Markets operate in distinct regimes determined by liquidity conditions and inflation dynamics. Each regime has different winners and losers.

Regime 1: Reflation (Gold (GLD)ilocks) Conditions: Liquidity rising, DXY falling, real rates stable/low Characteristics: Risk-on, beta works, everything rallies Winners: Cyclicals, EM, commodities, crypto, growth stocks Losers: Cash, defensive bonds

Regime 2: Air Pocket Conditions: Liquidity falling, DXY rising, real rates rising Characteristics: Risk-off, flight to safety, drawdowns Winners: Cash, USD, short-term Treasuries Losers: Everything else (stocks, EM, crypto, commodities)

Regime 3: Real Rate Squeeze Conditions: Inflation falling faster than rates cut Characteristics: Mixed — economy slows, real rates stay high Winners: Quality equities, cash Losers: Levered assets, duration, crypto

Regime 4: Debasement Conditions: Aggressive money printing, currency confidence eroding Characteristics: Nominal assets inflate, real value erodes Winners: Gold (GLD), BTC (BTCUSD), real assets, equities (nominally) Losers: Cash, bonds (real returns negative)

Regime Identification:

Check Basket 1 (Macro) metrics:

• Fed Net Liquidity (FED_NET_LIQUIDITY) direction
• DXY direction
• Real yield level and direction
• Curve shape