🟢 [E6333] Serbian President Vucic quoted: 'We are getting close to the precipice, to the abyss; the US and NATO are in an endless proxy war in Ukraine they cannot afford to lose and will not let Russia win.' Gromen frames this alongside the fiscal crisis—geopolitical commitments compound the unsustainable fiscal position requiring above-target inflation and USD debasement.

🟢 [E6330] The US fiscal position is unsustainable without significant USD weakening and above-target inflation. Gromen identifies a potential Trump victory as a catalyst for structural USD weakening arrangements. The system shows 'Soviet-like characteristics' and requires currency devaluation to manage debt dynamics with deficits never below 6% of GDP through 2034.

🟢 [E6325] Gromen recommends fading the rally in medium and long-term USTs, calling them a 'lose/lose proposition.' Either USD liquidity injections debase currency hurting real bond returns, or lack of intervention causes system dysfunction also hurting bonds. UST market liquidity at 14-year lows compounds the risk. Upcoming July QRA identified as key catalyst.

🟢 [E6326] 5-year inflation breakevens are plunging while UST liquidity deteriorates to 14-year lows, creating dangerous conditions. Gromen argues declining inflation actually threatens the US fiscal position by removing the only thing preventing another 3Q23-like debt spiral, making long-term Treasuries fundamentally unattractive.

🟢 [E6329] Gromen argues the US government's fiscal position REQUIRES above-Fed-target inflation. With True Interest Expense at 144% of receipts and deficits projected above 6% of GDP through 2034, the system needs either currency devaluation or faces collapse. The declining inflation investors are cheering by buying long-term USTs is the very thing that threatens fiscal sustainability.

💬 [E6334] Gromen favors shifting exposure from long-term Treasuries to equities that benefit from USD liquidity expansion. The thesis implies equities are relatively better positioned than bonds given the forced choice between currency debasement (bullish nominal equities) and system dysfunction (bearish everything but especially bonds).

🟢 [E6327] Gold is diverging from 5-year US inflation breakevens, which are plunging. Gromen argues gold is saying 'I don't care—whether US policymakers inject more USD liquidity or whether they stand aside and let the collateral underpinning the US banking system and global monetary system crash, I win either way.' Recommends shifting exposure to gold over long-term USTs.

🟢 [E6322] US 'True Interest Expense' hit 144% of federal receipts in May 2024—highest on record since tracking began mid-2018—pushing FY2024 YTD to 91% of receipts. Gromen argues this approaching 100% threshold historically triggers USD liquidity injections, forcing Fed/Treasury hand within 1-2 weeks when MOVE volatility index rises, as seen in 1Q23, 3Q23, and 1Q24.

🟢 [E6323] Bloomberg UST Liquidity Index hit its poorest level in 14 years as of June 2024. Since 2020, reaching these levels has consistently resulted in Fed and/or Treasury supplying more USD liquidity. The pattern suggests intervention typically occurs within 1-2 weeks, reinforcing the thesis that a new liquidity injection cycle is imminent.

🟢 [E6324] Federal spending growing 22-23% annually provides economic stimulus while US deficit projections never fall below 6% of GDP through 2034 even under rosy assumptions (no recessions, 175-200bp Fed cuts, unemployment below 4.5%). Gromen argues this fiscal math requires massive USD liquidity injections to prevent a debt spiral.

💬 [E6332] Japanese banks, specifically Norinchukin Bank, are identified as entities exposed to UST market dysfunction. With UST liquidity at 14-year lows and the collateral underpinning the US banking system and global monetary system at risk, Gromen implies foreign bank holdings of Treasuries represent a systemic vulnerability requiring USD liquidity response.

🔴 [E6328] Gromen is bullish on Bitcoin, arguing BTC is diverging from plunging 5-year inflation breakevens because 'BTC is saying we think more USD liquidity is coming.' With True Interest Expense at 144% of receipts and UST liquidity at 14-year lows, he sees Bitcoin as a beneficiary of inevitable currency debasement alongside gold and equities.

🟢 [E6331] Gromen identifies a critical deflationary spiral risk: if private sector weakening outpaces fiscal stimulus (22-23% annual federal spending growth), it could trigger USD strength and asset crashes—the opposite of the base case. This counter-thesis acknowledges the system sits at a bifurcation point between inflationary debasement and deflationary collapse.