URGENT: The Everything Code UPDATE ft. Julien Bittel
🎯 Summary
[{“key_takeaways”=>[“Diversification is dead; investors must pursue hyper-concentration to achieve necessary returns.”, “The required hurdle rate for investments is 11% (8% currency debasement + inflation) to avoid getting poorer.”, “Demographics (declining labor force participation) are destiny, forcing governments to increase debt to offset slowing GDP growth.”, “Global liquidity (M2 plus central bank actions) is the primary mechanism used to finance this rising debt and pay interest payments.”, “The Bitcoin halving cycle is a misinterpretation; crypto cycles align with the 3-5 year debt refinancing cycle, which has recently extended to about 5.4 years.”, “Financial conditions lead liquidity, which leads the ISM by six months, suggesting an acceleration in the ISM is imminent based on recent financial easing.”, “Inflation is entering an early-cycle acceleration phase driven by rising commodity and goods prices, despite lagging shelter inflation keeping headline CPI muted for now.”], “overview”=>”Ralph Hell and Julian Bittel unveil their "Everything Code" framework, arguing that traditional investment diversification is obsolete, replaced by a necessity for hyper-concentration to outpace a hidden 11% hurdle rate driven by currency debasement and inflation. The core of their analysis rests on demographics, showing that a declining labor force participation rate necessitates ever-increasing government debt, which is financed through global liquidity injections, creating predictable, debt-refinancing cycles that dictate asset performance.”, “themes”=>[“Macroeconomic Framework (The Everything Code)”, “Demographics and Debt Dynamics”, “Liquidity and Monetary Policy”, “Business Cycle Forecasting and Asset Correlation”, “Inflation Sequencing”]}]
🏢 Companies Mentioned
đź’¬ Key Insights
"It's our job to live in the future. Right? So we live approximately nine months in the future versus current ISM numbers to try and then pick up on cyclical recoveries in asset prices, especially things like equities in crypto because they tend to operate in advance to more coincidence and like economic data."
"This is the chart of the labor force participation rate versus government percent of GDP inverted. So, what it shows is trend rate of GDP is basically offsetting the labor force participation rate fall as the population ages out. That is why we have a debt problem."
"That is your hurdle rate to unfuck your future plus you need to add inflation. Yes, it's in addition to this because inflation is not the same as debasement. So you've got an 11% hurdle rate on any investment that you have."
"global governments and central banks are increasing liquidity to manage debt at 8% a year. 8% a year is actually the devaluation of fear of currency that you don't see."
"The raising cycle comes when the business cycle is peaking. That's when that all happens. So there's nothing to fear from the Fed about, oh my god, do they cut less? Maybe? Maybe not. We don't think so, but remember that whole game is later when you're looking for the cycle top, not when we're just pulling off the cycle lows."
"GMI financial conditions index leads the ISM by nine months, liquidity leads the ISM by six. And therefore financial conditions lead total liquidity by three."