🟢 [E8100] Gromen argues that the reserve currency system is structurally shifting: global central banks stopped net UST buying in 2014, $7T in USTs in global FX reserves could rotate to gold if yields go nominally negative, and 'unprecedented policy coordination' among central banks per the BlackRock framework signals a new monetary order where the Fed must nationalize credit markets to maintain dollar system viability.

🟢 [E8096] Gromen argues cross-currency basis swap improvement signals USD liquidity normalization, setting up sustained USD weakness. Germany's €1.1 trillion stimulus (30% of GDP) saw EUR rise after announcement, suggesting coordinated global central bank action per BlackRock's 'going direct' framework, which implies synchronized easing that structurally weakens the USD.

🟢 [E8093] Global central banks stopped being net buyers of USTs in 2014, and leveraged hedge fund basis trades filled the gap as marginal buyers. COVID forced these hedge funds to unwind, leaving a structural financing gap the Fed must permanently fill. An estimated $7T in USTs sitting in global FX reserves could begin bidding for gold if UST yields go nominally negative, representing a fundamental shift in reserve asset dynamics.

🟢 [E8099] In a highly-leveraged system with closed borders and stores, financial markets become a source of cash globally, creating deflationary pressure in financial assets while physical commodity markets (gold) show tightness and backwardation. The Fed's unlimited QE response represents the inflationary counter-force, creating a barbell between physical asset scarcity and financial asset debasement.

💬 [E8101] Gromen notes that if the Fed doesn't print 'enough' fast enough, a deflationary system collapse could temporarily favor the USD, representing a risk scenario. However, if cross-currency basis swaps continue improving and the Fed sustains unlimited QE, equities (SPX) should benefit alongside gold and Bitcoin from USD weakness.

🟢 [E8094] First-to-second month gold futures backwardation occurring for first time since December 2015 indicates physical market tightness. Last time this happened, gold rose 30% in six months. A similar move would put gold at all-time highs against USD. Gromen argues negative UST yields make gold relatively attractive as a reserve asset, with $7T in USTs in global FX reserves potentially rotating toward gold.

🟢 [E8095] Physical gold shortages are emerging alongside futures backwardation, forcing price discovery higher. Gromen holds a strong bullish outlook on gold, silver, and miners based on unprecedented Fed balance sheet expansion and structural monetary system changes requiring the Fed to finance US deficits permanently.

🟢 [E8091] Gromen argues the Fed's $34 trillion annual rate of balance sheet expansion (nearly $1T added in two weeks as of March 2020) is not temporary but structural. Leveraged hedge funds—previously the biggest marginal UST buyers—have been forced to unwind, requiring the Fed to permanently fill the financing gap for US deficits, effectively nationalizing credit markets including USTs, MBS, and corporate credit in unlimited amounts.

🟢 [E8092] Cross-currency basis swaps (EUR and JPY) are showing meaningful improvement in USD liquidity as of late March 2020, suggesting the Fed's 'bazooka' intervention is working. Gromen interprets this as a signal that USD should weaken from here, historically benefiting gold, silver, Bitcoin, and equities.

🟢 [E8098] Gromen includes Bitcoin alongside gold and silver as beneficiaries of sustained USD weakness and unprecedented Fed balance sheet expansion. Cross-currency basis swap improvement historically benefits Bitcoin, and the structural shift to permanent Fed deficit financing creates a favorable macro backdrop for Bitcoin appreciation.

🟢 [E8097] Gromen frames the COVID crisis as accelerating what was already inevitable—Fed financing of US deficits after global central banks stopped net UST purchases in 2014. The BlackRock 'going direct' framework for unprecedented policy coordination is being implemented. The Fed took 21 months to reduce $700B previously but added nearly $1T in just two weeks, representing a regime change in monetary policy speed and scale.