Carl Nilsson @Duntan123: "🌿 Green Day — But..."

Sweden

🌿 Green Day — But We’re Not Out of the Woods Yet Good morning everyone! ☀️ I was asked to clarify my statement that precious metals usually rally first, followed by a shift in monetary policy toward more liquidity — and then, finally, a speculative boom in crypto and tech. So let’s unpack that a bit. 🧩 🪙 The Sequence in Theory The rough order — precious metals → liquidity easing → crypto & tech rally — follows the way capital tends to flow through the system as monetary conditions and inflation expectations shift. Let’s walk through it logically 👇 🏆 Gold and Silver as Early Indicators Gold and silver often begin rising before official liquidity easing begins. Why? Because markets are forward-looking. When investors sense that the economy is slowing, real yields are peaking, and inflation pressure is easing, they begin to accumulate metals. $GOLD tends to move first — it rises on expectations that future real rates will fall. $SILVER lags initially but accelerates once the “liquidity narrative” gains traction, since it has both monetary and industrial demand. So yes — metals can act as early warning lights for an approaching policy shift, when markets start pricing in easier money before it’s official. 💧 The Liquidity Phase: Rate Cuts and QE Once the Fed actually begins easing — cutting rates, expanding the balance sheet, restarting QE — the effect is direct: Real yields decline The dollar often weakens Financial conditions loosen Liquidity starts flowing again, and soon that capital goes looking for higher returns once fear subsides. At the moment, the market expects the Fed to cut rates further at the next meeting, and Jerome Powell has already hinted that the era of quantitative tightening might be over — meaning it could be time to increase the Fed’s balance sheet again. That’s code for: more liquidity in the system. 💵 🚀 The Risk-On Phase: Tech & Crypto Take Off When liquidity starts circulating and risk appetite returns, the most speculative parts of the market — crypto and high-growth tech — tend to outperform dramatically. In index form, this would be $NSDQ100 which is why I'm loading up on $TQQQ (ProShares UltraPro QQQ) (ProShares UltraPro QQQ) at the moment as well as increasing my $BTC position . These assets are ultra-sensitive to discount rates. When rates fall, the future earnings of growth stocks look far more attractive, and crypto often reacts even faster — effectively serving as a leveraged bet on global liquidity. That’s why you typically see gold rally first, and crypto/tech rally later, sometimes with a lag of a few months. 📈 Historical Patterns This cycle has played out several times before: 2008–2011: Gold surged ahead of QE1, and risk assets followed — NASDAQ and early crypto soared as liquidity flooded in. 2020: Gold peaked mid-2020 after QE went into overdrive. Tech and crypto then exploded higher as real yields collapsed. 2022–2023: Precious metals strengthened again as markets began pricing in a Fed pivot away from peak tightening — and tech/crypto later followed. ⚖️ Why It’s Not Always Linear Of course, this isn’t a strict rule — more of a recurring sequence. Markets sometimes compress or invert the order depending on the macro backdrop: If inflation stays sticky, gold might outperform longer while tech lags. If inflation collapses quickly, crypto might front-run the easing before metals catch up. But the core driver remains the same: liquidity expectations and real yield direction. Metals respond to real yields, while crypto and growth respond to nominal rates and liquidity velocity. Markets look green today 🌱, and we’re now sitting at 76.63% YTD, but as I like to say — we’re not out of the woods just yet. The sequence may be setting up again, but timing it precisely is always tricky. We have however broken into new ATH on $SPX500 which is bullish, so I'm buying back in cautiously. We might see some more sideways movement at these levels for the rest of the year, before we start the next rally properly, but I think that the likelyhood of a deeper correction has significantly declined by now. More on this tomorrow. Have a great day everyone — and if you enjoy these insights, feel free to like, comment, or copy! Jonathan

6 Mentioned Show all

GOLD

SILVER

NSDQ100

TQQQ

ProShares UltraPro QQQ

BTC

Bitcoin

SPX500

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