Rogier De Langhe

Economics | Complexity | Systems Theory | Using X to think out loud

[Anish Moonka @anishmoonka]

Oxygen already killed most of the life on Earth once. The first time it filled the air, around 2.4 billion years ago, it was so poisonous that nearly everything alive died. Scientists call it the Oxygen Catastrophe.

Back then the oceans were full of tiny microbes, and none of them used oxygen. Then one kind, an ancestor of the green scum you still see on ponds, started giving off oxygen as a waste gas, the same way you breathe out air you don’t need. Oxygen is a wrecker. It rips apart the delicate machinery inside a living cell, including the DNA, and as it built up in the water and then the sky, it triggered the first mass extinction this planet had ever seen.

A few survivors hid in the mud and deep underground where the gas couldn’t reach, and some of their descendants are still down there. But one tiny cell did something nobody else did. It ate a bacterium that had learned to use oxygen rather than die from it, and instead of digesting its meal, it kept it alive inside itself. That trapped bacterium became the mitochondria, the little engines that power your cells right now. Almost every cell you are made of carries hundreds or thousands of them, all descended from that one strange truce with a poison.

The trade was worth it because burning food with oxygen releases about 18 times more energy than burning it without. It is the reason anything can swim fast or think hard. Every big, fast-moving animal on Earth, you included, runs on the gas that almost ended life.

Oxygen changed the sky too. Some of it floated up high and turned into ozone, a thin layer that blocks most of the sun’s harshest rays. Before that shield existed, raw sunlight was strong enough to fry the DNA of anything out in the open, so life had to stay underwater, where a few feet of sea soaked up the danger. For almost two billion years, nothing lived on land at all. Only once the ozone grew thick enough, a few hundred million years ago, did the first plants and animals crawl out of the water.

And the old poison never really left. Every second, the oxygen your cells burn throws off tiny broken bits called free radicals, and they keep nicking your DNA and the proteins around it. The damage adds up, slowly, your whole life. Back in 1956 a scientist named Denham Harman suggested this slow rusting from the inside is a big reason we get old. People still argue about how much it matters, and no antioxidant pill has ever been shown to make anyone live longer, but the basic idea has held up. The gas keeping you alive right now is also quietly wearing you down, year by year. The joke just got the timing wrong. Oxygen really does kill slowly, and billions of years before we showed up, it already proved it can kill fast.

[Rogier De Langhe @_roedel]

@zerohedge they're just pricing in the recession that will follow higher oil prices

[Rogier De Langhe @_roedel]

@SpencerHakimian why are you always behind the curve Spencer?

[Rogier De Langhe @_roedel]

Microsoft Study Finds AI Makes Human Cognition “Atrophied and Unprepared”

https://t.co/P2926xkkea

[Rogier De Langhe @_roedel]

‘We’re Definitely Going to Build a Bunker Before We Release AGI’

https://t.co/015P2oXC6c

[Rogier De Langhe @_roedel]

@AlecStapp Herb Simon won a Nobel Prize for tagging that logic of Administrative Behavior, it's called "satisficing"

https://t.co/9T09tq6aWb

[Rogier De Langhe @_roedel]

@michaeljmcnair Why do you think the dollar standard is unwinding? Isn't the whole point of addressing these imbalances to make dollar dominance more robust going forward? Like with the Plaza Accord, devaluation of the dollar needn't undermine reserve status.

[John B. Holbein @JohnHolbein1]

Studying economics and business in college makes students become much more conservative.

[Rogier De Langhe @_roedel]

@RealEmirHan if TV didn't kill cinema, why would streaming?

[Rogier De Langhe @_roedel]

@SantiagoAuFund Is this how they'll kill the Eurodollar and replace it with a stablecoin?

[Rogier De Langhe @_roedel]

@onechancefreedm Tariffs have put pressure on the USDCNH peg, but so far no accidents happened because Trump was talking the dollar down in tandem.

US waiting for signs of stress on the peg to go for the jugular. Right when PBOC starts struggling to match USD, talk up USD = game over for PBOC

[Rogier De Langhe @_roedel]

@OopsGuess Just goes to show the only way to keep Chinese society from falling apart is to keep factories running, no matter what

[Rogier De Langhe @_roedel]

@LukeGromen Miran's Gold-to-FX swap in action?

Miran's plan was to buy gold + FX forwards, and then sell the gold to fulfill the contracts. Would also explain diverging spot and forward rates

https://t.co/mNtAJJlZ9G

[Michael McNair @michaeljmcnair]

Is Treasury Quietly Executing Miran’s Gold-to-FX Playbook?
We have compelling evidence of stealthy US FX reserve accumulation – using gold. Stephen Miran’s 2023 “User’s Guide” detailed how Treasury could convert gold into foreign reserves without congressional approval. Current market fingerprints suggest Miran’s playbook may already be active.

How Miran’s Strategy Works:
1. Buy unlimited gold: Treasury, under 31 U.S.C. § 5116, can acquire bullion freely without new appropriations, typically financing via short-term T-bills. Gold is the only asset Treasury can later “monetize” into foreign cash without new appropriations.
2. Monetize gold later: The Gold Reserve Act requires proceeds from gold sales to retire Treasury debt.
3. Create a debt liability first: ESF sells dollars forward (ex. agreeing to deliver USD in six months for euros).
4. Settle using gold: Just before settlement, Treasury sells gold, immediately using dollars raised to retire the forward liability, satisfying statutory debt reduction.
Result: Treasury swapped idle bullion for interest-bearing FX reserves, all within existing law…no congressional vote, no hit to headline debt, no directional bet on gold.
That’s the whole playbook: buy gold freely and use it as collateral to flip into euros or yen via a forward sale of dollars.

Evidence Its Live:
1. 2000+ tonnes of gold shipped to New York since December, the largest inflow ever.
2. EUR fwd rate - essentially the 1yr fwd discount vs. spot EUR/USD - normally tracks spot closely but recently has diverged sharply (see chart). This indicates someone, who is rate-insensitive, is supplying dollars (or demanding euros) in the forward market strongly enough to flatten the curve even as the cash market pushes spot higher. That is precisely the footprint you would expect if a large player were selling USD fwd in size while simultaneously accumulating euros: the forward supply leans on basis/forward points, but the spot legs of those trades, whether outright EUR buys or the mirror leg of a gold swap, push spot up. In other words, the correlation break is further circumstantial evidence that the fwd leg is being used to fund something structural, not a speculative punt.
3. Last week, Treasury abruptly raised its Q2 borrowing estimate by $390 billion, primarily in short-dated bills, precisely how you'd prefund a substantial fwd settlement requiring cash delivery.

Alternative Explanations (partial):
Admittedly, this theory could partially be explained by other factors:
1. European institutional investors have sold large unhedged USD asset holdings, pressuring spot EUR/USD upward.
2. The massive bullion inflows to COMEX were partly driven by tariff fears, creating a profitable arb and prompting dealers to deliver gold against COMEX futures.
3. The extra bills issuance could merely be “catch-up” financing to get the TGA back to $850 bn once the debt ceiling is lifted.
But if Treasury were also buying bullion for a forthcoming FX swap, the mechanics would look identical on headline borrowing data: issue bills now (shows up as higher net borrowing), pay bullion suppliers (cash outflow eats into the TGA), sell the gold for dollars at forward settlement.
It also doesn’t fully explain why the EUR/USD fwd curve has flattened steadily across longer maturities, nor why the forward vs spot correlation would break so decisively, nor the curious alignment with Treasury’s sudden borrowing spike, and why COMEX stocks would remain persistently high after the tariff exemption - only bled ~1.5 mn oz...small vs the inflow. Why isn’t the metal racing back to London now that the arb is gone?
Also, important to note that public ledgers still show flat official FX assets. That means either: dealer banks are warehousing the euro and yen leg until forward settlement - perfectly consistent with Miran’s structure; or we’re still “testing the plumbing” with modest ticket sizes.
We should know for certain in short order, as Treasury must publish Sovereign Wealth Fund details by Sunday, May 4 and Thursday’s H.4.1 release and upcoming TIC banking data will confirm whether we're witnessing the first genuine US fx reserve build in decades, or if it’s simply an improbable set of coincidences that just happen to perfectly align with the mechanics of Miran’s gold-reserve accumulation strategy.

[Rogier De Langhe @_roedel]

@SuitablePolitic Miran's Gold-to-FX swap underway?

Treasury Dept. can only sell gold to service national debt. Seems like the Treasury has been buying tons of gold + forward FX contracts before April 20th, and has been selling gold to fulfill the contracts since

https://t.co/mNtAJJmwZe

[Michael McNair @michaeljmcnair]

Is Treasury Quietly Executing Miran’s Gold-to-FX Playbook?
We have compelling evidence of stealthy US FX reserve accumulation – using gold. Stephen Miran’s 2023 “User’s Guide” detailed how Treasury could convert gold into foreign reserves without congressional approval. Current market fingerprints suggest Miran’s playbook may already be active.

