To The Moon

1. The Federal Reserve Is Re‑Expanding Liquidity

Since early December, the Federal Reserve has expanded its balance sheet by roughly $105 billion, marking the fastest increase since the regional banking turmoil of 2023. This move aims to ease pressure on bank reserves, which had been tightening significantly.

St. Louis Federal Reserve

Key points

• The Fed’s balance sheet had fallen by about 30% since 2022, draining liquidity from the system.

• Facing renewed stress, the Fed resumed injections to stabilize reserves.

• It is now purchasing around $40 billion in U.S. Treasuries per month, supporting financial markets.

• Historically, such liquidity waves tend to boost risk appetite and lift asset prices.

Bottom line: the Fed has shifted from tightening to quietly re‑adding liquidity.

2. Private‑Sector Deleveraging Continues, but Stress Is Shifting

Unlike past cycles, U.S. households and corporations are not excessively leveraged. Since the 2008 crisis, they have reduced debt relative to GDP, making them more resilient to higher interest rates.

However:

• The decline in private‑sector debt has been offset by a surge in government debt.

• Household debt‑to‑GDP has fallen from 100% in 2007 to about 69% in 2025.

• Debt‑service payments now consume 30% of national disposable income, the highest level since 2008.

• Financial stress is increasingly concentrated among lower‑income households and small businesses.

Conclusion: the private sector looks healthier on average, but vulnerabilities are becoming more concentrated.

3. Productivity Is Rising, Wages Are Not

Since the late 1970s, U.S. productivity has grown three times faster than wages. This long‑term decoupling is a major driver of inequality and weak consumer demand.

Why the gap?

• Globalization and offshoring

• Declining union power

• Technology that favors capital over labor $NVIDIA(NVDA)$ $Oracle(ORCL)$ $Palantir Technologies Inc.(PLTR)$

• Corporate focus on shareholder returns

• A fiat‑money system that encourages credit expansion

Economic consequences

• Households increasingly rely on debt to maintain living standards.

• Growth becomes dependent on credit rather than income.

• Social and political tensions intensify.

In short: productivity gains no longer translate into broad wage growth.

Final Takeaway

The U.S. economy is navigating a complex environment where:

• The Fed is quietly re‑adding liquidity, supporting markets but masking deeper fragilities. $S&P 500(.SPX)$ $NASDAQ(.IXIC)$

• The private sector is less leveraged, yet stress is rising in vulnerable segments.

• The productivity–wage gap is widening, undermining long‑term economic stability.

These forces could shape the economic and social landscape for years to come…

[Salute]

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.

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