The Bull Case (Is That Nothing Matters Anymore)

Submitted by QTR's Fringe Finance

As far as my macro outlook goes, I think I’ve been pretty clear: over time, I expect nominal prices of everything to drift—no, march—higher as governments and central banks eventually capitulate to the obvious: their only escape route from the irresponsible, slow-motion debt disaster they engineered is to quietly (or, recently, not so quietly) brutalize the middle and lower classes through inflation.

It’s not elegant, it’s not moral, but it’s historically reliable and gets politicians and bankers off the hook of taking actual responsibility—so of course it’s the easy choice.

That said, for the last year or two I’ve also argued that once the consumer and the broader economy finally run out of steam, we’ll see a sharp deleveraging event. A quick, violent move lower—one that unwinds years of easy money, risk-free speculation, and the hilariously reckless funding of things that, in hindsight, will look indistinguishable from hot air. (Think: Fartcoin, Dogecoin, Ethereum treasury companies, cash burning SPACs or any other asset whose primary utility is generating memes. This blog excluded, of course.) The tidal wave of hubris and euphoria that’s defined the last decade eventually gets taken out back and put down. Frankly, it’s years overdue.

But—because I try not to permanently live inside my own echo chamber no matter how luxurious and genius-shaped it feels—I found myself thinking today about the “what if I’m wrong” bull case. Everyone knows the long-term bull case. I’m talking about the very short-term bull case. Is it possible we dodge the sharp deleveraging here and actually finish this year, and maybe even next year, much higher? Sure. The whole question boils down to how quickly the next wave of forced deleveraging hits and how long it actually lasts.

The common-sense part of me says: to clear out the crypto bubble, the AI bubble, frothy valuations, and the delusional optimism embedded in markets, we’d need at least...(READ THIS FULL COLUMN, 100% FREE, HERE).