A note from @lukegrowmen POINT: The USA is going to have to SELL...

A note from @lukegrowmen

POINT: The USA is going to have to SELL ITS BONDS or go full Argentina !

Thought this tweet from Dylan LeClair highlighting a chart from Lombard Odier made a really important point: The only other two times in the last 96 years that both US stocks and bonds sold off this much, major monetary system changes followed shortly thereafter (note that the reserve currency issuing UK defaulted on its gold peg and devalued the GBP in 1931.)

Given greater sovereign debt levels now v. in 1969, infinitely greater derivative levels now v. in 1969 and 1931, and much greater economic dependence on asset prices now v. in either 1969 or 1931, arguably the combined drawdowns of stocks and bonds of this magnitude are likely to precipitate a crisis and/or monetary system change far faster than 24 months this time around.

Let's watch