Former Goldman Sachs executive Raoul Pal is outlining what he says are currently the three most important charts for crypto and macro.
The first chart Pal shares with his 1 million followers on the social media platform X is a graph plotting US labor force participation rate and the US birth rate per 1,000 people using a 14-year lead.
Explains the Real Vision chief executive,
“These are the three most important charts in Global Macro, along with crypto…
Demographics are destiny. GDP (gross domestic product) slows over time as size of labor force shrinks.”
Pal’s second chart plots the US labor force participation rate against US government debt as a percentage of GDP.
“Government Debt to GDP ratio is just a function of the working population. It offsets the weak growth and pays for the compunding interests on the debts. This is THE most important chart in macro.”
His third chart plots federal net liquidity against US government debt as a percentage of GDP.
“That debt is serviced via debasement via liquidity increases over time.
So to sum up The Everything Code:
– Older population = lower trend GDP growth
– Lower GDP growth requires increasing debts to maintain growth and service old population.
– Governments/Central Banks print money to service the debts.
– It’s a four-year cycle
= Number go up.”
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