WTFinance Liquidity Godfather Warns Markets Face Perfect Storm As Cycle Turns
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Mar 6, 2026 
Michael Howell, founder of CrossBorder Capital and liquidity-cycle specialist, explains why the peak in global financial liquidity passed in Q3 2025. He outlines a textbook 65-month liquidity cycle and asset rotations from tech into energy, commodities and bonds. He also discusses a shift from buybacks to capex, China’s unique liquidity role, and why geopolitical shocks rarely alter multi-year liquidity trends.
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Bond Gains Boost Collateral But Fuel Real Economy
- Rising bond prices improve collateral and lending capacity, but current lending is more likely to flow into real-economy activity rather than fueling financial-asset speculation.
- Howell links stronger bond performance and gold to investors shifting toward safe assets as liquidity growth slows.
Geopolitical Shocks Rarely Alter Liquidity Cycles
- Geopolitical shocks usually move sentiment short-term but rarely change multi-year liquidity cycles; only rare secular shifts (e.g., fall of the Berlin Wall) materially alter liquidity.
- Howell says current Iran conflict unlikely to change global liquidity direction.
China's Liquidity Push Is Lifting Gold Not Western Debasement
- China faces a debt problem and is easing liquidity domestically to devalue debt and the yuan internally, which is driving much of the recent gold and precious-metal rally.
- Howell argues gold's rise is 'Chinese debasement' rather than Western monetary debasement, with PBOC actions key.