🟢 [E6784] BRICS nations are working on a commodity-basket reserve currency as a structural challenge to the USD system. Energy exporters and importers are seeking alternatives after witnessing that reserves 'can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved,' per IMF data cited by Putin.

🟢 [E6783] Putin announced BRICS are developing a commodity-basket based reserve currency similar to Keynes' 'Bancor' proposal. The IMF reports global currency reserves at $7.1 trillion and €2.5 trillion, devaluing at ~8% annually and subject to confiscation risk (citing Russia sanctions), driving energy exporters and importers to seek alternatives to UST surpluses.

🟢 [E6780] Foreign UST demand is evaporating: China's UST holdings hit 12-year lows and Japan is also reducing holdings. FX-hedged UST yields are negative in EUR and barely positive in JPY, making foreign purchases economically irrational while the USD remains strong. This creates a structural funding gap that only Fed QE can fill.

🟢 [E6781] Gromen argues the US government has become critically dependent on asset bubbles to generate tax receipts and consumption. With May 2022 tax receipts down 16% y/y, the government faces an impossible trilemma: default on obligations, allow crowding out of private markets, or resume QE — with QE being the only politically viable option.

🟢 [E6782] Gromen states 'inflation must remain above interest rates to first eat through the debt,' projecting the base case as a repeat of the 1970s pattern of inadequate tightenings and chronic inflation. This is framed as a once-or-twice-a-century inflection point where the physical economy constrains the financial economy.

🟢 [E6786] Multiple recession indicators cited: US tax receipts fell 16% y/y in May, gasoline sales declined for 14 consecutive weeks (-8.2% in June), Lennar cited stock market impact on housing buyer demand, and retail inventory building requires price cuts. Gromen recommends two strategies: aggressive tactical short-everything-except-USD/TLT/gold, or a 'chicken strategy' of lightening energy/commodity positions and raising cash.

🟡 [E6788] Gromen recommends tactically shorting energy in the near term despite long-term structural bullishness. The 'chicken strategy' involves lightening energy/commodity positions slightly while holding core positions, anticipating a 4-8 week deflationary window before the Fed pivot. Fall 2022 EU energy crisis escalation is flagged as a potential catalyst for broader policy shifts favoring energy longs.

🟢 [E6787] Gold is recommended in both of Gromen's positioning strategies — both the high-risk tactical approach (own USD, TLT, gold, short everything else) and the 'chicken strategy' (hold core gold positions). Gold benefits from the thesis that the Fed must eventually resume QE and that chronic inflation above interest rates is the base case for working through the debt.

🟢 [E6778] Gromen argues the Fed pivot is inevitable by end of August 2022, driven by fiscal necessity. US debt/GDP at 122% vs Volcker's 30%, deficit/GDP at 6% vs 2%, and 'True Interest Expense' approaching 100% of tax receipts make sustained tightening impossible. The Fed must resume QE to fill the funding gap left by evaporating foreign UST demand.

🟢 [E6779] Gromen identifies a 4-8 week temporary deflationary window (from late June 2022) that will provide political cover for the Fed to pivot. Recommends tactical positioning: own USD, TLT, and gold while shorting everything else including energy until the pivot materializes.

💬 [E6789] Gromen's 'chicken strategy' includes holding core BTC positions through the near-term deflationary period while raising cash and waiting for the Fed pivot by end of August 2022. BTC is grouped with gold and industrial equities as core holdings to maintain through the correction, implying structural bullishness post-pivot.

🟢 [E6785] Gromen frames the current environment as a once-or-twice-a-century inflection point where the Volcker playbook cannot be repeated due to radically different fiscal starting conditions (122% vs 30% debt/GDP). The structural cycle comparison suggests the 1970s chronic inflation pattern is the correct analog, not the early-1980s disinflation.