Global Macro Trading
Fundamental Thesis
The dollar-based credit boom of the post-war decades has been unwinding since the global financial crisis, and that long, slow contraction is the backdrop for every Macro Pig trade. Inside it, the AI investment build is driving a shorter inflationary counter-cycle, creating asymmetric opportunities on both the advance and the eventual reversal.
THE LONG DOLLAR CREDIT CYCLE
DOLLAR CREDIT EXPANSION
1945–2008
The postwar dollar system, demographics, globalization and offshore dollar credit drive a multi-decade expansion in private leverage and global dollar liquidity.
2008 GFC
STRUCTURAL PIVOT
The private-credit architecture breaks. Leverage migrates toward sovereign and nonbank balance sheets. The dollar establishes its secular low as the credit regime turns.
DOLLAR CREDIT CONTRACTION
2008–PRESENT
The 2008 GFC marks the beginning of a long deleveraging. Public balance sheets expand to offset the contraction, prolonging the underlying adjustment.
CURRENT COUNTER-CYCLE
AI CAPEX
AI investment counters the post-2008 dollar-credit contraction. The buildout adds inflationary pressure; the productivity and capacity it creates could ultimately prove disinflationary.
MARKET EXPRESSION
U.S. DOLLAR — THE LONG CREDIT CYCLE
The dollar provides the primary market expression of the structural regime above.
1945–2008: Structural dollar decline
2008: Major dollar low / regime pivot
Post-2008: Structural dollar-strength regime
Current cycle: Countertrend expansion within the post-2008 deleveraging regime
The shaded zone is where we expect Phase 1, the inflationary build-out, to end. In Phase 2, the Reset, we expect a sharp but short-lived dollar rally that pushes just above its 2022 high, its highest level since 2008, before policymakers step in to stabilize markets. Price will confirm it, not the calendar.
For informational and educational purposes only. Not investment advice.