The goal of the human species is to survive and procreate. It follows, then, that an organisation of humans has the same goals. The ECB will always do whatever it takes to ensure the EU is still a thing. If pesky things like EU inflation hitting 30-to-40-year highs get in the way, they can be explained away as “transitory”, thereby allowing the ECB to avoid its legal obligation to tighten monetary policy. The ECB can instead continue printing money, keeping countries from leaving the Euro due to their unaffordable government bond yields.

The EU needs to find buyers for a gargantuan amount of bonds IMMEDIATELY.

I hope this little tale illustrates the dilemma facing the ECB. Explicit Yield Curve Control (YCC) — whereby the ECB targets a general absolute level of government bond yields and then purchases member state bonds to achieve that target — is the only way it can coax investors into taking the inflation and redenomination risk associated with buying the weaker member states’ bonds. Anything short of YCC, and investors will shun those bonds. The EU member states will quickly find there is no one left to purchase the bonds they have issued to pay for their high and rising budget deficits. But printing more Euros (which is necessary for the EU to buy their member countries’ bonds and successfully implement YCC) will cause the exchange rate to fall, and energy costs — and most importantly, the cost of natural gas — will rise.

America’s stalwart allies, Japan and the EU, need help implementing YCC. They can’t afford to print the money necessary to buy back their own domestic bonds, so they need America’s support. But how could this work in practice?

I remind readers that the only thing that will have really peaked is the rate at which prices were increasing, not the prices themselves. Don’t expect prices to actually decline and become more affordable to those whose incomes do not rise as quickly as food and fuel prices.

What we as crypto degen traders really care about is the $USD liquidity conditions’ rate of change. The Fed is concerned about the PRICE of money (aka USD interest rates). We are concerned about the QUANTITY of money. And hopefully (assuming that you didn’t just skim the top of this piece and skip to this section) I’ve convinced you that the rate of change in the quantity of USD is likely to begin increasing shortly.