Ann: Anode project development and funding advances, page-18

Yes. For those that don't understand how this works, here's an ELI5 version:

The Fed has a dual mandate to keep unemployment low and inflation down. They do this by loosening or tightening monetary policy. A simple (crude) way to think of it is they either increase the supply of USD or they decrease it. Since the value of everything (including USD) is determined by supply and demand, this process increases or decreases the value of the dollar. When we see the market crashing, another way to think of it is the dollar is going up. When we see a high CPI print, the market reacts by assuming the Fed will tighten monetary policy more aggressively to curb inflation, and investors sell off assets to get long the dollar.

The major compounding factor is leverage. When monetary policy is loose (cheap to borrow), people take out loans to buy things. When monetary policy tightens and the market sells off, the collateral for those loans declines. This triggers margin-calls where people are forced to sell their collateral to cover their loans. The forced selling results in more margin-calls, etc. In a depression event, the leverage unwind becomes a chain-reaction where assets are continuously foreclosed on into a thin bid (not many people buying), sending the price spiraling down.

The X-factor that is under-discussed (IMO) is the U.S. national debt (I say U.S. debt b/c the USD is the global reserve currency, but the same dynamic is playing out with almost every gov in the world right now). When the market crashes, tax receipts plunge (b/c cap gains and corporate taxes make up a huge chunk of receipts). At the same time, interest rates on the massive debt are exploding The interest rate on the 10-year treasury is at the highest level since 2014 when U.S. debt to GDP was at 96% (now at ~125%).

Consequently, if the Fed keeps this up, the U.S. government will default on its debt (less revenue from taxes at the same time they're eating higher interest payments on the debt). My thesis is that, at some point (sooner than the market is currently pricing in), the Fed will be forced to follow the example of the BOJ (Bank of Japan) and implement yield curve control to prevent the U.S. government from defaulting. If/when that happens, inflation will run super hot and the market will likely explode as investors race to get out of the dollar and into hard assets. Commodities tend to perform very well in this environment, and I expect TLG stock to rip in a YCC scenario.

Until then, we're fighting against a rising dollar. TLG may be able to succeed in spite of macro head-winds (particularly if we get good news and/or the shorts get squeezed), but it's uphill sledding as long as the Fed is tightening.

For the long-term investors, monetary tightening presents some juicy buying opportunities if you pick your spots right. When the Fed pivots, you'll be glad you got in during the tightening cycle.