Global liquidity cycle (new) Re-liquefication ▲

Polomny (Oct 5 '24): Sept 2024 was the biggest month of central-bank easing since the pandemic (~25 cuts) — a global re-liquefication cycle; liquidity & sentiment drive markets over the short/medium term (Druckenmiller), so he is bullish on the resulting wall of fund flows. Hay (Jan 5 '26): Michael Howell sees the liquidity dam — long contained within financial markets — breaking and flooding into the real economy, reviving Main Street at Wall Street's expense. Polomny (Jun 27): the near-term tide has turned the other way — the world's ~55 central banks have flipped from net easing to net tightening (CFR Global Monetary Policy Tracker, May 2026), so liquidity is contracting and gold, Bitcoin, oil and the broad CRB are consolidating/selling off; Bitcoin is his real-time liquidity barometer (its peak lined up with the phase-shift to higher rates). It does not change the long-term view — 'all roads lead to money printing' — but a 3-to-12-month consolidation is underway. Hay (Jun 29): corroborating the tightening read — despite a structural deficit, aluminum (like oil) 'has been acting like there is a glut,' with Alcoa's correction outrunning the metal's, which 'may speak to a growing global liquidity squeeze' rather than weak fundamentals. Paulo Macro (Jun 30): the China leg is turning back on — the PBOC (the '21st-century Bundesbank,' per Louis-Vincent Gave: rising energy reads as inflationary, so it slammed the brakes in March) has been injecting again since ~May 21 after Mar-May tightening showed up in poor data, and more consistently (a 'positive hum' vs sporadic pumps); since China is the world's biggest gold buyer, gold's price has become inextricably linked to that PBOC liquidity (Michael Howell). Polomny (Jul 4): record price-to-sales are sustained by liquidity, not fundamentals — Raoul Pal’s ~97% liquidity/NASDAQ correlation and the Cantillon effect keep a floor under valuations, so “own hard assets they can’t create by fiat.” Paulo Macro (2025-NOV-25, back-fill — the funding-side tell): the invisible variable is funding — SRF draws, GC repo above the corridor and FX basis all tightening, and the equity-funding cost (the CME AIR total-return future, AXW) stuck at the top of its band even as leverage demand eased — the tightening driver handing off from leverage demand to dealer-balance-sheet supply. Paulo Macro (2026-APR-11, back-fill — the plumbing mechanics): the quarter's Risk-On ran on RRP drained to ~zero, a ~$300bn TGA drawdown (issuance held back ahead of the Apr-15 tax date) and RMP injections lifting reserves ~$250bn — and the post-tax TGA rebuild removes the tailwind: markets rise "like an elevator" on liquidity and fall "by the stairs" on the drain (a "Sell in May" set-up). Howell (CrossBorder Capital, 2026-SEP-09): the growth rate of global liquidity has peaked in its 5–6-year cycle (a cycle set by the ~5–6-year average term of debt that must be refinanced), even though the level is still inching up. Not central-bank tightening: strong real economies are pulling liquidity out of financial markets. Weak bonds plus strong commodities is the late-cycle signature; equities straddle P/E pressure and earnings strength and stay range-bound. Watch the plumbing, not the Fed funds "pantomime": SOFR vs Fed funds and the MOVE index. In a crisis, cash first, then re-liquefication sends gold and Bitcoin sharply higher.