Credit Cycle Playbook: Stagflation vs Melt Up

The signals, logic and regime mapping for the next stage of liquidity and credit

Credit Cycle Playbook: Stagflation vs Melt Up

Credit cycles are path-dependent. The sequence of shocks matters more than any individual data point, because each disruption forces the underlying balance sheet of the system into the open. What was obscured becomes legible. What was priced as stable becomes re-evaluated.

The geopolitical shock currently moving through the system is not a distraction from the credit cycle. It is the mechanism by which the next phase of it becomes visible. The injection of liquidity and credit across the global economy over the past several years did not stay contained within national borders. It moved through cross-border flows, altered sovereign balance sheets, and is now being actively weaponized by economies positioning themselves against the United States in a contest that is fundamentally about technological dominance. Those flows are not discretionary. They are mechanical. And when the purchasing power calculus shifts, whether through nominal or real purchasing power changes, investors on the risk curve do not choose to reposition. They are forced to.

That is the period of time we are living through. This playbook traces the logic of it.

(As a reminder, I am doing a livestream every day at 8:30am MST to build the entire framework incrementally so you can have clarity about WHAT is happening and WHERE we are going. Here is the link for tomorrow morning: LINK)

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The Misdirected Narratives About Macro Liquidity: