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Dear Fellow Traveler, I dug into my copy of Andrew Ross Sorkin’s new book, “1929.” So far, so good. Reviews have been stellar, and the associated commentary has been wonderful. People are exploring the political parallels of today to the 1920s, and they’re wild. Evan Hughes, writing in The Atlantic, uses Sorkin’s history to flag today’s moral hazard in a highly recommended read. Sorkin also published his own Atlantic essay on the core through line of crises: debt. This is what I covered yesterday. We’re doing much of what we saw back then again, but this time, it’s private equity and private credit, not arcane trusts and wash-selling. But this is just the first wave of deep dives and social commentaries into “crisis.” Expect more Depression-era articles in the months ahead if the economy weakens. As we go, each will become more partisan and absurdist. We’ll come to find out that somehow Trump was responsible for the Depression… while someone else will argue that the secrecy of 1920s banking laws led to Hillary Clinton’s email server in 2016… This is the hive mentality of writers… especially in the era of Wikipedia and AI… where everyone suddenly becomes an expert on financial crises when markets turn south. Or… they’re given assignments, and basically stop at the headline… Today, writers at Marketwatch wrote this headline… with zero understanding of what’s actually happened to this economy over the last 17 years.
No mention of the impact of monetary policy… No mention of extraction? No mention of the Cantillon Effect or the Money Printer… Just… “Hey Americans… why so sad?” But it’s not the partisans or the journalists (or the partisan journalists) who have my attention or concern... It’s the policymakers who caused the crisis themselves. They’re now positioning themselves as ”concerned" experts. And that should worry you. The Bank of England’s Amazing HypocrisyThis week, the Bank of England warned of “worrying echoes” of 2008 in private credit markets. Governor Andrew Bailey said recent U.S. firm collapses might be “the canary in the coalmine” and warned about “slicing and dicing” of loan structures. Welcome to the party, bud. Did you just get here? See, the thing about this is that this guy - like so many others - didn’t even see the crisis in THEIR OWN COUNTRY until it was too late. In 2022, the UK gilt turmoil came from the mini-budget shock colliding with leveraged LDI pension strategies. The BoE’s emergency gilt purchases stabilized markets. Our central bank had to get involved… That history doesn’t make Bailey wrong about private credit, but it does make his tone hard to swallow. Now they’re lecturing others about financial stability? It’s like getting fire safety advice from someone who just put out their own house fire. But there’s a clear reason why England’s worried. They saw what we saw when it came to to Japan’s blow up last year - and how it impacted almost everyone… When Japan Sneezes, America Catches PneumoniaI expect we’re going to see more of this… criticism of central bankers by central bankers… (Yet, they’ll claim it’s not political.) This is the reality that we’re in now… We operate in a post-independent central bank environment. BIS work this year shows that, in some cases, spillovers between the U.S. and euro area are comparable to domestic transmission. That’s not “no independence,” but it’s a reminder that policy is never independent of consequences... In this interconnected world, the deeper issue is that a rapid yen reversal and carry-trade unwind can quickly transmit stress. We saw that dynamic in 2024-2025 alongside sharp equity moves. Remember Alistair Darling? As Chancellor of the Exchequer, he resisted a Barclays rescue of Lehman just before it collapsed in 2008. The oft-quoted “we will not import your cancer” line appears in reporting from that period, though Darling denied saying it. Darling later served on Morgan Stanley’s board; he died in 2023. The man who refused to let Britain catch America’s financial disease ended up working for the very system he was trying to protect against. Three years after rejecting American “cancer,” the European financial system nearly imploded anyway due to problems linked to the euro’s flawed formation and perverse incentives that created a fractured trade bloc doomed from inception. European crises spread globally in 2011... The same went for LTCM, the Asian Financial Crisis, and every other “isolated” event… There is no “isolated…” only compounding… The Fed can’t act independently when Tokyo’s decisions move American markets as much as their own policies do. This isn’t monetary sovereignty… It’s monetary theater. Will that lead to more finger-pointing among central banks about their exposure and their challenges moving forward? Basically… “Hey, I know we’re bad at this… but have you seen what the Fed is doing?” This is like a bunch of private school boys trying to avoid bullying by immediately deflecting to the insecurity of some other guy in the class and picking on him… The Dennis Miller SyndromeMy other random concern is that central bankers will start sounding like comedian Dennis Miller… making increasingly arcane historical references that nobody understands while missing the obvious problems right in front of them. For reference, Miller is famous for making extremely random references - like, “The Cowboys’ defense has more holes in it than Ronny Milsap and Jose Feliciano after a game of lawn darts” during an NFL football game. Most people barely remember 2008 after the horror of the 2020 COVID crash and the rest of the multiple-sigma financial events that have taken our markets down over and over again (With repeated bailouts…) We’ve heard enough about 2008, 1987, 1997, 2020, and 1929… To feel original, someone’s going to pull some really insane economic reference out… Picture Jerome Powell, yanking on his tie in full Miller mode, comparing current financial conditions to some random French economist during the French Revolution: “This reminds me of Jacques Necker’s failed grain policy in 1788… They’ll cut off your heads, baby!” To everyone out there… It’s okay not to be an expert in central banking. In fact, I highly recommend against it. The Real ProblemThis isn’t 1929, despite what the headline-chasing articles will tell you. We have the money printer now, which changes everything about how crises unfold and are resolved. But that doesn’t make us safer - it makes us more vulnerable to different kinds of problems. When you can print unlimited money, you don’t get deflationary bank runs. You get inflationary asset bubbles and currency crises instead. The central bankers' warning about “1929-style” risks is fighting the last war while creating the conditions for the next one. They’re so focused on preventing bank runs that they’ve ignored the systemic leverage in private credit, Treasury basis trades, and stablecoin redemptions - among others flagged by central banks - that could freeze markets overnight. When the people who caused the crisis become the “concerned” experts explaining the situation, you’re probably in more trouble than they’re admitting. Bailey’s “worrying echoes” aren’t echoes of 2008 - they’re previews of 2026-27 - when liquidity will peak and we’ll start to see real refinancing issues (assuming that they don’t bail the whole thing out all over again...) The difference is this time, the central bankers warning about systemic risks are the same ones who built the system they’re warning about. Don’t be surprised when their solutions involve more of the same policies that created the problems in the first place. Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. 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