How Miran’s Strategy Works:
1. Buy unlimited gold: Treasury, under 31 U.S.C. § 5116, can acquire bullion freely without new appropriations, typically financing via short-term T-bills. Gold is the only asset Treasury can later “monetize” into foreign cash without new appropriations.
2. Monetize gold later: The Gold Reserve Act requires proceeds from gold sales to retire Treasury debt.
3. Create a debt liability first: ESF sells dollars forward (ex. agreeing to deliver USD in six months for euros).
4. Settle using gold: Just before settlement, Treasury sells gold, immediately using dollars raised to retire the forward liability, satisfying statutory debt reduction.
Result: Treasury swapped idle bullion for interest-bearing FX reserves, all within existing law…no congressional vote, no hit to headline debt, no directional bet on gold.
That’s the whole playbook: buy gold freely and use it as collateral to flip into euros or yen via a forward sale of dollars.

Evidence Its Live:
1. 2000+ tonnes of gold shipped to New York since December, the largest inflow ever.
2. EUR fwd rate - essentially the 1yr fwd discount vs. spot EUR/USD - normally tracks spot closely but recently has diverged sharply (see chart). This indicates someone, who is rate-insensitive, is supplying dollars (or demanding euros) in the forward market strongly enough to flatten the curve even as the cash market pushes spot higher. That is precisely the footprint you would expect if a large player were selling USD fwd in size while simultaneously accumulating euros: the forward supply leans on basis/forward points, but the spot legs of those trades, whether outright EUR buys or the mirror leg of a gold swap, push spot up. In other words, the correlation break is further circumstantial evidence that the fwd leg is being used to fund something structural, not a speculative punt.
3. Last week, Treasury abruptly raised its Q2 borrowing estimate by $390 billion, primarily in short-dated bills, precisely how you'd prefund a substantial fwd settlement requiring cash delivery.

Alternative Explanations (partial):
Admittedly, this theory could partially be explained by other factors:
1. European institutional investors have sold large unhedged USD asset holdings, pressuring spot EUR/USD upward.
2. The massive bullion inflows to COMEX were partly driven by tariff fears, creating a profitable arb and prompting dealers to deliver gold against COMEX futures.
3. The extra bills issuance could merely be “catch-up” financing to get the TGA back to $850 bn once the debt ceiling is lifted.
But if Treasury were also buying bullion for a forthcoming FX swap, the mechanics would look identical on headline borrowing data: issue bills now (shows up as higher net borrowing), pay bullion suppliers (cash outflow eats into the TGA), sell the gold for dollars at forward settlement.
It also doesn’t fully explain why the EUR/USD fwd curve has flattened steadily across longer maturities, nor why the forward vs spot correlation would break so decisively, nor the curious alignment with Treasury’s sudden borrowing spike, and why COMEX stocks would remain persistently high after the tariff exemption - only bled ~1.5 mn oz...small vs the inflow. Why isn’t the metal racing back to London now that the arb is gone?
Also, important to note that public ledgers still show flat official FX assets. That means either: dealer banks are warehousing the euro and yen leg until forward settlement - perfectly consistent with Miran’s structure; or we’re still “testing the plumbing” with modest ticket sizes.
We should know for certain in short order, as Treasury must publish Sovereign Wealth Fund details by Sunday, May 4 and Thursday’s H.4.1 release and upcoming TIC banking data will confirm whether we're witnessing the first genuine US fx reserve build in decades, or if it’s simply an improbable set of coincidences that just happen to perfectly align with the mechanics of Miran’s gold-reserve accumulation strategy.

[Rogier De Langhe @_roedel]

De Commissie heeft MiCA regels, maar hoe afdwingbaar zijn die zonder banken als intermediair??

ECB's Philip Lane: Als we onze financiële soevereiniteit willen verdedigen, zullen we met een eigen digitale € moeten komen, en snel!

https://t.co/hvyYxpAAsL

[Rogier De Langhe @_roedel]

De ECB vreest de digitale dollar

Digitale vereist geen bankrekening bij een bank in die muntzone, waardoor Europese bankregulering wordt omzeild en de VS (itt het Eurodollarsysteem) de economische macht behoudt. Financiële kolonisatie?

https://t.co/X9v9dSysc8

[Rogier De Langhe @_roedel]

Een munt is een standaard, die maar waarde krijgt via adoptie. Die adoptie was gegarandeerd via de banken: geld gebruiken in Euroland vereist € bij Europese bank. Digitale dollar ondermijnt die garantie en zou een vicieuze cirkel in gang kunnen zetten naar dollaradoptie

[Rogier De Langhe @_roedel]

@optigrab1984 @SantiagoAuFund Something along these lines is what spooked the ECB last month.

Commission thinks recently approved MiCA regulation prevents it. But the ECB doesn't think it's strong enough, and they are rushing to get a digital currency of their own

https://t.co/8UWc3KGmGB

[Rogier De Langhe @_roedel]

@michaeljmcnair April 20 was right at the height of Trump's attack on Powell. Maybe that was all just a show to pump the price of gold before Treasury started selling.