5 poststagged with “liquidity”
The August 2024 yen carry trade unwind was not a one-off event. It was the first tremor. The Bank of Japan is still the largest buyer of Japanese government bonds and the second-largest foreign holder of US Treasuries. Every time the yen rallies, that position becomes a source of forced selling. The next tremor is closer than the market is positioned for.
Q1 2026: a Fed that refused to cut, a dollar that refused to weaken, and a global liquidity expansion that refused to wait for either. The quarter in full.
Global M2 shows the highest correlation with Bitcoin's price among all macro variables tested. The money printer dictates the trajectory - and it's running again.
The Bank of Japan abandoned yield curve control, letting 10-year JGB yields rise to 1.8%. The yen carry trade unwind is draining global liquidity.
DXY climbed to 108 as global capital flows toward US assets. The milkshake theory predicted this - but its implications for Bitcoin are more nuanced than either side admits.