🗯 TWO DIMENSIONS OF THE MARKET

🔺 Today’s market lives in two dimensions at once. In some assets we see clear signs of deflation — demand is shrinking, prices rolling back. In others — the opposite: inflation keeps accelerating, with the cost of coveted assets and goods rising, fueled by excess liquidity.

🔺 This is no paradox. It all depends on where you look. Where there’s no flow of speculative capital, prices tend to reflect real demand and the state of the economy. But wherever investment flows and mass expectations concentrate, a bubble takes shape.

🔺 In recent years it has become obvious that gold, stocks, and crypto now move in sync as a single class of risk assets. Once they could live their own lives, but after trillions in liquidity were pumped into the system, the difference has vanished. These assets are no longer a diversification for each other. Either they all rise, or they all fall.

🔺 This creates the illusion of prosperity. People eagerly take loans, live on credit, buy what used to be considered luxury, and at the same time invest, expecting returns above interest rates. In essence, risk assets are leveraged by credit. And as long as it works, the crowd believes it’s the natural order of things.

🔺 But the market is cyclical. When the math stops adding up, the effect can be devastating. We’ve seen before how overheated expectations and living beyond means ended in crisis. Today the set of factors is lining up into a similar picture. The trader’s task is not to argue with the crowd, but to remember: markets reward not faith, but the ability to doubt at the right time.

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