Market Refuses To CRASH: Here's Why! | Michael Howell

In this episode of Soar Financially, host Kai welcomes back Michael Howell, founder of Cross Border Capital and a leading expert on global liquidity flows, to analyze why financial markets continue to rally despite rising geopolitical tensions and inflationary pressures. Howell argues that the S&P 500’s strength isn’t just due to 'headline-driven' sentiment but is rooted in a powerful underlying liquidity cycle, with global central banks—especially the U.S. Treasury—engaging in large-scale monetary stimulus through short-term debt issuance, effectively monetizing debt. This 'Treasury QE' is fueling a robust U.S. economy, evidenced by strong manufacturing data, rising commodity prices, and outperformance of cyclical stocks. The episode reveals that commodity markets, particularly copper and gold, are signaling a shift in the investment cycle toward real assets, driven not just by geopolitics but by deep structural monetary expansion. Howell also explains how the U.S. government is actively managing bond market volatility through Treasury buybacks and liquidity injections, effectively creating a 'put' on Wall Street to maintain stability. A key insight is the gold-to-oil ratio, which historically averages 20:1, suggesting oil prices could rise significantly if gold holds at $5,000/oz, indicating broader inflationary pressures. Finally, Howell highlights China’s internal devaluation of the yuan through massive liquidity injections, which is driving gold demand domestically and further supporting global commodity prices. The episode concludes with a forward-looking perspective: while markets may remain range-bound in the near term, the momentum is clearly in resource-related equities and real assets. Howell’s data-driven analysis—featuring unique metrics like the MOVE index, liquidity cycles, and China’s PBOC injections—offers a rare, systemic view of global finance that goes beyond conventional narratives. The discussion underscores that markets are not ignoring risks but are instead pricing in a new era of monetary expansion, structural shifts in global capital flows, and a reorientation toward tangible assets. The episode ends with a teaser for Howell’s upcoming keynote at the Deutsche Goldmesse in Frankfurt, promising deeper dives into these themes.