21st June 2024 > > Global dollar liquidity.

tl;dr

Global dollar liquidity is set to grow, despite the Fed claiming otherwise.ETH is NOT a security! Buying ETH ETFs will require a shift in mindset for those who are staking ETH today.

Market Snap

Market Wrap

The techies are largely doomsters now, drawing red lines that should not be crossed at current price levels. I expect prices with a 5-handle would be met with a wall of buyers, but I could be wrong.

Occasional Series – The Euros

I could never bet against Watford (*), and neither would I ever bet against England.

However, I cannot help but notice that you can lay England to reach the quarters at 1.35 in small, but you can get nearly £1,000 notional on one exchange at 1.37. I assume you can do a shed load more at anywhere close to 1.5 spread across a number of betting platforms.

After last night’s dismal performance of England yet again sitting back after getting an early goal, that does look to me as the best bet of the tournament.

But, like I say, I won’t go there.

Curious Cryptos’ Commentary – Spot SOL ETP

Not quite the same as an SEC-approved ETF for American investors, but 3iQ has filed for a spot SOL ETP in Canada:

https://pages.3iq.io/solana

Slowly, so very slowly, the wheels start turning.

Then they turn very fast indeed.

Curious Cryptos’ Commentary – Shameless

For so long we have all agreed that Technical Analysis is snake oil.

Apart from when it suits my world view:

Curious Cryptos’ Commentary – Arthur Hayes

Arthur’s essays are always entertaining, and very well researched, though the image at breakfast time of Caroline Ellison in an, ahem, compromising position, is not for the faint-hearted. In the latest instalment he identifies a new source of QE which is being carefully hidden by the Fed:

https://cryptohayes.medium.com/any-views-expressed-in-the-below-are-the-personal-views-of-the-author-and-should-not-form-the-dbe21d05ce28

The crux of his argument is that Japanese banks that bought 10-year US treasuries and hedged the 10-year FX risk with rolling 3-month FX hedges have simply used the old cash and carry trade, which always works well until it doesn’t. And now it doesn’t.

Japanese banks hold over $1 TRILLION of US Treasuries, nearly 4% of the entire market. These are soon to be offloaded, starting with Norinchukin Bank:

https://asia.nikkei.com/Business/Finance/Japan-s-Norinchukin-Bank-to-sell-63bn-of-U.S.-and-European-bonds

If all these bonds were allowed to be sold on the open market, that would raise the prospect of widening yields with the election just a few months away. This cannot be countenanced. And so, once again, the Fed is about to embark on another exercise of market manipulation on a grand scale, an exercise which is illegal and carries long jail sentences for anyone other than central bankers.

Using the Bank of Japan and others as intermediaries, the Fed will be secretly buying unlimited amounts of treasuries using the unlimited credit lines granted to other central banks in response to Covid, at the current market price, reducing supply, lowering yields, and pumping freshly minted dollars into the global economy. That is the very definition of quantitative easing. And we all know what that will do to the price of hard assets such as houses, stocks, and cryptos.

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(*) Dante’s Circle Nine of Hell is much too pleasant a place for those that do.