- Financial experts Michael Howell and Raoul Pal discussed how most nations prefer a weaker US dollar despite Treasury Secretary Bessent’s support for dollar strength.
- The US dollar’s role in global liquidity is crucial for debt refinancing, with Howell noting that China specifically needs a 30% increase in their liquidity base.
- Rising global liquidity and monetary expansion will benefit crypto assets according to Howell, who sees inflation as a positive driver for Bitcoin and related assets.
- Pal contests claims of the crypto bull market ending and predicts market expansion could continue into Q1 2026.
Michael Howell, CEO and managing director of CrossBorder Capital and former Goldman Sachs man Raoul Pal, sat down to discuss geopolitical and economic factors that are likely impacting the US dollar and crypto.
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During the hour-long masterclass in global liquidity and macroeconomics, Pal said that “everyone wants a weaker dollar”.
He said that US Treasury Secretary Scott Bessent “talked about it” and that China “desperately” needs a weaker dollar.
Though recently Bessent said he did in fact favour a strong US dollar, which contrasts the views of President Donald Trump who has been critical about the dollar’s strength impacting US exports by making them more expensive overseas.
During an interview Bessent said he believes in the stability and current trajectory of US debt issuance, while adding support for continuity of these policies.
According to Howell Debt Liquidity Crucial
However, Pal said that most nations – including the EU bloc, Canada, China, Japan and Australia – prefer a weaker US dollar.
Why is that important?
The US dollar is one of the key drivers of global liquidity and a lot of the world’s lending is based on the currency.
According to Howell, what’s really important is not how much debt countries have, but if they can refinance that debt and the debt liquidity ratio, which is a problem for countries like China.
They [China] need at least a 30% increase in their liquidity base. And that’s why you need this big devaluation.
Michael HowellSo, ultimately, he suggests “liquidity has to keep rising to match debt”, and you guessed it, that leads to more inflation.
Crypto Bull Market Is Not Over, Say Experts
Enter crypto.
The CrossBorder Capital CEO said that inflation is good for “all these assets that we know and love, like gold and bitcoin and crypto”.
They are bound to be going up long term because their lifeblood is global liquidity and monetary expansion.
Michael HowellAnd Pal – a staunch proponent of the “banana zone” theory (a period of significant price upswings) – thinks we still have a lot of room to the upside left in this bull run. Which is contrary to some views that the bull run may be over or cancelled (as altcoins for example have hardly had a bull run this cycle).
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A lot of people fear a short cycle […] we have seen the bottom of the business cycle but we have not seen the expansion.
Raoul PalPal believes there is a “probabilistic risk that it extends into q1 2026”.
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