The global market is facing a year-end test, and a liquidity crisis is imminent. How can your assets avoid this?
It's exploded! Wall Street's 'lifeblood' is running dry.
A gigantic 'fund pool' with a scale of $12.6 trillion—larger than the total market capitalization of the top ten global companies like Apple and Microsoft—has fallen to a dangerously low level. Many major Wall Street banks have issued warnings overnight: the liquidity in the U.S. money market is about to collapse!
Once this 'money bag' bursts, the resulting shock will sweep across every corner of the globe. This is not alarmist; the biggest 'thunder' at the end of the year may really explode.
In three minutes, explain clearly: Where has the money gone? What are we panicking about?
Let me clarify the core of the current market panic in simple terms:
1. Banks' 'under-the-mattress money' is running low: Just like ordinary people who run out of cash and can only borrow everywhere in emergencies. The depletion of bank 'reserves' means that the entire financial system's buffer to respond to sudden demands has disappeared, causing natural panic in the market.
2. The cost of borrowing is getting higher: The days of low-cost financing are gone. Now, overnight borrowing and other short-term rates are continuously climbing, leading to a sharp increase in financing costs for companies and investment institutions. Who can still bear it?
3. The first time in history that there is an 'experience blank': This is the first time since the Federal Reserve started 'tapering' (withdrawing liquidity) that it has encountered such a severe 'money drought'. There is no historical script to refer to, and everyone's panic is doubling.
Several shocking numbers to feel the magnitude of the crisis:
12.6 trillion USD: The total scale of the near-dry monetary market, considered the heart of global liquidity.
· 85% plunge: The usage of the key indicator 'overnight reverse repurchase' has plummeted sharply, directly proving that the market's 'idle money' has been drained, and liquidity is in exhaustion.
· Gap of 300 to 500 billion: The current market's conservative estimate of the funding shortfall is equivalent to the GDP of a medium-sized country disappearing out of thin air!
Root cause of the money drought: a complete imbalance between supply and demand
Simply put, there are too many places wanting money, and too little money available:
Year-end 'performance rush': Financial institutions are facing regulatory assessments, all are recalling funds to beautify reports, unwilling to lend externally.
· Government 'suction pump': The U.S. Treasury is still frantically issuing debt, continuously siphoning off huge amounts of funds from the market.
· Global 'dollar repatriation' encountered obstacles: Even if global dollars return to the U.S., it still cannot fill this huge gap.
· Impact on the cryptocurrency market: Liquidity stress has even spread to the cryptocurrency market, with some funds being withdrawn from BTC and ETH, flowing back to traditional markets to 'firefight'.
At 2 a.m. tonight, the Federal Reserve's 'life-or-death decision'
Global investors are focusing on the upcoming Federal Reserve meeting. This is not just a routine meeting but a 'market rescue decision-making meeting'. Powell must clearly answer three life-and-death questions:
1. Should we restart the 'printing press'? That is, should we announce the restart of quantitative easing (QE) to directly purchase government bonds for 'blood transfusions' to the market?
2. Is it an emergency rescue or poverty relief? If buying government bonds, should it be short-term or long-term? This will directly determine the effectiveness and duration of the 'market rescue'.
3. Is the 'firefighting tool' strong enough? How to upgrade existing emergency lending tools to ensure banks dare to and can borrow money?
Is history repeating itself? The crisis alarm of 2019 has sounded again.
This is by no means a trivial matter. In September 2019, a similar liquidity crisis caused overnight rates to spike to 10%, triggering severe market turbulence. Now, several key indicators are approaching the dangerous levels of that year.
· JPMorgan warns: 'This is no longer a technical adjustment but a signal that monetary policy needs a major shift!'
· U.S. Bank warns: 'Powell must give a clear commitment tonight, or the market will respond with a crash!'
The last 8 hours countdown, what will you do with your assets?
Powell must not only respond to interest rate cut expectations tonight but also present a practical and reliable 'market rescue plan'. The result of this year-end exam will directly determine the starting trend of the global stock market and cryptocurrency market in 2024.
If the market rescue efforts exceed expectations, the liquidity floodgates will open, and risk assets like $BTC and $ETH ETH are likely to usher in a new round of increases.
· If the plan disappoints the market, panic selling may sweep across all markets in an instant.
Tonight, I will closely follow the live broadcast of the Federal Reserve meeting and provide you with interpretations in real time:
The true value and subsequent impact of the market rescue plan.
· Direct impact and potential opportunities for the cryptocurrency market.
· Key operational strategies for BTC and ETH: Where are the bottom-fishing signals? How to set the hedging position?
This storm may signify risks but also holds opportunities. Follow me, and let's see the direction tonight to decide whether we can lay the foundation for wealth next year!
