This is a pleasant thought, indeed. Even more so, if you’re a Texan freezing under the snow this week. It is also the feeling of a warming-up economy. The rise of retail sales in Jan21 (+5.3%), and higher than expected industrial production are the signs of this catch-up effect.

Whether this is the anticipation of an elusive inflation or a repositioning toward even more risk-taking, investors have been ditching their bonds lately. Bond yields are going back up. Of course, they are still a long way from your 15% return on staking your USDC through your crypto yield-harvesting trades, but some see the beginning of a shift.

Listen carefully, and fasten your seatbelt. Everywhere in the developed world, and at the same time, economic policy leaders advocate for loosening the purse strings, while being more lenient on monetary policy. In the rear-view mirror, they see the past 10 years of sluggish growth as a consequence of excessive monetary conservatism. In a Frozen-Elsa unleashing moment, they are ready to let it go. This will be, and is already, providing a serious kick.

In short, get ready to see more bubbles, more often. Bubbles are feared, while in fact they are the mere expression of a sudden increased demand. In the short term, there is no reason for this demand to stop, as financing is dirt cheap. There is eventually an end to the story, and it is this: at some point, debt clogs the system and needs to be worked out. This has been the issue of the Mortgage Back Securities blow-up of the great financial crisis, and the reckoning of Japan after the 1908s debt binge.

This scenario will come to haunt us again, but in the meantime, please enjoy your bath.

360 Advisory – Markets