🟢 [E6820] China's move to sell USTs and USD-denominated assets to fund a $278B domestic rescue package would 'throw what consensus currently views strictly as a Chinese problem onto the lap of the Fed and US Treasury in short order.' This demonstrates China's leverage over US financial markets and the erosion of unilateral US policy control, requiring coordination rather than confrontation.

🟢 [E6819] Gromen posits that both the US and China benefit from coordinated USD weakness following Treasury-China talks in Beijing. The US needs weaker USD to support the UST market, stock market, and tax receipts given fiscal pressures, while China needs it to reduce economic pressure. A weaker USD would help drive US stocks up, bolster tax receipts, reduce UST issuance, and support Biden's re-election chances.

🟢 [E6818] Gromen warns of potential 3Q23-style UST market dysfunction as record corporate bond issuance ($150B), Chinese UST selling from $278B repatriation, and EM debt issuance all compete for limited capital. The Treasury needs to refinance $9T over the next 12 months. The QRA is described as 'absolute Must Watch TV' given these converging pressures on bond supply absorption.

🟢 [E6827] Gromen's framework of nominal GDP staying positive through fiscal spending while real recession develops supports the inflationary bust thesis. Government spending keeps nominal figures positive but real economic deterioration occurs, favoring real assets (stocks, gold) over nominal assets (bonds). This fiscal dominance regime creates persistent inflation even as unemployment rises.

🟡 [E6826] Despite multiple recession warning signals including state-level Sahm Rule breaches and liquidity pressures from Chinese UST selling and record bond issuance, Gromen suggests anti-Trump establishment is incentivized to maintain market stability through 2024. The political economy alignment means both US and China benefit from weaker USD which would drive US stocks up, creating a contested outlook between liquidity risks and policy support.

🟢 [E6824] Gromen argues that high fiscal deficits may prevent nominal recession while creating a real recession — unemployment rises but government spending keeps nominal GDP positive. In this scenario, stocks and gold outperform bonds, as the inflationary fiscal response supports gold while debasing currency, with multiple states already breaching Sahm Rule unemployment thresholds.

🟢 [E6817] China's proposed $278B stock market rescue package involves repatriating foreign assets by selling USD-denominated securities including USTs, which would pressure UST yields higher and weaken the USD. This coincides with record $150B corporate bond issuance and upcoming Treasury QRA, creating significant liquidity cross-currents. Gromen's 'North Star' remains that policymakers will NOT allow sustained UST market dysfunction and will respond with additional liquidity.

🟢 [E6822] Bitcoin ETFs saw $10B in trading volume in their first 3 days yet Bitcoin price fell from $48K to $38K, suggesting that strong ETF demand was insufficient to overcome broader USD liquidity headwinds. Gromen frames this divergence between ETF flows and price action as a warning signal about liquidity conditions rather than evidence of structural ETF-driven price suppression.

🟢 [E6821] Despite strong Bitcoin ETF demand with $10B volume in first 3 days of trading, Bitcoin fell from $48K to $38K. Gromen suggests Bitcoin may be acting as a 'USD liquidity smoke alarm' warning about upcoming bond supply pressures and the Treasury QRA impact, implying the price weakness reflects broader liquidity deterioration rather than crypto-specific factors.

🟢 [E6825] Gromen identifies a regime where high fiscal deficits prevent nominal recession while creating real recession: unemployment rises but government spending keeps nominal GDP positive. Multiple states now show unemployment patterns historically associated with recession onset via the Sahm Rule, yet the framework predicts stocks and gold outperform bonds due to fiscal dominance preventing traditional recessionary asset behavior.

💬 [E6823] China is considering a $278B stock market rescue package funded by repatriating foreign assets to support domestic markets. This suggests Chinese authorities view domestic equity markets as requiring significant intervention, while the coordinated approach with USD weakness could create a more favorable environment for Chinese equities if USD weakens as intended.