The Real Crypto Cycle: What Happens When Global Liquidity Peaks | Michael Howell

What It Covers

Michael Howell explains how global liquidity drives asset prices through 65-month debt refinancing cycles, warns of current cycle peak, and analyzes the emerging monetary divide between US stablecoin-backed and China gold-backed systems.

Key Questions Answered

• •Debt Liquidity Ratio: When debt-to-liquidity ratio stays below 200%, markets experience asset bubbles; above 200% triggers financial crises. Current transition from everything bubble phase suggests upcoming market turbulence as liquidity tightens relative to debt obligations.
• •Fed Liquidity Withdrawal: Federal Reserve liquidity growth dropped from 80% annual rate in 2021 to negative 40% within twelve months. Recent Treasury General Account replenishment withdrew $500 billion from markets, creating repo market stress with SOFA spreads exceeding normal ranges by 10 basis points.
• •65-Month Refinancing Cycle: Global liquidity follows predictable 65-month cycles matching average debt maturity worldwide. Current cycle bottomed October 2022, peaks late 2025, with statistical validation from Foundation for Study of Cycles confirming this tempo across decades of data.
• •Monetary Inflation Projections: Congressional Budget Office projects US federal debt-to-GDP reaching 250% by mid-2030s, implying 8% annual debt growth. Maintaining historical gold-to-debt ratios suggests gold reaching $10,000 per ounce by mid-2030s, $25,000 by 2050, with Bitcoin tracking proportionally.