Liquidity cycles and why they matter more than narratives

Every rally comes with a story. Artificial intelligence, a new payments rail, a demographic shift. The stories are often true, but they rarely explain the timing.

Timing tends to line up with something duller: how much money is sloshing around the system and how cheap it is to borrow. When central bank balance sheets grow and credit spreads tighten, almost every risky asset rises together.

The practical lesson is not to trade liquidity. It is to avoid confusing a rising tide with personal skill, and to size positions so that the next contraction is survivable.

Narratives explain what goes up. Liquidity explains when.