The Banana Zone Explained

A bit of shade is being thrown about the Banana Zone. Let me clarify...

Macro Summer and Fall are driven by the global liquidity cycle that has exhibited clear cyclicality since 2008.

Why since 2008? Well, back then the worlds all reset their interest payments to zero and their debt maturity to 3 to 4 years, creating a perfect macro cycle.

You can see the perfect cyclicality in ISM (the best guide to the business cycle)

This all forms part of The Everything Code, where the business cycle near-perfectly repeats as liquidity rises to debase the currency to service the debt rollovers. Without it, yields lose all anchor in a debt spiral (to be avoided at ALL costs).

The effect of that debasement is to lower the denominator (fiat currency) and that makes asset prices optically rise in value. Here is the NDX...

And here is BTC...

Growth assets (tech and crypto) do best as they are in secular trends based around adoption (Metcalfes Law)

This is twice the speed of adoption of the internet (comparing active wallets vs IP address, which are not perfect but are comparable measures)

On a long-term time horizon, it looks like this. This I believe is the adoption curve that takes the crypto market cap from $2.5trn to $100trn over time.

Back to the Banana zone... In Macro Summer and Fall tech does really well and has its own mini-Banana Zone, with Fall being the most pronounced.

But because crypto has outperformed tech (the Super Massive Black Hole), the Banana Zone is much more pronounced in crypto.

The transition to Macro Summer is relatively forecastable due to the repeating cycle...Again The Everything Code.

And that ushers in liquidity growth...

Which has a tendency to create The Banana Zone...

The odds of this changing significantly are low due to the current debt rollover, the election, and global issues such as China. However, nothing plays out perfectly, and we can't tell the structure or nature of the final leg of Fall, if its a blow-off or stunted cycle.

Ah, the mysteries of markets...You can't always get what you want. But The Everything Code is the best framework to understand this all and I think comes with decently high probabilities. But expect surprises along the way (sharp corrections, long sideways markets, whatever).

But with the right time horizon, the right portfolio management, and plenty of patience the odds of you fucking this up are low. I will put out a video soon about how or when to take partial profits in this cycle, should you wish to.

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Don't mid-curve it > Number goes up over time. #DFTU. Good luck!