The Everything Code

v.6💡Featured: The Cycle of Money

No comment.

Grab a pen & paper. Download the documents. Listen. Take really, really good notes. This is honestly THE best financial education video I’ve ever watched. It is almost like having keys to the universe (of finance). Long? Yes. Informative? Without any doubt. #TheEverythingCode has brought everything together & everything makes SO much sense! Once you see (and comprehend) this video, you will NOT be able to unsee it. Happy Learning!

Attached Documents:

Personal Key Highlight(s):

• Everything moves in cycles & diversification is dead. Cycles have “seasons”, as does nature. But speaking of financial seasons, the breakdown is: (Spring (2023); Summer (2024); Fall (2025); Winter (2026)./

• “The Everything Code” is about understanding that: Liquidity is everything./

• Liquidity is a function of debt & is a key driver for asset prices. Liquidity implies surpassing a hurdle rate increase of roughly 8% per year. 11 to 12% if you factor in 3 or 4% global inflation./

• We, as a society are not “battling” inflation, but currency debasement (debt being fought with money printing). Think balance sheets of government(s) (M2 Money Supply chart is & should be used as a proxy for liquidity)./

• The Magic Formula = GDP growth equals population growth, productivity growth, & debt growth./

• Liquidity & Debasement are use-cases for financial repression./

• Demographics are destiny. Demographics explain the reason(s) that things accelerate or slow./

• The labor force participation rate is a measure of the percentage of the populations in the labor force, which converges as being a function of demographics./

• What currency debasement does is, it moves the scarce supply asset, price, or equities./

   

• Money printing doesn’t create inflation. Inflation is based on inflation as in CPI, a variable asset thing, which goods and services based around supply & demand./

   

• The “Institute for Supply Managers” (ISM): is perfectly cyclical & can be forecasted (a four-year cyclical that triggers “up only” during election years - as does Bitcoin); ISM will probably peak June 2025*; the ISM is the best general business cycle indicator; Below (<) 50, means that the economy is slowing. Above (>) 50, means that the economy is expanding. Above 60 might indicate that inflation is probably coming from some mix of demand or cost-push inflation demand (consumption cost that are driven by supply, leading a “hawkish” central banks & rate hikes)./

• Higher interest rates increase borrowing costs, while wages typically increase simultaneously. If your have rising borrowing costs & rising wages, it tends to mean that your margins are being compressed, which may lead to layoffs (less consumption, less earnings, less GDP)./

• Global Liquidity peaks in September 2024, and doesn’t go negative until December 2025./

• The business cycle is the most important driver of all asset prices over the medium term, & liquidity is a function of the business cycle. Therefore, it is crucial to understand how the business cycle works. Once you see it, you can’t unsee it, maming it embedded in your investment DNA./

• The business cycle is the earnings cycle, which is why the business cycle maps basically all classes & their performance(s) (aka “seasonal” allocation & earnings)./

• The business cycle turns higher, there becomes more confidence to spend money. The business cycle turns down, fear and a lack in confidence is triggered, making people spend less & save more./

• If you are bullish on the business cycle (spring/summer/fall season(s)), Bitcoin is your go-to asset. If you are bearish on the business cycle (winter season), Bitcoin is the one thing you don’t want to own./

• Central banks focus on lagging indicators, when the markets are forward-thinking./

• There is an 86% correlation between Bitcoin & Liquidity, so Bitcoin is a function of liquidity./

• The rise of P/E ratios is driven by liquidity & currency debasement is the dominant factor in a P/E ratio./

• The Fed always cuts when the business cycle is expanding (b/c they operate months behind the curve). Operating “behind the curve” is the Fed’s mandate. They are still cutting b/c they are dealing with wages & shelter, which are deflating the CPI numbers for an extended period of time. Shelter typically lags behind by 18 months, which tends to lead to disinflationary pressure (growth is accelerating & and inflation momentum is decelerating) on the things that central banks look at, all while forward-looking inflation will have already gone up (inflation is not really on central banks’ radar). Therefore, central banks always shift interest rates when it is “too late”. or late in the cycle, which is why Macro Fall (stagflation) tends to have a lot of rate cuts & liquidity./

   

• Central Bank’s Hikes & Cuts: CPI shelter operates around 17/18 months; ISM leads by 4 months; Bitcoin leads the ISM by 8 months & Fine Wine by 13 months; Financial conditions index leads the ISM by 9 months./

• Liquidity is a function of where we are in the business cycle. Prices rise with the liquidity cycle. Earnings rise with the business cycle./

   

• Stagflation is when inflation is rising, and no growth. Stagflation is typical classic late cycle action. Where you want to be completely risk-off, is a macro regime where both growth & inflation are slowing./

• Bitcoin operates in line with the liquidity cycle. Altcoins operate in line with the business cycle./

• The Four Seasons represent either growth and/or inflation./

• In an environment where the business cycle is bottoming (trough) & starting to move higher, copper outperforms gold./

• Fine wine follows the same “code" & is a long-term investing play that rises in value over time. Might want to load up while you can because wine is set to skyrocket within the next 18 to 24 months./

• Good Reminder (to combat your emotion(s) is: “When in doubt, zoom out” & “The trend is your friend.”/

• When central banks increase or decrease interest rates, you will typically have between 12 to 18 months to make your move(s) before it to begins to trigger within the economy./

• For Bitcoin, this is the first time we are experiencing institutional adoption. This concludes that we are dealing with a technological adoption (& one that adopts the fastest & investable)./

• AI is not investable (right now), but has been growing twice as fast compared to the adoption of the internet./

• Active wallets is where to look. By the end of 2025, we could* reach 1.1 billion active wallets, not actual users (as people have multiple wallets much like people have multiple IP addresses./

   

• This is the biggest macro opportunity we have ever been given. “Don’t Fuck This Up.” This is the best macro performing asset of all time, along with the best risk-adjusted reward of any asset in all recorded history. EVER! A true & treasured alien asset, whose marketcap can go from $2.5T to 10 to 15T to 100T, as it sucks money in from all other investable asset classes over time (the “supermassive black hole”… of assets & money). This sucking from the black hole is what will continue to drive the adoption curve, which started from the Innovators (tech enthusiasts) to Early Adopters (visionaries) to Early Majority (pragmatists) to Late Majority (conservatives) to the Laggards (skeptics)(see figure below)./

  

  Roger’s Innovation Adoption Curve - (Al-Dawood, 2024)

• With Bitcoin, humanity gets to invest in the infrastructure, the network layer, & an incredible new technology. Building will occur on the applications layer, which new innovations, ideas, & companies will be created. The new Facebook & Google’s of the world./

• Forward-looking price targets: For Bitcoin at peak (minimum $100k to $400k)(overall since January 2009, $BTC has accelerated to 20,000,000% in gains; & annualized 139%) & Ethereum at peak (up to around $20k from current level; & annualized 146%)(overall, since 2016, $ETH has accelerated to 324,000% in gains). If we include Solana (overall, since 2021, $ETH has accelerated to 8,300% in gains; annialized 203%)./

• 1 Bitcoin equals 1 Bitcoin./

• The banana zone is coming./

• In the past decade, the NASDAQ has outperformed the Fed balance sheet by a few percent (roughly 5% per year). Zero other assets will outperforming the debasement of currency plus inflation & in the wise words of, Raoul Pal, “unfuck your future” outside of Bitcoin, Crypto, & Technology plays (like the NASDAQ). These are the “alien assets” of the future. Therefore, Anytime you take money out of Bitcoin and/or crypto & put it into anything else, you are simply going to lose money./

Time to fasten your seatbeat, folks! Things are set to get wild for both the prepared & the unprepared. The future is up to you. Do something today that your future self will thank you tomorrow for.

To end with a good mental note for “The Banana Zone” is to 1) Have an plan; 2) Save in Bitcoin; 3) Sell some appreciating assets for lifestyle chips (family vacation, a home, learning a new skill, etc).

The time is NOW. “DON’T FUCK THIS UP!”

*NOTE: THIS ENTIRE IS NOT FINANCIAL ADVICE & ALL PRICE TARGETS ARE GUESSES. NO ONE KNOWS WHERE THINGS ARE HEADED, BUT FRAMEWORK HELPS BUILD SOUND INVESTMENTS!/

#SowSaveSustain

Raven.

PS - IMO, this is the greatest finance video since 2008.

Source(s) Verification:

Al-Dawood, M. (2024, March 06). Rodger's Innovation Adoption Curve. Retrieved from Grow Enterprise Enterprise Training & Consultancy: https://growenterprise.co.uk/2023/03/06/what-is-the-adoption-curve-of-innovation-and-how-does-it-work/

Bittel, J., & Pal, R. (2024, May 24). The Everything Code: Making Sense of Everything. Retrieved from YouTube: https://youtu.be/I6IraYngzgo?si=MJ-d14mPFLnvzF3H