

The risk is in which side has the President’s ear at any given point in time. Over the past week, it appears to have been the destructive camp, the “degrowthers”. But now, mercifully, it seems like the more measured, constructive approach is gaining favour.

This won’t necessarily bring relief to markets, which will continue to be wracked by uncertainty for some time yet. And much depends on Trump’s mood and who he last spoke to. But it just might hint at a light at the end of this tunnel.

Trade is bad

In the “degrowther” camp, we have the “no trade deficit” philosophy of Peter Navarro.