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Real Vision Founder: The Fed may be forced to adjust fiscal policy to prevent a liquidity crisis, liquidity management has devolved into a political game

By: theblockbeats.news|2025/11/17 10:45:53
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BlockBeats News, November 17th, Real Vision co-founder and CEO Raoul Pal wrote that this week the Fed is highly likely to be forced to "fix the plumbing" to prevent a funding crisis at month-end and year-end. Crypto now resembles a margin call, with the price reflecting a "plumbing failure" discount; the U.S. stock market is temporarily supported by repo and year-end window dressing, but if the issue is not resolved immediately, the 2018/19 script could replay at any time.

The deeper battleground is at the Treasury Department: the Treasury now wants to control liquidity through the banks (increasing loans to benefit the general public) rather than relying on the Fed's quantitative easing. This allows fiscal policy and monetary policy to remain aligned in stimulating the key objectives of the general public while still allowing Wall Street to benefit from currency devaluation, thereby increasing collateral value. The benefits of quantitative easing do not trickle down to the general public. Liquidity management has now devolved into a political game rather than a monetary policy game.

Raoul Pal concluded that U.S. policymakers will "fix the plumbing first, then open the floodgates; asset inflation is only delayed, not absent."

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