A 2027 CRASH? Michael Howell's Liquidity Cycle Points to the End of the Land Boom

If you want to better understand the future of interest rates, inflation, gold, oil and have a broader framework for where we may be positioned within the timing of the land cycle, then this week's LCI report is for you!

This week, I sat down with one of the world's leading experts on global liquidity markets, Michael Howell, for a mind blowing discussion that highlights just how close we are to the end of the land cycle.

Michael is the founder of CrossBorder Capital, author at Capital Wars Substack, and a keynote speaker at the recent Foundation for the Study of Cycles conference in New York,

His work grew out of his time at Salomon Brothers, once the world's largest fixed-income investment bank.

Standing on the trading floor, Howell says he observed something that mainstream economists miss when they focus merely on GDP, interest rates, and inflation – simply that the flow of money that begins in one market would quickly spill over into every other market.  

In other words, a change in the bond market would impact equities…currency movements would influence credit markets... capital was constantly rotating around the financial system.

This observation became the foundation of Michael’s work.

Today, Michael monitors liquidity across more than ninety financial systems worldwide, tracking the creation and movement of money on a daily basis.

In this week's report, I provide a summary of the important points discussed in context of the land cycle, explain some of Michael's most important charts, and in my interview, we evidence how close we are to the end of this current land and liquidity cycle.

If you want to go straight to the interview, click here.. (Includes download link to slides and full transcript)

What exactly is liquidity?

In simple terms, liquidity is the flow of credit and savings through financial markets. It is the fuel that allows debts to be refinanced, assets to be purchased and speculation to rocket off.

Howell argues that modern financial markets are not primarily mechanisms for raising new capital, however. They are debt refinancing machines. Every day, governments, banks, corporations and households are rolling over old debts into new debts.

From this perspective, financial crises are not really interest rate crises. They are refinancing crises.

The Global Financial Crisis, the European Debt Crisis, the March 2020 COVID panic and countless other market shocks all had one thing in common: at some point the system and the punters sitting at the bottom of the pile, struggled to refinance debt.

When that occurs, central banks intervene, injecting liquidity into the financial system and restoring the ability of institutions to roll over their obligations.

This is why Howell says that liquidity drives markets.

Money moves markets, markets drive the economy – and the economy then influences politics and geopolitics.

Viewed through this lens, liquidity sits at the very top of the chain and watching it closely, we should be able to identify booms and busts in advance of the impact hitting asset prices.

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