U.S. employment data is collapsing rapidly. In theory, under these circumstances, the Fed should immediately inject liquidity—a combination of rate cuts and reserve requirement reductions. Wouldn’t that make the stock and crypto markets take off?

But what happened? The markets didn’t rise, they actually dropped—and quite sharply.

Where’s the problem? Liquidity. How bad is the dollar liquidity situation now? It’s basically dried up. Money in the market isn’t chasing appreciating assets; instead, people are holding onto it tightly.

When a cash crunch gets to this level, people stop thinking about “growing their assets” and start thinking about “survival.” Having cash on hand means you can buy food and necessities. Who cares about investment returns or inflation hedging at this point? Cash is king.

When everyone is clutching their wallets and refusing to let go, you know—you can sense the atmosphere of the eve before deflation.