🔴 URGENT: The Everything Code UPDATE ft. Julien Bittel

The global economy is driven by an 'Everything Code' where governments' debt management and central bank liquidity creation lead to continuous debasement of fiat currency, making assets like crypto and technology essential for wealth preservation and growth amidst declining GDP and increasing debt.

• Fiat currency debasement and inflation create an 11% annual hurdle rate for investments, necessitating a concentrated portfolio in high-growth assets.

• Liquidity and the business cycle are the dominant macro factors explaining asset price movements, with crypto and technology outperforming all other asset classes.

• Crypto represents a generational mega trend, growing twice as fast as the internet, with its market cap projected to reach $100 trillion, offering unmatched long-term returns despite cyclical volatility.

The 'Everything Code' framework, developed by Raoul Pal and Julien Bittel, explains that global governments and central banks continuously increase liquidity to manage burgeoning debt, leading to an 8% annual debasement of fiat currency. This, combined with inflation, creates an 11% annual hurdle rate for investments, meaning most traditional assets fail to make investors richer. The framework highlights that diversification is dead, and hyper-concentration in high-growth, scarce assets like crypto and technology is crucial to overcome this debasement and 'unfuck your future'.

The Everything Code Framework

• 00:05:57 The 'Everything Code' framework, representing 35 years of Raoul Pal's work, aims to explain the world's current economic state, its drivers, and future opportunities, particularly how to 'unfuck your future'. It posits that diversification is obsolete, advocating for hyper-concentration in specific assets. The core issue is the 8% annual debasement of fiat currency by global governments and central banks to manage debt, which, when combined with inflation, results in an 11% annual hurdle rate for investments. This debasement is further explained by a 'magic formula' of GDP drivers: falling population growth, declining productivity, and ever-increasing public debt offsetting private sector deleveraging.

Business & Liquidity Cycles

• 00:21:34 Forecasting asset prices and the business cycle relies on understanding financial conditions and liquidity. GMI's financial conditions index, a regression of commodity prices, the dollar, and interest rates, leads total liquidity by three months, which then leads the ISM by six months. This 'Everything Code dominoes' sequence means financial conditions lead the ISM by nine months. Total global liquidity, encompassing global M2 and central bank net liquidity (adjusting for the TGA and reverse repo), has been the primary mechanism for financing debt, with its year-on-year rate of change directly impacting asset prices like the NASDAQ and Bitcoin. This relationship is so dominant that liquidity explains 96% of NASDAQ variability and 90% of Bitcoin variability, overriding most other factors.

Inflation & Central Bank Action

• 00:26:10 Inflation follows a sequential pattern, with commodity prices rising early in the cycle, followed by core goods prices, and then services inflation (driven by unit wage costs) late in the cycle. This creates a 'tug of war' dynamic where early cycle inflation (commodities, core goods) is offset by lagging cycle deflation (shelter costs, influenced by mortgage rates). Central banks typically focus on lagging indicators like unemployment and core inflation, causing them to be consistently late in cutting or hiking rates. Current indicators suggest a slow, controlled rise in inflation, but the Federal Reserve has room to cut rates due to persistent labor market weakness and subdued inflation breadth, keeping them engaged despite early cycle inflationary pressures.

Crypto as a Macro Asset & Mega Trend

• 00:44:04 Bitcoin is identified as a macro asset that functions within the business cycle, with its price movements closely mirroring the ISM, small-cap equities, and other cyclical assets. Beyond its cyclical nature, Bitcoin and the broader crypto market represent a 'supermassive black hole' of assets, offering superior returns due to Metcalfe's Law and network adoption models. Crypto has grown at twice the speed of the internet and is projected to reach a $100 trillion market capitalization by 2032. This mega trend of digital asset adoption, driven by the debasement of fiat currency and the need to 'unfuck your future,' offers unparalleled excess returns compared to traditional assets, making it an essential, albeit volatile, part of a concentrated investment portfolio.